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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇ ▇▇ ACQUISITION CORP.
BUYER
AND
FORUS COMMUNICATIONS OF GEORGIA, INC.,
FORUS COMMUNICATIONS OF ATLANTA, INC.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
AND
▇▇▇▇▇ ▇▇▇▇▇
COLLECTIVELY, SELLER
DATED AS OF AUGUST 26, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I. ASSETS TO BE CONVEYED...............................................1
1.1 Licenses and Authorizations.........................................1
1.2 Station Equipment...................................................1
1.3 Contracts...........................................................2
1.4 Real Property.......................................................2
1.5 Call Signs, Promotional Materials and Intangibles...................2
1.6 Records.............................................................2
1.7 Accounts Receivable.................................................3
1.8 Non-Compete Agreement...............................................3
1.9 Excluded Assets.....................................................3
ARTICLE II. ASSUMPTION OF LIABILITIES..........................................4
ARTICLE III. PURCHASE PRICE AND PAYMENT........................................4
ARTICLE IV. PRORATIONS AND ADJUSTMENTS.........................................4
ARTICLE V. [RESERVED]..........................................................5
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER...........................5
6.1 Organization........................................................5
6.2 Authorization.......................................................6
6.3 No Breach...........................................................6
6.4 Station Licenses....................................................6
6.5 Station Applications................................................7
6.6 Title to Assets.....................................................7
6.7 Condition of Equipment..............................................7
6.8 Condition of Real Property..........................................7
6.9 Contracts...........................................................8
6.10 Employees...........................................................9
6.11 Employee Benefit Plans..............................................9
6.12 Litigation.........................................................10
6.13 Payment of Taxes...................................................10
6.14 Compliance With Laws...............................................11
6.15 Insolvency Proceedings.............................................12
6.16 Citizenship........................................................12
6.17 Patents, Trademarks, Copyrights....................................12
6.18 Financial Statements...............................................12
6.19 Sufficiency of Assets..............................................13
6.20 No Misleading Statements...........................................13
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ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER..........................13
7.1 Organization.......................................................13
7.2 Authorization......................................................13
7.3 No Breach..........................................................13
7.4 Litigation.........................................................14
7.5 No Misleading Statements...........................................14
7.6 Qualification as Broadcast Licensee................................14
ARTICLE VIII. ENVIRONMENTAL MATTERS...........................................14
ARTICLE IX. PRE-CLOSING OBLIGATIONS...........................................14
9.1 Application for Commission Consent.................................14
9.2 Other Governmental Consents........................................15
9.3 Financial Information..............................................15
9.4 Third Party Consents...............................................15
9.5 Environmental Site Assessment......................................15
9.6 Title Insurance....................................................16
9.7 [Reserved].........................................................16
9.8 Confidentiality....................................................16
9.9 Access.............................................................16
9.10 Employee Matters...................................................16
9.11 Operations Prior to Closing........................................17
9.12 Adverse Developments...............................................18
9.13 Administrative Violations..........................................18
9.14 [Reserved.]........................................................18
9.15 Control of Stations................................................18
9.16 Buyer's Financing..................................................18
9.16.1 Other Documents and Acts...................................18
9.16.2 Senior Lender's Consent....................................19
ARTICLE X. CONDITIONS PRECEDENT...............................................19
10.1 Mutual Conditions.................................................19
10.1.1 Governmental Consents......................................19
10.1.2 Absence of Litigation......................................19
10.2 Conditions to Buyer's Obligation...................................19
10.2.1 Representations and Warranties.............................19
10.2.2 Compliance with Conditions.................................19
10.2.3 No Material Adverse Development............................19
10.2.4 Title Commitment and Surveys...............................19
10.2.5 Validity of Station Licenses...............................20
10.2.6 Closing Documents..........................................20
10.2.7 Third Party Consents.......................................20
10.2.8 [Reserved.]................................................20
10.2.9 Settlement of Claims.......................................20
10.2.10 Finality...................................................20
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10.2.11 Satisfactory Environmental Assessment......................20
10.3 Conditions to Seller's Obligation..................................21
10.3.1 Representations and Warranties.............................21
10.3.2 Compliance with Conditions.................................21
10.3.3 Payment....................................................21
10.3.4 Closing Documents..........................................21
ARTICLE XI. CLOSING...........................................................21
11.1 Closing Date.......................................................21
11.2 Performance at Closing.............................................21
11.2.1 Seller shall deliver to Buyer:.............................21
11.2.2 Buyer shall deliver to Seller:.............................22
11.2.3 Other Documents and Acts...................................23
ARTICLE XII. POST-CLOSING OBLIGATIONS.........................................23
12.1 Indemnification....................................................23
12.1.1 Buyer's Right to Indemnification...........................23
12.1.2 Seller's Right to Indemnification..........................23
12.1.3 Conduct of Proceedings.....................................24
12.1.4 Indemnification Not Sole Remedy............................24
12.1.5 Limits on and Conditions of Indemnification;
Threshold and Cap..........................................24
12.2 Post-Closing Access................................................25
ARTICLE XIII. DEFAULT AND REMEDIES............................................25
13.1 Termination by Seller..............................................25
13.2 Termination by Buyer...............................................25
13.3 Letter of Credit...................................................26
13.4 [Reserved].........................................................26
13.5 Buyer's Remedies...................................................26
13.6 Breach of Contract.................................................27
ARTICLE XIV. TERMINATION......................................................27
14.1 Absence of Commission Consent......................................27
14.2 Designation for Hearing............................................27
14.3 Damage.............................................................27
14.3.1 Risk of Loss...............................................27
14.3.2 Failure of Broadcast Transmission..........................28
14.3.3 Resolution of Disagreements................................28
ARTICLE XV. POST-CLOSING OBLIGATIONS OF SELLER................................29
ARTICLE XVI. GENERAL PROVISIONS...............................................29
16.1 Brokerage..........................................................29
16.2 Expenses...........................................................29
16.3 Notices............................................................29
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16.4 Attorneys' Fees....................................................31
16.5 Survival of Representations, Warranties and Indemnification
Rights.............................................................31
16.6 Exclusive Dealings.................................................31
16.7 Waiver.............................................................31
16.8 Assignment.........................................................31
16.9 Entire Agreement...................................................31
16.10 Counterparts.......................................................32
16.11 Construction.......................................................32
16.12 Schedules and Exhibits.............................................32
16.13 Severability.......................................................32
16.14 Choice of Law......................................................32
16.15 Counsel............................................................32
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DEFINED TERMS
As used herein, the following terms shall have the meanings defined
in the introduction, background or section indicated below:
Adjustment Date Article IV
Administrative Violation Section 9.13
Agreement Introduction
Assets Article I
Assignment Applications Section 9.1
Barter Agreements Section 1.3
Buyer Introduction
Buyer Indemnitees Section 12.1.1
Closing Article II
Closing Date Section 11.1
Code Section 6.11
Commission Background
Contract Date Introduction
Contracts Section 1.3
Covenant Section 1.5
Credit Agreement Section 7.3
Employee Plan Section 6.11
Environmental Assessment Section 9.5
Environmental Laws Section 9.5
ERISA Section 6.11
Escrow Agent Section 13.3
Escrow Agreement Section 13.3
FAA Section 6.14(e)
FCC Background
FCC Consent Section 10.1.1
Final Order Section 10.2.10
Financial Statements Section 6.18
Hired Employees Section 9.10
Indemnified Party Section 12.1.3
Indemnitor Section 12.1.3
Intangible Property Section 1.5
Landlord Consents Section 6.8(c)
Lease Agreements Section 6.8(c)
Letter of Credit Section 13.3
Liens Section 6.6
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Material Contracts Section 9.4
Operating Contracts Section 1.3
Payment Date Article IV
Permitted Liens Section 6.6
Promotional Rights Section 6.17
Purchase Price Section 3.1
Real Property Section 1.4
Receivables Section 1.7
Required Consent Section 9.4
Sales Agreements Section 1.3
Seller Introduction
Seller Indemnitees Section 12.1.2
Senior Lenders Section 7.3
Station Applications Section 1.1
Station Equipment Section 1.2
Station Licenses Section 1.1
Station Records Section 1.6
Stations Background
Title Commitment Section 9.6
Trade Agreements Section 1.3
Transaction Background
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TABLE OF SCHEDULES AND EXHIBITS
SCHEDULE TITLE
1.1 Licenses and Authorizations
1.2 Station Equipment
1.3(a) Operating Contracts
1.3(c) Sales Agreements
1.3(d) Trade Agreements
1.3(e) Barter Agreements
1.4 Real Property
1.5 Call Signs, Promotional
Materials and Intangibles
6.1 Organization
6.3 No Breach
6.6(a) Title to Assets
6.6(b) Permitted Liens
6.8(c) Liens on Leases; Assignment
Restrictions on Lease Agreements
6.10 Employees
6.11 Employee Benefits Plans
6.12 Litigation
6.18 Financial Statements
EXHIBIT TITLE
A Non Compete Agreement
B Opinion of Seller's Counsel
C Escrow Agreement
D Landlord Consent
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered on
August 26, 1999 (the "Contract Date"), by and among ▇▇▇▇▇▇▇ ▇▇ ACQUISITION
CORP., a Delaware corporation ("Buyer") and FORUS COMMUNICATIONS OF GEORGIA,
INC., a Georgia corporation ("Forus Georgia"), FORUS COMMUNICATIONS OF ATLANTA,
INC., a Georgia corporation ("Forus Atlanta" and, together with Forus Georgia,
the "Licensees"), ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇-▇▇▇▇▇") (the Licensees
and ▇▇▇▇-▇▇▇▇▇ being collectively referred to as "Seller," or each individually
as an "Owner").
BACKGROUND:
Forus Georgia is the licensee, owner and operator of Broadcast Station
WAEC (AM), ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and Forus Atlanta is the licensee, owner
and operator of Broadcast Station WWWE (AM), 1100 Khz, Hapeville, Georgia
(together, the "Stations"), pursuant to certain authorizations issued by the
Federal Communications Commission (the "Commission" or "FCC"), and the
individual Owners each own certain assets used or held for use solely in
connection with the operation of the Stations. Seller desires to sell and
assign and Buyer desires to purchase and acquire substantially all of the
property and assets used or held for use in the operation of the Stations upon
the terms set forth in this Agreement (the "Transaction"). The parties
acknowledge that the licenses issued by the Commission for the operation of the
Stations may not be assigned without the prior written consent of the
Commission. Accordingly, in consideration of the foregoing and of the mutual
promises, covenants, and conditions set forth below, the parties agree as
follows:
ARTICLE I.
