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Exhibit 10.09
ASSET PURCHASE AGREEMENT
DATED AUGUST 20, 1999
AMONG
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
▇▇▇▇▇▇▇▇ MEDIA III, INC.
▇▇▇▇▇▇▇▇ RADIO OF KANSAS CITY LICENSEE, LLC
AS SELLERS,
AND
ENTERCOM COMMUNICATIONS CORP.
AS BUYER
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into on August
20, 1999 but is effective as of August 18, 1999, by and among ▇▇▇▇▇▇▇▇
Communications, Inc., a Maryland corporation ("SCI"), ▇▇▇▇▇▇▇▇ Media III, Inc. a
Maryland corporation ("MEDIA III"), ▇▇▇▇▇▇▇▇ Radio of Kansas City Licensee, LLC,
a Maryland limited liability company ("KANSAS CITY LICENSEE"), (each a "SELLER"
and collectively, "SELLERS"), and Entercom Communications Corp., a Pennsylvania
corporation ("BUYER").
All references herein to the "date hereof" and the "date of this
Agreement" shall mean August 18, 1999, and all representations and warranties
herein shall be deemed to have been made as of August 18, 1999.
R E C I T A L S:
WHEREAS, Media III operates radio broadcast stations KCFX-FM,
Harrisonville, MO; KQRC-FM, Leavenworth, KS; KCIY-FM, Liberty, MO; and KXTR-FM,
Kansas City, MO (collectively, the "STATIONS") and owns or leases certain assets
used in connection with the Stations;
WHEREAS, Kansas City Licensee is the licensee of each of the Kansas City
Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, the Buyer and Sellers and certain other sellers entered into the
Original Agreement and, pursuant to Section 2 of the accompanying Letter
Agreement dated August 18, 1999, the parties thereto agreed to amend and restate
the Original Agreement and to enter into this Agreement with respect to the
Stations solely for the purpose of providing separate processing of the Stations
for ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ purposes.
WHEREAS, the parties hereto desire to enter into this Agreement to provide
for the sale, assignment and transfer by Sellers to Buyer of certain of the
assets owned, leased or used by Sellers in connection with the business and
operations of the Stations.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
SECTION 1: CERTAIN DEFINITIONS
1.1 Terms Defined in this Section. The following terms, as used in this
Agreement, have the meanings set forth in this Section:
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"ACCOUNTS RECEIVABLE" means the rights of Sellers as of the Closing Date
to payment in cash for the sale of advertising time and other goods and services
by the Stations prior to the Closing Date.
"AFFILIATE" means, with respect to any Person, (a) any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person, or (b) an officer or
director of such Person or of an Affiliate of such Person within the meaning of
clause (a) of this definition. For purposes of clause (a) of this definition,
(i) a Person shall be deemed to control another Person if such Person (A) has
sufficient power to enable such Person to elect a majority of the board of
directors of such Person, or (B) owns a majority of the beneficial interests in
income and capital of such Person; and (ii) a Person shall be deemed to control
any partnership of which such Person is a general partner.
"AGGREGATED INITIAL PURCHASE PRICE" means the amount of $824,500,000.
"ALLOCABLE ESCROW DEPOSIT" means that portion of the Escrow Deposit
equaling $7,398,425.00.
"ASSETS" means the assets to be transferred or otherwise conveyed by
Sellers to Buyer under this Agreement, as specified in Section 2.1.
"ASSUMED CONTRACTS" means (a) all Contracts set forth on Schedule 3.7, (b)
Contracts entered into prior to the date of this Agreement with advertisers for
the sale of advertising time or production services for cash at rates consistent
with past practices, (c) Contracts entered into by any Seller prior to the date
of this Agreement which are not required to be included on Schedule 3.7 hereto,
(d) any Contracts entered into by Sellers between the date of this Agreement and
the Closing Date that Buyer agrees in writing to assume, and (e) other contracts
entered into by Sellers between the date of this Agreement and the Closing Date
in compliance with Section 5.
"CLOSING" means the consummation of the exchange and acquisition of the
Assets pursuant to this Agreement on the Closing Date in accordance with the
provisions of Section 8.1.
"CLOSING DATE" means the date on which the Closing occurs, as determined
pursuant to Section 8.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CONSENTS" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"CONTAMINANT" shall mean and include any pollutant, contaminant, hazardous
material
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(as defined in any of the Environmental Laws), toxic substances (as defined in
any of the Environmental Laws), asbestos or asbestos containing material, urea
formaldehyde, polychlorinated biphenyls, regulated substances and wastes,
radioactive materials, and petroleum or petroleum by-products, including crude
oil or any fraction thereof, except the term "Contaminant" shall not include
small quantities of maintenance, cleaning and emergency generator fuel supplies
customary for the operation of radio stations and maintained in compliance with
all Environmental Laws in the ordinary course of business.
"CONTRACTS" means all contracts, consulting agreements, leases,
non-governmental licenses and other agreements (including leases for personal or
real property and employment agreements), written or oral (including any
amendments and other modifications thereto) to which ▇▇▇▇▇▇▇▇, SCI, or any
Seller is a party or that are binding upon any Seller, that relate to or affect
the Assets or the business or operations of the Stations, and that either (a)
are in effect on the date of this Agreement, including those listed on Schedule
3.7 hereto, or (b) are entered into by any Seller between the date of this
Agreement and the Closing Date.
"DELAY AMOUNT" shall equal 0.75% of the Initial Purchase Price.
"DEPOSIT RELEASE DATE" is the date on which a Closing under this Agreement
and the Multi-Stations Agreement has occurred for which more than forty-five
percent (45%) of the Aggregated Initial Purchase Price has been paid to Sellers.
"EFFECTIVE TIME" means 12:01 a.m., Eastern time, on the Closing Date.
"ENVIRONMENTAL LAWS" shall mean and include, but not be limited to, any
applicable federal, state or local law, statute, charter, ordinance, rule or
regulation or any governmental agency interpretation, policy or guidance,
including without limitation applicable safety/environmental/health laws such as
but not limited to the Resource Conservation and Recovery Act of 1976,
Comprehensive Environmental Response Compensation and Liability Act, Federal
Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the Clean
Water Act, and the Toxic Substance Control Act, as any of the foregoing have
been amended, and any permit, order, directive, court ruling or order or consent
decree applicable to or affecting the Property or any other property (real or
personal) used by or relating to the Station in question promulgated or issued
pursuant to any Environmental Laws which pertains to, governs, or controls the
generation, storage, remediation or removal of Contaminants or otherwise
regulates the protection of health and the environment including, but not
limited to, any of the following activities, whether on site or off site if such
could materially affect the site: (i) the emission, discharge, release, spilling
or dumping of any Contaminant into the air, surface water, ground water, soil or
substrata; or (ii) the use, generation, processing, sale, recycling, treatment,
handling, storage, disposal, transportation, labeling or any other management of
any Contaminant.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW DEPOSIT" means the sum of Fifty Million Dollars ($50,000,000.00)
or, at Buyer's option, a letter of credit in favor of Sellers in the face amount
of Fifty Million Dollars ($50,000,000.00), which was deposited by Buyer with
First Union National Bank (the "ESCROW
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AGENT") on August 18, 1999, pursuant to the Multi-Stations Agreement to secure
the obligations of Buyer to close under this Agreement and the Multi-Stations
Agreement, with (i) such deposit being held by the Escrow Agent in accordance
with the Escrow Agreement executed among Buyer, Sellers and Escrow Agent on
August 18, 1999 pursuant to the Multi-Stations Agreement, and (ii) the Escrow
Deposit, and all earnings thereon, being returned to Buyer upon the consummation
of this Agreement and the Multi-Stations Agreement or as otherwise provided
under the Multi-Stations Agreement.
"EXCESS AMOUNT" has the meaning set forth in Section 10.5.
"EXCLUDED REAL PROPERTY INTERESTS" means all interests in Real Property
listed on Schedule 2.2 hereto.
"EXCLUDED TANGIBLE PERSONAL PROPERTY" means all tangible personal property
owned or held by Sellers that is located at the Excluded Real Property other
than such tangible personal property listed on Schedule 3.6 hereto, any assets
used primarily in the operation of any television broadcast station owned,
operated or programmed by Sellers or any Affiliate of Sellers, any assets used
primarily in the operation of any radio broadcast station owned, operated or
programmed by Sellers, but not included as a "Station" hereunder, and any
tangible personal property located at Suite 220, Meadow Mill at ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"FCC" means the Federal Communications Commission.
"FCC CONSENT" means action by the FCC granting its consent to the transfer
of the FCC Licenses by Sellers to Buyer as contemplated by this Agreement.
"FCC LICENSES" means those licenses, permits and authorizations issued by
the FCC to Sellers in connection with the business and operations of the
Stations.
"FINAL ORDER" shall mean an action by the Commission upon any application
for FCC Consent filed by the parties hereto for FCC consent, approval or
authorization, which action has not been reversed, stayed, enjoined, set aside,
annulled or suspended, and with respect to which action, no protest, petition to
deny, petition for rehearing or reconsideration, appeal or request for stay is
pending, and as to which action the time for filing of any such protest,
petition, appeal or request and any period during which the Commission may
reconsider or review such action on its own authority has expired.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Acts of 1976, as amended, and all Laws promulgated pursuant thereto or in
connection therewith.
"INTANGIBLES" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by
Sellers or under which Sellers are licensed or franchised and that are used in
the business and
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operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"KNOWLEDGE" or any derivative thereof with respect to the Sellers means,
exclusively, the actual Knowledge of the President and Chief Executive Officer
or the Chief Financial Officer of ▇▇▇▇▇▇▇▇ Broadcast Group, Inc. ("▇▇▇▇▇▇▇▇"),
the general managers of the Stations, and any other employee of ▇▇▇▇▇▇▇▇ or SCI
designated as a "vice president" or any officer of any of the Sellers.
"LEASED REAL PROPERTY" means all real property and all buildings and other
improvements thereon and appurtenant thereto leased or held by Sellers and used
in the business or operation of the Stations.
"LICENSES" means all licenses, permits, construction permits and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Sellers, currently in
effect and used in connection with the conduct of the business or operations of
the Stations (other than the Non-Owned Stations), together with any additions
thereto between the date of this Agreement and the Closing Date.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
assets or financial condition of the Stations taken as a whole, except for any
such material adverse effect resulting from (a) general economic conditions
applicable to the radio broadcast industry, (b) general conditions in the
markets in which the Stations operate, or (c) circumstances that are not likely
to recur and either have been substantially remedied or can be substantially
remedied without substantial cost or delay.
"MATERIAL CONTRACT" means those Assumed Contracts that are designated
on Schedules 3.5 and 3.7 as "Material Contracts."
"MULTI-STATIONS AGREEMENT" means that certain Amended and Restated Asset
Purchase Agreement dated as of August 20, 1999 but effective August 18, 1999, by
and between the Multi-Stations Sellers of the Multi-Stations and the USA Digital
Shares (as defined in the Multi-Stations Agreement) and Buyer pursuant to which
the Multi-Stations Sellers have agreed to sell, and Buyer has agreed to
purchase, the Multi-Stations and the USA Digital Shares.
"MULTI-STATIONS SELLERS" means ▇▇▇▇▇▇▇▇ Communications, Inc., WCGV, Inc.,
a Maryland corporation, ▇▇▇▇▇▇▇▇ Radio of Milwaukee Licensee, LLC, a Maryland
limited liability company, ▇▇▇▇▇▇▇▇ Radio of New Orleans, LLC, a Maryland
limited liability company, ▇▇▇▇▇▇▇▇ Radio of New Orleans Licensee, LLC, a
Maryland limited liability company, ▇▇▇▇▇▇▇▇ Radio of Memphis, Inc., a Maryland
corporation, ▇▇▇▇▇▇▇▇ Radio of Memphis Licensee, Inc., a Delaware corporation,
▇▇▇▇▇▇▇▇ Properties, LLC, a Virginia limited liability company, ▇▇▇▇▇▇▇▇ Radio
of Norfolk/Greensboro Licensee L.P., a Virginia limited partnership, ▇▇▇▇▇▇▇▇
Radio of Norfolk Licensee, LLC, a Maryland limited liability company, ▇▇▇▇▇▇▇▇
Radio of Buffalo, Inc., a Maryland corporation, ▇▇▇▇▇▇▇▇ Radio of Buffalo
Licensee, LLC, a Maryland limited liability company, WLFL, Inc., a Maryland
corporation, ▇▇▇▇▇▇▇▇ Radio of Greenville Licensee, Inc., a Delaware
corporation, ▇▇▇▇▇▇▇▇ Radio of ▇▇▇▇▇▇-▇▇▇▇▇, Inc., a Maryland corporation, and
▇▇▇▇▇▇▇▇
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Radio of ▇▇▇▇▇▇-▇▇▇▇▇ Licnesee, LLC, a Maryland limited liability company.
"MULTI-STATIONS" means the following radio broadcast stations: WPTE-FM,
Virginia Beach, VA; WWDE-FM, Hampton, VA; WNVZ-FM, Norfolk, VA; WVKL-FM,
Norfolk, VA, WMQX-FM, Winston-Salem, NC; WQMG-FM, Greensboro, NC; WJMH-FM,
Reidsville, NC; WEAL-AM, Greensboro, NC; WEMP-AM, Milwaukee, WI; WMYX-FM,
Milwaukee, WI; WXSS-FM, Wauwatosa, WI; WLMG-FM, New Orleans, LA; WWL-AM, New
Orleans, LA; WSMB-AM, New Orleans, LA; WEZB-FM, New Orleans, LA; WLTS-FM,
Kenner, LA; WTKL-FM, New Orleans, LA; WRVR-FM, Memphis, TN; WJCE-AM, Memphis,
TN; WOGY-FM, Germantown, TN; WMJQ-FM, Buffalo, NY; WKSE-FM, Niagara Falls, NY;
WBEN-AM, Buffalo, NY; WWKB-AM, Buffalo, NY; WGR-AM, Buffalo, NY; and WWWS-AM,
Buffalo, NY; WGGI-FM, ▇▇▇▇▇▇, PA; WKRZ-FM; ▇▇▇▇▇▇-▇▇▇▇▇, PA: WGGY-FM, Scranton,
PA; ▇▇▇▇-AM, ▇▇▇▇▇▇-▇▇▇▇▇, PA; WGBI-AM, Scranton, PA; WSHG-FM, Pittston, PA;
WILP-AM, West ▇▇▇▇▇▇▇▇, PA; WWFH-FM, Freeland, PA; WKRF-FM, Tobyhanna, PA;
WOLI-FM, Easely, SC; and WOLI-FM, Greer, SC.
"ORIGINAL AGREEMENT" means that certain Asset Purchase Agreement dated
August 18, 1999, by and among the Multi-Station Sellers, Sellers hereunder, and
Buyer relating to the sale by the Multi-Stations Sellers of the Multi-Stations,
the Stations, and the USA Digital Shares to Buyer.
