STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Purchase Agreement") is entered
into as of February 3, 1998 by and between Montecito Broadcasting Corporation, a
Delaware corporation ("MBC"), ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, the
sole stockholders of MBC (collectively the "MBC Sellers") and ▇▇▇▇▇▇▇▇
Communications, Inc., a Maryland corporation ("Buyer").
R E C I T A L S:
A. On this same date MBC acquired all of the issued and
outstanding capital stock (the "Company Stock") of Channel 33, Inc., a Nevada
corporation (the "Company"), which owns and operates television station KFBT-TV,
Channel 33, Las Vegas, Nevada (the "Station"), pursuant to licenses issued by
the Federal Communications Commission ("FCC").
B. MBC acquired the Company Stock pursuant to consummation (the
"Consummation") of that certain Stock Purchase Agreement dated September 17,
1997 (the "▇▇▇▇▇ Agreement") by and among Acme Television Holdings, LLC
("Acme"), a predecessor-in-interest of MBC, the Company, and the selling
shareholders named therein (collectively, the "Sellers").
C. Acme and Buyer entered into a certain Letter Agreement (the
"Letter Agreement") dated September 15, 1997 setting forth certain undertakings
of Buyer to become effective upon the Consummation of the ▇▇▇▇▇ Agreement,
including exercise of a certain option to enter into this Purchase Agreement.
D. Acme and Buyer entered into a certain Option Agreement (the
"Option Agreement") dated September 25, 1997 whereby Acme granted to Buyer an
option to enter into a Time Brokerage Agreement ("TBA") with the Company upon
consummation of the ▇▇▇▇▇ Agreement, to become effective when all necessary
regulatory approval had been obtained (the "TBA Effective Date").
E. Acme has assigned to MBC, and MBC has thereby assumed, all of
Acme's rights and obligations under the ▇▇▇▇▇ Agreement, the Letter Agreement
and the Option Agreement.
F. MBC consummated the ▇▇▇▇▇ Agreement with loan funds (the
"Loan") provided by The Chase Manhattan Bank and one or more other lenders
(collectively, the "Lender") pursuant to a loan agreement (the "Loan Agreement")
dated February 3, 1998, and Buyer agreed to certain undertakings in the Letter
Agreement and Option Agreement with respect to the Loan Agreement and the
payments to be made to the Lender pursuant to the Loan Agreement.
G. The MBC Sellers desire to sell, and Buyer desires to purchase,
all of the issued and outstanding stock of MBC (the "MBC Stock") on the terms
and conditions set forth herein.
In consideration of the above recitals and the mutual agreements and
covenants contained in this Purchase Agreement, the parties to this Purchase
Agreement, intending to be bound legally, hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
1.1.Terms Defined in this Section. The following terms, as used in
this Purchase Agreement, have the meanings set forth in this Section:
(a) "Accounts Receivable" means the right of MBC or the
Company as of the TBA Effective Date to payment for the sale of advertising time
and other goods and services provided by the Station prior to the TBA Effective
Date.
(b) "Affiliate" means (i) any Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with another Person; (ii) an officer or director of an
affiliate within the meaning of (i) above; or (iii) any Person that owns more
than fifty percent (50%) of voting control of another Person. For purposes of
(i) above, (A) a Person shall be deemed to control another Person if such Person
(1) has sufficient power to enable such Person to elect a majority of the board
of directors of a corporation, or (2) owns a majority of the beneficial
interests in income and capital of such other Person; and (B) a general partner
shall be deemed to control a limited partnership if such general partner owns a
majority of that portion of the beneficial interests in income and capital of
such limited partnership owned by all general partners of such limited
partnership.
(c) "Assets" means the assets owned or held by MBC and the
Company and include those assets necessary for the operation of the Station as
presently conducted, all as specified in Section 2.2(a).
(d) "Closing" means the consummation of the purchase and sale
of the MBC Stock pursuant to this Purchase Agreement in accordance with the
provisions of Section 8.
(e) "Closing Date" means the date on which the Closing occurs,
as determined pursuant to Section 8.
(f) "Communications Act" means the Communications Act of 1934,
as amended.
(g) "Consents" means the consents, permits, or approvals of
government authorities and other third parties necessary to transfer the MBC
Stock to Buyer and to maintain and preserve all contract, lease and other rights
of MBC or the Company existing
currently and as of the Closing Date in connection with the consummation of the
transactions contemplated by this Purchase Agreement.
(h) "Contracts" means all contracts, leases, nongovernmental
licenses, and other agreements (including leases for personal or real property
and employment agreements), written or oral (including any amendments and other
modifications thereto), to which MBC or the Company is a party or that are
binding upon MBC or the Company, and (i) that are in effect on the date of this
Purchase Agreement or (ii) that are entered into by MBC or the Company between
the date of this Purchase Agreement and the Closing Date as permitted by the
terms hereof.
(i) "FAA" means the Federal Aviation Administration.
(j) "FCC" means the Federal Communications Commission.
(k) "FCC Consent" means action by the FCC granting its consent
to the transfer of control of MBC and the Company as contemplated by this
Purchase Agreement.
(l) "FCC Licenses" means those licenses, permits, and
authorizations issued by the FCC to the Company in connection with the business
and operations of the Station.
(m) "Final Order" means an action by the FCC that has not been
reversed, stayed, enjoined, set aside, annulled, or suspended, and with respect
to which no requests are pending for administrative or judicial review,
reconsideration, appeal, or stay, and the time for filing any such requests and
the time for the FCC to set aside the action on its own motion have expired.
(n) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
(o) "Intangibles" means all copyrights, trademarks, trade
names, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by MBC or
the Company or under which MBC or the Company is licensed or franchised and that
are used or useful in the business and operations of the Station, together with
any additions thereto between the date of this Purchase Agreement and the
Closing Date.
(p) "GAAP" means generally accepted accounting principles as
consistently applied in the United States.
(q) "Licenses" means all licenses, permits, construction
permits, and other authorizations issued by the FCC, the FAA, or any other
federal, state, or local governmental authorities to MBC or the Company which
are in effect as of the date of this
Purchase Agreement as are necessary in connection with the conduct of the
business or operations of the Station as presently conducted together with any
additions thereto between the date of this Purchase Agreement and the Closing
Date.
(r) "Material Contract" means any material contract, lease,
nongovernmental license, agreement, or commitment, except for any contract,
lease, non-governmental license, agreement, or commitment the obligations under
which will be performed prior to Closing.
(s) "Person" means an individual, corporation, association,
partnership, joint venture, trust, estate, limited liability company, limited
liability partnership, or other entity or organization.
(t) "Programming Contract" means a contract for the
acquisition of programming to be aired on the Station in exchange for payment of
consideration.
(u) "Station" means television station KFBT-TV, Channel 33,
Las Vegas, Nevada.
(v) "Stock" means, as the case may be, all the issued and
outstanding shares of capital stock of MBC or the Company.
(w) "Tangible Personal Property" means all property owned by
MBC or the Company as of the date of the Consummation plus any replacements or
substitutions thereof, listed on Schedule 2.2(a)(1) attached hereto.
(x) "Taxes" (and with correlative meaning "Taxes" and
"Taxable") means all federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, capital transfer, employment, withholding and other taxes and
assessments, together with any interest, additions or penalties with respect
thereto and any interest in respect of such addition, or penalties, and "Tax"
means any one of such Taxes.