ASSETS TO BE CONVEYED
On the Closing Date (as defined below), subject to and in reliance
upon the covenants, representations, warranties and agreements set forth
herein, and subject to the terms and conditions contained herein, Seller shall
sell, assign, transfer and deliver to Buyer and Buyer shall purchase from
Seller, all of the assets used or held for use in the operation of the
Stations, other than Excluded Assets (as defined below), including without
limitation, the following (collectively, the "Assets"):
1.1 Licenses and Authorizations. Any licenses, permits,
permissions and other authorizations issued to Seller for the operation of the
Stations by the Commission or any other governmental agencies, including, but
not limited to, those listed on Schedule 1.1 and the right to use the Stations'
call letters (the "Station Licenses"), and any applications for modification,
extension or renewal thereof, and any pending applications for any new
licenses, permits, permissions or authorizations pending on the Closing Date,
including, but not limited to, those listed on Schedule 1.1 (the "Station
Applications").
1.2 Station Equipment. All the fixed and tangible personal
property used or held for use in the operation of the Stations including, but
not limited to, the transmitters, towers, ground system and studio equipment
listed on Schedule 1.2 together with any
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replacements, improvements, or additions thereto made between the Contract Date
and the Closing Date (the "Station Equipment").
1.3 Contracts. All rights of Seller for the benefit of the
Stations including, without limitation, those rights under (a) all agreements,
contracts or leases described on Schedule 1.3(a); (b) such other contracts,
agreements or leases entered into (i) with the written consent of Buyer, or
(ii) in the ordinary course of business and consistent with past practice,
between August 26, 1999 and the Closing Date, that (x) are approved in writing
by Buyer, or (y) do not, in the aggregate, impose obligations in excess of Ten
Thousand Dollars ($10,000) on Buyer (the contracts, agreements and leases
described in clauses (a) and (b) are collectively referred to as the "Operating
Contracts"); (c) all contracts for the sale of time on the Stations for cash
(i) at rates substantially in accordance with the Stations' past practices with
a term ending on or before May 31, 2000, (ii) set forth on Schedule 1.3(c), or
(iii) entered into with the written consent of Buyer ("Sales Agreements"); (d)
contracts for the sale of time on the Stations in exchange for merchandise or
services used or useful for the benefit of the Stations, set forth on Schedule
1.3(d), to the extent that such contracts (i) were entered into in the
ordinary course of business, (ii) are preemptible for cash time sales, and
(iii) obligate Buyer to provide advertising time only on a "run of schedule"
basis ("Trade Agreements"); and (e) contracts for the sale of time on the
Stations in exchange for programming set forth on Schedule 1.3(e) or entered
into after the Contract Date with the written consent of Buyer ("Barter
Agreements"). (The Operating Contracts, Sales Agreements, Trade Agreements,
and Barter Agreements are referred to collectively as the "Contracts.")
1.4 Real Property. All right, title and interest of any Seller
in the real property used or held for use or necessary in the operation of the
Stations and owned, leased, or licensed by Seller or its affiliates, as
described in Schedule 1.4, or acquired for the benefit of the Stations by
Seller or its affiliates with the written consent of Buyer between the Contract
Date and Closing Date (the "Real Property").
1.5 Call Signs, Promotional Materials and Intangibles. All of
Seller's or its affiliates' rights in the Stations' call signs, copyrights,
patents, trademarks, trade names, slogans, logos, service marks, computer
software, magnetic media, data processing files, systems and programs, business
lists, trade secrets, sales and operating plans, all goodwill of the Stations
and other similar intangible property rights used or held for use in the
operation of the Stations, including but not limited to the intangible property
identified on Schedule 1.5 (the "Intangible Property").
1.6 Records. All records, including but not limited to all books
of account, customer lists, supplier lists, computer programs and software,
employee personnel files, local public inspection file materials, engineering
data, logs, programming records, consultants' reports, ratings reports,
budgets, marketing and demographic data, financial reports and projections,
lists of advertisers, promotional materials, and sales, operating and business
plans, relating to or used in the operation of the Stations or necessary or
desirable to show compliance with any law or regulation applicable to the
Stations or the operation of the Stations and not pertaining solely to Seller's
internal corporate affairs or its other stations or interests (the
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"Station Records"), provided, however, for a period of three (3) years
following the Closing Date, Buyer shall cooperate with and make available to
each Owner, upon reasonable prior notice, during normal business hours and at
the Owners' expense, Station Records for inspection and duplication so long as
such inspection and copying do not unreasonably interfere with Buyer's
operation of the Stations.
1.7 Accounts Receivable. At the consummation of the transaction
contemplated by this Agreement on the Closing Date, Seller shall assign to
Buyer, for purpose of collection only, all of Seller's accounts receivable
outstanding as of the Closing Date arising from the operation of the Stations
(the "Receivables"). For a period of one hundred twenty days (120) after the
Closing Date, Buyer will collect in the normal course of business for the
account of Seller the Receivables. Seller will furnish Buyer with a complete
list of the Receivables at or as soon as is reasonably possible after the
Closing. Buyer will not adjust, compromise or settle any dispute concerning the
Receivables without prior written consent of Seller. Thirty-five (35),
sixty-five (65) and ninety-five (95) days after the Closing Date, Buyer shall
pay to Seller all amounts collected on account of the Receivables during the
first thirty (30), sixty (60) and ninety (90) days following the Closing Date,
respectively, and provided, further, that any payment received by Buyer during
the one hundred thirty (130) day period (described below) from any customer
which continues to be serviced by Buyer shall be applied to the oldest accounts
receivable outstanding. The obligation of Buyer hereunder will be to collect
such accounts receivable in the ordinary and normal course of business and does
not extend to the institution of litigation, employment of counsel or a
collection agency, or any other extraordinary means of collection. Within one
hundred thirty (130) days of the Closing Date, Buyer will deliver to Seller the
balance of amounts collected on account of the Receivables. Buyer shall then
reassign to Seller the Receivables that remain uncollected.
1.8 Non-Compete Agreement. At Closing, Seller and Buyer shall
enter into a Non-Compete Agreement in the form set forth in Exhibit A (the
"Covenant").
1.9 Excluded Assets. It is understood and agreed that the
following assets shall not be among the Assets purchased pursuant to this
Agreement:
(a) Seller's cash on hand as of the Closing and any of
Seller's interests in its bank accounts and all of Seller's other cash, cash
equivalents, security funds, securities, investments, deposits, prepayments
(including prepaid taxes and insurance), tax refunds and overpayments;
(b) Any insurance policies and proceeds thereof,
promissory notes, amounts due from employees, bonds, letters of credit,
certificates of deposits or other similar items and cash surrender value in
regard thereto;
(c) Any pension, profit-sharing, or employee benefit
plans, including all of Seller's interest in any Employee Plan (as defined in
Section 6.11), and any collective bargaining agreements;
(d) Any agreements not included among the Contracts;
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(e) All tax returns and supporting materials, all
original financial statements and supporting materials, all books and records
that Seller is required by law to retain, all corporate minutes and records,
and all records of Seller relating to the sale of the Assets; and
(f) Any interest in and to any refunds of federal,
state, or local franchise, income or other taxes for periods prior to the
Closing Date.
ARTICLE II.
ASSUMPTION OF LIABILITIES
Buyer shall assume or undertake to pay, satisfy or discharge those
liabilities, obligations, commitments or responsibilities of Seller arising and
accruing after or relating exclusively to the operation of the Stations after
11:59 p.m. Eastern Standard Time ("EST") of the day prior to the Closing Date.
Buyer shall assume or undertake to pay, satisfy or discharge those liabilities,
obligations, commitments or responsibilities of Seller arising and accruing
after 11:59 p.m. EST of the day prior to the Closing Date and relating
exclusively to the Contracts to be assigned to Buyer pursuant to (and as
limited by) Section 1.3 above. If any Contract requires the consent of third
parties for assignment, but (i) such consent has not been obtained as of the
Closing Date, as required by Section 10.2.7, and (ii) in the case of Material
Contracts (as defined below), Buyer waives such condition precedent to the
closing of the transactions contemplated herein (the "Closing") in its sole
discretion, then Buyer shall assume Seller's obligations under such Contract
for the period after Closing during which Buyer receives the benefits to which
Seller is currently entitled under such Contract (unless consent is
subsequently obtained and such delay has not prejudiced Buyer, and unless the
failure of Buyer to receive benefits under such Contract is due to Buyer's
failure to perform Seller's obligations thereunder after Closing). Buyer will
assume and honor the trade obligations set out in Schedule 1.3(d) up to the
amount of Twenty One Thousand Dollars ($21,000). Except as otherwise expressly
set forth in the preceding sentences of this Article II, Buyer shall not assume
any other liabilities or obligations of Seller.
ARTICLE III.
PURCHASE PRICE AND PAYMENT
The purchase price for the Assets and the Covenant shall be Ten
Million Dollars ($10,000,000) (the "Purchase Price"). At Closing, Buyer will
pay the Purchase Price by wire transfer of federal funds (pursuant to wire
instructions that Seller shall deliver to Buyer at least five (5) days prior to
Closing) as follows: (i) Forus Georgia, Eight Million Dollars ($8,000,000);
(ii) Forus Atlanta, One Million Seven Hundred Fifty Thousand Dollars ($
1,750,000) and (iii) ▇▇▇▇-▇▇▇▇▇, Two Hundred Fifty Thousand Dollars ($250,000).
ARTICLE IV.
PRORATIONS AND ADJUSTMENTS
Current real estate taxes, rent, utilities and all other normal income
and expense items related to the Assets shall be apportioned between the
parties to reflect the principal that all
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expenses and income arising from the operation of the Assets up through 11:59
p.m. EST of the day prior to the Closing Date (the "Adjustment Date") shall be
for the account of Seller, and all expenses and income arising from the
operation of the Assets acquired by Buyer after the Adjustment Date shall be
for the account of Buyer. Three (3) days prior to the Closing Date Seller
shall estimate all apportionments pursuant to this Article IV and shall deliver
a statement of its estimates to Buyer (which statement shall set forth in
reasonable detail the basis for those estimates). At the Closing, Buyer shall
pay to Seller, or Seller shall pay to Buyer, as the case may be, the net amount
due as a result of the estimated apportionments (excluding any item that is in
dispute). Such payment shall be made by separate certified or cashier's check
and not by credit towards or debit from the Purchase Price payable as provided
in Article III hereof. Within sixty (60) days after the Closing (the "Payment
Date"), Buyer shall deliver to Seller a statement of any adjustments to
Seller's estimate of the apportionments, and Buyer shall pay to Seller, or
Seller shall pay to Buyer, as the case may be, any amount due as a result of
the adjustment (or, if there is any dispute, the undisputed amount). If Seller
disputes Buyer's determinations, or if at any time after delivery of Buyer's
statement of determinations, either party determines that any item included in
the apportionments is inaccurate, or that an additional item should be included
in the apportionments, the parties shall confer with regard to the matter and
an appropriate adjustment and payment shall be made as agreed upon by the
parties (or, if they are unable to resolve the matter, they shall select a firm
of independent certified public accountants to resolve the matter, whose
decision on the matter shall be binding and whose fees and expenses shall be
borne equally by the parties). All amounts due pursuant to this subsection
that are not paid on the Closing Date or the Payment Date shall bear interest
from the Closing Date until paid at a rate per annum equal to generally
prevailing prime interest rate (as reported by The Wall Street Journal) plus
five percent (5%).
