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EXHIBIT 10.1.1
ASSET PURCHASE AGREEMENT
between
EMERALD CITY RADIO PARTNERS, L.P.
and
WNOK ACQUISITION COMPANY, INC.
dated as of
March 10, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2. References and Titles . . . . . . . . . . . . . . . . . . . 10
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ARTICLE II
SALE AND PURCHASE OF ASSETS
2.1. Agreement to Sell and Buy . . . . . . . . . . . . . . . . . 10
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2.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 11
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2.3. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 12
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2.4. Adjustments and Prorations . . . . . . . . . . . . . . . . . 12
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2.5. Assumption of Liabilities and Obligations . . . . . . . . . 13
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2.6. Allocation . . . . . . . . . . . . . . . . . . . . . . . . . 14
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2.7. ▇▇▇▇▇▇▇ Money . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties Regarding Seller. . . . . . . 15
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3.2. Representations and Warranties of Buyer . . . . . . . . . . 24
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. Covenants of Seller . . . . . . . . . . . . . . . . . . . . 26
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4.2. Negative Trade Balance . . . . . . . . . . . . . . . . . . . 27
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4.3. Environmental Site Assessments . . . . . . . . . . . . . . . 28
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ARTICLE V
ADDITIONAL AGREEMENTS OF SELLER
5.1. No Solicitation of Transactions . . . . . . . . . . . . . . 28
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5.2. Access and Information . . . . . . . . . . . . . . . . . . . 28
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5.3. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . 29
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5.4. Compliance With Station Licenses . . . . . . . . . . . . . . 30
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5.5. Notification of Certain Matters . . . . . . . . . . . . . . 30
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5.6. Third Party Consents . . . . . . . . . . . . . . . . . . . . 31
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5.7. Loan Condition . . . . . . . . . . . . . . . . . . . . . . . 31
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ARTICLE VI
COVENANT OF BUYER
6.1. Notification of Certain Matters . . . . . . . . . . . . . . 31
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6.2. Employee Matters . . . . . . . . . . . . . . . . . . . . . . 31
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ARTICLE VII
MUTUAL COVENANTS
7.1. Application for FCC Consents . . . . . . . . . . . . . . . . 32
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7.2. Control of Stations . . . . . . . . . . . . . . . . . . . . 32
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7.3. Other Governmental Consents . . . . . . . . . . . . . . . . 32
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7.4. Accounts Receivable . . . . . . . . . . . . . . . . . . . . 32
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7.5. Brokers or Finders . . . . . . . . . . . . . . . . . . . . . 33
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7.6. Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . 33
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7.7. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . 33
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7.8. Additional Agreements . . . . . . . . . . . . . . . . . . . 34
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ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions to Each Party's Obligation . . . . . . . . . . . 34
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8.2. Conditions to Obligation of Buyer . . . . . . . . . . . . . 35
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8.3. Conditions to Obligations of the Seller . . . . . . . . . . 36
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ARTICLE IX
CLOSING
9.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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9.2. Actions to Occur at Closing . . . . . . . . . . . . . . . . 38
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ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . 40
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10.2. Effect of Termination . . . . . . . . . . . . . . . . . . . 42
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ARTICLE XII
INDEMNIFICATION
11.1. Indemnification of Buyer . . . . . . . . . . . . . . . . . . 43
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11.2. Indemnification of Seller . . . . . . . . . . . . . . . . . 43
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11.3. Defense of Third-Party Claims . . . . . . . . . . . . . . . 43
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11.4. Direct Claims . . . . . . . . . . . . . . . . . . . . . . . 44
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11.5. Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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11.6. Limitations . . . . . . . . . . . . . . . . . . . . . . . . 44
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11.7. Instructions to Escrow Agent . . . . . . . . . . . . . . . . 45
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ARTICLE XII
GENERAL PROVISIONS
12.1. Survival of Representations, Warranties, and Covenants . . . 45
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12.2. Further Actions . . . . . . . . . . . . . . . . . . . . . . 46
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12.3. Amendment and Modification . . . . . . . . . . . . . . . . . 46
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12.4. Waiver of Compliance . . . . . . . . . . . . . . . . . . . . 46
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12.5. Specific Performance . . . . . . . . . . . . . . . . . . . . 46
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12.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . 46
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12.7. Expenses and Obligations . . . . . . . . . . . . . . . . . . 46
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12.8. Parties in Interest . . . . . . . . . . . . . . . . . . . . 47
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12.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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12.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 48
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12.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 48
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12.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 48
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12.13. Public Announcements . . . . . . . . . . . . . . . . . . . . 48
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12.14. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 48
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12.15. Director and Officer Liability . . . . . . . . . . . . . . . 49
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12.16. No Reversionary Interest . . . . . . . . . . . . . . . . . . 49
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12.17. No Waiver Relating to Claims for Fraud . . . . . . . . . . . 49
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Annexes:
Annex A -- The Stations
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Exhibits:
Exhibit A -- Form of Deposit Letter of Credit
Exhibit B -- Deposit Escrow Agreement
Exhibit C-1 -- Form of Seller Non-Competition Agreement
Exhibit C-2 -- Form of ▇▇▇▇▇▇▇▇ Non-Competition Agreement
Exhibit D -- Form of ▇▇▇▇ of Sale and Assignment
Exhibit E -- Form of Assumption Agreement
Exhibit F -- Form of Indemnification Escrow Agreement
Exhibit G -- Form of Opinion of ▇▇▇▇ and ▇▇▇▇
Exhibit H -- Form of Release of Claims
Schedules:
Schedule 2.1(j) -- Choses in Action
Schedule 2.2(j) -- Excluded Personal Property
Schedule 2.5(b) -- Trade Deals
Schedule 3.1(a) -- Qualification to do Business and Good Standing
Schedule 3.1(e) -- Unrecorded Liabilities and Conduct of Business
Schedule 3.1(f) -- Licenses and Permits
Schedule 3.1(g) -- Litigation
Schedule 3.1(h) -- Insurance
Schedule 3.1(i) -- Owned Real Estate
Schedule 3.1(j) -- Leased Real Property
Schedule 3.1(k) -- Personal Property
Schedule 3.1(l) -- Liens and Encumbrances
Schedule 3.1(o) -- Certain Agreements
Schedule 3.1(p) -- Employee Benefit Plans; Labor
Schedule 3.1(q) -- Patents, Trademarks; Etc.
Schedule 8.2(e) -- Real Estate Title Commitment
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of March __, 1997, between Emerald City Radio Partners, L.P., a limited
partnership ("Seller"), and WNOK Acquisition Company, Inc., a Delaware
corporation ("Buyer").
R E C I T A L S
A. Seller is the licensee of and owns and operates each of the
radio stations listed on Annex A hereto (each referred to individually as a
"Station" and collectively, the "Stations") pursuant to licenses issued by the
Federal Communications Commission ("FCC").
B. Seller desires to sell and Buyer desires to buy substantially
all the assets used or held for use in the operation of each of the Stations,
both tangible and intangible, excluding the Excluded Assets (as hereinafter
defined), and by so doing to acquire the radio broadcast business presently
conducted by each of the Stations, upon the terms and conditions hereinafter
set forth.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the respective representations,
warranties, agreements, and conditions hereinafter set forth, and other good
and valuable consideration, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I
DEFINED TERMS
1.1. DEFINED TERMS. The following terms shall have the following
meanings in this Agreement:
"Accounts Receivable" means the rights of Seller to cash
payment for the sale of advertising time by the Stations prior to 11:59 p.m. on
the day prior to the Closing Date.
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with such Person.
For purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person.
"Applicable Laws" means all laws, statutes, rules,
regulations, ordinances, judgments, orders, decrees, injunctions, and writs of
any Governmental Entity having jurisdiction over the Assets or the business or
operations of each of the Stations, as may be in effect on or prior to the
Closing.
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"Applications" has the meaning set forth in Section 7.1.
"Assets" means all the tangible and intangible assets owned,
leased, or licensed by Seller that are used or held for use in connection with
the business or operations of any of the Stations, whether or not reflected on
the Financial Statements or Balance Sheet of Seller, but specifically excluding
therefrom the Excluded Assets.
"Assumed Contracts" means (a) those Contracts set forth on
Schedule 3.1(o) identified as being assumed by Buyer and all other contracts of
Seller entered into in the ordinary course of business prior to the date of
this Agreement that relate to the Assets or the business or operation of the
Assets or any part thereof, (b) all other non-trade advertising Contracts for
cash entered into by Seller for any of the Stations prior to the date of this
Agreement and which are terminable on not more than 30 days notice, (c) all
Contracts entered into by Seller on or after the date of this Agreement and
before the Closing in accordance with the applicable provisions of Section 4.1,
and (d) Trade Deals described in Section 2.5(b).
"Assumption Agreement" means the Assumption Agreement between
Buyer and Seller substantially in the form of Exhibit E.
"Balance Sheet" has the meaning set forth in Section 3.1(e).
"Balance Sheet Date" has the meaning set forth in Section
3.1(e).
"Banking Event" has the meaning set forth in Section 9.1.
"▇▇▇▇ of Sale and Assignment" means the ▇▇▇▇ of Sale and
Assignment between Buyer and Seller substantially in the form of Exhibit D.
"Brokerage Fee" has the meaning set forth in Section 12.7.
"Business Day" means any other day than (i) a Saturday or
Sunday or (ii) a day on which commercial banks in New York, New York or Dallas,
Texas are authorized or required to be closed.
"Buyer" has the meaning set forth in the first paragraph of
this Agreement, and it includes its permitted successors and assigns.
"Buyer Indemnified Costs" means (a) any and all damages,
losses, claims, liabilities, demands, charges, suits, penalties, costs, and
expenses (including court costs and reasonable attorneys' fees and expenses
incurred in investigating and preparing for any litigation or proceeding) that
any of the Buyer Indemnified Parties incurs and that arise out of any breach or
default by Seller of any of the representations or warranties under this
Agreement or any agreement or document executed in connection herewith
(collectively, "Buyer Indemnified Representation Costs"); (b) any
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and all losses, liabilities, or damages incurred by any of the Buyer
Indemnified Parties resulting from Seller's operation or control of any of the
Stations prior to the Closing Date, including any and all liabilities arising
under the Licenses or the Assumed Contracts which relate to events occurring
prior to the Closing Date; (c) any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs, and expenses (including
court costs and reasonable attorneys' fees and expenses incurred in
investigating and preparing for any litigation or proceeding) that any of the
Buyer Indemnified Parties incurs and that arise out of any breach or default by
Seller of any covenant or agreement under this Agreement or any agreement or
document executed in connection herewith; (d) any and all obligations or
liabilities of Seller under any contract or agreement not expressly assumed by
Buyer pursuant to the terms hereof; (e) the items indemnified against pursuant
to Section 7.6; and (f) 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; provided, however,
that insofar as the items in this clause (f) relate to the items in clause (a)
above, such items, without duplication, shall constitute Buyer Indemnified
Representation Costs.
"Buyer Indemnified Parties" means Buyer and each officer,
director, employee, consultant, stockholder, and Affiliate of Buyer.
"CERCLA" has the meaning set forth in the definition of
Environmental Laws contained in this Section 1.1.
"Choses in Action" means a right to receive or recover
property, debt, or damages on a cause of action, whether pending or not and
whether arising in contract, tort or otherwise. The term shall include rights
to indemnification, damages for breach of warranty or any other event or
circumstance, judgments, settlements, and proceeds from judgments or
settlements.
"Closing" means the consummation of the transactions
contemplated by this Agreement in accordance with the provisions of Article IX.
"Closing Date" means the date of the Closing specified in
Article IX.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended. All references to the Code, U.S. Treasury regulations or
other governmental pronouncements shall be deemed to include references to any
applicable successor regulations or amending pronouncement.
"Commitment Letter" means that certain Commitment Letter of
even date herewith between Commodore Media, Inc. and Seller pursuant to which
Commodore Media, Inc. may lend and Buyer may borrow the Commodore Loan.
"Commodore Loan" means that certain loan from an Affiliate of
Buyer to Seller in the principal amount of $13,050,000 as such may be funded
pursuant to the Commitment Letter.
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"Communications Act" has the meaning set forth in Section
3.1(f).
"Company Reports" has the meaning set forth in Section 3.1(e).
"Conflict Event" has the meaning set forth in Section 9.1.
"Consents" means all governmental consents and approvals,
including the FCC Consents, and all consents and approvals of third parties, in
each case that are necessary in order to transfer the Assets to Buyer and
otherwise to consummate the transactions contemplated hereby.
"Contracts" means all agreements, contracts, or other binding
commitments or arrangements, written or oral (including any amendments and
other modifications thereto), to which Seller is a party or is otherwise bound
and which affect or relate to the Assets or the business or operations of each
of the Stations.
"Deposit Escrow Agreement" means the Deposit Escrow Agreement
among Seller, Buyer and Escrow Agent, a copy of which is attached hereto as
Exhibit B.
"▇▇▇▇▇▇▇ Money" means the sum of $500,000 in cash held in
accordance with the provisions of the Deposit Escrow Agreement.
"Employee Benefit Plans" means any "employee benefit plan"
within the meaning of Section 3(3) of ERISA and any bonus, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, vacation, severance, disability, death benefit,
hospitalization or insurance plan providing benefits to any present or former
employee or contractor of Seller or any member of the ERISA Group maintained by
any such entity or as to which any such entity has any liability or obligation.
"Employee Pension Benefit Plan" has the meaning set forth in
Section 3.(2) of ERISA.
"Environmental Costs or Liabilities" has the meaning set forth
in Section 3.1(n)(iv).
"Environmental Laws" means all Applicable Laws and rules of
common law pertaining to the environment, natural resources, and public or
employee health and safety including the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"),
the Emergency Planning and Community Right to Know Act and the Superfund
Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Hazardous and Solid Waste Amendments Act of 1984, the Clean
Air Act, the Clean Water Act, the Toxic Substances Control Act, the Safe
Drinking Water Act, the Occupational Safety and Health Act of 1970, the Oil
Pollution Act of 1990, the Hazardous Materials Transportation Act, and any
similar or analogous statutes, regulations and decisional law of any
Governmental Authority, as each of the foregoing may be amended and in effect
on or prior to the Closing.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Group" has the meaning set forth in Section 3.1(p).
"ESA" means Phase I or Phase II environmental site
assessments.
"Escrow Agent" means (a) as to the Deposit Escrow Agreement,
the Person identified as the "Escrow Agent" therein, and (b) as to the
Indemnification Escrow Agreement, the Person identified as the "Escrow Agent"
therein, and in each case includes their respective successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Existing ESAs" means the Preliminary Environmental Evaluation
WOIC-AM and WNOK-FM Radio Transmitter Sites, Columbia, South Carolina dated
December 18, 1989, prepared by Westinghouse Environmental and Geotechnical
Services, Inc.
"FCC" has the meaning set forth in the second recital hereto.
"FCC Consents" means actions by the FCC granting its consent
to the assignment of the FCC Licenses for each of the Stations to Buyer as
contemplated by this Agreement.
"FCC Licenses" means all of the licenses, permits, and other
authorizations issued by the FCC to Seller and applications of Seller, if any,
to the FCC relating to or used in the business or operations of each of the
Stations, including those listed on Schedule 3.1(f) and any additions thereto
between the date hereof and the Closing Date.