(y) "Tax Returns" means all federal, state, local and foreign
income, franchise, sales, use, occupation, property, excise, alternative or
add-on minimum, social security, employees' withholding, unemployment,
disability, transfer, capital stock and other tax returns and tax reports, and
"Tax Return" means any one of such Tax Returns, franchise tax returns,
declarations of estimated tax, tax reports and other tax statements and other
similar filings required to be filed.
(z) "TBA Effective Date" means the date upon which the Buyer
commences certain sales and programming activities with respect to the Station
pursuant to the TBA.
1.12.Terms Defined Elsewhere in this Agreement. For purposes
of this Agreement, the following terms have the meanings set forth in the
sections indicated:
Term Section
Buyer Preamble
Claimant Section 10.4(a)
Company Preamble
DOJ Section 6.4
FTC Section 6.4
Indemnifying Party Section 10.4
Leases Section 2.2(a)(ii)
Purchase Price Section 2.3
MBC Sellers Preamble
MBC Stock Recitals
Studio Lease Section 2.2(a)(ii)
Tower Lease Section 2.2(a)(ii)
0.3.Clarifications. Words used herein, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender and any other number as the context requires. Use of the word
"including" herein shall be deemed and construed to mean "including but not
limited to." Except as specifically otherwise provided in this Purchase
Agreement in a particular instance, a reference to a Section or Schedule is a
reference to a Section of this Purchase Agreement or a Schedule hereto, and the
terms "hereof," "herein" and other like terms refer to this Agreement as a
whole, including the Schedules hereto, and not solely to any particular part
hereof.
SECTION 1. EXCHANGE OF CONSIDERATION.
1.1.Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, the MBC Sellers hereby agree to sell,
transfer, and deliver to Buyer on the Closing Date, and Buyer hereby agrees to
purchase on the Closing Date, the MBC Stock, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions, charges,
or encumbrances of any nature whatsoever, except those permitted or identified
hereunder.
1.2.Assets and Liabilities at Closing.
(aa) Assets of the Company at Closing. The Assets owned
by MBC or the Company at the Closing shall include the following:
(i) the Tangible Personal Property listed on
Schedule 2.2(a)(i);
(ii) the Leases ("Leases") listed on Schedule
2.2(a)(ii), specifically, including a certain Broadcast Facilities Lease (the
"Studio Lease") assigned to MBC on October 16, 1997, and a certain Tower Lease
(the "Tower Lease") assigned to MBC on October 16, 1997;
(iii) the Licenses listed on Schedule 2.2(a)(iii).
(i) the Contracts listed on Schedule 2.2(a)(iv);
(ii) the Intangibles listed on Schedule 2.2.(a)(v)
of MBC or the Company relating to the Station and those intangibles that are not
specifically listed on Schedule 2.2(a)(v), including the goodwill of the
Station, if any;
(iii) all of MBC's and the Company's proprietary
information, technical information and data, machinery and equipment warranties,
maps, computer discs and tapes, plans, diagrams, blueprints, and schematics,
including filings with the FCC relating to the business and operation of the
Station; and
(iv) all books and records of the Station
including, but not limited to, financial statements, Tax Returns, program logs,
executed copies of Contracts, and all records required by the FCC to be kept by
the Station.
(ab) Liabilities of MBC and the Company at Closing.
(v) At the Closing, MBC and the Company shall have
no liabilities or obligations other than (A) liabilities and obligations
incurred in the ordinary course of business at the Station; (B) liabilities or
obligations arising under Contracts after the Closing Date as permitted
hereunder or under the TBA; and (C) liabilities for taxes that are not yet due
and payable for any period of time subsequent to the Closing Date.
(vi) The liabilities and obligations of MBC and
the Company at Closing shall not include: (A) any obligations or liabilities
under any Contract (including any Programming Contract) (i) not identified in
Schedule 2.2(a)(iv) or (ii) entered into after the date hereof unless permitted
hereunder or by the TBA, (B) any credit agreements, promissory notes, note
purchase agreements, indentures, capital leases or other financing arrangements,
(C) any obligations or liabilities, if any, related to any litigation,
arbitration proceeding or proceeding before or by any court, arbitration panel,
commission, agency or other administrative or regulatory body or authority based
solely on a breach by MBC or the MBC Sellers of their respective obligations
under this Purchase Agreement for matters occurring prior to the Closing Date;
and (D) any liability incurred after the TBA Effective Date arising from Buyer's
acts or omissions pursuant to the TBA.
43.Consideration to be Paid to MBC Sellers.
(ac) Purchase Price. The purchase price for the MBC
Stock (the "Purchase Price") shall be Thirty Three Million Dollars
($33,000,000). The Purchase Price shall be paid as follows:
(iv) Deposits.
(A) MBC acknowledges receipt from Buyer of One
Million Dollars ($1,000,000) referred to in the Letter Agreement as the LMA
Option ▇▇▇▇▇ ▇▇▇▇▇. At the Consummation of the ▇▇▇▇▇ Agreement, MBC shall borrow
$33,000,000 pursuant to the Loan Agreement. MBC shall refund to Buyer, on behalf
of Acme, the sum of $1,000,000: provided, that the payments due to MBC upon the
execution of this Agreement described in Section 2.3(c), shall be deducted from
such refund and shall be paid to MBC, with the balance, if any, paid to Buyer.
(B) Buyer shall pay MBC quarterly payments as
follows:
QUARTERLY PAYMENT DATE AGGREGATE AMOUNT
(DOLLARS)
June 30, 1998 $190,000
September 30, 1998 $190,000
December 31, 1998 $190,000
March 31, 1999 $190,000
June 30, 1999 $190,000
September 30, 1999 $190,000
December 31, 1999 $190,000
March 31, 2000 $190,000
June 30, 2000 $190,000
September 30, 2000 $190,000
December 31, 2000 $190,000
(v) Balance. The payments referred to in
Section 2.3(a)(i)(B) hereof shall constitute a credit to Buyer at Closing
against the Purchase Price. The remaining balance of the Purchase Price shall be
paid by the Buyer by wire transfer of same day Federal funds at the time of
Closing, and such balance shall be paid directly to The Chase Manhattan Bank, as
agent for the Lender, pursuant to the Loan Agreement.
(ad) Operating Payments. From the date hereof until
the TBA Effective Date, Buyer shall make a payment to MBC on the last day of
each calendar month equal to the amount certified by MBC by which the monthly
expenses, exclusive of debt service, of the Station exceed the monthly income.
(ae) Transaction Expenses. Upon execution of this
Purchase Agreement, Buyer shall pay to MBC: (i) the sum of $275,000 which
represents the transaction
costs as of the date hereof, including professional fees, incurred by MBC in
connection with the ▇▇▇▇▇ Agreement, the Consummation, the Letter Agreement, the
Option Agreement, the TBA, this Purchase Agreement and the Loan Agreement as of
the date hereof; (ii) all fees, costs, expenses and other monetary obligations
of MBC arising under the Loan Agreement and due and payable on the Closing Date;
and (iii) deposits payable on the Closing Date by MBC for the Leases.
(af) Monthly Extension Fees. Until the Closing Date,
the Buyer shall pay to MBC a monthly closing extension fee of $200,000
commencing on March 1, 1998 and continuing on the first day of each month
thereafter.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF MBC
AND THE MBC SELLERS.
