<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ------------
Commission File Number 1-13452
PAXSON COMMUNICATIONS CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-3212788
---------------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
601 CLEARWATER PARK ROAD
WEST PALM BEACH, FLORIDA 33401
---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 659-4122
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during the proceeding 12 months (or for shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common and preferred stock, as of July 31, 1996:
CLASS OF STOCK NUMBER OF SHARES
-------------- ----------------------
COMMON STOCK-CLASS A, $0.001
PAR VALUE PER SHARE --------------------- 38,670,309
COMMON STOCK-CLASS B, $0.001
PAR VALUE PER SHARE ---------------------- 8,311,639
REDEEMABLE CUMULATIVE SENIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 2,000
REDEEMABLE CUMULATIVE SERIES B
PREFERRED STOCK, $0.001 PAR VALUE --------- 714.286
REDEEMABLE CUMULATIVE JUNIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 33,000
<PAGE> 2
PAXSON COMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
Part I - Financial Information
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations
Six Months Ended June 30, 1996
and June 30, 1995 4
Consolidated Statements of Operations
Three Months Ended June 30, 1996
and June 30, 1995 5
Consolidated Statements of Changes in
Common Stockholders' Equity 6
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996
and June 30, 1995 7-8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-17
Part II - Other Information
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults upon Senior Securities 18
Item 4. Submission of Matters to a Vote of
Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18-21
Signatures 22
</TABLE>
2
<PAGE> 3
PAXSON COMMUNICATIONS CORPORATION
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $115,577,129 $ 68,070,990
Accounts receivable, less allowance for doubtful
accounts of $1,037,349 and $909,713 respectively 19,354,203 17,726,415
Prepaid expenses and other current assets 2,487,528 971,363
Current program rights 664,830 1,412,544
------------ ------------
Total current assets 138,083,690 88,181,312
Property and equipment, net 110,429,710 79,859,080
Intangible assets, net 121,300,867 84,318,147
Other assets, net 28,480,440 19,896,694
Investments in broadcast properties 38,887,393 21,192,030
Program rights, net 266,551 384,814
------------ ------------
Total assets $437,448,651 $293,832,077
============ ============
LIABILITIES, REDEEMABLE SECURITIES AND COMMON STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 6,948,343 $ 5,030,692
Accrued interest 6,730,050 6,932,342
Current portion of program rights payable 642,229 1,449,602
Current portion of long-term debt 569,766 430,590
------------ ------------
Total current liabilities 14,890,388 13,843,226
Program rights payable 277,242 432,750
Long-term debt 3,764,578 12,484,024
Senior subordinated notes, net 227,507,455 227,374,911
Redeemable Cumulative Compounding Senior
preferred stock, $0.001 par value; 15% dividend rate
per annum, 2,000 shares authorized, issued and
outstanding 18,393,136 16,824,082
Redeemable Class A & B common stock warrants - 6,465,317
Redeemable Cumulative Compounding Series B preferred
stock, $0.001 par value; 15% dividend rate per annum,
714.286 shares authorized, issued and outstanding 2,990,200 2,352,654
Redeemable Cumulative Compounding Junior preferred
stock, $0.001 par value; 12% dividend rate per annum,
33,000 shares authorized, issued and outstanding 34,090,262 31,533,910
Class A common stock, $0.001 par value; one vote per share;
150,000,000 shares authorized, 38,665,509 shares issued
and outstanding 38,665 26,227
Class B common stock, $0.001 par value; ten votes per
share, 35,000,000 shares authorized, 8,311,639 shares
issued and outstanding 8,312 8,312
Class C common stock, $0.001 par value; non-voting;
12,500,000 shares authorized, 0 shares issued and
outstanding - -
Class A & B common stock warrants 6,862,647 -
Class C common stock warrants 4,281,852 5,338,952
Stock subscription notes receivable (17,500) (115,714)
Additional paid-in capital 197,424,842 34,342,086
Deferred option plan compensation (1,949,672) (1,384,267)
Accumulated deficit (71,113,756) (55,694,393)
Commitments and contingencies
------------ -------------
Total liabilities, redeemable securities and
common stockholders' equity $437,448,651 $293,832,077
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
3
<PAGE> 4
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $ 65,004,033 $ 40,454,900
Other 2,598,240 2,497,723
Trade and barter 1,767,993 1,403,725
------------ ------------
Total revenue 69,370,266 44,356,348
Operating expenses:
Direct 15,438,517 11,554,850
Programming 7,498,374 5,940,066
Sales and promotion 5,497,070 4,473,186
Technical 3,321,787 2,147,289
General and administrative 14,083,120 9,989,674
Trade and barter 1,357,018 1,193,843
Time brokerage agreement fees 3,040,383 549,947
Sports rights fees 766,160 1,019,355
Option plan compensation 2,291,917 9,404,129
Program rights amortization 721,802 777,057
Depreciation and amortization 11,736,929 8,054,256
------------ ------------
Total operating expenses 65,753,077 55,103,652
------------ ------------
Income (loss) from operations 3,617,189 (10,747,304)
Other income (expense):
Interest expense (15,098,141) (4,887,226)
Interest income 4,034,676 578,580
Other income, net (559,053) (13,763)
------------ ------------
Loss before income tax benefit (8,005,329) (15,069,713)
Income tax benefit - 640,000
------------ ------------
Net loss (8,005,329) (14,429,713)
Dividends and accretion on preferred stock and
common stock warrants (7,414,034) (5,864,161)
------------ ------------
Net loss attributable to common stock and
common stock equivalents $(15,419,363) $(20,293,874)
============ ============
Net loss per share $ (.20) $ (.42)
Dividends and accretion on preferred stock and
common stock warrants per share (.18) (.17)
------------ ------------
Net loss attributable to common stock and
common stock equivalents per share $ (.38) $ (.59)
============ ============
Weighted average shares outstanding primary and fully
diluted 40,566,865 34,401,282
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
4
<PAGE> 5
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Three Months
Ended June 30,
1996 1995
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $34,890,219 $ 21,971,676
Other 1,418,749 1,006,757
Trade and barter 932,531 758,212
----------- ------------
Total revenue 37,241,499 23,736,645
Operating expenses:
Direct 8,380,789 5,920,695
Programming 3,592,045 2,813,262
Sales and promotion 2,915,404 2,293,673
Technical 1,796,175 1,168,083
General and administrative 7,469,972 5,331,824
Trade and barter 712,039 722,302
Time brokerage agreement fees 2,048,680 310,899
Sports rights fees 7,199 (22,227)
Option plan compensation 533,549 9,404,129
Program rights amortization 335,131 425,222
Depreciation and amortization 6,065,187 4,269,627
----------- ------------
Total operating expenses 33,856,170 32,637,489
----------- ------------
Income (loss) from operations 3,385,329 (8,900,844)
Other income (expense):
Interest expense (7,373,363) (2,794,867)
Interest income 3,203,604 280,380
Other income, net (602,239) (81,398)
----------- ------------
Loss before income tax benefit (1,386,669) (11,496,729)
Income tax benefit - 320,000
----------- ------------
Net loss (1,386,669) (11,176,729)
Dividends and accretion on preferred stock and
common stock warrants (2,466,085) (3,673,209)
----------- ------------
Net loss attributable to common stock and
common stock equivalents $(3,852,754) $(14,849,938)
=========== ============
Net loss per share $ (.03) $ (.32)
Dividends and accretion on preferred stock and
common stock warrants per share (.05) (.11)
=========== ============
Net loss attributable to common stock and
common stock equivalents per share $ (.08) $ (.43)
=========== ============
Weighted average shares outstanding primary and fully
diluted 46,570,794 34,448,665
=========== ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
5
<PAGE> 6
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Changes in Common Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock
----------------------
Class Class Class ClassA&B Class Stock
A B C Common C Subscription
Stock Common Stock Notes
Warrants Warrants Receivable
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $26,042 $8,312 $0 $ 0 $ 5,338,952 $ (77,666)
Stock issued for Cookeville
acquisition 95
Deferred option plan compensation
Option plan compensation
Stock options exercised 90
Increase in stock subscription
receivable (48,029)
Note repayments 9,981
Dividends on redeemable
preferred stock
Accretion on Senior redeemable
preferred stock
Accretion on Series B preferred stock
Accretion on Junior preferred stock
Accretion on Class A & B common
stock warrants
Net loss
------- ------ ----- ----------- ----------- ---------
Balance at December 31, 1995 26,227 8,312 - - 5,338,952 (115,714)
Release of Put on Class A&B common
stock warrants (unaudited) 9,116,399
Issuance of common stock, net of
issuance costs of $10,000,000
(unaudited) 10,300
Exercise of Class A,B&C common stock
warrants (unaudited) 1,854 (2,253,752) (1,057,100)
Stock issued for Todd Communications
acquisition (unaudited) 139
Deferred option plan
compensation (unaudited)
Option plan compensation(unaudited)
Stock options exercised (unaudited) 145
Note repayments (unaudited) 98,214
Dividends on redeemable
preferred stock (unaudited)
Accretion on Senior redeemable
preferred stock (unaudited)
Accretion on Series B preferred
stock (unaudited)
Accretion on Junior preferred
stock (unaudited)
Accretion on Class A & B common
stock warrants(unaudited)
Net loss (unaudited)
------- ------ ----- ----------- ----------- ---------
Balance at June 30, 1996 (unaudited) $38,665 $8,312 $0 $ 6,862,647 $ 4,281,852 $ (17,500)
======= ====== ===== =========== =========== =========
<CAPTION>
Additional Deferred Option Accumulated
Paid-in Plan Deficit
Capital Compensation
<S> <C> <C> <C>
Balance at December 31, 1994 $ 20,647,647 $ 0 $ (8,923,897)
Stock issued for Cookeville
acquisition 1,199,905
Deferred option plan compensation 12,187,508 (12,187,508)
Option plan compensation 10,803,241
Stock options exercised 307,026
Increase in stock subscription
receivable
Note repayments
Dividends on redeemable
preferred stock (7,275,516)
Accretion on Senior redeemable
preferred stock (332,156)
Accretion on Series B preferred stock (325,208)
Accretion on Junior preferred stock (634,988)
Accretion on Class A & B common
stock warrants (4,729,338)
Net loss (33,473,290)
----------- ------------ ------------
Balance at December 31, 1995 34,342,086 (1,384,267) (55,694,393)
Release of Put on Class A&B common
stock warrants (unaudited)
Issuance of common stock, net of
issuance costs of $10,000,000
(unaudited) 154,789,700
Exercise of Class A,B&C common stock
warrants (unaudited) 3,308,999
Stock issued for Todd Communications
acquisition (unaudited) 1,534,967
Deferred option plan
compensation (unaudited) 2,857,322 (2,857,322)
Option plan compensation(unaudited) 2,291,917
Stock options exercised (unaudited) 591,768
Note repayments (unaudited)
Dividends on redeemable
preferred stock (unaudited) (4,062,482)
Accretion on Senior redeemable
preferred stock (unaudited) (170,728)
Accretion on Series B preferred
stock (unaudited) (204,700)
Accretion on Junior preferred
stock (unaudited) (325,042)
Accretion on Class A & B common
stock warrants(unaudited) (2,651,082)
Net loss (unaudited) (8,005,329)
------------ ------------- ------------
Balance at June 30, 1996 (unaudited) $197,424,842 $ (1,949,672) $(71,113,756)
============ ============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
6
<PAGE> 7
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (8,005,329) $(14,429,713)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 11,736,929 8,054,256
Option plan compensation 2,291,917 9,404,129
Program rights amortization 721,802 777,057
Provision for doubtful accounts 427,256 325,294
Deferred income taxes - (640,000)
Loss on sale of assets 13,651 -
(Increase) decrease in accounts receivable (2,055,044) 232,653
Decrease (increase) in prepaid expenses and other
current assets (1,516,165) 187,121
Increase in other assets (1,863,879) (2,454,459)
Increase (decrease) in accounts payable and
accrued liabilities 1,806,130 (2,247,724)
(Decrease) increase in accrued interest (202,292) 582,194
------------- ------------
Net cash provided by (used in) operating
activities 3,354,976 (209,192)
------------- ------------
Cash flows from investing activities:
Acquisitions of broadcast properties (61,965,301) (45,110,012)
Increase in deposits on broadcast properties (6,907,000) (2,392,000)
Proceeds from sale of fixed assets 228,279 -
Increase in investments in broadcast properties (17,695,363) (500,000)
Purchase of property and equipment (13,936,104) (9,589,477)
------------- ------------
Net cash used in investing activities (100,275,489) (57,591,489)
------------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 164,800,000 -
Issuance expenses of common stock sale (9,888,479) -
Proceeds from long-term debt 17,700,000 49,980,000
Payments of long-term debt (27,930,270) (109,129)
Payments of loan origination costs - (5,002,634)
Proceeds from exercise of common stock options 465,893 -
Repayments of stock subscription notes receivable 98,214 -
Payments for program rights (818,706) (230,027)
------------- ------------
Net cash provided by financing activities 144,426,652 44,638,210
------------- ------------
Increase (decrease) in cash and cash equivalents 47,506,139 (13,162,471)
------------- ------------
Cash and cash equivalents at beginning of period 68,070,990 21,571,658
------------- ------------
Cash and cash equivalents at end of period $ 115,577,129 $ 8,409,187
============= ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
7
<PAGE> 8
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
<S> <C> <C>
Supplemental disclosures of cash flow
information:
Cash paid for interest $14,478,551 $4,249,482
=========== ==========
Cash paid for income taxes $ - $ -
=========== ==========
Non-cash operating and financing activities:
Accretion of discount on senior subordinated notes $ 132,544 $ -
=========== ==========
Issuance of common stock for Cookeville partner buyout $ - $1,200,000
=========== ==========
Issuance of common stock for Todd Communications
acquisition $1,535,106 $ -
=========== ==========
Note payable incurred for WOCD acquisition $1,650,000 $ -
=========== ==========
Dividends accreted on redeemable preferred stock $ 4,062,482 $3,465,829
=========== ==========
Accretion on redeemable securities $ 3,351,552 $2,398,332
=========== ==========
Trade and barter revenue $ 1,767,993 $1,403,725
=========== ==========
Trade and barter expense $ 1,357,018 $1,193,843
=========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
8
<PAGE> 9
PAXSON COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Paxson Communications Corporation's (the "Company") financial information
contained in the financial statements and notes thereto as of June 30, 1996 and
for the six and three month periods ended June 30, 1996 and 1995, are
unaudited. In the opinion of management, all adjustments necessary for the fair
presentation of such financial information have been included. These
adjustments are of a normal recurring nature. There have been no changes in
accounting policies since the period ended December 31, 1995. The composition
of accounts has changed to reflect the sale of Class A common stock and the
operations of acquisitions discussed below.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements, footnotes, and
discussions should be read in conjunction with the December 31, 1995 financial
statements and related footnotes and discussions contained in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, and the
definitive proxy statement for the annual meeting of stockholders held May 16,
1996, all of which were filed with the United States Securities and Exchange
Commission. Also, in connection with the April 3, 1996 sale of 13.5 million
shares of Class A common stock by the Company and others, the Company filed a
Registration Statement on Form S-1 with the Securities and Exchange Commission
on January 26, 1996 which, as amended, was declared effective March 28, 1996.
The Company has engaged the services of an investment banking firm to advise it
on strategic alternatives with regard to its network-affiliated television
operations in the West Palm Beach, Florida market. Such alternatives may
include the possible sale or exchange of these assets.
9
<PAGE> 10
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Since its inception in 1991, the Company has grown primarily through the
acquisition or management of radio and television broadcast stations and radio
networks, as well as the subsequent improvement of these properties' operations.
Certain of the Company's radio and television stations were and continue to be
operated under time brokerage agreements for various periods. Under time
brokerage agreements, the stations' operating revenues and expenses are
controlled by the Company and are included in the consolidated statement of
operations in the financial statements. The Company operates three business
segments: (1) the Infomall TV Network ("inTV"), a nationwide network of owned,
operated or affiliated television stations dedicated to the airing of long form
paid programming, consisting primarily of infomercials; (2) Paxson Radio,
consisting of radio broadcasting stations, radio news and sports networks and
billboard operations; and (3) Paxson Network-Affiliated Television, consisting
of network-affiliated television broadcasting stations in West Palm Beach,
Florida. The broadcast properties owned, to be owned, operated or affiliated
with the Company as of June 30, 1996, are listed below:
<TABLE>
<CAPTION>
INFOMALL TV NETWORK COMMENCEMENT
TV MARKET SERVED (1) STATION OF OPERATIONS OWNERSHIP
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York, NY WHAI-TV 1996 Owned
Los Angeles, CA KZKI-TV 1995 Owned
Philadelphia, PA WTGI-TV 1995 Owned
San Francisco, CA KLXV-TV 1995 Owned
Boston, MA WGOT-TV 1995 Owned
Washington, D.C. (2) WYVN-TV 1996 Owned
Dallas,TX (2)(3) Channel 68 1996 Owned
Atlanta, GA WTLK-TV 1994 Owned
Atlanta, GA WNGM-TV 1996 Time Brokerage
Houston, TX KTFH-TV 1995 Owned
Cleveland, OH WOAC-TV 1995 Time Brokerage
Cleveland, OH WAKC-TV 1996 Owned
Tampa, FL WFCT-TV 1994 Time Brokerage
Miami, FL WCTD-TV 1994 Time Brokerage
Denver, CO (4) KUBD-TV 1995 Owned
Phoenix,AZ (4) KWBF-TV 1996 Owned
St. Louis, MO (4) WCEE-TV 1996 Owned
Orlando, FL WIRB-TV 1994 Time Brokerage
Hartford, CT (5) WTWS-TV 1995 Owned
Raleigh, NC (6) WRMY-TV 1996 Time Brokerage
Grand Rapids, MI (2)(7) WJUE-TV 1996 Owned
Albany, NY WOCD-TV 1996 Owned
Dayton, OH (4) WTJC-TV 1995 Owned
Puerto Rico WSJN-TV 1996 Time Brokerage
Puerto Rico WKPV-TV 1996 Time Brokerage
Puerto Rico WJWN-TV 1996 Time Brokerage
Sacramento, CA KCMY-TV 1995 Affiliate
Indianapolis, IN WIIB-TV 1996 Affiliate
Norfolk, VA WJCB-TV 1995 Affiliate
Fresno, CA KGMC-TV 1996 Affiliate
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
PAXSON RADIO COMMENCEMENT
RADIO MARKET SERVED (1) STATION FORMAT OF OPERATIONS OWNERSHIP
- -------------------------- ---------- ----------------------------------------------
<S> <C> <C> <C> <C>
Miami, FL WLVE-FM Smooth Jazz 1993 Owned
WZTA-FM Active Rock 1992 Owned
WINZ-AM News 1992 Owned
WSHE-FM Modern AC 1996 Time Brokerage
WFTL-AM Hot Talk 1995 Owned
WSRF-AM Block/Long Form 1996 Time Brokerage
Tampa, FL WHPT-FM Rock AC 1991 Owned
WSJT-FM Smooth Jazz 1995 Owned
WHNZ-AM News 1991 Owned
WZTM-AM Sports 1994 Owned
Orlando, FL WMGF-FM Soft AC 1992 Owned
WJRR-FM Active Rock 1992 Owned
WDIZ-FM Modern AC 1996 Time Brokerage
WTKS-FM Hot Talk 1996 Time Brokerage
WWNZ-AM News 1992 Owned
WQTM-AM Sports 1994 Owned
Jacksonville, FL WROO-FM Country 1991 Owned
WPLA-FM Rock Alternative 1992 Owned
WFSJ-FM Smooth Jazz 1996 Owned
WNZS-AM Sports 1993 Owned
WZNZ-AM News 1992 Owned
Cookeville, TN WGSQ-FM Country 1994 Owned
WPTN-AM Talk 1994 Owned
RADIO NETWORK
-------------
Alabama Radio Network News 1995 Owned
Florida Radio Network News 1993 Owned
Tennessee Radio Network News 1994 Owned
University of Florida Sports Network Sports 1994 Owned
Universtiy of Miami Sports Network Sports 1995 Owned
Penn State Sports Network Sports 1994 Owned
</TABLE>
<TABLE>
<CAPTION>
PAXSON NETWORK-AFFILIATED TELEVISION COMMENCEMENT
TV MARKET SERVED (1) STATION AFFILIATION OF OPERATIONS OWNERSHIP
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
West Palm Beach, FL WPBF-TV (8) ABC 1994 Owned
WTVX-TV (8) Warner/UPN 1995 Time Brokerage
</TABLE>
(1) Each station is licensed by the Federal Communications Commission
("FCC") to serve a specific community, which is included in the listed
market.
(2) Station is currently under construction or presently not
operational.
(3) The Company owns 49% of Channel 68 and has an option to acquire the
remaining 51% upon completion of construction.
(4) On July 1, 1996, the Company exercised its options to purchase
these stations from The Christian Network, Inc. ("CNI") for $100,000
and forgiveness of outstanding loans aggregating $15 million.
(5) To be operated pursuant to a time brokerage agreement upon
completion of an FCC-required restructuring of the Company's
investment in such station in connection with the Company's
acquisition of WHAI-TV.
(6) The Company has an option to acquire a 40% ownership interest in
WRMY-TV.
(7) The Company owns 49% of WJUE-TV and has an option to acquire up to
70%.
(8) The Company has engaged the services of an investment banking firm
to advise it on strategic alternatives with regard to its
network-affiliated television operations. Such alternatives may include
the possible sale or exchange of these assets.
11
<PAGE> 12
In April 1996, the Company began operating WNGM-TV pursuant to 10 a year time
brokerage agreement with Whitehead Media, Inc.
In May and June 1996, the Company purchased the assets of WNYA-LP and W23BA-LP
for approximately $1.5 million and $2 million, respectively. These "low power"
stations will be utilized to simulcast the signal of the Company's WHAI-TV
station.
In May 1996, the Company purchased the assets of WOCD-TV for approximately $2.5
million which included the issuance by the Company of a $1.65 million
promissory note to the seller bearing interest at 8.25% and payable in equal
monthly amounts over seven years.
In May 1996, the Company purchased the assets of CASHI billboards, primarily
169 billboard faces, for approximatley $12 million.
In May 1996, the Company began operating WSHE-FM and WSRF-AM both in the Miami
market pursuant to a time brokerage agreement pending completion of the
acquisition of these stations scheduled for January 1997. Purchase price
consists of a cash payment of $47.5 million and $10 million of Company common
stock.
In June 1996, the Company purchased the stock of Todd Communications, Inc.,
owner of WFSJ-FM and which was beneficially owned by a member of Mr. Paxson's
family, for aggregate consideration of $5 million, consisting of Class A common
stock valued at approximately $1.5 million, the cancellation of a $1.85 million
note receivable from Todd Communications and the satisfaction of a Todd
Communications note payable to Mr. Paxson of approximately $1.65 million.
In June 1996, the Company began operating WDIZ-FM and WTKS-FM pursuant to time
brokerage agreements pending completion of the acquisition of these stations
for $22 million and $25 million, respectively.
The Company's operating data throughout the periods discussed have been
impacted significantly by the timing and mix of radio, television and inTV
acquisitions throughout such periods. Operating revenues are derived from the
sale of advertising to local and national advertisers. The Company's primary
operating expenses involved in owning and operating Paxson Radio and Paxson
Network-Affiliated Television are syndicated program rights fees, commissions
on revenues, employee salaries, news gathering, promotion and administrative
expenses. Comparatively, operation of an inTV station involves low operating
expenses relative to traditional network or independent television station
operation. As a result, the Company's inTV stations usually contribute to
operating profit within a short time frame. The costs of operating an inTV
station do not vary significantly with revenue, with the exception of costs
associated with sales commissions and agency fees. As such, upon obtaining a
certain level of revenue sufficient to cover fixed costs, additional revenue
levels have a significant impact on the operating results of an individual inTV
station.
The Company currently expects to continue acquiring additional stations which
may have similar effects on the comparability of revenues, operating expenses,
interest expense and operating cash flow as those described above.
The Company's past results are not necessarily indicative of future performance
due to various risks and uncertainties which may significantly reduce revenues
and increase operating expenses. For example, a reduction in expenditures by
radio and television advertisers in the Company's markets may result in lower
revenues. The Company may be unable to reduce expenses, including certain
variable expenses, in an amount sufficient in the short term to offset lost
revenues caused by poor market conditions. The Company's television stations
are dependent upon "must carry" regulations for carriage on cable systems in
each market. The constitutionality of "must carry" regulations is currently
being litigated in the U.S. Supreme Court and if such regulations were
invalidated, the Company could suffer decreased revenues or increased carriage
expenses if the Company's stations lose cable carriage or are forced to pay
cable systems for carriage. The broadcasting industry continues to undergo
rapid technological change which may increase competition within the Company's
markets as new delivery systems, such as direct broadcast satellite and
computer networks, attract customers. The changing nature of audience tastes
and viewing and listening habits may affect the continued attractiveness of the
Company's broadcasting stations to advertisers, upon whom the Company is
dependent for its revenue.
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount (contingent or otherwise) of assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. The fair value of the
Company's investments in broadcast properties and programming rights payable
were based upon the net present value of applicable estimated future cash flows
using a discounted rate approximating market rates. The fair values of the
Company's long-term debt and the senior subordinated notes were estimated based
on market rates and instruments with similar risks and maturities. The fair
value estimates presented are based
12
<PAGE> 13
on pertinent information available to management as of June 30, 1996.
As a result of the foregoing, the estimates presented in the Company's financial
statements are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. Although management is not aware of any
factors that would significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes of the Company's
financial statements.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected financial
information as a percentage of revenues.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1996 1995 1996 1995
----- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Operating Expenses:
Direct 22.3% 26.1% 22.5% 24.9%
Programming 10.8 13.4 9.6 11.9
Sales and promotion 7.9 10.1 7.8 9.7
Technical 4.8 4.8 4.8 4.9
General and administrative 20.3 22.5 20.1 22.5
Trade and barter 2.0 2.7 1.9 3.0
Time brokerage agreement fees 4.4 1.2 5.5 1.3
Sport rights fees 1.1 2.3 - -0.1
Option plan compensation 3.3 21.2 1.5 39.6
Program rights amortization 1.0 1.7 0.9 1.8
Depreciation and amortization 16.9 18.2 16.3 18.0
----- ----- ---- -----
Total operating expenses 94.8 124.2 90.9 137.5
----- ----- ---- -----
Income (loss) from operations 5.2 -24.2 9.1 -37.5
----- ----- ---- -----
Other income (expense):
Interest expense -21.8 -11.0 -19.8 -11.8
Interest income 5.8 1.3 8.6 1.2
Other income, net -0.7 - -1.6 -0.3
----- ----- ---- -----
Loss before income tax benefit -11.5 -33.9 -3.7 -48.4
----- ----- ---- -----
Income tax benefit - 1.4 - 1.3
----- ----- ---- -----
Net loss -11.5% -32.5% -3.7% -47.1%
===== ===== ==== =====
</TABLE>
13
<PAGE> 14
The following sets forth, for the periods indicated, selected information for
the Company's business segments:
<TABLE>
<CAPTION>
As of and for the six As of and for the three
months ended June 30, months ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INFOMALL TV NETWORK
Total revenue $ 27,327,040 $ 10,725,692 $ 14,611,120 $ 6,822,598
Operating expenses, less
depreciation, amortization
and option plan compensation 14,482,609 6,216,319 7,848,987 3,765,974
Depreciation and amortization 4,438,053 2,074,228 2,367,123 1,236,922
Option plan compensation 7,238 - 3,675 -
------------ ------------ ------------ ------------
Income (loss) from operations $ 8,399,140 $ 2,435,145 $ 4,391,335 $ 1,819,702
============ ============ ============ ============
Operating cash flow $ 13,988,000 $ 5,018,000 $ 7,463,000 $ 3,367,000
============ ============ ============ ============
Total identifiable assets $173,354,366 $ 74,506,976 $173,354,366 $ 74,506,976
============ ============ ============ ============
Capital expenditures $ 6,537,552 $ 885,369 $ 5,016,886 $ 536,704
============ ============ ============ ============
PAXSON RADIO
Total revenue $ 31,626,945 $ 25,121,812 $ 17,091,255 $ 12,816,094
Operating expenses, less
depreciation, amortization
and option plan compensation 25,084,027 21,425,930 12,968,931 10,248,871
Depreciation and amortization 5,299,811 4,135,204 2,710,785 2,095,254
Option plan compensation 254,251 1,561,000 220,847 1,561,000
------------ ------------ ------------ ------------
Income (loss) from operations $ 988,856 $ (2,000,322) $ 1,190,692 $ (1,089,031)
============ ============ ============ ============
Operating cash flow $ 7,012,000 $ 4,208,000 $ 4,666,000 $ 2,753,000
============ ============ ============ ============
Total identifiable assets $ 84,284,513 $ 66,742,444 $ 84,284,513 $ 66,742,444
============ ============ ============ ============
Capital expenditures $ 1,445,034 $ 4,091,180 $ 701,677 $ 2,375,462
============ ============ ============ ============
PAXSON NETWORK-AFFILIATED TELEVISION
Total revenue $ 9,696,270 $ 7,306,968 $ 5,155,602 $ 3,721,971
Operating expenses, less
depreciation, amortization
and option plan compensation 8,092,005 5,258,481 4,226,926 2,706,693
Depreciation and amortization 1,465,120 1,572,113 718,129 785,451
Option plan compensation - - - -
------------ ------------ ------------ -------------
Income (loss) from operations $ 139,145 $ 476,374 $ 210,547 $ 229,827
============ ============ ============ ============
Operating cash flow $ 2,722,000 $ 2,340,000 $ 1,494,000 $ 1,180,000
============ ============ ============ ============
Total identifiable assets $ 37,930,692 $ 38,062,872 $ 37,930,692 $ 38,062,872
============ ============ ============ ============
Capital expenditures $ 881,759 $ 1,523,408 $ 761,818 $ 1,039,109
============ ============ ============ ============
CORPORATE AND OTHER
Total revenue $ 720,011 $ 1,201,876 $ 383,522 $ 375,982
Operating expenses, less
depreciation,amortization
and option plan compensation 4,065,590 4,744,537 2,212,590 2,242,195
Depreciation and amortization 533,945 272,711 269,150 152,000
Option plan compensation 2,030,428 7,843,129 309,027 7,843,129
------------ ------------ ------------ ------------
Income (loss) from operations $ (5,909,952) $(11,658,501) $ (2,407,245) $ (9,861,342)
============ ============ ============ ============
Operating cash flow $ (3,346,000) $ (2,602,000) $ (1,829,000) $ (1,175,000)
============ ============ ============ ============
Total identifiable assets $141,879,080 $ 15,651,339 $141,879,080 $ 15,651,339
============ ============ ============ ============
Capital expenditures $ 5,071,759 $ 3,089,520 $ 4,816,340 $ 558,710
============ ============ ============ ============
CONSOLIDATED
Total revenue $ 69,370,266 $ 44,356,348 $ 37,241,499 $ 23,736,645
Operating expenses, less
depreciation,amortization
and option plan compensation 51,724,231 37,645,267 27,257,434 18,963,733
Depreciation and amortization 11,736,929 8,054,256 6,065,187 4,269,627
Option plan compensation 2,291,917 9,404,129 533,549 9,404,129
------------ ------------ ------------ -------------
Income (loss) from operations $ 3,617,189 $(10,747,304) $ 3,385,329 $ (8,900,844)
============ ============ ============ ============
Operating cash flow $ 20,376,000 $ 8,964,000 $ 11,794,000 $ 6,125,000
============ ============ ============ ============
Total identifiable assets $437,448,651 $194,963,631 $437,448,651 $194,963,631
============ ============ ============ ============
Capital expenditures $ 13,936,104 $ 9,589,477 $ 11,296,721 $ 4,509,985
============ ============ ============ ============
</TABLE>
"Operating cash flow" is defined as net income excluding non-cash items,
non-recurring items including terminated operations, interest, other income,
income taxes and time brokerage fees, less scheduled program rights payments.
The Company has included operating cash flow data because the financial
performance of broadcast companies is frequently evaluated based
14
<PAGE> 15
on some measure of cash flow from operations and such data may assist
investors in measuring the Company's ability to service debt. Operating cash
flow is not, and should not be used as an indicator or alternative to operating
income, net income or cash flow as reflected in the Consolidated Financial
Statements as it is not a measure of financial performance under generally
accepted accounting principles.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Consolidated revenues for the six months ended June 30, 1996 increased 56% (or
$25 million) to $69.4 million from $44.4 million for the six months ended June
30, 1995. This increase was primarily due to new television station
acquisitions and time brokerage operations ($14.0 million), new radio stations
($3.5 million) and increased revenues from existing television stations ($5.0
million) and radio stations ($3.6 million).
Operating expenses for the six months ended June 30, 1996 increased 19% (or
$10.7 million) to $65.8 million from $55.1 million for the six months ended
June 30, 1995. The increase was due to higher direct expenses such as
commissions which rise in proportion to revenues ($3.9 million), other
non-direct costs of operating new television stations ($3.4 million) and radio
stations ($1.8 million), increased non-direct costs of network-affiliated
television operations ($1.3 million) which is primarily due to the addition of
WTVX, higher depreciation and amortization related to assets acquired ($3.7
million), and increased time brokerage agreement fees ($2.5 million), all of
which were partially offset by lower option plan compensation costs ($7.1
million).
Operating cash flow for the six months ended June 30, 1996 increased 127% (or
$11.4 million) to $20.4 million, from $9.0 million for the six months ended
June 30, 1995. The increase in operating cash flow was a direct result of
television station acquisitions and improved performance of existing
television and radio properties.
Interest expense for the six months ended June 30, 1996 increased to $15.1
million from $4.9 million for the six months ended June 30, 1995, an increase
of 208% primarily due to a greater level of debt throughout the period and
higher borrowing rates. As a result of acquisitions, at June 30, 1996, total
long-term debt and senior subordinated notes were $231.8 million, or 75% higher
than the balance of $132.3 million outstanding a year prior.
Interest income for the six months ended June 30, 1996 increased to $4 million
from $.6 million, primarily due to greater levels of cash and cash equivalents
invested throughout the period primarily as a result of the receipt of the
proceeds of the April 1996 common stock sale.
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Consolidated revenues for the three months ended June 30, 1996 increased 57%
(or $13.5 million) to $37.2 million from $23.7 million for the three months
ended June 30, 1995. This increase was primarily due to new television station
acquisitions and time brokerage operations ($7.1 million), new radio stations
($2.4 million) and increased revenues from existing television stations ($2.1
million) and radio stations ($2.1 million).
Operating expenses for the three months ended June 30, 1996 increased 4% (or
$1.2 million) to $33.8 million from $32.6 million for the three months ended
June 30, 1995. The increase was due to higher direct expenses such as
commissions which rise in proportion to revenues ($2.5 million), other
non-direct costs of operating new television stations ($1.5 million) and radio
stations ($1.1 million), increased non-direct costs of network-affiliated
television operations ($.9 million) which is primarily due to the addition of
WTVX, higher depreciation and amortization related to assets acquired ($1.8
million), and increased time brokerage agreement fees ($1.7 million) all of
which were partially offset by lower option plan compensation costs ($8.9
million).
Operating cash flow for the three months ended June 30, 1996 increased
93% (or $5.7 million) to $11.8 million, from $6.1 million for the three months
ended June 30, 1995. The increase in operating cash flow was a direct result
of television station acquisitions and improved performance of the radio
properties.
Interest expense for the three months ended June 30, 1996 increased to $7.4
million from $2.8 million for the three months ended June 30, 1995, an increase
of 164% primarily due to a greater level of debt throughout the period and
higher borrowing rates. As a result of acquisitions, at June 30, 1996, total
long-term debt and senior subordinated notes were $231.8 million, or 75% higher
than the $132.3 million outstanding a year prior.
Interest income for the three months ended June 30, 1996 increased to $3.2
million from $.3 million, primarily due to greater levels of cash and cash
equivalents invested throughout the period primarily as a result of the receipt
of the proceeds of the April 1996 common stock sale.
15
<PAGE> 16
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at June 30, 1996 and December 31, 1995 was $123.2
million and $74.3 million, respectively, and the ratio of current assets to
current liabilities was 9.27:1 and 6.37:1 on such dates, respectively. Working
capital increased primarily due to the April 1996 sale of 10,300,000 shares of
Class A Common Stock (the "Offering") which netted proceeds of approximately
$154.8 million less the effect on working capital of the acquisitions
previously discussed. The remaining proceeds from the Offering will be
utilized to fund the acquisitions discussed below along with related capital
requirements. The completion of each of the acquisitions discussed below is
subject to a variety of factors and to the satisfaction of various conditions,
and there can be no assurance that any of such acquisitions will be completed.
Cash provided by (used in) operations of $3.4 million and ($.2) million for the
six months ended June 30, 1996 and 1995, respectively, reflects the improvement
in operating results of existing properties, acquisitions and time brokerage
properties net of increased interest expense and increases in other assets.
Cash used for investing activities primarily reflects the acquisitions and
investments discussed above, and purchases of equipment for these and existing
properties. Cash provided by financing activities primarily reflects the
proceeds from the Offering and long term debt borrowings net of debt
repayments. In addition, the Company has advanced $900,000 to CNI during the
six months ended June 30 1996 under a demand note bearing interest at the prime
rate (currently 8.25%). At June 30, 1996 the Company had total advances to CNI
outstanding of approximately $2.1 million, which has been included in
investments in broadcast properties. Non-cash activity relates to option plan
compensation, stock issued for the WFSJ-FM acquisition, a note payable incurred
with the WOCD-TV accquisition, reciprocal trade and barter advertising revenue
and expense and accretion of discount on senior subordinated notes, as well as
dividends and accretion on the redeemable preferred stock and common stock
warrants.
The Company has engaged the services of an investment banking firm to advise it
on strategic alternatives with regard to its network-affiliated television
operations in the West Palm Beach, Florida market. Such alternatives may
include the possible sale or exchange of these assets.
The Company's primary capital requirements are for the acquisition of
broadcasting properties and related capital expenditures and interest and
principal payments on indebtedness. The Company's outstanding senior
subordinated notes require semi-annual interest payments at a fixed rate. The
Company presently has no outstanding borrowings under its $100 million senior
secured revolving credit facility ("Senior Facility"). Borrowings under the
Senior Facility bear interest at floating rates and require interest payments
on varying dates depending on the interest rate option selected by the Company.
The Company believes that it will require additional financing to consummate
the acquisitions discussed below (including the expected capital expenditures
associated therewith), and to meet its anticipated short term and long term
working capital requirements for its existing properties. The Company presently
has available to it the full $100 million in borrowing capacity under the
Senior Facility. The Company is currently pursuing alternatives to obtain such
additional financing, but there can be no assurance that the Company will be
able to obtain such financing on terms acceptable to it. The failure to raise
funds necessary to finance the Company's future cash requirements could
adversely affect the Company's ability to pursue its business strategy. In
addition, should the Company suffer a significant impairment to its cash flow
from operations due to the occurrence of one or more adverse events, its
liquidity could become insufficient on a short term basis due to diminished
borrowing capacity under the Senior Facility and, on a long term basis, the
Company could have insufficient resources to repay indebtedness under the
Senior Facility or the senior subordinated notes when due.
16
<PAGE> 17
ACQUISITION COMMITMENTS
The Company has agreements to purchase significant assets of, or to enter into
time brokerage arrangements with respect to, the following properties, which
are subject to various conditions, including the receipt of regulatory
approvals:
<TABLE>
<CAPTION>
Property Market Served (1) Purchase Price
-----------------------------------------------------------------------------
<S> <C> <C>
Infomall TV Network:
KXLI-TV Minneapolis, MN $12,000,000
KAJW-TV Phoenix, AZ $12,000,000
WNAL-TV Birmingham, AL $10,000,000
KMNZ-TV Oklahoma City, OK $ 6,500,000
WAAP-TV Greensboro-Winston Salem, NC (2) $ 5,000,000
WSJN-TV,WKPV-TV,WJWN-TV Puerto Rico (3) $ 4,000,000
WHKE-TV Milwaukee, WI(4) $ 3,500,000
W42AJ-LPTV Washington, D.C. $ 1,550,000
WRAP-LPTV Boston, MA $ 1,300,000
WOST-TV Providence, RI (5) $ 1,000,000
KGLB-TV Tulsa, OK $ 825,000
KZAR-TV Salt Lake City, UT (6) $ 325,000
Paxson Radio:
WSHE-FM,WSRF-AM Ft. Lauderdale, FL (7) $57,500,000
WTKS-FM Orlando, FL (8) $25,000,000
WDIZ-FM Orlando, FL (8) $22,000,000
WSNI-FM,WTNT-FM,WTPS-FM Tallahassee, FL
WXSR-FM and WNLS-AM Tallahassee, FL
WOWW-FM,WTKX-FM Pensacola, FL
WPAP-FM,WPBH-FM Panama City, FL $21,300,000
WIOD-AM Miami, FL $13,000,000
WHUB-FM,WHUB-AM Cookeville, TN $ 3,800,000
WGNE-AM,WFSY-FM,WEBZ-FM Panama City, FL $ 2,850,000
Billboards Orlando, FL (9) $ 7,300,000
</TABLE>
(1) Each station is licensed by the FCC to serve a specific community,
which is included in the listed market.
(2) The Company completed the purchase on July 25, 1996.
(3) The Company intends to purchase a 50% ownership interest in these
stations which are currently operated under a time brokerage agreement.
(4) Station license was acquired by CNI on July 9, 1996, with the Company
financing the acquisition price through a loan to CNI. The Company has
entered into a ten year time brokerage agreement to operate the station,
and has an option to purchase the station for $100,000.
(5) The Company will acquire 50% ownership interest and has committed to
loan up to $3 million for capital improvements and relocation of the
station's tower.
(6) The Company has an option to acquire a 50% ownership interest and has
committed to loan up to $3.7 million for construction of the station.
(7) Purchase price includes a cash payment of $47.5 million and $10
million of Company common stock. The Company began operating the stations
pursuant to a time brokerage agreement on May 1, 1996 and anticipates
completing the purchase in January 1997.
(8) The Company began operating WDIZ-FM pursuant to a time brokerage
agreement on June 1, 1996. The Company began operating WTKS-FM pursuant
to a time brokerage agreement on June 17, 1996.
(9) Purchase includes billboards with 68 faces. The Company completed the
purchase on July 24, 1996.
On August 1, 1996, the Company entered into a three year time brokerage
agreement with W53AA-LPTV in New York, NY with an option to purchase the
station for $3.5 million.
17
<PAGE> 18
PAXSON COMMUNICATIONS CORPORATION
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the Company or any of its
property is subject. To the knowledge of the Company, no such legal
proceedings are contemplated by any governmental authority.
Items 2-3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders was held on May 16, 1996. At the
meeting, all nine of the Company's existing directors were re-elected for one
year terms. The proposal for the adoption of the Paxson Communications
Corporation 1996 Stock Incentive Plan was approved. The appointment of Price
Waterhouse LLP as the Company's independent certified public accountants was
also ratified.
The number of votes cast for, cast against and withheld, as well as the number
of broker nonvotes with respect to the election of directors is set forth below:
<TABLE>
<S> <C> <C> <C> <C>
Director For Withheld Broker Nonvotes Abstain
Lowell W. Paxson 32,198,760 6,281,583 41,510
James B. Bocock 32,199,760 6,281,583 40,510
Arthur D. Tek 32,199,579 6,281,583 40,691
J. Patrick Michaels, Jr. 32,198,779 6,281,583 41,491
S. William Scott 32,198,760 6,281,583 41,510
Bruce L. Burham 32,198,779 6,281,583 41,491
James L. Greenwald 32,199,560 6,281,583 40,710
</TABLE>
There were no votes cast against the election of the above 7 directors.
Pursuant to the Company's certificate of incorporation, the election of two
directors, Michael J. Marocco and John A. Kornreich, was voted on only by the
holders of the Company's 2000 outstanding shares of 15% Cumulative Compounding
Redeemable Preferred Stock, all of which were cast in favor of such two
directors.
The number of votes cast for, cast against and abstaining as well as the number
of broker nonvotes with respect to the remaining two matters voted upon at the
meeting is set forth below:
<TABLE>
<CAPTION>
For Against Withheld Broker Nonvotes Abstain
<S> <C> <C> <C>
Adoption of the Paxson
Communications Corporation
1996 Stock Incentive Plan 30,042,510 2,136,478 6,312
Accountant Appointment 32,227,772 9,859 2,669
</TABLE>
Item 5. Other Matters. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) List of Exhibits:
Exhibit No. Description
- ----------- -----------
3.1.1 Certificate of Incorporation of the Company**
3.1.2 The Company's Certificate of Designations of the Company's 15%
Cumulative Compounding Redeemable Preferred Stock*
3.1.3 The Company's Certificate of Designations of the Company's Series
B 15% Cumulative Compounding Redeemable Preferred Stock**
3.1.4 The Company's Certificate of Designations of the Company's Junior
Cumulative Compounding Redeemable Preferred Stock**
3.1.5 Bylaws of the Company +
18
<PAGE> 19
<TABLE>
<S> <C>
4.1 Form of Stock Certificate of Class A Common Stock*
10.89 Amended and restated promissory note dated August 5, 1996 between
Roberts Broadcasting of Salt Lake City, L.L.C. and Paxson Communications of
Salt Lake City-16, Inc.
10.90 First Amendment to Loan agreement dated August 5, 1996, between Roberts
Broadcasting of Salt Lake City, L.L.C. and Paxson Communications of Salt Lake City-16, Inc.
10.91 Asset purchase agreement, dated March 15, 1996, between Ralph E. Kaschai,
d/b/a Cashi Signs, Cashi Corp., Cashi Outdoor Advertising, Inc., and Cashi
Services, Inc., and Paxson Outdoor, Inc.
10.92 Asset purchase agreement, dated May 31, 1996 by and between Paxson
Broadcasting of Orlando, Limited Partnership and Press Broadcasting Company for
Radio Station WTKS(FM) Cocoa Beach, Florida
10.93 Time brokerage agreement, dated May 31, 1996, by and between Press
Broadcasting Company, Inc. and Paxson Broadcasting of Orlando, Limited
Partnership for Radio Station WTKS(FM) Cocoa Beach, Florida
10.94 Asset purchase agreement, dated December 11, 1995, by and between Channel
55 of Albany, Inc. and Cornerstone Television, Inc. for Television Station
WOCD(TV) Amsterdam, New York
10.95 First amendment to asset purchase agreement, dated February 29, 1996, by
and between Channel 55 of Albany, Inc and Cornerstone Television, Inc.
10.96 Promissory note, dated May 31, 1996, between Channel 55 of Albany, Inc.
and Cornerstone Television, Inc. principal sum of $1,650,000
10.97 Stock purchase agreement, dated May 23, 1996 by and among Channel 44 of
Tulsa, Inc, Paxson Communications of Tulsa-44, Inc and Broadcasting Systems,
Inc.
10.98 Asset purchase agreement, dated April 18, 1996, by and between Paxson
Communications of Phoenix-13, Inc. and Channel 13 of Flagstaff, Inc.
10.99 Asset purchase agreement, dated April 18, 1996 by and among Paxson
Communications of Denver-59, Inc., UHF Channel 59 Corp. and Channel 59 of
Denver, Inc.
10.100 Asset purchase agreement, dated April 18, 1996, by and between Paxson
Communications of Dayton-26, Inc. and Channel 26 of Dayton, Inc.
10.101 Asset purchase agreement, dated April 18, 1996 by and between Paxson
Communications of St. Louis-13, Inc and Channel 13 of St. Louis, Inc.
10.102 Asset purchase agreement, dated April 12, 1996, by and between Paxson
Broadcasting of Miami, Limited Partnership and TK Communications, L.C.
10.103 Construction agreement, dated April 16, 1996, by and among Offshore
Broadcasting Corporation, Ocean State Television, L.L.C. and Paxson
Communications of Providence-69, Inc.
10.104 Loan agreement, dated April 16, 1996, by and among Paxson Communications
of Providence-69, Inc., Offshore Broadcasting Corporation and Ocean State
Television, L.L.C.
10.105 Asset purchase agreement, dated April 19, 1996 by and between Paxson
Communications of Greensboro-16, Inc. and Television Communications, Inc. for
Television Station WAAP(TV), Burlington, North Carolina
10.106 Asset purchase agreement, dated April 26, 1996, by and between Paxson
Broadcasting of Miami, Limited Partership and WIOD, Inc.
10.107 Agreement and Plan of Merger, dated April 12, 1996 by and among Devon W.
Paxson, Todd L. Paxson, Pax Jax, Inc., Paxson Communications Corporation and
Todd Communications, Inc.
10.107.1 First amendment to agreement and Plan of Merger, dated June 27, 1996
by and among Devon W. Paxson, Todd L. Paxson, Pax Jax, Inc., Paxson
Communications Corporation and Todd Communications, Inc.
10.108 Asset purchase agreement , dated May 13, 1996, by and among Paxson
Communications of Tallahassee, Inc., B.Radio, Inc., and Boss Radio Group, Inc,
for WGNE, WFSY, WEBZ.
</TABLE>
19
<PAGE> 20
<TABLE>
<S> <C>
10.109 Option agreement by and between Paxson Communications of Minneapolis 41,
Inc. and KX Acquisition, L.P. for Television Station KXLI(TV), St.Cloud
Minnesota dated May 30, 1996.
10.110 Subordinated Note between MacDonald Communications Corporation and
Paxson Communications Corporation for $3,000,000 dated June 7, 1996.
10.111 Asset purchase agreement, dated April 29, 1996, by and among Paxson
Communications of Tallahassee, Inc., Southern Broadcasting Companies, Inc.,
Great South Broadcasting, Inc, Charles E. Giddens, Inc., and Southern
Broadcasting of Pensacola, Inc.
10.112 Asset purchase agreement, dated April 26, 1996, by and between Paxson
Broadcasting of Orlando, Limited Partnership and Shamrock Communications, Inc
10.113 Time Brokerage agreement, dated April 26, 1996, by and between Shamrock
Communications, Inc. and Paxson Broadcasting of Orlando, Limited Partnership
for Radio Station WDIZ(FM) Orlando, Florida
10.114 Purchase agreement, dated July 17, 1996, by and between Impact
Communications of Central Florida, Inc. and Paxson Outdoor, Inc.
10.115 Asset purchase agreement, dated February 23, 1996, by and among Paxson
Communications LPTV, Inc., and Michael A. Bogner d/b/a Amity Broadcasting
Company
10.116 Asset purchase agreement, dated July 1, 1996, by and among Paxson
Communications of New London-26, Inc., Paxson New London License, Inc. and
Roberts Broadcasting of Hartford, L.L.C.
10.117 Asset purchase agreement, dated March 5, 1996, by and between Paxson
Communications LPTV, Inc., and Craig L. Fox
10.118 Asset purchase agreement, dated June 18, 1996, by and between Paxson
Communications LPTV, Inc and Communications Corporation
10.119 Time brokerage agreement, dated July 9, 1996, by and between Channel 55
of Milwaukee, Inc. and Paxson Communications of Milwaukee-55, Inc. for
Television Station WHKE-TV Milwaukee, Wisconsin
10.120 Loan agreement, dated July 9, 1996, by and between Paxson Communications
of Milwaukee-55, Inc. and Channel 55 of Milwaukee, Inc. for Television Station
WHKE-TV Kenosha, Wisconsin
10.121 Second amendment to asset purchase agreement, dated July 9, 1996, by and
between LeSea Broadcasting Corporation and Channel 55 of Milwaukee, Inc.
10.122 Asset purchase agreement, dated July 1, 1996, by and between Paxson
Communications LPTV, Inc. and Electron Communications Corporation
10.123 Asset exchange agreement, dated August 7, 1996, by and between Paxson
Communications of Birmingham-44, Inc. and WNAL-TV Inc.
10.124 Loan agreement, dated August 7, 1996, by and between Paxson Communications
of Birmingham-44, Inc. and WNAL-TV Inc.
10.125 Time Brokerage Agreement, dated August 7, 1996, by and between Paxson
Communications of Birmingham-44, Inc. and WNAL-TV Inc.
10.126 Option agreement by and among Paxson Communications of Salt Lake City-16, Inc.
and Roberts Broadcasting of Salt Lake City, L.L.C., dated August 5, 1996
27 Financial Data Schedule (for SEC use only)
- -----------------
* Filed with the Company's Registration Statement on Form S-4, filed September
26, 1994, Registration No. 33-84416 and incorporated herein by reference.
** Filed with the Company's Annual Report on Form 10-K, dated March 31, 1995
and incorporated herein by reference.
+ Filed with the Company's Registration Statement on Form S-1, as amended,
filed January 26, 1996, Registration No. 333-473 and incorporated herein by
reference.
</TABLE>
(b) Reports on Form 8-K. None.
20
<PAGE> 21
PAXSON COMMUNICATIONS CORPORATION
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 thereunto duly authorized.
PAXSON COMMUNICATIONS CORPORATION
Date: August 12, 1996 By: /s/ James B. Bocock
---------------------------
James B. Bocock
President, Chief Operating
Officer, Director
Date: August 12, 1996 By: /s/ Arthur D. Tek
---------------------------
Arthur D. Tek
Vice President, Chief
Financial Officer, Director
21
<PAGE> 1
EXHIBIT 10.89
$3,703,000 August 5, 1996
AMENDED AND RESTATED
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, ROBERTS BROADCASTING OF
SALT LAKE CITY, L.L.C., a Delaware limited liability company with its address
at 1408 N. Kingshighway Blvd., St. Louis, Missouri 63113 (the "Maker"),
promises to pay to the order of PAXSON COMMUNICATIONS OF SALT LAKE CITY-16,
INC., a Florida corporation with its address at 601 Clearwater Park Road, West
Palm Beach, Florida 33401 (the "Payee"), or its designee, in the manner set
forth below, the principal sum of $3,703,000, pursuant to a certain Loan
Agreement dated as of April 19, 1996 (as amended through the date hereof, the
"Loan Agreement"), by and between the Maker and the Payee, together with
interest thereon as provided herein.
1. The holder of this Note is authorized to endorse the
date and amount of each Loan disbursement pursuant to Section 1.02 of the Loan
Agreement and each payment of principal and/or interest with respect thereto on
Schedule A annexed hereto and made a part hereof, which endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed,
but the failure of the holder of this Note to make such endorsement shall not
affect the rights of the Payee or the obligations of the Maker under this Note,
the Loan Agreement and any documents executed in connection therewith or under
applicable law.
2. The principal balance of and all interest on the Loan
shall be due and payable as provided in Sections 1.3 and 1.4 of the Loan
Agreement.
3. This Note evidences indebtedness of the Maker to the Payee
arising under the Loan Agreement, to which reference is hereby made for a
statement of the rights of the Payee and the duties and obligations of the
Maker in relation thereto. Neither this reference to the Loan Agreement nor
any provision thereof shall affect or impair the absolute and unconditional
obligation of the Maker to pay the principal of or interest on this Note when
due.
4. In the event any installment of principal or interest on this
Note is not paid when due, whether such installment comes due by acceleration
or otherwise, such installment shall bear interest equal to the lower of the
highest rate permitted by law or 18% per annum from and after the due date
thereof until paid in full.
5. The payment of this Note is secured by Security Agreements, a
Mortgage, a Leasehold Mortgage and Pledge Agreements, all as more fully
identified in the Loan Agreement.
6. Payment upon this Note shall be made by check or checks
payable to the Payee at 601 Clearwater Park Road, West Palm Beach, Florida
33401, or such other place as the
<PAGE> 2
- 2 -
Payee or a subsequent holder of this Note shall designate to the Maker in
writing, in lawful money of the United States of America.
7. This Note may be prepaid by the Maker, in whole or in part in
integral multiples of Twenty-Five Thousand Dollars ($25,000), at any time
without premium or penalty. Each prepayment on this Note shall be applied to
installments of principal payable on this Note in the inverse order of
maturity.
8. The Maker hereby waives any defenses based upon, and
specifically assents to, any and all extensions and postponements of the time
of payment and all other indulgences or forbearances which may be granted to
any party liable hereon by the Payee or any subsequent holder of this Note.
9. The Maker hereby waives presentment, demand for payment,
notice of protest, notice of non-payment, protest, and all other demands and
notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note.
10. No delay or omission on the part of the Payee or any
subsequent holder of this Note in exercising any right hereunder shall operate
as a waiver of such right or of any other right of the Payee or such holder,
nor shall any delay, omission or waiver on any one occasion be deemed a bar to
or waiver of the same or any other right on any other occasion.
11. No single or partial exercise by the Payee or any subsequent
holder hereof of any power hereunder shall preclude any other or future
exercise thereof or the exercise of any other power.
12. If any Event of Default shall occur, the Payee shall be under
no further obligation to make any Loan or advances of any Loan under the Loan
Agreement and the Payee may at its option by written notice to the Maker
declare the entire unpaid principal amount of this Note, together with all
unpaid interest and all other amounts payable under the Loan Agreement and
every other obligation of the Maker to the Payee, immediately due and payable,
whereupon this Note and all such obligations shall become and be forthwith due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are, except as expressly provided in the Loan Agreement, hereby
expressly waived by the Maker; provided, however, that in the case of an Event
of Default under Section 7.01(g) of the Loan Agreement, all of the obligations
of the Borrower under the Loan Agreement and this Note shall become immediately
due and payable as of the date of any such Event of Default regardless of the
cause of such Event of Default and without any notice to the Maker required
from the Payee. The Payee shall have, in addition to all other rights and
remedies allowed by law, the rights and remedies of a secured party under the
Uniform Commercial Code as in effect in the State of Florida and, without
limiting the generality of the foregoing, the rights and remedies provided for
in the Loan Documents, the provisions of which are hereby incorporated by
reference.
<PAGE> 3
- 3 -
13. The Maker shall pay on demand of the Payee or any subsequent
holder of this Note all costs of collection, including reasonable attorneys'
fees incurred by the Payee or such holder in enforcing collection of this Note
on default. If any litigation arises between the parties in connection with
this Note, the prevailing party shall be entitled to recover reasonable
attorneys' fees in addition to all other damages and remedies.
14. No provision of this Note shall be modified except by a
written instrument executed by the Maker and by the Payee or a subsequent
holder hereof expressly referring to this Note and to the provision modified.
15. This Note and the provisions hereof are to be binding on the
assigns or successors of the Maker and shall be enforceable in accordance with
the laws of the State of Florida (without regard to the conflicts of law
provisions thereof), and exclusive venue and jurisdiction shall be in the
state or federal district court for the district including Palm Beach, Florida.
16. The provisions of this Note are hereby declared to be
severable and if any such provision or the application of any such provision to
any person or in any circumstances shall be held to be invalid or
unconstitutional, such invalidity or unconstitutionality shall not be construed
to affect the validity or constitutionality of any of the remaining provisions
as applied to such person, or in circumstances other than those as to which it
is held invalid.
17. The entire unpaid principal amount of this Note, together
with all unpaid interest, shall become immediately due and payable upon Maker's
entering into an agreement to sell the Station.
18. This Note amends and restates the Promissory Note dated April
19, 1996 from the Maker to the Payee in the amount of $3,178,000.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 4
- 4 -
[SEAL]
ROBERTS BROADCASTING OF
SALT LAKE CITY, L.L.C.
By: /s/ Michael V. Roberts
--------------------------
<PAGE> 5
- 5 -
SCHEDULE A
Date Amount of Loan Amount Repaid Unpaid Balance Notation Made By
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
- ---- -------------- ------------- -------------- ----------------
<PAGE> 6
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire the Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of and acquire, own and operate the
Station under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC. Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC disqualify Buyer as assignee of the FCC Licenses or as the owner and
operator of the Station or would cause any significant delay in obtaining FCC
approval of its acquisition of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing without Buyer's
written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in connection
with the acquisition of replacement property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date and, (ii) liens for current
taxes not yet due and payable.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked or suspended or take any action
- 10 -
<PAGE> 1
EXHIBIT 10.90
FIRST AMENDMENT TO
LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of this 5th day of
August, 1996, is by and between PAXSON COMMUNICATIONS OF SALT LAKE CITY-16,
INC., a Florida corporation (the "Lender"), and ROBERTS BROADCASTING OF SALT
LAKE CITY, L.L.C., a Delaware limited liability company (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Lender and the Borrower are parties to a Loan Agreement
dated as of April 19, 1996 (the "Loan Agreement"); and
WHEREAS, the Lender and the Borrower wish to amend the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
1. Capitalized Terms. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
2. Amendments.
(a) Section 1.1 of the Loan Agreement is amended in its
entirety to read as follows:
"Section 1.1 The Loan. The Lender agrees, upon the terms
and conditions hereinafter set forth, to make a loan to the Borrower
in an aggregate principal amount not to exceed $3,703,000."
(b) The first sentence of Section 1.2 of the Loan Agreement
shall be amended in its entirety to read as follows:
"The outstanding principal amount of the Loan shall be
evidenced by and subject to the terms of an amended and restated
promissory note, dated August 5, 1996 (the "Note") payable to the
order of the Lender and representing the obligation of the Borrower to
pay to the Lender the amount of the Loan, with interest thereon, as
prescribed in Section 1.4."
3. Security Agreement. The parties hereto acknowledge and agree
that the payment of the Loan as increased hereby shall continue to be fully
secured by the Security Agreement by and between the parties hereto on the
terms and conditions set forth therein
<PAGE> 2
- 2 -
and that the Note referred to in such Security Agreement shall refer to the
Note referred to in Section 2(b) of this Amendment.
4. Effect of Amendment. Other than as amended hereby, all of the
provisions of the Loan Agreement shall remain in full force and effect.
5. Counterparts. This Amendment may be executed in counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
ROBERTS BROADCASTING OF
SALT LAKE CITY, L.L.C.
By: /s/ Michael V. Roberts
---------------------------
Name: Michael V. Roberts
Title Member
PAXSON COMMUNICATIONS OF
SALT LAKE CITY-16, INC.
By: /s/ William L. Watson
---------------------------
Name: William L. Watson
Title Secretary
<PAGE> 1
EXHIBIT 10.91
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Contract"), made the 15th day of
March, 1996 between RALPH E. KASCHAI, d/b/a CASHI SIGNS, CASHI CORP., a Florida
corporation, CASHI OUTDOOR ADVERTISING, INC., a Florida corporation, and CASHI
SERVICES, INC., a Florida corporation, whose address is 1460 33rd Street, P. 0.
Box 5672, Orlando, Florida 32855-5672 (collectively, the "Seller"), and PAXSON
OUTDOOR, INC., a Florida corporation, whose address is 601 Clearwater Park
Road, West Palm Beach, Florida 33401, or assignee (the "Purchaser").
1. Sale of Business and Assets. Seller agrees to sell and
Purchaser agrees to purchase, upon the terms and conditions herein set forth,
the outdoor advertising business owned and operated by Seller (the "Cashi
Advertising Business"'), consisting of one hundred sixty-nine (169) outdoor
advertising billboard faces as described in the schedule of billboard locations
attached as Exhibit "A", and the Business Summary incorporated as Exhibit "B",
as described hereinbelow, together with all real and personal property used in
connection with the business and all of the structures, buildings and
improvements now or hereafter placed thereon (hereinafter called the
"Properties"), and all of Seller's right, title and interest in and to all
leases, fixtures, equipment, installations, articles of personal property
(other than furnishings, decorations, etc.) and all books and records and other
intangibles used in connection with the Cashi Advertising Business (all
property sold hereunder is herein referred to collectively as the "Business and
Assets").
A. Description of Business and Assets. Seller has
prepared and has furnished to Purchaser a bound compilation of information
concerning the Cashi Advertising Business, and the Business and Assets,
including but not limited to the real properties owned and leased by the
Seller, and the billboards located thereon and the co-op signs, (herein called
the "Business Summary"). The Business Summary is hereby incorporated by this
reference as Exhibit "B" to this Contract.
B. Matters Excluded. The Assets shall not include
Seller's cash or cash equivalents, books and records pertaining to corporate
organization, employee pension and other benefit plans or collective bargaining
agreements.
2. Purchase Price. The Purchase Price for the Business and
Assets shall be the sum of TWELVE MILLION DOLLARS ($12,000,000.00), to be paid
in cash at Closing, adjusted as provided herein, including the following:
A. TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) as a
deposit (the "Deposit") to be held by Broad and Cassel, as Escrow Agent and
Closing Agent for First American Title Insurance Company, until the
consummation of this transaction, with any interest thereon paid to Purchaser.
The Deposit shall be placed and held in an interest bearing account. The
Deposit (which term includes all interest thereon) shall be paid to Seller at
Closing as a part of the Purchase Price, and shall be a credit to Purchaser
against payment of the Purchase Price.
<PAGE> 2
B. The balance of the Purchase Price in the amount of
ELEVEN MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($11,750,000.00) at Closing
by wire transfer of funds to the account of the Escrow Agent on the day of
Closing, to be paid to Seller together with the Deposit described in paragraph
A above, subject to credits and prorations as provided herein, if any.
3. Seller's Representations. Seller represents to Purchaser, to
the best of his knowledge, as follows:
A. Organization Standing and Authority. Each corporate
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. Each Seller, both corporate and
individual, has all requisite power and authority (i) to own, lease and use the
Business and Assets as now owned, leased and used; (ii) to conduct the Cashi
Advertising Business as now conducted; and (iii) to execute and deliver this
Contract and the documents contemplated hereby, and to perform and comply with
all the terms, covenants, and conditions to be performed and complied with by
each Seller hereunder. Each Seller is not a participant in any joint venture
or partnership with any other third party with respect to any part of the
operations of the Cashi Advertising Business.
B. Authorization and Binding Obligation. The execution,
delivery and performance of this Contract by each Seller has been duly
authorized by all necessary action on the part of such Seller and its
Shareholders, if applicable. This Contract has been duly executed and
delivered by each Seller and constitutes a legal, valid and binding obligation
of such Seller, enforceable against it in accordance with its respective terms,
except as the enforceability of this Contract may be affected by bankruptcy,
insolvency or similar laws affecting creditor's rights generally and by
judicial discretion in the enforcement of equitable remedies.
C. Consent. Subject to obtaining the consents listed
herein, the execution, delivery and performance of this Contract, and the
documents contemplated hereby, (i) do not require the consent of any third
party; (ii) will not conflict with any provision of such Seller's Articles of
Incorporation; (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction, or
ruling of any court or governmental instrumentality; (iv) will not conflict
with, or constitute grounds for termination of, result in a breach of,
constitute a default under or permit the acceleration of any performance
required by the terms of any agreement, license or permit to which Seller is a
party or by which Seller may be bound; and (v) will not create any claim
liability, mortgage, lien, pledge, condition, charge or encumbrance of any
nature whatsoever upon any of the Business or Assets.
D. Accuracy of Statements and Exhibits. That the
Business Summary and all statements, instruments and Exhibits furnished to the
Purchaser by the Seller hereunder are true, complete and accurate in all
respects, represent all governmental authorizations and all material items of
tangible personal property necessary to conduct the Cashi Advertising Business,
as presently conducted, contain the final understanding between all parties
thereto, include copies of all amendments, supplements, modifications, exhibits
and schedules, are in good standing and
2
<PAGE> 3
free of defaults, and neither Seller nor any party to any such instrument
has done or failed to do anything which, with the giving of notice or the
passage of time, would constitute a default thereunder.
E. Leases and Tenancies.
(1) The Billboard Contracts and the Ground Leases
(collectively, the "Leases") described in the Business Summary incorporated as
Exhibit "B" hereto, represent all leases, ground leases, billboard contracts,
tenancies and guaranties necessary to conduct the Cashi Advertising Business,
as presently conducted, and there are no oral or written amendments or
modifications thereto, except as listed in Exhibit "B". All alterations,
installations and other work required to be performed by the Seller under the
provisions of any Lease have been completed and fully paid for.
(2) Between now and the Closing, Seller shall
neither by act nor omission do anything that would result in a default by
Seller under any of the Leases. Seller is not in default under any of the
Leases nor does Seller have any knowledge of any alleged default by Seller
under any of the Leases.
(3) Each and every Lease and all contracts,
insurance policies or other instruments related thereto or listed in the
Exhibits hereto are valid, binding agreements, and in full force and effect as
of the date hereof.
(4) Seller has not given or suffered any
assignment, pledge or encumbrance with respect to any of the Leases or its
interests thereunder which shall not be released at closing. All of the Leases
are assignable by Seller without the consent of any party, other than the Lake
Co-Op signs discussed in subparagraph (5) herein.
(5) Purchaser acknowledges that Seller has
informed it that the Lake Co-Op signs, as described in the Business Summary,
are based upon oral agreements with Lake, which cannot be assigned without the
consent of Lake. There shall be no contact with Lake during the Investigation
Period. The initial contact with Lake concerning such assignment, after the
Investigation Period has expired, shall be made by and through Seller. If
Seller shall be unable to obtain the consent of Lake to such assignment, the
Lake Co-Op signs shall be removed from the Business and Assets to be sold and
purchased hereunder.
(6) Seller has not received, nor will he take or
receive, prepayment of any rent from any tenant/advertiser, except for the
rental due on the first day of each current month during the term of each
Lease, and except for the security deposits described in certain of such
Leases, other than those specifically disclosed by Seller to Purchaser. None
of the tenants/advertisers have been given any concessions as consideration for
the rental of any space, and no tenant/advertiser is entitled to any
concession, rebate, allowance or free rent for any period before or after the
closing other than as provided in the Leases, or as specifically disclosed by
Seller to Purchaser. All renewal rights, if any, are shown in the Leases.
3
<PAGE> 4
(7) Attached hereto as composite Exhibit "C" is a
rent roll dated as of March 4, 1996, containing Board numbers, names of
tenant/advertisers and guarantors, if any, expiration dates, monthly rents,
annual rents, total current annual rent roll, renewals, and other information
with respect to the Leases, which Exhibit will be updated and recertified by
Seller at closing.
F. Taxes and Assessments. That all real and personal
property taxes, sales taxes and all similar liabilities or obligations,
assessments or expenses have been fully and timely paid. Seller has no
knowledge of any pending improvement liens or assessments to be made by any
authority,
G. Pending Litigation. That as of the date of this
Contract, there are no legal or other proceedings pending or contemplated
affecting the Business and Assets, except for those matters described in
Exhibit "D" attached hereto, and routine collection matters.
H. Contracts. That there are no employment,
subcontractor, trade, supply, security, service or maintenance agreements
involving the Business and Assets or any portions thereof which are now or will
hereafter be in force and effect, except as listed on Exhibit "E". Other than
those listed in Exhibit "E", Seller requires no other contract or agreement to
enable it to operate the Cashi Advertising Business, as presently conducted.
All of the contracts are in full force and effect and are valid, binding and
enforceable in accordance with their terms and Seller has full legal power and
authority to assign its rights under the contracts to Buyer, and such
assignment will not affect the validity or continuation of any of the
contracts.
I. Insurance. That the only policies of insurance
maintained by Seller now in force and effect with respect to the Business and
Assets are listed in Exhibit "F".
J. Compliance with Law. That all structures and
improvements of the Cashi Advertising Business have been constructed and
installed in full compliance with all applicable laws, statutes, ordinances,
codes, covenants, conditions and restrictions. Seller has complied in all
material respects with all federal, state and local laws, rules and regulations
applicable to the Cashi Advertising Business.
K. Ownership of Properties. That Seller owns, will own
by closing, and will be able to convey marketable fee simple title or its
leasehold interest, as the case may be (subject to the Lake consent referred to
hereinabove) to the Properties and the Business and Assets, including the
improvements and personal property referred to in Paragraph 1 hereof as
required hereunder. The Business and Assets are now, or will at closing be,
free and clear of all mortgages or liens, and any other obligations,
reservations, judgments, restrictions, limitations, prohibitions, conditions,
easements, encroachments, rights-of-way, interests, claims or rights which
would prevent or interfere with the use of the Business and Assets for
commercial billboard purposes.
L. Environmental Matters. To the best of Seller's
knowledge, Seller has complied in all material respects with all laws, rules
and regulations of all federal, state and local governments concerning the
environment, public health
4
<PAGE> 5
and safety, and employee health and safety. No charge, complaint, action,
suit, proceeding, hearing, investigation, claim, demand or notice has been
filed or commenced against either Seller in connection with its ownership or
operation of the Cashi Advertising Business, alleging any failure to comply in
any material respect with any such law, rule or regulation. To the best of
Seller's knowledge, no pollutant, contaminant or chemical, industrial,
hazardous or toxic material or waste has ever been manufactured, buried,
leaked, spilled or released by either Seller in connection with its ownership
and operation of the Cashi Advertising Business.
M. Truth of Representations. That all of Seller's
representations set forth in this Contract or in any certificate, document or
other instrument furnished to Purchaser pursuant hereto shall be true at the
time of closing, and all obligations involving action or performance by Seller
prior to closing shall be complied with.
4. Business Records. Seller shall make available at all
reasonable times for review by Purchaser or its agents, all books and records
maintained by Seller in connection with the operation of the Cashi Advertising
Business, including, without limitation, copies of all correspondence and
instruments related to every matter connected with the subject matter of this
Contract, permits, operations, construction, guarantees, architect
certificates, expenses, title insurance policies, agreements, leases and
compliance with laws. At Purchaser's request, at no cost to Seller, Seller
shall make copies of any and all instruments desired by Purchaser and deliver
same to Purchaser. Seller does hereby grant to Purchaser and Purchaser's
representatives, at Purchaser's cost, the right to thoroughly and completely
audit all income and expenses, profits and losses and operational results of
the Cashi Advertising Business for the three (3) year period prior to closing.
Seller shall make all books and records and other documents and information
related to the foregoing, readily available to Purchaser and its
representatives from time to time and at any reasonable time until closing.
5. Inspection Period. Purchaser shall have a period of up to
sixty (60) days from the Effective Date of this Contact (the "Inspection
Period") to inspect the Business and Assets and the books and records of the
Seller. Purchaser's obligation to close under this Contract is contingent upon
and subject to proper confirmation and verification by Purchaser of the
financial and other information made available to Purchaser by the Seller,
review of further financial or other information relating to the purchase of
the Business and Assets and operation of the Cashi Advertising Business, as may
be requested by Purchaser, all to the satisfaction of Purchaser in its sole
discretion.
6. Conduct of Business Prior to Closing. Seller shall have the
absolute right to continue to conduct the Cashi Advertising Business in the
manner of his normal business practices until closing, provided, Seller agrees
that, without Purchaser's written consent, there will be no out of the ordinary
change, amendment, modification or addition of any item contained or listed in
any Exhibit prior to the date of closing. No security deposit under any Lease
shall be returned in whole to in part to the depositor prior to the expiration
of such tenancy. Any new lease or renewal of an existing Lease, and service
contracts, shall be executed in good faith, at arm's length, and in accord with
Seller's normal business practices. At all times prior to closing, Seller
shall continue to conduct business with respect to the Business and Assets in
the same manner in which said business has been heretofore conducted
5
<PAGE> 6
and, except as otherwise expressly provided in this Contract, shall not,
without the prior written consent of Purchaser, make any change in or
acceleration of its normal and customary advertising, promotional and
maintenance practices. Seller shall provide Purchaser with a monthly statement
of income and expenses for the Cashi Advertising Business and such other
financial information as Purchaser may reasonably request.
7. Title. Within forty-five (45) days from the Effective Date of
this Contract, Seller shall obtain and deliver to Purchaser: a title
commitment covering all of the land included within the Properties, including
fee simple and leasehold interests, to be written on the ALTA Form B form for
at least the amount of the Purchase Price, which shall reflect that the
Seller's interest is subject only to the matters described in paragraph 3.K.
hereof. Purchaser shall have ten (10) business days from receipt of the title
commitment to examine and notify Seller in writing to object to any title
matters which are not in accordance with the terms of this Contract. If
Purchaser shall object to the title as to one or more of the parcels included
within the Properties, Seller shall have the right, in his sole discretion, to
determine whether any such title objection can be cured, and shall advise
Purchaser in writing at least two (2) days prior to closing. If Seller is
unable to remove said defect(s), or if Seller shall determine that such defects
cannot be removed prior to closing, or if Seller, despite its best efforts, is
unable to obtain and furnish the title commitment with respect to one or more
of the parcels within the time permitted, Purchaser shall have the option of
either accepting title as it then is, or removing such affected parcel from
this Contract, by written notice to Seller at least one (1) day prior to
closing. Failure to furnish the written notice shall be deemed a waiver of the
title objection and election to accept title as it then is. All mortgages
affecting the Properties will be satisfied by Seller prior to or at the
Closing.
8. Plans and Specifications. Within fifteen (15) days from the
Effective Date of this Contract, Seller will deliver to Purchaser all plans and
specifications, and all working drawings, for the Properties and improvements
constructed thereon, which are in the possession of Seller.
9. Adverse Change. Purchaser shall not be obligated to
consummate the Contract if there has been a change in the Business or the
tangible properties of the Business, taken as a whole, including any unrestored
damage, destruction or loss materially adversely affecting any Assets used or
useful in the conduct of the Business, or a loss materially adversely affecting
the conduct of the business, during the period from the date of the Contract
until Closing. For purposes of this Contract, the parties agree that
"materially adversely affecting" shall mean any such change or loss affecting
six percent (6%) or more of the billboard faces owned and operated by Seller.
10. Closing. The Closing of this transaction shall be held at the
offices of Broad and Cassel on or before ten (10) days following the end of the
Inspection Period (the "Closing Date"). The cash proceeds of the sale shall be
held in escrow by the Escrow Agent until recordation of the deed and assignment
of leases to Purchaser and delivery to Purchaser of an endorsement to the title
commitment showing Purchaser to be vested with a good, marketable and insurable
fee simple title or leasehold interest to the Properties, as the case may be,
which title shall be subject only to the matters described herein and those
accepted by Purchaser as herein provided. Possession of the Business and
Assets shall be delivered to the Purchaser at
6
<PAGE> 7
closing, free from all tenancies or other occupancies unless referred to herein
or approved by Purchaser.
A. Use of Buildings Subsequent to Closing. Anything herein to
the contrary notwithstanding, Seller shall retain the right to use and
possession of two (2) of the buildings located on the main shop property of the
Cashi Advertising Business, said buildings described as 1408 and 1460 33rd
Street, respectively, for a period of up to ninety (90) days after the Closing
Date, and the right to enter upon said property from time to time to remove
Seller's personal property which is stored and located thereon. It shall be
the sole responsibility of Seller to maintain insurance upon the Seller's
personal property which is stored in said buildings. Seller shall indemnify
Purchaser of and from any loss, damage or claim which Purchaser may incur by
reason of such use of the buildings described by Seller.
B. Right to Terminate. Purchaser or Seller may terminate this
Contract without penalty or liability (except in the event of a default of a
party) if for any reason the Closing hereunder has not taken place by the
Closing Date. Provided, however, that if this Contract is terminated for any
reason whatsoever under any provision of this Contract, other than a default by
Purchaser which would entitle Seller to receive and retain the Deposit under
the terms of this Contract, Seller shall be entitled to receive reimbursement
from the Deposit, for all its expenses, including, but not limited to, title
work, reasonable attorney's fees and the reasonable costs of Seller's employees
in producing the materials necessary for Closing, with the balance of the
Deposit after payment of Seller's expenses to be promptly refunded to Purchaser
along with an expense summary.
11. Closing Costs. State documentary stamps on the deed, or
assignment of leases shall be paid by Seller. Recording the deed and
assignment, the cost of title searches, and title insurance premium insuring
Purchaser's fee simple interest and leasehold interest in the Properties, as
the case may be, shall be paid one-half (1/2) by Seller and one-half (1/2) by
Purchaser at Closing.
12. Prorations. Ad valorem real property taxes and personal
property taxes levied against the Properties and the Business and Assets shall
be prorated based on the most recent tax bill or, if available, based on the
current year's valuation or assessment and the last known millage rate, and
reprorated when known for the year of closing. Certified governmental
improvement liens and any pending liens shall be paid by Seller.
Tenant/advertiser rents received by Seller or due and owing to Seller prior to
closing and operating expenses shall be prorated as of the date of closing.
Purchaser agrees to pay Seller any unpaid base monthly rents for the period
prior to closing which are actually collected by Purchaser from
tenants/advertisers, less all costs of collection, including, but not limited
to, attorney's fees. Seller shall retain the right to sue any Tenant after
closing for back rent or in connection with their Leases or tenancies for
matters owing or arising for the period prior to closing. All security
deposits, last month's rent, or prepaid rent shall be delivered by Seller to
Purchaser at closing or at Purchaser's option, deducted from the cash to close.
7
<PAGE> 8
13. Deliveries at Closing.
A. By Seller: Unless waived in writing by Purchaser, Seller
shall deliver or cause to be delivered to Purchaser at closing, in form and
substance reasonably satisfactory to Purchaser, the following:
(1) Seller shall use its best efforts to obtain and
deliver a written statement or certificate on forms provided or approved by
Purchaser, dated and current as of the month of closing, and executed and
acknowledged by the landlords under the Ground Leases having a remaining term
of more than one (1) year, certifying the amount of the annual rent, and total
rent paid for the past two years; the commencement and expiration dates of the
original term, renewal terms, or other options; that the landlord knows of no
default thereunder; that the Ground Leases described in the Exhibits represent
the complete, final, unmodified and unamended understanding between the parties
thereto and there exist no written or verbal modifications, amendments, side
agreements or understandings related to such Ground Leases or the tenancy
thereunder. If Seller fails or is unable to obtain a current estoppel for a
particular Ground Lease at closing, Seller shall furnish, in lieu of the
missing or non-current Ground Lease estoppels, a certification from Seller
representing the truth and accuracy of all the information that would appear on
a current estoppel for such Ground Lease. Seller shall represent at closing
that it has no knowledge of and has received no notice of any matters which
would cause any of the items in any Ground Lease estoppel to be or become
incomplete, inaccurate or untrue. Seller and Purchaser agree that Seller shall
not be required to obtain such certificates for Ground Leases for a remaining
term of less than one (1) year. However, Seller agrees to cooperate and
consult with Purchaser in any efforts Purchaser may make to extend for up to
twelve (12) months any Ground Lease that has a remaining term of less than one
(1) year.
(2) The original or duplicate original of each and every
instrument listed in all Exhibits annexed hereto, all instruments modifying any
such instrument, each report, notice, agreement, arbitration award and court
decision, if any, or a copy thereof relating to any matter herein contained and
a certified rent roll current as of closing in form and content of Exhibit "C".
(3) The title insurance policy described in paragraph 7
above.
(4) A bill of sale, executed and acknowledged by Seller,
containing warranties of title and against encumbrances (including, without
limitation, all chattel mortgages, conditional sales and security interests of
every nature) covering any personal property included in this sale, and
assignments of the certificates of title to all vehicles and equipment owned
and utilized by the Cashi Advertising Business. All personal property, sales
and other taxes, if any, and all tax returns required to be made in connection
with the instant transactions shall be promptly paid and filed by Seller at
Seller's sole cost and expense.
(5) Any and all municipal, county and state permits or
licenses necessary for the use or occupancy of the buildings on the Premises
and the billboards; provided it is agreed that such delivery shall not include
any contractor's licenses or competency licenses held by Seller.
8
<PAGE> 9
(6) A warranty deed which includes full covenants of
title to the Properties, in proper form for recordation, duly executed, and
acknowledged by Seller, effective to convey to Purchaser or its assigns, the
fee simple title to the properties owned by Seller, free of all encumbrances,
except as herein stated.
(7) An Assignment to Purchaser, in recordable form, of
all of Seller's rights, title and interest in all Leases or other tenancies and
all other contracts to be assumed by Purchaser in connection with the Business
and Assets; provided Purchaser acknowledges that the Lake Co-Op signs are based
upon oral agreements with Lake, which must be confirmed prior to closing and
cannot be assigned by Seller without Lake's consent.
(8) Keys to the Business and Assets and every lock
thereon.
(9) An Assignment to Purchaser of all warranties and
guaranties on roof and equipment and builder's guaranties which have not
expired. The Seller represents that it has not done, and that it will not
between now and the date of closing do anything or suffer any act which could
cancel, terminate, reduce or interfere with the validity, effectiveness or good
standing of any such guaranties.
(10) An agreement whereby Seller agrees to indemnify and
hold Purchaser harmless against and reimburse Purchaser for any and all direct
losses, liabilities or damages resulting from the operation or ownership of the
Cashi Advertising Business prior to the Closing, including any liabilities
arising under the Leases or the other assumed contracts which relate to events
occurring prior to the Closing Date, including claims from third parties.
(11) Instruments reasonably satisfactory to Purchaser and
the title insurance company reflecting the proper power, good standing and
authorization for the sale of the Business and Assets from Seller to Purchaser
hereunder.
(12) An affidavit by Seller that there are no liens or
encumbrances existing on the Properties, and Assets, there has been full
payment of all labor, services and material rendered to the Business and Assets
by all contractors, materialmen, developers, and the owner, and a warranty,
indemnification and hold harmless agreement against such claims, liens or
encumbrances on account of any of same, there are no liens or encumbrances
existing on the Business and Assets, there has been full payment of all labor,
services and material rendered to the Business and Assets by all contractors,
subcontractors, materialmen, developers, and the owner, and containing such
other matters as the title insurance company may reasonably require for the
removal of the standard exceptions to title.
(13) An Affidavit by Seller that there have been no
changes in the condition of title from that shown in the title commitment
delivered to Purchaser.
(14) Notification to tenants/advertisers and other persons
of change of ownership on forms provided or approved by Purchaser.
(15) Affidavit of non-foreign status from each Seller.
8
<PAGE> 10
B. By Purchaser: Unless waived in writing by Seller, Purchaser
shall deliver or cause to be delivered to Seller at Closing, in form and
substance reasonably satisfaction to Seller, the following:
(1) An agreement whereby Purchaser will agree to
assume certain existing contracts and Leases of Seller relating to the Assets,
as described in this Contract. Purchaser shall assume and undertake to pay,
discharge and perform all obligations and liabilities of Seller under the
assumed contracts and Leases insofar as they relate to the time on and after
the Closing Date and arise out of events related to Purchaser's ownership of
the Assets on or after the Closing Date, and agrees to indemnify and hold
Seller harmless of and from all claims, losses or damage resulting from the
operation of the Cashi Advertising Business by Purchaser subsequent to the
Closing Date.
(2) The Purchase Price as provided herein.
C. By Seller and Purchaser:
(1) A non-competition and consulting agreement,
containing terms and conditions mutually agreed upon by the parties, including
a restrictive covenant prohibiting Ralph E. Kaschai and Cash Kaschai from
competing against Purchaser in the business of outdoor advertising in any
county in which the Business and Assets are located for a term of three (3)
years.
14. Fire, Condemnation. If, prior to closing, any portion of the
Business and Assets shall be damaged or destroyed by fire or other casualty, or
any portion of the Business and Assets shall be condemned or taken by eminent
domain, then in such event, Purchaser shall remain obligated to conclude the
transaction herein provided for. In the case of fire or other casualty, Seller
shall be obligated to restore the Business and Assets to the condition existing
prior to such damage with reasonable diligence, the closing shall occur as
provided herein, and Seller shall be obligated to complete the restoration as
soon as reasonably possible after the closing. There shall be no reduction in
the Purchase Price and Purchaser shall be entitled in the case of a
condemnation or taking by eminent domain, to receive the entire award with
respect to the Business and Assets or the portion thereof so taken and Seller
will execute and deliver to Purchaser on the closing hereunder all proper
instruments for the assignment and collection of such award. The risk of loss
or damages to the Business and Assets by fire or otherwise until the delivery
of the deed and occupancy by Purchaser is assumed by Seller. Seller agrees to
maintain in force and effect until the closing, the insurance policies listed
in Exhibit "F".
15. Broker. Purchaser and Seller each represent and warrant to
the other that they have dealt with no broker in connection with this
transaction. Purchaser and Seller agree to, and hereby do indemnify and hold
each other harmless from and against any and all causes, claims, demands,
losses, liabilities, fees, commissions, settlements, judgments, damages,
expenses and fees (including attorneys' fees and court costs) incurred by said
party in connection with any claim for commissions, fees, compensation, or
otherwise for the bringing about of this transaction, or the consummation
thereof which may be made against the other by any person,
10
<PAGE> 11
firm or entity as the result of any of the acts of such indemnifying party or
of its representatives.
16. Default. In the event this transaction does not close solely
on account of Purchaser's default, Seller may receive and retain the Deposit
from the Escrow Agent as Seller's sole remedy and as agreed upon and liquidated
damages on account of Purchaser's breach of contract, and both parties shall
thereupon be relieved of all further obligations to each other hereunder. If
Seller fails to perform any of the covenants of this Contract, the aforesaid
Deposit paid by the Purchaser shall, at the option of Purchaser, be returned to
the Purchaser on demand and the Purchaser shall have as its sole remedy
hereunder, the right of specific performance of this Contract; provided, if any
of the representations of Seller herein shall be determined to be incorrect,
the sole remedy of Purchaser shall be the right to terminate this Contract and
to receive back the Deposit paid hereunder. Provided further, anything herein
to the contrary notwithstanding, if Seller shall default by selling the Cashi
Advertising Business, or any portion thereof, to another party, then in such
event Purchaser shall have the right to recover damages as a result of that
default by Seller.
17. Relationship of Parties. Nothing contained in this Contract
or in the activities contemplated hereby shall be construed to create the
relationship of principal and agent, partnership, joint venture, trust,
tenants/advertisers in common or any other relationship between the parties
hereto other than separate and distinct entities dealing at arm's length as
Seller and Purchaser, respectively, for their own separate interests and
benefit.
18. Confidential Transaction. Purchaser and Seller each agree
that it will use its best efforts to keep confidential (except for disclosure
requirements of federal or state securities laws and securities markets along
with such disclosure to attorneys, bankers, consultants, underwriters,
investors, etc., as may be appropriate in the furtherance of this transaction)
all information of a confidential nature obtained by it from the other
(including the terms of this proposal and the identify of Purchaser) in
connection with the transactions contemplated by this Contract, and in the
event that such transactions are not consummated, will return to the other all
documents and other materials obtained from the other in connection therewith.
19. Escrow Agent. The Escrow Agent shall be BROAD and CASSEL, and
the Escrow Agent shall not be liable for any acts taken in good faith, shall
only be liable for its willful misconduct or gross negligence, and may, in its
sole discretion, rely upon the written notices, communications, orders or
instructions given by any party hereto. Seller and Purchaser, jointly and
severally, indemnify and hold the Escrow Agent harmless from and against any
and all matters directly or indirectly related to or in connection with the
funds held by Escrow Agent or this Contract, including, without limitation,
attorneys' fees and any other costs or expenses (hereinafter referred to as
"Escrow Expenses"). In the event that any Escrow Expenses are paid by Escrow
Agent, Escrow Agent may recover such payments, at its option, as follows: (a)
as a first priority out of the funds held by Escrow Agent, or (b) from Seller
or Purchaser. If either party makes a written demand upon Escrow Agent for
payment of the deposit, Escrow Agent shall give notice to the other party of
such demand. If Escrow Agent does not receive a written objection from the
non-demanding party to the proposed payment within five (5) days after the
giving of such notice, Escrow Agent is authorized to make such payment. If
Escrow Agent does receive such written objection within such 5-day period or if
for any other reason Escrow Agent
11
<PAGE> 12
in good faith shall elect not to make such payment, Escrow Agent shall continue
to hold such amount until otherwise directed by written instructions from the
Seller and Purchaser or a final judgment of a court having jurisdiction.
Escrow Agent shall have the right at any time to interplead the escrowed
proceeds and interest thereon, if any, in the circuit court of Orange County,
in which the Escrow Agent and the Business office are located. Escrow Agent
shall give written notice of such interpleader to Seller and Purchaser. Upon
such interpleader, Escrow Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder, and Seller and Purchaser shall
indemnify Escrow Agent for any and all expenses incurred.
20. Governing Law, Actions. This Contract is entered into and
shall be governed by the laws of the State of Florida. The venue for any
action to enforce the terms of this Contract, or concerning the subject matter
of this Contract, shall be located in Orange County, Florida.
21. Notices. Each notice or other communication shall be in
writing and given by hand delivery, or by mailing by certified or registered
mail, postage prepaid, return receipt requested, or by Federal Express or other
comparable expedited mail service, or Western Union telegram, to the addresses
first set forth above or at such other addresses as the parties hereto may from
time to time designate by notice given in the manner herein provided. Notices
shall be effective upon receipt if hand delivered, or upon deposit with Federal
Express, another comparable mail service, Western Union, or in the United
States mail as aforestated.
22. Further Instruments. At Purchaser's request, at any time and
from time to time before and after closing, Seller will execute, acknowledge
and deliver all instruments reasonably requested by Purchaser in order to carry
out the purposes of this Contract.
23. Waiver. Prior to and at closing, Purchaser may, in its sole
discretion, waive in writing any requirements for payment or performance by
Seller, and the truth and accuracy of any of Seller's representations,
warranties and agreements hereunder.
24. Merger. All understandings and agreements between the parties
are merged in this Contract which alone fully and completely expresses their
agreement.
25. Modifications, Successors. This Contract may be modified only
by an instrument in writing, signed by each of the parties. The provisions
aforesaid are to apply to and bind the heirs, executors, administrators,
successors and assigns of the respective parties.
26. Plurals, Captions. For all purposes of interpretation or
construction of this Contract, the singular shall include the plural and the
plural shall include the singular. Words of any gender shall include words of
any other gender. Captions and paragraph headings used herein are for
convenience only and are not part of this Contract and shall not be used in
construing it.
12
<PAGE> 13
27. Severability. If any provision or portion of this Contract is
found by a court of competent jurisdiction to be unenforceable or null and
void, such provision shall be deemed stricken and severed from this Contract,
and the remaining provisions and portions thereof shall continue in full force
and effect.
28. Confidential Business Information. Purchaser acknowledges and
agrees that all information which is contained in the Business Summary, and in
the books and records of the Cashi Advertising Business is deemed and agreed to
be proprietary and strictly confidential. None of such information which
Purchaser may obtain from the Business Summary or the books and records of
Seller may be disclosed, communicated or published to any other person, for any
reason whatsoever, without the prior written consent of Seller.
Purchaser will not be permitted, under any circumstances, to contact
any person whose name, identity or position is obtained from the Business
Summary or the books and records of Seller, or as a result of Seller having
permitted Purchaser access to portions of those books and records, for any
reason whatsoever, without the prior written consent of Seller. The term
"person" as used in this Contract shall include any natural person,
corporation, partnership, company, firm, association or other form of business
entity.
By execution of this Contract, Purchaser acknowledges and agrees that
any violation of the terms and conditions of this provision shall be deemed to
be an unfair trade practice under both federal and state laws having
applicability, and shall also be deemed to be and constitute a tortious
interference with an existing contract and/or business relationship, as the
case may be. In the case of any such violation of the terms of this Contract,
Purchaser further acknowledges and agrees that Seller shall be entitled to
recover from Purchaser, any and all damages which Seller may suffer or incur
arising directly or indirectly as a result of the violation of the terms of
this Contract.
Each party further agrees that in the event it shall be necessary for
such party to employ the services of an attorney to enforce the terms of this
Contract, whether or not it shall be necessary to file a legal action in a
court of competent jurisdiction, the non-prevailing party shall also be
obligated to pay all costs and expenses which the prevailing party may incur in
so enforcing the terms of this Contract, including but not limited to attorneys
fees.
Notwithstanding other inconsistent language in this paragraph,
Purchaser will not be in violation of this paragraph's prohibitions due to the
disclosure requirements of federal or state security laws and the regulations
of the American Stock Exchange. Similarly, disclosures to attorneys, bankers,
underwriters, etc. as may be appropriate in furtherance of this transaction
shall not be in violation of this paragraph 28.
29. Time for Acceptance. This Contract must executed by Seller
and delivered to Purchaser within three (3) days after execution by Purchaser
and delivery of the executed Contract to Seller. If not so executed, the
Contract shall be considered null and void and of no further force and effect,
and the parties shall be discharged from all further obligations hereunder.
13
<PAGE> 14
30. Effective Date. The Effective Date of this Contract shall be
the date when this Contract has been signed by the last one of Purchaser and
Seller to execute same, and a fully-executed copy thereof delivered to the
other party.
EXECUTED as of the date first above written, in several counterparts,
each of which shall be deemed an original but all constituting only one
contract.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: SELLER:
/s/ ??? /s/ Ralph E. Kaschai
- ---------------------------- ---------------------------------
RALPH E. KASCHAI, D/B/A CASHI
SIGNS
/s/ ???
- ----------------------------
DATED: MARCH 15, 1996
---------------------
CASHI CORP.
/s/ ??? BY: /s/ Ralph E. Kaschai
- ---------------------------- -------------------------------
RALPH E. KASCHAI, PRESIDENT
/s/ ???
- ----------------------------
DATED: MARCH 15, 1996
---------------------
CASHI SERVICES, INC., AND CASHI
OUTDOOR ADVERTISING, INC.
/s/ ??? BY: /s/ Ralph Cash Kaschai
- ---------------------------- -------------------------------
RALPH CASH KASCHAI, PRESIDENT
/s/ ???
- ----------------------------
DATED: MARCH 15, 1996
---------------------
{SIGNATURES CONTINUED ON FOLLOWING PAGE}
14
<PAGE> 15
PURCHASER:
PAXSON OUTDOOR, INC.
/s/ ??? BY: /s/ ???
- --------------------------------- ------------------------------------
President
/s/ ???
- ---------------------------------
DATED: MARCH , 1996
--------------------------
ESCROW AGENT:
RECEIPT OF FUNDS IN THE AMOUNT OF
DEPOSIT ACKNOWLEDGED.
(If paid by check, subject
to clearance).
BROAD AND CASSEL
By: /s/ ???
------------------------------------
Partner
DATED: MARCH 15, 1996
15
<PAGE> 1
EXHIBIT 10.92
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON BROADCASTING OF ORLANDO,
LIMITED PARTNERSHIP
AND
PRESS BROADCASTING COMPANY
FOR
RADIO STATION WTKS(FM)
COCOA BEACH, FLORIDA
* * *
MAY 31, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Leased Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.20 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.7 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.10 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Cancellation Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . 29
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
11.3 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.4 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.7 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.9 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.10 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C>
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Financial Matters
Schedule 3.11 -- Insurance Matters
Schedule 3.13 -- Employee Matters
Schedule 3.15 -- Litigation
Schedule 6.12 -- Contracts to be Canceled
Schedule 8.2(h) -- Form of Seller's Opinion of Counsel
Schedule 8.3(d) -- Form of Buyer's Opinion of Counsel
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 31st day of May,
1996, by and between Paxson Broadcasting of Orlando, Limited Partnership, a
Florida limited partnership ("Buyer"), and Press Broadcasting Company, a New
Jersey corporation ("Seller").
R E C I T A L S
A. Seller is the licensee of and owns and operates radio station
WTKS(FM), Cocoa Beach, Florida (the "Station") pursuant to licenses issued by
the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller as of 11:59 p.m., Orlando
time, on the day prior to the commencement date of the Time Brokerage Agreement
(as defined below).
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
other than financing leases to be satisfied pursuant to Section 5.17, (ii) any
Contracts entered into by Seller between the date of this Agreement and the
Closing Date that Buyer agrees in writing to assume, and (iii) time sales
contracts entered into by Seller in compliance with Section 5.3.
<PAGE> 8
- 2 -
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and
<PAGE> 9
- 3 -
data, machinery and equipment warranties, and other similar intangible property
rights and interests (and any goodwill associated with any of the foregoing)
applied for, issued to, or owned by Seller or under which Seller is licensed or
franchised and which are used or useful in the business and operations of the
Station, together with any additions thereto between the date of this Agreement
and the Closing Date but excluding those listed on Schedule 3.9 and designated
as "Excluded Intangibles".
"Leased Property" means that certain studio lease for the Station's
studio as more particularly described on Schedule 3.7 and that certain antenna
lease for the Station's transmission tower, as more particularly described on
Schedule 3.7.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to Seller in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which are listed
on Schedule 3.6 together with any additions thereto between the date of this
Agreement and the Closing Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as
of the date hereof between Buyer and Seller pursuant to which Buyer shall
provide programming for broadcast on the Station commencing on June 17, 1996.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the Assets, together with any additions thereto between the date of this
Agreement and the Closing Date, but excluding the assets described in Section
2.2, free and clear of any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges, or encumbrances of any nature whatsoever
(except for those arising pursuant to the terms of the Assumed Contracts or
liens for current taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Leased Property;
<PAGE> 10
- 4 -
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, a non-exclusive license to the
Excluded Intangibles and all intangible assets of Seller relating to the
Station that are not specifically included within the Intangibles, including
the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the
Station; and
(h) All books and records relating solely to the business
or operations of the Station, including executed copies of the Assumed
Contracts, and all records required by the FCC to be kept by the Station,
subject to the right of Seller to have such books and records made available to
Seller for a reasonable period, not to exceed three (3) years after the Closing
Date.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) Seller's corporate name, any books and records which
Seller is required by law to retain, all records relating to the excluded
assets described in this Section 2.2 and to Seller's accounts payable and
accounts receivable and general ledger records, each subject to the right of
Buyer to have access to and to copy that portion of such records which relate
to the Station for a period of three (3) years from the Closing Date, and
Seller's corporate minute books and other books and records relating to
Seller's internal corporate matters and financial relationships with Seller's
lenders;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) The Accounts Receivable;
<PAGE> 11
- 5 -
(e) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees of any
nature whatsoever for periods prior to the Closing Date;
(f) Any of Seller's real property whether owned or leased
(with the sole exception of the Leased Property which shall be conveyed
hereunder) and any and all assets of Seller not related to the Station; and
(g) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets shall be
Twenty-Five Million Dollars ($25,000,000) adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses, other than
expenses for which Buyer is obligated to reimburse Seller under the Time
Brokerage Agreement. All expenses arising from the operation of the Station,
including business and license fees, utility charges, real and personal
property taxes and assessments levied against the Assets, property and
equipment rentals, applicable copyright or other fees, sales and service
charges, taxes (except for taxes arising from the transfer of the Assets under
this Agreement), FCC annual regulatory fees and similar prepaid and deferred
items, shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date (subject to
reimbursement by Buyer to the extent provided in the Time Brokerage Agreement),
and Buyer shall be responsible for all expenses, costs, and obligations
allocable to the period on and after the Closing Date. Notwithstanding the
preceding sentence, there shall be no adjustment for, and Seller shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to
the Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects
as of the date thereof.
<PAGE> 12
- 6 -
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts (i) insofar as they relate to the time on and after the Closing Date
or arise out of events occurring on and after the Closing Date and (ii) with
respect to obligations and liabilities under the Licenses and those Assumed
Contracts which Seller assumed from Buyer and Buyer's obligations and
liabilities with respect to the Station which were not assumed by Seller in
connection with Seller's purchase of the Station from Buyer ("Paxson
Liabilities"), insofar as they relate to the time prior to May 6, 1993 or arise
out of events occurring prior to May 6, 1993. Buyer shall not assume any
other obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date except for Paxson Liabilities arising prior to May 6,
1993, (iii) any claims or pending litigation or proceedings relating to the
operation of the Station prior to the Closing except for Paxson Liabilities
arising prior to May 6, 1993, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements, (v) any obligations or
liabilities of Seller under any employee pension, retirement, health and
welfare or other benefit plans or collective bargaining agreements, or (vi) any
obligation to any employee of Seller for severance benefits, vacation time, or
sick leave accrued prior to the Closing Date, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of New Jersey. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement, the Escrow Agreement and the documents
contemplated hereby and thereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Seller
hereunder and thereunder. Seller is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
operations of the Station or any of the Assets, except as contemplated by the
Time Brokerage Agreement or by the transactions contemplated by this Agreement.
<PAGE> 13
- 7 -
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Seller
have been duly authorized by all necessary actions on the part of Seller and
its shareholders. This Agreement and the Escrow Agreement have been duly
executed and delivered by Seller and constitute the legal, valid, and binding
obligations of Seller, enforceable against it in accordance with their
respective terms except as the enforceability of this Agreement and the Escrow
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally, and by judicial discretion in the enforcement of
equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the Articles of Incorporation or Bylaws of Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Seller is a party or by which Seller may be bound; and (v) will
not create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith. Except as set forth in Schedule 3.15,
Seller has no reason to believe that any of the Licenses would not be renewed
by the FCC or other granting authority in the ordinary course.
3.5 Title to and Condition of Leased Property. Seller shall
provide copies of all leases relating to the Leased Property to Buyer (each of
which are treated as Contracts). Buyer shall, pursuant to the provisions of
Section 5.9, be entitled to review and inspect the real property to which such
leases are applicable. Except for the representations made with
<PAGE> 14
- 8 -
respect to such leases under Section 3.7 hereof, Seller makes no
representation, warranty or other covenant regarding such leases.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable or as
described on Schedule 3.3 or 3.6. Each item of Tangible Personal Property is
available for immediate use in the business and operations of the Station. All
items of transmitting and studio equipment included in the Tangible Personal
Property (i) have been maintained in a manner consistent with generally
accepted standards of good engineering practice, and (ii) will permit the
Station and any auxiliary broadcast facilities related to the Station to
operate in accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC, and with all other applicable federal, state, and local
statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Station without penalty on not more than thirty
days' notice. Seller has delivered to Buyer true and complete copies of all
written Contracts, true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts), and a schedule
summarizing Seller's obligations as of the date hereof under trade and barter
agreements relating to the Station. Other than the Contracts listed on
Schedule 3.7 and cash advertising contracts, Seller requires no contract,
lease, or other agreement to enable it to carry on its business as now
conducted. All of the Assumed Contracts are in full force and effect, and are
valid, binding, and enforceable in accordance with their terms. There is not
under any Assumed Contract any material default by any party thereto or any
event that, after notice or lapse of time or both, could constitute a default
the result of which would entitle either party thereto to terminate such
Contract. Except with respect to the lease for the Station's studio, Seller is
not aware of any intention by any party to any Assumed Contract (i) to
terminate such contract or amend the terms thereof, (ii) to refuse to renew the
Assumed Contract upon expiration of its term, or (iii) to renew the Assumed
Contract upon expiration only on terms and conditions which are more onerous
than those now existing. Except for the need to obtain the Consents listed in
Schedule 3.3, Seller has full legal power and authority to assign its rights
under the Assumed Contracts to Buyer in accordance with this Agreement, and
such assignment will not affect the validity, enforceability, or continuation
of any of the Assumed Contracts.
<PAGE> 15
- 9 -
3.8 Consents. Except for the FCC Consent provided for in Section
6.1, the other Consents described in Schedule 3.3, and any filing required
under the HSR Act, no consent, approval, permit, or authorization of, or
declaration to or filing with any governmental or regulatory authority, or any
other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, or (iii) to enable Buyer to conduct the business and
operations of the Station in essentially the same manner as such business and
operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not aware
that it is infringing upon or otherwise acting adversely to any trademarks,
trade names, service marks, service names, copyrights, patents, patent
applications, know-how, methods, or processes owned by any other person or
persons, and there is no claim or action pending, or to the knowledge of Seller
threatened, with respect thereto. The Intangibles listed on Schedule 3.9
comprise all intangible property interests necessary to conduct the business
and operations of the Station as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of financial statements including balance sheets, statements of
operations and a statement of operating cash flow for the period ending
December 31, 1995 (collectively, the "Financial Statements"). The Financial
Statements have been prepared from the books and records of Seller, have been
prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated,
accurately reflect the books, records, and accounts of the Station (which
books, records, and accounts are complete and correct), are complete and
correct in all material respects, and present fairly the financial condition of
the Station as at their respective dates and the results of operations for the
periods then ended. None of the Financial Statements understates the true
costs and expenses of conducting the business or operations of the Station,
fails to disclose any material contingent liabilities, or inflates the revenues
of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and reasonably foreseeable risks. During the
past three years, no insurance policy of Seller on the Assets or the Station
has been canceled by the insurer and no application of Seller for insurance has
been rejected by any insurer.
3.12 (a) Reports. All returns, reports, and statements that
the Station is currently required to file with the FCC or with any other
governmental agency have been filed, and all
<PAGE> 16
- 10 -
reporting requirements of the FCC and other governmental authorities having
jurisdiction over Seller and the Station have been complied with. All of such
returns, reports, and statements are substantially complete and correct as
filed. Seller has timely paid to the FCC all annual regulatory fees payable
with respect to the FCC Licenses.
3.13 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.13. Schedule 3.13
also contains a true and complete list of all employees of the Station, their
job description, date of hire, salary and amount and date of last salary
increase.
(b) Each Employee Plan and Compensation Arrangement has
been administered in compliance with its own terms and in material compliance
with the provisions of ERISA, the Code, the Age Discrimination in Employment
Act and any other applicable Federal or state laws. Seller is not aware of the
existence of any governmental audit or examination of any Employee Plan or
Compensation Arrangement or of any facts which would lead it to believe that
any such audit or examination is pending or threatened. There exists no
action, suit or claim (other than routine claims for benefits) with respect to
any Employee Plan or Compensation Arrangement pending or, to the best knowledge
of Seller, threatened against any of such plans or arrangements, and Seller
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Station, and neither Seller nor any other trade or business under common
control with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.13, neither Seller
nor any other trade or business under common control with Seller (within the
meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
contributes to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of
Seller at the Station.
(e) Except as described in Schedule 3.13, with respect to
each Employee Plan and, to the extent applicable, each Compensation
Arrangement: (i) each Employee Plan that is intended to be tax-qualified, and
each amendment thereto, is the subject of a favorable determination letter, and
no plan amendment that is not the subject of a favorable
<PAGE> 17
- 11 -
determination letter would affect the validity of an Employee Plan's letter;
(ii) no prohibited transaction, within the definition of section 4975 of the
Code or Title 1, Part 4 of ERISA, has occurred which would subject Seller to
any liability; and (iii) all contributions, premiums or payments accrued, in
whole or in part, under each Employee Plan or Compensation Arrangement or with
respect thereto as of the Closing will be paid by the Seller prior to the
Closing, including, but not limited to, contributions thereto with respect to
the plan year ending immediately prior to the Closing.
(f) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan
as defined in Section 3(3) of ERISA to which Seller or any entity related to
Seller (under the terms of Section 414(b), (c), (m) or (o) of the Code)
contributes or to which Seller or any entity related to Seller (under the terms
of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
otherwise is bound which provides benefits to persons employed or previously
employed at the Station; (ii) "Code" shall mean the Internal Revenue Code of
1986, as amended, any successor thereto and any regulations promulgated
thereunder; (iii) "Compensation Arrangement" shall mean any plan or
compensation arrangement other than an Employee Plan, whether written or
unwritten, which provides to employees, former employees, officers, directors
and shareholders of Seller or any entity related to Seller (under the terms of
Section 414(b), (c), (m) or (o) of the Code) employed or previously employed at
the Station any compensation or other benefits, whether deferred or not, in
excess of base salary or wages, including, but not limited to, any bonus or
incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other employee
fringe benefit plan; (iv) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, any successor thereto and any regulations
promulgated thereunder; and (v) "Multi-employer Plan" means a plan, as
defined in ERISA Section 3(37), to which Seller or any entity related to Seller
(under the terms of Section 414(b) or (c) of the Code) contributes or is
required to contribute.
(g) Seller is not a party to or subject to any collective
bargaining agreements with respect to the Station. Seller has no written or
oral contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7. Seller has complied with all laws, rules, and
regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and Seller has
not received any notice alleging that it has failed to comply in any material
respect with any such laws, rules, or regulations. No controversies, disputes,
or proceedings are pending or, to the best of Seller's knowledge, threatened,
between Seller and any employee (singly or collectively) of the Station. No
labor union or other collective bargaining unit represents or claims to
<PAGE> 18
- 12 -
represent any of the employees of the Station. To the best of Seller's
knowledge, there is no union campaign being conducted to represent any
employees of the Station or to solicit cards from employees to authorize a
union to request a National Labor Relations Board certification election with
respect to any employees at the Station.
3.14 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. To Seller's knowledge, there are no
governmental investigations or other legal, administrative, or tax proceedings
pursuant to which Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Station, and no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.15 Claims and Legal Actions. Except for any investigations or
rulemaking proceedings generally affecting the broadcasting industry and as set
forth on Schedule 3.15, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative, or tax
proceeding, nor any order, decree or judgment, in progress or pending, or to
the knowledge of Seller threatened, against or relating to Seller with respect
to its ownership or operation of the Station or otherwise relating to the
Assets or the business or operations of the Station, nor does Seller know or
have reason to be aware of any basis for the same. In particular, but without
limiting the generality of the foregoing and except as set forth on Schedule
3.15, there are no applications, complaints or proceedings pending or, to the
best of its knowledge, threatened (i) before the FCC relating to the business
or operations of the Station other than rule making proceedings which affect
the radio industry generally, (ii) before any federal or state agency relating
to the business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.16 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
<PAGE> 19
- 13 -
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis related to the past or present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property
or facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not exposed any employee to any substance or
condition that could form the basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the common law or pursuant to statute) against Seller giving rise to any
such liability) for any illness or personal injury to any employee.
(f) In connection with its ownership or operation of the
Station, Seller has obtained and been in compliance in all material respects
with all of the terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution,
<PAGE> 20
- 14 -
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.17 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. To the best of Seller's knowledge, neither the
ownership or use of the properties of the Station nor the conduct of the
business or operations of the Station conflicts with the rights of any other
person or entity.
3.18 Transactions with Affiliates. Seller has not been involved in
any business arrangement or relationship relating to the Station with any
affiliate of Seller which jointly with all such business arrangements or
relationships or separately has or is reasonably likely to have a material
adverse effect on the Station. As used in this paragraph, "affiliate" has the
meaning set forth in Rule 12b-2 promulgated under the Securities and Exchange
Act of 1934.
3.19 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement,
except for a commission payable by Seller to Media Venture Partners.
3.20 Prior Ownership by Buyer. Seller acquired the Station, some
of the Assets and the Licenses from Buyer on May 6, 1993. Accordingly,
notwithstanding any other representation, warranty, covenant or provision
contained in this Agreement to the contrary, Seller makes no representation or
warranty relating to the Station, the Assets acquired from Buyer or the
Licenses with respect to the periods prior to May 6, 1993.
3.21 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
<PAGE> 21
- 15 -
4.1 Organization, Standing, and Authority. Buyer is a limited
partnership duly organized, validly existing, and in good standing under the
laws of the State of Florida. Buyer has all requisite power and authority to
execute and deliver this Agreement and the Escrow Agreement and the documents
contemplated hereby and thereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Buyer
hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Buyer
have been duly authorized by all necessary actions on the part of Buyer and its
partners. This Agreement and the Escrow Agreement have been duly executed and
delivered by Buyer and constitute the legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms
except as the enforceability of this Agreement and the Escrow Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and making any filing required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the Escrow Agreement
and the documents contemplated hereby and thereby (with or without the giving
of notice, the lapse of time, or both): (i) do not require the consent of any
third party; (ii) will not conflict with the Certificate of Limited Partnership
or Agreement of Limited Partnership of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
<PAGE> 22
- 16 -
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct (a) has been expressly delegated to Buyer pursuant to the
terms of the Time Brokerage Agreement or (b) would conflict with the following
covenants or with Seller's other obligations under this Agreement), and in
accordance with the other covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Assumed Contract (or waive any material right thereunder), or incur any
obligation (including obligations relating to the borrowing of money or the
guaranteeing of indebtedness) that will be binding on Buyer after Closing,
except for cash time sales agreements made in the ordinary course of business.
Prior to the Closing Date, Seller shall deliver to Buyer a list of all Assumed
Contracts entered into between the date of this Agreement and the Closing Date,
together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in the ordinary
course of Seller's business, where no longer used or useful in the business or
operations of the Station or in connection with the acquisition of replacement
property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Station.
<PAGE> 23
- 17 -
5.7 Rights. Seller shall not waive any material right relating to
the Station or any of the Assets.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, including inspections incident to the environmental study
described in Section 6.5 and the engineering study described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Station that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Station). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees,
counsel, accountants and other representatives for the purpose of preparing and
auditing such financial statements as Buyer determines, in its sole judgment,
are required or advisable to comply with federal or state securities laws and
the rules and regulations of securities markets as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and
take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice.. Seller shall maintain inventories of spare
parts and expendable supplies at levels consistent with past practices.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets through the Closing Date.
5.12 Consents. Seller shall use its best efforts to obtain the
Consents without any change in the terms or conditions of any Contract or
License that could be less advantageous to the Station than those pertaining
under the Contract or License as in effect on the date of this Agreement.
Seller shall promptly advise Buyer of any difficulties experienced in obtaining
any of the Consents and of any conditions proposed, considered, or requested
for any of the Consents. Upon Buyer's request, Seller shall cooperate with
Buyer to obtain from the lessors under each Real Property lease such estoppel
certificates and consents to the collateral assignment of the lessee's interest
under each such lease as Buyer's senior lenders may request. Any provision of
this Agreement to the contrary notwithstanding, this
<PAGE> 24
- 18 -
Agreement shall not constitute an agreement to assign any claim, contract,
lease, agreement, license, commitment or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof
or in any way materially and adversely affect the rights of Buyer or Seller
thereunder. If such consent is not obtained, or if an attempted assignment
thereof would be ineffective or would materially and adversely affect the
rights of Seller thereunder so that Buyer would not in fact receive all such
rights, Seller will cooperate with Buyer in any arrangement reasonably
satisfactory to the parties (and at no out-of-pocket expense to Seller or
Buyer) designed to provide for Buyer the benefits under any such claims,
contracts, licenses, agreements, licenses or commitments, including enforcement
for the benefit of Buyer of any and all rights of Seller against the third
party thereto arising out of the breach or cancellation by such third party or
otherwise, and any transfer or assignment to Buyer by Seller of any property or
property rights or any contract, lease or agreement which shall require the
consent or approval of any third party, shall be made subject to such consent
or approval being obtained. Nothing contained in this Section 5.12 shall
affect the condition to the obligation of Buyer to close under Section 7.1(c).
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly, after becoming aware
thereof, notify Buyer in writing of any unusual or material developments with
respect to the business or operations of the Station, and of any material
change in any of the information contained in Seller's representations and
warranties contained in Section 3 of this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within
twenty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a
statement of operating cash flow for the month just ended and such other
financial information (including information on payables and receivables) as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to its
ownership and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain
<PAGE> 25
- 19 -
good title to the Assets leased by Seller pursuant to those leases so that
those Assets shall be transferred to Buyer at Closing free of any interest of
the lessors.
5.18 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes that in the good faith judgment of the Seller are
required by the public interest and such changes in programming that result
from the transactions contemplated by the Time Brokerage Agreement.
5.19 Preservation of Business. Except in the event that the
business and organization of the Station has been delegated to Buyer pursuant
to the Time Brokerage Agreement, Seller shall use its best efforts to preserve
the business and organization of the Station and use its best efforts to keep
available to the Station its present employees and to preserve the audience of
the Station and the Station's present relationships with suppliers,
advertisers, and others having business relations with it, to the end that the
business, operations, and prospects of the Station shall be substantially
unimpaired at the Closing Date. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Station shall
be maintained.
5.20 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within seven (7) days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application as expeditiously as
practicable and shall oppose any objections to the grant of the application for
the FCC Consent. Each party agrees to comply with any condition imposed on it
by the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of
<PAGE> 26
- 20 -
the FCC Consent. If the Closing shall not have occurred for any reason within
the original effective period of the FCC Consent, and neither party shall have
terminated this Agreement under Section 9, the parties shall jointly request an
extension of the effective period of the FCC Consent. No extension of the FCC
Consent shall limit the exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
(other than a loss, damage or impairment arising while the Time Brokerage
Agreement is in effect) shall be borne by Seller at all times prior to the
Closing. If any loss, damage, impairment, confiscation or condemnation of any
of the Assets that is not described in Section 6.3(b) occurs while the Time
Brokerage Agreement is not in effect, Seller shall repair, replace or restore
the Assets to their prior condition as represented in this Agreement as soon
thereafter as possible, and Seller shall use the proceeds of any claim under
any insurance policy or from any condemnation award solely to repair, replace
or restore any such Assets.
(b) Except in the event the Time Brokerage Agreement is
in effect, if any damage or destruction of the Assets or any other event occurs
which prevents signal transmission by the Station in the normal and usual
manner and Seller cannot restore or replace the Assets so that such conditions
are cured and normal and usual transmission is resumed before the Closing Date,
the Closing Date shall be postponed, at Buyer's option, for a period of up to
sixty (60) days, to permit the repair or replacement of the damage or loss.
(c) Except in the event the Time Brokerage Agreement is
in effect, in the event of any damage or destruction of the Assets described
above, if such Assets have not been restored or replaced and the Station's
normal and usual transmission resumed within the sixty (60) day period
specified above, Buyer may terminate this Agreement forthwith without any
further obligation hereunder by written notice to Seller. Alternatively, Buyer
may, at its option, proceed to close this Agreement and complete the
restoration and replacement of such damaged Assets at Buyer's expense after the
Closing Date, in which event Seller promptly shall deliver to Buyer following
receipt thereof all insurance proceeds received prior to or after Closing in
connection with such damage or destruction of the Assets without limitation as
to the costs and expenses arising in connection with such restoration and
replacement.
<PAGE> 27
- 21 -
(d) Except in the event the Time Brokerage Agreement is
in effect, notwithstanding any of the foregoing, Buyer may terminate this
Agreement forthwith by written notice to Seller if any event within the control
of Seller occurs which prevents signal transmission by the Station in the
normal and usual manner for a continuous period of three (3) days from the date
hereof through the Closing Date.
(e) If any loss, damage, impairment, destruction,
confiscation or condemnation of the Assets occur while the Time Brokerage
Agreement is in effect, Buyer shall, subject to satisfaction of the conditions
of Closing of Buyer, proceed to close this Agreement and Seller shall promptly
deliver to Buyer upon receipt thereof all insurance or condemnation award
proceeds received prior to or after the Closing in connection with such loss,
damage, impairment, destruction, confiscation or condemnation of the Assets,
without limitation as to the costs and expenses, arising in connection with the
restoration and replacement of such Assets.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the survey discloses any material
deficiencies in the operations or equipment of the Station, Buyer shall so
notify Seller as soon as practicable.
6.6 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
reasonably necessary and desirable to the implementation and consummation of
this Agreement, and otherwise use their best efforts to consummate the
transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i)
to expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto.
<PAGE> 28
- 22 -
6.7 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Florida shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.8 Sales Tax Filings. Seller shall continue to file Florida
sales tax returns with respect to the Station in accordance with Seller's past
practices and shall concurrently deliver copies of all such returns to Buyer.
6.9 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets that are not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of three years from the Closing Date any books and records relating to the
Assets.
6.10 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of radio station assets.
6.11 HSR Act Filing. Seller and Buyer agree to (a) file, or cause
to be filed, with the U.S. Department of Justice ("DOJ") and Federal Trade
Commission ("FTC") all filings, if any, which are required in connection with
the transactions contemplated hereby under the HSR Act within ten (10) business
days of the date of this Agreement; (b) submit to the other party, prior to
filing, their respective HSR Act filings to be made hereunder, and to discuss
with the other any comments the reviewing party may have; (c) cooperate with
each other in connection with such HSR Act filings, which cooperation shall
include furnishing the other with any information or documents in such party's
possession that may be reasonably required in connection with such filings; (d)
promptly file, after any request by the FTC or DOJ, any information or
documents requested by the FTC or DOJ; and (e) furnish each other with any
correspondence from or to, and notify each other of any other communications
with, the FTC or DOJ which relates to the transactions contemplated hereunder,
and to the extent practicable, to permit each other to participate in any
conferences with the FTC or DOJ.
6.12 Cancellation Notices. Seller shall send cancellation notices
to the other party to the Assumed Contracts set forth on Schedule 6.12 hereto
within five business days of the later of (i) the filing of the application
with the FCC or (ii) the effective date of the Time Brokerage Agreement
indicating that Seller intends to cancel such contracts upon expiration of
their current term without renewal of such contracts. This covenant shall not
affect
<PAGE> 29
- 23 -
Buyer's obligation hereunder to assume such Assumed Contracts in accordance
with Section 2.5 hereof.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents under Contracts listed as
Material Assumed Contracts on Schedule 3.7 shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have a materially adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending or
threatened the effect of which could be to revoke, cancel, fail to renew,
suspend, or modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Except in the event the Time
Brokerage Agreement is in effect, (i) between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the
Tangible Personal Property, Leased Property or Licenses of the Station,
including any damage, destruction, or loss affecting any assets used or useful
in the conduct of the business of the Station and (ii) between the date of this
<PAGE> 30
- 24 -
Agreement and the date of filing of the application for the FCC Consent, there
shall have been no material adverse change in the business of the Station.
(h) Time Brokerage Agreement. Seller shall have
performed in all material respects its obligations under the Time Brokerage
Agreement.
(i) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
(j) Studio Lease. Buyer shall have either (i) entered
into a lease agreement with Adventist Health System pursuant to which Buyer
shall lease from Adventist Health System studio space for the Station in
Seller's existing studio building for the period commencing on the Closing Date
and ending on December 31, 1996, at a monthly rental of $4,695 and upon such
other terms and conditions that are reasonably acceptable to Buyer or (ii)
sublet Seller's studio space for the period commencing on the Closing Date and
ending December 31, 1996 at a monthly rental of $4,695.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) Time Brokerage Agreement. Buyer shall have performed
in all material respects its obligations under the Time Brokerage Agreement.
(f) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
<PAGE> 31
- 25 -
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order, subject to satisfaction or
waiver of all other conditions precedent to the holding of the Closing. If
Buyer fails to specify the date for Closing prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances,
except for those arising pursuant to the terms of the Assumed Contracts or for
liens for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Leased
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by an officer of Seller,
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
<PAGE> 32
- 26 -
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations of the Station;
(f) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(h)
hereto;
(g) Lenders Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts insofar as they
relate to the time on and after the Closing Date or arise out of events
occurring on or after the Closing Date and with respect to Paxson Liabilities,
insofar as they relate to the time prior to May 6, 1993 or arise out of events
occurring prior to May 6, 1993;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by an officer of Buyer's general
partner, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date, and (2) that Buyer
has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
<PAGE> 33
- 27 -
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 31, 1997.
(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer has failed to cure or commenced
to cure any material breach of any of its representations, warranties or
covenants under this Agreement within fifteen days after Buyer received written
notice of such breach from Seller.
(e) Time Brokerage Agreement. Upon Seller's termination
of the Time Brokerage Agreement in accordance with Section 6.1A(b) thereof.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 31, 1997.
(d) Interruption of Service. Except in the event the
Time Brokerage Agreement is in effect, if any event within the control of
Seller shall have occurred that prevented signal transmission of the Station in
the normal and usual manner for a continuous period of three days.
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs within 30 days prior to the Closing
Date, and the cause thereof shall not have been remedied prior to the Closing
Date.
<PAGE> 34
- 28 -
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
(g) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller has failed to cure or commenced
to cure any material breach of any of its representations, warranties or
covenants under this Agreement within fifteen days after Seller received
written notice of such breach from Buyer.
(h) Time Brokerage Agreement. Upon Buyer's termination
of the Time Brokerage Agreement in accordance with Section 6.1A(b) thereof.
9.3 Rights on Termination.
(a) If this Agreement is terminated pursuant to
Section 9.1 or Section 9.2 and neither party is in material breach of this
Agreement, except as provided in Section 9.3(b), the parties hereto shall not
have any further liability to each other with respect to the purchase and sale
of the Assets.
(b) If this Agreement is terminated other than
pursuant to Section 9.1(a) for failure to satisfy the conditions precedent
described in Section 7.2(d) or (f), 9.1(b) or 9.1(c) (in each such case if
Buyer is not in material breach of this Agreement) or Section 9.2(a) for
failure to satisfy the conditions precedent described in Section 7.1(a), (b),
(d), (e) or (i), 9.2(b) or 9.2(h) (if the reason for Buyer's termination of the
Time Brokerage Agreement was due to Seller's failure to provide broadcast time
to Buyer in accordance with Section 1.3 thereof), then the payment to Seller of
Two Million Five Hundred Thousand Dollars ($2,500,000) pursuant to Section 9.4
below shall be liquidated damages and shall constitute full payment and the
exclusive remedy for any damages suffered by Seller by reason of a termination
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of $2,500,000 is a fair and
equitable amount to reimburse Seller for damages sustained due to a termination
of this Agreement. If this Agreement is terminated by Buyer due to Seller's
material breach of this Agreement, and all of the conditions precedent to
Seller's obligations have been satisfied, Buyer shall have all rights and
remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the
sum of $2,500,000 in accordance with the Escrow Agreement. All such funds
deposited with the Escrow Agent shall be held and disbursed in accordance with
the terms of the Escrow Agreement and the following provisions:
<PAGE> 35
- 29 -
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1(a) for failure to satisfy the conditions precedent described in Section
7.2(d) or (f), 9.1(b) or 9.1(c) (provided in each such case that Buyer is not
in material breach of this Agreement), or Section 9.2(a) for failure to satisfy
the conditions precedent described in Section 7.1(a), (b), (d), (e) or (i),
9.2(b) or 9.2(h) (if the reason for Buyer's termination of the Time Brokerage
Agreement was due to Seller's failure to provide broadcast time to Buyer in
accordance with Section 1.3 thereof), then all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(c) If this Agreement is terminated other than as set
forth in Section 9.4(b) above, $2,500,000 of the amount held by the Escrow
Agent pursuant to the Escrow Agreement shall be disbursed to or at the
direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow
Agent shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
<PAGE> 36
- 30 -
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date, except for Paxson
Liabilities arising prior to May 6, 1993.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
<PAGE> 37
- 31 -
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) The indemnification rights provided in
Sections 10.2 and 10.3 shall expire one (1) year following the Closing with
respect to claims asserted on behalf of the parties to this Agreement, but not
as to third party claims.
<PAGE> 38
- 32 -
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of (a) all filing fees required by the FCC in
connection with the FCC Consent, and (b) all filing fees required by the FTC
and/or DOJ under the HSR Act. Except as otherwise provided in this Agreement,
each party shall pay its own expenses incurred in connection with the
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives. Seller shall pay at the Closing all brokerage fees and
commissions payable to Media Venture Partners, and each party shall be
responsible for all fees or commissions payable to any other finder, broker,
advisor, or similar person retained by or on behalf of such party.
11.2 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. Rich Morena
Press Broadcasting Company
3601 Highway 66
Neptune, New Jersey 07754
<PAGE> 39
- 33 -
With a copy to: Eric Michaels, Esq.
Witman, Stadtmauer & Michaels, P.A.
26 Columbia Turnpike
Florham Park, New Jersey 07932
If to Buyer: Lowell W. Paxson, Chairman
Paxson Broadcasting of Orlando, Limited Partnership
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.3 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Seller's prior
approval. Notwithstanding any such assignment, Buyer shall not be relieved of
any liability hereunder unless and until it shall have obtained the prior
written consent of Seller. Upon any permitted assignment by Buyer or Seller in
accordance with this Section 11.4, all references to "Buyer" herein shall be
deemed to be references to Buyer's assignee and all references to "Seller"
herein shall be deemed to be references to Seller's assignee, as the case may
be. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
11.4 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
<PAGE> 40
- 34 -
11.6 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.7 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.8 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.9 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.10 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement, the Time Brokerage Agreement or the transactions
contemplated hereby or thereby without the prior written consent of the other
party; provided, however, that nothing contained herein shall prevent either
party from promptly making all filings with governmental authorities as may, in
its judgement be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 41
- 35 -
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON BROADCASTING OF ORLANDO,
LIMITED PARTNERSHIP
By: Paxson Communications of Florida, Inc.,
its General Partner
By: /s/ William L. Watson
-------------------------------
Name: William L. Watson
Title: Secretary
PRESS BROADCASTING COMPANY
By: /s/ Robert E. McAllan
-----------------------------------
Name: Robert E. McAllan
Title: President
<PAGE> 1
EXHIBIT 10.93
- --------------------------------------------------------------------------------
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
PRESS BROADCASTING COMPANY, INC.
AND
PAXSON BROADCASTING OF ORLANDO, LIMITED PARTNERSHIP
FOR
RADIO STATION WTKS(FM)
COCOA BEACH, FLORIDA
* * *
MAY 31, 1996
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. LEASE OF STATION AIR TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Option to Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Licensee Operation of the Station. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Licensee Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Programmer Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Licensee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Additional Licensee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Responsibility for Employees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. STATION PROGRAMMING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Broadcast Station Programming Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Licensee Control of Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Programmer Compliance with Copyright Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Payola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Cooperation on Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Staffing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Trade and Barter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Programmer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Licensee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Time Brokerage Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Confidential Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Political Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.11 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.13 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
- ii -
<PAGE> 4
TIME BROKERAGE AGREEMENT
TIME BROKERAGE AGREEMENT, made this 31st day of May, 1996, by and
between PRESS BROADCASTING COMPANY, INC., a New Jersey corporation (the
"Licensee") and PAXSON BROADCASTING OF ORLANDO, LIMITED PARTNERSHIP, a Florida
limited partnership (the "Programmer").
WHEREAS, Licensee is the owner and operator of Radio Station WTKS(FM),
Cocoa Beach, Florida (the "Station") pursuant to authorizations issued by the
Federal Communications Commission ("FCC").
WHEREAS, Programmer is involved in radio station ownership and
operation and has entered into an Asset Purchase Agreement with Licensee to
purchase the Station;
WHEREAS, the Licensee wishes to retain Programmer to provide
programming for the Station that is in conformity with the Station's policies
and procedures, FCC policies for time brokerage arrangements, and the
provisions hereof.
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station.
WHEREAS, Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and
Programmer represent that they are legally qualified, empowered and able to
enter into this Agreement and that the execution, delivery, and performance
hereof shall not constitute a breach or violation of any material agreement,
contract or other obligation to which either party is subject or by which it is
bound.
1.2 Effective Date; Term. The effective date of
this Agreement shall be June 17, 1996 (the "Effective Date") and it shall
continue in force for an initial term of twelve months from that date unless
otherwise extended or terminated as set forth below.
<PAGE> 5
- 2 -
1.3 Scope. During the term of this Agreement and any
renewal thereof, Licensee shall make available to Programmer broadcast time
upon the Station as set forth in this Agreement. Programmer shall deliver such
programming, at its expense, to the Station's transmitter facilities or other
authorized remote control points as reasonably designated by Licensee.
Programmer shall have the right to produce its programming (including
commercial amounts and related production activities) from the Licensee's
existing studio and production facilities. Subject to Licensee's reasonable
approval, as set forth in this Agreement, Programmer shall provide programming
of Programmer's selection complete with commercial matter, news, public service
announcements and other suitable programming to the Licensee up to one hundred
sixty two hours per week. Programmer agrees to substantially continue or
maintain the existing programming of the Station during the hours of 5:58 a.m.
to 9:00 p.m. Monday through Sunday; provided, however, that the parties
recognize that Programmer at its sole discretion shall have the right to
discontinue the program "Passion Phones". Notwithstanding the foregoing, the
Licensee may designate such additional time as it may require without any
adjustment of the monthly consideration to be paid to Licensee under Section
1.5 for the broadcast of programming necessary for the Station to broadcast
news, public affairs, religious and non-entertainment programming as required
by the FCC. All program time not reserved by or designated for Licensee shall
be available for use by Programmer and no other party.
1.4 Option to Renew. Subject to the termination
provisions of Section 6 hereof, this Agreement may be renewed for an additional
term as mutually agreed upon by the Licensee and the Programmer.
1.5 Consideration. As consideration for the air
time made available hereunder Programmer shall make payments to Licensee as set
forth in Attachment I.
1.6 Licensee Operation of the Station. Licensee
will have full authority, power and control over the management and operations
of the Station during the term of this Agreement and during any renewal of such
term. Licensee will bear all responsibility for the Station's compliance with
all applicable provisions of the Communications Act of 1934, as amended (the
"Act"), the rules, regulations and policies of the FCC and all other applicable
laws. Licensee shall be solely responsible for and pay in a timely manner all
customary operating costs of the Station, including but not limited to
maintenance of the studio and transmitting facility and costs of electricity,
except that Licensee shall be entitled to reimbursement pursuant to Attachment
I hereof and Programmer shall be responsible for the costs of its programming
and its personnel as provided in Sections 1.8 and 2.3 hereof. Licensee shall
employ at its expense management level and other employees consisting of a
General Manager and such operational and other personnel who will direct the
day-to-day operations of the Station, and who will report to and be accountable
to the Licensee.
