AGREEMENT OF PURCHASE AND SALE OF ASSETS
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This Agreement, dated as of October 31, 2001, by and among ▇▇▇▇▇▇▇
Broadcasting of Nevada, LLC. a North Carolina limited liability company
("▇▇▇▇▇▇▇"), KJUL License, LLC, a North Carolina limited liability company
("Licensing" and together with ▇▇▇▇▇▇▇ being hereinafter sometimes referred to
as "Sellers"), and ▇▇▇▇▇ Broadcasting LLC, a Delaware limited liability company
("Buyer"), and ▇▇▇▇▇ License Co., LLC, a Delaware limited liability company
("License Co." and together with Buyer being hereinafter sometimes referred to
as "Buyers").
W I T N E S S E T H:
WHEREAS, Sellers are the owner of radio stations WRNO-FM, licensed to
New Orleans, Louisiana and KMEZ(FM), licensed to Belle ▇▇▇▇▇▇, Louisiana (the
"Stations"), pursuant to certain authorizations issued by the Federal
Communications Commission (the "Commission" or "FCC") and Sellers own or lease
certain assets used or held for use in connection with the operation of the
Stations;
WHEREAS, Sellers desire to sell, assign and transfer the Stations, its
FCC authorizations for the Stations and its interest in the assets and business
of the Stations, and Buyers desire to acquire the Stations, the FCC
authorizations for the Stations, and the assets and business of the Stations,
all on the terms and subject to the conditions hereinafter set forth; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, Buyer and Seller have entered into a Time Brokerage Agreement dated
as of the date hereof (the "TBA").
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, and upon the terms and subject
to the conditions hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE 1
Purchase and Sale of Business and Assets
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1.1 Purchased Assets. Subject to and upon the terms and conditions
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of this Agreement, Sellers shall sell, transfer, convey, assign, grant and
deliver to Buyers, and Buyers shall purchase, at the Closing (as hereinafter
defined) all right, title and interest in and to all business, properties,
assets, machinery, equipment, furniture, fixtures, franchises, goodwill and
rights of Sellers as a going concern, of every nature, kind and description,
tangible and intangible, owned or leased, wheresoever located and whether or not
carried or reflected on the books or records of any of Sellers, that are used or
held for use in the operation of any of the Stations, including, without
limitation, all properties, assets, rights, licenses, permits and franchises of
and/or pertaining to any of the Stations, and all properties, assets and rights
described in the form of ▇▇▇▇ of Sale annexed as Exhibit 1.1 hereto (the "▇▇▇▇
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of Sale"), but excluding the "Excluded Assets", as hereinafter defined. All of
the foregoing are herein collectively referred to as the "Purchased Assets" and
include without limitation all of the
following (it being understood that License Co. shall acquire all right, title
and interest of any of Sellers in and to the Commission Authorizations (as
hereinafter defined) and Buyer shall acquire all of the other Purchased Assets):
(a) Commission Authorizations. All right, title and interest of any
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of Sellers in and to all licenses, permits, approvals, construction permits and
authorizations issued or granted by the FCC and used or held for use in the
operation of any of the Stations, and any and all broadcast auxiliary
facilities, boosters and repeaters associated with any of the Stations
(hereinafter the "Commission Authorizations"), including, without limitation,
all of those listed in Schedule 5.7(b) of the Disclosure Schedule (as such term
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is hereinafter defined), together with any applications therefor, renewals,
extensions or modifications thereof and additions thereto.
(b) Other Authorizations. All right, title and interest of any of
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Sellers in and to all licenses, permits, variances, franchises, certifications,
approvals, construction permits and authorizations issued or granted by any
administrative body or licensing authority or governmental or regulatory agency,
other than Commission Authorizations, used or held for use in the operation of
any of the Stations and/or the ownership and/or use of the Purchased Assets
(hereinafter the "Other Authorizations" and, collectively with the Commission
Authorizations, the "Authorizations"), including, without limitation, all of
those listed in Schedule 5.7(b) of the Disclosure Schedule, together with any
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applications therefor, renewals, extensions or modifications thereof and
additions thereto.
(c) Tangible Personal Property. All fixed and tangible personal
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property used or held for use, by or for any of the Stations and/or any of
Sellers in the business or operation of any of the Stations as such operations
are currently conducted, including, but not limited to, any physical assets and
equipment, leasehold improvements, machinery, vehicles, furniture, fixtures,
transmitting towers, transmitters, antennae, office materials and supplies,
spare parts and music libraries, including, without limitation, those listed in
Schedule 5.9 of the Disclosure Schedule, together with all replacements thereof,
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additions and alterations thereto, and substitutions therefor, made between the
date hereof and the Closing Date (hereinafter collectively the "Tangible
Personal Property"), provided that to the extent any Tangible Personal Property
is leased or co-owned by any of Sellers, only such leasehold or co-ownership
interest will be included in the Purchased Assets.
(d) Real Property. All land, buildings, improvements, fixtures, and
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transmitting towers (to the extent they constitute fixtures or other interests
in real property and not Tangible Personal Property) and other real property
owned by any of Sellers, and all right, title, and interest of any of Sellers in
and to all leaseholds and other interests in real property and the buildings and
improvements thereon and appurtenances thereto, including, without limitation,
any easements, variances, and air rights, and all security deposits with respect
to any of the foregoing (subject to the provisions of Section 2.5), used or held
for use by or for any of the Stations and/or any of Sellers in the business or
operation of any of the Stations as currently conducted (the foregoing
hereinafter collectively called the "Real Properties"), provided that to the
extent any Real Property is leased or co-owned by any of Sellers, only such
leasehold or co-ownership interest will be included in the Purchased Assets.
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(e) Advertising Contracts. All right, title and interest of any of
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Sellers in and to all orders and agreements for the sale of advertising time on
any of the Stations for cash and all trade, barter and similar agreements for
the sale of advertising time on any of the Stations other than for cash, and all
such orders and agreements for advertising time entered into in the ordinary
course of business between the date hereof and the Closing Date, and to the
extent the foregoing have not been performed as of the Closing Date, in each
case to which any of Sellers or any of the Stations is a party and to be assumed
by Buyer pursuant to this Agreement (hereinafter collectively "Advertising
Contracts").
(f) Agreements. All right, title and interest of any of Sellers in
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and to the contracts, agreements, and leases, including, without limitation, all
program licenses, and agreements and contracts to broadcast product or programs
on any of the Stations, to which any of Sellers or any of the Stations is a
party and to be assumed by Buyer pursuant to this Agreement (hereinafter,
together with the Advertising Contracts, collectively, "Contracts"), and all
rights of any of Sellers under all confidentiality agreements in favor of any of
Sellers and/or any of the Stations and/or relating to any of the Stations.
(g) Intangibles. All right, title and interest of any of Sellers in
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and to the call letters "WRNO-FM" and "KMEZ(FM)", together with all copyrights,
trademarks, trade names, logos, slogans, jingles, service marks, applications
for any of the foregoing, all telephone numbers and listings, trade secrets,
confidential or proprietary information and other intangible property used or
held for use by or for any of the Stations and/or any of Sellers in the business
or operation of any of the Stations as currently operated, and any and all
universal resource locators ("URLs"), domain names, of or maintained by or for
any of the Stations, including without limitation, the URLs "▇▇▇.▇▇▇▇.▇▇▇", and
"▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇" (the "Station URLs") and, the HTML code ("Code") created
by or for any of Sellers exclusively for the sites directly accessed (e.g. sites
with the same top level URL and not sites with other top level URLs even if such
sites are maintained on the same server) through such Station URLs as of the
date of this Agreement (collectively the "Site") and all goodwill associated
with any of the above (hereinafter collectively the "Intangibles").
(h) Deposits and Prepaid Items. Subject to the provisions of Section
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2.5, all right, title and interest of any of Sellers in and to all deposits and
prepaid items relating to any of the Purchased Assets or the operation or
business of any of the Stations (other than unearned insurance premiums).
(i) Programs. All right, title and interest of any of Sellers in and
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to all computer systems (including without limitation, management information
and order systems, hardware, software, servers, computers, printers, scanners,
monitors, peripheral and accessory devices and the related media, manuals,
documentation and user guides) of or used by or for the Business, all right,
title and interest of any of Sellers in and to all related claims, credits, and
rights of recovery and set-off with respect thereto, and all of the right, title
and interest (including by reason of license or lease) of any of Sellers or the
Business in or to any software, computer program or software product owned,
used, developed or being developed by or for the Business, whether for internal
use or for sale or license to others, and any software, computer program or
software product licensed by any of Sellers for use by the Business, and all
proprietary rights of
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any of Sellers or the Business, whether or not patented or copyrighted,
associated therewith (collectively, "Programs").
(j) Documentation. All documentation, records and software, whether
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in electronic or print form, currently in the possession or under the control of
any of Sellers evidencing, representing or containing or relating to any Program
or used in the Business, including, without limitation, any manuals, functional
and design specifications, user and programmer instructions, coding, testing
notes, error reports and logs, patches and patch instructions, itemizations of
development tools, and all other writings which would be necessary or helpful to
a skilled programmer to understand, maintain and enhance any Program
(collectively, "Documentation").
(k) FCC Logs. All FCC logs and similar records in the possession of
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any of Sellers that relate to the operation of any of the Stations ("FCC Logs").
(l) Business Records. All reports, statements, books, financial
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records, engineering and advertising reports, programming studies, consulting
reports, marketing data, technical information, specifications, research and
development information, engineering drawings, manuals, computer programs, tapes
and software, business and personnel records, mailing and listener lists, lists
of vendors or other suppliers and any other information in tangible form, used
or held for use by or for any of the Stations and/or any of Sellers in the
business or operation of any of the Stations or relating to any of the Purchased
Assets (hereinafter collectively "Business Records").
(m) Goodwill. All goodwill in, and going concern value of, each of
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the Stations (if any).
1.2 Excluded Assets. Notwithstanding anything set forth in Section 1.1,
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the Purchased Assets shall not include the following (the "Excluded Assets"):
(a) All cash, cash equivalents or similar type investments of Sellers,
such as certificates of deposit, money market accounts, commercial paper,
Treasury bills and other marketable securities on hand and/or in banks or in
inter-company or inter-affiliate accounts, any security deposits and any
insurance policies, contracts of insurance, and any proceeds therefrom (except
to the extent otherwise provided in Section 10.1 hereof), promissory notes,
amounts due from employees, bonds, letters of credit, other similar items, and
any cash surrender value in regard thereto.
(b) All assets used or held for use exclusively in the operation of
standard broadcast station WBYU(AM), New Orleans and those other assets listed
in Schedule 1.2(b) of the Disclosure Schedule.
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(c) All supplies, spare parts and similar items of tangible personal
property consumed in the ordinary course of business between the date of this
Agreement and the Closing Date and in conformity with the terms and provisions
of this Agreement.
(d) Certain personal effects identified in Schedule 1.2(d) of the
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Disclosure Schedule.
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(e) Sellers' Tax records, corporate seal, minute books, organizational
documents, such books and records as pertain solely to the organization,
existence and capitalization and Taxes of Sellers, such books and records as any
Seller is required by law to retain, and duplicate copies of the books and
records necessary to enable any Seller to file its Tax returns and reports.
(f) All accounts receivable of Sellers and/or any of the Stations, as
of 11:59 p.m., local time, on the day prior to the TBA Commencement Date (as
herein defined), in respect of air time broadcast by Sellers prior to the TBA
Commencement Date.
(g) Any assets, trusts, insurance policies, contracts, reserves or
arrangements relating to any compensation or benefit plan, contract or
arrangement in effect as of the Closing Date including, without limitation, all
pension, retirement, welfare, profit sharing, stock option or stock purchase,
savings and thrift, bonus, incentive or deferred compensation, severance pay,
vacation, sick pay, personal day and medical, vision, dental, accident,
disability, life and other health and hospitalization insurance plans in which
any current or former employee (or dependent of any such employee) of any of
Sellers or any of the Stations participates or is entitled to benefits (the
"Employee Benefit Plans").
(h) any interest in and to any refunds or overpayments of Taxes for
periods prior to the Closing Date.
(i) The accounting, payroll, general ledger and accounts payable
software systems, used or held for use in the operation of the Stations;
provided, however, that promptly after the TBA Commencement Date, ▇▇▇▇▇▇▇ will
provide Buyer with a hard copy print out of the general ledger current as of the
TBA Commencement Date.
1.3 Title to Purchased Assets. Title to all of the Purchased Assets
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shall be transferred to Buyers free and clear of any liens, pledges, charges,
mortgages, security interests, restrictions, easements, liabilities, claims,
title defects, encumbrances or rights of others of every kind and description
(collectively, "Liens"), except for those Liens listed in Schedule 1.3 of the
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Disclosure Schedule, said Liens so listed being herein called the "Permitted
Liens."
1.4 The Business. The business, operations, obligations and activities
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of Sellers principally related to any of the Stations and/or the use of any of
the Purchased Assets in the operation of any of the Stations are herein
collectively referred to as the "Business."
1.5 Assignments of Contracts. Buyer and Sellers acknowledge that the
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rights of Sellers under certain of the Contracts to be included in the Purchased
Assets, and the rights and benefits thereunder necessary or appropriate or
relating to the conduct of the business and activities of any of Sellers and/or
any of the Stations, may not, by their terms, be assignable. Anything in this
Agreement or in the Obligations Undertaking (as hereinafter defined) to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any such Contract and Buyer shall not be deemed to have assumed the same
or to be required to perform any obligations thereunder, if an attempted
assignment thereof, without the consent of a third party thereto, would
constitute a breach thereof or in any material way affect the rights under any
such Contract of Buyer or any of Sellers thereunder. In such event, Sellers
will cooperate with
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Buyer to provide for Buyer after the Closing all benefits to which any of
Sellers is entitled under such Contracts, and any transfer or assignment to
Buyer by any of Sellers of any such Contract or any right or benefit arising
thereunder or resulting therefrom which shall require the consent or approval of
any third party shall be made subject to such consent or approval being
obtained. Sellers shall use their reasonable commercial efforts prior to, and if
requested by Buyer after, the Closing Date to obtain all consents and approvals
necessary or required for the transfer and assignment of the Contracts to Buyer,
in each case in form and substance reasonably satisfactory to Buyer; it being
understood, that such commercial efforts shall include Sellers paying the
assignment fee under the Employment Agreement, dated November 20, 1998, between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ (formerly known as Centennial
Broadcasting LLC).
1.6 Satisfaction of Liens. At the Closing, Sellers shall cause all
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Liens on or relating to any of the Purchased Assets (other than Permitted
Liens), to be released, extinguished and discharged in full, and shall deliver
to Buyer instruments releasing, extinguishing and discharging all such Liens,
and all rights and claims of any holder(s) of any of such Liens with respect to
any of the Purchased Assets, all in such form and substance as Buyer shall
reasonably require (collectively the "Lien Release Instruments").
1.7 Receivables. At Closing, Sellers shall appoint Buyer their sole
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and exclusive agent for collecting Receivables during the Collection Period (as
hereafter defined). In such regard, at Closing Sellers shall deliver to Buyer a
complete and detailed statement showing the name, amount and age of each
Receivable. From the Closing Date until 120 days thereafter (the "Collection
Period"), Buyer shall endeavor to collect Receivables, as agent for Sellers and
on Sellers' behalf, but in accordance with Buyer's normal collection procedures
as in effect from time to time (and without being required to resort to
litigation or collection proceedings), and, Sellers agree that during such
period of time they shall refrain from taking action (whether in connection with
collection or otherwise) in respect of the Receivables. Buyer shall have the
right and authority to endorse, without recourse, with the name of any of
Sellers, any checks received in respect of any Receivables. As soon as
practicable, but in no event later than the 30th day of each calendar month
beginning with the first full month after the Closing Date or the next business
day thereafter if the 30th is not a business day, Buyer will furnish Sellers
with an accounting of the Receivables collected during the preceding calendar
month, and, on such day, Buyer shall remit to ▇▇▇▇▇▇▇ the net amount of all
Receivables collected on Sellers' behalf by Buyer during such calendar month
after deducting therefrom any applicable agency, sales and other commissions
paid by Buyer as set forth below. Within 20 business days after the end of the
Collection Period, Buyer will furnish Sellers with a final and up-to-date
accounting of the Receivables, and thereafter Sellers shall be solely
responsible for the collection of any remaining Receivables; provided, however,
that any funds received by Buyer subsequent to the Collection Period on account
of any Receivables paid or payable to any of Sellers, less any applicable
agency, sales or other commissions to the extent paid by Buyer as set forth
below, shall be remitted to ▇▇▇▇▇▇▇ as soon as practicable after the receipt of
such funds. Sellers acknowledge and agree that all accounts receivable of any
of the Stations that are earned from and after the Closing Date are the sole and
exclusive property of Buyer. Buyer shall not be obligated to use any
extraordinary efforts or retain counsel or a collection agency to collect any
Receivable. To the extent that any amounts are received by Buyer from an
obligor on both a Receivable and any other receivable of Buyer, such amounts,
unless specifically allocated by the obligor, shall be allocated to payment of
the oldest of such receivables first. Sellers shall be responsible for all
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agency, sales and other commissions which are attributable to the Receivables
and to the extent the same have not been paid by Sellers, during the Collection
Period, Buyer may deduct the amount of such commissions from the amount to be
remitted to ▇▇▇▇▇▇▇ and pay such commissions in accordance with Sellers' past
customary practice.