"OWNED REAL PROPERTY" means all real property and all buildings and other
improvements thereon and appurtenant thereto owned by Sellers and used in the
business or operations of the Stations.
"PERMITTED ENCUMBRANCES" means (a) encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord's liens arising in the
ordinary course of business, (b) encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Contracts
set forth on the Schedules, which Contracts have been made available to Buyer,
(c) encumbrances for Taxes not yet delinquent or which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on Sellers' books in accordance with generally accepted
accounting principles, or (d) encumbrances that do not materially detract from
the value of any of the Assets or materially interfere with the use thereof as
currently used.
"PERSON" means an individual, corporation, association, partnership, joint
venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"REAL PROPERTY" means all real property and all buildings and other
improvements thereon and appurtenant thereto, whether or not owned, leased or
held by Sellers used in the business or operations of the Stations.
"REAL PROPERTY INTERESTS" means all interests in Owned Real Property and
Leased Real Property, including fee estates, leaseholds and subleaseholds,
purchase options, easements, licenses, rights to access, and rights of way, and
all buildings and other improvements thereon and appurtenant thereto, owned or
held by Sellers that are used in the business or operations of
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the Stations, together with any additions, substitutions and replacements
thereof and thereto between the date of this Agreement and the Closing Date, but
excluding the Excluded Real Property Interests.
"TANGIBLE PERSONAL PROPERTY" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property owned or held by Sellers that
is used or useful in the conduct of the business or operations of the Stations,
together with any additions, substitutions and replacements thereof and thereto
between the date of this Agreement and the Closing Date, but excluding the
Excluded Tangible Personal Property.
"TAX" means any federal, state, local, or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, capital, transfer, employment, withholding, or other tax or similar
governmental assessment, together with any interest, additions, or penalties
with respect thereto and any interest in respect of such additions or penalties.
"TAX RETURN" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing required to be
submitted to any governmental authority with respect to any Tax.
"THRESHOLD AMOUNT" has the meaning set forth in Section 10.5.
"UNEXPENDED REMEDIATION AMOUNT" shall mean Three Million Dollars
($3,000,000.00) as aggregated with the Unexpended Remediation Amount under the
Multi-Stations Agreement, minus any amounts previously expended by Sellers to
remediate any of the Real Property pursuant to Section 6.16.
"USA DIGITAL SHARES" means the 300,000 shares of common stock of USA
Digital Radio, Inc. which are to be sold to Buyer under the Multi-Station
Agreement.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth in the sections indicated:
Term Section
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Balance Sheet Date Section 3.10
Benefit Arrangement Section 3.14 (a)(v)
Benefit Plans Section Section 3.14(a)(ii)
Buyer Preamble
Buyer's Plan Section 4.8
Claimant Section 10.4
Collection Period Section 6.7(a)
Confidentiality Agreement Section 6.4
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Deferred Contract Section 5.11(b)
Designee Section 11.3(b)
Employees Section 3.14(a)
Environmental Laws Section 3.16
Estimated Purchase Price Section 2.4(a)
Excluded Real Property Interests Section 1.1
Excluded Tangible Personal Property Section 1.1
FCC Objection Section 7.1(c)
FTC Section 4.6
Financial Statements Section 3.10
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filing Section 6.2
Indemnity Cap Section 10.5
Indemnifying Party Section 10.4
Initial Employee Cap Section 6.10(g)
Initial Purchase Price Section 2.3
Lease Section 6.12
Multiemployer Plan Section 3.14(a)(ii)
Operational Equipment Section 3.22
Pension Plan Section 3.14(a)(iii)
Purchase Price Section 2.3
Reimbursement Period Section 6.10(g)
Represented Employees Section 6.10(e)
Scheduled Employees Section 6.10(g)
Scheduled Retention Agreements Section 6.10(g)
SCI Preamble
Section 6.9 Amount Section 6.9
Seller Preamble
Seller Entities Section 6.10(i)
Sellers' Employees Section 6.10(i)
▇▇▇▇▇▇▇▇ Section 1.1
Stations Recitals
Stations Delay Amount Date Section 2.3(a)(i)
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Transferred Employees Section 6.10
Welfare Plan Section 3.14(a)(i)
SECTION 2: EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE
2.1 Agreement to Exchange and Transfer. Subject to the terms and conditions set
forth in this Agreement with respect to the Stations, Sellers hereby agree to
transfer, convey, assign and deliver to Buyer on the Closing Date, and Buyer
agrees to acquire, all of Sellers' right, title and interest in the tangible and
intangible assets used in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date, but excluding the assets described in
Section 2.2, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, charges, or encumbrances of any nature whatsoever
(except for Permitted Encumbrances), including the following:
(a) The Tangible Personal Property;
(b) The Real Property Interests;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill of the Stations, if any;
(f) Reserved.
(g) All of Sellers' proprietary information, technical information and
data, machinery and equipment warranties, maps, computer discs and tapes, plans,
diagrams, blueprints and schematics, including filings with the FCC, in each
case to the extent relating to the business and operation of the Stations;
(h) All choses in action of Sellers relating to the Stations to the extent
they relate to the period after the Effective Time; and
(i) All books and records relating to the business or operations of the
Stations, including executed copies of the Assumed Contracts, and all records
required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following:
(a) Sellers' cash, cash equivalents and deposits, all interest payable in
connection with any such items and rights in and to bank accounts, marketable
and other securities and similar investments of Sellers;
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(b) Any insurance policies, promissory notes, amounts due to Sellers from
employees, bonds, letters of credit, certificates of deposit, or other similar
items, and any cash surrender value in regard thereto; provided, that in the
event Sellers are obligated to assign to Buyer the proceeds of any such
insurance policy at the time a Closing occurs under Section 6.3, such proceeds
shall be included in the Assets;
(c) Any pension, profit-sharing, or employee benefit plans, including all
of Sellers' interest in any Welfare Plan, Pension Plan or Benefit Arrangement
(each as defined in Section 3.14(a);
(d) All Tangible Personal Property disposed of or consumed in the ordinary
course of business as permitted by this Agreement;
(e) All Tax Returns and supporting materials, all original financial
statements and supporting materials, all books and records that Sellers are
required by law to retain, all of Sellers' organizational documents, corporate
books and records (including minute books and stock ledgers) and originals of
account books of original entry, all records of Sellers relating to the sale of
the Assets and all records and documents related to any assets excluded pursuant
to this Section 2.2;
(f) Any interest in and to any refunds of federal, state, or local
franchise, income, or other taxes for periods (or portions thereof) ending on or
prior to the Closing Date;
(g) All Accounts Receivable;
(h) All rights and claims of Sellers whether mature, contingent or
otherwise, against third parties relating to the Assets of the Stations, whether
in tort, contract or otherwise, other than rights and claims against third
parties relating to the Assets which have as their basis loss, damage or
impairment of or to any of the Assets and which loss, damage or impairment has
not been restored or repaired prior to the Closing in which any of the Assets
which has been so damaged or impaired is being acquired by Buyer (or in the case
of a lost asset, that would have been acquired but for such loss);
(i) Any Contracts which are not Assumed Contracts;
(j) All of each Sellers' deposits and prepaid expenses; provided, any
deposits and prepaid expenses shall be included in the Assets to the extent that
Sellers receive a credit therefor in the proration of the Purchase Price
pursuant to Section 2.3(b);
(k) All rights of Sellers under or pursuant to this Agreement (or any
other agreements contemplated hereby);
(l) All rights to the names ▇▇▇▇▇▇▇▇ Broadcast Group, "▇▇▇▇▇▇▇▇
Communications," ▇▇▇▇▇▇▇▇ and any logo or variation thereof and goodwill
associated therewith;
(m) The Excluded Real Property Interests;
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(n) The Excluded Tangible Personal Property;
(o) All assets owned by the Sellers and used in connection with any
television or radio broadcast stations owned and/or programmed by any of the
Sellers or Sellers have the right to acquire other than the Stations, including
(without limitation) all assets related to Sellers' operation and ownership of
the Interstate Road Network and the Road Gang Coast to Coast Network; KPNT-FM,
St. ▇▇▇▇▇▇▇▇▇, MO; WVRV-FM, East St. Louis, IL; WIL-FM, St. Louis, MO; WRTH-AM,
St. Louis, MO; KIHT-FM, St. Louis, MO; KXOK-FM, St. Louis, MO; KUPN-AM, Mission,
KS, the assets of the Multi-Stations, and all assets of the Multi-Stations
Sellers which are subject to the provisions of or specifically excluded from the
Multi-Stations Agreement and the USA Digital Shares;
(p) All shares of capital stock, partnership interests, interests in
limited liability companies or other equity interest, including, but not limited
to, any options, warrants or voting trusts relating thereto which are owned by
Sellers and not expressly specified in Section 2.1.
2.3 Purchase Price. The purchase price of the Assets shall be One Hundred Twenty
Two Million U.S. Dollars ($122,000,000) (the "Initial Purchase Price"), plus the
Section 6.9 Amount adjusted as provided below (the "Purchase Price").
(a) Purchase Price Increase. Except as otherwise provided in this
Agreement, the Initial Purchase Price shall be increased by the Delay Amount
upon the occurrence of any of the following events:
(i) Reserved; and
(ii) one hundred fifty (150) days following public notice by the FCC
that applications for FCC Consent have been accepted for filing (the "Stations
Delay Amount Date") if Closing has not occurred with respect to the Stations due
to the failure to receive any necessary consent, including, but not limited to,
the FCC Consent, or expiration or termination under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ as a
result of facts relating to Buyer or its Affiliates, including without
limitation such facts as are disclosed on Schedule 4.6; and
(iii) each thirty (30) day period subsequent to the occurrence of
the Stations Delay Amount Date until the later to occur of (x) the Closing, or
(y) termination of this Agreement in accordance with its terms.
The Purchase Price and any increase due pursuant to this Section 2.3(a)
shall be paid at Closing.
(b) Prorations. The Purchase Price shall be increased or decreased as
required to effectuate the proration of revenues and expenses, as set forth
below. All revenues and all expenses arising from the operation of the Stations,
including tower rental, business and license fees, utility charges, real
property and personal property and other similar Taxes and assessments levied
against or with respect to the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, payments due
under film or programming license
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agreements, and employee compensation, including wages (including bonuses which
constitute wages), salaries, accrued sick leave, severance pay and related Taxes
shall be prorated between Buyer and Sellers as to the Stations at Closing in
accordance with the principle that Sellers shall receive all revenues and shall
be responsible for all expenses, costs and liabilities allocable to the
operations of the Stations for the period prior to the Effective Time of
Closing, and Buyer shall receive all revenues and shall be responsible for all
expenses, costs and obligations allocable to the operations of the Stations for
the period after the Effective Time of Closing, subject to the following:
(i) There shall be no adjustment for, and Sellers shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.2. An adjustment 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 Sellers by any lessee or other third
party. An adjustment and proration shall be made in favor of Sellers to the
extent Buyer receives the right to receive a refund (or to a credit against
payments otherwise due) under any Assumed Contract to any security deposit or
similar pre-payment paid by or on behalf of Sellers.
(ii) An adjustment and proration shall be made in favor of Sellers
for the amount, if any, by which the fair market value of the goods or services
to be received by the Stations under its trade or barter agreements as of the
Effective Time exceeds by more than Two Hundred Fifty Thousand Dollars
($250,000) the fair market value of any advertising time remaining to be run by
the Stations as of the Effective Time. An adjustment and proration shall be made
in favor of Buyer to the extent that the amount of any advertising time
remaining to be run by the Stations under its trade or barter agreements as of
the Effective Time exceeds by more than Two Hundred Fifty Thousand Dollars
($250,000) the fair market value of the goods or services to be received by the
Stations as of the Effective Time.
(iii) There shall be no proration for program barter.
(iv) Reserved.
(v) An adjustment and proration shall be made in favor of Sellers
for the amount, if any, of prepaid expense, the benefit of which accrues to
Buyer hereunder, and other current assets acquired by Buyer hereunder which are
paid by Sellers to the extent such prepaid expenses and other current assets
relate to the period after the Effective Time.
(vi) There shall be no proration for any payment(s) made by Interep
to any of the Sellers in connection with obtaining the right to serve as the
national sales representative of any of the Stations.
(c) Manner of Determining Adjustments. The Purchase Price, taking into
account the adjustments and prorations pursuant to Section 2.3(b), will be
determined in accordance with the following procedures:
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(i) Sellers shall prepare and deliver to Buyer not later than five
(5) days before the Closing Date a preliminary settlement statement which shall
set forth Sellers' good faith estimate of the adjustments to the Purchase Price
under Section 2.3(b). The preliminary settlement statement shall (A) contain all
information reasonably necessary to determine the adjustments to the Purchase
Price under Section 2.3(b) as to the Stations, to the extent such adjustments
can be determined or estimated as of the date of the preliminary settlement
statement, and such other information as may be reasonably requested by Buyer,
and (B) be certified by Sellers to be true and complete to Sellers' Knowledge as
of the date thereof.
(ii) Not later than ninety (90) days after the Closing Date, Buyer
will deliver to Sellers a statement setting forth Buyer's determination of the
Purchase Price and the calculation thereof pursuant to Section 2.3(b) as to the
Stations. Buyer's statement (A) shall contain all information reasonably
necessary to determine the adjustments to the Purchase Price under Section
2.3(b), and such other information as may be reasonably requested by Sellers,
and (B) shall be certified by Buyer to be true and complete to Buyer's knowledge
as of the date thereof. If Sellers dispute the amount of such Purchase Price
determined by Buyer, they shall deliver to Buyer within thirty (30) days after
receipt of Buyer's statement a statement setting forth their determination of
the amount of such Purchase Price. If Sellers notify Buyer of its acceptance of
Buyer's statement, or if Sellers fail to deliver their statement within the
thirty (30)-day period specified in the preceding sentence, Buyer's
determination of the Purchase Price shall be conclusive and binding on the
parties as of the last day of the thirty (30)-day period.
(iii) Buyer and Sellers shall use good faith efforts to resolve any
dispute involving the determination of the Purchase Price paid by Buyer at the
Closing. If the parties are unable to resolve the dispute within forty-five (45)
days following the delivery of all of Buyer's statements to be provided pursuant
to Section 2.3(c)(ii) after the Closing, Buyer and Sellers shall jointly
designate an independent certified public accounting firm of national standing
which has not regularly provided services to either the Buyer or Sellers in the
last three (3) years, who shall be knowledgeable and experienced in the
operation of radio broadcasting stations, to resolve the dispute. If the parties
are unable to agree on the designation of an independent certified public
accounting firm, the selection of the accounting firm to resolve the dispute
shall be submitted to arbitration to be held in Baltimore, Maryland, in
accordance with the commercial arbitration rules of the American Arbitration
Association. The accounting firm's resolution of the dispute shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction. Any fees of this accounting firm, and, if necessary, for
arbitration to select such accountant, shall be divided equally between the
parties.
