ASSET PURCHASE AGREEMENT
FOR STATION WYSR(FM)ROTTERDAM, NEW YORK
between
▇▇▇▇▇ BROADCASTING COMPANY OF NEW YORK, INC.
and
LIBERTY BROADCASTING OF ALBANY, INCORPORATED
TABLE OF CONTENTS
Page
ARTICLE 1. Exchange of Consideration..............................1
1.1. Consideration Conveyed by Seller.......................1
1.2. Payment by Buyer to Seller.............................3
1.3. Adjustments............................................3
1.4. Allocation.............................................4
1.5. Closing................................................4
1.6. Timing.................................................4
ARTICLE 2. Representations and Warranties of Seller...............4
2.1. Incorporation..........................................4
2.2. FCC Licenses...........................................4
2.3. Condition of Assets....................................5
2.4. Title..................................................5
2.5. Employees..............................................5
2.6. Taxes..................................................5
2.7. Environmental..........................................6
2.8. Litigation.............................................6
2.9. Compliance with Laws...................................7
2.10. No Defaults............................................7
2.11. Brokers................................................7
2.12. Corporate Action.......................................7
2.13. Station Assets.........................................7
2.14. Leases.................................................7
2.15. Insolvency.............................................7
2.16. Government Approvals...................................8
2.17. Contracts..............................................8
2.18. No Material Omission...................................8
ARTICLE 3. Representations and Warranties of Buyer................8
3.1. Status.................................................8
3.2. Corporate Action.......................................8
3.3. No Defaults............................................8
3.4. Brokers................................................8
3.5. Litigation.............................................9
3.6. Qualification as a Broadcast Licensee..................9
3.7. Financial Capabilities.................................9
3.8. No Material Omission...................................9
ARTICLE 4. Covenants of Seller Pending Closing....................9
4.1. Maintenance of Station.................................9
4.2 Organization, Good Will, Promotion....................10
4.3. Access to Facilities, Files, and Records..............10
4.4. Representations and Warranties........................10
4.5. Application for FCC Consent...........................10
4.6. Consents..............................................11
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4.7. Notice of Proceedings.................................11
4.8. Confidential Information..............................11
4.9. Consummation of Agreement.............................11
4.10. Compliance with Law...................................11
4.11. Performance under Leases..............................11
ARTICLE 5. Covenants of Buyer Pending the Closing................11
5.1. Representation and Warranties.........................12
5.2. Application for Commission Consent....................12
5.3. Confidential Information..............................12
5.4. Consummation of Agreement.............................12
5.5. Notice of Proceedings.................................12
5.6. Actions Inconsistent with Consummation................12
ARTICLE 6. Conditions Precedent to Obligations of Seller.........13
6.1. Representations, Warranties, Covenants................13
6.2 Proceedings...........................................13
6.3 FCC Approval..........................................13
ARTICLE 7. Conditions Precedent to Obligations of Buyer..........13
7.1 Representations, Warranties, Covenants................13
7.2 Proceedings...........................................14
7.3 FCC Approval..........................................14
ARTICLE 8 Indemnification.......................................14
8.1 Survival..............................................14
8.2 Indemnification of Buyer..............................14
8.3 Indemnification of Seller.............................14
8.4 Notice of Claim.......................................15
8.5 Defense of Third Party Claims.........................15
ARTICLE 9 Miscellaneous.........................................15
9.1 Termination of Agreement..............................15
9.2 Liabilities Upon Termination..........................16
9.3 Expenses..............................................16
9.4 Assignments...........................................17
9.5 Further Assurances....................................17
9.6 Damage to the Assets..................................17
9.7 Notices...............................................17
9.8 Captions..............................................18
9.9 Law Governing.........................................18
9.10 Waiver of Provisions..................................18
9.11 Counterparts..........................................18
9.12 Reimbursement of Legal Expenses.......................18
9.13 Entire Agreement......................................18
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SCHEDULE 1 FCC Licenses
SCHEDULE 2 Personal Property
SCHEDULE 3 Leases
SCHEDULE 4 Allocation
SCHEDULE 5 Employees
SCHEDULE 6 Contracts
EXHIBIT A Escrow Agreement
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is dated as of August 15, 1996, and is between ▇▇▇▇▇
Broadcasting Company of New York, Inc. ("Seller"), a corporation organized
under laws of the State of New York, and Liberty Broadcasting of Albany,
Incorporated ("Buyer"), a corporation duly organized under the laws of the
State of New York.
W I T N E S S E T H:
1. Seller holds licenses from the Federal Communications Commission (the
"FCC") for broadcast station WYSR(FM) in Rotterdam, New York (the "Station")
and owns or holds other assets used and useful in connection with the
operation of the Station.
2. Seller desires to sell, assign, and transfer, to the fullest extent
permitted by law, the FCC licenses and other assets owned or held by Seller
and used and useful in the operation of the Station, and, to the fullest
extent permitted by law, Buyer desires to acquire the FCC licenses and other
assets owned or held by Seller and used and useful in the operation of the
Station under the terms described herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties hereby agree as follows:
ARTICLE 1. Exchange of Consideration
1.1. Consideration Conveyed by Seller. At the Closing, Seller shall
provide Buyer with the following consideration:
1. Subject to the terms and conditions of this Agreement, Seller
shall, to the fullest extent permitted by law, convey, transfer, and deliver
to Buyer, and Buyer shall, to the fullest extent permitted by law, acquire
from Seller free and clear of all liens, claims, security interests and
encumbrances of any kind whatsoever, all of Seller's right, title and interest
in and to Seller's assets, as set forth hereafter, real and personal, tangible
and intangible, of every kind and description owned by Seller and used and
useful in connection with the business and operation of the Station as a going
concern (collectively the "Station Assets") except the assets described in
Section 1.1.2. of this Agreement. The Station Assets consist of the following
items:
1. FCC Licenses. All licenses issued by the FCC to Seller (the
"FCC Licenses") with respect to the Station, as shown on Schedule l to
this Agreement, and all applications therefore, together with any and
all applications pending before and orders issued by the FCC with
respect to renewals, extensions, or modifications thereof.
