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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): March 31, 1997
EMMIS BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 0-23264 35-1542018
(State or jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
950 North Meridian Street, Suite 1200
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 266-0100
Not applicable
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 31, 1997, wholly-owned subsidiaries of Emmis Broadcasting
Corporation (the "Company") acquired substantially all of the assets used in
the operation of the St. Louis radio stations WKBQ(AM), WKKX(FM) and WKBQ(FM),
including transmitting and other equipment, leases and contract rights,
broadcasting licenses and miscellaneous other assets, from Zimco, Inc. The
consideration paid by the Company for the assets consisted of approximately
$43.1 million in cash plus an agreement to broadcast approximately $1 million
in trade spots over a period of years. The Company obtained the funds for the
acquisition consideration from a loan made in the ordinary course of business
by a group of banks, as defined by Section 3(a)(6) of the Securities Exchange
Act of 1934, as amended, pursuant to the Company's existing credit agreement,
a copy of which is on file with the Commission and which contains a list of
such banks. Prior to the acquisition, the equipment acquired by the Company
was used by the seller and by the Company (pursuant to a time brokerage
agreement) in the operation of the radio broadcasting business in St. Louis,
Missouri, and the Company intends to continue to use such assets in the
operation of its radio broadcasting business in St. Louis, Missouri.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED AND PRO FORMA FINANCIAL
INFORMATION:
It is impracticable to provide the financial statements and pro forma
financial information required by Regulation S-X at the time of filing of this
Report. Such financial statements and pro forma financial information will be
filed by amendment to this Report within 60 days after the date on which this
Report is required to be filed.
EXHIBITS:
Exhibit
Number Exhibit
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2 Asset Purchase Agreement dated as of October 31, 1996, by and
between Zimco, Inc. and Emmis Broadcasting Corporation, as amended
by first and second amendments to the Asset Purchase Agreement.
Schedules and exhibits to the Asset Purchase Agreement will be
submitted supplementally to the Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMMIS BROADCASTING CORPORATION
Date: April 14, 1997 By: /s/ Howard L. Schrott
------------------------
Howard L. Schrott
Vice President, Chief
Financial Officer and
Treasurer
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ASSET PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement"), dated as of October 31, 1996,
made and entered into by and between Zimco, Inc. ("Seller"), a Missouri
corporation, and Emmis Broadcasting Corporation ("Buyer"), an Indiana
corporation.
R E C I T A L S:
1. Seller is the licensee of Radio Stations WKBQ(AM), St. Louis, Missouri
, WKKX(FM), Granite City, Illinois and WKBQ-FM, Jerseyville, Illinois (the
"Stations"), and holds the licenses and other authorizations issued by the
Federal Communications Commission (the "FCC") for the operation of the Stations.
Seller also owns or leases all tangible and intangible assets used or useful in
the business and operations of the Stations.
2. Buyer desires to acquire all of the assets of Seller used or useful in
the operation of the Stations, and Seller is willing to convey such assets to
Buyer, subject to the terms and conditions set forth in this Agreement.
3. The purchase and sale contemplated herein is subject to prior approval
by the FCC.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, Seller and Buyer hereby agree
as follows:
ARTICLE I
TERMINOLOGY
1.1 Act. The Communications Act of 1934, as amended.
1.2 Assignment Application. Such application and other documents as may
be necessary or advisable to obtain the FCC Order.
1.3 Closing. The closing with respect to the transactions contemplated by
this Agreement.
1.4 Closing Date. The date on which the transactions contemplated by this
Agreement shall be consummated as provided in Section 11.1.
1.5 Documents. This Agreement and all Exhibits and Schedules hereto, and
each other agreement, certificate, or instrument delivered pursuant to or in
connection with this Agreement, including amendments thereto that are expressly
permitted under, or agreed upon by the parties pursuant to, the terms of this
Agreement.
1.6 FCC. Federal Communications Commission.
1.7 FCC Authorizations. The licenses and authorizations of the FCC for
the operation of the Stations as listed in Schedule 3.3.
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1.8 FCC Order. An order or decision of the FCC granting its consent to
the assignment of the FCC Authorizations to Buyer.
1.9 FCC Renewal Orders. Orders or decisions of the FCC granting renewal
for a full term the FCC Authorizations of each Station.
1.10 Final Action. An action of the FCC as applicable that has not been
reversed, stayed, enjoined, set aside, annulled or suspended, with respect to
which no timely petition for reconsideration or administrative or judicial
appeal or sua sponte action of the FCC with comparable effect is pending and as
to which the time for filing any such petition or appeal (administrative or
judicial) or for the taking of any such sua sponte action of the FCC has
expired.
1.11 Lien. Any mortgage, deed or trust, pledge, hypothecation, security
interest, encumbrance, claim, lien, lease or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
assets or property including any written or oral agreement to give or grant any
of the foregoing, any conditional sale or other title retention agreement, and
the filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.
1.12 Permitted Lien. Any statutory lien which secures a payment not yet
due that arises, and is customarily discharged, in the ordinary course of the
Stations' business; any easement, right-of-way or similar imperfection in the
Stations' title to their assets or properties that, as reasonably perceived by
Buyer individually and in the aggregate, are not material in character or
amount and do not and are not reasonably expected to materially impair the
value or materially interfere with the use of any asset or property of the
Stations material to the operation of their business as it has been and is now
conducted; liens in favor of Seller's lenders which shall be removed at or
prior to the Closing and any other claims which will be removed at or prior to
the Closing, in each case solely at Seller's expense.
1.13 Stations. Radio Stations WKBQ(AM), St. Louis, Missouri, WKKX(FM),
Granite City, Illinois and WKBQ-FM, Jerseyville, Illinois.
1.14 Station Agreements. The agreements, leases, commitments, contracts,
and other items described in Schedule 2.1.3.
1.15 TBA. The Time Brokerage Agreement which Seller and Buyer will enter
into simultaneously with this Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Transfer of Assets. On the terms and conditions herein set forth, at
Closing, Seller shall sell, assign, transfer, and convey to Buyer, and Buyer
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shall purchase and acquire from Seller, all the assets (except as hereinafter
expressly excluded), now owned or hereafter acquired and used by Seller or
useful in operating the Stations (the "Assets"), free and clear of all Liens
(except Permitted Liens), including without limitation the following:
2.1.1 Personal Property. Title or assignment of leases to all
tangible personal property, whether owned or leased, of Seller used or useful in
the operation of the Stations, including all broadcasting and office equipment,
furniture, furnishings, equipment, machinery, installations and fixtures,
including but not limited to, all replacements and additions thereto and
deletions therefrom arising in the ordinary course of business between the date
of this Agreement and the Closing Date, including, but not limited to, the
property listed on Schedule 3.4 hereto.
2.1.2 FCC Authorizations. All FCC Authorizations, permits and other
authorizations necessary to operate the Stations and associated facilities,
copies of which are attached hereto as Schedule 3.3 hereto.
2.1.3 Station Agreements. All Station Agreements which are: (1) set
forth on Schedule 2.1.3 hereto, or (2) consented to in writing by Buyer.
Material Station Agreements shall be marked on Schedule 2.1.3 with an asterisk.
2.1.4 FCC Reports/Files. Copies of all documents required by the
FCC to be maintained by the Seller relating to the operation of the Stations,
including but not limited to, the local public inspection files, and all books
of account, logs, and records necessary or useful for the Buyer's operation of
the Stations;
2.1.5 Intangible Assets. Trademarks, trade names, service marks,
copyrights, patents, registrations (and pending applications for registration)
of any of the foregoing, slogans, emblems, the call signs "WKBQ," "WKKX" and
"WKBQ-FM," logos, jingles, music formats, music libraries, programs and program
production materials used by Seller or useful in Stations' operations, together
with the goodwill associated therewith and other intangible property listed and
described in Schedule 2.1.5 hereto (collectively, the "Intellectual Property").
2.1.6 Leases. Any lease agreements or equipment lease agreements
used or useful in the operation of the Stations as set forth in Schedule 2.1.3.
2.1.7 Real Property. Three parcels of real property as described
in Schedule 2.1.7 hereto.
2.2 Excluded Assets. The following assets are expressly excluded from the
Stations' assets to be purchased and sold:
2.2.1 Cash on hand as of the Closing Date;
2.2.2 Deposit accounts as of the Closing Date;
2.2.3 Accounts receivable;
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2.2.4 Contracts, agreements and leases other than those specified
in Section 2.1.3;
2.2.5 All of Seller's corporate books and records related to
internal corporate matters and financial relationship's with Seller's lenders;
and
2.2.6 Any other asset of Seller not located at either the
studios/offices or transmitter sites of the Stations or otherwise defined herein
as an Asset unless such asset is principally used by Seller or is principally
useful in the operation of the Stations.
2.3 No Assumption of Liabilities. Buyer shall assume no liabilities or
obligations of Seller, including, without limitation, accounts payable, debts,
liabilities, and other obligations, whether pursuant to a contract or otherwise,
except (i) liabilities and obligations under the Station Agreements that arise
during and are attributable to any period on or after the Closing Date and
(ii) liabilities of Seller for which Buyer receives a credit against the
Purchase Price pursuant to Section 2.4.4, but in no event in excess of the
amount of such credit (collectively, the "Assumed Obligations"). Without
limiting the generality of the foregoing, Buyer shall be under no obligation
to hire any employees of Seller or to assume any liability whatsoever for any
employment contract, collective bargaining agreement, pension plan, profit
sharing plan or any other employee benefits, programs or plans heretofore
created by and/or existing with Seller except for that part of the Assumed
Obligations arising under (i) the Artist Employment Agreement between Seller
and Terrence Trawick and Isaiah Wilhelm dated as of July 1, 1995, as modified
by an addendum dated as of August 2, 1996, and (ii) the Radio Network Agreement
between Seller and Superadio Limited Partnership dated May 1996.
2.4 Purchase Price and Terms of Payment. The purchase price ("Purchase
Price") to be paid by Buyer to Seller shall be Forty-Two Million Five Hundred
Thousand Dollars ($42,500,000.00), subject to adjustment as provided for in
Section 2.4.4 below, to be paid as follows:
2.4.1 Escrow Deposit. Simultaneously with the execution of this
Agreement, Buyer shall deposit Six Million Dollars ($6,000,000) (the "Deposit")
with Boatmen's Trust Company ("Escrow Agent") to be held by Escrow Agent in
accordance with the terms of the Escrow Agreement attached hereto as Exhibit 1
(the "Escrow Agreement"). Said Deposit shall be paid to Seller on the Closing
Date and shall be credited against the Purchase Price. Accrued interest
thereon shall be paid to Buyer at that time. Payment of the Deposit shall be
made by wire transfer of immediately available funds. If Closing does not take
place, the parties shall cooperate in arranging for the Deposit to be disbursed
as provided in this Agreement and/or the Escrow Agreement.
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2.4.2 Cash Payment at Closing. Buyer shall pay to Seller at Closing
the balance of the Purchase Price: Thirty-Six Million, Five Hundred Thousand
Dollars ($36,500,000.00), subject to adjustment as provided for in Section 2.4.4
below. Payment shall be made by wire transfer of immediately available funds.
2.4.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets as mutually agreed to by Buyer and Seller. Said
allocation schedule shall be prepared pursuant to Section 1060 of the Internal
Revenue Code.