"Final Order" means written action or order issued by the FCC
setting forth the FCC Consents (without the inclusion of any adverse conditions
affecting Buyer's operation or ownership of any Station) and (a) which has not
been reversed, stayed, enjoined, set aside, annulled, or suspended and (b) with
respect to which (i) no requests have been filed for administrative or judicial
review, reconsideration, appeal, or stay, and the time for filing any such
requests and for the FCC to set aside the action on its own motion has expired
or (ii) in the event of review, reconsideration, or appeal, such review,
reconsideration, or appeal has been denied and the time for further review,
reconsideration, or appeal has expired.
"Financial Statements"has the meaning set forth in Section
3.1(e).
"GAAP" means generally accepted accounting principles in the
United States.
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"Governmental Entity" means any governmental department,
commission, board, bureau, agency, court or other instrumentality of the United
States or any state, county, parish or municipality, jurisdiction, or other
political subdivision thereof.
"Hazardous Substances" has the meaning set forth in Section
3.1(m).
"Holdback Amount" has the meaning set forth in Section 11.5.
"Indemnification Escrow Agreement" means the Indemnification
Escrow Agreement among Seller, Buyer, and Escrow Agent substantially in the
form attached hereto as Exhibit F.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Indemnified Costs" means the Buyer Indemnified Costs or the
Seller Indemnified Costs, as the case may be.
"Indemnified Parties" means the Buyer Indemnified Parties or
the Seller Indemnified Parties, as the case may be.
"Indemnification Representation Costs" means the Buyer
Indemnified Representation Costs or the Seller Indemnified Representation
Costs, as the case may be.
"Indemnifying Party" means any Person who is obligated to
provide indemnification hereunder.
"Intellectual Property" means all Trademarks, Know-how,
copyrights, copyright registrations and applications for registration, Patents
and all other intellectual property rights whether registered or not, licenses
to or owned by Seller relating to the business or operations of any Station,
including the call letters of each of the Stations and the goodwill related to
the foregoing.
"Know-how" means all plans, ideas, concepts and data, research
records, all promotional literature, customer and supplier lists and similar
data and information and all other confidential or proprietary technical and
business information.
"Knowledge" means, with respect to a specified party hereto,
the actual knowledge of such party, together with such additional knowledge as
would be acquired by a reasonable Person upon conducting reasonable and
diligent inquiry concerning the subject matter in question; provided that in
the case of the Seller, the knowledge of the Seller shall refer to the actual
knowledge of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Leased Real Property" means all of the Seller's leasehold
interests, easements, licenses, rights to access and rights-of-way which are
used or held for use in the business and
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operations of any Station, including those interests which are identified and
described in Schedule 3.1(j), as modified by any addition or permitted deletion
thereto between the date hereof and the Closing Date.
"Licenses" means the FCC Licenses and all Permits issued by
any Governmental Entity to Seller relating to or used or held for use in the
business and operations of any Station, including those listed on Schedule
3.1(f), with any additions thereto between the date hereof and the Closing
Date.
"Liens" has the meaning set forth in Section 3.1(l).
"Material Adverse Effect" means a material adverse effect on
the business, operations, properties (taken as a whole), condition (financial
or otherwise), results of operations, assets (taken as a whole), liabilities,
or prospects of Seller.
"Multiemployer Plan" has the meaning set forth in Section
3(37) or Section 4001(a)(3) of ERISA.
"Non-Competition Agreement" means, as to Seller, the Non-
Competition Agreement between Buyer and Seller substantially in the form of
Exhibit C-1 and, as to ▇▇▇▇ ▇▇▇▇▇▇▇▇, the Non-Competition Agreement between
Buyer and ▇▇▇▇ ▇▇▇▇▇▇▇▇ substantially in the form of Exhibit C-2.
"Owned Real Property" means those parcels of real property
owned in fee and used or held for use by Seller as described in Schedule
3.1(i), and all buildings, structures, improvements, and fixtures thereon,
together with all rights of way, easements, privileges, and appurtenances
pertaining or belonging thereto, including any right, title, and interest of
Seller in and to any street or other property adjoining any portion of such
property.
"Patents" means all patent and patent applications (including
all reissues, divisions, continuations, continuations-in-part, renewals, and
extensions of the foregoing) owned by Seller.
"Pension Plans" has the meaning set forth in Schedule 3.1(p).
"Permits" has the meaning set forth in Section 3.1(m).
"Permitted Encumbrances" means (a) statutory Liens for current
Taxes not yet due and payable, (b) mechanics', carriers', workers', repairers',
and other similar liens imposed by law arising or incurred in the ordinary
course of business for obligations not yet due, (c) in the case of leases of
vehicles, rolling stock, and other personal property, encumbrances, which do
not, individually or in the aggregate, materially impair the operation of the
business at the facility at which such leased equipment or other personal
property is located, (d) other liens, charges or encumbrances incidental to the
operation of the Stations or the ownership of the Assets which were
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not incurred in connection with the borrowing of money or the advance of credit
and which, in the aggregate, do not materially detract from the value of the
Assets or materially interfere with the use thereof or the operation of the
Stations, (e) Liens on leases of real property arising from the provisions of
such leases, including, in relation to leased real property, any agreements
and/or conditions imposed on the issuance of land use permits, zoning, business
licenses, use permits, or other entitlements of various types issued by any
Governmental Entity, necessary or beneficial to the continued use and occupancy
of the Assets or the continuation of the operation of any Station and (f) Liens
securing the Commodore Loan.
"Person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization, or
other entity.
"Personal Property" means all of the machinery, equipment
(including the transmitter and studio equipment), computer programs, computer
software, tools, motor vehicles, furniture, furnishings, leasehold
improvements, office equipment, inventories, supplies, plant, spare parts, and
other tangible or intangible personal property which are owned or leased by
Seller for any Station and which are used or held for use in the business or
operations of any Station, including the personal property which is listed on
Schedule 3.1(k) hereto, together with any additions thereto between the date
hereof and the Closing Date less any dispositions made in accordance with
Section 4.1. The term Personal Property shall not include any of the Excluded
Assets.
"Purchase Price" means the consideration payable by Buyer to
Seller as provided in Section 2.3 hereof.
"Real Property" means the Leased Real Property and the Owned
Real Property.
"Release" means the Release of Claims between Buyer and Seller
substantially in the form of Exhibit H.
"Released Claims" has the meaning set forth in Section
10.2(b).
"Released Parties" has the meaning set forth in Section
10.2(b).
"Schedules" means the Schedules attached hereto.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Seller" has the meaning set forth in the first paragraph of
this Agreement.
"Seller Indemnified Costs" means (a) any and all damages,
losses, claims, liabilities, demands, charges, suits, penalties, costs, and
expenses (including court costs and reasonable attorneys' fees and expenses
incurred in investigating and preparing for any litigation or proceeding)
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that any of the Seller Indemnified Parties incurs and that arise out of any
breach or default by Buyer of any of the representations, or warranties under
this Agreement or any agreement or document executed in connection herewith
(collectively, "Seller Indemnified Representation Costs"); (b) any and all
losses, liabilities, or damages incurred by any of the Seller Indemnified
Parties resulting from Buyer's operation or control of any of the Stations on
and after the Closing Date, including any and all liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring after the
Closing Date; (c) any and all damages, losses, claims, liabilities, demands,
charges, suits, penalties, costs, and expenses (including court costs and
reasonable attorneys' fees and expenses incurred in investigating and preparing
for any litigation or proceeding) that any of the Seller Indemnified Parties
incurs and that arise out of any breach or default by Buyer of any covenant or
agreement under this Agreement or any agreement or document executed in
connection herewith; (d) the items indemnified against pursuant to Section 5.3;
and (e) 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; provided, however, that insofar as the items
in this clause (e) relate to the items in clause (a) above, such items, without
duplication, shall constitute Seller Indemnified Representation Costs.
"Seller Indemnified Parties" means Seller and each officer,
director, employee, consultant, stockholder, and Affiliate of Seller.
"Seller Negative Trade Balance" has the meaning set forth in
Section 4.2.
"Station Event" has the meaning set forth in Section 9.1.
"Station Licenses" has the meaning set forth in Section
3.1(f).
"Station Management" has the meaning set forth in Section
4.1(b).
"Taxes" means taxes, charges, fees, imposts, levies, interest,
penalties, additions to tax or other assessments or fees of any kind,
including, but not limited to, income, corporate, capital, excise, property,
sales, use, turnover, value added and franchise taxes, deductions, withholdings
and customs duties, imposed by any Governmental Entity and any payments with
respect thereto required under any tax-sharing agreement.
"Tax Returns" means any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed with any Governmental Entity in connection with the
determination, assessment, collection or administration of any Taxes or the
administration of any laws, regulations or administrative requirements relating
to any Taxes.
"Title Commitment" means the commitment to issue an owner's
title policy as provided in Section 8.2(e).
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"Title Company" means Chicago Title Insurance Company or such
other title insurance company reasonably acceptable to Buyer and Seller.
"Trade Deals" means the exchanges by a Station of its
advertising time for goods or services, other than in connection with the
licensing of programs and programming material.
"Trademarks" means (a) trademarks, service marks, trade names,
trade dress, labels, logos, and all other names and slogans associated with any
products or embodying the goodwill of the business of any Station, whether or
not registered, and any applications or registrations therefor and (b) any
associated goodwill incident thereto owned by Seller.
"Trading Event" has the meaning set forth in Section 9.1.
"Transaction Documents" has the meaning set forth in Section
3.1(c).
"Warranty Deed" means a South Carolina general warranty deed
in form and substance reasonably acceptable to the Buyer and the Title Company
pursuant to which Seller conveys to Buyer the Owned Real Property at the
Closing.
1.2. REFERENCES AND TITLES. All references in this Agreement to
Exhibits, Schedules, Articles, Sections, subsections, and other subdivisions
refer to the corresponding Exhibits, Schedules, Articles, Sections,
subsections, and other subdivisions of this Agreement unless expressly provided
otherwise. Titles appearing at the beginning of any Articles, Sections,
subsections, or other subdivisions of this Agreement are for convenience only,
do not constitute any part of such Articles, Sections, subsections or other
subdivisions, and shall be disregarded in construing the language contained
therein. The words "this Agreement," "herein," "hereby," "hereunder," " and
"hereof," and words of similar import, refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The words "this
Section," "this subsection," and words of similar import, refer only to the
Sections or subsections hereof in which such words occur. The word "or" is not
exclusive, and the word "including" (in its various forms) means "including
without limitation." Pronouns in masculine, feminine, or neuter genders shall
be construed to state and include any other gender and words, terms, and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise expressly
requires. Unless the context otherwise requires, all defined terms contained
herein shall include the singular and plural and the conjunctive and
disjunctive forms of such defined terms.
ARTICLE II
SALE AND PURCHASE OF ASSETS
2.1. AGREEMENT TO SELL AND BUY. Subject to the terms and
conditions set forth in this Agreement and except for the Excluded Assets,
Seller shall sell, assign, transfer and deliver to Buyer on the Closing Date,
and Buyer shall purchase on the Closing Date, all of the Assets, free and clear
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of any Liens or liabilities (except for Permitted Encumbrances and liabilities
assumed by Buyer in accordance with Section 2.5). The Assets to be assigned,
transferred and delivered by Seller hereunder shall include the following:
(a) All Personal Property;
(b) All Leased Real Property;
(c) All Owned Real Property;
(d) All Licenses and Permits;
(e) All Assumed Contracts;
(f) All Intellectual Property;
(g) Each of the Station's technical information and data,
machinery and equipment warranties (to the extent such warranties are
assignable), if any, maps, plans, diagrams, blueprints and schematics
relating to such Station, if any, including filings with the FCC which
relate to such Station, and goodwill relating to the foregoing;
(h) All books and records relating to the business and
operation of any of the Stations (excluding those described in, or
relating to the assets described in, Section 2.2), including (i)
executed copies of the Assumed Contracts, or if no executed agreement
exists, summaries of each Assumed Contract transferred pursuant to
clause (e) above and (ii) all records required by the FCC to be kept
by each Station, subject to the right of Seller to copy and have such
books and records made reasonably available to Seller for tax and
other legitimate organization purposes for a period of six years after
the Closing;
(i) To the extent assignable, all computer programs and
software, and all rights and interests of Seller in and to computer
programs and software used in connection with the business or
operations of any Station;
(j) Except for claims relating to Taxes, all Choses in
Action of Seller; and
(k) All intangible assets of Seller relating to any
Station or the business or operation of any Station not specifically
described above, including goodwill, and all other assets, other than
the Excluded Assets, used or held for use in connection with any
Station or the business of the Seller.
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2.2. EXCLUDED ASSETS. The Excluded Assets shall consist
of the following:
(a) In each case determined as of 11:59 p.m. on the day
prior to the Closing Date, Seller's cash on hand as of the Closing
Date and all other cash in any of Seller's bank or savings accounts;
notes receivable, letters of credit or other similar items of Seller;
any stocks, bonds, certificates of deposit and similar investments of
Seller; and any other cash equivalents of Seller;
(b) Seller's books and records relating solely to
internal corporate matters and any other books and records not related
to any Station or the business or operations of any Station;
(c) Any claims, rights and interest of Seller in and to
any (i) refunds of Taxes or fees of any nature whatsoever or (ii)
deposits or utility deposits, which, in each case, relate solely to
the period prior to the Closing Date;
(d) All insurance contracts, including the cash surrender
value thereof, and all insurance proceeds or claims made by Seller
relating to property or equipment repaired, replaced or restored by
Seller prior to the Closing Date;
(e) All Employee Benefit Plans and all assets or funds
held in trust, or otherwise, associated with or used in connection
with the Employee Benefit Plans;
(f) All Choses in Action, if any, of Seller excluded from
Section 2.1(j);
(g) All Accounts Receivable;
(h) All tangible and intangible personal property
disposed of or consumed in the ordinary course of business between the
date of this Agreement and the Closing Date, or as otherwise permitted
under the terms hereof; and
(i) Any collective bargaining agreement, any other
Contract not included in the Assumed Contracts, and all Contracts that
have terminated or expired prior to the Closing Date in the ordinary
course of business and as permitted hereunder; and
(j) The personal effects and other personal property, if
any, identified on Schedule 2.2(j).
2.3. PURCHASE PRICE. Subject to the adjustments set forth in
Section 2.4 and 2.5(b), the Purchase Price for the Assets is Fourteen Million
Nine Hundred Seventy-Five Thousand Dollars ($14,975,000).
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2.4. ADJUSTMENTS AND PRORATIONS.
