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EXHIBIT 10.15
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
EMMIS BROADCASTING CORPORATION
AND
WABASH VALLEY BROADCASTING CORPORATION
* * *
MARCH 20, 1998
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
"Accounts Receivable" 1
"Affiliate" 1
"Assets" 1
"Assumed Contracts" 1
"Closing" 2
"Closing Date" 2
"Consents" 2
"Contracts" 2
"Early Termination Event" 2
"Escrow Agent" 2
"Escrow Agreement" 2
"Excluded Assets" 2
"FCC" 2
"FCC Consent" 2
"FCC Licenses" 2
"Final Deposit" 2
"GAAP" 2
"Initial Deposit" 3
"Intangibles" 3
"Licenses" 3
"Material Adverse Effect" 3
"Non-FCC Licenses" 3
"Permitted Liens" 3
"Purchase Price" 3
"Real Property" 3
"Tangible Personal Property" 3
SECTION 2. PURCHASE AND SALE OF ASSETS 4
2.1 Agreement to Sell and Buy 4
2.2 Excluded Assets 4
2.3 Purchase Price 5
2.4 Payment of Purchase Price 6
2.5 Assumption of Liabilities and Obligations 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER 7
3.1 Organization, Standing, and Authority 7
3.2 Authorization and Binding Obligation 7
3.3 Absence of Conflicting Agreements 7
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Page
3.4 Title to and Condition of Real Property 8
3.5 Title to and Condition of Tangible Personal Property 8
3.6 Assumed Contracts 9
3.7 Consents 9
3.8 Intangibles 10
3.9 Insurance 10
3.10 Reports 10
3.11 Personnel 10
3.12 Taxes 11
3.13 Claims and Legal Actions 11
3.14 Environmental Matters 11
3.15 Compliance with Laws 12
3.16 Conduct of Business in Ordinary Course 12
3.17 Transactions with Affiliates 12
3.18 Broker 12
3.19 Governmental Licenses 12
3.20 Acquired Assets 13
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER 13
4.1 Organization, Standing, and Authority 13
4.2 Authorization and Binding Obligation 13
4.3 Absence of Conflicting Agreements 14
4.4 Broker 14
4.5 Buyer Qualifications 14
4.6 Financing 14
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING 14
5.1 Generally 14
5.2 Compensation 15
5.3 Contracts 15
5.4 Disposition of Assets 15
5.5 Encumbrances 15
5.6 Access to Information 15
5.7 Maintenance of Assets 15
5.8 Insurance 16
5.9 Consents 16
5.10 Books and Records 16
5.11 Notification 16
5.12 Compliance with Laws 16
5.13 Collection of Accounts Receivable 16
5.14 Cure 16
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Page
5.15 Licenses 16
5.16 Audited Financial Statements 17
5.17 Schedules 17
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS 17
6.1 HSR Act 17
6.2 Control of the Stations 17
6.3 Risk of Loss 17
6.4 Confidentiality 18
6.5 Cooperation 18
6.6 Access to Books and Records 18
6.7 Appraisal 18
6.8 Employment Matters 18
6.9 Accounts Receivable 19
6.10 FCC Consent 20
6.11 Buyer Conduct 20
6.12 Noncompetition Agreement 20
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING 21
7.1 Conditions to Obligations of Buyer 21
7.2 Conditions to Obligations of Seller 24
SECTION 8. CLOSING AND CLOSING DELIVERIES 24
8.1 Closing 24
8.2 Deliveries by Seller 25
8.3 Deliveries by Buyer 25
SECTION 9.TERMINATION 26
9.1 Termination by Seller 26
9.2 Termination by Buyer 26
9.3 Rights on Termination 27
9.4 Escrow Deposit 28
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES 28
10.1 Representations, Warranties and Covenants 28
10.2 Indemnification by Seller 29
10.3 Indemnification by Buyer 29
10.4 Limitations 30
10.5 Procedure for Indemnification 30
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Page
10.6 Specific Performance 31
10.7 Attorneys' Fees 31
10.8 Indemnification Fund 31
10.9 Bulk Transfer 32
SECTION 11. MISCELLANEOUS 32
11.1 Fees and Expenses 32
11.2 Notices 32
11.3 Benefit and Binding Effect 33
11.4 Assignment 33
11.5 Further Assurances 33
11.6 Governing Law 33
11.7 Headings 33
11.8 Gender and Number 34
11.9 Entire Agreement 34
11.10 Waiver of Compliance; Consents 34
11.11 Press Release 34
11.12 Counterparts 34
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LIST OF SCHEDULES
Schedule 3.3 -- Consents
Schedule 3.4 -- Real Property
Schedule 3.5 -- Tangible Personal Property
Schedule 3.6(a) -- Contracts
Schedule 3.6(b) -- Trade Agreements
Schedule 3.8 -- Intangibles
Schedule 3.9 -- Insurance
Schedule 3.11 -- Employee Matters
Schedule 3.13 -- Litigation
Schedule 3.17 -- Transactions with Affiliates
Schedule 3.19 -- FCC Licenses
Schedule 4.3 -- Buyer Consents
Schedule 6.12 -- Noncompetition Agreement
Schedule 10.8 -- Indemnification Escrow Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of the 20th day of March, 1998,
between Emmis Broadcasting Corporation, an Indiana corporation ("Buyer"), and
Wabash Valley Broadcasting Corporation, an Indiana corporation ("Seller").
R E C I T A L S
A. Seller is the licensee of radio and television stations WTHI (AM),
WTHI-FM and WTHI (TV), Terre Haute, Indiana, WWVR-FM, West Terre Haute, Indiana
(FCC license assignment application pending), and WFTX (TV), Cape Coral,
Florida (collectively, the "Stations") pursuant to authorizations issued by the
Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy, certain assets that
are used or useful in the business or operations of the Stations for the price
and on the terms and conditions set forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means all accounts receivable of Seller arising out
of the operation of the Stations prior to the Closing Date.
"Affiliate" means, with respect to any specified person or entity, another
person or entity which, or a member of an immediate family which, directly or
indirectly controls, is controlled by, or is under common control with, the
specified person or entity.
"Assets" means the assets to be sold, transferred, or otherwise conveyed
to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.6 that
are designated as Contracts that are to be assumed by Buyer on and after the
Closing Date, (ii) all Contracts that are not required to be listed on Schedule
3.6 by the express terms of Section 3.6, (iii) Contracts entered into by Seller
after the date hereof pursuant to Section 5.3 and (iv) any Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume.
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"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as determined
pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental 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 Seller is a party and which relate to or affect the Assets or
the business or operations of the Stations, and (i) which are in effect on the
date of this Agreement or (ii) which are entered into by Seller between the
date of this Agreement and the Closing Date, but excluding any of the foregoing
that are included in the Excluded Assets.
"Early Termination Event" has the meaning set forth in Section 9.2.
"Escrow Agent" means NBD Bank, N.A.
"Escrow Agreement" means the Deposit Escrow Agreement, of even date
herewith by and among Buyer, Seller and the Escrow Agent.
"Excluded Assets" has the meaning set forth in Section 2.2.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement,
provided that such action has not been reversed, stayed, enjoined, set aside,
annulled or suspended and with respect to which no timely petition for
reconsideration or administrative or judicial appeal or sua sponte action of
the FCC with comparable effect is pending.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Stations, including the right
to use the call letters "WWVR", "WFTX" or "WTHI".
"Final Deposit" has the meaning set forth in Section 9.4.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, applied on a consistent basis.
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"Initial Deposit" has the meaning set forth in Section 9.4.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, 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 Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding any of the foregoing that are included in the Excluded Assets.
"Licenses" means all licenses, permits, and other authorizations issued to
Seller by the FCC (including the right to use the call letters "WWVR" "WFTX"
and "WTHI"), the Federal Aviation Administration, or any other federal, state,
or local governmental authorities in connection with the conduct of the
business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Material Adverse Effect" means a material adverse effect on the Assets
taken as a whole or the businesses of the Stations, provided that the foregoing
shall not include any material adverse effect arising out of (i) factors
affecting the radio or television broadcasting industry generally, (ii) general
national, regional or local economic conditions, (iii) governmental or
legislative laws, rules or regulations affecting the radio or television
broadcasting industry generally, or (iv) actions taken by Buyer or its
affiliates.
"Non-FCC Licenses" means the Licenses issued by any governmental
authorities (other than the FCC) in connection with the business or operations
of the Stations.
"Permitted Liens" means liens for taxes and assessments not yet due and
payable, mechanics' and other statutory liens created in the ordinary course of
business that secure obligations not delinquent, restrictions, easements and
other encumbrances on the Real Property which do not adversely affect the use
or value of the Real Property.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all of Seller's real property and interests in real
property, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, rights of way, all buildings and other improvements thereon,
and other real property interests which are used or useful in the business or
operations of the Stations, together with any additions thereto between the
date of this Agreement and the Closing Date, but excluding any of the foregoing
that are included in the Excluded Assets.