<PAGE> 6
- 3 -
Licensee shall be responsible for the salaries, taxes, insurance and related
costs for all personnel employed by the Station and shall maintain the
insurance coverage existing on the date hereof on the Station's transmission
facilities. During the term of the Agreement and any renewal hereof,
Programmer agrees to perform, without charge, routine monitoring of the
Station's transmitter performance and tower lighting by remote control, if and
when requested by Licensee.
1.7 Licensee Representations and Warranties.
Licensee represents and warrants as follows:
(a) Licensee owns and holds or will hold all licenses and
other permits and authorizations necessary for the operation of the Station,
and such licenses, permits and authorizations are and will be in full force and
effect throughout the term of this Agreement. Except as set forth on Schedule
1.7(a) hereto, there is not now pending, or to Licensee's best knowledge,
threatened, any action by the FCC or by any other party to revoke, cancel,
suspend, refuse to renew or modify adversely any of such licenses, permits or
authorizations. Licensee is not in material violation of any statute,
ordinance, rule, regulation, policy, order or decree of any federal, state or
local entity, court or authority having jurisdiction over it or the Station,
which would have a material effect upon the Licensee, the Station or upon
Licensee's ability to perform this Agreement. Licensee shall not take any
action or omit to take any action which would have a material impact upon the
Licensee, the Station or upon Licensee's ability to perform this Agreement.
All reports and applications required to be filed with the FCC or any other
governmental body have been, and during the course of the term of this
Agreement or any renewal thereof, will be filed in a timely and complete
manner. During the term of this Agreement and any renewal thereof, Licensee
shall not dispose of, transfer, assign or pledge any of Licensee's assets and
properties without the prior written consent of the Programmer which consent
shall not be unreasonably withheld, if such action would have a materially
adverse effect on Licensee's performance hereunder or the business and
operations of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including salaries and benefits of
its two employees, lease payments, utilities, taxes, programming expenses,
etc., as set forth in Attachment II (except those for which a good faith
dispute has been raised with the vendor or taxing authority), and shall provide
Programmer with a certificate of such timely payment within thirty (30) days of
the end of each month and Programmer shall reimburse Licensee for those
payments pursuant to the procedures set forth in Attachments I and II hereof.
<PAGE> 7
- 4 -
1.8 Programmer Responsibility. Programmer shall
be solely responsible for any expenses incurred in the origination and/or
delivery of programming from any remote location and for any publicity or
promotional expenses incurred by Programmer, including, without limitation,
ASCAP and BMI music license fees for all programming provided by Programmer and
shall employ and be responsible for the salaries, commission, taxes, insurance
and all other related expenses for all personnel involved in the production and
broadcast of its Programs (including but not limited to air personalities,
outside air talent, including syndicated programming, engineering personnel,
sales personnel, traffic personnel, board operators and other programmers and
production staff members). Such payments by Programmer shall be in addition to
any other payments to be made by Programmer under this Agreement. Programmer
shall comply in all material respects with the terms of the Station's contracts
providing for the talent services of Jim Philips, Ed Tyll and Howard Stern and
shall keep in full force and effect such contracts during the term hereof
unless the term of such contracts expires in the ordinary course prior to the
termination of this Agreement.
1.9 Contracts. Programmer will enter into no
third-party contracts, leases or agreements which will bind Licensee in any way
except with Licensee's prior written approval.
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any
other provision of this Agreement, Programmer recognizes that Licensee has
certain obligations to broadcast programming to meet the needs and interests of
listeners in Cocoa Beach, Florida, the Station's service area. From time to
time the Licensee shall air specific programming on issues of importance to the
local community. Nothing in this Agreement shall abrogate the unrestricted
authority of the Licensee to discharge its obligations to the public and to
comply with the Act and the rules and policies of the FCC.
2.2 Additional Licensee Obligations. Although
both parties shall cooperate in the broadcast of emergency information over the
Station, Licensee shall also retain the right to interrupt Programmer's
programming in case of an emergency or for programming which, in the good faith
judgment of Licensee, is of greater local or national public importance.
Licensee shall also coordinate with Programmer the Station's hourly Station
identification and any other announcements required to be aired by FCC rules.
Licensee shall continue to maintain a main studio, as that term is defined by
the FCC, within the Station's principal community contour, shall maintain its
local public inspection file in accordance with FCC rules, regulations and
policies, and shall prepare and place in such inspection file or files in a
timely manner all material required by Section 73.3526 of the
<PAGE> 8
- 5 -
FCC's Rules, including without limitation the Station's quarterly issues and
program lists. Programmer shall, upon request by Licensee, provide Licensee
with such information concerning Programmer's programs and advertising as is
necessary to assist Licensee in the preparation of such information. Licensee
shall also maintain the Station's logs, receive and respond to telephone
inquiries, and control and oversee any remote control point which may be
established for the Station.
2.3 Responsibility for Employees and Expenses.
Programmer shall employ and be solely responsible for the salaries, commission,
taxes, insurance and related costs for all personnel used in the production of
its programming (including, but not limited to, salespeople, technical staff,
traffic personnel, board operators, programming staff and air personalities).
Licensee will provide and be responsible for the Station's personnel necessary
for the broadcast transmission of its own programs (including, without
limitation, the Station's General Manager and such operational and other
personnel as may be necessary or appropriate), and will be responsible for the
salaries, taxes, benefits, insurance and related costs for all the Licensee's
employees used in the broadcast transmission of its programs and necessary to
other aspects of the Station operation. Whenever on the Station's premises,
all personnel shall be subject to the overall supervision of Licensee's General
Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy
Statement. Licensee has adopted and will enforce a Broadcast Station
Programming Policy Statement (the "Policy Statement"), a copy of which appears
as Attachment III hereto and which may be amended in a reasonable manner from
time to time by Licensee upon notice to Programmer. Programmer agrees and
covenants to comply in all material respects with the Policy Statement, to all
rules and regulations of the FCC, and to all changes subsequently made by
Licensee or the FCC. Programmer shall furnish or cause to be furnished the
artistic personnel and material for the programs as provided by this Agreement
and all programs shall be prepared and presented in conformity with the rules,
regulations and policies of the FCC and with the Policy Statement set forth in
Attachment III hereto. All advertising spots and promotional material or
announcements shall comply with applicable federal, state and local regulations
and policies and shall be produced in accordance with quality standards
established by Programmer. If Licensee determines that a program supplied by
Programmer is for any reason, within Licensee's sole discretion, unsatisfactory
or unsuitable or contrary to the public interest, or does not comply with the
Policy Statement it may, upon prior written notice to Programmer (to the extent
time permits such notice), suspend or cancel such program without liability to
Programmer. Licensee will use reasonable efforts to provide such written
notice to Programmer prior to the suspension or cancellation of such program.
<PAGE> 9
- 6 -
3.2 Licensee Control of Programming. Programmer
recognizes that the Licensee has full authority to control the operation of the
Station. The parties agree that Licensee's authority includes but is not
limited to the right to reject or refuse such portions of the Programmer's
programming which Licensee believes to be unsatisfactory, unsuitable or
contrary to the public interest. Programmer shall have the right to change the
programming supplied to Licensee and shall give Licensee at least twenty-four
(24) hours notice of substantial and material changes in such programming.
3.3 Programmer Compliance with Copyright Act.
Programmer represents and warrants to Licensee that Programmer has full
authority to broadcast its programming on the Station, and that Programmer
shall not broadcast any material in violation of the Copyright Act. All music
supplied by Programmer shall be: (i) licensed by ASCAP, SESAC or BMI; (ii) in
the public domain; or (iii) cleared at the source by Programmer. Licensee will
maintain ASCAP, BMI and SESAC licenses as necessary. The right to use the
programming and to authorize its use in any manner shall be and remain vested
in Programmer.
3.4 Sales. Programmer shall retain all of the
Station's network compensation revenues, any revenues received from any network
or program supplier with respect to affiliation or use of programming by
Programmer, and all revenues from the sale of advertising time within the
programming it provides to the Licensee. Programmer shall be responsible for
payment of all expenses attributable thereto, including, but not limited to,
the commissions due to any national sales representative engaged by it for the
purpose of selling national advertising which is carried during the programming
it provides to Licensee. Unless otherwise agreed between the parties, Licensee
shall retain all revenues from the sale of Station's advertising during the
hours each week in which the Licensee airs its own programming pursuant to
Section 1.3 hereof.
3.5 Payola. Programmer agrees that it will not
accept any consideration, compensation, gift or gratuity of any kind
whatsoever, regardless of its value or form, including, but not limited to, a
commission, discount, bonus, material, supplies or other merchandise, services
or labor (collectively "Consideration"), whether or not pursuant to written
contracts or agreements between Programmer and merchants or advertisers, unless
the payer is identified in the program for which Consideration was provided as
having paid for or furnished such Consideration, in accordance with the Act and
FCC requirements. Programmer agrees to annually, or more frequently at the
request of the Licensee, execute and provide Licensee with a Payola Affidavit
from each of its employees involved with the Station substantially in the form
attached hereto as Attachment IV.
<PAGE> 10
- 7 -
3.6 Cooperation on Programming. Programmer and
Licensee mutually acknowledge their interest in ensuring that the Station serve
the needs and interests of listeners in Cocoa Beach and the surrounding service
area and agree to cooperate to provide such service. Licensee shall, on a
regular basis, assess the issues of concern to residents of Cocoa Beach and the
surrounding area and address those issues in its public service programming.
Programmer, in cooperation with Licensee, will endeavor to ensure that
programming responsive to the needs and interests of the community of license
and surrounding area is broadcast, in compliance with applicable FCC
requirements. Licensee will describe those issues and the programming that is
broadcast in response to those issues and place issues/programs lists in the
Station's public inspection file as required by FCC rules. Further, Licensee
may request, and Programmer shall provide, information concerning such of
Programmer's programs as are responsive to community issues so as to assist
Licensee in the satisfaction of its public service programming obligations.
Programmer shall also provide Licensee upon request such other information
necessary to enable Licensee to prepare records and reports required by the
Commission or other local, state or federal government entities.
3.7 Staffing Requirements. Licensee will be in
full compliance with the main studio staff requirements as specified by the
FCC.
3.8 Accounts Receivable. As soon as practicable
after the Effective Date, Licensee shall deliver to Programmer a complete and
detailed list of all the Accounts Receivable of the Station. During the four
(4) month period following the Effective Date (the "Collection Period"),
Programmer shall use its best efforts, as Licensee's agent, to collect the
Accounts Receivable in the usual and ordinary course of business. Programmer
shall not be required to institute any legal proceedings to enforce the
collection of any Accounts Receivable or to refer any of the Accounts
Receivable to a collection agency. Programmer shall not adjust any Accounts
Receivable or grant credit without Licensee's written consent, and any amounts
collected pursuant to this Section during any calendar month shall be paid to
Licensee by the 10th of the following calendar month. Programmer further
agrees not to pledge, secure or otherwise encumber such Accounts Receivable or
the proceeds therefrom. On the first day of November, 1996, Programmer shall
turn back the uncollected Accounts Receivable, together with all files
concerning the collection or attempts to collect the Accounts Receivable, and
Programmer's responsibility and liability for the collection of the Accounts
Receivable shall cease. Unless otherwise specifically designated by the
customers, payments received from customers shall be applied first to
obligations such customers incurred up until midnight on the day prior to the
Effective Date and shall not be applied to any obligations incurred by such
customer after midnight on the Effective Date until the amount of the Accounts
Receivable has been paid in full, unless Accounts Receivable are disputed by
the account debtor, in which event such disputed Account
<PAGE> 11
- 8 -
Receivable, to the extent disputed, and all records pertaining thereto, shall
be turned back to Licensee for resolution within sixty (60) days. Programmer
shall incur no liability to Licensee for any uncollected account unless
Programmer shall have engaged in willful misconduct or gross negligence in the
collection of such account. During the Collection Period, except for disputed
accounts, neither Licensee nor its agents shall make any direct solicitation of
the account debtors for collections purposes. The accounting for the Accounts
Receivable shall follow the same method and practices as now employed by
Licensee for the Station, using where reasonable, the computer now being used
by Licensee, with Licensee's software programs, Licensee's General Manager
shall have the right to review and audit the Accounts Receivable record keeping
and collection process to verify the accuracy of the amount(s) to be paid over
the Licensee.
3.9 Trade and Barter. To the extent they are
assignable, Licensee shall on the Effective Date assign to Programmer all of
its trade and barter agreements for the sale of advertising time, other than
for cash, with respect to the Station, (the "Assigned Trade and Barter
Agreements"). If on the Effective Date, the aggregate value of the goods,
services or other items to be received by the Station on or after the Effective
Date under the Assigned Trade and Barter Agreements minus the aggregate value
of the Station's obligations on or after the Effective Date under the Assigned
Trade and Barter Agreements, is less than $30,000, then Buyer shall receive a
credit against the Monthly Fee (see Attachment I) for the amount of such
deficit. The liability of the Station for unperformed time for purposes of
this Section shall be valued according to the Station's prevailing rates as of
the Effective Date. Programmer shall be entitled to any goods, services, or
other items to be received after the Effective Date, and shall be obligated to
include in its programming and to air the advertising as required under the
trade, barter, or similar arrangement.
SECTION 4. INDEMNIFICATION
4.1 Programmer's Indemnification. Programmer
shall indemnify and hold harmless Licensee from and against any and all claims,
losses, costs, liabilities, damages, forfeitures and expenses (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature and description (collectively, "Damages") resulting from (i)
Programmer's breach of any representation, warranty, covenant or agreement
contained in this Agreement, or (ii) any action taken by Programmer or its
employees and agents with respect to the Station, or any failure by Programmer
or its employees and agents to take any action with respect to the Station,
including, without limitation, damages relating to violations of the Act or any
rule, regulation or policy of the FCC, slander, defamation or other claims
relating to programming provided by Programmer and Programmer's broadcast and
sale of advertising time on the Station.
<PAGE> 12
- 9 -
4.2 Licensee's Indemnification. Licensee shall
indemnify and hold harmless Programmer from and against any and all claims,
losses, consents, liabilities, damages, FCC forfeitures and expenses (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature and description, arising out of Licensee's operation of, and broadcasts
on, the Station to the extent permitted by law and any action taken by the
Licensee or its employees and agents with respect to the Station, or any
failure by Licensee or its employees and agents to take any action with respect
to the Station.
4.3 Limitation. Neither Licensee nor Programmer
shall be entitled to indemnification pursuant to this section unless such claim
for indemnification is asserted in writing delivered to the other party.
4.4 Procedure for Indemnification. The procedure
for indemnification shall be as follows:
(a) The party claiming indemnification (the
"Claimant") shall promptly give written notice to the party from which
indemnification is claimed (the "Indemnifying Party") of any claim, whether
between the parties or brought by a third party, specifying in reasonable
detail the factual basis for the claim. If the claim relates to an action,
suit, or proceeding filed by a third party against Claimant, such notice
shall be given by Claimant no later than five (5) business days after
written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the
parties, following receipt of notice from the Claimant of a claim, the
Indemnifying Party shall have thirty days to make such investigation of the
claim as the Indemnifying Party deems necessary or desirable. For the
purposes of such investigation, the Claimant agrees to make available to the
Indemnifying Party or its authorized representatives the information relied
upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree in writing at or prior to the expiration of the
thirty-day period (or any mutually agreed upon extenstion thereof) to the
validity and amount of such claim, the Indemnifying Party shall immediately
pay to the Claimant the full amount of the claim or such amount as agreed to
by the parties. If the Claimant and the Indemnifying Party do not agree
within the thirty-day period (or any mutually agreed upon extension thereof),
the Claimant may seek appropriate remedy under the arbitration provisions of
this Agreement, as applicable.
(c) With respect to any claim by a third party as
to which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
<PAGE> 13
- 10 -
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a
third party, requires immediate action, the parties will make every effort to
reach a decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided herein
shall extend to the shareholders, directors, officers, employees,
representatives and successors and assigns of any Claimant although for the
purpose of the procedures set forth in this Section 4.4, any indemnification
claims by such parties shall be made by and through the Claimant.
4.5 Time Brokerage Challenge. If this Agreement
is challenged at the FCC, whether or not in connection with the Station's
license renewal application, counsel for the Licensee and counsel for the
Programmer shall jointly defend the Agreement and the parties' performance
thereunder throughout all FCC proceedings at the sole expense of the
Programmer. If portions of this Agreement do not receive the approval of the
FCC Staff, then the parties shall reform the Agreement as necessary to satisfy
the FCC Staff's concerns or, at Programmer's option and expense, seek reversal
of the Staff's decision and approval from the full Commission or a court of
law.
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the
commencement of any programming by Programmer under this Agreement, Programmer
shall acquaint the Licensee with the nature and type of the programming to be
provided. Licensee shall be entitled to review at its discretion from time to
time on a confidential basis any of Programmer's programming material it may
reasonably request. Programmer shall promptly provide Licensee with copies of
all correspondence and complaints received from the public (including any
telephone logs of complaints called in), and copies of all program logs and
promotional materials. However, nothing in this section shall entitle Licensee
to review the internal corporate or financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate
with Licensee to assist Licensee in complying with all rules of the FCC
regarding political broadcasting. Licensee shall promptly supply to
Programmer, and Programmer shall promptly supply to
<PAGE> 14
- 11 -
Licensee, such information, including all inquiries concerning the broadcast of
political advertising, as may be necessary to comply with FCC rules and
policies, including the lowest unit rate, equal opportunities, reasonable
access, political file and related requirements of federal law. Licensee, in
consultation with Programmer, shall develop a statement which discloses its
political broadcasting policies to political candidates, and Programmer shall
follow those policies and rates in the sale of political programming and
advertising. In the event that Programmer fails to satisfy the political
broadcasting requirements under the Act and the rules and regulations of the
FCC and such failure inhibits Licensee in its compliance with the political
broadcasting requirements of the FCC, then to the extent reasonably necessary
to assure such compliance, Programmer shall either provide rebates to political
advertisers or release broadcast time and/or advertising availabilities to
Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination.
A. In addition to other remedies available at law or equity,
this Agreement may be terminated as set forth below by either Licensee or
Programmer by written notice to the other if the party seeking to terminate is
not then in material default or material breach hereof, upon the occurrence of
any of the following:
(a) subject to the provisions of Section 7.9,
this Agreement is declared invalid or illegal in whole or substantial part by
an order or decree of an administrative agency or court of competent
jurisdiction and such order or decree has become final and no longer subject to
further administrative or judicial review;
(b) the other party is in material breach of its
obligations hereunder and has failed to cure such breach within thirty (30)
days of notice from the non-breaching party;
(c) the mutual consent of both parties;
(d) there has been a material change in FCC
rules, policies or precedent that would cause this Agreement to be in violation
thereof and such change is in effect and not the subject of an appeal or
further administrative review and this Agreement cannot be reformed, in a
manner acceptable to Buyer and Seller, to remove and/or eliminate the
violation;
<PAGE> 15
- 12 -
(e) upon the sale of the Station to Programmer by
Licensee; or
(f) upon the termination by either party of the
Asset Purchase Agreement of even date herewith between Licensee and Programmer
pursuant to Section 9.1(c) or 9.2(c) of such Asset Purchase Agreement.
B. In the event that the Asset Purchase Agreement of
even date herewith between Licensee and Programmer is terminated under either
Section 9.1 or 9.2 of said Asset Purchase Agreement, this Agreement will
terminate as follows:
(i) If the termination occurs between
the first and fifteenth day of a
calendar month, this Agreement will
terminate on the last day of that
month;
(ii) If the termination occurs between
the 16th and last day of a calendar
month, this Agreement will terminate
on the last day of the following
month.
C. During any period prior to the effective date of any
termination of this Agreement, Programmer and Licensee agree to cooperate in
good faith to ensure that Station's operations will continue, to the extent
possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to
the extent possible, the resulting disruption of the Station's ongoing
operations.
6.2 Force Majeure. Any failure or impairment of the Station's
facilities or any delay or interruption in the broadcast of programs, or
failure at any time to furnish facilities, in whole or in part, for broadcast,
due to Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, or for power reductions necessitated for
maintenance of the Station or for maintenance of other Station located on the
tower from which the Station will be broadcasting, shall not constitute a
breach of this Agreement and Licensee will not be liable to Programmer for
reimbursement or reduction of the consideration owed to Licensee.
6.3 Other Agreements. During the term of this Agreement or any
renewal hereof, Licensee will not enter into any other agreement with any third
party that would conflict with or result in a material breach of this Agreement
by Licensee.
<PAGE> 16
- 13 -
SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
(b) Neither this Agreement nor any of the rights,
interests or obligations of either party hereunder shall be assigned,
encumbered, hypothecated or otherwise transferred without the prior written
consent of the other party, such consent not to be unreasonably withheld.
7.2 Call Letters. Upon request of Programmer,
subject to the consent of the Licensee, Licensee shall apply to the FCC for
authority to change the call letters of the Station (with the consent of the
FCC) to such call letters that Programmer shall reasonably designate. Licensee
must coordinate with Programmer any proposed changes to the call letters of the
Station before taking any action to change such letters.
7.3 Counterparts. This Agreement may be executed
in one or more counterparts, each of which will be deemed an original but all
of which together will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement and the
Attachments hereto embodies the entire agreement and understanding of the
parties relating to the operation of the Station. No amendment, waiver of
compliance with any provision or condition hereof, or consent pursuant to this
Agreement will be effective unless evidenced by an instrument in writing signed
by the parties.
7.5 Taxes. Licensee and Programmer shall each
pay its own ad valorem taxes, if any, which may be assessed on such party's
respective personal property for the periods that such items are owned by such
party. Programmer shall pay all taxes, if any, to which the consideration
specified in Section 1.5 herein is subject, provided that Licensee is
responsible for payment of its own income taxes.
7.6 Headings. The headings are for convenience
only and will not control or affect the meaning or construction of the
provisions of this Agreement.
7.7 Governing Law. The obligations of Licensee
and Programmer are subject to applicable federal, state and local law, rules
and regulations, including, but not limited to, the Act and the Rules and
Regulations of the FCC. The construction and
<PAGE> 17
- 14 -
performance of the Agreement will be governed by the laws of the State of
Florida. Both parties hereby waive their right to a trial by jury.
7.8 Notices. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, (ii) sent by telecopy (with receipt personally confirmed by
telephone), delivered by personal delivery, or sent by commercial delivery
service or certified mail, return receipt requested, (iii) deemed to have been
given on the date telecopied with receipt confirmed, the date of personal
delivery, or the date set forth in the records of the delivery service or on
the return receipt, and (iv) addressed as follows:
<TABLE>
<S> <C>
To Programmer: Paxson Broadcasting of Orlando, Limited
Partnership
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
To Licensee:
Press Broadcasting Company, Inc.
3601 Highway 66
Neptune, New Jersey 07754
Attention: Mr. Rich Morena
</TABLE>
7.9 Severability. If any provision of this
Agreement or the application thereof to any person or circumstances shall be
invalid or unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
In the event that the FCC alters or modifies its rules or policies in a fashion
which would raise substantial and material question as to the validity of any
provision of this Agreement, the parties hereto shall negotiate in good faith
to revise any such provision of this Agreement with a view toward assuring
compliance with all then existing FCC rules and policies which may be
applicable, while attempting to preserve, as closely as possible, the intent of
the parties as embodied in the provision of this Agreement which is to be so
modified.
7.10 Arbitration. Any dispute arising out of or
related to this Agreement that Licensee and Programmer are unable to resolve by
themselves shall be settled by arbitration in Orlando, Florida by a panel of
three arbitrators. Within ten business days after receipt of demand for
arbitration of either party, Programmer and Licensee shall each designate one
disinterested arbitrator, and the two arbitrators so designated shall select
the
<PAGE> 18
- 15 -
third arbitrator. If the two arbitrators are unable to agree as to the third
arbitrator within ten business days of their appointment, then such third
arbitrator shall be appointed by the American Arbitration Association upon
request of either party. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
within thirty days of the appointment of the third arbitrator. The written
decision of a majority of the arbitrators shall be final and binding on
Programmer and Licensee. The costs and expenses of the arbitration proceeding
shall be assessed between Programmer and Licensee in a manner to be decided by
a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not
paid within thirty days, may be entered in any court having jurisdiction over
the matter. No action at law or suit in equity based upon any claim arising
out of or related to this Agreement shall be instituted in any court by
Programmer or Licensee against the other except (i) an action to compel
arbitration pursuant to this Section, or (ii) an action to enforce the award of
the arbitration panel rendered in accordance with this Section.
7.11 No Joint Venture. Nothing in this Agreement
shall be deemed to create a joint venture between the Licensee and the
Programmer.
7.12 FCC Compliance. Licensee hereby certifies that it will
maintain ultimate control over the Station's facilities, including specifically
over Station finances, personnel and programming and Programmer certificates
that this Agreement complies with the provisions of the radio contour overlap
rule of Section 73.3555(a) of the FCC rules.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this Time
Brokerage Agreement the day and year first above written.
LICENSEE: PRESS BROADCASTING COMPANY
By: /s/ Robert E. McAllan
--------------------------------
Name: Robert E. McAllan
Title: President
PROGRAMMER: PAXSON BROADCASTING OF
ORLANDO, LIMITED PARTNERSHIP
By Paxson Communications of Florida, Inc.,
its General Partner
By: /s/ William L. Watson
----------------------------
Name: William L. Watson
Title: Secretary
<PAGE> 20
ATTACHMENT I
Compensation Schedule
Programmer shall pay Licensee, on a monthly basis, a fee of One
Hundred Forty Five Thousand Eight Hundred Thirty Three Dollars ($145,833.00)
("Monthly Fee"), payable in advance by the fifth day of each month. Programmer
shall also reimburse Licensee on a monthly basis for Licensee's payment of the
Station expenses included in Reimbursable Expenses as defined in Attachment II
hereof.
Payments and reimbursement shall be made delivery of a check to
Licensee at an address to be designated by Licensee.
<PAGE> 21
ATTACHMENT II
Station's Expenses
(1) Lease and Utility Payments
(2) Employee Salaries and Benefits (2 employees)
(3) Property Insurance and Taxes
(4) Business and Regulatory Fees and Licenses
(5) Miscellaneous Station Expenses
(6) Equipment Maintenance, and Repair
<PAGE> 22
ATTACHMENT III
Broadcast Station Programming Policy Statement
<PAGE> 23
BROADCAST STATION PROGRAMMING POLICY STATEMENT
The following sets forth the policies generally applicable to
the presentation of programming and advertising over Radio Station WTKS(FM),
Cocoa Beach, Florida. All programming and advertising broadcast by the station
must conform to these policies and to the provisions of the Communications Act
of 1934, as amended [the "Act"], and the Rules and Regulations of the Federal
Communications Commission ["FCC"].
Station Identification
The station must broadcast a station identification announcement once an hour
as close to the hour as feasible in a natural break in the programming. The
announcement must include (1) the station's call letters; followed immediately
by (2) the station's city of license.
Broadcast of Telephone Conversations
Before recording a telephone conversation for broadcast or broadcasting such a
conversation simultaneously with its occurrent, any party to the call must be
informed that the call will be broadcast or will be recorded for later
broadcast, and the party's consent to such broadcast must be obtained. This
requirement does not apply to calls initiated by the other party which are made
in a context in which it is customary for the station to broadcast telephone
calls.
Sponsorship Identification
When money, service, or other valuable consideration is either directly or
indirectly paid or promised as part of an arrangement to transmit any
programming, the station at the time of broadcast shall announce (1) that the
matter is sponsored, either whole or in part; and (2) by whom or on whose
behalf the matter is sponsored. Products or services furnished to the station
in consideration for an identification of any person, product, service,
trademark or brand name shall be identified in this manner.
In the case of any political or controversial issue broadcast for which any
material or service is furnished as an inducement for its transmission, an
announcement shall be made at the beginning and conclusion of the broadcast
stating (1) the material or service that has been furnished; and (2) the
person(s) or association(s) on whose behalf the programming is transmitted.
However, if the broadcast is 5 minutes duration or less, the required
announcement need only be made either at its beginning or end.
Prior to any sponsored broadcast involving political matters or controversial
issues, the station shall obtain a list of the chief executive officers,
members of the executive committee or board of directors of the sponsoring
organization and shall place this list in the station's public inspection file.
<PAGE> 24
- 2 -
Payola/Plugola
The station, its personnel, or its programmers shall not accept or agree to
accept from any person any money, service, or other valuable consideration for
the broadcast of any matter unless such fact is disclosed to the station so
that all required station identification announcements can be made. All
persons responsible for station programming must, from time to time, execute
such documents as may be required by station management to confirm their
understanding of and compliance with the FCC's sponsorship identification
requirements.
Rebroadcasts
The station shall not rebroadcast the signal of any other broadcast station
without first obtaining such station's prior written consent to such
rebroadcast.
Fairness
Station shall seek to afford coverage to contrasting viewpoints concerning
controversial issues of public importance.
Personal Attacks
The station shall not air attacks upon the honesty, character, integrity or
like personal qualities of any identified person or group. If such an attack
should nonetheless occur during the presentation of views on a controversial
issue of public importance, those responsible for programming shall submit a
tape or transcript of the broadcast to station management and to the person
attacked within 48 hours, and shall offer the person attacked a reasonable
opportunity to respond.
Political Editorials
Unless specifically authorized by station management, the station shall not air
any editorial which either endorses or opposes a legally qualified candidate
for public office.
Political Broadcasting
All "uses" of the station by legally qualified candidates for elective office
shall be in accordance with the Act and the FCC's Rules and policies, including
without limitation, equal opportunities requirements, reasonable access
requirements, lowest unit charge requirements and similar rules and
regulations.
<PAGE> 25
- 3 -
Obscenity and Indecency
The station shall not broadcast any obscene material. Material is deemed to be
obscene if the average person, applying contemporary community standards in the
local community, would find that the material, taken as a whole, appeals to the
prurient interest; depicts or describes in a patently offensive way sexual
conduct specifically defined by applicable state law; and taken as a whole,
lacks serious literary artistic, political or scientific value.
The station shall not broadcast any indecent material outside of the periods of
time prescribed by the Commission. Material is deemed to be indecent if it
includes language or material that, in context, depicts or describes, in terms
patently offensive as measured by contemporary community standards for the
broadcast medium, sexual or excretory activities or organs.
Billing
No entity which sells advertising for airing on the station shall knowingly
issue any bill, invoice or other document which contains false information
concerning the amount charged or the broadcast of advertising which is the
subject of the bill or invoice. No entity which sells advertising for airing
on the station shall misrepresent the nature or content of aired advertising,
nor the quantity, time of day, or day on which such advertising was broadcast.
Contests
Any contests conducted on the station shall be conducted substantially as
announced or advertised. Advertisements or announcements concerning such
contests shall fully and accurately disclose the contest's material terms. No
contest description shall be false, misleading or deceptive with respect to any
material term.
Hoaxes
The station shall not knowingly broadcast false information concerning a crime
or catastrophe.
Lottery
Except as otherwise provided in this paragraph, the station shall not advertise
or broadcast any information concerning any lottery (except the Florida State
Lottery and any other state lottery). The station may advertise and provide
information about lotteries conducted by non-profit groups, governmental
entities and in certain situations, by commercial
<PAGE> 26
- 4 -
organizations, if and only if there is no state or local restriction or ban on
such advertising or information and the lottery is legal under state or local
law. Any and all lottery advertising must first be approved by station
management.
Advertising
Station shall comply with all federal, state and local laws concerning
advertising, including without limitation, all laws concerning misleading
advertising, and the advertising of alcoholic beverages.
Programming Prohibitions.
Knowing broadcast of the following types of programs and announcements is
prohibited:
False Claims. False or unwarranted claims for any product or
service.
Unfair Imitation. Infringements of another advertiser's
rights through plagiarism or unfair imitation of either
program idea or copy, or any other unfair competition.
Commercial Disparagement. Any unfair disparagement of
competitors or competitive goods.
Profanity. Any programs or announcements that are slanderous,
obscene, profane, vulgar, repulsive or offensive, as evaluated
by station management.
Violence. Any programs which are excessively violent.
Unauthenticated Testimonials. Any testimonials which cannot
be authenticated.
<PAGE> 27
ATTACHMENT IV
Payola Statement
<PAGE> 28
FORM OF PAYOLA AFFIDAVIT
City of ________________________ )
)
County of ______________________ ) SS:
)
State of _______________________ )
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
________________________, being first duly sworn, deposes and says as follows:
1. He is _____________________ for _____________________.
Position
2. He has acted in the above capacity since ____________.
3. No matter has been broadcast by Station _____ for which
service, money or other valuable consideration has been
directly or indirectly paid, or promised to, or charged, or
accepted, by him from any person, which matter at the time so
broadcast has not been announced or otherwise indicated as
paid for or furnished by such person.
4. So far as he is aware, no matter has been broadcast by Station
_____ for which service, money, or other valuable
consideration has been directly or indirectly paid, or
promised to, or charged, or accepted by Station _____ or by
any independent contractor engaged by Station _____ in
furnishing programs, from any person, which matter at the time
so broadcast has not been announced or otherwise indicated as
paid for or furnished by such person.
5. In future, he will not pay, promise to pay, request, or
receive any service, money, or any other valuable
consideration, direct or indirect, from a third party, in
exchange for the influencing of, or the attempt to influence,
the preparation of presentation of broadcast matter on Station
_____.
6. Nothing contained herein is intended to, or shall prohibit
receipt or acceptance of anything with the expressed knowledge
and approval of my employer, but henceforth any such approval
must be given in writing by someone expressly authorized to
give such approval.
7. He, his spouse and his immediate family do___ do not___ have
any present direct or indirect ownership interest in (other
than an investment in a
<PAGE> 29
- 7 -
corporation whose stock is publicly held), serve as an officer
or director of, whether with or without compensation, or serve
as an employee of, any person, firm or corporation engaged in:
1. The publishing of music;
2. The production, distribution (including wholesale and
retail sales outlets), manufacture or exploitation of
music, films, tapes, recordings or electrical
transcriptions of any program material intended for
radio broadcast use;
3. The exploitation, promotion, or management or persons
rendering artistic, production and/or other services
in the entertainment field;
4. The ownership or operation of one or more radio or
television Station;
5. The wholesale or retail sale of records intended for
public purchase;
6. Advertising on Station _____, or any other station
owned by its licensee (excluding nominal
stockholdings in publicly owned companies).
8. The facts and circumstances relating to such interest are
none____ as follows___:
_______________________________________________________________
_______________________________________________________________
________________________________________
Affiant
Subscribed and sworn to before me this ______
day of _______________, 19___.
__________________________________________
Notary Public
My Commission expires: ___________________.
<PAGE> 1
EXHIBIT 10.94
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CHANNEL 55 OF ALBANY, INC.
AND
CORNERSTONE TELEVISION, INC.
FOR
TELEVISION STATION WOCD(TV)
AMSTERDAM, NEW YORK
DECEMBER 11, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Employees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 No Other Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.16 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Notice Regarding Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.6 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.7 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.8 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.9 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.10 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.11 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(e) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(g) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Casualty Termination Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(e) Environmental Hazards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(f) Technical Deficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
- iv -
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.12 Seller's Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.13 Guaranty of Paxson Communications Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
- v -
<PAGE> 7
<TABLE>
<CAPTION>
LIST OF SCHEDULES
<S> <C> <C>
Schedule 1.1 __ Time Brokerage Agreement
Schedule 2.2 __ Excluded Property
Schedule 2.4 __ Promissory Note and Guaranty And Suretyship
Agreement
Schedule 3.3 __ Consents
Schedule 3.4 __ Licenses and Cable Carriage
Schedule 3.5 __ Real Property
Schedule 3.6 __ Tangible Personal Property
Schedule 3.7 __ Assumed Contracts
Schedule 3.9 __ Intangibles
Schedule 3.10 __ Insurance Policies
Schedule 3.12 __ Employee Matters
Schedule 3.14 __ Litigation Matters
Schedule 6.10 __ Noncompetition Agreement
Schedule 8.2(f) __ Form of Opinions of Seller's Counsel
Schedule 8.3(d) __ Form of Opinion of Buyer's Counsel
Schedule 9.3 __ Escrow Agreement
</TABLE>
- vi -
<PAGE> 8
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of December 11, 1995, by and
between Channel 55 of Albany, Inc., a Florida corporation ("Buyer"), and
Cornerstone Television, Inc., a non-profit corporation ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station WOCD(TV), Amsterdam, New York (the "Station"), pursuant to licenses
issued by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller has a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are specifically designated as Contracts to be assumed by Buyer upon its
purchase of the Station, (ii) all Contracts entered into by Seller in the
ordinary course of business which comply with the provisions of Section 5.3
hereof; and (iii) any other Contracts entered into by Seller between the date
of this Agreement and the Closing Date that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
<PAGE> 9
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used in
the business and operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
- 2 -
<PAGE> 10
"Permitted Liens" means liens for taxes not yet due and payable.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means Seller's interests in real property, leaseholds
and subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, and all buildings and other improvements thereon, which are used
in the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by the Seller or in
which Seller has an interest and which is used in the conduct of the business
or operations of the Station, together with any additions thereto between the
date of this Agreement and the Closing Date, but excluding any Tangible
Personal Property consumed in the ordinary course of business between the date
hereof and the Closing Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement between
Channel 55 of Albany, Inc. and Cornerstone Television, Inc. to be executed at
the Closing and as set forth in Schedule 1 hereof.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and deliver to Buyer on the Closing Date, and Buyer agrees to purchase
and accept all of the Assets and property interests owned by Seller or in which
Seller has a property interest which are used in connection with the conduct of
the business or operations of the Station, (but excluding all vehicles)
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2, free and clear
of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, or encumbrances of any nature whatsoever (except for
Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts including executed copies
thereof;
- 3 -
<PAGE> 11
(e) The Intangibles, including the goodwill of the
Station, if any; and
(f) All records required by the FCC to be kept by the
Station and copies of all other books and records, if any, which belong to
Seller and are within its possession and control relating to the business or
operations of the Station (exclusive of corporate, financial and accounting
records).
2.2 Excluded Assets. The Assets shall exclude the following
assets.
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies (and
all rights under such policies), letters of credit, or other similar items and
cash surrender value in regard thereto; and any stocks, bonds, certificates of
deposit and similar securities or other investments;
(b) All corporate and accounting records of Seller and
copies of all other books and records relating to the business and operations
of the Station;
(c) Seller's claims, choses in action, causes of action
and judgments;
(d) All property listed on Schedule 2.2 hereto; and
(e) The Accounts Receivable.
2.3 Purchase Price. The Purchase Price for the Assets shall be
TWO MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS ($2,490,000), adjusted as
provided below, plus FIFTY THOUSAND DOLLARS ($50,000) in payment of the
Noncompetition Agreement.:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of 11:59 p.m.
local time, on the day prior to the Closing Date. All expenses arising from
the operation of the Station, including business and license fees, utility
charges, real and personal property taxes and assessments levied against the
Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, taxes (except for taxes arising from the transfer of
the Asset under this Agreement which shall be governed by Section 11.1 hereof)
and similar prepaid and deferred items, shall be prorated between Buyer and
Seller in accordance with the principle that Seller shall be responsible for
all expenses, costs, and liabilities allocable to the period prior to the
Closing Date, and Buyer shall be responsible for all expenses, costs, and
obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts including specifically
- 4 -
<PAGE> 12
all cash program licensing agreements and any other obligation or liability not
being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to Seller as follows: At the Closing, Buyer shall pay to Seller (i)
the sum of EIGHT HUNDRED THOUSAND DOLLARS ($800,000), adjusted as provided
above, by wire transfer of immediately available funds pursuant to wire
instructions which shall be delivered by Seller to Buyer, at least two days
prior to the Closing Date; and (ii) a Promissory Note and Guaranty in the form
of Schedule 2.4, in the principal amount of One Million Six Hundred Fifty
Thousand Dollars ($1,650,000).
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of the Seller under the Licenses and the Assumed
Contracts insofar as they relate to the Buyer's ownership of the Assets or its
operation of the Station on or after the Closing Date and those relating to the
period prior to the Closing which Buyer agrees to assume pursuant to the
prorations and adjustments. Buyer shall not assume any other obligations or
liabilities of Seller, including without limitation (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under agreements entered into other than
in the ordinary course of business, or (v) any obligation to any employee of
the Station for severance benefits, vacation time, or sick leave accrued prior
to the Closing Date, except that Buyer shall reimburse Seller for the amounts
paid by Seller as of the Closing Date in respect of such obligations, provided
that the amount of such reimbursement shall not exceed, in the aggregate, Five
Thousand Dollars ($5,000), and all such obligations and liabilities shall
remain and be the obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing and Authority. Seller is a non-profit
corporation duly organized, validly existing and subsisting under the laws of
the Commonwealth of Pennsylvania. Seller has all requisite corporate power and
authority (i) to own, lease, and use the Assets as now owned, leased, and used,
(ii) to conduct the business operations of the
- 5 -
<PAGE> 13
Station as now conducted, and (iii) to execute and deliver this Agreement and
the documents contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Seller
hereunder and thereunder. Seller is not a participant of any joint venture or
partnership with any person or entity with respect to any part of the operations
of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid, and binding
obligation of Seller, enforceable against it in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery and performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with the Articles of Incorporation
or Bylaws of Seller, (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality in a proceeding involving Seller; (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; and (v) will not
create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. To Seller's knowledge, (i) Schedule
3.4 includes a true and complete list of the material Licenses; (ii) Seller has
delivered to Buyer true and complete copies of the Licenses listed on such
Schedule (including any amendment and other modifications thereto), (iii) the
Licenses have been validly issued, and Seller is the authorized legal holder
thereof, (iv) the Licenses listed on Schedule 3.4 comprise all of the material
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, (v)
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated, and (vi) the Licenses
are in full force and effect, in all material respects, and the conduct of the
business and operations of the Station is in material accordance therewith.
Schedule 3.4 lists the cable systems to whom Seller made a valid election of
must carry and further lists those cable systems that have disputed or are
currently disputing Seller's must carry election.
- 6 -
<PAGE> 14
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). The Real Property
listed on Schedule 3.5 comprises all real property interests necessary to
conduct the business and operations of the Station as now conducted. With
respect to each leasehold or subleasehold interest included in the Real
Property being conveyed under this Agreement, so long as Seller fulfills its
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest. All Real Property (including all improvements thereon)
(i) is available for immediate use consistent with the conduct of the business
and present operations of the Station, and (ii) complies in all material
respects with all applicable building or zoning codes and the regulations of
any governmental authority having jurisdiction. Seller has practical access to
the Real Property.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property. The Tangible Personal
Property listed on Schedule 3.6 comprises all material items of inventory and
spare parts that are not currently used in the operation of the Station and the
tangible personal property used to conduct the business and operations of the
Station as now conducted exclusive of motor vehicles. Except as described in
Schedule 3.6, Seller owns and has good title to each item of Tangible Personal
Property, and none of the Tangible Personal Property owned by Seller is subject
to any security interest, mortgage, pledge, conditional sales agreement, or
other lien or encumbrance, except Permitted Liens. Each material item of
Tangible Personal Property (other than items of inventory and spare parts that
are not currently used in the operation of the Station) is available for
immediate use in the business and operations of the Station except as indicated
on Schedule 3.6. To Seller's knowledge, all items of transmitting and studio
equipment included in the Tangible Personal Property currently permit the
Station to operate in all material respects in accordance with the terms of the
FCC Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Assumed Contracts except contracts with advertisers for the sale of advertising
time on the Station for cash at prevailing rates and which have not been prepaid
and which may be canceled by the Station without penalty on not more than ninety
days' notice. Seller has delivered to Buyer true and complete copies of all
Assumed Contracts, (including any amendments and other modifications to such
Assumed Contracts), and a schedule summarizing Seller's obligations under trade
and barter agreements relating to the Station. To Seller's knowledge, all of
the Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with their terms and there is not under any Assumed
Contract any default by any party thereto or any event that, after notice or
lapse of time or both, could constitute a
- 7 -
<PAGE> 15
default. Except for the need to obtain the Consents listed in Schedule
3.3, Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of
any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided in Section 6.1
and the other Consents described in Schedule 3.3, to Seller's knowledge, no
consent, approval, permit, or authorization of, or declaration to or filing
with any governmental or regulatory authority, or any other third party is
required (i) to consummate this Agreement and the transactions contemplated
hereby, (ii) to permit Seller to assign or transfer the Assets to Buyer, or
(iii) to enable Buyer to conduct the business and operations of the Station in
essentially the same manner as such business and operations are now conducted.
3.9 Intangibles. To Seller's knowledge, Schedule 3.9 is a true
and complete list of all material Intangibles (exclusive of those listed in
Schedule 3.4), all of which, are valid and in good standing and uncontested.
Seller has delivered to Buyer copies of all documents establishing or
evidencing all intangibles. Seller is not, to the best of its knowledge,
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyright, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and,
there is no claim or action pending, or threatened, with respect thereto. To
the best of Seller's knowledge, the Intangibles listed on Schedule 3.9 comprise
all intangible property interests used to conduct the business and operations
of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 are in full
force and effect.
3.11 Reports. To Seller's knowledge, all returns, reports, and
statements that the Station is currently required to file with the FCC or place
in its Public File or file with any other governmental agency have been filed,
and all reporting requirements of the FCC and other governmental authorities
having jurisdiction over Seller and the Station have been complied with in all
material respects and all of such returns, reports, and statements are
substantially complete and correct as filed.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station, their job description,
date of hire, salary and amount and date of last salary increase. There are no
commitments, written or oral, to provide material salary increases or bonuses
to any station employee. Schedule 3.12 also contains a true and complete list
as of the date of this Agreement of all material employee
- 8 -
<PAGE> 16
benefit plans or arrangements applicable to the employees of the Station and all
material fixed or contingent liabilities or obligations of Seller with respect
to any person now or formerly employed by Seller at the Station, including
pension or thrift plans, individual or supplemental pension or accrued
compensation arrangements, contributions to hospitalization or other health or
life insurance programs, incentive plans, bonus arrangements, and vacation, sick
leave, disability and termination arrangements or policies, including workers'
compensation policies, and a description of all fixed or contingent liabilities
or obligations of Seller with respect to any person now or formerly employed at
the Station or any person now or formerly retained as an independent contractor
at the Station. Seller has furnished Buyer with true and complete copies of all
employee handbooks, written employee rules and regulations, and summary plan
descriptions of the written plans and arrangements listed in Schedule 3.12. At
Buyer's request, Seller will furnish Buyer with true and complete copies of all
applicable plan documents, trust documents, and insurance contracts with respect
to the plans and arrangements listed on Schedule 3.12. All employee benefits and
welfare plans or arrangements listed in Schedule 3.12 were established and have
been executed, managed and administered in all material respects in accordance
with the Internal Revenue Code of 1986, as amended, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and all other laws. Seller
is not aware of the existence of any governmental audit or examination of any of
such plans or arrangements or of any facts which would lead it to believe that
any such audit or examination is pending or threatened. No action, suit, or
claim with respect to any of such plans or arrangements (other than routine
claims for benefits) is pending or, to the knowledge of Seller, threatened, and
Seller possesses no knowledge of any facts which could give rise to any
such action, suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station. Seller has complied in all material respects with all laws, rules,
and regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and it has not
received any notice alleging that it has failed to comply in any material
respect with any such laws, rules, or regulations. No material controversies,
disputes, or proceedings are pending or, to Seller's knowledge, threatened,
between it and any employee (singly or collectively) of the Station. No labor
union or other collective bargaining unit represents or claims to represent any
of the employees of the Station. To Seller's knowledge, there is no union
campaign being conducted to solicit cards from employees to authorize a union
to request a National Labor Relations Board certification election with respect
to any employees at the Station.
(c) Liabilities. Except as disclosed in the Schedules
hereto, Seller has no liability of any kind to or in respect of
any employee benefit plan covering the employees of the Station, including
withdrawal liability under Section 4201 of ERISA. Seller has not incurred any
accumulated funding deficiency within the meaning of ERISA or Section 4971
- 9 -
<PAGE> 17
of the Internal Revenue Code. Seller has not failed to make any required
contributions to any employee benefit plan covering the employees of the
Station. The Pension Benefit Guaranty Corporation has not asserted that Seller
has incurred any liability in connection with any such plan. No lien has been
attached and no person has threatened to attach a lien on any property of
Seller as a result of a failure to comply with ERISA.
3.13 Taxes. To the best of the Seller's knowledge, (i) Seller has
filed or caused to be filed all federal income tax returns and all other
federal, state, county, local, or city tax returns which are required to be
filed, and it has paid or caused to be paid all taxes shown on those returns or
on any tax assessment received by it to the extent that such taxes have become
due, and (ii) there are no governmental investigations or other legal,
administrative, or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest, or other charges, the liability for
which could extend to Buyer as transferee of the business of the Station, and
no event has occurred that could impose on Buyer any transferee liability for
any taxes, penalties, or interest due or to become due from Seller. Seller is
not required to file New York sales tax returns.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, and except as set
forth on Schedule 3.14, to the best of Seller's knowledge, there is no claim,
legal action, counterclaim, nor any order, decree or judgment, in progress or
pending, or to the knowledge of Seller threatened, against or relating to
Seller with respect to its ownership or operation of the Station or otherwise
relating to the Assets, nor does Seller know or have reason to be aware of any
basis for the same. In particular, but without limiting the generality of the
foregoing, and except as forth on Schedule 3.14, to the best of Seller's
knowledge, there are no applications, complaints or proceedings pending or, to
the best of its knowledge, threatened (i) before the FCC relating to the
business or operations of the Station other than rule making proceedings which
affect the television industry generally, (ii) before any federal or state
agency relating to the business or operations of the Station involving charges
of illegal discrimination under any federal or state employment laws or
regulations, or (iii) before any federal, state, or local agency relating to
the business or operations of the Station involving zoning issues under any
federal, state, or local zoning law, rule, or regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
- 10 -
<PAGE> 18
(b) To Seller's knowledge, Seller has no liability
relating to its ownership and operation of the Station under any environmental
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning release or threatened release of hazardous substances,
public health and safety, or pollution or protection of the environment.
(c) To Seller's knowledge, Seller has no liability
relating to its ownership and operation of the Station for damage to any site,
location, or body of water (surface of subsurface) or for illness or personal
injury.
(d) To Seller's knowledge, Seller has no liability
relating to its ownership and operation of the Station under any environmental
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning employee health and safety.
(e) In connection with its ownership or operation of the
Station, Seller has obtained and been in material compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and has complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
(f) To Seller's knowledge, all properties and equipment
used in the business of the Station are free of friable asbestos and friable
asbestos-related products, PCB's, dioxins, and Extremely Hazardous Substances
(as defined in Section 302 of the Emergency Planning and Community
Right-to-Know Act).
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to Seller's
knowledge, by any other party on any Real Property.
3.16 Compliance with Laws. To Seller's knowledge, Seller has
complied in all material respects with the Licenses and all federal, state, and
local laws, rules, regulations, and ordinances applicable or relating to the
ownership and operation of the Station. To Seller's knowledge, neither the
ownership or use of the properties of the Station nor the
- 11 -
<PAGE> 19
conduct of the business or operations of the Station conflicts in any material
respect with the rights of any other person or entity.
3.17 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact.
3.18 No Other Representations. Notwithstanding anything to the
contrary stated herein, it is the explicit intent of each party hereto that the
Seller is making no representations or warranties whatsoever, express or
implied, other than those representations and warranties expressly set forth in
this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of New York. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the documents contemplated hereby (with or without the giving of notice,
the lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with the Certificate of Incorporation or Bylaws of
Buyer; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement,
- 12 -
<PAGE> 20
instrument, license, or permit to which Buyer is a party or by which Buyer may
be bound, such that Buyer could not acquire the Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as amended, and the rules, regulations
and policies of the FCC. Buyer knows of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC
disqualify Buyer as a assignee of the FCC Licenses or as the owner and operator
of the Station.
4.6 Inspection. Except for the environmental audit described in
Section 6.10 and the engineering study described in Section 6.11, Buyer has had
the opportunity to conduct such due diligence and to inspect such Assets as
Buyer deems appropriate, and, subject to Sections 6.10 and 6.11, Buyer is
purchasing the Assets "as is, where is" based on such due diligence and
inspection and the representations, warranties and covenants of Seller
expressly set forth herein. Buyer is experienced in the acquisition and
operation of television stations and is relying on such expertise in evaluating
the desirability of acquiring the Assets and is not relying on any information
provided by Seller; provided, however, that Buyer is relying on the
representations, warranties and covenants expressly set forth herein and the
Schedules attached hereto.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Compensation. Seller shall not materially increase the
compensation, bonuses, or other benefits payable or to be payable to any person
employed in connection with the conduct of the business or operations of the
Station, except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment which is not terminable on 90-days notice relating to the Station or
the Assets, or amend or terminate any Contract (or waive any material right
thereunder), or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness) that will
- 13 -
<PAGE> 21
be binding on Buyer after Closing, except for cash time sales agreements made in
the ordinary course of business and other contracts or commitments involving
less than $5,000. Prior to the Closing Date, Seller shall deliver to Buyer a
list of all Contracts entered into between the date of this Agreement and the
Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the material Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date, (ii) liens for current taxes
not yet due and payable, and (iii) mechanics' liens and other similar liens,
which shall be removed prior to the Closing Date either by payment or posting
an appropriate indemnity bond.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take any action that could reasonably be
expected to cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any of
the Licenses. Seller shall not fail to prosecute with due diligence any
applications to any governmental authority in connection with the operation of
the Station.
5.7 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its material obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business hours to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection, including inspections relating
to a Phase I Environmental Study and an engineering review of the Station all
to be accomplished in coordination with Seller and without disruption to the
Station and will furnish or cause to be furnished to Buyer or its authorized
representatives all material information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
operations reports produced with respect to the affairs and business of the
Station).
- 14 -
<PAGE> 22
5.10 Maintenance of Assets. Seller shall maintain all of the
Assets in their current existing condition (ordinary wear and tear and casualty
loss excepted), and use, operate, and maintain all of the Assets in a
reasonable manner. Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices.
5.11 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets.
5.12 Consents. Seller shall obtain the Consents described in
Section 8.2(c), without any material change in the terms or conditions of any
Contract or License as in effect on the date of this Agreement. Seller shall
advise Buyer of any communications it receives concerning the Consents and of
any conditions proposed, considered, or requested for any of the Consents.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any material developments of which Seller has actual knowledge with respect
to the business or operations of the Station, and of any material change in any
of the information contained in Seller's representations and warranties
contained in Section 3 of this Agreement.
5.15 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.16 Preservation of Business. Seller shall operate the Station in
the ordinary course of business consistent with its past practices.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
application as expeditiously as practicable. Each party agrees to comply with
any
- 15 -
<PAGE> 23
condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by the party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period
of the FCC Consent, and neither party shall have terminated this Agreement
under Section 9, the parties shall jointly request an extension of the
effective period of the FCC Consent. No extension of the FCC Consent shall
limit the exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of the Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing. If any damage or
destruction of the Assets or any other event occurs which prevents in any
material respect signal transmission by the Station in the normal and usual
manner and Seller is unable to restore or replace the Assets so that such
conditions are cured and normal and usual transmission is resumed in all
material respects before the Closing Date, Seller shall send Buyer written
notice of such event (a "Casualty Notice"), which notice shall contain an
estimate, in Seller's reasonable judgment, of the costs to repair or replace
the damaged or destroyed Assets, as well as the amount of any credit or refund
Seller will offer Buyer due to the inadequacy of Seller's insurance proceeds to
restore or place the Assets in all material respects. Within five (5) days
after its receipt of a Casualty Notice, Buyer may, by written notice to seller
(a "Casualty Termination Notice"), elect to terminate the Agreement and receive
a refund of the Escrow Deposit and interest earned thereon, and neither party
shall thereafter have any liability to the other hereunder. In the event that
Buyer does not give Seller a timely and unconditional Casualty Termination
Notice, then Buyer shall, proceed to close this Agreement and complete the
restoration and replacement of such damaged Assets and Seller shall deliver to
Buyer all insurance proceeds received in connection with such damage or
destruction of the Assets; provided, however, that Buyer will receive a credit
or refund at Closing for any funds it provides to the extent such credit or
refund is equal to or less than the amount of credit or refund established by
Seller in the Casualty Notice.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure
- 16 -
<PAGE> 24
requirements of federal or state securities laws and rules and regulations of
securities markets, each party will keep confidential any information obtained
from the other party in connection with the transactions contemplated by this
Agreement. Except as provided in this Paragraph each party will refrain from
disclosing any such information to any third party. If this Agreement is
terminated, each party will return to the other party all copies of all
documents and other all information obtained by the such party from the other
party in connection with the transactions contemplated by this Agreement.
6.5 Notice Regarding Employees. Buyer shall notify Seller no
later than seven days prior to the Closing of those employees of the Station
that Buyer intends to offer to employ following the Closing; provided, however,
that neither this Section 6.5 nor Buyer's delivery of the notice contemplated
hereby shall be deemed to create any obligation on the part of Buyer to offer
to employ or employ any employee of the Station.
6.6 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i)
to expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto.
6.7 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of four (4) years from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of four (4) years from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.8 Broker. Each of Buyer and Seller represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement.
6.9 Noncompetition Agreement. At Closing, Buyer, Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.10 and Buyer
shall pay Seller at the Closing Fifty Thousand Dollars ($50,000) for the
covenants of Seller.
6.10 Environmental Audit.
(a) Buyer may, at its option and expense, retain an
environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the
- 17 -
<PAGE> 25
properties of the Station. If the survey discloses any material environmental
hazard or the possibility of future material liability for environmental damages
or clean-up costs (each, an "Environmental Hazard"), Buyer shall so notify
Seller in writing as soon as practicable.
(b) If Buyer notifies Seller pursuant to Section 6.10(a)
of any Environmental Hazard within forty- five days after the date of this
Agreement, then Seller may, by written notice given to Buyer within seven days
after Seller's receipt of such notice from Buyer, agree to remedy such
Environmental Hazard prior to the Closing Date. If Seller does not agree prior
to the end of such seven-day period to remedy such Environmental Hazard prior
to the Closing Date, then Buyer may as its sole and exclusive remedy terminate
this Agreement pursuant to Section 9.2(e).
6.11 Engineering Study.
(a) Buyer may, at its option and expense, retain an
engineering firm or other broadcast engineer to conduct proof of performance
studies of the Station and to prepare a report on the Station's compliance with
customary engineering practices and all applicable FCC rules, regulations,
prescribed practices, and technical standards. If the study discloses any
material defects in the equipment or the operating condition of the equipment
of the Station (each, a "Material Defect"), Buyer shall so notify Seller in
writing as soon as practicable.
(b) If Buyer notifies Seller pursuant to Section 6.11(a)
of any Material Defect within forty-five days after the date of this Agreement,
then Seller may, by written notice given to Buyer within seven days after
Seller's receipt of such notice from Buyer, agree to remedy such Material
Defect prior to the Closing Date. If Seller does not agree prior to the end of
such seven-day period to remedy such Material Defect prior to the Closing Date,
then Buyer may as its sole and exclusive remedy terminate this Agreement
pursuant to Section 9.2(f).
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
- 18 -
<PAGE> 26
(b) Covenants and Conditions. Seller shall have
performed and complied in all respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any material conditions imposed on it by the FCC Consent, and the FCC
Consent shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all material Licenses and there shall not have been any modification
of any material License that could have an adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any material License. All FCC Licenses are material Licenses.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing, there shall have been no material adverse change in the assets
or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct or business of the Station.
(h) Correction of Defects. If Seller shall have notified
Buyer in accordance with Sections 6.10 or 6.11 that Seller intends to remedy an
Environmental Hazard or a Material Defect and Seller shall have failed to
remedy such Environmental Hazard or Material Defect as agreed by Seller and
Buyer.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
- 19 -
<PAGE> 27
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than the tenth business day after the
date upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1255 23rd Street, N.W, Suite 500,
Washington, D.C. 20037, or such other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens.
(b) Estoppel Certificate. Estoppel Certificate of the
Lessor of the leasehold interests listed in Schedule 3.5.
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the material representations and
warranties of Seller contained in
- 20 -
<PAGE> 28
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its material obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date. Such additional certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder.
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses and Assumed Contracts;
(f) Opinion of Counsel. An opinion or opinions of
Seller's counsel dated as of the Closing Date, which include the matters set
forth in Schedule 8.2(f) hereto and which are otherwise reasonably acceptable
in form and substance to Buyer and Buyer's counsel..
(g) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10 duly executed by Seller.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.4(a) and the Promissory Note, the Guaranty and Suretyship Agreement
and the Time Brokerage Agreement in the form of the Schedules attached hereto;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President, certifying (1)
that the representations and warranties of Buyer contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(d) Opinion of Counsel. An opinion or opinions of
Buyer's counsel dated as of the Closing Date, which include the matters set
forth in Schedule 8.3(d) hereto and which are otherwise reasonably acceptable
in form and substance to Seller and Seller's counsel.
- 21 -
<PAGE> 29
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10, duly executed by Buyer and the
noncompetition payment allocated thereto.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment not caused by Seller,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by August 1, 1996.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, not caused by Buyer,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by August 1, 1996.
(d) Casualty Termination Notice. Buyer shall have given
a timely and unconditional Casualty Termination Notice to Seller pursuant to
Section 6.3 hereof.
(e) Environmental Hazards. If Buyer shall have notified
Seller pursuant to Section 6.10(a) of any Environmental Hazard within
forty-five days after the date of this Agreement and Seller shall not have
agreed within the period specified in Section 6.10(b) to remedy such
Environmental Hazard; provided, however, that Buyer may only terminate this
Agreement pursuant to this Section 9.2(e) by delivering written notice to
Seller within seven
- 22 -
<PAGE> 30
days after the end of the period specified in Section 6.10(b) during which
Seller had the right to elect to remedy such Environmental Hazard.
(f) Material Defect. If Buyer shall have notified Seller
pursuant to Section 6.11(a) of any Material Defect within forty-five days after
the date of this Agreement and Seller shall not have agreed within the period
specified in Section 6.11(b) to remedy such Material Defect, provided, however,
that Buyer may only terminate this Agreement pursuant to this Section 9.2(f) by
delivering written notice to Seller within seven days after the end of the
period specified in Section 6.11(b) during which Seller had the right to elect
to remedy such Material Defect.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with First Union National Bank
of Florida, as escrow agent (the "Escrow Agent"), the sum of One Hundred
Thousand Dollars ($100,000) in accordance with an Escrow Agreement among Buyer,
Seller and the Escrow Agent in the form of Schedule 9.3. All funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or Section 9.2 and Buyer is not in material breach of any provision of this
Agreement, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's breach of this Agreement, then the amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent shall be disbursed by the
Escrow Agent to or at the direction of Seller.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of any provision of this Agreement, then the payment to Seller pursuant
to Section 9.3(c) shall be liquidated damages and shall constitute full payment
and the exclusive remedy for any damages suffered by Seller by reason of
Buyer's material beach of this Agreement. Seller and Buyer agree in advance
that actual damages would be difficult to ascertain and that the amount of One
Hundred Thousand ($100,000) is a fair and equitable
- 23 -
<PAGE> 31
amount to reimburse Seller for damages sustained due to Buyer's material breach
of this Agreement. If prior to Closing, Seller is in material breach of its
obligations under this Agreement, Buyer's sole remedy shall be an action for
specific performance of this Agreement and Buyer expressly waives any right to
pursue a claim for monetary damages.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
twelve (12) months provided, however, that as to any representation or warranty
made by either the Buyer or Seller which the other party knows, or has reason
to believe, is not true as of the Closing Date, such representation or warranty
shall not survive the Closing. Until the Closing, Buyer and Seller will
immediately advise each other, in writing, of any fact or occurrence or any
pending or threatened occurrence of which any of them obtains knowledge and
which (a) (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or pursuant
to this Agreement or a Schedule hereto, (b) (if existing and known at any time
prior to or at the Closing) would make the performance by any party of a
covenant contained in this Agreement impossible or make that performance
materially more difficult than in the absence of that fact or occurrence, or
(c) (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Subject to the proviso contained in the first
sentence of Section 10.1, any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages
contingent or otherwise resulting from Seller's operation or ownership of the
Station prior to the Closing Date, including any liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring prior to the
Closing Date.
- 24 -
<PAGE> 32
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Subject to the proviso contained in the first
sentence of Section 10.1, any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
contingent or otherwise, resulting from Buyer's operation or ownership of the
Station on and after the Closing, including any liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring on or after
the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within as soon
as practicable after written notice of such action, suit, or proceeding was
given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to
- 25 -
<PAGE> 33
substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty- day period (or any mutually agreed
upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible. Except as
otherwise expressly provided herein, the right to indemnification provided in
this Section 10 shall be the exclusive post-closing remedy available to the
parties with respect to the transaction contemplated hereby.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) In no event shall either Buyer or Seller be liable to
the other for any damages or claims until the cumulative amount of such damages
or claims against the Indemnifying Party equals or exceeds Fifty Thousand
Dollars ($50,000) and in no event shall Seller be liable for any damages or
claims in excess of the Purchase Price.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, as its sole and exclusive
remedy, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Seller shall waive the
defense that there is an adequate remedy at law.
- 26 -
<PAGE> 34
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid one-half by Buyer and
one-half by Seller. Buyer and Seller shall each pay one-half of the fee
payable to the FCC in connection with the filing of the application for FCC
Consent. Except as otherwise provided in this Agreement, each party shall pay
its own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses
of counsel, accountants, agents, and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia by a panel of three arbitrators. Seller and Buyer
shall each designate one disinterested arbitrator, and the two arbitrators so
designated shall select the third arbitrator. Before undertaking to resolve
the dispute, each arbitrator shall be duly sworn faithfully and fairly to hear
and examine the matters in controversy and to make a just award according to
the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Seller and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. Judgment on the award, if
it is not paid within thirty days, may be entered in any court having
jurisdiction over the matter. No action at law or suit in equity based upon
any claim arising out of or related to this Agreement shall be instituted in
any court by Seller or Buyer against the other except (i) an action to compel
arbitration pursuant to this Section, (ii) an action to enforce the award of
the arbitration panel rendered in accordance with this Section, or (iii) a suit
for specific performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set
- 27 -
<PAGE> 35
forth in the records of the delivery service or on the return receipt, and (d)
addressed as follows:
If to Seller: Oleen Eagle
President
Cornerstone Television, Inc.
Route #48
Signal Hill Drive
Wall, Pennsylvania 16148-1499
With a copy to: Joseph L. Luciana, III, Esquire
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222
If to Buyer: James L. West
President
The Christian Network
14444 66th Street North
Clearwater, Florida 34624
With a copy to: John R. Feore, Jr., Esquire
Dow, Lohnes & Albertson
1255 23rd Street, N.W., Suite 500
Washington, D.C. 20037
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto.
Upon any permitted assignment by Buyer or Seller in accordance with this
Section 11.4, all references to "Buyer" herein shall be deemed to be references
to Buyer's assignee and all references to "Seller" herein shall be deemed to be
references to Seller's assignee. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
including, in the case of Seller, any additional bills of sale, deeds, or other
transfer documents that, in the reasonable opinion of Buyer, may be necessary
to
- 28 -
<PAGE> 36
ensure, complete, and evidence the full and effective transfer of the
Assets to Buyer pursuant to this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Seller's Knowledge. Whenever a representation, warranty or
covenant contained herein is qualified by the phrase "to Seller's Knowledge" or
other similar phrase, such representation, warranty or covenant is made based
on the actual knowledge of
- 29 -
<PAGE> 37
the officers of Seller following reasonable inquiry to the officer or employee
of Seller who has responsibility for the area of the Station's operations to
which such representation, warranty or covenant relates.
11.13 Guaranty of Paxson Communications Corporation.
(a) In consideration of the execution and delivery of
this Agreement by Seller, Paxson Communications Corporation ("PCC") hereby
guarantees the full, complete and timely performance by Buyer of its payment
obligation under the Promissory Note.
(b) PCC hereby represents and warrants to Seller as
follows:
(1) The Guaranty, as set forth in Schedule 2.4,
will, when it is executed, constitute its legal, valid, and binding agreement,
enforceable in accordance with its terms, except as the enforceability of this
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally, and by judicial discretion in the enforcement of
equitable remedies.
(2) The execution, delivery and performance by
PCC of the Guaranty (A) do not require the consent of any third party; (B) will
not conflict with any provision of the Certificate of Incorporation or Bylaws
of PCC; (C) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; and (D)
will not conflict with, constitute grounds for termination of, result in a
breach of, constitute default under, or accelerate or permit the acceleration
of any performance required by the terms of, any agreement, instrument,
license, or permit to which PCC is a party or by which PCC may be bound.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 30 -
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
BUYER: CHANNEL 55 OF ALBANY, INC.
By: James L. West
-------------------------------------
Name: James L. West
-----------------------------------
Title: Chairman
----------------------------------
SELLER: CORNERSTONE TELEVISION, INC.
By: Oleen Eagle
-------------------------------------
Name: Oleen Eagle
-----------------------------------
Title: President
----------------------------------
As to Section 11.13 Only:
PAXSON COMMUNICATIONS CORPORATION
By: William Watson
-------------------------------
Name: William Watson
-------------------------------
Title: Assistant Secretary
-------------------------------
<PAGE> 1
EXHIBIT 10.95
FIRST AMENDMENT
This FIRST AMENDMENT (the "Amendment") is dated as of February 29,
1996, by and between Channel 55 of Albany, Inc., a Florida corporation
("Buyer"), and Cornerstone Television, Inc., a non-profit corporation
("Seller").
WHEREAS, Buyer and Seller are parties to an Asset Purchase Agreement
(the "Purchase Agreement"), dated as of December 11, 1995; and
WHEREAS, Buyer and Seller desire to amend the terms of the Purchase
Agreement.
NOW, THEREFORE, in consideration of the agreements set forth herein
and in the Purchase Agreement and other valuable consideration the sufficiency
of which is hereby acknowledged, Buyer and Seller agree as follows:
1. Capitalized Terms. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in the Purchase
Agreement.
2. Amendments.
a. The first four lines of Section 2.3 of the Purchase
Agreement are hereby amended to read in their entirety as follows:
"2.3 Purchase Price. The Purchase Price for
the Assets shall be TWO MILLION FOUR HUNDRED NINETY THOUSAND
DOLLARS ($2,490,000), adjusted as provided below, plus FIFTY
THOUSAND DOLLARS ($50,000) in payment of the Noncompetition
Agreement:"
b. Section 2.4 of the Purchase Agreement is hereby
amended to read in its entirety as follows:
"2.4 Payment of Purchase Price. The Purchase
Price shall be paid by Buyer to Seller as follows: At the
Closing, Buyer shall pay to Seller (i) the sum of EIGHT
HUNDRED FORTY THOUSAND DOLLARS ($840,000), adjusted as
provided above, by wire transfer of immediately available
funds pursuant to wire instructions which shall be delivered
by Seller to Buyer, at least two days prior to the Closing
Date; and (ii) a Promissory Note and Guaranty in the form of
Schedule 2.4, in the principal amount of ONE MILLION SIX
HUNDRED FIFTY THOUSAND DOLLARS ($1,650,000).
<PAGE> 2
-2-
3. Consent. Seller hereby consents to the transfer of all of the
capital stock of Buyer from The Christian Network, Inc. to Paxson
Communications Television, Inc. or an affiliate thereof.
4. Effect of Amendment. Except as expressly modified hereby, the
provisions of the Purchase Agreement shall remain unchanged and shall remain in
full force and effect.
5. Reference to Purchase Agreement. It shall not be necessary to
refer to this Amendment in any reference to the Purchase Agreement. Any
reference to the Purchase Agreement shall be deemed to be a reference to the
Purchase Agreement as amended hereby.
6. Governing Law. This Amendment shall be governed, construed
and enforced in accordance with the laws of the State of Florida (without
regard to the choice of law provisions thereof).
7. Counterparts. This Amendment may be executed in one or more
counterparts and each executed copy shall constitute an original.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date first above written.
CHANNEL 55 OF ALBANY, INC.
By: /s/ William L. Watson
------------------------
Name: William L. Watson
Title: Secretary
CORNERSTONE TELEVISION, INC.
By: /s/ Oleen Eagle
-----------------------
Name: Oleen Eagle
Title: President
<PAGE> 1
EXHIBIT 10.96
PROMISSORY NOTE
$1,650,000.00 May 31, 1996
FOR VALUE RECEIVED, the undersigned, Channel 55 of Albany, Inc., a
Florida corporation (the "Maker"), promises to pay to Cornerstone Television,
Inc., a non-profit corporation organized under the laws of the Commonwealth of
Pennsylvania (the "Payee"), the principal sum of One Million Six Hundred Fifty
Thousand Dollars ($1,650,000.00), together with interest accrued thereon as
provided in this Promissory Note ("Note"), as follows:
(a) Payments shall be due under this Note on successive
Payment Dates, which shall be the first day of each calendar month, until the
principal amount of this Note and all accrued interest has been paid in full as
provided herein, except that if any such date is not a business day, the
Payment Date shall be the next succeeding business day.
(b) On the first Payment Date, which shall be July 1, 1996,
and on each of the next eighty-three Payment Dates after the date of this Note,
Maker shall pay an installment of principal and accrued interest in the amount
of $25,923.25. Each installment shall be applied first to all interest accrued
and unpaid on the unpaid principal amount of this Note at the rate specified
below and then to the principal amount of this Note.
1. Place of Payment. Both principal and interest shall be payable to
Payee in lawful money of the United States of America, at its offices located
at Route #48, Signal Hill Drive, Wall, Pennsylvania 16148.
2. Interest. The unpaid principal balance of this Note shall bear
interest from the date hereof at a rate equal to the lesser of (a) 8.25% per
annum or (b) the maximum rate, if any, permissible under applicable law. Any
overdue payments hereunder shall bear interest at an annual rate equal to the
rate announced from time to time by the Bank of New York as its prime
commercial lending rate plus two percent (2%).
<PAGE> 2
3. Prepayments. The principal hereof (together with accrued interest
thereon) may be prepaid from time to time, in whole or in part, without premium
or penalty, any such prepayment to be applied to payments of principal in
inverse order of maturity.
4. Other Agreements. This Note constitutes the "Note" described in
Section 2.4 of the Asset Purchase Agreement, dated as of December 11, 1995,
between the Maker and the Payee, to which Agreement reference is hereby made.
This Note is entitled to the benefits of the Guaranty of Paxson Communications
Corporation (the "Guarantor") dated of even date herewith (as the same may from
time to time be modified, supplemented, renewed or amended, the "Guaranty").
TIME IS OF THE ESSENCE WITH REGARD TO THIS NOTE.
The occurrence of any one of the following events shall constitute an
event of default hereunder (individually, an "EVENT OF DEFAULT" and
collectively, the "EVENTS OF DEFAULT"):
a. Any failure to pay when due or any portion of any
payment required to be made by this Note within 10 days of the applicable due
date; or
b. Paxson Communications Corporation shall default in
any of its obligations under the Guaranty; or
c. Maker shall (i) admit in writing its inability to pay
its debts as such debts become due; (ii) make an assignment for the benefit of
creditors; (iii) file a petition in bankruptcy or for any relief under any law
of any jurisdiction relating to reorganization, arrangement, readjustment of
debt, dissolution or liquidation, or have any such petition field against it
and shall fail to discharge same within thirty days (30); or (iv) have a
receiver, custodian or trustee appointed for all or a substantial part of its
property.
Forthwith, upon becoming aware of any Event of Default or
event which, with the giving of notice or the lapse of time, or both, would
become an Event of Default, Maker shall furnish to Payee notice thereof.
If any Event of Default shall occur and be continuing, in
addition to all other rights and remedies available to Payee, Payee may declare
by notice to Maker the outstanding amount under this Note immediately due and
payable. Payee may proceed to protect and enforce its rights, whether by suit
in equity or action at law, for payment of such amounts as have become due and
payable (whether or not by acceleration) hereunder or to enforce any provision
hereof. If Payee institutes legal proceedings to enforce this Note as a result
of an Event of Default, Maker agrees to pay to Payee, upon demand, in addition
to any other amounts due hereunder, all amounts incurred by Payee (including
reasonable attorneys' fees and expenses) in connection with any action to
enforce or collect this Note or Guaranty.
-2-
<PAGE> 3
No waiver by Payee of any Event of Default shall be effective unless in
writing. The waiver by Payee of any event of Default shall not operate as a
waiver of any other Eventof Default or of the same Event of Default on a future
occasion. Any failure by Payee to insist upon strict performance by Maker of
any of the terms and provisions of this Note shall not be deemed to be a
waiver of any of the terms or provisions of this Note and Payee shall have the
right thereafter to insist upon strict performance by Maker of any and all of
them.
5. Sale of Station. If Maker sells Television Station WOCD(TV)
Amsterdam, New York (the "Station") to a party unaffiliated with the Maker or
the Guarantor, Maker shall notify Payee prior to the consummation of such a
sale and Payee may, at its option, declare the Note immediately due and payable
upon the sale of the Station to the party unaffiliated with the Maker or the
Guarantor.
6. Waivers. Except as otherwise expressly provided herein, Maker
waives presentment, demand, notice, protest, and all other demands and notices
in connection with the delivery, performance, default or enforcement of this
Note. Maker's obligation under this Note are absolute and unconditional and
Maker shall not have and hereby forever waives any right or claim of setoff,
recoupment, deduction, diminution or holdback against payment hereunder. This
waiver is not intended to prejudice any of the rights of either Maker or Payee
under the Asset Purchase Agreement of December 11, 1995 between Maker and
Payee.
7. No Assignments. This Note shall be binding upon Maker and shall
inure to the benefit of, and be enforceable by, the Payee, and its heirs,
representatives and assigns. In no event may Maker assign its obligations
under this Note without the prior written consent of Payee.
8. FCC Compliance. Notwithstanding anything to the contrary contained
in this Note or in any of the documents or instruments executed in connection
with this Note, Payee will not take any action pursuant to this Note or any of
such other documents or instruments that would constitute or result in any
assignment of a license granted by the Federal Communications Commission or any
change of control of any broadcast station operated by the Maker, if such
assignment of license or change of control would require under then existing
law (including the written rules and regulations promulgated by the Federal
Communications Commission), the prior approval of the Federal Communications
Commission, without first obtaining such approval of the Federal Communications
Commission.
9. Exculpation. Payee shall not have recourse to any member, officer,
director, or agent of Maker for payment of any of the obligations of Maker
under this Note.
-3-
<PAGE> 4
All notices, claims, requests, demands and other communications
hereunder will be in writing and will be deemed to have been duly given if
personally delivered or on the date of receipt or refusal indicated on the
return receipt if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) as set forth in the Asset Purchase
Agreement.
Maker irrevocably waives any and all right it may have to a trial by
jury in any action, proceeding or claim of any nature relating to this Note,
any documents executed in connection with this Note, or any transaction
contemplated in any of such documents. Maker acknowledges that the foregoing
waiver is knowing and voluntary.
10. Amendment. This Note may not be amended, modified or
supplemented except by an instrument in writing signed on behalf of the parties
or enforcement of this Note.
11. Governing Law. This Note shall be governed by the laws of the
State of Florida.
CHANNEL 55 OF ALBANY, INC.
By: /s/ William L. Watson
----------------------------------
Name: William L. Watson
Title: Secretary
-4-
<PAGE> 1
EXHIBIT 10.97
===============================================================================
STOCK PURCHASE AGREEMENT
AND RELATED DOCUMENTS
BY AND AMONG
CHANNEL 44 OF TULSA, INC.,
PAXSON COMMUNICATIONS OF TULSA-44, INC.
AND
BROADCASTING SYSTEMS, INC.
* * *
MAY 23, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
TAB
---
<S> <C>
Stock Purchase Agreement dated as of May 23, 1996, by and among
Channel 44 of Tulsa, Inc. ("Channel 44"), Paxson Communications of
Tulsa-44, Inc. ("Paxson-44") and Broadcasting Systems, Inc. ("BSI") . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Time Brokerage Agreement dated as of May 23, 1996, by and between
Channel 44 and Paxson-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Lease Agreement dated as of May 23, 1996 by and between Channel 44
and Paxson-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Construction Agreement dated as of May 23, 1996, by and between
Channel 44 and Paxson-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Escrow Agreement dated as of May 23, 1996, by and among BSI, Channel 44,
Paxson-44 and First Union National Bank of Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
</TABLE>
<PAGE> 3
- --------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
BY AND AMONG
CHANNEL 44 OF TULSA, INC.,
PAXSON COMMUNICATIONS OF TULSA-44, INC.
AND
BROADCASTING SYSTEMS, INC.
* * *
MAY 23, 1996
- --------------------------------------------------------------------------------
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Terms Defined in this Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Clarifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2. THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 The Initial Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Sale of Initial Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1 Organization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.2 Execution of Tower Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3 Extension Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 Pro Forma FCC Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5 Modification Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6 Assignment of Construction Permit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.7 Conduct Pending the Initial Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER
REGARDING THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Organization and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.4 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.5 Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.6 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
COMPANY REGARDING THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1 Organization and Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.4 Exchange Act; Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.6 Assets and Liabilities of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.7 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.8 Debts, Obligations and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.9 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
- i -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
AT THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.2 Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3 Extension Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.4 Approvals for Tower Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.5 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.6 Tower Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.7 Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.8 Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.9 Modification Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE INITIAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.2 Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.3 Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.4 Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.2 FCC Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.3 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.4 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.7 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.8 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.9 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.10 Cable Carriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 9. THE OPTIONS AND THE SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.1 Call Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.2 Put Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.3 The Second Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.4 Sale of Option Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.5 Purchase Price for Option Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER
REGARDING THE SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
- ii -
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY AND SELLER
REGARDING THE SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.2 Copyrights, Trademarks and Similar Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.3 Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.4 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.5 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . 19
Section 11.6 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11.7 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11.8 Public Inspection File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11.10 Dividends and Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 11.11 Notices; Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 11.12 Liabilities of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 11.13 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
AT THE SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.2 Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.3 FCC Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.5 Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.6 Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12.7 Time Brokerage Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12.8 Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND THE COMPANY AT THE
SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.2 Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.3 FCC Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.5 Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.6 Time Brokerage Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.7 Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
- iii -
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 14. JOINT COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 14.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 14.2 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 14.3 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 14.4 Station Operation and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 15.TRANSFER TAXES; FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 15.1 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 15.2 Filing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 15.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 16. ESCROW DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 16.1 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 17. RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 17.1 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 17.2 Postponement of the Second Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 17.3 Option to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 18. TERMINATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 18.1 Termination by the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 18.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 19. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 20. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 20.1 Seller's and the Company's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 20.2 Buyer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 20.3 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 20.4 Assumption and Defense of Third-Party Action . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 20.5 Limitation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 21. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21.1 Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . 29
Section 21.2 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21.4 Benefit and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
- iv -
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 21.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 21.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 21.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 21.10 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
- v -
<PAGE> 9
EXHIBITS AND SCHEDULES TO
STOCK PURCHASE AGREEMENT
<TABLE>
<S> <C> <C>
EXHIBITS
--------
EXHIBIT A -- Escrow Agreement
EXHIBIT B -- Shareholders Agreement
SCHEDULES
---------
Schedule 5.6 -- Assets
Schedule 5.8 -- Debts, Obligations and Liabilities
Schedule 6.7(f) -- Opinions of Counsel to Seller and the Company (Initial Closing)
Schedule 7.3(d) -- Opinion of Counsel to Buyer (Initial Closing)
Schedule 12.5(g) -- Opinions of Counsel to Seller and the Company (Second Closing)
Schedule 13.5(d) -- Opinion of Counsel to Buyer (Second Closing)
</TABLE>
- vi -
<PAGE> 10
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of the
23rd day of May, 1996, by and among BROADCASTING SYSTEMS, INC., an Arizona
corporation ("Seller"); CHANNEL 44 OF TULSA, INC., a Delaware corporation
("Company"); and PAXSON COMMUNICATIONS OF TULSA-44, INC., a Florida corporation
("Buyer").
W I T N E S S E T H
WHEREAS, Seller is the holder of an expired construction permit, File
No. BPCT-930902KF ("Construction Permit"), issued by the Federal Communications
Commission ("FCC") for new television station KGLB-TV, Channel 44, Okmulgee,
Oklahoma (the "Station");
WHEREAS, Seller has filed an application with the FCC, File No.
BMPCT-950714KG, requesting the extension of the Construction Permit (the
"Extension Application");
WHEREAS, subject to the grant of the Extension Application and FCC
approval of the pro forma assignment of the Construction Permit from Seller to
the Company, Seller intends to convey the Construction Permit to the Company in
exchange for all of the outstanding common stock of the Company;
WHEREAS, Buyer desires to purchase from Seller, following the
acquisition of the Construction Permit by the Company, forty-nine percent (49%)
of the outstanding common stock of the Company, subject to the terms and
conditions set forth herein;
WHEREAS, Buyer desires to grant to Seller an option to require Buyer
to purchase the remaining fifty-one percent (51%) of the outstanding common
stock of the Company, and Seller desires to grant to Buyer an option to
purchase such stock, subject to the terms and conditions set forth herein;
WHEREAS, on the date hereof, Buyer and the Company have entered into
(a) a Construction Agreement, pursuant to which Buyer agrees to provide certain
services in connection with the construction of the Station, (b) a Lease
Agreement, pursuant to which Buyer agrees to lease to the Company certain
assets used or useful in the business and operations of the Station, and (c) a
Time Brokerage Agreement, pursuant to which, upon completion of construction of
the Station and commencement of broadcast operations, Buyer shall provide
programming for broadcast on the Station, subject to the rules, regulations and
policies of the FCC; and
<PAGE> 11
WHEREAS, in connection with the foregoing transactions, Buyer, Seller and
the Company desire to enter into a Shareholders Agreement setting forth, among
other things, certain restrictions relating to the issuance and sale of the
capital stock of the Company.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, conditions and promises contained herein, and for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, agree as follows:
ARTICLE 1. CERTAIN DEFINITIONS
Section 1.1 Terms Defined in this Section. The following terms, as
used in this Agreement, have the meanings set forth in this Section:
"Closings" means the collective reference to the Initial Closing and the
Second Closing.
"Common Stock" means all of the issued and outstanding shares of capital
stock of the Company, consisting of 1,000 shares of voting common stock, par
value $.01 per share.
"Communications Act" means the Communications Act of 1934, as amended, the
Telecommunications Act of 1996 and the rules and regulations promulgated
thereunder.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Construction
Permit to the Company and to transfer the Common Stock to Buyer or otherwise to
consummate the transactions contemplated by this Agreement.
"Construction Agreement" means the Construction Agreement entered into by
Buyer and the Company on the date hereof.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which the Company is a party or that are binding upon the Company
and that relate to or affect the assets or the business or operations of the
Station, and (a) that are in effect on the date of this Agreement or (b) that
are entered into by the Company between the date of this Agreement and the
Second Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement to be entered into among
Buyer, Seller, the Company and the Escrow Agent, substantially in the form of
Exhibit A.
- 2 -
<PAGE> 12
"Escrow Deposit" means the Fifty Thousand Dollars ($50,000) in cash
deposited by Buyer with the Escrow Agent pursuant to the Escrow Agreement.
"FCC Consent" means action by the FCC granting its consent to the transfer
of control of the Company as contemplated by this Agreement.
"FCC Licenses" means those licenses, permits, and authorizations issued by
the FCC in connection with the business and operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Initial Closing" means the consummation of the purchase and sale of the
Initial Shares pursuant to this Agreement in accordance with the provisions of
Article 2.
"Initial Closing Date" means the date on which the Initial Closing occurs,
as determined pursuant to Section 2.1.
"Initial Shares" means 490 shares of the voting common stock, par value
$.01 per share, of the Company.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by the Company or under which the Company is licensed or franchised and that
are used or useful in the business and operations of the Station, together with
any additions thereto between the date of this Agreement and the Second Closing
Date.
"Lease Agreement" means the Lease Agreement entered into by Buyer and the
Company on the date hereof.
"Licenses" means all licenses, permits, construction permits, and other
authorizations issued as of the date hereof by the FCC, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
for the construction or operation of the Station, together with any additions
thereto between the date of this Agreement and the Second Closing Date.
"Option Shares" means 510 shares of the voting common stock, par value
$.01 per share, of the Company.
- 3 -
<PAGE> 13
"Pro Forma FCC Consent" means the action by the FCC granting its consent
to the pro forma assignment of the Construction Permit from Seller to the
Company.
"Real Property" means all real property, and all buildings and other
improvements thereon, whether or not owned or held by Seller or the Company,
used or useful in the business or operations of the Station.
"Real Property Interests" means all interests in real property, including
fee estates, leaseholds and subleaseholds, purchase options, easements,
licenses, rights to access, and rights of way, and all buildings and other
improvements thereon, owned or held by Seller or the Company that are used or
useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Second Closing
Date.
"Second Closing" means the consummation of the purchase and sale of the
Option Shares pursuant to this Agreement in accordance with the provision of
Article 9.
"Second Closing Date" means the date on which the Second Closing occurs,
as determined pursuant to Section 9.3.
"Shareholders Agreement" means the Shareholders Agreement to be entered
into upon the Initial Closing among Buyer, Seller and the Company,
substantially in the form of Exhibit B.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property owned or held by
Seller or the Company that is used or useful in the conduct of the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Second Closing Date.
"Taxes" (and, with correlative meaning, "Taxes" and "Taxable") means all
federal, state, local or foreign income, gross receipts, windfall profits,
severance, property, production, sales, use, license, excise, franchise,
capital, transfer, employment, withholding and other taxes and assessments,
together with any interest, additions or penalties with respect thereto and any
interest in respect of such additions or penalties, and "Tax" means any one of
such Taxes.
"Tax Returns" means all federal, state, local and foreign income,
franchise, sales, use, occupation, property, excise, alternative or add-on
minimum, social security, employees' withholding, unemployment, disability,
transfer, capital stock and other tax returns and tax reports, and "Tax Return"
means any one of such Tax Returns.
"Time Brokerage Agreement" means the Time Brokerage Agreement entered into
by Buyer and the Company on the date hereof.
- 4 -
<PAGE> 14
"Tower Lease" means a lease, in form and substance acceptable to Buyer, to
be entered into by the Company for the construction, operation and maintenance
of the Station's transmission facilities at the transmitter site specified in
the Construction Permit or at an alternate site acceptable to Buyer.
"Transaction Documents" means the Lease Agreement, Construction Agreement,
Time Brokerage Agreement and Shareholders Agreement.
Section 1.2 Clarifications. Words used herein, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender and any other number as the context requires. Use of the word
"including" herein shall be deemed and construed to mean "including but not
limited to." Except as specifically otherwise provided in this Agreement in a
particular instance, a reference to a Section, Exhibit or Schedule is a
reference to a Section of this Agreement or a Schedule or an Exhibit hereto,
and the terms "hereof," "herein" and other like terms refer to this Agreement
as a whole, including the Schedules and Exhibits hereto, and not solely to any
particular part hereof.
ARTICLE 2. THE INITIAL CLOSING
Section 2.1 The Initial Closing. The Initial Closing shall take place
at 10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less
than five (5) days' written notice to Seller, which date shall not be sooner
than the first business day after the date on which the Pro Forma FCC Consent
has become a Final Order and shall not be later than the tenth business day
after the date on which the Pro Forma FCC Consent has become a Final Order,
subject to the satisfaction of all other conditions precedent to the holding of
the Initial Closing. The Initial Closing shall take place at the offices of
Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or such other place as the parties shall mutually
agree. If Buyer fails to specify the date for Initial Closing prior to the
fifth business day after the date upon which the Pro Forma FCC Consent has
become a Final Order, the Initial Closing shall take place on the tenth
business day after the date upon which the Pro Forma FCC Consent has become a
Final Order.
Section 2.2 Sale of Initial Shares. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer
and deliver to Buyer on the Initial Closing Date, and Buyer agrees to purchase,
the Initial Shares, free and clear of any claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances of
any nature whatsoever.
Section 2.3 Purchase Price. The purchase price for the Initial Shares
(the "Purchase Price") shall be Four Hundred Four Thousand Dollars ($404,000).
The Purchase Price shall be paid at the Initial Closing by Buyer to Seller, in
accordance with written instructions provided by Seller to Buyer no less than
two (2) business days prior to the Initial Closing Date, by wire transfer of
immediately available federal funds or other means mutually satisfactory to
Buyer and Seller.
-5-
<PAGE> 15
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING
Section 3.1 Organization of the Company. Seller shall cause the
Company to be duly qualified to conduct business in the State of Oklahoma.
Section 3.2 Execution of Tower Lease. Upon the execution of this
Agreement, Seller and Buyer shall cooperate and use their respective best
efforts to negotiate and cause the Company to enter into the Tower Lease as
expeditiously as possible. Upon execution of the Tower Lease, the Company
shall prepare and file with the FCC and any other federal, state or local
government authorities such applications, notices or other documents as may be
necessary or advisable to permit the construction and operation of the
Station's transmission facilities at the site specified in the Tower Lease.
Buyer shall cooperate with the Company and use its best efforts to assist the
Company in obtaining such approvals of the FCC and any other federal, state or
local governmental authorities as may be necessary or advisable to permit such
construction and operation.
Section 3.3 Extension Application. Seller shall make such additional
filings with the FCC and continue to use its best efforts to cause the FCC to
grant the Extension Application as expeditiously as possible.
Section 3.4 Pro Forma FCC Consent. Seller and the Company shall prepare
and, within five (5) business days after the date of this Agreement, file with
the FCC an appropriate application for the Pro Forma FCC Consent. Seller and
the Company shall thereafter prosecute the application for the Pro Forma FCC
Consent with all diligence and otherwise use its best efforts to obtain a grant
of the application for the Pro Forma FCC Consent as expeditiously as possible.
Section 3.5 Modification Application. Seller shall prepare and, within
ten (10) business days after the date of this Agreement, file with the FCC an
application, in form and substance acceptable to Buyer, to relocate the
Station's transmitter site to the existing transmitter site of radio station
KCKI-FM, Henryetta, Oklahoma (NL 35 50 2.0, WL 96 07 28) (the "Modification
Application").
Section 3.6 Assignment of Construction Permit. Upon the grant of the
Pro Forma FCC Consent, Seller shall contribute the Construction Permit to the
Company in exchange for all of the issued and outstanding shares of Common
Stock not then owned by Seller, pursuant to conveyancing documents in form and
substance acceptable to Buyer.
Section 3.7 Conduct Pending the Initial Closing. Between the date
hereof and the Initial Closing Date, unless Buyer shall otherwise consent
in writing, Seller and the Company covenant and agree:
- 6 -
<PAGE> 16
(a) to perform all acts necessary to carry out the transactions
contemplated by this Agreement and to not: (i) create, incur, assume or
guarantee any indebtedness, obligation or liability or make any payments in
respect thereto except in the ordinary course of business and consistent with
past practices; (ii) encumber the Common Stock; or (iii) perform or suffer any
acts within its control that are inconsistent with its representations,
warranties, covenants and agreements set forth herein; and
(b) to notify Buyer promptly of (i) any adverse development
with respect to the Extension Application, the Modification Application, Pro
Forma FCC Consent or the Tower Lease or (ii) the commencement or threat of any
claim; suit; action; arbitration; legal, administrative or other proceeding;
governmental investigation; or tax audit against Seller or the Company or
affecting the Station; and
(c) to cooperate fully with Buyer in taking any and all actions
necessary or desirable for the consummation of the transactions
contemplated by this Agreement;
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE INITIAL CLOSING
As an inducement to Seller and the Company to enter into this Agreement
and consummate the transactions contemplated to occur upon the Initial Closing,
Buyer represents and warrants to Seller and the Company as follows:
Section 4.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and shall be, on or before the Initial Closing Date, duly qualified
to conduct business as a foreign corporation in the State of Oklahoma.
Section 4.2 Power and Authority. Buyer has full corporate power and
authority to enter into this Agreement and the other documents contemplated
hereby, and to perform and comply with the terms, covenants and conditions to
be performed or complied with by Buyer hereunder and thereunder. This
Agreement constitutes, and any other instrument contemplated hereby when
executed and delivered by Buyer at the Initial Closing, will constitute, the
legal, valid and binding obligations of Buyer, enforceable in accordance with
their terms, except as such enforceability may be affected by bankruptcy,
insolvency or similar laws and by court-applied equitable principles.
Section 4.3 Conflicts. The execution and delivery of this Agreement
and the instruments or documents to be delivered by Buyer pursuant to this
Agreement at the Initial Closing, the consummation of the transactions
contemplated by this Agreement at the Initial Closing, and compliance with the
terms, conditions and provisions of this Agreement at the Initial Closing by
Buyer, with or without the giving of notice or the passage of time, or both, do
not and will not: (i) contravene any provision of Buyer's Articles of
Incorporation or By-laws; (ii) conflict with or result in a breach of or
constitute a default under any of the terms,
- 7 -
<PAGE> 17
conditions or provisions of any indenture, mortgage, loan or credit agreement
or any other agreement or instrument to which Buyer is a party or by which it
or its assets may be bound or affected, or any decree, judgment or order of any
court or governmental department, commission, board, agency or instrumentality,
domestic or foreign, or any applicable law, ordinance, rule or regulation,
including but not limited to the Communications Act; or (iii) result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of Buyer's assets or give to others any interests or rights
therein.
Section 4.4 Investment. Buyer will acquire the Initial Shares for its
own account for investment and not with a present view to distribute or resell
the same.
Section 4.5 Qualifications. Buyer knows of no fact that, under
existing rules and regulations of the FCC, could reasonably be expected to
cause the FCC to determine that Buyer is not qualified to be the transferee of
the Initial Shares.
Section 4.6 Disclosure. No representation or warranty by Buyer in this
Agreement, and no schedule, document, statement, certificate furnished or to be
furnished by Buyer to Seller or the Company pursuant hereto, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements or facts contained herein or
therein not misleading
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
COMPANY REGARDING THE INITIAL CLOSING
As an inducement to Buyer to enter into this Agreement and consummate the
transactions contemplated to occur upon the Initial Closing, Seller and the
Company represent and warrant to Buyer as follows:
Section 5.1 Organization and Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and shall be, on or before the Initial Closing, duly
qualified to conduct business in the State of Oklahoma. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Arizona and is duly qualified to conduct business in the
State of Oklahoma. Seller has delivered to Buyer true and complete copies of
(a) the Articles of Incorporation and By-laws of Seller and (b) the Certificate
of Incorporation and By-laws of the Company.
Section 5.2 Power and Authority. Seller and the Company each has full
corporate power and authority to enter into this Agreement and the other
documents contemplated hereby, and to perform and comply with the terms,
covenants and conditions to be performed or complied with by Seller or the
Company hereunder or thereunder. This Agreement constitutes, and any other
instrument contemplated hereby, when executed and delivered by Seller or the
Company at the Initial Closing, will constitute, the legal, valid and binding
obligations of Seller and the Company, enforceable in accordance with their
terms, except as
- 8 -
<PAGE> 18
such enforceability may be affected by bankruptcy, insolvency or similar laws
and by court-applied equitable principles.
Section 5.3 Conflicts. The execution and delivery of this Agreement
and the instruments or documents to be delivered by Seller or the Company
pursuant to this Agreement at the Initial Closing, the consummation of the
transactions contemplated by this Agreement at the Initial Closing, and
compliance with the terms, conditions and provisions of this Agreement at the
Initial Closing by Seller and the Company, with or without the giving of notice
or the passage of time, or both, do not and will not: (i) contravene any
provision of the Articles of Incorporation or By- laws of Seller or the
Certificate of Incorporation or By-laws of the Company, (ii) conflict with or
result in a breach of or constitute a default under any of the terms,
conditions or provisions of any indenture, mortgage, loan or credit agreement
or any other agreement or instrument to which Seller or the Company is a party
or by which Seller or the Company or any of their respective assets may be
bound or affected, or any decree, judgment or order of any court or
governmental department, commission, board, agency or instrumentality, domestic
or foreign, or any applicable law, ordinance, rule or regulation, including but
not limited to the Communications Act; or (iii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the assets of Seller or the Company or the Initial Shares or give to others
any interests or rights therein.
Section 5.4 Exchange Act; Investment Company Act. No securities of the
Company are required to be registered under Section 12 of the Securities and
Exchange Act of 1934, as amended. Neither Seller nor the Company is an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
Section 5.5 Capitalization. The Company's capital stock consists
solely of One Thousand (1,000) shares of duly authorized voting common stock,
with a par value of $.01 per share, of which One Hundred (100) shares are
issued and outstanding (the "Outstanding Stock"). The Outstanding Stock is
and, as of the Initial Closing, the remaining shares of Common Stock will be,
validly issued and outstanding, fully paid and nonassessable. The Outstanding
Stock constitutes all of the issued and outstanding capital stock of the
Company. There are no outstanding securities convertible into or exchangeable
for, and no outstanding options, warrants or other rights to purchase or to
subscribe for, any shares of capital stock or other securities of the Company,
other than as set forth herein. There are no outstanding agreements,
arrangements, commitments or understandings of any kind affecting or relating
to the voting, issuance, purchase, redemption, repurchase or transfer of any of
the capital stock of the Company, other than as set forth herein or in the
Shareholders Agreement. Except as provided herein, there are no options,
warrants, rights or any other agreement or instrument giving any person any
right under any circumstances to acquire any shares of capital stock of the
Company. Seller has good and valid marketable title to the Outstanding Stock
and the sole right to vote, sell, transfer and deliver the Outstanding Stock.
Except as contemplated by this Agreement, neither the Company nor Seller has
agreed with any person to sell, transfer or deliver the Outstanding Stock or
other capital stock of the Company.
- 9 -
<PAGE> 19
Upon the sale of the Initial Shares to Buyer hereunder, Buyer shall have good
and valid marketable title thereto, free and clear of all liens, encumbrances,
security interests and restrictions of any kind.
Section 5.6 Assets and Liabilities of the Company. As of the Initial
Closing Date, the Company shall own and have good and marketable title to the
assets and properties listed on Schedule 5.6, and shall have no debts,
obligations or liabilities of any kind whatsoever, whether accrued, contingent
or otherwise, except those arising under the Tower Lease, the Transaction
Documents and the Communications Act.
Section 5.7 Broker Neither Seller, the Company nor any person acting
on their behalf has incurred any liability from any finder's or broker's fees
or commissions in connection with the transactions contemplated by this
Agreement, except for such fees and commissions owed by Seller to Bruce Fox,
which fees and commissions shall be the sole responsibility of Seller.
Section 5.8 Debts, Obligations and Liabilities. Schedule 5.8 hereto
contains a true and complete list, in all material respects, of all outstanding
debts, obligations and liabilities of Seller.
Section 5.9 Disclosure. No representation or warranty by Seller or the
Company in this Agreement, and no schedule, document, statement, certificate
furnished or to be furnished by Seller or the Company to Buyer pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements or facts
contained herein or therein not misleading.
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE INITIAL CLOSING
The obligations of Buyer at the Initial Closing are subject to the
fulfillment prior to or at the Initial Closing of the following conditions (any
one or more of which may be waived in whole or in part by Buyer at Buyer's
option):
Section 6.1 Representations and Warranties. The representations and
warranties of Seller and the Company contained in this Agreement relating to
the Initial Closing shall be true and correct in all material respects on and
as of the Initial Closing Date, with the same force and effect as though made
on and as of such date.
Section 6.2 Covenants and Conditions. Seller and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller and the
Company on or before the Initial Closing Date.
- 10 -
<PAGE> 20
Section 6.3 Extension Application. The FCC shall have granted the
Extension Application without the imposition on the Seller or the Station of
any conditions that could reasonably be expected to have a material adverse
effect on the construction or operation of the Station as currently
contemplated in the Extension Application, and such grant shall have become a
Final Order.
Section 6.4 Approvals for Tower Site. Seller and the Company shall
have obtained all necessary governmental consents or approvals required for the
construction and operation of the Station at the site specified in the Tower
Lease, and any such construction shall have been conducted in accordance with
the terms of such consents or approvals and with any applicable laws, rules and
regulations of any governmental authority, including, without limitation, the
FCC, any municipality or the Federal Aviation Administration.
Section 6.5 Contribution. The Pro Forma FCC Consent shall have become
a Final Order, and Seller shall have contributed the Construction Permit to the
Company in accordance with Section 3.6.
Section 6.6 Tower Lease. The Company shall have entered into the Tower
Lease, and the Tower Lease shall be in full force and effect and enforceable in
accordance with its terms.
Section 6.7 Deliveries. Seller and the Company shall have delivered to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
Buyer's Counsel:
(a) Initial Shares. Certificates representing the Initial Shares,
which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
(b) Certificate of Incorporation. A copy of the Certificate of
Incorporation of the Company, certified as of a date not earlier than ten (10)
days prior to the Initial Closing Date by the Secretary of State of Delaware.
(c) Bylaws. A copy of the Bylaws of the Company, certified as of
the Initial Closing Date by the Secretary or an Assistant Secretary of the
Company.
(d) Resolutions. Copies of resolutions adopted by the Board of
Directors of both Seller and the Company, authorizing and approving the
execution and delivery of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, certified by
the Secretary or an Assistant Secretary of Seller and the Company,
respectively, as being true and complete on the Initial Closing Date.
(e) Officer's Certificates. Certificates, dated as of the Initial
Closing Date, executed on behalf of Seller and the Company by the President of
Seller and the Company, respectively, each certifying: (1) that the
representations and warranties of Seller and the Company each contained in this
Agreement are true and complete in all material respects as
- 11 -
<PAGE> 21
of the Initial Closing Date as though made on and as of that date; and (2) that
Seller and the Company have performed in all material respects all of their
respective obligations and agreements in this Agreement to be performed and
complied with all of their respective covenants and conditions contained in
this Agreement to be complied with by Seller and the Company on or before the
Initial Closing Date.
(f) Opinions of Counsel. Opinions of Seller's and the Company's
counsel and communications counsel dated as of the Initial Closing Date,
substantially in the form of Schedule 6.7(f) hereto.
(g) Consents. A manually executed copy of any instrument evidencing
receipt of any Consent.
(h) Transaction Documents. Copies of the Transaction Documents duly
executed by Seller and the Company.
(i) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 6.8 Adverse Proceedings. Except for proceedings relating to
the television broadcast industry generally, there shall not be any order,
decree or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which is reasonably likely to result in any material adverse effect
upon the construction, business, property, assets or condition (financial or
otherwise) of the Station or which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken pursuant to or in
connection with this Agreement.
Section 6.9 Modification Application. The FCC shall have granted the
Modification Application without the imposition on the Seller or the Station of
any conditions that could reasonably be expected to have a material adverse
effect on the construction or operation of the Station as contemplated in the
Modification Application, and such grant shall have become a Final Order.
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE INITIAL CLOSING
The obligations of Seller and the Company at the Initial Closing are
subject to the fulfillment prior to or at the Initial Closing of the following
conditions (any one or more of which may be waived in whole or in part by
Seller and the Company at their option):
Section 7.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Initial Closing
shall be true and correct in all material respects on and as of the Initial
Closing Date, with the same force and effect as though made on and as of such
date.
- 12 -
<PAGE> 22
Section 7.2 Covenants and Conditions. Buyer shall have performed in
all material respects all of its obligations and agreements and complied with
all of its covenants and conditions contained in this Agreement to be performed
or complied with by Buyer on or before the Initial Closing Date.
Section 7.3 Deliveries. Buyer shall have delivered to Seller and the
Company the following in form and substance reasonably satisfactory to Seller,
the Company and their Counsel:
(a) Purchase Price. The Purchase Price described in Section 2.3.
(b) Resolutions. Copies of resolutions adopted by the Board of
Directors of Buyer, authorizing and approving the execution of this Agreement
and the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, certified by its Secretary as being true and
correct on the Initial Closing Date.
(c) Officer's Certificate. A certificate, dated as of the Initial
Closing Date, executed on behalf of Buyer by the Chairman or President of
Buyer, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as
of the Initial Closing Date as though made on and as of that date, and (2) that
Buyer has performed in all material respects all of its obligations and
agreements in this Agreement to be performed and complied with all of the
covenants and conditions contained in the Agreement to be complied with by
Buyer on or before the Initial Closing Date.
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as of
the Initial Closing Date, substantially in the form of Schedule 7.3(d) hereto.
(e) Transaction Documents. Copies of the Transaction Documents duly
executed by Buyer.
(f) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 7.4 Adverse Proceedings. There shall not be any order, decree
or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement.
- 13 -
<PAGE> 23
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION
Section 8.1 General. Following the date hereof and prior to the Second
Closing Date: (i) neither the Company nor Seller shall enter into any
contracts or agreements creating any security interests, mortgages, liens or
encumbrances on the assets of the Company or the Station; (ii) Seller shall not
enter into any contract or agreement creating any liens or security interests
in any shares of capital stock of the Company; (iii) the Company shall be
operated in a prudent and businesslike manner and in accordance with the other
covenants in this Article 8; (iv) Seller shall not amend its Articles of
Incorporation or By-laws and the Company shall not amend its Certificate of
Incorporation or By-Laws; and (v) neither Seller nor the Company shall take or
permit, or agree to take or permit, any action within Seller's or the Company's
control that is inconsistent with the proper performance of their obligations
under this Agreement, including but not limited to, the issuance or sale of any
capital stock of the Company or the granting to any person or entity, other
than Buyer, an option or similar right to purchase any of the Company's capital
stock.
Section 8.2 FCC Consent.
(a) The conveyance of the Option Shares by Seller to Buyer as
contemplated by this Agreement is subject to the prior consent and approval of
the FCC.
(b) Seller and Buyer shall prepare and, within five (5) business
days after the first to occur of Buyer's receipt of the Put Notice (as defined
below) or Seller's receipt of the Call Notice (as defined below), shall file
with the FCC an appropriate application for the FCC Consent. Seller and Buyer
shall thereafter prosecute the application for the FCC Consent with all
diligence and otherwise use their respective best efforts to obtain a grant of
the application for the FCC Consent as expeditiously as possible. Each party
agrees to comply with any condition imposed on it by the FCC Consent, except
that no party shall be required to comply with a condition if (i) the condition
was imposed on it as the result of a circumstance the existence of which does
not constitute a breach by that party of any of its representations,
warranties, or covenants hereunder, and (ii) compliance with the condition
would have a material adverse effect upon it. Buyer and Seller shall oppose
any petitions to deny or other objections filed with respect to the application
for the FCC Consent and any requests for reconsideration or judicial review of
the FCC Consent.
(c) If the Second Closing shall not have occurred for any reason
within the original effective period of the FCC Consent and neither party shall
have terminated this Agreement under Article 18, the parties shall jointly
request one or more extensions of the effective period of the FCC Consent. No
extension of the effective period of the FCC Consent shall limit the exercise
by either party of its right to terminate the Agreement under Article 18.
Section 8.3 Employee Benefit Plans. Except as may be consented to in
writing by Buyer, the Company will not adopt any employee benefit plans or
arrangements applicable to
- 14 -
<PAGE> 24
the employees of the Company, including, without limitation, pension or thrift
plans, individual or supplemental pension or accrued compensation arrangements,
incentive plans, or bonus and termination arrangements; provided, however, that
nothing herein shall prevent the Company from adopting reasonable policies on
vacation and sick leave for its employees or offering them participation in
employer-paid group health plans or any other benefits required by law.
Section 8.4 Labor Relations. Neither the Seller nor the Company (i)
will enter into any collective bargaining agreement with respect to the
Station; (ii) will enter into any written or oral contracts of employment;
(iii) will incur any fixed or contingent liabilities or obligations with
respect to any person employed at the Station; and (iv) will fail to comply in
all material respects with applicable laws, rules and regulations relating to
the employment of labor including, without limitation, those related to wages,
hours, collective bargaining, occupational safety, discrimination, and the
payment of social security and other payroll related taxes.
Section 8.5 Licenses. Neither the Seller nor the Company shall cause,
or fail to take any action within its reasonable control necessary to prevent,
(i) any License to expire, be surrendered or modified; (ii) any governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any License; (iii) any governmental authority to dismiss or
deny any pending application concerning the construction or operation of the
Station.
Section 8.6 Compliance with Laws. The Seller and the Company shall
construct and operate the Station in all material respects in accordance with
all applicable laws, rules and regulations and the terms of all Licenses.
Section 8.7 Notification. Seller and the Company shall give Buyer
prompt written notice of any material change in any of the information
contained in the representations and warranties of Seller and the Company set
forth in this Agreement or in the Schedules hereto.
Section 8.8 Preservation of Business. Seller and the Company shall
preserve the business and organization of the Station intact and use their best
efforts to keep available to the Station its employees and to preserve the
Station's relationships with suppliers, advertisers and others having business
relations with it, to the end that the business, operations, and prospects of
the Station shall be unimpaired at the Second Closing.
Section 8.9 Performance of Agreements. The Company and Seller shall
perform their respective obligations under this Agreement, the Shareholders
Agreement, Time Brokerage Agreement, Construction Agreement and Lease
Agreement, in each case in accordance with the terms thereof.
Section 8.10 Cable Carriage. Consistent with the rules and regulations
of the FCC, the Company shall notify the cable operators within the Tulsa,
Oklahoma Area of Dominant
- 15 -
<PAGE> 25
Influence of the Station's election to be carried on a "must-carry" basis on
such cable operators' cable television systems. The Company shall use its best
efforts to provide such notices on the date that is sixty (60) days prior to
commencing operations pursuant to program test authority as defined by FCC
rules and regulations, but in no event shall such notices be provided later
than thirty (30) days after the commencement of such operations.
AARTICLE 9. THE OPTIONS AND THE SECOND CLOSING
Section 9.1 Call Option.
(a) In consideration of Buyer's undertakings herein and in the
Transaction Documents, the receipt and sufficiency of which are hereby
acknowledged by Seller, Seller hereby grants to Buyer an exclusive and
irrevocable option to purchase from Seller the Option Shares (the "Call
Option"), free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances of any nature
whatsoever.
(b) Buyer may give written notice to Seller of Buyer's intention to
exercise the Call Option (the "Call Notice") at any time during the thirty (30)
day period beginning on the date the Station commences operations pursuant to
program test authority (the "Option Period"). In the event that Buyer fails to
give Seller the Call Notice prior to the end of the Option Period, then the
Call Option shall expire.
(c) Within five (5) business days of Seller's receipt of the Call
Notice, Seller and Buyer shall file with the FCC the application for the FCC
Consent and shall file such notices with, and obtain such approvals of, any
other governmental authorities that are required for the acquisition by Buyer
of the Option Shares and shall diligently and expeditiously prosecute such
filings.
Section 9.2 Put Option.
(a) In consideration of Sellers's and the Company's undertakings
herein and in the Transaction Documents, the receipt and sufficiency of which
are hereby acknowledged by Buyer, Buyer hereby grants to Seller an exclusive
and irrevocable option to require Buyer to purchase from Seller the Option
Shares (the "Put Option"), free and clear of any claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances of
any nature whatsoever.
(b) Seller may give written notice to Buyer of Seller's intention to
exercise the Put Option (the "Put Notice") at any time during the Option
Period. In the event that Seller fails to give Buyer the Put Notice prior to
the end of the Option Period, then the Put Option shall expire.
(c) Within five (5) business days of Buyer's receipt of the Put
Notice, Buyer and Seller shall file with the FCC the application for the FCC
Consent and shall file
- 16 -
<PAGE> 26
such notices with, and obtain such approvals of, any other governmental
authorities that are required for the acquisition by Seller of the Option
Shares and shall diligently and expeditiously prosecute such filings.
Section 9.3 The Second Closing. The Second Closing shall take place at
10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less than
five (5) days' written notice to Seller, which date shall not be sooner than
the first business day after the date on which the FCC Consent is granted and
shall not be later than the tenth business day after the date on which the FCC
Consent has become a Final Order, subject to the satisfaction of all other
conditions precedent to the holding of the Second Closing. The Second Closing
shall take place at the offices of Dow, Lohnes & Albertson, 1200 New Hampshire
Avenue, N.W., Suite 800, Washington, D.C. 20036, or such other place as the
parties shall mutually agree. If Buyer fails to specify the date for Second
Closing prior to the fifth business day after the date upon which the FCC
Consent has become a Final Order, the Second Closing shall take place on the
tenth business day after the date upon which the FCC Consent has become a Final
Order.
Section 9.4 Sale of Option Shares. Subject to the terms and conditions
set forth in this Agreement, Seller hereby agrees to sell, transfer and deliver
to Buyer on the Second Closing Date, and Buyer agrees to purchase, the Option
Shares, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances of any nature
whatsoever.
Section 9.5 Purchase Price for Option Shares. The purchase price for
the Option Shares (the "Option Price") shall be Four Hundred Twenty One
Thousand Dollars ($421,000). The Option Price shall be paid at the Second
Closing by Buyer to Seller by wire transfer of immediately available federal
funds or other means mutually satisfactory to Buyer and Seller in accordance
with written instructions provided by Seller to Buyer no less than two (2)
business days prior to the Second Closing Date.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE SECOND CLOSING
All of the representations and warranties of Buyer set forth in Article 4
hereof shall be true and correct in all material respects as of the Second
Closing Date, with the same force and effect as though made on and as of the
Second Closing Date, except as otherwise contemplated by the express terms of
this Agreement. For the purpose of this Article 10, each reference in Article
4 hereof to the "Initial Closing," "Initial Shares" and the "Initial Closing
Date" shall be deemed to be a reference to the Second Closing, Option Shares
and the Second Closing Date, respectively.
- 17 -
<PAGE> 27
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY AND SELLER REGARDING THE SECOND CLOSING
All of the representations and warranties of the Company and Seller set
forth in Article 5 hereof shall be true and correct in all material respects as
of the Second Closing Date, with the same force and effect as though made on
and as of the Second Closing Date, except as otherwise contemplated by the
express terms of this Agreement. For the purpose of this Article 11, each
reference in Article 5 hereof to the "Initial Closing" and the "Initial Closing
Date" shall be deemed to be a reference to the Second Closing and the Second
Closing Date, respectively, and each reference to the "Initial Shares" shall be
deemed to be a reference to the Option Shares. Seller and the Company further
represent, warrant and covenant to Buyer as follows:
Section 11.1 Contracts. Within ten (10) days after Seller receives the
Call Notice or Buyer receives the Put Notice, Seller shall deliver to Buyer a
true and complete list and copies of the Contracts. The Contracts shall be
valid and binding agreements of the Company enforceable in accordance with
their terms. The Company shall have complied with the Contracts in all
material respects, and the Company shall not be in default under any of the
Contracts.
Section 11.2 Copyrights, Trademarks and Similar Rights. Within ten (10)
days after Seller receives the Call Notice or Buyer receives the Put Notice,
Seller shall deliver to Buyer a true and complete list and copies of all
Intangibles.
Section 11.3 Governmental Authorizations. Within ten (10) days after
Seller receives the Call Notice or Buyer receives the Put Notice, Seller shall
deliver to Buyer a true and complete list and copies of the Licenses. The
Company shall be the authorized legal holder of the Licenses. The Licenses
shall comprise all of the licenses, permits and other authorizations required
from governmental and regulatory authorities for the lawful conduct of the
business and operations of the Station in the manner and to the full extent
they are conducted on the Second Closing Date, and none of the Licenses shall
be subject to any restriction or condition which would limit the full operation
of the Station. The Licenses shall be in full force and effect, and the
operation of the Station shall be in accordance therewith. Seller has no
knowledge of any events or conditions relating to Seller or Seller's ownership
and control of the Company that could prevent the FCC from approving the
transfer of control of the Company to Buyer.
Section 11.4 Title to and Condition of Real Property. Within ten (10)
days after Seller receives the Call Notice or Buyer receives the Put Notice,
Seller shall deliver to Buyer a true and complete description of all the Real
Property and the Company's interests therein. The Real Property shall comprise
all real property interests necessary to conduct the business and operations of
the Station as then conducted. The Company shall have good and marketable fee
simple title, insurable at standard rates, to all fee estates (including the
improvements thereon) included in the Real Property, free and clear of all
liens, mortgages,
- 18 -
<PAGE> 28
pledges, covenants, easements, restrictions, encroachments, leases, charges,
and other claims and encumbrances of any nature whatsoever, and without
reservation or exclusion of any mineral, timber, or other rights or interests,
except for liens for real estate taxes not yet due and payable. All Real
Property (including the improvements thereon) (i) shall be in good condition
and repair consistent with its present use, (ii) shall be available for
immediate use in the conduct of the business and operations of the Station, and
(iii) shall comply with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction.
Seciton 11.5 Title to and Condition of Tangible Personal Property.
Within ten (10) days after Seller receives the Call Notice or Buyer receives
the Put Notice, Seller shall deliver to Buyer a true and complete list of all
material items of Tangible Personal Property. The Tangible Personal Property
shall comprise all material items of tangible personal property necessary to
conduct the business and operations of the Station as then conducted. Seller
shall own and have good title to each item of Tangible Personal Property, and
none of the Tangible Personal Property shall be subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable. All
items of transmitting and studio equipment included in the Tangible Personal
Property (i) shall have been maintained in a manner consistent with generally
accepted standards of good engineering practice, and (ii) shall permit the
Station to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC, and, to Seller's knowledge, with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
Section 11.6 Compliance With Laws. As of the Second Closing Date, the
Company shall be in compliance in all material respects with the Communications
Act of 1934, as amended, and the rules and regulations of the FCC and, to
Seller's knowledge, with all other laws, regulations and governmental orders
applicable to the ownership or use of its assets and the conduct of the
business and operations of the Station.
Section 11.7 Reports. As of the Second Closing Date, all returns,
reports and statements which the Station is required to file with the FCC or
with any other governmental agency, as of the Second Closing Date, shall have
been filed and shall be complete and correct in all material respects.
Section 11.8 Public Inspection File. As of the Second Closing Date, the
Station's public inspection file shall be located at the Station's main studio
and shall contain, in all material respects, the original or copies of all
applications, reports and other documents and records relating to the operation
of the Station that are required to be in such file under the rules and
regulations of the FCC.
Section 11.9 Taxes. As of the Second Closing Date, (a) the Company
shall have filed all Tax Returns and shall have paid all Taxes shown on such
Tax Returns on any assessment received by the Company, provided that the
Company shall not be required to
- 19 -
<PAGE> 29
pay any Tax the validity of which is being contested by the Company in good
faith and pursuant to appropriate proceedings, (b) such reports and Tax Returns
shall have been prepared in accordance with applicable provisions of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder and with applicable provisions of state laws, rules and regulations
concerning taxation, and (c) the Company shall not have waived any statute of
limitations with respect to the payment of any taxes.
Section 11.10 Dividends and Redemptions. The Company shall not have made
at any time any declaration, set aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company, or any
direct or indirect redemption, purchase or other acquisition of such stock.
Section 11.11 Notices; Condemnation. As of the Second Closing Date: (i)
neither the Company nor Seller shall have received any written notice or order
by any governmental or other public authority, any insurance company that has
issued a policy of insurance with respect to the Station's assets or business,
or any board of fire underwriters or other body exercising similar functions
that relates to material violations of building, safety, fire or other
ordinances or regulations by the Station or requests the performance of any
significant repairs, alterations or other work to the assets of the Station;
and (ii) there will not be any pending or threatened condemnation,
expropriation, eminent domain, zoning or similar proceeding materially
affecting all or any portion of the assets of the Station.
Section 11.12 Liabilities of the Company. As of the Second Closing Date,
the Company shall have no liabilities or obligations of any sort whatsoever,
except those arising under the Licenses, those arising under the Transaction
Documents and those consented to in writing by Buyer.
Section 11.13 Disclosure. As of the Second Closing Date, no
representation or warranty by Seller or the Company in this Agreement, any
Exhibit or Schedule hereto or any certificate furnished or to be furnished to
Buyer pursuant hereto, and, to the knowledge of Seller, no representation or
warranty by Seller or the Company in any document or statement furnished or to
be furnished to Buyer pursuant hereto, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements or facts contained herein or therein not
misleading.
ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE SECOND CLOSING
The obligations of Buyer under this Agreement at the Second Closing are
subject to the fulfillment prior to or at the Second Closing of the following
conditions (any one or more of which may be waived in whole or in part by Buyer
at Buyer's option):
Section 12.1 Representations and Warranties. The representations and
warranties of Seller and the Company contained in this Agreement relating to
the Second Closing shall be
- 20 -
<PAGE> 30
true and correct in all material respects on and as of the Second Closing Date,
with the same force and effect as though such representations and warranties
had been made on as of such date.
Section 12.2 Covenants and Conditions. Seller and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller and the
Company on or before the Second Closing Date.
Section 12.3 FCC Consent. The FCC Consent shall have become a Final
Order.
Section 12.4 Consents. All material consents and approvals of all other
governmental authorities, bodies or agencies necessary for the consummation of
the transactions contemplated by this Agreement to occur at the Second Closing,
shall have been obtained, all without any conditions which would be unduly
burdensome on, or have a material adverse effect upon Buyer or the Company.
Section 12.5 Deliveries. Seller and the Company shall have delivered to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
Buyer's Counsel:
(a) Option Shares. Certificates representing the Option Shares,
which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
(b) Bylaws. A copy of the Bylaws of the Company, certified as of
the Second Closing Date, by the Secretary or Assistant Secretary of the
Company.
(c) Resolutions. Certificates, signed by the Secretary or Assistant
Secretary of Seller and the Company, certifying that the resolutions of the
Boards of Directors of Seller and the Company delivered to Buyer pursuant to
Section 6.7(d) hereof have not been amended or supplemented and remain in full
force and effect.
(d) Consents. A manually executed copy of any instrument evidencing
receipt of any Consent.
(e) Estoppel Certificates. Estoppel Certificates of the lessors of
all leasehold and subleasehold interests included in the Real Property
Interests.
(f) Officer's Certificates. Certificates, dated as of the Second
Closing Date, executed on behalf of Seller and the Company by the President of
Seller and of the Company, respectively, each certifying: (1) that the
representations and warranties of Seller and the Company each contained in this
Agreement are true and complete in all material respects as of the Second
Closing Date as though made on and as of that date; and (2) that Seller and the
Company have performed in all material respects all of their respective
- 21 -
<PAGE> 31
obligations and agreements in this Agreement to be performed and complied with
all of their respective covenants and conditions contained in this Agreement to
be complied with by Seller and the Company on or before the Second Closing
Date.
(g) Opinions of Counsel. Opinions of Seller's and the Company's
counsel and communications counsel dated as of the Second Closing Date,
substantially in the form of Schedule 12.5(g) hereto.
(h) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 12.6 Adverse Proceedings. Except for proceedings relating to
the television broadcast industry generally, there shall not be any order,
decree or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which is reasonably likely to result in any material adverse effect
upon the construction, business, property, assets or condition (financial or
otherwise) of the Station or which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken pursuant to or in
connection with this Agreement.
Section 12.7 Time Brokerage Agreement. The Time Brokerage Agreement
shall be in full force and effect, and the Company shall have complied in all
material respects with its obligations thereunder.
Section 12.8 Adverse Change. Between the date of this Agreement and the
Second Closing Date, there shall have been no material adverse change in the
business, assets, properties or financial condition of the Station, including
any unrestored damage, destruction, or loss affecting any assets that are
material to the conduct of the business of the Station.
ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE SECOND CLOSING
The obligations of Seller and the Company at the Second Closing under this
Agreement are subject to the fulfillment prior to or at the Second Closing of
the following conditions (any one or more of which may be waived in whole or in
part by Seller or the Company at their option):
Section 13.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Second Closing
shall be true and correct in all material respects on and as of the Second
Closing Date, with the same force and effect as though such representations and
warranties had been made on and as of such date.
Section 13.2 Covenants and Conditions. Buyer shall have performed in
all material respects all of its obligations and agreements and complied with
all of its covenants and
- 22 -
<PAGE> 32
conditions contained in the Agreement to be performed or completed with or
before the Second Closing Date.
Section 13.3 FCC Consent. The FCC shall have granted the FCC Consent.
Section 13.4 Consents. All material consents and approvals of all other
governmental authorities, bodies or agencies necessary for the consummation of
the transactions contemplated by this Agreement to occur at the Second Closing,
shall have been obtained, all without any conditions which would be unduly
burdensome on, or have a material adverse effect upon Seller.
Section 13.5 Deliveries. Buyer shall have delivered the following, in
form and substance reasonably satisfactory to Seller, the Company and their
Counsel:
(a) Option Price. The Option Price described in Section 9.5; and
(b) Resolutions. A Certificate, signed by the Secretary of Buyer,
certifying that the resolutions of the Board of Directors of Buyer delivered to
Seller and the Company pursuant to Section 7.3(b) hereof have not been amended
or supplemented and remain in full force and effect.
(c) Officer's Certificate. A certificate, dated as of the Second
Closing Date, executed on behalf of Buyer by the Chairman or President of
Buyer, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as
of the Second Closing Date as though made on and as of that date, and (2) that
Buyer has performed in all material respects all of its obligations and
agreements in this Agreement to be performed and complied with all of the
covenants and conditions in this Agreement to be complied with by Buyer on or
prior to the Second Closing Date.
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as of
the Second Closing Date, substantially in the form of Schedule 13.5(d) hereto.
Section 13.6 Time Brokerage Agreement. The Time Brokerage Agreement
shall be in full force and effect, and Buyer shall have complied in all
material respects with its obligations thereunder.
Section 13.7 Adverse Proceedings. There shall not be any order, decree
or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement.
- 23 -
<PAGE> 33
ARTICLE 14. JOINT COVENANTS
Section 14.1 Confidentiality. Buyer, on the one hand, and Seller and
the Company, on the other hand, shall each keep confidential all confidential
information obtained by it with respect to the other in connection with this
Agreement (except for such disclosure to attorneys, bankers, underwriters, and
investors, as may be appropriate in the furtherance of the transactions
contemplated by this Agreement), and if the transactions contemplated hereby
are not consummated for any reason, each shall, to the extent reasonably
possible, return to the other, without retaining a copy thereof, any
confidential schedules, documents or other written information obtained from
the other in connection with this Agreement and the transactions contemplated
hereby.
Section 14.2 Cooperation. Buyer, Seller and the Company shall cooperate
fully with each other and their respective counsels and accountants in
connection with any actions required to be taken as part of their obligations
under this Agreement, and the parties will use their best efforts to consummate
the transactions contemplated hereby and to fulfill their obligations
hereunder. No party shall take any action that is inconsistent with its
obligations under this Agreement, that would render any of its representations
or warranties herein untrue or incomplete or that could hinder or delay the
consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, and except as otherwise expressed in this
Agreement, Buyer shall have no obligation (a) to expend funds to obtain any of
the Consents or (b) to agree to any adverse change in any License or Contract
in order to obtain a Consent required with respect thereto.
Section 14.3 Governmental Consents. If any governmental consent
required for the consummation of the transactions contemplated hereby or the
satisfaction of any condition contained herein includes any condition, the
party upon which such condition is imposed shall use its best efforts to comply
therewith before the respective Closing to which such consent relates;
provided, however, that no party hereto shall be required to comply with any
condition that would be unduly burdensome or would have a material adverse
effect upon such party.
Section 14.4 Station Operation and Contracts. Buyer and Seller
specifically acknowledge that, as of the Initial Closing Date, the Station will
not have commenced broadcast operations. Buyer, Seller and the Company shall
cooperate and use their respective best efforts to complete construction of the
Station and commence broadcast operations at the Station as expeditiously as
possible. Seller and the Company shall file such applications with the FCC and
other governmental authorities as are necessary to enable the Station to
operate in compliance with FCC and other applicable rules and regulations.
- 24 -
<PAGE> 34
ARTICLE 15. TRANSFER TAXES; FEES AND EXPENSES
Section 15.1 Transfer Taxes. Buyer and Seller shall each pay one-half
of all transfer and documentary taxes or fees incurred in connection with the
transfer of the Initial Shares and Option Shares; provided, however, that
Seller shall be responsible for the payment of any federal, state or local
income tax applicable to Seller or the Company in connection with the
transaction contemplated by this Agreement.
Section 15.2 Filing Fees. Buyer and Seller shall each pay one-half of
all FCC filing fees and any other filing fee imposed by any other governmental
authority in connection with the transactions contemplated hereby.
Section 15.3 Expenses. Buyer and Seller shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation and
performance of and compliance with this Agreement; provided, however, that
Buyer shall pay all fees payable to the Escrow Agent pursuant to the Escrow
Agreement. In connection with the FCC application for the transfer of the
Option Shares to Buyer at the Second Closing, Seller shall be responsible for
the payment of any costs or expenses that are incurred as a result of the
filing of an objection to such FCC application based upon the qualifications of
Seller or the Company, or the acts or omissions of Seller or the Company with
respect to the acquisition or construction of the Station, and Buyer shall be
responsible for the payment of any costs or expenses that are incurred as a
result of the filing of an objection to such FCC application based upon the
qualifications of Buyer or the acts or omissions of Buyer with respect to the
acquisition or construction of the Station. On the Second Closing Date, Seller
shall pay 51% and Buyer shall pay 49% of the broker's fees and commissions
payable to Bruce Fox in connection with the transactions contemplated by this
Agreement.
ARTICLE 16. ESCROW DEPOSIT
Section 16.1 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited the Escrow Deposit with the
Escrow Agent in accordance with an Escrow Agreement. All funds and documents
deposited with or otherwise held by the Escrow Agent shall be held and
disbursed in accordance with the terms of the Escrow Agreement and the
following provisions:
(a) At the Initial Closing, Buyer, Seller and the Company shall
jointly instruct the Escrow Agent to disburse all funds held by the Escrow
Agent pursuant to the Escrow Agreement, including any interest or other
proceeds from the investment of funds held by the Escrow Agent, to or at the
direction of Buyer.
(b) If this Agreement is terminated pursuant to Article 18 and Buyer
is not in material breach of this Agreement, Buyer, Seller and the Company
shall jointly instruct the Escrow Agent to disburse all funds held by the
Escrow Agent pursuant to the Escrow
- 25 -
<PAGE> 35
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then Buyer, Seller and the Company shall
jointly instruct the Escrow Agent to disburse the Escrow Deposit to or at the
direction of Seller, and to disburse all other funds held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, to or at the direction of
Buyer.
(d) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then the payment to Seller of the Escrow
Deposit pursuant to this Section shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Seller by reason of Buyer's material breach of this Agreement. Seller and
Buyer agree in advance that actual damages would be difficult to ascertain and
that the amount of the Escrow Deposit is a fair and equitable amount to
compensate Seller for Buyer's material breach of this Agreement.
ARTICLE 17. RISK OF LOSS
Section 17.1 Risk of Loss. The risk of any loss, damage or impairment,
confiscation or condemnation of any of the assets of Seller or the Company from
any cause whatsoever shall be borne by Seller. In the event of any such loss,
damage or impairment, confiscation or condemnation, the proceeds of, or any
claim for any loss payable under, any insurance policy, judgment or award with
respect thereto shall be applied to repair, replace or restore such assets to
their prior condition as soon as possible after such loss, impairment,
condemnation or confiscation.
Section 17.2 Postponement of the Second Closing Date. If any damage or
destruction of Seller's or the Company's assets occurs and such assets cannot
be restored or replaced on or before the Second Closing Date, the Second
Closing Date shall be postponed, the exact date and time of such postponed
closing date to be such date and time within the effective period of the FCC
Consent as shall be as agreed to by Seller, Buyer and the Company. If such
assets cannot be restored or replaced within the effective period of the FCC
Consent, the parties shall join in requesting an extension of the effective
period of such consent for a period not to exceed an additional one hundred
twenty (120) days from the date of FCC Consent.