(a) All revenues arising from the operation of the
Stations earned or accrued up until 11:59 p.m. on the day prior to the Closing
Date, and all expenses, costs and liabilities, arising therefrom incurred,
accrued or payable up until such time, including expenses arising under the
Assumed Contracts, tower rentals, business and license fees, utility charges,
real and personal property Taxes levied against the Assets, property and
equipment rentals, applicable copyright or other fees, sales and service
charges, other Taxes, wages, salaries, vacation, sick and employee compensation
pay shall be prorated between Buyer and Seller in accordance with the principle
that (i) Seller shall receive all revenues, refunds and deposits of Seller held
by third parties, and shall be responsible for all expenses, costs and
liabilities incurred, payable or allocable to the conduct of the business and
operations of each Station for the period ending at 11:59 p.m. on the day prior
to the Closing Date and (ii) Buyer shall receive all revenues earned or accrued
and shall be responsible for all expenses, costs and liabilities incurred,
payable or allocable to the conduct of the business and operations of each
Station for the period commencing on and continuing after the Closing Date. An
adjustment of the Purchase Price and proration shall be made in favor of Buyer
to the extent that Buyer assumes any liability under any Assumed Contract to
refund (or to credit against payments otherwise due) any security deposit or
similar prepayment paid to Seller by any lessee or other third party which is
not otherwise credited to Buyer. Subject to Buyer's receipt of appropriate
estoppel certificates, an adjustment of the Purchase Price and proration shall
be made in favor of Seller to the extent that Seller has made (A) any security
deposit under any Assumed Contract whether or not there is a proration under
such Assumed Contract or (B) other prepayment under any Assumed Contracts for
which there is a proration. Seller shall be liable for all of the costs of
employee compensation relating to each of the Stations properly attributable to
or accruable on account of service with the Seller through 11:59 p.m. on the
date prior to the Closing Date, including (1) all Taxes and related
contributions, vacations and sick pay and (2) all group medical, dental or
death benefits for expenses incurred, related to or arising from, events
occurring on or prior to 11:59 p.m. on the date prior to the Closing Date, or
death or disability occurring on or prior to 11:59 p.m. on the date prior to
the Closing Date, whether reported by the Closing Date or thereafter; Buyer
will be liable for all of the costs of employee compensation relating to each
of the Stations, properly attributable or accruable thereafter on account of
service with Buyer. Except as provided in Section 2.5(b), Trade Deals shall
not be adjusted or prorated. Notwithstanding the foregoing, no adjustments or
prorations under this Agreement shall result in a decrease or increase in the
aggregate Purchase Price of greater than $24,000.
(b) Adjustments or prorations pursuant to this Section
2.4 will, insofar as feasible be determined and paid on the Closing Date based
upon Seller's good faith calculation delivered to Buyer five days prior to the
Closing Date and reasonably approved by Buyer, with final settlement and
payment by the appropriate party occurring no later than 60 days after the
Closing Date. Within 60 days after the Closing Date, Buyer shall submit to
Seller its good faith determination of the adjustments or prorations required
by this Section 2.4. Buyer's determination of the amount of adjustment under
this Section 2.4 shall be made in accordance with GAAP, consistently applied.
If Seller disagrees with the determination made by Buyer of the adjustment,
Seller shall give prompt
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written notice thereof, but in no event later than 20 days after notice of
Buyer's determination, specifying in reasonable detail the nature and extent of
the disagreement, and Buyer and Seller shall have a period of 30 days in which
to resolve the disagreement. If the parties are unable to resolve the
disagreement within the 30-day period, the matter shall be submitted to Coopers
& ▇▇▇▇▇▇▇ L.L.P., an independent certified public accounting firm, which
accounting firm shall be directed to submit a final resolution within 30 days.
The accounting firm's determination shall be binding on Buyer and Seller. Each
party shall bear the fees and expenses of its own representatives, including
its independent accountants, if any, and shall share equally the fees and
expenses of Coopers & ▇▇▇▇▇▇▇, L.L.P., if engaged, to resolve any disagreement
between the parties. Within five Business Days following a final determination
hereunder, the party obligated to make payment will make the payments
determined to be due and owing in accordance with this Section 2.4.
2.5. ASSUMPTION OF LIABILITIES AND OBLIGATIONS. (a) As of the
Closing Date, Buyer shall assume and undertake to pay, discharge and perform
all the obligations and liabilities of Seller relating to each Station under
the Licenses and the Assumed Contracts assumed by Buyer relating to the time
period beginning on or arising out of events occurring on or after the Closing
Date. All other obligations and liabilities of Seller, including (i)
obligations or liabilities under any contract not included in the Assumed
Contracts, (ii) obligations or liabilities under any Assumed Contract for which
a Consent, if required, has not been obtained as of the Closing, (iii) any
obligations and liabilities arising under the Assumed Contracts that relate to
the time period prior to the Closing Date or arise out of events occurring
prior to the Closing Date and (iv) any forfeiture, claim or pending litigation
or proceeding relating to the business or operations of any Station prior to
the Closing Date, shall remain and be the obligation and liability solely of
Seller. Other than as specified in the first sentence of this Section 2.5,
Buyer, directly or indirectly, shall assume no liabilities or obligations of
Seller and shall not be liable therefor.
(b) Schedule 2.5(b) contains a list of all of the Trade
Deals in effect as of the date of this Agreement and correctly sets forth the
balance, in dollar value, of either (i) Seller's obligations to the other party
under such Trade Deals (denoted by a minus on Schedule 2.5(b)) or (ii) the
amount due Seller under such Trade Deals (reflected as a positive on Schedule
2.5(b)). On the Closing Date, Buyer shall assume Seller's obligations under
(i) the Trade Deals listed on Schedule 2.5(b) to the extent that the goods or
services to be provided by the advertisers pursuant to such Trade Deals are
solely used or useful in connection with the business or operations of any
Station and (ii) all Trade Deals entered into by Seller between the date hereof
and the Closing Date with the consent of Buyer; provided, however, if, as of
the Closing Date, the obligation of Seller for air time due another party
pursuant to all Trade Deals to be assumed by Buyer exceeds $50,000 in the
aggregate, then the amount of such excess shall be considered a pre-Closing
Date operating expense of Seller that shall serve as a reduction of the
Purchase Price in accordance with Section 2.4(a). The Trade Deals assumed by
Buyer pursuant to the terms of this Section 2.5(b) shall be considered Assumed
Contracts.
2.6. ALLOCATION. Within 30 days after the Closing Date, Seller and
Buyer shall negotiate in good faith an allocation of the Purchase Price among
the Assets (as well as any liabilities assumed
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by Buyer) that complies with Section 1060 of the Code with respect to the
allocation of the Purchase Price. If the allocation is not agreed upon within
30 days after the Closing, then Buyer and Seller agree that the allocation
shall be made and consistently reported by Buyer and Seller in compliance with
Section 1060 based upon an asset valuation supplied by KPMG Peat Marwick. The
cost of such appraisal shall be shared equally by Buyer and Seller. Buyer will
order such appraisal from KPMG Peat Marwick on or after such date as the FCC
Consents have been placed on public notice. The appraisal, if required, shall
be provided to Seller within 45 days after the Closing Date.
2.7. ▇▇▇▇▇▇▇ MONEY. (a) On or before the fourth Business Day after
the date of this Agreement, Buyer shall deposit the ▇▇▇▇▇▇▇ Money with the
Escrow Agent to be held in escrow in accordance with the Deposit Escrow
Agreement.
(b) Subject to satisfaction of the conditions to the
obligations set forth in Article VIII, at the Closing, Seller shall instruct
the Escrow Agent to pay the ▇▇▇▇▇▇▇ Money to Buyer.
(c) If this Agreement is terminated as provided in
Section 10.1, Buyer and Seller shall instruct the Escrow Agent to pay the
▇▇▇▇▇▇▇ Money to Buyer or to Seller, all as provided in Section 10.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES REGARDING SELLER. Seller
represents and warrants to Buyer as follows (with the understanding that Buyer
is relying on such representations and warranties in entering into and
performing this Agreement).
(a) Organization, Good Standing, Etc. Seller is a
limited partnership, validly existing under the laws of the State of Delaware,
has all requisite partnership power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is duly
qualified to do business in each state listed on Schedule 3.1(a), which states
represent every jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary.
Seller has delivered to Buyer true and complete copies of its Limited
Partnership Agreement, as in effect at the date of this Agreement. Seller is
not in violation of any provisions of its Limited Partnership Agreement.
(b) Subsidiaries of Seller. Seller does not own,
directly or indirectly, any equity interest in, any other corporation,
partnership, or other Person or have the right, pursuant to a contract or
otherwise, to acquire any capital stock, equity interest or other similar
investment in any corporation, partnership, or other Person.
(c) Authority. Seller has all requisite partnership
power and authority to enter into this Agreement, the Deposit Escrow Agreement,
the ▇▇▇▇ of Sale and Assignment, the
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Assumption Agreement, the Indemnification Escrow Agreement, the Non-Competition
Agreement and each other agreement, document, and instrument required to be
executed by Seller in accordance herewith (collectively, the "Transaction
Documents") and to consummate the transactions contemplated hereby or thereby.
The execution and delivery of the Transaction Documents by Seller and the
consummation by Seller of the transactions contemplated hereby or thereby have
been duly authorized by all necessary action on the part of Seller, including,
without limitation, the requisite approval of the holders of the outstanding
equity interest of Seller entitled to vote thereon. The Transaction Documents
have been, or upon execution and delivery will be, duly executed and delivered
and constitute the valid and binding obligations of Seller enforceable against
it in accordance with their terms, subject as to enforceability to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(d) No Conflict; Required Filings and Consents. The
execution and delivery of the Transaction Documents by Seller do not and the
performance by Seller of the transactions contemplated hereby or thereby will
not, subject to obtaining the consents, approvals, authorizations, and permits
and making the filings described in this Section 3.1(d), (A) violate, conflict
with, or result in any breach of any provision of Seller's Limited Partnership
Agreement, (B) violate, conflict with, or result in a violation or breach of,
or constitute a default (with or without due notice or lapse of time or both)
under, or permit the termination of, or result in the acceleration of, or
entitle any party to accelerate (whether as a result of a change of control of
Seller or otherwise) any obligation, or result in the loss of any benefit, or
give any Person the right to require any security to be repurchased, or give
rise to the creation of any lien, charge, security interest, or encumbrance
upon any of the Assets under any of the terms, conditions, or provisions of any
loan or credit agreement, note, bond, mortgage, indenture, or deed of trust, or
any license, lease, agreement, or other instrument or obligation to which
Seller is a party or by which it or any of the Assets may be bound or
subjected, or (C) violate any order, writ, judgment, injunction, decree,
statute, law, rule, or regulation, of any Governmental Entity applicable to
Seller or by which or to which any of the Assets is bound or subject. No
consent, approval, order, or authorization of, or registration, declaration, or
filing with, any Governmental Entity is required by or with respect to Seller
in connection with the execution and delivery of the Transaction Documents by
Seller or the consummation of the transactions contemplated hereby or thereby,
except for the FCC Consents as contemplated by Section 7.1 hereof and any that
may be required under the HSR Act.
(e) Reports; Financial Statements; Absence of Certain
Changes or Events.
(i) Seller has filed all forms, reports,
statements, and other documents required to be filed with the FCC.
Seller has filed all forms, reports, statements, and other documents
required to be filed with any and all other Governmental Entities.
All such forms, reports, statements and other documents required to be
filed with the FCC or any other Governmental Entity are referred to
herein, collectively, as the "Company Reports"). The
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Company Reports were prepared in all material respects in accordance
with the requirements of applicable law.
(ii) Seller has delivered to Buyer copies of (A)
the audited balance sheets of Seller as of December 31, 1994 and
December 31, 1995, together with the audited statements of income and
cash flows of Seller for the periods then ended, and the notes
thereto, accompanied by the reports thereon of BDO ▇▇▇▇▇▇▇, L.L.P.,
independent public accountants, and (B) the unaudited balance sheet of
Seller as of December 31, 1996, together with the related unaudited
statements of income for the periods then ended (such audited and
unaudited financial statements collectively being referred to as the
"Financial Statements"). The Financial Statements, including the
notes thereto, were prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby (except to the
extent disclosed therein or required by changes in GAAP) and present
accurately the information purported to be presented therein as of
such dates and for the periods then ended.
(iii) Except as disclosed in Schedule 3.1(e), there
is no liability or obligation of any kind, whether accrued, absolute,
fixed, contingent, or otherwise, of Seller that is not reflected or
reserved against in the balance sheet for the year ended December 31,
1996 (the "Balance Sheet"), other than (A) liabilities incurred in the
ordinary course of business in a manner consistent with past practice
since December 31, 1996 (the "Balance Sheet Date"), or (B) any such
liability or obligation which would not be required to be presented in
financial statements or the notes thereto prepared in conformity with
GAAP applied, in a manner consistent with past practice, in the
preparation of the Financial Statements.
(iv) Except as disclosed in Schedule 3.1(e), since
the Balance Sheet Date, Seller has conducted its business only in the
ordinary course consistent with past practice and nothing has occurred
that would have been prohibited by Section 4.1 if the terms of such
section had been in effect as of and after the Balance Sheet Date.
Since the Balance Sheet Date, there has not occurred, and Seller has
not incurred or suffered, any event, circumstance, or fact that could
result in a Material Adverse Effect. Additionally, since the Balance
Sheet Date, there has not occurred, and Seller has not incurred or
suffered, any event, circumstance, or fact that materially impairs the
physical assets of any of the Stations.
(f) Compliance with Applicable Laws: FCC Matters.
(i) The business of Seller has been conducted in
compliance in all material respects with each Applicable Law. No
investigation or review by any Governmental Entity with respect to
Seller is pending or, to the Knowledge of Seller, threatened. Without
limiting the generality of the foregoing, Seller has complied with the
Communications Act of 1934, as amended, and all material rules,
regulations and written policies of the FCC thereunder (collectively,
the "Communications Act"), all obligations with respect to equal
employment opportunity under Applicable Law, and all material rules
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and regulations of the Federal Aviation Administration applicable to
each of the towers used or held for use by a Station. In addition,
Seller has duly and timely filed, or caused to be so filed, with the
FCC and other appropriate Governmental Entities all reports,
statements, documents, registrations, filings, or submissions with
respect to the operation of each Station and the ownership thereof,
including, applications for renewal of authority required by
Applicable Law to be filed. All such FCC filings complied in all
material respects with Applicable Laws when made, and no deficiencies
have been asserted with respect to any such filings. The material
required by 47 C.F.R. Section 73.3526 to be kept in the public
inspection files of each Station is in such files.
(ii) Schedule 3.1(f) is a true and complete list
of (A) all of the FCC Licenses, including the expiration dates
thereof, as of the date of this Agreement and (B) all other material
licenses, permits, or authorizations issued to Seller by any other
Governmental Entities and held by it as of the date of this Agreement.
Such FCC Licenses, licenses, permits, and authorizations, and all
pending applications for modification, extension, or renewal thereof
or for new licenses, permits, permissions, or authorizations, are
collectively referred to herein as the "Station Licenses." Schedule
3.1(f) accurately lists the legally authorized holder(s) of the
Station Licenses. The Station Licenses constitute all the licenses,
permits and authorizations required for the operation of each of the
Stations and the business of Seller, and each of the Station Licenses
is in full force and effect. Each of the Stations has been operated
in all material respects in accordance with the terms of its Station
Licenses and the Seller is otherwise in compliance with, and has
conducted its business so as to comply with, the terms of such Station
Licenses. There are no proceedings pending or, to the Knowledge of
Seller, threatened with respect to Seller's ownership or operation of
any Station which reasonably may be expected to result in the
revocation, material adverse modification, non-renewal, or suspension
of any of the Station Licenses, the denial of any pending applications
for any Station Licenses, the issuance against Seller of any cease and
desist order, or the imposition of any administrative actions by the
FCC or any other Governmental Entity with respect to any Station
Licenses, or which reasonably may be expected to adversely affect any
Station's ability to operate as currently operated or Buyer's ability
to obtain control of any Station Licenses or to operate any Station.