2. Tangible Personal Property. All equipment, furniture,
fixtures, office materials and supplies, spare parts, and other tangible
personal property of every kind and description owned as of the date of
this Agreement by Seller and used and useful in connection with the
business and operation of the Station, all of which are set
forth on Schedule 2 to this Agreement, and any additions, improvements,
replacements, and alterations made thereto in the ordinary course of
business between the date of this Agreement and the Closing Date, as
defined herein.
3. Leases. Seller's leases for the main studio and the
Station's transmitter site, both of which are annexed hereto in
Schedule 3.
4. Marketing Items. All trademarks, call signs, service marks,
franchises, patents, trade names, jingles, slogans, and logotypes owned
and used by Seller as of the date hereof as well as those acquired
between the date hereof and the Closing Date in connection with the
business and operation of the Station.
5. Programming and Copyrights. All programs and programming
materials and elements of whatever form or nature owned by Seller and
used and useful in connection with the business and operation of the
Station as of the date hereof, together with all such programs,
materials, elements and copyrights acquired between the date hereof and
the Closing Date, whether recorded on tape or any other substance or
intended for live performance, and whether completed or in production,
and all related common law and statutory copyrights owned by or licensed
to Seller and used in connection with the business and operation of the
Station.
6. Records. Any and all files, program logs, public inspection
files, and other records that relate to the operation of the Station.
7. Warranties. Any and all warranties and guarantees supplied
by vendors, suppliers, and other third parties which cover or provide
any benefit with respect to any of the Personal Property being assigned.
8. Goodwill. All of Seller's goodwill in and going concern
value of the Station.
2. There shall be excluded from the Station Assets and retained by
Seller, to the extent in existence on the Closing Date, the following assets
(the "Excluded Assets"):
1. Receivables. All notes and accounts receivable and other
receivables of Seller relating to or arising out of the business and
operation of the Station.
2. Cash and Investments. All cash on hand or in bank accounts.
3. Prepaid Items. All deposits, reserves, and prepaid expenses
and taxes (which shall be prorated as provided in Section 1.3. below).
4. Personal Property. All tangible personal property disposed
of or consumed in the ordinary course of business of the Station.
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5. Insurance. All contracts of insurance.
6. Securities. Any and all securities owned or held by
Seller.
7. Claims. Any and all claims of Seller with respect to
transactions which transpire prior to the Closing Date, including,
without limitation, claims for tax refunds.
8. Name. Any right to use the name "▇▇▇▇▇ Broadcasting
Company of New York, Inc." or any logo or variation of such name.
9. Contracts. All agreements and contracts except for those
which Buyer will assume in accordance with Section 1.1.1.(c) of this
Agreement.
10. Miscellaneous Assets. Pension, profit-sharing, and savings
plans and trusts and any assets thereof.
3. The Station Assets shall be sold and conveyed to Buyer free and
clear of all liens, claims, security interests and encumbrances except for (a)
liens for taxes not yet due and payable, and (b) the obligations of Seller
which Buyer shall assume under leases described in Subsection 1.1.1.(c)
hereof. Buyer shall not assume or be liable for any liability or obligation of
Seller arising out of any contract of insurance, any pension, retirement or
profit-sharing plan, trust or other benefit plan, or any litigation,
proceeding, or claim by any person or entity relating to the business or
operation of the Station prior to the Closing Date, whether or not such
litigation, proceeding, or claim is pending, threatened, or asserted before,
on, or after the Closing Date.
1.2. Payment by Buyer to Seller.
1. Buyer shall pay Seller One Million Dollars ($1,000,000) (the
"Purchase Price") in cash at the Closing, as defined herein.
2. Simultaneous with the execution of this Agreement, Buyer will
deposit One Hundred Thousand Dollars ($100,000) in an interest-bearing account
in North Fork Bank pursuant to the terms of an Escrow Agreement in the form
annexed hereto as Exhibit A. Such deposit shall be referred to herein as the
"Escrow Funds." The Escrow Funds shall be paid to Seller at the Closing,
subject to any adjustments made under Section 1.3. of this Agreement. All
interest accrued prior to Closing shall be paid to Buyer. In the event this
Agreement is terminated prior to any Closing, the Escrow Funds will be
distributed in accordance with Section 9.2. of this Agreement.
1.3. Adjustments. At the Closing, all tangible and intangible personal
property taxes and assessments, rent, water, sewer and other utility charges,
if any, and any other lienable municipal services, if any, and any other
pre-paid items with respect to the Station Assets to be acquired by Buyer
shall be apportioned and allocated between Buyer and Seller as of the Closing
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Date on the basis of the period of time to which such items or liabilities
apply. To the extent such items cannot be determined at Closing, a final
settlement on such prorations shall be held within thirty (30) days after the
Closing Date. If the Closing occurs before the tax rate is fixed for the then
current term, the apportionment of taxes at Closing shall be upon the basis of
the tax rate for the preceding tax year applied to the latest assessed
valuation. All transfer, sales, use or other taxes or assessments or
documentary stamps imposed by any governmental body or others on the sale
and/or transfer of the Station Assets herein, if any, shall be paid by Buyer.
1.4. Allocation. The Purchase Price shall be allocated in accordance with
Schedule 4 annexed hereto.