"Tangible Personal Property" means all of Seller's machinery, equipment,
tools, vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Stations,
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together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding any of the foregoing that are included in the
Excluded Assets.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer agrees to purchase on the Closing Date, all
of Seller's rights, title and interest in and to the following Assets used or
useful in connection with the conduct of the business or operations of the
Stations, together with any additions thereto between the date of this Agreement
and the Closing Date, but excluding the assets described in Section 2.2, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens):
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Assumed Contracts;
(d) The Intangibles and the goodwill of the Stations, if any;
(e) All of Seller's proprietary information, technical information and
data, machinery and equipment warranties, maps, computer discs and tapes,
plans, diagrams, blueprints, and schematics, relating to the business and
operation of the Stations;
(f) All books and records relating to the business or operations of the
Stations, other than those described in Section 2.2(b), including executed
copies of the Assumed Contracts;
(g) The Licenses; and
(h) All records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets sold, transferred and delivered to Buyer
hereunder shall exclude the following assets (the "Excluded Assets"):
(a) Seller's cash on hand as of the Closing and all other cash in any
of Seller's bank or savings accounts; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto;
and any stocks, bonds, certificates of deposit and similar investments;
(b) All books and records that Seller is required by law to retain,
that pertain to Seller's organization or other internal matters and all tax
records;
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(c) Any pension, profit-sharing, or employee benefit plans, and any
collective bargaining agreements;
(d) The Accounts Receivable;
(e) Claims of Seller against third parties with respect to matters
occurring prior to the Closing Date, except to the extent such claims relate to
the condition of the Assets on and after the Closing Date; and
(f) Prepaid expenses for which Seller does not receive a credit under
Section 2.3(b) hereof and deposits to the extent not reflected in the
adjustments made pursuant to Section 2.3(b) hereof.
2.3 Purchase Price.
(a) Purchase Price. The Purchase Price for the Assets shall be Ninety
Million Dollars ($90,000,000.00), adjusted as provided in Section 2.3(b)
below.
(b) Prorations. The Purchase Price shall be increased or decreased as
required to effectuate the proration of the revenues and expenses of the
Stations. All revenues and all expenses arising from the operation of the
Stations, excluding accrued sick leave days but including business and
non-governmental license fees, annual regulatory fees imposed by the FCC,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), programming fees and expenses,
employee compensation, including wages, commissions, vacation and personal days
accrued but unused for all employees of Seller who become employees of Buyer
and prepaid and deferred items, shall be prorated between Buyer and Seller in
accordance with GAAP and the principle that Seller shall be entitled to all
revenues and shall be responsible for all expenses, costs, and liabilities
allocable to the period prior to the Closing Date and Buyer shall be entitled
to all revenues and shall be responsible for all expenses, costs, and
obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts and any other obligation or liability not being
assumed by Buyer in accordance with Section 2.5.
(c) Manner of Determining Adjustments.
(i) Any adjustments will, insofar as feasible, be determined and paid on
the Closing Date, with final settlement and payment by the appropriate party
occurring no later than ninety (90) days after the Closing Date or such other
date as the parties shall mutually agree upon. Seller shall prepare and
deliver to Buyer not later than five (5) days before the Closing Date a
preliminary settlement statement which shall set forth Seller's good faith
estimate of the prorations
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under Section 2.3(b). The preliminary settlement statement shall contain all
information reasonably necessary to determine the prorations under Section
2.3(b), including appropriate supporting documentation and such other
information as may be reasonably requested by Buyer, to the extent such
prorations can be determined or estimated as of the date of the preliminary
settlement statement and shall be certified by an officer (but without personal
liability of such officer) on behalf of Seller to be true and complete to
Seller's knowledge.
(ii) Not later than ninety (90) days after the Closing Date, Buyer shall
deliver to Seller a statement setting forth Buyer's determination of any
changes to the prorations made at the Closing. Buyer's statement (A) shall
contain all information reasonably necessary to determine the prorations to the
Purchase Price under Section 2.3(b), including appropriate supporting
documentation, and such other information as may be reasonably requested by
Seller, and (B) shall be certified by an officer (but without personal
liability to such officer) on behalf of Buyer to be true and complete to
Buyer's knowledge. Seller (and its authorized representatives) shall have the
right to visit the Stations during normal business hours to verify and review
such documentation upon providing reasonable notice to Buyer (such access not
to unreasonably interfere with the business or operations of the Stations). If
Seller disputes the prorations determined by Buyer, it shall deliver to Buyer
within fifteen (15) days after its receipt of Buyer's statement a statement
setting forth its determination of such prorations. If Seller notifies Buyer
of its acceptance of Buyer's statement, or if Seller fails to deliver its
statement within the fifteen (15) day period specified in the preceding
sentence, Buyer's determination of such adjustments and prorations shall be
conclusive and binding on the parties as of the last day of such fifteen (15)
day period.
(iii) Buyer and Seller shall use good faith efforts to resolve any dispute
involving the determination of the prorations in connection with the Closing.
If the parties are unable to resolve any dispute within fifteen days following
the delivery to Buyer of the statement described in the penultimate sentence of
Section 2.3(c)(ii), Buyer and Seller shall jointly designate a nationally
recognized firm of independent certified public accountants (the "Neutral
Auditors") to resolve such dispute. If the parties are unable to agree on the
designation of the Neutral Auditors, then a nationally recognized accounting
firm will be selected by lot from two names submitted by Seller and two names
submitted by Buyer, none of which shall be employed by Seller or Buyer or any
of their respective affiliates. The Neutral Auditors' resolution of the
dispute shall be made within sixty (60) days of their selection, shall be based
on presentations by Seller and Buyer and not by independent financial audit and
shall be final and binding on the parties. The Neutral Auditors' resolution of
the dispute may be enforced by any court of competent jurisdiction. Fees of
the Neutral Auditors shall be split equally between the parties.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted under
Section 2.3(b) and less the amount of the Indemnity Fund to be paid as provided
in Section 10.8, shall be paid by Buyer to Seller at Closing by federal wire
transfer of same-day funds pursuant to wire instructions delivered by Seller to
Buyer at least two (2) days prior to the Closing Date.
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2.5 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall assume and undertake to pay, discharge, and perform all obligations
and liabilities (a) under the Licenses and Assumed Contracts insofar as such
obligations and liabilities arise on and after the Closing Date, (b) with
respect to which an adjustment to the Purchase Price is made in favor of Buyer
pursuant to Section 2.3(b), and (c) to any former employee of Seller who is
hired by Buyer insofar as such obligations and liabilities arise on and after
the Closing Date. Buyer shall not assume any other obligations or liabilities
of Seller, including (i) any obligations or liabilities under any Contract not
included in the Assumed Contracts, (ii) any obligations or liabilities under the
Assumed Contracts relating to the period prior to the Closing Date, (iii) any
claims or pending litigation or proceedings relating to the operation of the
Stations prior to the Closing, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements not assumed by Buyer, and (v)
any obligations or liabilities of Seller under any employee pension, retirement,
or other benefit plans or collective bargaining agreements, and all such
obligations and liabilities shall remain and be the obligations and liabilities
solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the parties' agreement and acknowledgment that the Schedules
referred to in this Section 3 are to be delivered by Seller not later than ten
(10) business days after the date hereof, Seller represents and warrants to
Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Indiana. Seller has full power and authority (i) to own, lease, and use the
Assets as now owned, leased, and used, (ii) to conduct the business and
operations of the Stations as now conducted, and (iii) subject to obtaining the
Consents set forth on Schedule 3.3 and any applicable requirement under the HSR
Act, to execute and deliver this Agreement and all of the other agreements and
documents contemplated hereby (the "Seller Ancillary Agreements") and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Seller hereunder and thereunder.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance by Seller of this Agreement and the Seller Ancillary Agreements have
been duly authorized by all necessary corporate actions on the part of Seller
and its board of directors and shareholders. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid, and binding
obligation of Seller and upon execution thereof, the Seller Ancillary Agreements
will be duly executed and delivered by Seller and will constitute the legal,
valid and binding obligations of Seller, in each case enforceable against it in
accordance with their respective terms, except as the enforceability of this
Agreement and the Seller Ancillary Agreements may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the FCC
Consent, the other Consents listed on Schedule 3.3 and any applicable
requirements under the HSR Act, the execution,
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delivery, and performance of this Agreement and the Seller Ancillary Agreements
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party, except for any such individual consent
the failure of which to obtain could not reasonably be expected to have a
Material Adverse Effect; (ii) will not conflict with any provision of the
organizational documents of Seller; (iii) will not conflict with, result in a
breach of, or constitute a default or an event creating rights of acceleration,
termination or cancellation under, any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Seller; and (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, or constitute a
default under, any material agreement, instrument, license, or permit to which
Seller is a party or by which Seller or the Assets may be bound.
3.4 Title to and Condition of Real Property. Schedule 3.4 contains a
complete and accurate description in all material respects of all the Real
Property and Seller's interests therein. Together with the Excluded Assets, the
Real Property listed on Schedule 3.4 comprises all real property interests
necessary to conduct the business and operations of the Stations as now
conducted. With respect to each leasehold or subleasehold interest included in
the Real Property being conveyed under this Agreement, so long as Seller
fulfills its obligations under the lease therefor, Seller will have enforceable
rights under such lease in accordance with the terms and conditions thereof.