ARTICLE V.
[RESERVED]
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties, all of
which have been relied upon by Buyer in entering into this Agreement and,
except as otherwise specifically provided, all of which shall be true and
correct at Closing.
6.1 Organization. Each Licensee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia,
is duly qualified to do business in, and is in good standing under, the laws of
the State of Georgia. Each Owner has full power and authority to own, lease
and operate its Assets and to conduct the business and operations of the
Stations as currently conducted and proposed to be conducted and to enter into
and perform this Agreement. The address of each Owner's chief executive
offices, and the locations of all tangible personal property included in the
Assets are listed in Schedule 6.1. Except as set forth in Schedule 6.1, during
the past five (5) years, none of the Owners have, nor to the best of any of the
Owner's knowledge, has any prior owner of the Stations been known by
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or used any corporate, partnership, fictitious or other name in the conduct of
the Stations' business or in connection with the use or operation of the
Assets.
6.2 Authorization. The execution and delivery of this Agreement
by each of the Licensees has been duly authorized by all necessary corporate
action on each of their parts. Each of the Licensees shall deliver evidence of
such authorization at Closing. Each of ▇▇▇▇-▇▇▇▇▇ has full power and authority
to execute and deliver this Agreement and to perform his respective obligations
hereunder. This Agreement has been duly executed by Seller and delivered to
Buyer and constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as limited by
laws affecting the enforcement of creditors' rights generally or equitable
principles.
6.3 No Breach. Except as provided on Schedule 6.3, none of (i)
the execution, delivery and performance of this Agreement by Seller, (ii) the
consummation of this Agreement and all other documents or instruments related
thereto or executed in connection therewith or in contemplation of the
Transaction, or (iii) Seller's compliance with the terms and conditions hereof
will, with or without the giving of notice or the lapse of time or both,
conflict with, breach the terms and conditions of, constitute a default under,
or violate either of the Licensee's certificate of incorporation or bylaws, any
judgment, decree, order, injunction, agreement, lease or other instrument to
which Seller is a party or by which Seller is legally bound, or any law, rule,
or regulation applicable to Seller or the operation of the Stations.
6.4 Station Licenses. The Station Licenses are all of the
licenses, permits, and other authorizations used or necessary to lawfully
operate the Stations in the manner and to the full extent as they are now
operated, and the Station Licenses are validly issued in the name of Seller.
Seller has delivered to Buyer true and complete copies of the Station Licenses,
including any and all amendments and other modifications thereto. The Station
Licenses are in full force and effect, are valid for the balance of the current
license term applicable generally to radio stations licensed to communities in
the state where the Stations are located, so far as Seller has any knowledge,
are unimpaired by any acts or omissions of Seller or any of its affiliates, or
the employees, agents, officers, directors, or shareholders of 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). There are no applications, proceedings, or complaints pending or,
to the knowledge of 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). Seller is not aware of
any reason why those of the Station Licenses subject to expiration might not be
renewed in the ordinary course for a full term without material qualifications
or of any reason why any of the Station Licenses might be revoked. The
Stations are in compliance with the Commission's policy on exposure to radio
frequency radiation. No renewal of any Station License would constitute a
major environmental action under the rules of the Commission. There are no
facts which, under the Communications Act of 1934, as amended, or the existing
rules of the Commission, would disqualify Seller from assigning the Station
Licenses or from consummating the transactions contemplated herein within the
times contemplated herein. Seller maintains an appropriate public inspection
file at the Stations' studio
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in accordance with Commission rules. Access to the Stations' transmission
facilities are restricted in accordance with the policies of the Commission.
6.5 Station Applications. There are no Station Applications
pending with the Commission.
6.6 Title to Assets. Except as set forth on Schedule 6.6(a),
Seller has good and marketable title to the Assets, in the case of owned
Assets, and a valid leasehold interest, in the case of leased Assets, in each
case free and clear of all debts, liens, charges, security interests,
mortgages, deeds of trust, pledges, judgments, trusts, adverse claims,
liabilities, collateral assignments, leases, easements, covenants, encumbrances
and other impairments of title ("Liens"), other than as set forth on Schedule
6.6(a). At Closing, Seller shall convey to Buyer good and marketable title to
the Assets free and clear of all Liens other than those set forth on Schedule
6.6(b) ("Permitted Liens").
6.7 Condition of Equipment. The Station Equipment listed on
Schedule 1.2 constitutes all of the personal property that is used, held by the
Seller or others for use by the Stations, or necessary to operate the Stations
as they are now operated. The Station Equipment is in good operating condition
and repair (reasonable wear and tear excepted), is maintained in compliance
with good engineering practice, is performing satisfactorily, is not in need of
repair, has been properly maintained, is available for immediate use and is
otherwise sufficient to permit the Stations to operate in accordance with the
Station Licenses and the rules and regulations of the Commission. All Station
Equipment is type-approved or type-accepted where such type-approval or
type-acceptance is required. No warranty is made regarding the ▇▇▇▇▇▇ ▇▇-1
1100 Khz transmitter.
6.8 Condition of Real Property.
(a) The Real Property listed on Schedule 1.4 constitutes
all the real property owned or leased by Seller or others in connection with
the operation of the Stations as they are now operated.
(b) There are no encroachments upon the Real Property
owned by Seller (the "Real Property-Owned") by any buildings, structures, or
improvements located on adjoining real estate. None of the buildings,
structures, or improvements (including without limitation any ground radials,
guy wires or guy anchors) constructed on the Real Property-Owned encroach upon
adjoining real estate, and all such buildings, structures, and improvements are
constructed in conformity with or are "grandfathered" with respect to all
"setback" lines, easements, and other restrictions, or rights of record, or
that have been established by any applicable building or safety code or zoning
ordinance. Such "grandfathered" approvals shall survive indefinitely the
transfer of the Real Property-Owned to Buyer. No utility lines serving the
Real Property-Owned pass over the lands of others except where appropriate
easements have been obtained. There are no pending or, to the best
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of Seller's knowledge, threatened or contemplated condemnation or eminent
domain proceedings that may affect the Real Property-Owned. There exists no
writ, injunction, decree, order or judgment, nor any litigation, pending, or to
the best of Seller's knowledge, threatened, relating to the ownership, use,
lease, occupancy or operation of any of the Real Property-Owned. Seller's use
and occupancy of the Real Property-Owned complies in all material respects with
all regulations, codes, ordinances, and statutes of all applicable governmental
authorities, including without limitation all environmental protection and
sanitary laws and regulations, occupational safety and health regulations, and
electrical codes. There are no material structural defects in the buildings,
structures, and improvements located on the Real Property-Owned. Roofs of the
Real Property-Owned are in good condition and repair, and all plumbing
equipment, heating, ventilating and air conditioning equipment, electrical
wiring, and water and sewage systems of the Real Property-Owned are operating
properly and are free of any material defects.
(c) The leased premises are leased at the rates and for
terms ending on the dates shown on Schedule 1.4 pursuant to the agreements
described in Schedule 1.4 (the "Lease Agreements"), which are the sole and
complete agreements concerning Seller's use of the leased premises. Each Lease
Agreement is legal, valid, binding, enforceable and in full force and effect.
Neither Seller nor any other party is in default, violation or breach in any
respect under any Lease Agreement, and no event has occurred and is continuing
that constitutes or, with notice or the passage of time or both, would
constitute a default, violation or breach thereunder. No amount payable under
any Lease Agreement is past due. Seller has not received any notice of a
default, offset or counterclaim under any Lease Agreement or any other
communication asserting non-compliance with any Lease Agreement. Seller has
the exclusive right to use and occupy the premises leased under each Lease
Agreement. Seller enjoys peaceful and undisturbed possession of the premises
leased by Seller under the Lease Agreement. Except as set forth on Schedule
6.8(c), the Lease Agreements are free and clear of all Liens, except for
lessors' interests in the leases. Seller has delivered to Buyer, true and
complete copies of the Lease Agreements, together, in the case of any subleases
or similar occupancy agreements, with copies of all overleases. Each lessor of
the Lease Agreements has consented, in the form set forth in Exhibit D (a
"Landlord Consent"), to the assignment of its respective Lease Agreement from
Seller to Buyer on terms and conditions no less favorable than those in effect
on the date hereof, and such assignment will not affect the validity,
enforceability and continuity of any such lease.
(d) All utilities that are required for the full and
complete occupancy and use of the Real Property-Owned for the purposes for
which such properties are presently being used by Seller, including without
limitation electric, water, sewer, telephone and similar services, have been
connected and are in good working order. By the Closing Date, Seller will have
paid all charges for such utilities, including without limitation any "tie-in"
charges or connection fees, except for those charges that will not become due
until after the Closing Date and that are to be prorated between Seller and
Buyer pursuant to Article IV.
6.9 Contracts. The Contracts are assignable to Buyer on terms
and conditions no less favorable than those in effect on the date hereof
without consent, or, if consent
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of the other contracting party to the assignment is required, Seller shall use
its best efforts to secure such consent, at Seller's sole expense, prior to the
Closing Date. Each Contract is in full force and effect and is unimpaired by
any acts or omissions of Seller, Seller's employees, agents, officers,
directors or shareholders. Seller has complied in all material respects will
all Contracts to be assigned to Buyer hereunder, and there has not occurred as
to any Contract any default by Seller or any event that, with notice or the
lapse of time or otherwise, could become a default by Seller. Seller has not
granted or been granted any waiver or forbearance with respect to any of the
Contracts. To the best knowledge of Seller, there has not occurred as to any
Contract any default by any other party thereto or any event that, with notice
or the lapse of time or at the election of any person other than Seller, could
become a default by such party. Those Contracts whose stated duration extends
beyond the Closing Date will, at Closing, be in full force and effect and will
be unimpaired by any acts or omissions of Seller, Seller's agents, employees,
officers, directors or shareholders. Seller has provided to Buyer true and
correct copies of all written Contracts, as modified to date, or true and
complete memoranda describing the terms of all oral Contracts, and all
liabilities and obligations under such Contracts can be ascertained from such
copies or memoranda. The Contracts as amended through the date of this
Agreement will not be modified without Buyer's written consent, which consent
shall not be unreasonably withheld.
6.10 Employees.
(a) Schedule 6.10 contains a true and complete list of
all persons employed at the Stations, each such person's compensation and bonus
arrangements and the Employee Plans listed in Schedule 6.11, if any, applicable
to each such person. Seller is not a party to any agreement or arrangement,
written or oral, with salaried or non-salaried employees except as described in
Schedules 6.10 and 6.11 or included among the Operating Contracts. Except as
described in Schedule 6.10, Seller has no knowledge that any employee
identified in Schedule 6.10 currently plans to terminate employment, whether by
reason of the transactions contemplated by this Agreement or otherwise.