Section 17.3 Option to Terminate. In the event of any damage or
destruction of the assets, if such assets have not been restored or replaced
within the effective period of the FCC Consent as extended, Buyer may terminate
this Agreement forthwith without any further obligation hereunder by written
notice to Seller. Alternatively, Buyer may, at its option, proceed to close
this Agreement and complete the restoration and replacement of such damaged
assets after the Second Closing Date, in which event Seller shall deliver to
Buyer
- 26 -
<PAGE> 36
all insurance proceeds payable to it or the Company and received in connection
with such damage or destruction of the assets without limitation as to the
costs and expenses arising in connection with such restoration and replacement.
ARTICLE 18. TERMINATION RIGHTS
Section 18.1 Termination by the Parties. This Agreement may be
terminated by either Buyer, on the one hand, or Seller and the Company, on the
other hand, if not then in material default, upon written notice to the other
upon the occurrence of any of the following:
(a) If the purchase of the Initial Shares and Option Shares by Buyer
pursuant to this Agreement shall not have occurred on or prior to May 1, 1997;
(b) If the other party defaults in the observance or in the due and
timely performance of any of its material covenants or agreements contained
herein and such default has not been cured within ten (10) days after notice by
that party not in default;
(c) If on the date of either of the Closings, any of the conditions
precedent to the obligations of a party set forth in this Agreement as to that
Closing have not been satisfied or waived by the other party and such condition
shall remain unsatisfied ten (10) days after notice thereof by the other party;
or
(d) If there shall be in effect on the date of either of the
Closings any final judgment, decree or order that would prevent or make
unlawful the actions to be taken at such Closing.
Section 18.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if not then in material default, upon written notice to Seller and the
Company, if the FCC denies the Extension Application or the application for the
Pro Forma FCC Consent.
ARTICLE 19. SPECIFIC PERFORMANCE
Seller and the Company agree that the Initial Shares and the Option Shares
are unique and valuable properties such that Buyer shall be entitled to sue for
specific performance of the terms of this Agreement in the event of a breach by
Seller or the Company with respect to either the Initial Closing or the Second
Closing, in which case Seller and the Company shall waive the defense that
there is an adequate remedy at law.
ARTICLE 20. INDEMNIFICATION
Section 20.1 Seller's and the Company's Indemnification. Seller and the
Company shall jointly indemnify, defend and hold Buyer harmless from and
against any and all loss, cost, liability, damage and expense (including legal
and other expenses incident thereto) of
- 27 -
<PAGE> 37
every kind, nature or description, arising out of: (a) the breach of any
representation or warranty of Seller or the Company set forth in this Agreement
or in any schedule or certificate delivered to Buyer pursuant hereto; (b) the
breach of any of their covenants or other agreements contained in or arising
out of this Agreement or the transactions contemplated hereby; or (c) the
ownership of the Initial Shares prior to the Initial Closing, and the conduct
of the business and operations of the Station and the ownership of the Option
Shares prior to the Second Closing, including, but not limited to, any
liability, judgment or damages against the Company or Seller, their officers,
directors, employees or agents, as a result of litigation involving the
Company, Seller or the operation of the Station prior to each of the Closings.
Section 20.2 Buyer's Indemnification. Buyer shall indemnify, defend and
hold Seller and the Company harmless from and against any and all loss, cost,
liability, damage and expense (including legal and other expenses incident
thereto) of every kind, nature or description, arising out of: (i) the breach
of any representation or warranty of Buyer set forth in this Agreement
(including the Schedules hereto); (ii) the ownership or operation of the
Station after the Second Closing, or (iii) the breach of any of its other
agreements contained in or arising out of this Agreement or the transactions
contemplated hereby.
Section 20.3 Notice of Claim. Buyer, on the one hand, and Seller and
the Company, on the other hand, upon discovery of the breach of any of the
representations, warranties and covenants of the other under this Agreement,
shall give to the other prompt written notice of the discovery of such breach.
If any action, suit or proceeding shall be commenced against, or any claim or
demand be asserted against Buyer, Seller or the Company, as the case may be, in
respect of which such party proposes to seek indemnification from the other
under this Article 20, then such party (hereinafter the "Claimant") shall
notify the party from whom indemnification is sought (hereinafter the
"Indemnifying Party") to that effect in writing with reasonable promptness and
in any event, if such claim arises out of a claim by a person or entity other
than the Claimant, then within fifteen (15) days after written notice of such
claim was given to the Claimant.
Section 20.4 Assumption and Defense of Third-Party Action. If any claim
hereunder arises of out a claim against the Claimant by a third party, the
Indemnifying Party shall have the right, at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall fully
cooperate with the Indemnifying Party subject to reimbursement for actual
out-of-pocket expenses incurred as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of
any third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If a claim requires immediate
action, the parties will make every effort to reach a decision with respect
thereto as expeditiously as possible. If the Indemnifying Party does not elect
to assume control or otherwise participate in the defense of any third-party
claim, it shall be bound by the results obtained by the Claimant with respect
to such claim.
- 28 -
<PAGE> 38
Section 20.5 Limitation Period. No party shall be entitled to
indemnification hereunder with respect to the breach of any representation,
warranty or covenant contained herein unless such claim for indemnification is
asserted in writing to the party from whom indemnification is sought within six
(6) months after the Second Closing, except that any claim for indemnification
related to a claim by a third party, including claims by the Internal Revenue
Service against the Company or Seller, shall be made within the statute of
limitations period applicable to such third-party claim.
ARTICLE 21. OTHER PROVISIONS
Section 21.1 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants, indemnities and agreements contained
herein are and will be deemed and construed to be continuing representations,
warranties, covenants, indemnities and agreements and will survive the
respective Closings as to which breach or claim is asserted until the
termination of the limitation period set forth in Section 20.5 hereof. Any
investigations by or on behalf of any party hereto prior to or after the
Closings shall not constitute a waiver as to enforcement of any representation,
warranty, covenant or agreement contained herein.
Section 21.2 Press Releases. Buyer, Seller and the Company shall
jointly prepare, and determine the timing of, any press release or other
announcement relating to the transactions contemplated by the Agreement. No
party will issue any press release or make any other public announcement
relating to the transactions contemplated by the Agreement without the prior
consent of the other parties, except that any party may make any disclosure
required to be made by it under applicable law (including the federal
securities laws) or by this Agreement if it determines in good faith that it is
appropriate to do so and provided further that it gives prior notice of any
such disclosure to the other party hereto.
Section 21.3 Further Assurances. At and after each of the Closings,
Buyer, Seller and the Company will, without further consideration, execute and
deliver such further instruments and documents and do such other acts and
things as the other parties may reasonably request in order to effect or
confirm the transactions contemplated by this Agreement.
Section 21.4 Benefit and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. No party hereto may assign, transfer, encumber or
otherwise convey its interest under this Agreement without the prior written
consent of the other parties hereto; provided, however, that Buyer may assign
its rights and interests under this Agreement to its lenders as collateral
security for Buyer's obligations to such lenders.
Section 21.5 Entire Agreement. This Agreement and the schedules
attached hereto embody the entire agreement and understanding of the parties
and supersedes any and all prior agreements, arrangements and understandings
relating to matters provided for herein.
- 29 -
<PAGE> 39
No amendment, waiver of compliance with any provision or condition hereof, or
consent pursuant to this Agreement will be effective unless evidenced by an
instrument in writing signed by the party against whom enforcement of any
waiver, amendment, extension or discharge is sought.
Section 21.6 Headings. The headings are for convenience only and will
not control or affect the meaning or construction of the provisions of this
Agreement.
Section 21.7 Governing Law. The construction and performance of this
Agreement will be governed by the laws of the State of Delaware (except for the
choice of law provisions thereof).
Section 21.8 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
To Buyer: Paxson Communications of Tulsa-44, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
With a copy (which shall
not constitute notice) to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
To Company and Seller: Channel 44 of Tulsa, Inc.
2002 West Lone Cactus Drive
Phoenix, AZ 85027
Attention: Kenneth Casey
and
Broadcasting Systems, Inc.
2002 West Lone Cactus Drive
Phoenix, AZ 85027
Attention: Kenneth Casey
- 30 -
<PAGE> 40
With a copy (which shall
not constitute notice) to: Irwin, Campbell & Tannenwald, P.C.
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
Attention: Peter Tannenwald, Esq.
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
21.8.
Section 21.9 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
Section 21.10 Defined Terms. The following terms shall have the meanings
specified in the sections of this Agreement set forth opposite such terms:
<TABLE>
<S> <C>
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Buyer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Call Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Call Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.1
"Claimant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 20.3
"Closings" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Communications Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Construction Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Construction Permit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "Recitals
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Escrow Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Escrow Deposit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Extension Application" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Indemnifying Party" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 20.3
"Initial Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Initial Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Initial Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Lease Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Modification Application" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.5
</TABLE>
- 31 -
<PAGE> 41
<TABLE>
<S> <C>
"Option Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Option Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.1
"Outstanding Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.5
"Pro Forma FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3
"Put Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Put Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.2
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Real Property Interests" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Second Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Second Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Seller" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Shareholders Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Tax Returns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Tower Lease" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
"Transaction Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
</TABLE>
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
- 32 -
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement as of the date first above written.
CHANNEL 44 OF TULSA, INC.
By: /s/ Kenneth Casey
---------------------------------------
Kenneth Casey
President
BROADCASTING SYSTEMS, INC.
By: /s/ Kenneth Casey
---------------------------------------
Kenneth Casey
President
PAXSON COMMUNICATIONS
OF TULSA-44, INC.
By: /s/ Lowell W. Paxson
---------------------------------------
Name: Lowell W. Paxson
Title: Chairman & CEO
- 33 -
<PAGE> 1
EXHIBIT 10.98
- ------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
PHOENIX-13, INC.
AND
CHANNEL 13 OF FLAGSTAFF, INC.
* * *
APRIL 18, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliation Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Prior Owner's Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Buyer Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.15 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Survival of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.12 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
-iv-
<PAGE> 6
LIST OF SCHEDULES
Exhibit A -- Affiliation Agreeemnt
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Insurance
Schedule 3.12 -- Employee Matters
Schedule 3.14` -- Litigation
Schedule 8.2(i) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
-v-
<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of the 18th day of April, 1996,
by and between Paxson Communications of Phoenix-13, Inc., a Florida corporation
("Buyer"), and Channel 13 of Flagstaff, Inc., a Florida corporation
("Seller").
R E C I T A L S
A. Seller and Buyer are parties to an Option Agreement dated as of
January 24, 1996 (the "Option Agreement"), pursuant to which Seller granted to
Buyer an option (the "Option") to acquire from Seller substantially all of the
assets used or useful in the business or operations of Television Station
KWBF(TV), Flagstaff, Arizona (the "Station").
B. In accordance with the Option Agreement, Buyer has notified Seller
that Buyer intends to exercise the Option.
C. Seller desires to sell, and Buyer desires to buy, substantially all
the assets that are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the sale
of advertising or programming time (i) run on the Station by Seller prior to
the Closing Date (the "Seller's Receivables") or (ii) run on the Station prior
to the date that Seller acquired the Station (the "Prior Owner's Receivables").
"Affiliation Agreement" means the Affiliation Agreement in the form of
Exhibit A hereto to be entered into upon the Closing by Buyer and The Christian
Network, Inc.
"Assets" means the assets to be sold, transferred, or otherwise conveyed
to Buyer under this Agreement, as specified in Section 2.1.
<PAGE> 8
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are designated as Contracts that are to be assumed by Buyer upon its purchase
of the Station and (ii) any Contracts entered into by Seller between the date
of this Agreement and the Closing Date that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as determined
pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or which are binding upon Seller and which
relate to or affect the Assets or the business or operations of the Station,
and (i) which are in effect on the date of this Agreement or (ii) which are
entered into by Seller between the date of this Agreement and the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
-2-
<PAGE> 9
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations issued by
the FCC, the Federal Aviation Administration, or any other federal, state, or
local governmental authorities in connection with the conduct of the business
or operations of the Station, together with any additions thereto between the
date of this Agreement and the Closing Date.
"Loan Agreement" means the Loan Agreement dated as of January 24, 1996,
between Buyer and Seller.
"Note" means the Promissory Note dated January 24, 1996, in the principal
amount of $3,000,000, delivered by Seller to Buyer pursuant to the Loan
Agreement.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as of
January 24, 1996, between Seller and Buyer.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets used or useful in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for encumbrances
permitted by Section 5.5 herein), including the following:
-3-
<PAGE> 10
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all other intangible assets
of Seller relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any, except for any
lists of donors, contributors or other supporters of the Station;
(f) All of Seller's proprietary information,
technical information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics,
including filings with the FCC relating to the business and operation of the
Station;
(g) The Seller's Receivables as of 11:59 p.m., local
time, on the day prior to the Closing Date;
(h) All choses in action of Seller relating to the
Station; and
(i) All books and records relating to the business
or operations of the Station, including executed copies of the Assumed
Contracts, and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all
other cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Seller is required by
law to retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto;
-4-
<PAGE> 11
(e) All lists of donors, contributors or other
supporters of the Station; and
(f) The Prior Owner's Receivables.
2.3 Purchase Price. The Purchase Price for the Assets shall be
(i) One Hundred Thousand Dollars ($100,000), adjusted as provided in Section
2.3(a) below, payable in cash at the Closing and (ii) the forgiveness on the
Closing Date of all principal, accrued but unpaid interest, fees, expenses and
other charges owed by Seller to Buyer as of the Closing Date pursuant to the
Loan Agreement and the Note.
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses, other
than expenses for which Buyer is obligated to reimburse Seller under the Time
Brokerage Agreement, for which no proration shall be required. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), FCC regulatory fees, and similar
prepaid and deferred items, shall be prorated between Buyer and Seller in
accordance with the principle that Seller shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, other than expenses for which Buyer is obligated to reimburse Seller
under the Time Brokerage Agreement, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date,
with final settlement and payment by the appropriate party occurring no later
than ninety (90) days after the Closing Date or such other date as the parties
shall mutually agree upon.
2.4 Payment of Purchase Price. The cash portion of the
Purchase Price, as adjusted, shall be paid by Buyer to Seller at Closing by
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer, at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the
Closing Date, Buyer shall assume and undertake to pay, discharge, and perform
all obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in
-5-
<PAGE> 12
the Assumed Contracts, (ii) any obligations or liabilities under the Assumed
Contracts relating to the period prior to the Closing Date, (iii) any claims or
pending litigation or proceedings relating to the operation of the Station
prior to the Closing, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements not assumed by Buyer, (v) any
obligations or liabilities arising under agreements entered into other than in
the ordinary course of business, (vi) any obligations or liabilities of Seller
under any employee pension, retirement, or other benefit plans or collective
bargaining agreements, (vii) any obligation to any employee of the Station for
severance benefits, vacation time, or sick leave accrued prior to the Closing
Date, or (viii) any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of Seller prior to the Closing, and all
such obligations and liabilities shall remain and be the obligations and
liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Arizona. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement and the documents contemplated hereby,
and to perform and comply with all of the terms, covenants, and conditions to
be performed and complied with by Seller hereunder. Seller is not a
participant in any joint venture or partnership with any other person or entity
with respect to any part of the operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller and its shareholder. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid, and binding obligation of Seller, enforceable against it in
accordance with its terms, except as the enforceability of this Agreement may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally, and by judicial discretion in the enforcement of equitable
remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining
the Consents listed on Schedule 3.3, the execution, delivery, and
performance of this Agreement and the documents contemplated hereby (with or
without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with any provision of
the Articles of Incorporation or Bylaws of Seller; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order, ordinance, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the
-6-
<PAGE> 13
acceleration of any performance required by the terms of, any agreement,
instrument, license, or permit to which Seller is a party or by which Seller
may be bound; and (v) will not create any claim, liability, mortgage, lien,
pledge, condition, charge, or encumbrance of any nature whatsoever upon any of
the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith in all material respects. Seller has no
reason to believe that any of the Licenses would not be renewed by the FCC or
other granting authority in the ordinary course. The Station's city of
license, as determined by the FCC, is not currently located within the Phoenix,
Arizona Area of Dominant Influence as defined by the 1991-1992 Area of Dominant
Influence Market Guide published by The Arbitron Co., however, Flagstaff is
within the Phoenix, Arizona Designated Market Area as defined by the 1995
United States Television Household Estimates published by Nielsen Media
Research. To the best of Seller's knowledge, on or before June 17, 1993, the
Station made a valid election of must carry with respect to each cable system
located within the Station's Area of Dominant Influence. Except as disclosed
on Schedule 3.4, no cable system on which the Station is entitled to must carry
status has advised the Station of any signal quality or copyright indemnity or
other prerequisite to cable carriage of the Station's signal, and no cable
system has declined or threatened to decline such carriage or failed to respond
to a request for carriage or sought any form of relief from carriage from the
FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein. The Real Property listed on Schedule 3.5 comprises
all real property interests necessary to conduct the business and operations of
the Station as now conducted. Seller has good and marketable fee simple title,
insurable at standard rates, to all fee estates (including the improvements
thereon) included in the Real Property, free and clear of all liens, mortgages,
pledges, covenants, easements, restrictions, encroachments, leases, charges,
and other claims and encumbrances of any nature whatsoever, and without
reservation or exclusion of any mineral, timber, or other rights or interests,
except for liens for real estate taxes not yet due and payable and liens
disclosed on Schedule 3.5. With respect to each leasehold or subleasehold
interest included in the Real Property being conveyed under this Agreement, so
long as Seller fulfills its obligations under the lease therefor, Seller has
enforceable rights to nondisturbance and quiet enjoyment, and, to the best of
Seller's knowledge, no third party holds any interest in the leased premises
with the right to foreclose upon Seller's
-7-
<PAGE> 14
leasehold or subleasehold interest. All towers, guy anchors, and buildings and
other improvements included in the Assets are located entirely on the Real
Property listed in Schedule 3.5. Seller has delivered to Buyer true and
complete copies of all deeds pertaining to the Real Property. All Real
Property (including the improvements thereon) (i) is in good condition and
repair consistent with its present use, (ii) is available for immediate use in
the conduct of the business and operations of the Station, and (iii) complies
in all material respects with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction. Seller has full
legal and practical access to the Real Property. All easements, rights-of-way,
and real property licenses affecting or constituting part of the Real Property
have been properly recorded in the appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for encumbrances permitted by Section 5.5 herein. Each
item of Tangible Personal Property is available for immediate use in the
business and operations of the Station. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained
in a manner consistent with generally accepted standards of good engineering
practice, and (ii) will permit the Station and any auxiliary broadcast stations
used in the operation of the Station to operate, in all material respects, in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete
list of all Contracts. Seller has delivered to Buyer true and complete copies
of all written Contracts, true and complete memoranda of all oral Contracts
(including any amendments and other modifications to such Contracts). Other
than the Contracts listed on Schedule 3.7 or any other Schedule to this
Agreement, Seller requires no contract, lease, or other agreement to enable it
to carry on its business as now conducted. All of the Assumed Contracts are in
full force and effect, and are valid, binding, and enforceable in accordance
with their terms. There is not under any Assumed Contract any default by any
party thereto or any event that, after notice or lapse of time or both, could
constitute a default. Seller is not aware of any intention by any party to any
Assumed Contract (i) to terminate such contract or amend the terms thereof,
(ii) to refuse to renew the Assumed Contract upon expiration of its term, or
(iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Seller has full legal power and
authority to assign its rights under the Assumed Contracts to Buyer in
accordance with this
-8-
<PAGE> 15
Agreement, and such assignment will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in
Section 6.1, the other Consents described in Schedule 3.3, and any filing
required under the HSR Act, no consent, approval, permit, or authorization of,
or declaration to or filing with any governmental or regulatory authority, or
any other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, or (iii) to enable Buyer to conduct the business and
operations of the Station in essentially the same manner as such business and
operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of
all Intangibles (exclusive of those listed in Schedule 3.4), all of which are
valid and in good standing and uncontested. Seller has delivered to Buyer
copies of all documents establishing or evidencing all Intangibles. To the
best knowledge of Seller, Seller is not infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Seller threatened, with respect thereto. The Intangibles
listed on Schedule 3.9 comprise all intangible property interests necessary to
conduct the business and operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of
all insurance policies of Seller that insure any part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.10 are
in full force and effect. The insurance policies listed in Schedule 3.10 are
adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Station against all customary and foreseeable risks. During the past
three years, no insurance policy of Seller on the Assets or the Station has
been canceled by the insurer and no application of Seller for insurance has
been rejected by any insurer.
3.11 Reports. All Station returns, reports, and statements
required to be filed by Seller with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller and the Station have
been complied with by Seller in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed.
Seller has timely paid to the FCC all annual regulatory fees required to be
paid by Seller with respect to the FCC Licenses.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12
contains a true and complete list of all employees of the Station, their job
titles, date of hire and current salary.
-9-
<PAGE> 16
Schedule 3.12 also contains a true and complete list as of the date of this
Agreement of all employee benefit plans or arrangements applicable to the
employees of the Station and all fixed or contingent liabilities or obligations
of Seller with respect to any person now or formerly employed by Seller at the
Station, including pension or thrift plans, individual or supplemental pension
or accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick leave, disability and termination arrangements or policies,
including workers' compensation policies. Seller has furnished Buyer with true
and complete copies of all employee handbooks, employee rules and regulations,
and summary plan descriptions of the written plans and arrangements listed in
Schedule 3.12, and with descriptions of the unwritten plans and arrangements
listed in Schedule 3.12. At Buyer's request, Seller will furnish Buyer with
true and complete copies of all applicable plan documents, trust documents, and
insurance contracts with respect to the plans and arrangements listed on
Schedule 3.12. All employee benefits and welfare plans or arrangements listed
in Schedule 3.12 were established and have been executed, managed and
administered in accordance with the Internal Revenue Code of 1986, as amended,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
all other laws. Seller is not aware of the existence of any governmental audit
or examination of any of such plans or arrangements or of any facts which would
lead it to believe that any such audit or examination is pending or threatened.
No action, suit, or claim with respect to any of such plans or arrangements
(other than routine claims for benefits) is pending or, to the knowledge of
Seller, threatened, and Seller possesses no knowledge of any facts which could
give rise to any such action, suit or claim.
(b) Labor Relations. Seller is not a party to or
subject to any collective bargaining agreements with respect to the Station.
Seller has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of its
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any
kind to or in respect of any employee benefit plan, including withdrawal
liability under Section 4201 of ERISA. Seller has not incurred any accumulated
funding deficiency within the meaning of ERISA or Section 4971 of the Internal
Revenue Code. Seller has not failed to make any required contributions to any
employee benefit plan. The Pension Benefit Guaranty Corporation has not
asserted that Seller
-10-
<PAGE> 17
has incurred any liability in connection with any such plan. No lien has
been attached and no person has threatened to attach a lien on any property of
Seller as a result of a failure to comply with ERISA.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and, to the best knowledge of Seller, no event has occurred that
could impose on Buyer any transferee liability for any taxes, penalties, or
interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry or as listed on
Schedule 3.14 attached hereto, there is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other legal, administrative,
or tax proceeding, nor any order, decree or judgment, in progress or pending,
or to the knowledge of Seller threatened, against or relating to Seller with
respect to its ownership or operation of the Station or otherwise relating to
the Assets or the business or operations of the Station, nor does Seller know
or have reason to be aware of any basis for the same. In particular, but
without limiting the generality of the foregoing, there are no applications,
complaints or proceedings pending or, to the best of its knowledge, threatened
(i) before the FCC relating to the business or operations of the Station other
than rule making proceedings which affect the television industry generally,
(ii) before any federal or state agency relating to the business or operations
of the Station involving charges of illegal discrimination under any federal or
state employment laws or regulations, or (iii) before any federal, state, or
local agency relating to the business or operations of the Station involving
zoning issues under any federal, state, or local zoning law, rule, or
regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects
with all laws, rules, and regulations of all federal, state, and local
governments (and all agencies thereof) concerning the environment, public
health and safety, and employee health and safety, and no charge, complaint,
action, suit, proceeding, hearing, investigation, claim, demand, or notice has
been filed or commenced against Seller in connection with its ownership or
operation of the Station alleging any failure to comply with any such law,
rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material
-11-
<PAGE> 18
adverse effect on the business or operations of the Station (and there is no
basis related to the present operations, properties, or facilities of Seller
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Seller giving rise to any such
liability) under any law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning release or threatened release of
hazardous substances, public health and safety, or pollution or protection of
the environment.
(c) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility in any manner that could form the basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to any statute) against
Seller giving rise to any such liability) for damage to any site, location, or
body of water (surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not exposed any employee to any
substance or condition that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to statute) against Seller giving rise
to any such liability) for any illness or personal injury to any employee.
(f) To the best of Seller's knowledge, in connection
with its ownership or operation of the Station, Seller has obtained and been in
compliance in all material respects with all of the terms and conditions of all
permits, licenses, and other authorizations which are required under, and has
complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all federal, state, and local laws, rules, and regulations
(including all codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety,
worker health and safety, and pollution or protection of the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
-12-
<PAGE> 19
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
(g) No pollutant, contaminant, or chemical,
industrial, hazardous, or toxic material or waste has ever been manufactured,
buried, stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, by any other party on any Real Property.
3.16 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Since January 24,
1996, Seller has conducted the business and operations of the Station only in
the ordinary course and has not:
(a) Suffered any material adverse change in the
assets or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any sale, assignment, lease, or other
transfer of any of the Station's properties other than in the normal and usual
course of business with suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by
Seller with respect to the Station, except in the normal and usual course of
business;
(d) Suffered any material write-down of the value of
any Assets or any material write-off as uncollectible of any accounts
receivable of the Station; or
(e) Transferred or granted any right under, or
entered into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, trade name, franchise, or similar right,
or modified any existing right relating to the Station.
3.18 Transactions with Affiliates. Seller has not been involved
in any business arrangement or relationship relating to the Station with any
affiliate of Seller, and no affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Station, other
than such arrangements and relationships between Seller and The Christian
Network, Inc. that have been disclosed to Buyer. As used in this paragraph,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934.
-13-
<PAGE> 20
3.19 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Full Disclosure. No representation or warranty made by
Seller in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Arizona. Buyer has all requisite power and authority
to execute and deliver this Agreement and the documents contemplated hereby,
and to perform and comply with all of the terms, covenants, and conditions to
be performed and complied with by Buyer hereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining
the Consents and making any filing required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the documents
contemplated hereby (with or without the giving of notice, the lapse of time,
or both): (i) do not require the consent of any third party; (ii) will not
conflict with the Articles of Incorporation or Bylaws of Buyer; (iii) will not
conflict with, result in a breach of, or constitute a default under, any law,
judgment, order, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality; or (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound, such that Buyer could not acquire or
operate the Assets.
-14-
<PAGE> 21
4.4 Broker. Neither Buyer nor any person acting on Buyer's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, the Telecommunications
Act of 1996, and the rules, regulations and policies of the FCC as now in
effect. Buyer knows of no fact that would, under existing law and the existing
rules, regulations, policies and procedures of the FCC disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of the Station.
4.6 Full Disclosure. No representation or warranty made by
Buyer in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not, without the prior written
consent of Buyer, enter into any contract or commitment relating to the Station
or the Assets, or amend or terminate any Assumed Contract (or waive any
material right thereunder), or incur any obligation (including obligations
relating to the borrowing of money or the guaranteeing of indebtedness) that
will be binding on Buyer after Closing. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign,
lease, or otherwise transfer or dispose of any of the Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
-15-
<PAGE> 22
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed on or prior
to the Closing Date, (ii) liens for current taxes not yet due and payable, and
(iii) mechanics' liens and other similar liens, which shall be removed on or
prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause any cable system located
within the Station's Area of Dominant Influence to refuse to carry the
Station's signal.
5.8 No Inconsistent Action. Seller shall not take any action
that is inconsistent with its obligations under this Agreement or that could
hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Seller shall give Buyer and its
authorized representatives reasonable access to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection.
5.10 Maintenance of Assets. Seller shall use its best efforts
and take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice. Seller shall maintain inventories of spare parts
and expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, other than any loss, damage or impairment resulting from actions taken
by Buyer pursuant to the Time Brokerage Agreement, Seller shall repair,
replace, or restore the Assets to their prior condition as represented in this
Agreement as soon thereafter as possible, and Seller shall use the proceeds of
any claim under any insurance policy solely to repair, replace, or restore any
of the Assets that are lost, damaged, impaired, or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets through the Closing Date.
-16-
<PAGE> 23
5.12 Consents. Seller shall use its best efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Station than those pertaining under the Contract or License
as in effect on the date of this Agreement; provided, however, that Seller's
failure to obtain any Consent shall not constitute a material breach of this
Agreement. Seller shall promptly advise Buyer of any difficulties experienced
in obtaining any of the Consents and of any conditions proposed, considered, or
requested for any of the Consents. Upon Buyer's request, Seller shall
cooperate with Buyer and use it best efforts to obtain from the lessors under
each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
lenders may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in
writing of any unusual or material developments with respect to the business or
operations of the Station, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer such
financial information regarding the Assets and the business or operations of
the Station (including information on payables and receivables) as Buyer may
reasonably request. All financial information delivered by Seller to Buyer
pursuant to this Section shall be prepared from the books and records of Seller
in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to
Closing all outstanding obligations under capital and financing leases with
respect to any of the Assets and obtain good title to the Assets leased by
Seller pursuant to those leases so that those Assets shall be transferred to
Buyer at Closing free of any interest of the lessors.
5.18 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
-17-
<PAGE> 24
5.19 Preservation of Business. To the extent consistent with
its obligations under the Time Brokerage Agreement, Seller shall use its best
efforts to preserve the business and organization of the Station and use its
best efforts to keep available to the Station its present employees and the
Station's present relationships with suppliers and others having business
relations with it, to the end that the business and operations of the Station
shall be unimpaired at the Closing Date.
5.20 Collection of Accounts Receivable. Seller shall collect
the accounts receivable of the Station only in the ordinary course consistent
with its past practices and will not take any action designed or likely to
accelerate the collection of its accounts receivable.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection
with the purchase and sale of the Assets pursuant to this Agreement shall be
subject to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any
reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Prior Owner's Receivables.
-18-
<PAGE> 25
(a) Collection. At the Closing, Seller shall designate Buyer as its
agent solely for the purposes of collecting the Prior Owner's Receivables.
Buyer shall make reasonable efforts to collect the Prior Owner's Receivables
during the "Collection Period," which shall be the period beginning on the
Closing Date and ending on July 31, 1996. Buyer shall not be obligated to use
any extraordinary efforts to collect any of the Prior Owner's Receivables or to
refer any of the Prior Owner's Receivables to a collection agency or attorney
for collection, and Buyer shall not make any such referral or compromise, nor
settle or adjust the amount of any of the Prior Owner's Receivables, except
with the approval of Seller. During the Collection Period, neither Seller nor
its agents shall make any direct solicitation with respect to the Prior Owner's
Receivables. All payments received from advertisers on the Station during the
Collection Period which relate to advertising run on the Station prior to the
Closing Date shall first be applied to the Prior Owner's Receivables, if any.
(b) Payments to Seller. On or before the fifteenth day after the
end of each full calendar month during the Collection Period, Buyer shall
furnish to Seller (i) a list of the amounts collected before the end of such
month with respect to the Prior Owner's Receivables, and (ii) the amount
collected during such month with respect to the Prior Owner's Receivables. On
or before the fifteenth day after the end of the Collection Period, Buyer
shall furnish Seller with a list of all of the Prior Owner's Receivables which
remain uncollected at the end of the Collection Period.
(c) Further Obligations. After the expiration of the Collection
Period, Buyer shall have no further obligation hereunder other than to make the
payment under Section 6.3(b) and to remit to Seller any payments with respect
to any of the Prior Owner's Receivables that Buyer subsequently receives, and
Seller itself shall act to collect any of the Prior Owner's Receivables that
continue to remain uncollected.
6.4 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or
any other event occurs, other than any damage or destruction of the Assets or
any other event resulting from Buyer's conduct or actions under the Time
Brokerage Agreement, which (i) causes the Station to cease broadcasting
operations for a period of three or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer, in its sole discretion, may (x) terminate this Agreement
forthwith without any further obligations hereunder upon written notice to
Seller or (y) proceed to consummate the transaction contemplated by this
Agreement and complete the
-19-
<PAGE> 26
restoration and replacement of the Assets after the Closing Date, in
which event Seller shall deliver to Buyer all insurance proceeds received in
connection with such damage, destruction or other event.
6.5 Confidentiality. Except as necessary for the consummation
of the transaction contemplated by this Agreement, including Buyer's obtaining
of financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.6 Environmental Audit. Buyer may, at its option and expense
and within thirty (30) days of the date hereof, retain an environmental
consultant to be selected by Buyer to perform a Phase I environmental survey of
the properties of the Station. If the survey discloses any material
environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Buyer shall so notify Seller as soon
as practicable.
6.7 Engineering Study. Buyer may, at its option and expense
and within thirty (30) days of the date hereof, retain an engineering firm to
conduct a proof of performance study of the Station and to prepare a report on
the Station's compliance with customary engineering practices and all
applicable FCC rules, regulations, prescribed practices, and technical
standards. If the survey discloses any material deficiencies in the operations
or equipment of the Station, Buyer shall so notify Seller as soon as
practicable.
6.8 Cooperation. Buyer and Seller shall cooperate fully with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.9 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Arizona shall be complied with by Seller and Buyer. Any loss,
liability, obligation, or cost suffered by Seller or Buyer as the result of the
failure of Seller or Buyer to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets as contemplated by this Agreement
shall be borne by Buyer.
-20-
<PAGE> 27
6.10 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect
to each parcel of Real Property that Seller owns, Seller will obtain and
deliver to Buyer, at Buyer's expense, at or prior to Closing, an ALTA Owner's
Policy of Title Insurance Form B-1987 (or equivalent policy acceptable to
Buyer), issued by a title insurer satisfactory to Buyer, in an amount equal to
the fair market value of the property and any improvements thereon (as
reasonably determined by Buyer), insuring title to such parcel to be in the
name of Buyer as of the Closing, subject only to liens or encumbrances
expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance
Policies. Each title insurance policy obtained and delivered to Buyer pursuant
to this Agreement shall (1) insure title to the Real Property described in the
policy and all recorded easements benefitting such Real Property, (2) contain
an "extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel, and (7) not be subject to any survey exception
or any defect or encroachment disclosed by a survey delivered with respect to
the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will procure a current survey of the parcel, prepared by
a licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
6.11 Sales Tax Filings. Through the Closing Date, Seller shall
continue to file Arizona sales tax returns with respect to the Station, if and
to the extent such returns are required to be filed by applicable law, and
shall concurrently deliver copies of all such returns to Buyer.
6.12 Access to Books and Records. Seller shall provide Buyer
reasonable access and the right to copy for a period of three years from the
Closing Date any books and records relating to the assets that are not included
in the Assets. Buyer shall provide Seller reasonable access and the right to
copy for a period of three years from the Closing Date any books and records
relating to the Assets.
6.13 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of television station assets.
-21-
<PAGE> 28
6.14 Buyer Conduct. Buyer shall take no action, or fail to take
any required action, that would disqualify Buyer from being the licensee of the
Station under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations and policies of the
FCC as now in effect. Buyer, in programming the Station pursuant to the Time
Brokerage Agreement, shall not cause or permit, by any act or failure to act,
any of the Licenses to expire or to be revoked, suspended, or modified, or take
any action that could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses.
6.15 HSR Act Filing. Seller and Buyer agree to (a) file, or
cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, which are required in connection
with the transactions contemplated hereby under the HSR Act within ten (10)
business days of the date of this Agreement; (b) submit to the other party,
prior to filing, their respective HSR Act filings to be made hereunder, and to
discuss with the other any comments the reviewing party may have; (c) cooperate
with each other in connection with such HSR Act filings, which cooperation
shall include furnishing the other with any information or documents in such
party's possession that may be reasonably required in connection with such
filings; (d) promptly file, after any request by the FTC or DOJ, any
information or documents requested by the FTC or DOJ; and (e) furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ which relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of
Buyer at the Closing are subject at Buyer's option to the fulfillment prior to
or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All
representations and warranties of Seller contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents designated as "material"
on Schedule 3.3 shall have been obtained and delivered to Buyer without any
adverse change in the terms or conditions of any agreement or any governmental
license, permit, or other authorization.
-22-
<PAGE> 29
(d) FCC Consent. The FCC Consent shall have been
granted without the imposition on Buyer of any conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on it by the FCC Consent, and the FCC Consent shall
have become a Final Order.
(e) Governmental Authorizations. Seller shall be
the holder of all Licenses and there shall not have been any modification of
any License that could have a material adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any License.
(f) Deliveries. Seller shall have made or stand
willing to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this
Agreement and the Closing Date, there shall have been no material adverse
change in the assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Seller shall have complied, in
all material respects, with its obligations thereunder.
(i) Loan Agreement. There shall exist no Event of
Default as defined in the Loan Agreement.
(j) HSR Act. The waiting period under the HSR Act
shall have expired without unresolved action by the DOJ or the FTC to prevent
the Closing.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All
representations and warranties of Buyer contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Buyer shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
-23-
<PAGE> 30
(c) Deliveries. Buyer shall have made or stand
willing to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been
granted without the imposition on Seller of any conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
(e) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Buyer shall have complied, in
all material respects, with its obligations thereunder.
(f) HSR Act. The waiting period under the HSR Act
shall have expired without unresolved action by the DOJ or the FTC to prevent
the Closing.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at
10:00 a.m. on a date, to be set by Buyer on at least five days' written notice
to Seller, that is (1) not earlier than the first business day after the FCC
Consent is effective, and (2) not later than ten business days following the
date upon which the FCC Consent has become a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date,
Seller shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty
bills of sale, deeds, motor vehicle titles, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for liens for
current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of
the lessors of all leasehold and subleasehold interests included in the Real
Property;
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
-24-
<PAGE> 31
(d) Officer's Certificate. A certificate, dated as
of the Closing Date, executed on behalf of Seller by its Chairman or President,
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(e) Title Insurance and Surveys. The title
insurance and surveys described in Section 6.10;
(f) Licenses, Contracts, Business Records, Etc.
Copies of all Licenses, Assumed Contracts, blueprints, schematics, working
drawings, plans, projections, engineering records, and all files and records
used by Seller in connection with its operations;
(g) Accounts Receivable. A complete and accurate
list of the Station's Accounts Receivable as of a date no more than five
business days prior to the Closing Date, including, with respect to each of the
Accounts Receivable, the account number, date of issuance, name and address of
account debtor, aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Seller's
counsel dated as of the Closing Date, substantially in the form of Schedule
8.2(i) hereto; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder, provided that Buyer shall bear any reasonable and necessary expense
incurred by Seller to obtain such certificate and confirmation.
8.3 Deliveries by Buyer. Prior to or on the Closing Date,
Buyer shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The cash portion of the
Purchase Price, as adjusted pursuant to Section 2.3(a), the executed original
of the Note marked "canceled" and such other documents as may be required to
release or terminate any security interests held by Buyer in any of the assets
described in Section 2.2;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts as provided in
Section 2.5;
(c) Officer's Certificate. A certificate, dated as
of the Closing Date, executed on behalf of Buyer by its Secretary, certifying
(1) that the representations and warranties of
-25-
<PAGE> 32
Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date; and
(d) Opinion of Counsel. An opinion of Buyer's
counsel dated as of the Closing Date, substantially in the form of Schedule
8.3(d) hereto.
(e) Affiliation Agreement. The Affiliation
Agreement, duly executed by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller, if Seller is not then in material default, upon written notice to
Buyer, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would
otherwise be the Closing Date, Seller shall have notified Buyer in writing that
one or more of the conditions precedent to the obligations of Seller set forth
in this Agreement have not been satisfied or waived in writing by Seller and
such condition or conditions shall not have been satisfied by Buyer or waived
in writing by Seller within fifteen days following such notice.
(b) Judgments. If, on the date that would otherwise
be the Closing Date, Seller shall have notified Buyer that there is in effect
any judgment, decree, or order that would
prevent or make unlawful the Closing and such judgment, decree or order
shall not have been satisfied by Buyer within fifteen (15) days following such
notice.
(c) Upset Date. If the Closing shall not have
occurred by October 18, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if Buyer is not then in material default, upon written notice to Seller,
upon the occurrence of any of the following:
(a) Conditions. If, on the date that would
otherwise be the Closing Date, Buyer shall have notified Seller in writing that
one or more of the conditions precedent to the obligations of Buyer set forth
in this Agreement have not been satisfied or waived in writing by Buyer and
such condition or conditions shall not have been satisfied by Seller or waived
in writing by Buyer within fifteen (15) days following such notice.
(b) Judgments. If, on the date that would otherwise
be the Closing Date, Buyer shall have notified Seller that there is in effect
any judgment, decree, or order that would
-26-
<PAGE> 33
prevent or make unlawful the Closing and such judgment, decree or order shall
not have been satisfied by Seller within fifteen (15) days following such
notice.
(c) Upset Date. If the Closing shall not have
occurred by October 18, 1997.
(d) Interruption of Service. If any event shall
have occurred that prevented signal transmission of the Station in the normal
and usual manner for a continuous period of three days unless such interruption
of service is due to actions of Buyer under the Time Brokerage Agreement.
9.3 Rights on Termination. Subject to Section 9.4, if this
Agreement is terminated pursuant to Section 9.1 or Section 9.2 and neither
party is in material breach of any provision of this Agreement, the parties
hereto shall have no liability to each other as a result of such termination.
In addition to its rights under Section 9.4, if this Agreement is terminated by
Buyer due to Seller's material breach of its obligations hereunder, Buyer shall
have all rights and remedies available at law or equity. If this Agreement is
terminated by Seller due to Buyer's material breach of its obligations
hereunder, the payment to Seller of the expenses (including reasonable
attorneys' fees and costs) incurred by Seller in the negotiation and
preparation of this Agreement and the performance by Seller of its obligations
hereunder shall constitute full payment and the exclusive remedy for any
damages suffered by Seller by reason of Buyer's material breach.
9.4 Survival of Option. In the event that the transactions
contemplated by this Agreement are not consummated for any reason whatsoever,
the Option shall nevertheless remain exercisable by Buyer until the expiration
of the Option as provided in the Option Agreement, and Buyer may at any time,
and from time to time, prior to such expiration again exercise the Option as
set forth in the Option Agreement and, upon such exercise, Buyer and Seller
shall enter into an Asset Purchase Agreement that is, subject to the
requirement in the following sentence, substantially identical to this
Agreement and thereafter diligently proceed to perform their obligations
thereunder. In the event that the transactions contemplated by this Agreement
are not consummated because a provision of this Agreement is determined by the
FCC to violate any FCC rule or policy, Buyer and Seller shall negotiate in good
faith to revise any such provision to ensure compliance with such rule or
policy while preserving, to the extent possible, the intent of the parties as
embodied in the provision to be revised.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant
-27-
<PAGE> 34
contained in this Agreement. No notice or information delivered by Seller
shall affect Buyer's right to rely on any representation or warranty made by
Seller or relieve Seller of any obligations under this Agreement as the result
of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing,
and regardless of any investigation made at any time by or on behalf of Buyer
or any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Seller contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Station prior to the Closing,
including any liabilities arising under the Licenses or the Assumed Contracts
which relate to events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees, subject to the limitation
in the last sentence of Section 9.3, to indemnify and hold Seller harmless
against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Buyer contained in this Agreement or in any certificate,
document, or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Station on and after the
Closing.
-28-
<PAGE> 35
(d) Any and all losses, liabilities or damages
resulting from any action taken by Buyer or its employees and agents with
respect to the Station, or any failure by Buyer or its employees and agents to
take any action with respect to the Station, in connection with the performance
by Buyer of its obligations under the Time Brokerage Agreement, including,
without limitation, any and all losses, liabilities or damages resulting from
(i) violations by Buyer or its employees and agents of the Communications Act
of 1934, as amended, or any rule, regulation or policy of the FCC, (ii)
slander, defamation or other claims relating to programming provided by Buyer
for broadcast on the Station, and (iii) Buyer's broadcast and sale of
advertising time on the Station.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the
"Claimant") shall promptly give notice to the party from which indemnification
is claimed (the "Indemnifying Party") of any claim, whether between the parties
or brought by a third party, specifying in reasonable detail the factual basis
for the claim. If the claim relates to an action, suit, or proceeding filed by
a third party against Claimant, such notice shall be given by Claimant within
five days after written notice of such action, suit, or proceeding was given to
Claimant.
(b) With respect to claims solely between the
parties, following receipt of notice from the Claimant of a claim, the
Indemnifying Party shall have thirty days to make such investigation of the
claim as the Indemnifying Party deems necessary or desirable. For the purposes
of such investigation, the Claimant agrees to make available to the
Indemnifying Party and/or its authorized representatives the information relied
upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of the thirty- day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such claim, the Indemnifying Party shall immediately pay to the
Claimant the full amount of the claim. If the Claimant and the Indemnifying
Party do not agree within the thirty-day period (or any mutually agreed upon
extension thereof), the Claimant may seek appropriate remedy at law or equity
or under the arbitration provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual
-29-
<PAGE> 36
out-of-pocket expenses incurred by the Claimant as the result of a request by
the Indemnifying Party. If the Indemnifying Party elects to assume control of
the defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a
third party, requires immediate action, the parties will make every effort to
reach a decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections
10.2 and 10.3 shall extend to the shareholders, directors, officers, employees,
and representatives of any Claimant although for the purpose of the procedures
set forth in this Section 10.4, any indemnification claims by such parties
shall be made by and through the Claimant.
(f) Notwithstanding any provision in this Agreement
to the contrary, Seller shall not be required to indemnify Buyer for any
losses, liabilities or damages relating to or arising from (i) a chose in
action of Seller relating to the Station unless Buyer promptly notifies Seller
of such chose in action, and thereupon Seller shall have sole responsibility
for the prosecution of such chose in action or (ii) any environmental or
engineering defect or other circumstance that is described in the environmental
survey or engineering study referred to in Sections 6.6 and 6.7 hereof,
respectively, if and to the extent such defect or circumstance is not a
violation of Seller's representations, warranties or covenants hereunder.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by the party upon whom such
tax is imposed by law. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the
-30-
<PAGE> 37
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, except that Buyer and Seller shall each pay one-half of all
filing fees required by the FCC, and Buyer shall pay any filing fee required by
the FTC under the HSR Act , and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers
shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association.
The written decision of a majority of the arbitrators shall be final and
binding on Seller and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Seller and Buyer in a manner to be decided
by a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not
paid within thirty days, may be entered in any court having jurisdiction over
the matter. No action at law or suit in equity based upon any claim arising
out of or related to this Agreement shall be instituted in any court by Seller
or Buyer against the other except (i) an action to compel arbitration pursuant
to this Section, (ii) an action to enforce the award of the arbitration panel
rendered in accordance with this Section, or (iii) a suit for specific
performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. James L. West
The Christian Network, Inc.
14444 66th Street North
Clearwater, FL 34624
-31-
<PAGE> 38
With a copy to: Alan C. Campbell, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
Mr. Lowell W. Paxson
If to Buyer: Paxson Communications Corporation
601 Clearwater Park Road West
Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may
assign this Agreement without the prior written consent of the other party
hereto; provided, however, that Buyer may assign its rights and obligations
under this Agreement, in whole or in part, to one or more subsidiaries or
commonly controlled affiliates of Buyer, prior to the filing of the FCC
application, without seeking or obtaining Seller's prior approval, provided
that such assignment shall not constitute a release of Buyer's obligations
hereunder, and Buyer may collaterally assign its rights and interests hereunder
to its lenders without seeking or obtaining Seller's prior approval. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA
(WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
-32-
<PAGE> 39
11.8 Gender and Number. Words used in this Agreement,
regardless of the gender and number specifically used, shall be deemed and
construed to include any other gender, masculine, feminine, or neuter, and any
other number, singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto,
and all documents, certificates, and other documents to be delivered by the
parties pursuant hereto, collectively represent the entire understanding and
agreement between Buyer and Seller with respect to the subject matter hereof.
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and which is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.
11.10 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with
any obligation, representation, warranty, covenant, agreement, or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Prior to the Closing, neither party
shall publish any press release, make any other public announcement or
otherwise communicate with any news media concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party; provided, however, that nothing contained herein shall prevent either
party from promptly making all filings with governmental authorities as may, in
its judgement be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
11.12 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against Buyer or Seller arising out of or relating
to this Agreement may be brought in any state or federal court of competent
jurisdiction in the State of Florida and, by execution and delivery of this
Agreement, Buyer and Seller each accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and waives any defense of forum non conveniens and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Seller designates and appoints James L. West, and Buyer
designates and appoints William L. Watson, and such other persons as may
hereafter be selected by Buyer or Seller, as its respective agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by Buyer and Seller to be effective and
binding service in every respect. A copy of any such
-33-
<PAGE> 40
process so served shall be mailed by registered mail to Buyer or Seller at its
address provided in Section 11.3, except that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of process. If any agent appointed by Buyer or Seller refuses to
accept service, Buyer and Seller hereby agree that service upon it by mail
shall constitute sufficient notice. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
either party to bring proceedings against the other in the courts of any other
jurisdiction.
11.13 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-34-
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
PHOENIX-13, INC.
By: /s/ James B. Bocock
--------------------------------
Name: James B. Bocock
Title: President
CHANNEL 13 OF FLAGSTAFF, INC.
By: /s/ James L. West
-------------------------------
James L. West
Chairman
-35-
<PAGE> 42
KWBF(TV), FLAGSTAFF, ARIZONA
EXHIBIT A
AFFILIATION AGREEMENT
The form of a Television Affiliation Agreement to be executed by Buyer and
delivered to The Christian Newtork, Inc. at closing is attached hereto.
<PAGE> 1
EXHIBIT 10.99
- -------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
DENVER-59, INC.,
UHF CHANNEL 59 CORP.
AND
CHANNEL 59 OF DENVER, INC.
* * *
APRIL 18, 1996
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
----
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliation Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Assumed Contracts . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
Page
----
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Page
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 FCC Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Buyer Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.14 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Survival of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
Page
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.12 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
-iv-
<PAGE> 6
LIST OF SCHEDULES
Exhibit A -- Affiliation Agreement
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Insurance
Schedule 3.12 -- Employee Matters
Schedule 3.14` -- Litigation
Schedule 8.2(h) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
-v-
<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of the 18th day of April, 1996,
by and among Paxson Communications of Denver-59, Inc., a Florida corporation
("Buyer"), UHF Channel 59 Corp., a Colorado corporation ("UHF-59"), and Channel
59 of Denver, Inc., a Florida corporation ("CNI-59"; and UHF-59 and CNI-59 are
individually, a "Seller" and collectively, the "Sellers").
R E C I T A L S
A. Sellers and Buyer are parties to an Option Agreement dated as of
August 31, 1995 (the "Option Agreement"), pursuant to which Sellers granted to
Buyer an option (the "Option") to acquire from Sellers substantially all of the
assets used or useful in the business or operations of Television Stations
KUBD-TV, Denver, Colorado ("Station KUBD"), and Low Power Television Station
K54CQ, Fort Collins, Colorado ("Station K54CQ"; and Station KUBD and Station
K54CQ are individually, a "Station" and collectively, the "Stations").
B. In accordance with the Option Agreement, Buyer has notified Sellers
that Buyer intends to exercise the Option.
C. Sellers desire to sell, and Buyer desires to buy, substantially all
the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Sellers, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings set
forth in this Section:
"Accounts Receivable" means the rights of either Seller to payment for the
sale of advertising or programming time run on the Stations by Sellers prior to
the Closing Date.
"Affiliation Agreement" means the Affiliation Agreement in the form of
Exhibit A hereto to be entered into upon the Closing by Buyer and The Christian
Network, Inc.
"Assets" means the assets to be sold, transferred, or otherwise conveyed to
Buyer under this Agreement, as specified in Section 2.1.
-1-
<PAGE> 8
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that are
designated as Contracts that are to be assumed by Buyer upon its purchase of
the Stations and (ii) any Contracts entered into by either Seller between the
date of this Agreement and the Closing Date that Buyer agrees in writing to
assume.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as determined
pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which either Seller is a party or which are binding upon either
Seller and which relate to or affect the Assets or the business or operations
of either or both Stations, and (i) which are in effect on the date of this
Agreement or (ii) which are entered into by either Seller between the date of
this Agreement and the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consents" means actions by the FCC granting its consents to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to either Seller in
connection with the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Intangibles" means all copyrights, trademarks, trade names, service marks,
service names, licenses, patents, permits, jingles, proprietary information,
technical information and data, machinery and equipment warranties, and other
similar intangible property rights and
-2-
<PAGE> 9
interests (and any goodwill associated with any of the foregoing) applied for,
issued to, or owned by either Seller or under which either Seller is licensed
or franchised and which are used or useful in the business and operations of
either or both Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations issued by
the FCC, the Federal Aviation Administration, or any other federal, state, or
local governmental authorities in connection with the conduct of the business
or operations of each Station, together with any additions thereto between the
date of this Agreement and the Closing Date.
"Loan Agreement" means the Loan Agreement dated as of August 31, 1995, among
Buyer and Sellers.
"Note" means the Promissory Note dated August 31, 1995, in the principal
amount of $7,000,000, delivered by CNI-59 to Buyer pursuant to the Loan
Agreement.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of either or both Stations, together with
any additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of either or both Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as of
August 31, 1995, among Sellers and Buyer.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, each Seller hereby agrees to sell,
transfer, and deliver to Buyer on the Closing Date, and Buyer agrees to
purchase, all of the tangible and intangible assets used or useful in
connection with the conduct of the business or operations of the Stations that
is owned, leased or otherwise held by such Seller, together with any additions
thereto between the date of this Agreement and the Closing Date, but excluding
the assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
-3-
<PAGE> 10
encumbrances of any nature whatsoever (except for encumbrances permitted by
Section 5.5 herein), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all other intangible assets of
each Seller relating to the either or both Stations that are not specifically
included within the Intangibles, including the goodwill of the Stations, if
any, except for any lists of donors, contributors or other supporters of the
Stations;
(f) All of each Seller's proprietary information,
technical information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics,
including filings with the FCC relating to the business and operation of the
either or both Stations;
(g) The Accounts Receivable as of 11:59 p.m., local time,
on the day prior to the Closing Date;
(h) All choses in action of each Seller relating to
either or both Stations; and
(i) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Each Seller's cash on hand as of the Closing and all
other cash in any of either Seller's bank or savings accounts; any insurance
policies, letters of credit, or other similar items and cash surrender value in
regard thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that each Seller is required by
law to retain and that pertain to each Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
-4-
<PAGE> 11
(d) All property listed on Schedule 2.2 hereto; and
(e) All lists of donors, contributors or other supporters
of the Stations.
2.3 Purchase Price. The Purchase Price for the Assets shall be
(i) One Hundred Thousand Dollars ($100,000), adjusted as provided in Section
2.3(a) below, payable in cash at the Closing and (ii) the forgiveness on the
Closing Date of all principal, accrued but unpaid interest, fees, expenses and
other charges owed by CNI-59 to Buyer as of the Closing Date pursuant to the
Loan Agreement and the Note.
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses, other than
expenses for which Buyer is obligated to reimburse Sellers under the Time
Brokerage Agreement, for which no proration shall be required. All expenses
arising from the operation of each Station, including business and license
fees, utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), FCC regulatory fees, and similar
prepaid and deferred items, shall be prorated between Buyer and Sellers in
accordance with the principle that Sellers shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, other than expenses for which Buyer is obligated to reimburse Sellers
under the Time Brokerage Agreement, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Sellers shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The cash portion of the Purchase
Price, as adjusted, shall be paid by Buyer to Sellers at Closing by wire
transfer of same-day funds pursuant to wire instructions which shall be
delivered by Sellers to Buyer, at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Sellers under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
-5-
<PAGE> 12
of the Stations on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of either or both Sellers, including (i) any
obligations or liabilities under any Contract not included in the Assumed
Contracts, (ii) any obligations or liabilities under the Assumed Contracts
relating to the period prior to the Closing Date, (iii) any claims or pending
litigation or proceedings relating to the operation of either or both Stations
prior to the Closing, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements not assumed by Buyer, (v) any
obligations or liabilities arising under agreements entered into other than in
the ordinary course of business, (vi) any obligations or liabilities of either
or both Sellers under any employee pension, retirement, or other benefit plans
or collective bargaining agreements, (vii) any obligation to any employee of
the Stations for severance benefits, vacation time, or sick leave accrued prior
to the Closing Date, or (viii) any obligations or liabilities caused by,
arising out of, or resulting from any action or omission of either or both
Sellers prior to the Closing, and all such obligations and liabilities shall
remain and be the obligations and liabilities solely of Sellers.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. CNI-59 is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Colorado. UHF-59 is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado.
Each Seller has all requisite power and authority (i) to own, lease, and use
the Assets as now owned, leased, and used by it, (ii) to conduct the business
and operations of each Station as now conducted by it, and (iii) to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by such Seller hereunder. Neither Seller is a participant in any
joint venture or partnership with any other person or entity with respect to
any part of the operations of either or both Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by each Seller have been duly
authorized by all necessary actions on the part of such Seller and its
shareholder. This Agreement has been duly executed and delivered by each
Seller and constitutes the legal, valid, and binding obligation of such Seller,
enforceable against it in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally, and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not
-6-
<PAGE> 13
require the consent of any third party; (ii) will not conflict with any
provision of the Articles of Incorporation or Bylaws of each Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which either Seller is a party or by which either Seller may be bound; and (v)
will not create any claim, liability, mortgage, lien, pledge, condition,
charge, or encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Sellers have delivered to Buyer true and
complete copies of the Licenses (including any amendments and other
modifications thereto). The Licenses have been validly issued, and the
respective Seller identified on Schedule 3.4 is the authorized legal holder
thereof. The Licenses listed on Schedule 3.4 comprise all of the licenses,
permits, and other authorizations required from any governmental or regulatory
authority for the lawful conduct of the business and operations of the Stations
in the manner and to the full extent they are now conducted, and none of the
Licenses is subject to any restriction or condition that would limit the full
operation of the Stations as now operated. Except as described on Schedule
3.4, the Licenses for each Station are in full force and effect, and the
conduct of the business and operations of such Station is in accordance
therewith in all material respects. Sellers have no reason to believe that any
of the Licenses would not be renewed by the FCC or other granting authority in
the ordinary course. The city of license of Station KUBD, as determined by the
FCC, is located within the Denver Area of Dominant Influence as defined by the
1991-1992 Area of Dominant Influence Market Guide published by The Arbitron
Co. and the Denver Designated Market Area as defined by the 1995 United States
Television Household Estimates published by Nielsen Media Research. To the
best of Sellers' knowledge, on or before June 17, 1993, Station KUBD made a
valid election of must carry with respect to each cable system located within
such Station's Area of Dominant Influence. Except as disclosed on Schedule
3.4, no cable system on which Station KUBD is entitled to must carry status has
advised such Station of any signal quality or copyright indemnity or other
prerequisite to cable carriage of such Station's signal, and no cable system
has declined or threatened to decline such carriage or failed to respond to a
request for carriage or sought any form of relief from carriage from the FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and each
Seller's interests therein. Except as disclosed on Schedule 3.5, the Real
Property listed on Schedule 3.5 comprises all real property interests necessary
to conduct the business and operations of the Stations as now conducted.
Sellers have good and marketable fee simple title, insurable at standard rates,
to all fee estates (including the improvements thereon) included in the Real
Property, free and clear of all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments, leases, charges, and other claims and
encumbrances of any nature whatsoever, and without reservation or exclusion
-7-
<PAGE> 14
of any mineral, timber, or other rights or interests, except for liens for real
estate taxes not yet due and payable and liens disclosed on Schedule 3.5. With
respect to each leasehold or subleasehold interest included in the Real
Property being conveyed under this Agreement, so long as UHF-59 fulfills its
obligations under the lease therefor, UHF-59 has enforceable rights to
nondisturbance and quiet enjoyment, and, to the best of Sellers' knowledge, no
third party holds any interest in the leased premises with the right to
foreclose upon UHF-59's leasehold or subleasehold interest. All towers, guy
anchors, and buildings and other improvements included in the Assets are
located entirely on the Real Property listed in Schedule 3.5. Sellers have
delivered to Buyer true and complete copies of all deeds pertaining to the Real
Property. All Real Property (including the improvements thereon) (i) is in
good condition and repair consistent with its present use, (ii) is available
for immediate use in the conduct of the business and operations of the
Stations, and (iii) complies in all material respects with all applicable
building or zoning codes and the regulations of any governmental authority
having jurisdiction. Sellers have full legal and practical access to the Real
Property. All easements, rights-of-way, and real property licenses affecting
or constituting part of the Real Property have been properly recorded in the
appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Stations as now conducted. Except as described in Schedule 3.6, each
Seller owns and has good title to each item of Tangible Personal Property owned
by it, and none of the Tangible Personal Property owned by either Seller is
subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except for encumbrances permitted by
Section 5.5 herein. Each item of Tangible Personal Property is available for
immediate use in the business and operations of the Stations. All items of
transmitting and studio equipment included in the Tangible Personal Property
(i) have been maintained in a manner consistent with generally accepted
standards of good engineering practice, and (ii) will permit the Stations and
any auxiliary broadcast stations used in the operation of the Stations to
operate, in all material respects, in accordance with the terms of the FCC
Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete list
of all Contracts. Sellers have delivered to Buyer true and complete copies of
all written Contracts, true and complete memoranda of all oral Contracts
(including any amendments and other modifications to such Contracts). Other
than the Contracts listed on Schedule 3.7 or any other Schedule to this
Agreement, neither Seller requires any contract, lease, or other agreement to
enable it to carry on its business as now conducted. All of the Assumed
Contracts are in full force and effect, and are valid, binding, and enforceable
in accordance with their terms. There is not under any Assumed Contract any
default by any party thereto or any event that, after notice or lapse of time
or both, could constitute a default. Sellers are not aware of any intention by
any party to any Assumed
-8-
<PAGE> 15
Contract (i) to terminate such contract or amend the terms thereof, (ii) to
refuse to renew the Assumed Contract upon expiration of its term, or (iii) to
renew the Assumed Contract upon expiration only on terms and conditions which
are more onerous than those now existing. Except for the need to obtain the
Consents listed in Schedule 3.3, each Seller has full legal power and authority
to assign its rights under the Assumed Contracts to Buyer in accordance with
this Agreement, and such assignment will not affect the validity,
enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consents provided for in Section
6.1, the other Consents described in Schedule 3.3, and any filing required
under the HSR Act, no consent, approval, permit, or authorization of, or
declaration to or filing with any governmental or regulatory authority, or any
other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit each Seller to assign or
transfer the Assets to Buyer, or (iii) to enable Buyer to conduct the business
and operations of the Stations in essentially the same manner as such business
and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Sellers have delivered to Buyer copies
of all documents establishing or evidencing all Intangibles. To the best
knowledge of Sellers, neither Seller is infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Sellers threatened, with respect thereto. The Intangibles
listed on Schedule 3.9 comprise all intangible property interests necessary to
conduct the business and operations of the Stations as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of
all insurance policies of either Seller that insure any part of the Assets or
the business of the Stations. All policies of insurance listed in Schedule
3.10 are in full force and effect. The insurance policies listed in Schedule
3.10 are adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Stations against all customary and foreseeable risks. During the past
three years, no insurance policy of either Seller on the Assets or the Stations
has been canceled by the insurer and no application of either Seller for
insurance has been rejected by any insurer.
3.11 Reports. All Station returns, reports, and statements
required to be filed by Sellers with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Sellers and the Stations have
been complied with by Sellers in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed.
Sellers have timely paid to the FCC all annual regulatory fees required to be
paid by Sellers with respect to the FCC Licenses.
-9-
<PAGE> 16
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Stations, their job titles, date
of hire and current salary. Schedule 3.12 also contains a true and complete
list as of the date of this Agreement of all employee benefit plans or
arrangements applicable to the employees of the Stations and all fixed or
contingent liabilities or obligations of either Seller with respect to any
person now or formerly employed by either Seller at the Stations, including
pension or thrift plans, individual or supplemental pension or accrued
compensation arrangements, contributions to hospitalization or other health or
life insurance programs, incentive plans, bonus arrangements, and vacation,
sick leave, disability and termination arrangements or policies, including
workers' compensation policies. Sellers have furnished Buyer with true and
complete copies of all employee handbooks, employee rules and regulations, and
summary plan descriptions of the written plans and arrangements listed in
Schedule 3.12, and with descriptions of the unwritten plans and arrangements
listed in Schedule 3.12. At Buyer's request, Sellers will furnish Buyer with
true and complete copies of all applicable plan documents, trust documents, and
insurance contracts with respect to the plans and arrangements listed on
Schedule 3.12. All employee benefits and welfare plans or arrangements listed
in Schedule 3.12 were established and have been executed, managed and
administered in accordance with the Internal Revenue Code of 1986, as amended,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
all other laws. Sellers are not aware of the existence of any governmental
audit or examination of any of such plans or arrangements or of any facts which
would lead them to believe that any such audit or examination is pending or
threatened. No action, suit, or claim with respect to any of such plans or
arrangements (other than routine claims for benefits) is pending or, to the
knowledge of Sellers, threatened, and Sellers possess no knowledge of any facts
which could give rise to any such action, suit or claim.
(b) Labor Relations. Neither Seller is a party to or
subject to any collective bargaining agreements with respect to the Stations.
Neither Seller has any written or oral contracts of employment with any
employee of the Stations, other than those listed in Schedule 3.7. Each Seller
has complied with all laws, rules, and regulations relating to the employment
of labor, including those related to wages, hours, collective bargaining,
occupational safety, discrimination, and the payment of social security and
other payroll related taxes, and it has not received any notice alleging that
it has failed to comply in any material respect with any such laws, rules, or
regulations. No controversies, disputes, or proceedings are pending or, to the
best of Sellers' knowledge, threatened, between Sellers and any employee
(singly or collectively) of the Stations. No labor union or other collective
bargaining unit represents or claims to represent any of the employees of the
Stations. To Sellers' knowledge, there is no union campaign being conducted to
solicit cards from employees to authorize a union to request a National Labor
Relations Board certification election with respect to any employees at the
Stations.
-10-
<PAGE> 17
(c) Liabilities. Neither Seller has any liability of any
kind to or in respect of any employee benefit plan, including withdrawal
liability under Section 4201 of ERISA. Neither Seller has incurred any
accumulated funding deficiency within the meaning of ERISA or Section 4971 of
the Internal Revenue Code. Neither Seller has failed to make any required
contributions to any employee benefit plan. The Pension Benefit Guaranty
Corporation has not asserted that either Seller has incurred any liability in
connection with any such plan. No lien has been attached and no person has
threatened to attach a lien on any property of either Seller as a result of a
failure to comply with ERISA.
3.13 Taxes. Each Seller has filed or caused to be filed all
federal income tax returns and all other federal, state, county, local, or city
tax returns which are required to be filed by it, and has paid or caused to be
paid all taxes shown on those returns or on any tax assessment received by to
the extent that such taxes have become due, or has set aside on its books
adequate reserves (segregated to the extent required by generally accepted
accounting principles) with respect thereto. There are no governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which either Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Stations, and, to the best knowledge of
Sellers, no event has occurred that could impose on Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from
either Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry or as listed on
Schedule 3.14 attached hereto, there is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other legal, administrative,
or tax proceeding, nor any order, decree or judgment, in progress or pending,
or to the knowledge of Sellers threatened, against or relating to either Seller
with respect to the ownership or operation of its respective Station or
otherwise relating to the Assets or the business or operations of either
Station, nor do Sellers know or have reason to be aware of any basis for the
same. In particular, but without limiting the generality of the foregoing,
there are no applications, complaints or proceedings pending or, to the best of
Sellers' knowledge, threatened (i) before the FCC relating to the business or
operations of either Station other than rule making proceedings which affect
the television industry generally, (ii) before any federal or state agency
relating to the business or operations of either Station involving charges of
illegal discrimination under any federal or state employment laws or
regulations, or (iii) before any federal, state, or local agency relating to
the business or operations of either Station involving zoning issues under any
federal, state, or local zoning law, rule, or regulation.
3.15 Environmental Matters.
(a) Each Seller has complied in all material respects
with all laws, rules, and regulations of all federal, state, and local
governments (and all agencies thereof) concerning the
-11-
<PAGE> 18
environment, public health and safety, and employee health and safety, and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against either Seller in
connection with its ownership or operation of the Stations alleging any failure
to comply with any such law, rule, or regulation.
(b) To the best of Sellers' knowledge, neither Seller has
any liability relating to its ownership and operation of the Stations that
could reasonably be expected to have a material adverse effect on the business
or operations of the Stations (and there is no basis related to the present
operations, properties, or facilities of either Seller for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against such Seller giving rise to any such liability) under
any law, rule, or regulation of any federal, state, or local government (or
agency thereof) concerning release or threatened release of hazardous
substances, public health and safety, or pollution or protection of the
environment.
(c) To the best of Sellers' knowledge, neither Seller has
any liability relating to its ownership and operation of the Stations that
could reasonably be expected to have a material adverse effect on the business
or operations of the Stations (and neither Seller has handled or disposed of
any substance, arranged for the disposal of any substance, or owned or operated
any property or facility in any manner that could form the basis for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to any
statute) against either Seller giving rise to any such liability) for damage to
any site, location, or body of water (surface of subsurface) or for illness or
personal injury.
(d) To the best of Sellers' knowledge, neither Seller has
any liability relating to its ownership and operation of the Stations that
could reasonably be expected to have a material adverse effect on the business
or operations of the Stations (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against either Seller giving rise to any such liability) under any law,
rule, or regulation of any federal, state, or local government (or agency
thereof) concerning employee health and safety.
(e) To the best of Sellers' knowledge, neither Seller has
any liability relating to its ownership and operation of the Stations that
could reasonably be expected to have a material adverse effect on the business
or operations of the Stations (and neither Seller has exposed any employee to
any substance or condition that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to statute) against either Seller
giving rise to any such liability) for any illness or personal injury to any
employee.
(f) To the best of Sellers' knowledge, in connection with
the Sellers' ownership or operation of the Stations, each Seller has obtained
and been in compliance in all
-12-
<PAGE> 19
material respects with all of the terms and conditions of all permits,
licenses, and other authorizations which are required under, and has complied
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained in,
all federal, state, and local laws, rules, and regulations (including all
codes, plans, judgments, orders, decrees, stipulations, injunctions, and
charges thereunder) relating to public health and safety, worker health and
safety, and pollution or protection of the environment, including laws relating
to emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by either Seller in
connection with its ownership and operation of the Stations or, to the best of
Sellers' knowledge, by any other party on any Real Property.
3.16 Compliance with Laws. Each Seller has complied in all
material respects with the Licenses and all federal, state, and local laws,
rules, regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. Neither the ownership or use of the properties of
the Stations nor the conduct of the business or operations of the Stations
conflicts with the rights of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Except as
disclosed on Schedule 3.5, since October 18, 1995, each Seller has conducted
the business and operations of the Station only in the ordinary course and has
not:
(a) Suffered any material adverse change in the assets or
properties of either Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of either
Station;
(b) Made any sale, assignment, lease, or other transfer
of any of the properties of either Station other than in the normal and usual
course of business with suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by either
Seller with respect to the Stations, except in the normal and usual course of
business;
(d) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Stations; or
-13-
<PAGE> 20
(e) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Stations.
3.18 Transactions with Affiliates. Neither Seller has been
involved in any business arrangement or relationship relating to either Station
with any affiliate of Sellers, and no affiliate of Sellers owns any property or
right, tangible or intangible, which is used in the business of the Stations,
other than such arrangements and relationships between Sellers and The
Christian Network, Inc. that have been disclosed to Buyer. As used in this
paragraph, "affiliate" has the meaning set forth in Rule 12b-2 promulgated
under the Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person acting on Sellers'
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Full Disclosure. No representation or warranty made by
Sellers in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Sellers pursuant hereto contains or will
contain any untrue statement of a material fact, or omits or will omit to state
any material fact and required to make any statement made herein or therein not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and is duly qualified and in good standing under the laws of
the State of Colorado. Buyer has all requisite power and authority to execute
and deliver this Agreement and the documents contemplated hereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and making any filing required under the HSR Act, the execution,
delivery, and performance by
-14-
<PAGE> 21
Buyer of this Agreement and the documents contemplated hereby (with or without
the giving of notice, the lapse of time, or both): (i) do not require the
consent of any third party; (ii) will not conflict with the Articles of
Incorporation or Bylaws of Buyer; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the
Stations under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations and policies of the
FCC as now in effect. Buyer knows of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC
disqualify Buyer as an assignee of the FCC Licenses or as the owner and
operator of the Stations.
4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Each Seller agrees that, between the date of this
Agreement and the Closing Date, Sellers shall operate Station KUBD and, at such
time as it resumes broadcast operations, Station K54CQ, diligently in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Sellers'
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Neither Seller shall increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices.
5.3 Contracts. Neither Seller will, without the prior written
consent of Buyer, enter into any contract or commitment relating to either
Station or the Assets, or amend or terminate
-15-
<PAGE> 22
any Assumed Contract (or waive any material right thereunder), or incur any
obligation (including obligations relating to the borrowing of money or the
guaranteeing of indebtedness) that will be binding on Buyer after Closing.
Prior to the Closing Date, Sellers shall deliver to Buyer a list of all
Contracts entered into between the date of this Agreement and the Closing Date,
together with copies of such Contracts.
5.4 Disposition of Assets. Neither Seller shall sell, assign,
lease, or otherwise transfer or dispose of any of the Assets, except where no
longer used or useful in the business or operations of the Stations or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Neither Seller shall create, assume or permit
to exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed on or prior
to the Closing Date, (ii) liens for current taxes not yet due and payable, and
(iii) mechanics' liens and other similar liens, which shall be removed on or
prior to the Closing Date.
5.6 Licenses. Neither Seller shall cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Neither Seller shall fail to prosecute
with due diligence any applications to any governmental authority in connection
with the operation of either Station.
5.7 Rights. Neither Seller shall waive any right relating to
either Station or any of the Assets. Neither Seller shall cause any cable
system located within the Area of Dominant Influence of Station KUBD to refuse
to carry such Station's signal.
5.8 No Inconsistent Action. Neither Seller shall take any action
that is inconsistent with its obligations under this Agreement or that could
hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Sellers shall give Buyer and its
authorized representatives reasonable access to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Stations for the purpose of audit and inspection.
5.10 Maintenance of Assets. Each Seller shall use its best
efforts and take all reasonable actions to maintain all of the Assets in good
condition (ordinary wear and tear excepted), and use, operate, and maintain all
of the Assets in a reasonable manner and in accordance with the terms of the
FCC Licenses, all rules and regulations of the FCC and generally accepted
standards of good engineering practice. Each Seller shall maintain
-16-
<PAGE> 23
inventories of spare parts and expendable supplies at levels consistent with
past practices. If any loss, damage, impairment, confiscation, or condemnation
of or to any of the Assets occurs, other than any loss, damage or impairment
resulting from actions taken by Buyer pursuant to the Time Brokerage Agreement,
Sellers shall repair, replace, or restore the Assets to their prior condition
as represented in this Agreement as soon thereafter as possible, and Sellers
shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Sellers shall maintain the existing insurance
policies on the Stations and the Assets through the Closing Date.
5.12 Consents. Sellers shall use their best efforts to obtain
the Consents and the estoppel certificates described in Section 8.2(b), without
any change in the terms or conditions of any Contract or License that could be
less advantageous to the Stations than those pertaining under the Contract or
License as in effect on the date of this Agreement; provided, however, that
Sellers' failure to obtain any Consent shall not constitute a material breach
of this Agreement. Sellers shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request,
Sellers shall cooperate with Buyer and use their best efforts to obtain from
the lessors under each Real Property lease such estoppel certificates and
consents to the collateral assignment of the lessee's interest under each such
lease as Buyer's lenders may request.
5.13 Books and Records. Each Seller shall maintain its books
and records relating to the Stations in accordance with past practices.
5.14 Notification. Sellers shall promptly notify Buyer in
writing of any unusual or material developments with respect to the business or
operations of the Stations, and of any material change in any of the
information contained in Sellers' representations and warranties contained in
Section 3 of this Agreement.
5.15 Financial Information. Sellers shall furnish to Buyer
such financial information regarding the Assets and the business or operations
of the Stations (including information on payables and receivables) as Buyer
may reasonably request. All financial information delivered by Sellers to
Buyer pursuant to this Section shall be prepared from the books and records of
Sellers in accordance with generally accepted accounting principles
consistently applied, shall accurately reflect the books, records, and accounts
of the Stations, shall be complete and correct in all material respects, and
shall present fairly the financial condition of the Stations as at their
respective dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Each Seller shall comply in all
material respects with all laws, rules, and regulations applicable or relating
to the ownership and operation of the Stations.
-17-
<PAGE> 24
5.17 Financing Leases. Each Seller will satisfy at or prior to
Closing all outstanding obligations under capital and financing leases with
respect to any of the Assets and obtain good title to the Assets leased by
either Seller pursuant to those leases so that those Assets shall be
transferred to Buyer at Closing free of any interest of the lessors.
5.18 Programming. Sellers shall not make any material changes
in the broadcast hours or in the percentages of types of programming broadcast
by the Stations, or make any other material change in the Stations' programming
policies, except such changes as in the good faith judgment of the Sellers are
required by the public interest.
5.19 Preservation of Business. To the extent consistent with
their obligations under the Time Brokerage Agreement, each Seller shall use its
best efforts to preserve the business and organization of the Stations and use
its best efforts to keep available to the Stations their present employees and
the Stations' present relationships with suppliers and others having business
relations with them, to the end that the business and operations of the
Stations shall be unimpaired at the Closing Date.
5.20 Collection of Accounts Receivable. Sellers shall collect
the accounts receivable of the Stations only in the ordinary course consistent
with its past practices and will not take any action designed or likely to
accelerate the collection of its accounts receivable.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consents.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Sellers and Buyer shall promptly prepare appropriate
applications for the FCC Consents and shall file the applications with the FCC
within five (5) business days of the execution of this Agreement. The parties
shall prosecute the applications with all reasonable diligence and otherwise
use their best efforts to obtain a grant of the applications as expeditiously
as practicable. Each party agrees to comply with any condition imposed on it
by the FCC Consents, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Sellers shall oppose any requests for reconsideration or
judicial review of the FCC Consents. If the Closing shall not have occurred
for any reason within the original effective period of the FCC Consents, and
neither party shall have terminated this Agreement under
-18-
<PAGE> 25
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consents. No extension of the FCC Consents shall limit the
exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations; such operations,
including complete control and supervision of all of the Stations programs,
employees, and policies, shall be the sole responsibility of Sellers until the
Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Sellers at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs, other than any damage or destruction of the Assets or any
other event resulting from Buyer's conduct or actions under the Time Brokerage
Agreement, which (i) causes Station KUBD to cease broadcasting operations for a
period of three or more days or (ii) prevents in any material respect signal
transmission by Station KUBD in the normal and usual manner and Sellers fail to
restore or replace the Assets so that normal and usual transmission is resumed
within seven days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon written notice to Sellers or (y) proceed to
consummate the transaction contemplated by this Agreement and complete the
restoration and replacement of the Assets after the Closing Date, in which
event Sellers shall deliver to Buyer all insurance proceeds received in
connection with such damage, destruction or other event.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense and
within thirty (30) days of the date hereof, retain an environmental consultant
to be selected by Buyer to perform a Phase I environmental survey of the
properties of the Stations. If the survey discloses any material environmental
hazard or material possibility of future liability for environmental damages or
clean-up costs, Buyer shall so notify Sellers as soon as practicable.
-19-
<PAGE> 26
6.6 Engineering Study. Buyer may, at its option and expense and
within thirty (30) days of the date hereof, retain an engineering firm to
conduct a proof of performance study of the Stations and to prepare a report on
the Stations' compliance with customary engineering practices and all
applicable FCC rules, regulations, prescribed practices, and technical
standards. If the survey discloses any material deficiencies in the operations
or equipment of the Stations, Buyer shall so notify Sellers as soon as
practicable.
6.7 Cooperation. Buyer and Sellers shall cooperate fully with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Sellers shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Colorado shall be complied with by Sellers and Buyer. Any loss,
liability, obligation, or cost suffered by Sellers or Buyer as the result of
the failure of Sellers or Buyer to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets as contemplated by this Agreement
shall be borne by Buyer.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to
each parcel of Real Property that either Seller owns, Sellers will obtain and
deliver to Buyer, at Buyer's expense, at or prior to Closing, an ALTA Owner's
Policy of Title Insurance Form B-1987 (or equivalent policy acceptable to
Buyer), issued by a title insurer satisfactory to Buyer, in an amount equal to
the fair market value of the property and any improvements thereon (as
reasonably determined by Buyer), insuring title to such parcel to be in the
name of Buyer as of the Closing, subject only to liens or encumbrances
expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall (1) insure title to the Real Property described in the policy
and all recorded easements benefitting such Real Property, (2) contain an
"extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property
-20-
<PAGE> 27
consisting of more than one record parcel, and (7) not be subject to any survey
exception or any defect or encroachment disclosed by a survey delivered with
respect to the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will procure a current survey of the parcel, prepared by
a licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
6.10 Sales Tax Filings. Through the Closing Date, Sellers
shall continue to file Colorado sales tax returns with respect to the Stations,
if and to the extent such returns are required to be filed by applicable law,
and shall concurrently deliver copies of all such returns to Buyer.
6.11 Access to Books and Records. Sellers shall provide Buyer
reasonable access and the right to copy for a period of three years from the
Closing Date any books and records relating to the assets that are not included
in the Assets. Buyer shall provide Sellers reasonable access and the right to
copy for a period of three years from the Closing Date any books and records
relating to the Assets.
6.12 Appraisal. Buyer and Sellers agree to allocate the
Purchase Price for tax and recording purposes in accordance with an appraisal
to be conducted by an appraisal firm selected and paid for by Buyer with
experience in the valuation and appraisal of television station assets.
6.13 Buyer Conduct. Buyer shall take no action, or fail to
take any required action, that would disqualify Buyer from being the licensee
of the Stations under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations and policies of the
FCC as now in effect. Buyer, in programming the Stations pursuant to the Time
Brokerage Agreement, shall not cause or permit, by any act or failure to act,
any of the Licenses to expire or to be revoked, suspended, or modified, or take
any action that could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses.
6.14 HSR Act Filing. Sellers and Buyer agree to (a) file, or
cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, which are required in connection
with the transactions contemplated hereby under the HSR Act within ten (10)
business days of the date of this Agreement; (b) submit to the other party,
prior to filing, their respective HSR Act filings to be made hereunder, and to
discuss with the other any comments the reviewing party may have; (c) cooperate
with each other in connection with such HSR Act filings, which cooperation
shall include furnishing the other with any information or documents in such
party's possession that may be reasonably required in connection with such
filings; (d) promptly file, after any request by the FTC or DOJ, any
information or
-21-
<PAGE> 28
documents requested by the FTC or DOJ; and (e) furnish each other with any
correspondence from or to, and notify each other of any other communications
with, the FTC or DOJ which relates to the transactions contemplated hereunder,
and to the extent practicable, to permit each other to participate in any
conferences with the FTC or DOJ.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Sellers contained in this Agreement shall be true and
complete in all material respects at and as of the Closing Date as though made
at and as of that time.
(b) Covenants and Conditions. Sellers shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) Consents. All Consents designated as "material" on
Schedule 3.3 shall have been obtained and delivered to Buyer without any
adverse change in the terms or conditions of any agreement or any governmental
license, permit, or other authorization.
(d) FCC Consents. The FCC Consents shall have been
granted without the imposition on Buyer of any conditions that need not be
complied with by Buyer under Section 6.1 hereof, Sellers shall have complied
with any conditions imposed on it by the FCC Consents, and the FCC Consents
shall have become Final Orders.
(e) Governmental Authorizations. Sellers shall be the
holders of all Licenses and there shall not have been any modification of any
License that could have a material adverse effect on the Stations or the
conduct of their business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any License.
(f) Deliveries. Sellers shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
assets, or properties of the Stations,
-22-
<PAGE> 29
including any damage, destruction, or loss affecting any assets used or useful
in the conduct of the business of the Stations.
(h) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Sellers shall have complied,
in all material respects, with their obligations thereunder.
(i) Loan Agreement. There shall exist no Event of
Default as defined in the Loan Agreement.
(j) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
7.2 Conditions to Obligations of Sellers. All obligations of
Sellers at the Closing are subject at Sellers' option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consents. The FCC Consents shall have been
granted without the imposition on Sellers of any conditions that need not be
complied with by Sellers under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consents.
(e) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Buyer shall have complied, in
all material respects, with its obligations thereunder.
(f) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
-23-
<PAGE> 30
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Sellers, that is (1) not earlier than the first business day after both FCC
Consents are effective, and (2) not later than ten business days following the
date upon which both FCC Consents have become Final Orders.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Sellers.
8.2 Deliveries by Sellers. Prior to or on the Closing Date,
Sellers shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims, and obligations except for liens for current taxes not
yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property;
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of each Seller by its Chairman or
President, certifying (1) that the representations and warranties of each
Seller contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date; and (2)
that each Seller has in all material respects performed and complied with all
of its obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(e) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.9;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Sellers in connection with its operations;
-24-
<PAGE> 31
(g) Accounts Receivable. A complete and accurate list of
the Stations' accounts receivable as of a date no more than five business days
prior to the Closing Date, including, with respect to each of the accounts
receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Sellers' counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(h)
hereto; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder, provided that Buyer shall bear any reasonable and necessary expense
incurred by Sellers to obtain such certificate and confirmation.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:
(a) Purchase Price. The cash portion of the Purchase
Price, as adjusted pursuant to Section 2.3(a), the executed original of the
Note marked "canceled" and such other documents as may be required to release
or terminate any security interests held by Buyer in any of the assets
described in Section 2.2;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Sellers' obligations under the Licenses and Assumed Contracts as provided in
Section 2.5;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its Secretary, certifying (1)
that the representations and warranties of Buyer contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date; and
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Affiliation Agreement. The Affiliation Agreement,
duly executed by Buyer.
-25-
<PAGE> 32
SECTION 9. TERMINATION
9.1 Termination by Sellers. This Agreement may be terminated by
Sellers, if neither Seller is then in material default, upon written notice to
Buyer, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, Sellers shall have notified Buyer in writing that one or more
of the conditions precedent to the obligations of Sellers set forth in this
Agreement have not been satisfied or waived in writing by Sellers and such
condition or conditions shall not have been satisfied by Buyer or waived in
writing by Sellers within fifteen days following such notice.
(b) Judgments. If, on the date that would otherwise be
the Closing Date, Sellers shall have notified Buyer that there is in effect any
judgment, decree, or order that would prevent or make unlawful the Closing and
such judgment, decree or order shall not have been satisfied by Buyer within
fifteen (15) days following such notice.
(c) Upset Date. If the Closing shall not have occurred
by October 18, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if Buyer is not then in material default, upon written notice to
Sellers, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, Buyer shall have notified Sellers in writing that one or more
of the conditions precedent to the obligations of Buyer set forth in this
Agreement have not been satisfied or waived in writing by Buyer and such
condition or conditions shall not have been satisfied by Sellers or waived in
writing by Buyer within fifteen (15) days following such notice.
(b) Judgments. If, on the date that would otherwise be
the Closing Date, Buyer shall have notified Sellers that there is in effect any
judgment, decree, or order that would prevent or make unlawful the Closing and
such judgment, decree or order shall not have been satisfied by Sellers within
fifteen (15) days following such notice.
(c) Upset Date. If the Closing shall not have occurred
by October 18, 1997.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of Station KUBD in the normal and
usual manner for a continuous period of three days unless such interruption of
service is due to actions of Buyer under the Time Brokerage Agreement.
-26-
<PAGE> 33
9.3 Rights on Termination. Subject to Section 9.4, if this
Agreement is terminated pursuant to Section 9.1 or Section 9.2 and neither
party is in material breach of any provision of this Agreement, the parties
hereto shall have no liability to each other as a result of such termination.
In addition to its rights under Section 9.4, if this Agreement is terminated by
Buyer due to Sellers' material breach of their obligations hereunder, Buyer
shall have all rights and remedies available at law or equity. If this
Agreement is terminated by Sellers due to Buyer's material breach of its
obligations hereunder, the payment to Sellers of the expenses (including
reasonable attorneys' fees and costs) incurred by Sellers in the negotiation
and preparation of this Agreement and the performance by Sellers of their
obligations hereunder shall constitute full payment and the exclusive remedy
for any damages suffered by Sellers by reason of Buyer's material breach.
9.4 Survival of Option. In the event that the transactions
contemplated by this Agreement are not consummated for any reason whatsoever,
the Option shall nevertheless remain exercisable by Buyer until the expiration
of the Option as provided in the Option Agreement, and Buyer may at any time,
and from time to time, prior to such expiration again exercise the Option as
set forth in the Option Agreement and, upon such exercise, Buyer and Sellers
shall enter into an Asset Purchase Agreement that is, subject to the
requirement in the following sentence, substantially identical to this
Agreement and thereafter diligently proceed to perform their obligations
thereunder. In the event that the transactions contemplated by this Agreement
are not consummated because a provision of this Agreement is determined by the
FCC to violate any FCC rule or policy, Buyer and Sellers shall negotiate in
good faith to revise any such provision to ensure compliance with such rule or
policy while preserving, to the extent possible, the intent of the parties as
embodied in the provision to be revised.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Sellers shall affect Buyer's right to rely on any representation or warranty
made by Sellers or relieve either Seller of any obligations under this
Agreement as the result of a breach of any of its representations and
warranties.
10.2 Indemnification by Sellers. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Sellers hereby agree to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
-27-
<PAGE> 34
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by either Seller contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of either Seller not assumed
by Buyer pursuant to this Agreement, including any liabilities arising at any
time under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of either Station prior to the Closing,
including any liabilities arising under the Licenses or the Assumed Contracts
which relate to events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Sellers or
any information Sellers may have, Buyer hereby agrees, subject to the
limitation in the last sentence of Section 9.3, to indemnify and hold each
Seller harmless against and with respect to, and shall reimburse each Seller
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Sellers under this Agreement.
(b) Any and all obligations of each Seller assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations on and after the Closing.
(d) Any and all losses, liabilities or damages resulting
from any action taken by Buyer or its employees and agents with respect to the
Station, or any failure by Buyer or its employees and agents to take any action
with respect to the Station, in connection with the performance by Buyer of its
obligations under the Time Brokerage Agreement, including, without limitation,
any and all losses, liabilities or damages resulting from (i) violations by
Buyer or its employees and agents of the Communications Act of 1934, as
amended, or any rule, regulation or policy of the FCC, (ii) slander, defamation
or other claims relating to programming
-28-
<PAGE> 35
provided by Buyer for broadcast on the Station, and (iii) Buyer's broadcast and
sale of advertising time on the Station.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
-29-
<PAGE> 36
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) Notwithstanding any provision in this Agreement to
the contrary, Sellers shall not be required to indemnify Buyer for any losses,
liabilities or damages relating to or arising from (i) a chose in action of
either Seller relating to either Station unless Buyer promptly notifies Sellers
of such chose in action, and thereupon Sellers shall have sole responsibility
for the prosecution of such chose in action or (ii) any environmental or
engineering defect or other circumstance that is described in the environmental
survey or engineering study referred to in Sections 6.5 and 6.6 hereof,
respectively, if and to the extent such defect or circumstance is not a
violation of Sellers' representations, warranties or covenants hereunder.
10.5 Specific Performance. The parties recognize that if
either Seller breaches this Agreement and refuses to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for its injury. Buyer shall therefore be entitled, in
addition to any other remedies that may be available, including money damages,
to obtain specific performance of the terms of this Agreement. If any action
is brought by Buyer to enforce this Agreement, each Seller shall waive the
defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either
party which results in a lawsuit or other proceeding for any remedy available
under this Agreement, the prevailing party shall be entitled to reimbursement
from the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Sellers
to Buyer pursuant to this Agreement shall be paid by the party upon whom such
tax is imposed by law. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives, except that
Buyer, on the one hand, and Sellers, on the other hand, shall each pay one-half
of all filing fees required by the FCC, and Buyer shall pay any filing fee
required by the FTC under the HSR Act , and each party shall be responsible for
all fees or commissions payable to any finder, broker, advisor, or similar
person retained by or on behalf of such party.
-30-
<PAGE> 37
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Sellers and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers
shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association.
The written decision of a majority of the arbitrators shall be final and
binding on Sellers and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Sellers and Buyer in a manner to be
decided by a majority of the arbitrators, and the assessment shall be set forth
in the decision and award of the arbitrators. Judgment on the award, if it is
not paid within thirty days, may be entered in any court having jurisdiction
over the matter. No action at law or suit in equity based upon any claim
arising out of or related to this Agreement shall be instituted in any court by
Sellers or Buyer against the other except (i) an action to compel arbitration
pursuant to this Section, (ii) an action to enforce the award of the
arbitration panel rendered in accordance with this Section, or (iii) a suit for
specific performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to either Seller: Mr. James L. West
The Christian Network, Inc.
14444 66th Street North
Clearwater, FL 34624
With a copy to: Alan C. Campbell, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
-31-
<PAGE> 38
If to Buyer: Mr. Lowell W. Paxson
Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may
assign this Agreement without the prior written consent of the other party
hereto; provided, however, that Buyer may assign its rights and obligations
under this Agreement, in whole or in part, to one or more subsidiaries or
commonly controlled affiliates of Buyer, prior to the filing of the FCC
application, without seeking or obtaining Sellers' prior approval, provided
that such assignment shall not constitute a release of Buyer's obligations
hereunder, and Buyer may collaterally assign its rights and interests hereunder
to its lenders without seeking or obtaining Sellers' prior approval. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions
and execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Sellers, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA
(WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement,
regardless of the gender and number specifically used, shall be deemed and
construed to include any other gender, masculine, feminine, or neuter, and any
other number, singular or plural, as the context requires.
-32-
<PAGE> 39
11.9 Entire Agreement. This Agreement, the schedules, hereto,
and all documents, certificates, and other documents to be delivered by the
parties pursuant hereto, collectively represent the entire understanding and
agreement between Buyer and Sellers with respect to the subject matter hereof.
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and which is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.
11.10 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with
any obligation, representation, warranty, covenant, agreement, or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Prior to the Closing, neither party shall
publish any press release, make any other public announcement or otherwise
communicate with any news media concerning this Agreement or the transactions
contemplated hereby without the prior written consent of the other party;
provided, however, that nothing contained herein shall prevent either party
from promptly making all filings with governmental authorities as may, in its
judgement be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
11.12 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against Buyer or either Seller arising out of or
relating to this Agreement may be brought in any state or federal court of
competent jurisdiction in the State of Florida and, by execution and delivery
of this Agreement, Buyer and each Seller accepts for itself and in connection
with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
conveniens and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement. Each Seller designates and appoints James
L. West, and Buyer designates and appoints William L. Watson, and such other
persons as may hereafter be selected by Buyer or Sellers, as its respective
agent to receive on its behalf service of all process in any such proceedings
in any such court, such service being hereby acknowledged by Buyer and each
Seller to be effective and binding service in every respect. A copy of any
such process so served shall be mailed by registered mail to Buyer or Sellers
at the address provided in Section 11.3, except that, unless otherwise provided
by applicable law, any failure to mail such copy shall not affect the validity
of service of process. If any agent appointed by Buyer or Sellers refuses to
accept service, Buyer and Sellers hereby agree that service upon it by mail
shall constitute sufficient notice. Nothing herein shall affect
-33-
<PAGE> 40
the right to serve process in any other manner permitted by law or shall limit
the right of either party to bring proceedings against the other in the courts
of any other jurisdiction.
11.13 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-34-
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF DENVER-59, INC.
By: /s/ James B. Bocock
-----------------------------------
Name: James B. Bocock
Title: President
UHF CHANNEL 59 CORP.
By: /s/ James L. West
------------------------------------
James L. West
Chairman
CHANNEL 59 OF DENVER, INC.
By: /s/ James L. West
------------------------------------
James L. West
Chairman
-35-
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF DENVER-59, INC.
By:
-----------------------------------
Name: James B. Bocock
Title: President
UHF CHANNEL 59 CORP.
By: /s/ James L. West
------------------------------------
James L. West
Chairman
CHANNEL 59 OF DENVER, INC.
By: /s/ James L. West
------------------------------------
James L. West
Chairman
-35-
<PAGE> 1
EXHIBIT 10.100
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
DAYTON-26, INC.
AND
CHANNEL 26 OF DAYTON, INC.
* * *
APRIL 18, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliation Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Buyer Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.14 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Survival of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.12 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C>
Exhibit A -- Affiliation Agreement
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Insurance
Schedule 3.12 -- Employee Matters
Schedule 3.14 -- Litigation
Schedule 8.2(i) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of the 18th day of April,
1996, by and between Paxson Communications of Dayton-26 , Inc., a Florida
corporation ("Buyer"), and Channel 26 of Dayton, Inc., a Florida corporation
("Seller").
R E C I T A L S
A. Seller and Buyer are parties to an Option Agreement dated as
of October 6, 1995 (the "Option Agreement"), pursuant to which Seller granted
to Buyer an option (the "Option") to acquire from Seller substantially all of
the assets used or useful in the business or operations of Television Station
WTJC(TV), Springfield, Ohio (the "Station").
B. In accordance with the Option Agreement, Buyer has notified
Seller that Buyer intends to exercise the Option.
C. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising or programming time (i) run on the Station by Seller prior
to the Closing Date or (ii) run on the Station prior to the date that Seller
acquired the Station.
"Affiliation Agreement" means the Affiliation Agreement in the form of
Exhibit A hereto to be entered into upon the Closing by Buyer and The Christian
Network, Inc.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are designated as Contracts that are to be assumed by Buyer upon its
purchase of the Station and (ii) any Contracts
<PAGE> 8
entered into by Seller between the date of this Agreement and the Closing Date
that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the
- 2 -
<PAGE> 9
business and operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Loan Agreement" means the Loan Agreement dated as of October 6,
1995, between Buyer and Seller.
"Note" means the Promissory Note dated October 6, 1995, in the
principal amount of $3,500,000, delivered by Seller to Buyer pursuant to the
Loan Agreement.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as
of October 6, 1995, between Seller and Buyer.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets used or useful in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for encumbrances
permitted by Section 5.5 herein), including the following:
- 3 -
<PAGE> 10
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all other intangible assets
of Seller relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any, except for any
lists of donors, contributors or other supporters of the Station;
(f) All of Seller's proprietary information,
technical information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics,
including filings with the FCC relating to the business and operation of the
Station;
(g) The Accounts Receivable as of 11:59 p.m., local
time, on the day prior to the Closing Date;
(h) All choses in action of Seller relating to the
Station; and
(i) All books and records relating to the business
or operations of the Station, including executed copies of the Assumed
Contracts, and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the
following assets:
(a) Seller's cash on hand as of the Closing and all
other cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Seller is required
by law to retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee
benefit plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto; and
(e) All lists of donors, contributors or other
supporters of the Station.
- 4 -
<PAGE> 11
2.3 Purchase Price. The Purchase Price for the Assets
shall be (i) One Hundred Thousand Dollars ($100,000), adjusted as provided in
Section 2.3(a) below, payable in cash at the Closing and (ii) the forgiveness
on the Closing Date of all principal, accrued but unpaid interest, fees,
expenses and other charges owed by Seller to Buyer as of the Closing Date
pursuant to the Loan Agreement and the Note.
(a) Prorations. The Purchase Price shall be
increased or decreased as required to effectuate the proration of expenses,
other than expenses for which Buyer is obligated to reimburse Seller under the
Time Brokerage Agreement, for which no proration shall be required. All
expenses arising from the operation of the Station, including business and
license fees, utility charges, real and personal property taxes and assessments
levied against the Assets, property and equipment rentals, applicable copyright
or other fees, sales and service charges, taxes (except for taxes arising from
the transfer of the Assets under this Agreement), FCC regulatory fees, and
similar prepaid and deferred items, shall be prorated between Buyer and Seller
in accordance with the principle that Seller shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, other than expenses for which Buyer is obligated to reimburse Seller
under the Time Brokerage Agreement, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any
adjustments will, insofar as feasible, be determined and paid on the Closing
Date, with final settlement and payment by the appropriate party occurring no
later than ninety (90) days after the Closing Date or such other date as the
parties shall mutually agree upon.
2.4 Payment of Purchase Price. The cash portion of the
Purchase Price, as adjusted, shall be paid by Buyer to Seller at Closing by
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer, at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the
Closing Date, Buyer shall assume and undertake to pay, discharge, and perform
all obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under
- 5 -
<PAGE> 12
capitalized leases or other financing agreements not assumed by Buyer, (v) any
obligations or liabilities arising under agreements entered into other than in
the ordinary course of business, (vi) any obligations or liabilities of Seller
under any employee pension, retirement, or other benefit plans or collective
bargaining agreements, (vii) any obligation to any employee of the Station for
severance benefits, vacation time, or sick leave accrued prior to the Closing
Date, or (viii) any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of Seller prior to the Closing, and all
such obligations and liabilities shall remain and be the obligations and
liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Ohio. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement and the documents contemplated hereby,
and to perform and comply with all of the terms, covenants, and conditions to
be performed and complied with by Seller hereunder. Seller is not a
participant in any joint venture or partnership with any other person or entity
with respect to any part of the operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller and its shareholder. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid, and binding obligation of Seller, enforceable against it in
accordance with its terms, except as the enforceability of this Agreement may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally, and by judicial discretion in the enforcement of equitable
remedies.
3.3 Absence of Conflicting Agreements. Subject to
obtaining the Consents listed on Schedule 3.3, the execution, delivery, and
performance of this Agreement and the documents contemplated hereby (with or
without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with any provision of
the Articles of Incorporation or Bylaws of Seller; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order, ordinance, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Seller is a
party or by which Seller may be bound; and (v) will not create any
- 6 -
<PAGE> 13
claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true
and complete list of the Licenses. Seller has delivered to Buyer true and
complete copies of the Licenses (including any amendments and other
modifications thereto). The Licenses have been validly issued, and Seller is
the authorized legal holder thereof. The Licenses listed on Schedule 3.4
comprise all of the licenses, permits, and other authorizations required from
any governmental or regulatory authority for the lawful conduct of the business
and operations of the Station in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any restriction or condition
that would limit the full operation of the Station as now operated. The
Licenses are in full force and effect, and the conduct of the business and
operations of the Station is in accordance therewith in all material respects.
Seller has no reason to believe that any of the Licenses would not be renewed
by the FCC or other granting authority in the ordinary course. The Station's
city of license, as determined by the FCC, is located within the Dayton, Ohio
Area of Dominant Influence as defined by the 1991-1992 Area of Dominant
Influence Market Guide published by The Arbitron Co. and the Dayton, Ohio
Designated Market Area as defined by the 1995 United States Television
Household Estimates published by Nielsen Media Research. To the best of
Seller's knowledge, on or before June 17, 1993, the Station made a valid
election of must carry with respect to each cable system located within the
Station's Area of Dominant Influence. Except as disclosed on Schedule 3.4, no
cable system on which the Station is entitled to must carry status has advised
the Station of any signal quality or copyright indemnity or other prerequisite
to cable carriage of the Station's signal, and no cable system has declined or
threatened to decline such carriage or failed to respond to a request for
carriage or sought any form of relief from carriage from the FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein. The Real Property listed on Schedule 3.5 comprises
all real property interests necessary to conduct the business and operations of
the Station as now conducted. Seller has good and marketable fee simple title,
insurable at standard rates, to all fee estates (including the improvements
thereon) included in the Real Property, free and clear of all liens, mortgages,
pledges, covenants, easements, restrictions, encroachments, leases, charges,
and other claims and encumbrances of any nature whatsoever, and without
reservation or exclusion of any mineral, timber, or other rights or interests,
except for liens for real estate taxes not yet due and payable and liens
disclosed on Schedule 3.5. With respect to each leasehold or subleasehold
interest included in the Real Property being conveyed under this Agreement, so
long as Seller fulfills its obligations under the lease therefor, Seller has
enforceable rights to nondisturbance and quiet enjoyment, and, to the best of
Seller's knowledge, no third party holds any interest in the leased premises
with the right to foreclose upon Seller's leasehold or subleasehold interest.
All towers, guy anchors, and buildings and other improvements included in the
Assets are located entirely on the Real Property listed in Schedule 3.5.
Seller has delivered to Buyer true and complete copies of all deeds pertaining
to
- 7 -
<PAGE> 14
the Real Property. All Real Property (including the improvements thereon) (i)
is in good condition and repair consistent with its present use, (ii) is
available for immediate use in the conduct of the business and operations of
the Station, and (iii) complies in all material respects with all applicable
building or zoning codes and the regulations of any governmental authority
having jurisdiction. Seller has full legal and practical access to the Real
Property. All easements, rights-of-way, and real property licenses affecting
or constituting part of the Real Property have been properly recorded in the
appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for encumbrances permitted by Section 5.5 herein. Each
item of Tangible Personal Property is available for immediate use in the
business and operations of the Station. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained
in a manner consistent with generally accepted standards of good engineering
practice, and (ii) will permit the Station and any auxiliary broadcast stations
used in the operation of the Station to operate, in all material respects, in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and
complete list of all Contracts. Seller has delivered to Buyer true and
complete copies of all written Contracts, true and complete memoranda of all
oral Contracts (including any amendments and other modifications to such
Contracts). Other than the Contracts listed on Schedule 3.7 or any other
Schedule to this Agreement, Seller requires no contract, lease, or other
agreement to enable it to carry on its business as now conducted. All of the
Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with their terms. There is not under any Assumed
Contract any default by any party thereto or any event that, after notice or
lapse of time or both, could constitute a default. Seller is not aware of any
intention by any party to any Assumed Contract (i) to terminate such contract
or amend the terms thereof, (ii) to refuse to renew the Assumed Contract upon
expiration of its term, or (iii) to renew the Assumed Contract upon expiration
only on terms and conditions which are more onerous than those now existing.
Except for the need to obtain the Consents listed in Schedule 3.3, Seller has
full legal power and authority to assign its rights under the Assumed Contracts
to Buyer in accordance with this Agreement, and such assignment will not affect
the validity, enforceability, or continuation of any of the Assumed Contracts.
- 8 -
<PAGE> 15
3.8 Consents. Except for the FCC Consent provided for in
Section 6.1, the other Consents described in Schedule 3.3, and any filing
required under the HSR Act, no consent, approval, permit, or authorization of,
or declaration to or filing with any governmental or regulatory authority, or
any other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, or (iii) to enable Buyer to conduct the business and
operations of the Station in essentially the same manner as such business and
operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list
of all Intangibles (exclusive of those listed in Schedule 3.4), all of which
are valid and in good standing and uncontested. Seller has delivered to Buyer
copies of all documents establishing or evidencing all Intangibles. To the
best knowledge of Seller, Seller is not infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Seller threatened, with respect thereto. The Intangibles
listed on Schedule 3.9 comprise all intangible property interests necessary to
conduct the business and operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list
of all insurance policies of Seller that insure any part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.10 are
in full force and effect. The insurance policies listed in Schedule 3.10 are
adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Station against all customary and foreseeable risks. During the past
three years, no insurance policy of Seller on the Assets or the Station has
been canceled by the insurer and no application of Seller for insurance has
been rejected by any insurer.
3.11 Reports. All Station returns, reports, and statements
required to be filed by Seller with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller and the Station have
been complied with by Seller in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed.
Seller has timely paid to the FCC all annual regulatory fees required to be
paid by Seller with respect to the FCC Licenses.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12
contains a true and complete list of all employees of the Station, their job
titles, date of hire and current salary. Schedule 3.12 also contains a true
and complete list as of the date of this Agreement of all employee benefit
plans or arrangements applicable to the employees of the Station and all fixed
or contingent liabilities or obligations of Seller with respect to any person
now or formerly
- 9 -
<PAGE> 16
employed by Seller at the Station, including pension or thrift plans,
individual or supplemental pension or accrued compensation arrangements,
contributions to hospitalization or other health or life insurance programs,
incentive plans, bonus arrangements, and vacation, sick leave, disability and
termination arrangements or policies, including workers' compensation policies.
Seller has furnished Buyer with true and complete copies of all employee
handbooks, employee rules and regulations, and summary plan descriptions of the
written plans and arrangements listed in Schedule 3.12, and with descriptions
of the unwritten plans and arrangements listed in Schedule 3.12. At Buyer's
request, Seller will furnish Buyer with true and complete copies of all
applicable plan documents, trust documents, and insurance contracts with
respect to the plans and arrangements listed on Schedule 3.12. All employee
benefits and welfare plans or arrangements listed in Schedule 3.12 were
established and have been executed, managed and administered in accordance with
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other laws. Seller is not
aware of the existence of any governmental audit or examination of any of such
plans or arrangements or of any facts which would lead it to believe that any
such audit or examination is pending or threatened. No action, suit, or claim
with respect to any of such plans or arrangements (other than routine claims
for benefits) is pending or, to the knowledge of Seller, threatened, and Seller
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
(b) Labor Relations. Seller is not a party to or
subject to any collective bargaining agreements with respect to the Station.
Seller has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of its
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any
kind to or in respect of any employee benefit plan, including withdrawal
liability under Section 4201 of ERISA. Seller has not incurred any accumulated
funding deficiency within the meaning of ERISA or Section 4971 of the Internal
Revenue Code. Seller has not failed to make any required contributions to any
employee benefit plan. The Pension Benefit Guaranty Corporation has not
asserted that Seller has incurred any liability in connection with any such
plan. No lien has been attached and no person has threatened to attach a lien
on any property of Seller as a result of a failure to comply with ERISA.
- 10 -
<PAGE> 17
3.13 Taxes. Seller has filed or caused to be filed all
federal income tax returns and all other federal, state, county, local, or city
tax returns which are required to be filed, and it has paid or caused to be
paid all taxes shown on those returns or on any tax assessment received by it
to the extent that such taxes have become due, or has set aside on its books
adequate reserves (segregated to the extent required by generally accepted
accounting principles) with respect thereto. There are no governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which Seller is or could be made liable for any taxes, penalties, interest, or
other charges, the liability for which could extend to Buyer as transferee of
the business of the Station, and, to the best knowledge of Seller, no event
has occurred that could impose on Buyer any transferee liability for any taxes,
penalties, or interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC
rulemaking proceedings generally affecting the broadcasting industry or as
listed on Schedule 3.14 attached hereto, there is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative, or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller with respect to its ownership or operation of the Station or
otherwise relating to the Assets or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same. In
particular, but without limiting the generality of the foregoing, there are no
applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the television
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects
with all laws, rules, and regulations of all federal, state, and local
governments (and all agencies thereof) concerning the environment, public
health and safety, and employee health and safety, and no charge, complaint,
action, suit, proceeding, hearing, investigation, claim, demand, or notice has
been filed or commenced against Seller in connection with its ownership or
operation of the Station alleging any failure to comply with any such law,
rule, or regulation.
(b) To the best of Seller's knowledge, Seller has
no liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and there is no basis related to the present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any
- 11 -
<PAGE> 18
such liability) under any law, rule, or regulation of any federal, state, or
local government (or agency thereof) concerning release or threatened release
of hazardous substances, public health and safety, or pollution or protection
of the environment.
(c) To the best of Seller's knowledge, Seller has
no liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility in any manner that could form the basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to any statute) against
Seller giving rise to any such liability) for damage to any site, location, or
body of water (surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, Seller has
no liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has
no liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not exposed any employee to any
substance or condition that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to statute) against Seller giving rise
to any such liability) for any illness or personal injury to any employee.
(f) To the best of Seller's knowledge, in
connection with its ownership or operation of the Station, Seller has obtained
and been in compliance in all material respects with all of the terms and
conditions of all permits, licenses, and other authorizations which are
required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
- 12 -
<PAGE> 19
(g) No pollutant, contaminant, or chemical,
industrial, hazardous, or toxic material or waste has ever been manufactured,
buried, stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, by any other party on any Real Property.
3.16 Compliance with Laws. Seller has complied in all
material respects with the Licenses and all federal, state, and local laws,
rules, regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Since October
6, 1995, Seller has conducted the business and operations of the Station only
in the ordinary course and has not:
(a) Suffered any material adverse change in the
assets or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any sale, assignment, lease, or other
transfer of any of the Station's properties other than in the normal and usual
course of business with suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by
Seller with respect to the Station, except in the normal and usual course of
business;
(d) Suffered any material write-down of the value
of any Assets or any material write-off as uncollectible of any accounts
receivable of the Station; or
(e) Transferred or granted any right under, or
entered into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, trade name, franchise, or similar right,
or modified any existing right relating to the Station.
3.18 Transactions with Affiliates. Seller has not been
involved in any business arrangement or relationship relating to the Station
with any affiliate of Seller, and no affiliate of Seller owns any property or
right, tangible or intangible, which is used in the business of the Station,
other than such arrangements and relationships between Seller and The Christian
Network, Inc. that have been disclosed to Buyer. As used in this paragraph,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person acting on
Seller's behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
- 13 -
<PAGE> 20
3.20 Full Disclosure. No representation or warranty made
by Seller in this Agreement or in any certificate, document, or other
instrument furnished or to be furnished by Seller pursuant hereto contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact and required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Ohio. Buyer has all requisite power and authority to
execute and deliver this Agreement and the documents contemplated hereby, and
to perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to
obtaining the Consents and making any filing required under the HSR Act, the
execution, delivery, and performance by Buyer of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) do not require the consent of any third party; (ii)
will not conflict with the Articles of Incorporation or Bylaws of Buyer; (iii)
will not conflict with, result in a breach of, or constitute a default under,
any law, judgment, order, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; or (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person acting on
Buyer's behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
- 14 -
<PAGE> 21
4.5 Buyer Qualifications. Buyer is legally, financially
and otherwise qualified to be the licensee of, acquire, own and operate the
Station under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations and policies of the
FCC as now in effect. Buyer knows of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC
disqualify Buyer as an assignee of the FCC Licenses or as the owner and
operator of the Station.
4.6 Full Disclosure. No representation or warranty made
by Buyer in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of
this Agreement and the Closing Date, Seller shall operate the Station
diligently in the ordinary course of business in accordance with its past
practices (except where such conduct would conflict with the following
covenants or with Seller's other obligations under this Agreement), and in
accordance with the other covenants in this Section 5.
5.2 Compensation. Seller shall not increase the
compensation, bonuses, or other benefits payable or to be payable to any person
employed in connection with the conduct of the business or operations of the
Station, except in accordance with past practices.
5.3 Contracts. Seller will not, without the prior written
consent of Buyer, enter into any contract or commitment relating to the Station
or the Assets, or amend or terminate any Assumed Contract (or waive any
material right thereunder), or incur any obligation (including obligations
relating to the borrowing of money or the guaranteeing of indebtedness) that
will be binding on Buyer after Closing. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign,
lease, or otherwise transfer or dispose of any of the Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Seller shall not create, assume or
permit to exist any claim, liability, mortgage, lien, pledge, condition,
charge, or encumbrance of any nature whatsoever upon the Assets, except for (i)
liens disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed on or
prior to the Closing Date, (ii) liens for current taxes not yet due and
payable, and
- 15 -
<PAGE> 22
(iii) mechanics' liens and other similar liens, which shall be removed on or
prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any
act or failure to act, any of the Licenses to expire or to be revoked,
suspended, or modified, or take any action that could cause the FCC or any
other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to
the Station or any of the Assets. Seller shall not cause any cable system
located within the Station's Area of Dominant Influence to refuse to carry the
Station's signal.
5.8 No Inconsistent Action. Seller shall not take any
action that is inconsistent with its obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Seller shall give Buyer and
its authorized representatives reasonable access to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection.
5.10 Maintenance of Assets. Seller shall use its best
efforts and take all reasonable actions to maintain all of the Assets in good
condition (ordinary wear and tear excepted), and use, operate, and maintain all
of the Assets in a reasonable manner and in accordance with the terms of the
FCC Licenses, all rules and regulations of the FCC and generally accepted
standards of good engineering practice. Seller shall maintain inventories of
spare parts and expendable supplies at levels consistent with past practices.
If any loss, damage, impairment, confiscation, or condemnation of or to any of
the Assets occurs, other than any loss, damage or impairment resulting from
actions taken by Buyer pursuant to the Time Brokerage Agreement, Seller shall
repair, replace, or restore the Assets to their prior condition as represented
in this Agreement as soon thereafter as possible, and Seller shall use the
proceeds of any claim under any insurance policy solely to repair, replace, or
restore any of the Assets that are lost, damaged, impaired, or destroyed.
5.11 Insurance. Seller shall maintain the existing
insurance policies on the Station and the Assets through the Closing Date.
5.12 Consents. Seller shall use its best efforts to obtain
the Consents and the estoppel certificates described in Section 8.2(b), without
any change in the terms or conditions of any Contract or License that could be
less advantageous to the Station than those pertaining under the Contract or
License as in effect on the date of this Agreement; provided, however, that
- 16 -
<PAGE> 23
Seller's failure to obtain any Consent shall not constitute a material breach
of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
lenders may request.
5.13 Books and Records. Seller shall maintain its books
and records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in
writing of any unusual or material developments with respect to the business or
operations of the Station, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer
such financial information regarding the Assets and the business or operations
of the Station (including information on payables and receivables) as Buyer may
reasonably request. All financial information delivered by Seller to Buyer
pursuant to this Section shall be prepared from the books and records of Seller
in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Seller shall comply in all
material respects with all laws, rules, and regulations applicable or relating
to the ownership and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to
Closing all outstanding obligations under capital and financing leases with
respect to any of the Assets and obtain good title to the Assets leased by
Seller pursuant to those leases so that those Assets shall be transferred to
Buyer at Closing free of any interest of the lessors.
5.18 Programming. Seller shall not make any material
changes in the broadcast hours or in the percentages of types of programming
broadcast by the Station, or make any other material change in the Station's
programming policies, except such changes as in the good faith judgment of the
Seller are required by the public interest.
5.19 Preservation of Business. To the extent consistent
with its obligations under the Time Brokerage Agreement, Seller shall use its
best efforts to preserve the business and organization of the Station and use
its best efforts to keep available to the Station its present employees and the
Station's present relationships with suppliers and others having business
- 17 -
<PAGE> 24
relations with it, to the end that the business and operations of the Station
shall be unimpaired at the Closing Date.
5.20 Collection of Accounts Receivable. Seller shall
collect the accounts receivable of the Station only in the ordinary course
consistent with its past practices and will not take any action designed or
likely to accelerate the collection of its accounts receivable.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in
connection with the purchase and sale of the Assets pursuant to this Agreement
shall be subject to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any
reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall
not, directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
- 18 -
<PAGE> 25
(b) If any damage or destruction of the Assets or
any other event occurs, other than any damage or destruction of the Assets or
any other event resulting from Buyer's conduct or actions under the Time
Brokerage Agreement, which (i) causes the Station to cease broadcasting
operations for a period of three or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer, in its sole discretion, may (x) terminate this Agreement
forthwith without any further obligations hereunder upon written notice to
Seller or (y) proceed to consummate the transaction contemplated by this
Agreement and complete the restoration and replacement of the Assets after the
Closing Date, in which event Seller shall deliver to Buyer all insurance
proceeds received in connection with such damage, destruction or other event.
6.4 Confidentiality. Except as necessary for the
consummation of the transaction contemplated by this Agreement, including
Buyer's obtaining of financing related hereto, and except as and to the extent
required by law, including, without limitation, disclosure requirements of
federal or state securities laws and the rules and regulations of securities
markets, each party will keep confidential any information obtained from the
other party in connection with the transactions contemplated by this Agreement.
If this Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and
expense and within thirty (30) days of the date hereof, retain an environmental
consultant to be selected by Buyer to perform a Phase I environmental survey of
the properties of the Station. If the survey discloses any material
environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Buyer shall so notify Seller as soon
as practicable.
6.6 Engineering Study. Buyer may, at its option and
expense and within thirty (30) days of the date hereof, retain an engineering
firm to conduct a proof of performance study of the Station and to prepare a
report on the Station's compliance with customary engineering practices and all
applicable FCC rules, regulations, prescribed practices, and technical
standards. If the survey discloses any material deficiencies in the operations
or equipment of the Station, Buyer shall so notify Seller as soon as
practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their respective obligations under
this Agreement, and Buyer and Seller shall execute such other documents as may
be necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing,
- 19 -
<PAGE> 26
Buyer shall have no obligation (i) to expend funds to obtain any of the
Consents or (ii) to agree to any adverse change in any License or Assumed
Contract to obtain a Consent required with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of
the State of Ohio shall be complied with by Seller and Buyer. Any loss,
liability, obligation, or cost suffered by Seller or Buyer as the result of the
failure of Seller or Buyer to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets as contemplated by this Agreement
shall be borne by Buyer.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect
to each parcel of Real Property that Seller owns, Seller will obtain and
deliver to Buyer, at Buyer's expense, at or prior to Closing, an ALTA Owner's
Policy of Title Insurance Form B-1987 (or equivalent policy acceptable to
Buyer), issued by a title insurer satisfactory to Buyer, in an amount equal to
the fair market value of the property and any improvements thereon (as
reasonably determined by Buyer), insuring title to such parcel to be in the
name of Buyer as of the Closing, subject only to liens or encumbrances
expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance
Policies. Each title insurance policy obtained and delivered to Buyer pursuant
to this Agreement shall (1) insure title to the Real Property described in the
policy and all recorded easements benefitting such Real Property, (2) contain
an "extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel, and (7) not be subject to any survey exception
or any defect or encroachment disclosed by a survey delivered with respect to
the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will procure a current survey of the parcel, prepared by
a licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
6.10 Sales Tax Filings. Through the Closing Date, Seller
shall continue to file Ohio sales tax returns with respect to the Station, if
and to the extent such returns are required to be filed by applicable law, and
shall concurrently deliver copies of all such returns to Buyer.
- 20 -
<PAGE> 27
6.11 Access to Books and Records. Seller shall provide
Buyer reasonable access and the right to copy for a period of three years from
the Closing Date any books and records relating to the assets that are not
included in the Assets. Buyer shall provide Seller reasonable access and the
right to copy for a period of three years from the Closing Date any books and
records relating to the Assets.
6.12 Appraisal. Buyer and Seller agree to allocate the
Purchase Price for tax and recording purposes in accordance with an appraisal
to be conducted by an appraisal firm selected and paid for by Buyer with
experience in the valuation and appraisal of television station assets.
6.13 Buyer Conduct. Buyer shall take no action, or fail to
take any required action, that would disqualify Buyer from being the licensee
of the Station under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations and policies of the
FCC as now in effect. Buyer, in programming the Station pursuant to the Time
Brokerage Agreement, shall not cause or permit, by any act or failure to act,
any of the Licenses to expire or to be revoked, suspended, or modified, or take
any action that could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses.
6.14 HSR Act Filing. Seller and Buyer agree to (a) file,
or cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, which are required in connection
with the transactions contemplated hereby under the HSR Act within ten (10)
business days of the date of this Agreement; (b) submit to the other party,
prior to filing, their respective HSR Act filings to be made hereunder, and to
discuss with the other any comments the reviewing party may have; (c) cooperate
with each other in connection with such HSR Act filings, which cooperation
shall include furnishing the other with any information or documents in such
party's possession that may be reasonably required in connection with such
filings; (d) promptly file, after any request by the FTC or DOJ, any
information or documents requested by the FTC or DOJ; and (e) furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ which relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of
Buyer at the Closing are subject at Buyer's option to the fulfillment prior to
or at the Closing Date of each of the following conditions:
- 21 -
<PAGE> 28
(a) Representations and Warranties. All
representations and warranties of Seller contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents designated as
"material" on Schedule 3.3 shall have been obtained and delivered to Buyer
without any adverse change in the terms or conditions of any agreement or any
governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been
granted without the imposition on Buyer of any conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on it by the FCC Consent, and the FCC Consent shall
have become a Final Order.
(e) Governmental Authorizations. Seller shall be
the holder of all Licenses and there shall not have been any modification of
any License that could have a material adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any License.
(f) Deliveries. Seller shall have made or stand
willing to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this
Agreement and the Closing Date, there shall have been no material adverse
change in the assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Seller shall have complied, in
all material respects, with its obligations thereunder.
(i) Loan Agreement. There shall exist no Event of
Default as defined in the Loan Agreement.
(j) HSR Act. The waiting period under the HSR Act
shall have expired without unresolved action by the DOJ or the FTC to prevent
the Closing.
- 22 -
<PAGE> 29
7.2 Conditions to Obligations of Seller. All obligations
of Seller at the Closing are subject at Seller's option to the fulfillment
prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All
representations and warranties of Buyer contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Buyer shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand
willing to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been
granted without the imposition on Seller of any conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
(e) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Buyer shall have complied, in
all material respects, with its obligations thereunder.
(f) HSR Act. The waiting period under the HSR Act
shall have expired without unresolved action by the DOJ or the FTC to prevent
the Closing.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at
10:00 a.m. on a date, to be set by Buyer on at least five days' written notice
to Seller, that is (1) not earlier than the first business day after the FCC
Consent is effective, and (2) not later than ten business days following the
date upon which the FCC Consent has become a Final Order.
(b) Closing Place. The Closing shall be held at
the offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite
800, Washington, D.C. 20036, or any other place that is agreed upon by Buyer
and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing
Date, Seller shall deliver to Buyer the following, in form and substance
reasonably satisfactory to Buyer and its counsel:
- 23 -
<PAGE> 30
(a) Transfer Documents. Duly executed warranty
bills of sale, deeds, motor vehicle titles, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for liens for
current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates
of the lessors of all leasehold and subleasehold interests included in the Real
Property;
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as
of the Closing Date, executed on behalf of Seller by its Chairman or President,
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(e) Title Insurance and Surveys. The title
insurance and surveys described in Section 6.9;
(f) Licenses, Contracts, Business Records, Etc.
Copies of all Licenses, Assumed Contracts, blueprints, schematics, working
drawings, plans, projections, engineering records, and all files and records
used by Seller in connection with its operations;
(g) Accounts Receivable. A complete and accurate
list of the Station's Accounts Receivable as of a date no more than five
business days prior to the Closing Date, including, with respect to each of the
Accounts Receivable, the account number, date of issuance, name and address of
account debtor, aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Seller's
counsel dated as of the Closing Date, substantially in the form of Schedule
8.2(i) hereto; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder, provided that Buyer shall bear any reasonable and necessary expense
incurred by Seller to obtain such certificate and confirmation.
8.3 Deliveries by Buyer. Prior to or on the Closing Date,
Buyer shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
- 24 -
<PAGE> 31
(a) Purchase Price. The cash portion of the
Purchase Price, as adjusted pursuant to Section 2.3(a), the executed original
of the Note marked "canceled" and such other documents as may be required to
release or terminate any security interests held by Buyer in any of the assets
described in Section 2.2;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts as provided in
Section 2.5;
(c) Officer's Certificate. A certificate, dated as
of the Closing Date, executed on behalf of Buyer by its Secretary, certifying
(1) that the representations and warranties of Buyer contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date, and (2) that Buyer has in all material
respects performed and complied with all of its obligations, covenants, and
agreements set forth in this Agreement to be performed and complied with on or
prior to the Closing Date; and
(d) Opinion of Counsel. An opinion of Buyer's
counsel dated as of the Closing Date, substantially in the form of Schedule
8.3(d) hereto.
(e) Affiliation Agreement. The Affiliation
Agreement, duly executed by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be
terminated by Seller, if Seller is not then in material default, upon written
notice to Buyer, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would
otherwise be the Closing Date, Seller shall have notified Buyer in writing that
one or more of the conditions precedent to the obligations of Seller set forth
in this Agreement have not been satisfied or waived in writing by Seller and
such condition or conditions shall not have been satisfied by Buyer or waived
in writing by Seller within fifteen days following such notice.
(b) Judgments. If, on the date that would
otherwise be the Closing Date, Seller shall have notified Buyer that there is
in effect any judgment, decree, or order that would prevent or make unlawful
the Closing and such judgment, decree or order shall not have been satisfied by
Buyer within fifteen (15) days following such notice.
(c) Upset Date. If the Closing shall not have
occurred by October 18, 1997.
- 25 -
<PAGE> 32
9.2 Termination by Buyer. This Agreement may be
terminated by Buyer, if Buyer is not then in material default, upon written
notice to Seller, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would
otherwise be the Closing Date, Buyer shall have notified Seller in writing that
one or more of the conditions precedent to the obligations of Buyer set forth
in this Agreement have not been satisfied or waived in writing by Buyer and
such condition or conditions shall not have been satisfied by Seller or waived
in writing by Buyer within fifteen (15) days following such notice.
(b) Judgments. If, on the date that would
otherwise be the Closing Date, Buyer shall have notified Seller that there is
in effect any judgment, decree, or order that would prevent or make unlawful
the Closing and such judgment, decree or order shall not have been satisfied by
Seller within fifteen (15) days following such notice.
(c) Upset Date. If the Closing shall not have
occurred by October 18, 1997.
(d) Interruption of Service. If any event shall
have occurred that prevented signal transmission of the Station in the normal
and usual manner for a continuous period of three days unless such interruption
of service is due to actions of Buyer under the Time Brokerage Agreement.
9.3 Rights on Termination. Subject to Section 9.4, if
this Agreement is terminated pursuant to Section 9.1 or Section 9.2 and neither
party is in material breach of any provision of this Agreement, the parties
hereto shall have no liability to each other as a result of such termination.
In addition to its rights under Section 9.4, if this Agreement is terminated by
Buyer due to Seller's material breach of its obligations hereunder, Buyer shall
have all rights and remedies available at law or equity. If this Agreement is
terminated by Seller due to Buyer's material breach of its obligations
hereunder, the payment to Seller of the expenses (including reasonable
attorneys' fees and costs) incurred by Seller in the negotiation and
preparation of this Agreement and the performance by Seller of its obligations
hereunder shall constitute full payment and the exclusive remedy for any
damages suffered by Seller by reason of Buyer's material breach.
9.4 Survival of Option. In the event that the
transactions contemplated by this Agreement are not consummated for any reason
whatsoever, the Option shall nevertheless remain exercisable by Buyer until the
expiration of the Option as provided in the Option Agreement, and Buyer may at
any time, and from time to time, prior to such expiration again exercise the
Option as set forth in the Option Agreement and, upon such exercise, Buyer and
Seller shall enter into an Asset Purchase Agreement that is, subject to the
requirement in the following sentence, substantially identical to this
Agreement and thereafter diligently proceed to perform their obligations
thereunder. In the event that the transactions contemplated by this
- 26 -
<PAGE> 33
Agreement are not consummated because a provision of this Agreement is
determined by the FCC to violate any FCC rule or policy, Buyer and Seller shall
negotiate in good faith to revise any such provision to ensure compliance with
such rule or policy while preserving, to the extent possible, the intent of the
parties as embodied in the provision to be revised.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations
and warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf
of Buyer or any information Buyer may have, Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Seller contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed
by Buyer pursuant to this Agreement, including any liabilities arising at any
time under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Station prior to the Closing,
including any liabilities arising under the Licenses or the Assumed Contracts
which relate to events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs, and expenses, including
reasonable legal fees and expenses, incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity; provided, however, that
Seller shall not be required to indemnify or hold Buyer harmless against or
with respect to, or reimburse Buyer for, any losses, liabilities, damages or
expenses relating to or arising from Home Shopping Club, Inc. v. Channel 26 of
Dayton, Inc. (File No. 95-006235-CI-021, Sixth Judicial Circuit, Pinellas
County, Florida.
- 27 -
<PAGE> 34
10.3 Indemnification by Buyer. Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf
of Seller or any information Seller may have, Buyer hereby agrees, subject to
the limitation in the last sentence of Section 9.3, to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Buyer contained in this Agreement or in any certificate,
document, or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Station on and after the
Closing.
(d) Any and all losses, liabilities or damages
resulting from any action taken by Buyer or its employees and agents with
respect to the Station, or any failure by Buyer or its employees and agents to
take any action with respect to the Station, in connection with the performance
by Buyer of its obligations under the Time Brokerage Agreement, including,
without limitation, any and all losses, liabilities or damages resulting from
(i) violations by Buyer or its employees and agents of the Communications Act
of 1934, as amended, or any rule, regulation or policy of the FCC, (ii)
slander, defamation or other claims relating to programming provided by Buyer
for broadcast on the Station, and (iii) Buyer's broadcast and sale of
advertising time on the Station.
(e) Any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses, including
reasonable legal fees and expenses, incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the
"Claimant") shall promptly give notice to the party from which indemnification
is claimed (the "Indemnifying Party") of any claim, whether between the parties
or brought by a third party, specifying in reasonable detail the factual basis
for the claim. If the claim relates to an action, suit, or proceeding filed by
a third party against Claimant, such notice shall be given by Claimant within
five days after written notice of such action, suit, or proceeding was given to
Claimant.
- 28 -
<PAGE> 35
(b) With respect to claims solely between the
parties, following receipt of notice from the Claimant of a claim, the
Indemnifying Party shall have thirty days to make such investigation of the
claim as the Indemnifying Party deems necessary or desirable. For the purposes
of such investigation, the Claimant agrees to make available to the
Indemnifying Party and/or its authorized representatives the information relied
upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of the thirty- day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such claim, the Indemnifying Party shall immediately pay to the
Claimant the full amount of the claim. If the Claimant and the Indemnifying
Party do not agree within the thirty-day period (or any mutually agreed upon
extension thereof), the Claimant may seek appropriate remedy at law or equity
or under the arbitration provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as
to which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a
third party, requires immediate action, the parties will make every effort to
reach a decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections
10.2 and 10.3 shall extend to the shareholders, directors, officers, employees,
and representatives of any Claimant although for the purpose of the procedures
set forth in this Section 10.4, any indemnification claims by such parties
shall be made by and through the Claimant.
(f) Notwithstanding any provision in this Agreement
to the contrary, Seller shall not be required to indemnify Buyer for any
losses, liabilities or damages relating to or arising from (i) a chose in
action of Seller relating to the Station unless Buyer promptly notifies Seller
of such chose in action, and thereupon Seller shall have sole responsibility
for the prosecution of such chose in action or (ii) any environmental or
engineering defect or other circumstance that is described in the environmental
survey or engineering study referred to in Sections 6.5 and 6.6 hereof,
respectively, if and to the extent such defect or circumstance is not a
violation of Seller's representations, warranties or covenants hereunder.
- 29 -
<PAGE> 36
10.5 Specific Performance. The parties recognize that if
Seller breaches this Agreement and refuses to perform under the provisions of
this Agreement, monetary damages alone would not be adequate to compensate
Buyer for its injury. Buyer shall therefore be entitled, in addition to any
other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement. If any action is brought
by Buyer to enforce this Agreement, Seller shall waive the defense that there
is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either
party which results in a lawsuit or other proceeding for any remedy available
under this Agreement, the prevailing party shall be entitled to reimbursement
from the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales
or transfer tax arising in connection with the conveyance of the Assets by
Seller to Buyer pursuant to this Agreement shall be paid by the party upon whom
such tax is imposed by law. Except as otherwise provided in this Agreement,
each party shall pay its own expenses incurred in connection with the
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, except that Buyer and Seller shall each pay one- half of all
filing fees required by the FCC, and Buyer shall pay any filing fee required by
the FTC under the HSR Act , and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the
contrary below, any dispute arising out of or related to this Agreement that
Seller and Buyer are unable to resolve by themselves shall be settled by
arbitration by a panel of three (3) neutral arbitrators who shall be selected
in accordance with the procedures set forth in the commercial arbitration rules
of the American Arbitration Association. The persons selected as arbitrators
shall have prior experience in the broadcasting industry but need not be
professional arbitrators, and persons such as lawyers, accountants, brokers and
bankers shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association.
The written decision of a majority of the arbitrators shall be final and
binding on Seller and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Seller and Buyer in a manner to be decided
by a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not
paid within thirty days, may be entered in any court having jurisdiction over
the matter. No action at law or suit in equity based upon any claim arising
out of or related to this Agreement shall be instituted in any court by Seller
or Buyer against the other except (i) an action to compel arbitration pursuant
to this Section, (ii) an
- 30 -
<PAGE> 37
action to enforce the award of the arbitration panel rendered in accordance
with this Section, or (iii) a suit for specific performance pursuant to Section
10.5.