Except as disclosed on Schedule 3.4, all towers, guy anchors, and buildings and
other improvements included in the Assets are located entirely on the Real
Property listed in Schedule 3.4. Seller will deliver to Buyer true and complete
copies of all leases pertaining to the Real Property within ten (10) business
days after the date of execution of this Agreement. All Real Property
(including the improvements thereon) (i) is in good condition and repair in all
material respects consistent with its present use (ordinary wear and tear
excepted), (ii) is available for immediate use in the conduct of the business
and operations of the Stations, and (iii) complies in all material respects with
all applicable building or zoning codes and the regulations of any governmental
authority having jurisdiction. Seller has full legal and practical access to
the Real Property. Seller has no material Non-FCC Licenses.
3.5 Title to and Condition of Tangible Personal Property. Schedule 3.5
lists all material items of Tangible Personal Property. Together with the
Excluded Assets, the Tangible Personal Property listed on Schedule 3.5 comprises
all material items of tangible personal property necessary to conduct the
business and operations of the Stations as now conducted. Except as described
in Schedule 3.5, Seller owns and has good title to each item of Tangible
Personal Property, and none of the Tangible Personal Property owned by Seller is
subject to any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for Permitted Liens and liens set forth on
Schedule 3.5 hereto. Each item of Tangible Personal Property is available for
immediate use in the business and operations of the Stations and, except as set
forth on Schedule 3.5, is in good operating condition and repair, ordinary wear
and tear excepted. Except as set forth on Schedule 3.5, all items of
transmitting equipment included in the Tangible Personal Property (i) have been
maintained in all material respects in a manner consistent with generally
accepted standards of good engineering practice, and (ii) together with the
Excluded Assets, will permit the Stations and
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any auxiliary broadcast stations used in the operation of the Stations to
operate in all material respects in compliance with the terms of the FCC
Licenses, the rules and regulations of the FCC, and with all other applicable
federal, state, and local statutes, ordinances, rules, and regulations.
3.6 Assumed Contracts.
(a) Schedule 3.6(a) is a true and complete list of all Contracts except
(a) Contracts payable in cash for production services or for the sale of
advertising time broadcast on the Stations, (b) trade or barter advertising
agreements entered into in the ordinary course of business, (c) oral employment
Contracts terminable at will and (d) other Contracts with a duration of one
year or less and entered into in the ordinary course of business not involving
liabilities exceeding $1,000 per Contract per year or $25,000 per year in the
aggregate for all such Contracts. Seller will deliver to Buyer true and
complete copies of all written Contracts listed on Schedule 3.6(a) and true and
complete memoranda of all oral Contracts (including any amendments and other
modifications to such Contracts) within ten (10) business days after the date
of execution of this Agreement. Other than the Contracts listed on Schedule
3.6(a) or any other Schedule to this Agreement and the Contracts that are not
required to be listed on Schedule 3.6(a), Seller requires no contract, lease,
or other agreement to enable it to carry on its business as now conducted. All
of the Assumed Contracts (a) are in full force and effect and constitute valid
and binding obligations of Seller, (b) contain no provisions restricting
competition and (c) to the best knowledge of Seller, the other parties
thereto, and subject to obtaining the Consents listed on Schedule 3.3 to the
extent applicable to such Contracts, may be transferred to Buyer pursuant to
this Agreement and will be in full force and effect at the time of such
transfer except to the extent any such Assumed Contract is terminated or
expires in accordance with its terms prior to Closing. Seller has fulfilled
and performed in all material respects its obligations under each of the
Assumed Contracts and, to the best knowledge of Seller, no other party to the
Assumed Contracts is in material default or breach thereunder, and no event has
occurred and no condition exists which, with the passage of time or the giving
of notice or both, would constitute a material default or breach by Seller or,
to the best knowledge of Seller, by any such other party.
(b) Schedule 3.6(b) lists all agreements, contracts, understandings and
commitments as of the date indicated thereon for the sale of time on the
Stations for other than monetary consideration ("Trade Agreements") as of the
date stated therein, and sets forth the parties thereto, the financial value of
the time required to be provided from and after the date of such Schedule and
the financial value of the goods or services to be received by Seller from and
after the date of such Schedule. True and complete copies of all written Trade
Agreements in effect as of such date, including all amendments, modifications
and supplements thereto, will be delivered to Buyer within ten (10) business
days after the date of execution of this Agreement and each Trade Agreement
hereafter entered into prior to Closing shall be promptly delivered to Buyer.
3.7 Consents. Except for any applicable requirements under the
HSR Act and subject to obtaining the FCC Consent and the other Consents
described in Schedule 3.3, no consent, approval, permit, or authorization of,
or declaration to or filing with, any governmental or regulatory authority,
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or any other third party is required to permit Seller (i) to consummate this
Agreement and the transactions contemplated hereby and (ii) to assign or
transfer the Assets to Buyer.
3.8 Intangibles. Schedule 3.8 is a true and complete list of all material
Intangibles, all of which are valid and in good standing and uncontested.
Seller will deliver to Buyer copies of all documents establishing or evidencing
all material Intangibles within ten (10) business days after the date of
execution of this Agreement. To the best knowledge of Seller, Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. Except as set forth in Schedule 3.8, Seller has not licensed
anyone to use any Intangible and Seller has no knowledge of the infringement by
any person of any Intangible. The Intangibles listed on Schedule 3.8, the FCC
Licenses and the Excluded Assets described in Section 2.2(f) comprise all
intangible property interests necessary to conduct the business and operations
of the Stations as now conducted.
3.9 Insurance. Schedule 3.9 sets forth all policies of insurance covering
the Assets and such policies are in full force and effect.
3.10 Reports. To the best of Seller's knowledge, all material returns,
reports, and statements required to be filed by Seller with respect to the
Stations with any governmental agency have been filed, and all reporting
requirements of any governmental authorities having jurisdiction over Seller and
the Stations have been complied with by Seller in all material respects. All of
such returns, reports, and statements are substantially complete and correct as
filed.
3.11 Personnel.
(a) Employees and Compensation. Schedule 3.11 contains a true and complete
list of all positions of employees of Seller who are employed at the Stations,
their job titles and current salary. Schedule 3.11 also contains a description
as of the date of this Agreement of all employee benefit plans or arrangements
applicable to the employees of the Stations. All employee benefits and welfare
plans or arrangements listed in Schedule 3.11 were established and have been
executed, managed and administered in all material respects in accordance with
the Internal Revenue Code of 1986, as amended and the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Seller is not aware of the existence
of any governmental audit or examination of any of such plans or arrangements
nor is Seller liable for any arrears of wages (other than those arising as the
result of reasonable payroll practices) or any material taxes or penalties for
failure to comply with any of the foregoing.
(b) Labor Relations. Seller is not a party to or subject to any collective
bargaining agreements with respect to the Stations, except as described in
Schedule 3.6. Seller has no written contracts of employment with any employee
of the Stations, other than those listed in Schedule 3.6. Seller has complied
in all material respects with all laws, rules, and regulations relating to the
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employment of labor, including those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll related taxes and it has not received any written
notice alleging that it has failed to comply in any material respect with any
such laws, rules, or regulations. No labor union or other collective
bargaining unit represents or to Seller's knowledge, claims to represent any of
the employees of the Stations. To Seller's knowledge, there is no union
campaign being conducted to solicit cards from employees to authorize a union
to request a National Labor Relations Board certification election with respect
to any employees at the Stations.
3.12 Taxes. There are no proceedings pending pursuant to which
Seller is or could be made liable for any taxes, penalties, interest, or other
charges, the liability for which could extend to Buyer as transferee of the
Assets and, to the best knowledge of Seller, no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.13 Claims and Legal Actions. Except for any FCC rulemaking proceedings
generally affecting the broadcasting industry or as listed on Schedule 3.13
attached hereto, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative, or tax
proceeding, nor any order, decree or judgment, in progress or pending, or to the
knowledge of Seller threatened, against or relating to Seller with respect to
its ownership or operation of the Stations or otherwise relating to the Assets
or the business or operations of the Stations which could reasonably be expected
to have a Material Adverse Effect.
3.14 Environmental Matters.
(a) Seller is in compliance with all laws, rules, and regulations of all
federal, state, and local governments (and all agencies thereof) concerning the
environment, except for any noncompliance which could not reasonably be
expected to have a Material Adverse Effect, and Seller has received no written
notice of a charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice having been filed or commenced against
Seller in connection with its ownership or operation of the Stations alleging
any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no liability relating to
its ownership or operation of the Stations that could reasonably be expected to
have a Material Adverse Effect under any law, rule, or regulation of any
federal, state, or local government (or agency thereof) concerning the release
or threatened release of hazardous substances, pollution or protection of the
environment.
(c) To the best of Seller's knowledge, in connection with its ownership or
operation of the Stations, Seller holds and is in compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and is in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
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schedules, and timetables which are contained in, all federal, state, and local
laws, rules, and regulations relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes, except in each case for any noncompliance which could not
be reasonably expected to have a Material Adverse Effect.
3.15 Compliance with Laws. Seller is, in all material respects, in
compliance with all federal, state, and local laws, rules, regulations, and
ordinances applicable or relating to the ownership and operation of the
Stations. Neither the ownership or use of the properties of the Stations nor
the conduct of the business or operations of the Stations conflicts in any
material respect with the rights of any other person or entity.