ARTICLE 2
Purchase Price; Letter of Credit; Payment;
Assumption of Obligations
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2.1 Purchase Price. Subject to and upon the terms and conditions of
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this Agreement, in reliance on the representations, warranties, covenants and
agreements of Sellers contained herein, and in full payment and consideration
for the sale, conveyance, assignment, transfer and delivery of the Purchased
Assets by Sellers, Buyer will pay a total amount of Twenty Three Million United
States Dollars (U.S. $23,000,000), subject to adjustment as herein provided (the
"Purchase Price"), and payable as hereinafter provided.
2.2 Letter of Credit.
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(a) Upon the execution and delivery of this Agreement, Buyer
shall deposit with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as escrow agent (the "Escrow Agent"), as a
good faith deposit, an irrevocable letter of credit ("Letter of Credit") in the
stated principal amount of Three Million Dollars (U.S. $3,000,000). The Letter
of Credit shall be held by the Escrow Agent, pursuant to the terms of an escrow
agreement in the form of Exhibit 2.2 hereto (the "Escrow Agreement"), which
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Escrow Agreement shall be executed and delivered by ▇▇▇▇▇▇▇, Buyer and the
Escrow Agent simultaneously with the execution and delivery of this Agreement.
The parties' rights and obligations with respect to the proceeds of the Letter
of Credit shall be governed by clause (b) of this Section 2.2.
(b) The Letter of Credit shall be held, distributed and/or drawn
upon in accordance with the following requirements:
(i) The Letter of Credit shall be returned to Buyer: (A) if
at the latest time for the Closing referred to in Section 4.1 hereof (as may be
modified by Section 8.1 hereof) a condition to Buyer's obligation to close the
transactions contemplated by this Agreement has not been satisfied or waived and
Buyer rightfully elects to terminate the Agreement; or (B) if this Agreement
shall terminate for any reason specified in Article 3 of this Agreement; or (C)
if this Agreement terminates for any reason other than as a result of a material
breach or default by Buyer of its obligations under this Agreement or as a
result of Buyer's wrongful failure to close as set forth in Section 2.2(b)(ii);
it being understood that if Buyer and any of Sellers are in breach of their
respective material obligations under this Agreement and the Agreement is
terminated, the Letter of Credit shall be returned to Buyer; or (D) the Closing
shall occur.
(ii) ▇▇▇▇▇▇▇ shall be entitled to the proceeds of the Letter
of Credit to compensate the Sellers for the damages they shall suffer if the
Closing shall not occur, if (A) this Agreement terminates as a result of a
material breach or default by Buyer of its obligations under this Agreement so
long as Sellers are not also in breach or default of any of
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their respective material obligations under this Agreement or (B) the Closing
does not occur and each of the following shall occur (x) at the latest time for
the Closing referred to in Section 4.1 hereof (as may be modified by Section 8.1
hereof), all conditions to Buyer's obligations to close shall have been
satisfied or waived, (y) the Sellers shall then be ready, willing and able to
close and none of the Sellers shall be in material breach or default of their
respective obligations under this Agreement, and (z) Buyer fails or refuses to
close.
(c) Anything to the contrary contained in this Agreement
notwithstanding, under no circumstances shall any of the Sellers have any right
or remedy under or in connection with this Agreement if this Agreement shall
terminate for any reason whatsoever and/or in the event of any breach or default
under this Agreement, other than such right as Seller may have to the proceeds
of the Letter of Credit under the terms and conditions set forth in Section
2.2(b) above and as may be expressly provided in Section 8.4 and Article 9
herein.
2.3 Payment. At Closing (x) the Letter of Credit shall be returned
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to Buyer, and (y) the sum of Nineteen Million Six Hundred Fifty Thousand United
States Dollars (U.S. $19,650,000) in cash shall be paid by Buyer to Sellers by
wire transfer of immediately available funds, to an account designated by
▇▇▇▇▇▇▇ or such other means as Sellers and Buyer shall agree and (z) a
promissory note in the principal amount of Three Million Three Hundred Fifty
Thousand United Stated Dollars (U.S. $3,350,000), and in the form attached
hereto as Exhibit 2.3 (the "Note"), shall be delivered by Buyer to Sellers.
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2.4 Allocation. Sellers and Buyer agree to allocate the Purchase
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Price among the Purchased Assets in accordance with the allocation schedule to
be attached hereto as Schedule 2.4, which allocation schedule will reflect the
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allocation of the Purchase Price among the classes of assets specified by
Section 1060 of the Code and will be determined after the date hereof but prior
to Closing (the "Allocation Schedule"). If the parties are unable to agree on
the final Allocation Schedule within 30 days after the Closing Date, a third-
party appraiser selected by Buyer, and reasonably acceptable to Sellers, the
fees of which, up to a maximum of $7,500 shall be borne equally by Buyer and
Sellers, shall resolve the allocation of the consideration to any items with
respect to which there is a dispute between the parties. In the event that the
Purchase Price shall be adjusted pursuant to this Agreement, the Allocation
Schedule shall be appropriately modified, on such basis as Buyer shall
reasonably require, to reflect such adjustment. Seller and Buyer will each file
an IRS Form 8594 consistent with the Allocation Schedule.
2.5 Certain Closing Prorations and Adjustments. (a) All utilities
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charges, real estate and personal property taxes, security deposits and monthly
rental payments under leases of Real Properties to be assumed by Buyer pursuant
to this Agreement, accrued employee vacation and sick pay time, monthly
equipment rental payments under Personal Property Leases (as hereinafter
defined) assumed by Buyer pursuant to this Agreement, amounts payable (and
security deposits in respect thereof) in respect of contracts and agreements
assumed by Buyer pursuant to this Agreement, association dues, business, license
and annual FCC fees and similar prepaid items (to the extent included in the
Purchased Assets) and similar accrued expenses shall be prorated between Sellers
and Buyer as of Midnight on the day immediately preceding the Closing Date, and
the net amount resulting from the foregoing in favor of Buyer or Sellers, as the
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case may be, shall then be paid to such party at the Closing or credited against
the Purchase Price in the event Sellers are to pay Buyer any such amount. If
all the apportionments set forth above are not accomplished at the Closing,
then, within ninety (90) days thereafter, representatives of Sellers and Buyer
shall examine all appropriate books and records in order to make the
determination of said apportionments. Payments in respect thereof shall be made
within one hundred twenty (120) days after Closing, provided that if payments
with respect to real or personal property taxes are based in whole or in part on
the previous year's taxes, there shall be a later adjustment to reflect the
current year's taxes when the bills are finally rendered.
(b) All amounts paid prior to the Closing under all contracts, orders
or commitments of any of the Stations for the sale of air time to be performed
or aired on or after the Closing Date shall be paid by Sellers to Buyer or, at
Buyer's option, credited against the Purchase Price, at the Closing.
(c) Prior to Closing, the parties shall jointly prepare a schedule
showing (i) the cumulative net value, as of the Effective Date of (and as
defined in) the TBA (the "TBA Commencement Date"), of all advertising time
required to be broadcast by the Station after the TBA Commencement Date pursuant
to agreements included in the Contracts under which ▇▇▇▇▇▇▇ has agreed to
provide commercial advertising time on any of the Stations in exchange for
property or services in lieu of, or in addition to, cash ("Trade Agreements"),
and (ii) the cumulative net value of all property or services to be received by
any of the Stations after the TBA Commencement Date pursuant to Trade
Agreements. The amount to be attributed to the value of remaining broadcast
advertising time and goods and services hereunder shall be the amount specified
in the Trade Agreement in question, as established at the time the Trade
Agreement was entered into. To the extent the amount in clause (i) above
exceeds the amount in clause (ii) above by more than Seven Thousand Five Hundred
Dollars ($7,500), the Purchase Price due at Closing shall be decreased by such
excess.
(d) In the event of any dispute between the parties as to prorations
or adjustments under this Section 2.5, the amounts not in dispute shall
nonetheless be paid and adjusted for at the Closing, or within one hundred
twenty (120) days thereafter as set forth in this Section above, and such
disputes shall be promptly presented for resolution to an independent certified
public accountant mutually acceptable to the parties. The accountant's
resolution of the dispute shall be final and binding on the parties and a
judgment may be entered thereon, provided, however, that any such accountant
shall have no authority to assess damages or award attorney's fees or costs.
The fees and expenses of such accountant shall be paid one-half (1/2) by
Sellers and one-half (1/2) by Buyer.
2.6 Assumed Obligations.
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(a) Except as otherwise provided in the TBA, from and after the
Closing Date, Buyer shall assume and pay, perform and discharge the following
liabilities and obligations relating to the Stations, but in each case only to
the extent first accruing, and only with respect to periods, after the Closing
Date (the "Assumed Obligations"):
(i) liabilities and obligations arising or accruing after the
Closing Date with respect to any (i) all contracts, agreements, leases, licenses
or other
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understandings or arrangements listed in Schedule 5.8(A) of the Disclosure
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Schedule and marked with an asterisk (*) to indicate that it is an "Assumed
Contract", (ii) all Advertising Contracts (including Trade Agreements), and
(iii) any other contract, agreement, lease, license or other understanding or
arrangement entered into by any of Sellers with respect to any of the Stations
pursuant to Section 7.1 hereof;
(ii) liabilities and obligations arising or accruing after the
Closing Date with respect to Buyer's ownership of the Purchased Assets and
Buyer's operation of the Stations; and
(iii) liabilities and obligations arising after the Closing Date,
with respect to any property taxes, regulatory fees and other governmental
charges on the Purchased Assets or the Stations for periods after the Closing
Date during which Buyer owned the Stations.
(b) Notwithstanding anything to the contrary contained herein, the
Assumed Obligations shall not include any of the following debts, commitments,
obligations or liabilities of any of Sellers (herein collectively referred to as
the "Excluded Liabilities"):
(i) any obligation or liability of any of Sellers based upon
acts or omissions of any of Sellers occurring on or after the Closing Date;
(ii) except as otherwise expressly provided in the TBA, any
liabilities or obligations of any of Sellers resulting or arising from claims
for personal injury or property damage arising prior to the Closing Date or out
of any breach or default prior to the Closing Date by any of Sellers of any
contract, commitment or obligation, whether imposed by law or otherwise;
(iii) any obligations of either of Sellers under any stock
option, stock purchase or profit-sharing plans or under any outstanding
qualified or non-qualified stock options;
(iv) any liabilities of either of Sellers to any of its present
or former stockholders or partners as such or arising out of any action by
either of Sellers in connection with the transactions contemplated by this
Agreement;
(v) any and all obligations of either of Sellers for
indebtedness for borrowed money, including without limitation, capitalized
leases for equipment not assumed by Buyer hereunder and amounts advanced by
either of Sellers or any affiliate thereof to Seller or amounts otherwise owed
or payable by either of Sellers to either of Sellers or any affiliate thereof,
and any and all other intercompany obligations (whether current or long-term);
(vi) except as otherwise expressly provided in the TBA, any and
all debts, liabilities and obligations of either of Sellers incurred or accrued
with respect to any period, or circumstances, or state of facts or occurrences,
on or prior to the Closing Date, relating to bonuses, salaries, wages,
commissions, incentive compensation, compensated absences, workmen's
compensation, FICA, unemployment taxes, employee benefits, medical and health,
deferred compensation, wage continuation, severance, termination, pension
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(including any unfunded accrued or vested obligation), section 401(k) plans,
cafeteria, child care, retirement, profit-sharing or similar plans or
arrangements, with respect to any current or former employees of Sellers whether
or not such employees become employees of Buyer;
(vii) any and all domestic and foreign federal, state and local
income, gains, or franchise Tax liabilities, imposed on either of Sellers or
with respect to income or activities thereof, including interest and penalties,
if any, imposed in respect of such taxes, and including any income or gains Tax
with respect to the transactions contemplated by this Agreement;
(viii) any and all liabilities and obligations of either of
Sellers arising under this Agreement or any of the Seller Documents (including,
without limitation, indemnification obligations and obligations to pay expenses
arising out of the Agreement), or from its failure to perform any of its
agreements contained therein or incurred by it in connection with the
consummation of the transactions contemplated thereby, or for which either of
Sellers is responsible under this Agreement, including, without limitation, fees
of Sellers' lawyers, accountants and other advisors;
(ix) except as otherwise expressly provided in the TBA, any and
all liabilities and obligations with respect to claims, suits, legal,
administrative, arbitral or other actions, proceedings and judgments with
respect to causes of action or disputes arising, and other non-contractual
liabilities of either of Sellers asserted or imposed, or arising out of, any
events occurring, or circumstances or state of facts existing, on or prior to
the Closing Date, including without limitation, personal injury, negligence,
deceptive trade practices, libel or slander;
(x) except as otherwise expressly provided in the TBA, any and
all liabilities and obligations of either of Sellers based on or arising from
the presence, use, disposal or treatment of any Hazardous Substance (as defined
below) on, about or from any of the Real Properties or any discharge or release
of a Hazardous Substance on or prior to the Closing Date or failure to obtain
any license or permit required in connection with any Hazardous Substance or
arising out of any non-compliance with any federal, foreign, state or local
environmental, health or safety law, ordinance, code, rule regulation, order or
requirement, in each case based on or arising from any act, transaction, state
of facts or other condition or conduct which existed on or before the Closing
Date. The term "Hazardous Substance" as used in this Agreement shall include,
without limitation, gasoline, oil and other petroleum products, explosives,
radioactive materials and related and similar materials, and any other substance
or material defined as a hazardous, toxic or polluting substance or material by
any federal, state or local law, ordinance, rule or regulation, including
asbestos and asbestos-containing materials;
(xi) except as otherwise expressly provided in the TBA, any and
all debts, liabilities and obligations of either of Sellers with respect to any
of the Excluded Assets or any Contract that is not an Assumed Contract; or
(xii) any and all debts, liabilities or obligations as a
guarantor, co-obligor or surety of either of Sellers or any affiliate of either
of Sellers.
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(c) Buyer shall, at the Closing, execute and deliver to Sellers
an Obligations Undertaking (the "Obligations Undertaking"), substantially in the
form of Exhibit 2.6 hereto, in order to effect the assumption of the Assumed
-----------
Obligations by Buyer. Except for the Assumed Obligations, and except as
otherwise provided in the TBA, Buyer shall not and does not assume any liability
or obligation of any of Sellers, fixed or contingent, disclosed or undisclosed,
and assumes no liability for any claim, debt, default, duties, obligations or
liabilities of any of Sellers of any kind or nature, whether known or unknown,
contingent or fixed, including with out limitation the Excluded Liabilities, all
of which, to the extent that they exist from and after the Closing shall be
retained and discharged by Sellers.
ARTICLE 3
Application to and Consent By Commission
----------------------------------------
3.1 Commission Consent. Consummation of the purchase and sale
------------------
provided for herein and the performance of the obligations of Sellers and Buyers
to close under this Agreement are subject to the condition that the Commission
shall have issued its approval, without any condition adverse to Buyers'
operation of the Stations and outside of the ordinary course for similar
transactions, of the assignment (the "Assignment") of the Commission
Authorizations to License Co. in accordance with the terms of this Agreement
(the "Initial Order"), and such approval shall have become a Final Order (as
hereinafter defined).
3.2 Application For Commission Consent. (a) Sellers and Buyers agree
----------------------------------
to proceed expeditiously and with due diligence and to use their reasonable
efforts and to cooperate with each other in seeking and applying (the
"Assignment Application") for the Initial Order and the Final Order. Within
five (5) business days after the date of this Agreement, each party shall
prepare and file with the Commission the Assignment Application and all
information, data, exhibits, resolutions, statements, and other materials
necessary and proper in connection with such Assignment Application. Each party
further agrees to expeditiously prepare and file with the FCC any Assignment
Application amendments whenever such amendments are required by the Commission
or its rules. For purposes of this Agreement, each party shall be deemed to be
using its reasonable efforts with respect to obtaining the Final Order, and to
be otherwise complying with the foregoing provisions of this Section 3.2, so
long as it expeditiously and truthfully provides information necessary in
completing the application process, expeditiously provides its comments on any
filing materials, and uses its reasonable efforts to oppose attempts by third
parties to resist, modify or overturn the grant of the Initial Order or the
Final Order without prejudice to the parties' termination rights under this
Agreement, it being further understood that neither the Sellers nor Buyers shall
be required to expend any funds or efforts contemplated under this Article 3
unless the other(s) of them is concurrently and likewise complying with its
obligations under this Article 3.
(b) Except as otherwise provided herein, each party will be
solely responsible for the expenses incurred by it in the preparation, filing
and prosecution of its respective portion of the Assignment Application. All
filing fees and grant fees imposed shall be paid one-half (1/2) by Sellers and
one-half (1/2) by Buyer.
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(c) Buyer and Sellers, each at their own respective expense,
shall use their respective reasonable efforts to oppose any efforts or any
requests by third parties for reconsideration or judicial review of the grant by
the Commission of the Initial Order.