11.3 Notices. All notices, demands, and requests required
or permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. James L. West
The Christian Network, Inc.
14444 66th Street North
Clearwater, FL 34624
With a copy to: Alan C. Campbell, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
Mr. Lowell W. Paxson
If to Buyer: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may
assign this Agreement without the prior written consent of the other party
hereto; provided, however, that Buyer may assign its rights and obligations
under this Agreement, in whole or in part, to one or more subsidiaries or
commonly controlled affiliates of Buyer, prior to the filing of the FCC
application, without seeking or obtaining Seller's prior approval, provided
that such assignment shall not constitute a release of Buyer's obligations
hereunder, and Buyer may collaterally assign its rights and interests hereunder
to its lenders without seeking or obtaining Seller's prior
- 31 -
<PAGE> 38
approval. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any
actions and execute any other documents that may be necessary or desirable to
the implementation and consummation of this Agreement, including, in the case
of Seller, any additional bills of sale, deeds, or other transfer documents
that, in the reasonable opinion of Buyer, may be necessary to ensure, complete,
and evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA
(WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included
for ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement,
regardless of the gender and number specifically used, shall be deemed and
construed to include any other gender, masculine, feminine, or neuter, and any
other number, singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules,
hereto, and all documents, certificates, and other documents to be delivered by
the parties pursuant hereto, collectively represent the entire understanding
and agreement between Buyer and Seller with respect to the subject matter
hereof. This Agreement supersedes all prior negotiations between the parties
and cannot be amended, supplemented, or changed except by an agreement in
writing that makes specific reference to this Agreement and which is signed by
the party against which enforcement of any such amendment, supplement, or
modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with
any obligation, representation, warranty, covenant, agreement, or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Prior to the Closing, neither party
shall publish any press release, make any other public announcement or
otherwise communicate with any news media concerning this Agreement or the
transactions contemplated hereby without the prior written
- 32 -
<PAGE> 39
consent of the other party; provided, however, that nothing contained herein
shall prevent either party from promptly making all filings with governmental
authorities as may, in its judgement be required or advisable in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
11.12 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against Buyer or Seller arising out of or relating
to this Agreement may be brought in any state or federal court of competent
jurisdiction in the State of Florida and, by execution and delivery of this
Agreement, Buyer and Seller each accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and waives any defense of forum non conveniens and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Seller designates and appoints James L. West, and Buyer
designates and appoints William L. Watson, and such other persons as may
hereafter be selected by Buyer or Seller, as its respective agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by Buyer and Seller to be effective and
binding service in every respect. A copy of any such process so served shall
be mailed by registered mail to Buyer or Seller at its address provided in
Section 11.3, except that, unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of process.
If any agent appointed by Buyer or Seller refuses to accept service, Buyer and
Seller hereby agree that service upon it by mail shall constitute sufficient
notice. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of either party to bring
proceedings against the other in the courts of any other jurisdiction.
11.13 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 33 -
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
DAYTON-26, INC.
By: /s/ James B. Bocock
-----------------------
Name: James B. Bocock
Title: President
CHANNEL 26 OF DAYTON, INC.
By: /s/ James L. West
-----------------------
James L. West
Chairman
- 34 -
<PAGE> 1
EXHIBIT 10.101
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
ST. LOUIS-13, INC.
AND
CHANNEL 13 OF ST. LOUIS, INC.
* * *
APRIL 18, 1996
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
Page
----
<S> <C>
TABLE OF CONTENTS
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliation Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Prior Owner's Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.11 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.14 Buyer Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.15 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Survival of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.12 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C>
Exhibit A -- Affiliation Agreement
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Insurance
Schedule 3.12 -- Employee Matters
Schedule 3.14 -- Litigation
Schedule 8.2(i) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of the 18th day of April,
1996, by and between Paxson Communications of St. Louis-13, Inc., a Florida
corporation ("Buyer"), and Channel 13 of St. Louis, Inc., a Florida corporation
("Seller").
R E C I T A L S
A. Seller and Buyer are parties to an Option Agreement dated as
of January 26, 1996 (the "Option Agreement"), pursuant to which Seller granted
to Buyer an option (the "Option") to acquire from Seller substantially all of
the assets used or useful in the business or operations of Television Station
WCEE(TV), Mt. Vernon, Illinois (the "Station").
B. In accordance with the Option Agreement, Buyer has notified
Seller that Buyer intends to exercise the Option.
C. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising or programming time (i) run on the Station by Seller prior
to the Closing Date (the "Seller's Receivables") or (ii) run on the Station
prior to the date that Seller acquired the Station (the "Prior Owner's
Receivables").
"Affiliation Agreement" means the Affiliation Agreement in the form of
Exhibit A hereto to be entered into upon the Closing by Buyer and The Christian
Network, Inc.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
<PAGE> 8
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are designated as Contracts that are to be assumed by Buyer upon its
purchase of the Station and (ii) any Contracts entered into by Seller between
the date of this Agreement and the Closing Date that Buyer agrees in writing to
assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
- 2 -
<PAGE> 9
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Loan Agreement" means the Loan Agreement dated as of January 26,
1996, between Buyer and Seller.
"Note" means the Promissory Note dated January 26, 1996, in the
principal amount of $4,800,000, delivered by Seller to Buyer pursuant to the
Loan Agreement.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as
of January 26, 1996, between Seller and Buyer.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets used or useful in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for encumbrances
permitted by Section 5.5 herein), including the following:
- 3 -
<PAGE> 10
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all other intangible assets of
Seller relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any, except for any
lists of donors, contributors or other supporters of the Station;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) The Seller's Receivables as of 11:59 p.m., local
time, on the day prior to the Closing Date;
(h) All choses in action of Seller relating to the
Station; and
(i) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Seller is required by law
to retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto; and
(e) All lists of donors, contributors or other supporters
of the Station; and
- 4 -
<PAGE> 11
(f) The Prior Owner's Receivables.
2.3 Purchase Price. The Purchase Price for the Assets shall
be (i) One Hundred Thousand Dollars ($100,000), adjusted as provided in Section
2.3(a) below, payable in cash at the Closing and (ii) the forgiveness on the
Closing Date of all principal, accrued but unpaid interest, fees, expenses and
other charges owed by Seller to Buyer as of the Closing Date pursuant to the
Loan Agreement and the Note.
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses, other than
expenses for which Buyer is obligated to reimburse Seller under the Time
Brokerage Agreement, for which no proration shall be required. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), FCC regulatory fees, and similar
prepaid and deferred items, shall be prorated between Buyer and Seller in
accordance with the principle that Seller shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, other than expenses for which Buyer is obligated to reimburse Seller
under the Time Brokerage Agreement, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The cash portion of the
Purchase Price, as adjusted, shall be paid by Buyer to Seller at Closing by
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer, at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the
Closing Date, Buyer shall assume and undertake to pay, discharge, and perform
all obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating
- 5 -
<PAGE> 12
to the operation of the Station prior to the Closing, (iv) any obligations or
liabilities arising under capitalized leases or other financing agreements not
assumed by Buyer, (v) any obligations or liabilities arising under agreements
entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Seller under any employee pension, retirement, or
other benefit plans or collective bargaining agreements, (vii) any obligation
to any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date, or (viii) any obligations or
liabilities caused by, arising out of, or resulting from any action or omission
of Seller prior to the Closing, and all such obligations and liabilities shall
remain and be the obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Illinois. Seller has all requisite power and
authority (i) to own, lease, and use the Assets as now owned, leased, and used,
(ii) to conduct the business and operations of the Station as now conducted,
and (iii) to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Seller hereunder. Seller is
not a participant in any joint venture or partnership with any other person or
entity with respect to any part of the operations of the Station or any of the
Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller and its shareholder. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid, and binding obligation of Seller, enforceable against it in
accordance with its terms, except as the enforceability of this Agreement may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally, and by judicial discretion in the enforcement of equitable
remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining
the Consents listed on Schedule 3.3, the execution, delivery, and performance
of this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with any provision of the Articles
of Incorporation or Bylaws of Seller; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (v) will not create any
- 6 -
<PAGE> 13
claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith in all material respects. Seller has no
reason to believe that any of the Licenses would not be renewed by the FCC or
other granting authority in the ordinary course. The Station's city of
license, as determined by the FCC, is located within the St. Louis, Missouri
Area of Dominant Influence as defined by the 1991-1992 Area of Dominant
Influence Market Guide published by The Arbitron Co. and the St. Louis,
Missouri Designated Market Area as defined by the 1995 United States Television
Household Estimates published by Nielsen Media Research. To the best of
Seller's knowledge, on or before June 17, 1993, the Station made a valid
election of must carry with respect to each cable system located within the
Station's Area of Dominant Influence. Except as disclosed on Schedule 3.4, no
cable system on which the Station is entitled to must carry status has advised
the Station of any signal quality or copyright indemnity or other prerequisite
to cable carriage of the Station's signal, and no cable system has declined or
threatened to decline such carriage or failed to respond to a request for
carriage or sought any form of relief from carriage from the FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein. The Real Property listed on Schedule 3.5 comprises
all real property interests necessary to conduct the business and operations of
the Station as now conducted. Seller has good and marketable fee simple title,
insurable at standard rates, to all fee estates (including the improvements
thereon) included in the Real Property, free and clear of all liens, mortgages,
pledges, covenants, easements, restrictions, encroachments, leases, charges,
and other claims and encumbrances of any nature whatsoever, and without
reservation or exclusion of any mineral, timber, or other rights or interests,
except for liens for real estate taxes not yet due and payable and liens
disclosed on Schedule 3.5. With respect to each leasehold or subleasehold
interest included in the Real Property being conveyed under this Agreement, so
long as Seller fulfills its obligations under the lease therefor, Seller has
enforceable rights to nondisturbance and quiet enjoyment, and, to the best of
Seller's knowledge, no third party holds any interest in the leased premises
with the right to foreclose upon Seller's leasehold or subleasehold interest.
All towers, guy anchors, and buildings and other improvements included in the
Assets are located entirely on the Real Property listed in Schedule 3.5.
Seller has delivered to Buyer true and complete copies of all deeds pertaining
to
- 7 -
<PAGE> 14
the Real Property. All Real Property (including the improvements thereon) (i)
is in good condition and repair consistent with its present use, (ii) is
available for immediate use in the conduct of the business and operations of
the Station, and (iii) complies in all material respects with all applicable
building or zoning codes and the regulations of any governmental authority
having jurisdiction. Seller has full legal and practical access to the Real
Property. All easements, rights-of-way, and real property licenses affecting
or constituting part of the Real Property have been properly recorded in the
appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for encumbrances permitted by Section 5.5 herein. Each
item of Tangible Personal Property is available for immediate use in the
business and operations of the Station. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained
in a manner consistent with generally accepted standards of good engineering
practice, and (ii) will permit the Station and any auxiliary broadcast stations
used in the operation of the Station to operate, in all material respects, in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete
list of all Contracts. Seller has delivered to Buyer true and complete copies
of all written Contracts, true and complete memoranda of all oral Contracts
(including any amendments and other modifications to such Contracts). Other
than the Contracts listed on Schedule 3.7 or any other Schedule to this
Agreement, Seller requires no contract, lease, or other agreement to enable it
to carry on its business as now conducted. All of the Assumed Contracts are in
full force and effect, and are valid, binding, and enforceable in accordance
with their terms. There is not under any Assumed Contract any default by any
party thereto or any event that, after notice or lapse of time or both, could
constitute a default. Seller is not aware of any intention by any party to any
Assumed Contract (i) to terminate such contract or amend the terms thereof,
(ii) to refuse to renew the Assumed Contract upon expiration of its term, or
(iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Seller has full legal power and
authority to assign its rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts.
- 8 -
<PAGE> 15
3.8 Consents. Except for the FCC Consent provided for in
Section 6.1, the other Consents described in Schedule 3.3, and any filing
required under the HSR Act, no consent, approval, permit, or authorization of,
or declaration to or filing with any governmental or regulatory authority, or
any other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, or (iii) to enable Buyer to conduct the business and
operations of the Station in essentially the same manner as such business and
operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of
all Intangibles (exclusive of those listed in Schedule 3.4), all of which are
valid and in good standing and uncontested. Seller has delivered to Buyer
copies of all documents establishing or evidencing all Intangibles. To the
best knowledge of Seller, Seller is not infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Seller threatened, with respect thereto. The Intangibles
listed on Schedule 3.9 comprise all intangible property interests necessary to
conduct the business and operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of
all insurance policies of Seller that insure any part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.10 are
in full force and effect. The insurance policies listed in Schedule 3.10 are
adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Station against all customary and foreseeable risks. During the past
three years, no insurance policy of Seller on the Assets or the Station has
been canceled by the insurer and no application of Seller for insurance has
been rejected by any insurer.
3.11 Reports. All Station returns, reports, and statements
required to be filed by Seller with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller and the Station have
been complied with by Seller in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed.
Seller has timely paid to the FCC all annual regulatory fees required to be
paid by Seller with respect to the FCC Licenses.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station, their job titles, date
of hire and current salary. Schedule 3.12 also contains a true and complete
list as of the date of this Agreement of all employee benefit plans or
arrangements applicable to the employees of the Station and all fixed or
contingent liabilities or obligations of Seller with respect to any person now
or formerly
- 9 -
<PAGE> 16
employed by Seller at the Station, including pension or thrift plans,
individual or supplemental pension or accrued compensation arrangements,
contributions to hospitalization or other health or life insurance programs,
incentive plans, bonus arrangements, and vacation, sick leave, disability and
termination arrangements or policies, including workers' compensation policies.
Seller has furnished Buyer with true and complete copies of all employee
handbooks, employee rules and regulations, and summary plan descriptions of the
written plans and arrangements listed in Schedule 3.12, and with descriptions
of the unwritten plans and arrangements listed in Schedule 3.12. At Buyer's
request, Seller will furnish Buyer with true and complete copies of all
applicable plan documents, trust documents, and insurance contracts with
respect to the plans and arrangements listed on Schedule 3.12. All employee
benefits and welfare plans or arrangements listed in Schedule 3.12 were
established and have been executed, managed and administered in accordance with
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other laws. Seller is not
aware of the existence of any governmental audit or examination of any of such
plans or arrangements or of any facts which would lead it to believe that any
such audit or examination is pending or threatened. No action, suit, or claim
with respect to any of such plans or arrangements (other than routine claims
for benefits) is pending or, to the knowledge of Seller, threatened, and Seller
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of its
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller has not incurred any accumulated funding
deficiency within the meaning of ERISA or Section 4971 of the Internal Revenue
Code. Seller has not failed to make any required contributions to any employee
benefit plan. The Pension Benefit Guaranty Corporation has not asserted that
Seller has incurred any liability in connection with any such plan. No lien
has been attached and no person has threatened to attach a lien on any property
of Seller as a result of a failure to comply with ERISA.
- 10 -
<PAGE> 17
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and, to the best knowledge of Seller, no event has occurred that
could impose on Buyer any transferee liability for any taxes, penalties, or
interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry or as listed on
Schedule 3.14 attached hereto, there is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other legal, administrative,
or tax proceeding, nor any order, decree or judgment, in progress or pending,
or to the knowledge of Seller threatened, against or relating to Seller with
respect to its ownership or operation of the Station or otherwise relating to
the Assets or the business or operations of the Station, nor does Seller know
or have reason to be aware of any basis for the same. In particular, but
without limiting the generality of the foregoing, there are no applications,
complaints or proceedings pending or, to the best of its knowledge, threatened
(i) before the FCC relating to the business or operations of the Station other
than rule making proceedings which affect the television industry generally,
(ii) before any federal or state agency relating to the business or operations
of the Station involving charges of illegal discrimination under any federal or
state employment laws or regulations, or (iii) before any federal, state, or
local agency relating to the business or operations of the Station involving
zoning issues under any federal, state, or local zoning law, rule, or
regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and there is no basis related to the present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or
- 11 -
<PAGE> 18
agency thereof) concerning release or threatened release of hazardous
substances, public health and safety, or pollution or protection of the
environment.
(c) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility in any manner that could form the basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to any statute) against
Seller giving rise to any such liability) for damage to any site, location, or
body of water (surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station that could
reasonably be expected to have a material adverse effect on the business or
operations of the Station (and Seller has not exposed any employee to any
substance or condition that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to statute) against Seller giving rise
to any such liability) for any illness or personal injury to any employee.
(f) To the best of Seller's knowledge, in connection with
its ownership or operation of the Station, Seller has obtained and been in
compliance in all material respects with all of the terms and conditions of all
permits, licenses, and other authorizations which are required under, and has
complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all federal, state, and local laws, rules, and regulations
(including all codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety,
worker health and safety, and pollution or protection of the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
- 12 -
<PAGE> 19
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, by any other party on any Real Property.
3.16 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Since January
26, 1996, Seller has conducted the business and operations of the Station only
in the ordinary course and has not:
(a) Suffered any material adverse change in the assets or
properties of the Station, including any damage, destruction, or loss affecting
any assets used or useful in the conduct of the business of the Station;
(b) Made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by Seller
with respect to the Station, except in the normal and usual course of business;
(d) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(e) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.18 Transactions with Affiliates. Seller has not been
involved in any business arrangement or relationship relating to the Station
with any affiliate of Seller, and no affiliate of Seller owns any property or
right, tangible or intangible, which is used in the business of the Station,
other than such arrangements and relationships between Seller and The Christian
Network, Inc. that have been disclosed to Buyer. As used in this paragraph,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
- 13 -
<PAGE> 20
3.20 Full Disclosure. No representation or warranty made
by Seller in this Agreement or in any certificate, document, or other
instrument furnished or to be furnished by Seller pursuant hereto contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact and required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and is duly qualified and in good standing under
the laws of the State of Illinois. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining
the Consents and making any filing required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the documents
contemplated hereby (with or without the giving of notice, the lapse of time,
or both): (i) do not require the consent of any third party; (ii) will not
conflict with the Articles of Incorporation or Bylaws of Buyer; (iii) will not
conflict with, result in a breach of, or constitute a default under, any law,
judgment, order, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality; or (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound, such that Buyer could not acquire or
operate the Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
- 14 -
<PAGE> 21
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, the Telecommunications
Act of 1996, and the rules, regulations and policies of the FCC as now in
effect. Buyer knows of no fact that would, under existing law and the existing
rules, regulations, policies and procedures of the FCC disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of the Station.
4.6 Full Disclosure. No representation or warranty made by
Buyer in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not, without the prior written
consent of Buyer, enter into any contract or commitment relating to the Station
or the Assets, or amend or terminate any Assumed Contract (or waive any
material right thereunder), or incur any obligation (including obligations
relating to the borrowing of money or the guaranteeing of indebtedness) that
will be binding on Buyer after Closing. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign,
lease, or otherwise transfer or dispose of any of the Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Seller shall not create, assume or permit
to exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed on or prior
to the Closing Date, (ii) liens for current taxes not yet due and payable, and
- 15 -
<PAGE> 22
(iii) mechanics' liens and other similar liens, which shall be removed on or
prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause any cable system located
within the Station's Area of Dominant Influence to refuse to carry the
Station's signal.
5.8 No Inconsistent Action. Seller shall not take any action
that is inconsistent with its obligations under this Agreement or that could
hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Seller shall give Buyer and its
authorized representatives reasonable access to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection.
5.10 Maintenance of Assets. Seller shall use its best efforts
and take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice. Seller shall maintain inventories of spare parts
and expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, other than any loss, damage or impairment resulting from actions taken
by Buyer pursuant to the Time Brokerage Agreement, Seller shall repair,
replace, or restore the Assets to their prior condition as represented in this
Agreement as soon thereafter as possible, and Seller shall use the proceeds of
any claim under any insurance policy solely to repair, replace, or restore any
of the Assets that are lost, damaged, impaired, or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets through the Closing Date.
5.12 Consents. Seller shall use its best efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Station than those pertaining under the Contract or License
as in effect on the date of this Agreement; provided, however, that
- 16 -
<PAGE> 23
Seller's failure to obtain any Consent shall not constitute a material breach
of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
lenders may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in
writing of any unusual or material developments with respect to the business or
operations of the Station, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer such
financial information regarding the Assets and the business or operations of
the Station (including information on payables and receivables) as Buyer may
reasonably request. All financial information delivered by Seller to Buyer
pursuant to this Section shall be prepared from the books and records of Seller
in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to
Closing all outstanding obligations under capital and financing leases with
respect to any of the Assets and obtain good title to the Assets leased by
Seller pursuant to those leases so that those Assets shall be transferred to
Buyer at Closing free of any interest of the lessors.
5.18 Programming. Seller shall not make any material changes
in the broadcast hours or in the percentages of types of programming broadcast
by the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
5.19 Preservation of Business. To the extent consistent with
its obligations under the Time Brokerage Agreement, Seller shall use its best
efforts to preserve the business and organization of the Station and use its
best efforts to keep available to the Station its present employees and the
Station's present relationships with suppliers and others having business
- 17 -
<PAGE> 24
relations with it, to the end that the business and operations of the Station
shall be unimpaired at the Closing Date.
5.20 Collection of Accounts Receivable. Seller shall collect
the accounts receivable of the Station only in the ordinary course consistent
with its past practices and will not take any action designed or likely to
accelerate the collection of its accounts receivable.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any
reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall
not, directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Prior Owner's Receivables.
(a) Collection. At the Closing, Seller shall designate
Buyer as its agent solely for the purposes of collecting the Prior Owner's
Receivables. Buyer shall make reasonable efforts to collect the Prior Owner's
Receivables during the "Collection Period," which shall be
- 18 -
<PAGE> 25
the period beginning on the Closing Date and ending on July 31, 1996. Buyer
shall not be obligated to use any extraordinary efforts to collect any of the
Prior Owner's Receivables or to refer any of the Prior Owner's Receivables to a
collection agency or attorney for collection, and Buyer shall not make any such
referral or compromise, nor settle or adjust the amount of any of Prior Owner's
Receivables, except with the approval of Seller. During the Collection
Period, neither Seller nor its agent shall make any direct solicitation with
respect to the Prior Owner's Receivables.
(b) Payments. All collections of Prior Owner's Receivables
by Buyer shall be applied first to any account specifically identified by the
account debtor or, if none is designated, to the oldest invoice of the account
debtor, unless such invoice is in dispute. On or before the tenth day after
the end of each full calendar month during the Collection Period, Buyer shall
furnish to Seller (i) a list of the amounts collected before the end of such
month with respect to Prior Owner's Receivables, and (ii) the amount collected
during such month with respect to Prior Owner's Receivables. On or before the
twentieth day after the end of the Collection Period, Buyer shall furnish
Seller with a list of all of Prior Owner's Receivables which remain uncollected
at the end of the Collection Period.
(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.3(b) and to remit to Seller any payments
with respect to any of the Prior Owner's Receivables that Buyer subsequently
receives, and Seller itself shall act to collect any of the Prior Owner's
Receivables that continue to remain uncollected.
6.4 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs, other than any damage or destruction of the Assets or any
other event resulting from Buyer's conduct or actions under the Time Brokerage
Agreement, which (i) causes the Station to cease broadcasting operations for a
period of three or more days or (ii) prevents in any material respect signal
transmission by the Station in the normal and usual manner and Seller fails to
restore or replace the Assets so that normal and usual transmission is resumed
within seven days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon written notice to Seller or (y) proceed to
consummate the transaction contemplated by this Agreement and complete the
restoration and replacement of the Assets after the Closing Date, in which
event Seller shall deliver to Buyer all insurance proceeds received in
connection with such damage, destruction or other event.
- 19 -
<PAGE> 26
6.5 Confidentiality. Except as necessary for the consummation
of the transaction contemplated by this Agreement, including Buyer's obtaining
of financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.6 Environmental Audit. Buyer may, at its option and expense
and within thirty (30) days of the date hereof, retain an environmental
consultant to be selected by Buyer to perform a Phase I environmental survey of
the properties of the Station. If the survey discloses any material
environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Buyer shall so notify Seller as soon
as practicable.
6.7 Engineering Study. Buyer may, at its option and expense
and within thirty (30) days of the date hereof, retain an engineering firm to
conduct a proof of performance study of the Station and to prepare a report on
the Station's compliance with customary engineering practices and all
applicable FCC rules, regulations, prescribed practices, and technical
standards. If the survey discloses any material deficiencies in the operations
or equipment of the Station, Buyer shall so notify Seller as soon as
practicable.
6.8 Cooperation. Buyer and Seller shall cooperate fully with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.9 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Illinois shall be complied with by Seller and Buyer. Any loss,
liability, obligation, or cost suffered by Seller or Buyer as the result of the
failure of Seller or Buyer to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets as contemplated by this Agreement
shall be borne by Buyer.
6.10 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to
each parcel of Real Property that Seller owns, Seller will obtain and deliver
to Buyer, at Buyer's expense, at or prior
- 20 -
<PAGE> 27
to Closing, an ALTA Owner's Policy of Title Insurance Form B-1987 (or
equivalent policy acceptable to Buyer), issued by a title insurer satisfactory
to Buyer, in an amount equal to the fair market value of the property and any
improvements thereon (as reasonably determined by Buyer), insuring title to
such parcel to be in the name of Buyer as of the Closing, subject only to liens
or encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall (1) insure title to the Real Property described in the policy
and all recorded easements benefitting such Real Property, (2) contain an
"extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel, and (7) not be subject to any survey exception
or any defect or encroachment disclosed by a survey delivered with respect to
the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will procure a current survey of the parcel, prepared by
a licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
6.11 Sales Tax Filings. Through the Closing Date, Seller shall
continue to file Illinois sales tax returns with respect to the Station, if and
to the extent such returns are required to be filed by applicable law, and
shall concurrently deliver copies of all such returns to Buyer.
6.12 Access to Books and Records. Seller shall provide Buyer
reasonable access and the right to copy for a period of three years from the
Closing Date any books and records relating to the assets that are not included
in the Assets. Buyer shall provide Seller reasonable access and the right to
copy for a period of three years from the Closing Date any books and records
relating to the Assets.
6.13 Appraisal. Buyer and Seller agree to allocate the
Purchase Price for tax and recording purposes in accordance with an appraisal
to be conducted by an appraisal firm selected and paid for by Buyer with
experience in the valuation and appraisal of television station assets.
6.14 Buyer Conduct. Buyer shall take no action, or fail to
take any required action, that would disqualify Buyer from being the licensee
of the Station under the Communications Act of 1934, as now in effect, the
Telecommunications Act of 1996, and the rules, regulations
- 21 -
<PAGE> 28
and policies of the FCC as now in effect. Buyer, in programming the Station
pursuant to the Time Brokerage Agreement, shall not cause or permit, by any act
or failure to act, any of the Licenses to expire or to be revoked, suspended,
or modified, or take any action that could cause the FCC or any other
governmental authority to institute proceedings for the suspension, revocation,
or adverse modification of any of the Licenses.
6.15 HSR Act Filing. Seller and Buyer agree to (a) file, or
cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, which are required in connection
with the transactions contemplated hereby under the HSR Act within ten (10)
business days of the date of this Agreement; (b) submit to the other party,
prior to filing, their respective HSR Act filings to be made hereunder, and to
discuss with the other any comments the reviewing party may have; (c) cooperate
with each other in connection with such HSR Act filings, which cooperation
shall include furnishing the other with any information or documents in such
party's possession that may be reasonably required in connection with such
filings; (d) promptly file, after any request by the FTC or DOJ, any
information or documents requested by the FTC or DOJ; and (e) furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ which relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of
Buyer at the Closing are subject at Buyer's option to the fulfillment prior to
or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents designated as "material" on
Schedule 3.3 shall have been obtained and delivered to Buyer without any
adverse change in the terms or conditions of any agreement or any governmental
license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under
- 22 -
<PAGE> 29
Section 6.1 hereof, Seller shall have complied with any conditions imposed on
it by the FCC Consent, and the FCC Consent shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have a material adverse effect on the Station or the conduct
of its business and operations. No proceeding shall be pending the effect of
which could be to revoke, cancel, fail to renew, suspend, or modify adversely
any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station.
(h) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Seller shall have complied, in
all material respects, with its obligations thereunder.
(i) Loan Agreement. There shall exist no Event of
Default as defined in the Loan Agreement.
(j) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
- 23 -
<PAGE> 30
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Buyer shall have complied, in
all material respects, with its obligations thereunder.
(f) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is effective, and (2) not later than ten business days following the
date upon which the FCC Consent has become a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date,
Seller shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims, and obligations except for liens for current taxes not
yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property;
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
- 24 -
<PAGE> 31
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by its Chairman or President,
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(e) Title Insurance and Surveys. The title insurance
and surveys described in Section 6.10;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations;
(g) Accounts Receivable. A complete and accurate list of
the Station's Accounts Receivable as of a date no more than five business days
prior to the Closing Date, including, with respect to each of the Accounts
Receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(i)
hereto; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder, provided that Buyer shall bear any reasonable and necessary expense
incurred by Seller to obtain such certificate and confirmation.
8.3 Deliveries by Buyer. Prior to or on the Closing Date,
Buyer shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The cash portion of the Purchase
Price, as adjusted pursuant to Section 2.3(a), the executed original of the
Note marked "canceled" and such other documents as may be required to release
or terminate any security interests held by Buyer in any of the assets
described in Section 2.2;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts as provided in
Section 2.5;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its Secretary, certifying (1)
that the representations and warranties of Buyer contained in this Agreement
are true and complete in all material respects as of the
- 25 -
<PAGE> 32
Closing Date as though made on and as of that date, and (2) that Buyer has in
all material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date; and
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Affiliation Agreement. The Affiliation Agreement,
duly executed by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated
by Seller, if Seller is not then in material default, upon written notice to
Buyer, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, Seller shall have notified Buyer in writing that one or more
of the conditions precedent to the obligations of Seller set forth in this
Agreement have not been satisfied or waived in writing by Seller and such
condition or conditions shall not have been satisfied by Buyer or waived in
writing by Seller within fifteen days following such notice.
(b) Judgments. If, on the date that would otherwise be
the Closing Date, Seller shall have notified Buyer that there is in effect any
judgment, decree, or order that would prevent or make unlawful the Closing and
such judgment, decree or order shall not have been satisfied by Buyer within
fifteen (15) days following such notice.
(c) Upset Date. If the Closing shall not have occurred
by October 18, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if Buyer is not then in material default, upon written notice to Seller,
upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, Buyer shall have notified Seller in writing that one or more
of the conditions precedent to the obligations of Buyer set forth in this
Agreement have not been satisfied or waived in writing by Buyer and such
condition or conditions shall not have been satisfied by Seller or waived in
writing by Buyer within fifteen (15) days following such notice.
(b) Judgments. If, on the date that would otherwise be
the Closing Date, Buyer shall have notified Seller that there is in effect any
judgment, decree, or order that would
- 26 -
<PAGE> 33
prevent or make unlawful the Closing and such judgment, decree or order shall
not have been satisfied by Seller within fifteen (15) days following such
notice.
(c) Upset Date. If the Closing shall not have occurred
by October 18, 1997.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of the Station in the normal and
usual manner for a continuous period of three days unless such interruption of
service is due to actions of Buyer under the Time Brokerage Agreement.
9.3 Rights on Termination. Subject to Section 9.4, if this
Agreement is terminated pursuant to Section 9.1 or Section 9.2 and neither
party is in material breach of any provision of this Agreement, the parties
hereto shall have no liability to each other as a result of such termination.
In addition to its rights under Section 9.4, if this Agreement is terminated by
Buyer due to Seller's material breach of its obligations hereunder, Buyer shall
have all rights and remedies available at law or equity. If this Agreement is
terminated by Seller due to Buyer's material breach of its obligations
hereunder, the payment to Seller of the expenses (including reasonable
attorneys' fees and costs) incurred by Seller in the negotiation and
preparation of this Agreement and the performance by Seller of its obligations
hereunder shall constitute full payment and the exclusive remedy for any
damages suffered by Seller by reason of Buyer's material breach.
9.4 Survival of Option. In the event that the transactions
contemplated by this Agreement are not consummated for any reason whatsoever,
the Option shall nevertheless remain exercisable by Buyer until the expiration
of the Option as provided in the Option Agreement, and Buyer may at any time,
and from time to time, prior to such expiration again exercise the Option as
set forth in the Option Agreement and, upon such exercise, Buyer and Seller
shall enter into an Asset Purchase Agreement that is, subject to the
requirement in the following sentence, substantially identical to this
Agreement and thereafter diligently proceed to perform their obligations
thereunder. In the event that the transactions contemplated by this Agreement
are not consummated because a provision of this Agreement is determined by the
FCC to violate any FCC rule or policy, Buyer and Seller shall negotiate in good
faith to revise any such provision to ensure compliance with such rule or
policy while preserving, to the extent possible, the intent of the parties as
embodied in the provision to be revised.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant
- 27 -
<PAGE> 34
contained in this Agreement. No notice or information delivered by Seller
shall affect Buyer's right to rely on any representation or warranty made by
Seller or relieve Seller of any obligations under this Agreement as the result
of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing,
and regardless of any investigation made at any time by or on behalf of Buyer
or any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing,
and regardless of any investigation made at any time by or on behalf of Seller
or any information Seller may have, Buyer hereby agrees, subject to the
limitation in the last sentence of Section 9.3, to indemnify and hold Seller
harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities or damages resulting
from the operation or ownership of the Station on and after the Closing.
- 28 -
<PAGE> 35
(d) Any and all losses, liabilities or damages resulting
from any action taken by Buyer or its employees and agents with respect to the
Station, or any failure by Buyer or its employees and agents to take any action
with respect to the Station, in connection with the performance by Buyer of its
obligations under the Time Brokerage Agreement, including, without limitation,
any and all losses, liabilities or damages resulting from (i) violations by
Buyer or its employees and agents of the Communications Act of 1934, as
amended, or any rule, regulation or policy of the FCC, (ii) slander, defamation
or other claims relating to programming provided by Buyer for broadcast on the
Station, and (iii) Buyer's broadcast and sale of advertising time on the
Station.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty- day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual
- 29 -
<PAGE> 36
out-of-pocket expenses incurred by the Claimant as the result of a request by
the Indemnifying Party. If the Indemnifying Party elects to assume control of
the defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) Notwithstanding any provision in this Agreement to
the contrary, Seller shall not be required to indemnify Buyer for any losses,
liabilities or damages relating to or arising from (i) a chose in action of
Seller relating to the Station unless Buyer promptly notifies Seller of such
chose in action, and thereupon Seller shall have sole responsibility for the
prosecution of such chose in action or (ii) any environmental or engineering
defect or other circumstance that is described in the environmental survey or
engineering study referred to in Sections 6.6 and 6.7 hereof, respectively, if
and to the extent such defect or circumstance is not a violation of Seller's
representations, warranties or covenants hereunder.
10.5 Specific Performance. The parties recognize that if
Seller breaches this Agreement and refuses to perform under the provisions of
this Agreement, monetary damages alone would not be adequate to compensate
Buyer for its injury. Buyer shall therefore be entitled, in addition to any
other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement. If any action is brought
by Buyer to enforce this Agreement, Seller shall waive the defense that there
is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either
party which results in a lawsuit or other proceeding for any remedy available
under this Agreement, the prevailing party shall be entitled to reimbursement
from the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by the party upon whom such
tax is imposed by law. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the
- 30 -
<PAGE> 37
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, except that Buyer and Seller shall each pay one-half of all
filing fees required by the FCC, and Buyer shall pay any filing fee required by
the FTC under the HSR Act , and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers
shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association.
The written decision of a majority of the arbitrators shall be final and
binding on Seller and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Seller and Buyer in a manner to be decided
by a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not
paid within thirty days, may be entered in any court having jurisdiction over
the matter. No action at law or suit in equity based upon any claim arising
out of or related to this Agreement shall be instituted in any court by Seller
or Buyer against the other except (i) an action to compel arbitration pursuant
to this Section, (ii) an action to enforce the award of the arbitration panel
rendered in accordance with this Section, or (iii) a suit for specific
performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. James L. West
The Christian Network, Inc.
14444 66th Street North
Clearwater, FL 34624
- 31 -
<PAGE> 38
With a copy to: Alan C. Campbell, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
Mr. Lowell W. Paxson
If to Buyer: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may
assign this Agreement without the prior written consent of the other party
hereto; provided, however, that Buyer may assign its rights and obligations
under this Agreement, in whole or in part, to one or more subsidiaries or
commonly controlled affiliates of Buyer, prior to the filing of the FCC
application, without seeking or obtaining Seller's prior approval, provided
that such assignment shall not constitute a release of Buyer's obligations
hereunder, and Buyer may collaterally assign its rights and interests hereunder
to its lenders without seeking or obtaining Seller's prior approval. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions
and execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA
(WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
- 32 -
<PAGE> 39
11.8 Gender and Number. Words used in this Agreement,
regardless of the gender and number specifically used, shall be deemed and
construed to include any other gender, masculine, feminine, or neuter, and any
other number, singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto,
and all documents, certificates, and other documents to be delivered by the
parties pursuant hereto, collectively represent the entire understanding and
agreement between Buyer and Seller with respect to the subject matter hereof.
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and which is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.
11.10 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with
any obligation, representation, warranty, covenant, agreement, or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Prior to the Closing, neither party shall
publish any press release, make any other public announcement or otherwise
communicate with any news media concerning this Agreement or the transactions
contemplated hereby without the prior written consent of the other party;
provided, however, that nothing contained herein shall prevent either party
from promptly making all filings with governmental authorities as may, in its
judgement be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
11.12 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against Buyer or Seller arising out of or relating
to this Agreement may be brought in any state or federal court of competent
jurisdiction in the State of Florida and, by execution and delivery of this
Agreement, Buyer and Seller each accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and waives any defense of forum non conveniens and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Seller designates and appoints James L. West, and Buyer
designates and appoints William L. Watson, and such other persons as may
hereafter be selected by Buyer or Seller, as its respective agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by Buyer and Seller to be effective and
binding service in every respect. A copy of any such
- 33 -
<PAGE> 40
process so served shall be mailed by registered mail to Buyer or Seller at its
address provided in Section 11.3, except that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of process. If any agent appointed by Buyer or Seller refuses to
accept service, Buyer and Seller hereby agree that service upon it by mail
shall constitute sufficient notice. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
either party to bring proceedings against the other in the courts of any other
jurisdiction.
11.13 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 34 -
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
ST. LOUIS-13, INC.
By: /s/ James B. Bocock
-----------------------------
Name: James B. Bocock
Title: President
CHANNEL 13 OF ST. LOUIS, INC.
By: /s/ James L. West
-----------------------------
James L. West
Chairman
- 35 -
<PAGE> 1
EXHIBIT 10.102
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 12, 1996
BY AND BETWEEN
PAXSON BROADCASTING OF MIAMI, LIMITED PARTNERSHIP
AND
TK COMMUNICATIONS, L.C.
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Average Closing Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FAA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"PCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"PCC Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Trading Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2 PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.18 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.19 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.20 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.22 Accredited Investor; Investment Knowledge; Distribution . . . . . . . . . . . . . . . . . . . . . . 17
3.23 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.5 PCC Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.10 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.11 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.12 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.13 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.15 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.16 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.17 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.18 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.19 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.20 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.21 Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 HSR Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Control of the Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.4 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.9 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.10 Office Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.11 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8 CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . 32
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.12 Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.13 No-Shop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.14 Seller's Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<CAPTION>
TAB
---
<S> <C> <C> <C>
Schedule 2.1 - Liens A
Schedule 2.2 - Excluded Assets B
Schedule 2.3 - Registration Rights C
Schedule 3.3 - Consents D
Schedule 3.4 - Licenses E
Schedule 3.5 - Real Property F
Schedule 3.6 - Tangible Personal Property G
Schedule 3.7 - Contract H
Schedule 3.9 - Intangibles I
Schedule 3.10 - Financial Statements J
Schedule 3.11 - Insurance K
Schedule 3.13 - Employee - Employee Benefits L
Schedule 3.16 - Claims and Legal Actions M
Schedule 3.17 - Environmental Matters N
Schedule 4.3 - Buyer Consents O
Schedule 8.2(g) - Counsel Opinion (Seller) P
Schedule 8.3(d) - Counsel Opinion (Buyer) Q
Schedule 9.3 - Escrow Agreement R
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of April 12, 1996, by and
between Paxson Broadcasting of Miami, Limited Partnership, a Florida limited
partnership ("Buyer"), and TK Communications, L.C., a Florida limited liability
company ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates radio stations
WSRF-AM and WSHE-FM, Ft. Lauderdale, Florida (the "Stations") pursuant to
licenses issued by the Federal Communications Commission.
B. Seller desires to sell, and Buyer wishes to buy, substantially all
the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Stations prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are designated to indicate that they will be assumed by Buyer upon its
purchase of the Stations, (ii) any Contracts entered into by Seller between the
date of this Agreement and the Closing Date that Buyer agrees in writing to
assume, and (iii) Contracts entered into by Seller in compliance with Section
5.3.
"Average Closing Price" means the sum of the Closing Prices per share
of PCC Shares for the trailing thirty day period ending on the Closing Date
divided by thirty.
<PAGE> 8
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Closing Price" means the closing price for a PCC Share on the
American Stock Exchange as reported for each Trading Day in the American Stock
Exchange composite transactions section of The Wall Street Journal.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Stations.
"Escrow Agent" means First Union National Bank of Florida.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or
- 2 -
<PAGE> 9
owned by Seller or under which Seller is licensed or franchised and
which are used or useful in the business and operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the FAA or any other federal, state, or local governmental
authorities to Seller, in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the
date of this Agreement and the Closing Date.
"PCC" means Paxson Communications Corporation, a Delaware corporation.
"PCC Shares" means the shares of the Class A Common Stock of PCC.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, easements,
rights to access, and rights of way, and all buildings and other improvements
thereon, and other real property interests which are used or useful in the
business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, inventory, spare
parts, and other tangible personal property which is used or useful in the
conduct of the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Trading Day" means a day on which PCC Shares are actually sold on the
American Stock Exchange.
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions
set forth in this Agreement, Seller hereby agrees to sell, transfer, and deliver
to Buyer on the Closing Date, and Buyer agrees to purchase, all of the tangible
and intangible assets used or useful in connection with the conduct of the
business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for liens for current taxes not
yet due and payable or as set forth on Schedule 2.1), including the following:
- 3 -
<PAGE> 10
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts, including executed copies thereof;
(e) The Intangibles and all intangible assets of Seller
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Stations;
(g) All choses in action of Seller relating to the Stations;
and
(h) All books and records relating to the business or
operations of the Stations, and all records required by the FCC to be kept by
the Stations.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash or cash equivalent on hand as of the
Closing and all other cash in any of Seller's bank or savings accounts; any
insurance policies, letters of credit, or other similar items and cash
surrender value in regard thereto; deposits; and any stocks, bonds,
certificates of deposit, treasury bills or similar types of investments;
(b) All books and records relating to Seller's internal
corporate organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) The Accounts Receivable;
(e) Any Contracts not included among the Assumed
Contracts; and
(f) Any other assets listed on Schedule 2.2.
2.3 Purchase Price.
- 4 -
<PAGE> 11
(a) Purchase Price. The Purchase Price for the Assets shall be
Fifty Seven Million Five Hundred Thousand Dollars ($57,500,000). The Purchase
Price shall be payable by Buyer on the Closing Date as follows: (i) Buyer shall
pay Seller $47,500,000 in cash on the Closing Date (the "Cash Purchase Price"),
adjusted as set forth in Section 2.3(b), by federal wire transfer of immediately
available funds pursuant to wire instructions which shall be delivered by Seller
to Buyer at least two business days prior to the Closing Date and (ii) Buyer
shall cause PCC to transfer to Seller on the Closing Date Ten Million Dollars
worth of PCC Shares (the "Stock Purchase Price"). The per share price of the PCC
Shares shall be Sixteen ($16.00) dollars (the "Registration Price") and PCC
shall guarantee that the minimum per share price shall be the Average Closing
Price and if the Average Closing Price is less than the Registration Price,
Buyer shall fund at closing the difference with additional PCC Shares. The PCC
Shares received by Seller will be unregistered and PCC agrees to register
Seller's PCC Shares between twenty and twenty four months following the Closing
if Seller so requests in accordance with the procedures set forth in Schedule
2.3 hereof. Buyer shall pay all costs and expenses related to the registration
statement and the registration of Seller's Shares as permitted by the Securities
and Exchange Commission.
(b) Adjustments.
(1) Expenses. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Stations, including annual regulatory fees
imposed by the FCC and other business and license fees, utility charges, real
and personal property taxes and assessments levied against the Assets, property
and equipment rentals, applicable copyright or other fees, sales and service
charges and similar prepaid and deferred items, shall be prorated between Buyer
and Seller in accordance with the principle that Seller shall be responsible for
all expenses, costs, and liabilities allocable to the period prior to the
Closing Date subject to the provisions of the Time Brokerage Agreement, and
Buyer shall be responsible for all expenses, costs, and obligations allocable to
the period on and after the Closing Date. Notwithstanding the foregoing, there
shall be no adjustment or proration for, and Seller shall remain solely liable
with respect to, (i) any Contracts not included in the Assumed Contracts and any
other obligation or liability not being assumed by Buyer in accordance with
Section 2.4 hereof and (ii) any commissions, wages, bonuses, incentive programs,
payroll taxes, vacation pay, sick leave, severance benefits, or other benefits
of employees of any Station with respect to periods prior to or arising by
virtue of the Closing all of which obligations shall be discharged and satisfied
in full at or prior to the Closing.
(2) Revenues. The Purchase Price shall be decreased by
the amount of any revenues received by Seller under any Assumed Contract to the
extent such revenues relate to the performance of obligations on or after the
Closing Date.
- 5 -
<PAGE> 12
(3) Trade and Barter. If, on May 1, 1996, the aggregate
value of the Stations' obligations on or after the Closing Date under trade,
barter or similar arrangements for the sale of advertising time other than for
cash, minus the aggregate value of the goods, services or other items to be
received on or after the Closing Date under such trade and barter arrangements,
exceeds $25,000, then Buyer shall receive a credit against the Purchase Price
for the amount of such excess. The liability of the Stations for unperformed
time for purposes of this Section shall be valued according to the Stations'
prevailing rates as of May 1, 1996.
(c) Manner of Determining Adjustments. The Purchase Price,
taking into account the adjustments and prorations pursuant to Section 2.3(a),
will be determined finally in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not later
than five days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(b). The preliminary settlement statement (A) shall
contain all information reasonably necessary to determine the adjustments to the
Purchase Price under Section 2.3(b), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (B)
shall be certified by Seller to be true and complete to the best of Seller's
knowledge as of the date thereof. Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(b) hereof prior to the
Closing. The Purchase Price payable at Closing under Section 2.3(a) shall be
increased or decreased, as applicable, based on the adjustments set forth in the
preliminary settlement statement except that any adjustments set forth in the
preliminary settlement statement to which Buyer objects in writing in good faith
shall be deemed omitted from such preliminary settlement statement and shall
instead be determined as part of the post-closing adjustments under this Section
2.3(c).
(2) No later than 45 days after the Closing Date, Buyer
will deliver to Seller a statement certified by Buyer to be true and complete to
the best of Buyer's knowledge as of the date thereof setting forth Buyer's
determination of the Purchase Price as adjusted pursuant to Section 2.3(b). If
Seller disputes the amount of the Purchase Price determined by Buyer, it shall
deliver to Buyer within 30 days after their receipt of Buyer's statement a
statement setting forth their determination of the amount of the Purchase Price
(the "Seller Statement"). If Seller notifies Buyer of its acceptance of Buyer's
statement, or if Seller fails to deliver its statement within the 30-day period
specified in the preceding sentence, Buyer's determination of the Purchase Price
shall be conclusive and binding on the parties as of the last day of the 30-day
period.
(3) Buyer and Seller shall use good faith efforts to
resolve any dispute involving the determination of the Purchase Price. If the
parties are unable to resolve the
- 6 -
<PAGE> 13
dispute within 15 days following the delivery of Seller's Statement, Buyer and
Seller shall jointly designate an independent certified public accountant, who
shall be knowledgeable and experienced in the operation of radio broadcasting
stations, to resolve the dispute. The accountant's resolution of the dispute
shall be final and binding on the parties, and a judgment may be entered thereon
in any court of competent jurisdiction. Any reasonable fees and costs of such
accountant shall be split equally between the parties.
(4) If the Purchase Price as finally determined pursuant
to this Section 2.3(c) exceeds the Purchase Price paid by Buyer on the Closing
Date (the "Estimated Purchase Price"), Buyer shall pay to Seller, in immediately
available funds within five days after the date on which the Purchase Price is
finally determined pursuant to this Section 2.3(c), the difference between the
Purchase Price and the Estimated Purchase Price. If the Purchase Price as
finally determined pursuant to Section 2.3(c) is less than the Estimated
Purchase Price, Seller shall pay to Buyer, in immediately available funds within
five days after the date on which the Purchase Price is finally determined
pursuant to this Section 2.3(c), the difference between the Purchase Price and
the Estimated Purchase Price. If Seller fails to make the payment required by
the preceding sentence, Buyer may retain the difference between the Estimated
Purchase Price and the Purchase Price from the amounts collected by Buyer
pursuant to Section 6.4 with respect to the Accounts Receivable provided that
such right of set-off shall not cure any breach of this Section 2.3(c)(4) by
Seller.
2.4 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Stations on or after the Closing Date. Except to the extent specifically
required of Buyer pursuant to the Time Brokerage Agreement, Buyer shall not
assume any other obligations or liabilities of Seller, including (i) any
obligations or liabilities under any Contract not included in the Assumed
Contracts, (ii) any obligations or liabilities under the Assumed Contracts
relating to the period prior to the Closing Date, (iii) any claims or pending
litigation or proceedings relating to the operation of the Stations prior to the
Closing, (iv) any obligations or liabilities arising under capitalized leases or
other financing agreements, (v) any obligations or liabilities of Seller under
any employee pension, retirement, or other benefit plans or collective
bargaining agreements, (vi) any obligation to any employee of the Stations for
commissions, wages, bonuses, incentive programs, payroll taxes, vacation pay,
sick leave, severance benefits or other benefits with respect to periods prior
to or arising by virtue of the Closing or (vii) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing.
2.5 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets being sold by Seller based upon an appraisal of the
Assets performed by an appraiser selected by Buyer with such appraisal to be
done at Buyer's sole expense. Buyer shall
- 7 -
<PAGE> 14
provide Seller with a copy of the final appraisal report upon its delivery to
Buyer. Prior to the completion of such appraisal report, Seller shall be
permitted to consult with the appraiser. Each party warrants and covenants to
the other that it shall report the Purchase Price Allocation as set forth above
on all state and/or federal tax returns and filings and shall indemnify and hold
each other harmless for any damage the other may sustain by reason of not
reporting the above allocation on any state or federal return or filing. The
above indemnity and hold harmless provision includes the indemnifying party
compensating the non-indemnifying party for all of its expenses in connection
with an audit resulting from a failure to report the Purchase Price Allocation
set forth above, including but not limited to attorneys' fees, certified public
accountants' fees and costs. Further, each party hereby agrees to provide the
other written notice of any notification or correspondence from any state or
federal taxing authority that concerns that Purchase Price Allocation or the
reporting thereof. Each party shall have the right to participate in the
defense of any audit or claim by a state or federal taxing authority. This
covenant shall survive closing for a period of five (5) years.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Florida. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Stations as now conducted, and (iii)
to execute and deliver this Agreement and the documents contemplated hereby, and
to perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Seller hereunder and thereunder. Seller is not a
participant in any joint venture or partnership with any other person or entity
with respect to any part of the operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Seller has been duly authorized by all
necessary actions on the part of Seller and its members. This Agreement has
been duly executed and delivered by Seller and constitutes the legal, valid, and
binding obligation of Seller, enforceable against it in accordance with its
terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby (with or without the giving
of notice, the lapse of time, or both): (i) do not require the consent of any
third party; (ii) will not conflict with any
- 8 -
<PAGE> 15
provision of the Articles of Organization or Regulations of Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or ruling
of any court or governmental instrumentality, which conflict would have a
material adverse effect on the transaction contemplated hereby; (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Seller is a party or by which Seller may be bound, which
conflict would have a material adverse effect on the transaction contemplated
hereby; and (v) will not create any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature whatsoever upon any of the
Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Stations in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would limit
the full operation of the Stations as now operated, which would materially
adversely affect the operations of the Seller. The Licenses are in full force
and effect, and the conduct of the business and operations of the Stations are
in accordance therewith. Seller has no reason to believe that any of the
Licenses would not be renewed by the FCC or other granting authority in the
ordinary course based upon events occurring prior to Closing.
3.5 Title to and Condition of Real Property.
(a) Schedule 3.5 contains a complete and accurate description
of all the Real Property and Seller's interests therein (including street
address, legal description, owner, and use and the location of all improvements
thereon). The Real Property listed on Schedule 3.5 comprises all real property
interests necessary to conduct the business and operations of the Stations as
now conducted.
(b) With respect to each leasehold or subleasehold interest
included in the Real Property being conveyed under this Agreement (the "Leased
Property"), so long as the Seller fulfills its obligations under the lease
therefor, Seller has enforceable rights to nondisturbance and quiet enjoyment.
Seller has good title to the Leased Property, free and clear of all liens,
claims, and encumbrances, except as specifically stated in Schedule 3.5. With
respect to each such lease, (i) the leases are in full force and effect, and are
valid, binding and enforceable in accordance with their respective terms, (ii)
all accrued and currently payable rents and other payments required by such
leases have been paid, (iii)
- 9 -
<PAGE> 16
neither any Seller nor any other party is in default in any respect under any
such leases, (iv) no party has asserted any defense, set off or counterclaim
thereunder, and (v) no notice of default or termination has been given or
received, no event of default has occurred, and no condition exists and no event
has occurred that, with the giving of notice, the lapse of time, or the
happening of any further event would become a default or permit early
termination under any such lease. Except as set forth in Schedule 3.3 hereto, no
third-party consent or approval is required for the assignment of any such lease
to Buyer, or for the consummation of the transactions contemplated herein. All
improvements located on the Real Property are in good condition and repair
(ordinary wear and tear excepted), are available for immediate use in the
conduct of the business or operations of the Stations and comply with all
applicable building and zoning codes. All towers, guy anchors, buildings and
other improvements included in the Assets are located entirely on the Real
Property. Seller have full legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Stations as now conducted. Except as described in Schedule 3.6, Seller owns
and has good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Stations. All items of transmitting and studio equipment
included in the Tangible Personal Property (i) have been maintained in a manner
consistent with generally accepted standards of good engineering practice, and
(ii) will permit the Stations and any auxiliary broadcast facilities related
thereto to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC and the FAA.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except (i) contracts with advertisers for the sale of advertising time
on the Stations for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Stations without penalty on not more than thirty
days' notice and (ii) contracts or commitments for the purchase or sale of
goods, supplies, equipment, capital assets, products or services, that do not
involve more than $2,500 for each such contract or commitment and more than
$10,000 in the aggregate for all such contracts or commitments. With respect to
the Contracts listed on Schedule 3.7, Seller has delivered to Buyer true and
complete copies of all written Contracts, true and complete memoranda of all
oral Contracts (including any amendments and other modifications to such
Contracts), and a schedule summarizing Seller' obligations under trade and
barter agreements relating to the Stations. All of the Assumed Contracts are in
full force and effect, and are valid, binding, and enforceable in accordance
with their terms. To the Seller's knowledge, there is not under any Assumed
Contract any
- 10 -
<PAGE> 17
default by any party thereto or any event that, after notice or lapse of time or
both, could constitute a default. Seller is not aware of any intention by any
party to any Assumed Contract (i) to terminate such contract or amend the terms
thereof, (ii) to refuse to renew the Assumed Contract upon expiration of its
term, or (iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Seller has full legal power and
authority to assign their rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts. The
Contracts listed on Schedule 3.7 hereto constitute all of the contracts
necessary to conduct the business and operations of the Stations as currently
conducted.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Schedule 3.3, no consent, approval,
permit, or authorization of, or declaration to or filing with any governmental
or regulatory authority, or any other third party is required and the absence of
which consent would have a materially adverse effect on the transaction
contemplated hereby (i) to consummate this Agreement and the transactions
contemplated hereby, (ii) to permit Seller to assign or transfer the Assets to
Buyer, or (iii) to enable Buyer to conduct the business and operations of the
Stations in essentially the same manner as such business and operations are now
conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all existing documents that establish or evidence any of the Intangibles. To
Seller's knowledge, Seller is not infringing upon or otherwise acting adversely
to any trademarks, trade names, service marks, service names, copyrights,
patents, patent applications, know-how, methods, or processes owned by any other
person or persons, and there is no claim or action pending, or to the knowledge
of Seller threatened, with respect thereto. The Intangibles listed on Schedule
3.9 comprise all intangible property interests necessary to conduct the business
and operations of the Stations as now conducted.
3.10 Financial Statements. Schedule 3.10 represents true and
complete copies of (i) audited financial statements of the Stations containing
balance sheets, statements of income and statements of cash flow for a Stations'
fiscal years ended December 31, 1994 and, (ii) the most recent unaudited
financial statements of the Stations containing balance sheets, statements of
income and statements of cash flow at and for a twelve month period and (iii) an
unaudited statement of Operating Cash Flow for a twelve month period
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated, are
complete and correct in all material respects, and present fairly the financial
condition of the Stations as at their respective dates and the results of
operations for
- 11 -
<PAGE> 18
the periods then ended. None of the Financial Statements understates the true
costs and expenses of conducting the business or operations of the Stations,
fails to disclose any material contingent liabilities, or inflates the revenues
of the Stations.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Stations. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Stations against all customary and foreseeable risks.
3.12 Reports. All tax returns, ownership and employment reports,
and other material documents that the Stations are currently required to file
with the FCC or with any other governmental agency have been filed, and all
reporting requirements of the FCC and other governmental authorities having
jurisdiction over Seller and the Stations have been complied with in all
material respects. All of such returns, reports, and statements are complete
and correct in all material respects as filed. Seller has timely paid to the
FCC all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Employee Benefits.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.13. Schedule 3.13
also contains a true and complete list of all employees of the Stations, their
job description, date of hire, salary and amount and date of last salary
increase.
(b) Each Employee Plan and Compensation Arrangement has been
administered in compliance with its own terms and in material compliance with
the provisions of ERISA, the Code, the Age Discrimination in Employment Act and
any other applicable Federal or state laws. Seller is not aware of the
existence of any governmental audit or examination of any Employee Plan or
Compensation Arrangement or of any facts which would lead it to believe that any
such audit or examination is pending or threatened. There exists no action,
suit or claim (other than routine claims for benefits) with respect to any
Employee Plan or Compensation Arrangement pending or, to the best knowledge of
Seller, threatened against any of such plans or arrangements, and Seller
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
- 12 -
<PAGE> 19
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Stations, and neither Seller nor any other trade or business under common
control with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.13, neither Seller nor
any other trade or business under common control with Seller (within the meaning
of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain or contribute
to any Employee Plan or Compensation Arrangement that provides retiree medical
or retiree life insurance coverage to former employees of Seller at the
Stations.
(e) Except as described in Schedule 3.13, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is intended to be tax-qualified, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
affect the validity of an Employee Plan's letter; (ii) no prohibited
transaction, within the definition of section 4975 of the Code or Title 1, Part
4 of ERISA, has occurred which would subject Seller to any liability; and (iii)
all contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by Seller prior to the Closing, including, but not limited
to, contributions thereto with respect to the plan year ending immediately prior
to the Closing.
(f) For purposes of this Agreement, the following terms shall
have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan as
defined in Section 3(3) of ERISA to which Seller or any entity related to Seller
(under the terms of Section 414(b), (c), (m) or (o) of the Code) contribute or
to which Seller or any entity related to Seller (under the terms of Sections
414(b), (c), (m) or (o) of the Code) sponsor, maintain or otherwise are bound
which provides benefits to persons employed or previously employed at the
Stations; (ii) "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor thereto and any regulations promulgated thereunder; (iii)
"Compensation Arrangement" shall mean any plan or compensation arrangement other
than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of Seller or
any entity related to Seller (under the terms of Section 414(b), (c), (m) or (o)
of the Code) employed or previously employed at the Stations any compensation or
other benefits, whether deferred or not, in excess of base salary or wages,
including, but not limited to, any bonus or incentive plan, stock rights plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other employee fringe benefit plan; (iv) "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended, any
- 13 -
<PAGE> 20
successor thereto and any regulations promulgated thereunder; and (v)
"Multi-employer Plan" means a plan, as defined in ERISA Section 3(37), to which
Seller or any entity related to Seller (under the terms of Section 414(b) or (c)
of the Code) contribute or are required to contribute.
3.14 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to the Stations. Seller has no
written or oral contracts of employment with any employee of the Stations, other
than those listed in Schedule 3.7. Seller has complied in all material respects
with all laws, rules, and regulations relating to the employment of labor,
including those related to wages, hours, collective bargaining, occupational
safety, discrimination, and the payment of social security and other payroll
related taxes, and Seller has not received any notice alleging that it has
failed to comply in any material respect with any such laws, rules, or
regulations. No controversies, disputes, or proceedings are pending or, to the
best of Seller's knowledge, threatened, between Seller and any employee (singly
or collectively) of the Stations. No labor union or other collective bargaining
unit represents or claims to represent any of the employees of the Stations. To
Seller's knowledge, there is no union campaign being conducted to represent
employees of the Stations or to solicit cards from employees to authorize a
union to request a National Labor Relations Board certification election with
respect to any employees at the Stations.
3.15 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by them to
the extent that such taxes have become due. To Seller's knowledge, there are no
governmental investigations or other legal, administrative, or tax proceedings
pursuant to which Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Stations, and no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.16 Claims and Legal Actions. Except as disclosed on Schedule
3.16, there is no claim, legal action, counterclaim, suit, arbitration,
governmental investigation or other legal, administrative, or tax proceeding,
nor any order, decree or judgment, in progress or pending, or to the knowledge
of Seller threatened, against or relating to Seller or otherwise relating to the
Assets or the business or operations of the Stations, nor does Seller know or
have reason to be aware of any basis for the same. In particular, but without
limiting the generality of the foregoing, there are no applications, complaints
or proceedings pending or, to the best of their knowledge, threatened (i) before
the FCC relating to the business or operations of the Stations other than
rulemaking proceedings which affect the radio industry generally, (ii) before
any federal or state agency relating to the business or operations of the
Stations involving charges of illegal discrimination under any federal or state
employment laws or regulations, or (iii) before any federal, state, or local
agency relating to the business
- 14 -
<PAGE> 21
or operations of the Stations involving zoning issues under any federal, state,
or local zoning law, rule, or regulation except as set forth on Schedule 3.17.
3.17 Environmental Matters.
(a) To Seller's knowledge, Seller has complied in all material
respects with all laws, rules, and regulations of all federal, state, and local
governments (and all agencies thereof) concerning the environment, public health
and safety, and employee health and safety, and no charge, complaint, action,
suit, proceeding, hearing, investigation, claim, demand, or notice has been
filed or commenced against Seller or the Stations alleging any failure to comply
with any such law, rule, or regulation.
(b) To Seller's knowledge, Seller has no liability relating to
its ownership and operation of the Stations (and there is no basis related to
the past or present operations, properties, or facilities of the Stations by
Seller for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Seller giving rise to any such
liability) under the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Refuse Act, the Emergency Planning and Community
Right-to-Know Act, or the Occupational Safety and Health Act (each as amended),
or any other law, rule, or regulation of any federal, state, or local government
(or agency thereof) concerning release or threatened release of hazardous
substances, public or employee health and safety, or pollution or protection of
the environment.
(c) To Seller's knowledge, Seller has no liability relating to
its ownership and operation of the Stations (and there is no basis for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand, under the common law or pursuant to any
statute, against Seller giving rise to any such liability) arising out of such
Seller's handling, disposal or arranging for disposal of any substance.
(d) To Seller's knowledge, Seller has no liability relating to
its ownership and operation of the Stations (and there is no basis for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand, under the common law or pursuant to a statute,
against Seller giving rise to any such liability) for any illness or personal
injury to any employee.
(e) To Seller's knowledge, except as set forth on Schedule
3.17, all properties and equipment used in the business of the Stations are and
have been free of friable asbestos, and all transformers used in the operations
of the Stations are free of PCB's.
- 15 -
<PAGE> 22
(f) To Seller's knowledge, no pollutant, contaminant,
industrial, hazardous, or toxic material or waste is located on the Real
Property.
3.18 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. Neither the ownership or use of the properties of
the Stations nor the conduct of the business or operations of the Stations
conflicts with the rights of any other person or entity.
3.19 Conduct of Business in Ordinary Course. Since [December 31,
1995], Seller has conducted the business and operations of the Stations only in
the ordinary course and have not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Stations, including any material damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Stations;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Stations, or any bonus payment
made or promised to any employee of the Stations, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Stations;
(c) Made any sale, assignment, lease, or other transfer of any
of the Stations' properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by any Seller
with respect to the Stations, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Stations; (f) Transferred or granted any right under, or entered into any
settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Stations;
(g) Incurred any obligation or liability (fixed or contingent)
except normal trade or business obligations and liabilities incurred in the
ordinary course of business; or
(h) Mortgaged, pledged or subjected to any lien any of the
Assets other than in the ordinary course of business.
- 16 -
<PAGE> 23
3.20 Transactions with Affiliates. Seller has not been involved in
any business arrangement or relationship relating to the Stations with any
affiliate of any Seller, and no affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Stations. As used
in this paragraph, "affiliate" has the meaning set forth in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934.
3.21 Broker. Neither Seller nor any person or entity acting on its
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.22 Accredited Investor; Investment Knowledge; Distribution.
Seller is an accredited investor within the meaning of Rule 501 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). Seller has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the risks and merits of its investment in PCC, and it
is capable of bearing the economic risks of such investment. Seller has had an
opportunity to discuss the business, management and financial affairs of PCC
with PCC's representatives and such Seller has had its questions concerning PCC
and its business answered to its full satisfaction. The PCC Shares to be
transferred hereunder to such Seller are being acquired for Seller's own account
for the purpose of investment and not with a view to or for resale in connection
with any distribution thereof or interest therein. Seller understands that (i)
such PCC Shares have not been registered under the Securities Act by reason of
their issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof, (ii) such PCC Shares must be
held indefinitely unless subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration, and (iii) such PCC Shares
shall bear a legend to such effect.
3.23 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a limited
partnership duly organized, validly existing, and in good standing under the
laws of the State of Florida. Buyer has all requisite power and authority to
execute and deliver this Agreement and the documents contemplated hereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder and thereunder.
- 17 -
<PAGE> 24
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Buyer have been duly authorized by all
necessary partnership actions on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer and constitutes the legal, valid, and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and except as set forth in Schedule 4.3, the execution, delivery, and
performance by Buyer of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party under any agreement, license or law
applicable to Buyer; (ii) will not conflict with the limited partnership
agreement or the certificate of limited partnership of Buyer; (iii) will not
conflict with, result in a breach of, or constitute a default under, any law,
judgment, order, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality applicable to Buyer; or (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to which
Buyer is a party or by which Buyer may be bound, that may impair Buyer's ability
to acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person or entity acting on its
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 PCC Shares. The PCC Shares to be transferred to Seller under
Section 2.3(a) will be duly authorized, validly issued, fully paid and
nonassessable when transferred to Seller pursuant to this Agreement.
4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading.
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Stations diligently in
the ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the
- 18 -
<PAGE> 25
following covenants or with Seller's other obligations under this Agreement),
and in accordance with the other covenants in this Section 5 and the Time
Brokerage Agreement.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices.
5.3 Contracts. Except as otherwise agreed to by Buyer and Seller,
Seller will not incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness) that will be binding on
Buyer after Closing, enter into any contract or commitment relating to the
Stations or the Assets, or amend or terminate any Contract (or waive any
material right thereunder), except for (i) cash time sales agreements made in
the ordinary course of business and (ii) other contracts and commitments entered
into in the ordinary course of business (other than trade or barter agreements)
which will not obligate Buyer to an amount of more than $2,500 in respect to
each contract or commitment and $10,000 in respect to all such contracts and
commitments and which will not obligate Buyer to perform any material
non-monetary obligations. Prior to the Closing Date, Seller shall deliver to
Buyer a list of all Contracts entered into between the date of this Agreement
and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except assets that are no
longer used or useful in the business or operations of the Stations and assets
that are disposed of in connection with the acquisition of replacement property
of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) matters
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable or (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Stations.
5.7 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the
- 19 -
<PAGE> 26
Stations for the purpose of audit and inspection and will furnish or cause to be
furnished to Buyer or its authorized representatives all information with
respect to the affairs and business of the Stations that Buyer may reasonably
request (including any financial reports and operations reports produced with
respect to the affairs and business of the Stations). Without limiting the
generality of the foregoing, Seller shall give Buyer and its counsel,
accountants and other authorized representatives reasonable access to Seller's
financial records and Seller's employees, counsel, accountants and other
representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its judgment, are required or advisable to
comply with federal or state securities laws and the rules and regulations of
securities markets as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
5.8 Maintenance of Assets. Prior to the effective date of the
Time Brokerage Agreement, Seller shall maintain all of the Assets in good
condition (ordinary wear and tear excepted), and use, operate, and maintain all
of the Assets in a reasonable manner and maintain inventories of spare parts and
expendable supplies at levels consistent with past practices. Upon the
effectiveness of the Time Brokerage Agreement, Buyer shall assume these
responsibilities. If any loss, damage, impairment, confiscation, or
condemnation of or to any of the Assets occurs, Seller shall use the proceeds of
any claim under any insurance policy solely to repair, replace, or restore any
of the Assets that are lost, damaged, impaired, or destroyed.
5.9 Insurance. Seller shall maintain the existing insurance
policies on the Stations and the Assets.
5.10 Consents. Seller shall use its best efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Stations than those pertaining under the Contract or License
as in effect on the date of this Agreement. Seller shall promptly advise Buyer
of any difficulties experienced in obtaining any of the Consents and of any
conditions proposed, considered, or requested for any of the Consents.
5.11 Books and Records. Seller shall maintain its books and records
relating to the Stations in accordance with past practices.
5.12 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the business or
operations of the Stations, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement, provided that such notification shall not relieve Seller of any
obligations hereunder.
- 20 -
<PAGE> 27
5.13 Financial Information. Seller shall furnish to Buyer within
fifteen days after the end of each calendar month ending between the date of
this Agreement and the Closing Date a statement of income and expense of the
Stations for the month just ended and such other financial information
(including information on payables and receivables) as Buyer may reasonably
request, all of which financial information shall comply with the standards
contained in the representations and warranties set forth in Section 3.10.
5.14 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Stations.
5.15 Financing Leases. Seller shall satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.16 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Stations, or make any other material change in the Stations' programming
policies, except such changes as in the good faith judgment of Seller are
required by the public interest.
5.17 Preservation of Business. Prior to the effective date of the
Time Brokerage Agreement, Seller shall use its best efforts to preserve the
business and organization of the Stations and use its best efforts to keep
available to the Stations their present employees and to preserve the audience
of the Stations and the Stations' present relationships with suppliers,
advertisers, and others having business relations with them. The ordinary and
customary operating, marketing, promotional, sales, and advertising practices of
the Stations shall be maintained.
5.18 Collection of Accounts Receivable. Seller shall collect the
accounts receivable of the Stations only in the ordinary course consistent with
their past practices.
5.19 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Stations and consider for employment all
personnel recommended by Buyer for such vacant position.
5.20 Rights. Seller shall not knowingly waive any material rights
relating to the Stations or any of the Assets.
5.21 Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
-21 -
<PAGE> 28
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare appropriate
applications for the FCC Consent and shall file such applications with the FCC
on or before the fifth business day after the execution of this Agreement. The
parties shall prosecute the applications with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
applications as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a breach
by such party of any of its representations, warranties, or covenants under this
Agreement, and (2) compliance with the condition would have a material adverse
effect upon it. Buyer and Seller shall oppose any requests for reconsideration
or judicial review of the FCC Consent. If the Closing shall not have occurred
for any reason within the original effective period of the FCC Consent, and
neither party shall have terminated this Agreement under Section 9, the parties
shall jointly request an extension of the effective period of the FCC Consent.
No extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 HSR Filing. As soon as practicable after the execution hereof
but in no event later than ten business days after the execution hereof, Buyer
and Seller shall each make the filings required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Each party will
cooperate with the other in accomplishing such filings and will keep the other
party appraised of the status of any inquiries made of such party by the Federal
Trade Commission, the U.S. Department of Justice or any other governmental
agency with respect to this Agreement or the transaction contemplated hereby.
The transfer of the Assets hereunder is expressly conditioned upon the waiting
period relating to any such filings having duly expired or been terminated by
the appropriate government agencies without the enforcement of any action by any
such agencies to restrain or postpone the transactions contemplated hereby.
6.3 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations; such operations, including
complete control and supervision of all of the Stations' programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing;
provided, however, that simultaneously with the execution of this
- 22 -
<PAGE> 29
Agreement, Seller and Buyer are entering into a Time Brokerage Agreement
providing for Buyer to provide programming for the Stations.
6.4 Accounts Receivable.
(a) Collection. As of May 1, 1996, Seller shall assign the
Accounts Receivable to Buyer for purposes of collection only. Buyer shall
collect the Accounts Receivable as Seller's agent in the same manner and with
the same diligence that Buyer uses to collect its own Accounts Receivable for
the period of one hundred twenty (120) days following the closing date (the
"Collection Period"); provided that Buyer shall not be obligated to institute
litigation, employ a collection agency, legal counsel or other third party, or
take any other extraordinary means of collection. Buyer shall not refer any
Accounts Receivable to a collection agency or attorney for collection, and Buyer
shall not make any such referral or compromise, nor settle or adjust the amount
of any of the Accounts Receivable, except with the written approval of Seller.
Neither Seller nor its agents will make any solicitation of Such Accounts
Receivable during the Collection Period, except with respect to Accounts
Receivable returned to Seller for collection as set forth below. Buyer shall
incur no liability to Seller for any uncollected account unless Buyer shall have
engaged in willful misconduct or gross negligence in the collection of such
account.
(b) Payments to Seller. On or before the fifteenth day after
the end of each full calendar month during the Collection Period, Buyer shall
furnish to Seller (i) a list of the amounts collected before the end of such
month with respect to the Accounts Receivable, and (ii) the amount collected
during such month with respect to the Accounts Receivable, less the amounts
permitted to be retained by Buyer pursuant to Section 2.3(c). On or before the
fifteenth day after the end of the Collection Period, Buyer shall furnish Seller
with a list of all of the Accounts Receivable which remain uncollected at the
end of the Collection Period. All amounts received by Buyer from account
debtors included among the Accounts Receivable shall be applied first to the
Accounts Receivable, unless the account debtor specifically disputes a
receivable or instructs that the payment be otherwise applied. If, during the
collection period, account debtor disputes an account included among the
Accounts Receivable, Buyer may return that account to Seller for collection.
(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.4(b) and to remit to Seller any payments
with respect to any of the Accounts Receivable that Buyer subsequently receives,
and Seller may act to collect any of the Accounts Receivable that continue to
remain uncollected.
- 23 -
<PAGE> 30
6.5 Risk of Loss.
(a) The risk of any loss, damage or impairment, confiscation
or condemnation of any of the Assets from any cause whatsoever shall be borne by
Seller to the extent of its insurance coverage as provided for in Section 3.11
hereof at all times prior to the completion of the Closing.
(b) If any damage or destruction of the Assets or any other
event occurs which prevents in any material respect signal transmission by the
Stations in the normal and usual manner and Seller is unable to restore or
replace the Assets so that such conditions are cured and normal and usual
transmission is resumed in all material respects before the Closing Date, the
Closing Date may be postponed by Buyer for up to sixty (60) days, to permit the
repair or replacement of the damage or loss.
(c) In the event of any damage or destruction of the Assets
described above, if such Assets have not been restored or replaced and the
Stations' normal and usual transmission resumed within the sixty (60) day
period, Buyer may, at its option, proceed to close this Agreement and complete
the restoration and replacement of such damaged Assets after the Closing Date,
in which event Seller shall deliver to Buyer all insurance proceeds received in
connection with such damage or destruction of the Assets; provided, however,
that Seller may retain the proceeds of any business interruption insurance with
respect to periods prior to the Closing. Notwithstanding any of the foregoing,
Seller shall have no obligation to expend its own funds to restore any damage or
destruction.
(d) If Buyer elects to postpone the Closing pursuant to
Subsection (b) hereof, Buyer shall provide written notice to Seller within five
(5) days of the Station's failure to broadcast in the normal and usual manner.
6.6 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement and, except as and to the extent
required by law, including, without limitation, disclosure requirements of
federal or state securities laws and rules and regulations of securities
markets, each party will forever keep confidential any information of a
confidential nature obtained from the other party in connection with the
transactions contemplated by this Agreement. If this Agreement is terminated,
each party will immediately return to the other party all information obtained
by such party from the other party in connection with the transactions
contemplated by this Agreement.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to consummate
- 24 -
<PAGE> 31
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i) to
expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto, and Seller shall have no obligation to expend funds (other than
the incidental cost of preparing and submitting requests, responding to
reasonable inquiries and ordinary and customary filing fees and processing
charges) to obtain any of the Consents.
6.8 Title Insurance and Surveys.
(a) Title Insurance. With respect to each parcel of Real
Property, Seller will obtain and deliver to Buyer (1) as soon as practicable
after the date of this Agreement, a title commitment disclosing the condition of
title to all Real Property and all easements, rights of way, and restrictions of
record with respect thereto, as of a date not earlier than the date of this
Agreement, accompanied by copies of all instruments evidencing the scope and
extent of all such easements, rights of way, and restrictions of record, and (2)
at or prior to Closing, an ALTA Leasehold Policy of Title Insurance on a form
customarily used in the State of Florida, issued by a title insurer satisfactory
to Buyer, in an amount equal to the fair market value of Seller' leasehold
interest (as reasonably determined by Buyer), insuring title to such leasehold
interest to be in the name of Buyer as of the Closing, subject only to liens or
encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies. Each
title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall, except to the extent that title insurers in the State of
Florida are not lawfully permitted to issue such policies or unless otherwise
agreed by Buyer, (1) insure title to the Real Property described in the policy
and all recorded easements benefitting such Real Property, (2) contain an
"extended coverage endorsement" or similar modification insuring over or
otherwise eliminating the general exceptions customarily contained in title
policies, (3) contain an endorsement insuring that the Real Property described
in the policy is the same real estate shown in the survey delivered with respect
to such property and (4) contain a "contiguity" endorsement with respect to any
Real Property consisting of more than one record parcel. Seller shall cause
prior to Closing all lease agreements included in the Real Property or
memorandums of lease relating thereto to be recorded in the appropriate public
recording office in the county where such Real Property is located.
(c) Surveys. With respect to each parcel of Real Property,
Seller will obtain and deliver to Buyer as soon as practicable after the date of
this Agreement a current survey of the parcel, prepared by a licensed surveyor
and conforming to current ALTA Minimum Detail Requirements for Land Title
Surveys, disclosing the location of all improvements, easements, party walls,
sidewalks, roadways, utility lines, and other matters customarily shown on such
surveys, and showing access affirmatively to public streets and roads.
- 25 -
<PAGE> 32
(d) Associated Fees and Costs. Seller shall be responsible
for the costs associated with obtaining the title commitments and the surveys
described above, and Buyer shall be responsible for the costs associated with
obtaining the title insurance policy with the special endorsements described
above.
6.9 Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Seller access and the right to copy for a period of three years
from the Closing Date any books and records relating to the Assets that are
included in the Assets.
6.10 Office Space. For a period of sixty (60) days following the
Closing, Buyer shall make available to Seller's Chairman and CEO the existing
office space utilized by the Chairman and CEO, John F. Tenaglia, the existing
office space utilized by the Chairman and CEO for his use at no extra cost to
Seller or John F. Tenaglia.
6.11 Engineering Study. Buyer has prepared a report on the
Stations' compliance with customary engineering practices and all applicable FCC
rules, regulations, prescribed practices, and technical standards and Seller has
agreed to correct the phasing of WSRF-AM within thirty (30) days of this
Agreement to the reasonable satisfaction of Buyer's Chief Engineer and Buyer
shall have ten (10) days after notification from Seller to confirm in writing
that Seller has made the necessary correction.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Seller shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement or the Time Brokerage Agreement to be performed or
complied with by them prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
License or Assumed Contract.
- 26 -
<PAGE> 33
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on them by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the holders
of all Licenses and there shall not have been any modification of any License
that could have an adverse effect on any Station or the conduct of its business
and operations. No proceeding shall be pending the effect of which could be to
revoke, cancel, fail to renew, suspend, or modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the assets
or properties of the Stations, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Stations that has not been repaired, restored or remedied, excepting normal wear
and tear to the Assets.
(h) HSR Act. Any approval required pursuant to the HSR Act
shall have been obtained (or the waiting period thereunder shall have expired or
been terminated).
7.2 Conditions to Obligations of Seller. All obligations of Seller
at the Closing are subject at Seller' option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement or the Time Brokerage Agreement to be performed or
complied with by it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section
- 27 -
<PAGE> 34
6.1 hereof and Buyer shall have complied with any conditions imposed on it by
the FCC Consent.
(e) HSR Act. Any approval required pursuant to the HSR Act
shall have been obtained (or the waiting period thereunder shall have expired or
been terminated).
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. Subject to the provisions of Section 6.5
and the satisfaction of the Section 7 Closing conditions, the Closing shall take
place at 10:00 a.m. on a date, to be set by Buyer on at least five days' written
notice to Seller, that is (1) not earlier than January 1, 1997, and (2) not
later than January 12, 1997. If Buyer fails to specify the date for Closing
prior to the fifth business day after the date upon which the FCC Consent
becomes a Final Order, the Closing shall take place on January 12, 1997.
(b) Closing Place. The Closing shall be held at the offices
of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon in writing by
Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of sale,
deeds, motor vehicle titles, assignments, and other transfer documents which
shall be sufficient to vest good and marketable title to the Assets in the name
of Buyer, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances of any nature
whatsoever, except for liens for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property including consents to the collateral assignment of such interests by
Buyer to its lenders as collateral security for Buyer's obligations to such
lenders;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificate. A certificate, dated as of the Closing Date,
executed by a duly authorized member of Seller on behalf of Seller, certifying
(1) that the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date; and (2) that Seller has
- 28 -
<PAGE> 35
in all material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(e) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.9;
(f) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with the operations of the Stations;
(g) Opinion of Counsel. Opinion of Seller's counsel dated as
of the Closing Date, in substantially the form attached hereto as Schedule
8.2(g), and if requested by Buyer, Buyer's lenders shall be permitted to rely on
such opinion;
(h) Lender's Certificate. If requested by Buyer within 21
days prior to Closing, Seller shall deliver to Buyer's lenders such closing
certificates as Buyer's lenders may reasonably request; and
(i) Other Instruments. Such other instruments and
certificates or other documentation as Seller is required by the terms hereof to
deliver or as Buyer may reasonably request.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3(a);
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform all obligations
and liabilities of Seller under the Licenses and Assumed Contracts insofar as
they relate to the time on or after the Closing Date and arise out of events
related to Buyer's ownership of the Assets or its operation of the Stations on
or after the Closing Date, together with appropriate indemnification by Seller;
(c) Certificate. A certificate, dated as of the Closing Date
executed by an officer of the general partner of Buyer on behalf of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date, and (2) that Buyer has in all
material respects performed and complied with all of its obligations,
- 29 -
<PAGE> 36
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date substantially in the form of Schedule 8.3(d) hereof;
(e) Certificate Regarding Time Brokerage Agreement. A
certificate dated as of the Closing Date by an officer of the general partner
of the Buyer, on behalf of Buyer, certifying (i) Buyer's compliance with the
terms and conditions of the Time Brokerage Agreement and (ii) that Buyer has
not, through its actions or inactions, caused any breach in Seller's
representations and warranties hereunder as a result of the Time Brokerage
Agreement.
(f) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Seller may reasonably request.
SECTION 9 TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Stations abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement have not been satisfied or waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
February 1, 1997.
(d) Breach. Without limiting Seller' rights under the other
provisions of this Section 9.1, if Buyer has failed to cure any material breach
of any of its representations, warranties, covenants or other obligations under
this Agreement or the Time Brokerage Agreement within fifteen days after Buyer
received written notice of such breach from Seller.
(e) Time Brokerage Agreement. If Buyer terminates the Time
Brokerage Agreement prior to Closing.
- 30 -
<PAGE> 37
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Stations abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
February 1, 1997.
(d) Breach. Without limiting Buyer's rights under the other
provisions of this Section 9.2, if Seller has failed to cure any material breach
of any of its representations, warranties, covenants or other obligations under
this Agreement or the Time Brokerage Agreement within fifteen days after Seller
received written notice of such breach from Buyer.
(e) Technical Deficiencies. Seller shall have failed to
correct the phasing of Station WSRF-AM, to the satisfaction of Buyer's Chief
Engineer David Glenn.
(f) Time Brokerage Agreement. If Seller terminates the Time
Brokerage Agreement prior to Closing.
9.3 Escrow Deposit. Simultaneously with the execution and delivery
of this Agreement, Buyer has deposited with the Escrow Agent $2,000,000 (the
"Escrow Deposit") in accordance with an Escrow Agreement among Buyer, Seller,
and the Escrow Agent (the "Escrow Agreement") in the form attached hereto as
Schedule 9.3. All funds deposited with the Escrow Agent shall be held and
disbursed in accordance with the terms of the Escrow Agreement and the following
provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1 or
Section 9.2 and Buyer is not in material breach of this Agreement, all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
- 31 -
<PAGE> 38
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, and Seller has complied in all material
respects with the terms of this Agreement, then the Escrow Deposit and any
interest or other proceeds from the investment of funds held by the Escrow Agent
shall be disbursed to or at the direction of Seller.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material breach
of this Agreement and Seller shall have complied in all material respects with
the terms of this Agreement, then the payment to Seller pursuant to Section
9.3(c) shall be liquidated damages and shall constitute full payment and the
exclusive remedy for any damages suffered by Seller by reason of Buyer's
material breach of this Agreement. Seller and Buyer agree in advance that
actual damages would be difficult to ascertain and that the amount of the Escrow
Deposit plus any interest earned thereon is a fair and equitable amount to
reimburse Seller for damages sustained due to Buyer's material breach of this
Agreement. If this Agreement is terminated by Buyer due to Seller's material
breach of this Agreement, Buyer shall have all rights and remedies available at
equity as its sole and exclusive remedy.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties until the Closing. Any investigations by or on
behalf of any party hereto shall not constitute a waiver as to enforcement of
any representation, warranty, or covenant contained in this Agreement. No
notice or information delivered by Seller shall affect Buyer's right to rely on
any representation or warranty made by Seller or relieve Seller of any
obligations under this Agreement as the result of a breach of any of their
representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agree to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting from
third party claims based on any material untrue representation, breach of
warranty, or nonfulfillment of any covenant by Seller contained in this
Agreement or in any certificate, document, or instrument delivered to Buyer
under this Agreement.
- 32 -
<PAGE> 39
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Stations prior to the Closing, including any
liabilities arising under the Licenses or the Assumed Contracts which relate to
events occurring prior the Closing Date, except for any damages caused by Buyer
as a result of its actions under the Time Brokerage Agreement.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting from
third party claims based on any material untrue representation, breach of
warranty, or nonfulfillment of any covenant by Buyer contained in this Agreement
or in any certificate, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Stations on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give written notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in
- 33 -
<PAGE> 40
reasonable detail the factual basis for the claim. If the claim relates to an
action, suit, or proceeding filed by a third party against Claimant, such notice
shall be given by Claimant as soon as practicable after written notice of such
action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
or its authorized representatives the information relied upon by the Claimant to
substantiate the claim. If the Claimant and the Indemnifying Party agree in
writing at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim or such amount as agreed to by the parties. If the Claimant and the
Indemnifying Party do not agree within the thirty-day period (or any mutually
agreed upon extension thereof), the Claimant may seek appropriate remedy under
the arbitration provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any third
party claim, it shall be bound by the results obtained by the Claimant with
respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees,
representatives and successors and assigns of any Claimant although for the
purpose of the procedures set forth in this Section 10.4, any indemnification
claims by such parties shall be made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
materially breaches this Agreement and refuses to perform under the provisions
of this Agreement, monetary damages alone would not be adequate to compensate
Buyer for its injury. Buyer shall therefore be entitled to obtain specific
performance of the terms of this Agreement as its sole
- 34 -
<PAGE> 41
and exclusive remedy. If any action is brought by Buyer to enforce this
Agreement, Seller shall waive the defense that there is an adequate remedy at
law.
10.6 Attorneys' Fees. In the event any action is brought to enforce,
interpret and/or arbitrate any claim under this Agreement, the prevailing party
shall be entitled to reimburse the other party for its reasonable legal fees and
expenses, both on the trial and appellate levels.
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Buyer shall pay any escrow agent fees under
the Escrow Agreement. Any federal, state, or local sales or transfer tax
arising in connection with the conveyance of the Assets by Seller to Buyer
pursuant to this Agreement shall be paid by Seller. Buyer and Seller shall each
pay one-half of (i) the fees payable to the FCC in connection with the filing of
the applications for the FCC Consent and (ii) the fee imposed by the Federal
Trade Commission in connection with filings made pursuant to the HSR Act. Except
as otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution, and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives, and each party shall be responsible
for all fees or commissions payable to any finder, broker, advisor, or similar
person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below or in Section 2.3(c), any dispute arising out of or related to this
Agreement that Seller and Buyer are unable to resolve by themselves shall be
settled by arbitration in Broward County, Florida, by a panel of three
arbitrators. Seller and Buyer shall each designate one disinterested arbitrator,
and the two arbitrators so designated shall select the third arbitrator. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to make
a just award according to the best of his or her understanding. The arbitration
hearing shall be conducted in accordance with the commercial arbitration rules
of the American Arbitration Association. The written decision of a majority of
the arbitrators shall be final and binding on Seller and Buyer. The costs and
expenses of the arbitration proceeding shall be assessed between Seller and
Buyer in a manner to be decided by a majority of the arbitrators, and the
assessment shall be set forth in the decision and award of the arbitrators.
Judgment on the award, if it is not paid within thirty days, may be entered in
any court having jurisdiction over the matter. No action at law or suit in
equity based upon any claim arising out of or related to this Agreement shall be
instituted in any court by Seller or Buyer against the other except (i) an
action to compel arbitration pursuant to this Section, (ii) an action to enforce
the award of the arbitration panel rendered in accordance with this Section, or
(iii) a suit for specific performance pursuant to Section 10.5.
- 35 -
<PAGE> 42
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed to
have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:
<TABLE>
<CAPTION>
<S> <C>
If to Seller: TK Communications, L.C.
3000 S.W. 60th Avenue
Fort Lauderdale, FL 33314
Attention: John F. Tenaglia
With a copy to: Ira Marcus, Esquire
Atlas, Pearlman, Trop & Borks
New River Center - Suite 1900
200 East Las Olas Boulevard
Fort Lauderdale, FL 33301
If to Buyer: Paxson Broadcasting of Miami, Limited Partnership
601 Clearwater Park Road West
Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W
Suite 800 Washington, D.C. 200366
</TABLE>
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto,
except that Buyer may assign its rights and obligations under this Agreement, in
whole or in part, without Seller's consent to one or more subsidiaries or
commonly controlled affiliates of Buyer or to an unaffiliated entity, provided
that Buyer guarantees that entity's payment and performance hereunder, and Buyer
may collaterally assign its rights and obligations hereunder to its lenders
without obtaining Seller' consent. Upon any permitted assignment by Buyer or
Seller in accordance with this Section 11.4, all reference to "Buyer" herein
shall be deemed to be references to Buyer's assignee and all references to
"Seller" herein shall be deemed to be references to
- 36 -
<PAGE> 43
Seller's assignee. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD
TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease
of reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations among the parties, including,
without limitation, the letter of intent among the parties hereto dated February
29, 1996, and cannot be amended, supplemented, or changed except by an agreement
in writing that makes specific reference to this Agreement and which is signed
by the party against which enforcement of any such amendment, supplement, or
modification is sought. The parties hereto acknowledge that no representations
or warranties have been made with respect to matters relating to the
transactions contemplated by this Agreement other than as expressly set forth in
this Agreement.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement, or condition shall not operate as a waiver of,
- 37 -
<PAGE> 44
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Press Releases. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgment, be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, in which case the other
party shall be first notified in writing.
11.13 No-Shop. Without limiting the generality of the foregoing,
Seller covenants that neither it nor any of its members, officers or agents
will, prior to the Closing Date, (a) solicit, initiate or encourage the
submission of any proposal or offer relating to any (i) liquidation, dissolution
or recapitalization, (ii) merger or consolidation, (iii) acquisition or purchase
of securities or assets, or (iv) similar transaction or business combination, in
each case involving Seller or (b) participate in any discussion or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any party to do or seek
any of the foregoing. Seller shall notify Buyer as soon as practicable if any
party makes any proposal with respect to any of the foregoing. Notwithstanding
any other provision in this Agreement to the contrary, in the event that Seller
violates its obligations in this Section 11.13, Buyer shall have the right to
seek specific performance of Seller's obligations hereunder.
11.14 Seller's Knowledge. Whenever a representation, warranty or
covenant contained herein is qualified by the phrase "to Seller's knowledge" or
other similar phrase, such representation, warranty or covenant is made based on
the actual knowledge of the officers of Seller or the actual knowledge of John
Tenaglia following reasonable inquiry by John Tenaglia to the officer or
employee of Seller who has responsibility for the area of the Stations'
operations to which such representation, warranty or covenant relates.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 38 -
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON BROADCASTING OF MIAMI,
LIMITED PARTNERSHIP
By: Paxson Communications of Florida, Inc.,
its General Partner
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
TK COMMUNICATIONS, L.C.
By: /s/ John Tenaglia
----------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.103
CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT (the "Agreement") is entered into as of
this 16th day of April, 1996, by and among OFFSHORE BROADCASTING CORPORATION, a
Rhode Island corporation ("Licensee"), OCEAN STATE TELEVISION, L.L.C., a
Delaware limited liability company (the "Company"), and PAXSON COMMUNICATIONS
OF PROVIDENCE-69, INC., a Florida corporation ("Contractor").
W I T N E S S E T H
WHEREAS, on March 18, 1996, Licensee secured from the Federal
Communications Commission ("FCC") a construction permit (the "Construction
Permit") to relocate the transmitter site for television station WOST-TV,
Channel 69, Block Island, Rhode Island (the "Station"), to Hopkinton, Rhode
Island;
WHEREAS, Licensee, Contractor and the Company have entered into an
Asset Contribution Agreement dated as of the date hereof (the "Contribution
Agreement"), pursuant to which, among other things, subject to the prior
approval of the FCC, Licensee agrees to contribute to the Company substantially
all of the assets used or useful in connection with the business or operations
of the Station, and Contractor agrees to contribute to the Company One Million
Dollars ($1,000,000) in cash and to loan the Licensee and the Company up to
Three Million Dollars ($3,000,000) to finance construction and operation of the
Station; and
WHEREAS, the Contribution Agreement provides that Contractor, Licensee
and the Company shall enter into this Agreement in order to permit Contractor
to specify the materials and equipment required to construct the Station
facilities as specified in the Construction Permit and to undertake, with the
concurrence of Licensee, such construction.
NOW THEREFORE, in consideration of the above and of the mutual
promises covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. DEFINITIONS. In addition to the terms which are
elsewhere defined in this Agreement, the following terms shall have the
respective meanings hereinafter set forth:
A. "Budget" shall mean the preliminary budget as
agreed to by Licensee and Contractor, as described in Exhibit A attached
hereto, as such Budget may be amended in accordance with Paragraph 5 of this
Agreement.
B. "Contract Documents" shall mean this Agreement,
all FCC and other authorizations issued to the Licensee for the Station's
operation and construction, the Plans and Specifications and the Budget.
<PAGE> 2
- 2 -
C. "Plans and Specifications" shall mean the plans
and specifications described in Exhibit B attached hereto, and as supplemented
from time to time with the agreement of Contractor and Licensee.
D. "Work" shall mean all labor, materials and
equipment necessary or appropriate for the construction of the facilities
described in the Plans and Specifications as authorized in the Construction
Permit.
SECTION 2. THE WORK.
A. Contractor agrees to do the following:
(i) With the concurrence of Licensee,
specify for the purchase or lease by the Company of the equipment, supplies and
materials necessary or appropriate for the construction and installation of the
facilities described in the Plans and Specifications as authorized in the
Construction Permit; and
(ii) With the concurrence of the
Licensee and its Chief Engineer, construct and/or install the facilities
described in the Plans and Specifications (x) as authorized in the Construction
Permit and (y) in accordance with all applicable zoning, building or other
governmental laws, ordinances or regulations, including, without limitation,
all permits, regulations and directions of the FCC.
B. Licensee has done or agrees to do the following:
(i) Secured the grant of the
Construction Permit;
(ii) File with the FCC or any other
governmental agency any other applications which may be necessary for the
implementation of the Construction Permit, the construction of the Station, and
the commencement and continuation of the Station's operations;
(iii) Prepare and timely file with the
FCC an application for license for the constructed facilities in accordance
with the rules and regulations of the FCC; and
(iv) Cooperate with Contractor in
obtaining as expeditiously as practicable any zoning, building and other
permits, state, county or municipal, that are required in connection with the
Plans and Specifications and the Work and execute the necessary documents and
agreements provided by Contractor in accordance with its obligations hereunder.
<PAGE> 3
- 3 -
SECTION 3. COMPLETION OF THE WORK.
A. The Work shall be commenced upon the execution
of this Agreement and shall be substantially completed as promptly as
reasonably practicable following the grant of the Application; provided,
however, that the parties agree that such date shall be extended by reason of
strikes, labor troubles, inability to procure material, failure of power,
governmental actions or inactions, riots, insurrection, war or other reasons
beyond the control of the parties.
B. The Work shall be deemed to be substantially
complete when (i) construction is sufficiently complete, in accordance with the
Contract Documents, so that the Station may begin operating pursuant to Program
Test Authority under FCC rules using the facilities authorized by the
Construction Permit and (ii) all permits, modifications of permits,
authorizations and licenses necessary to operate such facilities have been
obtained. Any Work required by the Contract Documents which remains to be
completed after the date of substantial completion shall, if reasonably
feasible, be completed by Contractor within ninety (90) days after the date of
substantial completion.
SECTION 4. COST OF THE WORK. The cost of the Work shall not exceed
Three Million Dollars ($3,000,000). Prior to the Contribution Closing, as that
term is defined in the Contribution Agreement, Licensee shall use the proceeds
of the Relocation Loans, as that term is defined in the Loan Agreement dated
the date hereof, among Contractor, Licensee and the Company, to pay the cost of
the Work. Upon the Contribution Closing, the Company shall be responsible for
the cost of the Work.
SECTION 5. BUDGET. Licensee and Contractor acknowledge and agree
that the Budget represents the estimated cost of the Work. Promptly after the
date hereof, Contractor shall obtain firm bids from responsible manufacturers,
suppliers, and contractors approved by Licensee for the performance of the Work
or portions thereof, and shall supply copies of all bids to Licensee. Upon
receipt of the bids and upon the agreement by Licensee and Contractor to accept
those bids, Contractor shall accept the bids and the Budget shall be adjusted
to conform to the bids.
SECTION 6. CONTRACTOR'S CONSTRUCTION OBLIGATIONS.
A. Subject to the oversight and control of
Licensee, Contractor shall supervise and direct the Work, using its best skill
and attention and shall be responsible for all construction means, methods,
techniques, sequences and procedures and for coordinating all portions of the
Work under this Agreement.
<PAGE> 4
- 4 -
B. Contractor shall be responsible to the Licensee
and the Company for the acts and omissions of Contractor's employees,
contractors, subcontractors and other persons providing or performing any of
the Work.
C. Unless otherwise provided in the Contract
Documents, Contractor shall provide all labor, materials, equipment, tools,
construction, equipment and machinery, water, heat, utilities, transportation
and other facilities and services necessary for the proper execution and
completion of the Work, whether temporary or permanent and whether or not
incorporated or to be incorporated in the Work.
D. Contractor shall at all times enforce strict
discipline and good order among any person working at the construction site.
E. Contractor warrants to Licensee that all
materials and equipment furnished under this Contract will be new, unless
otherwise specified in Exhibit A, and that all Work will be of good quality,
free from faults and defects and in conformance with the Contract Documents.
F. Contractor shall comply with all laws,
ordinances, rules, regulations and lawful orders of any public authority
bearing on the performance of the Work.
G. Contractor shall prepare and submit to Licensee
an estimated progress schedule for the Work. The progress schedule shall be
related to the entire project to the extent required by the Contract Documents
and shall provide for expeditious and practicable completion of the Work.
H. Contractor at all times shall keep the
construction site free from accumulation of waste material or rubbish caused by
the Work. At the completion of the Work, Contractor shall remove or cause to
be removed all waste materials and rubbish from and about the construction site
and tools, construction equipment, machinery and surplus materials and shall
retain all documentation, working drawings, and schematics of construction so
that said materials can be stored on Licensee's premises for future reference.
SECTION 7. SUBCONTRACTORS. By an appropriate written agreement,
Contractor shall require each subcontractor retained by Contractor to be bound
by the terms of the Contract Documents, and to assume all the obligations and
responsibilities which Contractor, by those documents, assumes toward Licensee.
<PAGE> 5
- 5 -
SECTION 8. PROTECTION OF PERSONS AND PROPERTY.
A. Contractor shall take all reasonable
precautions for the safety of, and shall provide all reasonable protection to
prevent damage, injury or loss to:
(i) all individuals employed to perform
the Work;
(ii) all materials and equipment to be
used in the Work, whether in storage, on or off the site, under the care,
custody or control of Contractor or any of its subcontractors; and
(iii) other property at the site or adjacent
thereto.
B. Contractor shall give all notices and comply
with all applicable laws, ordinances, rules, regulations and lawful orders of
any public authority bearing on the safety of persons or property or their
protection from damage, injury or loss.
SECTION 9. INSURANCE.
A. Contractor shall purchase and maintain or cause
to be purchased and maintained such insurance as will protect Contractor,
Licensee and the Company from any and all claims, including those set forth
below, which may arise out of or result from the Work, whether such operations
be by Contractor or by any subcontractor or by anyone directly or indirectly
employed by any of them, or by anyone for whose acts any of them may be liable:
(i) claims under workmen's compensation,
disability benefit and other similar employee benefit acts;
(ii) claims for damages because of bodily
injury, occupational sickness or disease, or death;
(iii) claims for damages insured by usual and
customary personal injury liability coverage which are sustained (1) by any
person as a result of an offense directly or indirectly related to the
employment of such person by Contractor, or (2) by any other person;
(iv) claims for damages, other than to the Work
itself, because of injury to or destruction of tangible property; and
<PAGE> 6
- 6 -
(v) claims for damages because of
bodily injury or death or any property damage arising out of the ownership,
maintenance or use of any motor vehicle in respect of the Work.
B. The insurance required by this Section shall be
written for not less than the limits of liability agreed to by Contractor and
Licensee or required by law, whichever is greater.
C. Certificates of Insurance acceptable to
Licensee and Contractor shall be delivered to Licensee prior to commencement of
the Work. These Certificates shall contain a provision that coverage afforded
under the policies will not be canceled until at least thirty (30) days' prior
written notice has been given to the Licensee.
D. The Company shall purchase and maintain
property insurance upon the entire Work to the full insurable value thereof.
This insurance shall insure against the perils of fire and extended coverage,
shall include "all risk" insurance for physical loss or damage including,
without duplication of coverage, theft, vandalism and malicious mischief and
shall provide that all proceeds from such insurance shall go to the Company.
10. DAMAGES. In the event of a default by Contractor of
its obligations under this Agreement or the failure of Contractor to complete
the Work, Contractor shall not be liable to Licensee or the Company for any
consequential damages as a result of such failure or delay. The sole liability
of Contractor to Licensee and the Company shall be for the full cost and
expense of completing the Work in accordance with the Contract Documents and
the Plans and Specifications.
SECTION 11. TERMINATION. This Agreement shall terminate, and no
party shall have any further obligation hereunder, upon the earlier to occur of
(a) the completion of the Work, (b) the Closing (as defined in the Contribution
Agreement), or (c) the termination of the Contribution Agreement in accordance
with its terms.
SECTION 12. MISCELLANEOUS PROVISIONS.
A. The Contract shall be governed by the laws of
the State of Florida applicable to contracts made and to be performed there,
without reference to the principles of the conflicts of law.
B. Licensee, Contractor and the Company each binds
itself and its successors, assigns and legal representatives to the other party
hereto and to the successors, assigns and
<PAGE> 7
- 7 -
legal representatives of such other party with respect to all covenants,
agreements and obligations contained in the Contract Documents.
C. The parties hereto agree to cooperate fully
with each other in preparing, filing, prosecuting, advocating grant, and taking
any other actions necessary with respect to any applications or actions which
are or may be necessary to obtain the consent of the FCC or of any other
governmental instrumentality, or any third party to, or are or may be necessary
or helpful in order to accomplish the transactions contemplated by this
Agreement.
D. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, (ii) delivered by personal delivery or sent by commercial delivery
service or certified mail, return receipt requested, (iii) deemed to have been
given on the date of personal delivery, the date set forth in the records of
the delivery service or on the return receipt, and (iv) addressed as follows::
If to Licensee: Mr. Raymond A. Yorke
Offshore Broadcasting Corp.
449 Barlow's Landing Road
Pocassett, Massachusetts 02559
If to Contractor: Mr. Lowell W. Paxson
Paxson Communications of Providence-69, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
If to the Company: Mr. Raymond A. Yorke
Offshore Broadcasting Corp.
449 Barlow's Landing Road
Pocassett, Massachusetts 02559
-and-
Mr. Lowell W. Paxson
Paxson Communications of Providence-69, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or to any such other or additional persons and addresses as the parties may
from time to time designate in a writing delivered in accordance with this
Section 12.D.
<PAGE> 8
- 8 -
E. No action or failure to act by Licensee, Contractor or
the Company shall constitute a waiver of any right or duty afforded any of them
under this Agreement, nor shall any such action or failure to act constitute an
approval of or acquiescence in any breach thereunder, except as may be
specifically agreed in writing.
F. If the Contract Documents, laws, ordinances, rules,
regulations or orders or any public authority having jurisdiction require any
portion of the Work to be inspected, tested or approved, Contractor shall give
Licensee timely notice of its readiness so Licensee may observe such
inspection, testing or approval.
G. Licensee's and Contractor's respective obligations
hereunder are unique and valuable and not readily subject to compensation by
money damages alone. Accordingly, in the event either party should breach its
obligations under this Agreement, the other party shall be entitled to an order
directing specific performance from a court of competent jurisdiction, in
addition to all other remedies at law or in equity.
H. This Agreement and the Exhibits hereto represent the
entire understanding and agreement among Contractor, Licensee and the Company
with respect to the subject matter of this Agreement. This Agreement
supersedes all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing that makes specific
reference to this Agreement and that is signed by the party against which
enforcement of any such amendment, supplement, or modification is sought.
SECTION 13. COUNTERPARTS. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures on all
counterparts were upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 9
IN WITNESS WHEREOF, Licensee, Contractor and the Company have executed
this Construction Agreement as of the date first above written.
PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC.
By: /s/ Lowell W. Paxson
--------------------------------------
Name: Lowell W. Paxson
Title: Chairman
OFFSHORE BROADCASTING CORPORATION
By: /s/ Raymond A. Yorke
--------------------------------------
Raymond A. Yorke
President
OCEAN STATE TELEVISION, L.L.C.
By: /s/ Raymond A. Yorke
--------------------------------------
Raymond A. Yorke
Representative
By: /s/ Lowell W. Paxson
--------------------------------------
Lowell W. Paxson
Representative
<PAGE> 1
EXHIBIT 10.104
===============================================================================
LOAN AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
PROVIDENCE-69, INC.,
OFFSHORE BROADCASTING CORPORATION
AND
OCEAN STATE TELEVISION, L.L.C.
* * *
APRIL 16, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. AMOUNT AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 The Promissory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.5 Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.6 Forgiveness of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.7 Use of Proceeds and Advancement of Funds . . . . . . . . . . . . . . . . . . . . . 4
Section 1.8 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.9 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.10 Payment on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II. CLOSING; ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1 Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3 Leasehold Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.5 Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Conditions Precedent to Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.1 Representations and Warranties of Borrower and the Company . . . . . . . . . . . . 9
ARTICLE VI. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.3 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
Section 8.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.4 Address for Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.10 Rights Affected by Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.11 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 24
Section 8.12 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.14 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.15 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.16 Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
LIST OF EXHIBITS AND SCHEDULE
-----------------------------
Exhibit 1 -- Form of Promissory Note
Exhibit 2 -- Form of Security Agreement
Exhibit 3 -- Form of Pledge Agreement
Exhibit 4 -- Form of Assignment and Assumption
Agreement
</TABLE>
ii
<PAGE> 4
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 16th day of April, 1996, is by
and among PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC., a Florida corporation
having its principal offices at 601 Clearwater Park Road, West Palm Beach,
Florida 33401 (the "Lender"), OFFSHORE BROADCASTING CORPORATION, a Rhode Island
corporation having its principal offices at 449 Barlow's Landing Road,
Pocassett, Massachusetts 02559 (the "Borrower"), and OCEAN STATE TELEVISION,
L.L.C., a Delaware limited liability company having its principal offices at
601 Clearwater Park Road, West Palm Beach, Florida 33401 (the "Company").
W I T N E S S E T H:
WHEREAS, the Borrower owns or leases substantially all of the assets
and properties, including all broadcast licenses issued by the Federal
Communications Commission ("FCC Licenses") and licenses and permits issued by
other governmental authorities, used or useful in the business or operations of
Television Station WOST-TV, Block Island, Rhode Island (the "Station");
WHEREAS, Borrower has secured from the FCC a construction permit to
relocate the Station's transmitter site to Hopkinton, Rhode Island (the
"Construction Permit");
WHEREAS, Lender and Borrower have formed the Company pursuant to the
terms of an Operating Agreement of Ocean State Television, L.L.C., dated as of
the date hereof (the "Operating Agreement");
WHEREAS, Borrower, Lender and the Company have entered into an Asset
Contribution Agreement dated as of the date hereof (the "Contribution
Agreement"), whereby, inter alia, subject to the prior consent of the FCC, (i)
Borrower has agreed to contribute to the Company substantially all of the
assets used or useful in the business or operations of the Station in exchange
for a cash payment in the amount of One Million Dollars ($1,000,000) and a
fifty percent (50%) equity interest in the Company, and (ii) Lender has agreed
to contribute to the Company a cash payment in the amount of One Million
Dollars ($1,000,000) in exchange for a fifty percent (50%) equity interest in
the Company;
WHEREAS, the Contribution Agreement provides that Borrower and Lender
shall enter into this Loan Agreement, pursuant to which Lender agrees to make a
loan to Borrower of up to a total principal amount of Three Million Dollars
($3,000,000) to provide interim funds for construction in accordance with the
Construction Permit and for operating expenses of the Station prior to the
consummation of the transactions contemplated by the Contribution
<PAGE> 5
- 2 -
Agreement (the "Contribution Closing") and, following the Contribution Closing,
for certain operating and capital expenses related to the relocation of the
Station; and
WHEREAS, upon the Contribution Closing, the Company shall assume the
obligations of the Borrower to repay the outstanding principal balance of the
loans made prior to the Contribution Closing.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender, Borrower and the Company agree as follows:
ARTICLE I. AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. The Lender agrees, upon the terms and
conditions hereinafter set forth, to make a loan or loans to the Borrower and
the Company in an aggregate principal amount not to exceed at any one time
outstanding Three Million Dollars ($3,000,000.00) (the "Loan") as provided
below:
(a) Operating Loans. Upon the terms and conditions
hereinafter set forth, the Lender agrees to advance Borrower up to Six Thousand
Dollars ($6,000) for each calendar month prior to the Contribution Closing
(individually, an "Operating Loan" and collectively, the "Operating Loans").
At Borrower's request, Lender made Operating Loans to Borrower in the amount of
Six Thousand Dollars ($6,000) each on or about January 1, February 1, March 1,
and April 1, 1996, in contemplation of the execution and delivery of this
Agreement. Upon the Contribution Closing, Lender shall have no further
obligation to make any Operating Loans.
(b) Relocation Loans. Upon the terms and conditions
hereinafter set forth, the Lender agrees to advance the Company up to an amount
equal to Three Million Dollars less the total outstanding principal balance of
the Operating Loans (the "Relocation Loan" and collectively with the Operating
Loans, the "Loan"); provided, however, that the Lender may elect, in its sole
discretion, to not make any Relocation Loan prior to the later of (x) the
execution and delivery of the Lease Agreement (as defined in the Contribution
Agreement) or (y) the issuance by the Town of Hopkinton, Rhode Island, of a
building permit for the construction of the Station's transmission facilities
at the site specified in the Construction Permit.
Section 1.2 The Promissory Note. The outstanding principal
amount of the Loan shall be evidenced by and subject to the terms of a
promissory note, dated of even date herewith, substantially in the form set
forth as Exhibit 1 hereto (as amended, renewed, restated, increased,
consolidated or substituted from time to time, the "Note") payable to the
<PAGE> 6
- 3 -
order of the Lender and representing (a) prior to the Contribution Closing, the
obligation of the Borrower to pay the Lender the amount of the Operating Loans
and (b) following the Contribution Closing, the obligation of the Company to pay
the Loan, with interest thereon, as prescribed in Section 1.4. All references
to the "Note" in this Loan Agreement, the Security Agreement, the Pledge
Agreement, each Leasehold Mortgage or Mortgage (each as defined in this Loan
Agreement) and in such other agreements and documents executed and delivered in
connection with this Loan Agreement shall be deemed to be references to the Note
referred to in this Section.
Section 1.3 Interest. The Loan shall bear interest on the unpaid
principal amount thereof at a rate per annum at all times equal to the interest
rate per annum paid by Lender or its affiliates pursuant to the terms of the
Credit Agreement dated as of December 19, 1995, among Paxson Communications
Corporation, the several lenders party thereto from time to time, and Union
Bank as Agent, as such rate may be adjusted from time to time. Interest shall
be calculated on the basis of a year of three-hundred and sixty (360) days and
the actual number of days elapsed during the period for which such interest is
payable. Interest on the Operating Loans shall begin to accrue on the
outstanding principal amount of such Loans on the date of disbursement of all
or a portion of such Loans. Interest on the Relocation Loan shall not begin to
accrue until one hundred and twenty (120) days after the Station commences
broadcast operations at the site proposed in the Construction Permit (the
"Commencement Date"). In the event the Contribution Closing occurs, the first
payment of interest to the Lender on the Operating Loans and the Relocation
Loan shall be due on the first day of the fourth month after the Commencement
Date, at which time all accrued but unpaid interest shall become due and
payable. Thereafter, accrued interest shall be paid monthly on or before the
first day of each month until all principal and interest hereunder is paid in
full at the repayment or maturity of the Loan. If any installment of principal
or interest is not paid when due, that installment shall bear interest at a
rate per annum equal to the lower of the highest rate permitted by law or
eighteen percent (18%) from the date due thereof until paid in full.
Section 1.4 Principal. In the event the Contribution Closing
occurs, the outstanding principal balance of the Loan plus any accrued and
unpaid interest thereon shall be due and payable on the first day of the 76th
month following the Commencement Date (the "Term Date"). The Company shall, in
addition to payments of interest required under Section 1.3 hereof, repay the
outstanding principal balance of the Loan in consecutive, equal monthly
installments commencing on the first day of the sixteenth (16th) month
following the Commencement Date (the "Amortization Commencement Date") and
ending on the Term Date.
<PAGE> 7
- 4 -
Section 1.5 Mandatory Prepayment. Notwithstanding anything in
this Agreement to the contrary, the entire outstanding principal balance of the
Operating Loans and all interest accrued thereon and all other amounts owed by
Borrower to Lender hereunder shall be due and payable within ninety (90) days
following a termination of the Contribution Agreement for any reason other than
a material breach thereof by Lender.
Section 1.6 Forgiveness of Loans. In the event that Borrower
terminates the Contribution Agreement due to Lender's material breach thereof
in accordance with Section 9.1(d) of the Contribution Agreement, the total
outstanding principal balance and all accrued interest owed by Borrower to
Lender hereunder as of the date of such termination shall be forgiven, and
Lender's commitment to make any additional Loans shall terminate.
Section 1.7 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Operating Loans are to be used by
the Borrower exclusively for reasonable and necessary operating expenses
incurred by Borrower in connection with the business and operations of the
Station.
(b) The proceeds of the Relocation Loan are to be used by
Borrower or the Company for reasonable and necessary operating and capital
expenses incurred in connection with the business and operations of the Station
and the relocation of the Station as contemplated by the Construction Permit.
(c) For each Loan to be made hereunder, Borrower or the
Company, as the case may be, shall deliver to Lender a borrowing notice no less
than three business days prior to the date of such Loan.
Section 1.8 Information. The Borrower and Company each agree to
furnish to the Lender such information as the Lender may reasonably request in
connection with the Loan or the Station, including, without limitation, copies
of invoices or other evidence of the expenses incurred by Borrower and the
Company in connection with the operation or construction of the Station.
Section 1.9 Prepayment. The Borrower or the Company may prepay
the Note in whole at any time, or from time to time in part, with accrued
interest to the date of prepayment on the amount prepaid, without penalty.
Each prepayment on the Note shall be applied to installments of principal
payable on the Note in the inverse order of maturity.
Section 1.10 Payment on Non-Business Days. Whenever any payment
to be made hereunder or under the Note shall become due on a Saturday, Sunday
or public holiday, such
<PAGE> 8
- 5 -
payment may be made on the next succeeding business day, and such extension of
time in such case shall be included in the computation of interest hereunder and
under the Note.
ARTICLE II. CLOSING; ASSIGNMENT
Section 2.1 Closing Date. Closing of the loan transactions
contemplated by this Agreement shall occur contemporaneously with the parties'
execution and delivery of this Agreement (the "Closing Date").
Section 2.2 Assignment and Assumption. Upon the Contribution
Closing, Borrower's rights and interests under this Agreement and the other
Loan Documents (as defined below) shall be assigned by Borrower to the Company,
and the Company shall assume Borrower's obligations under this Agreement and
the other Loan Documents, pursuant to an Assignment and Assumption Agreement in
the form of Exhibit 4 hereto.
ARTICLE III. SECURITY
Section 3.1 Security Interest. As security for the Operating
Loans, the Borrower shall execute and deliver to the Lender, on or before the
Closing Date, a security agreement in the form of Exhibit 2 hereto (the
"Security Agreement"). In the event the Operating Loans are forgiven pursuant
to Section 1.6 hereof, the Security Agreement shall terminate, and Borrower
shall have no further obligation thereunder. In connection with the assignment
and assumption transactions contemplated by Section 2.2, the Company agrees,
upon the Contribution Closing, to execute and deliver to the Lender an Amended
and Restated Security Agreement substantially in the form of the Security
Agreement.
Section 3.2 Pledge Agreement. As further security for the Loan,
on or before the Closing Date, the Borrower shall deliver to the Lender a
pledge agreement in the form of Exhibit 3 hereto, duly executed by Raymond A.
Yorke (the "Shareholder"), the sole shareholder of the Borrower (the "Pledge
Agreement"). In the event the Operating Loans are forgiven pursuant to Section
1.6 hereof, the Pledge Agreement shall terminate, Shareholder shall have no
further obligation thereunder, and Borrower shall immediately return to
Shareholder the collateral pledged pursuant thereto. In connection with the
assignment and assumption transactions contemplated by Section 2.2, Borrower
agrees, upon the Contribution Closing, to execute and deliver to the Lender an
Amended and Restated Pledge Agreement substantially in the form of the Pledge
Agreement, pursuant to which Borrower shall pledge to Lender all of its rights
and interests in Borrower's Percentage Interest in the Company (as defined in
the Operating Agreement) as collateral security for the Company's obligations
hereunder, and the Pledge Agreement shall terminate.
<PAGE> 9
- 6 -
Section 3.3 Leasehold Mortgages. At such time as the Borrower
enters into or assumes the lessee's interest under any lease, it shall execute
with respect to such lease a leasehold mortgage in a form reasonably acceptable
to Borrower and Lender (a "Leasehold Mortgage"), granting the Lender a lien on
its leasehold interest under such lease. Notwithstanding the requirement in
the preceding sentence, Borrower shall not be required to execute a Leasehold
Mortgage with respect to the existing Lease dated October 14, 1988, between
Borrower, as assignee of Offshore Broadcasting, a general partnership, and
Block Island Power Company unless specifically requested to do so by the
Lender. If requested by Lender, the Borrower shall also deliver to the Lender
with respect to any lease to which the Borrower becomes a party one or more of
the following documents, each of which shall be in form and substance
satisfactory to the Lender: (i) evidence of the filing of the lease or a
memorandum of lease, (ii) an estoppel certificate executed by the landlord
under such lease or any sublessee, (iii) an executed landlord's consent and
waiver, (iv) fixture filing UCC-1 financing statements, (v) copies of such
lease and any sublease, (vi) executed tenant subordination agreements, (vii) a
title encumbrance report with respect to the real property subject to such
lease, and (viii) any other document required by applicable law to create or
perfect a mortgage lien with respect to such lease or reasonably required by
the Lender.
Section 3.4 Mortgages. At such time as the Borrower or the
Company acquires any parcel of real estate, the Borrower or the Company shall
execute a first mortgage or deed of trust in favor of the Lender on such
parcel, in form and substance acceptable to Lender (a "Mortgage"). If
requested by Lender, the Borrower or the Company shall also deliver to the
Lender with respect to such property one or more of the following documents,
each of which shall be in form and substance satisfactory to the Lender: (i)
fixture filing UCC-1 financing statements, (ii) copies of any lease relating to
such property, if any, (iii) executed tenant subordination agreements and
estoppel certificates, if applicable, (iv) a survey of such real property, (v)
a mortgagee title insurance policy, with such coverage and with such
endorsements, including, without limitation, usury, first loss, last dollar,
revolving credit, variable rate, doing business, zoning comprehensive,
contiguity (as applicable) and survey, to the extent available in the state
where the property is located, as the Lender may require, and (vi) any other
document required by applicable law to create or perfect a mortgage lien with
respect to such property or reasonably required by the Lender.
Section 3.5 Assignment and Assumption. In connection with the
assignment and assumption transactions contemplated by Section 2.2, the Company
agrees to execute and deliver to Lender an Amended and Restated Promissory
Note, substantially in the form of the Note, any Leasehold Mortgage or Mortgage
contemplated by Section 3.3 and Section 3.4, respectively, and any other
agreements, financing statements, certificates or documents requested by Lender
in connection with the assignment and assumption transactions contemplated by
Section 2.2.
<PAGE> 10
- 7 -
ARTICLE IV. CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of the
Lender to disburse from time to time any portion of the Loan hereunder is
subject to the condition precedent that the Lender shall have received all of
the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the
Borrower;
(b) The Security Agreement, together with appropriate
UCC-1 forms and, if applicable, landlord lien waivers, duly executed and
delivered by the Borrower;
(c) The Pledge Agreement, duly executed and delivered by the
Shareholder together with stock certificates and blank stock powers;
(d) Certified copies of the resolutions of the Board of
Directors of Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby;
(e) A Certificate of Good Standing for the Borrower from the
State of Rhode Island issued no more than 10 days prior to the Closing Date or
at such other time specified by Lender;
(f) A copy of the Construction Permit;
(g) Copies of UCC, judgment and tax lien searches in each
jurisdiction in which collateral covered by the Security Agreement is located,
naming the Borrower as debtor;
(h) With respect to leased real property, the documents
required by Section 3.3, and with respect to owned real property, if any, the
documents required by Section 3.4;
(i) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.1(e);
(j) The Contribution Agreement, duly executed by Borrower and
the Company;
<PAGE> 11
- 8 -
(k) The Construction Agreement (as defined in the
Contribution Agreement), duly executed by Borrower and the Company;
(l) The Operating Agreement, duly executed by the Borrower;
and
(m) Such other agreements, certificates, opinions of counsel
and documents that the Lender may reasonably require.
Section 4.2 Compliance. Prior to the Contribution Closing, all
of the representations and warranties of the Borrower and Shareholder in this
Loan Agreement, and, following the Contribution Closing, all representations
and warranties of the Company, shall be true and accurate in all material
respects on and as of the Closing Date and the date of any subsequent
disbursement of any portion of the Loan, as if made on and as of such date and
time. Prior to the Contribution Closing, the Borrower, and, following the
Contribution Closing, the Company, shall be in compliance with all of the
applicable terms and provisions of this Agreement and no Event of Default or any
event which with the lapse of any applicable grace period or the giving of
notice or both would constitute an Event of Default shall have occurred and be
continuing. The Borrower or the Company, as the case may be, shall have
performed all obligations and taken all actions to be performed or taken by it
hereunder on or prior to such date. On the Closing Date, the Borrower and
Shareholder shall deliver to the Lender a certificate, dated as of such date and
signed by an executive officer of the Borrower and the Shareholder, certifying
compliance with the conditions of this Section 4.2. Each disbursement of all or
a portion of the Loan to the Borrower or the Company shall in and of itself,
constitute a representation and warranty that the Borrower, Shareholder and the
Company as of the date of such Loan, is in compliance with this Section and if
the Borrower, Shareholder or the Company is not in compliance with this Section,
the Lender shall not be required to disburse such Loan.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Borrower and the
Company. In order to induce the Lender to enter into this Agreement and make
the Loan, Borrower and the Company represent and warrant as follows:
(a) Existence and Standing. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Rhode Island, and the Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware.
The Borrower and the Company each are qualified to do business and in good
standing under the laws of any other jurisdiction in which it conducts its
business, and has all requisite power and authority, corporate or otherwise, to
<PAGE> 12
- 9 -
conduct its business, to own its properties and to execute and deliver, and to
perform all of its obligations under this Agreement, the Note, any Mortgage or
Leasehold Mortgage, the Security Agreement, and all other documents that have
been or will be executed and delivered by the Borrower or the Company pursuant
to this Agreement.
(b) Authorizations, Compliance with Laws. The execution,
delivery and performance by the Borrower and the Company of this Agreement, the
Note, any Mortgage or Leasehold Mortgage, the Security Agreement, and all other
documents required to be executed and delivered by the Borrower or the Company
pursuant to this Agreement have been duly authorized by all necessary corporate
or limited liability company action and do not and will not (i) violate (A) any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to the
Borrower or the Company or (B) any provision of the charter or by-laws of the
Borrower or the Operating Agreement of the Company; or (ii) result in a breach
of or constitute a default under any agreement or instrument to which the
Borrower or the Company is a party or by which its properties may be affected;
or (iii) result in the creation of a lien, charge or encumbrance of any nature
upon the Borrower's or the Company's properties or assets other than as
contemplated by this Agreement.
(c) No Consent. Except for the prior consent of the FCC
as to any transfer of control or exercise of creditor's rights deemed to
operate as a transfer of control, no authorization, consent, approval, license,
exemption of or filing or registration with any court or governmental
department or agency is or will be necessary for the valid execution, delivery
and performance by the Borrower or the Company of this Agreement, the Note, any
Mortgage or Leasehold Mortgage, the Security Agreement, or any other document
required to be executed and delivered by the Borrower or the Company pursuant
to this Agreement.
(d) Binding Obligations. This Agreement, the Note, any
Leasehold Mortgage or Mortgage, the Security Agreement, the Pledge Agreement,
and all other documents required to be executed and delivered by the Borrower,
the Shareholder or the Company pursuant to this Agreement have been executed
and delivered by a duly authorized officer or representative of the Borrower or
the Company, respectively, and constitute legal, valid and binding obligations
of the Borrower and the Company (or, in the case of this Agreement or the
Pledge Agreement, of the Shareholder) enforceable in accordance with their
respective terms.
(e) Litigation. Except as described on Schedule 3.16 of
the Contribution Agreement, there are no actions, suits or proceedings pending,
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or its properties before any court or governmental department or
agency which materially adversely affects the transactions
<PAGE> 13
- 10 -
contemplated by this Agreement or which would have a material adverse effect
on the business, properties, prospects, operation or condition (financial or
otherwise) of the Borrower. There are no actions, suits or proceedings
pending, or, to the knowledge of the Company, threatened against or affecting
the Company or its properties before any court or governmental department or
agency which materially adversely affects the transactions contemplated by this
Agreement or which would have a material adverse effect on the business,
properties, prospects, operation or condition (financial or otherwise) of the
Company.
(f) No Default. Neither the Borrower nor the Company is in
default in the performance, observance or fulfillment of any of the obligations
or conditions contained in any material agreement or instrument to which it is
a party, nor with respect to any order, judgment, writ, injunction or decree of
any court, governmental authority or arbitration board.
(g) Compliance with Laws. The Borrower and the Company have
complied in all material respects with all applicable federal, state and local
laws. The Borrower and the Company have obtained all necessary licenses and
permits required for the conduct of their business and operations or such
licenses and permits have been applied for and are now being diligently
pursued.
(h) Taxes. The Borrower and the Company have filed all tax
returns and reports (federal, state and local) required to be filed by them,
and has paid all taxes shown thereon, including interest and penalties, and all
assessments received by them (except to the extent that the same are being
contested in good faith by appropriate proceedings diligently prosecuted and as
to which adequate reserves have been set aside on the books of the Borrower or
the Company in conformity with generally accepted accounting principles).
(i) Title to Properties. The Borrower and the Company have
good and marketable title to all of their property and assets and valid and
enforceable leasehold interests in the property which they hold under lease,
all such property, assets and leasehold interests being free and clear of any
and all mortgages, deeds of trust, assignments, liens, security interests,
charges or encumbrances of any nature whatsoever, except for those created
hereby, and no mortgages, deeds of trust, financing statements or other
evidences of security interests covering all or any of the aforesaid property
are on file among the records of any public office, except those evidencing a
security interest in favor of the Lender.
(j) Material Misstatement. No statement made herein or
information, exhibit or report furnished by the Borrower or the Company to the
Lender in connection with
<PAGE> 14
- 11 -
this Agreement or its negotiation, contains any material misstatement of fact or
omits to state a material fact or any fact necessary to make the foregoing not
misleading.
ARTICLE VI. COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall
remain unpaid, the Borrower hereby covenants and agrees that it will, unless
the Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
when due: (i) all indebtedness heretofore or hereafter incurred; (ii) all
taxes, assessments and governmental charges or levies imposed upon it or its
income or profits, or upon any properties belonging to it; (iii) claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid might become a lien or charge upon the property
of the Borrower; provided that this covenant shall not require the payment of
any of the matters set forth in (i), (ii) and (iii) above if the same shall be
contested in good faith and by proper proceedings diligently pursued and as to
which adequate reserves have been set aside on the books of the Borrower in
accordance with generally accepted accounting principles.
(b) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all
of its properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
(e) Maintenance of Insurance. Maintain with responsible
and reputable insurance companies policies on all of its properties and
covering such risks, including public liability and workers' compensation, in
such amounts as are usually carried by companies engaged in similar businesses
and owning similar properties as the Borrower, and promptly upon execution
thereof provide to the Lender copies of all such policies and any riders or
amendments thereto. The policies of insurance required hereunder shall name the
Lender as an additional loss payee or additional insured, as applicable, and
shall provide that the Lender shall receive at least thirty (30) days' written
notice prior to the cancellation, termination or alteration of any such policy.
<PAGE> 15
- 12 -
(f) Operations in Ordinary Course. Continue to operate
its business in the ordinary course.
(g) Perfection of Liens. Do all things requested by the
Lender to preserve and perfect the liens and security interests of the Lender
arising pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage, any Mortgage or any other agreement required hereunder as first liens
and security interests.
(h) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required in connection with the
execution, delivery and performance of this Agreement, the Pledge Agreement,
the Security Agreement, any Mortgage or Leasehold Mortgage or any other
document delivered to the Lender in connection herewith or therewith or as a
result of any action which may be taken pursuant hereto or thereto, then
Shareholder, Borrower and the Company, as the case may be, shall use their
respective best efforts, at their sole cost and expense, to secure such consent
and to cooperate with the Lender in any action commenced by the Lender to
secure such consent.
(i) Agreements. Comply with its obligations under the
Contribution Agreement, Construction Agreement and Operating Agreement.
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower hereby
covenants that it will not, without the Lender's prior written approval:
(a) Indebtedness. Create or incur, assume or, except for
the obligations set forth on Schedule 6.2 hereof, suffer to exist any
indebtedness, obligation or liability, whether matured or unmatured, liquidated
or unliquidated, direct or contingent, joint or several, except for: (i)
indebtedness evidenced by the Note; (ii) indebtedness (other than for borrowed
money) incurred in the ordinary course of business not to exceed Fifty Thousand
Dollars ($50,000.00) in the aggregate at any one time; (iii) obligations or
liabilities arising under the indemnification provisions of the Contribution
Agreement.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant with respect to property or assets other
than the Stock (as defined in the Pledge Agreement):
<PAGE> 16
- 13 -
(i) any security interest or lien created
pursuant to or in connection with this Agreement or securing the Loan, the
Security Agreement, the Pledge Agreement, any Leasehold Mortgage or any
Mortgage;
(ii) liens for taxes or assessments either not
delinquent or the validity of which are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves shall have been set aside on its books, in conformity with generally
accepted accounting principles;
(iii) materialmen's, mechanics', carriers',
workmen's, repairmen's, warehousemen's or other like liens arising in the
ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
(v) any judgment lien, singly or aggregated with
other judgment liens, in an amount less than $100,000, unless the judgment it
secures shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Except pursuant to the terms
of the Contribution Agreement, sell, transfer, lease or otherwise dispose of
any of its assets or properties other than sales of assets in the ordinary
course of business (which sales in the ordinary course of business shall
expressly not include any transfer or assignment of any FCC License).
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or assets
of any person or entity.
(e) Transfer or Issuance of Shares. Issue or permit the
transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock. The preceding sentence shall not apply to issuances or transfers to the
Lender.
<PAGE> 17
- 14 -
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form
UCC-1 has been filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution, or incur any liability for
the purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution
of any kind to a shareholder of the Borrower or any affiliate of the Borrower
(other than any stock dividend or stock split or similar distribution payable
only in capital stock of the Borrower) in respect of the Borrower's capital
stock.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Five Thousand Dollars ($5,000.00) and contracts which can
be terminated without penalty on thirty (30) days' notice or less, or amend or
terminate any material contract (or waive any substantial right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse change
in the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material increase
in excess of the reasonable range in the broadcast industry in the same or
similar markets in compensation payable or to become payable to any employees,
or any bonus payment made or promised to any employee, or any material change
in personnel policies, insurance benefits or other compensation arrangements
affecting any employees, provided that nothing in this clause shall be
construed to limit or restrict the commission compensation of employees who may
be selling brokered time for the Borrower.
<PAGE> 18
- 15 -
(m) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(n) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender except and
as required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service mark, trade name, franchise, or similar
right, or modify any existing right relating to the Borrower.
(p) Agreements. Terminate, amend, commit any material
breach or default under the Contribution Agreement, Operating Agreement or
Construction Agreement.
(q) Subsidiaries. Create or acquire any subsidiary of
Borrower, other than the Company, unless Lender shall have approved such action
in advance and Borrower shall have taken all actions required by Lender to
grant Lender a first priority security interest in all of the issued and
outstanding stock or other equity interests of such subsidiary. Borrower
acknowledges and agrees that until such time as such security interest is
granted and perfected, Lender shall have an equitable lien in the stock of any
subsidiary created or acquired by Borrower.