3.16 Conduct of Business in Ordinary. Since December 28, 1997, Seller has
conducted the business and operations of the Stations in the ordinary course of
business consistent with past practices in all material respects and has not:
(a) Made any sale, assignment, lease, or other transfer of any of the
Stations' properties other than obsolete assets no longer used in the operation
of the Stations or other assets sold or disposed of in the normal and usual
course of business with suitable replacements being obtained therefor;
(b) Canceled any debts owed to or claims held by Seller with respect to
the Stations, except in the normal and usual course of business; or
(c) Suffered any material write-down of the value of any Assets or any
material write-off as uncollectible of any accounts receivable of the Stations.
3.17 Transactions with Affiliates. Except as described on Schedule 3.17,
Seller has not been involved in any business arrangement or relationship
relating to the Stations with any affiliate of Seller, and no affiliate of
Seller owns any property or right, tangible or intangible, which is used in the
business of the Stations. As used in this paragraph, "affiliate" has the
meaning set forth in Rule 12b-2 promulgated under the Securities Exchange Act of
1934.
3.18 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.19 Governmental Licenses. Schedule 3.19 includes a true and complete
list of all of the Licenses issued by the FCC. Seller will deliver to Buyer true
and complete copies of the Licenses (including any amendments and other
modifications thereto) issued by the FCC within ten (10)
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business days after the date of execution of this Agreement. Except for the
FCC License for the operation of WWVR-FM, West Terre Haute, Indiana (the "WWVR
License") for which the assignment application is currently pending, all FCC
Licenses have been validly issued, and Seller is the authorized legal holder
thereof. Except for the WWVR License, the FCC Licenses listed on Schedule 3.19
comprise all of the licenses, permits, and other authorizations required from
the FCC for the lawful conduct of the business and operations of the Stations
in the manner and to the extent they are now conducted, except for any
auxiliary broadcast authorization the failure to obtain which could not
reasonably be expected to have a Material Adverse Effect. Except for the WWVR
License, none of the FCC Licenses is subject to any restriction or condition
that would limit in any material respect the operation of the Stations as now
operated. Except for the WWVR License, the FCC Licenses are in full force and
effect, and the conduct of the business and operations of the Stations is in
compliance therewith and no event has occurred or condition or state of facts
exists which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any such FCC Licenses, except for such
events, conditions or state of facts that could not reasonably be expected to
have a Material Adverse Effect. Seller has no reason to believe that any of the
FCC Licenses would not be renewed by the FCC and no written notice of
cancellation, of default or of any dispute concerning any FCC License, or of
any event, condition or state of facts as described in the preceding sentence,
has been received by Seller. Notwithstanding any provision in this Agreement
to the contrary, Seller makes no representation, warranty or covenant
whatsoever regarding any DTV allocation that Seller has received or may receive
in the future for the television Stations or the outcome of the FCC rulemaking
identified as In the Matter of Advanced Television Systems, MM Docket No.
87-268 and any related or subsequent FCC or court proceeding (the "ATV
Rulemaking"), except that Seller has not knowingly taken any action which could
reasonably be expected to materially adversely affect or jeopardize the
television Stations' respective DTV allocation.
3.20 Acquired Assets. The Assets constitute all of the assets necessary
for the continued operation and business of the Stations in the ordinary course
as substantially conducted on the date hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is an Indiana corporation
duly organized, validly existing, and in good standing under the laws of the
State of Indiana and at Closing, Buyer will be duly qualified as a foreign
corporation and will be in good standing in the State of Florida. Buyer has all
requisite power and authority to execute and deliver this Agreement and all of
the other agreements documents and instruments contemplated hereby (the "Buyer
Ancillary Agreements"), and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by Buyer hereunder
and thereunder.
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4.2 Authorization and Binding Obligation. The execution, delivery, and
performance by Buyer of this Agreement and the Buyer Ancillary Agreements have
been duly authorized by all necessary actions on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes the
legal, valid, and binding obligation of Buyer and, upon execution thereof, the
Buyer Ancillary Agreements will be duly executed and delivered by Buyer and will
constitute the legal, valid and binding obligations of Buyer, in each case
enforceable against Buyer in accordance with their respective terms, except as
the enforceability of this Agreement and the Buyer Ancillary Agreements may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the FCC Consent
and the other Consents listed on Schedule 4.3 and any applicable requirements
under the HSR Act, the execution, delivery, and performance by Buyer of this
Agreement and the Buyer Ancillary Agreements (with or without the giving of
notice, the lapse of time, or both): (i) do not require the consent of any
third party except for such consents the failure of which to obtain could not
reasonably be expected to have a material adverse effect on the performance by
Buyer of its obligations hereunder; (ii) will not conflict with the
organizational documents of Buyer; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental instrumentality
applicable to Buyer; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, or constitute a default under, any
material agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 Buyer Qualifications. Buyer is, and as of the Closing will be,
legally, financially and otherwise qualified to perform its obligations
hereunder and to be the licensee of and to acquire, own and operate the Stations
under the Communications Act of 1934, as amended, and the rules, regulations and
policies of the FCC. Buyer knows of no fact that would disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of the Stations. To
Buyer's knowledge, no waiver of any FCC rule or policy is required for the grant
of the FCC Consent.
4.6 Financing. Buyer will have available sufficient funds to enable it to
consummate the transactions contemplated hereby.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this Agreement and
the Closing Date, Seller shall operate the Stations only in the ordinary course
of business in accordance with their respective current practices and staffing
levels and shall maintain expenditures for marketing and promotion efforts in
amounts not less than the amounts so expended in the corresponding months
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of the previous year (except where such conduct would conflict with the
following covenants or with Seller's other obligations under this Agreement),
and in accordance with the other covenants in this Section 5.
5.2 Compensation. Seller shall not increase by more than three percent
(3%) the compensation, bonuses, or other benefits payable or to be payable to
any person employed in connection with the conduct of the business or operations
of the Stations, except as may be contractually required.
5.3 Contracts. Seller will not, without the prior written consent of
Buyer, which consent (except for consents relating to programming agreements)
shall not be unreasonably withheld, enter into any contract or commitment
relating to the Stations or the Assets, or amend any Assumed Contract or incur
any obligation that will be binding on Buyer after Closing, except that Seller
shall have the right to enter into or renew (i) contracts or commitments with
advertisers for production or the sale of advertising time on the Stations for
cash, (ii) trade or barter agreements entered into in the ordinary course of
business consistent with past practices, and (iii) other contracts or
commitments therefor having a duration of one year or less and not involving
liabilities in excess of $5,000 per year individually or $25,000 per year in the
aggregate. Prior to the Closing Date, Seller shall deliver to Buyer a list of
all Contracts entered into between the date of this Agreement and the Closing
Date in accordance with this Section 5.3, together with copies of such
Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease, or
otherwise transfer or dispose of any of the Assets, except where no longer used
or useful in the business or operations of the Stations or in connection with
the acquisition of replacement property of equivalent kind and value.
Notwithstanding the foregoing, the expiration by their terms of Contracts prior
to Closing shall not be deemed a violation of this Agreement.
5.5 Encumbrances. Seller shall not create or assume any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon the Assets, except for (i) liens disclosed on Schedule 3.4 or
Schedule 3.5 which shall be removed on or prior to the Closing Date and (ii)
Permitted Liens.
5.6 Access to Information. Seller shall give Buyer and its authorized
representatives access, during normal business hours and with reasonable prior
notice, to the Assets and to all other books, records, Contracts, and documents
relating to the Stations for the purpose of audit and inspection, so long as
such audit and inspection does not unreasonably interfere with the business and
operations of the Stations.
5.7 Maintenance of Assets. Seller shall use commercially reasonable
efforts to maintain the Assets in good operating condition and repair (ordinary
wear and tear excepted). Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices and shall use its
commercially reasonable efforts to preserve the goodwill of the suppliers,
contractors, licensors, employees, customers, distributors and others having
business relations with
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the Stations. If any loss, damage, impairment, confiscation, or condemnation
of or to any of the Assets occurs, Seller shall repair, replace, or restore the
Assets to their prior condition as represented in this Agreement as soon
thereafter as possible, and Seller shall use the proceeds of any claim under
any insurance policy solely to repair, replace, or restore any of the Assets
that are lost, damaged, impaired, or destroyed. Seller shall pay when due all
amounts it is obligated to pay pursuant to the Contracts and shall otherwise
comply with all of their obligations thereunder.
5.8 Insurance. Seller shall maintain the existing insurance policies on
the Stations and the Assets through the Closing Date.
5.9 Consents. Seller shall use commercially reasonable efforts to obtain
the Consents without any change in the terms or conditions of any Contract or
License that could be materially less advantageous to the Stations than those
pertaining under the Contract or License as in effect on the date of this
Agreement; provided, however, that Seller's failure to obtain any Consent shall
not constitute a breach of this Agreement so long as Seller shall have used
commercially reasonable efforts to obtain such Consent. Seller shall promptly
advise Buyer of any difficulties experienced in obtaining any of the Consents
and of any conditions proposed, considered, or requested for any of the
Consents. Buyer shall use commercially reasonable efforts to assist Seller in
obtaining the Consents, including, without limitation, executing such assumption
instruments and other documents as may be reasonably required in connection with
obtaining the Consents.