3.3 Notice of Application. Sellers shall, at their expense, give due
---------------------
notice of the filing of the Assignment Application by such means as may be
required by the rules and regulations of the Commission.
3.4 Absence of Commission Consent. This Agreement, prior to the
-----------------------------
Closing, may be terminated by Sellers, on the one hand, or Buyers on the other
hand, upon written notice to the other(s), if an Initial Order as to the
assignment of the Station has not come into existence and effect within nine (9)
months after the date hereof, or the Final Order as to the assignment of the
Stations has not come into existence and effect within twelve (12) months after
the date hereof; provided, however, that neither Sellers nor Buyers, as the case
-------- -------
may be, may terminate this Agreement if any of Sellers, or any of Buyers, as the
case may be, is in material default or breach under this Agreement, or if a
delay in any decision or determination by the Commission respecting the
Assignment Application has been caused, or materially contributed to, (i) by any
failure of any of Sellers, or any of Buyers, as the case may be, to furnish,
file or make available to the Commission information within its control; (ii) by
the willful furnishing by any of Sellers, or any of Buyers, as the case may be,
of incorrect, inaccurate or incomplete information to the Commission; or (iii)
by any other action taken by any of Sellers, or any of Buyers, as the case may
be, for the purpose of delaying the Commission's decision or determination
respecting the Assignment Application.
3.5 Designation For Hearing. In the event the Commission shall,
-----------------------
prior to the Closing, designate for hearing any aspect of the Assignment
Application, Sellers, on the one hand, or Buyers, on the other hand, shall be
entitled, upon notice to the other(s), which notice must be given within twenty
(20) days after the terminating parties' receipt of notice of such designation
for hearing, to terminate this Agreement; provided, however, that neither any of
-------- -------
Sellers, nor any of Buyers, as the case may be, shall be entitled to terminate
this Agreement if any of Sellers or any of Buyers, as the case may be, is in
material default or breach of this Agreement.
3.6 Definition of Final Order. For purposes of this Agreement, the
-------------------------
term "Final Order" shall mean a final order of the Commission which is not
reversed, stayed, enjoined or set aside, and with respect to which no timely
request for stay, reconsideration, review, rehearing or notice of appeal or
determination to reconsider or review is pending, and as to which the time for
filing any such request, petition or notice of appeal or for review by the
Commission, and for any reconsideration, stay or setting aside by the Commission
on its own motion or initiative, has expired.
3.7 Effect of Termination. No termination under this Article 3 shall
---------------------
affect any rights or obligations under this Agreement arising by reason of any
breach or default by any party under this Agreement prior to such termination or
any remedy to which any party hereto may be entitled by reason of such breach or
termination, each of which shall survive such termination.
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ARTICLE 4
Closing; Deliveries; Conditions Precedent
-----------------------------------------
4.1 Closing. The Closing under this Agreement (the "Closing") shall
-------
take place at the offices of Buyer's counsel, at 10:00 a.m., local time, on the
later of March 31, 2002 and the fifth (5th) business day after the Initial Order
becomes a Final Order, or such other date, place or time as the parties hereto
shall mutually agree upon. The date of the Closing is herein called the
"Closing Date".
(a) All proceedings to be taken and all documents to be executed
and delivered by the parties at the Closing shall be deemed to have been taken
and executed simultaneously and no proceedings shall be deemed taken nor any
documents executed or delivered until all have been taken, executed and
delivered.
4.2 Sellers' Deliveries. At the Closing, Sellers shall deliver to
-------------------
Buyers:
(a) the ▇▇▇▇ of Sale, executed by Sellers;
(b) [Intentionally Omitted]
(c) an assignment of lease in the form of Exhibit 4.2(c) hereto
--------------
(each a "Lease Assignment") which respect to each of the leases of the Real
Properties listed in Schedule 5.8 of the Disclosure Schedule (each a "Lease"),
------------
executed by the lessee thereunder, in each case together with:
(i) the written consent to the assignment of each Lease,
other than those deemed immaterial by Buyer; and
(ii) such estoppel agreements ("Estoppels") of the
landlord, in form and substance reasonably required by Buyer and Buyer's
institutional lenders, with respect to such Lease and Lease Assignment, if any,
as Sellers shall have received prior to the Closing Date, and Sellers shall use
reasonable efforts (not to include the payment of any fee or cost of any
landlord) to so obtain the same from each landlord; and
(iii) such non-disturbance agreements ("NDA's") from the
landlord's mortgagees in favor of Buyer in form and substance reasonably
required by Buyer, if any, as Sellers shall have received prior to the Closing
Date, and Sellers shall use reasonable efforts (not to include the payment of
any fee or cost of any landlord) to so obtain the same from each mortgagee of
each landlord; and
(iv) such memoranda in recordable form, as to such lease
and the assignment thereof to Buyer, executed by the landlord, if any, as
Sellers shall have received prior to the Closing Date and Sellers shall use
reasonable efforts (not to include the payment of any fee or cost of any
landlord) to so obtain the same from each landlord;
(d) instruments of assignment and transfer of all the Commission
Authorizations and the Intangibles, executed by Sellers, in form reasonably
required by Buyer;
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(e) all Contracts, FCC Logs and Business Records not previously
delivered to Buyers;
(f) copies of corporate and limited liability company
resolutions of the Sellers authorizing, by approval of the board of directors
and the members and board of managers of the Sellers, the execution and delivery
of this Agreement and each exhibit hereto and the consummation of the
transactions contemplated hereby and thereby, certified by an executive officer
of each of the Sellers;
(g) a certificate of good standing with respect to ▇▇▇▇▇▇▇,
issued as of a recent date by the Secretary of State of the State of North
Carolina and a certificate of foreign qualification with respect to ▇▇▇▇▇▇▇,
issued as of a recent date by the Secretary of State of the State of Louisiana;
(h) irrevocable written instructions to the Escrow Agent to
return the Letter of Credit to Buyer;
(i) a License, substantially in the form attached as Exhibit
-------
4.2(i) (the "License"), executed by Sellers, provided that landlord's consent to
------
the same has been obtained;
(j) such other good and sufficient instruments of conveyance,
assignment and transfer, as Buyer shall reasonably require, each in form and
substance reasonably required by Buyer, and as shall be effective to vest in
Buyers title to the Purchased Assets as contemplated by this Agreement; and
(k) all other documents required by the terms of this Agreement
to be delivered to Buyers at the Closing.
4.3 Buyers' Deliveries. At the Closing, Buyers will deliver:
------------------
(a) the portion of the Purchase Price, as the same may be
adjusted in accordance with the terms of this Agreement, payable in cash at the
Closing;
(b) the Note;
(c) each Lease Assignment, duly executed by Buyer;
(d) the Obligations Undertaking, duly executed by Buyer;
(e) certificates of good standing with respect to each of
Buyers, each issued as of a recent date by the Secretary of State of Delaware
and a certificate of foreign qualification with respect to Buyer, issued as of a
recent date by the Secretary of State of Louisiana;
(f) an Equity Subscription Agreement to be entered into by and
among Buyer, ▇▇▇▇▇ Communications & Media Partners L.P., Wicks Parallel
(Limited) Partnership I, L.P. and ▇▇▇▇▇ Broadcasting Holdings, LLC, in the form
attached hereto as Exhibit 4.3(f) (the "Equity Subscription Agreement"),
--------------
executed by the parties thereto;
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(g) the License, executed by Buyer, provided that landlord's
consent to the same has been obtained;
(h) copies of all necessary limited liability company
resolutions of Buyer authorizing the execution and delivery of this Agreement
and each exhibit hereto and the consummation of the transactions contemplated
hereby and thereby, certified by an officer of Buyer; and
(i) all other documents required by the terms of this Agreement
to be delivered to Sellers at the Closing.
4.4 Further Assurances. At any time and from time to time after the
------------------
Closing, at Buyer's request, and without further consideration, Sellers will
execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation, and take such actions, as Buyer may reasonably deem
necessary or desirable in order more effectively to transfer, convey and assign
to Buyers, and to confirm Buyers' title to, all of the Purchased Assets, to put
Buyers in actual possession and operating control thereof, and to assist Buyers
in exercising all rights with respect thereto.
4.5 Buyers' Conditions Precedent. The obligations of the Buyers
----------------------------
under this Agreement to proceed with the transactions contemplated hereby are,
at the option of the Buyer, subject to the fulfillment of the following
conditions at or prior to the Closing:
(a) no action, suit or proceeding shall have been instituted
against any of Sellers or against any of Buyers by, in or before any court,
tribunal or governmental body or agency, and be unresolved, to restrain,
prevent, enjoin or prohibit, or to obtain substantial damages by reason of, any
of the transactions contemplated hereby and no order shall have been issued, to
restrain, prevent, enjoin or prohibit, or to obtain substantial damages by
reason of, any of the transactions contemplated hereby;
(b) the representations and warranties of any of the Sellers
contained in this Agreement, any Schedules and Exhibits hereto and/or any
certificates or documents delivered in connection with this Agreement shall be
true and correct in all respects when made, and, except for changes expressly
permitted by this Agreement, shall also be true and correct in all respects on
and as of the Closing Date as if made on and as of that date and as though the
Closing Date were substituted for the date of this Agreement, except (i) to the
extent that any such representations and warranties were made only as of a date
specified therein, and as to such representations and warranties the same shall
continue on the Closing Date to have been true and correct as of the specified
date, and (ii) where the breach of any of such representations or warranties
does not have, and could not reasonably be expected to have, either individually
or in the aggregate for all representations and warranties, a material adverse
effect on the financial condition, business or operating results of the Stations
taken as a whole or any Seller's ability to consummate the transactions
contemplated hereby (a "Material Adverse Effect") (except that for purposes of
application of this clause (ii) all materiality and material adverse effect
qualifications within all representations and warranties shall be deemed
omitted);
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(c) each covenant, agreement and obligation required by the
terms of this Agreement to be complied with and performed by any of the Sellers,
at or prior to the Closing shall have been duly and properly complied with and
performed except where the noncompliance or nonperformance does not have, and
could not reasonably be expected to have, individually or in the aggregate for
all covenants, agreements and obligations, a Material Adverse Effect (except
that for purposes of application of this subsection (c) all materiality and
material adverse effect qualifications within all covenants, agreements and
obligations shall be deemed omitted);
(d) the Final Order shall have been granted by the Commission
and License Co. shall be entitled to be the holder of the Commission
Authorizations;
(e) all consents necessary to the assignment to Buyer of those
Contracts listed in Schedule 4.5(e) of the Disclosure Schedule, shall have been
---------------
obtained and there shall have been delivered to Buyer executed counterparts
reasonably satisfactory in form and substance to Buyer of such consents (the
"Consents");
(f) Buyer shall have received an opinion of Sellers' counsel
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, dated the Closing Date, addressed to Buyers and permitting
reliance thereon by Buyers' lenders, and favorably opining as to the matters
included in Exhibit 4.5(f) hereto, in form and substance reasonably satisfactory
--------------
to Buyer; and
(g) there shall be delivered to and for the benefit of Buyers
and Buyers' lenders a certificate of (i) Sellers executed on the Closing Date
that the conditions set forth in subsections (b) through (e) of this Section 4.5
have been fulfilled.
4.6 Sellers' Conditions Precedent. The obligations of Sellers under
-----------------------------
this Agreement to proceed with the transactions contemplated hereby are, at the
option of Sellers, subject to the fulfillment of each of the following
conditions at or prior to the Closing:
(a) the representations and warranties of Buyer contained in
this Agreement or any exhibits hereto or any certificates or documents delivered
by it to Sellers in connection with this Agreement shall be true and correct in
all respects when made, and, except for changes expressly permitted by this
Agreement, shall also be true and correct in all respects on and as of the
Closing Date as if made on and as of that date and as though the Closing Date
were substituted for the date of this Agreement, except (i) to the extent that
any such representations and warranties were made only as of a date specified
therein, and as to such representations and warranties the same shall continue
on the Closing Date to have been true and correct as of the specified date, and
(ii) where the breach of any such representations or warranties does not have,
and could not reasonably be expected to have, either individually or in the
aggregate for all representations and warranties, a material adverse effect on
Buyer's ability to consummate the transactions contemplated hereby (except that
for purposes of application of this clause (ii) all materiality and material
adverse effect qualifications within all representations and warranties shall be
deemed omitted);
(b) each covenant, agreement and obligation required by the
terms of this Agreement to be complied with and performed by any of Buyers, at
or prior to the Closing
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shall have been duly and properly complied with and performed, except where the
noncompliance or nonperformance does not have, and could not reasonably be
expected to have, individually or in the aggregate for all covenants, agreements
and obligations, a material adverse effect on Buyer's ability to consummate the
transactions contemplated hereby (except that for purposes of application of
this subsection (b) all materiality and material adverse effect qualifications
within all covenants, agreements and obligations shall be deemed omitted);
(c) there shall be delivered to Sellers a certificate of Buyer
executed on the Closing Date that the conditions set forth in subsections (a)
and (b) of this Section 4.6 have been fulfilled; and
(d) the Final Order shall have been granted by the Commission
and License Co. shall be entitled to be the holder of the Commission
Authorizations.
4.7 Sellers' Cooperation With Respect to Like-Kind Exchange. Sellers
--------------------------------------------------------
agree that Buyers' acquisitions of the Purchased Assets (or a portion thereof)
may, at Buyers' election, be part of a like-kind exchange of property covered by
Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code") (a
"Like-Kind Exchange"). If Buyer so elects, Sellers shall cooperate with Buyers
to effect such Like-Kind Exchange, by consenting to and acknowledging assignment
of Buyers' rights under this Agreement to a qualified intermediary, as such term
is defined in Treasury Regulation (S) 1.1031(k)-1(g)(4), or to an exchange
accommodation titleholder under Revenue Procedure 2000-37.
4.8 Effect of TBA on Closing Conditions. To the extent that any
-----------------------------------
party hereto fails to fulfill a closing condition to the other party's
obligation to close (as set forth in Section 4.5 or 4.6, as applicable), and
such failure is caused by actions taken or not taken (when such actions should
have been taken) by the other party pursuant to the TBA, such condition to
closing shall nevertheless be deemed to have been waived.
ARTICLE 5
Representations and
Warranties of Sellers
---------------------
The Sellers hereby jointly and severally make each of the following
representations and warranties:
5.1 Organization, Standing and Qualification. (a) Parent is a
----------------------------------------
corporation validly existing and in good standing under the laws of the State of
Delaware. ▇▇▇▇▇▇▇ is a limited liability company validly existing and in good
standing under the laws of the State of North Carolina and is qualified to
conduct business in the State of Louisiana. Licensing is a limited liability
company validly existing and in good standing under the laws of the State of
North Carolina and is qualified to conduct business where so required and
neither of Sellers is required to be qualified to do business in any other
jurisdiction in connection with the operation of any of the Stations or the
Business; and each of the Sellers has all requisite power and authority and is
entitled to own, lease and operate its properties and to carry on its business
as and in the places such properties are now owned, leased or operated and where
such business is presently conducted. Except as set forth in Schedule 5.1 of
------------
the disclosure schedule delivered by
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Sellers to Buyers concurrently with the execution and delivery hereof and making
express reference to this Agreement (the "Disclosure Schedule"), the operations
of the Stations and the Business, have not been conducted through any direct or
indirect subsidiary, shareholder, member or affiliate of any of Sellers, and
none of the business, assets, properties or rights of or related to any of the
Stations or the Business is held, owned, used or conducted by any shareholder,
member or affiliate of any of Sellers.
5.2 Authority of Sellers. Each of the Sellers has all requisite
--------------------
power and authority to execute, deliver and perform this Agreement and each
other agreement, document and instrument to be executed, delivered or performed
by such of the Sellers in connection with this Agreement (the "Seller
Documents") and to carry out the transactions contemplated hereby and thereby.
This Agreement constitutes, and, when executed and delivered at the Closing,
each other Seller Document will constitute, the legal, valid and binding
obligation of each of the Sellers as is party thereto. All corporate, limited
liability company shareholder and member proceedings and action required to be
taken by each of the Sellers relating to the execution, delivery and performance
of this Agreement and the Seller Documents and the consummation of the
transactions contemplated hereby and thereby shall have been duly taken by the
Closing.
5.3 No Violation. Except for the filing of the Assignment
------------
Application and the granting of the Initial Order and the Final Order, and
except as indicated in Schedule 5.3 of the Disclosure Schedule:
------------
(a) The execution, delivery and performance of this Agreement
and the Seller Documents and the consummation of the transactions contemplated
hereby and thereby, will not (i) conflict with or violate any provision of the
Articles of Organization or Limited Liability Company Operating Agreement of any
of the Sellers, (ii) with or without the giving of notice or the passage of
time, or both, result in a breach of, or violate, or be in conflict with, or
constitute a default under, or permit the termination of, or cause or permit
acceleration under, any agreement or instrument of any debt or obligation to
which any of the Sellers is a party or to or by which it or any of the Purchased
Assets is subject or bound, or result in the loss or adverse modification of any
of the Authorizations or Intangibles, (iii) require the consent of any party to
any agreement or commitment to which either Seller is a party, or to or by which
it or the Purchased Assets is subject or bound, (iv) result in the creation or
imposition of any Lien other than Permitted Liens upon any of the Purchased
Assets, or (v) violate any law, rule or regulation or any order, judgment,
decree or award of any court, governmental authority or arbitrator to or by
which any of the Sellers or any of the Purchased Assets is subject or bound.