To the Knowledge of Seller, no other broadcast station or radio
communications facility is causing interference to any Station's
transmissions beyond that which is allowed by FCC rules and
regulations and no Station is causing interference to any other
broadcast station or radio communications facilities' transmissions
beyond that which is allowed by the FCC rules and regulations. To the
knowledge of Seller, there is no reason to believe that the FCC will
not renew any of the Station Licenses issued by the FCC in the
ordinary course of business. To the Knowledge of Seller, there are no
facts relating to Seller under the Communications Act that reasonably
may be expected to disqualify Seller from transferring control of any
of the Station Licenses pursuant to the terms of this Agreement or
that would prevent the consummation by Seller of the transactions
contemplated by this Agreement.
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(g) Absence of Litigation. Except as set forth on
Schedule 3.1(g), there is no claim, action, suit, inquiry, judicial, or
administrative proceeding, grievance, or arbitration pending or, to the
Knowledge of Seller, threatened against Seller or any of the Assets by or
before any arbitrator or Governmental Entity, nor are there any investigations
relating to Seller or any of the Assets pending or, to the Knowledge of Seller,
threatened by or before any arbitrator or Governmental Entity. Except as set
forth in Schedule 3.1(g), there is no judgment, decree, injunction, order,
determination, award, finding, or letter of deficiency of any Governmental
Entity or arbitrator outstanding against Seller or any of the Assets. There is
no action, suit, inquiry, judicial, or administrative proceeding pending or, to
the Knowledge of Seller, threatened against Seller relating to the transactions
contemplated by this Agreement.
(h) Insurance. Since March 16, 1994, Seller has been
insured against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. Schedule
3.1(h) sets forth an accurate summary of all fire, general liability,
malpractice liability, theft, and other forms of insurance and all fidelity
bonds held by or applicable to Seller. Except as set forth on Schedule 3.1(h),
the policies of general liability, malpractice liability, fire, theft, and
other insurance maintained with respect to the operations, assets, or business
of Seller provide adequate coverage against loss. To the Knowledge of Seller,
no event has occurred, including the failure by Seller to give any notice or
information or the delivery of any inaccurate or erroneous notice or
information, which limits or impairs the rights of Seller under any such
insurance policies in such a manner as could have a Material Adverse Effect.
Excluding insurance policies that have expired and been replaced in the
ordinary course of business, no insurance policy has been canceled within the
last two years prior to the date hereof.
(i) Owned Real Property. Schedule 3.1(i) contains an
accurate description of all the Owned Real Property. Seller has good and
marketable, fee simple, absolute title in and to the Owned Real Property.
Seller has sufficient title to such easements, rights of way and other rights
appurtenant to each of the Owned Real Properties as are necessary to permit
ingress and egress to and from the Owned Real Property to a public way, and the
improvements on the Owned Real Property have access to such sewer, water, gas,
electric, telephone and other utilities as are necessary to allow the business
of the Seller operated thereon to be operated in the ordinary course. There is
no pending condemnation or similar proceeding affecting the Owned Real Property
or any portion thereof, and to the Knowledge of Seller, no such action is
threatened. Except as set forth on Schedule 3.1(i), the improvements located
on the Owned Real Property are in sufficiently good condition (except for
ordinary wear and tear) to allow the business of the Seller to be operated in
the ordinary course and there has been no damage to such improvements that
affects the conduct of such business in any material respect that has not been
repaired or remedied. Except as set forth on Schedule 3.1(i), there are no
lessees or tenants at will in possession of any portion of any of the Owned
Real Property other than Seller, whether as lessees, tenants at will,
trespassers or otherwise. Except as set forth on Schedule 3.1(i), no zoning,
building or other federal, state or municipal law, ordinance, regulation or
restriction is violated in any material respect by the continued maintenance,
operation or use of the Owned Real Property or any tract or portion thereof or
interest therein in its present manner. The current use of the Owned Real
Property and all parts thereof does not violate
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any restrictive covenants of record affecting any of the Owned Real Property.
All necessary Licenses by any Governmental Entity with respect to the Owned
Real Property have been obtained, have been validly issued and are in full
force and effect.
(j) Leased Real Property. Schedule 3.1(j) contains an
accurate description of all the leasehold interests relating to the business
and operations of each of the Stations as now conducted. Each lease described
in Schedule 3.1(j) is a valid and binding obligation of Seller and is in full
force and effect without amendment other than as described in Schedule 3.1(j).
Except as otherwise disclosed on Schedule 3.1(j), Seller is not, and to the
Knowledge of the Seller, no other party is, in default under any lease
described in Schedule 3.1(j). Subject to obtaining the Consents disclosed in
Schedule 3.1(j), Seller has the full legal power and authority to assign its
rights under the leases listed in Schedule 3.1(j) to Buyer. All leasehold
interests listed in Schedule 3.1(j) (including the improvements thereon) are
available for immediate use in the conduct of the business and operations of
each of the Stations as currently conducted.
(k) Personal Property. Schedule 3.1(k) contains a
description of the items of Personal Property (having a replacement cost of not
less than $10,000 for each item) which comprise all Personal Property used or
held for use in connection with the business and operations of each Station or
which permit the operation of each Station as now conducted. Except as set
forth on Schedule 3.1(k), Seller has good title to, or a valid leasehold or
license interest in, all Personal Property and none of the Personal Property is
subject to any Lien or other encumbrances, except for Permitted Encumbrances.
Seller is not, and to the Knowledge of the Seller, no other party is, in
default under any of the leases, licenses and other Contracts relating to the
Personal Property. Except as otherwise disclosed in Schedule 3.1(k), the
Personal Property (i) is in good operating condition and repair (ordinary wear
and tear excepted), (ii) is available for immediate use in the business and
operation of each of the Stations as currently conducted and (iii) permits each
of the Stations to operate in accordance with the terms of their respective FCC
Licenses, and the rules and regulations of the FCC, and with all other
applicable federal, state and local statutes, ordinances, rules and
regulations.
(l) Liens and Encumbrances. All of the Assets, including
leases, are free and clear of all liens, pledges, claims, security interests,
restrictions, mortgages, tenancies, and other possessory interests, conditional
sale or other title retention agreements, assessments, easements, rights of
way, covenants, restrictions, rights of first refusal, defects in title,
encroachments, and other burdens, options or encumbrances of any kind
(collectively, "Liens") except (i) Permitted Encumbrances and (ii) Liens set
forth on Schedule 3.1(l) (the Liens referred to in clauses (i) and (ii) being
"Permitted Liens"). At the Closing, all of the Assets shall be free and clear
of all Liens other than Permitted Encumbrances.
(m) Environmental Matters. Except as expressly disclosed
in the Existing ESAs,
(i) The real property and facilities owned,
operated, and leased by Seller and the operations of Seller thereon
comply and have at all times complied in all material
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respects with all Applicable Laws and rules of common law pertaining
to the environment, natural resources, and public or employee health
and safety, including all Environmental Laws;
(ii) No judicial proceedings are pending or, to
the Knowledge of Seller, threatened against Seller alleging the
violation of any Environmental Laws, and there are no administrative
proceedings pending or, to the Knowledge of Seller, threatened against
Seller, alleging the violation of any Environmental Laws and no notice
from any Governmental Entity or any private or public Person has been
received by Seller claiming any violation of any Environmental Laws in
connection with any real property or facility owned, operated or
leased by Seller, or requiring any remediation, clean-up,
modification, repairs, work, construction, alterations, or
installations on or in connection with any real property or facility
owned, operated or leased by Seller that are necessary to comply with
any Environmental Laws and that have not been complied with or
otherwise resolved to the satisfaction of the party giving notice;
(iii) All permits, registrations, licenses,
authorizations, and the like ("Permits") required to be obtained or
filed by Seller under any Environmental Laws in connection with
Seller's operations, including those activities relating to the
generation, use, storage, treatment, disposal, release, or remediation
of Hazardous Substances (as such term is defined in Section 3.1(n)(iv)
hereof), have been duly obtained or filed, and Seller is and has at
all times been in full compliance in all material respects with the
terms and conditions of all such Permits;
(iv) All Hazardous Substances used or generated by
Seller or any of its predecessors on, in, or under any of the owned,
operated, or leased real property or facilities are and have at all
times been generated, stored, used, treated, disposed of, and released
by such Persons or on their behalf in such manner as not to result in
any Environmental Costs or Liabilities. "Hazardous Substances" means
(A) any hazardous materials, hazardous wastes, hazardous substances,
toxic wastes, and toxic substances as those or similar terms are
defined under any Environmental Laws; (B) any asbestos or any material
which contains any hydrated mineral silicate, including chrysolite,
amosite, crocidolite, tremolite, anthophylite and/or actinolite,
whether friable or non-friable; (C) PCBs, or PCB-containing materials,
or fluids; (D) radon; (E) any other hazardous, radioactive, toxic or
noxious substance, material, pollutant, contaminant, constituent, or
solid, liquid or gaseous waste; (F) any petroleum, petroleum
hydrocarbons, petroleum products, crude oil and any fractions or
derivatives thereof, any oil or gas exploration or production waste,
and any natural gas, synthetic gas and any mixtures thereof; (G) any
substance that, whether by its nature or its use, is subject to
regulation under any Environmental Laws or with respect to which any
Environmental Laws or Governmental Entity requires environmental
investigation, monitoring or remediation; and (H) any underground
storage tanks, dikes, or impoundments as defined under any
Environmental Laws. "Environmental Costs or Liabilities" means any
losses, liabilities, obligations, damages, fines, penalties,
judgments, settlements, actions,
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claims, costs and expenses (including, without limitation, reasonable
fees, disbursements and expenses of legal counsel, experts, engineers
and consultants, and the costs of investigation or feasibility studies
and performance of remedial or removal actions and cleanup activities)
in connection with (1) any Environmental Laws, (2) order of, or
contract of Seller with, any Governmental Entity or any private or
public Persons or (3) any exposure of any Person or property to
Hazardous Substances;
(v) There are not now, nor have there been in the
past, on, in or under any property or facilities when owned, leased,
or operated by Seller or when owned, leased, or operated by any of its
predecessors, any Hazardous Substances that are in a condition or
location that violates any Environmental Law or that reasonably could
be expected to require remediation under any Environmental Laws or
give rise to a claim for damages or compensation by any affected
Person or to any Environmental Costs or Liabilities; and
(vi) Seller has not received, and to the Knowledge
of Seller, does not expect to receive, any notification from any
source advising Seller that: (A) it is a potentially responsible
party under CERCLA or any other Environmental Laws; (B) any real
property or facility currently or previously owned, operated, or
leased by it is identified or proposed for listing as a federal
National Priorities List ("NPL") (or state-equivalent) site or a
Comprehensive Environmental Response, Compensation and Liability
Information System ("CERCLIS") list (or state-equivalent) site; and
(C) any facility to which it has ever transported or otherwise
arranged for the disposal of Hazardous Substances is identified or
proposed for listing as an NPL (or state-equivalent) site or CERCLIS
(or state-equivalent) site.
(n) Taxes. Seller has filed or caused to be filed all
Tax Returns affecting the Stations or the Assets which are required to be filed
by Seller, all such Tax Returns which have been filed are accurate and
complete, and Seller has timely paid all Taxes shown on such returns or on any
Tax assessment received by Seller to the extent that such Taxes have become
due. There are no Liens for Taxes upon the Stations or the Assets except for
the Permitted Encumbrances. Seller has not received notice of any Tax
deficiency or delinquency. No Internal Revenue Service audit of Seller is
pending or, to the Knowledge of Seller, threatened, and the results of any
completed audits are properly reflected in the Financial Statements. All
monies required to be withheld by Seller from employees or collected from
customers for Taxes and the portion of any Taxes to be paid by Seller to
governmental agencies or set aside in accounts for such purposes have been so
paid or set aside, or such monies have been reserved against and entered upon
the books and are reflected in the Balance Sheet. There are no legal,
administrative, or tax proceedings 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 business of the Stations.
(o) Certain Agreements.
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(i) Schedule 3.1(o) hereto lists each (A)
employment or consulting Contract which is not terminable without
liability or penalty on 30 days or less notice, (B) Contract under
which any party thereto remains obligated to provide goods or services
having a value, or to make payments aggregating, in excess of $50,000
per year, and (C) other Contract that is material to the operation of
the Stations or to the Seller's business, in any such case to which
Seller is a party or Seller or the Assets is bound. Each such
Contract described in Schedule 3.1(o) or required to be so described
is a valid and binding obligation of Seller and is in full force and
effect without amendment. Seller and, to the Knowledge of Seller,
each other party to such Contracts, has performed in all material
respects the obligations required to be performed by it under such
Contracts and is not (with or without lapse of time or the giving of
notice, or both) in breach or default thereunder. Schedule 3.1(o)
identifies, as to each such Contract listed thereon, whether the
consent of the other party thereto is required in order for such
Contract to continue in full force and effect upon the consummation of
the transactions contemplated hereby or whether such Contract can be
canceled by the other party without liability to such other party due
to the consummation of the transactions contemplated hereby. A
complete copy of each written Contract and a description of each oral
Contract set forth in Schedule 3.1(o) has been provided to Buyer prior
to the date of this Agreement.
(ii) Seller is not a party to any oral or written
agreement, plan or arrangement with any employee or other station or
broadcast Personnel (whether an employee, consultant or an independent
contractor) of Seller (A) the benefits of which are contingent, or the
terms of which are materially altered, upon, or result from, the
occurrence of a transaction involving Seller of the nature of any of
the transactions contemplated by this Agreement, (B) providing
severance benefits longer than forty-five days or other benefits after
the termination of employment or other contractual relationship
regardless of the reason for such termination and regardless of
whether such termination is before or after a change of control, (C)
under which any Person may receive payments subject to the tax imposed
by Section 4999 of the Code or (D) any of the benefits of which will
be increased, or the vesting of benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by
this Agreement.
(p) ERISA Compliance; Labor.
(i) The present value of all accrued benefits
(vested and unvested) under all the Employee Pension Benefit Plans,
which Seller or any other trades or businesses under common control
within the meaning of Section 4001(b)(1) of ERISA with Seller
(collectively, the "ERISA Group") maintains, or to which Seller or any
member of the ERISA Group is or has been obligated to contribute (the
"Pension Plans"), did not, as of the respective last annual valuation
dates for such Pension Plans, exceed the value of the assets of such
Pension Plan allocable to such benefits. None of such Pension Plans
subject to Title IV of ERISA or any of their related trusts has been
terminated or partially terminated.
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Neither Seller or any member of the ERISA Group has contributed or
been obligated to contribute to any Multiemployer Plan. Except as set
forth on Schedule 3.1(p), neither Seller nor any member of the ERISA
Group has any Employee Benefit Plans.
(ii) True, correct, and complete copies of each of
the Employee Benefit Plans, and related trusts, if applicable, have
been furnished to Buyer, along with the most recent report filed on
Form 5500 and summary plan description with respect to each Employee
Benefit Plan required to file Form 5500.