5.10 Books and Records. Seller shall maintain its books and records
relating to the Stations only in the ordinary course consistent with past
practices.
5.11 Notification. Seller shall promptly notify Buyer in writing of any
material change in any of the information contained in Seller's representations
and warranties contained in Section 3 of this Agreement.
5.12 Compliance with Laws. Seller shall comply in all material respects
with all laws, rules, and regulations applicable or relating to the ownership
and operation of the Stations.
5.13 Collection of Accounts Receivable. Seller shall collect the accounts
receivable of the Stations only in the ordinary course consistent with its past
practices.
5.14 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances that constitutes or causes a breach of
a representation or warranty of Seller or Buyer under this Agreement (including,
without limitation, in the case of Seller, under the information disclosed in
the Schedules hereto) on the date such representation or warranty is made shall
be deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured on or before thirty (30) days after the receipt
by such party of written notice thereof from such other party.
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5.15 Licenses. Seller shall not cause or permit, by any act
or failure to act, any of the FCC Licenses to expire or to be revoked,
suspended, or modified in any materially adverse respect, or take any action
that could reasonably be expected to cause the FCC to institute proceedings for
the suspension, revocation, or materially adverse modification of any of the
FCC Licenses; provided, however, that in no event shall any action of the FCC
with respect of the ATV Rulemaking constitute a breach or default hereunder
unless Seller knowingly takes any action with respect thereto that at the time
of the taking of such action could reasonably be expected to materially
adversely affect the Stations.
5.16 Audited Financial Statements. Seller recognizes that Buyer is a
publicly reporting company and agrees that notwithstanding the restrictions in
Section 6.4, Buyer shall be entitled at its expense to cause audited and
unaudited financial statements of the Stations to be prepared for such periods
and filed with the Securities and Exchange Commission, and included in a
prospectus distributed to prospective investors, as required by laws and
regulations applicable to Buyer as a publicly reporting company or registrant.
Seller agrees to cooperate with Buyer and the auditing accountants as reasonably
requested by Buyer in connection with the preparation and filing of such
financial statements, including providing a customary management representation
letter in the form prescribed by generally accepted auditing standards.
5.17 Schedules. Seller shall deliver to Buyer all of the
Schedules referred to in Section 3 not later than ten (10) business days after
the date hereof.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 HSR Act. As soon as practicable after the execution hereof but in no
event later than twenty (20) business days after the execution hereof, each of
Buyer and Seller shall make the filings required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Buyer and
Seller agree to (a) cooperate with each other in connection with all 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; (b) promptly file, after any request by the Federal Trade Commission
("FTC") or Department of Justice ("DOJ") and after appropriate negotiation with
the FTC or DOJ of the scope of such request, any information or documents
requested by the FTC or DOJ; and (c) 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. The transfer of the Assets hereunder is expressly conditioned upon the
waiting period relating to any such filings having duly expired or been
terminated by the appropriate government agencies without the enforcement of any
action by any such agencies to restrain or postpone the transactions
contemplated hereby.
6.2 Control of the Stations. Prior to Closing, Buyer shall not, directly
or indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Stations;
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such operations, including complete control and supervision of all of the
Stations' respective programs, employees, and policies, shall be the sole
responsibility of Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage,
impairment, confiscation, or condemnation of any of the Assets from any cause
whatsoever shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the
consummation of the transaction contemplated by this Agreement, 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 Agreement. If this 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 Agreement.
6.5 Cooperation. Buyer and Seller 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 Agreement, and Buyer and Seller shall execute such other documents as may
be necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to
consummate the transaction contemplated hereby and to fulfill their obligations
under this Agreement. Notwithstanding the foregoing, Buyer shall have no
obligation to agree to any material adverse change in any Assumed Contract or
FCC License to obtain a Consent required with respect thereto.
6.6 Access to Books and Records. Seller shall provide Buyer reasonable
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the assets that are not included in the
Assets. Buyer shall provide Seller reasonable access and the right to copy for
a period of three years from the Closing Date any books and records relating to
the Assets.
6.7 Appraisal. Buyer and Seller agree to allocate the
Purchase Price for tax and recording purposes in accordance with an appraisal
to be completed as soon as practicable but in no event later than 90 days
following Closing. The appraisal shall be conducted by a party mutually
acceptable to Buyer and Seller. Buyer and Seller shall each pay one-half of
the cost of such appraisal.
6.8 Employment Matters.
(a) Immediately after the Closing, Buyer shall employ as employees at will
all individuals employed by Seller at the Stations immediately prior to the
Closing. Such employment by Buyer shall be subject to the terms, conditions
and policies of employment established by Buyer. Buyer shall not assume any
Seller employee benefit plans as listed on Schedule 3.11.
(b) For each employee of Seller who becomes an employee of Buyer (a "Hired
Employee"), Buyer shall provide to such employee credit for past service with
Seller in accordance
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with Buyer's policies and practices as in effect at such time. Buyer shall
offer health insurance and other benefits of the types and amounts as are
generally offered to employees of Buyer and its Affiliates engaged in
broadcasting activities as of the Closing Date.
(c) To the extent the Purchase Price is reduced pursuant to Section 2.3 in
respect thereof, Buyer shall grant Hired Employees credit for and shall assume
and be responsible for any liabilities with respect to vacation and personal
days accrued but unused by any Hired Employee as of the Closing Date.
(d) Within a reasonable period of time after the Closing Date, Buyer shall
accept a rollover of Hired Employees' account balances in Seller's 401(k) Plan.
6.9 Accounts Receivable.
(a) Within ten (10) days after the Closing Date, Seller shall furnish to
Buyer a true and complete list of Seller's Accounts Receivable, which list
shall set forth for each Accounts Receivable the name of the debtor, the date
of the invoice, the amount of any payments previously received on account and
the balance due.
(b) For a period of ninety (90) days after the Closing Date (the
"Collection Period"), Buyer will, without charge to Seller, use its usual and
customary procedures to collect the Accounts Receivable as Seller's agent for
collection, provided that (i) Buyer shall not be required to commence
litigation, employ legal counsel or a collection agency or make any other
extraordinary collection efforts, and (ii) Buyer's obligation to act as
Seller's agent in the collection of the Accounts Receivable shall terminate
upon expiration of the Collection Period. For the purpose of determining
amounts collected by Buyer with respect to the Accounts Receivable, each
payment by an account debtor shall be applied to the older or oldest accounts
receivable, whether Seller's or Buyer's, constituting a liability of such
account debtor unless the account debtor in writing identifies such an account
as being in dispute and directs that a particular payment be applied to a
specific newer account receivable.
(c) Every four weeks during the Collection Period (and within fifteen (15)
days after the end of the Collection Period), Buyer shall deliver to Seller a
statement showing all collections of Accounts Receivable made on behalf of
Seller since the last previous report and shall pay such collections to Seller
by check at the time such statement is delivered.
(d) Seller shall not engage in any collection efforts against account
debtors under the Accounts Receivable during the Collection Period, other than
with respect to Accounts Receivable identified as in dispute as provided in
foregoing Subsection (b).
(e) Buyer shall not, without Seller's prior written consent, compromise or
settle for less than full value any of the Accounts Receivable unless Buyer
pays Seller the full amount of
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any deficiency. Buyer shall be entitled to purchase from Seller any Accounts
Receivable for such amount as the parties may agree at any time during or at
the expiration of the Collection Period.
6.10 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the purchase and
sale of the Assets pursuant to this Agreement shall be subject to the prior
consent and approval of the FCC.
(b) Seller and Buyer shall file within ten (10) business days after the
date hereof an appropriate application for the FCC Consent. The parties shall
prosecute the application with all reasonable diligence and otherwise use their
commercially reasonable efforts to obtain a grant of the application as
expeditiously as practicable. Buyer's portion of the applications for the FCC
Consents with respect to radio and television stations WTHI(AM), WTHI-FM and
WTHI(TV), Terre Haute, Indiana, and WWVR-FM, West Terre Haute, Indiana (the
"Terre Haute FCC Consents"), shall include a request for waiver of the FCC's
one-to-a-market rule (47 C.F.R. Section 73.3555(c)) to permit the common
ownership of such radio and television stations (the "Terre Haute
One-To-A-Market Waiver"). Notwithstanding any provision in this Agreement to
the contrary, Buyer's obligation to consummate the transactions contemplated by
this Agreement shall not be affected by the imposition of any condition in the
Terre Haute FCC Consents requiring divestiture of one or more of the
above-referenced Terre Haute radio stations in order to comply with current or
future FCC ownership rules. Should such divestiture be required, Buyer will
use its commercially reasonable efforts (i) to sell the necessary radio
station(s) and (ii) to cause the filing of an application for FCC consent to
the sale of the necessary radio station(s), each within the period specified by
the FCC. Further more, each party agrees to comply with any other condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. 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 Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.11 Buyer Conduct Buyer shall take no action or fail
to take any action that would disqualify Buyer from being the licensee of the
Stations under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC or that would result in the imposition on
Buyer of any condition contained in the FCC Consent that need not be complied
with by or under Section 6.10.