2.4.4 Proration of Expenses. Subject to the TBA and except as
otherwise provided in this Agreement, the following items shall be pro-rated as
of midnight of the day before the Closing Date and paid, as between Seller, on
the one hand, and Buyer, on the other hand, at the Closing (to the extent
possible) in the manner provided for herein below:
2.4.4.1 All pre-paid expenses and deposits, and all expenses
for which liability has accrued but whose payment is not yet due as of the
Closing Date, including but not limited to (i) such expenses in connection with
the Station Agreements, (ii) rents and deposits, (iii) utility deposits and
charges, including electricity, water and sewer charges, (iv) business and
license fees, including any retroactive adjustments thereof, (v) property and
equipment rentals, (vi) applicable copyright or other fees, (vii) sales and
service charges, (viii) real and personal property taxes in connection with the
Assets, (ix) operating expenses, and (x) similar prepaid and deferred items and
all revenues arising from the operation of the Stations, and all wages and
salaries, vacation pay, sick leave and other leave allowances, awards, bonuses,
commissions, and other forms of employment compensation and benefits that have
accrued in favor of (but that as of midnight on the day before the Closing Date
shall not yet have been paid or otherwise provided to), the employees of the
Stations who may become employees of Buyer after the Closing, shall be
pro-rated and adjusted between Buyer and Seller in accordance with the
principle that except as otherwise provided in this Agreement or the TBA,
Seller shall receive all revenues, and shall be responsible for all expenses,
costs, and liabilities allocable to the conduct of the business or operations of
the Stations up to midnight on the day before the Closing Date. Any credit to
Seller for a pre-paid expense shall not exceed an amount commensurate with the
value to Buyer of the pre-paid expense. All prorations shall be made in
accordance with generally accepted accounting principles. Notwithstanding the
foregoing, there shall be no adjustment for, and Seller shall remain solely
liable with respect to, any contract other than the Station Agreements in
Schedule 2.1.3 hereto, or any other obligation or liability not being assumed
by Buyer, including, but not limited to, any liability or obligation of Seller
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under any employee benefit plan, policy (including, but not limited to,
severance benefits) or arrangement applicable to any of its employees.
2.4.4.2 At the conclusion of ninety (90) days from and after
the Closing Date, a final adjustment of the items to be pro-rated between Buyer
and Seller pursuant to Section 2.4.4.1 hereof shall be made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 Organization and Good Standing; Ownership. Seller is a corporation
validly organized, existing and in good standing under the laws of the State of
Missouri. Seller is duly qualified to do business under the laws of the State
of Missouri. Seller has all requisite power and authority to own, operate and
lease the Assets and carry on the business of the Stations as they are now being
conducted. Seller has paid (or shall pay when due) all franchise and similar
fees imposed by the State of Missouri. Seller further agrees to furnish at
Closing a certificate of good standing for the State of Missouri.
3.2 Authorization and Binding Effect of Documents. Seller has the power
and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Documents and to consummate the transactions
contemplated hereby. By the Closing, appropriate corporate actions approving
this Agreement and Seller's obligations hereunder shall have been taken. This
Agreement and each of the other Documents executed or to be executed by Seller
have been, or at or prior to the Closing will be, duly executed and delivered
by Seller. The execution, delivery and performance of the terms of this
Agreement will not conflict with or result in the breach of or constitute a
violation of or default under, any of the terms, conditions or provisions of
Seller's articles of incorporation, by-laws, or any license, judgment, order,
decree, law, regulation, rule or ruling of any court, arbitration or
governmental authority to which Seller is subject, or conflict with, result in
the breach of, or constitute a default under, any other agreement, lease,
contract or other commitment to which Seller, its principals or any of the
Assets are subject and will not result in the creation of any Lien on any of
the Assets to be conveyed. Subject to obtaining the FCC Order and any
consents to assignment of the Station Agreements, the execution, delivery and
performance of this Agreement by Seller does not require the consent of any
governmental authority or other third party. This Agreement constitutes the
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, except to the extent limited by bankruptcy,
insolvency, moratorium and other laws of general applicability relating to or
affecting the enforcement of creditors' rights.
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3.3 FCC Authorizations.
3.3.1 Seller is the legal holder of the FCC Authorizations listed
on Schedule 3.3. There is not now pending, or to the knowledge of the Seller
threatened, any action by the FCC to revoke, cancel, rescind, modify or
refuse to renew in the ordinary course any of the FCC Authorizations, or any
investigation, Order to Show Cause, Notice of Violation or of Apparent
Liability or of Forfeiture, or material complaint against the Stations or
Seller. All material reports, forms and statements required to be filed by
Seller with the FCC with respect to the Stations have been filed and are
complete and accurate in all material respects. The Stations are operating in
accordance with their respective FCC Authorizations, and in material compliance
with the Act and the rules and regulations of the FCC. Renewal applications
for each of the Stations are currently pending before the FCC. Such
applications were timely filed. Seller knows of no reason why such
applications will not be granted in the ordinary course. Complete and
accurate copies of all FCC Authorizations have been delivered to Buyer by
Seller.
3.3.2 The FCC Authorizations:
3.3.2.1 are in full force and effect, unimpaired by any
act or omission of Seller, or its agents, and constitute all of the permits and
Authorizations required by the Act, the rules and regulations thereunder or the
FCC for, or used in, the operation of the Stations as now operated;
3.3.2.2 constitute all the Authorizations, including
amendments and modifications thereto, issued by the FCC to Seller for or in
connection with the operation of the Stations; and
3.3.2.3 none of the FCC Authorizations is subject to any
restriction or condition which would limit in any respect the full operation of
the Stations as now conducted.
3.4 Tangible Personal Property.
3.4.1 Schedule 3.4 lists all tangible personal property (other than
office supplies and other incidental items) used or useful in the conduct of the
business and operations of the Stations (the "Tangible Personal Property").
3.4.2 Seller has good and marketable title to all of the Tangible
Personal Property (except for the items indicated on Schedule 3.4 as leased or
licensed by Seller), free and clear of all Liens except Permitted Liens.
3.4.3 Except as set forth on Schedule 3.4, the equipment included
in Tangible Personal Property of Seller is serviceable and in a good state of
repair and operating condition (ordinary wear and tear excepted), is adequate
and suitable in accordance with general industry practice for its current and
intended use, complies in all material respects with all applicable rules and
regulations of the FCC, the Act, and all other applicable laws, rules,
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regulations and ordinances, is not in need of material repair or replacement
and is available for immediate use in the conduct of the business or operation
of the Stations.
3.5 Litigation. Except as described in Schedule 3.5 and except for any
investigations and rule-making proceedings affecting the broadcasting industry
generally, there are no actions, judgments (issued or outstanding), suits,
claims, investigations or administrative, arbitration or other proceedings
pending or, to the knowledge of Seller, threatened against Seller, its
principals or the Stations before or by any court, arbitration tribunal or
governmental department or agency of any kind, domestic or foreign that would
give any third party the right to enjoin the transactions contemplated by this
Agreement, or that could adversely affect Seller's ability to consummate the
transactions contemplated hereunder or that could adversely affect Buyer as the
owner of any of the Stations. Seller does not know of any basis for such claim,
litigation, proceeding or investigation. Should any such litigation or other
proceeding commence or be threatened after the date of this Agreement, Seller
shall promptly, and in no event later than five (5) days after becoming aware
of it, notify Buyer and use its best efforts to accomplish the prompt removal
or dismissal thereof.
3.6 Broker's or Finder's Fees. No agent, broker, investment banker or
other person or firm acting on behalf of or under the authority of Seller is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee, directly or indirectly, from Seller in connection with the
transactions contemplated by this Agreement.
3.7 Disclosure. No representation, warranty or other statement by Seller
in this Agreement or any other Document furnished by Seller or on its behalf
contains, or will contain, any untrue statement of a material fact, or omits to
state a material fact necessary to make any representation, warranty or
statement contained herein or therein not misleading and to provide Buyer with
complete and accurate information as to Stations and their affairs.
3.8 Adequacy of Assets. Except as disclosed in this Agreement, including
the Schedules, the Seller owns, leases or holds all property, including the FCC
Authorizations, real property, tangible personal property, intellectual property
and Station Agreements, necessary for the operation of the businesses of the
Stations as they have been and are now conducted.
3.9 Absence of Conflicts. Seller's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents, and the consummation by Seller of the transactions contemplated
hereby will not cause or result in the alteration or modification to the
detriment of Buyer of the terms, conditions or provisions of any contract,
lease agreement or other instrument to which Seller is a party or any of the
Assets hereunder are subject.
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3.10 Discharge of Liens. As of the Closing Date, Seller will have paid and
discharged all taxes, assessments, excises, liens, levies and judgments for
which it is obligated and which are then due and payable and Seller shall
promptly pay and discharge, as and when any of them become due and payable
after Closing, all taxes, assessments, excises, liens, levies and judgments
for which it is obligated or which are a Lien on any of the Assets immediately
prior to the Closing.
3.11 Insurance. Seller currently has, and through the Closing Date will
maintain, insurance on the Assets in an amount sufficient to cover the value of
said Assets and will use the proceeds of any claims for loss to repair, replace
or restore any damaged property. All such policies are outstanding and full
in force and effect.
3.12 Real Property. Schedule 2.1.7 is a complete and correct list of all
real estate owned by the Seller and used in the operation of the Stations (the
"Real Property"). Seller has good and marketable fee simple title, insurable at
standard ALTA rates (with exceptions as are usual and customary for ALTA title
insurance in Missouri or Illinois, as applicable), in and to the Real Property,
free and clear of all liens (except the Permitted Liens), charges, security
interests, claims, obligations and encumbrances whatsoever except for insurable
restrictions and easements of record as of the date hereof, which are listed and
described in Schedule 2.1.7. The Real Property is free and clear of all
conditions, equities, reservations, restrictions, encroachments, adverse uses,
easements, servitudes or limitations except as listed and described in Schedule
2.1.7, none of which shall interfere with Buyer's intended use of the Real
Property for the Stations' operations and all of which shall be eligible for an
ALTA owner's title policy. Seller's improvements upon and the use of the Real
Property conform in all material respects to all restrictions, restrictive
covenants, building codes, fire regulations, building restrictions, and
federal, state and local laws, regulations and ordinances. The Real Property
is zoned for the various purposes for which it is currently being used by
Seller and there are no outstanding variances or special use permits affecting
the Real Property or the current uses thereof. Seller's improvements on the
Real Property are in good working condition and repair. There is no pending, or
to the best of Seller's knowledge, threatened or contemplated action to take by
eminent domain or otherwise to condemn any of the Real Property.
3.13 Compliance with Ordinances and Laws. The Seller warrants and
represents that the Real Property, and any use, structure or structures thereon,
is not, and as of the Closing Date will not be in violation in any material
respect of any zoning or environmental regulations, ordinances, orders, laws or
requirements of any federal, state or local governmental authority (including,
without limitation, the Toxic Substances Control Act or the Comprehensive
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Environmental Response, Compensation and Liability Act). Seller's operation of
the Stations complies in all material respects with all other federal, state
and local laws, statutes, ordinances, rules, regulations and orders of any
governmental authority.