(b) Except as disclosed in Schedule 6.10, Seller is not
a party to or subject to any Contract with any labor organization, nor has
Seller agreed to recognize any union or other collective bargaining unit, nor
has any union or other collective bargaining unit been certified as
representing any of Seller's employees at the Stations. Seller has no
knowledge of any organizational effort currently being made or threatened by or
on behalf of any labor union with respect to employees of Seller at the
Stations. There are no unfair labor practice charges pending or, to the best
of Seller's knowledge, threatened against Seller; there are no pending or
threatened strikes, arbitration proceedings involving labor matters or other
labor disputes affecting Seller or the Stations; and Seller has not experienced
any strikes, work stoppages or other significant labor difficulties of any
nature at the Stations in the past two (2) years.
6.11 Employee Benefit Plans. Schedule 6.11 sets forth a true and
complete list of each employee or retiree benefit or compensation plan within
the meaning of
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Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or compensation, bonus, incentive, deferral, equity based,
severance, termination, retention, change in control, employment or other
similar program, agreement, arrangement, trust or other funding arrangement,
whether or not subject to the provisions of ERISA, to which Seller is bound or
that is or has been established or maintained or in respect of which Seller has
ever had any obligation to contribute (each, an "Employee Plan"). Except
pursuant to an Employee Plan, Seller has no fixed or contingent liability or
obligation to or in respect of any person now or formerly employed at the
Stations or any beneficiary or dependent of any such person, including, without
limitation, in respect of pension or thrift benefits or payments, individual or
supplemental pension benefits or payments or compensation arrangements,
contributions to hospitalization or other health, life or other welfare
benefits, incentive benefits or payments, bonus benefits or payments or
vacation, sick leave, disability and termination benefits or payments,
including workers' compensation. No trade or business (whether or not
incorporated) is or has been as of any date within the preceding six (6) years
treated as a single employer together with Seller pursuant to Section 414 of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "Code"). Seller has not incurred or does not reasonably expect to incur
(either directly or indirectly, including as a result of any indemnification
obligation) any liability that could become a liability of Buyer or, following
the Closing, remain a liability of the Stations under or pursuant to Title I or
IV of ERISA or the penalty, excise tax or joint and several liability
provisions of the Code relating to employee benefit plans and, to the best
knowledge of Seller, no event, transaction or condition has occurred or exists
which could result in any such liability. Each of the Employee Plans has been
operated and administered in all respects in accordance with all applicable
laws, including but not limited to ERISA and the Code. It is expressly
understood that Buyer is not assuming any obligation of Seller under or with
respect to any Employee Plan.
6.12 Litigation. Except as set forth on Schedule 6.12, there is
no unsatisfied judgment outstanding and no litigation, proceeding, claim or
investigation of any nature pending or, to Seller's best knowledge, threatened
against Seller or any of the Assets which might adversely affect the continued
operation of the Stations or impair the value of the Assets or which might
adversely affect Seller's ability to perform in accordance with the terms of
this Agreement. Seller has no knowledge of any facts that could reasonably
result in any such proceedings. With respect to each matter set forth therein,
Schedule 6.12 sets forth a description of the forum for the matter, the parties
thereto and the type and amount of relief sought.
6.13 Payment of Taxes. Seller has, or by the Closing Date will
have, duly filed all tax returns and forms required to be filed in respect of
the Stations and paid in full or discharged all taxes, assessments, excises,
interest, penalties, deficiencies and other levies relating to the Assets or
that could give rise to a lien or other encumbrances on the Assets in the hands
of the Buyer, excepting such taxes, assessments, and other levies as will not
be due until after the Closing Date and that are to be prorated between Seller
and Buyer pursuant to Article IV. No event has occurred that could impose on
Buyer any liability for any taxes, penalties, or interest due or to become due
from Seller from any taxing authority.
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6.14 Compliance With Laws. To Seller's best knowledge, Seller has
complied in all material respects with, and is not in violation of any federal,
state or local laws, regulations or orders (including any applicable statutes,
ordinances or codes relating to zoning and land use, health and sanitation,
occupational safety, and the use of electrical power but excluding federal,
state and local laws, regulations and orders relating to environmental
protection, except as provided in Article VIII hereof) affecting the Assets,
Seller's business, or the operation of the Stations. Without limiting the
generality of the foregoing, to Seller's best knowledge:
(a) The Stations' transmitting and studio equipment is
operating in accordance with the terms and conditions of the Station Licenses
and the rules, regulations and policies of the Commission, including without
limitation all regulations concerning equipment authorization and human
exposure to radio frequency radiation. To the best of Seller's knowledge, (i)
the Stations are not causing interference in violation of Commission rules to
the transmission of any other broadcast Station or communications facility and
have not received any complaints with respect thereto and (ii) no other
broadcast Station or communications facility is causing interference in
violation of Commission rules to the Stations' transmissions or the public's
reception of such transmissions. There are no outstanding construction
permits.
(b) Seller has, in the conduct of the Stations'
business, complied in all material respects with all applicable laws, rules and
regulations relating to the employment of labor, including those concerning
wages, hours, equal employment opportunity, collective bargaining, pension and
welfare benefit plans, and the payment of Social Security and similar taxes,
and Seller is not liable for any arrearages of wages or any tax penalties due
to any failure to comply with any of the foregoing.
(c) Seller has received no notification from the
Commission that Seller's affirmative action program for the Stations or
Seller's other employment practices fail to comply with Commission rules and
policies.
(d) All ownership reports, employment reports, tax
returns and other documents required to be filed by Seller with the Commission
or other governmental authorities have been filed. Such items as are required
to be placed in the Stations' local public inspection files have been placed in
such files. All proofs of performance and measurements that are required to be
made by Seller with respect to the Stations' transmission facilities have been
completed and filed at the Stations. All information contained in the
foregoing documents is true, complete and accurate in all material respects.
(e) The towers used in the operation of the Stations are
painted, obstruction marked and lighted to the extent required by, and in
accordance with the rules and regulations of the Federal Aviation
Administration (the "FAA"), the Commission and any other applicable
requirements of law. Appropriate notifications to the FAA have been filed for
such towers where required by the Commission's rules and regulations.
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6.15 Insolvency Proceedings. Neither Seller nor 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. Seller has not 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. After giving effect to
the Transaction, Seller (i) will have sufficient capital to carry on its
business and transactions, (ii) will be able to pay its debts as they mature or
become due, and (iii) will own assets the fair value of which will be greater
than the sum of all liabilities (including contingent liabilities) of Seller
not specifically assumed by Buyer pursuant to the terms of this Agreement.
Seller is not insolvent nor will it become insolvent as a result of entering
into this Transaction.
6.16 Citizenship. Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Code. On the Closing Date, Seller will deliver to
Buyer an affidavit to that effect, verified as true and sworn to under penalty
of perjury by a duly-authorized officer of Seller. The affidavit shall also
set forth Seller's name, address, taxpayer identification number, and such
additional information as may be required to exempt the Transaction from the
withholding provisions of Section 1445 of the Code. Buyer shall have the right
to furnish copies of the affidavit to the Internal Revenue Service.
6.17 Patents, Trademarks, Copyrights. The call signs and all
slogans, logos, copyrights, patents, trademarks, trade names, service marks,
and other similar intangible property rights, including registrations and
applications to register or renew the registrations of any of the foregoing,
currently used to promote or identify the Stations, or otherwise used in
connection with the Stations' business, are listed or described on Schedule 1.5
(the "Promotional Rights"). The Promotional Rights are either owned or validly
licensed by Seller, and Schedule 1.5 identifies which Promotional Rights are so
owned and which are licensed, and if licensed, the royalties paid thereon and
the parties paid thereunder. Seller does not have any knowledge, nor has
Seller received any notice to the effect that its use of any of the Promotional
Rights may be or are claimed to infringe on the right of another. Seller has
no knowledge of any infringement or unlawful or unauthorized use of such
Promotional Rights, including without limitation the use of any call sign,
slogan or logo by any broadcast or cable Station in the Atlanta, Georgia or
Hapeville, Georgia areas that may be confusingly similar to the call signs,
slogans, and logos currently used by the Stations. The operations of the
Stations do not infringe any copyright, patent, trademark, trade name, service
▇▇▇▇, or other similar right of any third party. Seller has not sold, licensed
or otherwise disposed of any Promotional Rights to any person or entity and
Seller has not agreed to indemnify any person or entity for any patent,
trademark or copyright infringement. Schedule 1.5 lists all of the Promotional
Rights which have been duly registered with, filed in or issued by, as the case
may be, the United States Patent and Trademark Office and United States
Copyright Office or other filing offices, domestic or foreign.
6.18 Financial Statements. Seller prepares, on a monthly basis, a
Statement of Earnings and a Balance Sheet for each Licensee. The Earnings
Statements and Balance Sheets provided to Buyer are listed on Schedule 6.18
(the "Financial Statements"). All reports are prepared internally, although
the year-end adjustments are provided by Seller's
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external accountant. The July, 1998 reports for Forus Atlanta were the first
prepared for that Licensee after the acquisition and reconstruction of
Broadcast Station WWWE. The accountant has not yet provided the 1998 year-end
adjustments for that Licensee. The 1997 year-end adjustments for Forus Georgia
are reflected in the reports of that company for June, 1998; the 1998 year-end
adjustments have not yet been received. Subject to the foregoing, all
Financial Statements (i) have been prepared on a consistent basis throughout
the periods involved and (ii) fairly and accurately reflect the financial
condition and the results of the Stations' operations and cash flows as of the
dates and for the periods indicated. Except as reflected in the Financial
Statements or otherwise disclosed to Buyer in writing, no event has occurred
since the preparation of the most recent Financial Statements that would make
such Financial Statements misleading.
6.19 Sufficiency of Assets. The Assets are sufficient to operate
the Stations as they are now operated.
6.20 No Misleading Statements. No statement made by Seller to
Buyer and no information provided or to be provided by Seller to Buyer pursuant
to this Agreement or in connection with the negotiations covering the
transaction, contains or will contain any untrue statement of a material fact
or omits or will omit a material fact necessary in order to make such
statements or information not misleading.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties, all of which
have been relied upon by Seller in entering into this Agreement and, except as
otherwise specifically provided, all of which shall be true and correct as of
Closing.
7.1 Organization. Buyer is a corporation duly organized, validly
existing, and in good standing, under the laws of the State of Delaware. Buyer
is duly qualified to do business in the State of Georgia.
7.2 Authorization. The execution and delivery of this Agreement
by Buyer has been duly authorized by all necessary corporate action on the part
of Buyer. Evidence of such authorizations shall be delivered to Seller at
Closing. This Agreement has been duly executed by Buyer and delivered to Seller
and constitutes a valid and binding agreement of Buyer, enforceable in
accordance with its terms.