2.4 Payment of Purchase Price. The Initial Purchase Price shall be paid by Buyer
to Sellers as follows:
(a) Payment of Estimated Purchase Price At Closing. The Initial Purchase
Price, adjusted by the estimated adjustments pursuant to Section 2.3(b) as set
forth in Sellers' preliminary settlement statement pursuant to Section
2.3(c)(i), is referred to as the "ESTIMATED PURCHASE PRICE." At the Closing,
Buyer shall pay or cause to be paid to Sellers the Estimated Purchase Price for
the Stations, including, if applicable, any Delay Amount, by federal wire
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transfer of same-day funds pursuant to wire transfer instructions, which
instructions shall be delivered to Buyer by Sellers at least two (2) business
days prior to the Closing Date.
(b) Buyer and Sellers shall cause the Escrow Deposit to be released to
Sellers as partial payment of the Estimated Purchase Price by delivering wiring
instructions to the Escrow Agent two (2) days prior to the Closing Date;
provided, however, that none of the Escrow Deposit shall be released by the
parties at the Closing until the Deposit Release Date. Once the Deposit Release
Date has occurred, the Sellers agree immediately to deliver to the Escrow Agent
their consent to the release of that pro rata portion of the Escrow Deposit
attributable to a Closing hereunder or under the Multi-Stations Agreement
consummated prior to the Deposit Release Date. Until the Deposit Release Date,
Buyer shall deliver the entire Estimated Purchase Price at the Closing for the
Stations.
(c) Payments to Reflect Adjustments. The Purchase Price as finally
determined pursuant to Section 2.3(c) shall be paid as follows:
(i) If the Purchase Price as finally determined pursuant to Section
2.3(c) exceeds the Estimated Purchase Price, Buyer shall pay to Sellers, in
immediately available funds within five (5) business days after the date on
which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
(ii) If the Purchase Price as finally determined pursuant to Section
2.3(c) is less than the Estimated Purchase Price, Sellers shall pay to Buyer, in
immediately available funds within five (5) business days after the date on
which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
2.5 Assumption of Liabilities and Obligations. As of the Closing Date, Buyer
shall assume and undertake to pay, discharge and perform all obligations and
liabilities of Sellers under the Licenses, the Assumed Contracts or as otherwise
specifically provided for herein to the extent that either (i) the obligations
and liabilities relate to the time after the Effective Time of the Closing, or
(ii) the Purchase Price was reduced pursuant to Section 2.3(b) as a result of
the proration of such obligations and liabilities. Buyer shall not assume any
other obligations or liabilities of Sellers, including (1) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (2) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Effective Time of the Closing to which such Assumed Contracts
relate, except insofar as an adjustment therefor is made in favor of Buyer under
Section 2.3(b), (3) any claims or pending litigation or proceedings relating to
the operation of the Stations prior to the Closing or (4) any obligations or
liabilities of Sellers under any employee pension, retirement, or other benefit
plans.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer as of the date hereof and as of the
Closing Date (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date or time) as follows:
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3.1 Organization and Authority of Sellers. Each Seller is a corporation, limited
liability company or limited partnership (as applicable), duly organized,
validly existing and in good standing under the laws of the State listed on
Schedule 3.1 next to each such Seller's name. Each Seller has the requisite
corporate power and authority (or other appropriate power and authority based on
the structure of such Seller) to own, lease and operate its properties, to carry
on its business in the places where such properties are now owned, leased, or
operated and such business is now conducted, and to execute, deliver and perform
this Agreement and the documents contemplated hereby according to their
respective terms. Each Seller is duly qualified and in good standing in each
jurisdiction listed on Schedule 3.1 next to each such Seller's name, which are
all jurisdictions in which such qualification is required. Except as set forth
on Schedule 3.1, no Seller is a participant in any joint venture or partnership
with any other Person with respect to any part of the operations of the Stations
or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by each Seller have been duly authorized by all
necessary corporate or other required action on the part of each Seller. This
Agreement has been duly executed and delivered by each Seller and constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. Subject to obtaining the
Consents listed on Schedules 3.3 and 3.7, the execution, delivery and
performance by each Seller of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a)
do not require the consent of any third party; (b) will not conflict with any
provision of the Articles of Incorporation, Bylaws or other organizational
documents of Sellers; (c) will not conflict with, result in a breach of, or
constitute a default under any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (d) will not conflict with, constitute grounds for termination
of, result in a breach of, constitute a default under, or accelerate or permit
the acceleration of any performance required by the terms of, any material
agreement, instrument, license, or permit to which any Seller is a party or by
which any Seller may be bound legally; and (e) will not create any claim,
liability, mortgage, lien, pledge, condition, charge, or encumbrance of any
nature whatsoever upon any of the Assets. Except for the FCC Consent provided
for in Section 6.1, the filings required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ provided for in
Section 6.2 and the other Consents described in Schedules 3.3 and 3.7, no
consent, approval, permit, or authorization of, or declaration to, or filing
with any governmental or regulatory authority or any other third party is
required (a) to consummate this Agreement and the transactions contemplated
hereby, or (b) to permit Sellers to transfer and convey the Assets to Buyer.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete list of the
FCC Licenses. Sellers have made available to Buyer true and complete copies of
the main Licenses (including any amendments and other modifications thereto).
The Licenses have been validly issued, and each Seller is the authorized legal
holder of the Licenses and those FCC Licenses listed on Schedule 3.4. The
Licenses and the FCC Licenses listed on Schedule 3.4 comprise all
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of the material licenses, permits, and other authorizations required from any
governmental or regulatory authority for the lawful conduct in all material
respects of the business and operations of the Stations in the manner and to the
full extent they are now conducted, and, except as otherwise disclosed on
Schedule 3.4, none of the Licenses is subject to any unusual or special
restriction or condition that could reasonably be expected to limit materially
the full operation of the Stations as now operated. The FCC Licenses are in full
force and effect, are valid for the balance of the current license term
applicable generally to radio stations licensed to the same communities as the
Stations, are unimpaired by any acts or omissions of any Seller or any of its
Affiliates, or the employees, agents, officers, directors, or shareholder of any
Seller or any of its Affiliates, and are free and clear of any restrictions
which might limit the full operation of the Stations in the manner and to the
full extent as they are now operated (other than restrictions under the terms of
the licenses themselves or applicable to the radio broadcast industry
generally). Except as listed on Schedule 3.4 hereto, there are no applications,
proceedings or complaints pending or, to the knowledge of any Seller, threatened
which may have an adverse effect on the business or operation of the Stations
(other than rulemaking proceedings that apply to the radio broadcasting industry
generally). Except as disclosed on Schedule 3.4 hereto, no Seller is aware of
any reason why any of the FCC Licenses might not be renewed in the ordinary
course for a full term without material qualifications or of any reason why any
of the FCC Licenses might be revoked. The Stations are in compliance with the
Commission's policy on exposure to radio frequency radiation. No renewal of any
FCC License would constitute a major environmental action under the rules of the
Commission. To the knowledge of Sellers, there are no facts relating to Sellers
which, under the Communications Act of 1934, as amended, or the existing rules
of the Commission, would (a) disqualify any Seller from assigning any of its FCC
Licenses to Buyer, (b) cause the filing of any objection to the assignment of
the FCC Licenses to Buyer, (c) lead to a delay in the processing by the FCC of
the applications of the FCC Licenses to Buyer, (d) lead to a delay in the
termination of the waiting period required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, or (e)
disqualify any Seller from consummating the transactions contemplated herein
within the times contemplated herein. An appropriate public inspection file for
each Station is maintained at the Station's studio in accordance with Commission
rules. Access to the Stations' transmission facilities are restricted in
accordance with the policies of the Commission.
3.5 Real Property. Schedule 3.5 contains a complete description of all Real
Property Interests (including street address, owner, and Sellers' use thereof)
other than the Excluded Real Property Interests. The Real Property Interests
listed on Schedule 3.5, together with the Real Property Interests which will be
created by the execution of the Lease by Buyer and the appropriate Sellers,
comprises all interests in real property necessary to conduct the business and
operations of the Stations as now conducted. Except as described on Schedule
3.5, Sellers have good fee simple title to all fee estates included in the Real
Property Interests and good title to all other Real Property Interests, in each
case free and clear of all liens, mortgages, pledges, covenants, easements,
restrictions, encroachments, leases, charges, and other claims and encumbrances,
except for Permitted Encumbrances. Each leasehold or subleasehold interest
included as a Material Contract on Schedule 3.5 is legal, valid, binding,
enforceable and in full force and effect. To Sellers' Knowledge, each leasehold
or subleasehold designated in the Real Property Interests, but not designated as
Material Contracts on Schedule 3.5 is legal, binding and enforceable and in full
force and effect. Neither the Seller party thereto or to Sellers' Knowledge any
other party thereto, is in default, violation or breach under any lease or
sublease and no event has occurred and is continuing that constitutes (with
notice or passage of time or both) a default,
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violation or breach thereunder. Sellers have not received any notice of a
default, offset or counterclaim under any lease or sublease with respect to any
of the Real Property Interests. As of the date hereof and as of the applicable
Closing Date, Sellers enjoy peaceful and undisturbed possession of the leased
Real Property Interests; and so long as Sellers fulfill their obligations under
the lease therefor, Sellers have enforceable rights to nondisturbance and quiet
enjoyment against its lessor or sublessor, and, to the Knowledge of Sellers,
except as set forth in Schedule 3.5, no third party holds any interest in the
leased premises with the right to foreclose upon Sellers' leasehold or
subleasehold interest. Sellers have legal and practical access to all of the
Owned Real Property and Leased Real Property, as applicable. Except as otherwise
disclosed in Schedule 3.5, all towers, guy anchors, ground radials, and
buildings and other improvements included in the Assets are located entirely on
the Owned Real Property or the Leased Real Property, as applicable, listed in
Schedule 3.5. All Owned Real Property and Leased Real Property (including the
improvements thereon) (a) is in good condition and repair consistent with its
current use, (b) is available for immediate use in the conduct of the business
and operations of the Stations, and (c) complies in all material respects with
all applicable material building or zoning codes and the regulations of any
governmental authority having jurisdiction, except to the extent that the
current use by Sellers, while permitted, constitutes or would constitute a
"nonconforming use" under current zoning or land use regulations. No eminent
domain or condemnation proceedings are pending or, to the knowledge of Sellers,
threatened with respect to any Real Property Interests.
3.6 Tangible Personal Property. The lists of Tangible Personal Property
comprising all material items of tangible personal property, other than the
Excluded Tangible Personal Property, necessary to conduct the business and
operations of the Stations as now conducted has been provided to Buyer
previously. Except as described in Schedule 3.6, Sellers own and have good title
to each item of Tangible Personal Property and none of the Tangible Personal
Property owned by Sellers is subject to any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for Permitted
Encumbrances. With allowance for normal repairs, maintenance, wear and
obsolescence, each material item of Tangible Personal Property is in good
operation condition and repair and is available for immediate use in the
business and operations of the Stations. All material items of transmitting and
studio equipment included in the Tangible Personal Property (a) have been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (b) will permit the Stations and any unit auxiliaries
thereto to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC and in all material respects with all other
applicable federal, state and local statutes, ordinances, rules and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all Contracts which
either (a) have a remaining term (after taking into account any cancellation
rights of Sellers) of more than one year after the date hereof or (b) require
expenditures in excess of Twenty Five Thousand Dollars ($25,000) in any calendar
year after the date hereof, except contracts with advertisers for production or
the sale of advertising time on the Stations for cash that may be canceled by
Sellers without penalty on not more than ninety days' notice. Sellers have
delivered or made available to Buyer true and complete copies of all written
Assumed Contracts, and true and complete descriptions of all oral Assumed
Contracts (including any amendments and other modifications to such Contracts).
Other than the Contracts listed on Schedule 3.7, Schedule 3.5, and the Lease,
Sellers require no material contract, lease, or other agreement to enable them
to
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carry on their business in all material respects as now conducted. All of the
Contracts are in full force and effect and are valid, binding and enforceable in
accordance with their terms except as the enforceability of such Contracts may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and by judicial discretion in the enforcement of equitable
remedies. Neither the Seller party thereto or, to the knowledge of Sellers, any
other party thereto, is in default, violation or breach in any material respect
under any Contract and no event has occurred and is continuing that constitutes
(with notice or passage of time or both) a default, violation, or breach in any
material respect thereunder. Except as disclosed on Schedule 3.7, other than in
the ordinary course of business, Sellers do not have Knowledge of any intention
by any party to any Contract (a) to terminate such Contract or amend the terms
thereof, (b) to refuse to renew the Contract upon expiration of its term, or (c)
to renew the Contract upon expiration only on terms and conditions that are more
onerous than those now existing. Except for the need to obtain the Consents
listed on Schedule 3.7, the exchange and transfer of the Assets in accordance
with this Agreement will not affect the validity, enforceability, or
continuation of any of the Contracts.
3.8 Intangibles. Schedule 3.8 is a true and complete list of all Intangibles
(exclusive of Licenses listed in Schedule 3.4) that are required to conduct the
business and operations of the Stations as now conducted, all of which are valid
and in good standing and uncontested. Sellers have provided or made available to
Buyer copies of all documents establishing or evidencing the Intangibles listed
on Schedule 3.8. Sellers own or have a valid license to use all of the
Intangibles listed on Schedule 3.8. Other than with respect to matters generally
affecting the radio broadcasting industry and not particular to Sellers and
except as set forth on Schedule 3.8, Sellers have not received any notice or
demand alleging that Sellers are infringing upon or otherwise acting adversely
to any trademarks, trade names, service marks, service names, copyrights,
patents, patent applications, know-how, methods, or processes owned by any other
Person, and there is no claim or action pending, or to the Knowledge of Sellers
threatened, with respect thereto. To the knowledge of Sellers, except as set
forth on Schedule 3.8, no other Person is infringing upon Sellers rights or
ownership interest in the Intangibles.
3.9 Title to Properties. Except as disclosed in Schedule 3.5 or 3.6, Sellers
have good and marketable title to the Assets subject to no mortgages, pledges,
liens, security interests, encumbrances, or other charges or rights of others of
any kind or nature except for Permitted Encumbrances.