(b) No consent, approval or authorization of, or declaration,
filing or registration with, or notice to, any governmental or regulatory
authority or any other third party is required to be obtained or made by any of
the Sellers in connection with the execution, delivery and performance of this
Agreement or the Seller Documents or the consummation of the transactions
contemplated hereby and thereby.
5.4 Financial Statements. Sellers have delivered to Buyer copies of
--------------------
the balance sheets and related statements of income and cash flow of each of the
Stations as at and for the fiscal year ended December 31, 2000, and as at and
for the eight-month period ended August 31, 2001 (the "Financial Statements").
Except for the variations expressly noted in said
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Schedule 5.4 of the Disclosure Schedule, all of the Financial Statements have
------------
been prepared in accordance with generally accepted accounting principles
(except for the absence of footnotes and normal and customary year-end
adjustments), consistently applied and maintained throughout the periods
indicated, and fairly present the financial condition of the Stations as at
their respective dates and the results of operations of the Stations for the
periods covered thereby. Except as disclosed in Schedule 5.4 of the Disclosure
------------
Schedule, such Financial Statements do not contain any items of special or
nonrecurring income or any other income not earned in the ordinary course of
business, and reflect no operations or business other than those of the
Stations, except as expressly specified therein, and include all adjustments,
which consist only of normal recurring accruals, necessary for such fair
presentation.
5.5 Title to and Condition of Purchased Assets. Except for the
------------------------------------------
assets and properties leased to Sellers, and except as set forth on Schedule 5.5
------------
of the Disclosure Schedule, Sellers have good and marketable title to all of the
assets and properties which any of them owns or uses in the operation of any of
the Stations or the Business. Except as set forth on Schedule 5.5 of the
------------
Disclosure Schedule, none of the Purchased Assets is subject to any Lien other
than Permitted Liens. The Purchased Assets are in all material respects in good
operating condition and repair, are reasonably suitable for the purposes
currently used, and are reasonably adequate and sufficient for the operations of
the Stations as currently operated. Sellers enjoy peaceful possession of all
leased real property , including, where relevant, the buildings and improvements
thereon, in conformance with the relevant lease agreement, used in the Business.
5.6 Litigation. Except as set forth in Schedule 5.6 of the
---------- ------------
Disclosure Schedule: there is no action, suit, proceeding, arbitration or
investigation pending, or to the knowledge of any of the Sellers threatened,
against or affecting any of the Sellers in connection with any of the Stations
or the Business or any of the assets, properties, business or employees (in
their capacity as employees) of any of the Stations or the Business or the
transactions contemplated by this Agreement, and there is not outstanding any
order, writ, injunction, award or decree of any court or arbitrator or any
federal, state, municipal or other governmental department, commission, board,
agency or instrumentality to which any of the Stations or any of the Sellers in
connection with any of the Stations or the Business is subject or otherwise
applicable to the Business, or the Purchased Assets, nor is any of them in
default with respect to any such order, writ, injunction, award or decree.
5.7 Compliance; Properties; Authorizations. (a) Except as set forth
--------------------------------------
in Schedule 5.7 of the Disclosure Schedule, each of Sellers and each of the
------------
Stations has complied in all material respects, with all laws, rules,
regulations, ordinances, orders, judgments and decrees applicable to any of the
Stations or any of Sellers, in connection with any of the Stations or the
Business, any of the employees thereof, or any of the Real Properties and/or any
aspect of a Station's operations, including, without limitation, any laws,
rules, regulations, ordinances, codes, orders, judgments or decrees as to
zoning, building requirements or standards, hiring, employment, or
environmental, health and/or safety matters. Each Seller has all material
approvals, certificates, authorizations, consents, licenses, franchises, orders
and permits, including, without limitation, all Authorizations, necessary or
useful to the operation of the Stations, the conduct of the Business and/or the
use of the Purchased Assets and/or each of the Real Properties, all of which are
identified in Schedule 5.7.
------------
-20-
(b) Licensing is the holder of the Commission Authorizations
listed on Schedule 5.7(b) of the Disclosure Schedule. All such Commission
---------------
Authorizations are validly existing authorizations for the operation of the
facilities described therein under the Communications Act of 1934, as amended
(the "Communications Act"). The Commission Authorizations identified in Schedule
--------
5.7(b) of the Disclosure Schedule constitute all of the licenses and
------
authorizations required under the Communications Act or the rules, regulations,
and policies of the FCC in connection with the Business or the operation of the
Stations as currently operated. The Commission Authorizations are in full force
and effect and are unimpaired by any act or omission of any of Sellers or any
members, stockholders, officers, directors, employees or agents of any of
Sellers. There is no condition imposed by the FCC as part of any Commission
Authorization that is neither set forth on the face thereof as issued by the FCC
nor contained in the rules and regulations of the FCC applicable generally to
stations of the type, nature, class or location of the Stations. All FCC
regulatory fees for each of the Stations have been paid, and all broadcast
towers from which any of the Stations operates have been duly registered with
the FCC if such registration is required. Except as set forth on Schedule 5.7(b)
---------------
of the Disclosure Schedule, there is no action pending nor, to the knowledge of
any of the Sellers, threatened by or before the FCC or other body to revoke,
refuse to renew, suspend or adversely modify any of the Commission
Authorizations, or any action which may result in the denial of any pending
application, the issuance of any cease and desist order, or the imposition of
any administrative sanction with respect to any of the Stations or its
operation, except for the Assignment Application before the FCC to transfer the
Commission Authorizations pursuant hereto. Except as set forth on Schedule
--------
5.7(b) of the Disclosure Schedule, there is not pending to the best knowledge of
------
any of the Sellers, any investigation, by or before the FCC, or any order to
show cause, notice of violation, notice of apparent liability, or notice of
forfeiture or complaint by, before or with the FCC against any of Sellers or
members, stockholders, officers, directors, or affiliates of any of Sellers with
respect to the Stations nor, to the knowledge of any of the Sellers, is any of
the foregoing threatened. Each of the Stations is operating, in all material
respects, in compliance with the Commission Authorizations, the Communications
Act, and the current rules, regulations, and policies of the FCC. Sellers have
timely filed all reports, forms and statements required to be filed with the
FCC. All applications for the Authorizations submitted by Sellers were true and
correct when made. None of Sellers has received any notice with respect to any
of the Commission Authorizations or any Station's compliance with the
Communications Act that might cause the FCC not to consent to the assignment of
the Commission Authorizations as contemplated by this Agreement. To the
knowledge of Sellers, no Station is shortspaced to any present or proposed
broadcast station or frequency/channel allotment that is not otherwise fully
consistent with Section 73.215 of the FCC's rules and regulations. No Station is
causing, nor receiving, any interference which the FCC would deem to be
objectionable.
5.8 Schedules. Schedule 5.8(A) of the Disclosure Schedule contains a
--------- ---------------
true, complete and accurate list of the following:
(a) all Real Properties, together with each lease, sublease or
license related to any of the Stations under which any of Sellers holds any
leasehold or other interest or right to the use thereof (the "Real Property
Leases") or pursuant to which any of Sellers has leased, assigned, sublet or
granted any rights therein or with respect thereto;
-21-
(b) all items of machinery, equipment, vehicles, furniture,
fixtures, transmitting towers, transmitters, antennas, spare parts, music
libraries and other tangible personal property owned and used by any of Sellers
in the operation of the Stations or the Business or included in the Purchased
Assets, except for items having a value of less than $10,000, which do not, in
the aggregate, have a total value of more than $50,000;
(c) all trademarks, trademark registrations, and applications
therefor, service marks, service ▇▇▇▇ registrations, and applications therefor,
trade names, patents and patent applications, copyrights and copyright
registrations, and applications therefor, domain names, owned and used by any of
Sellers in the operation of any of the Stations or the Business as currently
conducted; and all contracts, agreements, commitments or licenses relating to
any patent(s), trademark(s), trade name(s), copyright(s), software, know-how,
trade secret(s), proprietary information and other Intangible(s) to which any of
Sellers in the operation of any of the Stations or the Business as currently
conducted is a party or by which any of Sellers in the operation of any of the
Stations or the Business as currently conducted is bound;
(d) all contracts, agreements, commitments, barter agreements,
purchase orders for material reasonably expected to be delivered after the TBA
Commencement Date, leases, licenses or other understandings or arrangements
relating to any of the Stations, the Business or the Purchased Assets and to
which any of Sellers or any of the Stations is a party or by which it or any of
the Sellers or Stations is bound, but excluding (A) purchase orders for
necessary supplies or services made in the ordinary course of business (on
customary terms and conditions and consistent with past practice) involving
payments or receipts by any of Sellers of less than $10,000 in any single case
or series of related orders, and (B) contracts entered into in the ordinary
course of business on customary terms and conditions involving payments or
receipts during the entire life of such contracts of less than $15,000 in the
case of any single contract but not more than $75,000 in the aggregate;
(e) all collective bargaining agreements, all employment and
consulting agreements, and all Employee Benefit Plans and any other employee
benefit plan, agreement, arrangement, commitment and/or practice, to which any
of Sellers is a party or bound and which covers or relates to any of the
employees of any of the Stations;
(f) as of a date no earlier than September 30, 2001, all
receivables of the Stations, together with an aging thereof;
(g) the names and current annual salary rates and commission
schedules of all persons (including independent commission agents) employed or
engaged by any of Sellers in connection with any of the Stations, and showing
separately for each such person the amounts paid or payable as salary, bonus
payments, commissions and direct and indirect compensation for the period from
February 1, 2001 through September 30, 2001; and
(h) all fire, theft, casualty, liability and other insurance
policies insuring any of Sellers in connection with any of the Stations,
specifying with respect to each such policy the name of the insurer, the risk
insured against, the limits of coverage, the deductible amount (if any), the
premium rate and the date through which coverage will continue by virtue of
premiums already paid.
-22-
True and complete copies of all contracts, agreements, plans,
arrangements, commitments and documents currently in effect and to be assumed by
Buyer pursuant to this Section 5.8 or to be performed by Buyer pursuant to
Section 1.5 (to the extent in writing or if not in writing, an accurate summary
thereof), together with any and all current amendments thereto, have been
delivered to Buyer. Schedule 5.8 may be supplemented prior to Closing to
------------
reflect additions or deletions necessitated by actions taken in compliance with
Section 7.1 herein.
Except as set forth in Schedule 5.8(B) of the Disclosure Schedule, all
---------------
of the contracts, agreements and commitments required to be listed pursuant to
this Section 5.8 (other than those which have been fully performed) are in full
force and effect, do not require the consent or approval of any party to the
assignment thereof and will be unaffected by the sale or other transfer of the
Purchased Assets to Buyer. To the knowledge of the Sellers, there is not under
any contract, agreement or commitment required to be listed pursuant to this
Section 5.8, any existing material default or event which, after notice or lapse
of time, or both, would constitute a material default or result in a right to
accelerate or loss of material rights.
5.9 Insurance. The properties and assets of Sellers, which are of an
---------
insurable character and are used or useful in the Business, are insured as set
forth in Schedule 5.8 of the Disclosure Schedule against loss or damage by fire
---------------------------------------
or other risks, and Sellers maintain liability insurance, to the extent and in
the manner and covering such risks as set forth in Schedule 5.8 of the
Disclosure Schedule. The coverage under each such policy of insurance set forth
in Schedule 5.8 of the Disclosure Schedule is in full force and effect, and no
notice of cancellation or nonrenewal with respect to, or disallowance of any
claim under, any such policy has been given to any of the Sellers.
5.10 Absence of Changes or Events. Except as set forth in Schedule
----------------------------
5.10 of the Disclosure Schedule, since February 1, 2001 each of Sellers has
conducted the business of each of the Stations only in the ordinary course in a
manner consistent with past practices. Without limiting the foregoing, since
such date (and with respect to (iv) below as of the date of this Agreement),
neither of Sellers in connection with any of the Stations nor any of the
Stations has, except as set forth on said Schedule 5.10:
(i) incurred any obligation or liability, absolute,
accrued, contingent or otherwise, whether due or to become due, except current
liabilities for trade obligations incurred in the ordinary course of business
and consistent with its prior practice, and except for liabilities, in any case
or in the aggregate, that neither have had nor reasonably could be expected to
have a material adverse affect on the financial condition, assets, or operations
of the Business or any of the Stations;
(ii) sold, transferred, leased to others or otherwise
disposed of any of its assets, except for supplies consumed and inoperative,
obsolete equipment disposed of in the ordinary course of business;
(iii) accepted any prepayment for the sale of air time or
canceled or compromised any substantial debt or claim, or waived or released any
right of substantial value or collected or compromised any accounts receivable
other than in the ordinary course of business consistent with past practice;
-23-
(iv) received any notice from any advertiser that it, nor
has knowledge that any advertiser, intends to cease doing business with any of
the Stations, which, in any case or in the aggregate, has had, or could
reasonably be expected to have, a material adverse effect on the financial
condition, assets, or operations of the Business or any of the Stations;
(v) made any change or changes (in excess of 5% per annum)
in the rate of compensation, commission, bonus or other direct or indirect
remuneration payable, conditionally or otherwise, and whether as bonus, extra
compensation, pension or severance or vacation pay or otherwise, to any
director, officer, employee, salesman, representative or agent, except for such
changes that are expressly set forth in employment contracts or agreements that
have been disclosed and provided to Buyer pursuant to Section 5.8;
(vi) entered into any transaction, contract or commitment
other than in the ordinary course of business on customary terms and conditions,
or paid or agreed to pay any brokerage, finder's fee, or other compensation in
connection with, or incurred any severance pay obligations by reason of, this
Agreement or the transactions contemplated hereby; or
(vii) entered into any agreement or made any commitment to
take any of the types of actions described in any of subsections (i), (ii),
(iii), (v) or (vi) above.
5.11 Intangibles. Except as set forth in Schedule 5.11 of the
----------- -------------
Disclosure Schedule, and except in regard of the Site (to which Sellers make no
representation), Sellers own or possess all authorizations necessary from the
FCC to use the call letters "WRNO-FM" and "KMEZ(FM)", together with all
copyrights, trademarks, trade names, logos, slogans, jingles, service marks and
other proprietary rights and Intangibles used in the operation of any of the
Stations. None of the Sellers has any knowledge of any infringement or
unlawful, unauthorized or conflicting use of any of the foregoing, or of the use
of any call letters, slogan or logo by any broadcast station in any of the areas
served by any of the Stations which may be confusingly similar to any of the
call letters, slogans and logos currently used by any of the Stations. To the
Sellers' knowledge, none of Sellers or the Stations is infringing upon or
otherwise acting adversely to any copyright, trademark, trademark right, service
▇▇▇▇, service ▇▇▇▇ right, trade name, service name, slogan, call letter, logo,
jingle, license or any other proprietary right owned or used by any other person
or entity.
5.12 Environmental Matters.
---------------------
(a) Except as set forth in Schedule 5.12 of the Disclosure
-------------
Schedule, neither of Sellers, nor, to the knowledge of the Sellers, any prior
owner, tenant or occupant of any part of any of the Real Properties, has at
present or at any time stored, treated, released, disposed of or discharged any
Hazardous Substance (as hereinafter defined) on, about, from or affecting any of
the Real Properties in any material amounts and to the knowledge of the Sellers,
no Seller has any liability which is based upon or related to any environmental
condition under or about any of the Real Properties, and, to the knowledge of
the Sellers, there is no reasonable basis for any such liability arising; and,
to the knowledge of the Sellers, none of the Real Properties contains any
asbestos or asbestos-containing materials or any underground storage
-24-
tank. The radio frequency emissions from each of the Stations' main antenna
comply with the FCC's guidelines regarding RF radiation.
(b) Except as set forth in Schedule 5.12 of the Disclosure
-------------
Schedule, neither of Sellers, nor, to the knowledge of the Sellers, any prior or
current owner, tenant or occupant of any part of any of the Real Properties, has
received (i) any notification or advice from or given or been required to have
given any report or notice to any governmental agency or authority or any other
person or entity involving the use, management, handling, transport, treatment,
generation, storage, spill, escape, seepage, leakage, spillage, emission,
release, discharge, remediation or clean-up of any Hazardous Substance on or
about any of the Real Properties or caused by any of Sellers or any affiliate
thereof (a "Hazardous Discharge"), or (ii) received any complaint, order,
citation or notice with regard to a Hazardous Substance or any other
environmental, health or safety matter affecting any of the Real Properties or
the Business or operations conducted thereat (an "Environmental Complaint"),
whether under the federal Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") or under any other federal, state or local law,
ordinance, rule or regulation.