1.5. Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall be accomplished by overnight delivery services
and such other communications, including the wire transfer of funds, mutually
agreed to by the parties commencing at 10:00 a.m. on a date (the "Closing
Date") mutually agreed to or, in the absence of a mutual agreement, selected
by Seller, which shall be within ten (10) days after the date on which the FCC
order approving the assignment of the FCC Licenses becomes a Final Order
(which, for purposes of this Agreement, means an order issued by the FCC
consenting to the assignment of the FCC Licenses which is no longer subject to
reconsideration or review by the FCC or a court of competent jurisdiction and
does not include conditions materially adverse to Seller or Buyer). At the
Closing, each party shall execute and deliver to the other party the documents
and other items (including but not limited to the Purchase Price) specified
herein as well as any other document(s) and item(s) reasonably necessary for
the consummation of the transactions contemplated herein. Such additional
documents shall be reasonably satisfactory to the other party as to both form
and substance and shall include, without limitation, a ▇▇▇▇ of sale and
assignments of licenses and leases.
1.6. Timing. Time is of the essence to implementation of this Agreement.
It is the intention of the parties that the Closing of the transactions
contemplated herein occur not later than April 1, 1997.
ARTICLE 2. Representations and Warranties of Seller.
Seller represents and warrants to Buyer as to the following matters from
now until the date one (1) year after the Closing Date hereunder:
2.1. Incorporation. Seller is a corporation duly organized, validly
existing, and in good standing in the State of New York and has the corporate
power to carry on the business of the Station as it is now being conducted, to
own and operate the Station Assets, and to enter into and consummate the
transactions contemplated by this Agreement.
2.2. FCC Licenses. Seller is the holder of the FCC Licenses listed in
Schedule 1 to this Agreement. The FCC Licenses constitute all of the licenses
required under the Communications Act of 1934, as amended (the "Communications
Act"), and the current rules,
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regulations, and policies of the FCC for the operation of the Station as
currently conducted. The FCC Licenses are in full force and effect and are in
good standing in every respect for the purpose of operating the Station for
its full term expiring on June 1, 1998. All material applications, reports and
other disclosures required by the FCC with respect to the Station have been
and will be, as of the Closing, timely filed. There is not, as of the date of
this Agreement, pending or, to the best of Seller's knowledge, threatened, any
action by or before the FCC or any court to revoke, cancel, rescind, modify,
or refuse to renew any of the FCC Licenses, or which would otherwise have a
material adverse impact on the operation of the Station. There is not now
pending or, to the best of Seller's knowledge, threatened, any petition,
informal objection, investigation, order to show cause, notice of violation,
notice of apparent liability, or notice of forfeiture or complaint before the
FCC or any court against Seller with respect to the Station. The Station is
operating in material compliance with the FCC Licenses, the Communications
Act, and the rules, regulations and policies of the FCC. There is not now
pending or, to the best of Seller's knowledge, threatened any petition,
application, or proposal (except those of general applicability) which, if
favorably acted upon, would have a material adverse impact on the Station's
signal coverage.
2.3. Condition of Assets. The Station Assets are in good working order
(ordinary wear and tear excepted), meet any and all government-requirements,
are being maintained in accordance with generally accepted engineering
practices, and constitute all the assets needed to operate the Station as
currently conducted.
2.4. Title. On the Closing Date, the Station Assets will be in each case
free and clear of all security interests, mortgages, pledges, liens,
conditional sales agreements, leases, encumbrances, or charges of any nature
whatsoever except for those referenced in Section 1.1.3. of this Agreement.
2.5. Employees. Annexed hereto as Schedule 5 is a list of Station
employees and their respective compensation. Seller is not a party to any
pending or, to its knowledge, threatened labor dispute affecting the Station.
Except for taxes due to be paid to the Internal Revenue Service and
instrumentalities of the State of New York with respect to Seller's employees,
Seller (a) has complied in all material respects with all applicable federal,
state, and local laws, ordinances, rules and regulations and requirements
relating to employment or labor, including but not limited to the provisions
thereof relative to wages, hours, collective bargaining, and payment of Social
Security, unemployment and withholding taxes and (b) is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. There are no collective bargaining agreements, or negotiations
for the same, in existence which affect any of the Station employees, and
Seller is not aware of any efforts to have the Station recognize any union as
the bargaining agent for Station employees.
2.6. Taxes. To the best of Seller's knowledge, it has duly and timely
filed all required federal, state and local tax returns and paid all taxes,
interest and penalties due with respect to Seller's interest in the Station
Assets or its operation of the Station, has sought and obtained extensions of
time to file such and pay same within the time provided therefor, or is
challenging such taxes in good faith in accordance with applicable procedures.
Between the date hereof and
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the Closing Date Seller shall exercise its best efforts to duly and timely
file all such required returns and pay all such taxes, interest and penalties
or to obtain such extensions within the time provided therefor, unless such
taxes are being challenged in good faith in accordance with applicable
procedures. Seller shall indemnify, defend, save and hold Buyer harmless from
and against all claims, obligations and liabilities for all taxes, interest
and penalties attributable to Seller's ownership or operation of the Station
and the Station Assets prior to the Closing Date.
2.7. Environmental. (a) To the best of Seller's knowledge, none of the
real property or buildings and improvements erected thereon and leased by
Seller and assigned to Buyer hereunder has ever been used by Seller or, to the
best of Seller's knowledge, by any prior owner or occupant to refine, produce,
store, handle, transfer, process, dispose of or transport "Hazardous or Toxic
Waste or Substances" or "Pollutants" (including and without limitation
hydrocarbons, polychlorinated biphenyls, petroleum and the like) as such terms
or similar terms are defined under the laws, rules, regulations or ordinances
of the United States, the State of the State of New York or any other
governmental authority with jurisdiction over the Station Assets. Seller has
not received any notice, summons, citation, directive, letter or other
communication, written or oral, from the United States or New York
Environmental Protection Agencies or anyone else concerning any intentional or
unintentional action or omission on Seller's or any prior owner or prior
occupant's part which resulted in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leeching,
dumping or disposing or the like of such "Hazardous or Toxic Waste or
Substances" or "Pollutants" into the waters, into the air or onto the land
which may or may not have resulted in damage to the land, waters, fish,
shellfish, wildlife, air or other resources owned, managed, held in trust or
otherwise controlled by the United States, the State of New York, Seller, or
others.