6.12 Noncompetition Agreement As an
inducement to Buyer to consummate the transactions contemplated herein, at the
Closing, Seller shall execute and deliver to Buyer, and Buyer
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shall execute and deliver to Seller, a Noncompetition Agreement in the form of
Schedule 6.12 hereto (the "Noncompetition Agreement").
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at
the Closing are subject at Buyer's option
to the fulfillment prior to or at the Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations and warranties of
Seller contained in this Agreement (i) that are qualified as to materiality,
shall be true and complete and (ii) that are not qualified as to materiality,
shall be true and complete in all material respects, in each case at and as of
the Closing Date as though made at and as of that time except to the extent
that (i) any such representation or warranty is expressly stated only as of a
specified earlier date, in which case such representation or warranty shall be
true as of such earlier date and (ii) any changes are contemplated by this
Agreement.
(b) Covenants and Conditions. Seller shall have performed and complied in
all material respects with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.
(c) Consents. All Consents designated as "material" on Schedule 3.3 (the
"Material Consents") shall have been obtained and delivered to Buyer without
any material adverse change in the terms or conditions of any agreement or any
governmental license, permit, or other authorization.
(d) HSR Act; No Restraint. The waiting period under the HSR Act, if
applicable, shall have expired or been terminated without any unresolved action
by the DOJ or the FTC to prevent the Closing and there shall not be in effect
any preliminary or permanent injunction or other order, decree or ruling by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, no statute, rule, regulation or
administrative order shall have been promulgated or enacted by a government
authority and there shall not be in effect any temporary restraining order of a
court of competent jurisdiction, which, in any case, materially restrains or
prohibits the transactions contemplated hereby.
(e) Deliveries. Seller shall have made or stand willing to make all the
deliveries to Buyer set forth in Section 8.2.
(f) FCC Consent. The FCC Consent shall have been granted without the
imposition on Buyer of any conditions that need not be complied with by Buyer
under Section 6.10 hereof and Seller shall have complied with any conditions
imposed on it by the FCC Consent.
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(g) Governmental Authorizations. Seller shall be the holder of the
Licenses issued by the FCC to the Stations and, other than as a result of any
decision or order issued by the FCC or any court in connection with the ATV
Rulemaking, there shall not have been any modification of such Licenses that
would have a Material Adverse Effect. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely in any material respect such Licenses.
(h) Title Insurance and Survey. Buyer shall have obtained, at Buyer's
expense, a title commitment (the "Title Commitment") on the current ALTA form
from a title insurance company (the "Title Insurance Company") wherein the
Title Insurance Company shall agree to insure in Buyer fee simple title to each
parcel of Real Property owned by Seller (the "Owned Real Property"). The
exceptions to title specified in the Title Commitment shall be limited to the
preprinted or standard exceptions to title (the "Standard Exceptions"), the
lien for taxes not yet due and payable (the "Permitted Tax Lien") and such
other exceptions (the "Other Permitted Exceptions") that will neither (1)
materially impair Buyer's ability to use the insured Owned Real Property in the
operation of the Stations in the manner in which it is now used, nor (2)
constitute or evidence a mortgage or other lien (other than a Permitted Tax
Lien) against such title, except mortgages or other liens that will be released
at Closing at Seller's expense. Furthermore:
(i) Buyer shall have obtained, at Buyer's expense, a current "as-built"
survey (each, a "Survey") of each portion of the Owned Real Property. Each
such Survey shall be prepared by a registered surveyor, shall comply with
current ALTA Minimum Standard Detail Requirements, shall be accompanied by a
certification sufficient for the Title Insurance Company's deletion of the
Standard Exceptions relating to survey matters, and shall not disclose any
matters which would materially impair Buyer's ability to use any of the
surveyed Owned Real Property in the operation of the Stations in the manner in
which it is now used;
(ii) On the Closing Date, the Title Insurance Company shall have
unconditionally agreed in writing to issue pursuant to the Title Commitment a
final title policy, the premium for which shall be paid by the Buyer, as of the
Closing Date insuring fee simple title in Buyer to the Owned Real Property
covered by the Title Commitment, subject only to the Permitted Tax Lien and
Other Permitted Exceptions. On or before the Closing Date, Seller shall
execute and deliver to the Title Insurance Company an affidavit regarding
mechanic's liens sufficient to allow deletion of such liens as a Standard
Exception in the final title policy; and
(iii) If within sixty (60) days after the date hereof:
(a) A Title Commitment has not been obtained for any portion of the Owned
Real Property, Buyer shall be deemed to have waived the conditions precedent in
foregoing Subsections (h) and (h)(ii) with respect to such portion of the Owned
Real Property.
(b) A Survey has not been obtained by Buyer for any portion of the Owned
Real Property, Buyer shall be deemed to have waived the condition precedent in
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foregoing Subsection (h)(i) with respect to such portion of the Owned Real
Property, and shall be deemed to have waived the condition precedent in
foregoing Subsection (h)(ii) to the extent satisfaction of such condition with
respect to such portion of the Owned Real Property would require such Survey.
(c) Buyer does not by written notice to Seller within ten (10) days of
receipt of the Title Commitment and Survey specifically identify and object to
a defect or exception to title to any of the Owned Real Property, Buyer shall
be deemed to have waived its right to object to such defect or exception.
(i) Environmental Inspection. At Buyer's expense, Buyer shall have caused
an environmental inspection to be performed by a reputable environmental
engineering company of each portion of the Owned Real Property, and any real
property leased by Seller and used in the operation of any Station (the "Leased
Real Property"), and the inspection report shall not disclose a reasonable
basis for a determination that any such portion of the Owned Real Property or
the Leased Real Property in its current condition would cause Buyer as the
owner or lessee thereof to incur a material liability under any applicable
environmental law, rule or regulation. Buyer shall cause the environmental
consultant to deliver to Seller's attorney a copy of each such inspection
report at the same time such report(s) are delivered to Buyer. In the event
that within sixty (60) days after the date hereof, Buyer shall have failed to
give Seller's attorney written notice specifying in detail the manner in which
any such report discloses a reasonable basis for a determination that a portion
of the Owned Real Property or the Leased Real Property in its current condition
would cause Buyer as the owner or lessee thereof to incur a material liability
under applicable environmental laws, rules or regulations, Buyer shall be
deemed to have waived the condition precedent set forth in this Section 7.1(i).
(j) Opinions of Seller's Counsel. Buyer shall have received (a) the
written opinion of Seller's counsel, dated as of the Closing Date, that (i)
Seller is a corporation duly organized and validly existing under the laws of
the State of Indiana, (ii) the execution, delivery and performance of the
Agreement and each of the other documents have been duly authorized by all
requisite corporate action (including all necessary shareholder approval) on
the part of Seller, (iii) the Agreement and each of the other documents have
been duly and validly executed and delivered by Seller, and (iv) the execution,
delivery and performance by Seller of this Agreement and the Seller Ancillary
Documents do not violate or contravene, to counsel's knowledge, any judgment,
order, or agreement to which Seller is subject or a party or to which the
Assets are bound; and (b) the written opinion of the Seller's FCC counsel,
dated as of the Closing Date, that (i) Seller holds the FCC Licenses, each of
which is in effect, (ii) the FCC Licenses are not subject to any conditions
other than those shown upon their face and those imposed by generally
applicable rules and regulations of the FCC, (iii) the FCC has granted the FCC
Consent and the FCC Consent is not the subject of any petition for
reconsideration, application for review or other similar apparition, and (iv)
to the counsel's knowledge, there are no proceedings pending, or threatened by
or before the FCC affecting or relating to the Stations or the FCC Licenses.
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(k) Schedules. Seller shall have delivered to Buyer within ten (10)
business days after the date hereof all of the Schedules referred to in Section
3, and all such Schedules shall be acceptable in form and substance to Buyer
within its reasonable judgment; provided, however, that if Buyer fails to
provide Seller with written notice specifying in detail the manner in which any
such Schedule is unacceptable to Buyer within fifteen (15) business days after
the date hereof, Buyer shall be deemed to have waived the condition precedent
set forth in this Section 7.1(k).
7.2 Conditions to Obligations of Seller. All obligations of Seller
at the Closing are subject at Seller's
option to the fulfillment prior to or at the Closing Date of each of the
following conditions:
(a) Representations and Warranties. All representations and warranties of
Buyer contained in this Agreement (i) that are qualified as to materiality,
shall be true and complete and (ii) that are not qualified as to materiality,
shall be true and complete in all material respects, in each case at and as of
the Closing Date as though made at and as of that time, except to the extent
that (i) any such representation or warranty is expressly stated only as of a
specified earlier date, in which case such representation or warranty shall be
true as of such earlier date and (ii) any changes are contemplated by this
Agreement.
(b) Covenants and Conditions. Buyer shall have performed and complied in
all material respects with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to make all the
deliveries set forth in Section 8.3.