The MBC Sellers and MBC, jointly and severally, represent and
warrant to Buyer as follows:
0.4.Organization and Authority of MBC. MBC is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware. MBC has the requisite power and authority to execute, deliver and
perform this Purchase Agreement and the documents contemplated hereby according
to their respective terms.
0.5.Authorization and Binding Obligation. The execution,
delivery and performance of this Purchase Agreement by MBC has been duly
authorized by all necessary corporate or other action on the part of MBC. This
Purchase Agreement has been duly executed and delivered by MBC and each MBC
Seller and constitutes the legal, valid, and binding obligation of MBC and each
MBC Seller, enforceable against it or him in accordance with its terms except as
the enforceability of this Purchase Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
0.6.Compliance with Laws. MBC is in compliance in all
material respects with all laws, rules, policies, and regulations including, but
not limited to, federal, state and local and the FCC's rules and policies.
0.7.Licenses. The Company is the holder of the Licenses
included in Schedule 2.2(a)(iii) to this Purchase Agreement, all of which are in
full force and effect. The FCC Licenses constitute all of the licenses issued by
the FCC under the Communications Act of 1934, as amended (the "Act"), and the
current rules, regulations, and policies of the FCC for the operation of the
Station as currently conducted. There is not pending or, to MBC's or the MBC
Sellers' knowledge, threatened, any petition, complaint, objection (whether
formal or informal), order to show cause, investigation, or other action by or
before the FCC or any court to revoke, cancel, rescind, modify, or refuse to
renew any of the FCC Licenses. Except as disclosed on Schedule 3.4 and other
than proceedings of general applicability to the broadcasting industry, there is
not now pending or, to MBC's or the MBC Sellers' knowledge, threatened, any
other
petition, complaint, objection (whether formal or informal), investigation,
order to show cause, notice of violation, notice of apparent liability, or
notice of forfeiture or other proceeding by or before the FCC or any court
against the Company with respect to any matter affecting the Station which would
have a materially adverse effect on the operation of the Station.
0.8.MBC Stock. As of the date hereof, no shares of the
capital stock of MBC are held in the treasury. There are no outstanding options,
conversion rights, warrants, or other present or future rights in existence to
acquire or to vote any of MBC's shares of capital stock. The MBC Stock
represents all the issued and outstanding shares of capital stock of MBC and all
such shares have been duly and validly issued and are fully paid and
nonassessable and are not subject to any preemptive rights. There are no voting
trust agreements or other contracts, agreements, or arrangements restricting or
affecting voting or dividend rights or transferability with respect to the MBC
Stock. MBC has not violated any federal, foreign, state, or local law,
ordinance, rule, or regulation in connection with the offer for sale or sale and
issuance of its outstanding shares of capital stock or any other securities. The
MBC Sellers own the MBC Stock free and clear of any mortgages, liens, claims,
charges, encumbrances, assessments, or other security or adverse interests of
any kind or nature whatsoever.
▇.▇.▇▇▇▇▇▇▇ Stock. To MBC and the MBC Sellers'
knowledge, (a) as of the date hereof, no shares of the capital stock of the
Company are held in the treasury; (b) there are no outstanding options,
conversion rights, warrants, or other present or future rights in existence to
acquire or to vote any of the Company's shares of capital stock; (c) the Company
Stock represents all the issued and outstanding shares of capital stock of the
Company, and all such shares have been duly and validly issued and are fully
paid and nonassessable and are not subject to any preemptive rights; (d) there
are no voting trust agreements or other contracts, agreements, or arrangements
restricting or affecting voting or dividend rights or transferability with
respect to the Company Stock; (e) the Company has not violated any federal,
foreign, state, or local law, ordinance, rule, or regulation in connection with
the offer for sale or sale and issuance of its outstanding shares of capital
stock or any other securities; and (f) MBC owns the Company Stock free and clear
of any mortgages, liens, claims, charges, encumbrances, assessments, or other
security or adverse interests of any kind or nature whatsoever.
0.10.Absence of Conflicting Agreements. The execution,
delivery and performance by MBC and the MBC Sellers of this Purchase Agreement
and the documents contemplated hereby (with or without the giving of notice, the
lapse of time, or both): (a) subsequent to the receipt of the Consents, do not
require the consent of any third party, (b) will not conflict with, result in a
breach of, or constitute a default under any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instruments, and (c) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of any
Contract or other contract or agreement of MBC Sellers.
0.11.Consents. Except for the FCC Consent provided for
in Section 6.1 and the HSR Filing provided for in Section 6.4, no consent,
approval, permit, or authorization of, or declaration to, or filing with any
governmental or regulatory authority or any other third party is required (a) to
consummate this Purchase Agreement and the transactions contemplated hereby, or
(b) to permit the MBC Sellers to assign or transfer the MBC Stock to Buyer.
0.12.Brokers. Neither MBC nor any of the MBC Sellers nor
any person or entity acting on their behalf has incurred any liability for any
finders' or brokers' fees or commissions in connection with the transactions
contemplated by this Purchase Agreement.
0.13.MBC Balance Sheet. Annexed hereto as Schedule 3.10
is a balance sheet of MBC which is true and complete in all material respects
and presents fairly the financial condition of MBC as of the date hereof (in the
"Before Closing" column) and pro forma immediately following MBC's acquisition
of the Company Stock (in the "After Closing" column).
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to MBC as follows:
0.14.Organization, Standing, and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Maryland and has the requisite power and authority to
execute, deliver, and perform this Purchase Agreement and the documents
contemplated hereby according to their respective terms and to own the Stock.
0.15.Authorization and Binding Obligation. The
execution, delivery and performance of this Purchase Agreement by Buyer have
been duly authorized by all necessary action on the part of Buyer. This Purchase
Agreement has been duly executed and delivered by Buyer and constitutes a legal,
valid, and binding, obligation of Buyer, enforceable against Buyer in accordance
with its terms except as the enforceability of this Purchase Agreement may be
affected by bankruptcy or similar laws affecting creditors' rights generally and
by judicial discretion in the enforcement of equitable remedies.
0.16.Absence of Conflicting Agreements and Required
Consents. Subject to the receipt of the Consents, the execution, delivery and
performance by Buyer of this Purchase Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a)
do not require the consent of any third party; (b) will not conflict with the
articles of incorporation of Buyer; (c) will not conflict with, result in a
breach of, or constitute a default under, any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (d) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license or permit to which Buyer is a party or by
which Buyer may be bound.
0.17.Qualification as a Broadcast Licensee. At the time
the Application referred to in Section 6.1 hereof is filed, Buyer will be
qualified under the Communications Act and all other applicable federal, state
and local laws, rules, regulations, and policies to acquire the MBC Stock from
Sellers.
▇.▇▇.▇▇▇▇▇▇▇▇▇ Qualifications. Buyer has on hand or
access to the financial resources necessary to fulfill Buyer's obligations under
this Purchase Agreement.
0.19.Brokers. Neither Buyer nor any person or entity
acting on its behalf has incurred any liability for any finders' or brokers'
fees or commissions in connection with the transactions contemplated by this
Purchase Agreement
SECTION 4. OPERATION OF STATION PRIOR TO CLOSING.