3.10 Financial Statements. Sellers have furnished Buyer with true and complete
copies of unaudited financial statements of the Stations containing a balance
sheet and statement of income, as at and for the fiscal year ended December 31,
1998, and an unaudited balance sheet and statement of income as at and for the
seven (7) months ended July 31, 1999 (the "BALANCE SHEET Date") (collectively,
the "FINANCIAL STATEMENTS"). To the extent the Financial Statements relate to
the period of time during which the Stations were owned by the Sellers (or any
Affiliate thereof) the Financial Statements have been prepared from the books
and records of Sellers and have been prepared in a manner consistent with the
audited Financial Statements of ▇▇▇▇▇▇▇▇, except for the absence of footnotes
and certain year-end adjustments. The Financial Statements accurately reflect
the books, records and accounts of Sellers, present fairly and accurately the
financial condition of the Stations as at their respective dates and the results
of operations for the
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periods then ended and none of the Financial Statements understates in any
material respect the normal and customary costs and expenses of conducting the
business or operations of the Stations in any material respect as currently
conducted by Sellers or otherwise materially inaccurately reflects the
operations of the Stations; provided, that the foregoing representations are
given only to the Sellers' Knowledge to the extent the Financial Statements
relate to a period of time during which the Stations were not owned by Sellers
(or an Affiliate thereof).
3.11 Taxes. Except as set forth in Schedule 3.11, Sellers have filed or caused
to be filed all Tax Returns that are required to be filed with respect to their
ownership and operation of the Stations, and have paid or caused to be paid all
Taxes shown on those returns or on any Tax assessment received by them to the
extent that such Taxes have become due, or have set aside on their books
adequate reserves (segregated to the extent required by generally accepted
accounting principles) with respect thereto. There are no legal, administrative,
or other Tax proceedings presently pending, and there are no grounds existing
pursuant to which Sellers are or could be made liable for any Taxes, the
liability for which could extend to Buyer as transferee of the business of the
Stations.
3.12 Insurance. Schedule 3.12 is a true and complete list of all insurance
policies of or covering Sellers. All policies of insurance listed in Schedule
3.12 are in full force and effect as of the date hereof. During the past three
years, no insurance policy of Sellers or the Stations has been canceled by the
insurer and, except as set forth on Schedule 3.12, no application of Sellers for
insurance has been rejected by any insurer.
3.13 Reports. All material returns, reports and statements that the Stations is
currently required to file with the FCC or Federal Aviation Administration have
been filed, and all reporting requirements of the FCC and Federal Aviation
Administration have been complied with in all material respects. All of such
returns, reports and statements, as filed, satisfy all applicable legal
requirements.
3.14 Personnel and Employee Benefits.
(a) Employees and Compensation. Schedule 3.14 contains a true and complete
list of all employees of Sellers employed at the Stations as of June 30, 1999
who earned in excess of $20,000 in 1998 or whose present rate of pay would cause
them to earn more than that amount in 1999, and indicates the salary and bonus,
if any, to which each such Employee is currently entitled (limited in the case
of Employees who are compensated on a commission basis to a general description
of the manner in which such commissions are determined). As of the date of this
Agreement, Sellers have no knowledge that any General Manager, Sales Manager, or
Program Director employed at the Stations currently plans to terminate
employment, whether by reason of the transactions contemplated by this Agreement
or otherwise. Schedule 3.14 also contains a true and complete list of all
employee benefit plans or arrangements covering the employees employed at the
Stations (the "Employees"), including, with respect to the Employees any:
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(i) "Employee welfare benefit plan," as defined in Section 3(1) of
ERISA, that is maintained or administered by Sellers or to which Sellers
contribute or are required to contribute (a "WELFARE PLAN");
(ii) "Multiemployer pension plan," as defined in Section 3(37) of
ERISA, that is maintained or administered by Sellers or to which Sellers
contribute or are required to contribute (a "MULTIEMPLOYER PLAN" and, together
with the Welfare Plans, the "BENEFIT PLANS");
(iii) "Employee pension benefit plan," as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan), to which Sellers contribute or are
required to contribute (a "PENSION PLAN");
(iv) Employee plan that is maintained in connection with any trust
described in Section 501(c)(9) of the Internal Revenue Code of 1986, as amended;
and
(v) Employment, severance, or other similar contract, arrangement,
or policy and each plan or arrangement (written or oral) providing for insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits, or
retirement benefits or arrangement for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases, or other
forms of incentive compensation or post-retirement insurance, compensation, or
benefits that (A) is not a Welfare Plan, Pension Plan, or Multiemployer Plan,
and (B) is entered into, maintained, contributed to, or required to be
contributed to by any Seller or under which any Seller has any liability
relating to Employees, (collectively, "BENEFIT ARRANGEMENTS").
(b) Pension Plans. Sellers do not sponsor, maintain, or contribute to any
Pension Plan other than the ▇▇▇▇▇▇▇▇ Broadcast Group 401(k) Profit Sharing Plan.
Each Pension Plan complies currently and has been maintained in substantial
compliance with its terms and, both as to form and in operation, with all
material requirements prescribed by any and all material statutes, orders, rules
and regulations that are applicable to such plans, including ERISA and the Code,
except where the failure to do so will not have a Material Adverse Effect.
(c) Welfare Plans. Each Welfare Plan complies currently and has been
maintained in substantial compliance with its terms and, both as to form and in
operation, with all material requirements prescribed by any and all material
statutes, orders, rules and regulations that are applicable to such plans,
including ERISA and the Code, except where the failure to do so will not have a
Material Adverse Effect. Sellers do not sponsor, maintain, or contribute to any
Welfare Plan that provides health or death benefits to former employees of the
Stations other than as required by Section 4980B of the Code or other applicable
laws.
(d) Benefit Arrangements. Each Benefit Arrangement has been maintained in
substantial compliance with its terms and with the material requirements
prescribed by all statutes, orders, rules and regulations that are applicable to
such Benefit Arrangement, except where the failure to do so will not have a
Material Adverse Effect. Except for those employment agreements listed on
Schedule 3.7, Sellers have no written contract prohibiting the termination of
any Employee.
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(e) Multiemployer Plans. Except as disclosed in Schedule 3.14, Sellers
have not at any time been a participant in any Multiemployer Plan.
(f) Delivery of Copies of Relevant Documents and Other Information.
Sellers have delivered or made available to Buyer true and complete copies of
each of the following documents:
(i) Each Welfare Plan and Pension Plan (and, if applicable, related
trust agreements) and all amendments thereto, and written descriptions thereof
that have been distributed to Employees, all annuity contracts or other funding
instruments; and
(ii) Each Benefit Arrangement and written descriptions thereof that
have been distributed to Employees and complete descriptions of any Benefit
Arrangement that is not in writing.
(g) Labor Relations. Except as set forth in Schedule 3.14(g), no Seller is
a party to or subject to any collective bargaining agreement or written or oral
employment agreement with any Employee. With respect to the Employees Sellers
have complied in all material respects with all laws, rules and regulations
relating to the employment of labor, including those related to wages, hours,
collective bargaining, occupational safety, discrimination, and the payment of
social security and other payroll related taxes, and have not received any
notice alleging that any Seller has failed to comply materially with any such
laws, rules, or regulations. Except as set forth on Schedule 3.14(g), no
proceedings are pending or, to the Knowledge of Sellers, threatened, between any
Seller and any Employee (singly or collectively) that relate to the Stations.
Except as set forth on Schedule 3.14(g), no labor union or other collective
bargaining unit represents or claims to represent any of the Employees. Except
as set forth in Schedule 3.14, to the Knowledge of Sellers, there is no union
campaign being conducted to solicit cards from any Employees to authorize a
union to represent any of the employees of any Seller or to request a National
Labor Relations Board certification election with respect to any Employees.
3.15 Claims and Legal Actions. Except as disclosed on Schedule 3.15 and except
for any FCC rulemaking proceedings generally affecting the radio broadcasting
industry and not particular to any of Sellers, there is no claim, legal action,
counterclaim, suit, arbitration, or other legal, administrative, or tax
proceeding, nor any order, decree, or judgment, in progress or pending, or to
the Knowledge of Sellers threatened, against or relating to the Assets, or the
business or operations of any of the Stations, nor does any Seller know of any
basis for the same.
3.16 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed on Schedule 3.16, (x) none of the Owned Real
Property and none of the Tangible Personal Property and, to Sellers' Knowledge
(provided such knowledge qualifer shall not apply to the extent caused by the
Tangible Personal Property), none of the Leased Real Property contains (i) any
asbestos, polychlorinated biphenyls or any PCB contaminated oil; (ii) any
Contaminants; or (iii) any underground storage tanks; (y) no underground storage
tank disclosed on Schedule 3.16 has leaked and has not been remediated or leaks
and such tank is in substantial compliance with all applicable Environmental
Laws; and (z) all of the Owned Real
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Property and, to Sellers' Knowledge, all of the Leased Real Property is in
substantial compliance with all applicable Environmental Laws.
(b) Sellers have obtained all material permits, licenses and other
authorizations that are required under all Environmental Laws.
3.17 Compliance with Laws. Sellers have complied in all material respects with
the Licenses and all material federal, state and local laws, rules, regulations
and ordinances applicable or relating to the ownership and operation of the
Assets and Stations, and Sellers have not received any notice of any material
violation of federal, state and local laws, regulations and ordinances
applicable or relating to the ownership or operation of the Assets and the
Stations nor, to Sellers' Knowledge, have Sellers received any notice of any
immaterial violation of federal, state and local laws, regulations, and
ordinances applicable or relating to the ownership or operation of the Assets or
the Stations.
3.18 Conduct of Business in Ordinary Course. Since the Balance Sheet Date and
through the date hereof, Sellers have conducted their business and operations in
the ordinary course and, except as disclosed in Schedule 3.18, have not:
(a) made any material increase in compensation payable or to become
payable to any of its employees other than those in the normal and usual course
of business or in connection with any change in an employee's responsibilities,
or any bonus payment made or promised to any of its Employees, or any material
change in personnel policies, employee benefits, or other compensation
arrangements affecting its employees;
(b) made any sale, assignment, lease, or other transfer of assets other
than in the normal and usual course of business with suitable replacements being
obtained therefor;
(c) canceled any debts owed to or claims held by Sellers, except in the
normal and usual course of business;
(d) made any changes in Sellers' accounting practices;
(e) suffered any material write-down of the value of any Assets or any
material write-off as uncorrectable of any Accounts Receivable; or
(f) transferred or granted any right under, or entered into any settlement
regarding the breach or infringement of, any license, patent, copyright,
trademark, trade name, franchise, or similar right, or modified any existing
right.
3.19 Transactions with Affiliates. Except as disclosed in Schedule 3.19 or with
respect to the Excluded Real Property Interests and the Excluded Tangible
Personal Property, no Seller has been involved in any business arrangement or
relationship with any Affiliate of Seller, and no Affiliate of any Seller owns
any property or right, tangible or intangible, that is material to the
operations of the business of the Stations.
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3.20 Broker. Except as disclosed on Schedule 3.20, no Seller nor any Person
acting on its behalf has incurred any liability for any finders' or brokers'
fees or commissions in connection with the transactions contemplated by this
Agreement, and Buyer shall have no liability for any finders' or brokers' fees
or commissions in connection with the transactions contemplated by this
Agreement for any broker listed on Schedule 3.20.
3.21 Insolvency Proceedings. None of the Sellers nor any of the Assets are the
subject of any pending or threatened insolvency proceedings of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary. No Seller
has made an assignment for the benefit of creditors or taken any action in
contemplation of or which would constitute a valid basis for the institution of
any such insolvency proceedings. No Seller is insolvent nor will it become
insolvent as a result of entering into or performing this Agreement.
3.22 Year 2000 Compatibility. Sellers believe that the Stations' hardware,
software, broadcast and ancillary equipment (the "Operational Equipment") that
are date dependent and are material to the operation of the Stations are year
2000 compliant. To Sellers' Knowledge, there are no facts or circumstances that
would result in material costs or disruption to the operation of the Stations
due to the failure of Sellers' customers or suppliers to be year 2000 compliant.
For the purposes of this section, "Year 2000 Compliant" shall mean that the
Operational Equipment will correctly process, provide and receive date data
before, during and after December 31, 1999.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as of the date hereof and as of the
Closing Date (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date and time) as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has the requisite corporate power and authority to execute,
deliver and perform this Agreement and the documents contemplated hereby
according to their respective terms and to own the Assets. Prior to the Closing
Date, Buyer will be qualified to do business in each of the States in which any
of the Stations are located.
4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by Buyer have been duly authorized by all
necessary action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Subject to the
receipt of the Consents, the execution, delivery and performance by Buyer of
this Agreement and the documents contemplated hereby (with or without the giving
of notice, the lapse of time, or both):
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(a) do not require the consent of any third party; (b) will not conflict with
the Articles of Incorporation or Bylaws of Buyer; (c) will not conflict with,
result in a breach of, or constitute a default under, any applicable law,
judgment, order, ordinance, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; and (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license or permit to which
Buyer is a party or by which Buyer may be bound. Except for the FCC Consent
provided for in Section 6.1. the filings required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ provided
for in Section 6.2 and the other Consents described in Schedule 4.3, no consent,
approval, permit, or authorization of, or declaration to, or filing with any
governmental or regulatory authority or any other third party is required (a) to
consummate this Agreement and the transactions contemplated hereby, or (b) to
permit Buyer to acquire the Assets from Sellers or to assume certain liabilities
and obligations of Sellers in accordance with Section 2.5.
4.4 Brokers. Neither Buyer nor any person or entity acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Availability of Funds. Buyer will have available on the Closing Date
sufficient funds to enable it to consummate the transactions contemplated
hereby.
4.6 Qualifications of Buyer. Except as disclosed in Schedule 4.6, Buyer is, and
pending Closing will remain legally, financially and otherwise qualified under
the Communications Act, ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ and all rules, regulations and
policies of the FCC, the Department of Justice, the Federal Trade Commission
(the "FTC") and any other governmental agency, to acquire and operate the
Stations. Except as disclosed in Schedule 4.6, there are no facts or proceedings
which would reasonably be expected to disqualify Buyer under the Communications
Act or ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ or otherwise from acquiring or operating the Stations
or would cause the FCC not to approve the assignment of the FCC Licenses to
Buyer or the Department of Justice and the FTC not to allow the waiting period
under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ to terminate within 30 days of the filing provided for
in Section 6.2. Except as disclosed in Schedule 4.6, Buyer has no knowledge of
any fact or circumstance relating to Buyer or any of Buyer's Affiliates that
would reasonably be expected to (a) cause the filing of any objection to the
assignment of the FCC Licenses to Buyer, (b) lead to a delay in the processing
by the FCC of the applications for such assignment or (c) lead to a delay in the
termination of the waiting period required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Except as
disclosed in Schedule 4.6, no waiver of any FCC rule or policy is necessary to
be obtained for the grant of the applications for the assignment of the FCC
Licenses to Buyer, nor will processing pursuant to any exception or rule of
general applicability be requested or required in connection with the
consummation of the transactions herein.
4.7 WARN Act. Buyer is not planning or contemplating, and has not made or taken
any decisions or actions concerning the employees of the Stations after the
Closing Date that would require the service of notice under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, or any similar
state law.