7.3 No Breach. Except for Buyer's obligation to comply with
certain requirements of that certain Credit Agreement (the "Credit Agreement")
dated as of March 30, 1998 among Buyer, certain affiliates of Buyer, the
lenders named therein (the "Senior Lenders") and the Bank of Montreal, Chicago
Branch, as agent, including obtaining the consent of the Senior Lenders, none
of (i) the execution, delivery and performance of this Agreement by Buyer, (ii)
the consummation of the Transaction, or (iii) Buyer's compliance with the terms
and conditions hereof will, with or without the giving of notice or the lapse
of time or both, conflict with, breach the terms and conditions of, constitute
a default under, or violate Buyer's articles of
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incorporation, bylaws, any judgment, decree, order, agreement, lease or other
instrument to which Buyer is a party or by which Buyer is legally bound, or any
law, rule or regulation applicable to Buyer.
7.4 Litigation. There is no action, suit, investigation or other
proceedings pending or, to Buyer's best knowledge, threatened which may
adversely affect Buyer's ability to perform in accordance with the terms of
this Agreement, and Buyer is unaware of any facts which could reasonably result
in any such proceeding.
7.5 No Misleading Statements. To Buyer's knowledge, no statement
made by Buyer to Seller and no information provided or to be provided by Buyer
to Seller pursuant to this Agreement or in connection with the negotiations
covering the purchase and sale contemplated herein contains or will contain any
untrue statement of a material fact or omits or will omit a material fact
necessary in order to make such statements or information not misleading.
7.6 Qualification as Broadcast Licensee. Buyer knows of no fact
that would, under the Communications Act of 1934, as amended, or the rules,
regulations and policies of the FCC, disqualify either Buyer or WAEC License
Limited Partnership ("License Sub"), an affiliate, from becoming the licensee
of the Stations. There are no proceedings, complaints, notices of forfeiture,
claims, investigations pending or, to the knowledge of Buyer, threatened
against any or in respect of any of the broadcast stations licensed to Buyer or
its affiliates that would materially impair the qualifications of either Buyer
or License Sub to become a licensee of the Stations.
ARTICLE VIII.
ENVIRONMENTAL MATTERS
Seller makes no warranties or representations concerning environmental
conditions at the Real Property being sold hereunder.
ARTICLE IX.
PRE-CLOSING OBLIGATIONS
The parties covenant and agree as follows with respect to the period
prior to the Closing Date:
9.1 Application for Commission Consent. Within ten (10) business
days after the date of this Agreement, Seller and Buyer shall join in and file
an application or applications requesting the Commission's written consent to
the assignment of the Station Licenses from Seller to Buyer (the "Assignment
Applications"), and they will diligently take all steps necessary or desirable
and proper to prosecute expeditiously the Assignment Applications and to obtain
the Commission's determination that approval of the Assignment Applications
will serve the public interest, convenience, and necessity, including, without
limitation, compliance with the public notice requirements of the
Communications Act of 1934, as amended. The failure by either party to timely
file or diligently prosecute its portion of the Assignment
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Applications shall be deemed a material breach of this Agreement. Each party
shall bear its own expenses in connection with the preparation, filing and
prosecution of the Assignment Applications. Each party will advise the other
of all inquiries from the Commission staff concerning the Assignment
Applications and will provide the other party copies of all correspondence from
and to the Commission (including any amendments filed) regarding the same.
9.2 Other Governmental Consents. Promptly following the
execution of this Agreement, Seller and Buyer shall proceed to prepare and file
with the appropriate governmental authorities (other than the Commission) such
requests, if any, for approval or waiver as may be required from such
governmental authorities in connection with the Transaction, and shall jointly,
diligently and expeditiously prosecute, and shall cooperate fully with each
other in the prosecution of, such requests for approval or waiver and all
proceedings necessary to secure such approvals and waivers.
9.3 Financial Information. Between the date hereof and the
Closing Date, Seller shall furnish Buyer with monthly financial statements
within fifteen (15) days after the end of each calendar month, and with such
additional data concerning the Stations' financial condition as are prepared by
Seller in the ordinary course of business, in the same form as the Financial
Statements contained in Schedule 6.18. Such financial statements and
additional data shall be accompanied by a certificate executed by the president
of Forus Georgia certifying that such financial statements and data: (i) have
been prepared on a consistent basis throughout the periods involved (except to
the extent noted thereon) and (ii) fairly and accurately reflect the financial
condition and the results of operations and cash flows of the Stations as of
the dates and for the periods indicated in all material respects. Between the
date hereof and the Closing Date, the president of Forus Georgia shall make
himself available to Buyer, upon reasonable prior notice, to discuss and
explain the compilation and preparation of the Financial Statements and the
monthly financial statements and such other additional data provided pursuant
to this Section 9.3, and each of the constituent elements reflected thereon.
9.4 Third Party Consents. Seller shall use its best efforts to
obtain the consents of the other contracting parties to the assignment of the
Contracts requiring such consent. The delivery of such consents to the
assignment of Contracts that are identified on Schedules 1.3(a), 1.3(c) and
1.3(e) to be material to the operation of the Stations ("Material Contracts")
shall be a condition to Buyer's obligation to close under Section 10.2.7.
9.5 Environmental Site Assessment. Within thirty (30) days of
the execution of this Agreement, Buyer shall obtain a Phase I Environmental
Assessment for each of the parcels of the Real Property-Owned (the
"Environmental Assessment"). In the event the Environmental Assessment
discloses any condition which could subject the owner of parcels of the Real
Property-Owned to liability of any kind under any local, state or federal
statute or regulation relating to the protection of human health or the
environment (the "Environmental Laws"), Seller shall promptly cause the
conditions to be remedied such that no conditions revealed by the Environmental
Assessment exists; provided, however, that Seller shall not be obligated to
expend in the aggregate in excess of Ten Thousand Dollars ($10,000) to effect
such
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remediation. In the event such remedial action(s) does cost in the aggregate
in excess of Ten Thousand Dollars ($10,000), Seller may elect not to take such
remedial action. In such event, Buyer may require Seller to proceed to Closing
and Buyer shall receive a proration at Closing, in the amount of Ten Thousand
Dollars ($10,000), to be paid by Seller to Buyer by a separate certified or
cashier's check and not by a credit towards the Purchase Price payable as
provided in Article III hereof. Alternatively, Buyer may terminate this
Agreement and neither Buyer nor Seller shall have any liability to the other as
a result of such termination. The cost of completing the Environmental
Assessment shall be paid by Buyer.
9.6 Title Insurance. Within ten (10) days of the date of this
Agreement, Seller shall deliver to Buyer its current title insurance policies.
Seller 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 shall be paid by Seller and the policy to be
issued pursuant to the Title Commitment shall be paid by Buyer.
9.7 [Reserved].
9.8 Confidentiality. Each party agrees that any and all
information learned or obtained by it from the other (and that is not otherwise
public or known in the radio broadcast industry) shall be confidential and
agrees not to disclose any such information to any person whatsoever other than
as is necessary for the purpose of effecting the Transaction or as otherwise
required by law.
9.9 Access. Between the date hereof and the Closing Date, Seller
shall give, upon prior notice, Buyer or representatives of Buyer (including
lenders, consultants and accountants) reasonable access to the Assets and to
the books and records of Seller relating to the business and operation of the
Stations. It is expressly understood that, pursuant to this Section, Buyer, at
its sole expense, shall be entitled to make such engineering inspections of the
Stations, and such audits of the Stations' financial records as Buyer may
desire, so long as the same do not unreasonably interfere with Seller's
operation of the Stations.
9.10 Employee Matters.
(a) As set forth on Schedule 6.10, Seller has provided
to Buyer an accurate list of all current employees of the Stations together
with a description of the terms and conditions of their respective employment
and their duties as of the date of this Agreement. Seller shall promptly
notify Buyer of any changes that occur prior to Closing with respect to such
information.
(b) Buyer may extend offers of employment to those
employees of Seller whom it desires to hire (such employees are hereinafter
referred to as the "Hired Employees"), which offers shall be on terms and
conditions that Buyer shall determine in its sole discretion. Buyer shall
provide notice to Seller within fifteen (15) days of the FCC's initial grant of
the Assignment Applications identifying those
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employees to whom Buyer intends to extend offers of employment. Nothing in
this Agreement shall obligate Buyer to hire any employee of Seller. Seller
waives any claims against Buyer or any of the Hired Employees arising from such
employment, including without limitation any claims arising from any employment
agreement or non-compete agreement. On or prior to Closing, Seller shall
compensate each of the Stations' employees for all accrued commissions, accrued
vacations, sick leave and other accrued benefits, or if Buyer assumes such
obligations, such liabilities shall be prorated between Seller and Buyer
pursuant to Article IV. Seller shall terminate the employment of all employees
effective on the Closing Date and shall cooperate with, and use its best
efforts to assist, Buyer in its efforts to secure satisfactory employment
arrangements with the Hired Employees to whom Buyer makes offers of employment.
(c) Nothing contained in this Agreement shall confer
upon any employee of Seller any right with respect to continued employment by
Buyer, nor shall anything herein interfere with the right of Buyer to terminate
the employment of any of the Hired Employees at any time, with or without
cause.
9.11 Operations Prior to Closing. Between the date of this
Agreement and the Closing Date:
(a) Seller shall operate the Stations in the normal and
usual manner, consistent with Seller's past practice and the rules,
regulations, and policies of the Commission, and shall conduct the Stations'
business only in the ordinary course. To the extent consistent with such
operations, Seller shall use its best efforts to: (i) maintain the present
character and entertainment format of the Stations and the quality of their
programs; (ii) keep available for Buyer the services and number of the
Stations' present employees reasonably necessary for the operation of the
Stations; (iii) preserve the Stations' present customers and business
relations; (iv) continue to make expenditures and engage in activities designed
to promote the Stations; and (v) continue making capital expenditures, in the
case of both (iv) and (v) of this Section 9.11(a), consistent with past
practices of the Stations.
(b) Seller shall: (i) subject to Section 14.3, maintain
the Assets in their present condition (reasonable wear and tear in normal use
excepted); and (ii) maintain all inventories of supplies, tubes, and spare
parts at levels consistent with the Stations' prior practices.
(c) Seller shall maintain its books and records in the
usual and ordinary manner, on a basis consistent with prior periods.
(d) Seller shall comply with all laws, rules, ordinances
and regulations applicable to it, to the Assets and to the business and
operation of the Stations.
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(e) Seller shall perform all Contracts without default
and shall pay all of Seller's trade accounts payable in a timely manner;
provided, however, that Seller may dispute, in good faith, any alleged
obligation of Seller.
(f) Seller shall not, without the express written
consent of Buyer which shall not be unreasonably withheld, and which shall be
deemed given in the event Buyer has not responded to a written request therefor
within ten (10) days: (i) sell or agree to sell or otherwise dispose of any of
the Assets (A) other than in the ordinary course of business, and (B) unless
such Assets are replaced prior to Closing by assets of equal or greater worth,
quality and utility; (ii) acquiesce in any infringement, unauthorized use or
impairment of the Intangible Property or change the Stations' call signs; (iii)
enter into any employment contract on behalf of the Stations unless the same is
terminable at will and without penalty; or (iv) enter into any other contract,
lease or agreement that will be binding on Buyer after Closing unless Seller
has entered into such contract, lease or agreement in the ordinary course of
business and consistent with past practice and such contract, lease or
agreement does not, in the aggregate, impose obligations in excess of Ten
Thousand Dollars ($10,000).