(r) Programming. Make any changes in the Station's
programming except for changes in the Station's non-entertainment or public
affairs programming so long as such changes do not increase by more than ten
percent the aggregate amount of non-entertainment and public affairs
programming broadcast each week by the Station between the hours of 6:00 a.m.
and midnight.
Section 6.3 Reporting Requirements. So long as the Note shall
remain unpaid and the Agreement shall not have been terminated, the Borrower
shall, unless the Lender shall otherwise consent in writing, furnish to the
Lender:
(a) Default Certificate. No later than five (5) business
days after the occurrence of each event described in Section 7.1 of which the
Borrower has knowledge, whether or not such event is remedied within any
applicable cure period specified in Section 7.2, the statement of the President
of the Borrower setting forth details of such event and the action which the
Borrower proposes to take with respect thereto.
<PAGE> 19
- 16 -
(b) Financial Statements. Quarterly financial statements
within thirty (30) days after the end of each fiscal quarter; within ninety
(90) days after the end of each fiscal year of the Borrower, a copy of the
unaudited financial statements for such year for the Borrower, including
therein a balance sheet of the Borrower as of the end of such fiscal year,
statements of income and expense of the Borrower for such fiscal year, and a
statement of cash flow of the Borrower for such fiscal year, in each case
prepared by an independent public accountant of recognized standing acceptable
to the Lender.
(c) Notice of Litigation. Promptly give written notice
of (i) all actions, suits and proceedings before any court or governmental
agency, domestic or foreign, which may be commenced or threatened against the
Borrower in which the claim involved is Five Thousand Dollars ($5,000.00) or
more and of any other matter of the type described in Section 5.1(e), and (ii)
any adverse development in the litigation described in Schedule 3.16 to the
Contribution Agreement.
(d) Budget. An annual budget within thirty (30) days of
the beginning of each fiscal year of the Borrower. Such budget shall be
satisfactory in form and substance to the Lender.
(e) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower as the Lender may from time to time reasonably request.
ARTICLE VII. EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, any of the
following events, unless remedied within any applicable cure period specified
in Section 7.2, shall constitute an Event of Default:
(a) The Borrower or the Company shall fail to pay any
installment of principal or interest on the Note, or any other obligation to
the Lender when due whether at the due date thereof or by acceleration or
otherwise, and, in the case of any installment of interest, such default shall
remain unremedied for a period of forty-five (45) days to enable the Company to
seek refinancing of the Loan in accordance with Section 5.6 of the Operating
Agreement; or
(b) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, Pledge
Agreement or any Leasehold Mortgage or Mortgage shall at any time not
constitute a legal, valid and enforceable security interest or lien; or
<PAGE> 20
- 17 -
(c) Any representation or warranty made by the Borrower
or the Company herein, in the Security Agreement or any Leasehold Mortgage or
Mortgage, or by the Shareholder herein or in the Pledge Agreement or in any
certificate, agreement, instrument or statement contemplated by or made or
delivered pursuant to or in connection with this Agreement, the Note, any
Leasehold Mortgage or Mortgage, the Security Agreement or the Pledge Agreement,
shall prove to have been incorrect in any material respect when made; or
(d) The Borrower or the Company shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement, the
Note, the Security Agreement, any Leasehold Mortgage or Mortgage, or the
Shareholder shall fail to perform or observe any term, covenant or agreement
contained in the Pledge Agreement, and any such failure remains unremedied for
thirty (30) days after written notice thereof shall have been given to the
Borrower, Shareholder and the Company by the Lender; or
(e) The Borrower or the Company shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Company or any
interest or premium thereon, when due, whether such indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand
or otherwise, or the Borrower or the Company shall fail to perform any term,
covenant or agreement under any agreement or instrument evidencing or securing
or relating to any such indebtedness owing by the Borrower or the Company, and
any such failure to pay or perform remains unremedied for a period of ten (10)
days; provided, however, that an event described in Section 7.1(g) shall
constitute an Event of Default without regard to the cure period provided for
herein if the effect of such failure to pay or perform is to accelerate, or to
permit the holder of such indebtedness to accelerate, the maturity of such
indebtedness; or
(f) The Borrower or the Company shall expend the proceeds
of the Loan for any purpose other than working capital and operating expenses
relating to the Station without the prior written consent of the Lender, which
may be withheld in the Lender's sole discretion, and the full amount of any
such improper expenditure of Loan proceeds is not repaid to the Lender within
ten (10) days after notice thereof shall have been given to the Borrower or the
Company by the Lender; or
(g) Either (i) any of the Borrower, Shareholder or the
Company shall fail to pay its debts, other than the debts of the Borrower set
forth on Schedule 6.2, as they mature in the ordinary course of business; or
(ii) any of Borrower, Shareholder or the Company shall file a petition
commencing a voluntary case concerning it under any Chapter of Title 11 of the
United States Code entitled "Bankruptcy"; or (iii) any of the Borrower,
Shareholder or the Company shall apply for or consent to the appointment of any
receiver,
<PAGE> 21
- 18 -
trustee, custodian or similar officer for it or for all or any substantial part
of its property; or (iv) such receiver, trustee, custodian or similar officer
shall be appointed without the application or consent of the Borrower,
Shareholder or the Company and such appointment shall continue undischarged for
a period of thirty (30) days; or (v) an involuntary case is commenced against
the Borrower, Shareholder or the Company under any Chapter of the aforementioned
Title 11 and an order for relief under such Title 11 is entered or the petition
commencing the case is controverted but is not dismissed within thirty (30) days
after the commencement of the case; or (vi) the Borrower, Shareholder or the
Company shall institute (by petition, application, answer, consent or otherwise)
any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or (vii) any such proceeding shall be instituted against the
Borrower, Shareholder or the Company and shall remain undismissed for a period
of thirty (30) days; or (viii) the Borrower, Shareholder or the Company shall
take any action for the purpose of effectuating the foregoing; or
(h) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower or the Company and
any such action shall not have been reversed or vacated within ten (10) days
from the date thereof; or
(i) There shall be a cancellation, denial or revocation
of any material FCC License for the Station, the Borrower or the Company shall
be finally denied renewal of any such License, or any such FCC License shall be
renewed on terms that materially adversely affect the economic or commercial
value or usefulness thereof; or
(j) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of One
Hundred Thousand Dollars ($100,000.00), or (ii) in the aggregate at any time an
amount in excess of One Hundred Thousand Dollars ($100,000.00), and in either
case not adequately covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against Borrower or the
Company or its assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 30 days or in any event later than five days prior to
the date of any proposed sale thereunder; or
(k) There shall be a development in the litigation
described in Schedule 3.16 of the Contribution Agreement that could reasonably
be expected to have a material adverse effect on the business, assets,
properties, financial condition or business prospects of the Station; provided,
however, that a monetary judgment in such litigation shall not constitute an
Event of Default if such judgment is paid by Offshore on or before such payment
is due.
<PAGE> 22
- 19 -
Section 7.2 Effect of Event of Default. Should any event set
forth in Section 7.1 occur and remain unremedied following the end of any cure
period specified in Section 7.1, the Lender may at its option by written notice
to the Borrower and the Company declare the entire unpaid principal amount of
the Note, together with all unpaid interest and all other amounts payable under
this Agreement and every other obligation of the Borrower or the Company to the
Lender, immediately due and payable, whereupon the Note and all such
obligations shall become and be forthwith due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower and the Company, anything contained herein or in the
Note or in such other note or evidence of indebtedness to the contrary
notwithstanding; provided, however, that in case of the occurrence of an event
under Section 7.1(g), said occurrence shall constitute an Event of Default and
all the obligations of the Borrower and the Company under this Agreement and the
Note shall become immediately due and payable as of the date of any such Event
of Default regardless of the cause of such Event of Default and without any
notice to the Borrower or the Company required from the Lender. Upon an Event
of Default, the Lender shall have, in addition to all other rights and remedies
allowed by law, the rights and remedies of a secured party under the Uniform
Commercial Code and, without limiting the generality of the foregoing, the
rights and remedies provided for in the Security Agreement, Pledge Agreements,
and any Mortgage or Leasehold Mortgage, which provisions are hereby incorporated
by reference.
ARTICLE VIII. MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies. No failure or delay
on the part of the Lender in exercising any right, power or remedy hereunder
shall operate as a waiver, nor shall any single or partial exercise of any such
right, power or remedy hereunder. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
Section 8.2 Amendments. No amendment, modification, termination
or waiver of any provision of this Agreement, the Note, the Security Agreement,
the Pledge Agreement or any Mortgage or Leasehold Mortgage, nor consent to any
departure by the Borrower or the Company therefrom, shall in any event be
effective unless in writing, signed by the Lender and then only in the specific
instance and for the specific purpose for which given. No notice to or demand
on the Borrower or the Company in any case shall entitle it to any other or
further notice or demand in similar or other circumstances.
Section 8.3 Conflicts. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
Note, the Security Agreement, the Pledge
<PAGE> 23
- 20 -
Agreement or any Mortgage or Leasehold Mortgage, the provisions of this
Agreement shall control.
Section 8.4 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
If to the Borrower: Mr. Raymond A. Yorke
Offshore Broadcasting Corp.
449 Barlow's Landing Road
Pocassett, Massachusetts 02559
With a copy (which shall not Mary A. McReynolds, Esq.
constitute notice) to: Mary A. McReynolds, P.C.
888 Sixteenth Street, N.W.
Suite 400
Washington, D.C. 20006
If to the Lender: Mr. Lowell W. Paxson
Paxson Communications of Providence-69, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
With a copy (which shall not John R. Feore, Jr., Esq.
constitute notice) to: Dow, Lohnes & Albertson,
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
Section 8.5 Expenses. The Borrower or the Company, as the case
may be, agrees to pay on demand all costs and expenses incurred by the Lender
directly in the enforcement of this Agreement, the Note, the Security
Agreement, any Mortgage or Leasehold Mortgage, the Pledge Agreement and other
instruments and documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of any attorney to whom the
<PAGE> 24
- 21 -
Note is referred for collection (whether or not litigation is commenced) or for
representation out of court, in trial, on appeal or in proceedings under any
bankruptcy or insolvency law or otherwise. In addition, Borrower, Lender and
the Company each agrees to pay its own respective expenses incurred in
connection with the negotiation, preparation and execution of this Loan
Agreement, the Note, the Security Agreement, the Pledge Agreement, any Mortgage
or Leasehold Mortgage and all other documents and instruments to be delivered
hereunder (collectively, the "Loan Documents").
Section 8.6 Binding Effect; Assignment. This Agreement shall
become effective when executed and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign any rights
or obligations hereunder without the prior written consent of the Lender;
provided, however, that Borrower shall be permitted to assign its rights and
interests under this Agreement and the other Loan Documents to the Company upon
the Contribution Closing so long as (a) the Company assumes all of the
Borrower's obligations under this Agreement and the other Loan Documents
pursuant to the Assignment and Assumption Agreement attached hereto as Exhibit
4, (b) there shall exist no Event of Default on the date of such assignment and
assumption, and (c) Borrower shall have complied with all of its obligations
hereunder, including its obligations with respect to such assignment and
assumption set forth in Article III. Lender shall be permitted to assign,
without Borrower's consent, all or any portion of Lender's rights and interests
hereunder and under each other document executed in connection with this Loan
Agreement (x) to one or more other affiliates of Lender, and, upon any such
assignment, each reference herein or in such other document to "Lender" shall
be deemed to be and include a reference to such other affiliate and (y) to
creditors of Lender or its affiliates as security for indebtedness of Lender or
such affiliates. For purposes of this section, the term affiliate shall mean,
as applied to any entity or individual, any other entity or individual directly
or indirectly controlling, controlled by, or under common control with, that
entity or individual. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled by" and under
"common control with"), as applied to any entity or individual, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that entity or individual, whether
through the ownership of voting securities, partnership interests or otherwise
by contract.
Section 8.7 Governing Law. This Agreement, the Note, the
Security Agreement, the Pledge Agreement and related documents shall be
governed by, and construed in accordance with, the laws of the State of Florida
with the exception of its conflicts of laws provisions; provided that the
effect of any recordation shall be determined by the State thereof.
<PAGE> 25
- 22 -
Section 8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Pledge Agreement, the Security Agreement, or any
Mortgage or Leasehold Mortgage that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions or affecting the validity or enforceability of any provisions in any
other jurisdiction.
Section 8.9 Headings. Article and headings in this Agreement
are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose.
Section 8.10 Rights Affected by Extensions. The rights of the
Lender and its assigns shall not be impaired by any indulgence, release,
renewal, extension or modification which the Lender may grant with respect to
the indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower, the Company or any endorser, guarantee, or surety.
Section 8.11 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and in any documents or
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the Note and the making of the Loan
hereunder and continue in full force and effect, as of the respective dates as
of which they were made, until all of the obligations of the Borrower and the
Company to the Lender hereunder have been paid in full.
Section 8.12 FCC Compliance. Notwithstanding anything herein or
in any of the other Loan Documents to the contrary, but without limiting or
waiving the Borrower's or the Company's obligations hereunder or under any of
the other Loan Documents, the Lender's remedies hereunder and under the other
Loan Documents are subject to compliance with the Communications Act of 1934,
as amended, and all applicable rules, regulations and policies of the FCC, and
the Lender will not take any action pursuant to this Agreement or any of the
other Loan Documents that would constitute or result, whether de jure or de
facto, in any assignment of any FCC authorization held by the Borrower or the
Company or any change of control of the Station if such assignment or change of
control would require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC. This Agreement, the other Loan
Documents and the transactions contemplated hereby and thereby do not and will
not constitute, create, or have the effect of constituting or creating, directly
or indirectly, actual or practical ownership of the Borrower or the Company by
the Lender or control, affirmative or negative, direct or indirect, of the
Borrower or the Company by the Lender, over the programming, management or any
other aspect of the operation of the Borrower or
<PAGE> 26
- 23 -
the Company, which ownership and control remain exclusively and at all times in
the Borrower and the Company until such time as the Lender has complied with
such law, rules, regulations and policies.
Section 8.13 Further Assurances. From time to time, the Borrower
and the Company shall execute and deliver to the Lender such additional
documents as the Lender may reasonably require to carry out the purposes of
this Agreement or any of the documents entered into in connection herewith, or
to preserve and protect the rights of the Lender hereunder or thereunder.
Section 8.14 Indemnification. The Borrower and the Company hereby
indemnifies and holds harmless the Lender and its directors, officers,
shareholders, employees, agents, counsel, subsidiaries and affiliates (the
"Indemnified Persons") from and against any and all losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against any Indemnified Person in any way relating to
or arising out of this Agreement, the documents entered into in connection
herewith, or any of them or any of the transactions contemplated hereby or
thereby; provided, however, that neither the Borrower nor the Company shall be
liable to any Indemnified Person, if there is a judicial determination that
such losses, liabilities, obligations, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the gross
negligence or willful misconduct of such Indemnified Person. The Shareholder
hereby indemnifies the Lender from and against any and all losses, damages,
costs, expenses or disbursements of any kind or nature whatsoever which may be
incurred by the Lender as a result of Shareholder's failure to comply with its
obligations set forth in 6.1(h) hereof; provided, however, that Shareholder
shall not be liable to the Lender if there is a judicial determination that
such losses, damages, costs, expenses or disbursements resulted solely from the
gross negligence or willful misconduct of the Lender.
Section 8.15 Waiver. EACH OF LENDER, BORROWER AND THE COMPANY
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
<PAGE> 27
- 24 -
Section 8.16 Maximum Interest. Lender, Borrower and the Company
intend that this Agreement and the other Loan Documents conform to all
applicable usury laws. Accordingly, no provisions of the Loan Documents shall
require the payment or permit the collection of interest in excess of the
maximum rate permitted by applicable law ("Maximum Rate"), or obligate Borrower
or the Company to pay any taxes, assessments, charges, insurance premiums or
other amounts which are held to constitute interest to the extent that such
payments, when added to the other obligations under the Loan Documents, would
be held to constitute contracting for, or the payment by Borrower or the
Company of, interest at a rate greater than the Maximum Rate. Lender, Borrower
and the Company further agree that:
(i) if any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be adjudicated to
be so provided for herein or in any such instrument, the provisions of this
subsection 8.16 shall govern, and neither Borrower, the Company nor their
successors or assigns shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate;
(ii) if at any time the amount of interest under
any of the Loan Documents for a calendar year exceeds the Maximum Rate had the
Maximum Rate at all times been in effect, the interest chargeable under any
such Loan Document shall be limited to the amount of interest that could have
been charged if the Maximum Rate had at all times been in effect, but any
subsequent reductions in the interest due shall not reduce the rate of interest
chargeable under any such Loan Document below the Maximum Rate until the total
amount of interest accrued under any such Loan Document equals the amount of
interest that would have accrued if the interest provided for in any such Loan
Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document is
accelerated for any reason, or in the event of any prepayment by Borrower or
the Company, or in any other event, earned interest may never include more than
the Maximum Rate, computed from the date of disbursement of the funds evidenced
by such Loan Document until payment, and any interest otherwise payable under
such Loan Document that is in excess of the Maximum Rate shall be canceled
automatically as of such acceleration or such other event and (if theretofore
paid) shall be credited against principal;
(iv) if it should be held that any interest
payable or chargeable under any Loan Document is in excess of the Maximum Rate,
the interest payable or chargeable under such Loan Document shall be reduced to
the maximum amount permitted by applicable
<PAGE> 28
- 25 -
federal or state law, whichever shall permit the higher lawful interest, as
construed by courts having jurisdiction thereof; and
(v) the spreading, prorating and amortizing of
interest over the term of the Loan Documents shall be allowed to the fullest
extent permitted by applicable law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be executed by their respective duly authorized officers, as of
the date first above written.
PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC.
By: /s/ Lowell W. Paxson
------------------------------------------
Name: Lowell W. Paxson
Title: Chairman
OFFSHORE BROADCASTING
CORPORATION
By: /s/ Raymond A. Yorke
------------------------------------------
Raymond A. Yorke
President
OCEAN STATE TELEVISION, L.L.C.
By: /s/ Raymond A. Yorke
------------------------------------------
Raymond A. Yorke
Representative
By: /s/ Lowell W. Paxson
------------------------------------------
Lowell W. Paxson
Representative
RAYMOND A. YORKE HEREBY JOINS IN THE EXECUTION
OF THE FOREGOING AGREEMENT TO AGREE TO THE
PROVISIONS OF SECTIONS 3.2, 4.2, 6.1(H) AND
8.14 ONLY, AS OF THE DATE FIRST ABOVE WRITTEN.
/s/ Raymond A. Yorke
---------------------------------------------
Raymond A. Yorke
<PAGE> 1
EXHIBIT 10.105
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF GREENSBORO-16, INC.
AND
TELEVISION COMMUNICATIONS, INC.
FOR
TELEVISION STATION
WAAP(TV), BURLINGTON, NORTH CAROLINA
APRIL 19, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Sales Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.18 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.19 Byrds' Assets; Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.21 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Confirmation Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.4 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.7 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.8 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.9 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.14 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.15 Post-Closing Programming Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3 Renewal of FCC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Indemnification Fund; Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.7 Administrative Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
-iii-
<PAGE> 5
LIST OF SCHEDULES
Schedule 2.2 -- Excluded Assets
Schedule 2.4 -- Indemnification Escrow Agreement
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Financial Matters
Schedule 3.11 -- Insurance Matters
Schedule 3.13 -- Employee Matters
Schedule 3.14 -- Tax Matters
Schedule 3.15 -- Litigation
Schedule 6.14 -- Noncompetition Agreement
Schedule 6.15 -- Post-Closing Programming Time
Schedule 8.2(h) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
-iv-
<PAGE> 6
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 19th day of April,
1996, by and between Paxson Communications of Greensboro-16, Inc., a Florida
corporation ("Buyer"), and Television Communications, Inc., a Michigan
corporation and Debtor-In-Possession ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station WAAP(TV), Burlington, North Carolina (the "Station"), pursuant to
licenses issued by the Federal Communications Commission ("FCC").
B. Pursuant to Title 11 of the United States Code, Seller filed a
Voluntary Petition for Chapter 11 Relief with the United States Bankruptcy
Court for the Middle District of North Carolina, Greensboro Division on
February 21, 1992, Case No. B-92-10853C-11G (the "Bankruptcy Proceeding").
C. Seller has filed with such Bankruptcy Court a Second Plan of
Reorganization Dated August 15, 1995 As Modified on November 7, 1995, and a
Disclosure Statement for the Second Plan of Reorganization Dated August 15,
1995 As Modified on November 7, 1995.
D. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement, and subject to the prior approval of the FCC and the
Court.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing
Date.
<PAGE> 7
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are specifically designated as Contracts that are to be assumed by Buyer
upon its purchase of the Station, (ii) any Contracts entered into by Seller
between the date of this Agreement and the Closing Date that Buyer agrees in
writing to assume, and (iii) time sales contracts entered into by Seller in
compliance with Section 5.3.
"Bankruptcy Code" means the United States Bankruptcy Code as set forth
in Title 11 of the United States Code and in effect on February 21, 1992,
together with any amendments thereto that are applicable to the Bankruptcy
Proceeding.
"Byrds" means C.R. Byrd and Margaret W. Byrd.
"Byrds' Assets" means all of the Real Property and Tangible Personal
Property (as those terms are defined below) held or owned by the Byrds.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Confirmation Order" shall mean an order of the Court in form and
substance reasonably acceptable to Buyer and Buyer's counsel confirming the New
Plan of Reorganization and the New Disclosure Statement (as those terms are
defined in Section 6.2) and approving the sale of the Station's Assets to Buyer
free and clear of any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges or encumbrances of any nature whatsoever
(except for liens for current taxes not yet due and payable) pursuant to the
New Plan of Reorganization and Sections 363, 365 and 1129 of the Bankruptcy
Code, and otherwise in accordance with the terms of this Agreement.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this
-2-
<PAGE> 8
Agreement or (ii) which are entered into by Seller between the date of this
Agreement and the Closing Date.
"Court" means the United States Bankruptcy Court for the Middle
District of North Carolina, Greensboro Division, or any other court with
jurisdiction over the Bankruptcy Proceeding.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means any action or order issued by the FCC or the Court
setting forth the FCC Consent or the Confirmation Order, respectively, that has
not been reversed, stayed, enjoined, set aside, annulled, or suspended, and
with respect to which no requests are pending for administrative or judicial
review, reconsideration, appeal, or stay, and the time for filing any such
requests has expired and, with respect to the FCC Consent, the time for the FCC
to set aside the action on its own motion has expired.
"Indemnification Escrow Agreement" means the Indemnification Escrow
Agreement in the form of Schedule 2.4 to be entered into upon the Closing by
Seller, Buyer and the Escrow Agent.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to Seller in connection with the
conduct of the business or operations of the
-3-
<PAGE> 9
Station, together with any additions thereto between the date of this Agreement
and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, whether
owned or held by Seller or the Byrds, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Settlement Order" means the Order Approving Settlement of Adversary
Proceeding entered by the Court on May 16, 1994 in response to the Motion for
Order Approving Settlement of Adversary Proceeding filed with the Court on May
20, 1993.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Station, whether
owned or held by Seller, Total Christian Television or the Byrds, together with
any additions thereto between the date of this Agreement and the Closing Date.
"Total Christian Television" means Seller's affiliate, Jack Rehburg
Ministries, d/b/a Total Christian Television.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets used or useful in connection with the
conduct of the business or operations of the Station, including, without
limitation, the Byrds' Assets and all Tangible Personal Property held by Total
Christian Television, together with any additions thereto between the date of
this Agreement and the Closing Date, but excluding the assets described in
Section 2.2, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges, or encumbrances of any nature
whatsoever (except for liens for current taxes not yet due and payable)
pursuant to the New Plan of Reorganization and Sections 363 and 365 of the
Bankruptcy Code, including the following:
(a) The Tangible Personal Property;
-4-
<PAGE> 10
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) The Accounts Receivable as of 11:59 p.m., local time,
on the day prior to the Closing Date;
(h) All choses in action of Seller relating to the
Station, other than those referred to in Section 2.2(e); and
(i) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash or cash equivalents on hand as of the
Closing and all other cash in any of Seller's bank or savings accounts; any
insurance policies, letters of credit, or other similar items and cash
surrender value in regard thereto;
(b) All books and records that Seller is required by law
to retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto; and
(e) All choses in action of Seller relating to the
Station that (i) are avoidance actions available to Seller under Sections 542
through 550 of the Bankruptcy Code, (ii) are equitable subordination actions
available to Seller under Section 510(c) of the
-5-
<PAGE> 11
Bankruptcy Code, and (iii) relate to the right of Seller to object to claims
filed against Seller in the Bankruptcy Proceeding pursuant to Section 502 and
any other applicable section of the Bankruptcy Code.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of the Principals (as defined in Section 6.14) set forth in the
Noncompetition Agreement referred to in Section 6.14 shall be Five Million
Dollars ($5,000,000), adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), FCC annual regulatory fees and
similar prepaid and deferred items, shall be prorated between Buyer and Seller
in accordance with the principle that Seller shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, and Buyer shall be responsible for all expenses, costs, and obligations
allocable to the period on and after the Closing Date. Notwithstanding the
preceding sentence, there shall be no adjustment for, and Seller shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to
the Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects
as of the dated thereof.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid as follows:
(a) Five Hundred Thousand Dollars ($500,000) of the
Purchase Price shall be deposited with the Escrow Agent to be held and
disbursed by the Escrow Agent pursuant to the terms of the Indemnification
Escrow Agreement; and
-6-
<PAGE> 12
(b) The payment required by the terms of the
Noncompetition Agreement shall be paid by Buyer to the Principals and the
balance of the Purchase Price shall be paid by Buyer to Seller at Closing by
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer at least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Seller under any employee pension, retirement,
health and welfare or other benefit plans or collective bargaining agreements,
(vii) any obligation to any employee of the Station for severance benefits,
vacation time, or sick leave accrued prior to the Closing Date, or (viii) any
obligations or liabilities caused by, arising out of, or resulting from any
action or omission of Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller.
2.6 Sales Procedure. The sale of the Assets pursuant to this
Agreement shall be done in accordance with the Bankruptcy Code including, but
not limited to, Section 363(m), and such sale is intended to provide to Buyer
all of the protection afforded by that section, and Seller agrees to
specifically so state in the New Plan of Reorganization and/or any other
applicable pleadings filed with the Court seeking authority to sell the Assets
as contemplated by this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
Debtor-In-Possession under Chapter 11 of the Bankruptcy Code. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Michigan and is duly qualified to conduct business as a
foreign corporation in the State of North Carolina. Seller has all requisite
power and authority (i) to own, lease, and use the Assets as now owned, leased,
and used, (ii) to conduct the business and operations of the Station as now
conducted, and (iii) to execute and deliver this Agreement, the Escrow
Agreement, the Indemnification Escrow Agreement and the documents contemplated
hereby and thereby, and to perform and comply
-7-
<PAGE> 13
with all of the terms, covenants, and conditions to be performed and complied
with by Seller hereunder and thereunder. Seller is not a participant in any
joint venture or partnership with any other person or entity with respect to
any part of the operations of the Station or any of the Assets. The
organization, standing and authority of Seller is currently under the
jurisdiction of the Court, and Seller is subject to the orders of the Court.
3.2 Authorization and Binding Obligation. Except for the issuance
of the Confirmation Order, the execution, delivery, and performance of this
Agreement, the Escrow Agreement and the Indemnification Escrow Agreement by
Seller have been duly authorized by all necessary actions on the part of Seller
and its shareholder. This Agreement and the Escrow Agreement have been, and,
upon the Closing, the Indemnification Escrow Agreement will be, duly executed
and delivered by Seller and constitute the legal, valid, and binding
obligations of Seller, enforceable against it in accordance with their
respective terms except as the enforceability of this Agreement, the Escrow
Agreement and the Indemnification Escrow Agreement may be affected by judicial
discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the Confirmation Order and the other Consents listed on Schedule
3.3, the execution, delivery, and performance by Seller of this Agreement, the
Escrow Agreement and the Indemnification Escrow Agreement and the documents
contemplated hereby and thereby (with or without the giving of notice, the
lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with any provision of the Articles of Incorporation or
Bylaws of Seller; (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller, the Byrds or
Total Christian Television is a party or by which Seller, the Byrds, Total
Christian Television or the Assets, including the Byrds' Assets and the
Tangible Personal Property held by Total Christian Television, may be bound or
affected; and (v) will not create any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature whatsoever upon any of the
Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the
-8-
<PAGE> 14
Licenses is subject to any restriction or condition that would limit the full
operation of the Station as now operated. The Licenses are in full force and
effect, and the conduct of the business and operations of the Station is in
accordance therewith. Seller has no reason to believe that any of the Licenses
would not be renewed by the FCC or other granting authority in the ordinary
course. The Station's city of license, as determined by the FCC, is located
within the Greensboro-Winston Salem-High Point Area of Dominant Influence as
defined by the 1991-1992 Area of Dominant Influence Market Guide published by
The Arbitron Co. and the Greensboro-Winston Salem-High-Point Designated Market
Area as defined by the 1995 United States Television Household Estimates
published by Nielsen Media Research. On or before June 17, 1993, Seller made a
valid election of must carry with respect to each cable system located within
the Station's Area of Dominant Influence. Except as disclosed on Schedule 3.4,
no cable system has advised Seller of any signal quality or copyright indemnity
or other prerequisite to cable carriage of the Station's signal, and no cable
system has declined or threatened to decline such carriage or failed to respond
to a request for carriage or sought any form of relief from carriage from the
FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). Schedule 3.5 accurately
and completely identifies all of the Real Property owned or held by the Byrds.
The Real Property listed on Schedule 3.5 comprises all real property interests
necessary to conduct the business and operations of the Station as now
conducted. Seller does not hold any fee simple Real Property interests. With
respect to each leasehold or subleasehold interest included in the Real
Property being conveyed under this Agreement so long as Seller fulfills its
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. All Real Property (including the improvements thereon)
(i) is in good condition and repair consistent with its present use, (ii) is
available for immediate use in the conduct of the business and operations of
the Station, and (iii) complies with all applicable building or zoning codes
and the regulations of any governmental authority having jurisdiction. Seller
has full legal and practical access to the Real Property. All easements,
rights-of-way, and real property licenses have been properly recorded in the
appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property and
accurately and completely identifies all of the Tangible Personal Property
owned or held by the Byrds or Total Christian Television. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Station as now conducted. Except as described in Schedule 3.6, Seller owns
and has good title to each
-9-
<PAGE> 15
item of Tangible Personal Property, and none of the Tangible Personal Property
owned by Seller is subject to any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for liens for
current taxes not yet due and payable. Each item of Tangible Personal Property
is available for immediate use in the business and operations of the Station.
All items of transmitting and studio equipment included in the Tangible
Personal Property (i) have been maintained in a manner consistent with
generally accepted standards of good engineering practice, and (ii) will permit
the Station and any auxiliary broadcast facilities related to the Station to
operate in accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC, and with all other applicable federal, state, and local
statutes, ordinances, rules, and regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete list
of all Contracts except contracts with advertisers for the sale of advertising
time on the Station for cash at prevailing rates and which have not been
prepaid and which may be canceled by the Station without penalty on not more
than thirty days' notice. Seller has delivered to Buyer true and complete
copies of all written Assumed Contracts, true and complete memoranda of all
oral Assumed Contracts (including any amendments and other modifications to
such Assumed Contracts), and a schedule summarizing Seller's obligations under
trade and barter agreements relating to the Station. Other than the Contracts
listed on Schedule 3.7 and cash programming contracts, Seller requires no
contract, lease, or other agreement to enable it to carry on its business as
now conducted. All of the Assumed Contracts are in full force and effect, and
are valid, binding, and enforceable in accordance with their terms. There is
not under any Assumed Contract any default by any party thereto or any event
that, after notice or lapse of time or both, could constitute a default.
Seller is not aware of any intention by any party to any Assumed Contract (i)
to terminate such contract or amend the terms thereof, (ii) to refuse to renew
the Assumed Contract upon expiration of its term, or (iii) to renew the Assumed
Contract upon expiration only on terms and conditions which are more onerous
than those now existing. Except for the need to obtain the Consents listed in
Schedule 3.3, Seller has full legal power and authority to assign its rights
under the Assumed Contracts to Buyer in accordance with this Agreement, and
such assignment will not affect the validity, enforceability, or continuation
of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1, the Confirmation Order provided for in Section 6.2 and the other Consents
described in Schedule 3.3, no consent, approval, permit, or authorization of,
or declaration to or filing with any governmental or regulatory authority, or
any other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, or (iii) to enable Buyer to conduct the business and
operations of the Station in essentially the same manner as such business and
operations are now conducted.
-10-
<PAGE> 16
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Station as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains a true
and complete copy of Seller's Tax Return filed with the Internal Revenue
Service for the fiscal year ended on June 30, 1995, and a true and complete
copy of Seller's Monthly Report filed with the Court for the month of February,
1996. Such Tax Return and Monthly Report have been prepared from the books and
records of Seller, have been prepared in accordance with generally accepted
accounting principles consistently applied and maintained throughout the
periods indicated, accurately reflect the books, records, and accounts of the
Station (which books, records and accounts are complete and correct in all
material respects).
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and foreseeable risks. During the past three
years, no insurance policy of Seller on the Assets or the Station has been
canceled by the insurer and no application of Seller for insurance has been
rejected by any insurer.
3.12 Reports. All returns, reports, and statements that the
Station is currently required to file with the FCC or with any other
governmental agency have been filed, and all reporting requirements of the FCC
and other governmental authorities having jurisdiction over Seller and the
Station have been complied with. All of such returns, reports, and statements
are substantially complete and correct as filed. Seller has timely paid to the
FCC all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Personnel.
(a) Employees and Compensation. Schedule 3.13 contains a
true and complete list of all employees of the Station, their job titles, date
of hire, current salary and date and amount of last salary increase. Schedule
3.13 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to
-11-
<PAGE> 17
the employees of the Station and all fixed or contingent liabilities or
obligations of Seller with respect to any person now or formerly employed by
Seller at the Station, including pension or thrift plans, individual or
supplemental pension or accrued compensation arrangements, contributions to
hospitalization or other health or life insurance programs, incentive plans,
bonus arrangements, and vacation, sick leave, disability and termination
arrangements or policies, including workers' compensation policies, and a
description of all fixed or contingent liabilities or obligations of Seller
with respect to any person now or formerly employed at the Station or any
person now or formerly retained as an independent contractor at the Station.
Seller has furnished Buyer with true and complete copies of all employee
handbooks, employee rules and regulations, and summary plan descriptions of the
written plans and arrangements listed in Schedule 3.13, and with descriptions,
in writing, of the unwritten plans and arrangements listed in Schedule 3.13.
At Buyer's request, Seller will furnish Buyer with true and complete copies of
all applicable plan documents, trust documents, and insurance contracts with
respect to the plans and arrangements listed on Schedule 3.13. All employee
benefits and welfare plans or arrangements listed in Schedule 3.13 were
established and have been executed, managed and administered in accordance with
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other laws. Seller is not
aware of the existence of any governmental audit or examination of any of such
plans or arrangements or of any facts which would lead it to believe that any
such audit or examination is pending or threatened. No action, suit, or claim
with respect to any of such plans or arrangements (other than routine claims
for benefits) is pending or, to the knowledge of Seller, threatened, and Seller
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of Seller's
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to represent employees of
the Station or to solicit cards from employees to authorize a union to request
a National Labor Relations Board certification election with respect to any
employees at the Station.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller
-12-
<PAGE> 18
has not incurred any accumulated funding deficiency within the meaning of ERISA
or Section 4971 of the Internal Revenue Code. Seller has not failed to make
any required contributions to any employee benefit plan. The Pension Benefit
Guaranty Corporation has not asserted that Seller has incurred any liability in
connection with any such plan. No lien has been attached and no person has
threatened to attach a lien on any property of Seller as a result of a failure
to comply with ERISA.
3.14 Taxes. Except as indicated on Schedule 3.14, Seller has filed
or caused to be filed all federal income tax returns and all other federal,
state, county, local, or city tax returns which are required to be filed, and
it has paid or caused to be paid all taxes shown on those returns or on any tax
assessment received by it to the extent that such taxes have become due, or has
set aside on its books adequate reserves (segregated to the extent required by
generally accepted accounting principles) with respect thereto. To the best of
Seller's knowledge, there are no governmental investigations or other legal,
administrative, or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest, or other charges, the liability for
which could extend to Buyer as transferee of the business of the Station, and
no event has occurred that could impose on Buyer any transferee liability for
any taxes, penalties, or interest due or to become due from Seller.
3.15 Claims and Legal Actions. Except for the proceedings
described on Schedule 3.15, and any FCC rulemaking proceedings generally
affecting the broadcasting industry, there is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative, or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller with respect to its ownership or operation of the Station or
otherwise relating to the Assets or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same. In
particular, but without limiting the generality of the foregoing, there are no
applications, complaints or proceedings pending or, to the best of Seller's
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the television
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation. The Settlement Order is in full force
and effect and has not been modified or supplemented in any respect. Neither
Seller nor, to the best knowledge of Seller, any other party to the Settlement
Order is in default of its obligations thereunder.
-13-
<PAGE> 19
3.16 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis related to the past or present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property
or facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not exposed any employee to any substance or
condition that could form the basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the common law or pursuant to statute) against Seller giving rise to any
such liability) for any illness or personal injury to any employee.
(f) In connection with its ownership or operation of the
Station, Seller has obtained and been in compliance in all material respects
with all of the terms and conditions
-14-
<PAGE> 20
of all permits, licenses, and other authorizations which are required under,
and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
which are contained in, all federal, state, and local laws, rules, and
regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.17 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station including, without limitation, all requirements under
the Bankruptcy Code and all procedures required by the Court. Neither the
ownership or use of the properties of the Station nor the conduct of the
business or operations of the Station conflicts with the rights of any other
person or entity.
3.18 Conduct of Business in Ordinary Course. Since September 1,
1995, Seller has conducted the business and operations of the Station only in
the ordinary course and has not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any material increase in compensation payable or
to become payable to any of the employees of the Station, or any bonus payment
made or promised to any employee of the Station, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Station;
(c) Made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
-15-
<PAGE> 21
(d) Canceled any debts owed to or claims held by Seller
with respect to the Station, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.19 Byrds' Assets; Transactions with Affiliates. Except for the
Byrds' Assets identified on Schedules 3.5 and 3.6 and the Tangible Personal
Property held by Total Christian Television and identified on Schedule 3.6,
neither the Byrds nor Total Christian Television own or hold any other assets
or properties used or useful in connection with the conduct of the business or
operations of the Station. Except as disclosed in Schedule 3.6, Seller has not
been involved in any business arrangement or relationship relating to the
Station with any affiliate of Seller, and no affiliate of Seller owns any
property or right, tangible or intangible, which is used in the business of the
Station. As used in this paragraph, "affiliate" has the meaning set forth in
Rule 12b-2 promulgated under the Securities and Exchange Act of 1934.
3.20 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of North Carolina. Buyer has all requisite
power and authority to execute and deliver this Agreement, the Escrow
Agreement, the Indemnification Escrow Agreement and the documents contemplated
hereby and thereby, and to perform and comply with all of the terms, covenants,
and conditions to be performed and complied with by Buyer hereunder and
thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement, the Escrow Agreement and the
Indemnification Escrow
-16-
<PAGE> 22
Agreement by Buyer have been duly authorized by all necessary actions on the
part of Buyer. This Agreement and the Escrow Agreement have been, and, upon
the Closing, the Indemnification Escrow Agreement will be, duly executed and
delivered by Buyer and constitute the legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms
except as the enforceability of this Agreement, the Escrow Agreement and the
Indemnification Escrow Agreement may be affected by judicial discretion in the
enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the Confirmation Order and the other Consents, the execution,
delivery, and performance by Buyer of this Agreement, the Escrow Agreement, the
Indemnification Escrow Agreement and the documents contemplated hereby and
thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
the Articles of Incorporation or Bylaws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money
-17-
<PAGE> 23
or the guaranteeing of indebtedness) that will be binding on Buyer after
Closing, except for cash time sales agreements made in the ordinary course of
business. Prior to the Closing Date, Seller shall deliver to Buyer a list of
all Contracts entered into between the date of this Agreement and the Closing
Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which, upon the Closing and
pursuant to the Confirmation Order, shall be transferred to the portion of the
proceeds from the sale of the Assets that is not paid to the Escrow Agent
pursuant to Section 2.4(a), (ii) liens for current taxes not yet due and
payable, and (iii) mechanics' liens and other similar liens, which shall be
removed prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause, by any act or failure to
act, any cable system located within the Station's Area of Dominant Influence
to refuse to carry the Station's signal.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, including inspections incident to the environmental study
described in Section 6.6 and the engineering study described in Section 6.7,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information relating to the Bankruptcy Proceeding and all
other information with respect to the affairs and business of the Station that
Buyer may reasonably request (including any financial reports and operations
reports produced with respect to the affairs and business of the Station).
-18-
<PAGE> 24
Without limiting the generality of the foregoing, Seller shall give Buyer and
its counsel, accountants and other authorized representatives reasonable access
to Seller's financial records and Seller's employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its sole judgment, are required or advisable
to comply with federal or state securities laws and the rules and regulations
of securities markets as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and
take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice. Seller shall maintain inventories of spare parts
and expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, Seller shall repair, replace, or restore the Assets to their prior
condition as represented in this Agreement as soon thereafter as possible, and
Seller shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.12 Consents. Seller shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. To the extent the approval of the Court is required in
connection with the assignment and assumption of any Assumed Contract pursuant
to Section 365 and Bankruptcy Rule 6006 or any other applicable Bankruptcy Code
sections or rules, Seller shall use its best efforts to obtain such approval.
Seller shall promptly advise Buyer of any difficulties experienced in obtaining
any of the Consents and of any conditions proposed, considered, or requested
for any of the Consents. Upon Buyer's request, Seller shall cooperate with
Buyer and use it best efforts to obtain from the lessors under each Real
Property lease such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Buyer's lenders
may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the business or
operations of the Station, and of any
-19-
<PAGE> 25
material change in any of the information contained in Seller's representations
and warranties contained in Section 3 of this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within
thirty (30) days after the end of each month between the date of this Agreement
and the Closing Date, a copy of the Monthly Report filed with the Court
pursuant to local Bankruptcy Rules for the month just ended and such other
financial information (including information on payables and receivables) as
Buyer may reasonably request. Such Monthly Report shall contain a cash flow
statement prepared from the books and records of Seller in accordance with
generally accepted accounting principles consistently applied and shall
accurately reflect the books, records and accounts of the Station and shall be
complete and correct in all material respects.
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station including, without limitation, all
requirements under the Bankruptcy Code and all procedures required by the
Court.
5.17 Financing Leases. Seller will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.18 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
5.19 Preservation of Business. Seller shall use its best efforts
to preserve the business and organization of the Station and use its best
efforts to keep available to the Station its present employees and to preserve
the audience of the Station and the Station's present relationships with
suppliers, advertisers, and others having business relations with it, to the
end that the business, operations, and prospects of the Station shall be
unimpaired at the Closing Date. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Station shall
be maintained.
5.20 Collection of Accounts Receivable. Seller shall collect the
Accounts Receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to
accelerate the collection of its Accounts Receivable.
-20-
<PAGE> 26
5.21 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement unless
the Court prohibits the filing of such application within such specified
period, in which event Seller and Buyer shall file the application for FCC
Consent as soon as the Court may allow. The parties shall prosecute the
application with all reasonable diligence and otherwise use their best efforts
to obtain a grant of the application as expeditiously as practicable. Each
party agrees to comply with any condition imposed on it by the FCC Consent,
except that no party shall be required to comply with a condition if (1) the
condition was imposed on it as the result of a circumstance the existence of
which does not constitute a breach by the party of any of its representations,
warranties, or covenants under this Agreement, and (2) compliance with the
condition would have a material adverse effect upon it. Buyer and Seller shall
oppose any requests for reconsideration or judicial review of the FCC Consent.
If the Closing shall not have occurred for any reason within the original
effective period of the FCC Consent, and neither party shall have terminated
this Agreement under Section 9, the parties shall jointly request an extension
of the effective period of the FCC Consent. No extension of the FCC Consent
shall limit the exercise by either party of its rights under Section 9.
6.2 Confirmation Order.
(a) The purchase and sale of the Assets pursuant to this
Agreement are subject to the prior approval of the Court.
(b) Within six (6) business days after the execution of
this Agreement, Seller shall submit to Buyer drafts of a Modified Plan of
Reorganization (the "New Plan of Reorganization") and a Modified Disclosure
Statement (the "New Disclosure Statement") setting forth, among other things,
the terms and conditions of this Agreement. Buyer shall have three (3)
business days following receipt of such drafts to submit to Seller any proposed
modifications to the New Plan of Reorganization and New Disclosure Statement.
Within one
-21-
<PAGE> 27
(1) business day after receipt of such modifications, Seller shall file with
the Court the New Plan of Reorganization and New Disclosure Statement in form
and substance reasonably acceptable to Buyer and Buyer's counsel. Seller shall
use its best efforts to obtain as expeditiously as possible the Court's
approval of the New Disclosure Statement and the entry of the Confirmation
Order. Seller shall comply with all requirements imposed by the Bankruptcy
Code and the Court in connection with the approval of the New Disclosure
Statement and the entry of the Confirmation Order, including, without
limitation, providing appropriate notice of the transactions contemplated by
this Agreement to all known creditors of Seller. Seller shall oppose any
objections to the issuance of the Confirmation Order and any requests for
reconsideration or review of the Confirmation Order and any appeals therefrom.
(c) Upon confirmation of the New Plan of Reorganization,
Seller will use its best efforts to cause the Byrds to reconvey to Seller, as
expeditiously as possible following such confirmation, the Byrds' Assets in
accordance with the terms of the Settlement Order.
(d) Seller shall immediately provide Buyer with copies of
all judgments, decisions or orders issued by the Court after the date hereof in
the Bankruptcy Proceeding and all pleadings or other documents filed by any
party after the date hereof in the Bankruptcy Proceeding, and shall immediately
notify Buyer in writing of all material developments in the Bankruptcy
Proceeding.
6.3 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.4 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs which (i) causes the Station to cease broadcasting
operations for a period of seven or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer, in its sole discretion, may (x) terminate this Agreement
forthwith without any further obligations hereunder by providing written notice
to Seller no later than five (5) business
-22-
<PAGE> 28
days following Buyer's receipt from Seller of written notice of any event
described in clause (i) or (ii), in which event all funds held by the Escrow
Agent pursuant to the Escrow Agreement, including all interest and other
proceeds from the investment of such funds, shall be immediately returned to
Buyer, or (y) proceed to consummate the transaction contemplated by this
Agreement and complete the restoration and replacement of the Assets after the
Closing Date, in which event Seller shall deliver to Buyer all insurance
proceeds received in connection with such damage, destruction or other event.
6.5 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.6 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable, but in no event later than the date of the confirmation
hearing for the New Plan of Reorganization.
6.7 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the survey discloses any material
deficiencies in the operations or equipment of the Station, Buyer shall so
notify Seller as soon as practicable, but in no event later than the date of
the confirmation hearing for the New Plan of Reorganization.
6.8 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
-23-
<PAGE> 29
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to
each parcel of Real Property that Seller owns, Buyer will obtain, at Buyer's
expense, at or prior to Closing, an ALTA Owner's Policy of Title Insurance Form
B-1987 (or equivalent policy acceptable to Buyer), issued by a title insurer
satisfactory to Buyer, in an amount equal to the fair market value of the
property and any improvements thereon, insuring title to such parcel to be in
the name of Buyer as of the Closing, subject only to liens or encumbrances
expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained by Buyer pursuant to this Agreement shall
(1) insure title to the Real Property described in the policy and all recorded
easements benefitting such Real Property, (2) contain an "extended coverage
endorsement" insuring over the general exceptions customarily contained in
title policies, (3) contain an ALTA Zoning Endorsement 3.1 (or equivalent), (4)
contain an endorsement insuring that the Real Property described in the policy
is the same real estate shown in the survey delivered with respect to such
property, (5) contain an inflation endorsement, (6) contain a "contiguity"
endorsement with respect to any Real Property consisting of more than one
record parcel, and (7) not be subject to any survey exception or any defect or
encroachment disclosed by a survey delivered with respect to the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will procure, at Buyer's expense, a current survey of the
parcel, prepared by a licensed surveyor and conforming to current ALTA Minimum
Detail Requirements for Land Title Surveys, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters customarily shown on such surveys, and showing access
affirmatively to public streets and roads.
6.10 Sales Tax Filings. Seller shall continue to file North
Carolina sales tax returns with respect to the Station in accordance with
Seller's past practices and shall concurrently deliver copies of all such
returns to Buyer.
6.11 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets. Buyer shall provide Seller
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets.
6.12 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm
-24-
<PAGE> 30
selected and paid for by Buyer with experience in the valuation and appraisal
of television station assets.
6.13 Broker. Buyer and Seller each represents and warrants to the
other that neither it nor any person or entity acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement, except for a
commission payable to The Connely Co. by Seller. Upon the Closing, Buyer
agrees to cause $150,000 of the Purchase Price to be paid for the benefit of
Seller to The Connely Co.
6.14 Noncompetition Agreement. At Closing, Buyer and Jack Rehburg,
L. Steven Rehburg and Jeffri L. Rehburg (collectively, the "Principals") shall
enter into a Noncompetition Agreement in the form of Schedule 6.14 and $500,000
of the Purchase Price shall be allocated to the covenants of the Principals set
forth therein.
6.15 Post-Closing Programming Time. Buyer agrees to make
available to Total Christian Television during the period commencing after the
Closing and ending on the fifth anniversary of the Closing a daily, one-hour
block of programming time on the Station upon the terms and conditions set
forth in Schedule 6.15.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under
-25-
<PAGE> 31
Section 6.1 hereof, Seller shall have complied with any conditions imposed on
it by the FCC Consent, and the FCC Consent shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License, including, without limitation, any renewal of any FCC License for less
than a full eight-year term, that could have an adverse effect on the Station
or the conduct of its business and operations. No proceeding shall be pending
or threatened the effect of which could be to revoke, cancel, fail to renew,
suspend, or modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station.
(h) Court Approval. The Court shall have entered the
Confirmation Order and the Confirmation Order shall have become a Final Order.
(i) Other Assets. The Byrds' Assets and the Tangible
Personal Property held by Total Christian Television shall have been reconveyed
to Seller pursuant to such deeds, bills of sale and other documents that are
acceptable in form and substance to Buyer and Buyer's counsel.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
-26-
<PAGE> 32
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) Court Approval. The Court shall have entered the
Confirmation Order.
7.3 Renewal of FCC Licenses. Notwithstanding anything in this
Agreement to the contrary, if the Closing shall not have occurred prior to
August 1, 1996, then Buyer, at its option in its sole discretion, may elect
upon written notice to Seller to either (i) postpone the Closing until the
FCC's grant of the renewal of the FCC Licenses shall have become a Final Order
and enter into a Time Brokerage Agreement with Seller in form and substance
reasonably acceptable to Buyer and Seller, or (ii) complete the transactions
contemplated by this Agreement, if the FCC permits the substitution of the
Buyer for the Seller in the application for the renewal of the FCC Licenses.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five (5) days' written notice to
Seller, that is (1) not earlier than the first business day after the grant of
the FCC Consent, and (2) no later than ten (10) business days after the date
the FCC Consent has become a Final Order. If Buyer fails to specify the date
for Closing, prior to the fifth business day after the date upon which the FCC
Consent becomes a Final Order, the Closing will take place on the tenth
business day after the date upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets,
including, without limitation, the Byrds' Assets and the Tangible Personal
Property held by Total Christian Television, in the name of Buyer, free and
clear of all claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges or encumbrances of any nature whatsoever (except
for liens for current
-27-
<PAGE> 33
taxes not yet due and payable) pursuant to the New Plan of Reorganization and
Sections 363 and 365 of the Bankruptcy Code;
(b) Estoppel Certificates. Estoppel certificates of
those parties to the Assumed Contracts listed in Schedule 3.7 that are
designated to indicate that estoppel certificates are required under this
paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by its President, certifying (1)
that the representations and warranties of Seller contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date; and (2) that Seller has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of Michigan, the State of North Carolina, as well as the records
of those counties in North Carolina in which any of the Assets are located,
such searches having been made no earlier than fifteen (15) days prior to the
Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations;
(g) Accounts Receivable. A complete and accurate list of
the Station's Accounts Receivable as of a date no more than five (5) business
days prior to the Closing Date, including, with respect to each of the Accounts
Receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(h) Opinions of Counsel. Opinions of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(h)
hereto;
(i) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.14, duly executed by the Principals;
-28-
<PAGE> 34
(j) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder;
(k) Confirmation Order. A certified copy of the
Confirmation Order; and
(l) Indemnification Escrow Agreement. The
Indemnification Escrow Agreement duly executed by Seller and the Escrow Agent.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price, less the payment
specified in Section 8.3(e) below, as provided in Section 2.4;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts insofar as they
relate to the time on and after the Closing Date, and arise out of events
related to Buyer's ownership of the Assets or its operation of the Station on
or after the Closing Date.
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President or Secretary,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date, and (2) that Buyer has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.14 duly executed by Buyer and the payment
of $500,000 to the Principals thereunder.
(f) Indemnification Escrow Agreement. The
Indemnification Escrow Agreement duly executed by Buyer and the Escrow Agent.
-29-
<PAGE> 35
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by March 1, 1997.
(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer has failed to cure any material
breach of any of its representations, warranties, or covenants under this
Agreement within fifteen days after Buyer received written notice of such
breach from Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by March 1, 1997.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of the Station in the normal and
usual manner for a continuous period of seven days.
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs, as indicated in the environmental
study described in Section 6.6, no later than the date
-30-
<PAGE> 36
of the confirmation hearing for the New Plan of Reorganization, and the cause
thereof shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.7, no later than
the date of the confirmation hearing for the New Plan of Reorganization, and
the cause thereof shall not have been remedied prior to the Closing Date.
(g) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller has failed to cure any material
breach of any of its representations, warranties, or covenants under this
Agreement within fifteen days after Seller received written notice of such
breach from Buyer.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of this Agreement, the parties hereto shall not have any further liability to
each other with respect to the purchase and sale of the Assets. If this
Agreement is terminated by Seller due to Buyer's material breach of this
Agreement, then the payment to Seller of $250,000 pursuant to Section 9.4 below
shall be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller by reason of Buyer's material breach
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of Two Hundred Fifty Thousand
Dollars ($250,000) is a fair and equitable amount to reimburse Seller for
damages sustained due to Buyer's material breach of this Agreement. If this
Agreement is terminated by Buyer due to Seller's material breach of this
Agreement, Buyer shall have all rights and remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with Escrow Agent the sum
of Two Hundred Fifty Thousand Dollars ($250,000) in accordance with the Escrow
Agreement. All such funds deposited with the Escrow Agent shall be held and
disbursed in accordance with the terms of the Escrow Agreement and the
following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or 9.2 and Buyer is not in material breach of this Agreement, all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
-31-
<PAGE> 37
(c) If this Agreement is terminated by Seller due to
Buyer's material breach of this Agreement, then all amounts held by the Escrow
Agent pursuant to the Escrow Agreement shall be disbursed to or at the
direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow
Agent shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
nine (9) months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
-32-
<PAGE> 38
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Indemnification Fund; Procedure for Indemnification.
(a) The portion of the Purchase Price deposited by Buyer
with the Escrow Agent at Closing pursuant to Section 2.4(a) plus all interest
earned thereon (the "Indemnification Fund") shall be applied to pay Buyer's
claims for indemnification under this Section 10. The procedure for
indemnification shall be as set forth in this Section 10.4 and Section 3 of the
Indemnification Escrow Agreement.
(b) The party claiming indemnification (the "Claimant")
shall promptly give written notice of the claim to the party from whom
indemnification is claimed (the "Indemnifying Party") and, if Buyer is the
Claimant, to the Escrow Agent, whether involving a claim between the parties or
brought by a third party, specifying (1) in reasonable detail the factual basis
for the claim, (2) the amount of the Indemnification Fund to be reserved
against the Claim (if Buyer is the Claimant) and (3) that Buyer has given a
copy of such notice to the Escrow Agent (if Buyer is the Claimant). If the
claim relates to an action, suit, or proceeding filed by a third party against
the Claimant, such notice shall be given by the Claimant within five days after
written notice of such action, suit, or a proceeding was given to the Claimant.
Following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the
-33-
<PAGE> 39
information relied upon by the Claimant to substantiate the claim. If Buyer is
the Claimant, and Buyer and Seller agree at or prior to the expiration of the
thirty-day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, Seller and Buyer shall immediately give the
Escrow Agent joint written instructions to disburse to Buyer such portion of
the Indemnification Fund as shall be necessary to reimburse Buyer for such
claim. If Seller is the Claimant, and Buyer and Seller agree at or prior to
the expiration of the thirty-day period (or any mutually agreed upon extension
thereof) to the validity and amount of the claim, Buyer shall reimburse Seller
for such claim. If the Claimant and the Indemnifying Party do not agree within
the thirty-day period (or any mutually agreed upon extension thereof), the
Claimant may seek from the Court an appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant, although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing
-34-
<PAGE> 40
party shall be entitled to reimbursement from the other party of its reasonable
legal fees and expenses.
10.7 Administrative Expense. In the event that Buyer makes a claim
against Seller pursuant to this Section 10, Seller acknowledges and agrees that
such a claim shall constitute an administrative expense under Section 503 of
the Bankruptcy Code.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by the Seller. Buyer and
Seller shall each pay one-half of any fees payable to the Escrow Agent and all
filing fees required by the FCC in connection with the FCC Consent. The filing
fee currently imposed by the FCC for the application required to obtain the FCC
Consent is $645. The Escrow Agent currently charges a $500 acceptance fee and
a $1500 annual fee to act as escrow agent under the terms of the Escrow
Agreement and Indemnification Escrow Agreement. Except as otherwise provided
in this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, Seller shall pay all brokerage fees or commission payable to
The Connely Co., and each party shall be responsible for all fees or
commissions payable to any other finder, broker, advisor, or similar person
retained by or on behalf of such party.
11.2 Jurisdiction. All matters concerning this Agreement,
including, but not limited to, the interpretation, enforcement, or alleged
breach of this Agreement or any other dispute between the parties concerning
this Agreement, are recognized as affecting the administration of the
Bankruptcy Proceeding and, as such, the resolution of the same would be a "core
proceeding" as that term is defined in 28 U.S.C. Section 157. As a core
proceeding, Seller and Buyer agree that the Court has the exclusive
jurisdiction over any such interpretation, enforcement, alleged breach or other
dispute as it relates to this Agreement.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
-35-
<PAGE> 41
If to Seller: Jack Rehburg, President
Television Communications, Inc.
5235 Mountain Trail
P.O. Box 16
Snowcamp, N.C. 27349
With a copy to: James K. Talcott, Esq.
Ivey, Ivey, McClellan & Gatton, L.L.P.
121 South Elm Street
Greensboro, N.C. 27401
If to Buyer: Lowell W. Paxson, Chairman
Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Seller's prior
approval in which event Buyer shall have no further obligation hereunder and
Buyer may collaterally assign its rights and interests hereunder to its lenders
without seeking or obtaining Seller's prior approval. Upon any permitted
assignment by Buyer or Seller in accordance with this Section 11.4, all
references to"Buyer" herein shall be deemed to be references to Buyer's
assignee and all references to "Seller" herein shall be deemed to be references
to Seller's assignee, as the case may be. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other
-36-
<PAGE> 42
transfer documents that, in the reasonable opinion of Buyer, may be necessary
to ensure, complete, and evidence the full and effective transfer of the Assets
to Buyer pursuant to this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be
-37-
<PAGE> 43
required or advisable in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-38-
<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
GREENSBORO-16, INC.
By: /s/ Lowell W. Paxson
-------------------------
Name: Lowell W. Paxson
Title:
TELEVISION COMMUNICATIONS, INC
By: /s/ Jack Rehburg
-------------------------
Name: Jack Rehburg
Title:
-39-
<PAGE> 1
EXHIBIT 10.106
EXECUTION COPY
================================================================================
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 26, 1996
BY AND BETWEEN
PAXSON BROADCASTING OF MIAMI, LIMITED PARTNERSHIP
AND
WIOD, INC.
================================================================================
<PAGE> 2
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 26, 1996
BY AND BETWEEN
PAXSON BROADCASTING OF MIAMI, LIMITED PARTNERSHIP
AND
WIOD, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" and "Escrow Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2 PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price and Asset Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.6 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Cure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.16 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.17 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.21 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Access to Books, Records and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Studio Lease-Back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . 21
7.1 Conditions Precedent to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Conditions Precedent to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8 CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.2 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.3 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.5 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.7 JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.9 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.11 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.12 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.14 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.15 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.16 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
- iv -
<PAGE> 6
INDEX TO SCHEDULES
Schedule 2.2 Excluded Assets
Schedule 3.3 Consents
Schedule 3.4 Licenses
Schedule 3.5 Real Property
Schedule 3.6 Tangible Personal Property
Schedule 3.7 Contracts
Schedule 3.9 Intangibles
Schedule 3.10 Insurance
Schedule 3.12 Personnel
Schedule 3.14 Claims & Legal Actions
Schedule 3.16 Environmental Matters
Schedule 6.11 Studio Lease
Schedule 8.2(f) Seller's Opinion
Schedule 8.3(e) Buyer's Opinion
Schedule 9.5 Escrow Agreement
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of April 26, 1996 by and
between Paxson Broadcasting of Miami, Limited Partnership, a Florida limited
partnership ("Buyer"), and WIOD, Inc., a Delaware corporation ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates radio station
WIOD-AM, Miami, Florida (the "Station") pursuant to licenses issued by the
Federal Communications Commission (the "FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially all
the assets that are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement. Seller intends to transfer the Station in a transaction to which
Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"),
applies and Buyer is willing to take such steps as are necessary on its part to
enable Seller's transfer to so qualify, including, but not limited to, the
acquisition of assets to transfer in the exchange by Seller through the use of
a qualified intermediary pursuant to Treasury Regulations.
C. In connection with the transactions contemplated by this
Agreement, Buyer, Seller and The Bank of New York, as escrow agent and
qualified intermediary (the "Escrow Agent"), have entered into an Escrow
Deposit Agreement dated the date hereof (the "Escrow Agreement") pursuant to
which Buyer has deposited into an escrow account the sum of Six Hundred and
Fifty Thousand Dollars ($650,000) to be held and disbursed in accordance with
the terms of the Escrow Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means all rights of Seller to payment for the
sale of advertising time on the Station or for services performed by Seller
prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means all Contracts listed in Schedule 3.7 that
will be assumed by Buyer upon its purchase of the Station.
<PAGE> 8
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all material contracts, leases, non-governmental
licenses, and other agreements (including leases for personal or real property
and employment agreements), written or oral (including any amendments and other
modifications thereto) listed on Schedule 3.7 to which Seller is a party and
which relate to the Assets or the business or operations of the Station, and
which are in effect on the date of this Agreement.
"Escrow Agent" and "Escrow Agreement" shall have the meanings given
such terms in the Recitals to this Agreement.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all intangible property rights and interests (and
any goodwill associated with any of the foregoing) owned by Seller and which
are used or useful in the business and operations of the Station, including the
goodwill of the Station and the call sign issued by the FCC;
"Licenses" means all material licenses, permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Seller in connection
with the conduct of the business or operations of the
- 2 -
<PAGE> 9
Station, together with any additions thereto between the date of this Agreement
and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tangible Personal Property" means the equipment listed on Schedule
3.6.
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Encumbrances and covenants, restrictions and easements disclosed
on Schedule 3.5 of this Agreement), the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station; and
(g) All records required by the FCC to be kept by the
Station.
- 3 -
<PAGE> 10
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing, all other cash
in any of Seller's bank accounts and cash equivalent investments, such as
certificates of deposit, Treasury Bills and other marketable securities;
(b) Any insurance policies, bonds, letters of credit, or
other similar items, and any cash surrender value in regard thereto;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) All books and records of Seller (other than those
described in Section 2.1(g));
(e) Any interest in and to any refunds due to Seller
including, without limitation, of federal, state, or local franchise, income,
or other taxes, fees or utilities for periods prior to the Closing Date;
(f) The Accounts Receivable and any other accounts or claims
receivable of the Station; and
(g) All other assets described in Schedule 2.2, attached
hereto.
2.3 Purchase Price and Asset Transfer. Notwithstanding anything
to the contrary in this Section 2.3 or elsewhere in this Agreement, Buyer
agrees that its transfer of the Purchase Price and the transfer of the Assets
shall be accomplished in a manner enabling Seller's transfer of the Station
Assets to qualify as part of a like-kind exchange of property within the
meaning of section 1031 of the Code. The Purchase Price for the Assets shall
be Thirteen Million Dollars ($13,000,000), adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of income and expenses. All
expenses arising from the operation of the Station, including business and
license fees, utility charges, real and personal property taxes and assessments
levied against the Assets, property and equipment rentals, applicable copyright
or other fees, commissions, wages, payroll, vacation pay, sick leave and other
benefits accruing to the Transferred Employees (as defined in Section 11.2),
sales and service charges, taxes and similar prepaid and deferred items, shall
be prorated between Buyer and Seller in accordance with the principle that
Seller shall be responsible for all expenses, costs, and liabilities allocable
to the period prior to the Closing Date, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and
- 4 -
<PAGE> 11
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts and assets described on Schedule 3.7 and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to the Escrow Agent acting as a qualified intermediary at the Closing
by wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all of
the liabilities and obligations, except Permitted Encumbrances, arising out of
Buyer's ownership of the Assets or its operation of the Station on or after the
Closing Date. Buyer shall not assume any other obligations or liabilities of
Seller, including (i) any obligations or liabilities under any Contract not
included in the Assumed Contracts, except as otherwise disclosed herein and
agreed to by Buyer, (ii) any obligations or liabilities under the Assumed
Contracts relating to the period prior to the Closing Date, (iii) any
obligations or liabilities relating to any assets described on Schedule 2.2,
(iv) any claims or pending litigation or proceedings relating to the operation
of the Station prior to the Closing, (v) any obligations or liabilities arising
under agreements entered into other than in the ordinary course of business,
(vi) any obligations or liabilities of Seller under any employee pension,
retirement, or other benefit plans or collective bargaining agreements, (vii)
any obligation or liability arising out of or relating to any employment
relationship or agreement with any current or former employee of the Station
for severance benefits, vacation time, or sick leave accrued prior to the
Closing Date, or (viii) all wages and other compensation earned by Seller's
employees prior to Closing and all payroll taxes therein, and all such
obligations and liabilities shall remain and be the obligations and liabilities
solely of Seller.
2.6 Accounts Receivable. At the Closing, Seller shall designate
Buyer as its agent to collect on Seller's behalf, all accounts receivable of
the Station existing at 11:59 p.m., local Miami, Florida time on the day
immediately preceding the Closing Date (the "Effective Time"). Seller shall
deliver to Buyer on or within ten business days after the Closing Date a
complete list of such accounts receivable, showing the name, amount and age of
each account receivable. Buyer shall use its commercially reasonable efforts
to collect such accounts receivable for a period of 90 days from the Closing
Date (the "Collection Period"). On or before the fifth day following the end
of each calendar month during the Collection Period, and on or before the fifth
day following the end of the Collection Period, Buyer shall furnish
- 5 -
<PAGE> 12
Seller with a list of the amounts collected during the preceding month or
portion thereof with respect to such accounts receivable and shall deliver all
such amounts to Seller. Any payment received by Buyer during the Collection
Period from any customer owing on any of such accounts receivable shall first
be applied in reduction of such account, unless the customer disputes its
obligation therefor in a writing specifically designating that the payment be
otherwise applied, in which case Buyer shall promptly return all records
relating to the disputed account to Seller and shall have no further obligation
with respect to the collection thereof. Upon the expiration of the Collection
Period, Buyer shall furnish Seller with a list of all accounts receivable which
then remain uncollected, together with all files concerning the collection or
attempts to collect such accounts receivable hereunder; thereafter, Buyer's
agency shall expire and Buyer shall have no further obligations hereunder,
except that Buyer shall immediately pay over to Seller any amounts subsequently
paid to it with respect to any such accounts receivable. Buyer shall not refer
any of Seller's accounts receivable to a collection agency or to an attorney
for collection, and Buyer shall not make any such referral or compromise, nor
settle or adjust the amount of any of Seller's accounts receivable, except with
the approval of Seller.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and is duly qualified to conduct business in
Florida. Seller has all requisite power and authority (i) to own, lease, and
use the Assets as now owned, leased, and used, (ii) to conduct the business and
operations of the Station as now conducted, and (iii) to execute and deliver
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Seller hereunder and
thereunder. Seller is not a participant in any joint venture or partnership
with any other person or entity with respect to any part of the operations of
the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Seller
have been duly authorized by all necessary actions on the part of Seller. This
Agreement and the Escrow Agreement have been duly executed and delivered by
Seller and constitute the legal, valid, and binding obligations of Seller,
enforceable against it in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
- 6 -
<PAGE> 13
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the Certificate of Incorporation or Bylaws; (iii) will not
conflict with, result in a breach of, or constitute a default under, any law,
judgment, order, ordinance, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; and (v) will not
create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets. Buyer may require
that certain Consents be obtained by Seller as a condition precedent to Buyer's
obligation to close hereunder (the "Required Consents"). Buyer has placed an
asterisk next to each such Consent on Schedule 3.3.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). Except as disclosed on Schedule 3.4, the Licenses have been validly
issued, and Seller is the authorized legal holder thereof. The Licenses
comprise all of the material licenses, permits, and other authorizations
required from any governmental or regulatory authority for the lawful conduct
of the business and operations of the Station in the manner and to the full
extent they are now conducted, and none of the Licenses is subject to any
restriction or condition that would limit the full operation of the Station as
now operated. The Licenses are in full force and effect, and the conduct of
the business and operations of the Station is in accordance therewith. Seller
has no reason to believe that any of the Licenses would not be renewed by the
FCC or other granting authority in the ordinary course.
3.5 Real Property. Schedule 3.5 describes all of the Real
Property owned by Seller ("Owned Property") to be conveyed to Buyer and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). Seller has good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements thereon) included in the Owned Property, free and
clear of all liens, mortgages, pledges, covenants, easements, restrictions,
encroachments, leases, charges, and other claims and encumbrances of any nature
whatsoever, and without reservation or exclusion of any mineral, timber, or
other rights or interests, except for Permitted Encumbrances and covenants,
restrictions and easements which are of record or which individually or in the
aggregate do not materially and adversely affect the present use of the Owned
Property. With respect to each leasehold or subleasehold interest included in
the Real Property being conveyed under this Agreement, so long as Seller
fulfills its obligations under the lease therefor, Seller has enforceable
rights to nondisturbance and quiet enjoyment, and no
- 7 -
<PAGE> 14
third party holds any interest in the leased premises with the right to
foreclose upon Seller's leasehold or subleasehold interest. Except as
disclosed in Schedule 3.5, all towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. Seller has delivered to Buyer a true and complete copy
of the deed pursuant to which Seller acquired the fee estate included in the
Real Property. All Real Property (including the improvements thereon) is
available for immediate use in the conduct of the business and operations of
the Station, and all of the Owned Property complies in all material respects
with all applicable building or zoning codes and the regulations of any
governmental authority having jurisdiction. Subject to matters of public
record, Seller has full legal and practical access to the Real Property.
3.6 Tangible Personal Property. Schedule 3.6 lists in all
material respects all items of Tangible Personal Property owned or used by
Seller to be conveyed to Buyer. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property owned by it,
and none of the Tangible Personal Property owned by Seller is subject to any
security interest, mortgage, pledge, conditional sales agreement, or other lien
or encumbrance, except for Permitted Encumbrances. Each item of Tangible
Personal Property is available for immediate use in the business and operations
of the Station. All items of transmitting and studio equipment included in the
Tangible Personal Property (i) have been maintained in a manner consistent with
generally accepted standards of good engineering practice, and (ii) will permit
the Station and any auxiliary facilities thereto to operate in accordance with
the terms of the FCC Licenses and the rules and regulations of the FCC, and
with all other applicable federal, state, and local statutes, ordinances,
rules, and regulations. To Seller's knowledge, the Tangible Personal Property
is in good and operating condition.
3.7 Contracts. Schedule 3.7 lists all Assumed Contracts. Seller
has delivered to Buyer true and complete copies of all written Assumed
Contracts, true and complete (in all material respects) memoranda of all oral
Assumed Contracts (including any amendments and other modifications to such
Contracts), and a schedule summarizing in all material respects Seller's
obligations as of the date of this Agreement under trade and barter agreements
relating to the Station. All of the Assumed Contracts are in full force and
effect, and are valid, binding, and enforceable in accordance with their terms.
There is not under any Assumed Contract any default by Seller and, to Seller's
knowledge, any other party thereto or any event that, after notice or lapse of
time or both, could constitute a default. Except as disclosed on Schedule 3.3,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Section 3.3 and Section 3.7, no
consent, approval, permit, or authorization of, or declaration to or filing
with any governmental or regulatory authority, or
- 8 -
<PAGE> 15
any other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, or (ii) to permit Seller to assign or
transfer the Assets to Buyer.
3.9 Intangibles. Schedule 3.9 lists all Intangibles (exclusive of
those listed in Schedule 3.4), all of which are valid and in good standing and
uncontested. To Seller's knowledge, Seller is not infringing upon or otherwise
acting adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Seller threatened, with respect thereto. The Intangibles
listed on Schedule 3.9 comprise all intangible property interests necessary to
conduct the business and operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 lists all insurance policies of
Seller that insure any part of the Assets or the business of the Station. All
policies of insurance listed in Schedule 3.10 are in full force and effect.
The insurance policies listed in Schedule 3.10 are adequate in amount with
respect to, and for the full value (subject to customary deductibles) of, the
Assets and insure the Assets and the business of the Station against all
customary and foreseeable risks.
3.11 Reports. All returns, reports, and statements which the
Station is currently required to file with the FCC or with any other
governmental agency have been filed in all material respects, and all reporting
requirements of the FCC and other governmental authorities having jurisdiction
over Seller and the Station have been complied with in all material respects.
All of such returns, reports, and statements are substantially complete and
correct as filed. Seller has timely paid to the FCC all annual regulatory fees
payable with respect to the FCC Licenses.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station. Seller has delivered
to Buyer true and complete (in all material respects) copies of all employment
agreements and employment notices for the employees listed on Schedule 3.12.
Schedule 3.12 also contains a true and complete list as of the date of this
Agreement of all employee benefit plans or arrangements applicable to the
employees of the Station. Seller is not aware of the existence of any
governmental audit or examination of any of such plans or arrangements or of
any facts which would lead it to believe that any such audit or examination is
pending or threatened. Except as set forth on Schedule 3.14, no action, suit,
or claim with respect to any of such plans or arrangements (other than routine
claims for benefits) is pending or, to the knowledge of Seller, threatened, and
Seller possesses no knowledge of any facts which could give rise to any such
action, suit or claim.
- 9 -
<PAGE> 16
(b) Labor Relations. Seller is not a party to or subject to
any collective bargaining agreements with respect to the Station. Seller has
no written or oral contracts of employment with any employee of the Station,
other than those listed in Schedule 3.7. Seller has complied in all material
respects with all laws, rules, and regulations relating to the employment of
labor, including without limitation those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll related taxes, and it has not received any notice
alleging that it has failed to comply in any material respect with any such
laws, rules, or regulations. No controversies, disputes, or proceedings are
pending or, to Seller's knowledge, threatened, between Seller and any employee
(singly or collectively) of the Station, except as described on Schedule 3.12.
No labor union or other collective bargaining representative represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and no event has occurred that could impose on Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from
Seller.
3.14 Claims and Legal Actions. Except as listed on Schedule 3.14,
there is no claim, legal action, counterclaim, suit, arbitration, governmental
investigation or other legal, administrative, or tax proceeding, nor any order,
decree or judgment, in progress or pending, or to the knowledge of Seller
threatened, against Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of
the Station, except for any FCC rulemaking proceedings generally affecting the
radio broadcasting industry, nor does Seller know or have reason to be aware of
any basis for the same, except for any FCC rulemaking proceedings generally
affecting the radio broadcasting industry. In particular, but without limiting
the generality of the foregoing, except as described on Schedule 3.14, there
are no applications, complaints or proceedings pending or, to Seller's
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the radio
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii)
- 10 -
<PAGE> 17
before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Financial Statements. Seller has furnished Buyer with true
and complete copies of the unaudited balance sheet of Seller as of December 31,
1995 and unaudited income statements of Seller as of December 31, 1994 and
December 31, 1995 (collectively "Financial Statements"). To Seller's
knowledge, the Financial Statements have been prepared from the books and
records of Seller, have been prepared in accordance with generally accepted
accounting principles consistently applied and maintained throughout the
periods indicated, accurately reflect the books, records, and accounts of the
Seller (which books, records, and accounts are complete and correct), are
complete and correct in all material respects, and present fairly in all
material respects the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended. None of the
Financial Statements understates in a material manner the true costs and
expenses of conducting the business or operations of the Station, fails to
disclose any material contingent liabilities, or inflates in a material manner
the revenues of the Station.
3.16 Environmental Matters. Except as listed and described on
Schedule 3.16 to this Agreement:
(a) To Seller's knowledge, Seller has complied in all
material respects with all laws, rules, and regulations of all federal, state,
and local governments (and all agencies thereof) concerning the environment,
public health and safety, and employee health and safety, and no charge,
complaint, action, suit, proceeding, hearing, investigation, claim, demand, or
notice is pending against Seller in connection with its ownership or operation
of the Station alleging any failure to comply with any such law, rule, or
regulation.
(b) To Seller's knowledge, Seller has no liability
relating to the ownership and operation of the Station (and there is no basis
related to the past or present operations, properties, or facilities of Seller
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Seller giving rise to any such
liability) under the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Refuse Act, or the Emergency Planning and
Community Right-to-Know Act (each as amended) or any other law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
(c) To Seller's knowledge, Seller has no liability
relating to the Owned Property (and Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility located on the Owned
- 11 -
<PAGE> 18
Property in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To Seller's knowledge, Seller has no liability
relating to its Real Property (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under the Occupational
Safety and Health Act, as amended, or under any other law, rule, or regulation
of any federal, state, or local government (or agency thereof) concerning
employee health and safety.
(e) To Seller's knowledge, Seller has no liability
relating to the ownership and operation of the Station (and Seller has not
exposed any employee to any substance or condition that could form the basis
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to statute)
against Seller giving rise to any such liability) for any illness or personal
injury to any employee.
(f) In connection with the Owned Property, to Seller's
knowledge, Seller has obtained and been in material compliance with all of the
terms and conditions of all material permits, licenses, and other
authorizations which are required under, and has materially complied with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained in,
all federal, state, and local laws, rules, and regulations (including all
codes, plans, judgments, orders, decrees, stipulations, injunctions, and
charges thereunder) relating to public health and safety, worker health and
safety, and pollution or protection of the environment, including laws relating
to emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating
to the manufacture, processing or handling of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes.
(g) To Seller's knowledge, no pollutant, contaminant, or
chemical, industrial, hazardous, or toxic material or waste has ever been
manufactured, buried, spilled, leaked, discharged, emitted, or released by
Seller in connection with the ownership and operation of the Station or by any
other party on any of the Owned Property.
3.17 Compliance with Laws. Seller has complied in all material
respects with (i) the Licenses, and (ii) all federal, state, and local laws,
rules, regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity in any material
respect.
- 12 -
<PAGE> 19
3.18 Brokers. Other than Media Venture Partners, whose fee shall
be the sole responsibility of Seller, there is no broker or finder or other
person who would have any valid claim against any of the parties to this
Agreement for a commission or brokerage fee or payment in connection with this
Agreement or the transactions contemplated hereby as result of any agreement of
or action taken by the Buyer.
3.19 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact required to make any statement made herein or therein not
misleading. All representations, warranties, schedules and other writings
required to be delivered hereunder shall be read and construed together in
their entirety. Seller has no knowledge that any of the representations or
warranties of Buyer contained herein are not true and correct in all material
respects.
3.20 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances which constitute or cause a breach of
a representation or warranty of Seller made in this Agreement (including,
without limitation, the Schedules) on the date such representation or warranty
is made shall not constitute a breach of such representation or warranty if
such event or circumstance is cured on or prior to the Closing Date.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a limited
partnership existing under the laws of the State of Florida and is duly
qualified to conduct business in the State of Florida. Buyer has all requisite
power and authority to execute and deliver this Agreement and the Escrow
Agreement and the documents contemplated hereby and thereby, and to perform and
comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Buyer
have been duly authorized by all necessary actions on the part of Buyer and its
partners. This Agreement and the Escrow Agreement have been duly executed and
delivered by Buyer and constitute the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with their respective terms
except as the enforceability of this Agreement and the Escrow Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
- 13 -
<PAGE> 20
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with the
Certificate of Limited Partnership, the Limited Partnership Agreement or any
other organizational document of Buyer; (iii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, and the rules,
regulations and policies of the FCC as now in effect. Buyer knows of no fact
that would, under existing law and the existing rules, regulations, policies
and procedures of the FCC disqualify Buyer as an assignee of the FCC Licenses
or as the owner and operator of the Station.
4.5 Brokers. There is no broker or finder or other person who
would have any valid claim against any of the parties to this Agreement for a
commission or brokerage fee or payment in connection with this Agreement or the
transactions contemplated hereby as a result of any agreement of or action
taken by Buyer.
4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading. All
representations, warranties and other writings required to be delivered
hereunder shall be read and construed together in their entirety. Buyer has no
knowledge that any of the representations or warranties of Seller contained
herein are not true and correct in all material respects.
4.7 Cure. For all purposes under this Agreement, the existence of
any events or circumstances which constitute or cause a breach of a
representation or warranty of Buyer made in this Agreement on the date such
representation or warranty is made shall not constitute a breach of such
representation or warranty if such event or circumstance is cured on or prior
to the Closing Date.
- 14 -
<PAGE> 21
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING
Between the date of this Agreement and the Closing Date, Seller agrees
as follows:
5.1 Generally. Seller shall operate the Station diligently in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except as required by written employee agreements and in accordance with past
practices or with the prior written consent of Buyer. Seller shall make no
material changes in the employment practices, policies or procedures prior to
Closing without prior written approval of Buyer.
5.3 Contracts. Except in the ordinary course of business and
consistent with its past practice, Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend, renew or, on its
behalf, terminate any Assumed Contract (or waive any material right
thereunder), or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness) that will be binding on
Buyer after Closing. Prior to the Closing Date, Seller shall deliver to Buyer
a list of all Contracts entered into between the date of this Agreement and the
Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except (i) where no
longer used or useful in the business or operations of the Station, (ii) in
connection with the acquisition of replacement property of equivalent kind and
value, or (iii) in the ordinary course of its business consistent with its past
practices.
5.5 Encumbrances. Seller shall not create or assume, and shall
use its best efforts not to permit to exist any claim, liability, mortgage,
lien, pledge, condition, charge, or encumbrance of any nature whatsoever upon
the Assets, except for (i) liens which shall be removed on or prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, (iii) liens
for obligations of Seller which Buyer will assume under leases and Assumed
Contracts assigned to Buyer, and (iv) conditions, restrictions or encumbrances
imposed by governmental authorities. The security interests referred to in the
foregoing clauses (i)-(iv) are collectively referred to herein as "Permitted
Encumbrances".
5.6 Licenses. Seller shall use its best efforts to not cause or
permit, by any act or failure to act, any of the Licenses to expire or to be
revoked, suspended, or modified, or take
- 15 -
<PAGE> 22
any action that could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses. Seller shall not fail to prosecute with due diligence
any applications to any governmental authority in connection with the operation
of the Station.
5.7 Rights. Seller shall not waive any material right relating to
the Station or any of the Assets.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement. Without limiting
the generality of the foregoing, Seller covenants that neither it nor any of
its members, officers or agents will, prior to the Closing Date, (a) solicit,
initiate or encourage the submission of any proposal or offer relating to any
(i) liquidation, dissolution or recapitalization, (ii) merger or consolidation,
(iii) acquisition or purchase of securities or assets, except in the ordinary
course of business consistent with past practices, or (iv) similar transaction
or business combination, in each case involving Seller or (b) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt by any party to do or seek any of the foregoing. Seller shall notify
Buyer as soon as practicable if any party makes any proposal with respect to
any of the foregoing. Notwithstanding any other provision in this Agreement to
the contrary, in the event that Seller violates its obligations in this Section
5.8, Buyer shall have the right to seek specific performance of Seller's
obligations under this Agreement.
5.9 Access to Information. At the reasonable request of Buyer
upon reasonable advance notice, Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
during regular hours to the Assets and to all other properties, equipment,
books, records, Contracts, and documents relating to the Station for the
purpose of investigation, audit, and inspection, including investigations,
audits, and inspections described in Sections 6.5 and 6.6, and will furnish or
cause to be furnished to Buyer or its authorized representatives all
information with respect to the affairs and business of the Station that Buyer
may reasonably request. Without limiting the generality of the foregoing,
Seller shall give Buyer and its counsel, accountants and other authorized
representatives reasonable access to Seller's financial records and Seller's
employees, counsel, accountants and other representatives for the purpose of
preparing and auditing such financial statements as Buyer determines, in its
reasonable judgment, are required or advisable to comply with federal or state
securities laws and the rules and regulations of securities markets as a result
of the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts to
maintain all of the Assets in good condition (ordinary wear and tear excepted),
and use, operate, and maintain all of the Assets in a reasonable manner.
Seller shall maintain inventories of spare parts and
- 16 -
<PAGE> 23
expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, Seller shall use the proceeds of any claim under any insurance policy
to repair, replace, or restore any of the Assets that are lost, damaged,
impaired, or destroyed to their condition prior to the occurrence of such act.
5.11 Insurance. Seller shall maintain the existing or
substantially similar insurance policies on the Station and the Assets.
5.12 Consents. Seller shall use its best efforts at no additional
cost to it, other than transactional costs needed to prepare and execute the
Consents, to obtain the Consents and the estoppel certificates described in
Section 8.2(b), without any change in the terms or conditions of any Contract
or License that could be less advantageous to the Station than those pertaining
under the Contract or License as in effect on the date of this Agreement.
Seller shall promptly advise Buyer of any difficulties experienced in obtaining
any of the Consents and of any conditions proposed, considered, or requested
for any of the Consents. Upon Buyer's request, Seller shall cooperate with
Buyer and use its best efforts to obtain from the lessors under each Real
Property lease such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Buyer's lenders
may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.15 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.16 Financial Information. Seller shall furnish to Buyer within
twenty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a
statement of operating cash flow for the month just ended and such other
financial information (including information on payables and receivables) as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect in all material respects the books, records,
and accounts of the Station, shall be complete and correct in all material
respects, and shall present fairly the financial condition of the Station as at
their respective dates and the results of operations for the periods then
ended.
- 17 -
<PAGE> 24
5.17 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages or types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of Seller are
required by the public interest.
5.18 Preservation of Business. Seller shall use its best efforts
to preserve the business and organization of the Station and use its best
efforts to keep available to the Station its present employees and to preserve
the audience of the Station and the Station's present relationships with
suppliers, advertisers, and others having business relations with it, to the
end that the business, operations, and prospects of the Station shall be
unimpaired at the Closing Date. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Station shall
be maintained.
5.19 Personnel Recommendations. Seller shall promptly notify
Buyer as personnel vacancies occur at the Station and consider for employment
all personnel recommended by Buyer for such vacant positions.
5.20 Collection of Accounts Receivable. Seller shall collect the
Accounts Receivable of the Station only in the ordinary course consistent with
its past practices.
5.21 Employees. Seller shall cooperate with Buyer's efforts to
determine which Station employees Buyer wishes to hire, on the Closing Date,
including without limitation, by providing reasonable access to employee
personnel records and to the employees. For each employee of the Seller with
respect to the Station which Buyer does not intend to offer to employ following
the Closing Date (which notification shall be provided to Seller within 30 days
of the date hereof), Seller shall notify such employee of such decision in
writing on the Closing Date (which notification shall be provided to Buyer
prior to the Closing Date for Buyer's review and comment). Absent an
affirmative written statement from Buyer regarding Buyer's intention to hire an
employee of the Station, after the Closing Date Seller may approach any
employee to whom Buyer did not offer employment.
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an appropriate
application for the FCC Consent and shall file the application with the FCC
within ten (10) business days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable
- 18 -
<PAGE> 25
diligence and otherwise use their best efforts to obtain a grant of the
application as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by the party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period of
the FCC Consent, and neither party shall have terminated this Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the FCC Consent shall limit the
exercise by either party of its rights under Section 9.
(c) In connection with the qualification of the transfer
of the Assets pursuant to this Agreement as a like-kind transfer to which
Section 1031 of the Code applies, Seller, at its own expense, may file a short
form application to transfer the assets of the Station to another wholly-owned
subsidiary of Cox Broadcasting, Inc.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station, and all such operations,
including complete control and supervision of all of the Station's programs,
employees, and policies, shall be the sole responsibility of Seller until the
Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation,
or condemnation of any of the Assets from any cause whatsoever shall be borne
by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs which (i) causes the Station to cease broadcasting
operations for a period of three or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer, in its sole discretion, may (x) terminate this Agreement
forthwith without any further obligations hereunder upon written notice to
Seller, in which event all funds held by the Escrow Agent pursuant to the
Escrow Agreement, including all interest and other proceeds from the investment
of such funds, shall be immediately returned to Buyer, or (y) proceed to
consummate the transactions contemplated by this Agreement. In the event Buyer
elects to proceed to consummate the transactions contemplated by this Agreement
and complete restoration and replacement of the Assets is not completed by the
Closing Date, Buyer shall
- 19 -
<PAGE> 26
complete the restoration and replacement of the Assets after the Closing Date,
in which event Seller shall deliver to Buyer the balance of the insurance
proceeds received in connection with such damage, destruction or other event.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
and its officers, directors, employees, lenders, accountants, representatives,
agents, consultants and advisors will keep confidential any information
obtained from the other party in connection with the transactions contemplated
by this Agreement. If this Agreement is terminated, each party will return to
the other party all information obtained by the such party from the other party
in connection with the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and sole
expense, retain an environmental consultant to be selected by Buyer to perform
a Phase I environmental survey of the properties of the Station which survey
shall be commenced within thirty days of the execution of this Agreement and
promptly completed thereafter. If the survey discloses any material
environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Buyer shall so notify Seller as soon
as practicable and shall promptly provide Seller with a copy of the Phase I
environmental survey and all ancillary reports.
6.6 Engineering Study. Buyer may, at its option and sole expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards which study shall be commenced within thirty
days of the execution of this Agreement and promptly completed thereafter. If
the survey discloses any material deficiencies in the operations or equipment
of the Station, Buyer shall so notify Seller as soon as practicable and shall
promptly provide Seller with a copy of all such studies and reports.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, (i) Seller, except as provided for in Section
5.12, and Buyer shall have no obligation to expend funds to obtain any of the
Consents and (ii) Buyer shall have no obligation to agree to any adverse change
in any License or Assumed Contract to obtain a
- 20 -
<PAGE> 27
Consent required with respect thereto. Buyer agrees that Seller's transfer of
the Assets to Buyer shall be accomplished in a manner enabling the transfer to
qualify as part of a like-kind exchange of property within the meaning of
Section 1031 of the Code. Buyer shall cooperate with Seller, which cooperation
shall include, without limitation, the manner in which the Purchase Price is
paid and the Assets are transferred through the Escrow Agent acting as a
qualified intermediary under Treasury Regulations, to qualify the transfer of
the Station as part of a like-kind exchange of property within the meaning of
Section 1031 of the Code.
6.8 Title Insurance and Surveys. Seller will cooperate with Buyer
at no expense to Seller and provide such assistance as Buyer may reasonably
request in connection with Buyer's efforts to obtain on or before Closing, at
Buyer's election and expense, a policy of title insurance and a current survey
with respect to the Real Property, including, without limitation, using its
best efforts to cause all lease agreements relating to the Real Property to be
recorded in the appropriate public recording offices.
6.9 Sales Tax Filings. Prior to Closing, Seller shall continue to
file sales tax returns with respect to the Station in accordance with Seller's
past practices and shall concurrently deliver copies of all such returns to
Buyer.
6.10 Access to Books, Records and Assets. Seller shall provide
Buyer access and the right to copy for a period of three years from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller (i) access and the right to copy for a
period of three years from the Closing Date any books and records relating to
the Assets that are included in the Assets and (ii) access and the right to
perform an appraisal after the Closing, at Seller's sole expense, of the Assets
that are included in the Assets for purposes of Seller's valuation of the
Assets.
6.11 Studio Lease-Back. Buyer shall lease the building
containing the Station's studio to Seller, for a period of one year commencing
on the Closing Date, substantially on the terms and subject to the conditions
of the form of lease attached hereto as Schedule 6.14 (the "Studio Lease").
SECTION 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND
SELLER AT CLOSING
7.1 Conditions Precedent to Obligations of Buyer. All obligations
of Buyer at the Closing are subject at Buyer's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
- 21 -
<PAGE> 28
(b) Covenants and Conditions. Seller shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Consents. All Required Consents shall have been obtained
and delivered to Buyer without any material adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof; Seller shall have complied with any
conditions imposed on it by the FCC Consent and the FCC Consent shall have
become a Final Order; provided, however, that Buyer may, at its sole option,
waive the condition that the FCC Consent shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the holder
of all Licenses and there shall not have been any modification of any License
that could have a material adverse effect on the Station or the conduct of its
business and operations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License.
(f) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Except as otherwise provided in Section
6.3(b)(y), between the date of this Agreement and the Closing Date, there shall
have been no material adverse change in the Assets of the Station, including
any damage, destruction, or loss affecting any material Assets used or useful
in the conduct of the business of the Station.
7.2 Conditions Precedent to Obligations of Seller. All
obligations of Seller at the Closing are subject at Seller's option to the
fulfillment prior to or at the Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
- 22 -
<PAGE> 29
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) Consents. All Required Consents shall have been
obtained, provided that Seller has fully complied with the requirements of
Section 5.12 hereof and Seller's failure to comply with Section 5.12 shall be
deemed to have satisfied this condition of Closing for Seller.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. Except as provided in Section 8.1(c)
hereof, the Closing shall take place at 10:00 a.m. on a date not earlier than
the first business day after the FCC Consent is granted and not later than ten
business days following the date upon which the FCC Consent has become a Final
Order to be set by Buyer on at least five days' written notice to Seller. If
Buyer fails to specify the date for Closing pursuant to the preceding sentence
prior to the fifth business day after the date upon which the FCC Consent
becomes a Final Order, the Closing shall take place on the fifteenth (15th)
business day after the date upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the offices
of Buyer or any other place that is agreed upon by Buyer and Seller.
(c) Extension of the Closing Date. In the event Buyer shall
have provided Seller with notice under Section 9.2(e) of a material
environmental hazard or under Section 9.2(f) of a material technical deficiency
and Seller shall have commenced and diligently pursued remediation prior to the
Closing Date but the cause thereof shall not have been remedied prior to the
Closing Date, then, at Seller's election, the Closing Date shall be
automatically extended by the parties for up to sixty (60) days to provide
Seller reasonable time to complete remediation of the cause.
(d) Like-Kind Exchange. On the Closing Date, Buyer and
Seller shall be prepared to effectuate the transfer of the Assets of the
Station in a manner which enables Seller to qualify the transaction as part of
a like-kind exchange of property within the meaning of Section 1031 of the
Code.
- 23 -
<PAGE> 30
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents in
form reasonably acceptable to Seller and Buyer which shall be sufficient to
vest good and marketable title to the Assets in the name of Buyer, free and
clear of all mortgages, liens, restrictions, encumbrances, claims, and
obligations, except for Permitted Encumbrances and claims, liabilities,
security interests, liens, conditions, changes and encumbrances disclosed on
Schedule 3.5 of this Agreement;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of Seller by its President or any Vice President of
Seller, certifying (1) that the representations and warranties of Seller
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date; and (2) that Seller
has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(e) Licenses, Contracts, Business Records, Etc. All
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Seller in
connection with its operations;
(f) Opinion of Counsel. An opinion of Seller's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(f) hereto;
(g) Lender's Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder; and
(h) Studio Lease. The Studio Lease in the form of Schedule
6.11 duly executed by Seller.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
- 24 -
<PAGE> 31
(a) Purchase Price. The Purchase Price as provided in
Section 2.4;
(b) Assumption Agreements. Appropriate assumption agreements
in form reasonably acceptable to Seller and Buyer pursuant to which Buyer shall
assume and undertake to perform Seller's obligations under the Licenses and
Assumed Contracts arising on or after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by the President or any Vice
President of the general Partner of Buyer, certifying (1) that the
representations and warranties of Buyer contained in this Agreement are true
and complete in all material respects as of the Closing Date as though made on
and as of that date, and (2) that Buyer has in all material respects performed
and complied with all of its obligations, covenants, and agreements set forth
in this Agreement to be performed and complied with on or prior to the Closing
Date;
(d) Studio Lease. The Studio Lease in the form of Schedule
6.11 duly executed by Buyer; and
(e) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.3(e) hereof.
SECTION 9 TERMINATION
9.1 Termination by Mutual Consent. This Agreement may be
terminated by the mutual agreement of Buyer and Seller at any time prior to the
Closing.
9.2 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement have not been satisfied or waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
April 1, 1997.
- 25 -
<PAGE> 32
9.3 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
April 1, 1997.
(d) Interruption of Service. Upon the occurrence of the
events described in Section 6.3(b) with respect to the cessation or material
impairment of the signal transmission of the Station.
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs, as indicated in the environmental
study described in Section 6.5, within 30 days prior to the Closing Date, and
the cause thereof shall not have been remedied prior to the Closing Date,
Seller having no obligation to perform such remediation.
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date, Seller having no obligation to perform such
remediation.
(g) Bankruptcy Proceeding. If a voluntary or involuntary
proceeding under federal or state bankruptcy or similar laws is initiated by or
against Seller or if a receiver, liquidator, trustee, custodian or similar
official for, or assignee for the benefit of creditors of, Seller is appointed.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.2 or Section 9.3 and neither party is in material breach
of this Agreement, the parties hereto shall not have any further liability to
each other with respect to the purchase and sale of the Assets. If this
Agreement is terminated by Seller due to Buyer's material breach of this
Agreement, then Seller shall be entitled to retain Six Hundred and Fifty
Thousand Dollars ($650,000) of the total amount held by the Escrow Agent, which
shall be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller
- 26 -
<PAGE> 33
by reason of Buyer's material breach of this Agreement. Seller and Buyer agree
in advance that actual damages would be difficult to ascertain and that
$650,000 is a fair and equitable amount to reimburse Seller for damages
sustained due to Buyer's material breach of this Agreement. If this Agreement
is terminated by Buyer due to Seller's material breach of any provision of this
Agreement, Buyer shall have all rights and remedies set forth under Section
10.5 hereof.
9.5 Escrow Deposit. Buyer has deposited with the Escrow Agent the
sum of Six Hundred and Fifty Thousand Dollars ($650,000) in accordance with the
Escrow Agreement in the form of Schedule 9.5 hereof. All such funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.2 or 9.3 and Buyer is not in material breach of this Agreement, all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's material breach of this Agreement, then $650,000 held by the Escrow
Agent pursuant to the Escrow Agreement shall be disbursed by the Escrow Agent
to or at the direction of Seller as liquidated damages under Section 9.4 above
and any interest or other proceeds from the investment of funds held by the
Escrow Agent after payment to Seller of $650,000 shall be disbursed by the
Escrow Agent to or at the direction of Buyer.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing; provided,
however, that no representation or warranty in this Agreement shall be deemed
to be made as of any date other than the date of this Agreement and the Closing
Date; and provided further, however, that any claim arising from any breach of
any representation or warranty shall be made within fifteen months after the
Closing. Any investigations by or on behalf of any party hereto shall not
constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any
- 27 -
<PAGE> 34
representation or warranty made by Seller or relieve Seller of any obligations
under this Agreement as the result of a breach of any of its representations
and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages resulting
from the operation and ownership of the Station prior to the Closing Date.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees
and expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
- 28 -
<PAGE> 35
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim.
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five days after
written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity as applicable.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
- 29 -
<PAGE> 36
(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the members, shareholders, directors, officers, employees,
and representatives of any Claimant although for the purpose of the procedures
set forth in this Section 10.4, any indemnification claims by such parties
shall be made by and through the Claimant.
(f) Notwithstanding anything in this Agreement or any
Agreement executed in connection herewith to the contrary, (i) in no event
shall either party be liable to the other for any damages or claims until the
cumulative amount of such damages or claims against the Indemnifying Party
equals or exceeds Fifty Thousand Dollars and No/100 ($50,000.00) and (ii) in no
event shall Seller be liable for any damages or claims in excess of the
Purchase Price.
(g) Notwithstanding anything in this Agreement or any
agreement executed in connection herewith to the contrary, (i) the
indemnification provided for in Paragraph 10 hereof shall be the sole and
exclusive remedy of Claimant and the sole liability of the Indemnifying Party
resulting from a breach of any representations or warranties contained herein,
(ii) in determining the extent of any damages which a party incurs, suffers or
becomes subject to as a result of matters for which it is entitled to
indemnification, appropriate deductions shall be made for any insurance
proceeds which inure to the benefit of such party or any affiliate thereof, and
(iii) no claim may be made for damages or losses arising hereunder except for
actual out of pocket costs and expenses, the parties specifically agreeing that
no claims may be made for consequential, punitive or special damages.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages along would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled to obtain specific performance
of the terms of this Agreement in addition to any other remedies available at
law or equity. If any action is brought by Buyer to enforce this Agreement,
Seller shall waive the defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of the fees payable to the FCC in connection with the
filing of the applications for FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with
- 30 -
<PAGE> 37
the authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Employee Benefits.
(a) Within a reasonable period of time after the Closing,
Seller shall cause to be transferred from the Cox Enterprises, Inc. Savings and
Investment Plan ("Cox 401(k) Plan") to ______________ ("Buyer's 401(k) Plan")
an amount in cash equal to the aggregate account balances held in the Cox
401(k) Plan as of the date of transfer with respect to all employees of the
Station that are hired by Buyer as of the Closing Date (the "Transferred
Employees"). Prior to the date of such transfer, and as preconditions thereto:
(i) Buyer shall deliver to Seller a copy of the most recently issued Internal
Revenue Service ("IRS") determination letter (or other proof reasonably
satisfactory to counsel for the Seller) that Buyer's 401(k) Plan is qualified
under the Code, and (ii) Seller shall deliver to Buyer a copy of the most
recently issued IRS determination letter (or other proof reasonably
satisfactory to counsel for the Buyer) that the Cox 401(k) Plan is qualified
under the Code. Subsequent to the transfer of assets to Buyer's 401(k) Plan,
neither the Seller nor the Cox 401(k) Plan shall retain any liability with
respect to the Transferred Employees to provide them with benefits in
accordance with the terms of Cox 401(k) Plan. Seller and Buyer agree to
cooperate with respect to any government filing, including, but not limited to,
the filing of IRS Forms 5310-A, if necessary, to effect the transfer of assets
contemplated by this Section 10.12. With respect to each Transferred Employee,
Buyer shall give past service credit for all crediting purposes under Buyer's
401(k) Plan for all periods of time after the Closing Date for each person's
employment service with Seller to the same extent such employment service was
credited for similar purposes under the Cox 401(k) Plan prior to the Closing
Date.
(b) Buyer shall offer welfare benefit plan coverage, on terms
and conditions determined by Buyer, to all of the Transferred Employees of the
Closing Date. For purposes of providing such coverage, Buyer shall waive all
preexisting condition limitations for all such Transferred Employees covered by
Seller's welfare benefit plans as of the Closing Date (other than preexisting
conditions which were excluded by Seller's welfare benefit plans) and shall
provide such welfare benefit coverage effective as of the Closing Date without
the application of any eligibility period for coverage. In addition, Buyer
shall credit all employee payments toward deductible and co-payment obligation
limits under Seller's welfare benefit plans for the plan year which includes
the Closing Date as if such payments had been made for similar purposes under
Buyer's welfare benefit plans during the plan year which includes the Closing
Date, with respect to the Transferred Employees.
(c) In accordance with the provisions of Internal Revenue
Service Revenue Procedure 84-77, Buyer shall assume the obligation to make all
Form W-2 income tax report
- 31 -
<PAGE> 38
filings for the calendar year in which the Closing Date occurs, and Seller
shall be relieved from making any such filings with respect to the Transferred
Employees as of the Closing Date. Seller shall provide to Buyer all
information, including withholding certificates, as may be reasonably requested
by Buyer to accomplish Buyer's obligations in this paragraph (c).
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Cox Communications, Inc.
1400 Lake Hearn Drive, N.E.,
Atlanta, Georgia 30319
Attention: Mr. Nicholas D. Trigony
If to Buyer: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign any or all of its rights and
obligations under this Agreement to one or more subsidiaries of Buyer without
seeking or obtaining Seller's prior approval, and Buyer may collaterally assign
its rights and interests hereunder to its lenders without seeking or obtaining
Seller's prior approval. Upon any permitted assignment by Buyer or Sellers in
accordance with this Section 11.4, all references to "Buyer" herein shall be
deemed to be references to Buyer's assignee and all references to "Seller"
herein shall be deemed to be references to Seller's assignee, as the case may
be; provided, however, no assignment by Paxson Broadcasting of Miami, Limited
Partnership or WIOD, Inc. shall relieve the assignor of its obligations to the
other party under this Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure,
- 32 -
<PAGE> 39
complete, and evidence the full and effective transfer of the Assets to Buyer
pursuant to this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 JURISDICTION. ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING
OUT OF OR BASED UPON THIS AGREEMENT SHALL BE BROUGHT IN THE LOCAL COURTS OF
DADE COUNTY, FLORIDA OR IN THE UNITED STATES DISTRICT COURT FOR THE DADE
DISTRICT OF FLORIDA. EACH PARTY HEREBY (A) IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE LOCAL COURTS OF DADE COUNTY, FLORIDA AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DADE DISTRICT OF
FLORIDA FOR THE PURPOSE OF ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT, AND (B) WAIVES, AND AGREES NOT TO ASSERT, BY WAY
OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION, OR PROCEEDING,
ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE
ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR
EXECUTION, THAT THE SUIT, ACTION, OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION, OR PROCEEDING IS IMPROPER, OR THAT
THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURT, EXCEPT AS OTHERWISE
PROVIDED IN SECTION 11.2 HEREOF, AND (C) WAIVES AND AGREES NOT TO SEEK ANY
REVIEW BY ANY COURT OF ANY JURISDICTION OTHER THAN THE STATE OF FLORIDA OR THE
UNITED STATES WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF THE JUDGMENT
OF ANY SUCH DADE COUNTY OR FEDERAL COURT.
11.8 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.9 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.10 Entire Agreement. This Agreement, the schedules hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the
- 33 -
<PAGE> 40
subject matter hereof. This Agreement supersedes all prior negotiations
between the parties and cannot be amended, supplemented, or changed except by
an agreement in writing that makes specific reference to this Agreement and
which is signed by the party against which enforcement of any such amendment,
supplement, or modification is sought.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.11.
11.12 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings with governmental authorities as may, in its judgment, be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, in which case the
other party shall be first notified in writing.
11.13 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.14 Knowledge. Where any representation or warranty of Seller
contained in this Agreement is expressly qualified by reference "to the best
knowledge of", the "knowledge of" or any similar language, it refers to the
actual knowledge of the Seller as to the existence or absence of facts that are
the subject to such representations and warranties without any independent
inquiry or investigation other than having consulted with the executive
officers of Seller who, in the reasonable judgment of Seller, are most familiar
with the matters covered by such representations and warranties (but not with
outside third parties).
11.15 Schedules. Notwithstanding any provision contained herein to
the contrary, any matter, fact, event, information or item disclosed in any of
the Schedules hereto shall be deemed to have been made in all of the Schedules,
and no liability shall attach to Seller for failure to make appropriate
disclosure in any particular Schedule
- 34 -
<PAGE> 41
in the event that any matter, fact, event, information or item which should
have been disclosed in such particular Schedule is disclosed or contained in
any other Schedule. For purposes of this Agreement, the term "Schedules" shall
include all schedules to the Agreement and the Disclosure Schedule.
11.16 No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.
- 35 -
<PAGE> 42
IN WITNESS WHEREOF, this Agreement has been executed by Seller and
Buyer as of the date first written above.
WIOD, INC.
By: /s/ John J. Rouse
---------------------------
Name: John J. Rouse
-------------------------
Title: Treasurer
------------------------
PAXSON BROADCASTING OF MIAMI, LIMITED
PARTNERSHIP
By: Paxson Communications of Florida, Inc.,
its general partner
By: /s/ Lowell W. Paxson
----------------------------
Name: Lowell W. Paxson
--------------------------
Title: Chairman
-------------------------
- 36 -
<PAGE> 1
EXHIBIT 10.107
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is dated as of April 12, 1996, by
and among Devon W. Paxson ("Devon"), Todd L. Paxson ("Todd" and together with
Devon, individually, a "Stockholder" and collectively, the "Stockholders"), Pax
Jax, Inc., a Florida corporation (the "PCC Subsidiary"), Paxson Communications
Corporation, a Delaware corporation ("PCC"), and Todd Communications, Inc., a
Florida corporation (the "Company").
RECITALS
A. The respective Boards of Directors of the Company, PCC and the
PCC Subsidiary have approved the merger of the Company with and into the PCC
Subsidiary, upon the terms and subject to the conditions set forth in this
Agreement (the "Merger"), whereby each issued and outstanding share of Common
Stock, par value $1.00 per share, of the Company (the "Company Common Stock"),
will be converted into the right to receive Class A Common Stock, par value of
$.001 per share, of PCC.
B. For Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended
(the "Code").
C. The Company is the licensee of and owns and operates radio
station WFSJ(FM), St. Augustine, Florida (the "Station").
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, the parties hereto intending to be
legally bound, agree as follows:
1. THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Florida Business
Corporation Act (the "FBCA"), the Company shall be merged with and into the PCC
Subsidiary at the Effective Time (as defined below). Following the Merger, the
separate corporate existence of the Company shall cease and the PCC Subsidiary
shall continue as the surviving corporation (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of the Company in
accordance with the FBCA.
1.2 Effective Time. At the time of the Closing (as defined
below), the Surviving Corporation shall file articles of merger or other
appropriate documents (in any such case, the "Articles
<PAGE> 2
-2-
of Merger") executed in accordance with the relevant provisions of the FBCA and
shall make all other filings or recordings required under the FBCA. The Merger
shall become effective upon the filing of the Articles of Merger with the
Department of State of the State of Florida (the "Effective Time").
1.3 Effects of the Merger. The Merger shall have the effects set
forth in Section 1106 of the FBCA.
1.4 Articles of Incorporation and By-laws.
(a) The articles of incorporation of the PCC Subsidiary as in
effect immediately prior to the Effective Time shall become the articles of
incorporation of the Surviving Corporation at the Effective Time until
thereafter changed or amended as provided therein or by applicable law.
(b) The By-laws of the PCC Subsidiary as in effect
immediately prior to the Effective Time shall become the By-laws of the
Surviving Corporation at the Effective Time until thereafter changed or amended
as provided therein or by applicable law.
1.5 Directors. The directors of the PCC Subsidiary immediately
prior to the Effective Time shall become the directors of the Surviving
Corporation at the Effective Time, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
1.6 Officers. The officers of the PCC Subsidiary immediately
prior to the Effective Time shall become the officers of the Surviving
Corporation at the Effective Time, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
1.7 Effect on Capital Stock. As of the Effective Time, by virtue
of the merger and without any action on the part of any holder of any shares of
the Company, the PCC Subsidiary or any other party:
(a) Capital Stock of PCC Subsidiary. Each share of the
capital stock of the PCC Subsidiary issued and outstanding immediately prior to
the Effective Time shall be converted into and become one share of Common Stock
of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Any share of Company
Common Stock held in treasury by the Company immediately prior to the Effective
Time shall be automatically canceled and
<PAGE> 3
-3-
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor.
(c) PCC Shares. The shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive an aggregate number of shares of the Class
A Common Stock, par value $.001 per share, of PCC (the "PCC Shares") equal to
(i) $5,000,000, minus the principal amount outstanding of all indebtedness of
the Company as of the Effective Time together with any unpaid interest or other
unpaid charges accrued on such indebtedness on or before the Effective Time,
divided by (ii) $16.00. The PCC Shares shall be apportioned between the
Stockholders pro rata in accordance with their respective ownership interest in
the Company immediately prior to the Effective Time. As of the Effective Time,
all shares of Company Common Stock shall be no longer outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such share of Company Common Stock shall
cease to have any rights with respect thereto except the right to receive the
PCC Shares in the amount set forth herein.
2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
Each Stockholder jointly and severally represents and warrants to the
PCC Subsidiary and PCC as follows:
2.1 Organization, Standing and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of Florida and authorized to transact business in each jurisdiction where
the conduct of the business or operations of the Company require the Company to
qualify to conduct its business as presently conducted. The Company has all
requisite power and authority to conduct the business operations of the Station
as now conducted. The Company is not a participant in any joint venture or
partnership with any person or entity with respect to any part of the
operations of the Station. The Company does not own any equity interest in any
corporation, partnership or other entity. The Stockholders and the Company
have the legal power and authority to execute, deliver and perform this
Agreement. This Agreement has been authorized by all necessary corporate
actions on the part of the Company and its stockholders.
2.2 Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth on Exhibit A hereto and is owned
by the Stockholders beneficially and of record as set forth on Exhibit A
hereto. The Company Common Stock constitutes all of the issued and outstanding
capital stock of
<PAGE> 4
-4-
the Company. The Company Common Stock has been duly authorized, is validly
issued, fully paid and nonassessable and was issued in accordance with all
federal and state securities laws. There are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, voting trusts, shareholders
agreements, proxies or other agreements or commitments which relate to the
issuance, disposition or acquisition of the capital stock of the Company, the
voting of the capital stock or the conduct of the affairs of the Company or
otherwise to the capital stock of the Company.
2.3 Binding Obligation. This Agreement has been duly executed and
delivered by the Stockholders and the Company and constitutes the legal, valid,
and binding obligation of the Stockholders and the Company, enforceable against
them in accordance with its terms except as the enforceability of this
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally, and by judicial discretion in the enforcement of
equitable remedies.
2.4 Absence of Conflicting Agreements. Subject to obtaining the
consents listed on Exhibit B hereto (the "Consents"), the execution, delivery
and performance of this Agreement and the documents contemplated hereby (with
or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iii) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license or permit to which the Company or any
Stockholder is a party or by which the Company or any Stockholder may be bound;
and (iv) will not conflict with any provision of the Company's Certificate of
Incorporation or By-laws.
2.5 Licenses. All licenses, permits and other authorizations
issued to the Company by any federal, state or local governmental authority,
including by the FCC (the "Licenses") constitute all of the licenses, permits
and authorizations necessary for the conduct of the business or operation of
the Station in accordance with applicable laws and in the manner and to the
extent presently operated. Such Licenses have been validly issued and the
Company is the authorized legal holder thereof. None of the Licenses is
subject to any restriction or condition which would limit the full operation of
the Station as presently operated. The Licenses are in full force and effect.
The business and operations of the
<PAGE> 5
-5-
Station are being conducted in accordance with the Licenses. The Stockholders
have no reason to believe that the Licenses issued by the FCC will not be
renewed by the FCC in the ordinary course.
2.6 Title to and Condition of Real Property. The Company has good
fee simple title or a valid leasehold interest to all of its real property and
such real property constitutes all of the real property necessary for the
conduct of the business or operation of the Station in the manner and to the
extent presently operated. Such real property is held by the Company free and
clear of any security interest, mortgage, pledge or other lien or encumbrance
other than liens for taxes not yet due. The buildings, improvements and
fixtures that are included in such real property are in all material respects
in good operating order (ordinary wear and tear excepted) and available for
immediate use in the ordinary course of the Station's business.
2.7 Title to and Condition of Tangible Personal Property. The
Company owns and has good title to all of the tangible personal property of the
Station, free and clear of any security interest, mortgage, pledge, conditional
sales agreement or other lien or encumbrance, except for liens for taxes not
yet due. Such personal property constitutes all of the personal property
necessary for the conduct of the business or operation of the Station in the
manner and to the extent presently conducted. Each item of material personal
property is in good operating condition and repair (ordinary wear and tear
excepted), and is available for immediate use in the business or operations of
the Station.
2.8 Contracts. The Stockholders have delivered to the PCC
Subsidiary true and complete copies of all contracts to which the Company is a
party or is bound. Other than such contracts, the Company requires no contract
or agreement to enable it to carry on its business as presently conducted. All
of such contracts are in full force and effect and are valid, binding and
enforceable in accordance with their terms. The Company is not in breach, nor
to the Stockholders' knowledge is any other party in breach, of the terms of
any such contracts.
2.9 Financial Statements. The Company has no indebtedness or
liabilities other than as set forth in financial statements previously
delivered to the PCC Subsidiary and other than liabilities incurred in the
ordinary course of business in an aggregate amount at any one time outstanding
not in excess of $10,000.
2.10 Reports. All returns, reports and statements which the Company
is currently required to file with the FCC and any other
<PAGE> 6
-6-
governmental agency have been filed. All of such reports, returns and
statements are complete and correct in all material respects as filed.
2.11 Employee Benefit Plans. All employee benefit plans or
compensation arrangements of the Company were established and have been
executed, managed and administered without material exception in accordance
with all applicable requirements of the Code, the Employee Retirement Income
Security Act of 1974, as amended, and other applicable laws. The Stockholders
are not aware of the existence of any governmental audit or examination of any
of the Company's employee benefit plans or compensation arrangements or of any
facts which would leave them to believe that any such audit or examination is
pending or threatened. There exists no action, suit or claim (other than
routine claims for benefits) with respect to any employee benefit plans or
compensation arrangements sponsored by the Company pending or, to the knowledge
of the Stockholders, threatened against any of such employee benefit plans or
compensation arrangements. The Stockholders have delivered to the PCC
Subsidiary true and correct copies of all such employee benefit plans and
compensation arrangements.
2.12 Labor Relations. The Company is not a party to or subject to
any collective bargaining agreements. No controversies, union disputes or
proceedings are pending or, to the knowledge of the Stockholders, threatened,
between the Company and employees (singly or collectively) of the Company. No
labor union or other collective bargaining representative represents or, to the
best knowledge of the Stockholders, claims to represent any of the employees of
the Company. To the knowledge of the Stockholders, there is no union campaign
being conducted to solicit cards from employees to authorize a union to request
a National Labor Relations Board certification election with respect to any of
the Company's employees.
2.13 Taxes. The Company has filed or caused to be filed all
federal income tax returns and all other federal, state, county, local or city
tax returns which are required to be filed and it has paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by it to the
extent that such taxes have become due.
2.14 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of the Stockholders, threatened,
against or relating to the Company, the Company Common Stock or the business or
operations of the Station.
<PAGE> 7
-7-
2.15 Investment Purpose. The Stockholders are acquiring the PCC
Shares for investment for their own account and not with a view to the sale or
distribution of any part thereof, and the Stockholders have no present
intention of selling or otherwise distributing the PCC Shares. Each
Stockholder is an "accredited investor" within the meaning of Rule 501
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), has sufficient knowledge of and experience in financial and business
matters so as to be capable of evaluating the risks and merits of his
investment in PCC, and is capable of bearing the economic risks of such
investment. The Stockholders understand that the PCC Shares must be held
indefinitely unless the sale thereof is registered under the Securities Act or
is exempt from such registration and that the PCC Shares will bear a legend to
that effect.
2.16 Dissenters' Rights. Each Stockholder has received a copy of
Sections 1301, 1302 and 1320 of the FBCA which are attached hereto as Exhibit C
and each Stockholder has decided not to exercise his dissenters' rights under
such Sections. The Company is in compliance with such Sections.
3. REPRESENTATIONS AND WARRANTIES OF THE PCC SUBSIDIARY AND PCC.
The PCC Subsidiary and PCC represent and warrant to the Stockholders
as follows:
3.1 Organization, Standing and Authority. Each of the PCC
Subsidiary and PCC is a corporation duly organized, validly existing, and in
good standing under the laws of its state of incorporation. The PCC Subsidiary
and PCC have all requisite corporate power and authority to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants and conditions to be performed and complied
with by the PCC Subsidiary and PCC hereunder and thereunder.
3.2 Authorization and Binding Obligation. The execution, delivery
and performance of this Agreement by the PCC Subsidiary and PCC have been duly
authorized by all necessary corporate actions of the part of the PCC Subsidiary
and PCC. This Agreement has been duly executed and delivered by the PCC
Subsidiary and PCC and constitutes the legal, valid and binding obligation of
the PCC Subsidiary and PCC, enforceable against the PCC Subsidiary and PCC in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
<PAGE> 8
-8-
3.3 Absence of Conflicting Agreements. Subject to obtaining the
consent of the FCC, the execution, delivery and performance by the PCC
Subsidiary and PCC of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time or both): (i) will not
conflict with any organizational documents of the PCC Subsidiary or PCC; and
(ii) will not conflict with, result in a breach of, or constitute a default
under, any law, judgment, order, injunction, decree, rule, regulation or ruling
of any court or governmental instrumentality applicable to the PCC Subsidiary
or PCC; and (iii) will not conflict with, constitute grounds for termination
of, result in a breach of, constitute a default under, or accelerate or permit
the acceleration of any performance required by the terms of, any agreement,
instrument, license, or permit to which the PCC Subsidiary or PCC is party or
by which the PCC Subsidiary or PCC may be bound.
3.4 PCC Shares. The PCC Shares will be, upon issuance to the
Stockholders, validly issued, fully paid and non-assessable, free and clear of
any liens, claims and encumbrances.
4. OPERATIONS OF THE COMPANY PRIOR TO CLOSING.
The Stockholders shall cause the Company to operate in accordance with
the following covenants during the period beginning on the date of this
Agreement and ending on the Closing Date:
4.1 Generally. The Stockholders agree that, between the date of
this Agreement and the Closing Date, they shall cause the Company to operate in
the ordinary course of business in accordance with its past practices.
4.2 Contracts. The Stockholders shall cause the Company not to
enter into any contract or commitment or incur any obligation (including
obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that will be binding on the Company after Closing.
4.3 Disposition of Assets. The Stockholders shall cause the
Company not to sell, assign, lease, or otherwise transfer or dispose of any of
its assets, except in connection with the acquisition of replacement property
of equivalent kind and value.
4.4 Encumbrances. The Stockholders shall cause the Company not to
create, assume or permit to exist any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature whatsoever upon its assets,
except for (i) liens which shall be removed prior to the Closing Date and (ii)
liens for current taxes not yet due and payable.
<PAGE> 9
-9-
4.5 Licenses. The Stockholders shall cause the Company not to
cause or permit, by any act or failure to act, any of the Licenses issued by
the FCC to expire or to be revoked, suspended, or modified or take any action
that could cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any of
the Licenses.
4.6 Access to Information. The Stockholders shall cause the
Company to give the PCC Subsidiary and its counsel, accountants, engineers and
other authorized representatives reasonable access during normal business hours
to the Company's assets, properties, equipment, books, records, contracts and
documents for the purpose of audit and inspection and will furnish or cause to
be furnished to the PCC Subsidiary or its authorized representatives all
material information with respect to the affairs and business of the Company
that the PCC Subsidiary may reasonably request (including any operations
reports produced with respect to the affairs and business of the Station).
4.7 Maintenance of Assets. The Stockholders shall cause the
Company to maintain all of its assets in good condition (ordinary wear and tear
excepted) with inventories of spare parts and expendable supplies being
maintained at levels consistent with past practices.
4.8 Insurance. The Stockholders shall cause the Company to
maintain substantially the same insurance coverage provided by the existing
insurance policies on the Company and its assets.
4.9 Consents. The Stockholders shall use their best efforts to
obtain the Consents without any change in the terms or conditions of any
contract or License as in effect on the date of this Agreement.
4.10 Books and Records. The Stockholders shall cause the Company
to maintain its books and records in accordance with past practices.
4.11 Notification. The Stockholders shall promptly notify the PCC
Subsidiary in writing of any material change in any of the information
contained in the Stockholders' representations and warranties contained in
Section 2 of this Agreement.
4.12 Compliance with Laws. The Stockholders shall cause the Company
to comply in all material respects with all laws, rules and regulations.
<PAGE> 10
-10-
4.13 Corporate Matters. The Stockholders shall cause the Company
(i) not to merge or consolidate with any other entity, (ii) to preserve its
corporate existence, (iii) not to amend its articles of incorporation or
by-laws, (iv) not to dissolve or liquidate, (v) not to do any act which would
have an adverse effect on the rights of the PCC Subsidiary or PCC hereunder or
(vi) to comply with Sections 1301, 1302 and 1320 of the FBCA.
4.14 Securities. The Stockholders shall cause the Company not to
issue, sell or otherwise dispose of any of its shares of capital stock or other
equity interest in the Company, including any options, warrants or other rights
to acquire any of the shares of the capital stock or other equity interest of
the Company and the Stockholders shall cause the Company not to redeem any such
shares or equity interests in the Company.
4.15 Restrictions relating to Shares. The Stockholders shall not
(i) sell, transfer, pledge or grant any lien or other encumbrance with respect
to their shares of the Company Common Stock or (ii) do any act which would have
an adverse effect on the rights of the PCC Subsidiary or PCC hereunder.
5. SPECIAL COVENANTS AND AGREEMENTS.
5.1 FCC Consent.
(a) The consummation of the Merger pursuant to this Agreement
shall be subject to the prior consent and approval of the FCC (the "FCC
Consent").
(b) The parties hereto shall promptly prepare appropriate
applications for the FCC Consent and shall file the applications with the FCC
within five (5) business days of the execution of this Agreement. The parties
hereto shall prosecute the applications with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
applications as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by such party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. The parties hereto shall oppose any requests
for reconsideration or judicial review of the FCC Consent, provided, however,
that the parties shall continue to have all rights available to them pursuant
to Section 8 hereof. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and no party shall
have terminated this
<PAGE> 11
-11-
Agreement under Section 8, the parties hereto shall jointly request an
extension of the effective period of the FCC Consent. No extension of the FCC
Consent shall limit the exercise by any party of its rights under Section 8.
5.2 Control of the Station. Prior to Closing, the PCC Subsidiary
and PCC shall not, directly or indirectly, control, supervise, direct, or
attempt to control, supervise, or direct, the operations of the Station; such
operations, including complete control and supervision of all of the Station's
programs, employees, and policies, shall be the sole responsibility of the
Company and the Stockholders until the Closing.
5.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the assets of the Company from any
cause whatsoever shall be borne by the Stockholders at all times prior to the
Closing.
5.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement and except as and to the extent
required by law, including, without limitation, disclosure requirements of
federal or state securities laws and rules and regulations of securities
markets, each party will keep confidential any information of a confidential
nature obtained from the other party in connection with the transactions
contemplated by this Agreement. If this Agreement is terminated, each party
will return to the other party all copies of all documents obtained by such
party from the other party in connection with the transactions contemplated by
this Agreement.
5.5 Cooperation. The parties hereto shall cooperate fully with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and the parties hereof shall execute from time to time such other
documents as may be necessary and desirable to the implementation and
consummation of this Agreement, and otherwise use their reasonable commercial
efforts to consummate the transaction contemplated hereby and to fulfill their
obligations under this Agreement.
5.6 Access to Books and Records. The Stockholder shall provide
the Surviving Corporation and PCC access and the right to copy for a period of
four (4) years from the Closing Date any books and records relating to the
Company which remain in the possession of the Stockholders. The Surviving
Corporation shall provide the Stockholders access and the right to copy for a
<PAGE> 12
-12-
period of four (4) years from the Closing Date any books and records relating
to the Company.
5.7 Broker. Each of the parties hereto represents and warrants
that neither they nor any person or entity acting on their behalf have incurred
any liability for any finders' or brokers' fees or commissions in connection
with the transactions contemplated by this Agreement.
5.8 Tax Matters.
(a) As used in this Agreement, "Taxes" means all federal,
state, local and foreign income, franchise, sales, use, occupation, property,
excise, alternative or add-on minimum, social security, employees' withholding,
unemployment, disability, transfer, capital stock, and other taxes (including,
without limitation, any estimated taxes, and any interest and penalties), and
"Tax" means any one of such Taxes. "Tax Returns" means all federal, state,
local and foreign income, franchise, sales, use, occupation, property, excise,
alternative or add-on minimum, social security, employees' withholding,
unemployment, disability, transfer, capital stock and other tax returns and tax
reports, and "Tax Return" means any one of such Tax Returns.
(b) Taxes of the Company with respect to the period
ending on (and including) the Closing Date shall be the responsibility of the
Stockholders. Taxes of the Surviving Corporation with respect to the period
after the Closing Date shall be the responsibility of the Surviving
Corporation.
(c) The Stockholders agree to pay and to indemnify,
reimburse and hold harmless the Surviving Corporation and PCC (and other
members of the affiliated group of which the Surviving Corporation and PCC are
or will be members (the "PCC Consolidated Group")) and their successors, and
their officers, directors, employees, agents and representatives, from and
against any and all Taxes of the Company payable with respect to, and any and
all claims, liabilities, losses, damages, penalties, interest, costs and
expenses (including without limitation court costs and reasonable professional
fees incurred in the investigation, defense or settlement of any claims covered
by this indemnity) (herein referred to as "Indemnifiable Tax Damages") arising
out of or in any manner incident, relating or attributable to Taxes of the
Company payable with respect to, (i) any taxable year (or other applicable
reporting period) ("Reporting Period") of the Company ending on or before the
Closing Date; and (ii) any period beginning on the first day of any Reporting
Period that is not completed as of the Closing Date and ending on and including
the Closing Date (a "Short Period"), whether such Taxes are imposed directly on
the Company or as a result of including the Company
<PAGE> 13
-13-
in consolidated or combined returns filed by the affiliated group of which the
Company is a member (the "Stockholders Consolidated Group"). The Stockholders
shall be entitled to any credits or refunds of Taxes of the Company payable
with respect to (i) any Reporting Period of the Company ending on or before the
Closing Date, and (ii) any Short Period. The Surviving Corporation shall cause
the amount of any credits or refunds of Taxes to which the Stockholders are
entitled under this Section, but which are received by or credited to the
Surviving Corporation after the Closing Date, to be delivered to the
Stockholders within ten (10) days following such receipt or crediting, provided
that the Stockholders shall reimburse the Surviving Corporation to the extent
of any required subsequent repayment of, or reduction in, the amount of such
credits or refunds of Taxes so received or credited.
(d) The Stockholders shall also indemnify and hold
harmless the Surviving Corporation and PCC (and members of the PCC Consolidated
Group) from and against any and all Taxes of the Stockholders and members of
the Stockholders Consolidated Group other than the Company for any and all
periods, whether before or after the Closing Date, and from and against any and
all Indemnifiable Tax Damages arising out of or in any manner incident,
relating, or attributable to such Taxes or to Tax Returns filed or required to
be filed by the Stockholders and members of the Stockholders Consolidated Group
other than the Company.
(e) The Surviving Corporation agrees to pay and to
indemnify, reimburse and hold harmless the Stockholders (and other members of
the Stockholders Consolidated Group) and their successors, and their officers,
directors, employees, agents and representatives, from and against any and all
Taxes of the Surviving Corporation payable with respect to, and any and all
Indemnifiable Tax Damages, arising out of or in any manner incident, relating
or attributable to Taxes of the Surviving Corporation payable with respect to,
or Tax Returns required to be filed by the Surviving Corporation with respect
to, (i) any Reporting Period of the Surviving Corporation beginning after the
Closing Date; and (ii) any Reporting Period that includes the Closing Date but
only for that portion of such period commencing the day after the Closing Date,
whether such Taxes are imposed directly on the Surviving Corporation or as a
result of including the Surviving Corporation in consolidated or combined
returns filed by the PCC Consolidated Group.
(f) The Surviving Corporation shall also indemnify and
hold harmless the Stockholders (and members of the Stockholders Consolidated
Group) from and against any and all Taxes of the members of the PCC
Consolidated Group other than the Company and
<PAGE> 14
-14-
the Surviving Corporation for any and all periods, whether before or after the
Closing Date, and from and against any and all Indemnifiable Tax Damages
arising out of or in any manner incident, relating, or attributable to such
Taxes or to Tax Returns filed or required to be filed by members of the PCC
Consolidated Group other than the Company and the Surviving Corporation.
(g) Any amounts owed by the Stockholders to any party
under this Section 5.8 shall be paid within ten (10) days of notice from such
party; provided that if such party has not paid such amounts and such amounts
are being contested before the appropriate governmental authorities in good
faith, the Stockholders shall not be required to make payment until it is
determined finally by an appropriate governmental authority that payment is due
if the Stockholders posts appropriate security if necessary to protect such
party from (A) the immediate imposition of a lien that arises or attaches from
nonpayment after assessment and demand of such amounts, or (B) seizures of
assets. Any amounts owed by the Surviving Corporation to any party under this
Section 5.8 shall be paid within ten (10) days of notice from such party;
provided that if such party has not paid such amounts and such amounts are
being contested before the appropriate governmental authorities in good faith,
the Surviving Corporation shall not be required to make payment until it is
determined finally by an appropriate governmental authority that payment is due
if the Surviving Corporation posts appropriate security if necessary to protect
such party from (A) the immediate imposition of a lien that arises or attaches
from nonpayment after assessment and demand of such amounts, or (B) seizures of
assets.
(h) The tax liabilities for each Short Period for the
Company shall be determined by closing the books and records of the Company as
of the close of business on the Closing Date, by treating each such Short
Period as if it were a separate Reporting Period, and by employing accounting
methods which are consistent with those employed in preparing the Tax Returns
for the Company in prior Reporting Periods and which do not have the effect of
distorting income or expenses, except that Taxes based on items other than
income or sales shall be computed for the Reporting Period beginning on the
first day of the applicable Short Period and prorated on a time basis between
the Short Period and the period beginning on the first day after the Closing
Date and ending on the last day of the Reporting Period which includes the
Closing Date.
(i) Within one hundred twenty (120) days after the
Closing Date, the Stockholders will provide the Surviving Corporation with a
schedule setting forth: (i) a computation of
<PAGE> 15
-15-
accrued Taxes of the Company for each applicable Short Period; (ii) the tax
basis of the assets of the Company as of the Closing Date; (iii) the net
operating loss carryover, investment tax credit carryover and the capital loss
carryover available, if any, to the Surviving Corporation (x) for federal
income tax purposes (and for purposes of any other Taxes for which the
applicable Reporting Period ends on the Closing Date), as of the Closing Date,
and (y) for purposes of other Taxes, as of the first day of the applicable
Short Period; and (iv) all federal, state and local tax elections in effect for
the Company as of the Closing Date.
(j) The Surviving Corporation shall promptly notify the
Stockholders in writing of any notice, letter, correspondence, claim,
determination, decision or decree ("Tax Claim") received by the Surviving
Corporation that might raise a claim for indemnification hereunder. The
Stockholders, at their cost and expense, shall have the sole and exclusive
right to (and shall promptly notify the Surviving Corporation as to whether or
not they will) handle, answer, defend, compromise or settle such Tax Claim and
any tax examination, audit, contest or litigation in connection therewith. If
the Stockholders fails within a reasonable time after notice to defend or
handle any Tax Claim or any examination, audit, contest or litigation as
provided herein, the Stockholders shall be bound by the results obtained by the
Surviving Corporation or their respective successors or assigns in connection
with such Tax Claim and such examination, audit, contest or litigation. The
Surviving Corporation shall give to the Stockholders any relevant information
relating to such Tax Claim which may be particularly within the knowledge of
the Surviving Corporation and otherwise to cooperate with the Stockholders in
good faith with respect to such Tax Claim. Notwithstanding the foregoing, the
Stockholders shall not agree, without the consent of the Surviving Corporation
(which will not be unreasonably withheld or delayed), to any adjustment for any
period ending on or prior to the Closing Date which will legally bind the
Surviving Corporation for any period after the Closing Date.