(iii) Seller is not a party to any collective
bargaining agreement. Seller has not agreed to recognize any union or
other collective bargaining representative, nor has any union or other
collective bargaining representative been certified as the exclusive
bargaining representative of any of its employees. Seller (A) is, and
has always been since January 1, 1995, in substantial compliance with
all applicable laws regarding labor, employment and employment
practices, terms and conditions of employment, equal employment
opportunity, employee benefits, affirmative action, wages and hours,
plant closing and mass layoff, occupational safety and health,
immigration, and workers' compensation, (B) is not engaged, nor has it
since January 1, 1995, engaged, in any unfair labor practices, and has
no, and has not had since January 1, 1995, any, unfair labor practice
charges or complaints before the National Labor Relations Board
pending or, to the Knowledge of Seller threatened against it, (C) has
no, and has not had since January 1, 1995, any, grievances,
arbitrations, or other proceedings arising or asserted to arise under
any collective bargaining agreement, pending or, to the Knowledge of
Seller threatened, against it and (D) has no, and has not had since
January 1, 1995, any, charges, complaints, or proceedings before the
Equal Employment Opportunity Commission, Department of Labor or any
other Governmental Entity responsible for regulating employment
practices, pending, or, to Seller's Knowledge, threatened against it.
There is no labor strike, slowdown, work stoppage or lockout pending
or, to the Knowledge of Seller, threatened against or affecting
Seller, and Seller has not experienced any labor strike, slowdown,
work stoppage or lockout since January 1, 1995. To the Knowledge of
Seller no union organizational campaign or representation petition is
currently pending with respect to any of the employees of Seller.
(q) Patents, Trademarks, Etc. Schedule 3.1(q) is a true
and complete list of all of the Intellectual Property. Except as set forth on
Schedule 3.1(q), Seller owns or has the unencumbered right to use pursuant to a
valid, binding, and enforceable license agreement or other contract or
arrangement all such Intellectual Property. To the Knowledge of Seller, Seller
is not infringing any such Intellectual Property, and Seller is not aware of
any infringement by others of any of the Intellectual Property owned by Seller.
(r) Affiliate Relationships. There are no contracts or
other arrangements involving Seller in which any member, manager, officer,
director, or Affiliate of Seller has a financial interest, including
indebtedness to Seller.
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(s) Assets. The Assets and the Excluded Assets include
all assets used or held for use in connection with the business and operations
of the Stations as currently conducted.
(t) No Dispositions. Since the Balance Sheet Date, there
has not occurred any sale, lease, transfer, assignment, abandonment or other
disposition of any of the assets of any Station other than any disposition of
(i) obsolete property,(ii) property in connection with the acquisition of
replacement property of equal value, or (iii) assets having, in the aggregate,
a value of less than $5,000 disposed of in the ordinary course of business and
consistent with past practices.
3.2. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows (with the understanding that Seller is relying on
such representations and warranties in entering into and performing this
Agreement):
(a) Organization Standing and Power. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease, and operate its properties and to carry on its
business as now being conducted.
(b) Authority. Buyer has all requisite corporate power
and authority to enter into the Transaction Documents to which it will be a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of such Transaction Documents by Buyer and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Buyer.
The Transaction Documents to which Buyer will be a party have been executed and
delivered, or upon execution and delivery will be executed and delivered and,
upon execution and delivery, will constitute the valid and binding obligation
of Buyer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(c) No Conflict; Required Filings and Consents. The
execution and delivery of the Transaction Documents to which Buyer will be a
party do not and the performance by Buyer of the transactions contemplated
hereby or thereby will not, subject to obtaining the consents, approvals,
authorizations, and permits and making the filings described in this Section
3.2(c), (A) violate, conflict with, or result in any breach of any provisions
of Buyer's Articles of Incorporation and Bylaws, (B) violate, conflict with, or
result in a violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under, or permit the termination of, or
result in the acceleration of, or entitle any party to accelerate (whether as a
result of a change of control of Buyer or otherwise) any obligation, or result
in the loss of any benefit, or give any Person the right to require any
security to be repurchased, or give rise to the creation of any lien, charge,
security interest, or encumbrance upon any of the Assets under any of the
terms, conditions, or provisions of any loan or credit agreement, note, bond,
mortgage, indenture, or deed of trust, or any license, lease, agreement, or
other instrument or obligation to which Buyer is a party or by which it or any
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of the Assets may be bound or subjected, or (C) except as described in the
following sentence, violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation, of any Governmental Entity applicable to
Buyer or by which or to which any of the Assets is bound or subject. No
consent, approval, order, or authorization of, or registration, declaration, or
filing with, any Governmental Entity is required by or with respect to Buyer in
connection with the execution and delivery of the Transaction Documents by
Buyer or the consummation of the transactions contemplated thereby, except for
the FCC Consents as contemplated by Section 7.1 hereof and any that may be
required under the HSR Act.
(d) Litigation. As of the date hereof, there is no
action, suit, inquiry, judicial or administrative proceeding pending or, to the
Knowledge of Buyer, threatened against it relating to the transactions
contemplated by this Agreement.
(e) FCC Matters. To the knowledge of Buyer, no facts
relating to Buyer under the Communications Act will exist upon Closing that
reasonably may be expected to disqualify it from qualifying as an assignee of
the Station Licenses or that would prevent it from consummating the
transactions contemplated by this Agreement. Buyer is able to certify on an
FCC Form 314 that it is financially qualified.
(f) Disclosure. No representation or warranty made by
Buyer contained in this Agreement or in any certificate furnished by Buyer
pursuant to this Agreement contains or will contain an untrue statement of
material fact, or omits or will omit to state a material fact necessary, in the
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. COVENANTS OF SELLER. Except as contemplated by this Agreement
or to the extent that Buyer shall otherwise consent in writing, from the date
of this Agreement until the Closing, Seller covenants and agrees that Seller
shall not:
(a) conduct its business in any manner except in the
ordinary course consistent with past practice; or
(b) fail to use all commercially reasonable efforts to
preserve intact Seller's present business organization and to keep available
the services of its present officers, station managerial personnel (including
the General Manager, Station Manager, General Sales Manager, Local Sales
Manager, Programming Director, and Business Manager, or Persons performing
comparable duties, of each Station (collectively, the "Station Management"))
and over-the-air employees or independent contractors and preserve its
relationships with customers, suppliers and others having business dealings
with it; or
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(c) fail to use commercially reasonable efforts to
maintain the Assets in their current condition, except for ordinary wear and
tear and damage by casualty governed by Section 7.7; or
(d) fail to use all commercially reasonable efforts to
maintain the present format of the Stations and with programming consistent
with past practices; or
(e) except for amendments, terminations (without payment
of penalty or damages), renewals, or failures to renew (without payment of
penalty or damages) of employment agreements with over-the-air personnel in the
ordinary course of business and consistent with past practice (subject to prior
consultation with Buyer reasonably in advance thereof), materially amend,
terminate, or fail to use all commercially reasonable efforts to renew any
material Contract (i.e., a contract or agreement of the type required to be
described in Schedule 3.1(o)) (provided that Seller shall not be required to
renew any material Contract on terms that are less favorable to Seller), or
default in any material respect (or take or omit to take any action that, with
or without the giving notice or passage of time, would constitute a material
default) under any material Contract or enter into any new material Contract or
amend the Limited Liability Company Agreement; or
(f) merge or consolidate with or into any other legal
entity, dissolve, or liquidate; or
(g) except as required by the terms and provisions of
written contracts between Seller and an employee thereof as in existence on
December 31, 1996, adopt or amend any Employee Benefit Plan or collective
bargaining agreement, or increase in any manner the compensation or fringe
benefits of any Station Manager, officer, director, or employee or other
station and broadcast personnel (whether employees or independent contractors),
except as required by law; or
(h) terminate any employee of any of the Stations without
prior consent of Buyer, such consent not to be unreasonably withheld; or
(i) acquire (including, without limitation, by merger,
consolidation, or the acquisition of any equity interest or assets) or sell
(whether by merger, consolidation, or the sale of an equity interest or
assets), lease, or dispose of any Assets except in the ordinary course of
business and consistent with past practice or, even if in the ordinary course
of business and consistent with past practices (other than sales of surplus or
obsolete equipment), whether in one or more transactions, in no event involving
an Asset or Assets having an aggregate fair market value in excess of $50,000;
or
(j) mortgage, pledge, or subject to any material Lien,
other than Permitted Encumbrances, any of the Assets; or
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(k) except as required by GAAP, applicable law, or
circumstances which did not exist as of the Balance Sheet Date, change any of
the material accounting principles or practices used by it; or
(l) change in any material respect its existing practices
and procedures with respect to the collection of accounts receivable of the
Stations and, except with respect to good faith attempts consistent with past
practice to obtain payment of a past due receivable, or except in accordance
with existing practices, a contested receivable, offer to discount the amount
of any outstanding receivable or extend any other incentive (whether to the
account debtor or any employee or third party responsible for the collection of
receivables) to accelerate the collection thereof; or
(m) change any Station's advertising rates or policies,
procedures or methods in connection with the sale of advertising time in a
manner expected to accelerate the receipt of cash payments or fail to incur
annual advertising and promotional department expenses in cash and trade other
than as budgeted for 1997 (as such budget previously has been delivered to
Buyer); or
(n) enter into, or enter into negotiations or discussions
with any Person other than Buyer with respect to any local marketing agreement,
time brokerage agreement, joint sales agreement, or any other similar
agreement; or
(o) agree to or make any commitment, orally or in
writing, to take any actions prohibited by this Agreement.
4.2. NEGATIVE TRADE BALANCE. Seller shall use commercially
reasonable efforts to ensure that the Seller Negative Trade Balance, as defined
below, of the Stations, taken as a whole, does not exceed $50,000 in the
aggregate at the Closing Date, provided that such excess will be an adjustment
to the Purchase Price as provided in Section 2.5(b). "Seller Negative Trade
Balance" means the difference, if negative, between the value of time owed
under barter agreements to which any of the Stations is a party or by which any
of them is bound and the value of the goods and services to be received under
such agreements.
4.3. ENVIRONMENTAL SITE ASSESSMENTS. If Buyer or its lenders or
other financing sources require Phase I or Phase II ESAs, Seller covenants and
agrees that, upon written notice from Buyer to Seller identifying the locations
at which such ESAs are required, Seller shall cause to be performed by a
nationally recognized and duly qualified environmental consultant reasonably
acceptable to Buyer and Seller an ESA at each identified transmission site
owned, operated, or leased by Seller and at such other identified real
properties and facilities owned, operated, or leased by Seller. The ESAs which
are to be conducted for the benefit of Buyer shall be performed in a manner
that at a minimum satisfies the requirements of ASTM Practice E 1527-94.
Seller covenants and agrees that, upon receipt of the notice referred to above,
it shall diligently pursue the performance of the requisite ESAs to their
completion, with final copies of the Phase I ESA reports (and, if applicable,
Phase II ESA reports) made available to Buyer by no later than 45 days
following the
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date on which Seller receives the notice referred to above. The cost of any
Phase I or Phase II ESA shall be borne by Buyer.
ARTICLE V
ADDITIONAL AGREEMENTS OF SELLER
5.1. NO SOLICITATION OF TRANSACTIONS. Seller shall not, directly
or indirectly, through any officer, director, stockholder, employee, agent,
financial advisor, banker or other representative, or otherwise, solicit,
initiate, or encourage the submission of any proposal or offer from any Person
relating to any acquisition or purchase of all or any material portion of the
Assets or any equity interest in Seller or any merger, consolidation, share
exchange, business combination, or other similar transaction with Seller or
participate in any negotiations regarding, or furnish to any other Person any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate, or encourage, any effort or attempt by any other
Person to do or seek any of the foregoing. Seller shall immediately
communicate to Buyer the material terms of any such proposal (and the identity
of the party making such proposal) which it may receive and, if such proposal
is in writing, the Seller shall promptly deliver a copy of such proposal to
Buyer. Seller agrees not to release any third party from, or waive any
provision of, any confidentiality or standstill agreement to which Seller is a
party. Seller immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
5.2. ACCESS AND INFORMATION. (a) Until the Closing, subject only
to applicable rules and regulations of the FCC, Seller shall afford to Buyer
and its representatives (including accountants and counsel) full access, during
normal business hours, upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of the business of Seller, to all
properties, books, records, and Tax Returns of Seller and all other information
with respect to its business, together with the opportunity to make copies of
such books, records, and other documents and to discuss the business of Seller
with such officers, directors, station managerial personnel (including the
Station Management of each Station), accountants, consultants, and counsel for
Seller as Buyer deems reasonably necessary or appropriate for the purposes of
familiarizing itself with Seller and the Stations, including the right to visit
the Stations. In furtherance of the foregoing, Seller shall authorize and
instruct its independent public accountants to meet with Buyer and its
representatives, including Buyer's independent public accountants, to discuss
the business and accounts of Seller and to make available (with the opportunity
to make copies) to Buyer and its representatives, including its independent
public accountants, all the work papers of its accountants related to their
audit of the consolidated financial statements and Tax Returns of Seller.
(b) Within 30 days after the end of each calendar month,
Seller shall deliver to Buyer, for each of the Stations, and for Seller as a
whole, monthly operating statements (in a form consistent with the monthly
operating statements previously supplied to Buyer) prepared in the ordinary
course of business for internal purposes. In addition, within 45 days after
the end of each
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calendar quarter, Seller shall deliver to Buyer, for each of the Stations,
quarterly statements prepared in the ordinary course for internal purposes
containing a detailed listing of all trade and barter agreements of each
Station showing the status of all such agreements as of the end of the quarter.
Seller shall deliver to Buyer the rating books and such other ratings
information subscribed to by Seller including, without limitation, Arbitrends,
Accuratings or any other written information reflective of the quantitative or
qualitative nature of the audiences of the Stations for each of the Stations
upon receipt of the same by any officer or director of Seller. Seller shall
instruct the Station Management of each Station to provide such information and
reports to Buyer's corporate officers promptly upon receipt by such Station
Management. In addition, as soon as the same are distributed to Seller's
officers or directors by each Station, Seller will provide Buyer with copies of
each Station's weekly sales pacing reports.
(c) Without duplication of Section 5.2(b), at such time
as Seller provides the same to its lenders, Seller shall provide Buyer with
copies of the financial statements and other information delivered by Seller to
such lenders.
5.3. ASSISTANCE. If Buyer requests, Seller will cooperate, and
will cause its accountants to cooperate, in all reasonable respects with any
financing efforts of Buyer or its Affiliates (including providing assistance in
the preparation of one or more registration statements or other offering
documents relating to public or private debt and/or equity financing) and any
other filings that may be made by Buyer or its Affiliates with the SEC, all at
the sole expense of Buyer. Seller (a) shall furnish to its independent
accountants (or, if requested by Buyer to Buyer's independent public
accountants), such customary management representation letters as its
accountants may require of Seller as a condition to its execution of any
required accountants' consents necessary in connection with the delivery of any
"comfort" letters requested by financing sources of Buyer or its Affiliates and
(b) shall furnish to Buyer all financial statements (audited and unaudited) and
other information in the possession of Seller or its representatives or agents
as Buyer shall reasonably determine is necessary or appropriate in connection
with such financing. Buyer will indemnify and hold harmless Seller and its,
officers, directors, and controlling Persons against any and all claims,
losses, liabilities, damages, costs, or expenses (including reasonable
attorneys' fees and expenses) that may arise out of or with respect to the
financing efforts by Buyer or its Affiliates, including any registration
statement, prospectus, offering documents, and other filings related thereto;
provided, however, that subject to the limitations and provisions of this
Agreement, nothing herein shall prevent Buyer from asserting any claim for
breach of representation or warranty under this Agreement.