(b) Buyer shall have the right to conduct a Phase I
environmental audit of the Station Assets at Buyer's expense. If the audit
reveals any material discrepancy with the representations contained in this
section, Seller shall, within 30 days after receipt of notice of such
discrepancy and at Seller's expense, eliminate the discrepancy or, at Seller's
option, provide an appropriate reduction in the Purchase Price based on the
monies to be expended by Buyer to eliminate the discrepancies. Notwithstanding
anything herein to the contrary, the Closing contemplated herein shall not
occur until after expiration of the aforesaid 30-day notice period provided to
Seller by this subsection.
2.8. Litigation. Seller has not been operating under or subject to, or
in default with respect to, any order, writ, injunction, or decree of any
court or federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality, foreign or domestic, which has
had or could reasonably be expected to have a material adverse effect on the
operation of the Station. There is no litigation, arbitration, dispute,
proceeding or investigation ("Litigation") pending by or against, or, to the
best of Seller's knowledge, threatened against Seller relating to or affecting
the Station Assets or the business of the Station which materially interferes
or could reasonably be expected materially to interfere with (a) the Seller's
right, title to, interest in, and operation of the Station or (b) Seller's
ability to transfer the Station Assets to Buyer free of such Litigation.
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2.9. Compliance with Laws. Seller is in material compliance with all
applicable laws, rules, regulations, and orders of the federal, state, and
local governments with respect to the Station. The present uses by Seller of
the Station Assets do not violate any such laws, regulations, or orders in any
material respect.
▇.▇▇.▇▇ Defaults. Neither the execution and delivery by Seller of this
Agreement nor the consummation by Seller of the transactions contemplated
herein are events that, by themselves or with the giving of notice or the
passage of time or both, constitute a material violation of or will conflict
with or result in any material breach of or any default under (a) the terms,
conditions, or provisions of any arbitration award, judgment, law, judicial
order, or regulation to which Seller is subject, (b) its articles of
incorporation or by-laws, or (c) any agreement or instrument to which Seller
is a party or by which Seller is bound, or result in the creation of
imposition of any lien, charge, or encumbrance on any of the Station Assets.
2.11.Brokers. There is no broker or finder or other person who would, as
a result of any agreement of or action taken by Seller, have any valid claim
against any of the parties to this Agreement for a commission or brokerage fee
in connection with this Agreement or the transactions contemplated herein.
2.12.Corporate Action. All corporate actions and proceedings necessary
to be taken by or on the part of Seller in connection with the transactions
contemplated by this Agreement and necessary to make them effective have been
duly and validly taken. This Agreement has been duly and validly authorized,
executed, and delivered by Seller and constitutes a valid and binding
agreement of Seller, enforceable in accordance with and subject to its terms,
except as limited by laws affecting the enforcement of creditor rights or
contractual obligations generally. Seller shall deliver to Buyer at Closing
copies of the resolutions adopted by the Board of Directors and shareholders
of Seller authorizing the delivery, execution and consummation of the
transactions contemplated by this Agreement.
2.13.Station Assets. All of the statements made and Schedules referred
to in this Agreement with respect to the Station Assets are true, accurate,
and complete in all material respects.
2.14.Leases. All of the leases listed on Schedule 3 have been complied
with in all material respects by Seller and will have been complied with in
all material respects by Seller as of the Closing Date hereunder, and no
material default of Seller in respect to any duties or obligations required to
be performed by Seller has or will have occurred. All such leases are valid,
binding, and enforceable in accordance with their respective terms and are
sufficient to enable the Station to operate as currently conducted. The leases
listed in the schedule are all of the leases currently used in the operation
of the station.
2.15.Insolvency. No insolvency proceedings of any character, including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting the Seller or
any of the Station Assets is pending or, to the best of Seller's knowledge,
threatened, and Seller has made no assignment for the benefit of
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creditors, nor taken any actions with a view to, or which would constitute the
basis for, the institution of any such insolvency proceedings.
2.16.Government Approvals. No approval of any third party, governmental
agency or of any court is required to be obtained by Seller with regard to the
assignment of the FCC Licenses and the other Station Assets except the lessors
of the leases cited in Schedule 3 and approval by the FCC as provided herein.
2.17.Contracts. Annexed hereto in Schedule 6 is a list of all the
material contracts utilized in the current operation of the Station.
▇.▇▇.▇▇ Material Omission. Seller has not failed to disclose any
material fact within its knowledge which would make any statement or
representation in this Agreement inaccurate or misleading.
ARTICLE 3. Representations and Warranties of Buyer.
Buyer represents and warrants to Seller as to the following matters now
and on the Closing Date hereunder:
3.1. Status. Buyer is a corporation duly organized, validly existing,
and in good standing in the State of New York and has the corporate power to
enter into and consummate the transactions contemplated by this Agreement.
3.2. Corporate Action. All corporate actions and proceedings necessary
to be taken by or on the part of Buyer in connection with the transactions
contemplated by this Agreement and necessary to make them effective have been
duly and validly taken. This Agreement has been duly and validly authorized,
executed, and delivered by Buyer and constitutes a valid and binding agreement
of Buyer, enforceable in accordance with and subject to its terms, except as
limited by laws affecting the enforcement of creditor rights or contractual
obligations generally. Buyer shall deliver to Seller at Closing copies of the
resolutions adopted by the Board of Directors and shareholders of Buyer
authorizing the delivery, execution and consummation of the transactions
contemplated by this Agreement.