9.12 Adverse Developments. Seller shall promptly notify Buyer of
any unusual or materially adverse developments that occur prior to Closing with
respect to the Assets or the operation of the Stations; provided, however, that
Seller's compliance with the disclosure requirements of this Section 9.12 shall
not relieve Seller of any obligation with respect to any representation,
warranty or covenant of Seller in this Agreement or waive any condition to
Buyer's obligations under this Agreement.
9.13 Administrative Violations. If Seller receives any finding,
order, complaint, citation or notice prior to the Closing Date which states
that any aspect of the Stations' operations violates any rule or regulation of
the Commission or of any other governmental authority (an "Administrative
Violation"), including without limitation any rule or regulation concerning
environmental protection, the employment of labor, or equal employment
opportunity, Seller shall promptly notify Buyer of the Administrative
Violation, remove or correct the Administrative Violation, and be responsible
for the payment of all costs associated therewith, including any fines or back
pay that may be assessed.
9.14 [Reserved.]
9.15 Control of Stations. This Agreement shall not be consummated
until after the Commission has given its written consent thereto, and
notwithstanding anything herein to the contrary, between the date of this
Agreement and the Closing Date, Buyer shall not directly or indirectly control,
supervise or direct, or attempt to control, supervise or direct the operation
of the Stations. Such operations shall be the sole responsibility of Seller.
9.16 Buyer's Financing.
9.16.1 Other Documents and Acts. Seller shall execute such
other reasonable documents and perform such other reasonable acts as are
conventionally executed and
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performed by sellers when reasonably required to assist buyers in financing
acquisitions. All such actions shall be at Buyer's expense.
9.16.2 Senior Lender's Consent. Buyer shall obtain any
consent required under the Credit Agreement in order to enter into and perform
its obligations under this Agreement.
ARTICLE X.
CONDITIONS PRECEDENT
10.1 Mutual Conditions. The obligation of both Seller and Buyer
to consummate this Agreement is subject to the satisfaction of each of the
following conditions:
10.1.1 Governmental Consents. The Commission shall have
granted its consent to the Assignment Applications (the "FCC Consent").
10.1.2 Absence of Litigation. As of the Closing Date, no
action, claim, suit or proceeding seeking to enjoin, restrain, or prohibit the
consummation of the Transaction shall be pending before any court, the
Commission, or any other governmental authority; provided, however, that this
condition may not be invoked by a party if any such action, suit, or proceeding
was solicited or encouraged by, or instituted as a result of any act or
omission of, such party.
10.2 Conditions to Buyer's Obligation. In addition to
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Buyer to consummate this Agreement is subject to the satisfaction of each of
the following conditions:
10.2.1 Representations and Warranties. The representations
and warranties of Seller to Buyer shall be true, complete, and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
10.2.2 Compliance with Conditions. All of the terms,
conditions and covenants to be complied with or performed by Seller on or
before the Closing Date shall have been timely complied with and performed in
all material respects.
10.2.3 No Material Adverse Development. No material
adverse development shall have occurred with respect to the Stations that
results in a significant impairment to the ability of the Stations to operate
as they are currently operated or represents a substantial impairment of the
aggregate value of the Stations or Assets being conveyed, provided, however, a
decline in economic conditions generally shall not constitute a substantial
impairment of the aggregate value of the Stations or Assets being conveyed.
10.2.4 Title Commitment and Surveys. Buyer shall have
timely received the Title Commitment, which shall reveal nothing inconsistent
with Seller's representations and warranties hereunder. Seller shall have
delivered to Buyer, at Seller's expense, surveys of the Real Property (i)
certified to Buyer and the Senior Lenders and sufficient to remove any "survey
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exception" from the title insurance policies to be issued pursuant to the Title
Commitments and (ii) which shall reveal nothing inconsistent with Seller's
representations and warranties hereunder.
10.2.5 Validity of Station Licenses. On the Closing Date,
Seller shall be the owner and holder of the Station Licenses to the extent that
such authorizations can be owned or held by Seller under the Communications Act
of 1934, as amended; the Station Licenses shall be in unconditional full force
and effect, valid for the balance of the current license term applicable
generally to radio stations licensed to communities in the state where the
Stations are located; and so far as Seller has any knowledge, the Station
Licenses shall be unimpaired by any acts or omissions of Seller or Seller's
employees, agents, officers, directors or shareholders.
10.2.6 Closing Documents. Seller shall deliver to Buyer
all of the closing documents specified in Section 11.2.1, all of which
documents shall be dated as of the Closing Date, duly executed, and in a form
customary in the state where the Assets are located and reasonably acceptable
to Buyer.
10.2.7 Third Party Consents. Seller shall have obtained
all consents to the assignment of Material Contracts (a "Required Consent"),
such that Buyer will enjoy all of the rights and privileges of Seller under the
Contracts subject only to the same obligations as are binding on Seller
thereunder, pursuant to the present terms thereof. In the event Seller fails
to obtain any consent necessary to validly assign a Contract (other than a
Required Consent), such Contract shall not be assigned to Buyer at Closing;
provided, however, that, Buyer may elect to require that Seller provide Buyer
the benefits under such Contract until such necessary consent is obtained and
such Contract is then assigned to Buyer; provided further, that Buyer shall
reimburse Seller for amounts paid by Seller pursuant to the terms of such
Contracts to the extent Buyer receives benefits thereunder.
10.2.8 [Reserved.]
10.2.9 Settlement of Claims. Seller shall have settled any
and all claims against Seller that affect or concern the Assets.
10.2.10 Finality. The FCC Consent shall have become a Final
Order. "Final Order" means an order or action of the Commission that, by reason
of expiration of time or exhaustion of remedies, is no longer subject to
administrative or judicial reconsideration or review.
10.2.11 Satisfactory Environmental Assessment. To the
extent that the Environmental Assessment or additional testing conducted
pursuant to Section 9.5 hereof reflects the existence of conditions which could
subject the owner of parcels of the Real Property to liability of any kind
under any Environmental Law, either (i) Seller shall have completed the
remediation of such conditions in accordance with Section 9.5 hereof or (ii)
Buyer shall have provided notice to Seller of Buyer's election to proceed to
Closing with the proration to the Purchase Price specified in Section 9.5
hereof.
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10.3 Conditions to Seller's Obligation. In addition to
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Seller to consummate this Agreement is subject to satisfaction of each of
the following conditions:
10.3.1 Representations and Warranties. The representations
and warranties of Buyer to Seller shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
10.3.2 Compliance with Conditions. All of the terms,
conditions and covenants to be complied with or performed by Buyer on or before
the Closing Date shall have been timely complied with and performed in all
material respects.
10.3.3 Payment. Buyer shall have paid Seller the Purchase
Price as provided in Article III.
10.3.4 Closing Documents. Buyer shall deliver to Seller
all the closing documents specified in Section 11.2.2, all of which documents
shall be dated as of the Closing Date, duly executed, and in a form customary
in transactions of this type and reasonably satisfactory to Seller.
ARTICLE XI.
CLOSING
11.1 Closing Date. The Closing hereunder shall occur on a date
mutually agreeable to Buyer and Seller no later than thirty (30) days after the
Commission's action granting its consent to the Assignment Applications has
become a Final Order, or, at the election of the Buyer, the date of the
Commission's action granting its consent (the "Closing Date"); provided,
however, that the Closing shall occur no later than May 1, 2000. The Closing
shall be effective as of 12:01 a.m. EST on the Closing Date. The Closing shall
take place on the Closing Date at (i) the offices of Buyer's counsel in
Washington, D.C., commencing at 10:00 a.m. EST or (ii) such other mutually
acceptable time or place. If, as of the Closing Date, any condition precedent
described in Article X has not been satisfied, the party that is entitled to
require that such condition be satisfied may (in its sole discretion) notify
the other party of the absence of such condition precedent at or before the
Closing and simultaneously therewith postpone the Closing until a date ten (10)
days after all such conditions have been (or are able to be) performed, and
such postponed date shall constitute the new Closing Date for all purposes
hereunder. Each of the parties shall use its reasonable best efforts to obtain
any FCC authority necessary to schedule the Closing Date as contemplated in
this Section.
11.2 Performance at Closing. The following documents shall be
executed and delivered at Closing:
11.2.1 Seller shall deliver to Buyer:
(a) A certificate executed by Seller attesting to
Seller's compliance with the matters set forth in Sections 10.2.1 and 10.2.2
together with certified
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copies of (i) the Certificate of Incorporation of Seller and (ii) appropriate
evidence of Seller's authorization to enter into and consummate this Agreement.
(b) One or more assignments transferring to Buyer all of
the interests of Seller in and to the Station Licenses, any Station
Applications, and any other licenses, permits, and authorizations issued by any
other governmental authorities that are used in or necessary for the lawful
operation of the Stations.
(c) One or more bills of sale conveying to Buyer the
Station Equipment.
(d) One or more assignments, together with all required
consents assigning to Buyer all of the Material Contracts and all other
Contracts for which the necessary contents have been obtained, the Station
Records and the Intangible Property.
(e) One or more assignments, general warranty deeds or
other appropriate instruments conveying to Buyer all rights of Seller in the
Real Property and all consents to such assignments necessary for the legally
enforceable assignment of such interests.
(f) The Covenant.
(g) An opinion of Seller's corporate and FCC Counsel,
dated the Closing Date, substantially in the form set forth in Exhibit B,
subject to customary qualifications, and addressed to Buyer.
(h) The affidavit described in Section 6.16.
(i) The Landlord Consents.
(j) A certified or cashier's check in the amount of
proration, if any, due Buyer pursuant to Article IV and Section 9.5 hereof.
11.2.2 Buyer shall deliver to Seller:
(a) A certificate executed by Buyer attesting to Buyer's
compliance with the matters set forth in Sections 10.3.1 and 10.3.2, together
with certified copies of (i) the Certificate of Incorporation of Buyer and (ii)
appropriate evidence of Buyer's authorization to enter into and consummate this
Agreement.
(b) The Purchase Price as provided in Section 10.3.3
hereof.
(c) Such assumption agreements and other instruments and
documents as are required to make, confirm, and evidence Buyer's assumption of
and obligation to pay, perform, or discharge Seller's obligations under the
Contracts to the extent the same are to be assumed by Buyer pursuant to the
terms of this Agreement.
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(d) A certified or cashier's check in the amount of
proration, if any, due Seller pursuant to Article IV hereof.
11.2.3 Other Documents and Acts. The parties will also
execute such other documents and perform such other acts, before and after the
Closing Date, as may be necessary for the complete implementation and
consummation of this Agreement.
ARTICLE XII.