5.4. COMPLIANCE WITH STATION LICENSES. Seller shall cause the
Stations to be operated in all material respects in accordance with the Station
Licenses and all applicable rules and regulations of the FCC and in compliance
with all other applicable laws, regulations, rules, and orders. Seller shall
use all commercially reasonable efforts not to cause or permit any of the
Station Licenses to expire or be surrendered, adversely modified, or
terminated. Seller shall file or cause to be filed with the FCC all
applications (including license renewals) or other documents required to be
filed in connection with the operation of the Stations. In addition, if
requested by Buyer and
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at Buyer's sole expense, Seller shall file or cause to be filed with the FCC
applications for new, specifically identified frequencies that may be useful in
connection with the operation of the Stations. Should the FCC institute any
proceedings for the suspension, revocation or adverse modification of any of
the Station Licenses, Seller will use all commercially reasonable efforts to
promptly contest such proceedings and to seek to have such proceedings
terminated in a manner that is favorable to the Stations. Seller will use all
commercially reasonable efforts to maintain the FCC construction permits (if
any) listed in Schedule 3.1(f) in effect until the applicable construction
projects are complete and to diligently prosecute all pending FCC applications
listed in Schedule 3.1(f). If Seller (or its FCC counsel) receives an
administrative or other order or notification relating to any violation or
claimed violation of the rules and regulations of the FCC, or of any other
Governmental Entity, that could affect Seller's ability to consummate the
transactions contemplated hereby, or should Seller (or its FCC counsel) become
aware of any fact relating to the qualifications of Buyer that reasonably could
be expected to cause the FCC to withhold its consent to the assignment of the
Station Licenses, Seller shall promptly notify Buyer in writing and use its
commercially reasonable efforts to take such steps as may be necessary to
remove any such impediment to the transactions contemplated by this Agreement.
5.5. NOTIFICATION OF CERTAIN MATTERS. Seller shall give prompt
written notice to Buyer of (a) the occurrence, or failure to occur, of any
event of which it becomes aware that has caused or that would be likely to
cause any representation or warranty of Seller contained in this Agreement to
be untrue or inaccurate in any material respect at any time from the date
hereof to the Closing Date, (b) the failure of Seller, or any officer,
director, employee, or agent of Seller, to comply with or satisfy in any
material respect any covenant, condition, or agreement to be complied with or
satisfied by it hereunder, (c) the occurrence of a Station Event (as defined in
Section 9.1), (d) the occurrence of any threat made to Seller by any of Seller
or any General Manager, Station Manager, General Sales Manager or Programming
Director of a Station to resign or otherwise terminate their employment or
independent contractor relationship with Seller, and (e) any material
development concerning the Applications (as defined in Section 7.1). No such
notification shall affect the representations or warranties of the parties or
the conditions to their respective obligations hereunder.
5.6. THIRD PARTY CONSENTS. After the date hereof and prior to the
Closing, Seller shall use all commercially reasonable efforts to obtain the
written consent from any party to an agreement or instrument identified in
Schedule 3.1(o) or any other Assumed Contract which is required to permit the
consummation of the transactions contemplated hereby.
5.7. LOAN CONDITION. Seller shall use all commercially reasonable
efforts to fulfill the condition set forth in Section 10.1(c) of the Commitment
Letter on or before March 19, 1997 and if not fulfilled by such date, to
fulfill such condition thereafter as soon as is commercially feasible.
ARTICLE VI
COVENANT OF BUYER
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6.1. NOTIFICATION OF CERTAIN MATTERS. If Buyer (or its FCC
counsel) receives an administrative or other order or notification relating to
any violation or claimed violation of the rules and regulations of the FCC, or
of any Governmental Entity, that could affect Buyer's ability to consummate the
transactions contemplated hereby, or should Buyer (or its FCC counsel) become
aware of any fact relating to the qualifications of Buyer that reasonably could
be expected to cause the FCC to withhold its consent to the assignment of the
Station Licenses, Buyer shall promptly notify Seller thereof and shall use its
commercially reasonable efforts to take such steps as may be necessary to
remove any such impediment to the transactions contemplated by this Agreement.
In addition, Buyer shall give to Seller prompt written notice of (a) the
occurrence, or failure to occur, of any event of which it becomes aware that
has caused or that would be likely to cause any representation or warranty of
Buyer contained in this Agreement to be untrue or inaccurate at any time from
the date hereof to the Closing Date, (b) the failure of Buyer, or any officer,
director, employee, or agent thereof, to comply with or satisfy in any material
respect any covenant, condition, or agreement to be complied with or satisfied
by it hereunder, and (c) any material development concerning the Applications
(as defined in Section 7.1). No such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
6.2. EMPLOYEE MATTERS. Buyer will use its reasonable efforts to
determine at least ten days prior to the Closing Date those employees of Seller
whom it desires to extend offers of employment. Any offers so extended by
Buyer shall be on such terms and conditions that Buyer shall determine in its
sole discretion. Buyer will give Seller prompt notice of the names of any
employee of Seller who Buyer has determined not to extend an offer of
employment. Seller waives any claims against Buyer and any of Seller's
employees who are extended an offer of employment by Buyer arising from such
employment by Buyer including any claims arising under any employment agreement
or noncompete agreement between such Person and Seller.
ARTICLE VII
MUTUAL COVENANTS
7.1. APPLICATION FOR FCC CONSENTS. By the tenth Business Day after
the date hereof, Seller and Buyer will, and will cause all necessary Persons or
entities to join in one or more applications filed with the FCC requesting the
FCC's written consent to the assignment of the FCC Licenses pursuant to this
Agreement (the "Applications"). The parties will take all proper steps
reasonably necessary (a) to diligently prosecute the Applications and (b) to
obtain the FCC Consents. The failure by either party to timely file or
diligently prosecute its portion of any Application shall be a material breach
of this Agreement. Buyer will not voluntarily undertake any action that would
materially hinder, delay, or otherwise prejudice the approval of the
Applications. The failure by either party to timely file or diligently
prosecute its portion of any Application shall be a material breach of this
Agreement.
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7.2. CONTROL OF STATIONS. This Agreement shall not be consummated
until after the FCC Consents with respect to the Applications referred to in
Section 7.1 are granted and have become Final Orders. Between the date of this
Agreement and the Closing Date, Buyer will not directly or indirectly control,
supervise or direct the operation of the Stations. Further, between the date
of this Agreement and the Closing Date, Seller shall, directly or indirectly,
supervise or control the operation of the Stations. Such operation shall be
the sole responsibility of Seller.
7.3. OTHER GOVERNMENTAL CONSENTS. Except for filing under the HSR
Act, promptly following the execution of this Agreement, the parties shall
proceed to prepare and file with the appropriate Governmental Entities (other
than the FCC) such requests, reports, or notifications as may be required in
connection with the consummation of the transactions contemplated by this
Agreement, and shall diligently and expeditiously prosecute, and shall
cooperate fully with each other in the prosecution of, such matters.
7.4. ACCOUNTS RECEIVABLE. All Accounts Receivable shall remain the
property of Seller. Seller hereby authorizes Buyer, however, to collect such
receivables for a period of 180 days after the Closing. Seller shall deliver
to Buyer a complete and detailed statement of each account within three days
after Closing and Buyer shall use its reasonable efforts, consistent with its
customary collection practices for its own accounts receivable, without
compensation, to collect each Account Receivable during such 180 days. During
that period Buyer shall provide to Seller a detailed bi-monthly statement of
the Accounts Receivable showing amounts collected to the date, and amounts
outstanding as of the same date, and, within 15 days of the end of the period
covered by such statement, deliver to Seller the Accounts Receivable report and
a check for the amounts collected during such period. All payments received by
Buyer during the 180-day period following the Closing Date from a Person
obligated with respect to an Account Receivable shall be applied first to
Seller's account and, only after full satisfaction thereof, to Buyer's account;
provided, however, that if such Person has, in the reasonable opinion of Buyer,
a legitimate dispute with respect to such Account Receivable and Buyer also has
an account receivable from such Person, all payments received by Buyer during
the 180-day period following the Closing Date from such Person shall be applied
first to Buyer's account and only after the earlier to occur of full
satisfaction of Buyer's account or resolution of such dispute, to Seller's
account. Buyer shall not be required to refer any Account Receivable to a
collection agency or an attorney for collection, nor shall it compromise,
settle, or adjust any Account Receivable having a value in excess of $5,000
without receiving the approval of Seller. Seller shall take no action with
respect to the Accounts Receivable, such as litigation, until the expiration of
such 180-day period. Following the expiration of said 180-day period, Seller
shall be free to take such action as Seller may in its sole discretion
determine to collect any Accounts Receivable then outstanding.
7.5. BROKERS OR FINDERS. Seller represents and warrants to Buyer,
that no agent, broker, investment banker, or other or Person engaged by Seller
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee payable by Buyer or Seller in connection with any of the
transactions contemplated by this Agreement. Except for the previously
disclosed fee payable to Media Venture Partners, which fee shall be paid in
accordance with the provisions of
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Section 12.7, Buyer represents and warrants to Seller that Buyer has not
engaged any broker, investment banker or other Person that will be entitled to
any broker's or finder's fee or any other commissions or fee from Seller in
connection with any of the transactions contemplated by this Agreement.
7.6. BULK SALES LAW. Buyer agrees to waive compliance by Seller
with the requirements of any bulk sales or fraudulent conveyance statute, and
Seller agrees to indemnify and hold Buyer harmless against any claim made
against Buyer by any creditor of Seller as a result of a failure to comply with
any such statute.
7.7. RISK OF LOSS.
(a) 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. In the event of
any such loss, damage, impairment, confiscation, or condemnation, whether or
not covered by insurance, Seller shall promptly notify Buyer of such loss,
damage, impairment, confiscation, or condemnation.
(b) If Seller, at its expense, repairs, replaces, or
restores such Assets to their prior condition to the satisfaction of Buyer
before the Closing, Seller shall be entitled to all insurance proceeds and
condemnation awards, if any, by reason of such award or loss.
(c) If Seller does not or cannot restore or replace lost,
damaged, impaired, confiscated or condemned Assets having a replacement cost in
excess of $250,000 in the aggregate and informs Buyer that it does not intend
to restore or replace such Assets, Buyer may at its option:
(i) terminate this Agreement by notice forthwith
without any further obligation hereunder; or
(ii) proceed to the Closing of this Agreement
without Seller completing the restoration and replacement of such
Assets, provided that Seller shall assign all rights under applicable
insurance policies and condemnation awards, if any, to Buyer; and in
such event, Seller shall have no further liability with respect to the
condition of the Assets directly attributable to the loss, damage,
impairment, confiscation, or condemnation.
(d) Buyer will notify Seller of a decision under the
options described in Section 7.7(c)(i) or (ii) above within ten Business Days
after Seller's notice to Buyer of the damage or destruction of Assets and the
estimate of the costs to repair or replace; provided, however, that if Seller
states that it intends to restore the damaged Assets and if Seller has not
restored such damaged Assets immediately prior to the Closing Date,
notwithstanding Buyer's prior delivery of a notice to proceed pursuant to this
Section 7.7(d), Buyer shall have the right to either postpone the Closing or
terminate this Agreement by notice forthwith.
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7.8. ADDITIONAL AGREEMENTS. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its commercially reasonable
efforts to do, or cause to be taken all action and to do, or cause to be done,
all things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. If at any time after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
to this Agreement and their duly authorized representatives shall take all such
action. Without limiting the generality of the foregoing, if, after the
Closing Date, Buyer seeks indemnification or recovery from one or more other
parties to an Assumed Contract or otherwise seeks to enforce such Assumed
Contract and, in order to obtain such indemnification, recovery or enforcement,
it is necessary for Seller to initiate a suit, participate in any enforcement
proceeding or otherwise provide assistance to Buyer, then, at the request and
the sole expense of Buyer, Seller shall take such action as Buyer may
reasonably request in connection with Buyer's efforts to obtain such
indemnification, recovery or enforcement.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1. CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of Buyer and Seller to effect the transactions contemplated hereby
are subject to the satisfaction (or, in the case of the condition specified in
the last sentence of Section 8.l(a), the waiver by Buyer) on or prior to the
Closing Date of the following conditions:
(a) Consents and Approvals. All authorizations,
consents, orders, or approvals of, or declarations or filings with, or
expirations of waiting periods imposed by, any Governmental Entity (including
under the HSR Act) necessary for the consummation of the transactions
contemplated by this Agreement shall have been filed, occurred, or been
obtained. The FCC Consents shall have become Final Orders and shall be in form
and substance satisfactory to Buyer.
(b) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction, or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated hereby shall be in
effect.
(c) No Action. No action shall have been taken nor any
statute, rule, or regulation shall have been enacted by any Governmental Entity
that makes the consummation of the transactions contemplated hereby illegal.
8.2. CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
effect the transactions contemplated hereby is subject to the satisfaction of
the following conditions unless waived, in whole or in part, by Buyer:
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(a) Representations and Warranties. The representations
and warranties of Seller set forth in this Agreement shall be true and correct
in all material respects (provided that any representation or warranty of
Seller contained herein that is qualified by a materiality standard shall not
be further qualified hereby) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, and Buyer shall have
received a certificate to such effect signed on behalf of Seller by the chief
executive officer or by the chief financial officer of Seller.
(b) Performance of Obligations. Seller shall have
performed in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing Date, and Buyer shall have
received a certificate to such effect signed on behalf of Seller by the chief
executive officer or by the chief financial officer of Seller.
(c) Consents Under Agreements. Buyer shall have been
furnished with evidence reasonably satisfactory to it of the consent or
approval of each Person that is a party to a Contract identified in Schedule
3.1(o) whose consent or approval shall be required in order to permit the
consummation of the transactions contemplated hereby and such consent or
approval shall be in form and substance reasonably satisfactory to Buyer.
(d) Legal Opinions. Buyer shall have received from ▇▇▇▇
and ▇▇▇▇, counsel to Seller, an opinion dated the Closing Date, in
substantially the forms attached as Exhibit G hereto, which opinion, if
requested by Buyer, shall expressly provide that they may be relied upon by
Buyer's lenders, underwriters, or other sources of financing with respect to
the transactions contemplated hereby.
(e) Real Estate Title Commitment. Within 30 days after
the date of this Agreement, Buyer, at its sole cost and expense, shall have
obtained a preliminary report on title to the Owned Real Property covering a
date subsequent to the date of this Agreement, issued by the Title Company,
which preliminary report shall contain a commitment (the "Title Commitment") of
the Title Company to issue an owner's title insurance policy at Seller's cost
as Buyer may reasonably require (the "Title Policy") insuring the fee simple
absolute interest of Seller in the Owned Real Property. The Title Commitment
shall be in the amount set forth in Schedule 8.2(e) shall be subject only to
the standard printed exceptions and: (i) liens of current state and local
property taxes which are not delinquent or subject to penalty; (ii) unviolated
zoning regulations and restrictive covenants and easements of record which do
not detract from the value of the Owned Real Property and do not materially and
adversely affect, impair or interfere with the use of any property affected
thereby as heretofore used by Seller or the Stations; (iii) public utility
easements of record, in customary form, to serve the Owned Real Property; and
(iv) Permitted Encumbrances. Such title policy shall be issued on the Closing
Date.