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4.8 Buyer's Defined Contribution Plan. Schedule 4.8 completely and accurately
lists all Buyer's defined contribution plan or plans (the "Buyer's Plan")
intended to be qualified under Section 401(a) and 401(k) of the Code in which
the Transferred Employees will be eligible to participate. Buyer has a currently
applicable determination letter from the Internal Revenue Service.
SECTION 5: OPERATION OF THE STATIONS PRIOR TO CLOSING
Sellers covenant and agree that between the date hereof and the Closing Date,
Sellers will operate the Stations in the ordinary course in accordance with
Sellers' past practices (except where such conduct would conflict with the
following covenants or with other obligations of Sellers under this Agreement),
and, except as contemplated by this Agreement or with the prior written consent
of Buyer (such consent not to be unreasonably withheld), Sellers will act in
accordance with the following insofar as such actions relate to the Stations:
5.1 Contracts. Seller will not renew, extend, amend or terminate, or waive any
material right under, any Material Contract, or enter into any contract or
commitment or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract, regardless of whether such Contract
is a Material Contract) that will be assumed by or be otherwise binding on Buyer
after Closing, except for (a) cash time sales agreements and production
agreements made in the ordinary course of business consistent with Seller's past
practices, (b) the renewal or extension of any existing Contract (other than
network affiliation agreements) on its existing terms in the ordinary course of
business, and (c) other contracts (other than network affiliation agreements, or
time brokerage or local marketing arrangements) entered into in the ordinary
course of business consistent with Sellers' past practices that do not involve
consideration, in the aggregate, in excess of Fifty Thousand Dollars ($50,000)
measured at Closing. Prior to the Closing Date, Sellers shall deliver to Buyer a
list of all material Contracts entered into between the date of this Agreement
and the Closing Date and shall make available to Buyer copies of such Contracts.
5.2 Compensation. Sellers shall not materially increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices, as required by an employment agreement
or consulting agreement or in connection and commensurate with the change in
responsibility of any employee.
5.3 Encumbrances. Sellers will not create, assume, or permit to exist any
mortgage, pledge, lien, or other charge or encumbrance affecting any of the
Assets, except for (a) liens disclosed in Schedule 5.3, (b) liens that will be
removed prior to the Closing Date, and (c) Permitted Encumbrances.
5.4 Dispositions. Sellers will not sell, assign, lease, or otherwise transfer or
dispose of any of the Assets except (a) Assets that are no longer used in the
operations of the Stations, (b) Assets that are replaced with Assets of
equivalent kind and value that are acquired after the date of this Agreement,
and (c) any intercompany accounts receivable.
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5.5 Access to Information. Upon prior reasonable notice by Buyer, Sellers will
give to Buyer and its investors, lenders, counsel, accountants, engineers and
other authorized representatives reasonable access to the Stations and all
books, records and documents of Sellers which are material to the business and
operation of the Stations, and will furnish or cause to be furnished to Buyer
and its authorized representatives all information relating to Sellers and the
Stations that they reasonably request (including any financial reports and
operations reports produced with respect to the Stations).
5.6 Insurance. Sellers or their Affiliates shall maintain in full force and
effect policies of insurance of the same type, character and coverage as the
policies currently carried with respect to the business, operations and assets
of the Stations.
5.7 Licenses. Sellers shall not cause or permit, by any act or failure to act,
any of the Licenses listed on Schedule 3.4 to expire or to be revoked, suspended
or modified, or take any action that could reasonably be expected to cause the
FCC or any other governmental authority to institute proceedings for the
suspension, revocation or material adverse modification of any of the Licenses.
Sellers shall prosecute with due diligence any applications to any governmental
authority necessary for the operation of the Stations.
5.8 Obligations. Sellers shall pay all its obligations insofar as they relate to
the Stations as they become due, consistent with past practices.
5.9 No Inconsistent Action. Sellers shall not take any action that is
inconsistent with its obligations under this Agreement in any material respect
or that could reasonably be expected to hinder or delay the consummation of the
transactions contemplated by this Agreement. Neither Seller nor any of its
respective representatives or agents shall, directly or indirectly, solicit,
initiate, or participate in any way in discussions or negotiations with, or
provide any confidential information to, any Person (other than Buyer or any
Affiliate or associate of Buyer and their respective representatives and agents)
concerning any possible disposition of the Stations, the sale of any material
assets of the Stations, or any similar transaction.
5.10 Maintenance of Assets. Sellers shall maintain all of the Assets in good
condition (ordinary wear, tear and casualty excepted), consistent with their
overall condition on the date of this Agreement, and use, operate and maintain
all of the Assets in a reasonable manner. Sellers shall maintain inventories of
spare parts and expendable supplies at levels consistent with past practices. If
any insured or indemnified loss, damage, impairment, confiscation, or
condemnation of or to any of the Assets occurs, Sellers shall repair, replace,
or restore the Assets to their prior condition as represented in this Agreement
as soon thereafter as possible, and Sellers shall use the proceeds of any claim
under any property damage insurance policy or other recovery solely to repair,
replace, or restore any of the Assets that are lost, damaged, impaired, or
destroyed.
5.11 Consents.
(a) Subject to Section 6.5 hereof, Sellers shall use their reasonable
efforts to obtain all Consents described in Section 3.3, without any adverse
change in the terms or conditions of
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any Assumed Contract or License. Sellers shall promptly advise Buyer of any
difficulties experienced in obtaining any of the Consents and of any conditions
proposed, considered or requested for any of the Consents.
(b) Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign or transfer any Contract
or any claim, right or benefit arising thereunder or resulting therefrom, if an
attempted assignment or transfer thereof, without the consent of a third party
thereto would constitute a breach thereof or in any way adversely affect the
rights of the Buyer thereunder. If such consent (a "Deferred Consent") is not
obtained, or if an attempted assignment or transfer thereof would be ineffective
or would affect the rights thereunder so that the Buyer would not receive all
such rights, then (i) the Seller and the Buyer will cooperate, in all reasonable
respects, to obtain such Deferred Consents as soon as practicable; provided that
Sellers shall have no obligation (y) to expend funds to obtain any Deferred
Consent, other than ministerial processing fees, and Sellers' out-of-pocket
expenses to its attorney or other agents incurred in connection with obtaining
any Deferred Consent, or (z) to agree to any adverse change in any License or
Assumed Contract in order to obtain a Deferred Consent, and (ii) until such
Deferred Consent is obtained, the Seller and the Buyer will cooperate in all
reasonable respects, to provide to the Buyer the benefits under the Contract, to
which such Deferred Consent relates (with the Buyer responsible for all the
liabilities and obligations thereunder). In particular, in the event that any
such Deferred Consent is not obtained prior to Closing, then the Buyer and the
Seller shall enter into such arrangements (including subleasing or
subcontracting if permitted) to provide to the parties the economic and
operational equivalent of obtaining such Deferred Consent and assigning or
transferring such Contract, including enforcement for the benefit of the Buyer
of all claims or rights arising thereunder, and the performance by the Buyer of
the obligations thereunder on a prompt and punctual basis.
5.12 Books and Records. Sellers shall maintain their books and records in
accordance with past practices.
5.13 Notification. Sellers shall promptly notify Buyer in writing of any or
material developments with respect to the business or operations of the Stations
and of any material change in any of the information contained in the
representations and warranties contained in Section 3 of this Agreement.
5.14 Financial Information. Sellers shall furnish Buyer with sales pacing
reports for the Stations on a weekly basis and shall furnish to Buyer within
thirty (30) days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense for the month
just ended and such other financial information (including information on
payables and receivables) as Buyer may reasonably request. All financial
information delivered by Sellers to Buyer pursuant to this Section 5.14 shall be
prepared from the books and records of Sellers in accordance with generally
accepted accounting principles, consistently applied, shall accurately reflect
the books, records and accounts of the Stations, shall be complete and correct
in all material respects, and shall present fairly the financial condition of
the Stations as at their respective dates and the results of operations for the
periods then ended.
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5.15 Compliance with Laws. Sellers shall comply in all material respects with
all material laws, rules and regulations.
5.16 Programming. Sellers shall not make any material changes in the Stations'
formats, except such changes as in the good faith judgment of Seller are
required by the public interest.
5.17 Preservation of Business. Sellers shall use commercially reasonable efforts
consistent with past practices to preserve the business and organization of the
Stations and to keep available to the Stations its present employees and to
preserve the audience of the Stations and the Stations' present relationships
with suppliers, advertisers, and others having business relations with it.
5.18 Normal Operations. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 5.1), prior to the Closing, Sellers
shall carry on the business and activities of the Stations, including, without
limitation, promotional activities, the sale of advertising time, entering into
other contracts and agreements, purchasing and scheduling programming,
performing research, and operating in all material respects in accordance with
existing budgets and past practice and will not enter into trade and barter
obligations except in the ordinary course of business consistent with past
practice.
5.19 Reserved
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent
(a) The exchange and transfer of the Assets as contemplated by this
Agreement is subject to the prior consent and approval of the FCC.
(b) Sellers and Buyer shall prepare and within seven (7) business days
after the date of this Agreement shall file with the FCC an appropriate
application for FCC Consent. The parties shall thereafter prosecute the
application with all reasonable diligence and otherwise use their respective
best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by the
FCC Consent, except that no party shall be required to comply with a condition
if (i) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by that party of any of its
representations, warranties or covenants hereunder, and (ii) compliance with the
condition would have a material adverse effect upon it. Buyer and Sellers shall
oppose any petitions to deny or other objections filed with respect to the
application for the FCC Consent and any requests for reconsideration or judicial
review of the FCC Consent.
(c) If the Closing shall not have occurred for any reason within the
original effective period of the FCC Consent, and neither party shall have
terminated this Agreement under Section 9, the parties shall jointly request an
extension of the effective period of the FCC Consent, as the case may be. No
extension of the effective period of the FCC Consent shall limit the exercise by
either party of its right to terminate the Agreement under Section 9.
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6.2 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Within ten (10) days following the execution of this
Agreement, Sellers and Buyer shall complete any filing that may be required
pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HRS Filing"). Sellers and Buyer shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
comply with, the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
6.3 Risk of Loss. The risk of any loss, damage, impairment, confiscation, or
condemnation of any of the Assets of Sellers for any cause whatsoever shall be
borne by Sellers at all times prior to the Closing. In the event of loss or
damage prior to the Closing Date, Sellers shall use commercially reasonable
efforts to fix, restore, or replace such loss, damage, impairment, confiscation,
or condemnation to its former operational condition. If Sellers have adequate
replacement cost insurance, Buyer may elect to have Sellers assign such
insurance proceeds to Buyer, in which case, Buyer shall proceed with the Closing
, and receive at the Closing the insurance proceeds or an assignment of the
right to receive such insurance proceeds, as applicable, to which Sellers
otherwise would be entitled, whereupon Sellers shall have no further liability
to Buyer for such loss or damage.
6.4 Confidentiality. Except as necessary for the consummation of the transaction
contemplated by this Agreement, including Buyer's obtaining of financing related
hereto, and except as and to the extent required by law, each party will keep
confidential any information obtained from the other party in connection with
the transactions specifically contemplated by this Agreement. If this Agreement
is terminated, each party will return to the other party all information
obtained by the such party from the other party in connection with the
transactions contemplated by this Agreement. Buyer shall continue to be bound by
the terms and conditions of the Confidentiality Agreement dated June 30, 1999
between the parties hereto (the "CONFIDENTIALITY AGREEMENT").
6.5 Cooperation. Buyer and Sellers shall reasonably cooperate with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and in connection with any litigation after the Closing Date which
relate to the Stations for periods prior to the applicable Effective Time, Buyer
and Sellers shall execute such other documents as may be reasonably necessary
and desirable to the implementation and consummation of this Agreement, and
otherwise use their commercially reasonable efforts to consummate the
transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Sellers shall have no obligation (a)
to expend funds to obtain any of the Consents, other than ministerial processing
fees, and Sellers' out-of-pocket expenses to its attorney or other agents
incurred in connection with obtaining such consents, or (b) to agree to any
adverse change in any License or Assumed Contract in order to obtain a Consent
required with respect thereto.
6.6 Control of the Stations. Prior to the Closing, Buyer shall not, directly or
indirectly, control, supervise or direct, or attempt to control, supervise or
direct, the operations of the Stations; those operations, including complete
control and supervision of all of each Stations' programs, employees and
policies, shall be the sole responsibility of Seller.
6.7 Accounts Receivable.
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(a) As soon as practicable after the Closing Date, Sellers shall deliver
to Buyer a complete and detailed list of all the Accounts Receivable for the
Stations. During the period beginning on the Closing Date and ending on the last
day of the sixth full calendar month beginning after the Closing Date (the
"COLLECTION PERIOD"), Buyer shall use commercially reasonable efforts, as
Sellers' agent, to collect the Accounts Receivable in the usual and ordinary
course of business, using the Stations' credit, sales and other appropriate
personnel in accordance with customary practices, which may include referral to
a collection agency. Notwithstanding the foregoing, Buyer shall not be required
to institute legal proceedings on Sellers' behalf to enforce the collection of
any Accounts Receivable. Buyer shall not adjust any Accounts Receivable or grant
credit without Sellers' written consent, and Buyer shall not pledge, secure or
otherwise encumber such Accounts Receivable or the proceeds therefrom. On or
before the twelfth business day after the end of each calendar month during the
Collection Period, Buyer shall remit to Sellers collections received by Buyer
with respect to the Accounts Receivable, together with a report of all amounts
collected with respect to the Accounts Receivable during, as the case may be,
the period from the Closing or the beginning of such month through the end of
such month, less any sales commissions or collection costs paid by Buyer during
the respective periods with respect to those Accounts Receivable.
(b) Any payments received by Buyer during the Collection Period from any
Person that is an account debtor with respect to any account disclosed in the
list of Accounts Receivable delivered by Sellers to Buyer shall be applied first
to the invoice designated by the account debtor and, if none, such payment shall
be applied to the oldest account which is not disputed. Buyer shall incur no
liability to Sellers for any uncollected account, other than as a result of
Buyer's breach of its obligations under this Section 6.7. Prior to the end of
the third full calendar month after the Closing, neither Sellers nor any agent
of Sellers shall make any direct solicitation of the account debtors for
payment. After the end of the third full calendar month after the Closing,
Sellers shall have the right, at their expense, to assist and participate with
Buyer in the collection of unpaid Accounts Receivable, provided, however,
Seller's collection efforts shall be commercially reasonable and consistent with
its past practices.
(c) At the end of the Collection Period, Buyer shall return to Sellers all
files concerning the collection or attempts to collect the Accounts Receivable,
and Buyer's responsibility for the collection of the Accounts Receivable shall
cease.