MBC covenants and agrees that between the date hereof and the TBA
Effective Date, or, in the event the TBA does not become effective, the Closing
Date, MBC shall cause the Company to conduct its business in the ordinary course
in accordance with its past practices (except where such conduct would conflict
with the following covenants or with other obligations of MBC under this
Purchase Agreement), and, except as contemplated by this Purchase Agreement or
with the prior written consent of Buyer, MBC shall cause the Company to act in
accordance with the following:
0.20.Contracts. Neither MBC nor the Company will renew,
extend, amend, terminate, or waive any material right under any Material
Contract or enter into any contract or commitment or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing of
indebtedness and obligations arising from the amendment of any existing
Contract, regardless whether such Contract is a Material Contract) that will be
binding on MBC or the Company after Closing except for (a) cash time sales
agreements and production agreements made in the ordinary course of business
consistent with the Company's past practices, (b) any Programming Contract or
network affiliation agreement made with the consent of Buyer, (c) other
Contracts entered into in the ordinary course of business consistent with the
Company's past practices that do not involve consideration in excess of $25,000
for any individual Contract or, in the aggregate, $150,000 for all such
Contracts, or (d) any Contract which can be
terminated upon 30 days notice without penalty. Prior to the Closing Date, MBC
shall cause the Company to deliver to Buyer a list of all Contracts entered into
between the date of this Purchase Agreement and prior to the Closing Date and
shall make available to Buyer copies of all such Contracts, except Contracts
made by Buyer.
0.21.Encumbrances. MBC and the Company will not create,
assume, or permit to exist any mortgage, pledge, lien, or other charge or
encumbrance affecting any of the Assets, except for (a) those in existence on
the date of this Purchase Agreement, (b) those created in connection with
financing provided by the Lender which shall be paid on or before the Closing
Date, (c) liens for current taxes not yet due and payable, or (d) those
otherwise permitted under the Loan Agreement with respect to a capital facility:
provided, that such capital facility must be approved by Buyer, which approval
shall not be unreasonably withheld.
0.22.Employee Obligations. On the Closing Date, neither
MBC nor the Company shall have any liability or obligation to any of their
employees, including, without limitation, any accrued but unpaid vacation or
leave or any severance obligation.
0.23.Dispositions. Neither MBC nor the Company will
sell, assign, lease, or otherwise transfer or dispose of any of the Assets
except in the ordinary course of business or in connection with the acquisition
of replacement property of equivalent kind and value. Neither MBC nor the
Company shall pay any dividend or make any similar distribution during the term
of this Purchase Agreement.
0.24.Mergers. Neither MBC nor the Company will
reorganize, liquidate or merge or consolidate with any other entity.
▇.▇▇.▇▇▇▇▇▇▇▇▇. MBC and the Company shall maintain in
full force and effect policies of insurance of the same type, character, and
coverage as the policies currently carried with respect to the business,
operations, and Assets of the Company.
0.26.Indebtedness and Obligations. MBC and the Company
shall not incur any indebtedness for borrowed money except pursuant to or
permitted by the Loan Agreement. MBC and the Company shall pay all their
obligations as they become due and satisfy any existing indebtedness so that, as
of the Closing Date, MBC and the Company shall have no current or long-term
liabilities relating to the period between the Consummation and the Closing Date
except those liabilities incurred under or permitted by the Loan Agreement in
accordance with the provisions of Section 5.2 hereof. The Loan shall be
discharged at or prior to Closing. Notwithstanding anything herein to the
contrary, neither MBC nor Company shall incur any long-term indebtedness (other
than the Loan) without the prior consent of Buyer, which consent shall not be
unreasonably withheld.
0.27.Amendments. Neither MBC nor the Company shall
amend, change, or modify its Certificate of Incorporation or Bylaws, except with
the written consent of Buyer.
0.28.Securities. Neither MBC nor the Company will (a)
issue, sell, or otherwise dispose of any of its Stock; (b) acquire (through
redemption or otherwise) any of its Stock; (c) grant any options, warrants, or
other rights to acquire any of its Stock; or (d) issue, sell, or otherwise
dispose of any stock options, bonds, notes, or other securities.
0.29.Licenses. Neither MBC nor the Company shall cause
or permit, by any act or failure to act, any of the Licenses included in
Schedule 2.2(a)(iii) to expire or to be revoked, suspended, or modified in a
material adverse manner, or take any action that could reasonably be expected to
cause the FCC or any other governmental authority to institute proceedings for
the suspension, revocation, or material adverse modification of any of the
Licenses: provided, that this covenant shall not apply to any act or omission of
Buyer pursuant to or in performance of the TBA. MBC and the Company shall
prosecute with due diligence any applications to any governmental authority
necessary for the operation of the Station and pay any and all amounts owed to
the FCC and every other government authority prior to Closing, other than any
fees associated with the sale of the MBC Stock to the Buyer or any transfer fees
required to be paid as a result of the sale to the Buyer, it being the
understanding that the Buyer will pay said fees.
▇.▇▇.▇▇ Inconsistent Action. Neither MBC, the MBC
Sellers nor the Company shall take any action that is inconsistent with its
obligations under this Purchase Agreement in any material respect or that could
reasonably be expected to hinder or delay the consummation of the transactions
contemplated by this Purchase Agreement. MBC shall conduct and maintain the
business and operation of the Station and the Company such that the
representations and warranties set forth in Section 3 of the ▇▇▇▇▇ Agreement
shall not become any less accurate or complete in any material respect. MBC
shall deliver to Buyer at the Closing revised schedules advising Buyer of any
material change occurring after the Consummation with respect to the
representations and warranties contained in Section 3 of the ▇▇▇▇▇ Agreement.
0.31.Maintenance of Assets. The Company shall maintain
all of the Assets in good condition (ordinary wear and tear excepted),
consistent with their overall condition on the date of this Purchase Agreement,
and use, operate and maintain all of the Assets in a reasonable manner, and the
Company shall maintain inventories of spare parts and expendable supplies at
levels consistent with past practices. If any insured or indemnified loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, the Company shall repair, replace, or restore the Assets to their prior
condition as represented in this Purchase Agreement as soon thereafter as
possible, and MBC shall use the proceeds of any claim under any property damage
insurance policy or other recovery solely to repair, replace, or restore any of
the Assets that are lost, damaged, impaired, or destroyed.
0.32.Consents. MBC and the Company shall cooperate with
Buyer to obtain all Consents and estoppel certificates from private parties
without any change in the terms or conditions of any Contract. MBC and the
Company shall promptly advise Buyer of any difficulties experienced in obtaining
any such Consents and of any conditions proposed, considered, or requested for
any such Consents.
0.33.Books and Records. The Company shall maintain its
books and records in accordance with past practices.
0.34.Notification. MBC and the Company shall promptly
notify Buyer in writing of any unusual or material developments with respect to
the business or operations of the Company and of any material change in any of
the information contained in the representations and warranties contained in
Section 3 of the ▇▇▇▇▇ Agreement.
0.35.Restrictions on Conduct of Other Business. From the
date on which the Purchase Agreement is executed, neither MBC nor the Company
shall conduct any business other than the operation of the Station.
0.36.Compliance with Laws. MBC and the Company shall
comply in all material respects with all laws, rules, policies, and regulations
including, but not limited to, federal, state and local and the FCC's rules and
policies.
0.37.Programming. From the date of execution of this
Purchase Agreement until the TBA Effective Date, or the Closing Date, if the TBA
does not become effective, the Company shall not (a) make any material changes
in the Station's programming policies, except such changes as the Company deems
to be required by the public interest or (b) enter into any Programming Contract
without Buyer's written consent, .