POST-CLOSING OBLIGATIONS
The parties covenant and agree as follows with respect to the period
subsequent to the Closing Date:
12.1 Indemnification.
12.1.1 Buyer's Right to Indemnification. Seller undertakes
and agrees to indemnify, defend by counsel reasonably acceptable to Buyer, and
hold harmless Buyer, its parent, subsidiaries, affiliates, successors and
assigns and their respective directors, officers, employees, shareholders,
representatives and agents (hereinafter referred to collectively as "Buyer
Indemnitees") from and against and in respect of any and all losses, costs,
liabilities, claims, obligations, diminution in value and expenses, including
reasonable attorneys' fees, incurred or suffered by a Buyer Indemnitee arising
from (i) the claims of third parties with respect to operation of the Stations
or ownership of the Assets prior to Closing not expressly assumed by Buyer
pursuant to this Agreement or otherwise consented to by Buyer in writing; (ii)
a breach, misrepresentation, or other violation of any of Seller's covenants,
warranties or representations contained in this Agreement; (iii) all liens,
charges, or encumbrances on any of the Assets which are not expressly permitted
by this Agreement or otherwise consented to by Buyer in writing; (iv) all
Administrative Violations and alleged Administrative Violations occurring prior
to Closing; and (v) any breach or default by Seller under any Contract prior to
Closing. The foregoing indemnity is intended by Seller to cover all acts,
suits, proceedings, claims, demands, assessments, adjustments, diminution in
value, costs, and expenses with respect to any and all of the specific matters
in this indemnity set forth.
12.1.2 Seller's Right to Indemnification. Buyer undertakes
and agrees to indemnify, defend by counsel reasonably acceptable to Seller, and
hold harmless Seller, its parent, subsidiaries, affiliates, successors and
assigns and their respective directors, officers, employees, shareholders,
representatives and agents (hereinafter referred to collectively as "Seller
Indemnitees") against any and all losses, costs, liabilities, claims,
obligations and expenses, including reasonable attorneys' fees, incurred or
suffered by a Seller Indemnitee arising from (i) the claims of third parties
with respect to the operation of the Stations or ownership of the Assets after
Closing; (ii) a breach, misrepresentation, or other violation of any of Buyer's
covenants, warranties or representations contained in this Agreement; (iii) all
liabilities under the Contracts to the extent specifically assumed by Buyer
pursuant to this Agreement; and (iv) any breach or default by Buyer under any
Contract after Closing. The foregoing indemnity is intended by Buyer to cover
all acts, suits, proceedings, claims, demands,
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assessments, adjustments, costs, and expenses with respect to any and all of
the specific matters in this indemnity set forth.
12.1.3 Conduct of Proceedings. If any claim or proceeding
covered by the foregoing agreements to indemnify and hold harmless shall arise,
the party who seeks indemnification (the "Indemnified Party") shall give
written notice thereof to the other party (the "Indemnitor") promptly after the
Indemnified Party learns of the existence of such claim or proceeding;
provided, however, that the Indemnified Party's failure to give the Indemnitor
prompt notice shall not bar the Indemnified Party's right to indemnification
unless such failure has materially prejudiced the Indemnitor's ability to
defend the claim or proceeding. The Indemnitor shall have the right to employ
counsel reasonably acceptable to the Indemnified Party to defend against any
such claim or proceeding, or to compromise, settle or otherwise dispose of the
same, if the Indemnitor deems it advisable to do so, all at the expense of the
Indemnitor; provided that the Indemnitor shall not have the right to control
the defense of any such claim or proceeding unless it has acknowledged in
writing its obligation to indemnify the Indemnified Party fully from all
liabilities incurred as a result of such claim or proceeding and then and
periodically thereafter provides the Indemnified Party with reasonably
sufficient evidence of the ability of the Indemnitor to satisfy any such
liabilities. The parties will fully cooperate in any such action, and shall
make available to each other any books or records useful for the defense of any
such claim or proceeding. If the Indemnitor fails to acknowledge in writing
its obligation to defend against or settle such claim or proceeding within
twenty (20) days after receiving notice thereof from the Indemnified Party (or
such shorter time specified in the notice as the circumstances of the matter
may dictate), the Indemnified Party shall be free to dispose of the matter, at
the expense of the Indemnitor, in any way in which the Indemnified Party deems
to be in its best interest.
12.1.4 Indemnification Not Sole Remedy. The right to
indemnification hereunder shall not be the exclusive remedy of any party in
connection with any breach by another party of its representations, warranties,
or covenants, nor shall such indemnification be deemed to prejudice or operate
as a waiver of any remedy to which any party may otherwise be entitled as a
result of any such breach.
12.1.5 Limits on and Conditions of Indemnification;
Threshold and Cap. Notwithstanding any other provision hereof, no Indemnified
Party shall be entitled to make a claim against an Indemnitor in respect of any
breach of this Agreement except to the extent that the aggregate amount of such
damages exceeds the amount of Twenty Five Thousand Dollars ($25,000); provided,
however, that once such aggregate has been exceeded, such Indemnitor shall be
liable for the full amount of such damages. Notwithstanding any other
provision of the Agreement, neither the indemnity obligation of Seller nor the
indemnity obligation of Buyer shall exceed One Million Dollars ($1,000,000).
Notwithstanding the immediately preceding sentence, the indemnity obligation of
▇▇▇▇-▇▇▇▇▇ shall not exceed Twenty Five Thousand Dollars ($25,000), provided,
however, this limitation shall not apply in respect of any amounts distributed
from the Licensees to ▇▇▇▇-▇▇▇▇▇, if such distribution renders either of the
Licensees insolvent or otherwise unable to satisfy any of their respective
indemnity obligations, in whole or in part, set forth in this Agreement.
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12.2 Post-Closing Access. Each party agrees that it will
cooperate with and make available to the other party, during normal business
hours and upon reasonable notice, all books and records which are necessary or
useful in connection with any tax inquiry, audit, investigation or dispute, any
litigation or investigation or any other matter requiring any such books and
records, information or employees for any reasonable business purpose. The
party requesting any such books and records, information or employees shall
bear all of the out-of-pocket costs and expenses reasonably incurred in
connection with providing such books and records, information or employees. All
information received pursuant to this Section 12.2 shall be kept confidential
by the party receiving it. If Buyer or Seller is required by legal process or
operation of law to disclose any confidential information, it shall provide the
other party with prompt written notice of such request so that such other party
may seek an appropriate protective order.
ARTICLE XIII.
DEFAULT AND REMEDIES
13.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Stations abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) If on the date that would otherwise be the Closing
Date any of the conditions precedent to the obligations of Seller set forth in
Section 10.3 hereof have not been satisfied in all material respects or waived
in writing by Seller.
(b) If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree or order that would prevent
or make unlawful the Closing.
(c) If there shall have been any material breach of any
representation, warranty, covenant or agreement made herein on the part of
Buyer.
(d) If the Closing shall not have occurred by May 1,
2000.
13.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Stations abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) If on the date that would otherwise be the Closing
Date any of the conditions precedent to the obligations of Buyer set forth in
Section 10.2 hereof have not been satisfied in all material respects or waived
in writing by Buyer.
(b) If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree or order that would prevent
or make unlawful the Closing.
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(c) If there shall have been any material breach of any
representation, warranty, covenant or agreement made herein on the part of
Seller.
(d) If the Closing shall not have occurred by May 1,
2000.
13.3 Letter of Credit. Upon execution and delivery of this
Agreement, Buyer shall deliver a letter of credit in the amount of Five Hundred
Thousand Dollars ($500,000) (the "Letter of Credit") to Force Communications
and Consultants, LLC (the "Escrow Agent") in accordance with an escrow
agreement among Buyer, Seller and the Escrow Agent (the "Escrow Agreement")
attached hereto as Exhibit C. The Letter of Credit shall be held and disbursed
in accordance with the terms of the Escrow Agreement and the following
provisions:
(a) Upon Closing, Buyer and Seller shall jointly
instruct the Escrow Agent to return the Letter of Credit to Buyer.
(b) If this Agreement is terminated pursuant to Section
9.5, 13.2 or Article XIV and Section 13.3(c) does not apply and Buyer is not in
material breach of this Agreement, Buyer and Seller shall jointly instruct the
Escrow Agent to return the Letter of Credit to Buyer.
(c) If this Agreement is terminated on account of a
breach by Buyer, and Seller is not in material breach of this Agreement, Seller
shall be entitled to liquidated damages of Five Hundred Thousand Dollars
($500,000), to be paid to Forus Management Corp., as trustee for Seller, from
the proceeds of the Letter of Credit, the parties hereby agreeing that Seller's
actual damages would be difficult to ascertain and that Five Hundred Thousand
Dollars is a fair and equitable amount to reimburse Seller for such breach.
Seller hereby waives all claims to any other damages arising from any
termination of this Agreement.
13.4 [Reserved]
13.5 Buyer's Remedies. The parties recognize that if, prior to
Closing, Seller breaches this Agreement and refuses to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for its injury. Buyer shall therefore be entitled, in
addition to any other remedies that may be available (including but not limited
to the provisions of Section 12.1 (relating to Indemnification)), to obtain
specific performance of the terms of this Agreement prior to Closing. If any
action is brought by Buyer to enforce this Agreement prior to Closing, Seller
shall waive the defense that there is an adequate remedy at law. In the event
Buyer elects to terminate this Agreement as a result of Seller's default
instead of seeking specific performance, Buyer shall be entitled to recover
Buyer's damages, not to exceed Five Hundred Thousand Dollars ($500,000). There
shall be an overall limitation of One Million Dollars ($1,000,000) on Seller's
liability under this Agreement, inclusive of the Five Hundred Thousand Dollars
($500,000) set forth in the preceding sentence, in addition to which the
limitation on the liability of ▇▇▇▇-▇▇▇▇▇ set forth in Section 12.1.5 shall be
all-inclusive.
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13.6 Breach of Contract. For purposes of clarification, it shall
be a breach by Seller if, at the Closing, Section 10.2.1 or 10.2.2 is not met
and/or Seller does not comply in all material respects with Section 11.2.1 and,
to the extent applicable, Section 11.2.3, and it shall be a breach by Buyer if,
at the Closing, Section 10.3.1 or 10.3.2 is not met and/or Buyer does not
comply in all material respects with Section 11.2.2 and, to the extent
applicable, Section 11.2.3.
ARTICLE XIV.
TERMINATION
14.1 Absence of Commission Consent. This Agreement may be
terminated at the option of either party upon notice to the other if the
Closing has not occurred by May 1, 2000; provided, however, that neither party
may terminate this Agreement if such party is in default hereunder, or if a
delay in any decision or determination by the Commission respecting the
Assignment Applications has been caused or materially contributed to by such
party's action or inaction with respect to the Assignment Applications. In the
event of termination pursuant to this Section, the parties shall be released
and discharged from any further obligation hereunder (i) unless the failure to
obtain such Final Order is attributable to Buyer and Seller is not in default
and has otherwise complied with its obligations under this Agreement, in which
case Seller shall be entitled to liquidated damages as provided in Section
13.3(c); or (ii) unless the failure to obtain such Final Order is attributable
to Seller and Buyer is not in default and has otherwise complied with its
obligations under this Agreement, in which case Buyer shall be entitled to
liquidated damages as provided in Section 13.5.