5.13 Employee Benefits.
-----------------
(a) All Employee Benefit Plans in which any employee of any of
the Stations participates are listed in Schedule 5.8 of the Disclosure Schedule
------------
and, to the best of Sellers' knowledge, each, in all material respects, conform
to, and the administration thereof is in compliance with, all applicable laws
and regulations. To the best of Sellers' knowledge, any Employee Benefit Plan
intended to be qualified under Section 401(a) of the Code is so qualified,
continues to be qualified, and complies with all applicable requirements of
ERISA. Sellers know of no fact or set of circumstances that has adversely
affected, or is reasonably likely to affect adversely, the qualification of such
Employee Benefit Plan. Neither the operation or the administration of any
Employee Benefit Plan, nor the sale of the Purchased Assets under this
Agreement, will result in Buyer incurring or suffering any liability, nor will
Buyer incur any liability for, with respect to or on account of any Employee
Benefit Plan. None of Sellers participates in, maintains or contributes to or
has any liability or obligation under or with respect to any multi-employer
employee benefit plan as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (whether by reason of being a
member of an affiliated group of companies, one of which maintains such a plan,
or otherwise), nor has any of Sellers participated in, maintained, contributed
to or incurred any liability or obligation with respect to any such plan. Each
of Sellers has complied in all material respects with applicable reporting and
disclosure requirements for each Employee Benefit Plan.
(b) Schedule 5.13(b) of the Disclosure Schedule lists each
present and former employee of any of Sellers or the Business who is currently
claiming or is entitled to any health care related benefits mandated by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), or
any of the rules or regulations thereunder.
(c) Neither Sellers nor either of the Stations has, since
February 1, 2001, encountered any labor union organizing activity or had any
actual or threatened employee strike, work stoppage, slowdown or lockout.
-25-
5.14 [Intentionally Omitted]
---------------------
5.15 Taxes. All taxes of Sellers that could give rise to a Lien
-----
(other than a Permitted Lien) on the Purchased Assets in the hands of the Buyer
have been paid in full.
5.16 Records. The FCC Logs and Business Records of each of the
-------
Stations are complete and correct in all material respects.
5.17 Receivables. Except as set forth in Schedule 5.17 of the
----------- -------------
Disclosure Schedule, all accounts receivable of any of Sellers in respect of any
of the Stations have arisen only from bona fide transactions with unrelated
third parties in the ordinary course of business.
5.18 Disclosure. No representation or warranty by any of the Sellers
----------
contained in this Agreement nor any written statement or certificate furnished
or to be furnished by or on behalf of any of the Sellers to Buyers or any of
their representatives in connection with this Agreement contains or will contain
any untrue statement of a material fact.
ARTICLE 6
Representations and Warranties of Buyer
---------------------------------------
Buyer represents and warrants to Seller that:
6.1 Organization and Standing. Each of Buyer and License Co. is a
-------------------------
limited liability company validly existing and in good standing under the laws
of the State of Delaware. On the Closing Date, Buyer will be qualified to do
business in Louisiana as a foreign limited liability company.
6.2 Authority of Buyers. Each of the Buyers have all requisite
-------------------
limited company power and limited liability company authority to execute,
deliver and perform this Agreement and each other agreement, document and
instrument to be executed, delivered or performed by such of the Buyers in
connection with this Agreement (the "Buyer Documents") and to carry out the
transactions contemplated hereby and thereby. This Agreement constitutes, and,
when executed and delivered at the Closing, each other Buyer Document will
constitute, the legal, valid and binding obligation of Buyers. All limited
liability company proceedings and limited liability company action required to
be taken by Buyers relating to the execution, delivery and performance of this
Agreement and the Buyer Documents and the consummation of the transactions
contemplated hereby and thereby shall have been duly taken by the Closing.
6.3 Litigation. Except for administrative rule making or other
----------
proceedings of general applicability to the broadcast industry and except for
the Assignment Application contemplated by this Agreement and matters pertaining
thereto, and except for any matter or item covered by Article 5 hereof: there
is no action, suit or proceeding pending, or to the knowledge of Buyers
threatened, against Buyers, which, in any case or in the aggregate, materially
adversely affects the ability of Buyers to consummate the transactions
contemplated hereby.
6.4 No Violation. Except for the filing of the Assignment
------------
Application and the granting of the Initial Order and the Final Order, and
except for the consent of Buyer's lenders
-26-
which will be obtained in connection with the Closing and for any item or matter
covered by Article 5 hereof:
(a) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, will not (i)
conflict with or violate any provision of the Certificate of Formation or
Limited Liability Company Agreement of either of Buyers, (ii) with or without
the giving of notice or the passage of time, or both, result in a breach of, or
violate, or be in conflict with, or constitute a default under, or permit the
termination of, or cause or permit acceleration under, any material contract to
which Buyer is a party or (iii) violate any law, rule or regulation or any
order, judgment, decree or award of any court, governmental authority or
arbitrator to or by which Buyer is subject or bound.
(b) No consent, approval or authorization of, or declaration,
filing or registration with, or notice to, any governmental or regulatory
authority or any other third party is required to be obtained or made by Buyer
in connection with the execution, delivery and performance of this Agreement or
the Buyer Documents or the consummation of the transactions contemplated hereby
and thereby.
6.5 Qualification. There are no facts regarding either of Buyers
--------------
that would, under existing law and the existing rules, regulations, policies and
procedures of the FCC disqualify License Co. as an assignee of the Commission
Authorizations or as the owner and operator of the Stations. Notwithstanding
the foregoing, it is acknowledged and agreed by the parties hereto that Buyer is
not making any representation or warranty with respect to (i) any future
amendment of Section 73.3555 of the Commission's Rules and Regulations or (ii)
any existing or future rule, policy or action of the Commission relating to
market shares of revenue or its related practice of "flagging" applications.
There is no action, suit, notice of forfeiture or proceeding pending or to
Buyer's knowledge threatened against Buyer or License Co. which would be
reasonably likely to materially adversely impair the qualifications of License
Co. to become a licensee of the Stations.
ARTICLE 7
Certain Covenants
-----------------
7.1 Conduct of Business. During the period from the date of this
-------------------
Agreement to and including the Closing Date, Sellers shall cause the operations
of the Stations and the Business (other than those operations conducted by Buyer
pursuant to the terms of the TBA) to be operated and conducted in the ordinary
and usual course of business and consistent, in all material respects, with past
practices. Without limiting the foregoing, prior to the Closing, Sellers,
without the prior written consent of Buyer, shall not and shall not permit any
of the Stations to:
(a) by any act or omission surrender, modify adversely, forfeit,
or fail to renew under regular terms any of the Authorizations, or give the FCC
grounds to institute any proceeding for the revocation, suspension or
modification of any of the Commission Authorizations, or fail to prosecute with
due diligence any pending application with respect to any of the Commission
Authorizations;
-27-
(b) dissolve or liquidate or sell, transfer, lease or otherwise
dispose of any Purchased Assets, other than supplies consumed, or inoperative or
obsolete property disposed of and replaced, in the ordinary and customary course
of business, or obligate itself to do so;
(c) amend, modify, change, alter, terminate, rescind or waive
any rights or benefits under any contract, agreement or commitment required to
be listed, or enter into any contract, agreement or commitment which, if in
existence as of the date of this Agreement would have been required to be
listed, under Schedule 5.8 of the Disclosure Schedule;
------------
(d) fail to maintain the Purchased Assets and the Real
Properties in their current repair and condition, reasonable and ordinary wear
and tear excepted; or cancel or fail to renew any of the current insurance
policies or any of the coverage thereunder maintained for the protection of any
of the Stations or the Purchased Assets; and
(e) except as expressly contemplated by the TBA, perform, take
any action or incur or permit to exist any of the acts, transactions, events or
occurrences of the type described in any of clauses (i), (ii), (iii), (v), (vi)
or (vii) of Section 5.10 hereof which would have been inconsistent with the
representations and warranties set forth in Section 5.10 hereof had the same
occurred after the Balance Sheet Date and prior to the date hereof.
7.2 Operations. During the period from the date of this Agreement to
----------
the Closing Date, Sellers shall have sole responsibility for the Stations and
their operations (other than those operations conducted by Buyer pursuant to the
terms of the TBA), and during such period, Sellers shall:
(a) Operate the Stations (other than those operations conducted
by Buyer pursuant to the terms of the TBA) in a manner consistent with the
normal and prudent operation of commercial broadcast radio station of similar
size and format and in accordance with the rules and regulations of the
Commission and Authorizations and the TBA, and file all ownership reports,
employment reports and other documents required to be filed during such period.
(b) Deliver to Buyer within fourteen (14) days after the receipt
thereof copies of any Commission inquiries reasonably expected to lead to a
forfeiture or loss of license.
7.3 Changes in Information. During the period from the date of this
----------------------
Agreement to the Closing Date, Sellers shall give Buyer prompt written notice of
any material change in, or any of the information contained in, the
representations and warranties made in or pursuant to this Agreement or of any
event or circumstance which, if it had occurred on or prior to the date hereof,
would cause any of such representations or warranties not to be true and correct
in any material respect.
7.4 Going Off the Air. If any of the Stations goes off the air for
-----------------
any length of time for any engineering reason, act of God, or any other reason,
Sellers shall immediately notify Buyer and shall take all reasonable steps to
begin broadcasting as soon as possible. If such Station is unable to begin and
to continue broadcasting with signal coverage and strength that
-28-
reasonably approximates its current signal coverage and strength within one
hundred twenty (120) hours, Buyer may, at its option, terminate this Agreement
without incurring any liability to any of the Sellers, provided that to be
effective such notice from Buyer to terminate this Agreement must be delivered
to Sellers within ten (10) business days after Buyer shall receive written
notice from Sellers that normal operations of such Station shall have resumed.
7.5 Restrictions on Buyers. Except as provided in the TBA, nothing
----------------------
contained in this Agreement shall give Buyers any right to control the
programming or operations of the Stations prior to the Closing Date and Sellers
shall have complete control of the programming and operation of the Stations
between the date hereof and the Closing Date and shall operate the Stations in
conformity with the public interest, convenience and necessity and with all
other applicable requirements of law.
7.6 Access to Information. During the period from the date of this
---------------------
Agreement to the Closing Date, Buyer and its accountants, counsel and other
representatives, shall be given reasonable and continuing access during normal
business hours and on reasonable prior notice to all of the facilities,
properties, books and records of the Stations, and they shall be furnished with
such documents and information with respect to the affairs of the Stations as
from time to time may reasonably be requested, and, in furtherance thereof,
Buyer may retain an engineering firm of its own choosing at its own expense to
conduct engineering due diligence into the adequacy, operation and condition of
the Stations, and the transmission, receiving, broadcast, studio and production
machinery, equipment, towers and facilities of and/or relating to the Stations,
and their compliance with the standards of applicable law, provided that neither
Buyers nor their agents do not interfere in any material respect with Sellers'
operation of the Stations, provided that nothing herein shall restrict the
access to be afforded to Buyer pursuant to the TBA.
7.7 Preservation of Business. Subject to the provisions of the TBA,
------------------------
during the period from the date of this Agreement to the Closing Date, Sellers
shall use their reasonable commercial efforts to preserve intact the goodwill of
the Stations and the Business, and the relationships of Sellers and the Stations
with advertisers, customers, suppliers, employees, contracting parties,
governmental authorities and others having business relations with any of
Sellers or the Stations.
7.8 Brokerage or Finder's Fee. Buyer represents and warrants to
-------------------------
Sellers, and Sellers represent and warrant to Buyer, that no person or entity,
except as set forth below, is entitled to any brokerage commissions or finder's
fees in connection with the transactions contemplated by this Agreement as a
result of any action taken by the representing party or any of the affiliates,
officers, directors or employees thereof. Except as expressly set forth below,
Sellers shall be solely and exclusively responsible for all commissions, finders
fees or other compensation claimed by any person or entity claiming to have
dealt with or for Sellers, and Buyer shall be solely and exclusively responsible
for all commissions, finder's fees or other compensation claimed by any person
or entity claiming to have dealt with or for Buyer. If the Closing occurs,
Buyer shall be responsible for payment of a fee in the amount of $400,000 to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ & Co.
7.9 Sales and Other Taxes. Sellers and Buyer shall each pay 50% of
---------------------
all sales taxes, transfer taxes and intangibles taxes and similar government
charges, filing fees and
-29-
recording and registration fees applicable to the transactions contemplated by
this Agreement, including, without limitation, all taxes and similar charges, if
any, payable upon the transfer of title to any Purchased Assets. Taxes,
governmental charges or fees incurred upon the granting or recording of
mortgages or deeds of trust by Buyer to Buyer's lenders shall be the
responsibility of Buyer. Buyer and ▇▇▇▇▇▇▇ will cooperate to prepare and file
with the proper public officials, as and to the extent necessary, all
appropriate sales tax exemption certificates or similar instruments as may be
necessary to avoid the imposition of sales, transfer and similar taxes on the
transfer of Purchased Assets pursuant hereto. The provisions of this Section 7.9
shall not apply to filing and grant fees associated with the Assignment
Application. The payment of such fees shall be governed by Section 3.2 hereof.
7.10 No Shop. Each of the Sellers agrees that from after the date
-------
hereof and until the earlier of the termination of this Agreement in accordance
with the terms hereof or twelve (12) months after the date hereof, none of the
Sellers will sell, transfer or otherwise dispose of any of the Stations or any
assets (except for dispositions of assets in the ordinary course of business as
expressly permitted elsewhere in this Agreement) of any of Sellers to be
included in the Purchased Assets (or any rights in any such stock or assets),
and the Sellers will not enter into or pursue any discussions, or enter into any
agreements (oral or written), with respect to, the sale or purchase of any of
the Stations, or any option or warrant with respect to such sale, lease or other
disposition of all or any portion of any of the Purchased Assets. The
provisions of this Section 7.10 shall not be deemed to limit or negate any other
obligations of the Sellers under this Agreement.
7.11 Bulk Transfer Laws. The parties do not believe that any bulk
------------------
transfer or fraudulent conveyance statute applies to the transactions
contemplated by this Agreement. Sellers agree to indemnify and hold Buyers
harmless against any claim by any creditor of any of Sellers or any claimant
against either or both of Buyers as a result of a failure to comply with any
such statute.
7.12 Environmental Notices. In the event that, on or prior to the
---------------------
Closing, any of the Sellers receives any notice or advice from any governmental
agency or authority or any other source with respect to a Hazardous Discharge or
presence of a Hazardous Substance, they shall immediately notify Buyer and
furnish to Buyer a copy of all such notices, correspondence and other
documentation. ▇▇▇▇▇▇▇ shall promptly conduct all investigations, studies,
sampling, testing and remediation which may be required in connection with any
such notice or advice under any applicable federal, state and local laws,
ordinances, rules and regulations.
7.13 Limited Audit Financial Statements. Sellers shall use
----------------------------------
reasonable commercial efforts to cooperate with the reasonable requests of
Buyer in connection with the preparation after the date hereof of financial
statements ("Limited Audited Financial Statements") for the Stations, for such
period(s) as Buyer shall request, together with the report thereon (unqualified
in any respect) consistent with said Limited Audit Procedures, of certified
public accountants selected by Buyer (the "Auditors"), which report shall be
addressed directly to Buyer. The fees, costs and expenses of such Auditors for
such limited audit of such Limited Audited Financial Statements shall be borne
by Buyer and Buyer shall reimburse Sellers for any reasonable out-of-pocket
costs incurred by Sellers in cooperating with respect to such Limited
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Audited Financial Statements. Buyer shall not cause any material disruption to
the Sellers' operations in its preparation of Limited Audited Financial
Statements.
7.14 Public Announcements. The parties will coordinate and consult
--------------------
with one another and obtain the prior approval of the other party, which shall
not be unreasonably withheld, before making any press release or other public
announcement concerning the transactions contemplated under this Agreement;
provided, however, that a party may, without the prior written consent of the
-------- -------
other party, issue such press release or make such public statement as may be
required by any law, rule, regulation, ordinance, order, judgment or decree or
any listing agreement with a national securities exchange to which it or any of
its affiliates is a party if it has used all reasonable efforts to consult with
the other party and to obtain such party's consent but has been unable to do so
in a timely manner. Nothing in this Section shall prevent either party from
disclosing information to its accountants, attorneys, lenders, investors, or
other advisors ("Representatives"), who shall be advised of the confidential
nature of such information and such party so disclosing such information shall
be responsible for any unauthorized disclosure by any of its Representatives.
7.15 Nonsolicitation. For a period of one (1) year from the Closing
---------------
Date hereof, no Seller shall or shall permit any person or entity directly or
indirectly (alone or together with others) controlling, controlled by,
affiliated with or related to, any of the Sellers to, directly or indirectly
(including through ownership, management, operation or control of any other
person or entity, or participation in the ownership, management, operation or
control of any other person or entity, or by being connected with or having any
interest in, as a stockholder, agent, consultant, partner or otherwise, any
other person or entity) without the express prior written consent of Buyer,
directly or indirectly employ or retain or attempt to employ or retain or
knowingly arrange or solicit to have any other person or entity employ or
retain, whether as an employee or consultant, any person who becomes a
Transferred Employee or who is in the employ of Buyer or any of Buyer's
affiliates at the Stations at any time while the License is in effect other than
those employees who have resigned at least 30 days prior to any such employment
or solicitation by any of the Sellers.