3.14 Other Matters Related to Real Property. Except as set forth in
Schedule 2.1.7, there are no leases or rental agreements regarding the occupancy
or use of the Real Property. With respect to those transmitting facilities of
the Stations located on the Real Property, all towers, guy lines, anchors,
ground systems and all other structures are located entirely within the
confines of the Real Property. The Real Property is freely accessible directly
from public streets, or, if not, any use of adjoining private land to access
the same is done in accordance with valid easements of record. Any such
easements are now, and on the Closing Date will be, in full force and effect
and assignable to Buyer. 3.15 Environmental Representations. Except as set
forth in Schedule 3.15: (a) to the best of Seller's knowledge, none of the
Real Property has ever been used by Seller by previous owners and/or operators,
to treat, produce, handle, transfer, process, transport, dispose or otherwise
release petroleum products, a "hazardous substance," "hazardous waste,"
"pollutant" or "contaminant" (as such terms are defined in any applicable
federal, state, or local laws, ordinances, rules and regulations, and including
any and all other terms which are or may be used in any applicable
environmental laws to define prohibited or regulated substances (collectively
"Toxic Substances")), other than in compliance with all applicable laws,
ordinances, rules and regulations of all federal, state or local governmental
authorities. To the best of Seller's knowledge no Toxic Substances are present
on or below the surface of the Real Property. Seller has not used any of the
Real Property for the purpose of treating, producing, storing, handling,
transferring, processing, transporting, disposing, using or releasing a Toxic
Substance other than in compliance with applicable laws, statutes and any
regulations promulgated thereunder; (b) Seller has no knowledge of any
notification having been filed with regard to a release of any Toxic Substances
on or into the Real Property occupied by the Stations or on which facilities
owned, leased or otherwise used by Seller in the operation of the Stations are
located; (c) Seller has no knowledge of any pollution or danger of pollution
resulting from a condition which exists on any Real Property occupied by
Stations or on which facilities owned, leased or otherwise used by Seller in
the operation of the Stations are located that would require notification,
clean-up or response action under any federal, state or local statute or
regulations; (d) neither Seller nor any present or former owner or operator of
the Real Property occupied by Stations or on which facilities owned, leased or
otherwise used by Seller in the operation of the Stations are located has been
identified as a potentially responsible party for
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clean up liability with regard to the emission, discharge or release of any
hazardous substance or for any other matter arising under law in any litigation,
administrative proceeding, finding, order, citation, notice, investigation or
complaint, nor has Seller been threatened with such; (e) Seller has no knowledge
of any: (1) generation, treatment, recycling, storage or disposal of any
hazardous waste, (2) underground storage tank, surface impoundment, lagoon or
other containment facility (past or present) for the temporary or permanent
storage, treatment or disposal of hazardous substance, (3) landfill or solid
waste disposal area, (4) asbestos-containing materials, (5) "friable" asbestos
(as defined in the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.,
and the regulations promulgated thereunder), (6) electrical transformers,
fluorescent light fixtures with ballasts or other equipment containing
polychlorinated biphenyls (PCBs) in or at any Real Property occupied by the
Stations or on which facilities owned, leased or otherwise used by Seller in
the operation of the Stations are located. Seller is in compliance in all
material respects with all applicable federal state and local regulations
concerning any USTs that are located on the Real Property owned or occupied by
the Stations, or on which facilities owned, leased or otherwise used by the
Stations are located. To the best of its knowledge, Seller has not committed
violations of any environmental law, statute, ordinance or regulation,
and no other circumstances exist that have subjected Seller, or could reasonably
be expected to subject Buyer as the owner of the Real Property, to any material
fine, penalty or other liability for environmental pollution, contamination or
remediation, including without limitation, liability to pay or contribute toward
the cleanup or removal of any toxic substances. Seller has delivered to Buyer
copies of any previously issued environmental audit report or similar document
pertaining to any of the Real Property or the Leased Real Property (as herein
defined).
3.16 Contracts. Schedule 2.1.3 is a true and complete list of all Station
Agreements to be assigned to and assumed by Buyer as and to the extent provided
in Section 2.3. Schedule 2.1.3 indicates for each Station Agreement whether a
consent thereunder is required for assignment of the Station Agreement. Seller
is not in material default under any of these Station Agreements and Seller has
no knowledge of the breach of any material provision of such Agreements.
Seller has not been granted, and has not granted, any material waiver or
forbearance with respect to any of the Station Agreements. No event has
occurred which, but for the passage of time or giving of notice, or both, would
or might constitute a material default by Seller under such Station Agreements,
and there is no outstanding notice of material default or termination under any
such Agreement. Except for the consents required pursuant to the terms of the
Station Agreements, Seller has authority to assign its rights thereunder to
Buyer on terms and conditions no less favorable to
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Buyer than those in effect on the date hereof, and such assignment will not
affect the validity, enforceability and continuity of any of such Agreements.
The Material Station Agreements as designated in Schedule 2.1.3, together with
the contracts for the sale of time, include all those necessary to conduct, in
all material respects, the business and operations of each Station as now
conducted. Each of the Station Agreements is valid, binding and enforceable in
accordance with its terms and is in full force and effect. Seller holds the
right to enforce and receive the benefits under each of the Station Agreements
free and clear of any Lien but subject to the terms and provisions of each
Station Agreement. The Station Agreements listed on Schedule 2.1.3 include
each studio and office lease, antenna lease and any other lease of any interest
in real property used in the operation of any of the Stations.
3.17 Insolvency. Seller is not now, and after giving effect to the
transactions contemplated by this Agreement, Seller will not be insolvent as
such term is defined in the Bankruptcy Code of 1978, as amended; after giving
effect to the transactions contemplated by this Agreement, the property
remaining with Seller shall not constitute an unreasonably small capital to
conduct its current business or its business as proposed to be conducted after
consummation of the transactions contemplated hereby; and Seller does not
intend to incur, or believe that Seller will incur, concurrently with or after
consummation of the transactions contemplated hereby, debts beyond Seller's
ability to pay as such debts mature.
3.18 Taxes and Reports. Seller has filed all federal, state and local tax
returns and state franchise returns which are required to be filed by Seller,
and has paid in full all taxes, interest, penalties, assessments and
deficiencies owed by or which have been assessed or levied against Seller or
any of its assets or properties (except any such obligations as are being
contested in good faith). Any additional taxes, interest, penalties,
assessments and deficiencies that shall become due and payable with respect to
any tax return or tax obligation of Seller arising from the operation of the
Stations prior to the Closing Date shall be the responsibility of Seller. All
other material federal, state, county and local tax returns, reports and
declarations of estimated tax or estimated tax deposit forms required to be
filed by the Seller in connection with the Stations' operations, real estate or
payroll have been duly and timely filed. Seller has paid all taxes which have
become due pursuant to such returns or pursuant to any assessment received by
it (except any such obligations being contested in good faith), and has
paid all installments of estimated taxes due. All taxes, levies and other
assessments which the Seller is required by law to withhold or to collect have
been duly withheld and collected, and have been paid over to the proper
governmental authorities or held by the Seller for such payment.
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3.19 Personnel. Seller has delivered to Buyer as Schedule 3.19 a list of
personnel showing the names of all persons currently on the payroll of the
Stations, together with a statement of (a) the amount paid or payable to each
such person for such services; (b) the severance and bonus arrangements for all
employees; and (c) vacation and any other material compensation or employee
benefits or policies in effect for such employees. Seller is in material
compliance with all federal, state and local laws respecting employment and
employment practices, terms and conditions of employment, and wages and hours.
There are no claims or complaints pending or to Seller's best knowledge
threatened against Seller before any court or governmental agency involving
allegedly unlawful employment practices. Schedule 3.19 lists each employee
benefit plan, policy or arrangement applicable to any employees of Seller, and
Seller has provided Buyer a copy of each such employee benefit plan, policy or
arrangement and a copy of any handbook, policy manual or similar written
guidelines furnished to Seller's employees. To the best of Seller's knowledge,
Seller has maintained each such employee benefit plan, policy or arrangement in
substantial compliance with its terms and with the requirements prescribed by
applicable law, rules and regulations. Seller shall timely discharge and
perform, and Buyer shall not assume or otherwise be liable for, any liability
or obligation under any such employee benefit plan, policy (including, but not
limited to, severance benefits) or arrangement whether arising before, upon or
after Closing, including, but not limited to, the responsibility and expense of
complying with Section 4980B of the Internal Revenue Code of 1986, as amended,
in connection with Seller's termination
of any of its employees prior to, on or after the Closing Date.
3.20 Operation in Ordinary Course. During the 12-month period ending on
the date hereof, Seller has operated each of the Stations in the ordinary course
of business consistent with past practices.
3.21 Business Conducted. The business of Seller has been and is limited to
the operation of the Stations and business activities directly related thereto.
3.22 Intellectual Property. Schedule 2.1.5 lists all Intellectual
Property applied for, owned, used or licensed (either as licensor or licensee)
in connection with the operation of any of the Stations. Except as disclosed on
Schedule 2.1.5:
3.22.1 Seller owns, free and clear of conflicting claims or
restrictions and without infringement on the rights of others, all right and
interest in, and right and authority to use in connection with the conduct of
each of the Stations as presently conducted, all of the Intellectual Property
listed on Schedule 2.1.5 and all such Intellectual Property is in full force
and effect.
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3.22.2 There are no outstanding or, to the knowledge of Seller,
threatened judicial or adversary proceedings with respect to any of the
Intellectual Property listed on Schedule 2.1.5.
3.22.3 No person or entity has been granted any license or other
right or interest in or to any of the Intellectual Property listed on Schedule
2.1.5 or to the use thereof.
3.22.4 Seller has no knowledge of any infringement or unlawful use
of any of the Intellectual Property listed on Schedule 2.1.5.
3.22.5 Seller has delivered to Buyer copies of all state and federal
registrations, and pending applications for registration and other material
documents, if any, establishing any of the rights and properties constituting a
part of the Intellectual Property.
3.23 HSR Representations, Warranties and Covenants. Seller hereby
represents, warrants and covenants to Buyer as provided on Schedule 3.23.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Indiana.
Buyer has or as of the Closing Date shall have, authority to conduct business
in the State of Missouri. Buyer has all requisite corporate power to acquire
the FCC Authorizations and to become the licensee of the Stations. Buyer
agrees to furnish at Closing a Certificate of Existence for the State of
Indiana and authorization as a foreign corporation to do business in the State
of Missouri.
4.2 Authorization and Binding Effect of Documents. Buyer has, or as of the
Closing Date will have, the power and authority to execute, deliver, and
perform its obligations under this Agreement and each of the other Documents
and to consummate the transactions contemplated hereby and thereby. By the
Closing, all necessary corporate actions approving this Agreement and Buyer's
obligations hereunder shall have been taken. This Agreement and each of the
other Documents to be executed by Buyer have been, or at or prior to the
Closing will be, duly executed and delivered by Buyer. The execution, delivery
and performance of the terms of this Agreement will not conflict with or result
in the breach of or constitute a violation of or default under any of the terms,
conditions or provisions of Buyer's articles of incorporation, by-laws, or any
license, judgement, order, decree, law, regulation, rule or ruling of any court,
arbitration or governmental authority to which Buyer is subject, or result in
the breach of, or constitute a default under, any other agreement, lease,
contract or other commitment to which Buyer, its principals or any of its
assets are subject.
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Subject to obtaining the FCC Order, the execution, delivery and performance of
this Agreement does not require the consent of any third party. This Agreement
constitutes (and each of the other Documents, when executed and delivered by
Buyer will constitute) legal and valid obligations of Buyer enforceable against
Buyer in accordance with its terms.
4.3 Absence of Conflicts. Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transactions contemplated:
4.3.1 Do not violate, or result in the creation of any claim, lien,
charge or encumbrance on any of the assets or properties of Buyer under any
provision of law, rule or regulation or under any order, judgment, injunction,
decree or ruling applicable to Buyer in any manner which would have a material
negative effect on the assets, business, operation or financial condition or on
the operations of Buyer or on Buyer's ability lawfully to close the transactions
contemplated hereby;
4.3.2 Do not (with or without the giving of notice or the passage
of time or both) conflict with or result in a breach or termination of, or
constitute a default or give rise to a right of termination or acceleration
under, the articles of incorporation or bylaws of Buyer or any lease,
agreement, commitment or other instrument which Buyer is a party to or bound by
or by which any of its assets or properties may be bound, other than conflicts,
breaches, terminations, defaults or accelerations which, individually or in the
aggregate, do not and will not have a material adverse effect on the business,
operations or financial condition of Buyer or on the ability of Buyer to
perform its obligations hereunder or under any other Document.
4.4 Governmental Consents and Consents of Third Parties. With the
exception of the FCC, Buyer's execution and delivery of, and the performance of
its obligations under, this Agreement and each of the other Documents and the
consummation by Buyer of the transactions contemplated hereby and thereby, do
not require the consent, waiver, approval, permit, license, clearance or
authorization of, or any declaration or filing with, any court or public agency
or other authority, or the consent of any person under any agreement,
arrangement or commitment of any nature which Buyer is a party to or bound by,
the failure of which to obtain would have a material adverse effect on the
ability of Buyer to consummate the transactions or perform its obligations
hereunder or under any other Document.