3.3. No Defaults. Neither the execution and delivery by Buyer of this
Agreement nor the consummation by Buyer of the transactions contemplated
herein are events that, by themselves or with the giving of notice or the
passage of time or both, constitute a material violation of or will conflict
with or result in any material breach of or any default under (a) the terms,
conditions, or provisions of any arbitration award, judgment, law, judicial
order, or regulation to which Buyer is subject, (b) its articles of
incorporation or by-laws, or (c) any agreement or instrument to which Buyer is
a party or by which Buyer is bound, or result in the creation of imposition of
any lien, charge, or encumbrance on any of the Station Assets.
3.4. Brokers. There is no broker or finder or other person who would, as
a result of any agreement of or action taken by Buyer, have any valid claim
against any of the parties to this
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Agreement for a commission or brokerage in connection with this Agreement or
the transactions contemplated herein.
3.5. Litigation. There is no litigation, proceeding, or investigation of
any nature pending or, to the best of Buyer's knowledge, threatened against or
affecting Buyer that would affect Buyer's ability to carry out the
transactions contemplated herein.
3.6. Qualification as a Broadcast Licensee. Buyer is legally and
financially qualified under the Communications Act and all other applicable
federal, state and local laws, rules and regulations, to acquire the Station
Assets from Seller. Buyer knows of no fact that would, under the
Communications Act and the rules, policies and practices of the FCC,
disqualify Buyer as an assignee of the FCC Licenses or as owner and holder of
the Station Assets.
3.7. Financial Capabilities. Buyer has sufficient liquid resources on
hand or from committed sources to fulfill its financial obligations under this
Agreement.
3.8. No Material Omission. Buyer has not failed to disclose any material
fact within its knowledge which would make any statement or representation in
this Agreement inaccurate or misleading.
ARTICLE 4. Covenants of Seller Pending Closing.
Seller covenants and agrees that, from the date of this Agreement to and
including the Closing Date, it will take, or refrain from taking, the
following actions:
4.1. Maintenance of Station. Seller shall continue to carry on the
Station's business and keep its books of account, records, and files in the
ordinary course of business. Seller also shall continue to operate the Station
in all material respects in accordance with the terms of the FCC Licenses and
in material compliance with all applicable rules, regulations, policies and
laws. Seller will maintain in full force and effect through and including the
Closing Date existing property damage, liability, and other insurance with
respect to the Station Assets and to cover contingencies that can be
reasonably anticipated. Prior to the Closing, Seller will not, without the
prior written consent of Buyer:
1. sell, lease, transfer, or agree to sell, lease, or transfer
any Station Assets without replacement thereof with a substantially
equivalent asset of substantially equivalent kind, condition, and value;
2. enter into any collective bargaining agreement;
3. renew, renegotiate, modify, amend, or terminate any
existing time sales contracts with respect to the Station except in the
ordinary course of business;
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4. enter into or amend any contract or commitment with respect
to the Station or the Station Assets in excess of $25,000 unless such
contract or amended contract is cancellable upon 30 days notice without
liability;
5. make any material change in the Station's buildings,
leasehold improvements, or fixtures except in the ordinary course of
business; or
6. except in the ordinary course of business consistent with
prior practices, (i) grant or agree to grant any general increases in
the rates of salaries or compensation payable to employees of the
Station; (ii) grant or agree to grant any specific bonus or increase to
any executive or management employee of the Station; or (iii) provide
for any new pension, retirement or other employment benefits for
employees of the Station or any increases in any existing benefits.
4.2. Organization, Good Will, Promotion. Seller shall use its best
efforts to preserve the business organization of the Station intact as well as
the goodwill of the Station's suppliers, customers, and others having business
relations with the Station and, to that end, will continue to expend whatever
monies Seller has previously budgeted for marketing purposes: provided, that
Buyer expressly acknowledges that the announcement of a sale of the Station
from Seller to Buyer may affect the business of the Station and the goodwill
of the Station's suppliers, customers, employees, and others having business
relations with the Station.
4.3. Access to Facilities, Files, and Records. At the reasonable request
of Buyer, Seller shall give Buyer and/or its representatives (a) reasonable
access during normal business hours to all facilities, property, accounts,
title papers, insurance policies, licenses, agreements, commitments, records,
machinery, fixtures, furniture, and inventories related to the Station, and
(b) all such other information concerning the affairs of the Station as Buyer
may reasonably request. The rights of Buyer under this Section shall not be
exercised in such a manner as to interfere unreasonably with the business of
the Station.
4.4. Representations and Warranties. Seller shall give notice to Buyer
promptly upon the occurrence of, or upon becoming aware of the impending or
threatened occurrence of, any event that would cause or constitute a material
breach of any of Seller's representations or warranties contained in this
Agreement.
4.5. Application for FCC Consent. Within ten (10) business days after
execution of this Agreement, Seller shall prepare and file an appropriate
application (the "Application") with the FCC requesting its written consent to
the assignment of the FCC Licenses for the Station to Buyer. Seller shall
diligently take, or cooperate in the taking of, all steps necessary and
appropriate to expedite the preparation of the Application and its prosecution
to a favorable conclusion. Seller will promptly provide Buyer with a copy of
any pleading, order, or other document served on it relating to the
Application. Seller will use its best efforts and otherwise cooperate with
Buyer in responding to any information requested by the FCC related to the
Application or this Agreement and in defending against any petition, informal
complaint, and
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other objection which may be filed against the Application. The FCC filing
fees shall be divided equally between Seller and Buyer.