6.8 Allocation of Purchase Price. Buyer and Sellers agree that the fair market
value of the Assets of the Stations (the "Fair Market Value of the Assets") will
be appraised by the appraisal firm of BIA, whose expenses will be borne one-half
(1/2) by Buyer and one-half (1/2) by Sellers. Buyer and Sellers shall
collaborate in good faith in the preparation of mutually satisfactory Form(s)
8594 (and Form 8824 to the extent applicable) reflecting the Fair Market Value
of the Assets as found by BIA and such other information as is required by the
form. Buyer and Sellers shall each file with their respective federal income tax
return for the tax year in which the Closing occurs, IRS Form(s) 8594 (and Form
8824 to the extent applicable) containing the information agreed upon by the
parties pursuant to the immediately preceding sentence. Buyer agrees to report
the purchase of the Assets of the Stations, and Sellers agree to report the sale
of such assets for income tax purposes on their respective income tax returns in
a manner consistent
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with the information agreed upon by the parties pursuant to this section and
contained in the IRS Form(s) 8594 (and Form 8824 to the extent applicable).
6.9 Access to Books and Records. To the extent reasonably requested by Buyer,
Sellers shall provide Buyer access and the right to copy from and after any
Closing Date any books and records relating to the Assets but not included in
the Assets. To the extent reasonably requested by Sellers, Buyer shall provide
Sellers access and the right to copy from and after the applicable Closing Date
any books and records relating to the Assets that are included in the Assets.
Buyer and Sellers shall each retain any such books and records, for a period of
three years (or such longer period as may be required by law or good business
practice) following the Final Closing Date. Subject to and in accordance with
the terms of this Section 6.9, Sellers shall cause its accountants regularly
servicing Sellers to conduct audits and reviews of Sellers' financial
information as Buyer may reasonably determine is necessary to satisfy Buyer's
due diligence, including, without limitation, (a) causing Sellers' auditors to
permit Buyer's auditors to have access to Sellers' auditor's work papers, and
(b) causing Sellers' auditors to consent to such access by Buyer. Under no
circumstance shall the preparation of any financial statements pursuant to such
audits and reviews (i) require any Seller to change or modify any accounting
policy, (ii) cause any unreasonable disruption in the business or operations of
any Station, or (iii) cause any delay that is more than de minimis in any
internal reporting requirements of any Seller. All costs and expenses incurred
in connection with the preparation of (and assimilation of relevant information
for) the audits and reviews of financial information shall be paid by Sellers;
provided, Buyer shall promptly pay upon presentation of any invoice, as a
non-refundable prepayment of the Purchase Price, for all charges incurred in
connection with such audit to the extent relating to work performed on or after
July 26, 1999 (such charges, the "Section 6.9 Amount") (it being understood that
the hourly charges of Sellers' accountants for the period of time for which
Buyer is responsible may be greater than the hourly charges incurred by
Sellers). In addition, Buyer shall be responsible for any costs and expenses (a)
associated with the inclusion of such audited financial statements in Buyer's
publicly filed documents, including, without limitation, any fees for consents
to such inclusion and a "comfort letter," and (b) incurred in connection with
any review of financial statements for the periods ended June 30, 1998 or June
30, 1999, or for any other periods other than the financial statements for
calendar year 1998.
6.10 Employee Matters.
(a) Upon consummation of the Closing, Buyer shall offer employment to each
of the Employees of the Stations (including those on leave of absence, whether
short-term, long-term, family, maternity, disability, paid, unpaid or other, and
those hired after the date hereof in the ordinary course of business) at a
comparable salary, position and place of employment as held by each such
employee immediately prior to the Closing Date (such employees who are given
such offers of employment are referred to herein as the "TRANSFERRED EMPLOYEES")
(b) Except as provided otherwise in this Section 6.10, Sellers shall pay,
discharge and be responsible for (a) all salary and wages arising out of or
relating to the employment of the Employees prior to the Closing Date and (b)
any employee benefits arising under the Benefit Plans or Benefit Arrangements of
Sellers and their Affiliates during the period prior to the
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Closing Date. From and after the Closing Date, Buyer shall pay, discharge and be
responsible for all salary, wages and benefits arising out of or relating to the
employment of the Transferred Employees by Buyer on and after the Closing Date.
Buyer shall be responsible for all severance liabilities, and all COBRA
liabilities for any Transferred Employees of the Stations terminated on or after
the Closing Date, including, without limitation, any related to any deemed
termination by Sellers of the Transferred Employees as a result of the
consummation of the transaction contemplated hereby and any required pursuant to
those retention/severance agreements listed on Schedule 6.10 hereto, but
excluding any severance due as a result of those agreements listed on Schedule
6.10-A.
(c) Buyer shall cause all Transferred Employees as of the Closing Date to
be eligible to participate in its "employee welfare benefit plans" and "employee
pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA,
respectively) of Buyer in which similarly situated employees of Buyer are
generally eligible to participate; provided, however, that all Transferred
Employees and their spouses and dependents shall be eligible for coverage
immediately after the Closing Date (and shall not be excluded from coverage on
account of any pre-existing condition) to the extent provided under such plans
with respect to Transferred Employees.
(d) For purposes of any length of service requirements, waiting period,
vesting periods or differential benefits based on length of service in any such
plan for which a Transferred Employee may be eligible after the Closing, Buyer
shall ensure that, to the extent permitted by law, and except as limited by
Buyer's Employment Termination Severance policy service by such Transferred
Employee with Sellers, any Affiliate of Sellers or any prior owner of the
Stations shall be deemed to have been service with the Buyer. In addition, Buyer
shall ensure that each Transferred Employee receives credit under any welfare
benefit plan of Buyer for any deductibles or co-payments paid by such
Transferred Employee and his or her dependents for the current plan year under a
plan maintained by Sellers or any Affiliate of Sellers to the extent allowable
under any such plan. Buyer shall grant credit to each Transferred Employee for
all sick leave in accordance with the policies of Buyer applicable generally to
its employees after giving effect to service for Sellers, any Affiliate of
Sellers or any prior owner of the Stations, as service for Buyer. To the extent
taken into account in determining prorations pursuant to Section 2.3 hereof,
Buyer shall assume and discharge Sellers' liabilities for the payment of all
unused vacation leave accrued by Transferred Employees as of the Closing Date.
To the extent any claim with respect to such accrued vacation leave is lodged
against Sellers with respect to any Transferred Employee for which Buyer has
received a proration credit, Buyer shall, to the extent of such credit,
indemnify, defend and hold harmless Sellers from and against any and all losses,
directly or indirectly, as a result of, or based upon or arising from the same.
(e) As soon as practicable following the Closing Date, Buyer shall make
available to the Transferred Employees Buyer's 401(k) Plan. To the extent
requested by a Transferred Employee, Sellers shall cause to be transferred to
Buyer's 401(k) Plan, in cash and in kind, all of the individual account balances
of Transferred Employees under the Sellers' Plan, including any outstanding plan
participant loan receivables allocated to such accounts.
(f) Buyer acknowledges and agrees that Buyer's obligations pursuant to
this Section 6.10 are in addition to, and not in limitation of, Buyer's
obligation to assume the employment
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contracts included in the Assumed Contracts. Nothing in this Agreement shall be
construed to provide employees of Sellers with any rights under this Agreement,
and no Person, other than the parties hereto, is or shall be entitled to bring
any action to enforce any provision of this Agreement against any of the parties
hereto, and the covenants and agreements set forth in this Agreement shall be
solely for the benefit of, and shall only be enforceable by, the parties hereto
and their respective successors and assigns as permitted hereunder.
(g) Certain Payments. Subject to the terms of this Section 6.10(g) and
Section 6.10(h), in the event Buyer terminates any of the Transferred Employees
during the six (6) calendar month period after the Closing Date (the
"Reimbursement Period"), which relates to the Station at which such employee is
employed, as applicable, Sellers shall promptly reimburse Buyer for the amount
paid by Buyer to such Terminated Employee pursuant to the terms of the Retention
Agreements listed on Schedules 6.10 (as in effect on the date hereof) (the
"Scheduled Retention Agreements") as follows: (y) the full amount of such
payments in an amount, when aggregated with any payments made by the
Multi-Stations Sellers under 6.10(g) of the Multi-Stations Agreement that does
not exceed $1,000,000 (the "Initial Employee Cap"); and (z) 50% of such payments
above the Initial Employee Cap in an amount, when aggregated with any payments
made by the Multi-Stations Sellers under 6.10(g) of the Multi-Stations Agreement
does not exceed $500,000. The payments made pursuant to this Section 6.10(g)
shall not be counted against the Threshold Amount. In no event shall Sellers be
obligated to reimburse Buyer (i) for any payments made by Buyer pursuant to the
Scheduled Retention Agreements to Transferred Employees terminated after the
expiration of the Reimbursement Period, or (ii) for any amount, when aggregated
with any payments made by the Multi-Stations Sellers under Section 6.10(g) under
the Multi-Stations Agreement in excess of $1,500,000.
(h) Notwithstanding any provisions of Section 6.10(g) of the Asset
Purchase Agreement to the contrary, Sellers shall have no obligation to
reimburse Buyer for any severance amount (whether or not pursuant to the
Scheduled Retention Agreements), which obligations shall be the sole obligation
of Buyer regardless of when such termination occurs paid to (i) any Transferred
Employee who is terminated (a) at the request of a third party who subsequently
enters into a memorandum of understanding, letter of intent, or agreement to
acquire any of the Stations, or (b) as a result of Buyer entering into a
memorandum of understanding, letter of intent, or an agreement to sell, assign,
swap, or otherwise dispose of or convey any Station to a third party, and/or
(ii) the employees listed on Schedule 6.10(h), including, but not limited to,
any employees of the Stations listed thereon.
(i) For twelve (12) calendar months after the Closing Date (a) none of
Sellers or any of their Affiliates shall hire any of the Transferred Employees;
provided that the provisions of this Section 6.10(i)(a) shall not apply to any
Transferred Employee terminated by Buyer; and provided further that this Section
6.10(i)(a) does not apply to any employees (other than the Transferred
Employees) hired by the Seller Entities (as defined below) after the Closing
Date, and (b) other than the Transferred Employees, Buyer shall not hire any
employees of Sellers or any Affiliate or parent of Sellers (the "Seller
Entities") who are employees, as of the Closing Date of any of the television
broadcast stations owned, operated, or programmed by any of the Seller Entities
in any market in which the Stations broadcast ("Sellers' Employees"); provided
that the provisions of this Section 6.10(i)(b) do not apply to Sellers'
Employees whose
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employment is terminated by the Seller Entities; and provided further that the
provisions of this Section 6.10(i)(b) do not apply to any employees (other than
Sellers' Employees) hired by Buyer after the Closing Date.
6.11 Reserved
6.12 Public Announcements. Sellers and Buyer shall consult with each other
before issuing any press releases or otherwise making any public statements with
respect to this Agreement or the transactions contemplated herein and shall not
issue any such press release or make any such public statement without the prior
written consent of the other party, which shall not be unreasonably withheld;
provided, however, that a party may, without the prior written consent of the
other party, issue such press release or make such public statement as may be
required by Law or any listing agreement with a national securities exchange to
which ▇▇▇▇▇▇▇▇ or Buyer is a party if it has used all reasonable efforts to
consult with the other party and to obtain such party's consent but has been
unable to do so in a timely manner.
6.13 Disclosure Schedules. Sellers and Buyer acknowledge and agree that Sellers
shall not be liable for the failure of the Schedules to be accurate as a result
of the operation of the Stations prior to the Closing in accordance with Section
5 of this Agreement. The inclusion of any fact or item on a Schedule referenced
by a particular section in this Agreement shall, should the existence of the
fact or item or its contents be relevant to any other section, be deemed to be
disclosed with respect to such other section whether or not an explicit
cross-reference appears in the Schedules if such relevance is readily apparent
from examination of such Schedules.
6.14 Bulk Sales Law. Buyer hereby waives compliance by Sellers, in connection
with the transactions contemplated hereby, with the provisions of any applicable
bulk transfer laws.
6.15 Environmental Site Assessment.
6.15.1 Within sixty (60) days of the execution of this Agreement, Buyer
may obtain Phase I Environmental Assessments at Buyer's expense for any or all
of the parcels of the Owned or Leased Real Property set forth on Schedule 6.15
(the "Environmental Assessments"). In the event any Environmental Assessment
discloses any conditions contrary to any representations and warranties
(determined without regard to any Knowledge qualifier therein) or any potential
that such conditions may exist, the Buyer may conduct or have conducted at its
expense additional testing to confirm or negate the existence of any such
conditions. If any such Environmental Assessment or additional testing reflects
the existence of any such conditions at any Owned Real Property or, to the
extent caused by any of the Assets, at any of the Leased Real Property, and if,
and only if, the cost of remediation, when aggregated with costs of remediation
as to the Multi-Stations, exceeds One Hundred Thousand Dollars ($100,000.00), in
the aggregate for all parcels of the Real Property to be conveyed by Sellers
hereunder and by the Multi-Stations Sellers pursuant to the Multi-Stations
Agreement, Sellers shall cause the conditions to be remedied as quickly as
possible (and in all events prior to Closing for which such property is used in
the operation of the Stations) such that no conditions contrary to the
representations and warranties (determined with regard to any knowledge
qualifier contained therein) of this Agreement exist; provided, however, that
Sellers shall not be obligated to expend in the aggregate for the Stations and
the Multi-Stations in excess of Three Million Dollars
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($3,000,000.00) to effect such remediation for all Real Property to be conveyed
hereunder and pursuant to the Multi-Stations Agreement. In the event that such
remedial action(s) does cost in the aggregate in excess of Three Million Dollars
($3,000,000.00), Sellers may elect not to take such remedial action. In such
event, Buyer may require Sellers to proceed to the Closing of the Stations, and
at the Closing, the purchase price for any of the Stations acquired at the
Closing shall be reduced by the estimated cost of remediation for that portion
of the Owned Real Property to be acquired at the Closing, not to exceed in the
aggregate for the Closing the Unexpended Remediation Amount. Alternatively,
Buyer may terminate this Agreement, and Sellers shall have no liability to Buyer
as a result of such termination. Such Environmental Assessments shall not
relieve Sellers of any obligation with respect to any representation, warranty,
or covenant of Sellers in this Agreement or waive any condition to Buyer's
obligations under this Agreement. The cost of completing the Environmental
Assessments shall be paid by Buyer.
6.15.2 Nothing in this Section 6.15 shall be deemed to extend the date on
which the Closing would otherwise occur under this Agreement.
6.16 Reserved
6.17 Adverse Developments. Sellers shall promptly notify Buyer of any unusual or
materially adverse developments that occur prior to the Closing with respect to
the Assets or the operation of the Stations; provided, however, that Sellers'
compliance with the disclosure requirements of this Section 6.17 shall not
relieve Sellers of any obligation with respect to any representation, warranty
or covenant of Sellers in this Agreement or relieve Buyer of any obligation or
duty hereunder, waive any condition to Buyer's obligations under this Agreement,
or expand or enhance any right of Buyer hereunder.