4.5 Qualifications.
4.5.1 Buyer has no knowledge of any facts concerning Buyer or any
person with an attributable interest in Buyer (as such term is defined under
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decisions, rules and regulations of the FCC) which would, under present law
(including the Act) and present rules, regulations and practices of the FCC:
4.5.1.1 disqualify Buyer from owning and operating the
Stations; or
4.5.1.2 raise a substantial and material question of fact
(within the meaning of Section 309(a) of the Act) respecting Buyer's
qualifications.
Buyer will not take, or fail to take, any action it knows or has reason to know
would cause such disqualification or raise such question of fact. Should Buyer
become aware of any such facts, it will promptly notify Seller in writing
thereof and use its best efforts to prevent such disqualification. Buyer
further represents and warrants that it is financially qualified to meet all
terms, conditions and obligations arising or contemplated under this Agreement.
4.6 Broker's or Finder's Fees. No agent, broker, investment banker, or
other person or firm acting on behalf of Buyer or under its authority is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee, directly or indirectly, from Buyer in connection with the transactions
contemplated by this Agreement.
4.7 Litigation. There are no legal, administrative, arbitration or other
proceedings, judgments (issued or outstanding), suits, claims, or governmental
investigations pending or, to the knowledge of Buyer, threatened against Buyer
before any court, arbitration tribunal or governmental department or agency that
would give any third party the right to enjoin the transactions contemplated by
this Agreement or that could adversely affect Buyer's ability to consummate the
transactions contemplated hereunder. Buyer does not know of any basis for such
claim, litigation, proceeding, or investigation. Should any such litigation
commence after the date of this Agreement and before the Closing, Buyer shall
promptly, and in no event later than five (5) days after becoming aware of it,
notify Seller, and use its best efforts to accomplish the prompt removal or
dismissal thereof.
4.8 Disclosure. No representation, warranty or other statement by Buyer
in this Agreement or any other Document furnished by Buyer or on its behalf
contains, or will contain, any untrue statement of a material fact, or omits to
state a material fact necessary to make any representation, warranty or
statement contained herein or therein not misleading.
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ARTICLE V
COVENANTS
5.1 Affirmative Covenants of Seller. Between the date hereof and the
Closing Date, except as contemplated by this Agreement, Seller shall:
5.1.1 Continued Operation of Stations. Subject to the terms of the
TBA, continue to operate the Stations in the ordinary course consistent with
past practices and in conformity with the FCC Licenses, the Act, the rules and
regulations of the FCC, and all other applicable laws, ordinances, regulations,
rules and orders. If Seller receives any finding, order, complaint, citation or
notice prior to Closing which asserts that any aspect of the Stations'
operations violates any rule, regulation or order of the FCC or any other
governmental authority (an "Administrative Violation"), including without
limitation, any rule, regulation or order concerning equal employment
opportunity, Seller shall promptly notify Buyer of any Administrative Violation,
take action promptly to remove or correct any Administrative Violation, and be
responsible for the payment of all costs associated therewith, including any
fines or back pay that may be assessed.
5.1.2 Reasonable Access. Subject to the terms of the TBA, provide
Buyer and representatives of Buyer with reasonable access, during normal
business hours on reasonable advance notice, to the properties, contracts,
books, files, logs, records and affairs of the Stations, and furnish such
additional information concerning the Stations as Buyer may from time to time
reasonably request.
5.1.3 Consent to Assignment. Use its best efforts to procure and
accomplish the consent of any third parties necessary for the assignment to
Buyer of all Material Station Agreements.
5.1.4 Maintain Assets. Maintain all of the Assets in their present
operating condition, repair and order, reasonable wear and tear in ordinary
usage excepted, and maintain the inventories of spare parts and tubes for the
technical operating equipment of the Stations at the levels normally maintained
for the Stations.
5.1.5 Timely Payments. Subject to the terms of the TBA, timely make
or provide all payments, services, or other considerations due under the Station
Agreements (including all contracts, agreements and leases to be assigned to
Buyer hereunder) so that all payments required to be made as of 12:01 a.m. on
the Closing Date will have been paid.
5.1.6 Maintain Licenses. Use its best efforts to maintain in full
force and effect, or renew when required, the FCC Authorizations and any other
licenses, permits and authorizations relating to the Stations.
5.2 Negative Covenants of Seller. Between the date hereof and the Closing
Date, except as contemplated by this Agreement, Seller will not, without the
prior written consent of Buyer which will not unreasonably be withheld:
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5.2.1 Mortgages. Create, assume or permit to exist any new mortgage
or pledge, or subject to lien or encumbrance, any of the Assets, whether now
owned or hereafter acquired, unless discharged of record prior to or at Closing.
5.2.2 Transfers. Sell, assign, lease or otherwise transfer or
dispose of any of the Assets, whether now owned or hereafter acquired, except
for disposal and consumption of supplies and inventories in the ordinary course
and retirements in the normal and usual course of business of items no longer
required for use in connection with the Stations' operations, or in connection
with the acquisition of similar property or assets of equal or greater value,
with the cost of any such replacement property to be Seller's responsibility.
5.2.3 Call Letters. Change the call letters of any of the Stations.
5.2.4 Collective Bargaining. Voluntarily enter into any collective
bargaining agreement covering employees of the Stations and not voluntarily
enter into any such collective bargaining agreement that contains a provision
requiring assignment to and assumption of the agreement by a purchaser of the
Stations.
5.2.5 Inconsistent Action. Take any action inconsistent with its
warranties, representations or obligations hereunder or which could jeopardize
or delay consummation of the transactions contemplated hereunder.
5.2.6 Contractual Obligations. Do, or omit to do, any act which
will cause a material breach of, or material default under, or termination of,
any Material Station Agreement.
5.3 Negative Covenant of Buyer. Between the date hereof and the Closing
Date, Buyer shall not take any action inconsistent with its representations,
warranties and other obligations hereunder or which could jeopardize or delay
the consummation of the transactions contemplated hereunder.
5.4 Certified Resolutions.
5.4.1 Within five (5) business days after the date hereof, Seller
shall furnish Buyer with certified resolutions of the Board of Directors and
shareholders of Seller evidencing the authorization and approval of Seller's
execution and delivery of and performance under this Agreement.
5.4.2 Within five (5) business days after the date hereof, Buyer
shall furnish Seller with certified resolutions of the Board of Directors of
Buyer evidencing the authorization and approval of Buyer's execution and
delivery of and performance under this Agreement.
5.5 Audited Financial Statements. Seller agrees that Buyer shall be
entitled at its expense to cause audited and unaudited financial statements of
the Stations to be prepared for such periods and filed as required by the rules
and regulations of the Securities and Exchange Commission applicable to Buyer
as a registrant or publicly reporting company. Seller agrees to cooperate with
Buyer and the auditing accountants as reasonably requested by Buyer in
connection with the
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preparation and filing of such financial statements, including providing a
customary management representation letter in the form prescribed by generally
accepted auditing standards.
5.6 No Solicitation. From the date hereof until the earlier of Closing
or termination of this Agreement, neither Seller nor any affiliate of Seller
shall directly or indirectly (i) solicit, initiate or encourage submission of
any proposal or offer from any person relating to any acquisition or purchase
of any interest in Seller or any material assets of any of the Stations or any
merger, consolidation or business combination with Seller (each an "Acquisition
Proposal"), or (ii) participate in any discussions or negotiations regarding,
furnish to any person any information with respect to, or otherwise assist,
facilitate, encourage or participate in or cooperate with, any effort or
attempt by any person to make or effect an Acquisition Proposal. Seller shall
promptly notify Buyer in writing if an Acquisition Proposal is made in writing
after the date of this Agreement.
ARTICLE VI
FCC CONSENT
6.1 FCC Approvals.
6.1.1 FCC Consent. Seller and Buyer shall jointly file the
Assignment Application with the FCC within seven (7) days of the execution of
this Agreement. Seller and Buyer shall take all steps necessary to prosecute
such filing with diligence and shall diligently oppose any objections to,
appeals from or petitions to reconsider the FCC Order, to the end that the FCC
Order shall become a Final Action as soon as practicable. Seller shall not
take, nor permit any shareholder, officer or director of Seller to take, and
Buyer shall not take, nor permit any officer or director of Buyer to take, any
action that such party knows or has reason to know would materially and
adversely affect or materially delay issuance of the FCC Order, or materially
and adversely affect or materially delay the FCC Order from becoming a Final
Action. Should Buyer or Seller become aware of any facts not disclosed which
could reasonably be expected to materially and adversely affect or materially
delay issuance of the FCC Order, or prevent or materially delay the FCC Order
from becoming a Final Action, such party shall promptly notify the other party
thereof in writing. Buyer shall be solely responsible for any filing fee
required by the FCC for the Assignment Application, but the parties shall
otherwise each bear their own expenses in connection with the Assignment
Application.
6.1.2 FCC Renewal Orders. Seller shall take all commercially
reasonable steps necessary to prosecute the applications for the FCC Renewal
Orders with diligence and shall diligently oppose any objections to, appeals
from or petitions to reconsider the grant of such applications.
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6.2 Time for FCC Approvals. In the event that the FCC Order and the FCC
Renewal Orders have not been issued and, unless waived by Buyer, become Final
Actions (it being understood that such orders becoming Final Actions shall not
be a condition precedent to Seller's obligation to close hereunder) on or before
November 15, 1997, either Buyer or Seller within ten (10) days thereafter may
terminate this Agreement upon written notice to the other party; provided,
however, no party shall be entitled to terminate this Agreement while such
party is in material breach hereunder.
ARTICLE VII
OTHER COVENANTS
7.1 Access Prior to the Closing Date. Prior to the Closing Date, subject
to the limitations contained in this Article, Buyer and its representatives may
make such investigation of the assets and business of Seller as it may desire.
Seller shall give to Buyer, its counsel, accountants and other representatives
reasonable access during normal business hours through the period prior to the
Closing to personnel and all of the assets, books, agreements, records and files
of or pertaining to Seller and the Stations provided that:
7.1.1 Buyer shall give Seller reasonable advance notice of the date
on which Buyer or any such other person or entity desires such access;
7.1.2 each visitor (other than an officer of Buyer) shall, if
requested by Seller, be accompanied by an officer or other representative of
Buyer approved by Seller, which approval shall not be unreasonably withheld;
and
7.1.3 the investigations at the Stations shall be reasonable in
number and frequency. Seller shall also furnish to Buyer during such period all
documents and copies of documents and information concerning the business and
affairs of the Stations as Buyer may reasonably request.
7.2 Good Faith; Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its reasonable efforts to
take all action and to do all things necessary, proper or advisable in good
faith to satisfy any condition to the parties' obligations hereunder in its
power to satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement.
7.3 Rescission Agreement. In the event Closing occurs before the FCC
Order and the FCC Renewal Orders each shall have become a Final Action, Seller
and Buyer on the Closing Date shall enter into the Rescission Agreement
attached hereto as Exhibit 2 (the "Rescission Agreement").
7.4 Bulk Sales Act Compliance. Subject to Seller's obligation to
indemnify Buyer for its noncompliance with the Bulk Sales Act, the parties
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understand that Seller's failure to comply with the Bulk Sales Act shall not
constitute a breach or default of this Agreement.
7.5 Employees.
7.5.1 Buyer's Hiring of Station Employees. After the date hereof,
Buyer shall be entitled to approach employees of Seller who perform services
principally for any or more of the Stations (each, a "Station Employee") and
make arrangements with the Station Employees to become employees of Buyer, and
Seller agrees to assist Buyer in hiring the Station Employees. Buyer shall
not, however, be obligated to continue employment of any such Station Employee
hired by Buyer, except in accordance with the terms and provisions of any
written employment agreement included as part of the Assumed Obligations
assumed by Buyer from and after the Closing Date. In the event the TBA is
terminated prior to the Closing Date, Seller shall be entitled to rehire all of
the Station Employees hired by Buyer, and Buyer agrees to assist Seller in
rehiring such Station Employees.