0.38.Preservation of Business. From the date of
execution of this Purchase Agreement until the TBA Effective Date, MBC and the
Company shall use commercially reasonable efforts to preserve the business and
organization of the Station and to preserve the audience of the Station and the
Station's present relationships with suppliers, advertisers, and others having
business relations with them, to the end that the business, operations, and
prospects of the Station shall be preserved at the TBA Effective Date or the
Closing Date, in the event that the TBA does not become effective.
▇.▇▇.▇▇▇ Matters. MBC, the MBC Sellers and the Company
shall timely file (taking into account all applicable extensions) all federal,
state, local, foreign and other Tax Returns required by law to be filed for
which the due date is on or before the Closing Date. MBC, the MBC Sellers and
the Company shall pay in full or establish adequate reserves for all Taxes and
other charges incurred or due to federal, state or local, foreign or any other
taxing authorities prior to the Closing Date.
0.40.Risk of Loss. The risk of any loss, damage,
impairment, confiscation, or condemnation of any of the assets of MBC and the
Company from any cause whatsoever shall be borne by MBC at all times prior to
the Closing Date.
0.41.Control of the Station. Prior to Closing, Buyer
shall not, directly or indirectly, control, supervise, or direct, or attempt to
control, supervise or direct the operations of the Station; those operations,
including complete control and supervision of all of the Station's programs,
employees, and policies, shall be the sole responsibility of MBC and the
Company.
Buyer's operations of pursuant to the TBA shall not be deemed in any way to
constitute control of the Station.
0.42.Related Party Transactions. Prior to Closing,
neither MBC nor the Company shall enter into any agreement or other transaction
with any party which is an Affiliate of MBC or the Company or in any way related
to the MBC Sellers, except with the written consent of Buyer.
SECTION 5. GOVERNMENTAL CONSENTS.
05.1.FCC Consent.
(ag) Prior FCC Approval. The sale of the MBC Stock
as contemplated by this Purchase Agreement is subject to the prior consent of
the FCC.
(ah) FCC Application. Within ten (10) business
days after notice to MBC by Buyer that (i) Buyer has been advised by Buyer's FCC
counsel that the transaction contemplated herein is reasonably likely to be
approved upon application to the FCC for consent and approval thereof or (ii)
Buyer has divested its existing television station in the Las Vegas, Nevada DMA,
MBC and Buyer shall prepare and file with the FCC an appropriate application
(the "Application") to secure FCC Consent. The parties shall thereafter
prosecute the Application with all reasonable diligence and otherwise use
commercially reasonable efforts to obtain a grant of the Application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if compliance with the condition would have a material
adverse effect upon it, including divestiture of any broadcast station licensed
to Buyer or its Affiliates. Buyer and MBC shall oppose any petitions to deny or
other objections filed with respect to the Application and any requests for
reconsideration or judicial review of the FCC Consent. Each party shall provide
the other party with copies of any and all documents received or sent with
respect to the Application.
(ai) Extension of Time. If the Closing shall not
have occurred for any reason within the original effective period of the FCC
Consent, and neither party shall have terminated this Purchase Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the effective period of the FCC
Consent shall limit the exercise by either party of its right to terminate the
Purchase Agreement under Section 9.
05.12.Confidentiality. Except as necessary for the
consummation of the transaction contemplated by this Purchase Agreement,
including Buyer's obtaining of financing related hereto, and except as and to
the extent required by law, each party will keep confidential any information
obtained from the other party in connection with the transactions contemplated
by this Purchase Agreement. The aforesaid shall apply from the date of this
Purchase Agreement forward unless such information is or becomes publicly
available without any breach by any party under this Section. If this Purchase
Agreement is terminated, each party will return to the other
party all information obtained by such party from the other party in connection
with the transactions contemplated by this Purchase Agreement.
05.13.Cooperation. Buyer and MBC shall cooperate fully
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their respective obligations under
this Purchase Agreement, and Buyer and MBC shall execute such other documents as
may be reasonably necessary to the implementation and consummation of this
Purchase Agreement and otherwise use commercially reasonable efforts to
consummate the transaction contemplated hereby and to fulfill their obligations
under this Purchase Agreement. Notwithstanding the foregoing, and except as
otherwise expressly provided in this Purchase Agreement, Buyer and MBC shall
have no obligation (a) to expend funds to obtain any of the Consents except to
pay any required filing or transfer fees; or (b) to agree to any adverse change
in any License or Contract in order to obtain a Consent required with respect
thereto.
05.14.HSR Act Filing. MBC and Buyer agree to (a) file,
or cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, that are required in connection
with the transactions contemplated hereby under the HSR Act within fifteen (15)
business days of the date that the Application for FCC Consent has been filed
with the FCC; (b) submit to the other party, prior to filing, their respective
HSR Act filings to be made hereunder, and to discuss with the other any comments
the reviewing party may have; (c) cooperate with each other in connection with
such HSR Act filings, which cooperation shall include furnishing the other with
any information or documents that may be reasonably required in connection with
such filings; (d) promptly file, after any request by the FTC or DOJ, any
information or documents requested by the FTC or DOJ; and (e) furnish each other
with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ that relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
SECTION 6. CONDITIONS TO OBLIGATIONS OF BUYER AND MBC.
056.1.Conditions to Obligations of Buyer. All
obligations of Buyer at the Closing hereunder are subject at Buyer's option to
the fulfillment prior to or at the Closing Date of each of the following
conditions:
(aj) Representations and Warranties. All
representations and warranties of MBC and the MBC Sellers contained in this
Purchase Agreement shall be true and complete in all material respects at and as
of the Closing Date as though made at and as of that time.
(ak) Covenants and Conditions. MBC, the MBC
Sellers and the Company shall have performed and complied in all material
respects with all covenants, agreements, and conditions required by this
Purchase Agreement to be performed or complied with by them prior to or on the
Closing Date. The representations and warranties of the Company contained in the
▇▇▇▇▇ Agreement shall be true and complete in all material respects
as of the Closing Date of the transaction contemplated herein, unless such
representation or warranty was not true and complete at the time of Consummation
of the ▇▇▇▇▇ Agreement.
(al) Consents. All Consents shall have been
obtained and delivered to Buyer (other than any Consent required under any
Contract listed on Schedule 2.2(a)(iv) that is not a Material Contract) without
any adverse change in the terms or conditions of any Contract or any License.
(am) FCC Consent. The FCC Consent shall have been
granted without the imposition on Buyer of any material adverse conditions, and
the FCC Consent shall have become a Final Order: provided, that Buyer may waive
the condition that the FCC Consent become a Final Order if no petition to deny
or other challenge is filed to the FCC Application referenced in Section 6.1 of
this Purchase Agreement.
(an) Governmental Authorizations. The Company
shall be the holder of all FCC Licenses and there shall not have been any
modification, revocation, or non-renewal of any License that could have an
adverse effect on the Station or the conduct of its business and operations. No
proceeding shall be pending the effect of which could reasonably result in the
revocation, cancellation, suspension, adverse modification or expiration of any
FCC License material to the operation of the Station.
(ao) HSR Act. The waiting period under the HSR Act
shall have expired without action by the DOJ or the FTC to prevent the Closing.