ARTICLE 8
Termination
-----------
8.1 Termination. This Agreement may be terminated at any time prior
-----------
to Closing as follows:
(a) by mutual written consent of Buyer and ▇▇▇▇▇▇▇;
(b) by written notice from Buyer, (i) if none of Buyers is then
in material breach of this Agreement, (ii) if any of the Sellers has continued
in breach of this Agreement for thirty (30) days after written notice of such
breach from Buyer is received by any of the Sellers; such breach is not cured by
the last day of such 30-day period (the "Cure Period") (which date shall be the
new Closing Date if that date occurs after the date that would be the Closing
Date pursuant to Section 4.1); provided, however, that if such breach cannot be
reasonably cured within such period but can be cured before the Closing Date,
and if diligent efforts to cure promptly commence, then the Cure Period shall
continue as long as such diligent
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efforts to cure continue, but not beyond the Closing Date, and (iii) such
continuing breach shall have, or could reasonably be expected to have, a
Material Adverse Effect;
(c) by written notice from ▇▇▇▇▇▇▇, if (i) none of the Sellers
is then in material breach of this Agreement, (ii) any of the Buyers has
continued in breach of this Agreement for thirty (30) days after written notice
of such breach from ▇▇▇▇▇▇▇ is received by any of the Buyers, and such breach is
not cured by the end of the Cure Period; provided, however, that if such breach
cannot be reasonably cured within such period but can be cured before the
Closing Date, and if diligent efforts to cure promptly commence, then the Cure
Period shall continue as long as such diligent efforts to cure continue, but not
beyond the Closing Date, provided further that, in the event of a default by
Buyer in payment of the Purchase Price hereunder, in no event will the Cure
Period extend for more than 15 days and (iii) such continuing breach shall have,
or could reasonably be expected to have, a material adverse effect on Buyer's
ability to consummate the transactions contemplated hereby;
(d) by written notice by Buyer to ▇▇▇▇▇▇▇, or by ▇▇▇▇▇▇▇ to
Buyer, if the FCC denies the Assignment Application;
(e) as provided in Section 3.4;
(f) as provided in Section 10.1;
(g) by written notice of ▇▇▇▇▇▇▇ to Buyer if the Closing shall
not have been consummated on or before the date twelve months after the date of
this Agreement provided that none of the Sellers are then in breach or default;
or
(h) by written notice of Buyer to ▇▇▇▇▇▇▇ if the Closing shall
not have been consummated on or before the date twelve months after the date of
this Agreement provided that none of the Buyers are then in breach or default;
8.2 Effect of Termination.
---------------------
Upon termination of this Agreement, each party shall thereafter remain
liable for breach of this Agreement prior to such termination, subject, however,
to Section 8.4 hereof.
8.3 Specific Performance. The Sellers agree that the Purchased
--------------------
Assets include unique property that cannot be readily obtained on the open
market and that Buyers will be irreparably injured if this Agreement, including
Section 7.15, is not specifically enforced. Therefore, Buyers shall have the
right specifically to enforce the performance of the Sellers under this
Agreement without the necessity of posting any bond or other security, and the
Sellers hereby waive the defense in any such suit that Buyers have an adequate
remedy at law and agree not to interpose any opposition, legal or otherwise, as
to the propriety of specific performance as a remedy. In addition, if any
dispute arises concerning action in violation of any provision of Section 7.15,
the Sellers agree that Buyer may seek an injunction restraining such action
pending determination of such controversy and that no bond or other security
shall be required in connection therewith. The remedy of specifically enforcing
any or all of the provisions of this Agreement in accordance with this Section
8.3 shall not be exclusive of any other rights and
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remedies which Buyers may otherwise have, all of which rights and remedies shall
be cumulative.
8.4 Liquidated Damages. If any of the Sellers terminates this
------------------
Agreement due to Buyer's failure to consummate the Closing on the Closing Date
in accordance with this Agreement or if this Agreement is otherwise terminated
by any of the Sellers pursuant to Section 8.1(c), then Buyer shall pay ▇▇▇▇▇▇▇
as the sole and exclusive remedy of the Sellers (or any of them) and as
liquidated damages an amount equal to Five Million U.S. Dollars ($5,000,000), as
such amount may be reduced pursuant to Section 14(c) of the TBA, which payment
is inclusive of (and not in addition to) the draw proceeds of the Letter of
Credit to the extent remitted to any of the Sellers. It is understood and
agreed that such liquidated damages amount represents Buyer's and ▇▇▇▇▇▇▇'▇
reasonable estimate of actual damages and does not constitute a penalty, and
that none of Buyers shall have any other liability or obligation whatsoever
arising out of or in connection with this Agreement or the TBA if the Closing
shall not occur.
ARTICLE 9
Indemnification
---------------
9.1 Obligation to Indemnify. (a) Following the Closing, Buyer
-----------------------
hereby agrees to save, indemnify and hold harmless Sellers, and the directors,
officers and managers of each of Sellers (collectively with Sellers, the "Seller
Indemnitees"), from and against, and shall on demand reimburse the Seller
Indemnitees for:
(i) any loss, liability, damage, or deficiency suffered or
incurred by any of the Seller Indemnitees by reason of or in connection with any
of the Assumed Obligations, including any failure by Buyer to comply with the
Obligations Undertaking;
(ii) any and all loss, liability, damage or deficiency
suffered or incurred by any of the Seller Indemnitees by reason of any
misrepresentation or breach of warranty by Buyers or nonfulfillment of any
covenant or agreement to be performed or complied with by Buyers under this
Agreement or in any agreement, certificate, document or instrument executed by
any of Buyers and delivered to Sellers pursuant to or in connection with this
Agreement;
(iii) any and all loss, liability, damage, or deficiency
suffered or incurred by any of the Seller Indemnitees by reason of the operation
by Buyer of the Stations after the Closing;
(iv) any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable
attorneys' fees, incident to any of the foregoing, or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing any of the obligations under this Section 9.1(a).
(b) Following the Closing, the Sellers hereby jointly and
severally, agree to save, indemnify and hold harmless Buyers, and the officers,
managers and members of each of Buyers (collectively with Buyers, the "Buyer
Indemnitees"), from, against and in respect of, and shall on demand reimburse
the Buyer Indemnitees for:
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(i) any and all loss, liability, damage or deficiency
suffered or incurred by any of the Buyer Indemnitees by reason of any
misrepresentation, breach of warranty or nonfulfillment of any covenant or
agreement to be performed or complied with by any of the Sellers under this
Agreement or any agreement, certificate, document or instrument executed by any
of the Sellers and delivered to any of Buyers pursuant to or in connection with
this Agreement;
(ii) any loss, liability, damage or deficiency suffered or
incurred by any of the Buyer Indemnitees by reason of or in connection with any
of the Excluded Liabilities;
(iii) any and all loss, liability or damage suffered or
incurred by any of the Buyer Indemnitees in respect of or in connection with any
and all debts, liabilities and obligations of, and any and all violation of
laws, rules, regulations, codes or orders by any of Sellers, direct or indirect,
fixed, contingent, legal, statutory, contractual or otherwise, which exist at or
as of the Closing Date or which arise after the Closing Date but which are based
upon or arise from any act, transaction, circumstance, sale or providing of air
time, goods or services, state of facts or other condition which occurred or
existed, or the content of any program, advertisement or transmission
broadcasted or aired, on or before the TBA Commencement Date, whether or not
then known, due or payable, except to the extent specifically assumed by Buyer
pursuant to the Obligations Undertaking;
(iv) any and all loss, liability or damage suffered or
incurred by any of the Buyer Indemnitees in respect of or in connection with any
Employee Benefit Plan; and
(v) any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including, without
limitation, reasonable attorneys' fees, incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing any of the obligations under this Section
9.1(b).
9.2 Survival and Other Matters. (a) Each representation, warranty,
--------------------------
indemnity, covenant and agreement of any of the parties hereto shall survive the
Closing; provided, however, that no party shall be entitled to assert claims
against any other for (x) misrepresentations or breach of warranty, covenant or
agreement under or pursuant to this Agreement unless the party asserting such
claim shall notify the other in writing of such claim within twelve (12) months
after the Closing Date; provided, however, that the foregoing twelve (12) month
limitation on survival shall not apply to claims that may be asserted by a party
hereto as a result of or arising out of (x) the actions, claims or demands of
any party other than the party to this Agreement asserting such claim, (y) any
of the Excluded Liabilities or (z) any of the Assumed Obligations (claims under
any of clauses (x), (y) or (z) being referred to as "Third Party Claims"), and
such Third Party Claims may be asserted at any time within three (3) years after
the Closing Date. Notwithstanding the foregoing, in no event shall the Sellers,
on the one hand, or Buyers, on the other hand, have any liabilities under or
pursuant to this Agreement (x) for any misrepresentations or breaches of
warranties, covenants or agreements contained herein (other than in respect of
Third Party Claims) until such liabilities shall exceed $75,000 in the
aggregate, at which time such indemnifying party shall be fully liable for all
such liabilities,
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including the first $75,000 or (y) in excess of Three Million Five Hundred
Thousand Dollars ($3,500,000).
(b) Anything to the contrary in this Agreement notwithstanding,
Buyer shall be solely and exclusively responsible and liable for all obligations
of any of Buyers, and License Co. shall not have or incur any liability
whatsoever, arising out of this Agreement or any of the transactions
contemplated hereby.
(c) The amount of any and all loss, liability, damage or
deficiency suffered by an indemnified party and subject to indemnification under
this Section 9 shall be reduced by the net amount recovered by the indemnified
party (after deducting all attorneys' fees, expenses, and other out-of-pocket
costs of recovery) from any insurer or other third party.
9.3 Indemnification Sole Remedy. After Closing, except with respect
---------------------------
to breaches or violations of Section 7.15 hereof, the right to indemnification
pursuant to this Article 9 shall be the sole and exclusive remedy of any party
in connection with any breach by another party of its representations,
warranties, or covenants, in lieu of any remedy to which any party may otherwise
be entitled as a result of any such breach.
9.4 Provisions Regarding Indemnification.
------------------------------------
(a) In connection with claims for indemnification or to be held
harmless hereunder arising out of actions, suits or proceedings brought against
an indemnified party by third parties, the following shall be applicable:
(i) The indemnified party shall give prompt written notice
to the indemnifying parties of any action, suit or proceeding brought against
the indemnified party by a third party, which gives rise to a claim by the
indemnified party against the indemnifying parties based on the indemnity
agreements contained in this Agreement and copies of all pleadings relating
thereto; provided, however, that the failure to so notify the indemnifying party
shall not relieve the indemnifying party from its obligation to indemnify the
indemnified party in such action, suit or proceeding except to the extent the
failure to notify has materially prejudiced the indemnifying party's ability to
defend the claim or proceeding.
(ii) In the event any action, suit or proceeding is brought
against the indemnified party, with respect to which any of the indemnifying
parties may have liability under the indemnity agreements contained herein, the
indemnifying party shall have the right, subject to the provisions of this
Section 9.3, to defend the action, suit or proceeding, with counsel reasonably
acceptable to the indemnified party, or compromise, settle or otherwise dispose
of the same, all at the indemnifying parties' sole cost and expense. The
indemnified party shall have the right to employ its own counsel in any such
case, and the fees and expenses of such counsel shall be at the indemnified
party's own expense unless (A) the employment of such counsel and the payment of
such fees and the expenses shall have been authorized in writing by the
indemnifying parties, in their sole discretion, in connection with the defense
of such action, suit or proceeding, or (B) such indemnified party shall have
reasonably concluded that there may be one or more defenses available to it that
are in conflict with one or more of those available to any of the indemnifying
parties, or (C) the indemnifying parties fail within a
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reasonable time to employ counsel to represent the indemnified party, in the
latter of which events the indemnifying parties shall not have the right to
defend such action, suit or proceeding on behalf of the indemnified party. The
indemnified party shall be kept informed of such action, suit or proceeding at
all stages thereof whether or not it is so represented. Each party shall make
available to the other party and its attorneys and accountants all books and
records of such party necessary or useful to defend or compromise such action,
suit or proceeding.
(b) Notwithstanding the foregoing provisions of this Section
9.3, the indemnifying parties shall have no right to defend any action, suit or
proceeding or compromise, settle or otherwise dispose of the same if:
(i) such action, suit or proceeding is brought by or
before the FCC;
(ii) such action, suit or proceeding seeks injunctive or
other equitable relief against the indemnified party; or
(iii) any of the indemnifying parties is then in default in
any of the material obligations thereof under this Agreement.
(c) If an indemnified party fails to comply with any of its
obligations under this Section 9.4, the indemnifying parties may offset against
the indemnification liability otherwise payable by the indemnifying parties to
the indemnified party the amount of damages actually suffered by the
indemnifying parties as a result of such default.
(d) If an indemnifying party is otherwise entitled to control
the settlement of an action, suit or proceeding then, subject to the
requirements and limitations of this Section 9.3, the indemnifying party will be
entitled to control such settlement only if (i) the terms of such settlement
require no more than the payment of money (i.e., such settlement does not
require any indemnified party to admit any wrong doing or take or refrain from
taking any action), (ii) the full amount of such monetary settlement is paid by
the indemnifying party, and (iii) the indemnifying party receives as part of
such settlement a legally binding and enforceable unconditional satisfaction
and/or release, in form and substance reasonably satisfactory to the
indemnifying party, providing that the action, suit or proceeding and any
claimed liability or obligation of the indemnifying party with respect thereto
is being fully satisfied by reason of such settlement and that the indemnifying
party is being released from any and all obligations or liabilities it may have
with respect thereto.
(e) No indemnifying party shall have any right to defend any
such action, suit or proceeding if the indemnifying party does not
unconditionally acknowledge in writing, within a reasonable period of time after
any indemnified party gives notice of such action, suit or proceeding, that each
of the indemnifying parties is obligated to indemnify the indemnified party in
full with respect to such action, suit or proceeding as provided in Section 9.1
hereof.
(f) Buyer expressly waives any and all rights of set off or
deduction in respect of any and all amounts due under the Note, whether such
rights arise out of or in
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connection with this Agreement, the TBA, at common law, in equity or under other
applicable law.
ARTICLE 10
Risk of Loss
------------
10.1 Risk of Loss. Except to the extent expressly provided otherwise
------------
in the TBA, or caused by actions taken or not taken (when such actions should
have been taken) by any of the Buyers either pursuant to this Agreement or the
TBA or in breach of this Agreement or the TBA, (a) the risk of loss, damage or
destruction to the Purchased Assets and/or the Real Properties from fire or
other casualty or cause, shall be borne by Sellers at all times up to the
Closing; and (b) it shall be the responsibility of ▇▇▇▇▇▇▇ to repair or cause to
be repaired and to restore the affected property to its condition prior to any
such loss, damage or destruction. In the event of any such loss, damage or
destruction, the proceeds of any claim for any loss payable under any insurance
policy with respect thereto shall be used to repair, replace or restore any such
property to its former condition subject to the conditions stated below. In the
event that property reasonably required for the normal operation of any of the
Stations is not repaired, replaced or restored prior to the Closing, unless such
damage was caused in whole or in material part by Buyer, including pursuant to
Buyer's use of the Stations under the TBA, Buyer, at its sole option, upon
written notice to Sellers: (a) may elect to postpone Closing until such time as
the property has been repaired, replaced or restored, or (b) may elect to
consummate the Closing and accept the property in its then condition, in which
event Seller shall assign to Buyer all proceeds of insurance theretofore, or to
be, received, covering the property involved; and if Buyer shall extend the time
for Closing pursuant to clause (a) above, and the repairs, replacements or
restorations are not completed within sixty (60) days after the later of the
date on which Final Order for the Stations has come into existence and effect or
March 31, 2002, Buyer may terminate this Agreement by giving written notice
thereof to Sellers.
ARTICLE 11
Miscellaneous
-------------
11.1 Binding Agreement. All the terms and provisions of this
-----------------
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their successors and permitted assigns.
11.2 Assignment. This Agreement and all rights of Buyers shall be
----------
assignable by Buyers to one or more subsidiaries or affiliates of Buyer, prior
to the Closing upon prior notice to Sellers, and may be collaterally assigned to
institutional lenders to Buyer, and, after the Closing may be assigned by Buyers
in any manner they deem appropriate, in each case without the consent of any of
the Sellers. This Agreement and all rights of Sellers shall be assignable by
Sellers to one or more of its affiliates prior to the Closing upon prior notice
to Buyer so long as such assignment would not delay the Closing, and may be
collaterally assigned to institutional lenders to Sellers. In addition, this
Agreement and all rights of Buyers shall be assignable to a qualified
intermediary or exchange accommodation titleholder as and to the extent
necessary under Treasury Regulations 1.1031 and Revenue Procedure 2000-37 to
permit Buyers to treat the acquisition of the Purchased Assets (or a portion
thereof) hereunder as part of a like kind exchange of property as contemplated
by Section 4.7 hereof. Prior to the Closing, this
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Agreement shall not be assignable by any of the Sellers without the prior
written consent of Buyer. No assignment shall relieve the assigning party of its
obligations hereunder.
11.3 Law To Govern. This Agreement, the Obligations Undertaking and
-------------
the Non-Competition Agreement shall be construed and enforced in accordance with
the internal laws of the State of New York, without regard to principles of
conflict of laws.