7.5.2 Seller's Severance Policy. Seller shall pay severance pay,
in accordance with Seller's severance policy in effect as of the date hereof, to
each Station Employee who is hired and then terminated by Buyer within ninety
(90) days after the date hereof.
7.5.3. Credit Under Buyer's Severance Policy. Buyer shall provide
to each Station Employee who remains employed by Buyer as of the date ninety
(90) days after the date hereof, a credit under Buyer's severance policy of one
(1) year for each two (2) full years of service with Seller, provided that such
credit shall not apply in connection with Buyer's termination of any Station
Employee upon termination of the TBA prior to the Closing Date.
7.6 Steve and D.C. Program. The rights of Seller and Affiliates of Seller
to broadcast the Steve and D.C. Program after the Closing Date shall be governed
by the terms and provisions set forth on Schedule 7.6. As used in this
Agreement and in such Schedule, the term "Affiliate" shall mean with respect to
any person or entity, any other person or entity which controls, is controlled
by or is under common control with the person or entity.
ARTICLE VIII
TIME BROKERAGE AGREEMENT
8.1 Time Brokerage Agreement. Simultaneously with the execution of this
Agreement, Buyer and Seller shall enter into the TBA pursuant to which Buyer
will provide programming for broadcast on the Stations pending the FCC Order
and the Closing contemplated hereunder. Other than as permitted under the TBA,
between the date of this Agreement and the Closing Date, Buyer, its employees
and its agents shall not be involved in the operation of the Stations, and such
operation shall be the sole responsibility, and in the complete discretion, of
Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO THE
OBLIGATION OF BUYER TO CLOSE
Buyer's obligation to close the transactions contemplated by this Agreement
is subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, unless waived by Buyer in writing:
9.1 Accuracy of Representations and Warranties. The representations and
warranties of Seller contained in this Agreement or in any other Document shall
be complete and correct in all material respects at the Closing Date with the
same effect as though made at such time, except for changes permitted under this
Agreement.
9.2 Performance of Agreement. Seller shall have performed in all material
respects all of its covenants, agreements and obligations required by this
Agreement to be performed or complied with by it prior to or upon the Closing
Date.
9.3 FCC and Other Consents.
9.3.1 The FCC Order and the FCC Renewal Orders shall have been
issued by the FCC. (This condition may not be waived.)
9.3.2 The FCC Order and the FCC Renewal Orders each shall have
become a Final Action without any condition materially adverse to Buyer.
9.3.3 Conditions which the FCC Order, the FCC Renewal Orders or any
order, ruling or decree of any judicial or administrative body relating thereto
or in connection therewith specifies and requires to be satisfied prior to
assignment of the Stations to Buyer shall have been satisfied.
9.3.4 Other Governmental Consents. All other authorizations,
consents, approvals and clearances of all federal, state and local governmental
agencies required to permit the consummation by Buyer of the transactions
contemplated by this Agreement shall have been obtained; all statutory and
regulatory requirements for such consummation shall have been fulfilled; and no
such authorizations, consents, approvals or clearances shall contain any
conditions that individually or in the aggregate would have a material adverse
effect on the Stations or Buyer's operation thereof.
9.3.5 Private Consents. All necessary approvals and consents to the
assignment to Buyer of the Material Station Agreements shall have been obtained
and delivered to Buyer.
9.4 No Adverse Proceedings. No suit, action or governmental proceeding
shall be pending against, and no order, decree or judgment of any court, agency
or other governmental authority shall have been rendered against Buyer, that
would make it unlawful for Buyer to consummate the transactions contemplated by
this Agreement in accordance with the terms hereof, or which might reasonably
result in any material adverse effect on the business, prospects or condition
of any of the
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Stations or the assets to be conveyed under this Agreement, or which question
the validity of any action taken or to be taken pursuant to or in connection
with this Agreement, or which would reasonably be expected to result in a claim
for damages greater than Twenty Thousand Dollars ($20,000) for which Buyer
would be responsible. No insolvency proceedings of any character against
Seller or any of its assets or properties shall be pending or to the knowledge
of Seller, threatened, and Seller shall not have taken any action in
contemplation of, or which would constitute the basis for, the institution of
any such insolvency proceeding.
9.5 Title Insurance and Survey.
9.5.1 Buyer at its own expense shall have obtained a title
commitment (the "Title Commitment") on the current ALTA form from a title
insurance company (the "Title Insurance Company") wherein the Title Insurance
Company shall agree to insure in Buyer fee simple title to each parcel of Real
Property. The exceptions to title specified in the Title Commitment shall be
limited to the preprinted or standard exceptions to title (the "Standard
Exceptions"), the lien for taxes not yet due and payable (the "Permitted Tax
Lien") and such other exceptions (the "Other Permitted Exceptions") that will
neither (1) materially impair Buyer's ability to use the insured Real Property
in the operation of the Station in the manner in which it is now used, nor (2)
constitute or evidence a mortgage or other lien (other than a Permitted Tax
Lien) against such title, except mortgages or other liens that will be released
at Closing at Seller's expense.
9.5.2 Buyer at its own expense shall have obtained a current "as
built" survey (each, a "Survey") of each portion of the Real Property. Each
such Survey shall be prepared by a registered surveyor, shall comply with
current ALTA Minimum Standard Detail Requirements, shall be accompanied by a
certification sufficient for the Title Insurance Company's deletion of the
Standard Exceptions relating to survey matters, and shall not disclose any
matters which would materially impair Buyer's ability to use any of the
surveyed Real Property in the operation of the Station in the manner in which
it is now used.
9.5.3 On the Closing Date, the Title Insurance Company shall have
unconditionally agreed in writing to issue pursuant to the Title Commitment a
final title policy as of the Closing Date insuring fee simple title in Buyer to
the Real Property covered by the Title Commitment, subject only to the
Permitted Tax Lien and Other Permitted Exceptions. On or before the Closing
Date, Seller shall execute and deliver to the Title Insurance Company an
affidavit regarding mechanic's liens sufficient to allow deletion of such liens
as a Standard Exception in the final title policy.
9.5.4 If within sixty (60) days after the date hereof:
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9.5.4.1 A Title Commitment has not been obtained for any
portion of the Real Property, Buyer shall be deemed to have waived the
conditions precedent in foregoing Subsections 9.5.1 and 9.5.3 with respect to
such portion of the Real Property.
9.5.4.2 A Survey has not been obtained by Buyer for any
portion of the Real Property, Buyer shall be deemed to have waived the condition
precedent in foregoing Subsection 9.5.2 with respect to such portion of the Real
Property, and shall be deemed to have waived the condition precedent in
foregoing Subsection (c) to the extent satisfaction of such condition with
respect to such portion of the Real Property would require such Survey.
9.5.4.3 Buyer does not by written notice to Seller
specifically identify and object to a defect or exception to title to any of the
Real Property, Buyer shall be deemed to have waived its right to object to such
defect or exception.
9.6 Environmental Inspection. Buyer at its expense shall have caused an
environmental inspection to be performed by a reputable environmental
engineering company of each portion of the Real Property, and any real property
leased by Seller and used in the operation of any of the Stations (the "Leased
Real Property"), and the inspection report shall not disclose a reasonable
basis for a determination that any such portion of the Real Property or the
Leased Real Property in its current condition would cause Buyer as the owner or
lessee thereof to incur a material liability under any applicable environmental
law, rule or regulation. Buyer shall cause the environmental consultant to
deliver to Seller a copy of each such inspection report at the same time such
report(s) are delivered to Buyer. In the event that within sixty (60) days
after the date hereof, Buyer shall have failed to give Seller written notice
specifying in detail the manner in which any such report discloses a reasonable
basis for a determination that a portion of the Real Property or the Leased
Real Property in its current condition would cause Buyer as the owner or lessee
thereof to incur a material liability under applicable environmental laws,
rules or regulations, Buyer shall be deemed to have waived the condition
precedent set forth in this Section 9.6.
9.7 Delivery of Closing Documents. Seller shall have delivered on or
before the Closing Date each of the documents required to be delivered pursuant
to Section 11.2 or as otherwise provided in this Agreement.
ARTICLE X
CONDITIONS PRECEDENT TO THE
OBLIGATION OF SELLER TO CLOSE
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The obligation of Seller to close the transactions contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, or
each of the following conditions, unless waived by Seller in writing:
10.1 Accuracy of Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement or in any other Document shall
be complete and correct in all material respects on the date hereof and at the
Closing Date with the same effect as though made at such time, except for
changes permitted under this Agreement.
10.2 Performance of Agreement. Buyer shall have performed in all material
respects all of its covenants, agreements and obligations required by this
Agreement to be performed or complied with by it prior to or upon the Closing
Date.
10.3 FCC and Other Consents.
10.3.1 The FCC Order shall have been issued by the FCC. (This
condition may not be waived.)
10.3.2 Conditions which the FCC Order, the FCC Renewal Orders or any
order, ruling or decree of any judicial or administrative body relating thereto
or in connection therewith specifies and requires to be satisfied prior to
assignment of the Stations to Buyer shall have been satisfied.
10.3.3 Other Governmental Consents. All other authorizations,
consents, approvals and clearances of all federal, state and local governmental
agencies required to permit the consummation by Seller of the transactions
contemplated by this Agreement shall have been obtained; all statutory and
regulatory requirements for such consummation shall have been fulfilled; and no
such authorizations, consents, approvals or clearances shall contain any
conditions that individually or in the aggregate would have a material adverse
effect on the Stations or Buyer's operation thereof.
10.4 No Adverse Proceedings. No suit, action or governmental proceeding
shall be pending against, and no order, decree or judgment of any court, agency
or other governmental authority shall have been rendered against, Seller that
would make it unlawful for Seller to consummate the transactions contemplated
by this Agreement in accordance with the terms hereof, or which question the
validity of any action taken or to be taken pursuant to or in connection with
this Agreement. No insolvency proceedings of any character against Buyer shall
be pending and Buyer shall not have taken any action in contemplation of, or
which would constitute the basis for, the institution of any such insolvency
proceeding.
10.5 Delivery of Closing Documents. Buyer shall have delivered on or
before the Closing Date each of the documents required to be delivered pursuant
to Section 11.3 or as otherwise provide in this Agreement.
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ARTICLE XI
CLOSING
11.1 The Closing shall take place ten (10) business days after satisfaction
(or waiver by the appropriate party) of the conditions precedent hereunder, or
on such other date as the parties may mutually agree (the "Closing Date"). The
Closing shall occur at a mutually agreeable location.