4.6. Consents. Seller shall obtain or cause to be obtained prior to the
Closing consents to the assignment to or assumption by Buyer of all leases of
Seller included in the Station Assets that require the consent of any third
party by reason of the transactions provided for in this Agreement. If any
necessary consent to any lease deemed material to Buyer's operation of the
Station is not obtained prior to the Closing, then Buyer has the option of
terminating this Agreement or of requiring Seller to cooperate with Buyer in
any reasonable arrangement necessary to provide to Buyer after the Closing the
benefits under such lease, including enforcement for the benefit of Buyer of
any and all rights of Seller against third parties.
4.7. Notice of Proceedings. Seller will promptly notify Buyer upon
becoming aware of any claim, dispute, arbitration, litigation, complaint,
order or decree relating to Seller, the Station, the operation of the Station,
or the consummation of this Agreement or any transaction contemplated herein.
4.8. Confidential Information. If the transactions contemplated in this
Agreement are not consummated for any reason, Seller shall not disclose to
third parties any information designated as confidential and received from
Buyer or its agents in the course of investigating, negotiating, and
consummating the transactions contemplated by this Agreement: provided, that
nothing shall be deemed to be confidential information that (a) is known to
Seller at the time of disclosure to it; (b) becomes publicly known or
available other than through disclosure by Seller; (c) is rightfully received
by Seller from a third party; or (d) is independently developed by Seller.
4.9. Consummation of Agreement. Seller shall fulfill and perform all
conditions and obligations to be fulfilled and performed by Seller under this
Agreement and make every reasonable effort to cause the transactions
contemplated by this Agreement to be fully carried out.
4.10.Compliance with Law. Seller will comply materially with all
applicable federal, state and local laws, ordinances and regulations,
including but not limited to the Communications Act and the rules, regulations
and policies of the FCC.
4.11.Performance under Leases. Seller will perform its obligations
under, and keep in good standing, all leases to which Seller is a party and
which will be assigned to Buyer at the Closing pursuant to this Agreement.
ARTICLE 5. Covenants of Buyer Pending the Closing.
Buyer covenants and agrees that, from the date of this Agreement to and
including the Closing, it will take, or refrain from taking, the following
actions:
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5.1. Representation and Warranties. Buyer shall give notice to Seller
promptly upon the occurrence of, or upon becoming aware of the impending or
threatened occurrence of, any event that would cause or constitute a material
breach of any of the representations and warranties of Buyer contained in this
Agreement.
5.2. Application for Commission Consent. Within ten (10) business days
after execution of this Agreement, Buyer will prepare and provide Seller's
counsel with the assignee's portion of the Application. Buyer will diligently
take, or cooperate in the taking of, all steps necessary and appropriate to
expedite the preparation of the Application and its prosecution to a favorable
conclusion. Buyer will promptly provide Seller with a copy of any pleading,
order, or other document served on it relating to the Application. Buyer will
use its best efforts and otherwise cooperate with Seller in responding to any
information requested by the FCC related to the Application or this Agreement
and in defending against any petition, informal complaint, and other objection
which may be filed against the Application.
5.3. Confidential Information. If the transactions contemplated in this
Agreement are not consummated for any reason, Buyer shall not disclose to
third parties any information designated as confidential and received from
Seller or its agents in the course of investigating, negotiating, and
performing the transactions contemplated by this Agreement: provided, however,
that nothing shall be deemed to be confidential information that (a) is known
to Buyer at the time of disclosure to it; (b) becomes publicly known or
available other than through disclosure by Buyer; (c) is rightfully received
by Buyer from a third party; or (d) is independently developed by Buyer.
5.4. Consummation of Agreement. Buyer shall fulfill and perform all
conditions and obligations to be fulfilled and performed by Buyer under this
Agreement and make every reasonable effort to cause the transactions
contemplated by this Agreement to be fully carried out.
5.5. Notice of Proceedings. Buyer will promptly notify Seller upon
becoming aware of any order or decree or any complaint requesting an order or
decree restraining or enjoining the consummation of this Agreement or the
transactions contemplated herein, or upon receiving any notice from any
governmental department, court, agency, or commission of its intention to
institute an investigation into, or institute a suit or proceeding to restrain
or enjoin, the consummation of this Agreement or such transactions, or to
nullify or render ineffective this Agreement or such transactions if
consummated.
5.6. Actions Inconsistent with Consummation. Prior to the Closing, Buyer
shall not (a) acquire (or, to the extent within Buyer's control, permit any
other person or entity affiliated with Buyer to acquire) any interest in any
radio or television station, newspaper, or other communications facility, or
take any other action, or omit to take any action, if such acquisition, action
or omission, together with the other interests of Buyer, would make the
consummation of this Agreement contrary to the Communications Act or the
rules, regulations, or policies of the FCC or would otherwise prevent the
consummation of this Agreement, or (b) have any right to
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exercise or attempt to exercise any control over programming, personnel,
finances, or any other matter relating to the Station.
ARTICLE 6. Conditions Precedent to Obligations of Seller.
The obligations of Seller under this Agreement are subject to the
fulfillment of the following conditions prior to or at the Closing.
6.1. Representations, Warranties, Covenants.
1. Each of the representations and warranties of Buyer contained in
this Agreement shall have been true and accurate in all material respects as
of the date when made and as of the Closing Date;
2. Buyer shall have performed and complied in all material respects
with each and every covenant and agreement required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing, other than the
delivery by Buyer of the Purchase Price; and
3. Buyer shall have delivered to Seller (a) a certificate executed
by an officer of Buyer, dated the Closing Date, certifying to the fulfillment
of the conditions set forth in Sections 6.1.1. and 6.1.2., and (b) certified
copies of the resolutions of Buyer's referred to in Section 3.2. of this
Agreement.
6.2 Proceedings. No action or proceeding shall have been instituted
before any court or governmental body to restrain or prohibit, or to obtain
substantial damages with respect to, the consummation of this Agreement that
may reasonably be expected to result in the issuance of a preliminary or
permanent injunction against such consummation or otherwise result in a
decision materially adverse to Seller.