(ap) Tax, Lien and Judgment Searches. Buyer shall
have obtained searches for tax, lien and judgment filings in the Secretary of
State's records of the State of Nevada, and in the records of ▇▇▇▇▇ County,
Nevada, made no earlier than ten (10) days prior to the Closing Date showing the
absence of any liens or encumbrances on the MBC Stock, the Company Stock or the
Assets, except liens expressly permitted by this Purchase Agreement or the Loan
Agreement. All liens or encumbrances arising under the Loan Agreement shall be
terminated at the Closing of the transactions contemplated in this Purchase
Agreement.
(aq) Deliveries. MBC and the MBC Sellers shall
have made or stand willing to make at the Closing all the deliveries to Buyer
described in Section 8.2.
(ar) Adverse Change. Between the date of this
Purchase Agreement and the Closing Date, there shall have been no material
adverse change in the business, Assets, properties, financial condition, or
business prospects of the Station, unless such change is the result of Buyer's
acts or omissions in performance of the TBA.
056.12.Conditions to Obligations of MBC. All obligations
of MBC and the MBC Sellers at the Closing hereunder are subject at MBC's option
to the satisfaction by Buyer prior to or at the Closing Date of each of the
following conditions:
(as) Representations and Warranties. All
representations and warranties of Buyer contained in this Purchase Agreement
shall be true and complete in all material respects on and as of the Closing
Date as though made on and as of that time.
(at) Covenants and Conditions. Buyer shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Purchase Agreement to be performed or complied
with by it prior to or on the Closing Date.
(au) Deliveries. Buyer shall have made or stand
willing to make all the deliveries described in Section 8.3.
(av) FCC Consent. The FCC Consent shall have been
granted without the imposition on MBC of any conditions that need not be
complied with by MBC under Section 6.1 hereof, and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
(aw) HSR Act. The waiting period under the HSR Act
shall have expired without action by the DOJ or the FTC to prevent the Closing.
SECTION 7. CLOSING AND CLOSING DELIVERIES.
056.7.1.Closing.
(ax) Closing Date.
(vii) Except as provided below in this Section
9.1(a) or as otherwise agreed to by Buyer and the MBC Sellers, the Closing shall
take place after the FCC Consent has become a Final Order: provided, that if the
requirement of a Final Order is waived by Buyer pursuant to Section 7. 1 (d) of
this Agreement, the Closing shall take place at 10:00 a.m. within ten (10) days
after the FCC Consent becomes effective.
(viii) If there is in effect on the date on
which the Closing would otherwise occur pursuant to this Section 8.1 (a) any
judgment, decree, or order that would prevent or make unlawful the Closing on
that date, the Closing shall be postponed until a date within the effective
period of the FCC Consent (as it may be extended pursuant to Section 6.1), to be
agreed upon by Buyer and the MBC Sellers, when such judgment, decree, or order
no longer prevents or makes unlawful the Closing. If the Closing is postponed
pursuant to this paragraph, the date of the Closing shall thereafter be mutually
agreed to by the MBC Sellers and Buyer.
(ay) Closing Place. The Closing shall be held at
the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in Washington, D.C., or
any other place that is agreed upon by Buyer and the MBC Sellers.
056.7.1.2.Deliveries by MBC and MBC Sellers. On the Closing
Date, MBC or the MBC Sellers shall deliver to Buyer the following items, in form
and substance reasonably satisfactory to Buyer and its counsel:
(az) Stock. Certificates representing all of the
MBC Stock, which shall be either duly endorsed or accompanied by stock powers
duly executed in favor of Buyer;
(ba) Officer's Certificate. A certificate, dated
as of the Closing Date, executed by a duly appointed officer of MBC certifying:
(i) that the representations and warranties of MBC contained in Section 3 of
this Purchase Agreement are true and complete in all material respects as of the
Closing Date as though made on and as of that date; (ii) that MBC has in all
material respects performed and complied with all of its obligations, covenants,
and agreements in this Purchase Agreement to be performed and complied with by
MBC on or prior to the Closing Date, and (iii) that the condition set forth in
Section 7.1(b) is satisfied;
(bb) Opinion. The opinions of MBC's and the
Company's counsel substantially in the form of Exhibit A annexed hereto;
(bc) Secretary's Certificate. A certificate, dated
as of the Closing Date, executed by MBC's Secretary certifying to the
authenticity of the resolutions, as attached to such certificate, duly adopted
by MBC's Board of Directors authorizing and approving the execution of this
Purchase Agreement and the consummation of the transactions contemplated
thereby;
(bd) Estoppel Certificates. Estoppel certificates
of the lessors of the Studio Lease and the Tower Lease;
(be) Performance of Company Obligations. Evidence
reasonably satisfactory to Buyer that all MBC and Company obligations and
liabilities due or payable by MBC prior to Closing (other than permitted
liabilities described in Section 2.2(b)) including any order of the FCC, shall
have been satisfied in full;
(bf) Resignations. Written resignations, effective
on the Closing Date, of officers and directors of MBC and the Company;
(bg) Release. A release from each of the MBC
Sellers stating that the Stock of such MBC Seller is free and clear of any and
all liens and encumbrances, and that such MBC Seller has no further claim with
respect to the MBC Stock except for payment hereunder;
(bh) Corporate, Financial and Tax Records. All
corporate records (including minute books and stock books and registers), and
financial and tax records of MBC and the Company for a period of three years
predating the Closing;
(bi) Licenses, Contracts, Business Records, Etc..
Originals or, if not available, true copies of all (1) Licenses, including any
modifications and amendments thereto, (2) all applications, reports, technical
information and engineering studies relating to the Station, (3) all files
required to be maintained by the FCC at the Station or in the Station's public
inspection file, (4) all Contracts, and other operational data or other
information maintained by the Company in the ordinary course, (5) all
blueprints, schematics, working drawings, plans, projections, statistics,
engineering records relating to the Station, and (6) all other business files
and records in the possession of MBC relating to the Station; and
056.7.1.23.Deliveries by Buyer. On the Closing Date,
Buyer shall deliver the following items in form and substance reasonably
satisfactory to MBC and its counsel:
(bj) Payment. The payment described in Section
2.3(a)(ii);
(bk) Opinion. The opinion of Buyer's counsel
substantially in the form set forth at Exhibit B;
(bl) Secretary's Certificate. A certificate, dated
as of the Closing Date, executed by Buyer's secretary, certifying to the
authenticity of resolutions duly adopted by Buyer's Board of Directors
authorizing and approving the execution of this Purchase Agreement and the
consummation of the transactions contemplated thereby; and
(bm) Officer's Certificate. A certificate, dated
as of the Closing Date, executed by a duly appointed officer of Buyer certifying
(i) that the representations and warranties of Buyer contained in Section 4 of
this Purchase Agreement are true and complete in all material respects as of the
Closing Date as though made on and as of that
date; and (ii) that Buyer has in all material respects performed and complied
with all of its obligations, covenants, and agreements in this Purchase
Agreement to be performed and complied with by Buyer on or prior to the Closing
Date.
SECTION 8. TERMINATION.