11.2 Seller's Performance. At the Closing hereunder Seller shall deliver
or cause to be delivered to Buyer the following in each case in form and
substance reasonably satisfactorily to Buyer:
11.2.1 License Assignments. Assignments of the FCC Authorizations
in customary form and substance;
11.2.2 Bill of Sale. A bill of sale and all other appropriate
documents and instruments in a form and substance acceptable to counsel for
Buyer assigning good and marketable title to the Tangible Personal Property and
all other Assets not otherwise conveyed (except the Real Property), free and
clear of any Liens;
11.2.3 Leases/Contracts. Such assignments and further instruments
of transfer to assign to Buyer all of Seller's rights under the Station
Agreements (including any ground lease, tower lease, or studio lease) free and
clear of all Liens and any other adverse claims with, where required, the
necessary consents to such assignments;
11.2.4 Additional Documents. Such other information, materials and
documentation as counsel for Buyer shall have reasonably requested for the
purpose of consummating the transactions described herein and to evidence
satisfaction of the conditions to Seller's obligations hereunder, and any other
documents expressly required by this Agreement to be delivered by Seller at
Closing;
11.2.5 Real Property. A general warranty deed, in a form recordable
in the State of Missouri or Illinois, as applicable, for each parcel of the Real
Property, which deed shall convey insurable, fee simple title for that parcel
free and clear of all Liens except the Permitted Liens;
11.2.6 Certificates. (i) A Certificate by Seller, dated as of the
Closing Date, certifying that, except as set forth in such Certificate, all of
Seller's undertakings and obligations under this Agreement are satisfied as of
the Closing Date and all of its warranties and representations remain true and
accurate as of the Closing Date; (ii) a certificate from the Secretary of State
of the State of Missouri, dated as near as practicable to the Closing Date,
showing that Seller is incorporated and in good standing in the State of
Missouri; and (iii) a certificate of the secretary of Seller attesting to the
incumbency of each officer of Seller who executes this Agreement and any of the
other Documents;
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11.2.7 Rescission Agreement. If the Closing occurs before each of
the FCC Order and the FCC Renewal Orders has become a Final Action, the
Rescission Agreement;
11.2.8 Opinions of Seller's Counsel. (a) The written opinion of
Seller's corporate counsel, dated as of the Closing Date, that (1) Seller is a
corporation duly formed and in good standing in the State of Missouri; (2)
Seller is authorized to sell the Stations and the Assets; (3) all corporate
actions necessary to sell the Stations and the Assets pursuant to this
Agreement have been duly and properly taken; (4) to the knowledge of counsel,
no suit, action or proceeding is pending or threatened that questions or may
affect the validity of any action to be taken by Seller pursuant to this
Agreement or that seeks to restrain Seller from carrying out the transactions
provided for herein; (5) to the knowledge of counsel, there is no outstanding
judgment or any suit, action or claim pending, threatened or deemed by counsel
to be probable of assertion, or any governmental proceeding or investigation in
progress that could reasonably be expected to have a material adverse effect
upon the assets to be conveyed hereunder or the Stations after Closing. (b)
The written opinion of Seller's FCC Counsel, dated as of the Closing Date,
that: (1) Seller validly holds the FCC Authorizations, each of which is in full
force and effect; (2) they are not subject to any conditions other than those
shown on the face of the FCC Authorizations; (3) the FCC has granted the FCC
Order and the FCC Renewal Orders and such orders each have become a Final
Action (unless the condition on finality has been waived as permitted herein);
and (4) there are no proceedings pending or, to such counsel's knowledge,
threatened by or before the FCC affecting or relating to any of the Stations or
the FCC Authorizations;
11.2.9 Joint Escrow Instructions. Written instructions to the Escrow
Agent directing that the Deposit be delivered to Seller and all interest thereon
be delivered to Buyer;
11.2.10 Records. Deliver to Buyer copies of the records and documents
referenced in Section 2.1.4 above. Such documents need not be provided in
person but may be located at the studios/offices of the Stations; and
11.2.11 Wire Instructions. Three (3) days prior to the Closing Date,
Seller shall provide to Buyer wire instructions for the payment of the cash
payment due on the Closing Date.
11.3 Deliveries to Seller by Buyer. At the Closing, Buyer shall deliver or
cause to be delivered to Seller the following, in each case in form and
substance reasonably satisfactory to Seller:
11.3.1 Cash. A wire transfer of immediately available funds to
Seller in the amount provided for in Section 2.4.2;
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11.3.2 Certificates. (i) A certificate by Buyer dated as of the
Closing Date certifying that, except as set forth in such certificate, all of
Buyer's undertakings and obligations under this Agreement are satisfied as of
the Closing Date, and all of its warranties and representations remain true and
accurate as of the Closing Date; (ii) a certificate from the Secretary of State
of the State of Indiana, dated as near as practicable to the Closing Date,
showing that Buyer is incorporated and in existence in the State of Indiana;
(iii) a certificate from the Secretary of State of the State of Missouri, dated
as near as practicable to the Closing Date, showing that Buyer is authorized to
do business in the State of Missouri; and (iv) a certificate of the secretary
of Buyer attesting to the incumbency of each officer of Buyer who executes this
Agreement and any of the other Documents;
11.3.3 Additional Documentation. Such additional information,
materials, and documentation as counsel to Seller shall have reasonably
requested to evidence satisfaction of the conditions to Buyer's obligations
hereunder, and any other documents expressly required by this Agreement to be
delivered by Buyer at Closing;
11.3.4 Assumption Agreement. Documentation in a form reasonably
satisfactory to counsel for Seller that Buyer has assumed the Assumed
Obligations;
11.3.5 Joint Escrow Instructions. Written instructions to the Escrow
Agent directing that the Deposit be delivered to Seller and all interest thereon
be delivered to Buyer; and
11.3.6 Rescission Agreement. If the Closing occurs before each of
the FCC Order and the FCC Renewal Orders has become a Final Action, the
Rescission Agreement.
ARTICLE XII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES:
INDEMNIFICATION
12.1 Survival of Representations and Warranties. All representations,
warranties, covenants and agreements contained in this Agreement or in any other
Document shall survive the Closing, regardless of any investigation, inquiry or
knowledge on the part of any party hereto, and the Closing shall not be deemed a
waiver by either party of the representations, warranties, covenants or
agreements of the other party contained herein or in any other Documents;
provided, however, that the period of survival shall end eighteen (18) months
after the Closing Date the ("Survival Period"). No claim may be brought under
this Agreement or any other Document, unless written notice describing in
reasonable detail the nature and basis of such claim is given on or prior to
the last day of the Survival Period. In the event such a notice is so given,
the right to indemnification with respect
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thereto under this Article shall survive the applicable Survival Period until
such claim is finally resolved and any obligations with respect thereto are
fully satisfied.
12.2 Indemnification in General. Buyer and Seller agree that the rights to
be indemnified and held harmless set forth in this Agreement, as between the
parties hereto and their respective permitted successors and assigns, shall be
exclusive of all rights to be indemnified and held harmless that such party
(or its permitted successors or assigns) would otherwise have by statute,
common law or otherwise.
12.3 Indemnification by Seller. Seller shall indemnify, defend, and hold
harmless Buyer, any officer or director thereof, and their permitted assigns
with respect to any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs, losses, damages, obligations, liabilities,
recoveries, deficiencies, and expenses (including interest, penalties and
reasonable attorneys' fees) of every kind and description (collectively
"Claim") relating to or arising out of:
12.3.1 Any breach or non-performance by Seller of any of its
representations, warranties, covenants or agreements set forth in this Agreement
or any other Document; or
12.3.2 Any debt, liability or obligation of Seller or the Stations
that arises or results from or is attributable to the operations or business of
the Seller or the Stations prior to the Closing Date, including but not limited
to, liabilities and obligations under Station Agreements to the extent such
liabilities and obligations relate to any period before the Closing Date,
regardless of whether disclosed in any Schedule or Document and regardless of
whether constituting a breach by Seller of any representation, warranty,
covenant or agreement, and any other liability or obligation of Seller other
than the Assumed Obligations; provided, however, that Seller shall not be
liable for any Claim arising out of or resulting from Buyer's action or failure
to act under the TBA; or
12.3.3 Noncompliance by Seller with the provisions of the Bulk Sales
Act, if applicable, in connection with the transactions contemplated by this
Agreement.
12.4 Indemnification by Buyer. Buyer shall indemnify, defend, and hold
harmless Seller, any officer or director thereof, and their permitted assigns,
with respect to any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs, losses, damages, obligations, liabilities,
recoveries, deficiencies, and expenses (including interest, penalties and
reasonable attorneys' fees) of every kind and description relating to or
arising out of:
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12.4.1 Any breach or non-performance by Buyer of any of its
representations, warranties, covenants or agreements set forth in this Agreement
or any other Document; or
12.4.2 The Assumed Obligations and any other liability, obligation
or debt of Buyer or the Stations that arises or results from and is attributable
to the operations or business of the Stations on or after the Closing Date
excluding, however, any liability or obligation of Seller other than the Assumed
Obligations.
12.5 Indemnification Procedure. For purposes of administering the
indemnification provisions set forth in Sections 12.3 and 12.4, the following
procedure shall apply:
12.5.1 Whenever a claim for indemnification shall arise under this
Article, the party entitled to indemnification (the "Indemnified Party") shall
promptly and in no event later than fifteen (15) days after receipt of such a
claim, give written notice to the party from whom indemnification is sought (the
"Indemnifying Party") setting forth in reasonable detail, to the extent then
available, the facts concerning the nature of such claim and the basis upon
which the Indemnified Party believes that it is entitled to indemnification
hereunder, provided that the Indemnified Party's failure to do so shall not
preclude it from seeking indemnification hereunder unless such failure has
materially prejudiced the Indemnifying Party's ability to defend such claim.
12.5.2 In the event of any claim for indemnification hereunder
resulting from or in connection with any claim, action, suit or legal
proceedings brought by a third party, the Indemnifying Party shall be entitled,
at its sole expense, either:
12.5.2.1 to participate therein, or
12.5.2.2 to assume the entire defense thereof with counsel
who is selected by it and who is reasonably satisfactory to the Indemnified
Party provided that:
(a) the Indemnifying Party agrees in writing that
it does not and will not contest its responsibility for indemnifying the
Indemnified Party in respect of such claim or proceeding, and
(b) no settlement shall be made without the prior
written consent of the Indemnified Party which shall not be unreasonably
withheld (except that no such consent shall be required if the claimant is
entitled under the settlement to only monetary damages to be paid solely by
the Indemnifying Party). If, however,
(1) the claim, action, suit or proceeding
would, if successful, result in the imposition of damages for which the
Indemnifying Party would not be solely responsible hereunder, or
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(2) representation of both parties by the same
counsel would otherwise be inappropriate due to actual or potential differing
interests between them, then the Indemnifying Party shall not be entitled to
assume the entire defense and each party shall be entitled to retain counsel
(in the case of Clause (a) of this sentence, at their own expense) who shall
cooperate with one another in defending against such action, claim or
proceeding.
12.5.3 If the Indemnifying Party does not choose to defend against a
claim, action, suit or legal proceeding by a third party, the Indemnified Party
may defend against such claim, action, suit or proceeding in such manner as it
deems appropriate or settle such claim, action, suit or proceeding (after
giving notice thereof to the Indemnifying Party) on such terms as the
Indemnified Party may deem appropriate, and the Indemnified Party shall be
entitled to periodic reimbursement
of expenses incurred in connection therewith and prompt indemnification from the
Indemnifying Party, including reasonable attorneys' fees, in accordance with
this Article.
12.5.4 The Indemnifying Party will not, without the Indemnified
Party's written consent, settle or compromise any claim or consent to any entry
of judgment which does not include, as an unconditional term thereof, the
giving by the claimant to the Indemnified Party of a release from all liability
with respect to such claim. Neither Buyer nor Seller shall be deemed to have
notice of any claim by reason of any knowledge acquired on or prior to the
Closing Date by an employee of the Stations unless express evidence is
available establishing actual notice to either party.
ARTICLE XIII
TERMINATION
13.1 Events of Termination. If Closing shall not have previously occurred,
this Agreement shall terminate upon written notice from one party to the other
if:
13.1.1 Closing has not occurred on or before January 1, 1998;
or
13.1.2 The FCC Order or any of the FCC Renewal Orders
has not been issued on or before November 15, 1997; or
13.1.3 Fifteen (15) days after written notice is given by one
party to the other party specifying a material breach hereunder by the other
party and such breach remains uncured after expiration of such 15-day period; or
13.1.4 The TBA is terminated, provided that (i) Seller shall
be entitled to terminate this Agreement under this Section 13.1.4 only if the
TBA is terminated by reason of Buyer's material breach under the TBA, and (ii)
Buyer shall be entitled to terminate this Agreement under this Section 13.1.4
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only if the TBA is terminated by reason of Seller's material breach under the
TBA or pursuant to Section 4.4 of the TBA.