(f) Survey. Buyer, at its sole cost and expense, shall
have obtained a survey of the Owned Real Property as of a date subsequent to
the date hereof which shall: (i) be prepared by a registered land surveyor
reasonably acceptable to Buyer; (ii) be certified to the Title Company and to
Buyer; and (iii) show with respect to the Owned Real Property: (A) the legal
description of the
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Owned Real Property (which shall be the same as the Title Policy pertaining
thereto); (B) all buildings, structures and improvements thereon and all
restrictions of record and other restrictions that have been established by an
applicable zoning or building code or ordinance and all easements or rights of
way across or serving the Owned Real Property (including any off-site easements
affecting or appurtenant thereto); (C) no encroachments upon the Owned Real
Property or adjoining parcels by buildings, structures or improvements and no
other survey defects; (D) access to such parcel from a public street; and (E) a
flood certification reasonably satisfactory to Buyer to the effect that no
portion of the Owned Real Property is located within a flood hazard area.
(g) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by Seller pursuant to
Section 9.2 shall have been delivered.
(h) Non-Competition Agreement. Buyer will have received
a counterpart of the Non-Competition Agreement between Buyer and ▇▇▇▇ ▇▇▇▇▇▇▇▇
executed by ▇▇▇▇ ▇▇▇▇▇▇▇▇.
8.3. CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligation of
Seller to effect the transactions contemplated hereby is subject to the
satisfaction of the following conditions unless waived, in whole or in part, by
Seller.
(a) Representations and Warranties. The representations
and warranties of Buyer set forth in this Agreement shall be true and correct
in all material respects (provided that any representation or warranty of Buyer
contained herein that is qualified by a materiality standard shall not be
further qualified hereby) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, and Seller shall
have received a certificate to such effect signed on behalf of Buyer by the
chief executive officer or by the chief financial officer of Buyer.
(b) Performance of Obligations of Buyer. Buyer shall
have performed in all material respects the obligations required to be
performed by it under this Agreement prior to the Closing Date, and Seller
shall have received a certificate to such effect signed on behalf of Buyer by
the chief executive officer or by the chief financial officer of Buyer.
(c) Closing, Deliveries. All documents and instruments
required to be delivered by Buyer pursuant to Section 9.2 shall have been
delivered.
ARTICLE IX
CLOSING
9.1. CLOSING. Subject to the satisfaction or waiver of the
conditions set forth in Article VIII, or at such other place and time as Buyer
and Seller may agree, the Closing will take place at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., Washington, D.C., at 10:00 a.m., local time, on a date selected
by Buyer on five Business Days notice to Seller, which date shall be on the
10th Business
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Day after the day on which the FCC Consents have been granted by Final Order
(the "Closing Date"); provided that (x) Buyer shall have the right by means of
notice to Seller to postpone the Closing Date to any date occurring on or
before October 31, 1997 and (y) if Buyer should exercise the right to extend
the Closing Date pursuant to clause (x), then Seller shall have the right by
means of notice to Seller to postpone the Closing Date to January 9, 1998;
provided further that if the condition set forth in Section 10.1(c) of the
Commitment Letter is not fulfilled on or before March 20, 1997 then the Closing
Date (subject to each party's right of extension provided above) shall be the
earlier of (1) 180 days after such condition has been fulfilled, or (2) June
12, 1998. Notwithstanding the foregoing:
(a) In the case of a Trading Event, a Banking Event or a
Station Event (in each case as defined below), (i) if the Cessation Date (as
defined below) is less than 60 days after the Event Date (as defined below),
Buyer, in its discretion, may extend the Closing Date to a date not later than
the 30th day after the Cessation Date, (ii) if the Cessation Date is more than
60, but less than 90, days after the Event Date, Buyer, in its discretion,
shall elect on the first to occur of the 10th Business Day after the Cessation
Date or the 90th day (or, if not a Business Day, the next Business Day) after
the Event Date (the "Election Date") to either (A) close the transactions
contemplated by this Agreement on the later to occur of the fifth Business Day
after the Election Date or the 90th day (or, if not a Business Day, the next
Business Day) after the Event Date or (B) terminate this Agreement, or (iii) if
the Cessation Date has not occurred by the 90th day after the Event Date, then
on the 90th day (or, if not a Business Day, the next Business Day) after the
Event Date Buyer, in its discretion, shall elect to close the transactions
contemplated by this Agreement on the fifth Business Day thereafter or
terminate this Agreement;
(b) In the case of a Conflict Event, Buyer, in its
discretion, may extend the Closing Date to a date not to exceed the 90th day
after the Event Date;
(c) If a Cure Period (as defined in Section 10.1(b)(i))
has not ended on or before the Closing Date, the Closing Date shall be extended
to the end of the Cure Period; and
(d) If the Closing does not occur within 20 days after
the date of the Final Order, the parties shall request approval from the FCC to
extend the Closing so that the Closing contemplated hereunder will not violate
any FCC rules or regulations.
For purposes of this Agreement, a "Trading Event" shall mean that
trading generally in securities on the New York Stock Exchange shall have been
suspended or materially limited; a "Banking Event" shall mean that a general
moratorium on commercial banking activities in New York, New York shall have
been declared by any federal or state authority; a "Conflict Event" shall mean
the occurrence of any major armed conflict involving a substantial
participation by the armed forces of the United States of America; a "Station
Event" shall mean any act of nature (including fires, floods, earthquakes, and
storms), calamity, casualty or condemnation or the act or omission to act of
any state or federal regulatory agency having jurisdiction over the Stations
that has caused one or more Stations representing an aggregate of at least 3%
of the consolidated gross revenues of
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Seller for the last full 12 calendar months prior to the Station Event not to
be operating in a manner substantially consistent with the operations conducted
before such act, omission, calamity, casualty, condemnation or agency action
occurred or not in compliance with its or their respective Station License(s);
an "Event Date" shall mean the date on which a Trading Event, Banking Event,
Conflict Event, or a Station Event occurs; and a "Cessation Date" shall mean
the date on which a Trading Event, Banking Event, Conflict Event, or a Station
Event ends. Pro forma adjustments shall be made for purposes of calculating
gross revenues for the 12-month period specified in the definition of "Station
Event" with respect to any radio broadcast station acquired during such 12-
month period, to assume that such station was acquired at the beginning of such
12-month period and include the gross revenues of such station for the full 12-
month period.
9.2. ACTIONS TO OCCUR AT CLOSING.
(a) At the Closing, Buyer shall deliver to Seller (or to
the Escrow Agent, as indicated) the following:
(i) Purchase Price. The Purchase Price (less the
Holdback Amount) by wire transfer of immediately available funds; provided that
at the option of the Buyer, such portion of the Purchase Price, as represented
by the outstanding principal and interest balance of the Commodore Loan
(determined as of the Closing Date) may be paid in the form of the cancellation
and forgiveness of such outstanding balance of the Commodore Loan;
(ii) Holdback Amount. The Holdback Amount to the
Escrow Agent by wire transfer of immediately available funds;
(iii) Certificates. The certificates referred to
in Section 8.3(a) and (b);
(iv) Assumption Agreement. A counterpart of the
Assumption Agreement executed by Buyer;
(v) Indemnification Escrow Agreement. A
counterpart of the Indemnification Escrow Agreement executed by Buyer;
(vi) Non-Competition Agreement. A counterpart of
each Non-Competition Agreement executed by Buyer; and
(b) At the Closing, Seller shall deliver to Buyer the
following:
(i) Certificates. The certificates described in
Section 8.2(a) and (b);
(ii) Assumption Agreement. A counterpart of the
Assumption Agreement executed by Seller;
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(iii) Indemnification Escrow Agreement. A
counterpart of the Indemnification Escrow Agreement executed by Seller;
(iv) Non-Competition Agreements. A counterpart of
the Non-Competition Agreement between Buyer and Seller executed by Seller and a
counterpart of the Non-Competition Agreement between Buyer and ▇▇▇▇ ▇▇▇▇▇▇▇▇
executed by ▇▇▇▇ ▇▇▇▇▇▇▇▇;
(v) Legal Opinions. The opinions of counsel
referred to in Section 8.2(d);
(vi) Transfer Documents. The duly executed ▇▇▇▇
of Sale and Assignment, together with any other assignments and other transfer
documents as requested by Buyer;
(vii) Consents; Acknowledgments. The original of
each Consent;
(viii) Estoppel Certificates. Estoppel certificates
from the lessor(s) of the Leased Real Property in a form and substance
reasonably satisfactory to Buyer and its lenders or other financing sources;
(ix) Licenses, Contracts, Business Records, Etc.
To the extent they are in the possession of Seller, copies of all Licenses,
Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, statistics, engineering records and all files and records used by
Seller in connection with a Station's business and operations, which copies
shall be available at the Closing or at a Station's principal business offices;
(x) Warranty Deed. A Warranty Deed executed by
Seller conveying fee simple title to the Owned Real Property to Buyer, subject
only to the Permitted Encumbrances, in proper statutory form for recording
together with documentary stamps affixed thereto;
(xi) No-Lien Affidavit. A standard No-Lien
Affidavit executed by Seller, which shall be in the recordable form and
otherwise satisfactory to the Title Company in order to delete the standard
printed exceptions relating to mechanics' liens and parties-in-possession;
(xii) GAP Affidavit. An affidavit, if requested by
the Title Company, as may be necessary to insure the gap between the effective
date of the Title Commitment to and through the date of the recordation of the
deed to the Owned Real Property; and
(xiii) Title Requirements. Such other documents as
shall be reasonably required by the Title Company as called for or required
under the terms of any title policy obtained or issued to Buyer.
(c) At the Closing, Seller and Buyer shall instruct the
Escrow Agent to pay, and it shall pay, the ▇▇▇▇▇▇▇ Money to Buyer.
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(d) At the Closing, Buyer shall receive from the chief
executive officer or chief financial officer of Seller a non-foreign affidavit
within the meaning of section 1445(b)(2) of the Code.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1. TERMINATION. This Agreement may be terminated prior to the
Closing:
(a) by mutual consent of Buyer and Seller;
(b) by either Seller or Buyer;
(i) if there shall have been any material breach
(provided that any representation or warranty of a party contained herein that
is qualified by a materiality standard or a Material Adverse Effect
qualification shall not be further qualified hereby) of any representation,
warranty, covenant, or agreement, on the part of Buyer, on the one hand, or
Seller, on the other hand, set forth in this Agreement, which breach shall not
have been cured within 30 days (the "Cure Period") following receipt by the
breaching party of written notice of such breach;
(ii) if a court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree, or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use their
best efforts to lift), in each case permanently restraining, enjoining, or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling, or other action shall have become final and
nonappealable;
(iii) if, for any reason, the FCC denies or
dismisses any of the Applications and the time for reconsideration or court
review under the Communications Act with respect to such denial or dismissal
has expired and there is not pending with respect thereto a timely filed
petition for reconsideration or request for review;
(iv) if, for any reason, any of the Applications
is designated for an evidentiary hearing by the FCC; or
(v) if the Closing shall not have occurred by the
later of February 28, 1998, the date provided for the Closing Date in the first
sentence of Section 9.1, or the date to which the Closing Date is extended
pursuant to the second sentence of Section 9.1; provided, however, that the
right to terminate this Agreement under this clause (v) shall not be available
to any party whose breach of this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date; or
(c) by Buyer:
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(i) pursuant to the provisions of Section 7.7;
(ii) with respect to a Trading Event, a Banking
Event or a Station Event, at its option, as provided in the second sentence of
Section 9.1;
(iii) if the FCC grants any of the Applications
with any adverse conditions not generally imposed on grants of such
applications and the time for reconsideration or court review under the
Communications Act with respect to such adverse conditions has expired and
there is not pending with respect thereto a timely filed petition for
reconsideration or request for review; or
(iv) if any suit, action or other proceedings
shall have been instituted against Buyer or its Affiliate before any court or
other Governmental Entity seeking to restrain, prohibit or to obtain damages or
other relief in connection with or as a consequence of this Agreement or the
consummation of the transactions contemplated herein.
(d) by Seller:
(i) if, Buyer breaches Section 2.7(a); or
(ii) if the condition set forth in Section 10.1(c)
of the Commitment Letter is not fulfilled on or before March 19, 1997,
provided, however, that the right to terminate this Agreement under this
subsection (ii) (x) must be exercised on or before 5:00 p.m. Dallas, Texas time
on March 21, 1997, and (y) may not be exercised if the Seller is in breach of
its obligations under Section 5.7.
The right of any party hereto to terminate this Agreement pursuant to
this Section 10.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
Person controlling any such party or any of their respective officers,
directors, employees, accountants, consultants, legal counsel, agents, or other
representatives whether prior to or after the execution of this Agreement.
Notwithstanding anything in the foregoing to the contrary, no party that is in
material breach of this Agreement shall be entitled to terminate this Agreement
except with the consent of the other party.
10.2. EFFECT OF TERMINATION.
(a) In the event of a termination of this Agreement by
either Seller or Buyer as provided above, there shall be no liability on the
part of either Buyer or Seller, except for liability arising out of a breach of
this Agreement. If this Agreement is terminated by Seller pursuant to Section
10.1(b)(i), the parties agree and acknowledge that Seller will suffer damages
that are not practicable to ascertain. Accordingly, in such event and if
within 10 Business Days after termination of this Agreement by Seller pursuant
to Section 10.1(b)(i), Seller delivers to Buyer a written demand for liquidated
damages, subject to Buyer's receipt of a counterpart of the Release executed by
Seller,
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Seller shall be entitled to the ▇▇▇▇▇▇▇ Money, as liquidated damages, payable
by Buyer within 10 Business Days after receipt of Seller's written demand and
payable in accordance with the provisions of the Deposit Escrow Agreement. As
security for payment thereof, Buyer has, concurrently with the execution of
this Agreement, entered into the Deposit Escrow Agreement with Seller and the
Escrow Agent as provided in Section 2.7. The parties agree that the foregoing
liquidated damages are reasonable considering all the circumstances existing as
of the date hereof and constitute the parties' good faith estimate of the
actual damages reasonably expected to result from the termination of this
Agreement by Seller pursuant to Section 10.1(b)(i). Seller agrees that, to the
fullest extent permitted by law, Seller's right to payment of such liquidated
damages as provided in this Section 10.2 shall be its sole and exclusive remedy
if the Closing does not occur with respect to any damages whatsoever that
Seller may suffer or allege to suffer as a result of any claim or cause of
action asserted by Seller relating to or arising from breaches of the
representations, warranties or covenants of Buyer contained in this Agreement
and to be made or performed at or prior to the Closing. If this Agreement is
terminated by Seller pursuant to Section 10.1(b)(i), upon Buyer's receipt of a
counterpart of the Release executed by Seller, Buyer and Seller shall instruct
the Escrow Agent to pay the ▇▇▇▇▇▇▇ Money to Seller. If this Agreement is
terminated either by Buyer or Seller pursuant to any provision of Section 10.1
other than a termination by Seller pursuant to Section 10.1(b)(i), then Buyer
and Seller shall instruct the Escrow Agent to pay the ▇▇▇▇▇▇▇ Money to Buyer.