14.2 Designation for Hearing. Either party may terminate this
Agreement upon notice to the other, if, for any reason, the Assignment
Applications are designated for hearing by the Commission; provided, however,
that notice of termination must be given within twenty (20) days after release
of the hearing designation order and that the party giving such notice is not
in default and has otherwise complied with its obligations under this
Agreement. Upon termination pursuant to this Section 14.2, the parties shall
be released and discharged from any further obligation hereunder , except that
if the factual situation which caused the Commission to designate the
Assignment Applications for hearing arose out of or involved or reflected a
violation of any warranty or representation or covenant of either party, the
other party shall have the remedy provided for it in Section 13.3(c) or Section
13.5 hereof.
14.3 Damage.
14.3.1 Risk of Loss. The risk of loss or damage to the
Assets shall be upon Seller at all times prior to the Closing. In the event of
loss or damage, Seller shall promptly notify Buyer thereof and shall repair,
replace and restore the lost or damaged property to its former condition as
soon as possible. If such repair, replacement and restoration has not been
completed prior to the Closing Date, Buyer may, at its option:
(a) elect to terminate this Agreement, but only if the
failure to repair, replace and restore the lost or damaged property continues
for a period in excess
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of sixty (60) days from the date that would be the Closing Date without
consideration of this Section 14.3;
(b) elect to consummate the Transaction on the Closing
Date in which event Seller shall assign to Buyer all of Seller's rights under
any applicable insurance policies; or
(c) elect to postpone the Closing Date, with prior
consent of the Commission if necessary, which consent both parties will use
their reasonable best efforts to obtain, until a date within fifteen (15)
business days after Seller gives written notice to Buyer of completion of the
repair, replacement and restoration of such lost or damaged property. If,
after the expiration of that extension period, the lost or damaged property has
not been adequately repaired, replaced or a restored, Buyer may terminate this
Agreement, and the parties shall be released and discharged from any further
obligation hereunder.
(d) Buyer's election of the remedy under Section
14.3.1(a) or 14.3.1(c) above, shall extend the May 1, 2000 deadline provided in
Section 11.1 hereof and elsewhere in this Agreement, and upon termination by
Buyer under any provision of this Section 14.3.1 the parties shall be released
and discharged from any further obligation hereunder.
14.3.2 Failure of Broadcast Transmission. Seller shall
give prompt written notice to Buyer if either of the following (a "Specified
Event") shall occur: (i) the regular broadcast transmissions of the Stations
in the normal and usual manner are interrupted or discontinued; or (ii) the
Stations are operated at less than ninety percent (90%) of their licensed
effective radiated power. If any Specified Event persists for more than
seventy-two (72) hours (or, in the event of force majeure or utility failure
affecting generally the market served by the Stations, ninety-six (96) hours),
whether or not consecutive, during any period of thirty (30) consecutive days,
then Buyer may, at its option: (i) terminate this Agreement by written notice
given to Seller not more than ten (10) days after the expiration of such thirty
(30) day period, or (ii) proceed in the manner set forth in Section 14.3.1. In
the event of termination of this Agreement by Buyer pursuant to this Section,
the parties shall be released and discharged from any further obligation
hereunder.
14.3.3 Resolution of Disagreements. If the parties are
unable to agree upon the extent of any loss or damage, the cost to repair,
replace or restore any lost or damaged property, the adequacy of any repair,
replacement, or restoration of any lost or damaged property, or any other
matter arising under this Section 14.3, the disagreement shall be referred to a
qualified consulting communications engineer mutually acceptable to Seller and
Buyer who is a member of the Association of Federal Communications Consulting
Engineers, whose decision shall be final, binding upon and non-appealable by
the parties, and whose fees and expenses shall be paid one-half by Seller and
one-half by Buyer.
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ARTICLE XV.
POST-CLOSING OBLIGATIONS OF SELLER
Seller acknowledges that Buyer may use the financial statements of
Seller and other information regarding Seller in connection with future
financings by Buyer, including in an initial public offering prospectus and a
registration statement filed under the Securities Act of 1933, as amended (the
"Public Filings") to be issued or filed by Buyer. For a period of three (3)
years from the Closing Date, Seller shall cooperate in a commercially
reasonable manner with Buyer so that Buyer can obtain information sufficient
for Buyer to prepare an initial public offering prospectus and the Public
Filings, in each case at Buyer's sole expense. The foregoing cooperation of
Seller shall include (i) compiling the requisite financial information,
including supplying financial information for purposes of comfort letters to be
issued in connection with Public Filings, (ii) granting Buyer and its
accountants full and complete access to the books and records of Seller and to
any personnel knowledgeable about such books and records (including the
Seller's accountants), in each case, to the extent reasonably requested by
Buyer and (iii) signing customary management representation letters related to
the financial statements and any comfort letters.
ARTICLE XVI.
GENERAL PROVISIONS
16.1 Brokerage. Each party represents and warrants to the other
that no agent, broker, investment banker, or other person or firm acting on
behalf of such party or any of its affiliates or under the authority of any of
them, other than Force Communications and Consultants, LLC, is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with the Transaction. All fees due and owing to Force
Communications and Consultants, LLC shall be borne by Seller. Each party
hereby agrees to indemnify, save harmless and defend the other from and against
all claims, losses, liabilities and expenses, including reasonable attorney's
fees, arising out of any claim made by any broker, finder or other intermediary
who claims to have dealt with such party in connection with the transaction
which is the subject of this Agreement. The provisions of this Section 16.1
shall survive Closing hereunder.
16.2 Expenses. Except as otherwise provided herein, all expenses
involved in the preparation and consummation of this Agreement shall be borne
by the party incurring the same whether or not the Transaction is consummated.
All Commission filing fees for the Assignment Applications shall be shared
equally by Buyer and Seller. All recording costs for instruments of transfer
shall be shared equally by Buyer and Seller. All stamp, sales, use and
transfer taxes shall be paid by Seller.
16.3 Notices. All notices, requests, demands, and other
communications pertaining to this Agreement shall be in writing and shall be
deemed duly given when delivered personally (which shall include delivery by
U.S. Express Mail, Federal Express or other nationally recognized, reputable
overnight courier service that issues a receipt or other
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confirmation of delivery) to the party for whom such communication is intended,
addressed as follows:
(a) If to Seller:
Forus Communications of Atlanta, Inc.
Forus Communications of Georgia, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, #▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy, which shall not constitute notice, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Buyer:
▇▇▇▇▇▇▇ ▇▇ Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy, which shall not constitute
notice, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(Counsel to ▇▇▇▇▇▇▇ ▇▇ Acquisition Corp.)
Any party may change its address for notices by notice to the others given
pursuant to this Section.
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16.4 Attorneys' Fees. If either party initiates any litigation
against the other party involving this Agreement, the prevailing party in such
action shall be entitled to receive reimbursement from the other party for all
reasonable attorneys' fees and other costs and expenses incurred by the
prevailing party in respect of that litigation, including any appeal, and such
reimbursement may be included in the judgment or final order issued in that
proceeding.
16.5 Survival of Representations, Warranties and Indemnification
Rights. The several representations and warranties of the parties contained
herein, and the parties respective indemnification rights pursuant to Section
12.1, shall survive the Closing for a period of one (1) year, at which time the
same shall expire (except for claims asserted during such one (1) year period).
16.6 Exclusive Dealings. For so long as this Agreement remains in
effect, neither Seller, its officers, directors, employees, nor any person
acting on Seller's behalf, shall, directly or indirectly, solicit or initiate
any offer from, or conduct any negotiations with, any person other than Buyer
or Buyer's assignee(s) concerning the acquisition of the Stations.
16.7 Waiver. Unless otherwise specifically agreed in writing to
the contrary: (i) the failure of any party at any time to require performance
by any other of any provision of this Agreement shall not affect such party's
right thereafter to enforce the same; (ii) no waiver by any party of any
default by any other shall be valid unless in writing and acknowledged by an
authorized representative of the non-defaulting party, and no such waiver shall
be taken or held to be a waiver by such party of any other preceding or
subsequent default; and (iii) no extension of time granted by any party for the
performance of any obligation or act by any other party shall be deemed to be
an extension of time for the performance of any other obligation or act
hereunder.
16.8 Assignment. No party may assign its rights or obligations
hereunder without the prior written consent of the other parties except Buyer
may assign all or a portion of its rights and obligations to a corporation,
partnership or other business entity that controls, is controlled by, or is
under common control with Buyer, including without limitation, the assignment
of the Station Licenses and Station Applications to License Sub, provided that
any such assignment shall not release Buyer from any of its obligations under
this Agreement. Seller agrees to execute acknowledgments of any assignment(s)
pursuant to this Section 16.8 in such forms as Buyer may from time to time
request. Subject to the foregoing, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties hereto and their
respective successors and assignees.
16.9 Entire Agreement. This Agreement and the Exhibits and
Schedules hereto (which are incorporated by reference herein) constitute the
entire agreement between the parties with respect to the subject matter hereof
and referenced herein, supersede and terminate any prior agreements between the
parties (written or oral). This Agreement may not be altered or amended except
by an instrument in writing signed by the party against whom enforcement of any
such change is sought.
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16.10 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures on each such counterpart
were on the same instrument.
16.11 Construction. The Section headings of this Agreement are for
convenience only and in no way modify, interpret or construe the meaning of
specific provisions of the Agreement. As used herein, the neuter gender shall
also denote the masculine and feminine, and the masculine gender shall also
denote the neuter and feminine, where the context so permits.
16.12 Schedules and Exhibits. The Schedules and Exhibits to this
Agreement are a material part of this Agreement.
16.13 Severability. If any one or more of the provisions contained
in this Agreement should be found invalid, illegal or unenforceable in any
respect, the validity, legality, and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. Any
illegal or unenforceable term shall be deemed to be void and of no force and
effect only to the minimum extent necessary to bring such term within the
provisions of applicable law and such term, as so modified, and the balance of
this Agreement shall then be fully enforceable.
16.14 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard
to the choice of law rules utilized in that jurisdiction.
16.15 Counsel. Each party has been represented by its own counsel
in connection with the negotiation and preparation of this Agreement and,
consequently, each party hereby waives the application of any rule of law that
would otherwise be applicable in connection with the interpretation of this
Agreement, including but not limited to any rule of law to the effect that any
provision of this Agreement shall be interpreted or construed against the party
whose counsel drafted that provision.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed by a respective duly authorized officer as of the date first
written above.
SELLER:
FORUS COMMUNICATIONS OF GEORGIA,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Title: President
FORUS COMMUNICATIONS OF ATLANTA,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Title: Secretary
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
BUYER:
▇▇▇▇▇▇▇ ▇▇ ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
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