6.18 Title Insurance. Within ten (10) days of the date of this Agreement, each
Seller shall deliver to Buyer its current title insurance policies. Sellers
shall cooperate with Buyer in obtaining the commitment of a title insurance
company reasonably satisfactory to Buyer agreeing to issue to Buyer, at standard
rates, ALTA [1992] Form extended coverage title insurance policies, insuring
Buyer's interest in the Real Property (the "Title Commitment"). The costs of the
Title Commitment and the policy to be issued pursuant to the Title Commitment
shall be paid by Buyer.
6.19 Surveys. Within sixty (60) days of the date of this Agreement, each Seller
of Real Property shall deliver to Buyer, at Buyer's expense, surveys of the Real
Property performed by surveyors reasonably acceptable to Buyer sufficient to
remove any "survey exception" from the title insurance policies to be issued
pursuant to the Title Commitments.
6.20 Reserved
6.21 Reserved
6.22 Cooperation on Tax Matters. The parties intend to allow for the election by
Sellers ("Election") to have the sale of all or a portion of the Assets
contemplated by this Agreement
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become part of a "Tax Deferred Exchange" in accordance with the provisions of
Section 1031 of the Internal Revenue Code of 1986 (the "Code"). Buyer covenants
and agrees to participate and fully cooperate with Sellers (and any qualified
intermediary (as that term is defined in the Code) involved in the Tax Deferred
Exchange), in the event of an Election, so long as such participation and
cooperation does not have an adverse effect on Buyer. To the extent that any
provision in this Section 6.22 or in this Agreement shall be found inconsistent
with or in violation of any of the terms of Section 1031 of the Code, such
provision shall be null and void, all other provisions of this Agreement shall
remain in full force and effect, and the parties shall endeavor to agree upon
alternative provisions that affect a "Tax Deferred Exchange" of property in such
manner as will comply with Section 1031 of the Code. If no such agreement is
reached within a reasonable period, then this Agreement shall be performed
without an exchange of properties.
6.23 Reference to Original Agreement. Buyer and Sellers agree that reference
shall be made to the Original Agreement and the accompanying Letter Agreement
dated August 18, 1999, and the Escrow Agreement dated August 18, 1999, to
resolve any ambiguity in this Agreement or any inconsistency between this
Agreement and the Multi-Station Agreement.
SECTION 7: CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the Closing
hereunder with respect to the Stations are subject at Buyer's option to the
fulfillment prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and warranties of
Sellers contained in this Agreement shall be true and complete at and as of the
Closing Date as though made at and as of that time, (except for representations
and warranties that speak as of a specific date or time which need only be true
and complete as of such date or time), except where the failure to be true and
complete (determined without regard to any materiality qualifications therein)
does not have a Material Adverse Effect.
(b) Covenants and Conditions. Sellers shall have performed and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date, except where
the failure to have performed and complied (determined without regard to any
materiality qualifications therein) does not have a Material Adverse Effect.
(c) FCC Consent. The FCC Consent shall have been granted, notwithstanding
that it may not have yet become a "Final Order," unless any filing is made with
the FCC that pertains to or becomes associated with any request for consent to
the assignment of any of the FCC Licenses (an "FCC Objection"), in which case,
Buyer shall not be obligated to close until the FCC Consent shall have become a
"Final Order," unless in the reasonable judgment of Buyer's counsel such
objection would not reasonably be expected to result in a denial of the FCC
Consent, or the designation for hearing for the applications for FCC Consent.
(d) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have expired or terminated.
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(e) Governmental Authorizations. Sellers shall be the holder of all FCC
Licenses, and there shall not have been any modification, revocation, or
non-renewal of any License that has had a Material Adverse Effect. No proceeding
shall be pending the effect of which could be to revoke, cancel, fail to renew,
suspend, or modify materially and adversely any FCC License.
(f) Consents. All consents of third parties that are required for the
valid and binding assignment from Sellers to Buyer of all Material Contracts
marked by an asterisk on Schedules 3.5 and 3.7 shall have been obtained (or
available upon consummation of the Closing) .
(g) Reserved
(h) Deliveries. Sellers shall have made or stand willing to make all the
deliveries to Buyer described in Section 8.2.
(i) Satisfactory Environmental Assessment. To the extent that any
Environmental Assessment or additional testing conducting pursuant to Section
6.15 hereof reflects the existence of conditions contrary to any representation
or warranty in this Agreement, either (i) Sellers shall have completed the
remediation of such conditions in accordance with Section 6.15 hereof, or (ii)
Buyer shall have provided notice to Sellers of Buyer's election to proceed to
Closing with the proration to the Purchase Price specified in Section 6.15
hereof.
7.2 Conditions to Obligations of Sellers. All obligations of Sellers at the
Closing hereunder are subject at Sellers' option to the fulfillment prior to or
at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and warranties of
Buyer contained in this Agreement shall be true and complete in all material
respects at and as of the Closing Date as though made at and as of that time.
(b) Covenants and Conditions. Buyer shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date.
(c) FCC Consent. The FCC Consent shall have been granted.
(d) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have expired or terminated.
(e) Deliveries. Buyer shall have made or stand willing to make all the
deliveries described in Section 8.3.
SECTION 8: CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
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(i) Except as provided below in this Section 8.1 or as otherwise agreed to
by Buyer and Sellers, the Closing hereunder shall be held for all of the
Stations on a date specified by Buyer on at least five (5) days written notice
that is not earlier than the first business day after or later than ten (10)
business days after the date on which all of the conditions to Closing have been
satisfied or waived;
(w) Reserved;
(x) Reserved;
(y) Reserved
(ii) If any event occurs that prevents signal transmission by any of the
Stations in the normal and usual manner and Sellers cannot restore the normal
and usual transmission before the date on which the Closing would otherwise
occur pursuant to this Section 8.1(a), and this Agreement has not been
terminated under Section 9, Sellers shall diligently take such action as
reasonably necessary to restore such transmission, and the Closing shall be
postponed until a date within the effective period of the FCC Consent (as it may
be extended pursuant to Section 6.1(c)) to allow Sellers to restore the normal
and usual transmission for such Station. If the Closing is postponed pursuant to
this paragraph, the date of the Closing shall be ten (10) days after notice by
Sellers to Buyer that transmission has been restored. Notwithstanding anything
to the contrary in this Agreement, Buyer shall not be obligated to close if the
transmission of any Station is not operating in the normal and usual manner,
unless and until the Sellers have restored the transmission of such Station to
its normal and usual level.
(iii) If there is in effect on the date on which the Closing would
otherwise occur pursuant to this Section 8.1(a) any judgment, decree or order
that would prevent or make unlawful the Closing on that date, the Closing shall
be postponed until a date within the effective period of the FCC Consent (as it
may be extended pursuant to Section 6.1(c)), to be agreed upon by Buyer and
Sellers, when such judgment, decree, or order no longer prevents or makes
unlawful the Closing. If the Closing is postponed pursuant to this paragraph,
the date of the Closing shall be mutually agreed to by Seller and Buyer.
(b) Closing Place. The Closing hereunder shall be held at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, or any
other place that is mutually agreed upon by Buyer and Sellers.
8.2 Deliveries by Sellers. Prior to or on Closing Date, Sellers shall deliver to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
its counsel:
(a) Conveyancing Documents. Duly executed deeds in form and quality
equivalent to the deeds by which Sellers obtained title, bills of sale, motor
vehicle titles, assignments, and other transfer documents that are sufficient to
vest good and marketable title to the Assets being transferred at the Closing in
the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims and obligations except for Permitted Encumbrances;
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40
(b) Officer's Certificate. A certificate, dated as of the Closing Date,
executed by an officer of Sellers, certifying: (i) that the representations and
warranties of Sellers contained in this Agreement are true and complete as of
the Closing Date as though made on and as of that date (except for
representations and warranties that speak as of a specific date or time, which
need only be true and complete as of such date or time), except to the extent
that the failure of such representations and warranties (in each case determined
without regard to any materiality qualifications contained therein) shall not
have had a Material Adverse Effect, and (ii) that Sellers have in all respects
performed and complied with all of its obligations, covenants and agreements in
this Agreement to be performed and complied with on or prior to the Closing
Date, except to the extent that the failure to perform such covenants (in each
case determined without regard to any materiality qualifications contained
therein) shall not have had a Material Adverse Effect.
(c) Secretary's Certificate. A certificate, dated as of the Closing Date,
executed by each of the Seller's Secretary, members, partners or designees, as
the case may be: (i) certifying that the resolutions, as attached to such
certificate, were duly adopted by such Seller's Board of Directors and
shareholders (if required) (or by the general partner in the case of a
partnership or by the members in the case of a limited liability company),
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect; and (ii) providing, as attachments thereto, the Articles of
Incorporation and Bylaws (or other organizational documents) of such Seller;
(d) Consents. A manually executed copy of any instrument evidencing
receipt of any Consent which has been received by Sellers which relate to the
Stations or, the Assets of which are being transferred at the Closing;
(e) Good Standing Certificates. To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of each Seller issued by the appropriate governmental authorities in the states
of organization and each jurisdiction in which such Sellers are qualified to do
business, each such certificate (if available) to be dated a date not more than
a reasonable number of days prior to the Closing Date;
(f) Opinions of Counsel. Opinions of Sellers' counsel and communications
counsel dated as of the Closing Date, substantially in the form of Exhibits 2
and 3 hereto; and
(g) Reserved
(h) Other Documents. Such other documents reasonably requested by Buyer or
its counsel for complete implementation of this Agreement and consummation of
the transaction contemplated hereby.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall deliver to
Sellers the following, in form and substance reasonably satisfactory to Sellers
and their counsel:
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(a) Closing Payment. The payment of the Estimated Purchase Price
described in Section 2.4(a);
(b) Officer's Certificate. A certificate, dated as of the Closing Date,
executed on behalf of an officer of the Buyer, certifying (i) that the
representations and warranties of Buyer contained in this Agreement are true and
complete in all material respects as of the Closing Date as though made on and
as of that date, and (ii) that Buyer has in all material respects performed and
complied with all of its obligations, covenants and agreements in this Agreement
to be performed and complied with on or prior to the Closing Date;
(c) Secretary's Certificate. A certificate, dated as of the Closing Date,
executed by Buyer's Secretary: (i) certifying that the resolutions, as attached
to such certificate, were duly adopted by Buyer's Board of Directors,
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect; and (ii) providing, as an attachment thereto, Buyer's
Certificate of Incorporation and Bylaws;
(d) Assumption Agreements. Appropriate assumption agreements pursuant to
which Buyer shall assume and undertake to perform Sellers' obligations and
liabilities to the extent provided under this Agreement for the Stations,
including (without limitation) under the Licenses and the Assumed Contracts;
(e) Good Standing Certificates. To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of Buyer issued by the appropriate governmental authorities in the state of
organization and each jurisdiction in which Buyer is qualified to do business,
each such certificate (if available) to be dated a date not more than a
reasonable number of days prior to the Closing Date;
(f) Opinion of Counsel. An opinion of Buyer's counsel dated as of the
Closing Date, substantially in the form of Exhibit 4 hereto; and
(g) Reserved
(h) Other Documents. Such other documents reasonably requested by Sellers
or their counsel for complete implementation of this Agreement and consummation
of the transactions contemplated hereby.
SECTION 9: TERMINATION
9.1 Termination by Mutual Consent. This Agreement may be terminated at any time
prior to Closing by the mutual consent of the parties.
9.2 Termination by Seller. This Agreement may be terminated by Sellers and the
sale and transfer of the Stations abandoned, if:
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(a) Sellers are not then in material default hereunder, upon written
notice to Buyer if on the date that would otherwise be the Closing Date any of
the conditions precedent to the obligations of Sellers set forth in Sections
7.2(a), 7.2(b) and 7.2(e) of this Agreement has not been satisfied or waived in
writing by Sellers (whether or not occurring as the result of Buyer's material
breach of any provision of this Agreement);
(b) Buyer shall default in the performance of its obligations under this
Agreement in any material respect and such default is not cured within thirty
(30) days after notice thereof;
(c) Sellers are not then in material default hereunder and Closing has not
occurred within one (1) calendar year from the date hereof and failure of
Closing to have occurred is due to the failure to receive any regulatory
approval required for Closing, including, but not limited to, expiration or
termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period, any FCC Consents
(including, without limitation, such facts as are disclosed on Schedule 4.6
hereto), and the failure of such consent, expiration or termination to be
granted is the result of facts relating to Buyer or any Affiliate of Buyer; or
(d) Sellers are not then in material default hereunder if the Closing has
not occurred within twenty four (24) months from the date hereof due to the
failure to receive any regulatory approval required for Closing, including, but
not limited to, the expiration or termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting
period of any FCC Consent, and the failure of such consent, expiration, or
termination to be granted is the result of facts relating to Sellers.
(e) Closing has not occurred with respect to the Stations within eighteen
(18) months from the date hereof, if Sellers are not then in material default
hereunder, and Closing has not occurred for any reason other than as provided in
Section 9.2(d).
9.3 Termination by Buyer. This Agreement may be terminated by Buyer and the
exchange and transfer of the Stations abandoned, if:
(a) Buyer is not then in material default, upon written notice to Sellers
if on the date that would otherwise be the Closing Date any of the conditions
precedent to the obligations of Buyer set forth in Sections 7.1(a), 7.1(b),
7.1(e), 7.1(f), 7.1(g), and 7(h) of this Agreement (and only such Sections) has
not been satisfied or waived in writing by Buyer (whether or not occurring as
the result of Sellers' material breach of any provision of this Agreement);
(b) Sellers shall have defaulted in the performance of Sellers'
obligations under this Agreement, and such default is not cured within thirty
(30) days after notice thereof and such default has had a Material Adverse
Effect; or
(c) Buyer is not then in material default hereunder and Closing has not
occurred within fifteen (15) months from the date hereof and failure to close is
due to the failure to receive any regulatory approval required for Closing,
including, but not limited to, expiration or termination of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period and any FCC Consents and the failure to receive
such consent is due to facts relating to Sellers or any Affiliate of Sellers.
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(d) Closing has not occurred with respect to the Stations within eighteen
(18) months from the date hereof, if the terminating party is not then in
material default hereunder and the Closing has not occurred for any reason other
than as provided in Section 9.2(c).
9.4 Rights on Termination. If this Agreement is terminated by Buyer pursuant to
Section 9.3 as a result of Sellers' material breach of any provision of this
Agreement, Buyer shall be entitled to the immediate return of the amount of the
Allocable Escrow Deposit, and Buyer shall have all rights and remedies available
at law or equity, including the remedy of specific performance described in
Section 9.6 below. If this Agreement is terminated by Sellers pursuant to
Section 9.2, Sellers, as their sole remedy, shall be entitled to receive the
amount of the Allocable Escrow Deposit, less any amount thereof released in
accord with the provisions of this Agreement prior to such termination, together
with all interest or other proceeds from the investment thereof, but less any
compensation due Escrow Agent, as liquidated damages in full and final
settlement of all claims of Sellers under this Agreement, and there shall be no
other or further obligations or remedies of Sellers hereunder.