(k) The Stockholders shall be responsible for preparing
and filing on behalf of the Company all Tax Returns for Reporting Periods of
the Company ending on or prior to the Closing Date, including Tax Returns of
the Company for such periods which are due after the Closing Date, and the
Stockholders shall be responsible for the contents of such returns; provided,
however, that the Stockholders shall furnish the Surviving Corporation with
copies of such returns at least thirty (30) days prior to the filing date for
the Surviving Corporation's review and consent. The Surviving Corporation
shall be responsible for preparing and filing all Tax Returns of
<PAGE> 16
-16-
the Company and the Surviving Corporation for Reporting Periods ending after
the Closing Date (including for Reporting Periods beginning prior to and ending
after the Closing Date).
(l) Each of the parties hereto will provide the other
with such assistance as may reasonably be requested by any of them in
connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the other, at all reasonable times, with any work papers, records or other
information which may be relevant to such return, audit or examination,
proceeding or determination. The party requesting assistance hereunder shall
reimburse the other parties for reasonable expenses incurred in providing such
assistance.
(m) The indemnification provided for hereunder shall not
be subject to the provisions of Section 9 and shall constitute a separate and
distinct indemnification obligation of the parties hereto.
6. CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS, THE COMPANY, THE PCC
SUBSIDIARY AND PCC AT CLOSING.
6.1 Conditions to Obligations of the PCC Subsidiary and PCC. All
obligations of the PCC Subsidiary and PCC at the Closing are subject at the
option of the PCC Subsidiary and PCC to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of the Stockholders contained in Section 2 of this Agreement
shall be true and complete in all material respects at and as of the Closing
Date as though made at and as of that time.
(b) Covenants and Conditions. The Stockholders and the
Company shall have performed and complied in all material respects with all
covenants, agreements, and conditions required by this Agreement to be
performed or complied with by them prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to the PCC Subsidiary and PCC without any material adverse change in
the terms or conditions of any agreement or any governmental license, permit,
or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on the PCC Subsidiary, PCC or the
<PAGE> 17
-17-
Surviving Corporation of any material conditions that need not be complied with
by the PCC Subsidiary or PCC under Section 5.1 hereof, the Stockholders shall
have complied with any conditions imposed on them by the FCC Consent, and the
FCC Consent shall have become a Final Order. For purposes of this Agreement, a
"Final Order" shall mean an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
(e) Material Adverse Change. There shall not have been a
material adverse change in the condition (financial or otherwise), business,
assets or prospects of the Company.
(f) Deliveries. The Stockholders shall have made or
stand willing to make all the deliveries to the PCC Subsidiary and PCC set
forth in Section 7.2.
(g) Release of Liens; No Indebtedness. The Stockholders
shall have delivered to the PCC Subsidiary and PCC evidence reasonably
satisfactory to the PCC Subsidiary and PCC that there are no security
interests, mortgages, encumbrances, and liens on the assets of the Company
other than liens for taxes not yet due and payable and that the only
indebtedness of the Company is indebtedness which is payable to PCC and Lowell
W. Paxson.
(h) No Substantial Interruption. No substantial
interruption shall have occurred in the broadcast operations of the Station.
(i) Corporate Authorizations. PCC shall have received
all necessary authorizations to issue the PCC Shares hereunder.
6.2 Conditions to Obligations of the Stockholders and the Company.
All obligations of the Stockholders and the Company at the Closing are subject
at the option of the Stockholders and the Company to the fulfillment prior to
or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of the PCC Subsidiary and PCC contained in Section 3 of this
Agreement shall be true and complete in all material respects at and as of the
Closing Date as though made at and as of that time.
(b) Covenants and Conditions. The PCC Subsidiary and PCC
shall have performed and complied in all material respects
<PAGE> 18
-18-
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by them prior to or on the Closing Date.
(c) Deliveries. The PCC Subsidiary and PCC shall have
made or stand willing to make all the deliveries set forth in Section 7.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on the Stockholders of any material conditions that need
not be complied with by the Stockholders under Section 5.1 hereof and the PCC
Subsidiary and PCC shall have complied with any conditions imposed on them by
the FCC Consent.
7. CLOSING AND CLOSING DELIVERIES
7.1 Closing.
(a) Closing Date. The Closing of the transactions
contemplated hereby (the "Closing") shall take place at 10:00 a.m. on a date to
be set by the PCC Subsidiary on at least five days' written notice to the
Stockholders, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order. The date of such Closing
shall be referred to herein as the Closing Date. If the PCC Subsidiary fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth business day after the date upon which the FCC Consent becomes a Final
Order, the Closing shall take place on the tenth business day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, NW, Suite 800,
Washington, D.C. 20036, or such other place that is agreed upon by the PCC
Subsidiary and the Stockholders.
7.2 Deliveries by the Stockholders. Prior to or on the Closing
Date, the Stockholders and the Company shall deliver to the PCC Subsidiary and
PCC the following, in form and substance reasonably satisfactory to the PCC
Subsidiary and PCC:
(a) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(b) Certificates. A certificate, dated as of the Closing
Date, executed by the Stockholders certifying (1) that the representations and
warranties of the Stockholders contained in this Agreement are true and
complete in all material respects
<PAGE> 19
-19-
as of the Closing Date as though made on and as of that date; and (2) that the
Stockholders and the Company have in all material respects performed and
complied with all of their obligations, covenants, and agreements set forth in
this Agreement to be performed and complied with on or prior to the Closing
Date;
(c) Corporate Records. All corporate records of the
Company including minute books and stock books and registers;
(d) Merger Documents. Any and all documents duly
executed by the Company and the Stockholders that may be necessary to
consummate the Merger; and
(e) Other Instruments. Such other instruments and
certificates or other documentation as the PCC Subsidiary or PCC may reasonably
request.
7.3 Deliveries by the PCC Subsidiary and PCC. Prior to or on the
Closing Date, the PCC Subsidiary and PCC shall deliver to the Stockholders the
following, in form and substance reasonably satisfactory to the Stockholders:
(a) Stock Certificates. Certificates representing the
PCC Shares;
(b) Certificate. A certificate, dated as of the Closing
Date, executed by the PCC Subsidiary and PCC certifying (1) that the
representations and warranties of the PCC Subsidiary and PCC contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date, and (2) that the PCC Subsidiary and PCC
have in all material respects performed and complied with all of their
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date; and
(c) Other Instruments. Such other instruments and
certificates or other documentation as the Stockholders may reasonably request.
8. TERMINATION
8.1 Termination by the Stockholders. This Agreement may be
terminated by the Stockholders, if the Stockholders and the Company are not
then in material default, upon written notice to the PCC Subsidiary and PCC,
upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the
<PAGE> 20
-20-
obligations of the Stockholders and the Company set forth in this Agreement
have not been satisfied or waived in writing by the Stockholders and the
Company.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by the Stockholders or the Company, that would prevent or make unlawful
the Closing.
(c) Upset Date. If the Closing shall not have occurred
by December 31, 1996.
8.2 Termination by the PCC Subsidiary and PCC. This Agreement may
be terminated by the PCC Subsidiary and PCC, if the PCC Subsidiary and PCC are
not then in material default, upon written notice to the Stockholders, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of the PCC
Subsidiary and PCC set forth in this Agreement have not been satisfied or
waived in writing by the PCC Subsidiary and PCC.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by the PCC Subsidiary or PCC, that would prevent or make unlawful the
Closing.
(c) Upset Date. If the Closing shall not have occurred
by December 31, 1996.
8.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 8.1 or 8.2 and no party is in material breach of any
provision of this Agreement, the parties hereto shall not have any further
liability to each other with respect to the subject matter of this Agreement.
If this Agreement is terminated by the Stockholders due to the material breach
by the PCC Subsidiary or PCC of this Agreement and the Stockholders and the
Company are not in material breach of any provision of this Agreement, then the
Stockholders shall have all rights and remedies available under Section 10.3
hereof. If this Agreement is terminated by the PCC Subsidiary and PCC due to
any material breach by the Stockholders or the Company of any provision of this
Agreement, and the PCC Subsidiary and PCC are not in material breach of any
provision of this Agreement, the PCC Subsidiary and PCC shall have all rights
and remedies available under Section 10.3 hereof, including the right to seek
specific performance of this Agreement.
<PAGE> 21
-21-
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES
9.1 Representations and Warranties. All representations and
warranties contained in this Agreement, other than with respect to Taxes which
shall survive for the applicable statute of limitations, shall be deemed
continuing representations and warranties and shall survive the Closing for a
period of six (6) months.
9.2 Indemnification by Stockholders. The Stockholders hereby
jointly and severally agree to indemnify and hold the Surviving Corporation and
PCC harmless against and with respect to, and shall reimburse the Surviving
Corporation and PCC for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by the Stockholders or the Company contained in
this Agreement or in any certificate, document, or instrument delivered to the
PCC Subsidiary or PCC under this Agreement.
(b) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
9.3 Indemnification by the Surviving Corporation. The Surviving
Corporation hereby agrees to indemnify and hold the Stockholders harmless
against and with respect to, and shall reimburse the Stockholders for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by the PCC Subsidiary or PCC contained in this
Agreement or in any certificate, document, or instrument delivered to the
Stockholders under this Agreement.
(b) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
9.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
<PAGE> 22
-22-
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty- day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate in the defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The Indemnification rights provided in Section 9.2
and 9.3 shall extend to the shareholders, directors, officers,
<PAGE> 23
-23-
employees and representatives of any Claimant although for the purpose of the
procedures set forth in this Section 9.4, any indemnification claims by such
parties shall be made by and through the Claimant.
10. MISCELLANEOUS
10.1 Attorneys' Fees. In the event of a default by any party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
10.2 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the Merger shall be paid by the
Stockholders. The Stockholders and the PCC Subsidiary shall each pay one-half
of the fee payable to the FCC in connection with the filing of the application
for the FCC Consent. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives, and each
party shall be responsible for all fees or commissions payable to any finder,
broker, advisor, or similar person retained by or on behalf of such party.
10.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that the parties
hereto are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia by a panel of three arbitrators. The Stockholders as a
group and the PCC Subsidiary or, if applicable, the Surviving Corporation and
PCC as a group shall each designate one disinterested arbitrator, and the two
arbitrators so designated shall select the third arbitrator. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to
make a just award according to the best of his or her understanding. The
arbitration hearing shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association. The written
decision of a majority of the arbitrators shall be final and binding on the
parties hereto. The costs and expenses of the arbitration proceeding shall be
assessed among the parties in a manner to be decided by a majority of the
arbitrators, and the assessment shall be set forth in the decision and award of
the arbitrators. Judgment on the award, if it is not paid within thirty days,
may be entered in any court having jurisdiction over the matter. No action at
law or suit in equity based upon any claim arising out of or
<PAGE> 24
-24-
related to this Agreement shall be instituted in any court by any party hereto
against any other party hereto except (i) an action to compel arbitration
pursuant to this Section, (ii) an action to enforce the award of the
arbitration panel rendered in accordance with this Section, or (iii) a suit for
specific performance under Section 8.3 of this Agreement.
10.4 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
<TABLE>
<S> <C>
If to the PCC Mr. Lowell W. Paxson
Subsidiary, PCC or Paxson Communications Corporation
the Surviving 601 Clearwater Park Road
Corporation: West Palm Beach, Florida 33401-6233
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Telecopy: (202) 776-2222
Telephone: (202) 776-2786
If to the Stockholders Mr. Todd L. Paxson
or prior to the Mr. Devon W. Paxson
Closing, the Company: 1756 North Congress Avenue
Suite 101
West Palm Beach, Florida 33409
Telecopy: (407) 684-1851
Telephone: (407) 684-1707
With a copy to: Richard F. Swift, Esq.
Tierney & Swift
1001 22nd Street, N.W.
Suite 350
Washington, D.C. 20037
Telecopy: (202) 659-5711
Telephone: (202) 293-7979
</TABLE>
<PAGE> 25
-25-
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
10.4.
10.5 Benefit and Binding Effect. No party hereto may assign this
Agreement without the prior written consent of the other parties hereto;
provided, however, that the PCC Subsidiary may assign its rights and
obligations under this Agreement to a wholly-owned subsidiary or commonly
controlled affiliate without seeking or obtaining the other parties' prior
approval. Upon any permitted assignment by a party hereto in accordance with
this Section 10.5, all references to such party herein shall be deemed to be
references to such party's assignee. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
10.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
10.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
10.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
10.9 Entire Agreement. This Agreement, the exhibits hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
10.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or
<PAGE> 26
-26-
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 10.10.
10.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
10.12 Press Releases. No party hereto shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other parties; provided, however, that
nothing contained herein shall prevent any party from promptly making all
filings with governmental authorities as may, in its judgment, be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, in which case the
other parties shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 27
-27-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
<TABLE>
<S> <C>
PAX JAX, INC.
By: /s/ Lowell W. Paxson
------------------------------------------
Name: Lowell W. Paxson
Title: Chairman
/s/ Todd L. Paxson
-----------------------------------------------
Todd L. Paxson
/s/ Devon W. Paxson
-----------------------------------------------
Devon W. Paxson
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
--------------------------------------------
Name: Lowell W. Parson
Title: Chairman
TODD COMMUNICATIONS, INC.
By: /s/ Devon Paxson
-------------------------------------------
Name: Devon Paxson
Title: President
</TABLE>
<PAGE> 28
List of Exhibits
<TABLE>
<S> <C>
Exhibit A Capitalization of Todd Communications, Inc.
Exhibit B Consents
Exhibit C Sections 1301, 1302 and 1320 of FBCA
</TABLE>
<PAGE> 29
Exhibit A
<TABLE>
<S> <C>
Stockholder Number of Outstanding Shares
----------- ----------------------------
Todd L. Paxson 49 shares of Common Stock, par value $1.00 per share
Devon W. Paxson 51 shares of Common Stock, par value $1.00 per share
Number of Authorized Shares: 1,000 shares of Common Stock, par value $1.00 per
share
</TABLE>
<PAGE> 30
Exhibit B
The FCC Consent.
<PAGE> 31
Exhibit C
See attached.
<PAGE> 32
EXHIBIT 10.107.1
FIRST AMENDMENT TO AGREEMENT AND
PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment"), is
dated as of June 27, 1996, by and among Devon W. Paxson ("Devon"), Todd L.
Paxson ("Todd" and together with Devon, individually, a "Stockholder" and
collectively, the "Stockholders"), Pax Jax, Inc., a Florida corporation (the
"PCC Subsidiary"), Paxson Communications Corporation, a Delaware corporation
("PCC"), and Todd Communications, Inc., a Florida corporation (the "Company").
RECITALS
A. The parties hereto are parties to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of April 12, 1996, which provides for the merger
of the Company with and into the PCC Subsidiary with the PCC Subsidiary being
the surviving corporation. As part of such merger, all of the issued and
outstanding shares of Common Stock, par value $1.00 per share, of the Company
will be converted into the right to receive Class A Common Stock, par value
$.001 per share, of PCC.
B. The parties hereto desire to amend the Merger Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Amendment and in the Merger Agreement, the parties
hereto, intending to be bound legally, agree as follows:
1. Amendment. Section 1.7(c) of the Merger Agreement is hereby amended
in its entirety to read as follows:
"(c) PCC Shares. The shares of Company Common Stock issued
and outstanding immediately prior to the Effective Time shall be
converted into the right to receive an aggregate number of shares
of the Class A Common Stock, par value $.001 per share, of PCC (the
"PCC Shares") equal to (i) $5,000,000, minus the principal amount
outstanding of all indebtedness of the Company as of the Effective
Time together with any unpaid interest or other unpaid charges
accrued on such indebtedness on or before the Effective Time,
divided by (ii) $11. The PCC Shares shall be apportioned between
the Stockholders pro rata in accordance with their respective
ownership interest in the Company immediately prior to the
Effective Time. As of the Effective Time, all shares of Company
Common Stock
<PAGE> 33
-2-
shall be no longer outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a
certificate representing any such share of Company Common Stock
shall cease to have any rights with respect thereto except the right
to receive the PCC Shares in the amount set forth herein.
2. Governing Law. This Amendment shall be governed, construed and
enforced in accordance with the laws of the State of Florida (without regard to
the choice of law provisions thereof).
3. Counterparts. This Amendment may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
4. Effect of Amendment. Except as expressly modified hereby, the
provisions of the Merger Agreement shall remain unchanged and shall remain in
full force and effect.
5. Reference to Merger Agreement. It shall not be necessary to refer
to this Amendment in any reference to the Merger Agreement. Any reference to
the Merger Agreement shall be a reference to the Merger Agreement as amended
hereby.
<PAGE> 34
-3-
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the day and year first above written.
PAX JAX, INC.
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
/s/ Todd L. Paxson
---------------------------------------
Todd L. Paxson
/s/ Devon W. Paxson
--------------------------------------
Devon W. Paxson
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
----------------------------------
Name: Lowell W. Paxson
Title: Chairman
TODD COMMUNICATIONS, INC.
By: /s/ Devon W. Paxson
----------------------------------
Name: Devon W. Paxson
Title: President
<PAGE> 1
EXHIBIT 10.107.1
FIRST AMENDMENT TO AGREEMENT AND
PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment"), is
dated as of June 27, 1996, by and among Devon W. Paxson ("Devon"), Todd L.
Paxson ("Todd" and together with Devon, individually, a "Stockholder" and
collectively, the "Stockholders"), Pax Jax, Inc., a Florida corporation (the
"PCC Subsidiary"), Paxson Communications Corporation, a Delaware corporation
("PCC"), and Todd Communications, Inc., a Florida corporation (the "Company").
RECITALS
A. The parties hereto are parties to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of April 12, 1996, which provides for the merger
of the Company with and into the PCC Subsidiary with the PCC Subsidiary being
the surviving corporation. As part of such merger, all of the issued and
outstanding shares of Common Stock, par value $1.00 per share, of the Company
will be converted into the right to receive Class A Common Stock, par value
$.001 per share, of PCC.
B. The parties hereto desire to amend the Merger Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Amendment and in the Merger Agreement, the parties
hereto, intending to be bound legally, agree as follows:
1. Amendment. Section 1.7(c) of the Merger Agreement is hereby amended
in its entirety to read as follows:
"(c) PCC Shares. The shares of Company Common Stock issued
and outstanding immediately prior to the Effective Time shall be
converted into the right to receive an aggregate number of shares
of the Class A Common Stock, par value $.001 per share, of PCC (the
"PCC Shares") equal to (i) $5,000,000, minus the principal amount
outstanding of all indebtedness of the Company as of the Effective
Time together with any unpaid interest or other unpaid charges
accrued on such indebtedness on or before the Effective Time,
divided by (ii) $11. The PCC Shares shall be apportioned between
the Stockholders pro rata in accordance with their respective
ownership interest in the Company immediately prior to the
Effective Time. As of the Effective Time, all shares of Company
Common Stock
<PAGE> 2
-2-
shall be no longer outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a
certificate representing any such share of Company Common Stock
shall cease to have any rights with respect thereto except the right
to receive the PCC Shares in the amount set forth herein.
2. Governing Law. This Amendment shall be governed, construed and
enforced in accordance with the laws of the State of Florida (without regard to
the choice of law provisions thereof).
3. Counterparts. This Amendment may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
4. Effect of Amendment. Except as expressly modified hereby, the
provisions of the Merger Agreement shall remain unchanged and shall remain in
full force and effect.
5. Reference to Merger Agreement. It shall not be necessary to refer
to this Amendment in any reference to the Merger Agreement. Any reference to
the Merger Agreement shall be a reference to the Merger Agreement as amended
hereby.
<PAGE> 3
-3-
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the day and year first above written.
PAX JAX, INC.
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
/s/ Todd L. Paxson
---------------------------------------
Todd L. Paxson
/s/ Devon W. Paxson
--------------------------------------
Devon W. Paxson
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
----------------------------------
Name: Lowell W. Paxson
Title: Chairman
TODD COMMUNICATIONS, INC.
By: /s/ Devon W. Paxson
----------------------------------
Name: Devon W. Paxson
Title: President
<PAGE> 1
EXHIBIT 10.108
- -------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF TALLAHASSEE, INC.,
B. RADIO, INC.,
AND
BOSS RADIO GROUP, INC.
FOR
RADIO STATIONS
WGNE-AM, PANAMA CITY, FLORIDA
WFSY-FM, PANAMA CITY, FLORIDA
AND
WEBZ-FM, MEXICO BEACH, FLORIDA
MAY 13, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"WMTO" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"WMTO Asset Purchase Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2 PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Gross Revenue Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i
<PAGE> 3
<TABLE>
Page
<CAPTION> -----
<S> <C> <C>
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION> Page
----
<S> <C> <C>
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.21 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT CLOSING . . . . . . . . . . . . . . . . . . . . . 22
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conditions to Obligations of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8 CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Deliveries by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . 28
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.2 Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION> Page
-----
<S> <C> <C>
SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
iv
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 2.2 -- Excluded Property
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Financial Matters
Schedule 3.11 -- Insurance Policies
Schedule 3.13 -- Employee Matters
Schedule 3.15 -- Claims
Schedule 3.19 -- Transactions with Affiliates
Schedule 6.13 -- Form of Noncompetition Agreement
Schedule 8.2(i) -- Form of Opinions of Seller's Counsel
Schedule 8.3(d) -- Form of Opinion of Buyer's Counsel
</TABLE>
v
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 13th day of May, 1996,
by and among Paxson Communications of Tallahassee, Inc., a Florida corporation
("Buyer"), B. Radio, Inc., a Florida corporation ("BR"), and Boss Radio Group,
Inc., a Florida corporation ("BRG") (BR and BRG shall be referred to herein
individually as a "Seller" and collectively as the "Sellers").
RECITALS
A. BR is the licensee of and owns and operates radio stations WGNE-AM,
Panama City, Florida and WFSY-FM, Panama City, Florida (the "BR Stations") and
BRG is the licensee of and owns and operates radio station WEBZ-FM, Mexico
Beach, Florida (the "BRG Station" and together with the BR Stations,
individually, a "Station" and collectively, the "Stations"), pursuant to
licenses issued by the Federal Communications Commission (the "FCC").
B. Sellers desire to sell, and Buyer desires to buy, substantially all
the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Sellers, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights of Sellers to payment for the
sale of advertising or program time run on the Stations by Sellers prior to the
Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
<PAGE> 8
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are specifically designated on Schedule 3.7 as Contracts that are to be assumed
by Buyer upon its purchase of the Stations, (ii) any Contracts entered into by
any Seller between the date of this Agreement and the Closing Date that Buyer
agrees in writing to assume, and (iii) time sales contracts entered into by any
Seller in compliance with Section 5.3.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which any Seller is a party or which are binding upon any Seller and
which relate to or affect the Assets or the business or operations of the
Stations, and (i) which are in effect on the date of this Agreement or (ii)
which are entered into by any Seller between the date of this Agreement and the
Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Sellers and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to any Seller in
connection with the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests, and the time for
the FCC to set aside the action on its own motion, have expired.
-2-
<PAGE> 9
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by any Seller or under which any Seller is licensed or franchised and which are
used or useful in the business and operations of the Stations, together with
any additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to any Seller in connection with the
conduct of the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Stations, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"WMTO" means radio station WMTO-FM, Port St. Joe, Florida.
"WMTO Asset Purchase Agreement" means that certain Asset Purchase
Agreement, by and between DP Media, Inc. and Transportation Group
International, Inc. relating to the sale of WMTO.
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions
set forth in this Agreement, Sellers hereby agree to sell, transfer, and
deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of the
tangible and intangible assets used or useful in connection with the conduct of
the business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests,
-3-
<PAGE> 10
mortgages, liens, pledges, conditions, charges, or encumbrances of any nature
whatsoever (except for liens for current taxes not yet due and payable),
including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Accounts Receivable as of 11:59 p.m., Panama City
time, on the day prior to the Closing Date;
(f) The Intangibles and all intangible assets of Sellers
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations, if any;
(g) All of Sellers' proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Stations;
(h) All choses in action of Sellers relating to the Stations;
and
(i) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Sellers' cash on hand as of the Closing and all other
cash in any of Sellers' bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Sellers are required by law to
retain and that pertain to Sellers' corporate organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements; and
-4-
<PAGE> 11
(d) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Sellers set forth in the Noncompetition Agreement referred to in
Section 6.13 shall be TWO MILLION EIGHT HUNDRED FIFTY THOUSAND DOLLARS
($2,850,000) adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Stations, including business and license
fees, utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), FCC annual regulatory fees and
similar prepaid and deferred items, shall be prorated between Buyer and Sellers
in accordance with the principle that Sellers shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, and Buyer shall be responsible for all expenses, costs, and obligations
allocable to the period on and after the Closing Date. Notwithstanding the
preceding sentence, there shall be no adjustment for, and Sellers shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Gross Revenue Adjustment. The Purchase Price shall
be decreased by 2.375 times the amount, if any, by which the gross revenue of
the Stations and WMTO for the latest period of twelve consecutive calendar
months ending at least twenty days prior to the Closing Date is less than
$1,200,000; provided, however, that the sum of (i) the Purchase Price payable
under this Agreement, as reduced pursuant to this Section 2.3(b), and (ii) the
Purchase Price payable under the WMTO Asset Purchase Agreement, shall in no
event be less than $3,100,000 prior to any adjustments to the Purchase Price
under Section 2.3(a) of this Agreement and of the WMTO Asset Purchase
Agreement.
(c) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Sellers shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Sellers' good faith estimate of the adjustments to the Purchase
Price under Sections 2.3(a) and (b). The preliminary settlement statement (i)
shall contain all information reasonably necessary to determine the adjustments
to the Purchase Price under Sections 2.3(a) and (b), to the extent such
adjustments can be determined or estimated as of the date of the preliminary
settlement statement, and such other information as may be reasonably requested
by Buyer, and (ii) shall be certified by Sellers to be true and complete in all
material respects as of the date thereof.
-5-
<PAGE> 12
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Sellers at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Sellers to Buyer at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Sellers under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Stations on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of any Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of any Station prior to the Closing, (iv)
any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of any Seller under any employee pension,
retirement, health and welfare or other benefit plans or collective bargaining
agreements, (vii) any obligation to any employee of any Station for severance
benefits, vacation time, or sick leave accrued prior to the Closing Date, and
(viii) any obligations or liabilities caused by, arising out of, or resulting
from any action or omission of any Seller prior to the Closing, and all such
obligations and liabilities shall remain and be the obligations and liabilities
solely of Sellers.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller jointly and severally represents and warrants to Buyer as
follows:
3.1 Organization, Standing, and Authority. Each Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida. Such Seller has all requisite power and
authority (i) to own, lease, and use the Assets as now owned, leased, and used,
(ii) to conduct the business and operations of the Stations as now conducted,
and (iii) to execute and deliver this Agreement, the Escrow Agreement and the
documents contemplated hereby and thereby, and to perform and comply with all
of the terms, covenants, and conditions to be performed and complied with by
such Seller hereunder and thereunder. Neither Seller is a participant in any
joint venture or partnership with any other person or entity with respect to
any part of the operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by each Seller have
been duly authorized by all necessary actions on the part of such Seller and
its shareholder. This Agreement and the
-6-
<PAGE> 13
Escrow Agreement have been duly executed and delivered by such Seller and
constitute the legal, valid, and binding obligations of such Seller,
enforceable against it in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the Certificate of Incorporation or Bylaws of any Seller;
(iii) will not conflict with, result in a breach of, or constitute a default
under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which any Seller is a party or by which any Seller may be bound; and
(v) will not create any claim, liability, mortgage, lien, pledge, condition,
charge, or encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Sellers have delivered to Buyer true and complete copies
of the Licenses (including any amendments and other modifications thereto).
The Licenses have been validly issued, and each Seller as indicated on Schedule
3.4 is the authorized legal holder thereof. The Licenses listed on Schedule
3.4 comprise all of the licenses, permits, and other authorizations required
from any governmental or regulatory authority for the lawful conduct of the
business and operations of the Stations in the manner and to the full extent
they are now conducted, and none of the Licenses is subject to any restriction
or condition that would limit the full operation of the Stations as now
operated. The Licenses are in full force and effect, and the conduct of the
business and operations of the Stations is in accordance therewith. Neither
Seller has any reason to believe that any of the Licenses would not be renewed
by the FCC or other granting authority in the ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains a
complete and accurate description of all the Real Property and each Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Stations as now conducted. Except as described
in Schedule 3.5, Sellers have good and marketable fee simple title to all fee
estates included in the Real Property and have good title to all other
interests included in the Real Property, free and clear of all liens,
mortgages, pledges, covenants, easements, encroachments, leases, charges and
other claims and encumbrances, except liens for taxes not
-7-
<PAGE> 14
yet due and payable. With respect to each leasehold or subleasehold interest
included in the Real Property being conveyed under this Agreement so long as
each Seller fulfills its obligations under the lease therefor, such Seller has
enforceable rights to nondisturbance and quiet enjoyment, and no third party
holds any interest in the leased premises with the right to foreclose upon such
Seller's leasehold or subleasehold interest. All towers, guy anchors, and
buildings and other improvements included in the Assets are located entirely on
the Real Property listed in Schedule 3.5. All Real Property (including the
improvements thereon) (i) is in good condition and repair consistent with its
present use, (ii) is available for immediate use in the conduct of the business
and operations of the Stations, and (iii) complies with all applicable building
or zoning codes and the regulations of any governmental authority having
jurisdiction. Each Seller has full legal and practical access to the Real
Property. All easements, rights-of-way, and real property licenses have been
properly recorded in the appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Stations as now conducted. Except as described in Schedule 3.6, Sellers
own and have good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Sellers is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable. Each
item of Tangible Personal Property is available for immediate use in the
business and operations of the Stations. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained
in a manner consistent with generally accepted standards of good engineering
practice, and (ii) will permit the Stations and any auxiliary broadcast
stations used in connection with the operation of the Stations to operate in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Stations for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Stations without penalty on not more than thirty
days' notice. Sellers have delivered to Buyer true and complete copies of all
written Assumed Contracts, true and complete memoranda of all oral Assumed
Contracts (including any amendments and other modifications to such Assumed
Contracts), and a schedule summarizing Sellers' obligations under trade and
barter agreements relating to the Stations. Other than the Contracts listed on
Schedule 3.7 and cash programming contracts, Sellers require no contract,
lease, or other agreement to enable them to carry on their respective
businesses as now conducted. All of the Assumed Contracts are in full force
and effect, and are valid, binding, and enforceable in accordance with their
terms. There is not under any Assumed Contract any default by any party
thereto or any
-8-
<PAGE> 15
event that, after notice or lapse of time or both, could constitute a default.
Sellers are not aware of any intention by any party to any Assumed Contract (i)
to terminate such contract or amend the terms thereof, (ii) to refuse to renew
the Assumed Contract upon expiration of its term, or (iii) to renew the Assumed
Contract upon expiration only on terms and conditions which are more onerous
than those now existing. Except for the need to obtain the Consents listed in
Schedule 3.3, Sellers have full legal power and authority to assign their
respective rights under the Assumed Contracts to Buyer in accordance with this
Agreement, and such assignment will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents described in Schedule 3.3, no consent, approval, permit,
or authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Sellers
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Stations in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Sellers have delivered to Buyer copies
of all documents establishing or evidencing all Intangibles. Neither Seller is
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications, know-
how, methods, or processes owned by any other person or persons, and there is
no claim or action pending, or to the knowledge of Sellers threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Stations as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of Sellers' financial statements including a balance sheet as
of March 31, 1996 and an income statement and a statement of operating cash
flow for the period ending March 31, 1996 and a statement setting forth the
gross revenue of the Stations and WMTO for the twelve-month period ended March
31, 1996 (collectively, the "Financial Statements"). The Financial Statements
have been prepared from the books and records of Sellers, have been prepared in
accordance with generally accepted accounting principles consistently applied
and maintained throughout the periods indicated, accurately reflect the books,
records, and accounts of the Stations and to the extent applicable, WMTO (which
books, records, and accounts are complete and correct), are complete and
correct in all material respects, and present fairly the financial condition of
the Stations and to the extent applicable, WMTO, as at their respective dates
and the results of operations for the periods then ended. None of the
Financial Statements understates the true costs and expenses of conducting the
business or operations of the Stations and to the extent applicable, WMTO,
fails to disclose any material
-9-
<PAGE> 16
contingent liabilities, or inflates the revenues of the Stations and to the
extent applicable, WMTO.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Sellers that insure any part of the Assets or the
business of the Stations. All policies of insurance listed in Schedule 3.11
are in full force and effect. The insurance policies listed in Schedule 3.11
are adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Stations against all customary and foreseeable risks. During the past
three years, no insurance policy of Sellers on the Assets or the Stations has
been canceled by the insurer and no application of Sellers for insurance has
been rejected by any insurer.
3.12 Reports. All returns, reports, and statements that the Stations
are currently required to file with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Sellers and the Stations have
been complied with. All of such returns, reports, and statements are
substantially complete and correct as filed. Each Seller has timely paid to
the FCC all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Personnel.
(a) Employees and Compensation. Schedule 3.13 contains a
true and complete list of all employees of the Stations, their job titles, date
of hire, current salary and date and amount of last salary increase. Except as
disclosed on Schedule 3.13, Sellers do not have any employee benefit plans or
arrangements applicable to the employees of the Stations or any fixed or
contingent liabilities or obligations with respect to any person now or
formerly employed by any Seller at the Stations, including any pension or
thrift plans, individual or supplemental pension or accrued compensation
arrangements, contributions to hospitalization or other health or life
insurance programs, incentive plans, bonus arrangements, and vacation, sick
leave, disability and termination arrangements or policies, including workers'
compensation policies. At Buyer's request, Sellers will furnish Buyer with
true and complete copies of all applicable plan documents, trust documents, and
insurance contracts with respect to any plans and arrangements listed on
Schedule 3.13. All employee benefits and welfare plans or arrangements listed
in Schedule 3.13 were established and have been executed, managed and
administered in accordance with the Internal Revenue Code of 1986, as amended,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
all other laws. Neither Seller is aware of the existence of any governmental
audit or examination of any of such plans or arrangements or of any facts which
would lead it to believe that any such audit or examination is pending or
threatened. No action, suit, or claim with respect to any of such plans or
arrangements (other than routine claims for benefits) is pending or, to the
knowledge of Sellers, threatened, and no
-10-
<PAGE> 17
Seller possesses knowledge of any facts which could give rise to any such
action, suit or claim;
(b) Labor Relations. Neither Seller is a party to or subject
to any collective bargaining agreements with respect to any Station. Neither
Seller has any written or oral contracts of employment with any employee of any
Station, other than those listed in Schedule 3.7. Each Seller has complied
with all laws, rules, and regulations relating to the employment of labor,
including those related to wages, hours, collective bargaining, occupational
safety, discrimination, and the payment of social security and other payroll
related taxes, and it has not received any notice alleging that it has failed
to comply in any material respect with any such laws, rules, or regulations.
No controversies, disputes, or proceedings are pending or, to the best of
Sellers' knowledge, threatened, between any Seller and any employee (singly or
collectively) of any Station. No labor union or other collective bargaining
unit represents or claims to represent any of the employees of any Station. To
Sellers' knowledge, there is no union campaign being conducted to represent
employees of any Station or solicit cards from employees to authorize a union
to request a National Labor Relations Board certification election with respect
to any employees at any Station; and
(c) Liabilities. Neither Seller has any liability of any
kind to or in respect of any employee benefit plan, including withdrawal
liability under Section 4201 of ERISA. Neither Seller has incurred any
accumulated funding deficiency within the meaning of ERISA or Section 4971 of
the Internal Revenue Code. Neither Seller has failed to make any required
contributions to any employee benefit plan. The Pension Benefit Guaranty
Corporation has not asserted that any Seller has incurred any liability in
connection with any such plan. No lien has been attached and no person has
threatened to attach a lien on any property of Seller as a result of a failure
to comply with ERISA.
3.14 Taxes. Each Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which any Seller is
or could be made liable for any taxes, penalties, interest, or other charges,
the liability for which could extend to Buyer as transferee of the business of
the Stations, and no event has occurred that could impose on Buyer any
transferee liability for any taxes, penalties, or interest due or to become due
from any Seller.
3.15 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding,
-11-
<PAGE> 18
nor any order, decree or judgment, in progress or pending, or to the knowledge
of Sellers threatened, against or relating to any Seller with respect to its
ownership or operation of any Station or otherwise relating to the Assets or
the business or operations of any Station, nor do Sellers know or have reason
to be aware of any basis for the same. In particular, but without limiting the
generality of the foregoing, there are no applications, complaints or
proceedings pending or, to the best of their knowledge, threatened (i) before
the FCC relating to the business or operations of any Station other than rule
making proceedings which affect the radio broadcasting industry generally, (ii)
before any federal or state agency relating to the business or operations of
any Station involving charges of illegal discrimination under any federal or
state employment laws or regulations, or (iii) before any federal, state, or
local agency relating to the business or operations of any Station involving
zoning issues under any federal, state, or local zoning law, rule, or
regulation.
3.16 Environmental Matters.
(a) Each Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against such Seller in connection with its ownership or operation of the
Stations alleging any failure to comply with any such law, rule, or regulation;
(b) To the best of Sellers' knowledge, after due
investigation, neither Seller has any liability relating to its ownership and
operation of the Stations (and there is no basis related to the past or present
operations, properties, or facilities of such Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against such Seller giving rise to any such liability) under any law,
rule, or regulation of any federal, state, or local government (or agency
thereof) concerning release or threatened release of hazardous substances,
public health and safety, or pollution or protection of the environment;
(c) To the best of Sellers' knowledge, after due
investigation, neither Seller has any liability relating to its ownership and
operation of the Stations (and such Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility in any manner that could form the basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to any statute) against such
Seller giving rise to any such liability) for damage to any site, location, or
body of water (surface of subsurface) or for illness or personal injury;
(d) To the best of Sellers' knowledge, after due
investigation, neither Seller has any liability relating to its ownership and
operation of the Stations (and there is no basis
-12-
<PAGE> 19
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against such Seller giving rise to any such
liability) under any law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning employee health and safety;
(e) To the best of Sellers' knowledge, after due
investigation, neither Seller has any liability relating to its ownership and
operation of the Stations (and such Seller has not exposed any employee to any
substance or condition that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to statute) against such Seller giving
rise to any such liability) for any illness or personal injury to any employee;
(f) In connection with its ownership or operation of the
Stations, each Seller has obtained and been in compliance in all material
respects with all of the terms and conditions of all permits, licenses, and
other authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes; and
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by any Seller in
connection with its ownership and operation of the Stations or, to the best of
Sellers' knowledge, after due investigation, by any other party on any Real
Property.
3.17 Compliance with Laws. Each Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. Neither the ownership or use of the properties of
the Stations nor the conduct of the business or operations of the Stations
conflicts with the rights of any other person or entity.
3.18 Conduct of Business in Ordinary Course. Since October 31, 1995,
each Seller has conducted the business and operations of the Stations only in
the ordinary course and has not:
-13-
<PAGE> 20
(a) Suffered any material adverse change in the business,
assets, or properties of the Stations, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Stations;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Stations, or any bonus payment
made or promised to any employee of the Stations, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Stations;
(c) Made any sale, assignment, lease, or other transfer of
any of the Stations' properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by such Seller
with respect to the Stations, except in the normal and usual course of
business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Stations; or
(f) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Stations.
3.19 Transactions with Affiliates. Except as disclosed on Schedule
3.19, neither Seller has been involved in any business arrangement or
relationship relating to the Stations with any affiliate of any Seller, and no
affiliate of any Seller owns any property or right, tangible or intangible,
which is used in the business of the Stations. As used in this paragraph,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934.
3.20 Broker. Neither Sellers nor any person acting on Sellers'
behalf have incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.21 Full Disclosure. No representation or warranty made by any
Seller in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by any Seller pursuant hereto contains or will
contain any untrue statement of a material fact, or omits or will omit to state
any material fact and required to make any statement made herein or therein not
misleading.
-14-
<PAGE> 21
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida. Buyer has all requisite power and authority to execute and
deliver this Agreement and the Escrow Agreement and the documents contemplated
hereby and thereby, and to perform and comply with all of the terms, covenants,
and conditions to be performed and complied with by Buyer hereunder and
thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by Buyer have been
duly authorized by all necessary actions on the part of Buyer. This Agreement
and the Escrow Agreement have been duly executed and delivered by Buyer and
constitute the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with the
Articles of Incorporation or Bylaws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement, except for a
commission payable by Buyer to Media Services Group, Inc..
4.5 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
-15-
<PAGE> 22
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Sellers agree that, between the date of this
Agreement and the Closing Date, Sellers shall operate the Stations diligently
in the ordinary course of business in accordance with their past practices
(except where such conduct would conflict with the following covenants or with
Sellers' other obligations under this Agreement), and in accordance with the
other covenants in this Section 5.
5.2 Compensation. Sellers shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices.
5.3 Contracts. Sellers will not enter into any contract or
commitment relating to the Stations or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing, except for cash
time sales agreements made in the ordinary course of business. Prior to the
Closing Date, Sellers shall deliver to Buyer a list of all Contracts entered
into between the date of this Agreement and the Closing Date, together with
copies of such Contracts.
5.4 Disposition of Assets. Sellers shall not sell, assign, lease, or
otherwise transfer or dispose of any of the Assets, except where no longer used
or useful in the business or operations of the Stations or in connection with
the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Sellers shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 Licenses. Sellers shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Sellers shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Stations.
5.7 Rights. Sellers shall not waive any right relating to the
Stations or any of the Assets.
-16-
<PAGE> 23
5.8 No Inconsistent Action. Sellers shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Sellers shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Stations for the purpose of audit and
inspection, including inspections incident to the environmental study described
in Section 6.5 and the engineering study described in Section 6.6, and will
furnish or cause to be furnished to Buyer or its authorized representatives all
information with respect to the affairs and business of the Stations that Buyer
may reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Stations). Without
limiting the generality of the foregoing, Sellers shall give Buyer and its
counsel, accountants and other authorized representatives reasonable access to
Sellers' financial records and Sellers' employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its sole judgment, are required or advisable
to comply with federal or state securities laws and the rules and regulations
of securities markets as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Sellers shall use their best efforts and
take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice. Sellers shall maintain inventories of spare
parts and expendable supplies at levels consistent with past practices. If any
loss, damage, impairment, confiscation, or condemnation of or to any of the
Assets occurs, Sellers shall repair, replace, or restore the Assets to their
prior condition as represented in this Agreement as soon thereafter as
possible, and Sellers shall use the proceeds of any claim under any insurance
policy solely to repair, replace, or restore any of the Assets that are lost,
damaged, impaired, or destroyed.
5.11 Insurance. Sellers shall maintain the existing insurance
policies on the Stations and the Assets.
5.12 Consents. Sellers shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Stations than those pertaining under the Contract or License as in effect on
the date of this Agreement. Sellers shall promptly advise Buyer of any
difficulties experienced in obtaining any of the Consents and of any conditions
proposed, considered, or requested for any of the Consents. Upon Buyer's
request, Sellers shall cooperate with Buyer and use their best efforts to
obtain from the lessors under each
-17-
<PAGE> 24
Real Property lease such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Buyer's lenders
may request.
5.13 Books and Records. Sellers shall maintain their books and
records relating to the Stations in accordance with past practices.
5.14 Notification. Sellers shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of any Station, and of any material change in any of the information contained
in Sellers' representations and warranties contained in Section 3 of this
Agreement.
5.15 Financial Information. Sellers shall furnish to Buyer within
twenty (20) days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a
statement of Operating Cash Flow and gross revenue of the Stations and WMTO for
the month just ended and such other financial information (including
information on payables and receivables) as Buyer may reasonably request. All
financial information delivered by Sellers to Buyer pursuant to this Section
shall be prepared from the books and records of Sellers in accordance with
generally accepted accounting principles consistently applied, shall accurately
reflect the books, records, and accounts of the Stations and to the extent
applicable, WMTO, shall be complete and correct in all material respects, and
shall present fairly the financial condition of the Stations and to the extent
applicable, WMTO, as at their respective dates and the results of operations
for the periods then ended.
5.16 Compliance with Laws. Sellers shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Stations.
5.17 Financing Leases. Sellers will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Sellers
pursuant to those leases so that those Assets shall be transferred to Buyer at
Closing free of any interest of the lessors.
5.18 Programming. Sellers shall not make any material changes in the
broadcast hours or in the percentages of types of programming broadcast by the
Stations, or make any other material change in the Stations' programming
policies, except such changes as in the good faith judgment of the Sellers are
required by the public interest.
5.19 Preservation of Business. Sellers shall use their best efforts
to preserve the business and organization of the Stations and use their best
efforts to keep available to the Stations their present employees and to
preserve the audience of the Stations and the Stations' present relationships
with suppliers, advertisers, and others having business relations with
-18-
<PAGE> 25
them, to the end that the business, operations, and prospects of the Stations
shall be unimpaired at the Closing Date. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Stations shall
be maintained.
5.20 Collection of Accounts Receivable. Sellers shall collect the
accounts receivable of the Stations only in the ordinary course consistent with
their past practices and will not take any action designed or likely to
accelerate the collection of their accounts receivable.
5.21 Personnel Recommendations. Sellers shall promptly notify Buyer
as personnel vacancies occur at the Stations and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC; and
(b) Sellers and Buyer shall promptly prepare an appropriate
application for the FCC Consent and shall file the application with the FCC
within five (5) business days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by
the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Sellers shall oppose any requests for reconsideration or
judicial review of the FCC Consent. If the Closing shall not have occurred for
any reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by any party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations; such operations,
including complete control and supervision of all of the Stations' programs,
employees, and policies, shall be the sole responsibility of Sellers until the
Closing.
-19-
<PAGE> 26
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation,
or condemnation of any of the Assets from any cause whatsoever shall be borne
by Sellers at all times prior to the Closing; and
(b) If any damage or destruction of the Assets or any other
event occurs which (i) causes any Station to cease broadcasting operations for
a period of three (3) or more days or (ii) prevents in any material respect
signal transmission by any Station in the normal and usual manner and Sellers
fail to restore or replace the Assets so that normal and usual transmission is
resumed within seven days of the damage, destruction or other event, Buyer, in
its sole discretion, may (x) terminate this Agreement forthwith without any
further obligations hereunder upon written notice to Sellers, in which event
all funds held by the Escrow Agent pursuant to the Escrow Agreement, including
all interest and other proceeds from the investment of such funds, shall be
immediately returned to Buyer, or (y) proceed to consummate the transaction
contemplated by this Agreement and complete the restoration and replacement of
the Assets after the Closing Date, in which event Sellers shall deliver to
Buyer all insurance proceeds received in connection with such damage,
destruction or other event.
6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Stations. Buyer shall promptly
notify Sellers if such survey discloses any material environmental hazard or
material possibility of future liability for environmental damages or clean-up
costs.
6.6 Engineering Study. Buyer may, at its option and expense, retain
an engineering firm to conduct a proof of performance study of the Stations and
to prepare a report on the Stations' compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. Buyer shall promptly notify Sellers if such survey
discloses any material deficiencies in the operations or equipment of the
Stations.
-20-
<PAGE> 27
6.7 Cooperation. Buyer and Sellers shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Sellers shall execute such other documents as may be
necessary or desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the State
of Florida shall be complied with by Sellers. Any loss, liability, obligation,
or cost suffered by Sellers or Buyer as the result of the failure of Sellers or
Buyer to comply with the provisions of any bulk sales law applicable to the
transfer of the Assets as contemplated by this Agreement shall be borne by
Sellers.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each
parcel of Real Property, Buyer may obtain, at Buyer's expense, at or prior to
Closing, an ALTA Owner's Policy of Title Insurance Form B-1987 (or equivalent
policy acceptable to Buyer), issued by a title insurer satisfactory to Buyer,
in an amount equal to the fair market value of Buyer's interest in the property
as of the Closing and any improvements thereon (as reasonably determined by
Buyer), insuring Buyer's interest in such parcel as of the Closing, subject
only to liens or encumbrances expressly permitted by this Agreement;
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained by Buyer pursuant to this Agreement shall
(1) insure title to the Real Property described in the policy and all recorded
easements benefitting such Real Property, (2) contain an "extended coverage
endorsement" insuring over the general exceptions customarily contained in
title policies, (3) contain an ALTA Zoning Endorsement 3.1 (or equivalent), (4)
contain an endorsement insuring that the Real Property described in the policy
is the same real estate shown in the survey delivered with respect to such
property, (5) contain an inflation endorsement, (6) contain a "contiguity"
endorsement with respect to any Real Property consisting of more than one
record parcel, and (7) not be subject to any survey exception or any defect or
encroachment disclosed by a survey delivered with respect to the property; and
(c) Surveys. With respect to each parcel of Real Property,
as to which a title insurance policy is procured pursuant to this Agreement,
Buyer may procure a current survey of the parcel, prepared by a licensed
surveyor and conforming to current ALTA Minimum Detail Requirements for Land
Title Surveys, disclosing the location of all improvements,
-21-
<PAGE> 28
easements, party walls, sidewalks, roadways, utility lines, and other matters
customarily shown on such surveys, and showing access affirmatively to public
streets and roads.
6.10 Sales Tax Filings. Sellers shall file such Florida sales tax
returns with respect to the Stations as required by applicable law and shall
concurrently deliver copies of all such returns to Buyer.
6.11 Access to Books and Records. Sellers shall provide Buyer access
and the right to copy for a period of three (3) years from the Closing Date any
books and records relating to the Assets that are not included in the Assets.
Buyer shall provide Sellers access and the right to copy for a period of three
(3) years from the Closing Date any books and records relating to the Assets
and delivered to Buyer at the Closing.
6.12 Appraisal. Buyer and Sellers agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of radio station assets.
6.13 Noncompetition Agreement. At Closing, Buyer and Sellers shall
enter into a Noncompetition Agreement in the form of Schedule 6.13 and $57,000
of the Purchase Price shall be allocated to the covenants of Sellers set forth
therein on the Closing Date.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at
the Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Sellers contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time;
(b) Covenants and Conditions. Sellers shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by them
prior to or on the Closing Date;
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization;
-22-
<PAGE> 29
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Sellers shall have complied with any
conditions imposed on them by the FCC Consent, and the FCC Consent shall have
become a Final Order;
(e) Governmental Authorizations. Sellers shall be the
holders of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on any Station or the conduct of its
business and operations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License;
(f) Deliveries. Sellers shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2;
(g) Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the
assets, properties, financial condition or business prospects of any Station,
including any damage, destruction, or loss affecting any assets used or useful
in the conduct of the business of any Station; and
(h) Asset Purchase Agreement. The transactions contemplated
by the WMTO Asset Purchase Agreement shall have been consummated
contemporaneously with the Closing in accordance with the terms of such Asset
Purchase Agreement.
7.2 Conditions to Obligations of Sellers. All obligations of Sellers
at the Closing are subject at Sellers' option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time;
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date;
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3; and
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Sellers of any conditions that need not be complied
with by Sellers under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
-23-
<PAGE> 30
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.
on a date, to be set by Buyer on at least five (5) days' written notice to
Sellers, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten (10) business days following the
date upon which the FCC Consent has become a Final Order, subject to the
satisfaction or waiver of all of the other conditions precedent to the holding
of the Closing. If Buyer fails to specify the date for the Closing pursuant to
the preceding sentence prior to the fifth day after the date upon which the FCC
Consent has become a Final Order, the Closing shall take place on the tenth
business day after the date upon which the FCC Consent has become a Final
Order.
(b) Closing Place. The Closing shall be held at the offices
of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Sellers.
8.2 Deliveries by Sellers. Prior to or on the Closing Date, Sellers
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances,
except for liens for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Sellers by their President, certifying (1)
that the representations and warranties of Sellers contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date; and (2) that Sellers have in all material respects
performed and complied with all of their obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
-24-
<PAGE> 31
(e) Tax, Lien, and Judgment Searches. Results of a search
for tax, lien, and judgment filings in the Secretary of State's records of the
State of Florida, as well as the records of those counties in Florida in which
any of the Assets are located, such searches having been made no earlier than
fifteen days prior to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all available files and records
used by Sellers in connection with their operations;
(g) Accounts Receivable. A complete and accurate list of the
Stations' Accounts Receivable as of a date no more than five (5) business days
prior to the Closing Date, including, with respect to each of the Accounts
Receivable, the amount number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(h) Opinions of Counsel. Opinions of Sellers' counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(h) hereto;
(i) Noncompetition Agreement. The Noncompetition Agreement
in the form of Schedule 6.13, duly executed by Sellers; and
(j) Lenders Certificates. Such certificates and
confirmations to Buyer's lenders as Buyer may reasonably request in connection
with obtaining financing for the performance of its payment obligations
hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.4;
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Sellers'
obligations under the Licenses and Assumed Contracts insofar as they relate to
the time on and after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by its President, certifying (1) that
the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
-25-
<PAGE> 32
(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.3(d) hereto;
and
(e) Noncompetition Agreement. The Noncompetition Agreement
in the form of Schedule 6.13 duly executed by Buyer and the payment of $57,000
to Sellers thereunder.
SECTION 9 TERMINATION
9.1 Termination by Sellers. This Agreement may be terminated by
Sellers and the purchase and sale of the Stations abandoned, if Sellers are not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Sellers set
forth in this Agreement have not been satisfied or waived in writing by
Sellers;
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing;
(c) Upset Date. If the Closing shall not have occurred by
April 1, 1997;
(d) Breach. Without limiting Sellers' rights under the other
provisions of this Section 9.1, if Buyer has failed to cure any material breach
of any of its representations, warranties, or covenants under this Agreement
within fifteen days after Buyer received written notice of such breach from
Sellers; and
(e) Asset Purchase Agreement. If the Seller under the WMTO
Asset Purchase Agreement terminates such Asset Purchase Agreement in accordance
with the terms thereof.
9.2 Termination by Buyer. This Agreement may be terminated by Buyer
and the purchase and sale of the Stations abandoned, if Buyer is not then in
material default, upon written notice to Sellers, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer;
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing;
-26-
<PAGE> 33
(c) Upset Date. If the Closing shall not have occurred by
April 1, 1997;
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of any Station in the normal and
usual manner for a continuous period of three days;
(e) Environmental Hazards. Buyer shall have notified Sellers
of material environmental hazards or the material possibility of environmental
damages or clean-up costs, as indicated in the environmental study described in
Section 6.5, within thirty (30) days prior to the Closing Date, and the cause
thereof shall not have been remedied prior to the Closing Date;
(f) Technical Deficiencies. Buyer shall have notified
Sellers of material deficiencies in the operations or equipment of any Station,
as indicated in the engineering study described in Section 6.6, within thirty
(30) days prior to the Closing Date, and the cause thereof shall not have been
remedied prior to the Closing Date;
(g) Breach. Without limiting Buyer's rights under the other
provisions of this Section 9.2, if Sellers have failed to cure any material
breach of any of their representations, warranties, or covenants under this
Agreement within fifteen days after Sellers received written notice of such
breach from Buyer; and
(h) Asset Purchase Agreement. If the Buyer under the WMTO
Asset Purchase Agreement terminates such Asset Purchase Agreement in accordance
with the terms thereof.
9.3 Rights on Termination. If this Agreement is terminated pursuant
to Section 9.1 or Section 9.2 and no party is in material breach of this
Agreement, the parties hereto shall not have any further liability to each
other with respect to the purchase and sale of the Assets. If this Agreement
is terminated by Sellers due to Buyer's material breach of this Agreement, then
the payment to Sellers of Two Hundred Eighty Thousand Dollars ($280,000)
pursuant to Section 9.4 below shall be liquidated damages and shall constitute
full payment and the exclusive remedy for any damages suffered by Sellers by
reason of Buyer's material breach of this Agreement. Sellers and Buyer agree
in advance that actual damages would be difficult to ascertain and that the
amount of Two Hundred Eighty Thousand Dollars ($280,000) is a fair and
equitable amount to reimburse Sellers for damages sustained due to Buyer's
material breach of this Agreement. If this Agreement is terminated by Buyer
due to Sellers' material breach of this Agreement, Buyer shall have all rights
and remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the
sum of Two Hundred Eighty Thousand Dollars ($280,000) in accordance with the
Escrow Agreement.
-27-
<PAGE> 34
All such funds deposited with the Escrow Agent shall be held and disbursed in
accordance with the terms of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer;
(b) If this Agreement is terminated pursuant to Section 9.1
or 9.2 and Buyer is not in material breach of this Agreement, all amounts held
by the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent, shall be
disbursed to or at the direction of Buyer; and
(c) If this Agreement is terminated by Sellers due to Buyer's
material breach of this Agreement, then all amounts held by the Escrow Agent
pursuant to the Escrow Agreement shall be disbursed to or at the direction of
Sellers as liquidated damages under Section 9.3 above and any interest or other
proceeds from the investment of funds held by the Escrow Agent shall be
disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen (18) months. Any investigations by or on behalf of any party hereto
shall not constitute a waiver as to enforcement of any representation,
warranty, or covenant contained in this Agreement. No notice or information
delivered by Sellers shall affect Buyer's right to rely on any representation
or warranty made by Sellers or relieve Sellers of any obligations under this
Agreement as the result of a breach of any of their representations and
warranties.
10.2 Indemnification by Sellers. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, each Seller hereby jointly and severally agrees
to indemnify and hold Buyer harmless against and with respect to, and shall
reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by any Seller contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement;
-28-
<PAGE> 35
(b) Any and all obligations of any Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts;
(c) Any loss, liability, obligation, or cost resulting from
the failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets;
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of any Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date; and
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees
and expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Sellers or
any information Sellers may have, Buyer hereby agrees to indemnify and hold
Sellers harmless against and with respect to, and shall reimburse Sellers for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Sellers under this Agreement;
(b) Any and all obligations of Sellers assumed by Buyer
pursuant to this Agreement;
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of any Station on and after the Closing; and
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
-29-
<PAGE> 36
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim.
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five days after
written notice of such action, suit, or proceeding was given to Claimant;
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable;
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim;
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible; and
(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if any Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary
-30-
<PAGE> 37
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, in addition to any other remedies that may be
available, including money damages, to obtain specific performance of the terms
of this Agreement. If any action is brought by Buyer to enforce this Agreement,
Sellers shall waive the defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Sellers
to Buyer pursuant to this Agreement shall be paid by Sellers. Buyer and
Sellers shall each pay one-half of the fees payable to the Escrow Agent and
one-half of the filing fee required in connection with the application for the
FCC Consent. Except as otherwise provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives, and each
party shall be responsible for all fees or commissions payable to any finder,
broker, advisor, or similar person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Sellers and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association in the State of Florida. The persons selected as
arbitrators shall have prior experience in the broadcasting industry but need
not be professional arbitrators, and persons such as lawyers, accountants,
brokers and bankers shall be acceptable. Before undertaking to resolve the
dispute, each arbitrator shall be duly sworn faithfully and fairly to hear and
examine the matters in controversy and to make a just award according to the
best of his or her understanding. The arbitration hearing shall be conducted
in accordance with the commercial arbitration rules of the American Arbitration
Association in the State of Florida. The written decision of a majority of the
arbitrators shall be final and binding on Sellers and Buyer. The costs and
expenses of the arbitration proceeding shall be assessed between Sellers and
Buyer in a manner to be decided by a majority of the arbitrators, and the
assessment shall be set forth in the decision and award of the arbitrators.
Judgment on the award, if it is not paid within thirty days, may be entered in
any court having jurisdiction over the matter. No action at law or suit in
equity based upon any claim arising out of or related to this Agreement shall
be instituted in any court by Sellers or Buyer
-31-
<PAGE> 38
against the other except (i) an action to compel arbitration pursuant to this
Section, (ii) an action to enforce the award of the arbitration panel rendered
in accordance with this Section, or (iii) a suit for specific performance
pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
<TABLE>
<S> <C>
If to Sellers: Timothy O'Brien, President
B. Radio, Inc.
Boss Radio Group, Inc.
2615 East 15th Street
Panama City, FL 32405
With a copy to: Larry D. Perry, Esq.
11464 Saga Lane, Suite 400
Knoxville, TN 37931
If to Buyer: Lowell W. Paxson, Chairman
Paxson Communications of Tallahassee, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
</TABLE>
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. No party hereto may assign this
Agreement without the prior written consent of the other parties hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Sellers' prior
approval in which event Buyer shall have no further obligation hereunder and
Buyer may assign its rights and interests hereunder to its lenders as
collateral security for Buyer's obligations to such lenders without seeking or
obtaining Sellers' prior approval. Upon any
-32-
<PAGE> 39
permitted assignment by Buyer or Sellers in accordance with this Section 11.4,
all references to"Buyer" herein shall be deemed to be references to Buyer's
assignee and all references to "Sellers" herein shall be deemed to be
references to Sellers' assignee, as the case may be. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Sellers, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease
of reference only and shall not control or affect the meaning or construction
of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Sellers with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement
-33-
<PAGE> 40
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. No party shall publish any press release, make
any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other parties; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-34-
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF TALLAHASSEE, INC.
By: /s/ Lowell W. Paxson
-----------------------------
Name: Lowell W. Paxson
Title: Chairman
B. RADIO, INC.
By: /s/ Timothy O'Brian
-----------------------------
Name: Timothy O'Brian
Title: President
BOSS RADIO GROUP, INC.
By: /s/ Timothy O'Brian
-----------------------------
Name: Timothy O'Brian
Title: President
-35-
<PAGE> 1
EXHIBIT 10.109
- --------------------------------------------------------------------------------
OPTION AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
MINNEAPOLIS-41, INC.
AND
KX ACQUISITION, L.P.
FOR
TELEVISION STATION KXLI(TV),
ST. CLOUD, MINNESOTA
MAY 30, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Option Agreement") is entered into as of May
30, 1996 by and between PAXSON COMMUNICATIONS OF MINNEAPOLIS - 41, INC., a
Florida corporation ("Paxson"), and KX ACQUISITION, L.P., a Minnesota limited
partnership ("Grantor").
R E C I T A L S
A. Grantor owns or leases all of the assets (the "Assets") that are used
or useful in the business and operations of Television Station KXLI(TV),
Channel 41, St. Cloud, Minnesota (the "Station"), and holds as part of the
Assets the licenses issued by the Federal Communications Commission ("FCC") for
the Station (the "FCC Licenses").
B. Grantor desires to grant to Paxson an exclusive and irrevocable option
to purchase the Assets, including the FCC Licenses, on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Grant of Option. In consideration for Three Hundred Fifty
Thousand Dollars ($350,000) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor hereby grants
to Paxson an exclusive and irrevocable option to acquire the Assets, including
the FCC Licenses (the "Option") for a purchase price of Twelve Million Dollars
($12,000,000) payable upon the closing of the Asset Purchase Agreement (as
defined in Section 3 below).
2. Effective Date and Notice of Exercise. This Option Agreement
shall become effective upon execution by Paxson and Grantor and may be exercised
by Paxson by delivery to Grantor of written notice of Paxson's intention to
exercise the Option (the "Option Notice"); which Option Notice may be given by
Paxson at any time prior to October 1, 1996, the latter being the "Termination
Date".
3. Asset Purchase Agreement. Within five (5) business days following
Grantor's receipt of the Option Notice, Grantor and Paxson shall enter into the
Asset Purchase Agreement in the form of Schedule A hereto (the "Asset Purchase
Agreement"), it being understood that the only changes to such form shall be
immaterial corrections and changes, if any, in the information contained in the
Schedules thereto and the addition of Schedules not attached to the Asset
Purchase Agreement at the execution of this Option Agreement to the
<PAGE> 3
extent such changes and information or the addition of Schedules is reasonably
required to reflect events occurring after the date hereof; provided, however,
Paxson shall not be required to enter into the Asset Purchase Agreement if the
changes to the Schedules or the addition of Schedules represent a material
adverse change from the Asset Purchase Agreement and Schedules attached hereto.
In the event Paxson concludes such changes or such additional Schedules
represent a material adverse change, Paxson shall notify Grantor in writing
that the changes or additions to the Asset Purchase Agreement attached hereto
are unacceptable whereupon this Option Agreement shall terminate and be of no
further force and effect. In the absence of such written notice by Paxson to
Grantor, the parties shall enter into the Asset Purchase Agreement and
thereafter Grantor and Paxson shall perform their respective obligations under
the Asset Purchase Agreement, including, without limitation, filing and
prosecuting an appropriate application for FCC consent to the assignment of the
FCC Licenses from Grantor to Paxson (the "FCC Consent").
4. Survival of Option. In the event that the transactions
contemplated by this Option Agreement are not consummated for any reason
whatsoever, the Option shall nevertheless remain exercisable by Paxson until the
Termination Date, and, upon such exercise, Paxson and Grantor shall enter into
an Asset Purchase Agreement that is substantially identical to the Asset
Purchase Agreement and thereafter diligently proceed to perform their
obligations thereunder.
5. Control of the Station. Prior to the closing of the transactions
contemplated by the Asset Purchase Agreement, Paxson shall not, directly or
indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Station; such operations, including complete
control and supervision of all of the Station programs, employees, and policies,
shall be the sole responsibility of Grantor until the closing of the
transactions contemplated by the Asset Purchase Agreement.
6. Representations and Warranties of Grantor. Grantor represents and
warrants to Paxson as follows:
(a) Grantor is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Minnesota. Grantor
has full power and authority to execute and deliver this Option Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Option Agreement and the consummation of the transactions contemplated
hereby by Grantor have been duly and validly authorized by all necessary
partnership action on the part of Grantor. This Option Agreement has been duly
and validly executed and delivered by Grantor and constitutes a legal, valid and
binding agreement of Grantor enforceable against Grantor in accordance with its
terms, except as such enforceability may be affected by bankruptcy, insolvency
or similar
-2-
<PAGE> 4
laws affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
(b) Except for the FCC Consent, there is no requirement
applicable to Grantor to obtain any permit, authorization, consent or approval
of, any governmental or regulatory authority or any other third party as a
condition to the consummation by Grantor of the transactions contemplated by
this Option Agreement and the Asset Purchase Agreement, and Grantor is required
to make no filing with the FCC except for filing this Option Agreement, the
Asset Purchase Agreement, and the application for the FCC Consent.
(c) Subject to obtaining the FCC Consent, and the consent of
Grantor's secured lender Richfield Bank and Trust Co., the execution, delivery
and performance of this Option Agreement and the Option Purchase Agreement by
Grantor will not (i) conflict with Grantor's organizational documents, (ii)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, agreement, or lease to which Grantor is a party or by which any
of the FCC Licenses or the other Assets are bound, or (iii) violate any statute,
law, rule, regulation, order, writ, injunction or decree applicable to Grantor,
the FCC Licenses or the other Assets.
(d) Grantor and each of Grantor's constituent members (1) is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation D,
promulgated under the Securities Act, or (2) has such knowledge and experience
in financial and business matters that he or she is capable of evaluating the
merits and risks of an investment in the Subordinated Note and the other
transactions contemplated by this Agreement.
7. Representations and Warranties of Paxson. Paxson represents and
warrants to Grantor as follows:
(a) Paxson has full corporate power and authority to execute
and deliver this Option Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Option Agreement and the
consummation of the transactions contemplated hereby by Paxson have been duly
and validly authorized by all necessary corporate action on the part of Paxson.
This Option Agreement has been duly and validly executed and delivered by Paxson
and constitutes a legal, valid and binding agreement of Paxson enforceable
against Paxson in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
-3-
<PAGE> 5
(b) Except for the FCC Consent, there is no requirement
applicable to Paxson to obtain any permit, authorization, consent or approval
of, any governmental or regulatory authority or any other third party as a
condition to the consummation by Paxson of the transactions contemplated by this
Option Agreement and the Asset Purchase Agreement, and, Paxson is required to
make no filing with the FCC except for filing the application for the FCC
Consent and notice of consummation of the assignment of license when that takes
place.
(c) Subject to obtaining the FCC Consent, the execution,
delivery and performance of this Option Agreement and the Option Purchase
Agreement by Paxson will not (i) conflict with Paxson's organizational
documents, (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, agreement, or lease to which Paxson is a party or
by which any of its assets are bound, or (iii) violate any statute, law, rule,
regulation, order, writ, injunction or decree applicable to Paxson.
8. So long as this Option Agreement is in force, Grantor will not (i)
commit any act that is inconsistent with the grant of the Option to Paxson or
the transactions contemplated by this Option Agreement and the Asset Purchase
Agreement or (ii) violate any of the covenants, by any act or failure to act,
set forth in Section 5 of the Asset Purchase Agreement.
9. Further Representations and Acknowledgements of Grantor. Pursuant
to Section 2.4 of the Asset Purchase Agreement, Buyer has the option to pay a
portion of the Purchase Price by assigning all or a portion of Buyer's right,
title and interest in and to the Subordinated Note (as attached to the Asset
Purchase Agreement as Schedule 2.4) and any equity securities (or right to
receive the same) of the issuer of the Subordinated Note issued to the holder
thereof upon the exercise of the conversion right with respect to all or part of
the principal amount of the Subordinated Notes contained in the Subordinated
Note, as adjusted under the terms of the Security Holders Agreement, together
with a ratable interest in any other claims or other amounts payable to the
holder of the Subordinated Note under the terms thereof (collectively, the
"Assigned Rights"). Such Assigned Rights shall be subject to the conditions as
set forth in Schedule 2.4 of the Asset Purchase Agreement.
10. Cooperation. Grantor and Paxson shall cooperate fully with each
other and their respective counsel and accountants in connection with any steps
required to be taken as part of their respective obligations under this Option
Agreement and the Asset Purchase Agreement and will each use their respective
best efforts to perform or fulfill all conditions and obligations to be
performed or fulfilled by them under this Option Agreement and the
-4-
<PAGE> 6
Asset Purchase Agreement so that the transactions contemplated hereby shall be
consummated.
11. Specific Performance. The parties recognize that if Grantor
breaches this Option Agreement and refuses to perform under the provisions of
this Option Agreement, monetary damages alone would not be adequate to
compensate Paxson for its injury. Paxson shall therefore be entitled, in
addition to any other remedies that may be available, including money damages,
to obtain specific performance of the terms of this Option Agreement. If any
action is brought by Paxson to enforce this Option Agreement, Grantor shall
waive the defense that there is an adequate remedy at law.
12. Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Option Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed to
have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:
If to Grantor:
KX Acquisition, L.P.
1197 Kenilworth Drive
Woodbury, MN 55125
Attention: Ronald R. Jensen
and
Mr. Dale W. Lang
c/o Lang Communications
230 Park Avenue, Seventh Floor
New York, NY 10169
With a copy to:
Richard A. Primuth, Esq.
Lindquist & Vennum
4200 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
If to Paxson:
Paxson Communications of Minneapolis-41, Inc.
601 Clearwater Park North
W. Palm Beach, FL 33401
Attention: Mr. Lowell W. Paxson
-5-
<PAGE> 7
With a copy to:
Anthony Morrison, Esq.
601 Clearwater Park North
W. Palm Beach, FL 33401
and
John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
Suite 800
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.
13. Entire Agreement; Amendment. This Option Agreement and the Asset
Purchase Agreement supersede all prior agreements and understandings of the
parties, oral and written, with respect to its subject matter. This Option
Agreement and the Asset Purchase Agreement may be modified only by an agreement
in writing executed by all of the parties hereto. No waiver of compliance with
any provision of this Option Agreement or the Asset Purchase Agreement will be
effective unless evidenced by an instrument evidenced in writing and signed by
the parties hereto.
14. Further Assurances. From time to time after the date of execution
hereof, the parties shall take such further action and execute such further
documents, assurances and certificates as either party reasonably may request of
the other to effectuate the purposes of this Option Agreement.
15. Counterparts. This Option Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when each of the parties hereto shall have delivered to it this Option
Agreement duly executed by the other parties hereto.
16. Headings. The headings in this Option Agreement are for the sole
purpose of convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Option
Agreement.
-6-
<PAGE> 8
17. Governing Law. This Option Agreement shall be construed under and
in accordance with the laws of the State of Minnesota without giving effect to
the principles of conflicts of law.
18. Benefit and Binding Effect; Assignability. This Option Agreement
shall inure to the benefit of and be binding upon Grantor, Paxson and their
respective successors and permitted assigns. No party hereto may assign this
Option Agreement without the prior written consent of the other parties hereto,
except that Paxson at any time prior to the consummation of the transactions
contemplated by this Option Agreement may assign its rights and obligations
under this Option Agreement without Grantor's consent to (a) any entity
controlled by or under common control with Paxson or (b) any other entity
designated by Paxson, which is reasonably acceptable to Grantor based upon its
financial capacity to consummate the transactions contemplated by this Option
Agreement and the Asset Purchase Agreement and its legal qualifications to
acquire the FCC licenses. Upon any permitted assignment by a party in
accordance with this Section 17, all references to "Paxson" herein shall be
deemed to be references to Paxson's assignee and all references to "Grantor"
herein shall be deemed to be references to Grantor's assignee, as the case may
be. Notwithstanding the foregoing, Paxson may assign its rights, benefits,
duties or obligations hereunder to its lenders as collateral security for the
obligations of Paxson to such lenders.
19. Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Option Agreement, and except as and to the
extent required by law, each party will keep confidential any information
obtained from the other party in connection with the transactions contemplated
by this Option Agreement. If this Option Agreement is terminated, each party
will return to the other party all information obtained by the such party from
the other party in connection with the transactions contemplated by this Option
Agreement.
20. Press Release. No party shall publish any press release, make any
other public announcement or otherwise communicate with any news media
concerning this Option Agreement or the transactions contemplated hereby without
the prior written consent of the other party.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-7-
<PAGE> 9
IN WITNESS WHEREOF the parties hereto have executed this Option Agreement
as of the date first above written.
PAXSON COMMUNICATIONS OF
MINNEAPOLIS-41, INC.
By: /s/ Antohony L. Morrison
--------------------------------
Name: Anthony L. Morrison
Title: Vice President
KX ACQUISITION, L.P.
By KXLI Acquisition Corp.,
its general partner
By: /s/ Ronald R. Jensen
--------------------------------
Name: Ronald R. Jensen
Title: Executive Vice President
<PAGE> 1
EXHIBIT 10.110
Schedule 2.4
SUBORDINATED NOTE
Buyer has the option to pay a portion of the Purchase Price by
assigning all or a portion of Buyer's right, title and interest in and to the
Subordinated Note (attached) and any equity securities (or right to receive the
same) of the issuer of the Subordinated Note issued to the holder thereof upon
the exercise of the conversion right with respect to all or part of the
principal amount of the Subordinated Note contained in the Subordinated Note,
as adjusted under the terms of the Security Holders Agreement, together with a
ratable interest in any other claims or other amounts payable to the hold er of
the Subordinated Note under the terms thereof (collectively, the "Assigned
Rights"). In that event, the Purchase Price shall be credited to the extent of
the unpaid face amount of the Subordinated Note or portion thereof assigned,
plus accrued and unpaid interest thereon. In the event of any such assignment
to Seller of the Subordinated Note or any securities issued upon the conversion
thereof or both, Seller agrees to accept the Assigned Rights subject to all of
the terms and conditions contained in the Subordinated Note, the Security
Holders Agreement and any other documents and agreements governing the rights
and liabilities of the holder of the Assigned Rights. Without limiting any of
the foregoing, the assignment shall be made, accepted and effective for the
foregoing purposes without representations or warranties of any kind and
without regard to:
(a) the validity, enforceability or collectibility of the
Subordinated Note or any of the other Assigned Rights. or the
financial condition, prospects, assets or liabilities of the
issuer thereof;
(b) the validity or enforceability of any purported sale,
assignment or transfer of any assets or property to such
issuer, or of any agreement or instrument relating to such
transfer;
(c) any default under or acceleration of any obligation of such
issuer of the Subordinated Note (including any such obligation
that may be subject to a guarantee issued by Seller or its
affiliate) arising as a result of such assignment of the
Assigned Rights.
<PAGE> 2
CONVERTIBLE SUBORDINATED NOTE
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE TO THE BORROWER'S SENIOR
SECURED NOTES AS MORE FULLY SET FORTH IN ANNEX A HERETO. COPIES OF THE SENIOR
SECURED NOTES AND THE DOCUMENTS PURSUANT TO WHICH THEY WERE ISSUED ARE
AVAILABLE FROM THE BORROWER (AS DEFINED BELOW).
NEITHER THIS NOTE NOR THE SECURITIES IT IS CONVERTIBLE INTO HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED OR SOLD UNLESS SO
REGISTERED OR UNLESS AN EXEMPTION IS AVAILABLE.
THIS NOTE AND THE SECURITIES IT IS CONVERTIBLE INTO ARE SUBJECT TO AN AGREEMENT
DATED JUNE 7, 1996, ENTERED INTO IN ORDER, INTER ALIA, TO RESTRICT THE
TRANSFERABILITY OF THIS NOTE AND SUCH SECURITIES. SAID AGREEMENT IS
AUTOMATICALLY BINDING UPON ANY PERSON WHO ACQUIRES THIS NOTE AND/OR THE
SECURITIES. ANY TRANSFER OR ACQUISITION IN VIOLATION OF SUCH AGREEMENT IS NULL
AND VOID. A COPY OF THE AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE BORROWER.
THIS NOTE IS CONVERTIBLE INTO SHARES OF BORROWER'S COMMON STOCK IN SUCH AMOUNT
AND ON TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE SECURITYHOLDERS
AGREEMENT (AS DEFINED BELOW).
$3,000,000.00 June 7, 1996
FOR VALUE RECEIVED, the undersigned, MACDONALD COMMUNICATIONS
CORPORATION, a New York corporation ("BORROWER"), hereby promises to pay to
PAXSON COMMUNICATIONS CORPORATION or registered assigns ("LENDER") on June
30, 2002 ("MATURITY DATE"), in lawful money of the United States, the
principal sum of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).
Borrower also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at a rate per annum equal to
the Prime Rate (as defined below). Interest on this Convertible Subordinated
Note ("NOTE") shall be payable in arrears commencing on December 31, 1996 and
continuing on the last day of each March, June, September and December in each
calendar year thereafter, on the Maturity Date, upon any payment or conversion
of this Note (to the extent accrued on the amount being paid or converted) and
at maturity (including final maturity) of this Note. Interest shall be
computed on the basis of a 365-day year.
<PAGE> 3
This Note shall mature on June 30, 2002, and on such date, the entire
unpaid principal balance of this Note, together with all accrued and unpaid
interest thereon, shall be due and payable in cash. If any payment is due on a
day that is not a business day, such payment shall be due on the next
succeeding business day.
Payments on this Note shall be made to Lender by crediting, before
1:00 p.m., New York time, by federal funds bank wire transfer, the account
designated in writing from time to time by Lender, in accordance with the
instructions set forth in such writing.
This Note is not prepayable. Borrower shall, upon written request,
provide any holder or prospective transferee of this Note with a written
statement setting forth a statement of the amount which will be due and payable
on this Note at maturity.
Subject to the restrictions on transfer set forth herein and in the
Securityholders Agreement: (i) each Convertible Note shall be issued in
registered form, and Borrower shall maintain a register for the Convertible
Notes in which it shall provide for the registration and transfer of the
Convertible Notes; (ii) upon surrender for registration or transfer of any
Convertible Note, Borrower, at its expense, shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Convertible
Notes; (iii) Convertible Notes may be exchanged at the option of any holder
thereof for Convertible Notes of a like aggregate principal amount in the same
name but in different denominations; whenever any Convertible Notes are so
surrendered for exchange, Borrower, at its expense, shall execute and deliver
the Convertible Notes which the holder making the exchange is entitled to
receive; (iv) all Convertible Notes issued upon any registration of transfer or
exchange thereof shall be the valid obligations of Borrower evidencing the same
debt, and entitled to the same benefits, as Convertible Notes surrendered upon
such registration of transfer or exchange; and (v) every Convertible Note
presented or surrendered for registration of transfer or exchange shall (if so
required by Borrower) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to Borrower duly executed by the
holder thereof or its attorney duly authorized in writing.
Upon receipt of evidence reasonably satisfactory to Borrower of the
loss, theft, destruction or mutilation of a Convertible Note and upon delivery
of an indemnity agreement reasonably satisfactory to Borrower from any holder
of such Convertible Note or, in the case of any such mutilation, upon the
surrender of such Convertible Note for cancellation to Borrower, at its
principal office, Borrower at its expense will execute and deliver, in lieu
thereof, a new Convertible Note of like tenor, dated so that there will be no
loss of interest. Any Convertible Note in lieu of which any such new
Convertible Note has been so executed and delivered by Borrower shall not
thereupon be deemed an outstanding Convertible Note for any purpose.
Upon the occurrence of any Event of Default (as defined below)
described in clause (ii), clause (iii) or clause (iv) of the definition of
"Event of Default," each of (a) the unpaid principal amount of and accrued
interest on this Note and (b) all other obligations and amounts due under or in
connection with this Note as set forth herein shall automatically
2
<PAGE> 4
become immediately due and payable, without presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly waived by
Borrower, and (ii) upon the occurrence and during the continuation of any other
Event of Default, the holder hereof may, by written notice to Borrower, declare
all or any portion of the amounts described in clauses (a) and (b) above to be,
and the same shall forthwith become, immediately due and payable.
All overdue payments on this Note (including, to the extent permitted
by law, overdue interest) shall bear interest from the due date of such
payments at a rate per annum equal to the Prime Rate plus 2%.
No amendment, modification or waiver of any provision of this Note, or
consent to any departure by Borrower herefrom, shall in any event be effective
without the written concurrence of the holder hereof.
No provision of this Note shall alter or impair the obligation of
Borrower, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times and in the currency
herein prescribed.
Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the preparation, execution, delivery, transfer,
collection and enforcement of this Note. Borrower and endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand and notice of every kind and, to the full extent permitted by law, the
right to plead any statute of limitations as a defense to any demand hereunder.
Any notice hereunder shall be in writing and shall be delivered by
recognized courier, telecopy or certified mail, return receipt requested, and
shall be conclusively deemed to have been received by a party hereto and to be
effective on the day on which delivered or telecopied to such party at its
address set forth below (or at such other address as such party shall specify
to the other parties hereto in writing), or, if sent by certified mail, on the
third business day after the day on which mailed, addressed to such party at
such address:
If to Borrower:
MacDonald Communications Corporation
230 Park Avenue
New York, NY 10010
Fax: (212) 697-1971
Attention: Jay MacDonald
If to Lender:
Paxson Communications Corporation
3
<PAGE> 5
601 Clearwater Park Road
West Palm Beach, Florida 33401
Fax: (561) 655-7395
Attention: Lowell W. Paxson
Anthony L. Morrison
THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
No failure or delay on the part of the holder hereof in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Note are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
The holder hereof shall not be under any obligation to marshal any
assets in favor of Borrower or any other party or against or in payment of any
or all of the obligations hereunder. To the extent that Borrower makes a
payment or payments to the holder hereof, or the holder hereof exercises its
rights of setoff, and such payment or payments or the proceeds of such setoff
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor or related thereto, shall be revived and continued in
full force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
In case any provision in or obligation under this Note shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
This Note shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the holder hereof. Neither Borrower's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Borrower without the prior written consent of the holder hereof.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OBLIGATION HEREUNDER MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE COUNTY OF NEW YORK, STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS NOTE BORROWER ACCEPTS FOR
ITSELF
4
<PAGE> 6
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS NOTE OR SUCH OBLIGATION. Borrower
hereby agrees that service of all process in any such court may be made by
registered or certified mail, return receipt requested, to Borrower at its
address provided above, such service being hereby acknowledged by Borrower to
be sufficient for personal jurisdiction in any action against Borrower in any
such court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of the holder hereof to bring
proceedings against Borrower in the courts of any other jurisdiction.
EACH OF THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREOF
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each such party
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering into this
Note, and that each will continue to rely on this waiver in their related
future dealings. Each such party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN MADE HEREUNDER. In the event of
litigation, this Note may be filed as a written consent to a trial by the
court.
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE AND JUNIOR IN
RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN ANNEX A HERETO) TO
THE EXTENT PROVIDED IN SAID ANNEX A.
DEFINED TERMS
The following terms shall have the following meanings:
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
5
<PAGE> 7
"COMMON SHARE" means one share of Common Stock of Borrower, par value
$0.01 per share.
"CONVERTIBLE NOTES" means this Note and each other of Borrower's
Convertible Subordinated Notes substantially in the form hereof, in an
aggregate principal amount not to exceed $6,000,000.00.
"EVENT OF DEFAULT" means any of the following:
(i) failure to pay any installment of principal of this Note when
due, whether at stated maturity, by acceleration or otherwise; or failure to
pay any interest on this Note or any fee or any other amount due under this
Note within five days after the date due; or
(ii) The Borrower shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, be adjudicated insolvent, petition or
apply to any tribunal for the appointment of a receiver, custodian, or any
trustee for it or a substantial part of its assets, or shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect, or the Borrower shall take any corporate action to
authorize any of the foregoing actions; or there shall have been filed any such
petition or application, or any such proceeding shall have been commenced
against it, that remains undismissed for a period of 60 days or more; or any
order for relief shall be entered in any such proceeding; or the Borrower by
any act or omission shall indicate its consent to, approval of or acquiescence
in any such petition, application or proceeding or the appointment of a
custodian, receiver or any trustee for it or any substantial part of any of its
properties, or shall suffer any custodianship, receivership or trusteeship to
continue undischarged for a period of 60 days or more; or
(iii) The Borrower shall generally not pay its debts as such debts
become due;
(iv) The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or
defraud its creditors or any of them or made or suffered a transfer of any of
its property that may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law (it being understood that the foregoing does not include any
obligation incurred by the Borrower with respect to its acquisition of the Lang
Assets (as defined in the Loan Agreement)); or shall have suffered or
permitted, while insolvent, any creditor to obtain a lien upon any of its
property through legal proceedings or distraint that is not vacated within 60
days from the date thereof; or
(v) a Loan Agreement Event of Default shall occur and be
continuing or the Loans (as defined in the Loan Agreement) thereunder shall
have become due and payable prior to their stated maturity date; or
(vi) a Securityholders Agreement Event of Default shall occur
and be continuing.
6
<PAGE> 8
"LOAN AGREEMENT" means that certain Loan Agreement dated as of the
date hereof by and between Borrower and Fleet Bank, N.A., as such Agreement may
be amended, restated, supplemented or otherwise modified from time to time.
"LOAN AGREEMENT EVENT OF DEFAULT" means an Event of Default as
defined in the Loan Agreement.
"PRIME RATE" means the rate that The Bank of New York publicly
announces from time to time as its prime lending rate, as in effect from time
to time. The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer.
"SECURITYHOLDERS AGREEMENT EVENT OF DEFAULT" means a breach of a
representation, warranty, covenant or any other agreement of Borrower contained
in the Securityholders Agreement.
"SECURITYHOLDERS AGREEMENT" means that certain Securityholders'
Agreement dated as of the date hereof by and among Borrower, each holder of
Common Shares and each holder of a Convertible Note, as such Agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"STATED AMOUNT" means, as of the date of conversion of this Note,
the unpaid principal amount of this Note.
CONVERSION PROVISIONS
1. At any time and from time to time, including, without
limitation, before, upon or after the maturity hereof, the holder hereof shall
be entitled to convert this Note in whole, but not in part, into fully paid and
nonassessable shares of Common Stock of Borrower, par value $0.01 per share
("CONVERSION COMMON SHARES") at the rate of one Common Share per $375 of
Stated Amount, subject to adjustment as set forth herein and in the
Securityholders Agreement, on the terms and conditions hereinafter set forth.
2. To exercise such conversion option, the holder hereof shall
give written notice, (the "CONVERSION NOTICE") postage prepaid, by certified
or registered mail, return receipt requested, or by hand delivery, to Borrower
at its principal executive office, of the election of such holder to convert
all of this Note into Common Shares, which notice shall set forth the name or
names in which the certificate or certificates representing the Common Shares
to be issued upon conversion are to be issued. Conversion shall be deemed to
have been effected on the date (the "CONVERSION DATE") of receipt by Borrower
of the Conversion Notice. As promptly as practicable thereafter, Borrower
shall issue to the holder, or the holder's designee as specified in the
Conversion Notice, a certificate or certificates for the number of full Common
Shares to which such holder is entitled and, upon such holder's receipt
thereof, the principal amount of the Note converted shall be deemed repaid and
the
7
<PAGE> 9
outstanding principal amount hereunder reduced by the amount of such
repayment. The holder, or the person or persons designated by the holder,
shall be deemed to have become a holder of record of the Conversion Common
Shares at the beginning of business on the applicable Conversion Date unless
the transfer books of Borrower are closed on such date, in which event the
holder, or the holder's designee, shall be deemed to have become a holder of
record of the Conversion Common Shares on the next succeeding date on which the
transfer books of Borrower are open.
3. No fractional Common Shares shall be issued upon conversion of
this Note. In lieu of issuing fractional Common Shares upon conversion of this
Note, Borrower shall pay a cash adjustment in respect of such fractional Common
Shares equal to the fair market value thereof, as determined in good faith by
the Board of Directors of Borrower.
4. The number of Common Shares into which this Note shall be
convertible shall be subject to adjustment from time to time as follows:
(a) In case Borrower shall at any time after the date hereof:
(i) declare a dividend or make a distribution on Common
Shares, or on any warrant or other security
convertible into or exercisable or exchangeable for
Common Shares, of Common Shares or any warrant or
other security convertible into or exercisable or
exchangeable for Common Shares;
(ii) subdivide the outstanding Common Shares, or any
warrant or other security convertible into or
exercisable or exchangeable for Common Shares, into a
greater number of Common Shares or any warrant or
other security convertible into or exercisable or
exchangeable for Common Shares; or
(iii) combine the outstanding Common Shares, or any warrant
or other security convertible into or exercisable or
exchangeable for Common Shares, into a smaller number
of Common Shares or any warrant or other security
convertible into or exercisable or exchangeable for
Common Shares,
then, in each case, the number of Conversion Common Shares to be received upon
conversion of this Note shall be adjusted so that conversion of this Note after
such time shall entitle the holder hereof to receive the aggregate number of
Common Shares such holder would have received had such holder converted this
Note under paragraph 1 of this Section immediately prior to such dividend,
distribution, subdivision or combination.
(b) In case Borrower shall at any time recapitalize or reclassify
its capital stock, or in case of any consolidation or merger of Borrower with
or into any other person (other than a consolidation or merger in which the
Borrower is the continuing entity and which
8
<PAGE> 10
does not result in any change in the capital stock of Borrower) or in
case of the sale or other disposition of all or substantially all the assets of
Borrower as an entirety to any other person, then in each such case this Note
shall, after such recapitalization, reclassification, consolidation, merger,
sale or other disposition, be convertible into the kind and number of shares of
capital stock or other securities or assets of the corporation or of the entity
resulting from such consolidation or surviving such merger or to which such
assets shall have been sold or otherwise disposed of, to which the holder
thereof would have been entitled if such holder had converted this Note
immediately prior to such recapitalization, reclassification, consolidation,
merger, sale or other disposition.
(c) (i) In case Borrower shall authorize the distribution to holders of
Common Shares of evidences of its indebtedness, assets or other property (other
than (a) cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or (b) dividends payable in Common Shares,
warrants, or other securities convertible into or exercisable or exchangeable
for Common Shares), the number of Common Shares issuable per $375 of Stated
Amount shall be adjusted as of the record date of such distribution to an
amount determined by multiplying such number of Common Shares by a fraction the
numerator of which is the Current Market Price Per Common Share (determined as
set forth in Section 4(c)(ii) below by the Board of Directors of Borrower) and
the denominator of which is the Current Market Price Per Common Share less the
fair market value (determined, subject to Section 4(c)(ii) below, by the Board
of Directors of Borrower) of the portion of the assets, other property or
evidences of indebtedness so distributed which is allocable to one Common
Share; provided that, in lieu of making such adjustment, Borrower may, at its
option (x) in the case of a cash distribution, set aside in a segregated,
interest-bearing account for distribution to the holder of this Note (together
with all interest earned thereon) upon conversion of this Note, cash in the
aggregate amount that would have been distributable to the holder of this Note
if this Note had been converted immediately prior to such distribution or (y)
in the case of any other distribution, make provisions, satisfactory to the
holders of not less than 40% of the principal amount of Convertible Notes
outstanding on the record date of the distribution, for the distribution to the
holder hereof, upon conversion hereof, of the evidences of indebtedness, assets
or other property that would have been distributed to the holder hereof if this
Note had been converted immediately prior to the record date for such
distribution, together with all interest that would have been paid or accrued
thereon from the date of distribution to the date of conversion had such
evidences of indebtedness, assets or other property been liquidated on the date
of distribution.
(ii) For the purpose of any computation under Section 4(c)(i)
above:
(x) at any time prior to Borrower's initial public
offering, the Current Market Price Per Common Share shall be the fair
market value of such share determined by the Board of Directors of
Borrower, subject to clause (z) of this paragraph, and at any time
after Borrower's initial public offering, the Current Market Price Per
Common Share on any date shall be deemed to be the average (weighted
by daily trading volume) of the daily closing prices per Common Share
(for
9
<PAGE> 11
each applicable class thereof) for the 30 consecutive trading days as
reported on the Composite Transactions tape commencing 45 trading days
before such date, or, if the Common Shares are not reported on the
Composite Transactions tape, on the principal national securities
exchange on which the Common Shares are listed for or admitted to
trading, or if the Common Shares are not listed for or admitted to
trading on any national securities exchange, the average of the
highest furnished by the National Association of Securities Dealers,
Inc. through NASDAQ or a similar organization if NASDAQ is no longer
reporting such information. If on any such date the Common Shares are
not quoted by any such organization, the Current Market Price Per
Common Share shall be the fair market value of such shares on such
date as determined by the Board of Directors of Borrower, subject to
clause (z) of this paragraph;
(y) the number of Common Shares outstanding at any time
shall not include shares owned or held by or for the account of
Borrower; and
(z) if the holders of not less than 40 percent of the
principal amount of Convertible Notes shall object to any
determination by the Board of Directors of Borrower of fair market
value or Current Market Price Per Common Share, the Board of Directors
of Borrower shall retain an independent appraiser reasonably
satisfactory to such holders to determine such fair market value or
the Current Market Price Per Common Share, as applicable.
5. In the event that Borrower prepares to take any action
described in Section 4 hereof, Borrower shall cause to be given to the
registered holder of this Note at his address appearing on the Note register,
at least 30 days prior to the applicable record date (or effective date, if no
record date is fixed), by certified mail, postage prepaid, a written notice
stating the date as of which the holders of record of Common Shares affected by
such actions are to be determined. Whenever the number of Common Shares
issuable upon the conversion of this Note is adjusted as provided in Section 4
hereof, Borrower shall promptly furnish the holder hereof a certificate
prepared by an officer of Borrower setting forth the number of Common Shares so
issuable upon conversion of this Note, together with a brief statement of the
facts accounting for such adjustment and a detailed explanation of the basis
for the computation. Failure to give any notice or certification required by
this Section 5 or any defect therein shall not affect the legality or validity
of any action that results in an adjustment pursuant to Section 4, or the right
of any holder to the benefits of such adjustment.
6. This Note shall be registered in the name of the record holder
hereof from time to time. Borrower may deem and treat the registered holder of
this Note as the absolute owner hereof for the purpose of any conversion
hereof, any distribution to the holder hereof, and for all other purposes, and
Borrower shall not be affected by any notice to the contrary.
10
<PAGE> 12
7. Borrower shall pay any transfer taxes attributable to the
initial issuance of this Note and of Common Shares issuable upon the conversion
of this Note (but not any income taxes or other taxes measured by or assessed
upon income of any holder thereof).
8. (a) Borrower shall at all times reserve and keep
available out of its authorized and unissued Common Shares, free from
preemptive rights, solely for the purpose of effecting the conversion of this
Note, the full number of Common Shares deliverable from time to time upon the
conversion of this Note.
(b) All Common Shares issued upon conversion of this Note
shall, when issued, be validly issued, fully paid and nonassessable and free
from preemptive rights.
9. Except as set forth in the Securityholders Agreement, nothing
contained in this Note shall be construed as conferring upon the holder hereof
any rights as, or responsibilities of, a shareholder of Borrower, including
without limitation the right to vote or receive dividends or to consent or to
receive notice as shareholders in respect of any meeting of shareholders for
the election of directors of Borrower or any other matter.
11
<PAGE> 13
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed as of the date first above written.
MACDONALD COMMUNICATIONS CORPORATION
By: J.C. MacDonald
--------------------
Name: Jay C. MacDonald
--------------------
Title: President
--------------------
12
<PAGE> 1
EXHIBIT 10.111
================================================================================
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 22, 1996
BY AND AMONG
PAXSON COMMUNICATIONS OF TALLAHASSEE, INC.
AND
WTNT, INC.
SOUTHERN BROADCASTING COMPANIES, INC.
GREAT SOUTH BROADCASTING, INC.
CHARLES E. GIDDENS, INC.
AND
SOUTHERN BROADCASTING OF PENSACOLA, INC.
================================================================================
<PAGE> 2
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of April 29, 1996, by and
among PAXSON COMMUNICATIONS OF TALLAHASSEE, INC., a Florida corporation
("Buyer"), WTNT, INC., a Florida corporation, SOUTHERN BROADCASTING COMPANIES,
INC., a Florida corporation, GREAT SOUTH BROADCASTING, INC., a Florida
corporation,, CHARLES E. GIDDENS, INC., a Florida corporation, and SOUTHERN
BROADCASTING OF PENSACOLA, INC., a Florida corporation [individually, referred
to as "Seller" and collectively as "Sellers"].
RECITALS
A. WTNT, Inc. is the proposed licensee of radio stations WNLS-AM
("Station I") and WTNT-FM ("Station II"), Tallahassee, Florida pursuant to
licenses issued by the FCC and upon approval of a joint assignment application
(File No. BAL-960221GP, BALH-960221GQ) pending before the FCC.
B. Southern Broadcasting Companies, Inc. is the licensee of and
owns and operates radio stations WSNI-FM (Station III), Thomasville, Georgia,
WPAP-FM ("Station IV"), Panama City, Florida and WPBH-FM ("Station V"), Parker,
Florida pursuant to licenses issued by the FCC.
C. Great South Broadcasting, Inc. is the licensee of and owns and
operates radio station WXSR-FM ("Station VI"), Quincy, Florida pursuant to
licenses issued by the FCC.
D. Charles E. Giddens, Inc., is the proposed permittee of radio
station WTPS-FM ("Station VII"), Midway, Florida pursuant to a construction
permit issued by the FCC and upon approval of an assignment application (File
No. BAPH-960315GS) pending before the FCC.
E. Southern Broadcasting of Pensacola, Inc. is the licensee of
and owns and operates radio station WTKX-FM ("Station VIII"), Pensacola,
Florida pursuant to licenses issued by the FCC and is the proposed licensee of
radio station WOWW(FM) )("Station IX"), Pensacola, Florida pursuant to licenses
issued by the FCC and, in the case of WOWW, upon approval of an assignment
application (File No. BALH-960215GG) pending before the FCC.
All of the above Stations I through IX hereinafter
collectively referred to as the Stations".
F. Sellers desire to sell, and Buyer wishes to buy, substantially
all the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
<PAGE> 3
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Sellers, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Sellers to payment for the
sale of advertising time run on the Stations prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are designated to indicate that they will be assumed by Buyer upon its
purchase of the Stations, (ii) any Contracts entered into by Sellers between
the date of this Agreement and the Closing Date that Buyer agrees in writing to
assume, and (iii) Contracts entered into by Sellers in compliance with Section
5.3.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Sellers are a party or which are binding upon Sellers and
which relate to or affect the Assets or the business or operations of the
Stations.
"Escrow Agent" means First Union National Bank of Florida.
- 2 -
<PAGE> 4
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses and construction permits issued or
to be issued by the FCC to Sellers in connection with the business or
operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Sellers or under which Sellers are licensed or franchised and which are used
or useful in the business and operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the FAA or any other federal, state, or local governmental
authorities to Sellers, in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the
date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means the real property and interests in real
property, including fee estates, leaseholds and subleaseholds, easements,
rights to access, and rights of way, and all buildings and other improvements
thereon described in Schedule 3.5 hereto used or useful in the business or
operations of the Stations.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, inventory, spare
parts, and other tangible personal property which is used or useful in the
conduct of the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
- 3 -
<PAGE> 5
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Sellers hereby agree to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, the
tangible and intangible assets used or useful in connection with the conduct of
the business or operations of the Stations described in the Schedules attached
hereto, together with any additions thereto between the date of this("")
Agreement and the Closing Date, but excluding the assets described in Section
2.2, free and clear of any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges, or encumbrances of any nature whatsoever
(except for liens or obligations associated with the Assumed Contracts and
liens for current taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts, including executed copies
thereof;
(e) The Intangibles and all intangible assets of Sellers
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations, if any;
(f) All of Sellers' proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Stations;
(g) All choses in action of Sellers relating to the
Stations; and
(h) All books and records relating to the business or
operations of the Stations, and all records required by the FCC to be kept by
the Stations.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Sellers' cash on hand as of the Closing and all other
cash in any of Sellers' bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; deposits; and any stocks, bonds, certificates of deposit and similar
investments;
- 4 -
<PAGE> 6
(b) All books and records relating to Sellers' internal
corporate organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) The Accounts Receivable; and
(e) Any Contracts not included among the Assumed Contracts.
(f) All real estate not listed on Schedule 3.5.
2.3 Purchase Price. The Purchase Price for the Assets shall be
Twenty One Million Three Hundred Thousand United States Dollars (US$21,300,000)
to be paid to Sellers by Buyer on the Closing Date adjusted as set forth in
Section 11.2 hereof, by federal wire transfer of immediately available funds
pursuant to wire instructions which shall be delivered by Sellers to Buyer at
least two business days prior to the Closing Date.
2.4 Assumption of Liabilities and Obligations/Trade and Barter.
As of the Closing Date, Buyer shall assume and undertake to pay, discharge, and
perform all obligations and liabilities of Sellers under the Licenses and the
Assumed Contracts insofar as they relate to the time on and after the Closing
Date, and arise out of events related to Buyer's ownership of the Assets or its
operation of the Stations on or after the Closing Date. Buyer shall assume
responsibility for the broadcast of barter announcements and programs for which
there is a negative trade balance not in excess of $5,000.00 for Stations I,
III, IV, V, VI, VII, VIII, and IX and not in excess of $10,000.00 for Station
II. Buyer shall not assume any other obligations or liabilities of Sellers,
including (i) any obligations or liabilities under any Contract not included in
the Assumed Contracts, (ii) any obligations or liabilities under the Assumed
Contracts relating to the period prior to the Closing Date, (iii) any claims or
pending litigation or proceedings relating to the operation of the Stations
prior to the Closing, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements not included in the Assumed
Contracts, (v) any obligations or liabilities of Sellers under any employee
pension, retirement, or other benefit plans or collective bargaining
agreements, (vi) any obligation to any employee of the Stations for
commissions, wages, bonuses, incentive programs, payroll taxes, vacation pay,
sick leave, severance benefits or other benefits with respect to periods prior
to or arising by virtue of the Closing or (vii) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Sellers
prior to the Closing.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer as follows:
- 5 -
<PAGE> 7
3.1 Organization, Standing, and Authority. Each Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and authorized to transact business in each
jurisdiction where the conduct of business or operations of such Seller
requires such Seller to qualify to conduct its business as presently
authorized. Sellers have all requisite power and authority (i) to own, lease,
and use the Assets as now owned, leased, and used, (ii) to conduct the business
and operations of the Stations as now conducted, and (iii) to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Sellers hereunder and thereunder. No Seller is a participant,
in any joint venture or partnership with any other person or entity with
respect to any part of the operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement, the Noncompetition Agreement, the
Escrow Agreement and the other agreements to be executed by Sellers and
delivered by Sellers have been duly authorized by all necessary actions on the
part of Sellers and their Shareholders. Schedule 3.2 sets forth the stock
ownership of each Seller. This Agreement has been duly executed and delivered
by Sellers and constitutes the legal, valid, and binding obligation of Sellers,
enforceable against them in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally, and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Except for restrictions on
the changing the format of Station VIII as disclosed on Schedule 3.3, and
subject to obtaining the Consents listed on Schedule 3.3, the execution,
delivery, and performance of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (i)
do not require the consent of any third party; (h) will not conflict with any
provision of any Sellers' Certificate of Incorporation or By-Laws; (iii) will
not conflict with, result in a breach of, or constitute a material default
under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a material default under, or accelerate or permit the
acceleration of any performance required by the terms of, any agreement,
instrument, license, or permit to which Sellers are a party or by which Sellers
may be bound; and (v) will not create any claim, liability, mortgage, lien,
pledge, condition, charge, or encumbrance of any nature whatsoever upon any of
the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the material Licenses. Sellers have delivered to Buyer true
and complete copies of the Licenses (including any amendments and other
modifications thereto). The Licenses have been validly issued, and the Seller
set forth above each License on Schedule 3.4 is the authorized legal holder
thereof. The Licenses listed on Schedule 3.4 comprise all of the licenses,
permits,
- 6 -
<PAGE> 8
and other authorizations required from any governmental or regulatory authority
for the lawful conduct of the business and operations of the Stations in the
manner and to the extent they are now conducted, and none of the Licenses is
subject to any restriction or condition that would materially limit the
operation to a greater extent than Stations are now operated. The Licenses are
in full force and effect, and the conduct of the business and operations of the
Stations are in accordance therewith. Sellers have no reason to believe that
any of the Licenses would not be renewed by the FCC or other granting authority
in the ordinary course based upon events occurring prior to Closing.
3.5 Title to and Condition of Real Property.
(a) Schedule 3.5 contains a complete and accurate
description of all the Real Property and each Seller's interests therein
(including street address, legal description, owner, and use and the location
of all improvements thereon). The Real Property listed on Schedule 3.5
comprises all real property interests necessary to conduct the business and
operations of the Stations as now conducted. Each Seller has good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements therein) included in the Real Property, free and
clear of all liens, mortgages, pledges, covenants, easements, restrictions,
encroachments, leases, charges and other claims and encumbrances of any nature
whatsoever, except for liens for real estate taxes not yet due and payable, and
liens which will be discharged at the Closing.
(b) With respect to each leasehold or subleasehold
interest included in the Real Property being conveyed under this Agreement (the
"Leased Property"), so long as the Sellers fulfill their obligations under the
lease therefor, Sellers have enforceable rights to nondisturbance and quiet
enjoyment. Sellers have good title to the Leased Property, free and clear of
all liens, claims, and encumbrances, except as specifically stated in Schedule
3.5. With respect to each such lease, (i) the leases are in full force and
effect, and are valid, binding and enforceable in accordance with their
respective terms, (ii) all accrued and currently payable rents and other
payments required by such leases have been paid, (iii) neither any Seller nor
any other party is in material default in any respect under any such leases,
(iv) no party has asserted any defense, set off or counterclaim thereunder, and
(v) no notice of default or termination has been given or received, no event of
default has occurred, and no condition exists and no event has occurred that,
with the giving of notice, the lapse of time, or the happening of any further
event would become a default or permit early termination under any such lease.
Except as set forth in Schedule 3.3 hereto, no third-party consent or approval
is required for the assignment of any such lease to Buyer, or for the
consummation of the transactions contemplated herein. All improvements located
on the Real Property are in good condition and repair (ordinary wear and tear
excepted), are available for immediate use in the conduct of the business or
operations of the Stations and comply with all applicable building and zoning
codes. All towers, guy anchors, buildings and other
- 7 -
<PAGE> 9
improvements included in the Assets are located entirely on the Real Property.
Sellers have full legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property and the
Station at which the items are used. The Tangible Personal Property listed on
Schedule 3.6 comprises all material items of tangible personal property
necessary to conduct the business and operations of the Stations as now
conducted. Except for liens to be discharged at the Closing unless assumed by
Buyer pursuant to the Assumed Contracts, or except as described in Schedule
3.6, Sellers own and have good title to each item of Tangible Personal
Property, and none of the Tangible Personal Property owned by Sellers is
subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except for liens for current taxes not
yet due and payable. Each item of Tangible Personal Property is available for
immediate use in the business and operations of the Stations. All material
items of transmitting and studio equipment included in the Tangible Personal
Property (i) have been maintained in a manner consistent with generally
accepted standards of good engineering practice, and (ii) will permit the
Stations and any auxiliary broadcast facilities related thereto to operate
substantially in accordance with the terms of the FCC Licenses and the rules
and regulations of the FCC and the FAA.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
material Contracts except (i) contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates and which have
not been prepaid and which may be canceled by the Stations without penalty on
not more than thirty days' notice and (ii) contracts or commitments for the
purchase or sale of goods, supplies, equipment, capital assets, products or
services, that do not involve more than $2,500 for each such contract or
commitment and more than $10,000 in the aggregate for all such contracts or
commitments per Station. With respect to the Contracts listed on Schedule 3.7,
Sellers have delivered to Buyer true and complete copies of all material
written Contracts, true and complete memoranda of all material oral Contracts
(including any amendments and other modifications to such Contracts), and a
schedule summarizing Sellers' obligations under trade and barter agreements
relating to the Stations. All of the Assumed Contracts are in full force and
effect, and are valid, binding, and enforceable in accordance with their terms.
There is not under any Assumed Contract any material default by any party
thereto or any event that, after notice or lapse of time or both, could
constitute a material default. Sellers are not aware of any intention by any
party to any Assumed Contract (i) to terminate such contract or amend the terms
thereof, (ii) to refuse to renew the Assumed Contract upon expiration of its
term, or (iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Sellers have full legal power
and authority to assign their rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts. The
Contracts listed on
- 8 -
<PAGE> 10
Schedule 3.7 hereto constitute all of the material contracts necessary to
conduct the business and operations of the Stations as currently conducted.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1, and the other Consents described in Schedule 3.3, no consent, approval,
permit, or authorization of, or declaration to or filing with any governmental
or regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Sellers
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Stations in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
material Intangibles, listed by Station, (exclusive of those listed in Schedule
3.4), all of which are valid and in good standing and uncontested. Sellers
have delivered to Buyer copies of all existing documents that establish or
evidence any of the Intangibles. To Sellers' knowledge, Sellers are not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Sellers threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Stations as now conducted.
3.10 Financial Condition of Sellers,
(a) Sellers have heretofore delivered to Buyer financial
statements and information attached hereto as Schedule 3.10, together with
monthly financial statements, referred to herein as the "Financial Statements."
The Financial Statements have been or, in the case of those to be provided
after the date hereof, will be prepared by Sellers in accordance with generally
accepted accounting principles, consistently applied and fairly present the
financial condition and results of operation of each Station for the periods
covered thereby (subject, in the case of interim Financial Statements, to
normal year-end adjustments and the absence of footnotes).
(b) Except as otherwise disclosed in Schedule 3.10,
between December 31, 1995 and the date of this Agreement, there has been no
change in the condition (financial or otherwise), results of operations,
business, assets or profits of any Station which, individually or in the
aggregate, is, or would be likely in the future to be, materially adverse to
such Station's condition, results of operations, business, assets or profits.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Sellers that insure any part of the Assets or the
business of the Stations listed by Station. All policies of insurance listed
in Schedule 3.11 are in full force and effect. The insurance
- 9 -
<PAGE> 11
policies listed in Schedule 3.11 are adequate in amount with respect to, and
for the full value (subject to customary deductibles) of, the Assets, and
insure the Assets and the business of the Stations against all customary and
foreseeable risks.
3.12 Reports. To Sellers' knowledge, all tax returns, ownership
and employment reports, and other material documents that the Stations are
currently required to file with the FCC or with any other governmental agency
have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Sellers and the Stations have
been complied with in all material respects. All of such returns, reports, and
statements are complete and correct in all material respects as filed. Sellers
have paid to the FCC all annual regulatory fees payable with respect to the FCC
Licenses.
3.13 Employee Benefits.
(a) Sellers have no Employee Plans and Compensation
Arrangements with their employees except Sellers pay one-half of their
employees' health insurance premiums, and offer their employees one week's paid
vacation after one year's service, and two weeks paid vacation after two years
service. Sellers pay their employees salaries on New Years Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Schedule 3.13 contains a
true and complete list of all employees of the Stations, their job description,
date of hire, salary and amount and date of last salary increase.
(b) Sellers do not contribute to and are not required to
contribute to any Multi-employer Plan with respect to the employees of the
Stations, and neither Sellers nor any other trade or business under common
control with Sellers (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
(c) Neither Sellers nor any other trade or business under
common control with Sellers (within the meaning of Sections 414(b), (c), (m)
or (o) of the Code) sponsor, maintain or contribute to any Employee Plan or
Compensation Arrangement that provides retiree medical or retiree life
insurance coverage to former employees of Sellers at the Stations.
(d) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan
as defined in Section 3(3) of ERISA to which Sellers or any entity related to
Sellers (under the terms of Section 414(b), (c), (m) or (o) of the Code)
contribute or to which Sellers or any entity related to Sellers (under the
terms of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain or
otherwise are bound which provides benefits to persons employed or previously
employed at the Stations; (ii) "Code" shall mean the Internal Revenue Code of
1986, as amended, any successor thereto and any regulations
- 10 -
<PAGE> 12
promulgated thereunder; (iii) "Compensation Arrangement" shall mean any plan or
compensation arrangement other than an Employee Plan, whether written or
unwritten, which provides to employees, former employees, officers, directors
and shareholders of Sellers or any entity related to Sellers (under the terms
of Section 414(b), (c), (m) or (o) of the Code) employed or previously employed
at the Stations any compensation or other benefits, whether deferred or not, in
excess of base salary or wages, including, but not limited to, any bonus or
incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other employee
fringe benefit plan; (iv) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, any successor thereto and any regulations
promulgated thereunder; and (v) "Multi-employer Plan" means a plan, as defined
in ERISA Section 3(37), to which Sellers or any entity related to Sellers
(under the terms of Section 414(b) or (c) of the Code) contribute or are
required to contribute.
3.14 Labor Relations. Sellers are not parties to or subject to any
collective bargaining agreements with respect to the Stations. Sellers have no
written or oral contracts of employment with any employee of the Stations,
other than those listed in Schedule 3.7. Sellers have complied in all material
respects with all laws, rules, and regulations relating to the employment of
labor, including those related to wages, hours, collective bargaining,
occupational safety, discrimination, and the payment of social security and
other payroll related taxes, and Sellers have not received any notice alleging
that they have failed to comply in any material respect with any such laws,
rules, or regulations. No material controversies, disputes, or proceedings are
pending or, to the best of Sellers' knowledge, threatened, between Sellers and
any employee (singly or collectively) of the Stations. No labor union or other
collective bargaining unit represents or claims to represent any of the
employees of the Stations. To Sellers' knowledge, there is no union campaign
being conducted to represent employees of the Stations or to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Stations.
3.15 Taxes. Sellers have filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by them to
the extent that such taxes have become due. To Sellers' knowledge, there are
no governmental investigations or other legal, administrative, or tax
proceedings pursuant to which Sellers are or could be made liable for any
taxes, penalties, interest, or other charges, the liability for which could
extend to Buyer as transferee of the business of the Stations, and no event has
occurred that could impose on Buyer any transferee liability for any taxes,
penalties, or interest due or to become due from Sellers.
3.16 Claims and Legal Actions. Except as disclosed on Schedule
3.16, there is no claim, legal action, counterclaim, suit, arbitration,
governmental investigation or other legal,
- 11 -
<PAGE> 13
administrative, or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Sellers threatened, against or
relating to Sellers or otherwise relating to the Assets or the business or
operations of the Stations, nor do Sellers know or have reason to be aware of
any basis for the same. In particular, but without limiting the generality of
the foregoing, to the best of Sellers' knowledge, there are no material
applications, complaints or proceedings pending or, threatened (i) before the
FCC relating to the business or operations of the Stations other than
rulemaking proceedings which affect the radio industry generally, (ii) before
any federal or state agency relating to the business or operations of the
Stations involving charges of illegal discrimination under any federal or state
employment laws or regulations, or (iii) before any federal, state, or local
agency relating to the business or operations of the Stations involving zoning
issues under any federal, state, or local zoning law, rule, or regulation.
3.17 Environmental Matters.
(a) Sellers have complied in all material respects with
all laws, rules, and regulations of all federal, state, and local governments
(and all agencies thereof) concerning the environment, public health and
safety, and employee health and safety, and no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or
commenced against Sellers or the Stations alleging any failure to comply with
any such law, rule, or regulation.
(b) Sellers have no liability relating to their ownership and
operation of the Stations (and there is no basis related to the past or present
operations, properties, or facilities of the Stations by Sellers for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Sellers giving rise to any such
liability) under the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Refuse Act, the Emergency Planning and
Community Right-to-Know Act, or the Occupational Safety and Health Act (each as
amended), or any other law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning release or threatened release of
hazardous substances, public or employee health and safety, or pollution or
protection of the environment.
(c) Sellers have no liability relating to their ownership
and operation of the Stations (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand, under the common law or pursuant to any statute, against Sellers giving
rise to any such liability) arising out of such Sellers's handling, disposal or
arranging for disposal of any substance.
- 12 -
<PAGE> 14
(d) Sellers have no liability relating to its ownership
and operation of the Stations (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand, under the common law or pursuant to a statute, against Sellers giving
rise to any such liability) for any illness or personal injury to any employee.
(e) Except as set forth on Schedule 3.17, to Sellers'
best knowledge, all properties and equipment used in the business of the
Stations are and have been free of friable asbestos, and all transformers used
in the operations of the Stations are free of PCB's.
(f) No pollutant, contaminant, industrial, hazardous, or
toxic material or waste is located on the Real Property.
3.18 Compliance with Laws. Sellers have complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. Neither the ownership or use of the properties of
the Stations nor the conduct of the business or operations of the Stations
conflicts with the rights of any other person or entity.
3.19 Conduct of Business in Ordinary Course. Since December 31,
1995, Sellers have conducted the business and operations of the Stations only
in the ordinary course and have not:
(a) Suffered any material adverse change in the
properties of the Stations, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Stations;
(b) Made any material increase in compensation payable or
to become payable to any of the employees of the Stations, or any bonus payment
made or promised to any employee of the Stations, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Stations;
(c) Made any sale, assignment, lease, or other transfer
of any of the Stations' properties that are subject to sale to Buyer other than
in the normal and usual course of business with suitable replacements being
obtained therefor;
(d) Canceled any material debts owed to or claims held by
any Seller with respect to the Stations, except in the normal and usual course
of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Stations:
- 13 -
<PAGE> 15
(f) Transferred or granted any material right under, or
entered into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, trade name, franchise, or similar right,
or modified any existing right relating to the Stations;
(g) Incurred any obligation or liability (fixed or
contingent) except normal trade or business obligations and liabilities
incurred in the ordinary course of business; or
(h) Mortgaged, pledged or subjected to any lien any of
the material Assets other than in the ordinary course of business.
3.20 Transactions with Affiliates. Sellers have not been involved
in any business arrangement or relationship relating to the Stations with any
affiliate of any Sellers, and no affiliate of Sellers owns any property or
right, tangible or intangible, which is used in the business of the Stations
where such arrangement, relationship or ownership could have a material adverse
effect on Buyer's rights under this Agreement. As used in this paragraph,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934.
3.21 Broker. Neither Sellers nor any person or entity acting on
their behalf have incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement,
except for a commission payable to Media Venture Partners. It is disclosed
that one of Sellers' principals, Charles E. Giddens, is a media broker and a
principal of Media Venture Partners, and Sellers and Buyer waive for all
purposes any objection to Mr. Giddens' participation in this transaction as
Sellers' principal and broker.
3.22 Full Disclosure. No representation or warranty made by
Sellers in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Sellers pursuant hereto contains or will
contain any untrue statement of a material fact, or omits or will omit to state
any material fact required to make any statement made herein or therein not
misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida. Buyer has all requisite power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
- 14 -
<PAGE> 16
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement, the Noncompetition Agreement, the
Escrow Agreement, and the other agreements to be executed by Buyer and
delivered by Buyer have been duly authorized by all necessary corporate actions
on the part of Buyer. This Agreement has been duly executed and delivered by
Buyer and constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies. Buyer has the partnership authority
to own the Assets and to operate the Stations after the consummation of the
transactions contemplated hereby.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and except as set forth in Schedule 4.3, the execution, delivery, and
performance by Buyer of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party under any agreement, license or law
applicable to Buyer; (ii) will not conflict with any provision of Buyer's
Certificate of Incorporation or By-laws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a material default under, any law,
judgment, order, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality applicable to Buyer; and (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a material default under, or accelerate or permit the acceleration of any
performance required by the terms of, any mortgage, deed of trust, agreement,
instrument, license, or permit to which Buyer is a party or by which Buyer may
be bound, that may impair Buyer's ability to acquire or operate the Assets.
4.4 Consents. Other than the consents and approvals of the FCC
referred to in Section 6.1, certain filings required to be made with the FCC
after the Closing Date, consents of third parties to Assumed Contracts, filings
required to perfect security interests and liens and other consents, approvals,
authorizations and filings contemplated by this Agreement or otherwise obtained
or completed at or prior to the Closing, Buyer is not required to obtain any
consent, approval or authorization from, or file any declaration or statement
with, any governmental instrumentality or other agency or any third party in
connection with the execution of this Agreement or any of the other agreements
contemplated hereunder, or the consummation of the transactions contemplated
hereunder.
4.5 Broker. Neither Buyer nor any person or entity acting on its
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.6 Qualification. Buyer is legally qualified to become the
licensee of the Stations and is financially qualified to purchase the Stations
and consummate the transactions contemplated herein.
- 15 -
<PAGE> 17
4.7 Litigation. To Buyer's knowledge, there is no litigation,
action, suit, investigation or proceeding pending or threatened before any
court or the FCC or any other governmental agency or any board of arbitration
which could reasonably be expected to (a) impair Buyer's ability to perform its
obligations under this Agreement, or (b) materially and adversely affect the
ability of Buyer to own and operate the Stations after the Closing.
4.8 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact required to make any statement made herein or therein not
misleading.
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Sellers agree that, between the date of this
Agreement and the Closing Date, Sellers shall operate the Stations diligently
in the ordinary course of business in material accordance with their past
practices (except where such conduct would conflict with the following
covenants or with Sellers' other obligations under this Agreement), and in
accordance with the other covenants in this Section 5.
5.2 Compensation. Sellers shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices.
5.3 Contracts. Except for any necessary "bridge" financing
necessary to the acquisition of Stations I, II, VII, and IX (which will be
repaid at the Closing), and except for contracts terminable on not more than 60
days' notice, Sellers will not incur any obligation (including obligations
relating to the borrowing of money or the guaranteeing of indebtedness) that
will be binding on Buyer after Closing, enter into any contract or commitment
relating to the Stations or the Assets, or amend or terminate any Contract (or
waive any material right thereunder), except for (i) cash time sales agreements
made in the ordinary course of business and (ii) other contracts and
commitments entered into in the ordinary course of business (other than trade
or barter agreements as described in Section 2.4) which will not obligate Buyer
to an amount of more than $2,500 in respect to each contract or commitment and
$10,000 in respect to all such contracts and commitments per Station and which
will not obligate Buyer to perform any material non-monetary obligations.
Prior to the Closing Date, Sellers shall deliver to Buyer a list of all
Contracts entered into between the date of this Agreement and the Closing Date,
together with copies of such Contracts.
5.4 Disposition of Assets. Except for transactions in the
ordinary course of business, Sellers shall not sell, assign, lease, or
otherwise transfer or dispose of any of the
- 16 -
<PAGE> 18
Assets subject to sale to Buyer, except assets that are no longer used or
useful in the business or operations of the Stations and assets that are
disposed of in connection with the acquisition of replacement property of
equivalent kind and value.
5.5 Encumbrances. Sellers shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) matters
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date (unless assumed by Buyer), (ii) liens for current taxes not yet
due and payable, (iii) mechanics' liens and other similar liens, which shall be
removed prior to the Closing Date, or (iv) liens necessary for the acquisition
of Stations I, II, VII and IX which will be removed by the Closing Date.
5.6 Licenses. Sellers shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Sellers shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Stations including the prosecution of the pending
assignment applications for radio stations WNLS(AM) and WTNT-FM, Tallahassee,
Florida (FCC File Nos. BAL-960221GP and BALH-950221GQ), radio station WTPS-FM,
Midway, Florida (FCC File No. BAPH-960215GS) and radio station WOWW(FM),
Pensacola, Florida (FCC File No. BALH-960215GG). Sellers are participating in
MM Docket No. 95-82 to upgrade Station VI to operate on Channel 268C1. Sellers
have agreed to reimburse the licensees of other radio stations to accommodate
the upgrade. With regard to Station VI, Seller will give the Buyer at the
Closing a credit in the amount of $37,500, which shall be deducted from the
Purchase Price and Buyer will assume sole responsibility for the reimbursement
of third parties in connection with the upgrade of Station VI. Sellers make no
warranty to Buyer that the FCC will ultimately adopt Sellers' proposal to
upgrade Station VI, and Buyer accepts Station VI as a Class C2 station and will
not refuse to close the purchase of Station VI in the event the upgrade is not
granted, or such grant is unlikely.
5.7 Access to Information. Sellers shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives, upon
reasonable advance notice, reasonable access to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Stations for the purpose of audit and inspection and will furnish or cause to
be furnished to Buyer or its authorized representatives all information with
respect to the affairs and business of the Stations that Buyer may reasonably
request (including any financial reports and operations reports produced with
respect to the affairs and business of the Stations). Without limiting the
generality of the foregoing, Sellers shall give Buyer and its counsel,
accountants and other authorized representatives reasonable access to Sellers'
financial records and Sellers' employees, counsel, accountants and other
representatives for the purpose of preparing and auditing, at Buyer's sole
expense, such financial statements as
- 17 -
<PAGE> 19
Buyer determines, in its judgment, are required or advisable to comply with
federal or state securities laws and the rules and regulations of securities
markets as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
5.8 Maintenance of Assets. Sellers shall maintain all of the
Assets in good condition (ordinary wear and tear excepted), and use, operate,
and maintain all of the Assets in a reasonable manner. Sellers shall maintain
inventories of spare parts and expendable supplies at levels consistent with
past practices. If any material loss, damage, impairment, confiscation, or
condemnation of or to any of the Assets occurs, Sellers shall repair, replace,
or restore the Assets. to their prior condition as represented in this
Agreement as soon thereafter as possible, and Sellers shall use the proceeds of
any claim under any insurance policy solely to repair, replace, or restore any
of the Assets that are lost, damaged, impaired, or destroyed. Sellers disclose
that the Station IX transmitter switching apparatus and production console are
inoperable, and Buyer acknowledges that Sellers have no obligation to repair
these items.
5.9 Insurance. Sellers shall maintain the existing insurance
policies on the Stations and the Assets.
5.10 Consents. Sellers shall use their best efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be
less advantageous to the Stations than those pertaining under the Contract or
License as in effect on the date of this Agreement. Sellers shall promptly
advise Buyer of any difficulties experienced in obtaining any of the Consents
and of any conditions proposed, considered, or requested for any of the
Consents.
5.11 Books and Records. Sellers shall maintain their books and
records relating to the Stations in accordance with past practices.
5.12 Notification. Sellers shall promptly notify Buyer in writing
of any unusual or material adverse developments with respect to the business or
operations of the Stations, and of any material adverse change in any of the
information contained in Sellers' representations and warranties contained in
Section 3 of this Agreement, provided that such notification shall not relieve
Sellers of any obligations hereunder.
5.13 Financial Information. Sellers shall furnish to Buyer as soon
as practicable after the information becomes available to Seller, between the
date of this Agreement and the Closing Date an unaudited statement of income
and expense of the Stations for the month just ended and such other financial
information (including information on payables and receivables) as Buyer may
reasonably request, all of which financial information shall comply with the
standards contained in the representations and warranties set forth in Section
3.10.
- 18 -
<PAGE> 20
5.14 Compliance with Laws. Sellers shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Stations.
5.15 Financing Leases. Except for obligations to be assumed by
Buyer listed on Schedule 3.7, Sellers shall satisfy at or prior to Closing all
outstanding obligations under capital and financing leases with respect to any
of the Assets and obtain good title to the Assets leased by Sellers pursuant to
those leases so that those Assets shall be transferred to Buyer at Closing free
of any interest of the lessors.
5.16 Programming. Sellers shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Stations, or make any other material change in the Stations' programming
policies, except such changes as in the good faith judgment of Sellers are
required by the public interest.
5.17 Preservation of Business. Sellers shall use their best
efforts to preserve the business and organization of the Stations and use their
best efforts to keep available to the Stations their present employees and to
preserve the audiences of the Stations and the Stations' present relationships
with suppliers, advertisers, and others having business relations with them, to
the end that the business, operations, and prospects of the Stations shall be
materially unimpaired at the Closing Date. The ordinary and customary
operating, marketing, promotional, sales, and advertising practices of the
Stations shall be maintained.
5.18 Collection of Accounts Receivable. Sellers shall collect the
accounts receivable of the Stations only in the ordinary course consistent with
their past practices.
5.19 Personnel Recommendations. Sellers shall promptly notify
Buyer as personnel vacancies occur at the Stations and consider for employment
(but Sellers shall be under no obligation to employ) all personnel recommended
by Buyer for such vacant position.
5.20 Rights. Sellers shall not knowingly waive any material rights
relating to the Stations or any of the Assets that could have a material
adverse effect on Buyer.
5.21 Inconsistent Action. Sellers shall not knowingly take any
action that is inconsistent with their obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
- 19 -
<PAGE> 21
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Sellers and Buyer shall promptly prepare appropriate
applications for the FCC Consent and shall file such applications with the FCC
on or before the tenth business day after the execution of this Agreement. The
parties shall prosecute the applications with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
applications as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by such party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Sellers shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period of
the FCC Consent, and neither party shall have terminated this Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the FCC Consent shall limit the
exercise by either party of its rights under Section 9.
6.2 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations; such operations,
including complete control and supervision of all of the Stations' programs,
employees, and policies, shall be the sole responsibility of Sellers until the
Closing.
6.3 Accounts Receivable.
(c) Collection. As of the Closing, Sellers shall
designate Buyer as their agent solely for the purposes of collecting the
Accounts Receivable. Sellers shall deliver to Buyer as soon as practicable
after the Closing a complete and detailed statement showing the name, amount
and age of each Account Receivable. Buyer shall make reasonable efforts in
accordance with Buyer's customary business practices to collect the Accounts
Receivable during the "Collection Period," which shall be the period beginning
on the Closing, and ending three months later. Buyer shall not be obligated to
use any efforts to collect any of the Accounts Receivable that are more
extensive than the efforts that Buyer uses to collect its own accounts
receivable. Buyer shall not refer any Accounts Receivable to a collection
- 20 -
<PAGE> 22
agency or attorney for collection, and Buyer shall not make any such referral
or compromise, nor settle or adjust the amount of any of the Accounts
Receivable, except with the approval of Sellers. During the Collection Period,
neither Sellers nor their agents shall make any direct solicitation with
respect to any of the Accounts Receivable. Buyer shall incur no liability to
Sellers for any uncollected account unless Buyer shall have engaged in wilful
misconduct or gross negligence in the collection of such account.
(d) Payments to Sellers. On or before the fifteenth day
after the end of each full calendar month during the Collection Period, Buyer
shall furnish to Sellers (i) a list of the amounts collected before the end of
such month with respect to the Accounts Receivable, and (ii) the amount
collected during such month with respect to the Accounts Receivable. On or
before the fifteenth day after the end of the Collection Period, Buyer shall
furnish Sellers with a list of all of the Accounts Receivable which remain
uncollected at the end of the Collection Period.
(e) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.4(b) and to remit to Sellers any payments
with respect to any of the Accounts Receivable that Buyer subsequently
receives, and Sellers may act to collect any of the Accounts Receivable that
continue to remain uncollected.
6.4 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Sellers at all times prior to the Closing.
6.5 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information of a confidential nature obtained from
the other party in connection with the transactions contemplated by this
Agreement. If this Agreement is terminated, each party will return to the
other party all information obtained by such party from the other party in
connection with the transactions contemplated by this Agreement.
6.6 Cooperation. Buyer and Sellers shall cooperate fully with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Sellers shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to
consummate the transaction contemplated hereby and to fulfill their obligations
under this Agreement. Notwithstanding the foregoing, Buyer shall have no
obligation (i) to expend funds to obtain
- 21 -
<PAGE> 23
any of the Consents or (ii) to agree to any adverse change in any License or
Assumed Contract to obtain a Consent required with respect thereto, and Sellers
shall have no obligation to expend funds (other than the incidental cost of
preparing and submitting requests, responding to reasonable inquiries and
ordinary and customary filing fees and processing charges) to obtain any of the
Consents.
6.7 Bulk Sales Law. If applicable, the bulk sales law of the
State of Florida shall be complied with by Sellers. Any loss, liability,
obligation, or cost suffered by Sellers or Buyer as the result of the failure
of Sellers or Buyer to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets as contemplated by this Agreement
shall be borne by Sellers.
6.8 Title Insurance and Surveys.
(f) Title Insurance. With respect to each parcel of Real
Property, Sellers will at Seller's sole cost obtain (1) as soon as practicable
after the date of this Agreement, a title commitment disclosing the condition
of title to all Real Property and all easements, rights of way, and
restrictions of record with respect thereto, as of a date not earlier than the
date of this Agreement, accompanied by copies of all instruments evidencing the
scope and extent of all such easements, rights of way, and restrictions of
record, and (2) at or prior to Closing, an ALTA Leasehold Policy of Title
Insurance on a form customarily used in the State of Florida, issued by a title
insurer satisfactory to Buyer, in an amount equal to the fair market value of
Sellers' leasehold interest (as reasonably determined by Buyer), insuring title
to such leasehold interest to be in the name of Buyer as of the Closing,
subject only to liens or encumbrances expressly permitted by this Agreement.
(g) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained pursuant to this Agreement shall, except
to the extent that title insurers in the State of Florida are not lawfully
permitted to issue such policies or unless otherwise agreed by Buyer, (1)
insure title to the Real Property described in the policy and all recorded
easements benefitting such Real Property, (2) contain an "extended coverage
endorsement" or similar modification insuring over or otherwise eliminating the
general exceptions customarily contained in title policies, (3) contain an
endorsement insuring that the Real Property described in the policy is the same
real estate shown in the survey delivered with respect to such property and (4)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel. At Buyer's expense, Sellers shall cause prior
to Closing all lease agreements included in the Real Property or memorandums of
lease relating thereto to be recorded in the appropriate public recording
office in the county where such Real Property is located.
(h) Surveys. With respect to each parcel of Real
Property, Sellers will cooperate with Buyer so that Buyer may obtain at Buyer's
sold expense as soon as practicable
- 22 -
<PAGE> 24
after the date of this Agreement a current survey of the parcel, prepared by a
licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
(i) Associated Fees and Costs. Buyer shall be
responsible for and promptly pay all costs associated with obtaining the title
commitments and the surveys, and for the costs associated with obtaining the
title insurance policy with the special endorsements described above. If this
Agreement is terminated for any reason, Buyer shall not have any recourse
against Sellers for the expenses so incurred.
6.9 Access to Books and Records. Sellers shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets but not included in the Assets.
Buyer shall provide Sellers access and the right to copy for a period of three
years from the Closing Date any books and records relating to the Assets that
are included in the Assets.
6.10 Environmental Audit. Buyer may, at its option and sole
expense, retain an environmental consultant to be selected by Buyer to perform
a Phase I environmental survey of the properties of the Stations which survey
shall be commenced within ten days following the execution of this Agreement
and promptly completed thereafter. If the survey discloses any material
environmental hazard, or as a direct result thereof material possibility of
future liability for environmental damages or clean-up costs, Buyer shall so
notify Sellers as soon as practicable and shall promptly provide Sellers with a
copy of the Phase I environmental survey and all ancillary reports.