6.3 FCC Approval. The FCC approval contemplated by this Agreement shall
have become a Final Order.
ARTICLE 7. Conditions Precedent to Obligations of Buyer.
The obligations of Buyer under this Agreement are subject to
the fulfillment of the following conditions prior to or at the Closing:
7.1. Representations, Warranties, Covenants.
1. Each of the representations and warranties of Seller contained
in this Agreement shall have been true and accurate in all material respects
as of the date when made and as of the Closing Date;
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2. Seller shall have performed and complied in all material
respects with each and every covenant and agreement required by this Agreement
to be performed or complied with by it prior to or at the Closing, other than
the delivery to Buyer of the instruments conveying the Station Assets to
Buyer; and
3. Seller shall have delivered to Buyer (a) a certificate executed
by an officer of Seller, dated the Closing Date, certifying to the fulfillment
of the conditions set forth in Sections 7.1.1. and 7.1.2., (b) certified
copies of the resolutions referred to in Section 2.12. hereof, and (c) the
required consents of the lessors for all leases being assigned hereunder.
7.2 Proceedings. No action or proceeding shall be pending or have been
instituted before any court or governmental body to restrain or prohibit, or
to obtain substantial damages with respect to, the consummation of this
Agreement that, in the reasonable opinion of Buyer, may reasonably be expected
to result in the issuance of a preliminary or permanent injunction against
such consummation or otherwise result in a decision materially adverse to
Buyer.
7.3. FCC Approval. The FCC approval contemplated by this Agreement shall
have become a Final Order: provided, that Buyer may waive the requirement that
the FCC approval become final, and, in that event, the parties may Close upon
the execution of an appropriate rescission agreement.
ARTICLE 8 Indemnification.
8.1 Survival. All statements of any party contained in this Agreement or
in any exhibit, schedule or certificate delivered pursuant to this Agreement
shall be deemed to be representations and warranties made pursuant to this
Agreement. The several representations, warranties, covenants, and agreements
of Seller and Buyer contained in or made pursuant to this Agreement shall be
deemed to have been made on the Closing, shall survive the Closing, and shall
remain operative and in full force and effect for a period of one (l) year
after the Closing, except that Buyer's obligation to pay or discharge any
liabilities assumed pursuant to this Agreement shall remain in effect until
such liabilities have been paid or discharged in full.
8.2 Indemnification of Buyer. Seller shall indemnify, defend, and hold
Buyer harmless from and against any and all damages, claims, losses, expenses,
costs, obligations, and liabilities including, without limiting the generality
of the foregoing, liabilities for reasonable attorneys' fees ("Loss and
Expense"), suffered, directly or indirectly, by Buyer after the Closing Date
by reason of, or arising out of, (a) any material breach of a representation
or warranty made by Seller pursuant to this Agreement, (b) any material
failure by Seller to perform or fulfill any of its covenants or agreements set
forth in this Agreement, (c) any material failure by Seller to pay or
discharge any liabilities which remain the responsibility of Seller under this
Agreement, or (d) any litigation, proceeding, or claim by any third party
relating to the business or operation of the Station prior to the Closing.
8.3 Indemnification of Seller. Buyer agrees that it shall indemnify,
defend and hold Seller harmless from and against any and all Loss and Expense
suffered, directly or
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indirectly, by Seller after the Closing Date by reason of, or arising out of,
(a) any material breach of a representation or warranty made by Buyer pursuant
to this Agreement, (b) any material failure by Buyer to perform or fulfill any
of its covenants or agreements set forth in this Agreement, (c) any material
failure by Buyer to pay or discharge any liabilities assumed pursuant to this
Agreement, (d) Buyer's termination of employment after the Closing of any
employee of the Station whom Buyer employs on or after the Closing Date, other
than any pre-closing claims of any such employee, or (e) any litigation,
proceeding, or claim by any third party relating to the business or operation
of the Station after the Closing.
8.4 Notice of Claim. If either Seller or Buyer believes that any
Loss and Expense has been suffered or incurred, such party shall notify the
other promptly in writing describing such Loss and Expense, the amount
thereof, if known, and the method of computation of such Loss and Expense, all
with reasonable particularity and containing a reference to the provisions of
this Agreement in respect of which such Loss and Expense shall have occurred.
If any action at law or suit in equity is instituted by a third party with
respect to which any of the parties intends to claim any liability or expense
as Loss and Expense under this Article 8, such party shall promptly notify the
indemnifying party of such action or suit.
8.5 Defense of Third Party Claims. The indemnifying party under this
Article 8 shall have the right to conduct and control, through counsel of that
party's own choosing, any third party claim, action, or suit at the
indemnifying party's sole cost and expense, but the indemnified party may, at
that latter party's election, participate in the defense of any such claim,
action, or suit at that party's sole cost and expense: provided, that if the
indemnifying party shall fail to defend any such claim, action, or suit, then
the indemnified party may defend, through counsel of that party's own
choosing, such claim, action, or suit and settle such claim, action, or suit,
and to recover from the indemnifying party the amount of such settlement or of
any judgment and the costs and expenses of such defense: provided further,
that the indemnifying party shall be given at least fifteen (15) days' prior
notice of the terms of any proposed settlement thereof so that the
indemnifying party may then undertake and/or resume the defense against the
claim. The indemnifying party shall not compromise or settle any third party
claim, action, or suit without the prior written consent of the indemnified
party, which consent will not be unreasonably withheld or delayed: provided,
that any such compromise or settlement shall include a release for the
Indemnified Party of all liability with respect to the matter being
compromised or settled.
ARTICLE 9 Miscellaneous.