11.4 Notices. All notices shall be in writing and shall be deemed to
-------
have been duly given when (i) delivered personally (which shall include delivery
by FedEx or other nationally-recognized, reputable overnight courier service
that issues a receipt or other confirmation of delivery), (ii) three (3)
business days after the date when deposited in the mail if mailed via registered
or certified mail, return receipt requested, postage prepaid to the other party
hereto at the addresses set forth below, or (iii) when transmitted by facsimile,
with a copy mailed on the same day in the manner provided in clause (ii), when
receipt is confirmed by telephone:
if to any of Sellers, to:
▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
if to any of Buyers, to:
▇▇▇▇▇ Broadcasting LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to:
The ▇▇▇▇▇ Group of Companies, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
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and
Golenbock, Eiseman, Assor, ▇▇▇▇ & Peskoe
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or to such other addresses as any such party may designate in writing in
accordance with this Section 11.4.
11.5 Fees and Expenses. Except as expressly set forth in this
-----------------
Agreement, each of the parties shall pay its own fees and expenses with respect
to the transactions contemplated hereby.
11.6 Entire Agreement. This Agreement sets forth the entire
----------------
understanding of the parties hereto in respect of the subject matter hereof and
may not be modified or amended except by a written agreement specifically
referring to this Agreement signed by all of the parties hereto. This Agreement
supersedes all prior agreements and understandings among the parties with
respect to such subject matter.
11.7 Waivers. Any failure by any party to this Agreement to comply
-------
with any of its obligations hereunder may be waived by any Sellers in the case
of a default by any of Buyers and by Buyer in case of a default by any of the
Sellers. No waiver shall be effective unless in writing and signed by the party
granting such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature.
11.8 Severability. Any provision of this Agreement which is rendered
------------
unenforceable by a court of competent jurisdiction shall be ineffective only to
the extent of such prohibition or invalidity and shall not invalidate or
otherwise render ineffective any or all of the remaining provisions of this
Agreement.
11.9 No Third-Party Beneficiaries. Nothing herein, express or
----------------------------
implied, is intended or shall be construed to confer upon or give to any person,
firm, corporation or legal entity, other than the parties hereto, any rights,
remedies or other benefits under or by reason of this Agreement or any documents
executed in connection with this Agreement.
11.10 Affiliate. For purposes of this Agreement, the term
---------
"affiliate" when used with respect to any person or entity, shall mean any
person or entity which directly or indirectly, alone or together with others,
controls, is controlled by or is under common control with such person or
entity.
11.11 Drafting. No party shall be deemed to have drafted this
--------
Agreement but rather this Agreement is a collaborative effort of the undersigned
parties and their attorneys.
11.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement.
-39-
11.13 Headings. The Section and paragraph headings contained herein
--------
are for the purposes of convenience only and are not intended to define or limit
the contents of said Sections and paragraphs.
11.14 Use of Terms. Whenever required by the context, any pronoun
------------
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa. The use of the words "include" or "including" in
this Agreement shall be by way of example rather than by limitation. Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or otherwise modified from time to time in accordance with
the terms thereof. Unless otherwise indicated, reference in this Agreement to a
"Section" or Article" means a Section or Article, as applicable, of this
Agreement. When used in this Agreement, words such as "herein", "hereinafter",
"hereof", "hereto", and "hereunder" shall refer to this Agreement as a whole,
unless the context clearly requires otherwise. The use of the words "or,"
"either" and "any" shall not be exclusive. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
-40-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
▇▇▇▇▇▇▇ BROADCASTING OF NEVADA, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
KJUL LICENSE, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇ BROADCASTING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ LICENSE CO., LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇ Acquisition Corp., a Delaware corporation, ("BFMA") hereby
guarantees the full and complete performance of the obligations of Sellers under
Section 9.1(b) hereof. BFMA hereby waives any defense that it may have that any
future amendment, modification, or waiver of this Agreement renders its
guarantee in the immediately preceding sentence unenforceable under New York
Law. BFMA hereby consents to the choice of law provision of Section 11.3 of
this Agreement and acknowledges and agrees that notices may be sent to it
pursuant to Section 11.4 of this Agreement at the address set forth for the
Sellers.
▇▇▇▇▇▇▇ ▇▇ ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VP/CFO/Sec/Treas
-41-
Exhibit 1.1
-----------
▇▇▇▇ OF SALE
------------
This ▇▇▇▇ of Sale is delivered to ▇▇▇▇▇ Broadcasting LLC, a Delaware
limited liability company ("Buyer") and ▇▇▇▇▇ License Co., LLC, a Delaware
limited liability company ("License Co." and together with Buyer being
hereinafter referred to as "Buyers"), pursuant to the terms of the Agreement of
Purchase and Sale of Assets (the "Agreement"), dated as of October 31, 2001,
among ▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC, a North Carolina limited liability
company ("▇▇▇▇▇▇▇"), KJUL License, LLC, a North Carolina limited liability
company ("Licensing" and together with ▇▇▇▇▇▇▇ being hereinafter referred to as
"Sellers"), Buyer and License Co. Capitalized terms used but not defined herein
are used with the definitions given them in the Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged:
1. Sellers do hereby sell, transfer, convey, assign, grant and
deliver to Buyer all right, title, and interest in and to all business,
properties, assets, machinery, equipment, furniture, fixtures, franchises, and
goodwill and rights of Sellers as a going concern, of every nature, kind and
description, tangible and intangible, owned or leased, wheresoever located and
whether or not carried or reflected on the books or records of Seller and used,
held for use or useful in connection with the operation of any of radio stations
WRNO(FM), New Orleans, Louisiana and KMEZ(FM), La Belle ▇▇▇▇▇▇, Louisiana
(individually, a "Station" and collectively, the "Stations"), as more
specifically defined as the "Purchased Assets" (as such term is defined in the
Agreement), free and clear of any debts, liens, pledges, charges, mortgages,
security interests, restrictions, easements, liabilities, claims, title defects,
encumbrances, or rights of others of every kind and description, except for
Permitted Liens (as such term is defined in the Agreement), excluding however
from this ▇▇▇▇ of Sale the "Excluded Assets"; it being understood that License
Co. is acquiring all right, title and interest of any of Sellers in and to the
Commission Authorizations and Buyer is acquiring all of the other Purchased
Assets.
To have and to hold all of the foregoing and unto Buyers, their
respective successors and assigns, forever.
2. This ▇▇▇▇ of Sale is made pursuant to the terms of the Agreement
and is made is without representation or warranty except those representations
and warranties contained in and provided by the Agreement. This ▇▇▇▇ of Sale
does not create any obligations, covenants, representations or warranties or
alter or amend any of the obligations, covenants, representations, or warranties
contained in the Agreement. In the event of any inconsistency between this ▇▇▇▇
of Sale and the Agreement, the Agreement shall control.
3. This Instrument shall inure to the benefit of and is binding upon
the respective successors and assigns of Buyers and Sellers.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, Seller has caused this instrument to be duly
executed as of the __ day of ________, 200_.
▇▇▇▇▇▇▇ BROADCASTING OF NEVADA, LLC
By:___________________________
Name:
Title:
KJUL LICENSE, LLC
By:___________________________
Name:
Title:
3
Exhibit 2.2
-----------
ESCROW AGREEMENT
----------------
This Escrow Agreement, dated as of ______ __, 2001, by and among
▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC, a North Carolina limited liability company
("Seller"), ▇▇▇▇▇ Broadcasting LLC, a Delaware limited liability company
------
("Purchaser") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as escrow agent only ("Escrow Agent").
--------- ------------
W I T N E S S E T H:
-------------------
WHEREAS, simultaneously with the execution and delivery of this Escrow
Agreement, Seller, KJUL License, LLC, a North Carolina limited liability
company, Purchaser and ▇▇▇▇▇ License Co., LLC, a Delaware limited liability
company, are executing and delivering to each other the Agreement of Purchase
and Sale of Assets, dated as of the date hereof (the "Purchase Agreement"),
------------------
relating to the sale and purchase of the Purchased Assets (capitalized terms
used herein and not otherwise defined are used herein with the meanings ascribed
thereto in the Purchase Agreement); and
WHEREAS, pursuant to the provisions of the Purchase Agreement, Seller
and Purchaser have requested Escrow Agent (i) to hold in escrow in accordance
with the provisions of the Purchase Agreement and this Escrow Agreement, the
Letter of Credit, the proceeds of any drawings thereof, and any funds deposited
hereunder in lieu of or in exchange for the release of the Letter of Credit, and
(ii) to act as escrow agent hereunder; and
WHEREAS, Escrow Agent is willing to hold the same in escrow in
accordance with the provisions of this Escrow Agreement and to act as escrow
agent hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
FIRST: Seller and Purchaser hereby appoint Escrow Agent to serve as
-----
escrow agent hereunder, subject to and in accordance with the provisions of this
Escrow Agreement, and Escrow Agent agrees to act as escrow agent hereunder,
subject to and in accordance with the provisions of this Escrow Agreement.
SECOND: A. Escrow Agent acknowledges receipt of a letter of credit
------
issued by The Bank of New York ("Issuer") naming the Escrow Agent as
------
beneficiary, and in the amount of THREE MILLION UNITED STATES DOLLARS (U.S.
$3,000,000), a copy of which is attached hereto as Exhibit A (such letter of
credit, and/or any and all replacement letters of credit therefor or renewals
thereof deposited with Escrow Agent hereunder being herein called the "Letter of
---------
Credit"), and Escrow Agent agrees to hold the Letter of Credit, and the proceeds
------
of any
drawings on same and/or any funds deposited ("Draw Proceeds") by or on behalf of
Purchaser under this Escrow Agreement in lieu of or in substitution for the
Letter of Credit (collectively hereinafter referred to as the "Escrow
------
Proceeds"), in escrow, subject to and in accordance with the provisions of this
--------
Escrow Agreement.
B. From time to time after the date hereof, Purchaser may elect to
substitute for the Letter of Credit one or more Letters of Credit in an
aggregate amount equal to the amount of the Letter of Credit to be so
substituted for, and with substantially the same terms and conditions, and
issued by the Issuer or a United States bank reasonably acceptable to Seller (a
"Substitute Letter of Credit") in which event, Escrow Agent shall, together with
---------------------------
Purchaser, arrange for a procedure for the simultaneous exchange of the Letter
of Credit to be substituted for and such Substitute Letter of Credit, and, upon
such exchange, such new Letter(s) of Credit shall be deemed to constitute the
Letter of Credit held hereunder, and such Letter of Credit substituted for shall
cease to be held under this Escrow Agreement and may be returned by Purchaser to
the issuing bank for cancellation. If Escrow Agent shall have received notice
from the Issuer that the Letter of Credit is not being renewed and if Purchaser
does not provide the Escrow Agent with a Substitute Letter of Credit at least
five (5) business days prior to the expiration of the Letter of Credit, the
Escrow Agent shall, prior to the expiration of the Letter of Credit, draw on it
and hold the proceeds thereof as Draw Proceeds in accordance with the terms
hereof.
THIRD: A. All Draw Proceeds (and any interest or income earned
-----
thereon) shall, at the direction of Purchaser from time to time, be deposited
and/or invested in any of the following (the Draw Proceeds with interest or
income earned thereon, being referred to herein collectively as the "Escrow
------
Funds"): (i) obligations issued or guaranteed as to interest and principal by
-----
the government of the United States or any agency or instrumentality thereof; or
(ii) obligations (including certificates of deposit and bankers' acceptances) of
U.S. banks which at the date of investment have capital, surplus, and undivided
profits (as of the date of their most recently published annual financial
statements) in excess of $50,000,000; (iii) commercial paper which at the date
of investment is rated A-1 by Standard & Poor's Corporation or Prime-1 by
▇▇▇▇▇'▇ Investment Service, Inc. or, if not rated, is of equivalent quality;
(iv) repurchase agreements fully secured by obligations of any of the kinds
specified in clauses (i) through (iii) above and issued by any government bond
dealer reporting to, trading with and recognized as a primary dealer by the
Federal Reserve Bank of New York or by any bank or trust company organized in
the United States of America which has a combined capital, surplus and undivided
profits of not less than $50,000,000; or (v) interests in any money market fund
or trust, the investments of which are principally restricted to obligations of
any of the kinds specified in clauses (i) through (iv) above. None of the
Escrow Funds shall become subject to the debts, obligations, liens, charges,
claims or encumbrances of Escrow Agent. All interest and income earned on the
Draw Proceeds ("Earnings") shall at all times be deemed earned by and the sole
property of Purchaser and shall be disbursed to Purchaser from time to time by
the Escrow Agent promptly upon Purchaser's request therefor; provided that if
Seller delivers a Seller's Notice of Demand and the Escrow Agent ultimately
delivers all or a portion of the Draw Proceeds in response, then Seller shall be
entitled to any Earnings that may have accrued on the Draw Proceeds, or the
portion thereof delivered to Seller, as the case may be, from the date upon
which Seller gave the Seller's Notice of Demand.
2
B. If Escrow Agent is instructed by Purchaser to disburse
all or any portion of the Escrow Funds to Seller, or to draw upon the Letter of
Credit and to cause the proceeds thereof to become Draw Proceeds held in escrow
under this Escrow Agreement, Escrow Agent shall comply with such instructions.
C. If Escrow Agent is instructed by Seller to disburse all
or any portion of the Escrow Funds to Purchaser, Escrow Agent shall comply with
such instructions.
D. In all events, Escrow Agent shall comply with the joint
written instructions of Seller and Purchaser.
FOURTH: A. If Seller believes that it is entitled to the entire Draw
------
Proceeds by reason of any entitlement thereto under Section 2.2(b)(ii) of the
Purchase Agreement, and if Seller shall give notice to Purchaser and Escrow
Agent requesting that Escrow Agent disburse the Draw Proceeds (and to draw upon
the Letter of Credit to effectuate the foregoing), to Seller by reason thereof
(such notice being referred to herein as a "Seller's Notice of Demand"), then:
-------------------------
Escrow Agent shall promptly give notice to Purchaser advising Purchaser that it
has received such Seller's Notice of Demand (any such notice being referred to
herein as a "Escrow Agent's Notice of Seller's Demand"), and shall enclose with
----------------------------------------
Escrow Agent's Notice of Seller's Demand a photocopy of Seller's Notice of
Demand. Unless, within twenty (20) days after the giving of Escrow Agent's
Notice of Seller's Demand, Escrow Agent shall receive a notice from Purchaser
objecting to Seller's Notice of Demand (any such notice is referred to as a
"Purchaser's Notice of Dispute"), Escrow Agent shall disburse to Seller the
-----------------------------
Escrow Funds (after having drawn upon the Letter of Credit). If Escrow Agent
receives any such Purchaser's Notice of Dispute within the twenty (20) day
period aforesaid, Escrow Agent shall not disburse to Seller any of the Draw
Proceeds, unless (i) thereafter instructed to do so by Purchaser or (ii)
required to do so by an order or judgment of a court of competent jurisdiction
(a "Court") after the rights of Purchaser and Seller shall have been fully
-----
adjudicated (with all rights of appeal having expired or terminated) by such
Court.
B. If Purchaser believes that it is entitled to the Draw
Proceeds by reason of any entitlement thereto pursuant to the Purchase
Agreement, and if Purchaser shall give notice to Escrow Agent and Seller
requesting that Escrow Agent disburse all the Escrow Funds to Purchaser by
reason thereof (such notice being referred to herein as a "Purchaser's Notice of
---------------------
Demand"), then: Escrow Agent shall promptly give notice to Seller advising
------
Seller that it has received such Purchaser's Notice of Demand (any such notice
being referred to herein as a "Escrow Agent's Notice of Purchaser's Demand"),
-------------------------------------------
and shall enclose with Escrow Agent's Notice of Purchaser's Demand a photocopy
of Purchaser's Notice of Demand. Unless, within twenty (20) days after the
giving of Escrow Agent's Notice of Purchaser's Demand, Escrow Agent shall
receive a notice from Seller objecting to Purchaser's Notice of Demand (any such
notice being referred to as a "Seller's Notice of Dispute"), Escrow Agent shall
--------------------------
disburse to Purchaser the Draw Proceeds. If Escrow Agent receives any such
Seller's Notice of Dispute within the twenty (20) day period aforesaid, Escrow
Agent shall not disburse any of the Draw Proceeds, unless (i) thereafter
instructed to do so by Seller or (ii) required to do so by an order or judgment
of a Court after the rights of Purchaser and Seller have been fully adjudicated
(with all rights of appeal having expired or terminated) by such Court.
3
C. Nothing contained herein shall limit or affect the
entitlement of Purchaser to the Earnings and to the disbursement thereof to it
upon its request to Escrow Agent.
FIFTH: Except as in this Escrow Agreement expressly provided, Escrow
-----
Agent shall not disburse to Seller or to Purchaser, or draw upon, all or any
portion of the Escrow Funds and/or the Letter of Credit.
SIXTH: A. Escrow Agent, when acting in good faith, shall not be
-----
responsible for the identity, authority or rights of any person, firm or
corporation executing or delivering or purporting to execute or deliver this
Escrow Agreement or any document pursuant hereto (other than by or on behalf of
Escrow Agent), or for the sufficiency, genuineness or validity of any such
document.