6.11 Engineering Study. Buyer may, at its option and sole expense,
retain an engineering firm to conduct a proof of performance study of the
Stations and to prepare a report on the Stations' compliance with applicable
FCC rules and regulations, which study shall be commenced within ten days
following the execution of this Agreement and promptly completed thereafter.
If the survey discloses any material violation of the FCC rules and regulations
relative to the operations or equipment of the Stations, Buyer shall so notify
Sellers as soon as practicable and shall promptly provide Sellers with a copy
of all such studies and reports.
6.12 Noncompetition Agreement. At Closing, Buyer, Sellers and
Seller's Shareholders shall enter into a Noncompetition Agreement in the form
of Schedule 6.12 and Buyer shall pay the amounts due thereunder.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT
CLOSING
- 23 -
<PAGE> 25
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Sellers contained in this Agreement shall be true and
complete in all material respects at and as of the Closing Date as though made
at and as of that time.
(b) Covenants and Conditions. Sellers shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) Consents. All material Consents shall have been
obtained and delivered to Buyer without any material adverse change in the
terms or conditions of any License or Assumed Contract.
(d) FCC Consents. Each Seller shall have received FCC
consent to the assignment of the licenses or construction permits of Stations
I, II, VII, and IX, without the imposition on Sellers of any material adverse
conditions, and each consent shall have become a Final Order, unless "finality"
is waived by mutual agreement of the parties. The FCC Consent referred to in
Section 6.1 hereof shall have been granted without the imposition on Buyer of
any material adverse conditions that need not be complied with by Buyer under
Section 6.1 hereof, Sellers shall have complied with any conditions imposed on
them by the FCC Consent, and the FCC Consent shall have become a Final Order.
In the event the third parties selling Stations I, II, VII and IX to Sellers
insist on a Final Order prior to closing the acquisitions of the subject
stations, Buyer agrees with Seller to extend the Closing Date so that the
conditions in the contracts to acquire Stations I, II, VII and IX can be
complied with.
(e) Governmental Authorizations. Sellers shall be the
holders of all Licenses and there shall not have been any modification of any
License that could have a material adverse effect on any Station or the conduct
of its business and operations. No proceeding shall be pending with respect to
the Licenses to be assigned to Buyer the effect of which could be reasonably
expected to revoke, cancel, fail to renew, suspend, or modify adversely any
License. Buyer shall at Closing accept the license of Station VI subject to
any modifications that may result from the proceeding in MM Docket No. 95-82.
(f) Deliveries. Sellers shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
assets or properties of the Stations, including any damage, destruction, or
loss affecting any assets used or useful in the
- 24 -
<PAGE> 26
conduct of the business of the Stations that has not been repaired, restored or
remedied, excepting normal wear and tear to the Assets.
7.2 Conditions to Obligations of Sellers. All obligations of
Sellers at the Closing are subject at Sellers' option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consents. Each Seller shall have received FCC
consent to the assignment of the licenses or construction permits of Stations
I, II, VII, and IX, without the imposition on Sellers of any material adverse
conditions, and each consent shall have become a Final Order, unless "finality"
is waived by mutual agreement of the parties. The FCC Consent referred to in
Section 6.1 hereof shall have been granted without the imposition on Seller of
any material adverse conditions that need not be complied with by Seller under
Section 6.1 hereof, Buyer shall have complied with any conditions imposed on it
by the FCC Consent, and the FCC Consent shall have become a Final Order. The
FCC Consent envisions multiple FCC actions, and the Closing Date shall be
determined from the date on which the last FCC consent is granted and becomes a
Final Order. In the event the third parties selling Stations I, II, VII and IX
to Sellers insist on a Final Order prior to closing the acquisitions of the
subject stations, Buyer will agree with Seller to extend the Closing Date so
that the conditions in the contracts to acquire Stations I, II, VII and IX can
be complied with.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. Subject to Sections 7.1(d) and 7.2(d)
hereof, the Closing shall take place at 10:00 a.m. on a date, to be set by
Buyer on at least five days' written notice to Sellers, that is (1) not earlier
than the first business day after the FCC Consent is granted, and (2) not later
than ten business days following the date upon which the last of the
- 25 -
<PAGE> 27
multiple FCC actions comprising the FCC Consent has become a Final Order. If
Buyer fails to specify the date for Closing pursuant to the preceding sentence
prior to the fifth business day after the date upon which the FCC Consent
becomes a Final Order, the Closing shall take place on the tenth business day
after the date upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Sellers.
8.2 Deliveries by Sellers. Prior to or on the Closing Date,
Sellers shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of any claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances of
any nature whatsoever, except for liens for current taxes not yet due and
payable, and obligations assumed by Buyer under Section 2.4;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property including consents to the collateral assignment of such interests by
Buyer to its lenders as collateral security for Buyer's obligations to such
lenders;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificate. A certificate, dated as of the Closing
Date, executed by duly authorized officers of Sellers on behalf of each Seller,
certifying (1) that the representations and warranties of each Seller contained
in this Agreement are true and complete in all material respects as of the
Closing Date as though made on and as of that date; and (2) that each Seller
has in all material respects performed and complied with all of their
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Sellers in connection with the operations of the Stations;
- 26 -
<PAGE> 28
(f) Opinion of Counsel. Opinion of Sellers's counsel
dated as of the Closing Date, in substantially the form attached hereto as
Schedule 8.2(h), and if requested by Buyer, Buyer's lenders shall be permitted
to rely on such opinion;
(g) Lender's Certificate. If requested by Buyer, and at
Buyer's expense, Sellers shall deliver to Buyer's lenders such closing
certificates as Buyer's lenders may reasonably request;
(h) Noncompetition Agreement. The executed
Noncompetition Agreement in the form of Schedule 6.12; and
(i) Other Instruments. Such other instruments and
certificates or other documentation as Sellers are required by the terms hereof
to deliver or as Buyer may reasonably request.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform all
obligations and liabilities of Sellers under the Licenses and Assumed Contracts
insofar as they relate to the time on or after the Closing Date and arise out
of events related to Buyer's ownership of the Assets or its operation of the
Stations on or after the Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date executed by an officer of the general partner of Buyer on behalf of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date, and (2) that Buyer has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date substantially in the form of Schedule 8.3(d)
hereof;
(e) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Sellers may reasonably request; and
- 27 -
<PAGE> 29
(f) Noncompetition Agreement. The executed
Noncompetition Agreement in the form of Schedule 6.12 and the portion of the
Purchase Price allocated thereto.
SECTION 9 TERMINATION
9.1 Termination by Sellers. This Agreement may be terminated by
Sellers and the purchase and sale of the Stations abandoned, if Sellers are not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Sellers
set forth in this Agreement have not been satisfied or waived in writing by
Sellers.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by January 31, 1997.
(d) Breach. Without limiting Sellers' rights under the
other provisions of this Section 9.1, if Buyer has failed to cure any material
breach of any of its representations, warranties, or covenants under this
Agreement within fifteen days after Buyer received written notice of such
breach from Sellers.
(e) Hearing. If the FCC designates for an evidentiary
hearing any of the applications referred to in Section 5.6 including the
applications by which Sellers will acquire Stations I, II, VII and IX.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Stations abandoned, if Buyer is not then
in material default, upon written notice to Sellers, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by January 31, 1997.
- 28 -
<PAGE> 30
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of any of the Stations for a
continuous period of five (5) days, or in the normal and usual manner for a
continuous period of fifteen (15) days.
(e) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Sellers have failed to cure any
material breach of any of their representations, warranties, or covenants under
this Agreement within fifteen days after Sellers received written notice of
such breach from Buyer.
(f) Environmental Hazards. Buyer shall have notified in
writing Sellers of material environmental hazards or the material possibility
of environmental damages or cleanup costs, as indicated in the environmental
study described in Section 6.10, within 20 days following the execution of
this Agreement, and the cause thereof shall not have been remedied prior to the
Closing Date, Sellers having no obligation to perform such remediation. If
Buyer does not timely notify Sellers of said environmental hazards, damages, or
clean-up costs, Buyer shall be deemed to have waived any claim against Sellers
on account of any such hazards, damages, or clean-up costs no matter when they
may arise.
(g) Technical Deficiencies. Buyer shall have notified
Sellers of material deficiencies in the operations or equipment of the
Stations, as indicated in the engineering study described in Section 6.11,
within 20 days following the execution of this Agreement, and the cause thereof
shall not have been remedied prior to the Closing Date, Sellers having no
obligation to perform such remediation. If Buyer does not timely notify
Sellers of said material deficiencies, Buyer shall be deemed to have waived any
claim against Sellers on account of any such deficiencies no matter when they
may arise.
(h) Assignment Application. The refusal by the FCC to
approve on delegated authority any of the assignment applications referenced in
Section 5.6 hereof.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with the Escrow Agent
$1,000,000 (the "Escrow Deposit") in accordance with an Escrow Agreement among
Buyer, Sellers, and the Escrow Agent (the "Escrow Agreement") in the form
attached hereto as Schedule 9.3. All funds deposited with the Escrow Agent
shall be held and disbursed in accordance with the terms of the Escrow
Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to Buyer
so long as Buyer has paid Seller the Purchase Price as provided in Section
2.3(a).
- 29 -
<PAGE> 31
(b) If this Agreement is terminated pursuant to Section
9.1 or Section 9.2 and Buyer has complied in all material respects with the
terms of this Agreement, all amounts held by the Escrow Agent pursuant to the
Escrow Agreement, including any interest or other proceeds from the investment
of funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(c) If this Agreement is terminated by Sellers due to
Buyer's material breach of this Agreement, and Sellers are not in material
breach of this Agreement, then the Escrow Deposit together with all interest
earned thereon shall be disbursed by the Escrow Agent to or at the direction of
Sellers.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Sellers due to Buyer's material
breach of this Agreement and Sellers are not in material breach of this
Agreement, then the payment to Sellers pursuant to Section 9.3(c) shall be
liquidated damages and shall constitute full payment and the exclusive remedy
for any damages suffered by Sellers by reason of Buyer's material breach of
this Agreement. Sellers and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of the Escrow Deposit is a fair
and equitable amount to reimburse Sellers for damages sustained due to Buyer's
material breach of this Agreement. Notwithstanding Buyer's rights under
Section 10.5 hereof, if this Agreement is terminated by Buyer due to Sellers'
material breach of this Agreement, and if Buyer has complied with all material
terms of this Agreement, Buyer shall be entitled only to damages as awarded
pursuant to the procedures set forth in Section 11.3 of this Agreement
(Arbitration).
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Sellers shall affect Buyer's right to rely on any representation or warranty
made by Sellers or relieve Sellers of any obligations under this Agreement as
the result of a breach of any of their representations and warranties.
10.2 Indemnification by Sellers. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have,
- 30 -
<PAGE> 32
Sellers hereby agree to indemnify and hold Buyer harmless against and with
respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Sellers contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Sellers not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Sellers or
any information Sellers may have, Buyer hereby agrees to indemnify and hold
Sellers harmless against and with respect to, and shall reimburse Sellers for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Sellers under this Agreement.
(b) Any and all obligations of Sellers assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations on and after the Closing,
including any liabilities arising under the Licenses or the Assumed Contracts
which relate to events occurring on or after the Closing Date.
- 31 -
<PAGE> 33
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a
third party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
or its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed
upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
- 32 -
<PAGE> 34
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees,
representatives and successors and assigns of any Claimant although for the
purpose of the procedures set forth in this Section 10.4, any indemnification
claims by such parties shall be made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Sellers
breach this Agreement and refuse to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Sellers shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a proceeding for any remedy available under this Agreement,
the prevailing party shall be entitled to reimbursement from the other party of
its reasonable legal fees and expenses.
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Buyer shall pay any escrow agent fees
under the Escrow Agreement. Sellers shall pay on or before Closing the
brokers' fee due to Media Venture Partners in connection with the transactions
contemplated by this Agreement. Any federal, state, or local sales or transfer
tax arising in connection with the conveyance of the Assets by Sellers to Buyer
pursuant to this Agreement shall be paid by Sellers. Buyer and Sellers shall
each pay one-half of (i) the fees payable to the FCC in connection with the
filing of the applications for the FCC Consent. Except as otherwise provided
in this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Adjustments and Pro-Rations.
(a) The operating income and expenses of the Stations
shall be prorated between Buyer and Sellers as of 12:01 a.m. on the Closing
Date, and the net amount thereof shall be paid to Sellers or the Buyer as
appropriate at the Closing as an adjustment of the Purchase Price. Such
prorations shall include, without limitation, all ad valorem, real estate, and
other property taxes, water and sewer use charges, business and license fees,
pre-paid fees and expenses, rents, utility expenses, Assumed Contracts, prepaid
trade and barter agreements, prepaid time sale agreements, but shall exclude
(i) wages, salaries, bonuses, accrued vacation and sick pay, and any other
obligations of Sellers to its employees, other
- 33 -
<PAGE> 35
than pursuant to such employment agreements, if any, that constitute Assumed
Contracts, (ii) all of the liabilities assumed pursuant to Section 2.4 hereof,
(iii) legal and professional fees and closing costs; (iv) financing costs,
capital expenditures, and other costs and expenses not pertaining to the
day-to-day operations of the Stations. Revenues, expenses, costs and
liabilities earned or incurred in particular programs and announcements shall
be allocated to the time of performance of such programs and announcements
without regard to the date of payment therefor. However, Sellers shall be
entitled to all income, and shall be responsible for all expenses, arising out
of contracts, agreements and commitments to which Seller is a party other than
the Assumed Contracts. Seller shall provide Buyer with an itemized statement
evidencing all proposed adjustments not less than five (5) business days prior
to the Closing Date.
(b) If the amount of any of the aforesaid taxes is not
known on the Closing Date, the same shall be apportioned on the basis of taxes
assessed for the preceding year, with a reapportionment as soon as the new tax
rate and valuation can be ascertained; and, if the taxes which are to be
apportioned shall thereafter be reduced by abatement, the amount of such
abatement, less the reasonable cost of obtaining the same, shall also be
apportioned between Buyer and Sellers, provided that no party shall be
obligated to institute proceedings for an abatement. All other prorations
shall, to the extent feasible, be determined and paid on the Closing Date, with
a final settlement thereof to be made within sixty (60) days after the Closing
Date.
(c) Any item for which a party receives credit from the
other party under this Section 11.2 shall be paid when due in accordance with
its terms by the party so receiving credit.
11.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Sellers and
Buyer are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia, by a panel of three arbitrators. Sellers and Buyer
shall each designate one disinterested arbitrator, and the two arbitrators so
designated shall select the third arbitrator. Before undertaking to resolve
the dispute, each arbitrator shall be duly sworn faithfully and fairly to hear
and examine the matters in controversy and to make a just award according to
the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Sellers and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Sellers and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. Judgment on the award, if
it is not paid within thirty days, may be entered in any court having
jurisdiction over the matter. No action at law or suit in equity based upon
any claim arising out of or related to this Agreement shall be instituted in
any court by Sellers or Buyer against the other except (i) an action to compel
arbitration pursuant
- 34 -
<PAGE> 36
to this Section, (ii) an action to enforce the award of the arbitration panel
rendered in accordance with this Section, or (iii) a suit for specific
performance pursuant to Section 10.5.
11.4 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Sellers: Mr. Paul C. Stone
WSNI Radio
3360 Capital Circle, N.E.
Suite D
Tallahassee, Florida 32308
Mr. Charles E. Giddens
Media Venture Partners
1650 Tysons Boulevard
Suite 790
McLean, Virginia 22102
Mr. R. Sanders Hickey
WTNT, Inc.
c/o Radio Station
WGMG(FM)
1137 Cedar Shoals Drive
Athens, Georgia 30605
With a copy to: (which shall not Mark S. Levine, Esquire
constituted notice) Levine & Stivers
245 E. Virginia Street
Tallahassee, Florida 32301
Gary S. Smithwick, Esquire
Smithwick & Belendiuk, P.C.
1990 M Street, N.W.
Suite 510
Washington, D.C. 20036
- 35 -
<PAGE> 37
If to Buyer: Paxson Broadcasting of Tallahassee,
Limited Partnership
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
With a copy to: John R. Feore, Jr., Esquire
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.5.
11.5 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto,
which shall not be unreasonably withheld, except that Buyer may assign its
rights and obligations under this Agreement, in whole or in part, without
Sellers' consent to one or more subsidiaries or commonly controlled affiliates
of Buyer and Buyer may collaterally assign its rights and obligations hereunder
to its lenders without obtaining Sellers' consent, provided that any such
assignments do not delay the FCC Consent. Upon any permitted assignment by
Buyer or Sellers in accordance with this Section 11.5, all reference to "Buyer"
herein shall be deemed to be references to Buyer's assignee and all references
to "Sellers" herein shall be deemed to be references to Sellers' assignee.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
11.6 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Sellers, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
- 36 -
<PAGE> 38
11.8 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.9 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Sellers with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations among the parties, including,
without limitation, the letter of intent among the parties hereto dated
February 23, 1996, and cannot be amended, supplemented, or changed except by an
agreement in writing that makes specific reference to this Agreement and which
is signed by the party against which enforcement of any such amendment,
supplement, or modification is sought. The parties hereto acknowledge that no
representations or warranties have been made with respect to matters relating
to the transactions contemplated by this Agreement other than as expressly set
forth in this Agreement.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the parry entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.12.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings with governmental authorities as may, in its judgment, be
- 37 -
<PAGE> 39
required or advisable in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, in which
case the other party shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 38 -
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF TALLAHASSEE, INC.
By: /s/ Lowell W. Paxson
-------------------------------------------
Name: Lowell W. Paxson
Title: Chairman and Chief Executive Officer
WTNT, INC.
By: /s/ R. Sanders Hickey
-------------------------------------------
Name: R. Sanders Hickey
Title: President
SOUTHERN BROADCASTING COMPANIES, INC.
By: /s/ Paul Stone
-------------------------------------------
Name: Paul Stone
Title: President
GREAT SOUTH BROADCASTING, INC.
By: /s/ Paul Stone
-------------------------------------------
Name: Paul Stone
Title: President
CHARLES E. GIDDENS, INC.
By: /s/ Charles E. Giddens
-------------------------------------------
Name: Charles E. Giddens
Title:
SOUTHERN BROADCASTING OF PENSACOLA, INC.
By: /s/ Paul Stone
-------------------------------------------
Name: Paul Stone
Title: President
<PAGE> 1
EXHIBIT 10.112
- -------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 26, 1996
BY AND BETWEEN
PAXSON BROADCASTING OF ORLANDO,
LIMITED PARTNERSHIP
AND
SHAMROCK COMMUNICATIONS, INC.
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
<TABLE>
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FAA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Material Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Material Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2 PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.21 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.22 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.7 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.10 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.12 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.13 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
5.17 Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 HSR Filing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8 CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.12 Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.13 No-Shop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.14 Guaranty of Paxson Communications Corporation (PCC) . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
-iv-
<PAGE> 6
LIST OF SCHEDULES
Tab
---
<TABLE>
<S> <C> <C> <C>
Schedule 3.3 - Consents A
Schedule 3.4 - Licenses B
Schedule 3.5 - Real Property C
Schedule 3.6 - Tangible Personal Property D
Schedule 3.7 - Contracts E
Schedule 3.9 - Intangibles F
Schedule 3.10 - Financial Statements G
Schedule 3.11 - Insurance H
Schedule 3.13 - Employee - Employee Benefits I
Schedule 3.16 - Claims and Legal Actions J
Schedule 3.17 - Environmental Matters K
Schedule 4.3 - Buyer Consents L
Schedule 8.2(e) - Counsel Opinion (Seller) M
Schedule 8.3(d) - Counsel Opinion (Buyer) N
Schedule 9.3 - Escrow Agreement O
</TABLE>
-v-
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of April 26, 1996, by and
between Paxson Broadcasting of Orlando, Limited Partnership, a Florida limited
partnership ("Buyer"), and Shamrock Communications, Inc., a Pennsylvania
corporation ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates radio station
WDIZ(FM), 100.3 MHZ, Orlando, Florida (the "Station") pursuant to licenses
issued by the Federal Communications Commission.
B. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets owned or leased by Seller that are used in the business or
operations of the Station for the price and on the terms and conditions set
forth in this Agreement.
C. Seller and Buyer intend to enter into a Time Brokerage
Agreement providing for Buyer to provide programming for the Station commencing
on June 1, 1996 on terms and conditions acceptable to the parties.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means all Contracts which are assignable without
the consent of a third party and those Contracts which are assignable only with
the consent of a third party whose consent is obtained by Seller prior to
Closing that are (i) listed in Schedule 3.7, (ii) entered into by Seller prior
to the Closing Date that Buyer agrees in writing to assume, or (iii) entered
into by Seller between the Effective Date of the Time Brokerage Agreement and
<PAGE> 8
the Closing Date at the request of Buyer (Programmer) pursuant to the Time
Brokerage Agreement.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station.
"Escrow Agent" means First Union National Bank of Florida.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used
-2-
<PAGE> 9
exclusively in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the FAA or any other federal, state, or local governmental
authorities to Seller, in connection with the conduct of the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Material Licenses" means the FCC Licenses.
"Material Contracts" means those contracts designated in Paragraph
1.A. on Schedule 3.7 for which Consents must be delivered at Closing.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property
located in the State of Florida, including fee estates, leaseholds and
subleaseholds, easements, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, inventory, spare
parts, and other tangible personal property owned or leased by Seller and
located in the State of Florida which is used in the business or operations of
the Station, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Time Brokerage Agreement" means the Agreement between Seller and
Buyer dated the date hereof whereby Buyer shall provide programming for the
Station effective June 1, 1996.
"To Seller's knowledge" or "Seller is not aware of" as used herein
means to the actual knowledge of the officers, directors or shareholders of
Seller.
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets specified in (a) through (h) below used in
connection with the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities,
- 3 -
<PAGE> 10
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for liens for current taxes not
yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts, including executed copies thereof;
(e) The Intangibles including the goodwill of the Station, if
any;
(f) All of the following relating exclusively to the business
and operation of the Station, in Seller's possession: Seller's proprietary
information, technical information and data, machinery and equipment
warranties, maps, computer discs and tapes, plans, diagrams, blueprints, and
schematics, including filings with the FCC;
(g) All choses in action of Seller relating to the Station;
and
(h) All books and records relating exclusively to the
business or operations of the Station, and all records required by the FCC to
be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; deposits; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records relating to Seller's corporate
organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) The Accounts Receivable; and
(e) Any Contracts not included among the Assumed Contracts.
- 4 -
<PAGE> 11
2.3 Purchase Price.
(a) Purchase Price. The Purchase Price for the Assets shall
be Twenty Two Million Dollars ($22,000,000) in cash on the Closing Date (the
"Purchase Price"), adjusted as set forth in Section 2.3(b), payable by federal
wire transfer of immediately available funds pursuant to wire instructions
which shall be delivered by Seller to Buyer at least two business days prior to
the Closing Date.
(b) Adjustments.
(1) Expenses. The Purchase Price shall be increased
or decreased as required to effectuate the proration of expenses. Subject to
the provisions of the Time Brokerage Agreement, all expenses arising from the
operation of the Station, including annual regulatory fees imposed by the FCC
and other business and license fees, utility charges, real and personal
property taxes and assessments levied against the Assets, property and
equipment rentals, applicable copyright or other fees, sales and service
charges and similar prepaid and deferred items, shall be prorated between Buyer
and Seller in accordance with the principle that Seller shall be responsible
for all expenses, costs, and liabilities allocable to the period prior to the
Closing Date, except for Reimbursable Expenses as such is defined in the Time
Brokerage Agreement (see Attachment II thereof) and for which Buyer
(Programmer) is required to reimburse Seller (Licensee) and Buyer shall be
responsible for all expenses, costs, and obligations allocable to the period on
and after the Closing Date. Notwithstanding the foregoing, there shall be no
adjustment or proration for, and Seller shall remain solely liable with respect
to, (i) any Contracts not included in the Assumed Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.4 hereof, except that to the extent that Seller (Licensee) is not entitled to
reimbursement for Reimbursable Expenses under the Time Brokerage Agreement for
which Seller (Licensee) shall be entitled to such reimbursement and (ii) any
commissions, wages, bonuses, incentive programs, payroll taxes, vacation pay,
sick leave, severance benefits, or other benefits of Seller's employees of the
Station with respect to periods prior to or arising by virtue of the Closing
all of which obligations shall be discharged and satisfied in full at or prior
to the Closing.
(2) Revenues. Subject to the provisions of the Time
Brokerage Agreement, the Purchase Price shall be decreased by the amount of any
revenues received by Seller under any Assumed Contract to the extent such
revenues relate to the performance of obligations on or after the Closing Date.
(3) Trade and Barter. Subject to the provisions of
the Time Brokerage Agreement, if, on the Closing Date, the aggregate value of
the Seller's obligations relating to the Station on or after the Closing Date
under trade, barter or similar arrangements for the
- 5 -
<PAGE> 12
sale of advertising time other than for cash, minus the aggregate value of the
goods, services or other items to be received on or after the Closing Date
under such trade and barter arrangements, exceeds $25,000, then Buyer shall
receive a credit against the Purchase Price for the amount of such excess. The
liability of the Station for unperformed time for purposes of this Section
shall be valued according to the Station's prevailing rates as of the Closing
Date.
(c) Manner of Determining Adjustments. The Purchase Price,
taking into account the adjustments and prorations pursuant to Section 2.3(b),
will be determined finally in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not
later than five days before the Closing Date a preliminary settlement statement
which shall set forth Seller's good faith estimate of the adjustments to the
Purchase Price under Section 2.3(b). The preliminary settlement statement (A)
shall contain all information reasonably necessary to determine the adjustments
to the Purchase Price under Section 2.3(b), to the extent such adjustments can
be determined or estimated as of the date of the preliminary settlement
statement, and such other information as may be reasonably requested by Buyer,
and (B) shall be certified by Seller to be materially true and complete to the
best of Seller's knowledge as of the date thereof. Buyer and Seller shall use
their good faith efforts to agree upon the adjustments under Section 2.3(b)
hereof prior to the Closing. The Purchase Price payable at Closing under
Section 2.3(a) shall be increased or decreased, as applicable, based on the
adjustments set forth in the preliminary settlement statement except that any
adjustments set forth in the preliminary settlement statement to which Buyer
objects in good faith shall be deemed omitted from such preliminary settlement
statement and shall instead be determined as part of the post-closing
adjustments under this Section 2.3(c).
(2) No later than 45 days after the Closing Date,
Buyer will deliver to Seller a statement setting forth Buyer's determination of
the Purchase Price as adjusted pursuant to Section 2.3(b). If Seller disputes
the amount of the Purchase Price determined by Buyer, it shall deliver to Buyer
within 45 days after its receipt of Buyer's statement a statement setting forth
its determination of the amount of the Purchase Price (the "Seller Statement").
If Seller notifies Buyer of its acceptance of Buyer's statement, or if Seller
fails to deliver its statement within the 45-day period specified in the
preceding sentence, Buyer's determination of the Purchase Price shall be
conclusive and binding on the parties as of the last day of the 45-day period.
(3) Buyer and Seller shall use good faith efforts to
resolve any dispute involving the determination of the Purchase Price. If the
parties are unable to resolve the dispute within 15 days following the delivery
of Seller's Statement, Buyer and Seller shall jointly designate an independent
certified public accountant, who shall be knowledgeable and experienced in
accounting for radio broadcasting stations within forty-five days following
- 6 -
<PAGE> 13
delivery of Seller's Statement, to resolve the dispute. If Seller and Buyer
fail to agree to the appointment of such certified public accountant within
said forty-five day period, either party may submit to the American Arbitration
Association for the appointment of such accountant under the commercial
arbitration rules of the American Arbitration Association. The accountant's
resolution of the dispute shall be final and binding on the parties, and a
judgment may be entered thereon in any court of competent jurisdiction. Any
fees of such accountant shall be split equally between the parties.
(4) If the Purchase Price as finally determined
pursuant to this Section 2.3(c) exceeds the Purchase Price paid by Buyer on the
Closing Date (the "Estimated Purchase Price"), Buyer shall pay to Seller, in
immediately available funds within five days after the date on which the
Purchase Price is finally determined pursuant to this Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price. If the
Purchase Price as finally determined pursuant to Section 2.3(c) is less than
the Estimated Purchase Price, Seller shall pay to Buyer, in immediately
available funds within five days after the date on which the Purchase Price is
finally determined pursuant to this Section 2.3(c), the difference between the
Purchase Price and the Estimated Purchase Price. If Seller fails to make the
payment required by the preceding sentence, Buyer may retain the difference
between the Estimated Purchase Price and the Purchase Price from the amounts
collected by Buyer pursuant to Section 6.4 with respect to the Accounts
Receivable.
2.4 Assumption of Liabilities and Obligations. As of the Closing
Date and subject to the provisions of the Time Brokerage Agreement, Buyer shall
assume and undertake to pay, discharge, and perform all obligations and
liabilities of Seller under the Licenses and the Assumed Contracts insofar as
they relate to the time on and after the Closing Date. Buyer shall not assume
any other obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the Closing, (iv) any
obligations or liabilities arising under capitalized leases or other financing
agreements, (v) any obligations or liabilities of Seller under any employee
pension, retirement, or other benefit plans or collective bargaining agreements,
(vi) any obligation to Seller's employees of the Station for commissions, wages,
bonuses, incentive programs, payroll taxes, vacation pay, sick leave, severance
benefits or other benefits with respect to periods prior to or arising by virtue
of the Closing or (vii) any obligations or liabilities caused by, arising out
of, or resulting from any action or omission of Seller prior to the Closing.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
- 7 -
<PAGE> 14
3.1 Organization, Standing, and Authority. Seller is a
Pennsylvania corporation duly organized, validly existing, and in good standing
under the laws of the State of Pennsylvania. Seller has all requisite power
and authority (i) to own, lease, and use the Assets as now owned, leased, and
used, (ii) to conduct the business and operations of the Station as now
conducted, and (iii) to execute and deliver this Agreement and the documents
contemplated hereby, and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by Seller hereunder
and thereunder. Seller is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller has been duly authorized
by all necessary actions on the part of Seller and its Shareholders. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid, and binding obligation of Seller, enforceable against it in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally, and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party under any Material Contract, Material License or law
applicable to Seller or the transactions contemplated by this Agreement; (ii)
will not conflict with any provision of the Articles of Incorporation or
By-Laws of Seller; (iii) will not conflict with, result in a material breach
of, or constitute a material default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iv) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit of a material nature to which
Seller is a party or by which Seller may be bound; and which would impair
Seller's ability to consummate the transaction contemplated hereby; and (v)
will not create any claim, liability, mortgage, lien, pledge, condition,
charge, or encumbrance of a material nature upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of all Material Licenses. Seller has delivered to Buyer true and
complete copies of the Material Licenses (including any amendments and other
modifications thereto). The Material Licenses have been validly issued, and
Seller is the authorized legal holder thereof. The Licenses listed on Schedule
3.4 comprise all of the licenses, permits, and other authorizations of a
material nature required from any governmental or regulatory authority for the
lawful conduct of the business and operations of the Station in the manner and
to the full extent they
- 8 -
<PAGE> 15
are now conducted. The Licenses are in full force and effect, and the conduct
of the business and operations of the Station are in accordance therewith.
3.5 Title to and Condition of Real Property.
(a) Schedule 3.5 contains a complete and accurate description
of all the Real Property and Seller's interests therein (including street
address, description, owner, and use). The Real Property listed on Schedule
3.5 comprises all real property interests of a material nature necessary to
conduct the business and operations of the Station as now conducted.
(b) With respect to each leasehold or subleasehold interest
included in the Real Property being conveyed under this Agreement (i) the leases
are in full force and effect, and are valid, binding and enforceable with
respect to Seller in accordance with their respective terms, (ii) all accrued
and currently payable rents and other payments required by such leases have been
paid, (iii) neither Seller nor to Seller's knowledge, any other party is in
material default in any respect under any such leases, (iv) no party has
asserted any defense, set off or counterclaim thereunder, and (v) no notice of
default or termination has been given or received by Seller, no event of default
has occurred. Except as set forth in Schedule 3.3 hereto, no third-party
consent or approval is required for the assignment of any such lease to Buyer.
All improvements located on the Real Property are available for immediate use in
the conduct of the business or operations of the Station and comply with all
applicable building and zoning codes. All towers, guy anchors, buildings and
other improvements included in the Assets are located entirely on the Real
Property. Seller have full legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns or leases and has good title to each item of Tangible Personal Property,
and none of the Tangible Personal Property owned by Seller will, after the
Closing, be subject to any security interest, mortgage, pledge, conditional
sales agreement, or other lien or encumbrance, except for liens for current
taxes not yet due and payable. If any item of Tangible Personal Property
listed on Schedule 3.6 is subject to any security interest, mortgage, pledge,
conditional sales agreement, or other liens or encumbrance (except for liens
for current taxes not yet due and payable) as of the Closing, the same shall be
terminated, satisfied, or released at the time of Closing using, to the extent
necessary, the Purchase Price to be paid to Seller. Each material item of
Tangible Personal Property is available for immediate use in the business and
operations of the Station. All items of transmitting and studio equipment
included in the Tangible Personal Property (i) have been maintained in a manner
consistent with generally accepted standards of good engineering practice, and
(ii) will permit the Station and any auxiliary broadcast facilities related
thereto
- 9 -
<PAGE> 16
to operate substantially in accordance with the terms of the FCC Licenses and
the rules and regulations of the FCC and the FAA.
3.7 Assumed Contracts. All of the Assumed Contracts are in full
force and effect, and are valid, binding, and enforceable in accordance with
their terms. To Seller's knowledge, there is not under any Material Contract
any material default by any party thereto.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 the Consent under the HSR Act and the other Consents described in Schedule
3.3, no consent, approval, permit, or authorization of, or declaration to or
filing with any governmental or regulatory authority, or any other third party
of a material nature is required (i) to consummate this Agreement and the
transactions contemplated hereby, (ii) to permit Seller to assign or transfer
the Assets to Buyer, excluding the Assumed Contracts, or (iii) to enable Buyer
to conduct the business and operations of the Station in substantially the same
manner as such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
material Intangibles (exclusive of those listed in Schedule 3.4), all of which
are, to Seller's knowledge, valid and in good standing and uncontested. Prior
to Closing, Seller will deliver to Buyer copies of all existing documents of
Seller that establish or evidence any of the Intangibles listed on Schedule
3.9. To Seller's knowledge, Seller is not infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, owned by any other person or persons, and there is no
claim or action pending, or to the knowledge of Seller threatened, with respect
thereto. The Intangibles listed on Schedule 3.9 comprise all material
intangible property interests necessary to conduct the business and operations
of the Station as now conducted.
3.10 Financial Statements. Schedule 3.10 represents true and
complete copies of (i) unaudited Statements of Income and Expenses for the
Station for the calendar year ending December 31, 1994 and December 31, 1995,
and (ii) unaudited Statements of Income and Expenses for the Station for the
month period ended on February 29, 1996. The Statements of Income and Expenses
have been prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated, are
complete and correct in all material respects, and present fairly results of
operations of the Station for the periods then ended. None of the Statements
of Income and Expenses of the Station materially understates the true costs and
expenses of conducting the business or operations of the Station, or materially
inflates the revenues of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any material part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.11 are
in full force and effect.
- 10 -
<PAGE> 17
3.12 Reports. All tax returns, ownership and employment reports,
and other material documents that the Station is currently required to file
with the FCC or with any other governmental agency have been filed, and all
reporting requirements of the FCC and other governmental authorities having
jurisdiction over Seller and the Station have been complied with in all
material respects. All of such returns, reports, and statements are complete
and correct in all material respects as filed. Seller has timely paid to the
FCC all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Employee Benefits.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.13. Schedule 3.13
also contains a true and complete list of all employees of the Station, their
job description, date of hire, salary and amount and date of last salary
increase.
(b) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Station, and neither Seller nor any other trade or business under common
control with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA with respect to the
employees of the Station.
(c) Except as described in Schedule 3.13, neither Seller nor
any other trade or business under common control with Seller (within the
meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain or
contribute to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of
Seller at the Station.
(d) For purposes of this Agreement, the following terms shall
have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan
as defined in Section 3(3) of ERISA to which Seller or any entity related to
Seller (under the terms of Section 414(b), (c), (m) or (o) of the Code)
contribute or to which Seller or any entity related to Seller (under the terms
of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain or otherwise
are bound which provides benefits to persons employed or previously employed at
the Station; (ii) "Code" shall mean the Internal Revenue Code of 1986, as
amended, any successor thereto and any regulations promulgated thereunder;
(iii) "Compensation Arrangement" shall mean any plan or
- 11 -
<PAGE> 18
compensation arrangement other than an Employee Plan, whether written or
unwritten, which provides to employees, former employees, officers, directors
and shareholders of Seller or any entity related to Seller (under the terms of
Section 414(b), (c), (m) or (o) of the Code) employed or previously employed at
the Station any compensation or other benefits, whether deferred or not, in
excess of base salary or wages, including, but not limited to, any bonus or
incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other employee
fringe benefit plan; (iv) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, any successor thereto and any regulations
promulgated thereunder; and (v) "Multi-employer Plan" means a plan, as defined
in ERISA Section 3(37), to which Seller or any entity related to Seller (under
the terms of Section 414(b) or (c) of the Code) contribute or are required to
contribute.
3.14 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to the Station. Seller has no
written or oral contracts of employment with any employee of the Station, other
than those listed in Schedule 3.13. Seller has complied in all material
respects with all laws, rules, and regulations relating to the employment of
labor, including those related to wages, hours, collective bargaining,
occupational safety, discrimination, and the payment of social security and
other payroll related taxes, and Seller has not received any notice alleging
that it has failed to comply in any material respect with any such laws, rules,
or regulations. No labor union or other collective bargaining unit represents
or claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to represent employees of
the Station or to solicit cards from employees to authorize a union to request
a National Labor Relations Board certification election with respect to any
employees at the Station.
3.15 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed with respect to the Station, and it has
paid or caused to be paid all taxes shown on those returns or on any tax
assessment received by it to the extent that such taxes have become due. To
Seller's knowledge, there are no legal, administrative, or tax proceedings
pursuant to which Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Station.
3.16 Claims and Legal Actions. Except as disclosed on Schedule
3.16, there is no legal action, counterclaim, suit, arbitration, or other
legal, administrative, or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller and which relates to the Assets or the business or
operations of the Station, of a material nature or not adequately covered by
insurance. In particular, but without limiting the generality of the
foregoing, to Seller's knowledge, there are no applications, complaints or
proceedings pending or threatened (i) before the FCC
- 12 -
<PAGE> 19
relating to the business or operations of the Station other than rulemaking
proceedings which affect the radio industry generally, (ii) before any federal
or state agency relating to the business or operations of the Station involving
charges of illegal discrimination under any federal or state employment laws or
regulations, or (iii) before any federal, state, or local agency relating to
the business or operations of the Station involving zoning issues under any
federal, state, or local zoning law, rule, or regulation.
3.17 Environmental Matters.
(a) To Seller's knowledge, Seller has complied in all
material respects with all laws, rules, and regulations of all federal, state,
and local governments (and all agencies thereof) concerning the environment,
public health and safety, and employee health and safety, and Seller has not
received written notice of any charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, having been filed or commenced against
Seller or the Station alleging any failure to comply with any such law, rule,
or regulation.
(b) To Seller's knowledge, Seller has not been notified of
any liability relating to its ownership and operation of the Station (and
Seller is not aware of any basis related to the past or present operations,
properties, or facilities of the Station by Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic Substances
Control Act, the Refuse Act, the Emergency Planning and Community Right-to-Know
Act, or the Occupational Safety and Health Act (each as amended), or any other
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning release or threatened release of hazardous substances,
public or employee health and safety, or pollution or protection of the
environment.
(c) To Seller's knowledge, Seller has not been notified of
any liability relating to its ownership and operation of the Station (and
Seller is not aware of any basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand, under the
common law or pursuant to any statute, against Seller giving rise to any such
liability) arising out of such Seller's handling, disposal or arranging for
disposal of any substance.
(d) To Seller's knowledge, Seller has not been notified of
any liability relating to its ownership and operation of the Station (and
Seller is not aware of any basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand, under the
common law or pursuant to a statute, against Seller giving rise to any
- 13 -
<PAGE> 20
such liability) for any illness or personal injury to any employee, except as
is adequately covered by insurance.
(e) To Seller's knowledge, except as set forth on Schedule
3.17, Real Property and Tangible Personal Property are free of friable
asbestos, and all transformers used in the operations of the Station are free
of PCB's.
3.18 Compliance with Laws. To Seller's knowledge, Seller has
complied in all material respects with the Licenses and all federal, state, and
local laws, rules, regulations, and ordinances applicable or relating to the
ownership and operation of the Station where noncompliance would have a
material and adverse effect on the operation of the Station. To Seller's
knowledge, neither the ownership or use of the properties of the Station nor
the conduct of the business or operations of the Station conflicts with the
rights of any other person or entity where such conflict would have a material
and adverse effect on the operation of the Station.
3.19 Conduct of Business in Ordinary Course. Since December 31,
1995, to the date hereof, Seller has conducted the business and operations of
the Station substantially in its ordinary course and has not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any material damage,
destruction, or loss affecting any assets used in the conduct of the business
of the Station;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment
made or promised to any employee of the Station, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Station;
(c) Made any sale, assignment, lease, or other transfer of
any of the Station's properties other than in the normal and usual course of
business of the Station;
(d) Canceled any debts owed to or claims held by any Seller
with respect to the Station, except in the normal and usual course of business
of the Station;
(e) Suffered any material write-down of the value of the
Assets;
(f) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or materially
modified any such existing right relating to the Station;
- 14 -
<PAGE> 21
(g) Incurred any obligation or liability (fixed or
contingent) except normal trade or business obligations and liabilities
incurred in the ordinary course of business of the Station; or
(h) Mortgaged, pledged or subjected to any lien any of the
Assets other than in the ordinary course of business of the Station.
3.20 Transactions with Affiliates. Other than with respect to
financing, Seller is not involved in any business arrangement or relationship
relating to the Station with any affiliate of any Seller, and no affiliate of
Seller owns any Asset. As used in this paragraph, "affiliate" has the meaning
set forth in Rule 12b-2 promulgated under the Securities and Exchange Act of
1934.
3.21 Broker. Neither Seller nor any person or entity acting on its
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.22 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact required to make any statement made herein or therein not
misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a Florida
limited partnership duly organized, validly existing, and in good standing
under the laws of the State of Florida. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
- 15 -
<PAGE> 22
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and except as set forth in Schedule 4.3, the execution, delivery, and
performance by Buyer of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party under any material agreement, license or
law applicable to Buyer or the transactions contemplated by this Agreement;
(ii) will not conflict with the Certificate of Partnership of Buyer; (iii) will
not conflict with, result in a material breach of, or constitute a material
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality applicable to Buyer; or
(iv) will not conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the acceleration
of any performance required by the terms of, any agreement, instrument,
license, or permit of a material nature to which Buyer is a party or by which
Buyer may be bound, that may impair Buyer's ability to acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person or entity acting on its
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact required to make any statement made herein or therein not
misleading.
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING
Between the date of this Agreement and the Closing Date, Seller shall
comply with the covenants in this Section 5 (except where such conduct would
conflict with Seller's other obligations under this Agreement or the intent of
the Time Brokerage Agreement).
5.1 Generally. Except as provided for in the Time Brokerage
Agreement, Seller shall operate the Station diligently in the ordinary course
of business in accordance with past practices.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed by
Seller in connection with the conduct of the business or operations of the
Station, except in accordance with past practices or as required by any law,
statute, or contract provision applicable to Seller.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any material Assets, except Assets that are
no longer used in the business or
- 16 -
<PAGE> 23
operations of the Station and Assets that are disposed of in connection with
the acquisition of replacement property.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any security interest, mortgage, lien, pledge, charge, or encumbrance of
any material nature whatsoever upon the Assets, except for (i) matters
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to or
on the Closing Date utilizing to the extent necessary the Purchase Price to be
paid to Seller, (ii) liens for current taxes not yet due and payable or (iii)
mechanics' liens and other liens, which shall be removed prior to or on the
Closing Date utilizing to the extent necessary the Purchase Price to be paid to
Seller.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of the FCC Licenses. Seller shall not fail to prosecute with due
diligence any applications to any governmental authority in connection with the
operation of the Station.
5.6 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection and will furnish or cause to be furnished to Buyer or its
authorized representatives all information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
Statements of Income and Expenses and operations reports produced with respect
to the affairs and business of the Station). Without limiting the generality
of the foregoing, Seller shall give Buyer and its counsel, accountants and
other authorized representatives reasonable access to Seller's financial
records of the Station and Seller's employees, counsel, accountants and other
representatives for the purpose of preparing and auditing such financial
statements as are required to comply with federal or state securities laws and
the rules and regulations of securities markets as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
5.7 Maintenance of Assets. Seller shall maintain all of the
Assets in their current condition (ordinary wear and tear excepted), and use,
operate, and maintain all of the Assets in a reasonable manner. Seller shall
maintain inventories of spare parts and expendable supplies at levels
substantially consistent with past practices. If any loss, damage, impairment,
confiscation, or condemnation of or to any material Assets occurs, Seller shall
repair, replace, or restore such Assets to their prior condition as represented
in this Agreement as soon thereafter as possible, and Seller shall use the
proceeds of any claim under any insurance policy solely to repair, replace, or
restore any of the Assets that are lost, damaged, impaired, or destroyed.
- 17 -
<PAGE> 24
5.8 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.9 Consents. Seller shall use reasonable commercial efforts to
obtain the Consents described in Section 8.2(b), without any change in the
terms or conditions of any Assumed Contract or License that could be materially
less advantageous to the Station than those pertaining under the Assumed
Contract or License as in effect on the date of this Agreement. Seller shall
promptly advise Buyer of any difficulties experienced in obtaining any of the
Consents and of any conditions proposed or requested for any of the Consents.
5.10 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.11 Notification. Seller shall promptly notify Buyer in writing
of any adverse material developments with respect to the business or operations
of the Station, and of any material change in any of the information contained
in Seller's representations and warranties contained in Section 3 of this
Agreement, provided that such notification shall not relieve Seller of any
obligations hereunder.
5.12 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.13 Financing Leases. Seller shall satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.14 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of Seller are
required by the public interest and except pursuant to the Time Brokerage
Agreement.
5.15 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station between the date hereof and the
Effective Date of the Time Brokerage Agreement and consider for employment all
personnel recommended by Buyer for such vacant position.
5.16 Rights. Seller shall not knowingly waive any material rights
relating to the Station or any of the Assets.
- 18 -
<PAGE> 25
5.17 Inconsistent Action. Seller shall not intentionally take any
action that is inconsistent with its obligations under this Agreement or that
could materially hinder or delay the consummation of the transactions
contemplated by this Agreement.
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare appropriate
applications for the FCC Consent and shall file such applications with the FCC
on or before the tenth (10th) business day after the execution of this
Agreement. The parties shall prosecute the applications with all reasonable
diligence and otherwise use their reasonable commercial efforts to obtain a
grant of the applications as expeditiously as practicable. Each party agrees
to comply with any condition imposed on it by the FCC Consent, except that no
party shall be required to comply with a condition if (1) the condition was
imposed on it as the result of a circumstance the existence of which does not
constitute a breach by such party of any of its representations, warranties, or
covenants under this Agreement, and (2) compliance with the condition would
have a material adverse effect upon it. Buyer and Seller shall oppose any
requests for reconsideration or judicial review of the FCC Consent. If the
Closing shall not have occurred for any reason within the original effective
period of the FCC Consent, and neither party shall have terminated this
Agreement under Section 9, the parties shall jointly request an extension of
the effective period of the FCC Consent. No extension of the FCC Consent shall
limit the exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, Seller's
employees, and policies, shall be the sole responsibility of Seller until the
Closing; provided, however, that Seller and Buyer shall enter into a Time
Brokerage Agreement effective June 1, 1996.
6.3 Risk of Loss. The risk of any physical loss, damage,
impairment, confiscation, or condemnation of any of the Assets from any cause
whatsoever shall be borne by Seller at all times prior to the Closing except
such caused by the negligence of Buyer or its employee(s), which shall be borne
by Buyer.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and
- 19 -
<PAGE> 26
except as and to the extent required by law, including, without limitation,
disclosure requirements of federal or state securities laws and rules and
regulations of securities markets, each party will keep confidential any
information of a confidential nature obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by such party from the other party in connection with the
transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary to the implementation and consummation of this Agreement, and
otherwise use their commercially reasonable efforts to consummate the
transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i)
to expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto, and Seller shall have no obligation to expend funds (other
than the incidental cost of preparing and submitting requests, responding to
reasonable inquiries and ordinary and customary filing fees and processing
charges) to obtain any of the Consents.
6.6 Bulk Sales Law. If applicable, the bulk sales law of the
State of Florida shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.7 Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Seller access and the right to copy for a period of three years
from the Closing Date any books and records relating to the Assets that are
included in the Assets.
6.8 Environmental Audit. Buyer may, at its option and sole
expense, retain an independent environmental consulting firm with the report
from a licensed engineer qualified in the State of Florida to be selected by
Buyer to perform a Phase I environmental survey of the Real Property of the
Station which survey shall be commenced promptly after execution of this
Agreement and completed within fifteen days thereafter. If the survey
discloses any material environmental hazard or the probability of material
future liability for environmental damages or clean-up costs, Buyer shall so
notify Seller within fifteen days after execution of this Agreement and shall
with such notice provide Seller with a copy of the Phase I environmental survey
and all ancillary reports. Seller shall, within fifteen days, notify Buyer
- 20 -
<PAGE> 27
in writing of whether it will remedy the matter pursuant to the Phase I survey
or not. Should Buyer fail to notify Seller within the above indicated
fifteen-day period of material environmental hazards or the probability of
material environmental damages or clean up costs, the right of Buyer to
terminate this Agreement pursuant to Section 9.2(e) shall terminate.
6.9 Engineering Study. Buyer may, at its option and sole expense,
utilize its Director of Engineering or retain an engineering firm to conduct a
proof of performance study of the Station and to prepare a report on the
Station's compliance with customary engineering practices and all applicable
FCC rules, regulations, prescribed practices, and technical standards which
study shall be commenced promptly after execution of this Agreement and
completed within fifteen days thereafter. If the survey discloses any such
material deficiencies in the operations or equipment of the Station, Buyer
shall so notify Seller within fifteen days after execution of this Agreement
and shall with such notice provide Seller with a copy of all such studies and
reports. Seller shall, within fifteen days, notify Buyer in writing whether it
will remedy the matter pursuant to the Engineering Study or not. Should Buyer
fail to notify Seller within the above indicated fifteen day period of material
deficiencies in the operations or equipment of the Station, the right of Buyer
to terminate this Agreement pursuant to Section 9.2(f) shall terminate.
6.10 HSR Filing. As soon as practicable after the execution hereof
but in no event later than twenty-one business days after the execution hereof,
Buyer and Seller shall each make the filings required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Each party
will cooperate with the other in accomplishing such filings and will keep the
other party appraised of the status of any inquiries made of such party by the
Federal Trade Commission, the U.S. Department of Justice or any other
governmental agency with respect to this Agreement or the transaction
contemplated hereby. The transfer of the Assets hereunder is expressly
conditioned upon the waiting period relating to any such filings having duly
expired or been terminated by the appropriate government agencies without the
enforcement of any action by any such agencies to restrain or postpone the
transactions contemplated hereby.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time which, if untrue or incomplete, have a material adverse effect on the
value of the Station and the Assets taken as a whole.
- 21 -
<PAGE> 28
(b) Covenants and Conditions. Seller shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date where nonperformance or noncompliance have a
material adverse effect on the value of the Station and the Assets as a whole.
(c) Consents. All Consents to Material Contracts shall have
been obtained and delivered to Buyer without any adverse change in the terms or
conditions of the Material Contracts.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on them by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) HSR Act. Any approval required pursuant to the HSR Act
shall have been obtained (or the waiting period thereunder shall have expired
or been terminated).
(f) Governmental Authorizations. Seller shall be the
holders of all Material Licenses and there shall not have been any modification
of any Material License that could have a material adverse effect on the
Station or the conduct of its business and operations. No proceeding shall be
pending the effect of which could be to revoke, cancel, fail to renew, suspend,
or modify materially and adversely any Material License.
(g) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(h) Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the
Tangible Personal Property, taken as a whole, except as a result of the
negligence of Buyer or its employees or agents or of actions taken by Buyer
under the Time Brokerage Agreement.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller' option to the fulfillment prior to
or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
- 22 -
<PAGE> 29
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) HSR Act. Any approval required pursuant to the HSR Act
shall have been obtained (or the waiting period thereunder shall have expired
or been terminated).
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.
on a date, to be set by Buyer on at least ten days' written notice to Seller,
that is (1) not earlier than the third business day after the FCC Consent is
granted, and (2) not later than ten business days following the date upon which
the FCC Consent has become a Final Order provided, however, that if Buyer fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth business day after the date upon which the FCC grant of the Station'
renewals becomes a Final Order, the Closing shall take place on the tenth
business day after the date upon which the FCC Consent become a Final Order.
At the Seller's option, upon at least five (5) days written notice to Buyer
following receipt of Buyer's specification of a Closing Date, the Closing may
be delayed until a date no later than January 12, 1997.
(b) Closing Place. The Closing shall be held at the offices
of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W, Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed bills of sale, deeds,
motor vehicle titles, assignments, and other transfer documents which shall be
sufficient to vest good and marketable title to the Assets in the name of
Buyer, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances of any nature
whatsoever, except for liens for current taxes not yet due and payable;
- 23 -
<PAGE> 30
(b) Consents. A manually executed copy of any instrument
evidencing the Consents indicated on Schedule 3.3;
(c) Certificate. A certificate, dated as of the Closing
Date, executed by a duly authorized officer of Seller on behalf of Seller,
certifying to his or her knowledge (1) that the representations and warranties
of Seller contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date which, if
untrue or incomplete, have a material adverse effect on the value of the
Station and the Assets taken as a whole; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date where nonperformance or
noncompliance have a material adverse effect on the value of the Station and
the Assets taken as a whole.
(d) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, and by delivery of possession of Seller's
office premises, blueprints, schematics, working drawings, plans, engineering
records, and all files and records in Seller's possession used exclusively by
Seller in connection with the operations of the Station;
(e) Opinion of Counsel. Opinion of Seller's counsel dated as
of the Closing Date, in substantially the form attached hereto as Schedule
8.2(f), and if requested by Buyer, Buyer's lenders shall be permitted to rely
on such opinion;
(f) Other Instruments. Such other instruments and
certificates or other documentation as Seller is required by the terms hereof
to deliver.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3(a);
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform all obligations
and liabilities of Seller under the Licenses and Assumed Contracts insofar as
they relate to the time on or after the Closing Date.
(c) Certificate. A certificate, dated as of the Closing Date
executed by a duly authorized officer of the general partner of the Buyer on
behalf of Buyer, certifying (1) that the representations and warranties of
Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
- 24 -
<PAGE> 31
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date substantially in the form of Schedule 8.3(d) hereof; and
(e) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver.
SECTION 9 TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in Section 7.2 of this Agreement have not been satisfied or waived in
writing by Seller.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
June 1, 1997.
(d) Breach. Without limiting Seller' rights under the other
provisions of this Section 9.1, if Buyer has failed to cure any material breach
of any of its representations, warranties, or covenants under this Agreement
which, if untrue or incomplete have a material adverse effect on the value of
the Station and the Assets taken as a whole within fifteen days after Buyer
received written notice of such breach from Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in Section 7.1 of this Agreement have not been satisfied or waived in
writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
-25-
<PAGE> 32
(c) Upset Date. If the Closing shall not have occurred by
June 1, 1997.
(d) Breach. Without limiting Buyer's rights under the other
provisions of this Section 9.2, if Seller has failed to cure any material
breach of any of its representations, warranties, or covenants under this
Agreement which, if untrue or incomplete have a material adverse effect on the
value of the Station and the Assets taken as a whole within fifteen days after
Seller received written notice of such breach from Buyer.
(e) Environmental Hazards. Buyer shall have notified Seller
of material environmental hazards or the probability of material environmental
damages or clean-up costs, as indicated in the Phase I Environmental Survey
described in Section 6.8, within 15 days of the execution of this Agreement,
and the cause thereof shall not have been remedied prior to the Closing Date,
Seller having no obligation to perform such remediation.
(f) Technical Deficiencies. Buyer shall have notified Seller
of material deficiencies in the operations or equipment of the Station, as
indicated in the engineering study described in Section 6.9, within fifteen
days of the execution of this Agreement, and the cause thereof shall not have
been remedied prior to the Closing Date, Seller having no obligation to perform
such remediation.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with the Escrow Agent Five
Million Dollars ($5,000,000) (the "Escrow Deposit") in accordance with an
Escrow Agreement among Buyer, Seller, and the Escrow Agent (the "Escrow
Agreement") in the form attached hereto as Schedule 9.3. All funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1
or Section 9.2 and Buyer is not in material breach of this Agreement, all
amounts held by the Escrow Agent pursuant to the Escrow Agreement, including
any interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, and Seller is not in material breach of this
Agreement, then the Escrow Deposit, together with interest or other proceeds of
investment, shall be disbursed by the Escrow Agent to or at the direction of
Seller.
- 26 -
<PAGE> 33
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
liability to each other thereafter with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement and Seller is not in material breach of this
Agreement, then the payment to Seller pursuant to Section 9.3(c) shall be
liquidated damages and shall constitute full payment and the exclusive remedy
for any damages suffered by Seller by reason of Buyer's material breach of this
Agreement. Seller and Buyer agree in advance that actual damages would be
difficult to ascertain and that the amount of the Escrow Deposit is a fair and
equitable amount to reimburse Seller for damages sustained due to Buyer's
material breach of this Agreement. If this Agreement is terminated by Buyer
due to Seller's material breach of this Agreement, Buyer shall have all rights
and remedies available at law or equity.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All written representations
and warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
six months. Any investigations by or on behalf of any party hereto shall not
constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No written notice or information
delivered by Seller shall affect Buyer's right to rely on any representation or
warranty made by Seller or relieve Seller of any obligations under this
Agreement as the result of a breach of any of their representations and
warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting from
the failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
- 27 -
<PAGE> 34
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Effective Date of
the Time Brokerage Agreement, including any such liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring prior to the
Effective Date of the Time Brokerage Agreement.
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees
and expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim.
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant as soon as practicable
after written notice of such action, suit, or proceeding was given to Claimant.
- 28 -
<PAGE> 35
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to promptly make available to the
Indemnifying Party or its authorized representatives the information relied
upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of the thirty-day period
(or any mutually agreed upon extension thereof) to the validity and amount of
such claim, the Indemnifying Party shall immediately pay to the Claimant the
full amount of the claim. If the Claimant and the Indemnifying Party do not
agree within the thirty-day period (or any mutually agreed upon extension
thereof), the Claimant may seek appropriate remedy at law or equity or under
the arbitration provisions of this Agreement, as provided for in Section 11.12
hereof.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuse to perform under the provisions of this
Agreement and Buyer is not in material breach of this Agreement, monetary
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, in addition to any other remedies that may be
available, including money damages, to obtain specific performance of the terms
of this Agreement. If any action is brought by Buyer to enforce this Agreement,
Seller shall waive the defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
- 29 -
<PAGE> 36
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Buyer shall pay any escrow agent fees
under the Escrow Agreement. Any federal, state, or local sales or transfer tax
arising in connection with the conveyance of the Assets by Seller to Buyer
pursuant to this Agreement shall be paid by Seller. Buyer and Seller shall
each pay one-half of (i) the fee payable to the FCC in connection with the
filing of the applications for the FCC Consent and (ii) the fee imposed by the
Federal Trade Commission in connection with filings made pursuant to the HSR
Act. Except as otherwise provided in this Agreement, each party shall pay its
own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses
of counsel, accountants, agents, and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below or in Section 2.3(c), any dispute arising out of or related to this
Agreement that Seller and Buyer are unable to resolve by themselves shall be
settled by arbitration in the District of Columbia, by a panel of three
arbitrators. Within ten business days after receipt of demand for arbitration
of either party, Seller and Buyer shall each designate one disinterested
arbitrator, and the two arbitrators so designated shall select the third
arbitrator. If the two arbitrators are unable to agree as to the third
arbitrator within ten business days of their appointment, then such third
arbitrator shall be appointed by the American Arbitration Association upon
request of either party. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
within thirty days of the appointment of the third arbitrator. The written
decision of a majority of the arbitrators shall be final and binding on Seller
and Buyer. The costs and expenses of the arbitration proceeding shall be
assessed between Seller and Buyer in a manner to be decided by a majority of
the arbitrators, and the assessment shall be set forth in the decision and
award of the arbitrators. Judgment on the award, if it is not paid within
thirty days, may be entered in any court having jurisdiction over the matter.
No action at law or suit in equity based upon any claim arising out of or
related to this Agreement shall be instituted in any court by Seller or Buyer
against the other except (i) an action to compel arbitration pursuant to this
Section, (ii) an action to enforce the award of the arbitration panel rendered
in accordance with this Section, or (iii) a suit for specific performance
pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set
- 30 -
<PAGE> 37
forth in the records of the delivery service or on the return receipt, and (d)
addressed as follows:
<TABLE>
<S> <C>
If to Seller: Shamrock Communications, Inc.
149 Penn Avenue
Scranton, PA 18503
Attention: William R. Lynett
With a copy to: Daniel Houlihan, Esquire
Shamrock Communications, Inc.
149 Penn Avenue
Scranton, PA 18503
If to Buyer: Paxson Broadcasting of Orlando,
Limited Partnership
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
</TABLE>
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto,
except that Buyer may assign its rights and obligations under this Agreement,
in whole or in part, without Seller's consent to one or more subsidiaries or
commonly controlled affiliates of Buyer and Buyer may collaterally assign its
rights and obligations hereunder to its lenders without obtaining Seller'
consent. Upon any permitted assignment by Buyer or Seller in accordance with
this Section 11.4, all reference to "Buyer" herein shall be deemed to be
references to Buyer's assignee and all references to "Seller" herein shall be
deemed to be references to Seller's assignee but any permitted assignment shall
not relieve Seller or Buyer from liability hereunder notwithstanding such
assignment. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of
- 31 -
<PAGE> 38
this Agreement, including, in the case of Seller, any additional bills of sale,
deeds, or other transfer documents that, in the reasonable opinion of Buyer,
may be necessary to ensure, complete, and evidence the full and effective
transfer of the Assets to Buyer pursuant to this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, including the Time Brokerage Agreement, collectively represent
the entire understanding and agreement between Buyer and Seller with respect to
the subject matter hereof. This Agreement supersedes all prior negotiations
among the parties, including, without limitation, the letter of intent among
the parties hereto dated March 25, 1996, and cannot be amended, supplemented,
or changed except by an agreement in writing that makes specific reference to
this Agreement and which is signed by the party against which enforcement of
any such amendment, supplement, or modification is sought. The parties hereto
acknowledge that no representations or warranties have been made with respect
to matters relating to the transactions contemplated by this Agreement other
than as expressly set forth in this Agreement.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
- 32 -
<PAGE> 39
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings with governmental authorities as may, in its judgment, be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, in which case the
other party shall be first notified in writing.
11.13 No-Shop. Seller covenants that neither it nor any of its
shareholders, officers or agents will, prior to the Closing Date, solicit, or
initiate the submission of any proposal or offer relating to a purchase, sale
or exchange of the Assets other than in the ordinary course of business of the
Station.
11.14 Guaranty of Paxson Communications Corporation (PCC)
(a) In consideration of the execution and delivery of this
Agreement by Seller, PCC agrees as follows:
(1) PCC hereby guarantees the full, complete and
timely performance by Buyer of each and every obligation of Buyer under this
Agreement. If any default shall be made by Buyer in the performance of any of
such obligations, then PCC will itself perform or cause to be performed such
obligation,
(2) PCC waives presentment, protest, demand or
action or delinquency in respect of any of the obligations of Buyer under this
Agreement. PCC waives all notices of nonperformance, notices of protest,
notices of dishonor and notices of acceptance of this guaranty.
(3) This guaranty shall be deemed a continuing
guaranty, and the above consents and waivers of PCC shall remain in full force
and effect until the satisfaction in full of all obligations of Buyer under
this Agreement.
(b) PCC hereby represents and warrants to Seller that this
Agreement has been duly and validly executed and delivered by PCC and
constitutes its legal, valid and binding agreement, enforceable in accordance
with its terms, except as the enforceability of this Agreement may be affected
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, and by judicial discretion in the enforcement of equitable remedies.
- 33 -
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON BROADCASTING OF ORLANDO,
LIMITED PARTNERSHIP
By Paxson Communications of Florida, Inc.,
its General Partner
By: /s/ Lowell W. Paxson
---------------------------------------
Name: Lowell W. Paxson
Title: Chairman
SHAMROCK COMMUNICATIONS, INC.
By: /s/ William R. Lynett
--------------------------------------
Name: William R. Lynett
Title: President
Paxson Communications Corporation
hereby joins in the execution of the
foregoing Agreement to agree to the
provisions of Section 11.14 only, as
of the date first above written.
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
-------------------------------------
Name: Lowell W. Paxson
Title: Chairman
<PAGE> 1
EXHIBIT 10.113
- -------------------------------------------------------------------------------
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
SHAMROCK COMMUNICATIONS, INC.
AND
PAXSON BROADCASTING OF ORLANDO, LIMITED PARTNERSHIP
FOR
RADIO STATION WDIZ(FM)
ORLANDO, FLORIDA
* * *
APRIL 26, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
<TABLE>
<S> <C> <C>
SECTION 1. LEASE OF STATION AIR TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Option to Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Licensee Operation of Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Licensee Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Programmer Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Licensee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Additional Licensee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Responsibility for Employees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. STATION PROGRAMMING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Broadcast Station Programming Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Licensee Control of Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Programmer Compliance with Copyright Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Licensee's Advertising and Revenues of Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Payola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Cooperation on Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Staffing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Trade and Barter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Programmer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Licensee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Time Brokerage Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Confidential Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Political Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.11 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.12 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
-ii-
<PAGE> 4
TIME BROKERAGE AGREEMENT
TIME BROKERAGE AGREEMENT, made this 26th day of April, 1996, by and
between SHAMROCK COMMUNICATIONS, INC., a Pennsylvania corporation (the
"Licensee") and PAXSON BROADCASTING OF ORLANDO, LIMITED PARTNERSHIP, a Florida
limited partnership (the "Programmer").
WHEREAS, Licensee is the owner and operator of Radio Station WDIZ(FM),
Orlando, Florida (the "Station") pursuant to authorizations issued by the
Federal Communications Commission ("FCC").
WHEREAS, Programmer is involved in radio station ownership and
operation and has entered into an Asset Purchase Agreement with Licensee to
purchase the Station;
WHEREAS, the Licensee wishes to retain Programmer to provide
programming for the Station that is in conformity with the Station' policies
and procedures, FCC policies for time brokerage arrangements, and the
provisions hereof.
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station.
WHEREAS, Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and Programmer represent that
they are legally qualified, empowered and able to enter into this Agreement and
that the execution, delivery, and performance hereof shall not constitute a
breach or violation of any material agreement, contract or other obligation to
which either party is subject or by which it is bound.
1.2 Effective Date; Term. The effective date of
this Agreement shall be June 1, 1996 and it shall continue in force for an
initial term of twelve months from that date unless otherwise extended or
terminated as set forth below.
<PAGE> 5
- 2 -
1.3 Scope. During the term of this Agreement and
any renewal thereof, Licensee shall make available to Programmer broadcast time
upon the Station as set forth in this Agreement. Programmer shall deliver such
programming, at its expense, to the Station' transmitter facilities or other
authorized remote control points as reasonably designated by Licensee.
Programmer shall have the right to produce its programming (including commercial
amounts and related production activities) from the Licensee's existing studio
and production facilities. Subject to Licensee's reasonable approval, as set
forth in this Agreement, Programmer shall provide programming of Programmer's
selection complete with commercial matter, news, public service announcements
and other suitable programming to the Licensee up to one hundred sixty two hours
per week. But in any event, sufficient to meet the minimum hours of operation
required by the FCC. Notwithstanding the foregoing, the Licensee may designate
such additional time as it may require without any adjustment of the monthly
consideration to be paid to Licensee under Section 1.5 for the broadcast of
programming necessary for the Station to broadcast news, public affairs,
religious and non-entertainment programming as required by the FCC. All program
time not reserved by or designated for Licensee shall be available for use by
Programmer and no other party.
1.4 Option to Renew. Subject to the termination
provisions of Section 6 hereof, this Agreement may be renewed for an additional
term as mutually agreed upon by the Licensee and the Programmer.
1.5 Consideration. As consideration for the air time
made available hereunder Programmer shall make payments to Licensee as set
forth in Attachment I.
1.6 Licensee Operation of Station. Licensee will have
full authority, power and control over the management and operations of the
Station during the term of this Agreement and during any renewal of such term.
Licensee will bear all responsibility for the Station' compliance with all
applicable provisions of the Communications Act of 1934, as amended, (the
"Act") the rules, regulations and policies of the FCC and all other applicable
laws. Subject to the provision of Attachment II. Licensee shall be solely
responsible for and pay in a timely manner all operating costs of the Station,
including but not limited to maintenance of the studio and transmitting
facility and costs of electricity, except that Programmer shall be responsible
for the costs of its programming as provided in Sections 1.8 and 2.3 hereof.
Licensee shall employ at its expense General Manager and one other employee who
shall report solely to and be accountable solely to and be accountable solely
to the Licensee, and will direct the day-to-day operations of the Station, and
who will report to and be accountable to the Licensee and Licensee shall be
responsible for the salaries, taxes, insurance and related costs for such
General Manager and one other employee and shall maintain insurance
satisfactory to Programmer covering the Station' transmission facilities.
<PAGE> 6
- 3 -
During the term of the Agreement and any renewal hereof, Programmer agrees to
perform, without charge, and shall be responsible for routine monitoring of the
Station' transmitter performance and tower lighting by remote control, if and
when requested by Licensee.
1.7 Licensee Representations and Warranties. Licensee represents
and warrants as follows:
(a) Licensee owns and holds or will hold all licenses and
other permits and authorizations necessary for the operation of the Station,
and such licenses, permits and authorizations are and will be in full force and
effect throughout the term of this Agreement. There is not now pending, or to
Licensee's best knowledge, threatened, any action by the FCC or by any other
party to revoke, cancel, suspend, refuse to renew or modify adversely any of
such licenses, permits or authorizations. Licensee is not in material
violation of any statute, ordinance, rule, regulation, policy, order or decree
of any federal, state or local entity, court or authority having jurisdiction
over it or the Station, which would have a material effect upon the Licensee,
the Station or upon Licensee's ability to perform this Agreement. Licensee
shall not take any action or omit to take any action which would have a
material impact upon the Licensee, the Station or upon Licensee's ability to
perform this Agreement. All reports and applications required to be filed with
the FCC or any other governmental body have been, and during the course of the
term of this Agreement or any renewal thereof, will be filed in a timely and
complete manner. During the term of this Agreement and any renewal thereof,
Licensee shall not dispose of, transfer, assign or pledge any of Licensee's
assets and properties without the prior written consent of the Programmer which
consent shall not be unreasonably withheld, if such action would have a
materially adverse affect on Licensee's performance hereunder or the business
and operations of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including salaries and benefits of
its two employees, lease payments, utilities, taxes, programming expenses,
etc., as set forth in Attachment II (except those for which a good faith
dispute has been raised with the vendor or taxing authority), and shall provide
Programmer with a certificate of such timely payment within thirty (30) days of
the end of each month.
1.8 Programmer Responsibility. Programmer shall be solely
responsible for any expenses incurred in the origination and/or delivery of
programming from any remote location and for any publicity or promotional
expenses incurred by Programmer, including, without limitation, ASCAP and BMI
music license fees for all programming provided by Programmer and shall employ
and be responsible for the salaries, commission, taxes, insurance and all other
related expenses for all personnel involved in the production
<PAGE> 7
- 4 -
and broadcast of its Programs (including but not limited to air personalities,
engineering personnel, sales personnel, traffic personnel, board operators and
other programmers and production staff members. Such payments by Programmer
shall be in addition to any other payments to be made by Programmer under this
Agreement.
1.9 Contracts. Programmer will enter into no third-party
contracts, leases or agreements which will bind Licensee in any way except with
Licensee's prior written approval.
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any other provision of
this Agreement, Programmer recognizes that Licensee has certain obligations to
broadcast programming to meet the needs and interests of listeners in Orlando,
Florida, the Station' service area. From time to time the Licensee shall air
specific programming on issues of importance to the local community. Nothing in
this Agreement shall abrogate the unrestricted authority of the Licensee to
discharge its obligations to the public and to comply with the Act and the rules
and policies of the FCC.
2.2 Additional Licensee Obligations. Although both parties shall
cooperate in the broadcast of emergency information over the Station, Licensee
shall also retain the right to interrupt Programmer's programming in case of an
emergency or for programming which, in the good faith judgment of Licensee, is
of greater local or national public importance. Licensee shall also coordinate
with Programmer the Station' hourly Station identification and any other
announcements required to be aired by FCC rules. Licensee shall continue to
maintain a main studio, as that term is defined by the FCC, within the Station'
principal community contour, shall maintain its local public inspection file in
accordance with FCC rules, regulations and policies, and shall prepare and place
in such inspection file or files in a timely manner all material required by
Section 73.3526 of the FCC's Rules, including without limitation the Station'
quarterly issues and program lists. Programmer shall, upon request by Licensee,
provide Licensee with such information concerning Programmer's programs and
advertising as is necessary to assist Licensee in the preparation of such
information. Licensee shall also maintain the Technical Station logs, receive
and respond to telephone inquiries, and control and oversee any remote control
point which may be established for the Station.
2.3 Responsibility for Employees and Expenses. Programmer shall
employ and be solely responsible for the salaries, commission, taxes, insurance
and related costs for all personnel used in the production of its programming
(including, but not limited to, salespeople, technical staff, traffic personnel,
board operators, programming staff and air
<PAGE> 8
- 5 -
personalities). Licensee will provide and be responsible for the Station'
personnel necessary for the broadcast transmission of its own programs
(including, without limitation, the Station' General Manager and such
operational and other personnel as may be necessary or appropriate), and will
be responsible for the salaries, taxes, benefits, insurance and related costs
for all the Licensee's employees used in the broadcast transmission of its
programs and necessary to other aspects of the Station operation. Whenever on
the Station' premises, all personnel shall be subject to the overall
supervision of Licensee's General Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy Statement. Licensee has
adopted and will enforce a Broadcast Station Programming Policy Statement (the
"Policy Statement"), a copy of which appears as Attachment III hereto and which
may be amended in a reasonable manner from time to time by Licensee upon notice
to Programmer. Programmer agrees and covenants to comply in all material
respects with the Policy Statement, to all rules and regulations of the FCC, and
to all changes subsequently made by Licensee or the FCC. Programmer shall
furnish or cause to be furnished the artistic personnel and material for the
programs as provided by this Agreement and all programs shall be prepared and
presented in conformity with the rules, regulations and policies of the FCC and
with the Policy Statement set forth in Attachment III hereto. All advertising
spots and promotional material or announcements shall comply with applicable
federal, state and local regulations and policies and shall be produced in
accordance with quality standards established by Programmer. If Licensee
determines that a program supplied by Programmer is for any reason, within
Licensee's sole discretion, unsatisfactory or unsuitable or contrary to the
public interest, or does not comply with the Policy Statement it may, upon prior
written notice to Programmer (to the extent time permits such notice), suspend
or cancel such program without liability to Programmer. Licensee will use
reasonable efforts to provide such written notice to Programmer prior to the
suspension or cancellation of such program.
3.2 Licensee Control of Programming. Programmer recognizes that
the Licensee has full authority to control the operation of the Station. The
parties agree that Licensee's authority includes but is not limited to the right
to reject or refuse such portions of the Programmer's programming which Licensee
believes to be unsatisfactory, unsuitable or contrary to the public interest.
Programmer shall have the right to change the programming supplied to Licensee
and shall give Licensee at least twenty-four (24) hours notice of substantial
and material changes in such programming.
3.3 Programmer Compliance with Copyright Act. Programmer represents
and warrants to Licensee that Programmer has full authority to broadcast its
programming on the Station, and that Programmer shall not broadcast any material
in violation of the
<PAGE> 9
-6-
Copyright Act. All music supplied by Programmer shall be: (i) licensed by
ASCAP, SESAC or BMI; (ii) in the public domain; or (iii) cleared at the source
by Programmer. Licensee will maintain ASCAP, BMI and SESAC licenses as
necessary. The right to use the programming and to authorize its use in any
manner shall be and remain vested in Programmer.
3.4 Licensee's Advertising and Revenues of Station. To the extent
they are assignable, Licensee will assign to Programmer all of its agreements
for advertising to be aired on the Station in effect on the commencement of the
Effective Date and Programmer shall assume the obligation of Licensee to air the
advertising required by such advertising agreements on the commencement of such
Effective Date.
The revenues of the Station (excluding Trade and Barter (see Section
3.9)) shall be dealt with using the principle that Licensee shall be entitled
to and receive all income of the Station earned, using the accrual method of
accounting, prior to the Effective Date ("Licensee Revenues"), and that
Programmer shall be entitled to and receive all income of the Station earned,
using the accrual method of accounting, on or after the Effective Date
("Programmer's Revenues"), except unless otherwise agreed between the parties,
Licensee shall be entitled to all revenues from sale of Station advertising
during hours of each week, after the Effective Date in which Licensee airs its
own programming pursuant to Section 1.3 hereof. Revenues shall include, but
not limited to, ABC Radio Network compensation from network programs, revenue
from any program supplier with respect to affiliation or use of programming.
If Licensee receives any of Programmer's Revenue, it shall pay over such
receipts to Programmer, and if Programmer receives any of Licensee Revenue, it
will pay over such receipts to Licensee. Such required payments shall be made
on or before the 10th of the month following receipt. Responsibility of
payment of commissions due any national sales representative shall fall on the
party who is entitled to the revenue for which the commission is payable.
3.5 Payola. Programmer agrees that it will not accept any
consideration, compensation, gift or gratuity of any kind whatsoever, regardless
of its value or form, including, but not limited to, a commission, discount,
bonus, material, supplies or other merchandise, services or labor (collectively
"Consideration"), whether or not pursuant to written contracts or agreements
between Programmer and merchants or advertisers, unless the payer is identified
in the program for which Consideration was provided as having paid for or
furnished such Consideration, in accordance with the Act and FCC requirements.
Programmer agrees to annually, or more frequently at the request of the
Licensee, execute and provide Licensee with a Payola Affidavit from each of its
employees involved with the Station substantially in the form attached hereto as
Attachment IV.
<PAGE> 10
- 7 -
3.6 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Station serve the needs and
interests of listeners in Orlando and the surrounding service area and agree to
cooperate to provide such service. Licensee shall, on a regular basis, assess
the issues of concern to residents of Orlando and the surrounding area and
address those issues in its public service programming. Programmer, in
cooperation with Licensee, will endeavor to ensure that programming responsive
to the needs and interests of the community of license and surrounding area is
broadcast, in compliance with applicable FCC requirements. Licensee will
describe those issues and the programming that is broadcast in response to those
issues and place issues/programs lists in the Station' public inspection file as
required by FCC rules. Further, Licensee may request, and Programmer shall
provide, information concerning such of Programmer's programs as are responsive
to community issues so as to assist Licensee in the satisfaction of its public
service programming obligations. Programmer shall also provide Licensee upon
request such other information necessary to enable Licensee to prepare records
and reports required by the Commission or other local, state or federal
government entities.
3.7 Staffing Requirements. Licensee will be in full compliance
with the main studio staff requirements as specified by the FCC.
3.8 Accounts Receivable. As soon as practicable after the
Effective Date, Licensee shall deliver to Programmer a complete and detailed
list of all the Accounts Receivable of the Station. During the five (5) month
period following the Effective Date (the "Collection Period"), Programmer shall
use its best efforts, as Licensee's agent, to collect the Accounts Receivable in
the usual and ordinary course of business. Programmer shall not be required to
institute any legal proceedings to enforce the collection of any Accounts
Receivable or to refer any of the Accounts Receivable to a collection agency.
Programmer shall not adjust any Accounts Receivable or grant credit without
Licensee's written consent, and any amounts collected pursuant to this Section
during any calendar month shall be paid to Licensee by the 10th of the following
calendar month. Programmer further agrees not to pledge, secure or otherwise
encumber such Accounts Receivable or the proceeds therefrom. On the first day
of November, 1996, Programmer shall turn back the uncollected Accounts
Receivable, together with all files concerning the collection or attempts to
collect the Accounts Receivable, and Programmer's responsibility and liability
for the collection of the Accounts Receivable shall cease. Unless otherwise
specifically designated by the customers, payments received from customers shall
be applied first to obligations such customers incurred up until midnight on the
day prior to the Effective Date and shall not be applied to any obligations
incurred by such customer after midnight on the Effective Date until the amount
of the Accounts Receivable has been paid in full, unless Accounts Receivable are
disputed by the account debtor, in which event such disputed Account Receivable,
to the
<PAGE> 11
- 8 -
extent disputed, and all records pertaining thereto, shall be turned back to
Licensee for resolution within sixty (60) days. Programmer shall incur no
liability to Licensee for any uncollected account unless Programmer shall have
engaged in willful misconduct or gross negligence in the collection of such
account. During the Collection Period, except for disputed accounts, neither
Licensee nor its agents shall make any direct solicitation of the account
debtors for collections purposes. The accounting for the Accounts Receivable
shall follow the same method and practices as now employed by Licensee for the
Station, using where reasonable, the computer now being used by Licensee, with
Licensee's software programs, Licensee's General Manager shall have the right
to review and audit the Accounts Receivable record keeping and collection
process to verify the accuracy of the amount(s) to be paid over the Licensee.
3.9 Trade and Barter. To the extent they are assignable, Licensee
shall on the Effective Date assign all of its trade and bargaining agreements
for the sale of advertising time, other than for cash, with respect to the
Station, (the "Assigned Trade and Barter Agreements"). If on the Effective
Date, the aggregate value of the Station's obligations on or after the Effective
date under the Assigned Trade and Barter Agreements minus the aggregate value of
the goods, services or other items to be received on or after the Effective Date
under the Assigned Trade and Barter Agreements, exceeds $25,000 then Buyer shall
receive a credit against the Monthly Fee (see Attachment II) for the amount of
such excess. The liability of the Station for unperformed time for purposes of
this Section shall be valued according to the Station's prevailing rates as of
the Effective Date. Programmer shall be entitled to any goods, services, or
other items to be received after the Effective Date, and shall be obligated to
include in its programming and to air the advertising as required under the
trade, barter, or similar arrangement.
SECTION 4. INDEMNIFICATION
4.1 Programmer's Indemnification. Programmer and Paxson
Communications Corporation shall indemnify and hold harmless Licensee from and
against any and all claims, losses, costs, liabilities, damages, forfeitures and
expenses (including reasonable legal fees and other expenses incidental thereto)
of every kind, nature and description (collectively, "Damages") resulting from
(i) Programmer's breach of any representation, warranty, covenant or agreement
contained in this Agreement, or (ii) any action taken by Programmer or its
employees and agents with respect to the Station, or any failure by Programmer
or its employees and agents to take any action with respect to the Station,
including, without limitation, Damages relating to violations of the Act or any
rule, regulation or policy of the FCC, slander, defamation or other claims
relating to programming provided by Programmer and Programmer's broadcast and
sale of advertising time on the Station.
<PAGE> 12
- 9 -
4.2 Licensee's Indemnification. Licensee shall indemnify and hold
harmless Programmer from and against any and all claims, losses, consents,
liabilities, damages, FCC forfeitures and expenses (including reasonable legal
fees and other expenses incidental thereto) of every kind, nature and
description, arising out of Licensee's operations and broadcasts to the extent
permitted by law and any action taken by the Licensee or its employees and
agents with respect to the Station, or any failure by Licensee or its employees
and agents to take any action with respect to the Station.
4.3 Limitation. Neither Licensee nor Programmer shall be entitled
to indemnification pursuant to this section unless such claim for
indemnification is asserted in writing delivered to the other party.
4.4 Time Brokerage Challenge. If this Agreement is challenged at
the FCC, whether or not in connection with the Station' license renewal
application, counsel for the Licensee and counsel for the Programmer shall
jointly defend the Agreement and the parties' performance thereunder throughout
all FCC proceedings at the sole expense of the Programmer. If portions of this
Agreement do not receive the approval of the FCC Staff, then the parties shall
reform the Agreement as necessary to satisfy the FCC Staff's concerns or, at
Programmer's option and expense, seek reversal of the Staff's decision and
approval from the full Commission or a court of law.
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the commencement of any
programming by Programmer under this Agreement, Programmer shall acquaint the
Licensee with the nature and type of the programming to be provided. Licensee
shall be entitled to review at its discretion from time to time on a
confidential basis any of Programmer's programming material it may reasonably
request. Programmer shall promptly provide Licensee with copies of all
correspondence and complaints received from the public (including any telephone
logs of complaints called in), and copies of all program logs and promotional
materials. However, nothing in this section shall entitle Licensee to review
the internal corporate or financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate with
Licensee to assist Licensee in complying with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be necessary
to comply with FCC rules and policies, including the lowest unit rate, equal
opportunities, reasonable access, political file and related requirements of
federal law. Licensee, in consultation with Programmer, shall develop a
statement which
<PAGE> 13
- 10 -
discloses its political broadcasting policies to political candidates, and
Programmer shall follow those policies and rates in the sale of political
programming and advertising. In the event that Programmer fails to satisfy the
political broadcasting requirements under the Act and the rules and regulations
of the FCC and such failure inhibits Licensee in its compliance with the
political broadcasting requirements of the FCC, then to the extent reasonably
necessary to assure such compliance, Programmer shall either provide rebates to
political advertisers or release broadcast time and/or advertising
availabilities to Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination.
A. In addition to other remedies available at law or equity,
this Agreement may be terminated as set forth below by either Licensee or
Programmer by written notice to the other if the party seeking to terminate is
not then in material default or material breach hereof, upon the occurrence of
any of the following:
(a) subject to the provisions of Section 7.9,
this Agreement is declared invalid or illegal in whole or substantial part by
an order or decree of an administrative agency or court of competent
jurisdiction and such order or decree has become final and no longer subject to
further administrative or judicial review;
(b) the other party is in material breach of its
obligations hereunder and has failed to cure such breach within thirty (30)
days of notice from the non-breaching party;
(c) the mutual consent of both parties;
(d) there has been a material change in FCC
rules, policies or precedent that would cause this Agreement to be in violation
thereof and such change is in effect and not the subject of an appeal or
further administrative review and this Agreement cannot be reformed, in a
manner acceptable to Buyer and Seller, to remove and/or eliminate the
violation;
(e) upon the sale of the Station to Programmer by
Licensee.
B. In the event that the Asset Purchase Agreement of
even date herewith between Licensee and Programmer is terminated under either
Section 9.1 or 9.2 of said Asset Purchase Agreement, this Agreement will
terminate as follows:
<PAGE> 14
- 11 -
(i) If the termination occurs between
the first and fifteenth day of a
calendar month, this Agreement will
terminate on the last day of that
month;
(ii) If the termination occurs between
the 16th and last day of a calendar
month, this Agreement will terminate
on the last day of the following
month.
C. During any period prior to the effective date of any
termination of this Agreement, Programmer and Licensee agree to cooperate in
good faith to ensure that Station' operations will continue, to the extent
possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to
the extent possible, the resulting disruption of the Station' ongoing
operations.
6.2 Force Majeure. Any failure or impairment of the Station'
facilities or any delay or interruption in the broadcast of programs, or failure
at any time to furnish facilities, in whole or in part, for broadcast, due to
Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, or for power reductions necessitated for
maintenance of the Station or for maintenance of other Station located on the
tower from which the Station will be broadcasting, shall not constitute a breach
of this Agreement and Licensee will not be liable to Programmer for
reimbursement or reduction of the consideration owed to Licensee.
6.3 Other Agreements. During the term of this Agreement or any
renewal hereof, Licensee will not enter into any other agreement with any third
party that would conflict with or result in a material breach of this Agreement
by Licensee.
SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
(b) Neither this Agreement nor any of the rights,
interests or obligations of either party hereunder shall be assigned,
encumbered, hypothecated or otherwise transferred without the prior written
consent of the other party, such consent not to be unreasonably withheld.
<PAGE> 15
- 12 -
7.2 Call Letters. Upon request of Programmer, subject to the
consent of the Licensee, Licensee shall apply to the FCC for authority to change
the call letters of the Station (with the consent of the FCC) to such call
letters that Programmer shall reasonably designate. Licensee must coordinate
with Programmer any proposed changes to the call letters of the Station before
taking any action to change such letters.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement and the Attachments hereto
embodies the entire agreement and understanding of the parties relating to the
operation of the Station. No amendment, waiver of compliance with any provision
or condition hereof, or consent pursuant to this Agreement will be effective
unless evidenced by an instrument in writing signed by the parties.
7.5 Taxes. Licensee and Programmer shall each pay its own ad
valorem taxes, if any, which may be assessed on such party's respective personal
property for the periods that such items are owned by such party. Programmer
shall pay all taxes, if any, to which the consideration specified in Section 1.5
herein is subject, provided that Licensee is responsible for payment of its own
income taxes.
7.6 Headings. The headings are for convenience only and will not
control or affect the meaning or construction of the provisions of this
Agreement.
7.7 Governing Law. The obligations of Licensee and Programmer are
subject to applicable federal, state and local law, rules and regulations,
including, but not limited to, the Act and the Rules and Regulations of the FCC.
The construction and performance of the Agreement will be governed by the laws
of the State of Florida.
7.8 Notices. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, (ii) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
certified mail, return receipt requested, (iii) deemed to have been given on the
date telecopied with receipt confirmed, the date of personal delivery, or the
date set forth in the records of the delivery service or on the return receipt,
and (iv) addressed as follows:
<PAGE> 16
- 13 -
To Programmer: Shamrock Communications, Inc.
149 Penn Avenue
Scranton, Pennsylvania 18503
Attention: William R. Lynett
To Licensee: Paxson Broadcasting of Orlando, Limited Partnership
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Lowell W. Paxson
7.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law. In the
event that the FCC alters or modifies its rules or policies in a fashion which
would raise substantial and material question as to the validity of any
provision of this Agreement, the parties hereto shall negotiate in good faith to
revise any such provision of this Agreement with a view toward assuring
compliance with all then existing FCC rules and policies which may be
applicable, while attempting to preserve, as closely as possible, the intent of
the parties as embodied in the provision of this Agreement which is to be so
modified.
7.10 Arbitration. Any dispute arising out of or related to this
Agreement that Licensee and Programmer are unable to resolve by themselves shall
be settled by arbitration in Orlando, Florida by a panel of three arbitrators.
Within ten business days after receipt of demand for arbitration of either
party, Programmer and Licensee shall each designate one disinterested
arbitrator, and the two arbitrators so designated shall select the third
arbitrator. If the two arbitrators are unable to agree as to the third
arbitrator within ten business days of their appointment, then such third
arbitrator shall be appointed by the American Arbitration Association upon
request of either party. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
within thirty days of the appointment of the third arbitrator. The written
decision of a majority of the arbitrators shall be final and binding on
Programmer and Licensee. The costs and expenses of the arbitration proceeding
shall be assessed between Programmer and Licensee in a manner to be decided by a
majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not paid
within thirty days, may be entered in any court having jurisdiction over the
matter. No action at law or suit in equity
<PAGE> 17
- 14 -
based upon any claim arising out of or related to this Agreement shall be
instituted in any court by Programmer or Licensee against the other except (i)
an action to compel arbitration pursuant to this Section, or (ii) an action to
enforce the award of the arbitration panel rendered in accordance with this
Section.
7.11 No Joint Venture. Nothing in this Agreement shall be deemed to
create a joint venture between the Licensee and the Programmer.
7.12 FCC Compliance. Licensee hereby certifies that it will
maintain ultimate control over the Station's facilities, including specifically
over Station finances, personnel and programming and Programmer certificates
that this Agreement complies with the provisions of the radio contour overlap
rule of Section 73.3555(a) of the FCC rules.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
LICENSEE: SHAMROCK COMMUNICATIONS, INC.
By: /s/ William R. Lynett
--------------------------------------
Name: William R. Lynett
Title: President
PROGRAMMER: PAXSON BROADCASTING OF
ORLANDO, LIMITED PARTNERSHIP
By Paxson Communications of Florida, Inc.,
its General Partner
By: /s/ Lowell W. Paxson
--------------------------------------
Name: Lowell W. Paxson
Title: Chairman
PAXSON COMMUNICATIONS CORPORATION hereby joins in
the execution of the foregoing Agreement to agree to
the provisions of Section 4 only, as of the date
first above written.
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
--------------------------------------
Name: Lowell W. Paxson
Title: Chairman
<PAGE> 19
ATTACHMENT I
Compensation Schedule
Programmer shall pay Licensee, on a monthly basis, a fee of One
Hundred Twenty Three Thousand Nine Hundred Fifty Eight and 33/100 Dollars
($123,958.33) ("Monthly Fee"), payable in advance by the fifth day of each
month. Programmer shall also reimburse Licensee on a monthly basis for
Licensee's payment of the Station expenses included in Reimbursable Expenses as
defined in Attachment II hereof.
Payments and reimbursement shall be made delivery of a check to
Licensee at an address to be designated by Licensee.
On or before the 15th of each month, after the month of June, 1996,
during the term of this Agreement and of the month following termination of
this Agreement, Licensee will submit to Programmer a Reimbursement Request for
reimbursement by Licensee of the Reimbursable Expenses paid by Licensee
allocable to the prior month which Programmer is responsible per Attachment II
herewith. Licensee shall attach to the Reimbursement Request appropriate
invoices supporting documentation or explanation. Payment shall be made by
Licensee within five (5) days after receipt of each Reimbursement Request.
This payment shall be in addition to the Monthly Fee.
<PAGE> 20
ATTACHMENT II
Notwithstanding anything to the contrary contained in this
Time Brokerage Agreement, Programmer shall reimburse Licensee for payments made
by Licensee for any and all expenses allocable under the accrual method of
accounting during the period beginning on June 1,1996, and ending on the
termination of this Time Brokerage Agreement, in the operation and business of
the station except for the following expenses referred to therein as excluded
expenses, salaries and benefits of its two employees, home office expenses,
management fees, home office accounting fees, corporate advertising and
promotion relating to Licensee as a whole in its radio station operations,
depreciation, amortization, interest and income taxes, which shall remain the
responsibility of Licensee ("Reimbursable Expenses").
To the extent that any invoice, bill or statement submitted to
Programmer after the Effective Date of this Agreement, or any payment made by
Licensee prior to the Effective Date of this Agreement relates to Reimbursable
Expenses in Attachment II for periods before and after the Effective Date, such
expenses shall be prorated between Licensee and Programmer in accordance with
the principle that Licensee shall be responsible for expenses allocable to the
period prior to the Effective Date, and Programmer shall be responsible for
expenses allocable to that period on and after the Effective Date to date of
termination of the Time Brokerage Agreement. Each party agrees to the extent
appropriate to implement the proration of expenses pursuant to the preceding
sentence.
Categories of anticipated expenses to be paid by Licensee to
be reimbursed by Programmer include, though are not limited to: lease and
utility payments, property insurance and taxes, fees and licenses, equipment
repair and maintenance, and miscellaneous station expenses.
<PAGE> 21
ATTACHMENT III
Broadcast Station Programming Policy Statement
<PAGE> 22
BROADCAST STATION PROGRAMMING POLICY STATEMENT
The following sets forth the policies generally applicable to
the presentation of programming and advertising over Radio Station WDIZ(FM),
Orlando, Florida. All programming and advertising broadcast by the station
must conform to these policies and to the provisions of the Communications Act
of 1934, as amended [the "Act"], and the Rules and Regulations of the Federal
Communications Commission ["FCC"].
Station Identification
The station must broadcast a station identification announcement once an hour
as close to the hour as feasible in a natural break in the programming. The
announcement must include (1) the station's call letters; followed immediately
by (2) the station's city of license.
Broadcast of Telephone Conversations
Before recording a telephone conversation for broadcast or broadcasting such a
conversation simultaneously with its occurrent, any party to the call must be
informed that the call will be broadcast or will be recorded for later
broadcast, and the party's consent to such broadcast must be obtained. This
requirement does not apply to calls initiated by the other party which are made
in a context in which it is customary for the station to broadcast telephone
calls.
Sponsorship Identification
When money, service, or other valuable consideration is either directly or
indirectly paid or promised as part of an arrangement to transmit any
programming, the station at the time of broadcast shall announce (1) that the
matter is sponsored, either whole or in part; and (2) by whom or on whose
behalf the matter is sponsored. Products or services furnished to the station
in consideration for an identification of any person, product, service,
trademark or brand name shall be identified in this manner.
In the case of any political or controversial issue broadcast for which any
material or service is furnished as an inducement for its transmission, an
announcement shall be made at the beginning and conclusion of the broadcast
stating (1) the material or service that has been furnished; and (2) the
person(s) or association(s) on whose behalf the programming is transmitted.
However, if the broadcast is 5 minutes duration or less, the required
announcement need only be made either at its beginning or end.
Prior to any sponsored broadcast involving political matters or controversial
issues, the station shall obtain a list of the chief executive officers,
members of the executive committee or board of directors of the sponsoring
organization and shall place this list in the station's public inspection file.
<PAGE> 23
- 2 -
Payola/Plugola
The station, its personnel, or its programmers shall not accept or agree to
accept from any person any money, service, or other valuable consideration for
the broadcast of any matter unless such fact is disclosed to the station so
that all required station identification announcements can be made. All
persons responsible for station programming must, from time to time, execute
such documents as may be required by station management to confirm their
understanding of and compliance with the FCC's sponsorship identification
requirements.
Rebroadcasts
The station shall not rebroadcast the signal of any other broadcast station
without first obtaining such station's prior written consent to such
rebroadcast.
Fairness
Station shall seek to afford coverage to contrasting viewpoints concerning
controversial issues of public importance.
Personal Attacks
The station shall not air attacks upon the honesty, character, integrity or
like personal qualities of any identified person or group. If such an attack
should nonetheless occur during the presentation of views on a controversial
issue of public importance, those responsible for programming shall submit a
tape or transcript of the broadcast to station management and to the person
attacked within 48 hours, and shall offer the person attacked a reasonable
opportunity to respond.
Political Editorials
Unless specifically authorized by station management, the station shall not air
any editorial which either endorses or opposes a legally qualified candidate
for public office.
Political Broadcasting
All "uses" of the station by legally qualified candidates for elective office
shall be in accordance with the Act and the FCC's Rules and policies, including
without limitation, equal opportunities requirements, reasonable access
requirements, lowest unit charge requirements and similar rules and
regulations.
<PAGE> 24
- 3 -
Obscenity and Indecency
The station shall not broadcast any obscene material. Material is deemed to be
obscene if the average person, applying contemporary community standards in the
local community, would find that the material, taken as a whole, appeals to the
prurient interest; depicts or describes in a patently offensive way sexual
conduct specifically defined by applicable state law; and taken as a whole,
lacks serious literary artistic, political or scientific value.
The station shall not broadcast any indecent material outside of the periods of
time prescribed by the Commission. Material is deemed to be indecent if it
includes language or material that, in context, depicts or describes, in terms
patently offensive as measured by contemporary community standards for the
broadcast medium, sexual or excretory activities or organs.
Billing
No entity which sells advertising for airing on the station shall knowingly
issue any bill, invoice or other document which contains false information
concerning the amount charged or the broadcast of advertising which is the
subject of the bill or invoice. No entity which sells advertising for airing
on the station shall misrepresent the nature or content of aired advertising,
nor the quantity, time of day, or day on which such advertising was broadcast.
Contests
Any contests conducted on the station shall be conducted substantially as
announced or advertised. Advertisements or announcements concerning such
contests shall fully and accurately disclose the contest's material terms. No
contest description shall be false, misleading or deceptive with respect to any
material term.
Hoaxes
The station shall not knowingly broadcast false information concerning a crime
or catastrophe.
Emergency Information
Any emergency information which is broadcast by the station shall be
transmitted both aurally and visually or only visually.
<PAGE> 25
- 4 -
Lottery
The station shall not advertise or broadcast any information concerning any
lottery (except the Florida State Lottery and any other state lottery). The
station may advertise and provide information about lotteries conducted by
non-profit groups, governmental entities and in certain situations, by
commercial organizations, if and only if there is no state or local restriction
or ban on such advertising or information and the lottery is legal under state
or local law. Any and all lottery advertising must first be approved by
station management.
Advertising
Station shall comply with all federal, state and local laws concerning
advertising, including without limitation, all laws concerning misleading
advertising, and the advertising of alcoholic beverages.
Programming Prohibitions.
Knowing broadcast of the following types of programs and announcements is
prohibited:
False Claims. False or unwarranted claims for any product or
service.
Unfair Imitation. Infringements of another advertiser's
rights through plagiarism or unfair imitation of either
program idea or copy, or any other unfair competition.
Commercial Disparagement. Any unfair disparagement of
competitors or competitive goods.
Profanity. Any programs or announcements that are slanderous,
obscene, profane, vulgar, repulsive or offensive, as evaluated
by station management.
Violence. Any programs which are excessively violent.
Unauthenticated Testimonials. Any testimonials which cannot be
authenticated.
<PAGE> 26
ATTACHMENT IV
Payola Statement
<PAGE> 27
FORM OF PAYOLA AFFIDAVIT
City of )
--------------------- )
County of ) SS:
------------------- )
State of )
--------------------
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
____________ , being first duly sworn, deposes and says as follows:
1. He is______________________ for _____________________.
Position
2. He has acted in the above capacity since_______________.
3. No matter has been broadcast by Station_______for which
service, money or other valuable consideration has been
directly or indirectly paid, or promised to, or charged, or
accepted, by him from any person, which matter at the time so
broadcast has not been announced or otherwise indicated as
paid for or furnished by such person.
4. So far as he is aware, no matter has been broadcast by Station
for which service, money, or other valuable consideration has
been directly or indirectly paid, or promised to, or charged,
or accepted by Station_______or by any independent contractor
engaged by Station_______in furnishing programs, from any
person, which matter at the time so broadcast has not been
announced or otherwise indicated as paid for or furnished by
such person.
5. In future, he will not pay, promise to pay, request, or
receive any service, money, or any other valuable
consideration, direct or indirect, from a third party, in
exchange for the influencing of, or the attempt to influence,
the preparation of presentation of broadcast matter on Station
_________________.
6. Nothing contained herein is intended to, or shall prohibit
receipt or acceptance of anything with the expressed knowledge
and approval of my employer, but henceforth any such approval
must be given in writing by someone expressly authorized to
give such approval.
7. He, his spouse and his immediate family do ___do not___ have
any present direct or indirect ownership interest in (other
than an investment in a
<PAGE> 28
- 2 -
corporation whose stock is publicly held), serve as an officer
or director of, whether with or without compensation, or serve
as an employee of, any person, firm or corporation engaged in:
1. The publishing of music;
2. The production, distribution (including wholesale and
retail sales outlets), manufacture or exploitation of
music, films, tapes, recordings or electrical
transcriptions of any program material intended for
radio broadcast use;
3. The exploitation, promotion, or management or persons
rendering artistic, production and/or other services
in the entertainment field;
4. The ownership or operation of one or more radio or
television Station;
5. The wholesale or retail sale of records intended for
public purchase;
6. Advertising on Station _______, or any other station
owned by its licensee (excluding nominal
stockholdings in publicly owned companies).
8. The facts and circumstances relating to such interest are
none ________ as follows _______:
------------------------------------------------------------
------------------------------------------------------------
___________________________________
Affiant
Subscribed and sworn to before me
this_______ day of ______________, 19___.
_________________________________________
Notary Public
My Commission expires:____________________.
<PAGE> 1
EXHIBIT 10.114
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT made and entered into this 17th day of July,
1996, by and between IMPACT COMMUNICATIONS OF CENTRAL FLORIDA, INC., a Florida
corporation, hereinafter referred to as "Seller", and PAXSON OUTDOOR, INC., a
Florida corporation, hereinafter referred to as "Buyer."
W I T N E S S E T H :
WHEREAS, Seller is the owner of nineteen (19) and, through management
agreements, the operator of three (3) outdoor advertising display structures as
described on Exhibit A attached hereto ("Billboards"), real estate leasehold
interests under real property leases for each of the sites on which the
Billboards are located ("Land Leases"), permits necessary for the ownership and
operation of the Billboards, leases of Billboard space with Billboard
advertising customers, and other related assets as will be more specifically
described in this Agreement (collectively, the "Assets") which Seller operates
as a commercial billboard outdoor advertising business (the "Outdoor
Advertising Business"), and
WHEREAS, Seller desires to sell, transfer, assign and convey the
Assets to Buyer subject to the terms, provisions and conditions of this
Agreement, and
WHEREAS, Buyer desires to acquire from Seller said Assets subject to
the terms, provisions and conditions of this Agreement.
NOW, THEREFORE, in exchange for mutually agreeable consideration, the
parties hereby agree as follows:
1. Sale. Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to sell, transfer, assign and deliver and Buyer
agrees to buy, on the Closing Date, all of the Assets of the Outdoor
Advertising Business free and clear of all debts, liens, encumbrances or other
liabilities.
2. Price. The total purchase price for the Assets shall be FIVE
MILLION SEVEN HUNDRED THOUSAND DOLLARS ($5,700,000), adjusted as provided
herein. Within three days of full execution of this Agreement, Buyer shall
make an earnest money deposit in the amount of Two Hundred Fifty Thousand
Dollars ($250,000) with First Union National Bank of Florida, N.A. (the
"Deposit") pursuant to an Escrow Agreement among the parties. Such Deposit
shall be deposited in an interest-bearing escrow account. The Deposit,
together with all interest earned thereon, shall be applied to the purchase
price at Closing. The purchase price shall be increased or decreased as
required to effectuate the
<PAGE> 2
proration of revenues and expenses in accordance with this Agreement and with
the principle that Seller shall be entitled to all revenues and responsible for
all expenses, costs and liabilities allocable to the period prior to the
Closing and Buyer shall be entitled to all revenues and responsible for all
expenses, costs and obligations allocable to the period on and after the
Closing.
3. Assets to be Purchased. The term "Assets," as used herein
shall mean the assets to be purchased under this Agreement, shall include all
the assets of Seller relating to the Outdoor Advertising Business, including
without limitation all right, title, and interest in and to all of the
following:
A. Any and all land, buildings, improvements, fixtures,
easements, and rights appurtenant thereto which are leased or otherwise used by
Seller in the conduct of the Outdoor Advertising Business, including without
limitation any and all real property interests in the Billboards and Seller's
leasehold interests under the Land Leases described on Exhibit B attached
hereto;
B. All tangible personal property (such as machinery,
equipment, inventories of raw materials and supplies, manufactured and
purchased parts, goods in process and finished goods, furniture, automobiles,
trucks, tractors, trailers, and tools) including without limitation the
Billboards described on Exhibit A and other tangible personal property
described on Exhibit C attached hereto;
C. All licenses and permits necessary for the ownership
and operation of the Billboards and the Outdoor Advertising Business (the
"Permits"), including without limitation the Permits listed on Exhibit D
attached hereto;
D. All leases or licenses of Billboard space between
Seller and Billboard advertising customers (the "Sign Leases"), including
without limitation those Sign Leases described on Exhibit E attached hereto;
E. Service agreements relating to the Outdoor
Advertising Business, provided Buyer desires to assume such agreements and
provided such agreements are terminable by Seller or Seller's successor upon no
more than thirty days written notice (the "Service Agreements"), including
without limitation those Service Agreements described on Exhibit F attached
hereto;
F. Intellectual property, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions;
G. Franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies;
2
<PAGE> 3
H. Books, records, ledgers, files, documents,
correspondence, lists, plats, architectural plans, drawings, specifications,
creative materials, advertising and promotional materials, studies, reports,
and other printed or written materials;
I. All currently existing and hereafter arising proceeds
of all of the foregoing.
The term "Assets" shall specifically exclude all cash or cash
equivalents belonging to Seller, all accounts receivable of Seller existing as
of the date of Closing, all books and records pertaining to Seller's corporate
formation and operation, all deposits held by Seller under Sign Leases, and all
choses in action relating to, or arising out of the operation of the Outdoor
Advertising Business prior to Closing, specifically including, without
limitation, all rights to the litigation known as Impact Communications of
Central Florida, Inc. and Frances Sirianni vs. National Advertising d/b/a 3M
Media and POA Acquisition Corp., Case No. 95-142-3LV, and Impact Communications
of Central Florida, Inc. vs. HMO, Case No. CI 951749 (collectively hereinafter
referred to as the "Excluded Assets"). Seller shall be entitled to retain
exclusive control over, and possession of, all Excluded Assets.
4. Assumption of Liabilities and Obligations. As of the date of
Closing, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities arising under the Land Leases, Sign Leases, Service
Contracts, or otherwise arising from the ownership or operation of the Assets
and the conduct of the Outdoor Advertising Business to the extent that such
obligations and liabilities relate to the time after the Closing. Buyer shall
not assume any other obligations or liabilities of Seller, including without
limitation: any obligations or liabilities under any agreement not included in
the agreements to be assigned hereunder; any obligations or liabilities under
the agreements to be assigned hereunder relating to a period prior to Closing;
any claims, litigation, or proceedings relating to the operation of the Assets
or the conduct of the Outdoor Advertising Business prior to Closing, whether
asserted or filed before or after Closing; any obligations or liabilities of
Seller under any management incentive, employee pension, retirement, or other
benefit plans; any obligations or liabilities of Seller under any collective
bargaining agreement; any obligation to any employee of Seller for severance
benefits, vacation time, or sick leave accrued prior to Closing; any credit
agreements, note purchase agreements, indentures, or other financing
arrangements; any agreements entered into other than in the ordinary course of
business; or any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of Seller prior to Closing. All of such
excluded obligations and liabilities shall remain the obligations and
liabilities solely of Seller.
3
<PAGE> 4
5. Representations, Covenants and Warranties of Buyer. As a
material inducement to Seller to enter into this Agreement, Buyer makes the
following representations, covenants and warranties.
A. Buyer is a corporation duly organized, validly
existing and in god standing under the laws of the State of Florida and Buyer
has all requisite power and authority to execute and deliver this Agreement and
the Escrow Agreement and the documents contemplated hereby and thereby and to
perform and comply with all of the terms, covenants and conditions to be
performed and complied with by Buyer hereunder and thereunder.
B. The execution, delivery and performance of this
Agreement by Buyer have been duly authorized by all necessary actions on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer
and constitutes the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms except as the enforceability of this
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally and by judicial discretion in the enforcement of
equitable remedies.
C. The execution, delivery and performance by Buyer of
this Agreement and the documents contemplated hereby (i) do not require the
consent of any third party; (ii) will not conflict with the Articles of
Incorporation or By-Laws of Buyer; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order injunction,
regulation or ruling of any court of governmental instrumentality; or (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license or
permit to which Buyer is a party or by which Buyer may be bound, that may
impair Buyer's ability to acquire or operate the Assets.
D. No representation or warranty made by Buyer in this
Agreement or in any certificate or other document furnished by Buyer pursuant
hereto contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact that is required to make any
statement made herein or therein not misleading.
6. Representations, Covenants and Warranties of Seller. As a
material inducement to Buyer to enter into this Agreement, Seller makes the
following representations, covenants and warranties:
A. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has
all requisite power and authority to execute and deliver this Agreement and the
Escrow Agreement
4
<PAGE> 5
and the documents, contemplated hereby and thereby and to perform and comply
with all of the terms, covenants and conditions to be performed and complied
with by Buyer hereunder and thereunder.
B. The execution, delivery and performance of this
Agreement by Seller have been duly authorized by all necessary actions on the
part of Seller. This Agreement has been duly executed and delivered by Seller
and constitutes the legal, valid and binding obligation of Seller, enforceable
against it in accordance with its terms except as the enforceability of this
Agreement may be affected by bankruptcy, insolvency or similar laws affect
creditors' rights generally and by judicial discretion in the enforcement of
equitable remedies.
C. The execution, delivery, and performance by Seller of
this Agreement and the documents contemplated hereby (i) do not require the
consent of any third party (ii) will not conflict with, result in a breach of,
or constitute a default under, any law, judgement, order, rules, regulation or
ruling of any court of governmental instrumentality, (iii) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under or accelerate or permit the acceleration of any performance
required by the terms of any agreement instrument license or permit to which
Seller is a party or by which Seller may be bound and (iv) will not create any
claim, liability, mortgage, lien, pledge condition charge or encumbrance of any
nature whatsoever upon any of the Assets.
D. Seller has good and marketable title to or, where
applicable, a valid and insurable leasehold interest in the Assets free and
clear of all liens and encumbrances. The Assets are all of the properties and
assets required to legally conduct the Outdoor Advertising Business as
presently conducted, and immediately after consummation of the transactions
contemplated herein, Buyer will be entitled to use the Assets free and clear of
all liens and encumbrances.
E. Neither Seller nor any shareholder, employee, or
agent of Seller has incurred any obligation for any finder's, broker's, or
agent's fee in connection with the transactions contemplated hereby.
F. The Permits listed on Exhibit D constitute all the
governmental authorizations required from any governmental or regulatory
authority for the lawful conduct of the Outdoor Advertising Business and
operation of the Assets in the manner and to the full extent they are now
conducted. None of these governmental or regulatory authorities has modified
or otherwise changed its permitting ordinances in any material respect since
the issuance of the Permits. None of the Permits is subject to any restriction
or
5
<PAGE> 6
condition that would limit Buyer's full operation of the Assets or the Outdoor
Advertising Business as now operated following Closing. The Permits are in
full force and effect and the current conduct of the Outdoor Advertising
Business and operation of the Assets is in full accord therewith. Seller has
no reason to believe that any of the Permits will not continue to remain in
effect following Closing and their assignment to Buyer.
G. The Billboards listed on Exhibit A and the tangible
personal property listed on Exhibit C constitute all items of tangible personal
property necessary to conduct Seller's business at each of the Billboard
locations as now conducted. Seller owns and has good title to each Billboard
and other item of tangible personal property and none is subject to any
security interest, mortgage, pledge, conditional sales agreement or other lien
or encumbrance, except for liens for current taxes not yet due and payable.
H. The Land Leases, Sign Leases, and Service Contracts
listed on Exhibits B, E, and F, respectfully, constitute all the Land Leases,
Sign Leases, and Service Contracts associated with the operation of the
Billboards and the Outdoor Advertising Business as now conducted. Seller has
delivered to Buyer true and complete copies of all such Land Leases, Sign
Leases, and Services Contracts and all of the Land Leases, Sign Leases and
Service Contracts are in full force and effect and are valid, binding and
enforceable in accordance with their terms. Seller has full legal power and
authority to assign its rights under such Land Leases, Sign Leases, and Service
Contracts to Buyer in accordance with this Agreement and such assignment will
not affect the validity, enforceability or continuation of any of the assigned
Land Leases, Sign Leases, and Service Contracts.
I. Except as set forth on Exhibit G, no consent,
approval, permit or authorization of or declaration to or filing with any
governmental or regulatory authority or any other third party is required (i)
to consummate this Agreement and the transactions contemplated hereby (ii) to
permit Seller to assign or transfer the Assets to Buyer or (iii) to enable
Buyer to conduct the business and operations associated with the Assets in
essentially the same manner as such business and operations are now conducted.
J. Except as set forth on Exhibit H, there is no claim,
legal action, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment in progress
or pending, or to the knowledge of Seller threatened, against Seller with
respect to its ownership or operation of the Assets or the Outdoor Advertising
Business nor does Seller know or have reason to be aware of any basis for the
same.
K. Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state and local governments
concerning the
6
<PAGE> 7
environment, public health and safety and no complaint, charge or notice has
been filed or commenced against Seller in connection with its ownership or
operation of the Assets or the Outdoor Advertising Business alleging any
failure to comply with any such law, rule or regulation.
L. The books of account of Seller have been kept
accurately in all material respects in the ordinary course of its business; the
transactions entered therein represent bona fide transactions; and the
revenues, expenses, assets, and liabilities of Seller have been properly
recorded in such books.
M. All the Billboards are constructed within the
boundaries of the applicable Land Lease, and each Land Lease provides adequate
access to and from a public road.
N. No representation or warranty made by Seller in this
Agreement or in any certificate, document or other instrument furnished or to
be furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
that is required to make any statement made herein or therein not misleading.
7. Prorations; Closing Expenses. At the time of Closing, Seller
shall provide Buyer with a schedule of all rental payments and revenues
received by Seller for periods from and after the date of Closing. The
aggregate amount of all such prepaid revenues shall be deducted from the
purchase price at Closing. All normal and customarily proratable items,
including without limitation, real estate taxes and assessments, personal
property taxes and assessments, utility bills, alarm and security bills, and
rents, shall be prorated as of the date of Closing, Seller being charged and
credited for all of the same up to such date and Buyer being charged and
credited for the same on and after such date. If the actual amounts to be
prorated are not known at the time of Closing, the prorations shall be made on
the basis of the best evidence then available, and within sixty (60) days
thereafter, when actual figures are received, a cash settlement will be made
between Seller and Buyer. All deposits held by Seller under Sign Leases shall
be credited in favor of Buyer against the purchase price.
8. Operations Prior to Closing. Seller agrees that, between the
date of this Agreement and the Closing, Seller shall operate the Outdoor
Advertising Business diligently in the ordinary course of business in
accordance with its past practices and in accordance with the other covenants
in this Agreement.
A. Seller shall not increase the compensation, bonuses or other
benefits payable or to be payable to any person employed in connection with the
conduct of the Outdoor Advertising Business, except in accordance with past
practices.
7
<PAGE> 8
B. Seller will not enter into any contract or commitment relating
to the Assets or the Outdoor Advertising Business or amend or terminate any
contract or incur any obligation that will be binding on Buyer after Closing,
except for advertising sales made in the ordinary course of business.
C. Seller shall not sell, assign, lease or otherwise transfer or
dispose of any of the Assets, except where no longer used or useful in the
Outdoor Advertising Business or in connection with the acquisition of
replacement property of equivalent kind and value.
D. Seller shall not create, assume or permit to exist any claim,
liability, mortgage, lien, pledge, condition, charge or encumbrance of any
nature whatsoever upon the Assets or the Outdoor Advertising Business except
for liens set forth on Exhibit I which shall be removed on or prior to Closing
and liens for current taxes not yet due and payable.
E. Seller shall not cause or permit by any act or failure to act
any of the licenses or permits set forth in Exhibit D to expire or to be
revoked, suspended or modified or take any action that could cause any
governmental authority to institute proceedings for the suspension, revocation
or adverse modification of any of such licenses.
F. Seller shall use its best efforts to preserve the Outdoor
Advertising Business and use its best efforts to keep available to such Outdoor
Advertising Business its present employees and to preserve the present
relationships with suppliers, advertisers and other having business relations
with it.
9. Buyers Conditions Precedent. Except as may be waived in
writing by Buyer, the obligations of Buyer hereunder are subject to the
fulfillment at or before the Closing of each of the following conditions:
A. Each representation and warranty of Seller contained
in this Agreement shall be true and correct in all material respects as of the
Closing;
B. Seller shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and complied
with by Seller at or before Closing;
C. No suit, action, order, or other proceeding by any
court or governmental body or agency shall have been threatened in writing,
asserted, instituted, or entered to restrain or prohibit carrying of the
transactions contemplated by this Agreement;
8
<PAGE> 9
D. No material adverse change in the Outdoor Advertising
Business or the Assets shall have occurred;
E. Seller shall have received all consents and
approvals, if any, necessary to consummate the transactions contemplated
hereby;
F. Schrimsher Land Fund VII, Ltd. shall have agreed to
modify its Land Lease in accordance with the terms of the provisions of
Paragraph 12F below.
10. Seller's Conditions Precedent. Except as may be waived in
writing by Seller, the obligations of Seller hereunder are subject to the
fulfillment at or before Closing of each of the following conditions:
A. Each representation and warranty of Buyer contained
in this Agreement shall be true and correct in all material respects as of
Closing;
B. Buyer shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and complied
with by it at or before Closing;
C. No order by any court or governmental body or agency
shall have been entered to restrain or prohibit the consummation of the
transactions contemplated herein.
11. Closing. The Closing hereunder shall occur on a date mutually
agreed upon by the parties, but in any event on or before July 31, with the
parties using their best efforts to close on or before July 24. The Closing
shall occur at the Seller's attorney's offices at a time mutually agreed to by
the parties.
12. Documents for Closing. Upon the Closing hereof, Seller shall
deliver the following documents to Buyer:
A. Duly executed Warranty Bill of Sale, Assignment of
Land Leases, Assignment of Sign Leases, Assignment of Permits and other
transfer documents which shall be sufficient to vest and fully warrant good and
marketable title to the Assets in the name of Buyer, free and clear of all
mortgages, liens, restrictions, encumbrances and obligations except for liens
for current taxes not yet due and payable;
B. All original documents of Land Leases, Sign
Agreements, Service Agreements, and Permits in Seller's possession and control,
and all records and correspondence in Seller's possession or control relating to
the Assets and the
9
<PAGE> 10
Outdoor Advertising Business being sold hereunder, with the etc.
C. Estoppel certificates of the lessors of all leasehold
and subleasehold interests included in the real property interests conveyed
hereunder (substantially in the form as set forth in Exhibit J attached hereto)
and any consents of third parties which enable Seller to transfer, assign and
convey the Assets to Buyer;
D. A certificate, dated as of the Closing Date, executed
on by Seller, certifying that these representations and warranties of Seller
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date and that Seller has
in all material respects performed and complied with all of its obligations,
covenants and agreement set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
E. Seller and Frances R. Sirianni shall have executed a
Noncompetition Agreement substantially in accordance with that attached hereto
as Exhibit K;
F. Seller's real property leases with Schrimsher Land
Fund VII, L.T.D. ("Schrimsher") for the six (6) I-4 Billboard locations shall
have been amended in consideration of a one-time, lump-sum payment of One
Million Six Hundred Thousand Dollars ($1,600,000) due and payable in cash to
Schrimsher by Buyer at Closing. The amended lease shall provide for a monthly
lease fee of $16,200 for all six (6) locations or twenty percent (20%) of the
total net revenue from the six (6) locations (as defined in the lease)
whichever is greater.
G. Any other documents reasonably necessary for the
consummation of the transactions contemplated hereby.
13. Further Assurances. At any time before or after Closing,
Seller agrees to execute, acknowledge and deliver all instruments reasonably
requested by Buyer in order to consummate the transactions contemplated by this
Agreement and to fully vest in Buyer the ownership of the Assets from and after
the Closing. Promptly upon receipt of any rental payments under the Sign
Leases for periods after the Closing, Seller shall pay over to Buyer all such
payments.
14. Default. If Buyer shall breach any material representation,
warranty, or covenant contained herein, then the entire earnest money deposit
paid hereunder shall be paid to Seller, as liquidated damages and not as a
penalty, as Seller's exclusive remedy, and the parties thereafter shall be
relieved of any further liability or
10
<PAGE> 11
obligation hereunder. If Seller shall breach any material representation,
warranty, or covenant contained herein, Buyer, in addition to obtaining a
refund of its earnest money deposit, may undertake any and all legal and
equitable actions, including without limitation, a suit for specific
performance. Seller acknowledges that a refusal by Seller to consummate the
transactions contemplated hereby will cause irrevocable harm to Buyer, for
which there may be no adequate remedy at law and for which the ascertainment of
damages would be difficult. Therefore, Buyer shall be entitled, in addition
to, and without having to prove the inadequacy of, other remedies at law, to
specific performance of this Agreement, as well as injunctive relief.
15. Indemnification Provisions.
A. Indemnification by Sellers. After the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer and its officers, directors, employees, and representatives harmless
against and with respect to, and shall reimburse Buyer and its officers,
directors, employees, and representatives for:
(i) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Outdoor Advertising Business
prior to the Closing, including without limitation any environmental
liabilities and liabilities arising under the Land Leases, Sign Leases, Service
Agreements, or any other source to the extent such liabilities relate to events
occurring prior to the Closing Date, or resulting from any other obligations of
Seller that are not assumed by Buyer pursuant to this Agreement, including
without limitation any liabilities arising at any time under any contract that
is not assumed hereunder.
(ii) Any loss, liability, obligation, or cost
resulting from any agreement with any finder, broker, advisor, or similar
person retained by or on behalf of Seller relating to the transactions
contemplated by this Agreement.
11
<PAGE> 12
(iii) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any incident to the
foregoing or incurred in investigating or attempting to avoid the same or to
oppose the imposition thereof, or in enforcing this indemnity.
B. Indemnification of Buyer. After the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller and Seller's officers, directors, employees, and representatives
harmless against and with respect to, and shall reimburse Seller and each
Seller's officers, directors, employees, and representatives for:
(i) Any and all obligations of Seller assumed by
Buyer pursuant to this Agreement.
(ii) Any and all losses, liabilities, or damages
resulting from the operation or ownership of the Outdoor Advertising Business
after the Closing.
(iii) Any loss, liability, obligation, or cost
resulting from any agreement with any finder, broker, advisor, or similar
person retained by or on behalf of Buyer relating to the transactions
contemplated by this Agreement.
(iv) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
C. Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(i) The party claiming indemnification (the
"Claimant") shall promptly give notice to the party from which indemnification
is claimed (the "Indemnifying Party") of any claim, whether between the parties
or brought by a third party, specifying in reasonable detail the factual basis
for the claim.
(ii) With respect to claims solely between the
parties, following receipt of notice from the Claimant of a claim, the
Indemnifying Party shall have thirty days to make such investigation of the
claim as the Indemnifying
12
<PAGE> 13
Party deems necessary or desirable. For the purposes of such investigation,
the Claimant agrees to make available to the Indemnifying Party and its
authorized representatives the information relied upon by the Claimant to
substantiate the claim. If the Claimant and the Indemnifying Party agree at or
prior to the expiration of the thirty-day period (or any mutually agreed upon
extension thereof) to the validity and amount of such claim, the Indemnifying
Party shall immediately pay to the Claimant the full amount of the claim. If
the Claimant and the Indemnifying Party do not agree within the thirty-day
period (or any mutually agreed upon extension thereof), the Claimant may seek
appropriate remedy at law or equity.
(iii) With respect to any claim by a third party as
to which the Claimant is entitled to indemnification under this Agreement, if
the Indemnifying Party notifies the Claimant in writing within ten days of its
receipt of notice from the Claimant of the third-party claim that the
Indemnifying Party acknowledges its potential liability to the Claimant under
this Agreement, the Indemnifying Party shall have the right, at its own
expense, to participate in or assume control of the defense of such claim, and
the Claimant shall cooperate fully with the Indemnifying Party, subject to
reimbursement for actual out-of-pocket expenses incurred by the Claimant as the
result of a request by the Indemnifying Party. If the Indemnifying Party
elects to assume control of the defense of any third- party claim, the Claimant
shall have the right to participate in the defense of such claim at its own
expense. If the Indemnifying Party fails timely to notify the Claimant in
writing that the Indemnifying Party acknowledges its potential liability to the
Claimant under this Agreement or if the Indemnifying Party does not elect to
assume control or otherwise participate in the defense of any third-party
claim, the Indemnifying Party shall be bound by the results obtained by the
Claimant with respect to such claim.
(iv) If a claim, whether between the parties or by
a third party, requires immediate action, the parties will make every effort to
reach a decision with respect thereto as expeditiously as possible.
(v) For the purpose of the procedures set forth
in this Section, any indemnification claim by any officer, director, employee,
or representative of Buyer shall be made by and through Buyer, and any
indemnification claim by any officer, director, employee, or representative of
any Seller shall be made by and through such Seller.
16. Survival. All representations, warranties and
indemnifications contained in this Agreement shall be deemed continuing
representations, warranties and indemnifications and shall survive the Closing
for a period of
13
<PAGE> 14
eighteen (18) months.
17. Attorneys Fees. In the event of a default or breach hereunder
by either party which results in a lawsuit or other proceeding for any remedy
available under this Agreement, the prevailing party shall be entitled to
reimbursement from the other party of its reasonable legal fees and expenses,
including on appeals and bankruptcy proceedings.
18. Physical Condition. Except as expressly provided in this
Agreement to the contrary, Buyer and Seller agree that the Assets are being
sold "as is" as to their physical condition existing at the time of execution
of this Agreement.
19. Controlling Law. Any dispute which may arise concerning this
Agreement shall be resolved in accordance with the laws of the State of Florida
and parties agree to venue in Orange County, Florida.
20. Risk of Loss; Maintenance of Assets. The risk of any loss,
damage, impairment, confiscation or condemnation of any of the Assets from any
cause whatsoever shall be borne by Seller at all times prior to Closing.
Seller shall maintain all of the Assets in their condition as of the date of
this Agreement (ordinary wear and tear excepted), and use, operate and maintain
all of the Assets in a reasonable manner consistent with past practices.
Seller shall maintain inventories of parts and supplies at levels consistent
with past practices. If any insured or indemnified loss, damage, impairment,
confiscation, or condemnation of or to any of the Assets occurs, Seller shall
repair, replace, or restore such Assets to their prior condition as soon
thereafter as possible (and at Buyer's option, prior to Closing), and Seller
shall use the proceeds of any insurance or other recovery solely to repair,
replace, or restore such Assets. Seller shall maintain the existing levels of
insurance on the Assets. In the event of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets, if restoration or
replacement has not occurred prior to Closing, Buyer shall be entitled to elect
to delay the Closing until such restoration or replacement is completed or
close the transaction and receive from Seller a transfer or assignment of all
insurance proceeds or other compensation applicable thereto.
21. Notices. All notices, demands, and requests required or
permitted to be given under this Agreement shall be in writing and shall be
either (a) personally delivered, (b) mailed by registered or certified mail,
postage prepaid with return receipt requested, (c) delivered by overnight
express delivery service or same day
14
<PAGE> 15
local courier service, or (d) delivered by telecopy or facsimile transmission,
to the address set forth below, or to such other address as may be designated
by the parties from time to time in accordance with this section.
<TABLE>
<S> <C>
If to Seller: Impact Communications of Central Florida, Inc.
1712 Demetree Drive
Winter Park, FL 32789
FAX: 407-628-1511
ATTN: Fran Sirianni, President
With a Copy to: Douglas E. Starcher, Esq.
Broad and Cassel
390 North Orange Avenue
Orlando, FL 32801
If to Buyer: Paxson Outdoor, Inc.
1460 33rd Street
Orlando, FL 32839
FAX: 407-425-2264
ATTN: John Jennings, General Manager
With a Copy to: William L. Watson, Esq.
Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
</TABLE>
Notice delivered personally, by overnight express delivery service or
by local courier service shall be deemed given as of actual receipt. Mailed
notices shall be deemed given three business days after mailing. Notices
delivered by telecopy or facsimile transmission shall be deemed given upon
confirmation of the transmission.
22. Transaction Costs. Each party shall be responsible for paying
their own attorney's and accounting fees in connection with this transaction.
All closing costs, such as transfer taxes and filing fees, shall be paid by
Buyer.
23. Entire Agreement. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof and cannot
be amended, supplemented or changed except by an Agreement in writing signed by
the party against which enforcement of any such amendment, supplement, or
modification is sought.
15
<PAGE> 16
24. Binding Effect. This Agreement and the rights, interests and
obligations hereunder shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, personal representatives,
estates, devisees, successors, and assigns.
25. Severability. If any portion of this Agreement is invalid,
illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect and this Agreement shall be construed in all respects as if
such invalid, illegal or unenforceable provision were amended.
26. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and year first above written.
<TABLE>
<S> <C>
In the Presence of: Impact Communications of Central Florida, Inc."Seller"
/s/
- -----------------------------------------
By: /s/ Francis R. Surann
----------------------------------------------------------
/s/ Its: President
- ----------------------------------------- ----------------------------------------------------------
As to "Seller"
In the Presence of: Paxson Outdoor, Inc.
"Buyer"
/s/ Julie Greengrass
- -----------------------------------------
By: /s/ Bill Watson
----------------------------------------------------------
/s/ Sue Parks Its: /s/ Secretary
- ----------------------------------------- ----------------------------------------------------------
As to "Buyer"
</TABLE>
16
<PAGE> 17
STATE OF FLORIDA ]
]
COUNTY OF Orange ]
I, Lois A. McCoy, a Notary Public in and for the State of Florida,
do hereby certify that Frances R. Sirianni the duly authorized President of
Impact Communications of Central Florida, Inc., personally appeared before me
in said jurisdiction and acknowledged executing the foregoing Purchase
Agreement on behalf of the corporation. He/she is personally known to me or
has produced _______________________________ ________________________________as
identification.
Given under my signature and seal this 17th day of July, 1996.
[SEAL]
/s/ Lois A. McCoy
-----------------------------------
Notary
STATE OF FLORIDA ]
]
COUNTY OF Palm Beach ]
I, Lori Closson, a Notary Public in and for the State of Florida, do
hereby certify that William L. Watson the duly authorized Secretary of Paxson
Outdoor, Inc., personally appeared before me in said jurisdiction and
acknowledged the foregoing Purchase Agreement on behalf of the corporation.
He is personally known to me.
Given under my signature and seal this 18th day of July, 1996
/s/ Lori E. Closson
[SEAL] -------------------------------
Notary
17
<PAGE> 1
EXHIBIT 10.115
=============================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS LPTV, INC.
AND
MICHAEL A. BOGNER
D/B/A
AMITY BROADCASTING COMPANY
FEBRUARY 23, 1996
=============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 No Breach or Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Environmental; Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.6 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.7 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(f) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(h) Tower Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Conditions to Obligations of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(f) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.7 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.9 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.11 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.13 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
<PAGE> 6
LIST OF SCHEDULES AND EXHIBITS
<TABLE>
<S> <C> <C>
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property
Schedule 3.6 - Personal Property
Schedule 3.7 - Contracts
Schedule 8.2(e) - Opinion of Seller's Counsel
Schedule 8.2(f) - Noncompetition Agreement
Schedule 8.3(d) - Opinion of Buyer's Counsel
Schedule 9.3 - Escrow Agreement
</TABLE>
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of February 23, 1996, by and
among Paxson Communications LPTV, Inc., a Florida corporation ("Buyer"), and
Michael A. Bogner d/b/a Amity Broadcasting Company ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates WNYA-LP,
Amityville, New York (the "Station"), pursuant to authorizations issued by the
Federal Communications Commission (the "FCC").
B. Seller desire to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller have a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the right of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under the Agreement, as specified in Section 2.1.
"Business Day" means any day other than Saturday, Sunday or other day
on which banks in Florida are authorized to close their regular banking
business.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
<PAGE> 8
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" shall have the meaning set forth in the Recitals to this
Agreement.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
- 2 -
<PAGE> 9
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" shall have the meaning set forth in Section 2.3
hereof.
"Real Property" means Seller's interests in real property, leaseholds
and subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, and all buildings and other improvements thereon, which are used
or useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Station" shall have the meaning set forth in the Recital to this
Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and/or deliver to Buyer on the Closing Date, and Buyer agrees to
purchase and accept, all of the assets and property interests owned by Seller
or in which Seller has a property interest which are used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2 hereof, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
- 3 -
<PAGE> 10
(e) The Intangibles, including the goodwill and call
signs of the Station, if any;
(f) All choses in action of Seller relating to the
Station that are assignable to Buyer as provided herein; and
(g) All records required by the FCC to be kept by the
Station and copies of all other books and records which belong to Seller and
are within its possession and control relating to the business or operations of
the Station (exclusive of corporate, financial and accounting records)
including executed copies of the Assumed Contracts.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's Accounts Receivable, and cash or cash
equivalents on hand as of the Closing Date; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar securities or other
investments;
(b) Any pension, profit sharing or employee benefit plans
and all contracts related thereto, and any collective bargaining agreements;
(c) All books and records relating to Seller's internal
corporate organization or internal financial matters;
(d) Any Contracts including, without limitation, all
affiliation agreements relating to the Station;
(e) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees for periods
prior to the Closing Date; and
(f) The Station's transmitter and transmission line.