(d) HSR Act; No Restraint. The waiting period under the HSR Act, if
applicable, shall have expired or been terminated without any unresolved action
by the DOJ or the FTC to prevent the Closing and there shall not be in effect
any preliminary or permanent injunction or other order, decree or ruling by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, no statute, rule, regulation or
administrative order shall have been promulgated or enacted by a government
authority and there shall not be in effect any temporary restraining order of a
court of competent jurisdiction, which, in any case, materially restrains or
prohibits the transactions contemplated hereby.
(e) FCC Consent. The FCC Consent shall have been granted without the
imposition on Seller of any conditions that need not be complied with by Seller
under Section 6.11 hereof and Buyer shall have complied with any conditions
imposed on it by the FCC Consent.
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SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. Subject to the satisfaction or, to the extent
permissible by law, waiver (by the party for whose benefit the Closing
condition is imposed) on the date scheduled for Closing, of the conditions
precedent set forth in Sections 7.1 and 7.2, as appropriate, the Closing shall
take place at 10:00 a.m. on a date, to be set by Buyer on at least five (5)
business days' written notice to Seller, that is (1) not earlier than the first
business day after the FCC Consent is granted and the condition of Closing set
forth in Sections 7.1(f) and 7.2(e) has been satisfied, and (2) not later than
fourteen (14) days following the date upon which the FCC Consent is granted and
the condition of Closing set forth in Sections 7.1(f) and 7.2(e) has been
satisfied. If Buyer fails to give notice of the Closing Date by the date which
is five (5) business days prior to the date set forth in clause (2) in the
preceding sentence, the Closing shall take place on the first business day
following the end of the fourteen (14) day period described in such clause.
(b) Closing Place. The Closing shall be held at a location agreed upon by
Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
(a) Transfer Documents. Duly executed special warranty deeds, bills of
sale, motor vehicle titles, assignments, and other transfer documents which
shall be sufficient to vest good and marketable title to the Assets in the name
of Buyer, free and clear of all mortgages, liens, restrictions, encumbrances,
claims, and obligations, except for Permitted Liens;
(b) Consents. An executed copy of any instrument evidencing receipt of
any Material Consents and to the extent obtained, any other Consents;
(c) Officer's Certificate. A certificate, dated as of the Closing Date,
executed by Seller, certifying compliance by Seller with the conditions set
forth in Sections 7.1(a) and (b);
(d) Contracts, Business Records, Etc. Copies of all Assumed Contracts,
Licenses, blueprints, schematics, working drawings, plans, projections,
engineering records, and all files and records used by Seller in connection
with its operations;
(e) Indemnification Escrow Agreement. The Indemnification Escrow
Agreement (as defined below) duly executed by Seller; and
(f) Noncompetition Agreement. The Noncompetition Agreement, duly executed
by Seller.
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8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Seller the following, in form and substance reasonably satisfactory
to Seller and its counsel:
(a) Purchase Price. The Purchase Price, as adjusted pursuant to Section
2.3(b) and as reduced pursuant to Section 10.8;
(b) Assumption Agreements. Appropriate assumption agreements pursuant to
which Buyer shall assume and undertake to perform Seller's obligations under
the Assumed Contracts and the FCC Licenses as provided in Section 2.5;
(c) Officer's Certificate. A certificate, dated as of the Closing Date,
executed by Buyer, certifying compliance by Buyer with the conditions set forth
in Sections 7.2(a) and (b);
(d) Indemnification Escrow Agreement. The Indemnification Escrow
Agreement duly executed by Buyer; and
(e) Noncompetition Agreement. The Noncompetition Agreement, duly
executed by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by Seller, if
Seller is not then in material default, upon written notice to Buyer, upon the
occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be the Closing Date,
Seller shall have notified Buyer in writing that one or more of the conditions
precedent to the obligations of Seller set forth in Section 7.2 of this
Agreement have not been satisfied by Buyer or waived in writing by Seller and
such condition or conditions shall not have been satisfied by Buyer or waived
in writing by Seller within five (5) days following such notice.
(b) Judgments. If, on the date that would otherwise be the Closing Date,
there is in effect any law, regulation, rule, judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by December 31,
1998.
(d) Breach. Without limiting Seller's rights under the other provisions
of this Section 9.1, if Buyer has failed to cure any material breach of any of
its representations, warranties or covenants under this Agreement within thirty
(30) days after Buyer received written notice thereof from Seller.
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(e) Final Deposit. If no Early Termination Event has occurred and Buyer
fails to deliver the Final Deposit in immediately available funds to the
account or accounts designated by the Escrow Agent by 5:00 p.m. EST, on the
sixteenth business day following the date of execution of this Agreement. If
this Agreement is terminated by Seller pursuant to this Section 9.1(e), the
Initial Deposit, held by the Escrow Agent pursuant to the Escrow Agreement,
including any interest or other proceeds from the investment of such Initial
Deposit, shall be disbursed to or at the direction of Seller; provided however,
that the remedies provided under this Section 9.1(e) are cumulative and shall
not preclude Seller from seeking any other remedies existing at law, in equity
or otherwise.
9.2 Termination by Buyer. This Agreement may be terminated by Buyer, if
Buyer is not then in material default, upon written notice to Seller, upon the
occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be the Closing Date,
Buyer shall have notified Seller in writing that one or more of the conditions
precedent to the obligations of Buyer set forth in Section 7.1 of this
Agreement have not been satisfied by Seller or waived in writing by Buyer and
such condition or conditions shall not have been satisfied by Seller or waived
in writing by Buyer within five (5) days following such notice.
(b) Judgments. If, on the date that would otherwise be the Closing Date,
there is in effect any law, regulation, rule, judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by December 31,
1998.
(d) Damage. If any damage or destruction of the Assets or any other event
occurs that causes any of the Stations to cease broadcasting operations for a
period of seven (7) or more full, consecutive days (for the purpose of this
Section 9.2(d), a "full day" shall mean a consecutive 24-hour period).
(e) Breach. Without limiting Buyer's rights under the other provisions of
this Section 9.2, if Seller has failed to cure any material breach of any of
its representations, warranties or covenants under this Agreement within thirty
(30) days after Seller received written notice thereof from Buyer.
(f) Early Termination Event. If (i) Seller does not deliver all of the
Schedules referred to in Section 3 within the time period specified in Section
5.17, or (ii) the Schedules delivered by Seller to Buyer are not acceptable to
Buyer within its reasonable judgment, or (iii) Buyer discovers through its due
diligence investigation, including review of the Schedules to be furnished by
Seller (which when delivered in final form shall constitute a part of this
Agreement), that any representation and warranty of Seller contained in this
Agreement (A) that is qualified as to materiality is not true and complete, or
(B) that is not qualified as to materiality is not true and complete in all
material respects (each of clauses (i), (ii) and (iii), an "Early Termination
Event");
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provided, however, that Buyer must deliver written notice to Seller of an Early
Termination Event within fifteen (15) business days of the date of this
Agreement. Notwithstanding any other provisions of this Agreement, if Buyer
terminates this Agreement pursuant to an Early Termination Event and timely
notice of such Early Termination Event is delivered to Seller, the Initial
Deposit held by the Escrow Agent pursuant to the Escrow Agreement, including
any interest or other proceeds from the investment of such Initial Deposit held
by the Escrow Agent, shall be disbursed to or at the direction of Buyer, and
Buyer shall have no other remedy for any damages suffered by Buyer by reason of
an Early Termination Event.
9.3 Rights on Termination. If this Agreement is terminated pursuant to
Section 9.1 or Section 9.2 and neither party is in material breach of this
Agreement, the parties hereto shall not have any further liability to each other
with respect to the purchase and sale of the Assets. Except as provided in
Section 9.1(e), if this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then the payment to Seller of the sum
described in Section 9.4 below shall be liquidated damages and shall constitute
full payment and the exclusive remedy for any damages suffered by Seller by
reason of Buyer's material breach of this Agreement. Seller and Buyer agree in
advance that actual damages would be difficult to ascertain and that said sum is
a fair and equitable amount to reimburse Seller for damages sustained due to
Buyer's material breach of this Agreement.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the sum of
One Million Eight Hundred Thousand Dollars ($1,800,000.00), which sum equals two
percent (2%) of the Purchase Price (the "Initial Deposit"), in accordance with
the Escrow Agreement. On or before the sixteenth business day following the
date of execution of this Agreement, Buyer shall deposit with the Escrow Agent
the sum of Seven Million Two Hundred Thousand Dollars ($7,200,000.00), which
shall equal eight percent (8%) of the Purchase Price (the "Final Deposit",
together with the "Initial Deposit", the "Deposit"). All such funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent pursuant to the
Escrow Agreement, including any interest or other proceeds from the investment
of funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(b) Unless otherwise provided in this Agreement, if this Agreement is
terminated pursuant to Section 9.1 or 9.2 and Buyer is not in material breach
of this Agreement, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(c) If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement, then the entire amount of the Deposit shall be
disbursed by the Escrow Agent to or at the direction of Seller as liquidated
damages under Section 9.3 above, and any interest or other
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proceeds from the investment of the Deposit shall be disbursed by the Escrow
Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations, Warranties and Covenants. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and, shall survive (and not be affected in any
respect by) the closing and any investigation conducted by any party and any
information any party may receive, except for the representations and warranties
contained in Sections 3.1, 3.2, 3.5 (in the case of Section 3.5 to the extent of
the title representation only), 3.18, 4.1, 4.2 and 4.4 (each of which shall
survive indefinitely), for a period of two (2) years and any claim for a breach
of a representation or warranty must be brought prior to the expiration of such
two (2) year period. Any claim for indemnification in respect of a covenant or
agreement of Buyer or Seller hereunder to be performed before the Closing shall
be made prior to the date which is two (2) years from the Closing Date.