8.1.Termination by MBC. This Purchase Agreement may be
terminated by MBC, if MBC is not then in material breach of any of its
obligations hereunder, upon ten (10) days written notice to Buyer, upon the
occurrence of any one of the following:
(bn) Conditions. If, on the date that would
otherwise be the Closing Date, any of the conditions precedent to the
obligations of MBC and the MBC Sellers set forth in Section 7.2 of this Purchase
Agreement have not been satisfied or waived in writing by MBC;
(bo) Judgments. If there shall be in effect on the
date that would otherwise be the Closing Date any judgment, decree, or order
that would prevent or make unlawful the Closing;
(bp) TBA. In the event that the TBA has become
effective and thereafter Buyer has breached any of its material obligations
thereunder, and, upon notice specifying such breach, Buyer fails to cure such
breach within forty (40) days of such notice; or
(bq) Expiration. If the transaction contemplated
herein has not closed within three (3) years from the date of the Purchase
Agreement.
8.12.Termination by Buyer. This Purchase Agreement may
be terminated by Buyer, if Buyer is not then in material breach of its
obligations hereunder, upon ten (10) days written notice to MBC, upon the
occurrence of any of the following:
(br) Conditions. If on the date that would
otherwise be the Closing Date any of the conditions precedent to the obligations
of Buyer set forth in Section 7.1 of this Purchase Agreement has not been
satisfied or waived in writing by Buyer: provided, that Buyer may not terminate
because of any breach of a representation or warranty by MBC or the MBC Sellers
if such breach is caused by the conduct of Buyer under the TBA;
(bs) Judgments. If there shall be in effect on the
date that would otherwise be the Closing Date any judgment, decree, or order
that would prevent or make unlawful the Closing.
(bt) TBA. In the event that the TBA has become
effective and thereafter the Company, MBC or the MBC Sellers have breached any
of their material obligations
thereunder, and, upon notice specifying such breach, the Company or MBC or the
MBC Sellers, as the case may be, fails to cure such breach within forty (40)
days of such notice; or
(bu) Time Limit. If the transaction contemplated
herein has not closed within three (3) years from the date of this Purchase
Agreement.
73.3.Right to Cure. Notwithstanding anything herein to the
contrary, no material breach shall be deemed to have occurred until the party in
breach has been notified in writing by the other party and provided twenty (20)
days to cure such breach: provided, that, in the event a cure would reasonably
require more than twenty (20) days, the party in breach shall be afforded an
additional twenty (20) days if such party timely initiates reasonable efforts to
effect a cure and provides the other party with satisfactory evidence that the
cure will be effectuated during the extended period; and provided further, that
a party in breach can pay the other party a sum certain if the payment of such
sum will cure the breach prior to or at the Closing; provided further, that the
Closing Date will be extended to allow a party in breach to effect a cure in
accordance with this Section. This right to cure provided in this Section shall
not be applicable to any payment due from the Buyer to MBC.
73.4.MBC's Rights on Buyer's Termination. If this Purchase
Agreement is terminated by MBC because of Buyer's breach of a material
obligation hereunder, MBC shall be entitled to payment from the Buyer of all
sums then due and payable hereunder (not including the Purchase Price) plus any
and all remedies available to MBC at law or equity: provided, that any payments
made by Buyer under Section 2.3(a)(i)(B) hereof shall constitute a credit
against any damages awarded to MBC.
73.5.Buyer's Rights on MBC's Termination. If this Purchase
Agreement is terminated by Buyer because of the Company's, MBC's or the MBC
Sellers' breach of a material obligation hereunder, Buyer shall have the right
of specific performance as its exclusive remedy, except as otherwise set forth
below. The parties recognize that this Purchase Agreement contemplates the sale
of unique assets and that monetary damages would not be adequate to compensate
Buyer for its injury. If any action is brought by Buyer to enforce this Purchase
Agreement, MBC, the Company and the MBC Sellers shall each waive the defense
that there is an adequate remedy at law. Notwithstanding the above, if specific
performance is not available, or if a breach by MBC, the Company or the MBC
Sellers of any of their obligations under this Purchase Agreement causes the FCC
Licenses to be revoked, forfeited or materially impaired, Buyer shall be
reimbursed all payments made by Buyer under Section 2.3(c) hereof and may also
pursue any and all remedies available to it in law or equity against MBC.
73.6.Litigation Expenses. In the event either party files a
lawsuit or other formal legal proceeding for any remedy available under this
Purchase Agreement, the prevailing party shall be entitled to reimbursement from
the other party of all reasonable legal fees and expenses incurred thereby.
73.7.Return of Deposits. In the event (i) the transaction
contemplated by this Purchase Agreement has not closed within three (3) years of
the date hereof and neither party is in material breach, or (ii) the parties
mutually agree to terminate this Agreement, upon
sale of the FCC Licenses and other Assets of the Station or the Stock of MBC or
the Company, MBC shall, after payment of all sums due under the Loan, pay to
Buyer from all monies retained the amount of all of Buyer's payments made
pursuant to Section 2.3 hereof.
73.8.Condition of MBC. Notwithstanding any other provision
of this Purchase Agreement or any related document described in Section 11.8
hereof, and except for the representations and warranties contained in Section 3
hereof, Buyer acknowledges (i) that the MBC Sellers have not and do not assume
any individual liability hereunder, and (ii) Buyer is aware of the financial
condition of MBC at the time of execution of this Purchase Agreement, including
MBC's lack of significant capital other than the Loan and that, but for the
provisions of Section 2.3 hereof, MBC may not have sufficient reserves to pay
its debts in the ordinary course as they come due. In consideration of the
foregoing and of MBC's and the MBC Sellers' willingness to enter into the
transaction contemplated hereby, Buyer expressly waives against all or any one
of the MBC Sellers, any demand, claim, action, suit, charge, proceeding,
assessment or judgment, whether based in contract, tort, or any other common law
or statutory cause of action, except to the extent that the MBC Sellers may be
liable pursuant to Section 3 hereof for breach of the representations and
warranties contained therein.
SECTION 9. INDEMNIFICATION.
79.1.Survival. All representations and warranties of Buyer,
MBC and the MBC Sellers herein and all covenants of Buyer and MBC herein with
respect to periods prior to Closing shall be deemed continuing representations,
warranties and covenants, and shall survive the Closing. Any investigations by
or on behalf of any party hereto shall not constitute a waiver as to enforcement
of any representation, warranty, or covenant contained in this Purchase
Agreement. No notice or information delivered by either party shall affect the
other party's right to rely on any representation, warranty, or covenant made by
such party or relieve such party of any obligations under this Purchase
Agreement as the result of a breach of any of its representations and
warranties.
79.2.Indemnification by MBC Sellers. After the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, the MBC Sellers jointly and severally hereby agree
to indemnify and hold Buyer harmless against and with respect to, and shall
reimburse Buyer for any and all losses, liabilities, or damages resulting from
any material breach of any warranty or representation of the MBC Sellers
contained in Section 3 of this Purchase Agreement, and any and all out-of-pocket
costs and expenses, including reasonable legal fees and expenses, incident to
any action, suit, proceeding, claim, demand, assessment, or judgment incident to
the foregoing or incurred in investigating or attempting to avoid the same or to
oppose the imposition thereof, or in enforcing this indemnity.