9.5 Liquidated Damages Not a Penalty. With respect to the liquidated damages as
described and provided for in Section 9.4 hereof, Sellers and Buyer hereby
acknowledge and agree that the damage that may be suffered by Sellers in the
event of a default by Buyer hereunder is not readily ascertainable and that such
liquidated damages as of the date hereof are a reasonable estimate of such
damages and are intended to compensate Sellers for any such damage and are not
to be construed as a penalty.
9.6 Specific Performance. The parties recognize that if Sellers breach this
Agreement and refuse to perform under the provisions of this Agreement, monetary
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, in addition to any other remedies that may be
available, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Sellers shall waive the
defense that there is an adequate remedy at law.
9.7 Attorneys' Fees. In the event of a default by either party that results in a
lawsuit or other proceeding for any remedy available under this Agreement, the
prevailing party shall be entitled to reimbursement from the other party of its
reasonable legal fees and expenses (whether incurred in arbitration, at trial,
or on appeal).
9.8 Survival. Notwithstanding the termination of this Agreement pursuant to this
Section 9, the obligations of Buyer and Sellers set forth in Sections 6.2, 6.4,
9, 10, and 11 shall survive such termination and the parties hereto shall have
any and all rights and remedies to enforce such obligations provided at law or
in equity or otherwise (including without limitations, specific performance).
9.9 Reserved
SECTION 10: SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
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10.1 Survival of Representations. All representations and warranties, covenants
and agreements of Sellers and Buyer contained in or made pursuant to this
Agreement or in any certificate furnished pursuant hereto shall survive the
Closing Date and shall remain in full force and effect to the following extent:
(a) representations and warranties (other than the representations and
warranties set forth in Section 3.16) shall survive for a period of twelve (12)
months after the Closing Date, (b) except as otherwise provided herein, the
covenants and agreements which, by their terms, survive the Closing shall
continue in full force and effect until fully discharged (but not beyond the
expiration of twelve (12) months after the Closing Date), and (c) any
representation, warranty, covenant or agreement that is the subject of a claim
which is asserted in a reasonably detailed writing prior to the expiration of
the survival period set forth in this Section 10.1 shall survive with respect to
such claim or dispute until the final resolution thereof; provided that
notwithstanding the foregoing, representations and warranties set forth in
Section 3.16 and the covenant in Section 6.15 shall survive for the lesser of
eighteen (18) months after the Closing Date, and (ii) the expiration of the
applicable statute of limitations, but, in no event, shall the survival period
in this proviso be less than one (1) year after the Closing Date; provided
further that the covenants and agreements set forth in Section 6.4
Confidentiality, Section 6.5 Cooperation, Section 6.9 Books and Records, Section
11.1 Fees and Expenses, Section 11.2 Notices, and Section 11.3 Benefit and
Binding Effect shall survive the Closing for the period provided therein or, if
no period is specified, in perpetuity; and provided finally that anything to the
contrary in this Section 10.1 notwithstanding any claim for indemnification
under Section 10 hereof which is asserted in a reasonably detailed writing prior
to the expiration of the survival periods provided in this Section 10.1 shall
survive with respect to such claim or dispute until final resolution thereof.
10.2 Indemnification by Seller. After the Closing but subject to Sections 10.1
and 10.5, Sellers hereby agree to indemnify and hold Buyer harmless against
and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages arising out of or
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Sellers contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement;
(b) Any and all obligations of Sellers not assumed by Buyer pursuant to
this Agreement, including any liabilities arising at any time under any Contract
not included in the Assumed Contracts;
(c) Any loss, liability, obligation, or cost arising out of or resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets;
(d) Any and all obligations, losses, liabilities, or damages arising out
of or resulting from the operation or ownership of the Stations prior to the
Closing (except any losses, liabilities or damages for which Buyer has received
a proration in its favor or a reduction in Purchase Price under Section 6.15),
including any liabilities arising under the Licenses or the Assumed Contracts to
the extent that they relate to events occurring prior to the Closing Date;
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(e) Any and all out-of-pocket costs and expenses, including reasonable
legal fees and expenses, incident to any action, suit, proceeding, claim,
demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity; and
(f) Any and all loss, liabilities or damages arising out of or resulting
from the loss or revocation of any of the FCC Licenses as a result of actions
taken by the FCC (or, to the extent applicable, by any reviewing court) solely
in connection with the specific applications relating to the Stations and listed
on Schedule 10.2.
10.3 Indemnification by Buyer. Notwithstanding the Closing, but subject to
Section 10.5, Buyer hereby agrees to indemnify and hold Sellers harmless against
and with respect to, and shall reimburse Sellers for:
(a) Any and all losses, liabilities, or damages arising out of or
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Buyer contained in this Agreement or in any certificate,
document, or instrument delivered to Sellers under this Agreement;
(b) Any and all obligations of Sellers assumed by Buyer pursuant to this
Agreement;
(c) Any and all obligations, losses, liabilities, or damages arising out
of or resulting from the operation or ownership of the Stations after the
Closing (including, without limitation, any obligations of ▇▇▇▇▇▇▇▇, SCI, or any
Affiliate thereof pursuant to any agreements by which the obligations of any of
the Stations have been guaranteed), except any losses, liabilities or damages
for which Sellers have received a proration in their favor; and
(d) Any and all out-of-pocket costs and expenses, including reasonable
legal fees and expenses, incident to any action, suit, proceeding, claim,
demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification shall be
as follows:
(a) The party claiming indemnification (the "CLAIMANT") shall promptly
give notice to the party from which indemnification is claimed (the
"INDEMNIFYING PARTY") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five business
days after written notice of such action, suit, or proceeding was given to
Claimant.
(b) With respect to claims solely between the parties, following receipt
of notice from the Claimant of a claim, the Indemnifying Party shall have thirty
days to make such investigation of the claim as the Indemnifying Party deems
necessary or desirable. For the purposes of such investigation, the Claimant
agrees to make available to the Indemnifying Party and its authorized
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representatives the information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnifying Party agree at or prior to the
expiration of the thirty-day period (or any mutually agreed upon extension
thereof) to the validity and amount of such claim, the Indemnifying Party shall
immediately pay to the Claimant the full amount of the claim. If the Claimant
and the Indemnifying Party do not agree within the thirty-day period (or any
mutually agreed upon extension thereof), the Claimant may seek appropriate
remedy at law or equity.
(c) With respect to any claim by a third party as to which the Claimant is
entitled to indemnification under this Agreement, the Indemnifying Party shall
have the right at its own expense, to participate in or assume control of the
defense of such claim, and the Claimant shall cooperate fully with the
Indemnifying Party, subject to reimbursement for actual out-of-pocket expenses
incurred by the Claimant as the result of a request by the Indemnifying Party,
provided, however, that Indemnifier may not assume control of the defense unless
it affirms in writing its obligation to indemnify Claimant for any damages
incurred by Claimant with respect to such third-party claim. If the Indemnifying
Party elects to assume control of the defense of any third-party claim, the
Claimant shall have the right to participate in the defense of such claim at its
own expense. If the Indemnifying Party does not elect to assume control or
otherwise participate in the defense of any third-party claim, it shall be bound
by the results obtained in good faith by the Claimant with respect to such
claim.
(d) If a claim, whether between the parties or by a third party, requires
immediate action, the parties will make every effort to reach a decision with
respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Section 10.2 and Section 10.3
shall extend to the members, partners, shareholders, officers, directors,
employees, representatives and affiliated entities of any Claimant although for
the purpose of the procedures set forth in this Section 10.4, any
indemnification claims by such parties shall be made by and through the
Claimant.
10.5 Certain Limitations.
(a) Notwithstanding anything in this Agreement to the contrary, neither
party shall indemnify or otherwise be liable to the other party with respect to
any claim for any breach of a representation or warranty, or for the breach of
any covenant contained in this Agreement, unless notice of the claim is given
within the relevant survival period specified in Section 10.1.
(b) Notwithstanding anything in this Agreement to the contrary, but except
as otherwise provided in this subsection (b) and Schedule 10.5, Sellers shall
not be liable to Buyer in respect of any indemnification hereunder except to the
extent that (i) the aggregate amount of losses of Buyer, when aggregated with
the amount of losses with respect to the Multi-Stations pursuant to the
Multi-Stations Agreement, if any, exceeds One Million Dollars ($1,000,000) (the
"Threshold Amount") (and then only to the extent such losses, when aggregated
with the amount of losses with respect to the Multi-Stations pursuant to the
Multi-Stations Agreement, if any, exceed the excess of Five Hundred Thousand
Dollars ($500,000)) over an amount (not in excess of $100,000) which Sellers are
not required to expend in environmental remediation as a result of the
Environmental Threshold Amount (such excess being the "Excess Amount") and (ii)
the
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aggregate amount of losses of Buyer, when aggregated with the amount of losses
with respect to the Multi-Stations pursuant to the Multi-Stations Agreement, if
any, is less than the excess of Fifty Million Dollars) ($50,000,000) over any
amounts expended by Buyer pursuant to Section 6.15 (as aggregated with the
Multi-Stations as set forth therein), or with respect to which Buyer receives a
proration in its favor under Section 6.15 (such excess being the "Indemnity
Cap"); provided, the foregoing shall not be applicable to any amounts owed in
connection with the Purchase Price or the proration adjustment thereof. In
determining whether Sellers shall be obligated to indemnify Buyer under this
Section 10, once the Threshold Amount has been satisfied, each representation
and warranty and each covenant contained in this Agreement for which indemnity
may be sought hereunder shall be read solely for purposes of determining whether
a breach of such representation, warranty or covenant has occurred without
regard to materiality (including Material Adverse Effect) qualifications that
may be contained therein.
(c) Notwithstanding any other provision of this Agreement to the contrary,
in no event shall a party be entitled to indemnification for such party's
consequential or punitive damages, regardless of the theory of recovery. Each
party hereto agrees to use reasonable efforts to mitigate any losses which form
the basis for any claim for indemnification hereunder.
SECTION 11: MISCELLANEOUS
11.1 Fees and Expenses.
(a) Buyer and Sellers shall each pay one-half of (i) any fees charged by
the FCC in connection with obtaining the FCC Consent, and (ii) any filing fees
incurred in connection with any ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings.
(b) Buyer and Sellers shall each pay one-half (1/2) of any filing fees,
transfer taxes, document stamps, or other charges levied by any governmental
entity (other than income Taxes, which shall be the responsibility of Sellers)
on account of the transfer of the Assets from Sellers to Buyer.
(c) Except as otherwise provided in this Agreement, each party shall pay
its own expenses incurred in connection with the authorization, preparation,
execution and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar Person retained by or on behalf of such party.
11.2 Notices. All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be (a) in writing, (b) sent
by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (c) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
To Buyer:
---------
Entercom Communications Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Bala ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Field
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
(which shall ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
not constitute Washington, D.C. 20004-2505
notice) to: Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To Sellers:
c/o Sinclair Broadcast Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇▇▇ Communications, Inc.
(which shall ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
not constitute ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
notice) to: Attn: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
(which shall ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
not constitute ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
notice) to: ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
11.3 Benefit and Binding Effect.
(a) Buyer shall have the right to assign all or any portion of its rights
under this Agreement to (i) any entity under common control with Buyer, (ii) a
Qualified Intermediary under Section 1031 of the Code, or (iii) any lender or
any agent for such lender(s) for collateral purposes only; provided, that no
such assignment shall relieve Buyer of its obligations hereunder. Sellers may
assign, combine, merge, or consolidate among themselves and any Affiliate of
Sellers so long as Sellers or their successors and assigns are bound by the
terms and conditions of this Agreement in all respects as if such successors and
assigns were original
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parties hereto, and such assignment, combination, merger, or consolidation does
not have an adverse affect on Buyer. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. No Person, other than the parties hereto, is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder. Other than as expressly set forth in this Section 11.3(a), no party
may assign or transfer all or any portion of its rights under this Agreement
without the prior written consent of the parties hereto.
(b) Sellers acknowledge and agree that at the Closing, Buyer may require
that Sellers transfer the Assets and liabilities of any Station to a third party
designated in writing by Buyer (a "DESIGNEE") at least ten (10) days prior to
the Closing; provided, however, that (a) such Designee shall on or prior to the
Closing Date assume all assumed liabilities with respect to the particular
Station so transferred; (b) an FCC Order shall have been issued on or prior to
the Closing Date authorizing such transfer; (c) the transfer to such Designee
would not violate any laws, (d) the transfer to such Designee would not delay in
any respect the date for the Closing as required by the terms of this Agreement;
(e) such transfer to a Designee shall not relieve Buyer from any of its
obligations hereunder; (f) there shall be no assignment or transfer (actual or
implied) of this Agreement to the Designee; (g) Sellers shall have no
liabilities to any such Designee under this Agreement or otherwise; and (h) such
Designee shall deliver to the Sellers a written certificate, pursuant to which
the Designee acknowledges and agrees for the benefit of Sellers to the terms and
conditions of the designation as described herein. The parties shall cooperate
in all reasonable respects in making any modifications to the closing documents
and deliveries that may be necessary or appropriate in connection with the
transfer of Assets and liabilities of any Station to any Designee pursuant to
this Section 11.3(b).
11.4 Further Assurances. The parties shall take any actions and execute any
other documents that may be necessary or desirable to the implementation and
consummation of this Agreement.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND (WITHOUT REGARD TO THE CHOICE
OF LAW PROVISIONS THEREOF). IN ADDITION, EACH OF THE PARTIES HERETO SUBMITS TO
LOCAL JURISDICTION IN THE STATE OF MARYLAND AND AGREES THAT ANY ACTION BY ANY
PARTY HEREUNDER SHALL BE INSTITUTED IN THE STATE OF MARYLAND.
11.6 Entire Agreement. This Agreement, the Schedules hereto, and all documents,
certificates and other documents to be delivered by the parties pursuant hereto,
collectively, represent the entire understanding and agreement between Buyer and
Sellers with respect to the subject matter of this Agreement. This Agreement
supersedes all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing duly executed by each
of the parties hereto and by ▇▇▇▇▇▇▇▇.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only
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by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement, or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 11.7.
11.8 Headings. The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
11.9 Counterparts. This Agreement may be signed in two or more counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
officers of Buyer and Sellers as of the date first written above.
Buyer: Sellers:
Entercom Communications Corp. ▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
-----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------- ----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Executive Vice President Title: Secretary
▇▇▇▇▇▇▇▇ MEDIA III, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF KANSAS CITY
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
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