B. Escrow Agent shall not be liable or responsible for any
act it may do or omit in the absence of gross negligence or willful misconduct.
C. In the event that (a) Escrow Agent receives a written
Notice of Dispute from Seller or Purchaser as provided in Article FOURTH, or (b)
any controversy shall arise between Seller and Purchaser with respect to this
Agreement, the Letter of Credit, the Escrow Funds, or any part thereof, or the
right of any party or other person to receive the same, or the parties shall
fail to designate another escrow agent if the Escrow Agent should resign as
provided herein, Escrow Agent shall (i) withhold delivery of the Escrow Funds
and the Letter of Credit or any disputed portion thereof, as the case may be, as
provided in said Article FOURTH, until instructed in writing to do so by
Purchaser and Seller or when required to do so by an order or judgment of a
Court after the rights of Purchaser and Seller shall have been fully adjudicated
(with all rights of appeal having expired or terminated) by such Court, or (ii)
institute a ▇▇▇▇ of interpleader in any Court to determine the rights of the
parties hereto (the right of Escrow Agent to institute such ▇▇▇▇ of interpleader
shall not, however, be deemed to modify the manner in which Escrow Agent is
entitled to make disbursements of the Escrow Funds or the Letter of Credit as
herein above set forth other than to tender the same into the registry of such
Court). Should a ▇▇▇▇ of interpleader be instituted, or should Escrow Agent be
threatened with litigation or become involved in litigation in any manner
whatsoever on account of this Escrow Agreement or the Letter of Credit or the
Escrow Funds, then as between themselves and the Escrow Agent, Purchaser, on the
one hand, and Seller, on the other hand, hereby agree each to pay Escrow Agent
fifty (50) percent of Escrow Agent's reasonable attorneys' fees and any and all
other disbursements, expenses, costs and damages of Escrow Agent in connection
with or resulting from such threatened or actual litigation. In case any
property held by Escrow Agent hereunder shall be attached, garnished or levied
upon under any order of a Court, or the delivery thereof shall be stayed or
enjoined by any order of any said Court, or any other order, judgment or decree
shall be made or entered by any such Court affecting such property, or any part
thereof, or any act of Escrow Agent shall be so stayed or enjoined, Escrow Agent
is hereby expressly authorized in its sole discretion to obey and comply with
all writs, orders, judgments or decrees so entered or issued, and in case Escrow
Agent obeys and complies with any such writ, order, judgment or decree it shall
not be liable to any of the parties hereto, their successors, heirs or personal
representatives or to any other person, firm or corporation, by reason of such
compliance,
4
notwithstanding that such writ, order, judgment or decree be subsequently
reversed, modified, annulled, set aside or vacated.
D. Escrow Agent undertakes to perform only such duties as
are expressly set forth herein and shall not have any liability or
responsibility arising under the Purchase Agreement or any other agreement to
which Escrow Agent is not a party, even though reference thereto may be made
herein.
E. Escrow Agent may rely and shall be protected in acting
or refraining from acting upon any written notice, instruction or request
furnished to it hereunder and believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties.
F. Escrow Agent may resign and be discharged from its duties
or obligations hereunder by giving notice in writing of such resignation
specifying a date when such resignation shall take effect. Within thirty (30)
days after receipt of such notice, Purchaser and Seller shall appoint a new
escrow agent, which Seller and Purchaser shall each find acceptable. In default
of such a joint designation of a successor escrow agent, Escrow Agent shall
retain the Letter of Credit and Escrow Funds as custodian thereof until
otherwise directed by Purchaser and Seller, jointly, or until it has released
the Letter of Credit and Escrow Funds, as the case may be, in accordance with
this Escrow Agreement, in each case, without liability or responsibility. If no
successor escrow agent is appointed within such thirty (30) day period, Escrow
Agent shall be entitled to petition a Court for such appointment of a successor
escrow agent and/or to deposit the Letter of Credit and Escrow Funds with such
Court.
G. Purchaser, on the one hand, and Seller, on the other
hand, shall share equally the fees payable to Escrow Agent with respect to its
services under this Escrow Agreement, and hereby agree jointly and severally to
indemnify Escrow Agent for, and to hold it harmless against, any claim,
liability or expense incurred by Escrow Agent, without bad faith and willful
misconduct on the part of Escrow Agent, arising out of or in connection with its
entering into this Escrow Agreement and carrying out of its duties hereunder,
including the costs and expenses of litigation, investigation and reasonable
attorneys' fees incurred by Escrow Agent in defending itself against any claim
of liability resulting therefrom. The provisions of this Section SIXTH (G) shall
survive termination of the escrow arrangement contemplated hereby.
SEVENTH: A. All notices, requests, demands, instructions or other
-------
communications required to or desired to be given hereunder shall be in writing,
may, at the election of any sending party, be given on behalf of such party by
(and under signature of) such party's attorneys, and shall be deemed given only
three (3) business days after the mailing thereof, postage prepaid, by certified
or registered mail (return receipt requested), or when delivered by hand or the
next day after delivery to a nationally recognized courier service to the
addresses indicated below:
(1) If addressed to Seller, to it at:
▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC
5
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. Landerhom
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(2) If addressed to Purchaser, to it at:
▇▇▇▇▇ Broadcasting LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to:
Golenbock, Eiseman, Assor, ▇▇▇▇ & Peskoe
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
and
The ▇▇▇▇▇ Group of Companies, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
(3) If addressed to Escrow Agent, to it at:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address or addresses as may be expressly designated by any party
by notice given in accordance with the foregoing provisions and actually
received by the party to whom addressed.
B. This Escrow Agreement shall not be binding and effective until
duly executed and unconditionally delivered by Seller, Purchaser and Escrow
Agent.
6
C. This Escrow Agreement may be executed in any number of
counterparts each of which shall be deemed an original and all of which,
together, shall constitute one and the same Escrow Agreement.
EIGHTH: The covenants, conditions and agreements contained in this
------
Escrow Agreement shall bind and inure to the benefit of Seller, Purchaser, and
Escrow Agent and their respective successors and assigns. No party hereto may
assign any of its rights or obligations under this Escrow Agreement except any
party may assign its rights and obligations hereunder if and to the extent it
assigns its rights and obligations under the Purchase Agreement in accordance
therewith, and except that this Section shall not be construed to impair Escrow
Agent's right to resign under this Escrow Agreement.
NINTH: This Escrow Agreement constitutes the entire agreement of the
-----
parties with respect to the subject matter hereof, may not be amended or
modified except by written agreement signed by Purchaser, Seller and Escrow
Agent, and shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York (without giving effect to contrary
rules of conflict of laws).
7
IN WITNESS WHEREOF, this Escrow Agreement has been executed as of the
date first above written:
▇▇▇▇▇▇▇ BROADCASTING OF NEVADA, LLC
By: ____________________________________
Name:
Title:
▇▇▇▇▇ BROADCASTING LLC
By: ____________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
as Escrow Agent only
____________________________________
8
Exhibit A
---------
9
Exhibit 2.6
-----------
OBLIGATIONS UNDERTAKING
-----------------------
OBLIGATIONS UNDERTAKING, dated as of ____________, 200_, by ▇▇▇▇▇
Broadcasting LLC, a Delaware limited liability company ("Purchaser"), in favor
of ▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC, a North Carolina limited liability
company ("Seller").
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to an Agreement of Purchase and Sale of Assets,
dated as of _____________, 2001, among Purchaser, ▇▇▇▇▇ License Co., LLC, a
Delaware limited liability company, Seller, and KJUL License, LLC, a North
Carolina limited liability company, (the "Agreement"; capitalized terms used but
not defined herein are used with the definitions given them in the Agreement),
Seller has concurrently herewith sold, assigned, transferred, conveyed and
delivered the Assets to Purchaser; and
WHEREAS, in partial consideration therefor, the Agreement requires
Purchaser to execute and deliver to Seller this Obligations Undertaking;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which by Purchaser is hereby
acknowledged, Purchaser hereby agrees as follows:
1. Purchaser hereby undertakes, assumes and agrees, subject to the
limitations contained herein and in the Agreement, to perform, pay and discharge
the Assumed Obligations relating to the Stations, but in each case only to the
extent first accruing, and only with respect to the periods, after the Closing
Date, including all contracts, agreements, leases, licenses or other
understandings or arrangements listed on Schedule A hereto.
2. Nothing contained herein or in the Agreement shall require
Purchaser to pay, perform or discharge any liabilities or obligations assumed
hereby so long as Purchaser shall in good faith contest the amount or validity
thereof.
3. Except for the Assumed Obligations, Buyer shall not and does not
assume any liability or obligation of any of Sellers, fixed or contingent,
disclosed or undisclosed, and assumes no liability for any claim, debt, default,
duties, obligations or liabilities of any of Sellers of any kind or nature,
whether known or unknown, contingent or fixed, all of which, to the extent that
they exist from and after the Closing shall be retained and discharged by
Sellers.
4. This Obligations Undertaking is made pursuant to the terms of the
Agreement and is made without representation or warranty except those
representations and
warranties contained in and provided by the Agreement. This Obligations
Undertaking does not create any additional obligations, covenants,
representations or warranties or alter or amend any of the obligations,
covenants, representations or warranties contained in the Agreement. In the
event of any inconsistency between this Obligations Undertaking and the
Agreement, the Agreement shall control.
5. No person or entity other than Seller shall have any rights under
or by reason of, or be a third third-party beneficiary of, this Obligations
Undertaking or the provisions contained herein.
▇▇▇▇▇ BROADCASTING LLC
By:_____________________________________
Name:
Title:
2
Schedule A
----------
[List of contracts to include those assumed pursuant to Section 2.6(a)(i) of the
Purchase Agreement.]
3
Exhibit 4.2(c)
--------------
LEASEHOLD ASSIGNMENT AGREEMENT
------------------------------
This Leasehold Assignment Agreement, dated as of the __day of _________, 200__,
between ▇▇▇▇▇▇▇ Broadcasting of Nevada, LLC, a North Carolina limited liability
company ("Assignor"), and ▇▇▇▇▇ Broadcasting LLC, a Delaware limited company
("Assignee").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged:
1. Effective as of the date of the Closing (the "Effective Date")
under that certain Agreement of Purchase and Sale of Assets, dated as of
________________, 2001, between Assignor and Assignee (the "Purchase
Agreement"), Assignor does hereby assign, bargain, transfer, convey and set over
unto Assignee, Assignor's entire interest in and under that certain [Lease
Agreement], dated ___________ (the "Lease"), between _____________, as lessor,
and _____, predecessor-in-interest to Assignor, as lessee, and covering certain
premises and rights more fully described in the Lease, which description is
hereby incorporated herein by reference,
To have and to hold all of the foregoing and unto Assignee, its
respective successors and assigns, forever.
2. Effective as of the Effective Date, Assignee assumes, and agrees
to pay and discharge following said date, the unperformed and unfulfilled
obligations of Assignor accruing under the Lease, but in all cases only to the
extent that such obligations first accrue after said date.
3. Nothing contained herein shall be deemed to relieve Assignor of
any of its obligations under the Lease with respect to any and all periods,
occurrences and matters prior to or ending with, and/or otherwise accrued as of,
the Effective Date.
4. This Leasehold Assignment Agreement is made pursuant to the terms
of the Agreement and is made without representation or warranty except those
representations and warranties contained in and provided by the Agreement. This
Landlord Assignment Agreement does not create any additional obligations,
covenants, representations or warranties or alter or amend any of the
obligations, covenants, representations or warranties contained in the
Agreement. In the event of any inconsistency between this Leasehold Assignment
Agreement and the Agreement, the Agreement shall control.
5. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first above written.
ASSIGNOR:
▇▇▇▇▇▇▇ BROADCASTING OF NEVADA, LLC
By:___________________________
Name:
Title:
ASSIGNEE:
▇▇▇▇▇ BROADCASTING, LLC
By:___________________________
Name:
Title:
The undersigned, being Lessor under the Lease, does hereby consent and agree to
the assignment of the Lease as set forth in the foregoing Leasehold Assignment
Agreement and acknowledges that, from and after the Effective Date, Assignee
will become the lessee under the Lease.
[LESSOR]
By:
Name:
Title:
[Note: Delivery of Landlord consent language is only a required closing delivery
for those leases listed on Schedule 4.5(e).]
Exhibit 4.5(f)
--------------
OPINIONS OF COUNSEL
FOR SELLER
----------
1. ▇▇▇▇▇▇▇ is a limited liability company, and is, validly existing and in
good standing under the laws of the State of North Carolina. Licensing is a
limited liability company, and is validly existing and in good standing under
the laws of the State of North Carolina. Each of the Sellers has the limited
liability company power and authority to enter into each of the Documents (as
such term is defined herein) to which it is a party and perform its obligations
thereunder.
2. The execution, delivery and performance by each of the Sellers of each
of the Documents to which it is a party have been duly authorized by all
necessary limited liability company action of each of the Sellers.
3. Each of the Documents to which a Seller is a party constitutes a
legally valid and binding obligation of such Seller, enforceable against such
Seller in accordance with its terms. We express no opinion as to the
enforceability of Section 7.15 of the Agreement or the remedies for enforcement
thereof set forth in Section 8.3 of the Agreement.
4. The execution and delivery by each of the Sellers of the Documents to
which it is a party, and the sale and assignment by the Sellers of the Purchased
Assets and the Assumed Obligations on the date hereof do not:
(i) violate the provisions of the Governing Documents [defined term
to include Certificate of Formation and LLC Operating Agreement],
(ii) result in the breach of or a default under any court or
administrative orders, writs, judgments or decrees specifically directed to
either of the Sellers and material to such Seller,
(iii) violate any federal or New York statute, rule or regulation
applicable to any of the Sellers.
5. Licensing holds all the authorizations, licenses and permits issued by
the FCC listed on Schedule A hereto (the "FCC Licenses"). The FCC Licenses
constitute all of the FCC licenses and authorizations that are necessary for
Licensing to operate an FM radio broadcast station on channel 275 licensed to
Belle ▇▇▇▇▇▇, Louisiana and an FM radio broadcast station on channel 258
licensed to New Orleans, Louisiana in compliance with the technical and
engineering specifications in the FCC Licenses and the applicable rules and
policies of the FCC, provided that (a) we render no opinion as to whether actual
construction or operations of such stations in conformity with the FCC Licenses
is feasible as a practical matter, and (b) we render no opinion with respect to
auxiliary authorizations issued under Part 74 of the FCC's rules or other
ancillary authorizations, permits or registrations that do not authorize full
service broadcast operations but may nevertheless be necessary for practical
operation of a broadcast station. Each
of the FCC Licenses is in full force and effect before giving effect to the
assignment thereof to Purchaser.
6. The FCC has granted its consent for the assignment of the FCC Licenses
from Licensing to License Co. pursuant to the Form 732 authorization attached as
Schedule B hereto (the "FCC Consent"). No other consent of the FCC is required
with regard to the FCC Licenses for the assignment of the FCC Licenses from
Licensing to License Co. as described in the application filed for the FCC
Consent The FCC gave public notice of the grant of the FCC Consent on [date].
The time within which any party in interest other than the FCC may seek
administrative or judicial reconsideration or review of the FCC Consent has
expired, and, to our knowledge based upon our review of the FCC Records, no
petition for such reconsideration or review was timely filed with the FCC or
with the appropriate court. The time within which the FCC may review the FCC
Consent on its own motion has expired and, to our knowledge based upon our
review of the FCC Records, the FCC has not undertaken such review. We advise you
that notice must be given to the FCC upon consummation of an assignment of a
broadcast license previously approved by the FCC.
7. Except for proceedings of general applicability to the radio industry
and except as set forth in Schedule 5.7(b) of the Purchase Agreement, to our
knowledge based solely on our examination of the FCC Records, there is no
investigatory proceeding, petition or other legal or administrative proceeding
pending before the FCC against any of the FCC Licenses that seeks, or is
reasonably likely to result in, the revocation, non-renewal or material adverse
modification of any of the FCC Licenses.
[Note: the opinion is subject to customary assumptions, limitations,
qualifications and exceptions and the following:
"In rendering the opinions in paragraph 1, 2 and 4(i) as to (i) the valid
existence and good standing of Sellers under the laws of the State of North
Carolina, (ii) the due authorization of the execution, delivery and performance
by each of the Sellers of each of the Documents to which it is a party, and
(iii) the conformance with the Governing Documents of the execution and delivery
by each of the Sellers of the Documents to which it is a party, and the sale and
assignment by the Seller of the Purchased Assets and the Assumed Obligations,
respectively, we have assumed, with your permission, that the Limited Liability
Company Act of Delaware (the "LLCA") governs these matters. These matters are
not governed by the LLCA, but are instead governed by the law of the State of
North Carolina and we have not independently verified and we assume no
responsibility for differences that may exist between the LLCA and the law of
the State of North Carolina."]
Schedule A
----------
WRNO-FM, New Orleans, Louisiana main station FM radio broadcasting license
(Facility ID. 54890)
KMEZ(FM), Belle ▇▇▇▇▇▇, Louisiana main station FM radio broadcasting license
(Facility ID. 12157)