79.3.Indemnification by Buyer. After the Closing, and
regardless of any investigation made at any time by or on behalf of MBC or any
information MBC may have, Buyer hereby agrees to indemnify and hold MBC harmless
against and with respect to, and shall reimburse MBC for:
(bv) any and all losses, liabilities, or damages
resulting from any material breach of any warranty or representation or
nonfulfillment of any covenant by Buyer contained herein or in any certificate,
document, or instrument delivered to MBC hereunder; and
(bw) any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
79.34.Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(bx) Notice. The party claiming indemnification
(the "Claimant") shall promptly give notice to the party from which
indemnification is claimed (the "Indemnifying Party") of any claim, whether
between the parties or brought by a third party, specifying in reasonable detail
the factual basis for the claim. If the claim relates to an action, suit, or
proceeding filed by a third party against Claimant, such notice shall be given
by Claimant within five (5) business days after receipt of written notice of
such action, suit, or proceeding was given to Claimant: provided, that no delay
in providing such notice shall excuse any party's indemnification obligations
hereunder, unless such delay prejudices the Indemnifying Party and then the
Indemnifying Party's obligations shall be reduced only to the extent of such
prejudice.
(by) Investigation and Payment. With respect to
claims solely between the parties, following receipt of notice from the Claimant
of a claim, the Indemnifying Party shall have thirty (30) days to make such
investigation of the claim as the Indemnifying Party deems necessary or
desirable. For purposes of such investigation, the Claimant agrees to make
available to the Indemnifying Party and its authorized representatives the
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree at or prior to the expiration of the
30-day period (or any mutually agreed upon extension thereof) to the validity
and amount of such claim, the Indemnifying Party shall immediately pay to the
Claimant the full amount of the claim. If the Claimant and the Indemnifying
Party do not agree within the 30-day period (or any mutually agreed upon
extension thereof), the Claimant may seek appropriate remedy at law or equity.
(bz) Third Party Claims. With respect to any claim
by a third party as to which the Claimant is entitled to indemnification under
this Purchase Agreement, the Indemnifying Party shall have the right at its own
expense, to participate in or assume control of the defense of such claim, and
the Claimant shall cooperate fully with the Indemnifying Party, subject to
reimbursement for actual out-of-pocket expenses incurred by the Claimant as the
result of any request by the Indemnifying Party. If the Indemnifying Party
elects to assume control of the defense of any third-party claim, the Claimant
shall have the right to participate in the defense of such claim at its own
expense. If the Indemnifying Party fails to assume control or otherwise
participate in the defense of any third-party claim within ten (10) business
days of receiving notice under subsection (a) of this section (unless some
action is required prior to such
date), it shall be bound by the results obtained in good faith by the Claimant
with respect to such claim.
(ca) Expeditious Action. If a claim, whether
between the parties or by a third party, requires immediate action, the parties
will make every reasonable effort to reach a decision with respect thereto as
expeditiously as possible.
(cb) Coverage. The indemnification rights provided
in Section 10.2 and Section 10.3 shall extend to the members, partners,
shareholders, officers, directors, employees, representatives, and affiliated
entities of any Claimant: provided, that for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
79.345.Special Indemnity with Respect to the ▇▇▇▇▇
Agreement. In the event that either party hereto learns of a material breach of
any representation or warranty contained in Section 3 of the ▇▇▇▇▇ Agreement
(such breach having occurred at or before the Consummation thereof), such party
shall notify the other party, and MBC shall assert a claim against the Sellers
for indemnity pursuant to the ▇▇▇▇▇ Agreement. On or before the Closing Date,
any proceeds derived therefrom shall be first allocated to remedy the material
breach giving rise to such claim, with any remaining amount held in a segregated
account for the benefit of the Lenders, or, at Closing, for Buyer.
79.346.Time Limits. Notwithstanding anything in this
Purchase Agreement to the contrary, neither party shall indemnify or otherwise
be liable to the other party with respect to any claim for any breach of a
representation or warranty, or for the breach of any covenant contained in this
Purchase Agreement, unless notice of the claim is received within three years
after the Closing Date.
SECTION 10. MISCELLANEOUS
79.10.1.Fees and Expenses. Buyer shall pay any and all
filing fees, transfer taxes, document stamps, or other charges levied by any
governmental entity on the fulfillment of the terms and conditions of this
Purchase Agreement, including but not limited to (i) fees associated with the
transfer of Stock from MBC to Buyer; (ii) fees charged by the FCC in connection
with obtaining the FCC Consent; (iii) filing fees payable in connection with any
HSR Act filing, to the extent required; and (iv) the costs and expenses of title
reports, surveys, environmental surveys and tax, lien and judgment searches.
79.10.2.Notices. All notices, demands, and requests required
or permitted to be given under the provisions of this Purchase Agreement shall
be in writing and shall be addressed as follows:
_______If to MBC or ▇▇▇▇▇▇ ▇▇▇▇▇
MBC Sellers: Montecito Broadcasting Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇ ▇. Paper, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Buyer: ▇▇▇▇▇▇ Quicksilver, Esq.
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
Notices shall be sent by registered or certified mail, postage prepaid and
return receipt requested, by overnight courier service, charges prepaid, or by
hand, and shall be deemed to have been received on the date of hand-delivery or
the date receipt shown on the return receipt.
0.3.Assignment. MBC shall not assign its rights and
obligations under this Purchase Agreement without the express written consent of
Buyer, which consent shall not be unreasonably withheld. Buyer may assign its
rights and obligations under this Purchase Agreement to any other party:
provided, that Buyer shall remain liable for the performance of all of Buyer's
obligations hereunder. Notwithstanding the above, either party may assign their
rights hereunder to the Lender in connection with the Loan Agreement.
0.4.Benefit and Binding Effect. This Purchase Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
0.5.Further Assurances. The parties shall take any actions
and execute any other documents that may be necessary or desirable to the
implementation and consummation of this Purchase Agreement.
0.6.GOVERNING LAW. THIS PURCHASE AGREEMENT SHALL BE
GOVERNED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
0.7.Headings. The headings herein are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Purchase Agreement.
0.8.Entire Agreement. This Purchase Agreement, the schedules
exhibits hereto, all documents, certificates, and other instruments to be
delivered by the parties pursuant hereto, the Letter Agreement, the Option
Agreement and the TBA collectively represent the entire understanding and
agreement between Buyer, MBC and the MBC Sellers with respect to the subject
matter of this Purchase Agreement. In the event of a conflict between the
provisions of this Purchase Agreement and any other agreement between the
parties, the provisions of this Purchase Agreement shall prevail. This Purchase
Agreement supersedes all prior and contemporaneous negotiations between the
parties and cannot be amended, supplemented, or changed except by an agreement
in writing that makes specific reference to this Purchase Agreement and that is
signed by the party against which enforcement of any such amendment, supplement,
or modification is sought.
0.9.Waivers. Except as otherwise provided in this Purchase
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Purchase Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Purchase Agreement.
▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇▇ Agreement. Although this Purchase
Agreement has been prepared by or on behalf of one Party, it shall not be more
strictly construed against that Party.
0.11.Counterparts. This Purchase Agreement may be signed in
counterparts, and all such counterparts shall collectively be deemed to be one
and the same document.
IN WITNESS WHEREOF, this Purchase Agreement has been duly executed by
Buyer and MBC as of the date written below as to each.
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By:____________________________________
MONTECITO BROADCASTING
CORPORATION
By:______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇, Executive Vice President
SELLING STOCKHOLDERS
________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
Schedule 2.2(a)(i)
Tangible Personal Property
See List Attached
Schedule 2.2(a)(ii)
Leases
See Attached
Schedule 2.2(a)(iii)
Licenses
See Attached
Schedule 2.2(a)(iv)
Contracts
See Attached List
Schedule 2.2(a)(v)
Intangibles
None