Notwithstanding anything in this Agreement to the contrary, the covenants and
agreements in this Agreement to be performed after the Closing shall survive the
Closing until fully performed.
10.2 Indemnification by Seller. Subject to Sections 10.1 and 10.4, Seller
hereby agrees to indemnify and hold Buyer harmless against and with respect to,
and shall reimburse Buyer for:
(a) Any and all costs, losses, liabilities, or damages resulting from any
inaccurate representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by Buyer pursuant to
this Agreement and the failure of Seller to perform any and all of such
obligations, including any obligation or liability arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting from the
operation or ownership of the Stations prior to the Closing, including any
liabilities arising under the Assumed Contracts or the Licenses which relate to
events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs, and expenses, including reasonable legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity.
10.3 Indemnification by Buyer. Subject to Sections 10.1 and 10.4, Buyer
hereby agrees to indemnify and hold Seller harmless against and with respect to,
and shall reimburse Seller for:
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(a) Any and all costs, losses, liabilities, or damages resulting from any
inaccurate representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer pursuant to this
Agreement and the failure of Buyer to perform any and all of such obligations.
(c) Any and all losses, liabilities or damages resulting from the
operation or ownership of the Stations on and after the Closing, including any
obligation or liability arising under the Licenses and the Assumed Contracts
which relate to events occurring after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses, including reasonable legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity.
10.4 Limitations. No indemnification shall be required to be made by any
party hereto until the aggregate amount of all indemnification claims against
such indemnifying party exceeds $50,000, provided that once such claims exceed
$50,000, such indemnifying party shall only be required to indemnify the other
party with respect to the portion of all claims which exceeds $50,000 in the
aggregate. The previous limitation shall not apply to the prorations to the
Purchase Price under Section 2.3. Notwithstanding anything to the contrary
contained herein, in no event shall Seller's obligations for indemnification
under this Agreement exceed in the aggregate the Purchase Price hereunder and
Buyer hereby waives and releases any recourse against Seller for indemnification
above the Purchase Price hereunder. Except as set forth in Section 10.6, the
indemnification provisions in this Section 10 set forth the exclusive remedies
of the parties hereto following the Closing for a breach of a representation,
warranty or covenant under this Agreement or any other claims relating to this
Agreement. There shall be no limitation as to amount or time with respect to
any breach of a representation or warranty set forth in Sections 3.1, 3.2, 3.5
(in the case of Section 3.5 to the extent of the title representation only),
3.18, 4.1, 4.2 and 4.4.
10.5 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) 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) days
after written notice of such action, suit, or proceeding was given to Claimant,
provided that any failure to give notice of such action, suit or proceeding
within such five (5) day period shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent such failure shall have prejudiced
such party in the defense or resolution of any such claim.
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(b) 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 the purposes of such investigation,
the Claimant agrees to make available to the Indemnifying Party and/or 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 thirty (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 amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty (30) day period (or any mutually agreed upon extension thereof), the
Claimant may seek appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to which the Claimant is
entitled to indemnification under this 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 a 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 does not
elect to assume control or otherwise participate in the defense of any third
party claim, it shall be bound by the results obtained by the Claimant with
respect to such claim.
(d) If a claim, whether between the parties or by a third party, requires
immediate action, the parties will make every effort to reach a decision with
respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2 and 10.3 shall
extend to the shareholders, directors, officers, members, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.5, any indemnification claims by such parties shall be
made by and through the Claimant.
10.6 Specific Performance. The parties recognize that if Seller breaches
this Agreement and refuses to perform under the provisions of this Agreement,
monetary damages alone would not be adequate to compensate Buyer for its injury.
Buyer shall therefore be entitled to obtain specific performance of the terms of
this Agreement. If any action is brought by Buyer to enforce this Agreement,
Seller shall waive the defense that there is an adequate remedy at law.
10.7 Attorneys' Fees. If either Seller or Buyer brings suit against the
other in connection with this Agreement and the party against whom suit is
brought (the "Defendant") is successful in denying substantially all the relief
sought by the claimant, then the Defendant shall be entitled to recover from the
claimant the reasonable attorneys' fees and other costs and expenses incurred by
the Defendant in connection with such suit regardless of whether such suit is
prosecuted to judgment.
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10.8 Indemnification Fund. At the Closing, $2,000,000 of the Purchase
Price payable by Buyer to Seller under Section 2.3(a) (the "Indemnity Fund")
shall be deposited with the Escrow Agent. The Indemnity Fund shall be held in
accordance with the terms hereof and the terms of the Indemnification Escrow
Agreement in the form of Schedule 10.8 attached hereto (the "Indemnification
Escrow Agreement"). The Indemnity Fund shall be used as a source of funds to
satisfy indemnification claims by Buyer under this Section 10; provided,
however, that the Indemnity Fund shall not be the only source of funds to
satisfy indemnification claims by Buyer and Buyer shall have all of its rights
at law and in equity to enforce its indemnification rights under this Section
10. Upon final determination of a claim in favor of Buyer by a court of
competent jurisdiction or by mutual agreement of Buyer and Seller, Buyer shall
be entitled to the amount of such claim from the Indemnity Fund. Any claims by
Buyer against the Indemnity Fund must be made by Buyer before the date which is
twelve months after the Closing Date (the "Indemnity Termination Date"). On
the Indemnity Termination Date, the Escrow Agent shall disburse to Seller the
Indemnity Fund together with all interest earned thereon less the amount of any
claims made by Buyer against the Indemnity Fund prior to such date (the "Claim
Amount"). The Claim Amount shall be retained by the Escrow Agent in escrow
until the underlying claim or claims related thereto have been finally
determined by a court of competent jurisdiction or by mutual agreement of Buyer
and Seller. Buyer and Seller hereby agree to jointly direct the Escrow Agent to
disburse any portion of the Indemnity Fund to any party which is entitled
thereto pursuant to the terms hereof.
10.9 Bulk Transfer. Seller and Buyer hereby waive compliance with the
provisions of any applicable bulk sales law and no representations, warranty or
covenant contained in this Agreement shall be deemed to have been breached as a
result of such non-compliance.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Buyer shall pay any federal, state, or local sales
or transfer tax, including Florida documentary stamp tax, arising in connection
with the conveyance of the Assets by Seller to Buyer pursuant to this Agreement
and any filing fees under the HSR Act. Buyer and Seller shall each pay one-half
of all filing fees required by the FCC in connection with the application for
the FCC Consent. Except as otherwise provided in this Agreement, each party
shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives. Each party
shall be responsible for all fees or commissions payable to any finder, broker,
advisor, or similar person retained by or on behalf of such party.
11.2 Notices. All notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
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If to Seller: Wabash Valley Broadcasting Corporation
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: Ice ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Buyer: Emmis Broadcasting Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: Attention: Bose ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, 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.
11.3 Benefit and Binding Effect. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors or permitted assigns. Except to the extent
specified herein, nothing in this Agreement, express or implied, shall confer on
any person other than the parties hereto and their respective successors or
permitted assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
11.4 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned by either party without the prior
written consent of the other party provided that:
(a) Either party may assign its rights under this Agreement as collateral
security to any lender providing financing to the party or any of its
Affiliates; and
(b) Buyer may assign all of its rights under this Agreement to an
Affiliate, provided that (i) the representations and warranties of Buyer
hereunder shall be true and correct in all material respects as applied to the
assignee, (ii) both Buyer and the assignee shall execute and deliver to Seller
a written instrument in form and substance satisfactory to Seller within its
reasonable judgment in which both Buyer and the assignee agree to be jointly
and severally liable
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for performance of all of Buyer's obligations under this Agreement, and (iii)
Buyer and the assignee shall deliver such other documents and instruments as
reasonably requested by Seller, including appropriate certified resolutions of
the boards of directors of Buyer and the assignee.
11.5 Further Assurances. The parties shall take any actions and execute
any other documents that may be necessary or desirable for the implementation
and consummation of this Agreement, including, in the case of Seller, any
additional bills of sale, deeds, or other transfer documents that, in the
reasonable opinion of Buyer, may be necessary to ensure, complete, and evidence
the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number, singular
or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided in this
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 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 Section 11.10.
11.11 Press Release. Prior to, at or after the Closing, neither party
shall publish any press release, make any other public announcement or otherwise
communicate with any news media concerning this Agreement or the transactions
contemplated hereby without the prior written consent of the other party;
provided, however, that nothing contained herein shall prevent either party from
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promptly making all filings with governmental authorities as may, in its
judgement, be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
11.12 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
SELLER
WABASH VALLEY BROADCASTING
CORPORATION
By:_____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President
BUYER
EMMIS BROADCASTING CORPORATION
By:______________________________________
Name:__________________________________
Title:_________________________________
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