Notwithstanding the foregoing, no party shall be entitled to terminate this
Agreement while such party is in material breach hereunder. In the event this
Agreement is terminated for any reason other than by Seller pursuant to
Section 13.1.3, Buyer shall be entitled to receive the return of the Deposit
together will all interest and other earnings earned thereon while held by the
Escrow Agent. If this Agreement is terminated by Seller pursuant to
Section 13.1.3, Seller shall be entitled to the Deposit plus all accrued
interest and other earnings earned thereon while held by the Escrow Agent as
provided in Section 15.4. Buyer and Seller shall cooperate in taking such
action as necessary to assist the designated party in receiving (i) the return
or payment of the Deposit and (ii) the payment of interest and earnings earned
while held by the Escrow Agent.
ARTICLE XIV
RISK OF LOSS
14.1 The risk of loss or damage to any of the assets to be conveyed
hereunder from fire, casualty or other cause (except as the result of the action
or inaction of Buyer or its agents or employees arising under the TBA) shall be
upon Seller at all times up to 12:01 a.m. on the Closing Date, and it shall
be the responsibility of Seller prior to Closing to repair or cause to be
repaired and to restore the assets as closely as practicable to their
condition, prior to any such loss or damage. Upon the occurrence of any such
casualty, loss, damage or destruction material to the operation of the Stations
prior to the Closing (except as the result of the action or inaction of Buyer,
its agents or employees arising under the TBA), Seller shall immediately give
Buyer written notice setting forth in detail the extent of such loss, damage
or destruction, the cause thereof if known, and the insurance coverage and
Seller shall use its best efforts promptly to commence and thereafter
diligently to proceed to repair or replace any such lost, damaged or destroyed
property. However, in the event that such repair or replacement is not fully
completed prior to the Closing Date, or the loss, damage or destruction causes
any of the Stations to cease regular broadcast transmission in the normal and
usual manner for more than seven (7) consecutive days or twelve (12) days
total, whether or not consecutive, then Seller shall give prompt written
notice to Buyer and Buyer may elect either:
14.1.1 to consummate the transactions contemplated hereby on the
Closing Date, in which event Seller shall pay to Buyer the portion of the
insurance deductible, if any, not previously met, and shall assign to Buyer the
portion of
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the insurance proceeds, if any, not previously expended by Seller to repair or
replace the damaged or destroyed property;
14.1.2 to terminate this Agreement; or
14.1.3 to delay the Closing Date until fifteen (15) days after Seller
provides written notice to Buyer of completion of the repair or replacement of
the damaged or destroyed property, provided that if Seller is unable through its
reasonable best efforts to complete such repair or replacement within sixty (60)
days after the casualty, Buyer may then terminate this Agreement on written
notice.
ARTICLE XV
DEFAULT AND REMEDIES
15.1 Material Breaches. Non-material breaches or failures to perform by a
party hereunder shall not be grounds for postponing the Closing, or terminating
this Agreement.
15.2 Opportunity to Cure. No party to this Agreement shall be deemed in
default hereunder unless such default continues for fifteen (15) days after
receipt of written notice from the other party specifying in reasonable detail
the nature of such default. The defaulting party shall have the right to cure
such default within such 15-day period, provided that if Closing is scheduled
prior to the end of this period, cure must be accomplished by the Closing Date.
15.3 Buyer's Remedies. Seller agrees that the assets to be conveyed
hereunder include unique property that cannot be readily obtained on the open
market and that Buyer will be irreparably injured if this Agreement is not
specifically enforced. Therefore, Buyer shall have the right specifically to
enforce Seller's performance under this Agreement, and Seller agrees to
waive the defense in any such suit that Buyer has an adequate remedy at law and
to interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy. In the event of Buyer's termination of this Agreement
as a result of Seller's breach of this Agreement instead of seeking specific
performance, Buyer shall be entitled to the return of the Deposit, plus all
accrued interest, and in addition Buyer shall be entitled to recover from
Seller Buyer's actual damages arising from such breach. The remedies described
in this Section shall be in lieu of any other remedies to which Buyer might
otherwise be entitled due to Seller's wrongful failure to consummate the
transactions contemplated by this Agreement.
15.4 Liquidated Damages. In the event of Seller's termination of this
Agreement pursuant to Section 13.1.3, then the Deposit, plus all accrued
interest, shall be paid to Seller as liquidated damages, it being agreed that
the Deposit shall constitute full payment for any and all damages suffered by
reason of, and shall constitute Seller's sole remedy at law or in equity for,
Buyer's material breach hereunder. The remedies described in this Section
shall be in lieu of any
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other remedies to which Seller might otherwise be entitled due to Buyer's
wrongful failure to consummate the transactions contemplated by this Agreement.
ARTICLE XVI
MISCELLANEOUS
16.1 Further Actions. From time to time before, at and after the Closing,
each party, at its expense and without further consideration, will execute and
deliver such documents to the other party as the other party may reasonably
request in order to accomplish the transactions contemplated hereby.
16.2 Payment of Expenses.
16.2.1 All state or local sales or use, stamp or transfer, grant and
other similar taxes payable in connection with consummation of the transactions
contemplated hereby shall be paid by the party primarily liable under applicable
law to pay such tax.
16.2.2 Except as otherwise expressly provided in this Agreement, each
of the parties shall bear its own expenses, including the fees of any attorneys
and accountants engaged by such party, in connection with this Agreement and the
consummation of the transactions contemplated herein.
16.3 Notices. All notices, demands or other communications given hereunder
shall be in writing and shall be sufficiently given if delivered by hand, by
courier (including nationally-recognized overnight delivery service) or sent by
registered or certified mail, first class mail, postage prepaid, or by facsimile
with receipt confirmation and a follow-up copy sent by nationally-recognized
overnight delivery service on the same day as such facsimile, addressed as
follows:
If to Seller: Jerome Zimmer, President
Zimco, Inc
324 Broadway
Cape Girardeau, Missouri 63701
Tel: 573-335-8291
Fax: 573-335-4809
Copies to: Frank R. Jazzo, Esquire
Kathleen Victory, Esquire
Fletcher Heald & Hildreth, P.L.C.
1300 N. 17th Street, Suite 1100
Rosslyn, VA 22209
Tel: 703-812-0400
Fax: 703- 812-0486
If to Buyer: Doyle L. Rose, Radio Division President
Emmis Radio
4444 Lakeside Drive, Suite 320
Burbank, CA 91505
Tel: 818-569-5705
Fax: 818-569-5707
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Copies to: David L. Wills, Esquire
Bose, McKinney & Evans
2700 First Indiana Plaza
Indianapolis, IN 46204
Tel: 317-684-5125
Fax: 317-684-5173
or such other address with respect to either party hereto as such party may from
time to time specify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given:
16.3.1 if sent by first class mail, as of the close of the third
business day following the date so mailed;
16.3.2 if personally delivered or sent by overnight courier, on the
date delivered; and
16.3.3 if faxed, on the date faxed, provided written or verbal
confirmation of receipt has been obtained by the sending party.
16.4 Entire Agreement. This Agreement, the Schedules and Exhibits hereto,
and the other Documents, constitute the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede any prior offers, negotiations, agreements, understandings or
arrangements between the parties hereto with respect to the subject matter
hereof.
16.5 Benefit and Assignment. Neither party may assign its rights or
obligations hereunder to another party without the advance written consent of
the other party provided, however, that (i) Buyer may assign its right under
this Agreement to an affiliate or subsidiary of Buyer, provided such affiliate
or subsidiary is controlled by or under common control with Buyer, and so long
as Buyer unconditionally guarantees all of such affiliate's or subsidiary's
obligations under the Agreement and other Documents, and (ii) any party's rights
to indemnification under Article XII hereof will inure to the benefit of and be
enforceable by any successor-in-interest by merger or consolidation or by any
lender secured by a security interest in such rights to indemnification. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors or assigns.
16.6 Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the internal laws of the State of Missouri,
including all matters of construction, validity and performance, without regard
to its principles of conflicts of laws.
16.7 Amendments and Waivers. No term or provision of this Agreement may be
amended, waived, modified, discharged or terminated orally but rather only by an
instrument in writing signed by both parties. Any written waiver shall be
effective only in accordance with its express terms and conditions.
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16.8 Severability. Any provision of this Agreement which is held by any
court of competent jurisdiction or as a result of further legislative or
administrative action, unenforceable shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without affecting the
validity or enforceability of any other provision hereof.
16.9 Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
16.10 Counterparts. This Agreement may be executed in any number of
counterparts, and by either party on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
16.11 References. All references in this Agreement to Schedules and
Exhibits are to Schedules and Exhibits contained in this Agreement unless a
different document is expressly specified.
16.12 Attorneys' Fees. If either Seller or Buyer brings suit against the
other in connection with this Agreement, the prevailing party shall be entitled
to receive from the other party reasonable attorneys' fees and other costs and
expenses incurred by such party in connection with such suit regardless of
whether such suit is prosecuted to judgment. As used herein, "prevailing
party" shall mean, in the case of a claimant, one who is successful in
obtaining substantially all of the relief sought, and in the case of a
defendant or respondent, one who is successful in denying substantially all of
the relief sought by the claimant.
16.13 Time of Essence. Time is of the essence of this Agreement and the
performance of each and every provision hereof.
16.14 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.
16.15 Confidentiality. Buyer and Seller shall keep confidential all
information obtained by it with respect to the other in connection with this
Agreement and the negotiations preceding this Agreement, and will use such
information solely in connection with the transactions contemplated by this
Agreement. If the transactions contemplated hereby are not consummated for any
reason, each party shall return to the other, without retaining a copy thereof,
any schedules, documents or other written information obtained from the other in
connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, neither party shall be required to keep
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confidential or return any information which (a) is known or available through
other lawful sources, not bound by a confidentiality agreement with the
disclosing party, or (b) is or becomes publicly available or known through no
fault of the receiving party or its agents, (c) is required to be disclosed
pursuant to an order or request of a judicial or governmental authority or
under applicable law (provided the disclosing party is given reasonable prior
notice), or (d) is developed by the receiving party independently of the
disclosure by the disclosing party.
16.16 News Releases. In the event either party wishes to issue a news
release or other announcement regarding this Agreement (other than public
notices required by Section 73.3580 of the FCC's rules), such party shall
coordinate with the other party in advance with respect to the information to
be disclosed and the timing of such disclosure.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above.
ZIMCO, INC.
By: ______________________________
Jerome Zimmer
President
EMMIS BROADCASTING CORPORATION
By: ______________________________
Doyle L. Rose
Radio Division President
<PAGE>
SCHEDULE 2.1.3
STATION AGREEMENTS
* indicates a Material Station Agreement
AMENDMENT TO ASSET PURCHASE AGREEMENT
AND TIME BROKERAGE AGREEMENT
THIS AMENDMENT TO ASSET PURCHASE AGREEMENT AND TIME BROKERAGE AGREEMENT
("Amendment"), dated as of November 27, 1996, by and between ZIMCO, INC., a
Missouri corporation ("Seller"), and EMMIS BROADCASTING CORPORATION, an Indiana
corporation ("Buyer").