(b) As a condition of payment, and upon receipt of the
liquidated damages under this Section 10.2, Seller hereby irrevocably and
unconditionally releases, acquits, and forever discharges Buyer and its
successors, assigns, officers, directors, employees, agents, stockholders,
subsidiaries, parent companies and other affiliates (corporate or otherwise)
(the "Released Parties") of and from any and all Released Claims, including,
without limitation, all Released Claims arising out of, based upon, resulting
from or relating to the negotiation, execution, performance, breach or
otherwise related to or arising out of the Transaction Documents or any
agreement entered into in connection therewith or related thereto. "Released
Claims" as used herein shall mean any and all charges, complaints, claims,
causes of action, promises, agreements, rights to payment, rights to any
equitable remedy, rights to any equitable subordination, demands, debts,
liabilities, express or implied contracts, obligations of payment or
performance, rights of offset or recoupment, accounts, damages, costs, losses
or expenses (including attorneys' and other professional fees and expenses)
held by any party hereto, whether known or unknown, matured or unmatured,
suspected or unsuspected, liquidated or unliquidated, absolute or contingent,
direct or derivative.
ARTICLE XI
INDEMNIFICATION
11.1. INDEMNIFICATION OF BUYER. Subject to the provisions of this
Article XI, Seller agrees to indemnify and hold harmless the Buyer Indemnified
Parties from and against any and all Buyer Indemnified Costs.
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11.2. INDEMNIFICATION OF SELLER. Subject to the provisions of this
Article XI, Buyer agrees to indemnify and hold harmless the Seller Indemnified
Parties from and against any and all Seller Indemnified Costs.
11.3. DEFENSE OF THIRD-PARTY CLAIMS. An Indemnified Party shall
give prompt written notice to any entity or Person who is obligated to provide
indemnification hereunder (an "Indemnifying Party") of the commencement or
assertion of any action, proceeding, demand, or claim by a third party
(collectively, a "third-party action") in respect of which such Indemnified
Party shall seek indemnification hereunder. Any failure so to notify an
Indemnifying Party shall not relieve such Indemnifying Party from any liability
that it, he, or she may have to such Indemnified Party under this Article XI
unless the failure to give such notice materially and adversely prejudices such
Indemnifying Party. The Indemnifying Party shall have the right to assume
control of the defense of, settle, or otherwise dispose of such third-party
action on such terms as they deem appropriate; provided, however, that:
(a) The Indemnified Party shall be entitled, at its own
expense, to participate in the defense of such third-party action (provided,
however, that the Indemnifying Parties shall pay the attorneys' fees of the
Indemnified Party if (i) the employment of separate counsel shall have been
authorized in writing by any such Indemnifying Party in connection with the
defense of such third-party action, (ii) the Indemnifying Parties shall not
have employed counsel reasonably satisfactory to the Indemnified Party to have
charge of such third-party action, (iii) the Indemnified Party shall have
reasonably concluded that there may be defenses available to such Indemnified
Party that are different from or additional to those available to the
Indemnifying Party, or (iv) the Indemnified Party's counsel shall have advised
the Indemnified Party in writing, with a copy delivered to the Indemnifying
Party, that there is a conflict of interest that could make it inappropriate
under applicable standards of professional conduct to have common counsel);
(b) The Indemnifying Party shall obtain the prior written
approval of the Indemnified Party before entering into or making any
settlement, compromise, admission, or acknowledgment of the validity of such
third-party action or any liability in respect thereof if, pursuant to or as a
result of such settlement, compromise, admission, or acknowledgment, injunctive
or other equitable relief would be imposed against the Indemnified Party or if,
in the opinion of the Indemnified Party, such settlement, compromise,
admission, or acknowledgment could have an adverse effect on its business;
(c) No Indemnifying Party shall consent to the entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
Indemnified Party of a release from all liability in respect of such third-
party action; and
(d) The Indemnifying Party shall not be entitled to
control (but shall be entitled to participate at its own expense in the defense
of), and the Indemnified Party shall be entitled to have sole control over, the
defense or settlement, compromise, admission, or acknowledgment of
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any third-party action (i) as to which the Indemnifying Party fails to assume
the defense within a reasonable length of time or (ii) to the extent the third-
party action seeks an order, injunction, or other equitable relief against the
Indemnified Party which, if successful, would materially adversely affect the
business, operations, assets, or financial condition of the Indemnified Party;
provided, however, that the Indemnified Party shall make no settlement,
compromise, admission, or acknowledgment that would give rise to liability on
the part of any Indemnifying Party without the prior written consent of such
Indemnifying Party.
The parties hereto shall extend reasonable cooperation in connection with the
defense of any third-party action pursuant to this Article XI and, in
connection therewith, shall furnish such records, information, and testimony
and attend such conferences, discovery proceedings, hearings, trials, and
appeals as may be reasonably requested.
11.4. DIRECT CLAIMS. In any case in which an Indemnified Party
seeks indemnification hereunder which is not subject to Section 11.3 because no
third-party action is involved, the Indemnified Party shall notify the
Indemnifying Party in writing of any Indemnified Costs which such Indemnified
Party claims are subject to indemnification under the terms hereof. Subject to
the limitations set forth in Section 11.6(c), the failure of the Indemnified
Party to exercise promptness in such notification shall not amount to a waiver
of such claim unless the resulting delay materially prejudices the position of
the Indemnifying Party with respect to such claim.
11.5. ESCROW. On the Closing Date, Buyer and Seller will enter into
the Indemnification Escrow Agreement in accordance with which Buyer shall, at
Closing, deposit an amount of the Purchase Price equal to $500,000 (the
"Holdback Amount") with the Escrow Agent.
11.6. LIMITATIONS. Subject to Section 11.7 and Section 12.17
hereof, the following provisions of this Section 11.6 shall be applicable after
the time of the Closing:
(a) Minimum Loss. No Indemnifying Party shall be
required to indemnify an Indemnified Party for Indemnified Representation Costs
unless and until the aggregate amount of such Indemnified Representation Costs
for which the Indemnified Party is otherwise entitled to indemnification
pursuant to this Article XI exceeds $50,000 (the "Minimum Loss"). After the
Minimum Loss is exceeded, the Indemnified Party shall be entitled to be paid
the entire amount of its Indemnified Representation Costs in excess of (but not
including) the Minimum Loss, subject to the limitations on recovery and
recourse set forth in this Section 11.6 and in Section 11.7 below and subject
to the exception contained in Section 12.17. For purposes of determining the
aggregate amount of Minimum Loss suffered by an Indemnified Party, each
representation and warranty contained in this Agreement for which
indemnification can be or is sought hereunder shall be read (including for
purposes of determining whether a breach of such representation or warranty has
occurred) without regard to materiality (including Material Adverse Effect)
qualifications that may be contained therein. In addition, in determining
whether an Indemnifying Party shall be required to indemnify an Indemnified
Party under this Article XI, once the Minimum Loss requirement set forth in
this clause (a) has been satisfied, each representation and warranty contained
in this
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Agreement for which indemnification can be or is sought hereunder shall be read
(including for purposes of determining whether a breach of such representation
or warranty has occurred) without regard to materiality (including Material
Adverse Effect) qualifications that may be contained therein.
(b) Limitation as to Time. No Indemnifying Party shall
be liable for any Indemnified Representation Costs pursuant to this Article XI
unless a written claim for indemnification in accordance with Section 11.3 or
11.4 is given by the Indemnified Party to the Indemnifying Party with respect
thereto on or before the 450th day following the Closing Date, except that this
time limitation shall not apply to any claims contemplated by Section 12.17.
(c) Recourse against Escrowed Funds. Subject to Section
12.17 hereof, a Buyer Indemnified Party shall be entitled to payment only out
of the Holdback Amount pursuant to the terms of this Article XI and the
Indemnification Escrow Agreement for all amounts due to a Buyer Indemnified
Party with respect to any claim by a Buyer Indemnified Party against Seller for
Buyer Indemnified Representation Costs payable under this Article XI.
(d) Other Indemnified Costs. The provisions of this
Section 11.6 shall only be applicable to Indemnified Representation Costs and
shall not be applicable to any other Indemnified Costs.
11.7. INSTRUCTIONS TO ESCROW AGENT. Seller hereby covenants and
agrees that at any ▇▇▇▇ ▇▇▇▇▇▇ is or becomes obligated to indemnify a Buyer
Indemnified Party for Buyer Indemnified Costs under this Article XI, Seller
will execute and deliver to the Escrow Agent written instructions to release to
the Buyer Indemnified Party such portion of the Holdback Amount as is necessary
to indemnify the Buyer Indemnified Party for such Buyer Indemnified Costs.
ARTICLE XII
GENERAL PROVISIONS
12.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS.
Regardless of any investigation at any time made by or on behalf of any party
hereto or of any information any party may have in respect thereof, each of the
representations and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing.
Except as otherwise provided in the next two sentences, the representations and
warranties set forth in this Agreement shall terminate on the 450th day
following the Closing Date. Following the date of termination of a
representation or warranty, no claim can be brought with respect to a breach of
such representation or warranty, but no such termination shall not affect any
claim for a breach of a representation or warranty that was asserted before the
date of termination. To the extent that such are performable after the
Closing, each of the covenants and agreements contained in each of the
Transaction documents shall survive the Closing indefinitely.
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12.2. FURTHER ACTIONS. After the Closing Date, Seller shall execute
and deliver such other certificates, agreements, conveyances, and other
documents, and take such other action, as may be reasonably requested by Buyer
in order to transfer and assign to, and vest in, Buyer the Assets pursuant to
the terms of this Agreement.
12.3. AMENDMENT AND MODIFICATION. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
12.4. WAIVER OF COMPLIANCE. Any failure of Buyer on the one hand,
or Seller, on the other hand, to comply with any obligation, covenant,
agreement, or condition contained herein may be waived only if set forth in an
instrument in writing signed by the party or parties to be bound thereby, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.
12.5. SPECIFIC PERFORMANCE. The parties recognize that in the event
Seller should refuse to perform under the provisions of this Agreement,
monetary damages alone will not be adequate. Buyer shall therefore be
entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement.
In the event of any action to enforce this Agreement specifically, Seller
hereby waives the defense that there is an adequate remedy at law.
12.6. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
applicable law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
12.7. EXPENSES AND OBLIGATIONS. Except as otherwise expressly
provided in this Agreement or as provided by law, all costs and expenses
incurred by the parties hereto in connection with the consummation of the
transactions contemplated hereby shall be borne solely and entirely by the
party which has incurred such expenses. Notwithstanding the foregoing, (a) the
fee payable to the Escrow Agent shall be borne as provided in the
Indemnification Escrow Agreement and the Deposit Escrow Agreement, (b) the
brokerage fees in the amount of $100,000 (the "Brokerage Fee") payable to Media
Venture Partners shall be borne by Buyer, (c) any consulting fees payable to
Anchor Financial shall be borne by Seller, and (d) all sales taxes arising out
of the transactions contemplated by this Agreement shall be paid by Seller. In
the event of a dispute between the parties in connection with this Agreement
and the transactions contemplated hereby, each of the parties hereto hereby
agrees that the prevailing party shall be entitled to reimbursement by the
other party of reasonable legal fees and expenses incurred in connection with
any action or proceeding.
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12.8. PARTIES IN INTEREST. This Agreement shall be binding upon
and, except as provided below, inure solely to the benefit of each party hereto
and their successors and assigns, and nothing in this Agreement, except as set
forth below, express or implied, is intended to confer upon any other Person
(other than the Indemnified Parties as provided in Article XI) any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
12.9. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Buyer, to
WNOK Acquisition Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
3700 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Capstar Broadcasting Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Seller, to
Emerald City Radio Partners, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to
▇▇▇▇ & ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12.10. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
12.11. ENTIRE AGREEMENT. This Agreement (which term shall be deemed
to include the exhibits and schedules hereto and the other certificates,
documents and instruments delivered hereunder) constitutes the entire agreement
of the parties hereto and supersedes all prior agreements, letters of intent
and understandings, both written and oral, among the parties with respect to
the subject matter hereof. There are no representations or warranties,
agreements, or covenants other than those expressly set forth in this
Agreement.
12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. ANY SUIT OR
PROCEEDING BROUGHT HEREUNDER SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF
THE COURTS LOCATED IN NEW YORK.
12.13. PUBLIC ANNOUNCEMENTS. Seller and Buyer shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation. Prior to the Closing, Seller will not
issue any other press release or otherwise make any public statements regarding
its business, except as may be required by applicable law.
12.14. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of law or otherwise; provided, however, that (a)
upon notice to Seller and without releasing Buyer from any of its obligations
or liabilities hereunder, Buyer may assign or delegate any or all of its rights
or obligations under this Agreement to any Affiliate thereof, and (b) nothing
in this Agreement shall limit Buyer's ability to make a collateral assignment
of its rights under this Agreement to any institutional lender that provides
funds to Buyer without the consent of Seller. Seller shall execute an
acknowledgment of such assignment(s) and collateral assignments in such forms
as Buyer or its institutional lenders may from time to time reasonably request;
provided, however, that unless written notice is given to Seller that any such
collateral assignment has been foreclosed upon, Seller
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shall be entitled to deal exclusively with Buyer as to any matters arising
under this Agreement or any of the other agreements delivered pursuant hereto.
In the event of such an assignment, the provisions of this Agreement shall
inure to the benefit of and be binding on Buyer's assigns.
12.15. DIRECTOR AND OFFICER LIABILITY. The directors, officers, and
stockholders of Buyer and its Affiliates shall not have any personal liability
or obligation arising under this Agreement (including any claims that Seller
may assert) other than as an assignee of this Agreement. Subject to Section
12.17, the partners of Seller shall not have any personal liability or
obligation arising under this Agreement.
12.16. NO REVERSIONARY INTEREST. The parties expressly agree,
pursuant to Section 73.1150 of the FCC's rules, that Seller does not retain any
right to reassignment of any of the FCC Licenses in the future, or to operate
or use the facilities of the Stations for any period beyond the Closing Date.
12.17. NO WAIVER RELATING TO CLAIMS FOR FRAUD. The liability of any
party under Article XI shall be in addition to, and not exclusive of any other
liability that such party may have at law or equity based on such party's
fraudulent acts or omissions. None of the provisions set forth in this
Agreement, including but not limited to the provisions set forth in Section
11.6(a) (relating to Minimum Loss), 11.6(b) (relating to limitations on the
period of time during which a claim for indemnification may be brought),
11.6(c) (relating to recourse against escrowed funds), or 12.15 shall be deemed
a waiver by any party to this Agreement of any right or remedy which such party
may have at law or equity based on any other party's fraudulent acts or
omissions, nor shall any such provisions limit, or be deemed to limit, (i) the
amounts of recovery sought or awarded in any such claim for fraud, (ii) the
time period during which a claim for fraud may be brought, or (iii) the
recourse which any such party may seek against another party with respect to a
claim for fraud; provided, that with respect to such rights and remedies at law
or equity, the parties further acknowledge and agree that none of the
provisions of this Section 12.17, nor any reference to this Section 12.17
throughout this Agreement, shall be deemed a waiver of any defenses which may
be available in respect of actions or claims for fraud, including but not
limited to, defenses of statutes of limitations or limitations of damages.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
signed, all as of the date first written above.
SELLER:
EMERALD CITY RADIO PARTNERS, L.P.
By:
Name: /s/
--------------------------------
Title:
-------------------------------
BUYER:
WNOK ACQUISITION COMPANY, INC.
By:
Name: /s/
--------------------------------
Title:
-------------------------------
57
ANNEX A
THE STATIONS
WNOK-FM Columbia, South Carolina
WOIC-AM Columbia, South Carolina
WMFX-FM St. ▇▇▇▇▇▇▇, South Carolina