9.1 Termination of Agreement. This Agreement may be terminated on or
prior to the Closing under one or more of the following circumstances upon 10
days prior notice (except for actions taken by mutual consent or for Buyer's
failure to timely pay the Purchase Price):
1. by the mutual consent of the parties hereto;
2. by Seller, if any of the conditions provided in Article 6 hereof
have not been met by the time required and have not been waived;
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3. by Buyer, if any of the conditions provided in Section 4.6 or
Article 7 hereof have not been met by the time required and have not
been waived;
4. by Seller or Buyer, if the FCC has failed by April 1, 1997 to
grant the Application in a decision which has become a Final Order
5. by any party hereto, if the FCC (a) denies the Application or
(b) designates a hearing on the Application or on any issue related to
the assignment contemplated herein.
9.2 Liabilities Upon Termination.
1. Except as provided in Section 9.2.2 of this Agreement, no party
shall have any liability to any other party for costs, expenses, or damages in
the event this Agreement is terminated pursuant to Section 9.1. and, in the
event of such termination, the Escrow Funds shall immediately be returned to
Buyer.
2. If the parties hereto shall fail to consummate this Agreement on
the Closing Date due to Buyer's material breach of any material
representation, warranty, covenant or condition hereunder, and Seller is not
at that time in material breach of any material representation, warranty,
covenant or condition hereunder, then Seller would suffer direct and
substantial damages that cannot be determined within reasonable certainty.
Seller shall thereupon be entitled to retain the Escrow Funds, which shall
constitute liquidated damages. Such liquidated damages represent Buyer's and
Seller's reasonable estimate of actual damages and do not constitute a
penalty. Recovery of liquidated damages shall be the exclusive remedy of
Seller against Buyer for termination of this Agreement under this Subsection
and shall be applicable regardless of the actual amount of damages sustained.
3. If the parties hereto shall fail to consummate this Agreement on
the Closing Date due to Seller's material breach of any material
representation, warranty, covenant or condition hereunder (after the
preparation of any applicable notice period), and Buyer is not at that time in
material breach of any material representation, warranty, covenant or
condition hereunder, then Buyer shall be entitled to specific performance of
the terms of this Agreement and of Seller's obligation to consummate the
transaction contemplated hereby. If any action is brought by Buyer to enforce
this Agreement, Seller shall waive the defense that there is an adequate
remedy at law or that Buyer has not incurred or will not incur irreparable
injury.
4. Notwithstanding any other provision of this Agreement, the
confidentiality provisions in Sections 4.8 and 5.3 shall survive any
termination of this Agreement.
9.3 Expenses. Each party hereto shall be solely responsible for all fees
and expenses each party incurs in connection with the transactions
contemplated by this Agreement, including, without limitation, legal fees
incurred in connection herewith: provided, that any and all FCC filing fees
shall be divided equally by Seller and Buyer.
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9.4 Assignments. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party: provided, that
Buyer may assign its rights under this Agreement to any other party controlled
by the Buyer or the same parties who control Buyer if such assignee agrees in
writing to be bound to the terms of this Agreement; and provided further, that
Buyer shall promptly notify Seller of any such assignment in writing.
9.5 Further Assurances. From time to time prior to, at and after the
Closing, each party hereto will execute all such instruments and take all such
actions any other party shall reasonably request in connection with
effectuating the intent and purpose of this Agreement and all transactions
contemplated by this Agreement, including, without limitation, the execution
and delivery of any and all confirmatory and other instruments in addition to
those to be delivered at the Closing.
9.6 Damage to the Assets. The risk of loss or damage to any of the
Station Assets prior to the Closing shall be upon Seller. In consultation with
Buyer, Seller shall repair, replace and restore any such damaged or lost
Station Asset to its prior condition as soon as possible and in no event later
than the Closing.
9.7 Notices. All notices, demands and other communications which may be
or are required to be given hereunder shall be in writing, shall be delivered
either by personal delivery, by United States certified mail-return receipt
requested (postage prepaid), or by overnight delivery service (charges
prepaid), and shall be deemed to have been given or made when personally
delivered, within five (5) days after being deposited in the mail, postage
prepaid, or within one (1) day after being delivered to an overnight delivery
service, charges prepaid. Notices shall be delivered to each party at the
following addresses (or at such other address as any party may designate in
writing to the other parties):
1. If to Seller --
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇ Broadcasting Co. of New York Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to (but which shall not constitute notice to
Seller):
▇▇▇▇▇ ▇. Paper, Esq.
Dickstein, Shapiro, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1. If to Buyer --
▇▇▇▇▇▇ F.X. Sillerman, Chief Executive Officer
Liberty Broadcasting of Albany, Incorporated
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▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to (but which shall not constitute notice to Buyer):
▇▇▇▇▇ ▇▇▇, Esq.
Liberty Broadcasting of Albany, Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
9.8 Captions. The captions of articles and sections of this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
9.9 Law Governing. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of New York without regard
to conflicts of laws provisions.
9.10 Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party
at any time or times to require performance of any provision of this Agreement
shall not affect the exercise of a party's rights at a later date. No waiver
by any party of any condition or the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
9.11 Counterparts. This Agreement may be executed in counterparts, and
all counterparts so executed shall collectively constitute one agreement,
binding on all of the parties hereto, notwithstanding that all the parties are
not signatory to the same counterpart.
9.12 Reimbursement of Legal Expenses. If a formal legal proceeding is
instituted by a party to enforce that party's rights under this Agreement, the
party prevailing in the proceeding shall reimburse the other party for all
reasonable costs, including but not limited to reasonable attorneys, fees,
incurred in conjunction with the proceeding.
9.13 Entire Agreement. This Agreement constitutes the entire Agreement
among the parties and supersedes any and all prior or contemporaneous
agreements between them relating to the subject matter hereof and may not be
amended except in a writing signed by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year written above.
▇▇▇▇▇ BROADCASTING COMPANY OF NEW YORK, INC.
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
LIBERTY BROADCASTING OF ALBANY, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
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