W I T N E S S E T H : That
WHEREAS, Seller and Buyer entered into an Asset Purchase Agreement, dated
as of October 31, 1996 (the "Purchase Agreement"), pertaining to the sale of the
Stations (as defined in the Purchase Agreement);
WHEREAS, Seller and Buyer are parties to a Time Brokerage Agreement, dated
as of October 31, 1996 (the "TBA"), which permits Buyer, beginning on December
1, 1996, to provide programming to be transmitted on the Stations pursuant to
the terms and conditions of the TBA; and
WHEREAS, each of Seller and Buyer desires to amend the Purchase Agreement
and the TBA as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed as follows:
1. Article III of the TBA. Article III of the TBA is hereby deleted in
its entirety and replaced with the following:
ARTICLE III
Broker Compensation
3.1 Compensation to Broker.
(a) Licensee may broadcast up to three (3) hours of Licensee
Programming per week pursuant to Section 1.2 hereof without any
compensation to Broker. If at any time during the Term, or any subsequent
term, of this Agreement the Stations shall fail for any reason, other than
as expressly provided in Sections 3.1(b) and (c) below, to carry Brokered
Programming for an amount of time for which Broker shall have offered such
Brokered Programming for transmission by the Stations, Licensee shall pay
to Broker ("Broker Compensation") the then-current value (established by
reference to Broker's standard rates for the same) of the advertising time
that was scheduled to have been broadcast by the Stations during any such
Brokered Programming that was offered by Broker for transmission by the
Stations but that was not transmitted; provided, however, that any payment
of Broker Compensation shall not prejudice any of Broker's rights under
Section 4.4 or 4.6 hereof.
(b) Broker Compensation shall be payable as set forth in
Section 3.1(a) above if Licensee's failure or refusal to carry the
Brokered Programming is for any reason other than either (i) the permitted
three (3) hours per week of Licensee Programming as provided in
Section 3.1(a) above or (ii) a force majeure event as provided in
Section 8.1 hereof; provided, however, that any payment of Broker
Compensation shall not prejudice any of Broker's rights under Section 4.4
or 4.6 hereof.
(c) Notwithstanding the provisions of Section 3.1(a) hereof,
no Broker Compensation shall be payable if Licensee shall determine, in
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its sole discretion, that Licensee Programming, as defined in Section 1.2
hereof, in an amount exceeding three (3) hours per week, shall be
necessary to be broadcast by the Stations in order to fulfill FCC
requirements or Licensee's obligations as an FCC licensee; provided,
however, that any exercise by Licensee of its rights pursuant to this
Section 3.2(c) shall not prejudice any of Broker's rights under Section
4.4 or 4.6 hereof.
(d) Licensee agrees that its rights to preempt the Brokered
Programming will be exercised only in good faith and not for a commercial
or economic advantage.
(e) Licensee shall pay to Broker any Broker Compensation
which accrues during a month by no later than the fifth business day of
the following month. Furthermore, any Broker Compensation which accrues
during a partial month shall be paid within five (5) business days
following the end of the Term.
2. Exhibit C to the TBA. Exhibit C to the TBA is hereby deleted in its
entirety.
3. Section 2.4 of the Purchase Agreement. The first paragraph of
Section 2.4 of the Purchase Agreement is hereby deleted in its entirety and
replaced with the following:
2.4 Purchase Price and Terms of Payment. The purchase price
("Purchase Price") to be paid by Buyer to Seller is Forty-Two Million Nine
Hundred Fifty Thousand Dollars ($42,950,000.00), subject to adjustment as
provided for in Section 2.4.4 below, to be paid as follows:
4. Section 2.4.2 of the Purchase Agreement. Section 2.4.2 of the
Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
2.4.2 Additional Payments. The balance of the Purchase Price
shall be paid as follows:
2.4.2.1 Cash Payment on December 2, 1996. On
December 2, 1996, Buyer shall pay to Seller Four Hundred Fifty Thousand
Dollars ($450,000.00)(the "December 2 Payment"), such payment representing
a non-refundable prepayment of a portion of the Purchase Price. Payment
shall be made by wire transfer of immediately available funds.
2.4.2.2 Cash Payment at Closing. Buyer shall pay to
Seller at Closing the balance of the Purchase Price: Thirty-Six Million,
Five Hundred Thousand Dollars ($36,500,000.00), subject to adjustment as
provided for in Section 2.4.4 below. Payment shall be made by wire
transfer of immediately available funds.
5. Section 11.1 of the Purchase Agreement. The first sentence in
Section 11.1 of the Purchase Agreement is hereby deleted in its entirety and
replaced with the following:
The Closing shall take place ten (10) business days after
satisfaction (or waiver by the appropriate party) of the conditions
precedent hereunder, or on such other date as the parties may
mutually agree (the "Closing Date"); provided that the Closing shall
occur no earlier than March 1, 1997.
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6. Section 11.3.1 of the Purchase Agreement. Section 11.3.1 of the
Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
11.3.1 Cash. A wire transfer of immediately available
funds to Seller in the amount provided for in Section 2.4.2.2;
7. Article XIII of the Purchase Agreement. The following sentence is
added at the end of Article XIII of the Purchase Agreement:
In addition, if this Agreement is terminated for any
reason, Seller shall be entitled to retain all of the
December 2 Payment.
8. Section 15.3 of the Purchase Agreement. The following sentence is
added at the end of Section 15.3 of the Purchase Agreement:
Notwithstanding the foregoing, Buyer agrees and
acknowledges that Buyer shall not be entitled to a
refund of any portion of the December 2 Payment.
9. Miscellaneous. All provisions of the Purchase Agreement and the TBA
except those amended hereby continue in full force and effect and shall also
apply to this Amendment to the extent applicable. This Amendment may be
executed in counterparts, each of which shall be an original and all of which,
taken together, shall be one instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
ZIMCO, INC.
By: ______________________________
Jerome Zimmer
President
EMMIS BROADCASTING CORPORATION
By: ______________________________
Doyle L. Rose
Radio Division President
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
made and entered into as of March 31, 1997, by and between Zimco, Inc.
("Seller"), a Missouri corporation, and Emmis Broadcasting Corporation
("Buyer"), an Indiana corporation.
RECITALS
A. WHEREAS, Seller is the licensee of Radio Stations WKBQ(AM),
St. Louis, Missouri, WKKX(FM), Granite City, Illinois and WALC(FM),
Jerseyville, Illinois (the "Stations") and holds the licenses and other
authorizations issued by the FCC for the operation of the Stations. Seller
also owns or leases all tangible and intangible assets used or useful in the
business and operations of the Stations.
B. WHEREAS, the Seller and Buyer have entered into that certain Asset
Purchase Agreement, dated as of October 31, 1996, and amended as of
November 27, 1996 (the "Purchase Agreement"), for the sale of certain of the
assets of Seller used or useful in the operation of the Stations (the
"Assets").
C. WHEREAS, the Seller and Buyer desire to amend the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Amendments.
(a) The first paragraph of Section 2.4 of the Purchase Agreement
is hereby deleted in its entirety and replaced with the following:
2.4 Purchase Price and Terms of Payment. The
purchase price ("Purchase Price") to be paid by Buyer to Seller is
Forty-Three Million One Hundred Thousand Dollars ($43,100,000.00),
subject to adjustment as provided for in Section 2.4.4 below, to
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be paid as follows:
(b) Section 2.4.2.1 of the Purchase Agreement is hereby deleted
in its entirety and replaced with the following:
2.4.2.1 Cash Payment on December 2, 1996 and March 14,
1997. On December 2, 1996, Buyer shall pay to Seller Four Hundred
Fifty Thousand Dollars ($450,000) (the "December 2 Payment"), and
on March 14, 1997, Buyer shall pay to Seller One Hundred Fifty
Thousand Dollars ($150,000) (the "March 14 Payment"), each such
payment representing a non-refundable prepayment of a portion of
the Purchase Price. Payments shall be made by wire transfer of
immediately available funds.
(c) Section 2.4.3 of the Purchase Agreement is hereby amended in
its entirety to read as follows:
2.4.3 Allocation of Purchase Price. The parties agree that
the Purchase Price shall be allocated among the Assets in
accordance with an appraisal prepared by a firm selected by Buyer,
and subject to the approval of Seller, such approval not to be
withheld unreasonably, whose fee and expense shall be born by the
Buyer. The Buyer shall direct such appraisal firm to deliver a
draft of such appraisal to each of Buyer and Seller for review and
comment within 30 days from the Closing. Said allocation shall be
prepared pursuant to Section 1060 of the Internal Revenue Code of
1986, as amended (the "Code").
(d) The last sentence of the end of Article XIII of the Purchase
Agreement (as added by the first amendment to the Purchase Agreement) is
hereby deleted in its entirety and replaced with the following:
In addition, if this Agreement is terminated for any reason,
Seller may be entitled to retain all of the December 2 Payment and
all of the March 14 Payment.
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(e) The last sentence at the end of Section 15.3 of the Purchase
Agreement (as added by the first amendment to the Purchase Agreement) is
hereby deleted in its entirety and replaced with the following:
Notwithstanding the foregoing, Buyer agrees and acknowledges
that Buyer shall not be entitled to a refund of any portion of the
December 2 Payment or any of the March 14 Payment.
(f) Section 16.5 of the Purchase Agreement is hereby amended in
its entirety to read as follows:
16.5 Benefit and Assignment. Neither party may assign its
right or obligations hereunder to another party without the
advance written consent of the other party provided, however, that
(i) Buyer may assign its rights under this Agreement to one or
more affiliates or subsidiaries of Buyer, provided each such
affiliate or subsidiary is controlled by or under common control
with Buyer, and so long as Buyer unconditionally guarantees all of
each such affiliate's or subsidiary's obligations under this
Agreement and other Documents, (ii) Seller may assign all or part
of its rights hereunder to a "qualified intermediary" as provided
in Section 16.17 hereof, but no such assignment shall relieve
Seller of its obligations under this Agreement and other Documents
and (iii) any party's rights to indemnification under Article XII
hereof will inure to the benefit of and be enforceable by any
successor-in-interest by merger or consolidation or by any lender
secured by a security interest in such rights to indemnification.
This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors or assigns.
(g) Section 6.17 is hereby added to the Purchase Agreement to
read as follows:
16.17 Like-Kind Exchange. Seller may elect to effect the
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transfer and conveyance of the Assets as part of an exchange under
Section 1031 of the Code. If Seller so elects, it shall provide written
notice to Buyer of its election, and thereafter (i) may at any time at or
prior to Closing assign its right under this Agreement and the Escrow
Agreement to a "qualified intermediary" as defined in Treas. Reg.
Section 1.1031(k)-1(g)(4), subject to all of Buyer's rights and obligations
hereunder and (ii) shall promptly provide written notice of such
assignment to all parties hereto. Buyer shall execute all documents
needed to give effect to Seller's election to effect the transfer and
conveyance of the Assets as part of an exchange under Section 1031 of the
Code, provided the execution of such documents does not obligate the Buyer
to expend any funds that Buyer would not otherwise expend or incur any
liabilities that Buyer would not otherwise incur. Without limiting the
generality of the foregoing, if Seller has given notice of its intention
to effect the disposition of the Assets as part of a tax-deferred
exchange, Buyer shall (i) promptly provide Seller with written
acknowledgment of such notice and (ii) at Closing, pay the Purchase
Price for the Assets to the "qualified intermediary" rather than to Seller
(which payment shall discharge the obligation of Buyer to make payment for
the Assets hereunder). Buyer also agrees that if Seller assigns its
rights under the Escrow Agreement to a "qualified intermediary" as defined
in Treas. Reg. Section 1.1031(k)-1(g)(4) prior to the Closing, such
qualified intermediary shall execute the joint written instructions
(referred in paragraph 5(a) of the Escrow Agreement) as the Seller's
assignee.
2. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
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together shall constitute one and the same instrument.
3. Governing Law. This Amendment shall in all respects be governed
by and construed in accordance with the internal laws of the State of
Missouri, including all matters of construction, validity and performance,
without regard to its principle of conflicts of laws.
4. Reference to Purchase Agreement. Except as amended hereby, the
Purchase Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.
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IN WITNESS WHEREOF, each of the parties hereto have executed this Second
Amendment to the Purchase Agreement as of the date and year first above
written.
Zimco, Inc.
By: ________________________________
Name: Jerome R. Zimmer
Title: President
Emmis Broadcasting Corporation
By: _______________________________
Name: Doyle L. Rose
Title: Radio Division President
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