2.3 Purchase Price. The purchase price for the Assets shall be
One Million Five Hundred Thousand Dollars ($1,500,000) (the "Purchase Price"),
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of 11:59 p.m.,
Eastern Standard Time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, and prepaid and deferred items, shall be
prorated between Buyer and Seller in accordance with the principle that Seller
shall be responsible for
- 4 -
<PAGE> 11
all expenses, costs, and liabilities allocable to the period prior to the
Closing Date, and Buyer shall be responsible for all expenses, costs, and
obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Taxes. Except for real and personal property taxes
and assessments incurred against the Assets, there shall be no proration or
adjustment for income taxes or any other taxes with respect to the Station or
the Assets which shall be Seller's sole responsibility for all periods prior to
the Closing Date. All taxes arising from the transfer of the Assets hereunder
shall be Seller's responsibility pursuant to Section 11.2 hereof.
(c) Manner of Determining Adjustments. The adjustments
and prorations to the Purchase Price pursuant to Section 2.3(a) will be
determined in accordance with the following procedures:
(i) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days prior to the Closing Date a preliminary
settlement statement, which statement shall set forth Seller's good faith
estimate of the adjustments to the Purchase Price under Section 2.3(a) hereof.
(ii) Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(a) hereof prior to the
Closing.
(iii) No later than forty-five (45) days after the
Closing Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the adjustments to the Purchase Price pursuant to Section
2.3(a) hereof. If Seller disputes the amount of the adjustments to the
Purchase Price determined by Buyer, they shall deliver to Buyer, within thirty
(30) days after their receipt of Buyer's statement, Seller's statement setting
forth their determination of the amount of the adjustments to the Purchase
Price and the basis for their dispute in reasonable detail. If Seller notifies
Buyer of their acceptance of Buyer's statement, or if Seller fail to deliver
the Seller's statement within the thirty (30) day period specified in the
preceding sentence, Buyer's determination of the adjustments pursuant to
Section 2.3(a) hereof shall be conclusive and binding on the parties.
(iv) After the Closing, Buyer and Seller shall use
good faith efforts to resolve any dispute involving the determination of the
adjustments to the Purchase Price under Section 2.3(a) hereof. If the parties
are unable to resolve the dispute within fifteen (15) days following the
delivery of Seller's statement described above, Buyer and Seller shall jointly
designate and retain, with fees and expenses to be borne equally by Seller and
Buyer, an independent certified public accountant mutually acceptable to Seller
and Buyer who shall be knowledgeable and experienced in the operation of
television broadcasting Station, to
- 5 -
<PAGE> 12
resolve the dispute within thirty (30) days. The accountant's resolutions of
the dispute shall be final and binding on the parties, and a judgment may be
entered thereon in any court of competent jurisdiction.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller the
Purchase Price adjusted pursuant to Section 2.3(a) hereof by federal wire
transfer of immediately available funds pursuant to wire instructions delivered
by Seller at least two (2) Business Days prior to the Closing Date.
(b) If as a result of the final determination of the
adjustments to the Purchase Price pursuant to Section 2.3(c) following the
Closing, (i) Buyer is determined to owe an amount to Seller, Buyer shall pay
such amount to Seller in immediately available funds within five (5) Business
Days of the date of such final determination or (ii) Seller is determined to
owe an amount to Buyer, Seller shall pay such amount to Buyer in immediately
available funds within five (5) Business Days of the date of such final
determination. The amount of the payment made in accordance with this Section
2.4(b) shall bear interest at a per annum rate equal to the "prime rate," as
published in the Money Rates column of the Eastern Edition of The Wall Street
Journal on the Monday of the week in which the Closing occurs, calculated from
the Closing Date to the date such payment is made to Seller or Buyer, as the
case may be, and payable with the amount of such payment.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses to the extent that
either (i) the obligations and liabilities relate to the period from and after
the Closing Date or (ii) the Purchase Price was reduced pursuant to Section
2.3(a) hereof as a result of the proration of such obligations and liabilities.
Buyer shall not assume any other obligations or liabilities of Seller,
including (i) any obligations or liabilities under any Contract, (ii) any
claims or pending litigation or proceedings relating to the operation of the
Station prior to the Closing, (iii) any obligations or liabilities of Seller
under any employee pension, retirement, or other benefit plans or with respect
to commissions, wages, bonuses, incentive payments, vacation pay, sick leave,
severance benefits, or other benefits of employees or former employees of
Seller or their beneficiaries, (iv) any obligations or liabilities of Seller
with respect to any Excluded Assets, or (v) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing.
- 6 -
<PAGE> 13
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Standing. Seller is an individual United States citizen doing
business as Amity Broadcasting Company.
3.2 No Breach or Violation. Neither the execution, delivery and
performance of this Agreement and all other agreements or instruments to be
executed in connection herewith, nor the compliance by Seller with the terms
and provisions hereof and thereof will conflict with or breach any judgment,
order, injunction, decree, regulation or ruling of any court or other
governmental authority to which he is subject or any agreement or contract to
which he is a party or to which he is subject, or constitute a default
thereunder.
3.3 Absence of Conflicting Agreements. The execution, delivery
and the performance of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iii) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (iv) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies
of the Licenses (including any and all amendments and other modifications
thereto) listed on Schedule 3.4. The Licenses listed on Schedule 3.4 have been
validly issued and the Seller is the authorized legal holder thereof. The FCC
Licenses comprise all of the licenses, permits and other authorizations
required from the FCC for the conduct of the business or operations of the
Station in accordance with applicable laws and in the manner and to the extent
they are now conducted. None of the Licenses listed on Schedule 3.4 is subject
to any restriction or condition which would limit the full operation of the
Station as presently operated. The Licenses listed on Schedule 3.4 are in full
force and effect. The business and operations of the Station are being
conducted in accordance with the Licenses listed on Schedule 3.4. Seller has
no reason to believe that the Licenses issued by the FCC will not be renewed by
the FCC in the ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all Seller's leasehold
interests necessary to conduct the business and operations of the Station as
now conducted. With respect to each leasehold or subleasehold
- 7 -
<PAGE> 14
interest included in the Real Property being conveyed under this Agreement, so
long as Seller fulfills its obligations under the lease therefor, Seller has
enforceable rights to nondisturbance and quiet enjoyment, and no third party
holds any interest in the leased premises with the right to foreclose upon
Seller's leasehold or subleasehold interest.
3.6 Title to and Condition of Tangible Personal Property. Except
for the equipment listed in Section 2.2(f) hereof, Schedule 3.6 contains
descriptions of all material items of the Personal Property which comprise all
material personal property necessary to conduct the business or operations of
the Station as now conducted. Seller owns and has good title to all Personal
Property, free and clear of any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for Permitted
Liens. Each item of material Personal Property is in operating condition and
repair (ordinary wear and tear excepted), and is available for immediate use in
the business or operations of the Station.
3.7 Contracts. Other than the Leasehold interest listed in
Schedule 3.5, Seller is not a party to any written Contracts.
3.8 Reports. All material returns, reports and statements which
the Station is currently required to file with the FCC and any other
governmental agency have been filed. All of such reports, returns and
statements are complete and correct as filed.
3.9 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by them to
the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
deemed by them to be adequate with respect thereto. No events have occurred
which could impose on Buyer any transferee liability for any taxes, penalties,
or interest due or to become due from Seller.
3.10 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller, the Assets, or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same.
3.11 Environmental; Hazardous Materials. There are no claims,
notices, suits, proceedings or investigations pending or, to Seller's
knowledge, threatened, and there are no judgments against Seller or the Station
by or before any governmental authority concerning environmental compliance.
To Seller's knowledge, after due inquiry, (i) no toxic materials, hazardous
waste, or hazardous substances, including any asbestos or asbestos-related
products, any oils, petroleum-derived compounds or pesticides (hereinafter
collectively referred to as the "Hazardous Materials") have been or are located
on or about the Real
- 8 -
<PAGE> 15
Property; (ii) the Real Property has not been previously used for the storage,
manufacture or disposal of Hazardous Materials; and (iii) no underground
storage tank or related equipment ("UST") is located at the Real Property.
3.12 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.13 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of
Florida. Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the execution, delivery, and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) will not conflict with the Certificate
of Incorporation or Bylaws of Buyer; (ii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Buyer; (iii) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any
- 9 -
<PAGE> 16
performance required by the terms of, any agreement, instrument, license, or
permit to which Buyer is a party or by which Buyer may be bound, such that
Buyer could not acquire the Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of and acquire, own and operate the
Station under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC. Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC disqualify Buyer as assignee of the FCC Licenses or as the owner and
operator of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing without Buyer's
written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in connection
with the acquisition of replacement property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date and, (ii) liens for current
taxes not yet due and payable.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked or suspended or take any action
- 10 -
<PAGE> 17
that could cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any of
the Licenses. Seller has filed with the FCC a minor modification application
for the Station and shall prosecute with due diligence this and any other
applications before the FCC in connection with the operation of the Station.
5.6 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.7 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business hours to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection and will furnish or cause to be
furnished to Buyer or its authorized representatives all material information
with respect to the affairs and business of the Station that Buyer may
reasonably request (including any operations reports produced with respect to
the affairs and business of the Station).
5.8 Maintenance of Assets. Seller shall maintain all of the
Assets in good condition (ordinary wear and tear excepted) with inventories of
spare parts and expendable supplies being maintained at levels consistent with
past practices.
5.9 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.10 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.11 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare the
appropriate application for the FCC Consent and shall file the application with
the FCC within ten (10) Business Days
- 11 -
<PAGE> 18
of the execution of this Agreement. The parties shall prosecute the
applications with all reasonable diligence and otherwise use their reasonable
commercial efforts to obtain a grant of the applications as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by
the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by such party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent, provided, however, that the parties shall continue
to have all rights available to them pursuant to Section 9 hereof. If the
Closing shall not have occurred for any reason within the original effective
period of the FCC Consent, and neither party shall have terminated this
Agreement under Section 9, the parties shall jointly request an extension of
the effective period of the FCC Consent. No extension of the FCC Consent shall
limit the exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing. As
of the date of this Agreement, Seller shall broadcast on the station
programming provided by the Buyer, which programming shall be provided to
Seller in a broadcast format ready for broadcast on the Station, for a period
of ninety (90) days unless the Closing has occurred within that 90 day period
at no cost to Buyer. If the Closing has not occurred within this 90 day
period, then Buyer shall compensate Seller for the Station's broadcast of
Buyer's programming at the rate of Ten Dollars ($10.00) per hour until the
Closing or this Agreement is terminated pursuant to the terms of Section 9
hereof. Buyer acknowledges that the Seller has full authority to control the
programming on the Station and that such authority includes, but is not limited
to, the right to reject or refuse such portions of the Buyer's programming
which Seller believes to be unsatisfactory, unsuitable or contrary to the
public interest.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information of a confidential nature obtained from
the other party in connection with the transactions contemplated by this
Agreement.
- 12 -
<PAGE> 19
Except as provided in this Paragraph each party will refrain from disclosing
any such information to any third party. If this Agreement is terminated, each
party will return to the other party all copies of all documents and other all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, neither Buyer nor Seller shall have
any obligation (i) to expend funds to obtain any of the Consents or (ii) to
agree to any material adverse change in any License or Assumed Contract to
obtain a Consent required with respect thereto; provided, however, that Seller
shall be required to expend funds, if necessary, to cure any defaults in order
to obtain Consents and either party shall be required to expend funds in
respect of normal and usual filing fees and the fees of professional advisors.
6.6 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of ninety (90) days from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of ninety (90) days from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.7 Broker. Each of Buyer and Seller represents and warrants that
neither they nor any person or entity acting on their behalf have incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
- 13 -
<PAGE> 20
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on them by the FCC Consent, and the FCC Consent
shall have become a Final Order.
(d) Governmental Authorizations. Seller shall be the
holder of all FCC Licenses and there shall not have been any modification of
any FCC License that could have a material adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any FCC License.
(e) Material Adverse Change. There shall not have been a
material adverse change in the Assets since the date of this Agreement,
including, without limitation, any damage, destruction or loss affecting any
material assets used in the conduct or the business of the Station, except
normal wear and tear to the Assets.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Release of Liens. Seller shall have delivered to
Buyer evidence reasonably satisfactory to Buyer that all security interests,
mortgages, encumbrances, and liens on the Assets that are not Permitted Liens
have been released and removed.
(h) Tower Lease. Seller shall have executed a Tower
Lease for the Station, freely assignable to Buyer and in form and substance
reasonably satisfactory to Buyer, providing that (i) the transmitter building
shall be climate controlled and otherwise suitable for the Station's
transmitter and equipment racks, (ii) the transmitter site will be accessible
to fiber optic connections, (iii) space shall be available on the tower for a
microwave dish at a height and orientation to be mutually agreed upon, and
(iv) space shall be available at the site for an off-air UHF parabolic antenna
and a 3.8 meter receive-only Satellite dish.
7.2 Conditions to Obligations of Seller All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
- 14 -
<PAGE> 21
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five (5) Business Days' written
notice to Seller, that is (1) not earlier than the first business day after the
FCC Consent is granted, and (2) not later than ten (10) Business Days following
the date upon which the FCC Consent has become a Final Order. If Buyer fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth Business Day after the date upon which the FCC Consent becomes a Final
Order, the Closing shall take place on the tenth Business Day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1255 23rd Street, N.W., Suite 500,
Washington, D.C. 20037, or such other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens;
- 15 -
<PAGE> 22
(b) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the representations and warranties
of such Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that such Seller has in all material respects performed and complied
with all of its obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date and
such additional certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder;
(c) Licenses, Contracts, Business Records, Etc. Copies
of all documents described in Section 2.1(g) hereof;
(d) Opinion of Counsel. An opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(e)
hereto;
(e) Resolutions. Certified copy of resolutions of the
Board of Directors of Seller authorizing the execution, delivery and
performance of this Agreement;
(f) Noncompetition Agreement. An executed copy of the
Noncompetition Agreement in the form of Schedule 8.2(f) hereof; and
(g) Other Instruments. Such other instruments and
certificates or other documentation as Seller are required by the terms hereof
to deliver or as Buyer may reasonably request.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date, executed by Buyer certifying (1) that the representations and warranties
of Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
- 16 -
<PAGE> 23
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto;
(e) Resolutions. Certified copy of resolutions of
Buyer's Board of Directors authorizing the execution, delivery and performance
of this Agreement;
(f) Noncompetition Agreement. An executed copy of the
Noncompetition Agreement, in the form of Schedule 8.2(g) for which Thirty
Thousand Dollars ($30,000) of the Purchase Price is allocated; and
(g) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Seller may reasonably request.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Seller, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by July 1, 1996
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Buyer, that would prevent or make unlawful the Closing.
- 17 -
<PAGE> 24
(c) Upset Date. If the Closing shall not have occurred
by July 1, 1996.
9.3 Escrow Deposit. On the date hereof, Buyer shall deposit with
First Union National Bank (the "Escrow Agent") One Hundred Fifty Thousand
Dollars ($150,000). All funds and documents deposited with the Escrow Agent
shall be held and disbursed in accordance with the terms of the Escrow
Agreement executed on the date hereof in the form of Schedule 9.3 (the "Escrow
Agreement") and the following provisions:
(a) At the Closing, Buyer shall be entitled to receive
all amounts held by the Escrow Agent pursuant to the Escrow Agreement,
including any interest or other proceeds from the investment of funds held by
the Escrow Agent.
(b) If this Agreement is terminated by Seller pursuant to
Section 9.1 hereof due to Buyer's material breach of this Agreement, and Seller
is not in material breach of any provision of this Agreement, Seller shall be
entitled to receive all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent.
(c) If this Agreement is terminated and all of the
conditions for the disbursement of the escrow fund to Seller under Section
9.3(b) are not satisfied, Buyer shall be entitled to receive all amounts held
by the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent.
9.4 Rights on Termination. (a) If this Agreement is terminated
pursuant to Section 9.1 or 9.2 and neither party is in material breach of any
provision of this Agreement, the parties hereto shall not have any further
liability to each other with respect to the purchase and sale of the Assets.
If this Agreement is terminated by Seller due to Buyer's material breach of
this Agreement and Seller is not in material breach of any provision of this
Agreement, then the payment to Seller pursuant to Section 9.3(b) hereof shall
be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller by reason of Buyer's material breach
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of the escrow in accordance with
Section 9.3 hereof, together with any interest or other proceeds from the
investment of that amount, is a fair and equitable amount to reimburse Seller
for damages sustained due to Buyer's material breach of this Agreement. If
this Agreement is terminated by Buyer due to Seller's material breach of any
provision of this Agreement, and Buyer is not in material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity, including the right to seek specific performance of this
Agreement.
- 18 -
<PAGE> 25
(b) Seller agrees that the Assets include unique property
that cannot be readily obtained on the open market and that Buyer would be
irreparably injured if this Agreement is not specifically enforced after breach
if Seller shall have committed a material breach. Therefore, Buyer shall have
the right to specifically 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.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
eighteen (18) months.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets prior to the
Closing Date, including any liabilities arising under the Licenses or the
Assumed Contracts which relate to events occurring prior to the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Buyer
- 19 -
<PAGE> 26
contained in this Agreement or in any certificate, Schedule, document, or
instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets by Buyer on
and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request
- 20 -
<PAGE> 27
by the Indemnifying Party. If the Indemnifying Party elects to assume control
of the defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate
int he defense of any third party claim, it shall be bound by the results
obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Certain Limitations.
(a) Notwithstanding anything in this Agreement to the
contrary, neither party shall indemnify or otherwise be liable to the other
party with respect to any claim for indemnification in excess of the Purchase
Price.
SECTION 11. MISCELLANEOUS
11.1 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
11.2 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of the fee payable to the FCC in connection with the
filing of the application for FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia by a panel of three (3) arbitrators. Seller and Buyer
shall each designate one (1) disinterested arbitrator, and the
- 21 -
<PAGE> 28
two (2) arbitrators so designated shall select the third arbitrator. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to
make a just award according to the best of his or her understanding. The
arbitration hearing shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association. The written
decision of a majority of the arbitrators shall be final and binding on Seller
and Buyer. The costs and expenses of the arbitration proceeding shall be
assessed between Seller and Buyer in a manner to be decided by a majority of
the arbitrators, and the assessment shall be set forth in the decision and
award of the arbitrators. Judgment on the award, if it is not paid within
thirty (30) days, may be entered in any court having jurisdiction over the
matter. No action at law or suit in equity based upon any claim arising out of
or related to this Agreement shall be instituted in any court by Seller or
Buyer against the other except (i) an action to compel arbitration pursuant to
this Section, (ii) an action to enforce the award of the arbitration panel
rendered in accordance with this Section, or (iii) a suit for specific
performance under Section 9.4(b) of this Agreement.
11.4 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Buyer: Paxson Communications LPTV, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attn: Mr. Lowell W. Paxson
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
- 22 -
<PAGE> 29
With copy to: John R. Feore, Jr., Esquire
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Telecopy: (202) 776-2222
Telephone: (202) 776-2786
If to Seller: Amity Broadcasting Company
25 Victoria Drive
Amityville, New York 11701
Attn: Mr. Michael A. Bogner
Telecopy: (519) 598-0466
Telephone: (519) 598-0466
With copy to: Howard J. Braun, Esquire
Rosenman & Colin LLP
1300 19th Street, N.W.
Suite 200
Washington, D.C. 20036
Telecopy: (202) 429-0046
Telephone: (202) 463-4641
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.4.
11.5 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a wholly-owned subsidiary or commonly controlled affiliate without
seeking or obtaining Seller's prior approval. Upon any permitted assignment by
Buyer or Seller in accordance with this Section 11.5, all references to "Buyer"
herein shall be deemed to be references to Buyer's assignee and all references
to "Seller" herein shall be deemed to be references to Seller's assignee. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.6 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
- 23 -
<PAGE> 30
11.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.8 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.9 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.11.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the
- 24 -
<PAGE> 31
other party; provided, however, that nothing contained herein shall prevent
either party from promptly making all filings and, if required, press releases
with governmental authorities as may, in its judgment, be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, in which case the other
party shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-25-
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS LPTV, INC.
By: /s/ Lowell W. Paxson
--------------------------------
Name:
Title:
MICHAEL A. BOGNER D/B/A
AMITY BROADCASTING COMPANY
By: /s/ Michael A. Bogner
---------------------------------
<PAGE> 1
EXHIBIT 10.116
========================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF NEW LONDON-26, INC.,
PAXSON NEW LONDON LICENSE, INC.
AND
ROBERTS BROADCASTING OF HARTFORD, L.L.C.
JULY 1, 1996
ASSET PURCHASE AGREEMENT
========================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Employees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5. OPERATIONS OF THE ASSETS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.9 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.10 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.11 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.6 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.7 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.8 Time Brokerage Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.9 Option Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Time Brokerage Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
(c) Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.12 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 2.2 - Excluded Assets
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property and Liens
Schedule 3.6 - Personal Property
Schedule 3.7 - Contracts
Schedule 3.9 - Intangibles
Schedule 3.10 - Insurance
Schedule 3.12 - Personnel
Schedule 3.14 - Claims and Legal Actions
Schedule 6.8 - Time Brokerage Agreement
Schedule 8.2(f) - Opinion of Counsel
Schedule 8.3(d) - Opinion of Counsel
Schedule 9.3 - Escrow Agreement
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of July 1, 1996, by and
among Roberts Broadcasting of Hartford, L.L.C., a Delaware Limited Liability
Company, ("Buyer"), Paxson Communications of New London-26, Inc., a Florida
corporation ("PC-26"), and Paxson New London License, Inc., a Florida
corporation ("PC-License") (PC-26 and PC-License are collectively referred to
herein as "Seller").
RECITALS
A. PC-License is the license of television station WTWS(TV), New
London, Connecticut (the "Station"), pursuant to authorizations issued by the
Federal Communications Commission (the "FCC").
B. PC-26 is the parent of PC-License and owns personal property
and real property necessary for the operation of the Station.
C. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller has a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1 and 2.2.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are to be assumed by Buyer upon its purchase of the Station, (ii) all
Contracts entered into by Seller in the ordinary course of business which
comply with the provisions of Section 5.3 hereof; and
<PAGE> 8
(iii) any other Contracts entered into by Seller between the date of this
Agreement and the Closing Date that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses and/or Construction Permits issued
by the FCC to Seller in connection with the business or operations of the
Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
y Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
- 2 -
<PAGE> 9
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means Seller's interests in real property, leaseholds
and subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, and all buildings and other improvements thereon, which are used
or useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by the Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and deliver to Buyer on the Closing Date, and Buyer agrees to purchase
and accept, all of the Assets and property interests owned by Seller or in
which Seller has a property interest which are used or useful in connection
with the conduct of the business or operations of the Station, together with
any additions thereto between the date of this Agreement and the Closing Date,
but excluding the assets described in Section 2.2, free and clear of any
claims, liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for Permitted Liens),
including the following:
(a) The Tangible Personal Property;
- 3 -
<PAGE> 10
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill of
the Station, if any;
(f) All proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station, which belong to
Seller and is within its possession and control;
(g) All choses in action of Seller relating to
the Station that are assignable to Buyer as provided herein;
(h) All records required by the FCC to be kept by
the Station and copies of all other books and records which belong to Seller
and are within its possession and control relating to the business or
operations of the Station (exclusive of corporate, financial and accounting
records), including executed copies of the Assumed Contracts; and
2.2 Excluded Assets. The Assets shall exclude the following
assets.
(a) Seller's cash on hand as of the Closing and
all other cash in any of Seller's bank or savings accounts; any insurance
policies, letters of credit, or other similar items and cash surrender value in
regard thereto; and any stocks, bonds, certificates of deposit and similar
securities or other investments;
(b) All corporate and accounting records of
Seller and copies of all other books and records relating to the business and
operations of the Station;
(c) The Accounts Receivable; and
(d) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price.
(a) Purchase Price. The Purchase Price for the
Assets shall be Three Million Fifty Thousand and Nine Hundred Forty-Nine
Dollars ($3,050,949) (the "Purchase Price").
- 4 -
<PAGE> 11
(b) Prorations. Any expenses or income
relating to the Assets shall be prorated in accordance with the principle that
Seller shall be responsible for all expenses, costs and liabilities and
entitled to all income allocable to the period prior to the Closing Date and
Buyer shall be responsible for all expenses, costs and liabilities and entitled
to all income allocable to the period on and after the Closing Date. The
Purchase Price shall be increased or decreased as required to effectuate such
proration of expenses and income.
(c) Manner of Determining Adjustments. Any
adjustments to the Purchase Price required under Section 2.3(b) will, insofar
as feasible, be determined and paid on the Closing Date, with final settlement
and payment by the appropriate party occurring no later than ninety (90) days
after the Closing Date or such other date as the parties shall mutually agree
upon.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller that (i) relate to the Assets insofar as
they relate to the time on and after the Closing Date, (ii) arise out of events
related to Buyer's ownership of the Assets or its operation of the Station on
or after the Closing Date and (iii) relate to the period prior to the Closing
which Buyer agrees to assume pursuant to the prorations and adjustments to the
Purchase Price under Section 2.3(b) hereof. Buyer shall not assume any other
obligations or liabilities of Seller. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under agreements entered into other than
in the ordinary course of business, (v) any obligation to any employee of the
Station for severance benefits, vacation time, or sick leave accrued prior to
the Closing Date relating to any employee of Seller who is not employed or
offered employment by Buyer within the 90-day adjustment period, or (vi) any
obligations or liabilities caused by, arising out of, or resulting from any
action or omission of Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller.
- 5 -
<PAGE> 12
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing and Authority. Seller is a corporation
organized under the laws of Florida and authorized to transact business in
Connecticut. Seller has all requisite power and authority (i) to own, lease,
and use the Assets as now owned, leased, and used, (ii) to conduct the business
operations of the Station as now conducted, and (iii) to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants, and conditions to be performed and complied
with by Seller hereunder and thereunder.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary corporate actions on the part of Seller. This Agreement has
been duly executed and delivered by Seller and constitutes the legal, valid,
and binding obligation of Seller, enforceable against it in accordance with its
terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery and performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality in a proceeding involving Seller; (iii) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; (iv) will not create
any Lien upon any of the Assets; and (v) will not conflict with any provision
of Seller's Certificate of Incorporation or By-laws.
3.4 Governmental Licenses. To the best of Seller's knowledge and
except as set forth on Schedule 3.4, (i) Schedule 3.4 includes a true and
complete list of the material Licenses and lists pending applications affecting
the Licenses; (ii) Seller has delivered to Buyer true and complete copies of
the Licenses listed on such Schedule (including any amendment and other
modifications thereto), (iii) the Licenses have been validly issued, and Seller
is the authorized legal holder thereof, (iv) the Licenses listed on Schedule
3.4 comprise all of the material licenses, permits, and other authorizations
required from any governmental or regulatory authority for the lawful conduct
of the business and operations of the Station in the manner and to the full
extent they are now conducted, (v) none of the
- 6 -
<PAGE> 13
Licenses is subject to any restriction or condition that would limit the full
operation of the Station as now operated, (vi) the Licenses are in full force
and effect, in all material respects, and the conduct of the business and
operations of the Station is in material accordance therewith, and (vii) Seller
has no reason to believe that any of the Licenses would not be renewed by the
FCC or other granting authority in the ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains
a complete and accurate description of all the Real Property and Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. With respect to each
leasehold or subleasehold interest included in the Real Property being conveyed
under this Agreement, so long as Seller fulfills its obligations under the
lease therefor, Seller has enforceable rights to nondisturbance and quiet
enjoyment, and no third party holds any interest in the leased premises with
the right to foreclose upon Seller's leasehold or subleasehold interest.
Seller has full legal and practical access to the Real Property. All
easements, rights-of-way, and real property licenses relating to the Real
Property have been properly recorded in the appropriate public recording
offices. Seller will cooperate with Buyer and provide such assistance as Buyer
may reasonably request in connection with Buyer's efforts to obtain on or
before Closing, at Buyer's election and expense, a policy of title insurance
and a current survey with respect to the Real Property, including, without
limitation, using its best efforts to cause all lease agreements relating to
the Real Property to be recorded in the appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property used to conduct the business and operations of the
Station as now conducted exclusive of motor vehicles. Except as described in
Schedule 3.6, Seller owns and has good title to each item of Tangible Personal
Property, and none of the Tangible Personal Property owned by Seller is subject
to any security interest, mortgage, pledge, conditional sales agreement, or
other lien or encumbrance, except Permitted Liens.
3.7 Contracts Schedule 3.7 is a true and complete list of all
Assumed Contracts except contracts with advertisers for the sale of advertising
time on the Station for cash at prevailing rates and which may be canceled by
the Station without penalty on not more than ninety days' notice. Seller has
delivered to Buyer true and complete copies of all written Assumed Contracts,
true and complete memoranda of all material oral Assumed Contracts (including
any amendments and other modifications to such Assumed Contracts), and a
schedule summarizing Seller's obligations under trade and barter agreements
relating to the Station. To the best of Seller's knowledge, all of the Assumed
Contracts are in full force and effect, and are valid, binding, and enforceable
in accordance with their terms and there
- 7 -
<PAGE> 14
is not under any Assumed Contract any default by any party thereto or any event
that, after notice or lapse of time or both, could constitute a default.
Except for the need to obtain the Consents listed in Schedule 3.3, Seller has
full legal power and authority to assign its rights under the Assumed Contracts
to Buyer in accordance with this Agreement, and such assignment will not affect
the validity, enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided in Section 6.1
and the other Consents described in Schedule 3.3, to the best of Seller's
knowledge, no consent, approval, permit, or authorization of, or declaration to
or filing with any governmental or regulatory authority, or any other third
party is required (i) to consummate this Agreement and the transactions
contemplated hereby, (ii) to permit Seller to assign or transfer the Assets to
Buyer, or (iii) to enable Buyer to conduct the business and operations of the
Station in essentially the same manner as such business and operations are now
conducted.
3.9 Intangibles. To the best of Seller's knowledge, Schedule 3.9
is a true and complete list of all material Intangibles (exclusive of those
listed in Schedule 3.4), all of which are valid and in good standing and
uncontested. Seller has delivered to Buyer copies of all documents
establishing or evidencing all intangibles.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 are in full
force and effect.
3.11 Reports. To the best of Seller's knowledge and except as set
forth in Schedule 3.4, all returns, reports, and statements that the Station is
currently required to file with the FCC or place in its Public File or file
with any other governmental agency have been filed, and all reporting
requirements of the FCC and other governmental authorities having jurisdiction
over Seller and the Station have been complied with in all material respects
and all of such returns, reports, and statements are substantially complete and
correct as filed.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station, their job description,
date of hire, salary and amount and date of last salary increase. Schedule
3.12 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to the employees of the
Station and all fixed or contingent liabilities or obligations of Seller with
respect to any person now or formerly employed by Seller at the Station,
including pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick leave, disability and termination
- 8 -
<PAGE> 15
arrangements or policies, including workers' compensation policies, and a
description of all fixed or contingent liabilities or obligations of Seller
with respect to any person now or formerly employed at the Station or any
person now or formerly retained as an independent contractor at the Station.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.12.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller has not incurred any accumulated funding
deficiency within the meaning of ERISA or Section 4971 of the Internal Revenue
Code. Seller has not failed to make any required contributions to any employee
benefit plan. The Pension Benefit Guaranty Corporation has not asserted that
Seller has incurred any liability in connection with any such plan. No lien
has been attached and no person has threatened to attach a lien on any property
of Seller as a result of a failure to comply with ERISA.
3.13 Taxes. To the best of the Seller's knowledge, (i) Seller has
filed or caused to be filed all federal income tax returns and all other
federal, state, county, local, or city tax returns which are required to be
filed, and it has paid or caused to be paid all taxes shown on those returns or
on any tax assessment received by it to the extent that such taxes have become
due, and (ii) there are no governmental investigations or other legal,
administrative, or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest, or other charges, the liability for
which could extend to Buyer as transferee of the business of the Station, and
no event has occurred that could impose on Buyer any transferee liability for
any taxes, penalties, or interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, and except as set
forth on Schedule 3.14, to the best of Seller's knowledge, there is no claim,
legal action, counterclaim, nor any order, decree or judgment, in progress or
pending, or to the knowledge of Seller threatened, against or relating to
Seller with respect to its ownership or operation of the Station or otherwise
relating to the Assets or the business or operations of the Station, nor does
Seller know or have reason to be aware of any basis for the same. In
particular, but without limiting the generality of the foregoing, and except as
forth on Schedule 3.14, to the best of Seller's knowledge, there are no
applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the radio
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii)
- 9 -
<PAGE> 16
before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and there is
no basis related to the past or present operations, properties, or facilities
of Seller for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against Seller giving rise
to any such liability) under any law, rule, or regulation of any federal,
state, or local government (or agency thereof) concerning release or threatened
release of hazardous substances, public health and safety, or pollution or
protection of the environment.
(c) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and Seller
has not handled or disposed of any substance, arranged for the disposal of any
substance, or owned or operated any property or facility in any manner that
could form the basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand (under the common law or
pursuant to any statute) against Seller giving rise to any such liability) for
damage to any site, location, or body of water (surface of subsurface) or for
illness or personal injury.
(d) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and there is
no basis for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Seller giving rise to any such
liability) under any law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning employee health and safety.
(e) In connection with its ownership or operation of the
Station, Seller has obtained and been in material compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and has complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including laws relating to
- 10 -
<PAGE> 17
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes.
(f) To the best of Seller's knowledge, all properties and
equipment used in the business of the Station are and have been free of
asbestos and asbestos-related products, PCB's, dioxins, and Extremely Hazardous
Substances (as defined in Section 302 of the Emergency Planning and Community
Right-to-Know Act).
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.16 Compliance with Laws. To the best Seller's knowledge and
except as set forth on Schedule 3.4, Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. To the best of Seller's knowledge, neither the
ownership or use of the properties of the Station nor the conduct of the
business or operations of the Station conflicts with the rights of any other
person or entity.
3.17 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a limited
liability corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and at Closing will be duly qualified
to conduct business as a foreign corporation in the State of Connecticut.
Buyer has all requisite power and authority to execute and deliver this
Agreement and the documents contemplated hereby, and to perform and comply with
all of the terms, covenants, and conditions to be performed and complied with
by Buyer hereunder and thereunder.
- 11 -
<PAGE> 18
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the execution, delivery, and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) do not require the consent of any
third party; (ii) will not conflict with the Certificate of Incorporation or
Bylaws of Buyer; (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Buyer is a party or by which Buyer may be bound, such that
Buyer could not acquire the Assets.
4.4 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to acquire the Licenses under the Communications Act of
1934, as amended, and the rules, regulations and policies of the FCC. Buyer
knows of no fact that would, under existing law and the existing rules,
regulations, policies and procedures of the FCC disqualify Buyer as assignee of
the Licenses or as the owner and operator of the Station.
SECTION 5. OPERATIONS OF THE ASSETS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment which is not terminable on 90-days notice relating to the Station or
the Assets, or amend or terminate any Contract (or waive any material right
thereunder), or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness) that will be binding on
Buyer after Closing, except for cash time sales agreements made in the ordinary
course of business and other contracts or commitments involving less than
$5,000. Prior to the Closing Date, Seller shall deliver to Buyer a list of all
Contracts entered into
- 12 -
<PAGE> 19
between the date of this Agreement and the Closing Date, together with copies
of such Contracts.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the material Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date, (ii) liens for current taxes
not yet due and payable, and (iii) mechanics' liens and other similar liens,
which shall be removed prior to the Closing Date either by payment or posting
an appropriate indemnity bond.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take any action that could cause the FCC or
any other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.6 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.7 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business hours to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection and will furnish or cause to be
furnished to Buyer or its authorized representatives all material information
with respect to the affairs and business of the Station that Buyer may
reasonably request (including any operations reports produced with respect to
the affairs and business of the Station).
5.8 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets.
5.9 Consents. Seller shall use its best efforts to obtain the
Consents described in Section 8.2(c), without any material change in the terms
or conditions of any Contract or License as in effect on the date of this
Agreement. Seller shall advise Buyer of any communications it receives
concerning the Consents and of any conditions proposed, considered, or
requested for any of the Consents. Upon Buyer's request, Seller shall
cooperate with Buyer and use its best efforts to obtain from the lessors under
each Real
- 13 -
<PAGE> 20
Property lease such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Buyer's lenders
may request.
5.10 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.11 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.12 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within thirty (30) days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
application as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if compliance with such condition would
have a material adverse effect upon it. Buyer and Seller shall oppose any
requests for reconsideration or judicial review of the FCC Consent, provided,
however, that the parties shall continue to have all rights available to them
pursuant to Section 9 hereof. If the Closing shall not have occurred for any
reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of PC-License until the Closing.
- 14 -
<PAGE> 21
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. Except as
provided in this Paragraph each party will refrain from disclosing any such
information to any third party. If this Agreement is terminated, each party
will return to the other party all copies of all documents and all other
information obtained by such party from the other party in connection with the
transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement.
6.6 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of two (2) years from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of two (2) years from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.7 Broker. Each of Buyer and Seller represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement.
6.8 Time Brokerage Agreement. At the Closing, Buyer and Seller
shall enter into the Time Brokerage Agreement attached hereto as Schedule 6.8.
6.9 Option Agreement. At the Closing, Buyer and Paxson
Communications Corporation shall enter into the Option Agreement attached
hereto as Schedule 6.9.
- 15 -
<PAGE> 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All material
representations and warranties of Seller contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all material covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any material adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any material conditions imposed on it by the FCC Consent, and the FCC
Consent shall have become a Final Order.
(e) Governmental Authorizations. PC-License shall be the
holder of the Licenses and there shall not have been any modification of any
License that could have a material adverse effect on the Station or the conduct
of its business and operations. No proceeding shall be pending the effect of
which could be to revoke, cancel, fail to renew, suspend, or modify adversely
any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All material
representations and warranties of Buyer contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
- 16 -
<PAGE> 23
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order. If Buyer fails to specify
the date for Closing pursuant to the preceding sentence prior to the fifth
business day after the date upon which the FCC Consent becomes a Final Order,
the Closing shall take place on the tenth business day after the date upon
which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1255 23rd Street, NW, Suite 500,
Washington, D.C. 20037, or such other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens.
(b) Estoppel Certificate. An Estoppel Certificate of the
Lessor of the leasehold interests listed in Schedule 3.5.
- 17 -
<PAGE> 24
(c) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificates. Certificates, dated as of the Closing
Date, executed by Seller certifying (1) that the material representations and
warranties of Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that Seller have in all material respects performed and complied with
all of its material obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date and
such additional Certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder.
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses and Assumed Contracts.
(f) Opinion of Counsel. Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(f)
hereto.
(g) Time Brokerage Agreement. The Time Brokerage
Agreement duly executed by Seller.
(h) Option Agreement. The Option Agreement duly executed
by Paxson Communications Corporation.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Sections 2.3 and 2.4.
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform the
obligations of Seller required by Section 2.5 of this Agreement.
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed by an officer of Buyer certifying (1) that the
representations and warranties of Buyer contained in this Agreement are true
and complete in all material respects as of the Closing Date as though made on
and as of that date, and (2) that Buyer has in all material respects performed
and complied with all of its obligations, covenants, and agreements set forth
in this Agreement to be performed and complied with on or prior to the Closing
Date.
- 18 -
<PAGE> 25
(d) Opinion of Counsel. Opinion of Buyer's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.3(d) hereto.
(e) Time Brokerage Agreement. The Time Brokerage
Agreement duly executed by Buyer.
(f) Option Agreement. The Option Agreement duly executed
by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Seller, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by July 1, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Buyer, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by July 1, 1997.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement by Seller and Buyer, Buyer has deposited with the
Escrow Agent the amount of Fifty Thousand Dollars ($50,000) in accordance with
the Escrow Agreement attached hereto as Schedule 9.3. All funds and documents
deposited with the Escrow Agent shall be held
- 19 -
<PAGE> 26
and disbursed in accordance with the terms of the Escrow Agreement and the
following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 and 9.2 and Buyer is not in material breach of this Agreement, all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of any provision of this Agreement, then Seller shall be entitled to the
Escrow Deposit of Fifty Thousand Dollars ($50,000) as liquidated damages which
shall constitute full payment and the exclusive remedy for any damages suffered
by Seller by reason of Buyer's material breach of this Agreement. Seller and
Buyer agree in advance that actual damages would be difficult to ascertain and
that the amount of Fifty Thousand ($50,000) is a fair and equitable amount to
reimburse Seller for damages sustained due to Buyer's material breach of this
Agreement. If prior to Closing, Seller is in material breach of its
obligations under this Agreement, Buyer's sole remedy shall be an action for
specific performance of this Agreement and Buyer expressly waives any right to
pursue a claim for monetary damages.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve (12) months.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
- 20 -
<PAGE> 27
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
contingent or otherwise resulting from the operation or ownership of the Assets
or the Station prior to the Closing Date, including any liabilities arising
under the Licenses which relate to events occurring prior to the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, document, or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
contingent or otherwise, resulting from the operation or ownership of the
Assets or the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
- 21 -
<PAGE> 28
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within such
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy under the arbitration provisions set forth in
Section 11.2 of this Agreement.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate in the defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) Notwithstanding anything in this Agreement to the
contrary, neither party shall indemnify or otherwise be liable to the other
party for any breach of a representation or warranty, or for breach of any
covenant in this Agreement except to the extent the losses, obligations,
liabilities, costs and expenses of such party arising therefrom exceed in the
aggregate Ten Thousand Dollars ($10,000). The provisions of the foregoing
sentence shall not apply to liabilities assumed by either party pursuant to the
adjustments and prorations to the Purchase Price provisions in this Agreement.
- 22 -
<PAGE> 29
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, as its sole and exclusive
remedy, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Seller shall waive the
defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of the fee payable to the FCC in connection with the
filing of the application for the FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia by a panel of three arbitrators. Seller and Buyer
shall each designate one disinterested arbitrator, and the two arbitrators so
designated shall select the third arbitrator. Before undertaking to resolve
the dispute, each arbitrator shall be duly sworn faithfully and fairly to hear
and examine the matters in controversy and to make a just award according to
the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Seller and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. Judgment on the award, if
it is not paid within thirty days, may be entered in any court having
jurisdiction over the matter. No action at law or suit in equity based upon
any claim arising out of or related to this Agreement shall be instituted in
any court by Seller or Buyer against the other except (i) an action to compel
arbitration pursuant to this Section, (ii) an action to enforce the award of
the arbitration panel rendered
- 23 -
<PAGE> 30
in accordance with this Section, or (iii) a suit for specific performance
pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Seller: Mr. Lowell W. Paxson
Paxson New London License, Inc. and
Paxson Communications of New London-26, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Telecopy: (407) 655-9424
Telephone: (407) 659-4122
If to Buyer: Mr. Steven C. Roberts
Roberts Broadcasting of Hartford, L.L.C.
1408 N. Kingshighway Blvd.
St. Louis, MO 63113
Telecopy: (314) 367-0174
Telephone: (314) 367-0090
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
- 24 -
<PAGE> 31
STATE OF FLORIDA (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings with governmental authorities as may, in its judgment, be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, in which case the
other party shall be first notified in writing.
- 25 -
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
NEW LONDON-26, INC.
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
PAXSON NEW LONDON LICENSE, INC.
By:/s/ Lovell W. Paxon
-------------------------------------
Name: Lovell W. Paxson
Title: Chairman
ROBERTS BROADCASTING OF HARTFORD, L.L.C.
By: /s/ Steven C. Roberts
------------------------------------
Name: Steven C. Roberts
Title: Member
<PAGE> 1
EXHIBIT 10.117
==========================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS LPTV, INC.
AND
CRAIG L. FOX
MARCH 5, 1996
ASSET PURCHASE AGREEMENT
==========================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 No Breach or Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Environmental; Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.11 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.12 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.14 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.8 Renard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i) Tower Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Conditions to Obligations of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.1 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.3 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.5 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.7 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.9 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.11 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.13 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
<PAGE> 6
LIST OF SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 2.3 - Allocation
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property
Schedule 3.6 - Personal Property
Schedule 3.7 - Contracts
Schedule 3.8 - Insurance
Schedule 8.2(e) - Opinion of Seller's Counsel
Schedule 8.3(d) - Opinion of Buyer's Counsel
Schedule 9.3 - Escrow Agreement
</TABLE>
<PAGE> 7
This ASSET PURCHASE AGREEMENT is dated as of March 5, 1996, by and
between Paxson Communications LPTV, Inc., a Florida corporation ("Buyer"), and
Craig L. Fox (the "Seller").
RECITALS
A. Craig L. Fox ("Fox") is the licensee of low power television
station W23BA, East Orange, New Jersey (the "Station"), pursuant to
authorizations issued by the Federal Communications Commission (the "FCC").
B. Renard Communications Corp. ("Renard") operates the Station.
C. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller have a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the right of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under the Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts that Buyer has marked with
an asterisk (*) on Schedule 3.7 to indicate that such Contract will be assumed
by Buyer upon its purchase of the Station, and (ii) any other Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume.
<PAGE> 8
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" shall have the meaning set forth in the Recitals to this
Agreement.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government
- 2 -
<PAGE> 9
authorities to Seller in connection with the conduct of the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" shall have the meaning set forth in Section 2.3
hereof.
"Real Property" means Seller's interests in leaseholds and
subleaseholds, easements, licenses, rights to access, and rights of way, and
other improvements thereon, which are used or useful in the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Station" shall have the meaning set forth in the Recital to this Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and/or deliver to Buyer on the Closing Date, and Buyer agrees to
purchase and accept, all of the assets and property interests owned by Seller
or in which Seller has a property interest which are used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2 hereof, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
- 3 -
<PAGE> 10
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill and call
signs of the Station, if any;
(f) All choses in action of Seller relating to the
Station that are assignable to Buyer as provided herein; and
(g) All records required by the FCC to be kept by the
Station and copies of all other books and records which belong to Seller and
are within its possession and control relating to the business or operations of
the Station (exclusive of corporate, financial and accounting records)
including executed copies of the Assumed Contracts.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's Accounts Receivable, and cash or cash
equivalents on hand as of the Closing Date; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar securities or other
investments;
(b) Any pension, profit sharing or employee benefit plans
and all contracts related thereto, and any collective bargaining agreements;
(c) All books and records relating to Seller's internal
corporate organization or internal financial matters;
(d) Any Contracts not included in the Assumed Contracts,
including, without limitation, all affiliation agreements relating to the
Station; and
(e) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees for periods
prior to the Closing Date.
2.3 Purchase Price. The purchase price for the Assets shall be
Two Million Dollars ($2,000,000) (the "Purchase Price"), allocated as set forth
in Schedule 2.3 and adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of 11:59 p.m.,
Eastern Standard Time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and
- 4 -
<PAGE> 11
assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, and prepaid and
deferred items, shall be prorated between Buyer and Seller in accordance with
the principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
be responsible for all expenses, costs, and obligations allocable to the period
on and after the Closing Date. Notwithstanding the preceding sentence, there
shall be no adjustment for, and Seller shall remain solely liable with respect
to, any Contracts not included in the Assumed Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Taxes. Except for real and personal property taxes
and assessments incurred against the Assets, there shall be no proration or
adjustment for income taxes or any other taxes with respect to the Station or
the Assets which shall be Seller's sole responsibility for all periods prior to
the Closing Date. All taxes arising from the transfer of the Assets hereunder
shall be Seller's responsibility pursuant to Section 11.2 hereof.
(c) Manner of Determining Adjustments. The adjustments
and prorations to the Purchase Price pursuant to Section 2.3(a) will be
determined in accordance with the following procedures:
(i) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days prior to the Closing Date a preliminary
settlement statement, which statement shall set forth Seller's good faith
estimate of the adjustments to the Purchase Price under Section 2.3(a) hereof.
(ii) Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(a) hereof prior to the
Closing.
(iii) No later than forty-five (45) days after the
Closing Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the adjustments to the Purchase Price pursuant to Section
2.3(a) hereof. If Seller disputes the amount of the adjustments to the
Purchase Price determined by Buyer, they shall deliver to Buyer, within thirty
(30) days after their receipt of Buyer's statement, Seller's statement setting
forth their determination of the amount of the adjustments to the Purchase
Price and the basis for their dispute in reasonable detail. If Seller notifies
Buyer of their acceptance of Buyer's statement, or if Seller fail to deliver
the Seller's statement within the thirty (30) day period specified in the
preceding sentence, Buyer's determination of the adjustments pursuant to
Section 2.3(a) hereof shall be conclusive and binding on the parties.
(iv) After the Closing, Buyer and
Seller shall use good faith efforts to resolve any dispute involving the
determination of the adjustments to the Purchase Price under Section 2.3(a)
hereof. If the parties are unable to resolve the dispute within fifteen
- 5 -
<PAGE> 12
(15) days following the delivery of Seller's statement described above, Buyer
and Seller shall jointly designate and retain, with fees and expenses to be
borne equally by Seller and Buyer, an independent certified public accountant
mutually acceptable to Seller and Buyer who shall be knowledgeable and
experienced in the operation of television broadcasting Station, to resolve the
dispute within thirty (30) days. The accountant's resolutions of the dispute
shall be final and binding on the parties, and a judgment may be entered
thereon in any court of competent jurisdiction.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller the
Purchase Price adjusted pursuant to Section 2.3(a) hereof by federal wire
transfer of immediately available funds pursuant to wire instructions delivered
by Seller at least two (2) Business Days prior to the Closing Date.
(b) If as a result of the final determination of the
adjustments to the Purchase Price pursuant to Section 2.3(c) following the
Closing, (i) Buyer is determined to owe an amount to Seller, Buyer shall pay
such amount to Seller in immediately available funds within five (5) Business
Days of the date of such final determination or (ii) Seller is determined to
owe an amount to Buyer, Seller shall pay such amount to Buyer in immediately
available funds within five (5) Business Days of the date of such final
determination. The amount of the payment made in accordance with this Section
2.4(b) shall bear interest at a per annum rate equal to the "prime rate," as
published in the Money Rates column of the Eastern Edition of The Wall Street
Journal on the Monday of the week in which the Closing occurs, calculated from
the Closing Date to the date such payment is made to Seller or Buyer, as the
case may be, and payable with the amount of such payment.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts to the extent that either (i) the obligations and liabilities relate
to the period from and after the Closing Date or (ii) the Purchase Price was
reduced pursuant to Section 2.3(a) hereof as a result of the proration of such
obligations and liabilities. Buyer shall not assume any other obligations or
liabilities of Seller, including (i) any obligations or liabilities under any
Contract not included in the Assumed Contracts, (ii) any obligations or
liabilities under the Assumed Contracts relating to the period prior to the
Closing Date, (iii) any claims or pending litigation or proceedings relating to
the operation of the Station prior to the Closing, (iv) any obligations or
liabilities of Seller under any employee pension, retirement, or other benefit
plans or with respect to commissions, wages, bonuses, incentive payments,
vacation pay, sick leave, severance benefits, or other benefits of employees or
former employees of Seller or their beneficiaries, (v) any obligations or
liabilities of Seller with respect to any Excluded Assets, or (vi) any
- 6 -
<PAGE> 13
obligations or liabilities caused by, arising out of, or resulting from any
action or omission of Seller prior to the Closing.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Standing. Seller is an individual United States citizen and
is the sole owner of Renard. Seller is not a participant in any joint venture
or partnership with any person or entity other than Renard with respect to any
part of the operations of the Station or any of the Assets.
3.2 No Breach or Violation. Neither the execution, delivery and
performance of this Agreement and all other agreements or instruments to be
executed in connection herewith, nor the compliance by Seller with the terms
and provisions hereof and thereof will conflict with or breach any judgment,
order, injunction, decree, regulation or ruling of any court or other
governmental authority to which he is subject or any agreement or contract to
which he is a party or to which he is subject, or constitute a default
thereunder.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery and the performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; (iii) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (iv) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies
of the Licenses (including any and all amendments and other modifications
thereto) listed on Schedule 3.4. The Licenses listed on Schedule 3.4 have been
validly issued and the Seller is the authorized legal holder thereof. The FCC
Licenses comprise all of the licenses, permits and other authorizations
required from the FCC for the conduct of the business or operations of the
Station in accordance with applicable laws and in the manner and to the extent
they are now conducted. None of the Licenses listed on Schedule 3.4 is subject
to any restriction or condition which would limit the full operation of the
Station as presently operated. The Licenses listed on Schedule 3.4 are in full
force and effect. The business and operations of the Station are being
conducted
- 7 -
<PAGE> 14
in accordance with the Licenses listed on Schedule 3.4. Seller has no reason
to believe that the Licenses issued by the FCC will not be renewed by the FCC
in the ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all leasehold interests
necessary to conduct the business and operations of the Station as now
conducted. With respect to each leasehold or subleasehold interest included in
the Real Property being conveyed under this Agreement, so long as each Seller
fulfills its obligations under the lease therefor, except for landlord's
mortgagee, if any, Seller has enforceable rights to nondisturbance and quiet
enjoyment, and no third party holds any interest in the leased premises with
the right to foreclose upon such Seller's leasehold or subleasehold interest.
The buildings, improvements and fixtures that are included in the Real Property
are in all material respects in good operating order wear and tear excepted and
available for immediate use in the ordinary course of the Station' business.
Seller has full legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 contains descriptions of all material items of the Personal
Property which comprise all material personal property necessary to conduct the
business or operations of the Station as now conducted. Except as described in
Schedule 3.6, Seller owns and has good title to all Personal Property, free and
clear of any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for Permitted Liens. Each item of
material Personal Property is in good operating condition and repair (ordinary
wear and tear excepted), and is available for immediate use in the business or
operations of the Station.
3.7 Contracts. Schedule 3.7 contains descriptions of all the
Contracts. Seller has delivered to Buyer true and complete copies of all
written Contracts and true and complete memoranda of all oral Contracts. Other
than the Contracts, Seller require no contract or agreement to enable it to
carry on its business as presently conducted. All of the Assumed Contracts are
in full force and effect and are valid, binding and enforceable in accordance
with their terms except as the enforceability thereof may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
or by court-applied equitable remedies. Seller is not in breach, nor to
Seller's knowledge is any other party in breach, of the terms of any such
Assumed Contracts. Except as expressly set forth in Schedule 3.7, Seller is
not aware of any intention by any party to any Assumed Contract (i) to
terminate such contract or amend the terms thereof, (ii) to refuse to renew the
same upon expiration of its term, or (iii) to renew the same upon expiration
only on terms and conditions which are substantially more onerous than those
pertaining to such existing contract. Subject to obtaining the Consents,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability and continuation of any
of the Assumed Contracts.
- 8 -
<PAGE> 15
3.8 Insurance. Schedule 3.8 comprises a true and complete list of
all insurance policies of Seller which insure any part of the Assets. All
policies of insurance listed in Schedule 3.8 are in full force and effect.
During the three-year period ending on the date hereof, no insurance policy of
Seller on the Assets or the Station have been canceled by the insurer and no
application of Seller for insurance has been rejected by any insurer.
3.9 Reports. All returns, reports and statements which the
Station is currently required to file with the FCC and any other governmental
agency have been filed. All of such reports, returns and statements are
complete and correct as filed.
3.10 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by them to
the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
deemed by them to be adequate with respect thereto. No events have occurred
which could impose on Buyer any transferee liability for any taxes, penalties,
or interest due or to become due from Seller.
3.11 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller, the Assets, or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same.
3.12 Environmental; Hazardous Materials. There are no claims,
notices, suits, proceedings or investigations pending or, to Seller's
knowledge, threatened, and there are no judgments against Seller or the Station
by or before any governmental authority concerning environmental compliance.
To Seller's knowledge, after due inquiry, (i) no toxic materials, hazardous
waste, or hazardous substances, including any asbestos or asbestos-related
products, any oils, petroleum-derived compounds or pesticides (hereinafter
collectively referred to as the "Hazardous Materials") have been or are located
on or about the Real Property; (ii) the Real Property has not been previously
used for the storage, manufacture or disposal of Hazardous Materials; and (iii)
no underground storage tank or related equipment ("UST") is located at the Real
Property.
3.13 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
- 9 -
<PAGE> 16
3.14 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of
Florida. Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the execution, delivery, and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) will not conflict with the Certificate
of Incorporation or Bylaws of Buyer; (ii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Buyer; (iii) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound, such that Buyer could not acquire the
Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
- 10 -
<PAGE> 17
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of and acquire, own and operate the
Station under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC. Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC disqualify Buyer as assignee of the FCC Licenses or as the owner and
operator of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing without Buyer's
written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in connection
with the acquisition of replacement property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date and, (ii) liens for current
taxes not yet due and payable.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take any action that could cause the FCC or
any other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.6 (a) Rights. Seller shall not knowingly waive any
material right relating to the Station or any of the Assets.
5.7 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business
- 11 -
<PAGE> 18
hours to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Station for the purpose of audit and
inspection and will furnish or cause to be furnished to Buyer or its authorized
representatives all material information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
operations reports produced with respect to the affairs and business of the
Station).
5.8 Maintenance of Assets. Seller shall maintain all of the
Assets in good condition (ordinary wear and tear excepted) with inventories of
spare parts and expendable supplies being maintained at levels consistent with
past practices.
5.9 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets until the Closing Date.
5.10 Consents. Seller shall use its best efforts to obtain the
Consents without any change in the terms or conditions of any Assumed Contract
or License as in effect on the date of this Agreement. Seller shall advise
Buyer of any communications it receives concerning the Consents and of any
conditions proposed, considered, or requested for any of the Consents. Upon
Buyer's request, Seller shall cooperate with Buyer and use its best efforts to
obtain from the lessors under each Real Property lease such estoppel
certificates and consents to the collateral assignment of the lessee's interest
under each such lease as Buyer's lenders may request.
5.11 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.12 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.13 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.14 Programming. Upon execution of this Agreement, Seller shall
immediately give the termination notice required by the Station's existing
agreement with Video Jukebox and will make a good faith effort to terminate the
Video Jukebox agreement prior to Closing. The Closing may be postponed if the
ninety (90) day termination period has not elapsed by the date set for the
Closing and the Agreement has not otherwise been terminated, unless Buyer
agrees to close and continue the Video Juke Box programming, subject to the
approval of Video Jukebox if required. Seller, and not Buyer, shall conduct
any required negotiations with Video Jukebox.
- 12 -
<PAGE> 19
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare the
appropriate application for the FCC Consent and shall file the application with
the FCC within ten (10) Days of the execution of this Agreement. The parties
shall prosecute the applications with all reasonable diligence and otherwise
use their reasonable commercial efforts to obtain a grant of the applications
as expeditiously as practicable. Each party agrees to comply with any
condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by such party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent, provided, however,
that the parties shall continue to have all rights available to them pursuant
to Section 9 hereof. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party
shall have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension
of the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information of a confidential nature obtained
- 13 -
<PAGE> 20
from the other party in connection with the transactions contemplated by this
Agreement. Except as provided in this Paragraph each party will refrain from
disclosing any such information to any third party. If this Agreement is
terminated, each party will return to the other party all copies of all
documents and other all information obtained by the such party from the other
party in connection with the transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, neither Buyer nor Seller shall have
any obligation (i) to expend funds to obtain any of the Consents or (ii) to
agree to any material adverse change in any License or Assumed Contract to
obtain a Consent required with respect thereto; provided, however, that Seller
shall be required to expend funds, if necessary, to cure any defaults in order
to obtain Consents and either party shall be required to expend funds in
respect of normal and usual filing fees and the fees of professional advisors.
6.6 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of ninety (90) days from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of ninety (90) days from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.7 Broker. Each of Buyer and Seller represents and warrants that
neither they nor any person or entity acting on their behalf have incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except that Seller shall be
responsible for the broker fee due to Biernacki Brokerage.
6.8 Renard. Seller will cause Renard to take whatever actions and
execute whatever documents are necessary and appropriate to complete the
transactions contemplated by this Agreement.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
- 14 -
<PAGE> 21
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any material adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on them by the FCC Consent, and the FCC Consent
shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all FCC Licenses and there shall not have been any modification of
any FCC License that could have a material adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any FCC License.
(f) Material Adverse Change. There shall not have been a
material adverse change in the Assets since the date of this Agreement,
including, without limitation, any damage, destruction or loss affecting any
material assets used in the conduct or the business of the Station, except
normal wear and tear to the Assets.
(g) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(h) Release of Liens. Seller shall have delivered to
Buyer evidence reasonably satisfactory to Buyer that all security interests,
mortgages, encumbrances, and liens on the Assets that are not Permitted Liens
have been released and removed.
(i) Tower Lease. Seller shall have obtained an amendment
to its existing Tower Lease permitting the installation of a UHF antenna on the
tower and a satellite dish on the property on terms and conditions acceptable
to Buyer.
7.2 Conditions to Obligations of Seller All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
- 15 -
<PAGE> 22
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five (5) Business Days' written
notice to Seller, that is (1) not earlier than the first business day after the
FCC Consent is granted, and (2) not later than ten (10) Business Days following
the date upon which the FCC Consent has become a Final Order. If Buyer fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth Business Day after the date upon which the FCC Consent becomes a Final
Order, the Closing shall take place on the tenth Business Day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held by the
exchange of signed documents delivered by mail to the offices of Dow, Lohnes &
Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington D.C. 20036.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, general warranty deeds,
assignments, and other transfer documents which shall be sufficient to vest
good and marketable title to the Assets in the name of Buyer, free and clear of
all mortgages, liens, restrictions, encumbrances, claims, and obligations
except for Permitted Liens;
- 16 -
<PAGE> 23
(b) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(c) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the representations and warranties
of such Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that such Seller has in all material respects performed and complied
with all of its obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date and
such additional certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder;
(d) Licenses, Contracts, Business Records, Etc. Copies
of all documents described in Section 2.1(g) hereof;
(e) Opinion of Counsel. An opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(e)
hereto;
(f) Resolutions. Certified copy of resolutions of the
Board of Directors of Seller authorizing the execution, delivery and
performance of this Agreement;
(g) Other Instruments. Such other instruments and
certificates or other documentation as Seller are required by the terms hereof
to deliver or as Buyer may reasonably request.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date, executed by Buyer certifying (1) that the representations and warranties
of Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
- 17 -
<PAGE> 24
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto;
(e) Resolutions. Certified copy of resolutions of
Buyer's Board of Directors authorizing the execution, delivery and performance
of this Agreement;
(f) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Seller may reasonably request.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Seller, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by June 1, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Buyer, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by June 1, 1997.
9.3 Escrow Deposit. On the date hereof, Buyer shall deposit with
First Union National Bank (the "Escrow Agent") Two Hundred Thousand Dollars
($200,000). All funds
- 18 -
<PAGE> 25
and documents deposited with the Escrow Agent shall be held and disbursed in
accordance with the terms of the Escrow Agreement executed on the date hereof
in the form of Schedule 9.3 (the "Escrow Agreement") and the following
provisions:
(a) At the Closing, Buyer shall be entitled to receive
all amounts held by the Escrow Agent pursuant to the Escrow Agreement,
including any interest or other proceeds from the investment of funds held by
the Escrow Agent.
(b) If this Agreement is terminated by Seller pursuant to
Section 9.1 hereof due to Buyer's material breach of this Agreement, and Seller
is not in material breach of any provision of this Agreement, Seller shall be
entitled to receive all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent.
(c) If this Agreement is terminated and all of the
conditions for the disbursement of the escrow fund to Seller under Section
9.3(b) are not satisfied, Buyer shall be entitled to receive all amounts held
by the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent.
9.4 Rights on Termination. (a) If this Agreement is
terminated pursuant to Section 9.1 or 9.2 and neither party is in material
breach of any provision of this Agreement, the parties hereto shall not have
any further liability to each other with respect to the purchase and sale of
the Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement and Seller is not in material breach of any provision
of this Agreement, then the payment to Seller pursuant to Section 9.3(b) hereof
shall be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller by reason of Buyer's material breach
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of the escrow in accordance with
Section 9.3 hereof, together with any interest or other proceeds from the
investment of that amount, is a fair and equitable amount to reimburse Seller
for damages sustained due to Buyer's material breach of this Agreement. If
this Agreement is terminated by Buyer due to Seller's material breach of any
provision of this Agreement, and Buyer is not in material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity, including the right to seek specific performance of this
Agreement.
(b) Seller agrees that the Assets include unique property
that cannot be readily obtained on the open market and that Buyer would be
irreparably injured if this Agreement is not specifically enforced after breach
if Seller shall have committed a material breach. Therefore, Buyer shall have
the right to specifically enforce Seller's performance under this Agreement and
Seller agrees to waive the defense in any such suit that Buyer has
- 19 -
<PAGE> 26
an adequate remedy at law and to interpose no opposition, legal or otherwise,
as to the propriety of specific performance as a remedy.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
eighteen (18) months.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets prior to the
Closing Date, including any liabilities arising under the Licenses or the
Assumed Contracts which relate to events occurring prior to the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
- 20 -
<PAGE> 27
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets by Buyer on
and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
- 21 -
<PAGE> 28
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Certain Limitations. Notwithstanding anything in this
Agreement to the contrary, neither party shall indemnify or otherwise be liable
to the other party with respect to any claim for any breach of a representation
or warranty, or for the breach of any covenant contained in this Agreement,
except to the extent the losses, obligations, liabilities, costs and expenses
of such parties arising therefrom exceed Twenty Thousand Dollars ($20,000).
SECTION 11. MISCELLANEOUS
11.1 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
11.2 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of the fee payable to the FCC in connection with the
filing of the application for FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
East Orange, New Jersey by a panel of three (3) arbitrators. Seller and Buyer
shall each designate one (1) disinterested arbitrator, and the two (2)
arbitrators so designated shall select the third arbitrator. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to
make a just award according to the best of his or her understanding. The
arbitration hearing shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association. The written
decision
- 22 -
<PAGE> 29
of a majority of the arbitrators shall be final and binding on Seller and
Buyer. The costs and expenses of the arbitration proceeding shall be assessed
between Seller and Buyer in a manner to be decided by a majority of the
arbitrators, and the assessment shall be set forth in the decision and award of
the arbitrators. Judgment on the award, if it is not paid within thirty (30)
days, may be entered in any court having jurisdiction over the matter. No
action at law or suit in equity based upon any claim arising out of or related
to this Agreement shall be instituted in any court by Seller or Buyer against
the other except (i) an action to compel arbitration pursuant to this Section,
(ii) an action to enforce the award of the arbitration panel rendered in
accordance with this Section, or (iii) a suit for specific performance under
Section 9.4(b) of this Agreement.
11.4 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Buyer: Paxson Communications LPTV, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attn: Mr. Lowell W. Paxson
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
With copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Telecopy: (202) 776-2222
Telephone: (202) 776-2786
If to Seller: Craig L. Fox
Renard Communications Corp.
48-53 Manor Hill Drive
Syracuse, New York 13215
Telecopy: (315) 468-0904
Telephone: (315) 468-0908
- 23 -
<PAGE> 30
With copy to: Bruce Poushter, Esquire
Poushter, Marshall and Leberman
500 South Salina Street, 10th Floor
Syracuse, New York 13202
Telecopy: (315) 424-1011
Telephone: (315) 424-9192
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.4.
11.5 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a wholly-owned subsidiary or commonly controlled affiliate
satisfying the requirements of Section 4.5 hereof without seeking or obtaining
Seller's prior approval. Upon any permitted assignment by Buyer or Seller in
accordance with this Section 11.5, all references to "Buyer" herein shall be
deemed to be references to Buyer's assignee and all references to "Seller"
herein shall be deemed to be references to Seller's assignee. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.6 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.8 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.9 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
- 24 -
<PAGE> 31
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.11.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings and, if required, press releases with governmental authorities as may,
in its judgment, be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, in which case the other party shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 25 -
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS LPTV, INC.
By: /s/ Lowell W. Paxson
---------------------------------
Name: Lowell W. Paxon
Title: Chairman
CRAIG L. FOX
By: /s/ Craig L. Fox
---------------------------------
<PAGE> 1
EXHIBIT 10.118
========================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS LPTV, INC.
AND
COMMUNICASTING CORPORATION
* * *
JUNE 18, 1996
========================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Leasehold Interests" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Leasehold Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Environmental; Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.11 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.12 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.6 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(h) Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(f) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.1 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.3 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.5 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.7 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.9 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.11 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.13 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
- iv -
<PAGE> 6
LIST OF SCHEDULES
-----------------
<TABLE>
<S> <C> <C>
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Leasehold Interests
Schedule 3.6 - Personal Property
Schedule 3.7 - Contracts
Schedule 3.8 - Insurance
Schedule 8.2(e) - Opinion of Seller's Counsel
Schedule 8.3(d) - Opinion of Buyer's Counsel
Schedule 8.2(g) - Noncompetition Agreement
Schedule 9.3 - Escrow Agreement
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of June 18, 1996, by and
between Paxson Communications LPTV, Inc., a Florida corporation ("Buyer"), and
Communicasting Corporation, a District of Columbia corporation ("Seller").
RECITALS
A. Seller is the licensee of low power television station
WSIT-LP, Channel 42, Washington, D.C. (the "Station"), pursuant to
authorizations issued by the Federal Communications Commission (the "FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller have a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the right of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under the Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts that Buyer has marked with
an asterisk (*) on Schedule 3.7 to indicate that such Contract will be assumed
by Buyer upon its purchase of the Station, and (ii) any other Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume.
"Business Day" means any day other than a Saturday, Sunday or legal holiday.
<PAGE> 8
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" shall have the meaning set forth in the Recitals to this
Agreement.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
- 2 -
<PAGE> 9
"Leasehold Interests" means Seller's interests in leaseholds and
subleaseholds, easements, licenses, rights to access, and rights of way, and
other improvements thereon, which are used or useful in the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable and
liens created by the operation of the Leasehold Interests.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" shall have the meaning set forth in Section 2.3
hereof.
"Station" shall have the meaning set forth in the Recital to this Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and/or deliver to Buyer on the Closing Date, and Buyer agrees to
purchase and accept, all of the assets and property interests owned by Seller
or in which Seller has a property interest which are used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2 hereof, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens), including the following:
(a) The Tangible Personal Property;
- 3 -
<PAGE> 10
(b) The Leasehold Interests;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill and call
signs of the Station, if any;
(f) All choses in action of Seller relating to the
Station that are assignable to Buyer as provided herein; and
(g) All records required by the FCC to be kept by the
Station and copies of all other books and records which belong to Seller and
are within its possession and control relating to the business or operations of
the Station (exclusive of corporate, financial and accounting records)
including executed copies of the Assumed Contracts.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Cash or cash equivalents on hand as of the Closing
Date; any insurance policies, letters of credit, or other similar items and
cash surrender value in regard thereto; and any stocks, bonds, certificates of
deposit and similar securities or other investments;
(b) Any pension, profit sharing or employee benefit plans
and all contracts related thereto, and any collective bargaining agreements;
(c) All books and records relating to Seller's internal
corporate organization or internal financial matters;
(d) The Accounts Receivable;
(e) Any Contracts not included in the Assumed Contracts,
including, without limitation, all affiliation agreements relating to the
Station; and
(f) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees for periods
prior to the Closing Date.
2.3 Purchase Price. The purchase price for the Assets and the
Noncompetition Agreement shall be One Million Five Hundred Thousand Dollars
($1,500,000) (the "Purchase Price"), adjusted as provided below:
- 4 -
<PAGE> 11
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of
11:59 p.m., Eastern Standard Time, on the day prior to the Closing Date. All
expenses arising from the operation of the Station, including business and
license fees, utility charges, real and personal property taxes and assessments
levied against the Assets, property and equipment rentals, applicable copyright
or other fees, sales and service charges, and prepaid and deferred items, shall
be prorated between Buyer and Seller in accordance with the principle that
Seller shall be responsible for all expenses, costs, and liabilities allocable
to the period prior to the Closing Date, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Taxes. Except for real and personal property taxes
and assessments incurred against the Assets, there shall be no proration or
adjustment for income taxes or any other taxes with respect to the Station or
the Assets which shall be Seller's sole responsibility for all periods prior to
the Closing Date. All taxes arising from the transfer of the Assets hereunder
shall be Seller's responsibility pursuant to Section 11.2 hereof.
(c) Manner of Determining Adjustments. The adjustments
and prorations to the Purchase Price pursuant to Section 2.3(a) will be
determined in accordance with the following procedures:
(i) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days prior to the Closing Date a preliminary
settlement statement, which statement shall set forth Seller's good faith
estimate of the adjustments to the Purchase Price under Section 2.3(a) hereof.
(ii) Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(a) hereof prior to the
Closing.
(iii) No later than forty-five (45) days after the
Closing Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the adjustments to the Purchase Price pursuant to Section
2.3(a) hereof. If Seller disputes the amount of the adjustments to the
Purchase Price determined by Buyer, they shall deliver to Buyer, within thirty
(30) days after their receipt of Buyer's statement, Seller's statement setting
forth their determination of the amount of the adjustments to the Purchase
Price and the basis for their dispute in reasonable detail. If Seller notifies
Buyer of their acceptance of Buyer's statement, or if Seller fail to deliver
the Seller's statement within the thirty (30) day period specified in the
preceding sentence, Buyer's determination of the adjustments pursuant to
Section 2.3(a) hereof shall be conclusive and binding on the parties.
- 5 -
<PAGE> 12
(iv) After the Closing, Buyer and Seller shall use
good faith efforts to resolve any dispute involving the determination of the
adjustments to the Purchase Price under Section 2.3(a) hereof. If the parties
are unable to resolve the dispute within fifteen (15) days following the
delivery of Seller's statement described above, Buyer and Seller shall jointly
designate and retain, with fees and expenses to be borne equally by Seller and
Buyer, an independent certified public accountant mutually acceptable to Seller
and Buyer who shall be knowledgeable and experienced in the operation of
television broadcasting Station, to resolve the dispute within thirty (30)
days. The accountant's resolutions of the dispute shall be final and binding
on the parties, and a judgment may be entered thereon in any court of competent
jurisdiction.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller the
Purchase Price adjusted pursuant to Section 2.3(a) hereof by federal wire
transfer of immediately available funds pursuant to wire instructions delivered
by Seller at least two (2) Business Days prior to the Closing Date.
(b) If as a result of the final determination of the
adjustments to the Purchase Price pursuant to Section 2.3(c) following the
Closing, (i) Buyer is determined to owe an amount to Seller, Buyer shall pay
such amount to Seller in immediately available funds within five (5) Business
Days of the date of such final determination or (ii) Seller is determined to
owe an amount to Buyer, Seller shall pay such amount to Buyer in immediately
available funds within five (5) Business Days of the date of such final
determination. The amount of the payment made in accordance with this Section
2.4(b) shall bear interest at a per annum rate equal to the "prime rate," as
published in the Money Rates column of the Eastern Edition of The Wall Street
Journal on the Monday of the week in which the Closing occurs, calculated from
the Closing Date to the date such payment is made to Seller or Buyer, as the
case may be, and payable with the amount of such payment.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts to the extent that either (i) the obligations and liabilities relate
to the period from and after the Closing Date or (ii) the Purchase Price was
reduced pursuant to Section 2.3(a) hereof as a result of the proration of such
obligations and liabilities. Buyer shall not assume any other obligations or
liabilities of Seller, including (i) any obligations or liabilities under any
Contract not included in the Assumed Contracts, (ii) any obligations or
liabilities under the Assumed Contracts relating to the period prior to the
Closing Date, (iii) any claims or pending litigation or proceedings relating to
the operation of the Station prior to the Closing, (iv) any obligations or
liabilities of Seller under any employee pension, retirement, or other benefit
plans or with respect to commissions, wages, bonuses, incentive payments,
vacation pay, sick leave, severance
- 6 -
<PAGE> 13
benefits, or other benefits of employees or former employees of Seller or their
beneficiaries, (v) any obligations or liabilities of Seller with respect to any
Excluded Assets, or (vi) any obligations or liabilities caused by, arising out
of, or resulting from any action or omission of Seller prior to the Closing.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Standing. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the District of Columbia.
Seller has all requisite corporate power and authority to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants, and conditions to be performed and complied
with by Seller hereunder and thereunder.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery and the performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) will not conflict with the
Certificate of Incorporation or Bylaws of Seller; (ii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iii) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (iv) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete list of
the Licenses. Seller has delivered to Buyer true and complete copies of the
Licenses (including any and all amendments and other modifications thereto)
listed on Schedule 3.4. The Licenses listed on Schedule 3.4 have been validly
issued and the Seller is the authorized legal holder thereof. The FCC Licenses
comprise all of the licenses, permits and other authorizations required from
the FCC for the conduct of the business or operations of the Station in
accordance with
- 7 -
<PAGE> 14
applicable laws and in the manner and to the extent they are now conducted.
None of the Licenses listed on Schedule 3.4 is subject to any restriction or
condition which would limit the full operation of the Station as presently
operated. The Licenses listed on Schedule 3.4 are in full force and effect.
The business and operations of the Station are being conducted in accordance
with the Licenses listed on Schedule 3.4. Seller has no reason to believe that
the Licenses issued by the FCC will not be renewed by the FCC in the ordinary
course.
3.5 Title to and Condition of Leasehold Interests. Schedule 3.5
contains a complete and accurate description of all leasehold interests
necessary to conduct the business and operations of the Station as now
conducted. With respect to each leasehold or subleasehold interest included in
the Leasehold Interests being conveyed under this Agreement, so long as Seller
fulfills its obligations under the lease therefor, except for landlord's
mortgagee, if any, Seller has enforceable rights to nondisturbance and quiet
enjoyment, and no third party holds any interest in the leased premises with
the right to foreclose upon such Seller's leasehold or subleasehold interest.
Seller has full legal and practical access to the Leasehold Interests.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 contains descriptions of all material items of the Personal
Property which comprise all material personal property necessary to conduct the
business or operations of the Station as now conducted. Except as described in
Schedule 3.6, Seller owns and has good title to all Personal Property, free and
clear of any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for Permitted Liens. Each item of
material Personal Property is in good operating condition and repair (ordinary
wear and tear excepted), and is available for immediate use in the business or
operations of the Station.
3.7 Contracts. Schedule 3.7 contains descriptions of all the
Contracts. Seller has delivered to Buyer true and complete copies of all
written Contracts and true and complete memoranda of all oral Contracts. Other
than the Contracts, Seller require no contract or agreement to enable it to
carry on its business as presently conducted. All of the Assumed Contracts are
in full force and effect and are valid, binding and enforceable in accordance
with their terms except as the enforceability thereof may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
or by court-applied equitable remedies. Seller is not in breach, nor to
Seller's knowledge is any other party in breach, of the terms of any such
Assumed Contracts. Except as expressly set forth in Schedule 3.7, Seller is
not aware of any intention by any party to any Assumed Contract (i) to
terminate such contract or amend the terms thereof, (ii) to refuse to renew the
same upon expiration of its term, or (iii) to renew the same upon expiration
only on terms and conditions which are substantially more onerous than those
pertaining to such existing contract. Subject to obtaining the Consents,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability and continuation of any
of the Assumed Contracts.
- 8 -
<PAGE> 15
3.8 Insurance. Schedule 3.8 comprises a true and complete list of
all insurance policies of Seller which insure any part of the Assets. All
policies of insurance listed in Schedule 3.8 are in full force and effect.
During the three-year period ending on the date hereof, no insurance policy of
Seller on the Assets or the Station have been canceled by the insurer and no
application of Seller for insurance has been rejected by any insurer.
3.9 Reports. All returns, reports and statements which the
Station is currently required to file with the FCC and any other governmental
agency have been filed. All of such reports, returns and statements are
complete and correct as filed.
3.10 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by them to
the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
deemed by them to be adequate with respect thereto. No events have occurred
which could impose on Buyer any transferee liability for any taxes, penalties,
or interest due or to become due from Seller.
3.11 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller, the Assets, or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same.
3.12 Environmental; Hazardous Materials. There are no claims,
notices, suits, proceedings or investigations pending or, to Seller's
knowledge, threatened, and there are no judgments against Seller or the Station
by or before any governmental authority concerning environmental compliance.
To Seller's knowledge, after due inquiry, (i) no toxic materials, hazardous
waste, or hazardous substances, including any asbestos or asbestos-related
products, any oils, petroleum-derived compounds or pesticides (hereinafter
collectively referred to as the "Hazardous Materials") have been or are located
on or about the Leasehold Interests; (ii) the Leasehold Interests has not been
previously used for the storage, manufacture or disposal of Hazardous
Materials; and (iii) no underground storage tank or related equipment ("UST")
is located at the Leasehold Interests.
3.13 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
- 9 -
<PAGE> 16
3.14 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of
Florida. Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the execution, delivery, and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) will not conflict with the Certificate
of Incorporation or Bylaws of Buyer; (ii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Buyer; (iii) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound, such that Buyer could not acquire the
Assets or operate the Station.
4.4 (a) Full Disclosure. No representation or warranty made
by Buyer in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
- 10 -
<PAGE> 17
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of and acquire, own and operate the
Station under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC. Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC disqualify Buyer as assignee of the FCC Licenses or as the owner and
operator of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing without Buyer's
written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in connection
with the acquisition of replacement property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date and, (ii) liens for current
taxes not yet due and payable.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take any action that could cause the FCC or
any other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.6 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.7 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business
- 11 -
<PAGE> 18
hours to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Station for the purpose of audit and
inspection and will furnish or cause to be furnished to Buyer or its authorized
representatives all material information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
operations reports produced with respect to the affairs and business of the
Station).
5.8 Maintenance of Assets. Seller shall maintain all of the
Assets in good condition (ordinary wear and tear excepted) with inventories of
spare parts and expendable supplies being maintained at levels consistent with
past practices.
5.9 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets until the Closing Date.
5.10 Consents. Subject to the provisions of Section 6.5 hereof,
Seller shall use its best efforts to obtain the Consents without any change in
the terms or conditions of any Assumed Contract or License as in effect on the
date of this Agreement. Seller shall advise Buyer of any communications it
receives concerning the Consents and of any conditions proposed, considered, or
requested for any of the Consents. Upon Buyer's request, Seller shall
cooperate with Buyer and use its best efforts to obtain from the Lessors under
the Leasehold Interests such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
lenders may request.
5.11 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.12 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.13 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
- 12 -
<PAGE> 19
(b) Seller and Buyer shall promptly prepare the
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) days of the execution of this Agreement. The parties
shall prosecute the applications with all reasonable diligence and otherwise
use their reasonable commercial efforts to obtain a grant of the applications
as expeditiously as practicable. Each party agrees to comply with any
condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by such party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent, provided, however,
that the parties shall continue to have all rights available to them pursuant
to Section 9 hereof. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party
shall have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension
of the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information of a confidential nature obtained from
the other party in connection with the transactions contemplated by this
Agreement. Except as provided in this Paragraph each party will refrain from
disclosing any such information to any third party. If this Agreement is
terminated, each party will return to the other party all copies of all
documents and other all information obtained by the such party from the other
party in connection with the transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such
- 13 -
<PAGE> 20
other documents as may be necessary and desirable to the implementation and
consummation of this Agreement, and otherwise use their reasonable commercial
efforts to consummate the transaction contemplated hereby and to fulfill their
obligations under this Agreement. Notwithstanding the foregoing, neither Buyer
nor Seller shall have any obligation (i) to expend funds to obtain any of the
Consents or (ii) to agree to any material adverse change in any License or
Assumed Contract to obtain a Consent required with respect thereto; provided,
however, that Seller shall be required to expend funds, if necessary, to cure
any defaults in order to obtain Consents and either party shall be required to
expend funds in respect of normal and usual filing fees and the fees of
professional advisors.
6.6 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of ninety (90) days from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of ninety (90) days from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.7 Broker. Each of Buyer and Seller represents and warrants that
neither they nor any person or entity acting on their behalf have incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except that Buyer shall be
responsible for the broker fee due to Biernacki Brokerage.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any material adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
- 14 -
<PAGE> 21
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on them by the FCC Consent, and the FCC Consent
shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all FCC Licenses and there shall not have been any modification of
any FCC License that could have a material adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any FCC License.
(f) Material Adverse Change. There shall not have been a
material adverse change in the Assets since the date of this Agreement,
including, without limitation, any damage, destruction or loss affecting any
material assets used in the conduct or the business of the Station, except
normal wear and tear to the Assets.
(g) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(h) Release of Liens. Seller shall have delivered to
Buyer evidence reasonably satisfactory to Buyer that all security interests,
mortgages, encumbrances, and liens on the Assets that are not Permitted Liens
have been released and removed.
7.2 Conditions to Obligations of Seller All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
- 15 -
<PAGE> 22
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five (5) business days' written
notice to Seller, that is (1) not earlier than the first business day after the
FCC Consent is granted, and (2) not later than ten (10) business days following
the date upon which the FCC Consent has become a Final Order. If Buyer fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth Business Day after the date upon which the FCC Consent becomes a Final
Order, the Closing shall take place on the tenth Business Day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held by the
exchange of signed documents delivered by mail to the offices of Dow, Lohnes &
Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington D.C. 20036.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, general warranty deeds,
assignments, and other transfer documents which shall be sufficient to vest
good and marketable title to the Assets in the name of Buyer, free and clear of
all mortgages, liens, restrictions, encumbrances, claims, and obligations
except for Permitted Liens;
(b) Consents. An executed copy of any instrument
evidencing receipt of any Consent;
(c) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the representations and warranties
of such Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that such Seller has in all material respects performed and complied
with all of its obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date and
such estoppel certificates and consents to the collateral assignment of the
lessee's interest under each such lease as Buyer's lenders may request;
(d) Licenses, Contracts, Business Records, Etc. Copies
of all documents described in Section 2.1(g) hereof;
- 16 -
<PAGE> 23
(e) Opinion of Counsel. An opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(e)
hereto;
(f) Resolutions. Certified copy of resolutions of the
Board of Directors of Seller authorizing the execution, delivery and
performance of this Agreement;
(g) Noncompetition Agreement. An executed copy of the
Noncompetition Agreement in the form of Schedule 8.2(g) hereof; and
(h) Other Instruments. Such other instruments and
certificates or other documentation as Seller are required by the terms hereof
to deliver or as Buyer may reasonably request.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date, executed by Buyer certifying (1) that the representations and warranties
of Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto;
(e) Resolutions. Certified copy of resolutions of
Buyer's Board of Directors authorizing the execution, delivery and performance
of this Agreement;
(f) Noncompetition Agreement. An executed copy of the
Noncompetition Agreement, in the form of Schedule 8.2(g), for which Thirty
Thousand Dollars ($30,000) of the Purchase Price is allocated; and
(g) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Seller may reasonably request.
- 17 -
<PAGE> 24
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Seller, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Buyer, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
9.3 Escrow Deposit. On the date hereof, Buyer shall deposit with
First Union National Bank (the "Escrow Agent") One Hundred Twenty Five Thousand
Dollars ($125,000). All funds and documents deposited with the Escrow Agent
shall be held and disbursed in accordance with the terms of the Escrow
Agreement executed on the date hereof in the form of Schedule 9.3 (the "Escrow
Agreement") and the following provisions:
(a) At the Closing, Buyer shall be entitled to receive
all amounts held by the Escrow Agent pursuant to the Escrow Agreement,
including any interest or other proceeds from the investment of funds held by
the Escrow Agent.
(b) If this Agreement is terminated by Seller pursuant to
Section 9.1 hereof due to Buyer's material breach of this Agreement, and Seller
is not in material breach of any
- 18 -
<PAGE> 25
provision of this Agreement, Seller shall be entitled to receive all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent.
(c) If this Agreement is terminated and all of the
conditions for the disbursement of the escrow fund to Seller under Section
9.3(b) are not satisfied, Buyer shall be entitled to receive all amounts held
by the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent.
9.4 Rights on Termination. (a) If this Agreement is
terminated pursuant to Section 9.1 or 9.2 and neither party is in material
breach of any provision of this Agreement, the parties hereto shall not have
any further liability to each other with respect to the purchase and sale of
the Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement and Seller is not in material breach of any provision
of this Agreement, then the payment to Seller pursuant to Section 9.3(b) hereof
shall be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller by reason of Buyer's material breach
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of the escrow in accordance with
Section 9.3 hereof, together with any interest or other proceeds from the
investment of that amount, is a fair and equitable amount to reimburse Seller
for damages sustained due to Buyer's material breach of this Agreement. If
this Agreement is terminated by Buyer due to Seller's material breach of any
provision of this Agreement, and Buyer is not in material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity, including the right to seek specific performance of this
Agreement.
(b) Seller agrees that the Assets include unique property
that cannot be readily obtained on the open market and that Buyer would be
irreparably injured if this Agreement is not specifically enforced
after breach if Seller shall have committed a material breach. Therefore,
Buyer shall have the right to specifically 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.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
eighteen (18) months.
- 19 -
<PAGE> 26
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets prior to the
Closing Date, including any liabilities arising under the Licenses or the
Assumed Contracts which relate to events occurring prior to the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets by Buyer on
and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
- 20 -
<PAGE> 27
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Certain Limitations. Notwithstanding anything in this
Agreement to the contrary, neither party shall indemnify or otherwise be liable
to the other party with respect
- 21 -
<PAGE> 28
to any claim for any breach of a representation or warranty, or for the breach
of any covenant contained in this Agreement, except to the extent the losses,
obligations, liabilities, costs and expenses of such parties arising therefrom
exceed Twenty Thousand Dollars ($20,000).
SECTION 11. MISCELLANEOUS
11.1 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
11.2 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer shall pay
the fee payable to the FCC in connection with the filing of the application for
FCC Consent. Except as otherwise provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives, and each
party shall be responsible for all fees or commissions payable to any finder,
broker, advisor, or similar person retained by or on behalf of such party.
11.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
Washington, D.C. by a panel of three (3) arbitrators. Seller and Buyer shall
each designate one (1) disinterested arbitrator, and the two (2) arbitrators so
designated shall select the third arbitrator. Before undertaking to resolve
the dispute, each arbitrator shall be duly sworn faithfully and fairly to hear
and examine the matters in controversy and to make a just award according to
the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Seller and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. Judgment on the award, if
it is not paid within thirty (30) days, may be entered in any court having
jurisdiction over the matter. No action at law or suit in equity based upon
any claim arising out of or related to this Agreement shall be instituted in
any court by Seller or Buyer against the other except (i) an action to compel
arbitration pursuant to this Section, (ii) an action to enforce the award of
the arbitration panel rendered in accordance with this Section, or (iii) a suit
for specific performance under Section 9.4(b) of this Agreement.
- 22 -
<PAGE> 29
11.4 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Buyer: Paxson Communications LPTV, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attn: Mr. Lowell W. Paxson
Telecopy: (407) 655-9424
Telephone: (407) 659-4122
With copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Telecopy: (202) 776-2222
Telephone: (202) 776-2786
If to Seller: Communicasting Corporation
11 West Melrose Street
Chevy Chase, Maryland 20815
Attn: Mr. Christopher S. Sargent
Telecopy: (202) 467-5915
Telephone: (202) 872-6570
With copy to: Michael McConihe, Esquire
O'Brien, Birney & Butler
888 17th Street, N.W., 10th Floor
Washington, D.C. 20006-3967
Telecopy: (202) 293-1640
Telephone: (202) 298-6161
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.4.
11.5 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a wholly-owned subsidiary or
- 23 -
<PAGE> 30
commonly controlled affiliate satisfying the requirements of Section 4.5 hereof
without seeking or obtaining Seller's prior approval. Upon any permitted
assignment by Buyer or Seller in accordance with this Section 11.5, all
references to "Buyer" herein shall be deemed to be references to Buyer's
assignee and all references to "Seller" herein shall be deemed to be references
to Seller's assignee. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
11.6 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.8 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.9 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of,
- 24 -
<PAGE> 31
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.11.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings and, if required, press releases with governmental authorities as may,
in its judgment, be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, in which case the other party shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 25 -
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS LPTV, INC.
By: /s/ William L. Watson
---------------------------------
Name: William L. Watson
Title: Secretary
COMMUNICASTING CORPORATION
By: /s/ Christopher S. Sargent
---------------------------------
Name: Christopher S. Sargent
Title: President
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS LPTV, INC.
By: /s/ Lowell W. Paxson
---------------------------------
Name: Lowell W. Paxson
Title: Chairman
MICHAEL A. BOGNER D/B/A
AMITY BROADCASTING COMPANY
By: /s/ Michael A. Bogner
---------------------------------
<PAGE> 1
EXHIBIT 10.119
================================================================================
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
CHANNEL 55 OF MILWAUKEE, INC.
AND
PAXSON COMMUNICATIONS OF
MILWAUKEE-55, INC.
FOR
TELEVISION STATION WHKE-TV
MILWAUKEE, WISCONSIN
* * *
JULY ___, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. LEASE OF STATION AIR TIME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Option to Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Licensee Operation of Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Licensee Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Programmer Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. STATION OBLIGATIONS TO ITS COMMUNITY OF LICENSE. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Licensee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Additional Licensee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Responsibility for Employees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. STATION PROGRAMMING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Broadcast Station Programming Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Licensee Control of Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Programmer Compliance with Copyright Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Children's Television Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Payola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.7 Cooperation on Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.8 Staffing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Programmer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Licensee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Time Brokerage Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Confidential Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Political Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Termination Requirements and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 3
- 2 -
<TABLE>
<S> <C>
6.3 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.4 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.2 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.11 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE> 4
TIME BROKERAGE AGREEMENT
This TIME BROKERAGE AGREEMENT, made this ____ day of July, 1996, by
and between CHANNEL 55 OF MILWAUKEE, INC., a Florida corporation (the
"Licensee"), and PAXSON COMMUNICATIONS OF MILWAUKEE-55, INC., a Florida
corporation (the "Programmer").
WHEREAS, Licensee owns and operates Television Station WHKE-TV,
Kenosha, Wisconsin (the "Station"), pursuant to authorizations issued by the
Federal Communications Commission ("FCC").
WHEREAS, Programmer is involved in television station programming and
operation.
WHEREAS, the Licensee wishes to retain Programmer to provide
programming for the Station that is in conformity with Station policies and
procedures, FCC policies for time brokerage arrangements, and the provisions
hereof.
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station.
WHEREAS, Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and Programmer represent that
they are legally qualified, empowered and able to enter into this Agreement and
that the execution, delivery, and performance hereof shall not constitute a
breach or violation of any material agreement, contract or other obligation to
which either party is subject or by which it is bound.
1.2 Effective Date; Term. The effective date of this Agreement shall
be the date of consummation of Licensee's acquisition of the Station following
FCC approval (the "Closing"). It shall continue in force for an initial term
of ten years from that date unless otherwise extended or terminated as set
forth below.
<PAGE> 5
- 2 -
1.3 Scope. During the term of this Agreement and any renewal thereof,
Licensee shall make available to Programmer broadcast time upon the Station as
set forth in this Agreement. Programmer shall deliver such programming, at its
expense, to the Station's transmitter facilities or other authorized remote
control points as reasonably designated by Licensee. Subject to Licensee's
reasonable approval, as set forth in this Agreement, Programmer shall provide
programming of Programmer's selection complete with commercial matter, news,
public service announcements and other suitable programming to the Licensee up
to ninety-eight hours per week. Notwithstanding the foregoing, the Licensee
may designate such additional time as it may require without any adjustment of
the monthly consideration to be paid to Licensee under Section 1.5 for the
broadcast of programming necessary for the Station to broadcast news, public
affairs, children's, religious and non-entertainment programming as required by
the FCC. All program time not reserved by or designated for Licensee shall be
available for use by Programmer and no other party.
1.4 Option to Renew. Subject to the termination provisions of Section
6 hereof, this Agreement may be renewed for an additional term as mutually
agreed upon by the Licensee and the Programmer.
1.5 Consideration. As consideration for the air time made available
hereunder Programmer shall make payments to Licensee as set forth in Attachment
I.
1.6 Licensee Operation of Station. Licensee will have full authority,
power and control over the management and operations of the Station during the
term of this Agreement and during any renewal of such term. Licensee will bear
all responsibility for Station's compliance with all applicable provisions of
the Communications Act of 1934, as amended (the "Act"), the rules, regulations
and policies of the FCC and all other applicable laws. Licensee shall be
solely responsible for and pay in a timely manner all operating costs of the
Station, including but not limited to maintenance of the studio and
transmitting facility and costs of electricity, except that Programmer shall be
responsible for the costs of its programming as provided in Sections 1.8 and
2.3 hereof. Licensee shall employ at its expense management level and other
employees consisting of a General Manager and such operational and other
personnel as outlined in the budget previously provided to Programmer, who will
direct the day-to-day operations of the Station, and who will report to and be
accountable to the Licensee. Licensee shall be responsible for the salaries,
taxes, insurance and related costs for all personnel employed by the Station
and shall maintain insurance satisfactory to Programmer covering the Station's
transmission facilities. During the term of the Agreement and any renewal
hereof, Programmer agrees to perform, without charge, routine monitoring of the
Station's transmitter performance and tower lighting by remote control, if and
when requested by Licensee.
<PAGE> 6
- 3 -
1.7 Licensee Representations and Warranties. Licensee represents and
warrants as follows:
(a) Licensee owns and holds or will hold all licenses and
other permits and authorizations necessary for the operation of the Station,
and such licenses, permits and authorizations are and will be in full force and
effect throughout the term of this Agreement. There is not now pending, or to
Licensee's best knowledge, threatened, any action by the FCC or by any other
party to revoke, cancel, suspend, refuse to renew or modify adversely any of
such licenses, permits or authorizations. Licensee is not in material
violation of any statute, ordinance, rule, regulation, policy, order or decree
of any federal, state or local entity, court or authority having jurisdiction
over it or the Station, which would have an adverse effect upon the Licensee,
the Station or upon Licensee's ability to perform this Agreement. Licensee
shall not take any action or omit to take any action which would have an
adverse impact upon the Licensee, the Station or upon Licensee's ability to
perform this Agreement. All reports and applications required to be filed with
the FCC or any other governmental body have been, and during the course of the
term of this Agreement or any renewal thereof, will be filed in a timely and
complete manner. During the term of this Agreement and any renewal thereof,
Licensee shall not dispose of, transfer, assign or pledge any of Licensee's
assets and properties except with the prior written consent of the Programmer,
if such action would adversely affect Licensee's performance hereunder or the
business and operations of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including salaries and benefits of
its employees, lease payments, utilities, taxes, programming expenses, etc., as
set forth in Attachment II (except those for which a good faith dispute has been
raised with the vendor or taxing authority), and shall provide Programmer with a
certificate of such timely payment within thirty (30) days of the end of each
month.
1.8 Programmer Responsibility. Programmer shall be solely
responsible for any expenses incurred in the origination and/or delivery of
programming from any remote location and for any publicity or promotional
expenses incurred by Programmer, including, without limitation, ASCAP and BMI
music license fees for all programming provided by Programmer. Such payments by
Programmer shall be in addition to any other payments to be made by Programmer
under this Agreement.
1.9 Contracts. Programmer will enter into no third-party contracts,
leases or agreements which will bind Licensee in any way except with Licensee's
prior written approval.
<PAGE> 7
- 4 -
SECTION 2. STATION OBLIGATIONS TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any other provision
of this Agreement, Programmer recognizes that Licensee has certain
obligations to broadcast programming to meet the needs and interests of viewers
in Kenosha, Wisconsin, the station's service area and the educational and
informational needs of children. From time to time the Licensee shall air
specific programming on issues of importance to the local community and
educational and informational programming for children. Nothing in this
Agreement shall abrogate the unrestricted authority of the Licensee to discharge
its obligations to the public and to comply with the Act and the rules and
policies of the FCC.
2.2 Additional Licensee Obligations. Although both parties
shall cooperate in the broadcast of emergency information over the Station,
Licensee shall also retain the right to interrupt Programmer's programming in
case of an emergency or for programming which, in the good faith judgment of
Licensee, is of greater local or national public importance. Licensee shall also
coordinate with Programmer the Station's hourly station identification and any
other announcements required to be aired by FCC rules. Licensee shall continue
to maintain a main studio, as that term is defined by the FCC, within the
Station's principal community contour, shall maintain its local public
inspection file in accordance with FCC rules, regulations and policies, and
shall prepare and place in such inspection file or files in a timely manner all
material required by Section 73.3526 of the FCC's Rules, including without
limitation the Station's quarterly issues and program lists; information
concerning the broadcast of children's educational and informational
programming; and documentation of compliance with commercial limits applicable
to certain children's television programming. Programmer shall, upon request by
Licensee, provide Licensee with such information concerning Programmer's
programs and advertising as is necessary to assist Licensee in the preparation
of such information. Licensee shall also maintain the station logs, receive and
respond to telephone inquiries, and control and oversee any remote control point
which may be established for the Station.
2.3 Responsibility for Employees and Expenses. Programmer shall
employ and be solely responsible for the salaries, taxes, insurance and
related costs for all personnel used in the production of its programming
(including, but not limited to, salespeople, technical staff, traffic personnel,
board operators and programming staff). Licensee will provide and be
responsible for the Station personnel necessary for the broadcast transmission
of its own programs (including, without limitation, the Station's General
Manager and such operational and other personnel as may be necessary or
appropriate), and will be responsible for the salaries, taxes, benefits,
insurance and related costs for all the Licensee's employees used in the
broadcast transmission of its programs and necessary to other aspects of Station
<PAGE> 8
- 5 -
operation. Whenever on the Station's premises, all personnel shall be subject
to the overall supervision of Licensee's General Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy Statement. Licensee
has adopted and will enforce a Broadcast Station Programming Policy
Statement (the "Policy Statement"), a copy of which appears as Attachment III
hereto and which may be amended in a reasonable manner from time to time by
Licensee upon notice to Programmer. Programmer agrees and covenants to comply
in all material respects with the Policy Statement, to all rules and regulations
of the FCC, and to all changes subsequently made by Licensee or the FCC.
Programmer shall furnish or cause to be furnished the artistic personnel and
material for the programs as provided by this Agreement and all programs shall
be prepared and presented in conformity with the rules, regulations and policies
of the FCC and with the Policy Statement set forth in Attachment III hereto.
All advertising spots and promotional material or announcements shall comply
with applicable federal, state and local regulations and policies and shall be
produced in accordance with quality standards established by Programmer. If
Licensee determines that a program supplied by Programmer is for any reason,
within Licensee's sole discretion, unsatisfactory or unsuitable or contrary to
the public interest, or does not comply with the Policy Statement it may, upon
prior written notice to Programmer (to the extent time permits such notice),
suspend or cancel such program without liability to Programmer. Licensee will
use reasonable efforts to provide such written notice to Programmer prior to the
suspension or cancellation of such program.
3.2 Licensee Control of Programming. Programmer recognizes that
the Licensee has full authority to control the operation of the Station.
The parties agree that Licensee's authority includes but is not limited to the
right to reject or refuse such portions of the Programmer's programming which
Licensee believes to be unsatisfactory, unsuitable or contrary to the public
interest. Programmer shall have the right to change the programming supplied to
Licensee and shall give Licensee at least twenty-four (24) hours notice of
substantial and material changes in such programming.
3.3 Programmer Compliance with Copyright Act. Programmer
represents and warrants to Licensee that Programmer has full authority to
broadcast its programming on the Station, and that Programmer shall not
broadcast any material in violation of the Copyright Act. All music supplied by
Programmer shall be: (i) licensed by ASCAP, SESAC or BMI; (ii) in the public
domain; or (iii) cleared at the source by Programmer. Licensee will maintain
ASCAP, BMI and SESAC licenses as necessary. The right to use the programming
and to authorize its use in any manner shall be and remain vested in Programmer.
<PAGE> 9
- 6 -
3.4 Sales. Programmer shall retain all of the Station's
network compensation revenues, any revenues received from any network or program
supplier with respect to affiliation or use of programming by Programmer, any
retransmission consent revenues and all revenues from the sale of advertising
time within the programming it provides to the Licensee. Programmer shall be
responsible for payment of the commissions due to any national sales
representative engaged by it for the purpose of selling national advertising
which is carried during the programming it provides to Licensee. Unless
otherwise agreed between the parties, Licensee shall retain all revenues from
the sale of Station's advertising during the hours each week in which the
Licensee airs its own programming pursuant to Section 1.3 hereof.
3.5 Children's Television Advertising. Programmer agrees
that it will not broadcast advertising within programs originally designed for
children aged 12 years and under in excess of the amounts permitted under
applicable FCC rules, and will take all steps necessary to pre-screen children's
programming broadcast during the hours it is providing such programming, to
establish that advertising is not being broadcast in excess of the applicable
FCC rules.
3.6 Payola. Programmer agrees that it will not accept any
consideration, compensation, gift or gratuity of any kind whatsoever, regardless
of its value or form, including, but not limited to, a commission, discount,
bonus, material, supplies or other merchandise, services or labor (collectively
"Consideration"), whether or not pursuant to written contracts or agreements
between Programmer and merchants or advertisers, unless the payer is identified
in the program for which Consideration was provided as having paid for or
furnished such Consideration, in accordance with the Act and FCC requirements.
Programmer agrees to annually, or more frequently at the request of the
Licensee, execute and provide Licensee with a Payola Affidavit from each of its
employees involved with the Station substantially in the form attached hereto as
Attachment IV.
3.7 Cooperation on Programming. Programmer and Licensee
mutually acknowledge their interest in ensuring that the Station serves the
needs and interests of viewers in Kenosha and the surrounding service area and
agree to cooperate to provide such service. Licensee shall, on a regular basis,
assess the issues of concern to residents of Kenosha and the surrounding area
and address those issues in its public service programming. Programmer, in
cooperation with Licensee, will endeavor to ensure that programming responsive
to the needs and interests of the community of license and surrounding area is
broadcast, in compliance with applicable FCC requirements. Licensee will
describe those issues and the programming that is broadcast in response to those
issues and place issues/programs lists in the Station's public inspection file
as required by FCC rules. Further, Licensee may request, and Programmer shall
provide, information
<PAGE> 10
- 7 -
concerning such of Programmer's programs as are responsive to community issues
so as to assist Licensee in the satisfaction of its public service programming
obligations. Licensee shall also evaluate the local need for children's
educational and informational programming and shall inform Programmer of its
conclusions in that regard. Licensee, in cooperation with Programmer, will
ensure that educational and informational programming for children is broadcast
over the Station in compliance with applicable FCC requirements. Programmer
shall also provide Licensee upon request such other information necessary to
enable Licensee to prepare records and reports required by the Commission or
other local, state or federal government entities.
3.8 Staffing Requirements. Licensee will be in full compliance
with the main studio staff requirements as specified by the FCC.
SECTION 4. INDEMNIFICATION
4.1 Programmer's Indemnification. Programmer shall indemnify
and hold harmless Licensee from and against any and all claims,
losses, costs, liabilities, damages, forfeitures and expenses (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature and description (collectively, "Damages") resulting from (i) Programmer's
breach of any representation, warranty, covenant or agreement contained in this
Agreement, or (ii) any action taken by Programmer or its employees and agents
with respect to the Station, or any failure by Programmer or its employees and
agents to take any action with respect to the Station, including, without
limitation, Damages relating to violations of the Act or any rule, regulation or
policy of the FCC, slander, defamation or other claims relating to programming
provided by Programmer and Programmer's broadcast and sale of advertising time
on the Station.
4.2 Licensee's Indemnification. Licensee shall indemnify
and hold harmless Programmer from and against any and all claims, losses,
consents, liabilities, damages, FCC forfeitures and expenses (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature and description, arising out of Licensee's operations and broadcasts to
the extent permitted by law and any action taken by the Licensee or its
employees and agents with respect to the Station, or any failure by Licensee or
its employees and agents to take any action with respect to the Station.
4.3 Limitation. Neither Licensee nor Programmer shall be
entitled to indemnification pursuant to this section unless such claim for
indemnification is asserted in writing delivered to the other party.
<PAGE> 11
- 8 -
4.4 Time Brokerage Challenge. If this Agreement is challenged at
the FCC, whether or not in connection with the Station's license renewal
application, counsel for the Licensee and counsel for the Programmer
shall jointly defend the Agreement and the parties' performance thereunder
throughout all FCC proceedings at the sole expense of the Programmer. If
portions of this Agreement do not receive the approval of the FCC Staff, then
the parties shall reform the Agreement as necessary to satisfy the FCC Staff's
concerns or, at Programmer's option and expense, seek reversal of the Staff's
decision and approval from the full Commission or a court of law.
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the commencement of any
programming by Programmer under this Agreement, Programmer shall acquaint the
Licensee with the nature and type of the programming to be provided. Licensee
shall be entitled to review at its discretion from time to time on a
confidential basis any of Programmer's programming material it may reasonably
request. Programmer shall promptly provide Licensee with copies of all
correspondence and complaints received from the public (including any telephone
logs of complaints called in), and copies of all program logs and promotional
materials. However, nothing in this section shall entitle Licensee to review
the internal corporate or financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate with
Licensee to assist Licensee in complying with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be necessary
to comply with FCC rules and policies, including the lowest unit rate, equal
opportunities, reasonable access, political file and related requirements of
federal law. Licensee, in consultation with Programmer, shall develop a
statement which discloses its political broadcasting policies to political
candidates, and Programmer shall follow those policies and rates in the sale of
political programming and advertising. In the event that Programmer fails to
satisfy the political broadcasting requirements under the Act and the rules and
regulations of the FCC and such failure inhibits Licensee in its compliance with
the political broadcasting requirements of the FCC, then to the extent
reasonably necessary to assure such compliance, Programmer shall either provide
rebates to political advertisers or release broadcast time and/or advertising
availabilities to Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination. In addition to other remedies available at law
or equity, this Agreement may be terminated as set forth below by either
Licensee or Programmer by
<PAGE> 12
- 9 -
written notice to the other if the party seeking to terminate is not then in
material default or breach hereof, upon the occurrence of any of the following:
(a) subject to the provisions of Section 7.9, this
Agreement is declared invalid or illegal in whole or substantial part by an
order or decree of an administrative agency or court of competent jurisdiction
and such order or decree has become final and no longer subject to further
administrative or judicial review;
(b) the other party is in material breach of its
obligations hereunder and has failed to cure such breach within thirty (30)
days of notice from the non-breaching party;
(c) the mutual consent of both parties;
(d) there has been a material change in FCC rules,
policies or precedent that would cause this Agreement to be in violation
thereof and such change is in effect and not the subject of an appeal or
further administrative review and this Agreement cannot be reformed, in a
manner acceptable to Programmer and Licensee, to remove and/or eliminate the
violation; or
(e) by either party upon six months written notice to
the other party.
6.2 Termination Requirements and Procedures.
(a) Programmer may terminate this Agreement pursuant to
Section 6.1(e) hereof only if it pays Licensee an amount equal to six times the
monthly compensation due for the month preceding the notice of termination by
Programmer pursuant to Attachment I.
(b) Licensee may terminate this Agreement pursuant to
Section 6.1(e) hereof only if it pays Programmer an amount equal to six times
the monthly compensation due for the month preceding the notice of termination
by Licensee pursuant to Attachment I.
(c) During any period prior to the effective date of
any termination of this Agreement, Programmer and Licensee agree to cooperate
in good faith to ensure that Station operations will continue, to the extent
possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to
the extent possible, the resulting disruption of the Station's ongoing
operations.
6.3 Force Majeure. Any failure or impairment of the
Station's facilities or any delay or interruption in the broadcast of programs,
or failure at any time to furnish facilities, in whole or in part, for
broadcast, due to Acts of God, strikes, lockouts, material or labor
<PAGE> 13
- 10 -
restrictions by any governmental authority, civil riot, floods and any other
cause not reasonably within the control of Licensee, or for power reductions
necessitated for maintenance of the Station or for maintenance of other
stations located on the tower from which the Station will be broadcasting,
shall not constitute a breach of this Agreement and Licensee will not be liable
to Programmer for reimbursement or reduction of the consideration owed to
Licensee.
6.4 Other Agreements. During the term of this
Agreement or any renewal hereof, Licensee will not enter into any other
agreement with any third party that would conflict with or result in a material
breach of this Agreement by Licensee.
SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) Neither this Agreement nor any of the rights, interests
or obligations of either party hereunder shall be assigned, encumbered,
hypothecated or otherwise transferred without the prior written consent of the
other party, such consent not to be unreasonably withheld. Notwithstanding the
foregoing, Programmer shall have the right to collaterally assign its rights and
interests hereunder to its lenders.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
7.2 Call Letters. Upon request of Programmer, subject to the
consent of the Licensee, Licensee shall apply to the FCC for authority to
change the call letters of the Station (with the consent of the FCC) to such
call letters that Programmer shall reasonably designate. Licensee must
coordinate with Programmer any proposed changes to the call letters of the
Station before taking any action to change such letters.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement and the Attachments hereto
embodies the entire agreement and understanding of the parties relating to the
operation of the Station. No amendment, waiver of compliance with any provision
or condition hereof, or consent pursuant to this Agreement will be effective
unless evidenced by an instrument in writing signed by the parties.
<PAGE> 14
- 11 -
7.5 Taxes. Licensee and Programmer shall each pay its own ad valorem
taxes, if any, which may be assessed on such party's respective personal
property for the periods that such items are owned by such party. Programmer
shall pay all taxes, if any, to which the consideration specified in Section 1.5
herein is subject, provided that Licensee is responsible for payment of its own
income taxes.
7.6 Headings. The headings are for convenience only and will not
control or affect the meaning or construction of the provisions of this
Agreement.
7.7 Governing Law. The obligations of Licensee and Programmer are
subject to applicable federal, state and local law, rules and regulations,
including, but not limited to, the Act and the Rules and Regulations of the
FCC. The construction and performance of the Agreement will be governed by the
laws of the State of Florida.
7.8 Notices. All notices, demands and requests required or permitted
to be given under the provisions of this Agreement shall be (i) in writing, (ii)
sent by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (iii) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (iv) addressed
as follows:
To Programmer: Paxson Communications of Milwaukee-55, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
To Licensee: Channel 55 of Milwaukee, Inc.
14444 66th Street North
Clearwater, FL 34624
Telecopy: (813) 530-0671
Telephone: (813) 536-0036
or to any such other or additional persons and addresses as the parties may
from time to time designate in a writing delivered in accordance with this
Section 7.8.
7.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of
<PAGE> 15
- 12 -
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law. In the event that the FCC alters or modifies
its rules or policies in a fashion which would raise substantial and material
question as to the validity of any provision of this Agreement, the parties
hereto shall negotiate in good faith to revise any such provision of this
Agreement with a view toward assuring compliance with all then existing FCC
rules and policies which may be applicable, while attempting to preserve, as
closely as possible, the intent of the parties as embodied in the provision of
this Agreement which is to be so modified.
7.10 Arbitration. Any dispute arising out of or related to this
Agreement that Licensee and Programmer are unable to resolve by themselves shall
be settled by arbitration in Miami, Florida by a panel of three arbitrators.
Licensee and Programmer shall each designate one disinterested arbitrator and
the two arbitrators designed shall select the third arbitrator. The persons
selected as arbitrators need not be professional arbitrators, and persons such
as lawyers, accountants and bankers shall be acceptable. Before undertaking to
resolve a dispute, each arbitrator shall be duly sworn faithfully and fairly to
hear and examine the matters in controversy and to make a just award according
to the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Licensee and Programmer. The costs and expenses
of the arbitration proceeding shall be assessed between Licensee and Programmer
in a manner to be decided by a majority of the arbitrators, and the assessment
shall be set forth in the decision and award of the arbitrators. Judgment on
the award, if it is not paid within thirty days, may be entered in any court
having jurisdiction over the matter. No action at law or in equity based upon
any claim arising out of or related to this Agreement shall be instituted in any
court by Licensee or Programmer against the other except: (i) an action to
compel arbitration pursuant to this Section; or (ii) an action to enforce the
award of the arbitration panel rendered in accordance with this Section.
7.11 No Joint Venture. Nothing in this Agreement shall be deemed to
create a joint venture between the Licensee and the Programmer.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 16
- 13 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
LICENSEE: CHANNEL 55 OF MILWAUKEE, INC.
By: /s/ James L. West
-----------------------------------
James L. West
Chairman
PROGRAMMER: PAXSON COMMUNICATIONS OF
MILWAUKEE-55, INC.
By: /s/ William L. Watson
---------------------------------
William L. Watson
Secretary
<PAGE> 1
EXHIBIT 10.120
============================================================================
LOAN AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
MILWAUKEE-55, INC.
AND
CHANNEL 55 OF MILWAUKEE, INC.
FOR
TELEVISION STATION WHKE-TV
KENOSHA, WISCONSIN
* * *
JULY 9, 1996
============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. AMOUNT AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 The Promissory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Repayment of the Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Use of Proceeds and Advancement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.6 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.7 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.8 Payment on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1 Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3 Leasehold Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.4 Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.1 Conditions Precedent to Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.2 Conditions Precedent to Final Installment . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.1 Representations and Warranties of Borrower . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 8.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.4 Address for Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.10 Rights Affected by Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.11 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.12 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.14 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.15 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.16 Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.1 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.3 Limited Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
LIST OF EXHIBITS
----------------
Exhibit 1 -- Promissory Note
Exhibit 2 -- Security Agreement
Exhibit 3 -- Pledge Agreement
Exhibit 4 -- Mortgage
- ii -
<PAGE> 4
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 9th day of July, 1996, is by
and between PAXSON COMMUNICATIONS OF MILWAUKEE-55, INC., a Florida corporation
having its principal offices at 601 Clearwater Park Road, West Palm Beach, FL
33401 (the "Lender"), and CHANNEL 55 OF MILWAUKEE, INC., a Florida corporation
having its principal offices at 14444 66th Street North, Clearwater, Florida
34624 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower is purchasing substantially all of the assets
and properties, including all broadcast licenses issued by the Federal
Communications Commission ("FCC Licenses") and other governmental authorities,
of Television Station WHKE-TV, Kenosha, Wisconsin (the "Station");
WHEREAS, the Lender is willing to lend the Borrower sufficient funds
to acquire the Station on which Lender will provide programming pursuant to a
Time Brokerage Agreement;
WHEREAS, the Borrower and Lender have entered into an Option Agreement
dated as of the date hereof pursuant to which the Borrower has granted to the
Lender an exclusive and irrevocable option to acquire the assets of the Station
upon the terms and conditions specified therein (the "Option Agreement"); and
WHEREAS, the Borrower desires to borrow funds from the Lender to
finance the purchase and operation of the Station.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
ARTICLE I . AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. The Lender agrees, upon the terms
and conditions hereinafter set forth, to make a loan or loans to the Borrower
in an aggregate principal amount not to exceed at any one time outstanding Six
Million Dollars ($6,000,000.00) plus such additional amounts that are
reasonably requested by Borrower for the purposes set forth in Section 1.5 and
are approved by Lender in its sole discretion (the "Loan").
Section 1.2 The Promissory Note. The outstanding
principal amount of the Loan shall be evidenced by and subject to the terms of
a promissory note, dated of even date herewith, substantially in the form set
forth as Exhibit 1 hereto (as amended, renewed, restated, increased,
consolidated or substituted from time to time, the "Note") payable
to the
<PAGE> 5
- 2 -
order of the Lender and representing the obligation of the Borrower to pay
the Lender the amount of the Loan, with interest thereon, as prescribed in
Section 1.4. All references to the "Note" in this Loan Agreement, the Security
Agreement, the Pledge Agreement, each Leasehold Mortgage or Mortgage (each as
defined in this Loan Agreement) and in such other agreements and documents
executed and delivered in connection with this Loan Agreement shall be deemed to
be references to the Note referred to in this Section.
Section 1.3 Interest. The Loan shall bear interest on
the unpaid principal amount thereof at a rate per annum equal to the Prime
Commercial Rate announced or published by Sun Bank of Tampa Bay to be adjusted
monthly as and when such rate is adjusted. Interest shall be calculated on the
basis of a year of three-hundred and sixty (360) days and the actual number of
days elapsed during the period for which such interest is payable. Interest
shall begin to accrue on the outstanding principal amount of the Loan on the
date of disbursement of all or a portion of the Final Installment (as defined
below) pursuant to Section 1.5(b) (the "Final Installment Date"). The first
payment of interest to the Lender shall be due thirty (30) days after the
acquisition of the Station by the Borrower pursuant to Federal Communications
Commission ("FCC") authority, at which time all interest accrued from the Final
Installment Date shall become due and payable. Thereafter, accrued interest
shall be paid monthly on or before the first day of each month until all
principal and interest hereunder is paid in full and at the repayment or
maturity of the Loan. If any installment of principal or interest is not paid
when due, that installment shall bear interest at a rate per annum equal to the
lower of the highest rate permitted by law or eighteen percent (18%) from the
date due thereof until paid in full.
Section 1.4 Repayment of the Loan. In the event that any
portion of the Loan is used by the Borrower to fund an escrow deposit or
similar payment toward the purchase of the Station (the "Deposit"), and such
Deposit is returned to the Borrower, the amount of such Deposit shall be
immediately repaid to Lender, together with all interest earned on such Deposit
and paid to the Borrower. In the event that the Borrower does not acquire the
Station, Borrower shall repay to Lender the outstanding principal amount of the
Loan no later than one-hundred eighty (180) days after such other party
acquires the Station. The principal amount of the Loan plus any accrued and
unpaid interest shall be due and payable on the first day of the 84th month
following the acquisition of the Station by the Borrower (the "Term Date"). In
the event of a termination of the Time Brokerage Agreement dated as of July
9, 1996, between Borrower and Lender, Borrower shall, in addition to payments
of interest required under Section 1.3 hereof, repay the outstanding principal
balance of the Loan in consecutive, equal monthly installments commencing on
the first day of the month following such termination (the "Amortization
Commencement Date") and ending on the Term Date, with each such monthly
principal installment payment equal to (x) the principal amount of the Loan
outstanding hereunder as of the first day of the month following such
<PAGE> 6
- 3 -
termination divided by (y) the total number of consecutive months included in
the period commencing on the Amortization Commencement Date, through and
including the Term Date.
Section 1.5 Use of Proceeds and Advancement of Funds.
(a) The proceeds of the Loan are to be used by the Borrower
exclusively for financing the purchase of the Station and for working capital
and operating expenses relating to the Station.
(b) The Lender shall loan to the Borrower the funds
required to acquire the Station, less the Deposit (the "Final Installment"), at
the closing of the acquisition of the Station, following final and
nonappealable FCC approval of the assignment of the FCC Licenses of the Station
to the Borrower.
Section 1.6 Information. The Borrower agrees to furnish to the
Lender such information as the Lender may reasonably request in connection with
the Loan or the Station.
Section 1.7 Prepayment. The Borrower may prepay the Note in whole at
any time, or from time to time in part, with accrued interest to the date of
prepayment on the amount prepaid, without penalty, provided that each payment,
other than that for the full amount of the outstanding balance, shall be in the
amount of Ten Thousand Dollars ($10,000.00) or an integral multiple thereof,
provided, however, that if any such prepayment is made within three years of the
Borrower's acquisition of the Station, Borrower shall reimburse Lender for any
prepayment penalty imposed on Lender or its affiliates under their debt
agreements or instruments as a result of Borrower's prepayment. Each prepayment
on the Note shall be applied to installments of principal payable on the Note in
the inverse order of maturity.
Section 1.8 Payment on Non-Business Days. Whenever any payment to be
made hereunder or under the Note shall become due on a Saturday, Sunday or
public holiday, such payment may be made on the next succeeding business day,
and such extension of time in such case shall be included in the computation of
interest hereunder and under the Note.
ARTICLE II. CLOSING
Section 2.1 Closing Date. Closing of this transaction shall occur
on a date agreed upon by the parties hereto (the "Closing Date").
<PAGE> 7
- 4 -
ARTICLE III. SECURITY
Section 3.1 Security Interest. As security for the Loan, the
Borrower shall execute and deliver to the Lender, on or before the Closing Date,
a security agreement in the form of Exhibit 2 hereto (the "Security Agreement").
Section 3.2 Pledge Agreement. As further security for
the Loan, on or before the Closing Date, the Borrower shall deliver to the
Lender a pledge agreement in the form of Exhibit 3 hereto, duly executed by The
Christian Network, Inc. (the "Shareholder"), the sole shareholder of the
Borrower (the "Pledge Agreement").
Section 3.3 Leasehold Mortgages. If requested by Lender,
at such time as the Borrower enters into or assumes the Lessee's interest under
any lease, it shall execute with respect to such lease a leasehold mortgage
substantially in the form of Exhibit 4 hereto (a "Leasehold Mortgage"),
granting the Lender a lien on its leasehold interest under such lease. In
particular, and without limiting the generality of the foregoing, if requested
by Lender, the Borrower shall execute a Leasehold Mortgage with respect to each
lease, if any, that it assumes as part of the acquisition of the Station. If
requested by Lender, the Borrower shall also deliver to the Lender with respect
to any lease to which the Borrower becomes a party one or more of the following
documents, each of which shall be in form and substance satisfactory to the
Lender: (i) evidence of the filing of the lease or a memorandum of lease, (ii)
an estoppel certificate executed by the landlord under such lease or any
sublessee, (iii) an executed landlord's consent and waiver, (iv) fixture filing
UCC-1 financing statements, (v) copies of such lease and any sublease, (vi)
executed tenant subordination agreements, (vii) a title encumbrance report with
respect to the real property subject to such lease, and (viii) any other
document required by applicable law to create or perfect a mortgage lien with
respect to such lease or reasonably required by the Lender.
Section 3.4 Mortgages. At such time as the Borrower
acquires any parcel of real estate, the Borrower shall execute a first mortgage
or deed of trust in favor of the Lender on such parcel, in form and substance
acceptable to Lender (a "Mortgage"). If requested by Lender, the Borrower
shall also deliver to the Lender with respect to such property one or more of
the following documents, each of which shall be in form and substance
satisfactory to the Lender: (i) fixture filing UCC-1 financing statements,
(ii) copies of any lease relating to such property, if any, (iii) executed
tenant subordination agreements and estoppel certificates, if applicable, (iv)
a survey of such real property, (v) a mortgagee title insurance policy, with
such coverage and with such endorsements, including, without limitation, usury,
first loss, last dollar, revolving credit, variable rate, doing business,
zoning comprehensive, contiguity (as applicable) and survey, to the extent
available in the state where the property is located, as the Lender may
require, and (vi) any other document required by applicable law
<PAGE> 8
- 5 -
to create or perfect a mortgage lien with respect to such property or
reasonably required by the Lender.
ARTICLE IV. CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation
of the Lender to disburse from time to time any portion of the Loan hereunder
is subject to the condition precedent that the Lender shall have received all
of the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the Borrower;
(b) The Security Agreement, together with appropriate UCC-1
forms and, if applicable, landlord lien waivers, duly executed and delivered by
the Borrower;
(c) The Pledge Agreement, duly executed and delivered by
the Shareholder together with stock certificates and blank stock powers;
(d) Certified copies of the resolutions of (i) the Board of
Directors of Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby, and (ii) the Board of Stewards of Shareholder
evidencing approval of the execution, delivery and performance of this Loan
Agreement and the Pledge Agreement;
(e) A Certificate of Good Standing for the Borrower and
Shareholder;
(f) A copy of the Asset Purchase Agreement dated as of March
31, 1995, between Borrower and LeSea Broadcasting Corporation (the "Purchase
Agreement"), pursuant to which Borrower is purchasing the Station;
(g) Copies of UCC, judgment and tax lien searches in each
jurisdiction in which collateral covered by the Security Agreement is located,
naming the Borrower and the Seller of the Station as debtors;
(h) Such other agreements, certificates, opinions of
counsel and documents that the Lender may reasonably require; and
(i) The Option Agreement, duly executed and delivered by
the Borrower.
<PAGE> 9
- 6 -
Section 4.2 Conditions Precedent to Final Installment. The
obligation of the Lender to advance the Final Installment to the Borrower is
subject to the condition precedent that the Lender shall have received each of
the following, on or before the Final Installment Date, in form and substance
satisfactory to the Lender:
(a) With respect to each leased real property, the documents
required by Section 3.3, and with respect to each owned real property, the
documents required by Section 3.4;
(b) A Certificate of Good Standing for the Borrower in the
State of Florida as of a recent date prior to the Final Installment Date;
(c) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.1(e);
(d) Evidence, in form and substance acceptable to Lender, that
Borrower has received the approval of the FCC to be the licensee of the Station
and that approval has become a final, non-appealable order no longer subject to
administrative or judicial review, reconsideration or appeal;
(e) A copy of the Purchase Agreement and each other contract,
certificate and other document executed by the Borrower or the seller of the
Station in connection with the Borrower's acquisition of the Station; and
(f) Such other agreements, certificates, opinions of counsel
and documents that the Lender may reasonably require.
Section 4.3 Compliance. All of the representations and warranties
of the Borrower and Shareholder in this Loan Agreement shall be true and
accurate in all material respects on and as of the Closing Date and the date of
any subsequent disbursement of any portion of the Loan, as if made on and as of
such date and time. The Borrower shall be in compliance with all of the
applicable terms and provisions of this Agreement and no Event of Default or any
event which with the lapse of any applicable grace period or the giving of
notice or both would constitute an Event of Default shall have occurred and be
continuing. The Borrower shall have performed all obligations and taken all
actions to be performed or taken by it hereunder on or prior to such date. On
the Closing Date, the Borrower and Shareholder shall deliver to the Lender a
certificate, dated as of such date and signed by an executive officer of the
Borrower and Shareholder, certifying compliance with the conditions of this
Section 4.3. Each disbursement of all or a portion of the Loan to the Borrower
shall in and of itself, constitute a representation and warranty that the
Borrower and Shareholder as of the
<PAGE> 10
- 7 -
date of such Loan, is in compliance with this Section and if the Borrower or
Shareholder is not in compliance with this Section, the Lender shall
not be required to disburse such Loan to the Borrower.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Borrower. In order to
induce the Lender to enter into this Agreement and make the Loan, Borrower
represents and warrants as follows:
(a) Existence and Standing. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and is qualified to do business and in good standing under the laws
of any other jurisdiction in which it conducts its business, and has all
requisite power and authority, corporate or otherwise, to conduct its business,
to own its properties and to execute and deliver, and to perform all of its
obligations under this Agreement, the Note, any Mortgage or Leasehold Mortgage,
the Security Agreement, the Option Agreement, and all other documents that have
been or will be executed and delivered by the Borrower pursuant to this
Agreement.
(b) Authorizations, Compliance with Laws. The execution,
delivery and performance by the Borrower of this Agreement, the Note, any
Mortgage or Leasehold Mortgage, the Security Agreement, the Option Agreement,
and all other documents required to be executed and delivered by the Borrower
pursuant to this Agreement have been duly authorized by all necessary corporate
action and do not and will not (i) violate (A) any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Borrower or (B) any provision of
the charter or by-laws of the Borrower; or (ii) result in a breach of or
constitute a default under any agreement or instrument to which the Borrower is
a party or by which its properties may be affected; or (iii) result in the
creation of a lien, charge or encumbrance of any nature upon the Borrower's
properties or assets other than as contemplated by this Agreement.
(c) No Consent. No authorization, consent, approval, license,
exemption of or filing or registration with any court or governmental department
or agency, except for filing with the FCC, is or will be necessary to the valid
execution, delivery and performance by the Borrower of this Agreement, the Note,
any Mortgage or Leasehold Mortgage, the Security Agreement, the Option
Agreement, or any other document required to be executed and delivered by the
Borrower pursuant to this Agreement.
<PAGE> 11
- 8 -
(d) Binding Obligations. This Agreement, the Note, any Lease
hold Mortgage, any Mortgage, the Security Agreement, the Pledge Agreement and
all other documents required to be executed and delivered by the Borrower (or,
in the case of this Agreement and the Pledge Agreement, by the Shareholder)
pursuant to this Agreement have been or, on or prior to the Closing Date, will
be executed and delivered by duly authorized officers of the Borrower (or, in
the case of this Agreement and the Pledge Agreement, of the Shareholder) and
constitute or, on or prior to the Closing Date, will constitute, legal, valid
and binding obligations of the Borrower (or, in the case of this Agreement and
the Pledge Agreement, of the Shareholder) enforceable in accordance with their
respective terms.
(e) Litigation. There are no actions, suits or proceedings
pending, or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or its properties before any court or governmental department or
agency which materially adversely affects the transactions contemplated by this
Agreement or which would have a material adverse effect on the business,
properties, prospects, operation or condition (financial or otherwise) of the
Borrower.
(f) No Default. The Borrower is not in default in the
performance, observance or fulfillment of any of the obligations or conditions
contained in any material agreement or instrument to which it is a party, nor
with respect to any order, judgment, writ, injunction or decree of any court,
governmental authority or arbitration board.
(g) Compliance with Laws. The Borrower has complied with all
applicable federal, state and local laws. The Borrower has obtained all
necessary licenses and permits required for the conduct of its business and
operations or such licenses and permits have been applied for and are now being
diligently pursued.
(h) Taxes. The Borrower has filed all tax returns and reports
(federal, state and local) required to be filed by it, and has paid all taxes
shown thereon, including interest and penalties, and all assessments received by
it (except to the extent that the same are being contested in good faith by
appropriate proceedings diligently prosecuted and as to which adequate reserves
have been set aside on the books of the Borrower in conformity with generally
accepted accounting principles).
(i) Title to Properties. The Borrower has good and
marketable title to all of its property and assets and valid and enforceable
leasehold interests in the property which it holds under lease, all such
property, assets and leasehold interests being free and clear of any and all
mortgages, deeds of trust, assignments, liens, security interests, charges or
encumbrances of any nature whatsoever, except for those created hereby, and no
mortgages, deeds of trust, financing statements or other evidences of security
interests covering all or
<PAGE> 12
- 9 -
any of the aforesaid property are on file among the records of any
public office, except those evidencing a security interest in favor of the
Lender.
(j) Material Misstatement. No statement made herein or
information, exhibit or report furnished by the Borrower to the Lender in
connection with this Agreement or its negotiation, contains any material
misstatement of fact or omits to state a material fact or any fact necessary
to make the foregoing not misleading.
ARTICLE VI. COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall remain
unpaid, the Borrower hereby covenants and agrees that it will, unless the
Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
when due: (i) all indebtedness heretofore or hereafter incurred; (ii) all taxes,
assessments and governmental charges or levies imposed upon it or its income or
profits, or upon any properties belonging to it; (iii) claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like persons
which, if unpaid might become a lien or charge upon the property of the
Borrower; provided that this covenant shall not require the payment of any of
the matters set forth in (i), (ii) and (iii) above if the same shall be
contested in good faith and by proper proceedings diligently pursued and as to
which adequate reserves have been set aside on the books of the Borrower in
accordance with generally accepted accounting principles.
(b) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all of
its properties necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority.
(e) Maintenance of Insurance. Maintain with responsible and
reputable insurance companies policies on all of its properties and covering
such risks, including public liability and workers' compensation, in such
amounts as are usually carried by companies engaged in similar businesses and
owning similar properties as the Borrower, and promptly
<PAGE> 13
- 10 -
upon execution thereof provide to the Lender copies of all such policies
and any riders or amendments thereto. The policies of insurance required
hereunder shall name the Lender as an additional loss payee or additional
insured, as applicable, and shall provide that the Lender shall receive at least
thirty (30) days' written notice prior to the cancellation, termination or
alteration of any such policy.
(f) Operations in Ordinary Course. Continue to operate its
business in the ordinary course.
(g) Perfection of Liens. Do all things requested by the
Lender to preserve and perfect the liens and security interests of the Lender
arising pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage, any Mortgage or any other agreement required hereunder as first liens
and security interests.
(h) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required in connection with the
execution, delivery and performance of this Agreement, the Pledge Agreement, the
Security Agreement, any Mortgage or Leasehold Mortgage or any other document
delivered to the Lender in connection herewith or therewith or as a result of
any action which may be taken pursuant hereto or thereto, then the Borrower, at
its sole cost and expense, agrees to use its best efforts to secure such consent
and to cooperate with the Lender in any action commenced by the Lender to secure
such consent.
(i) Purchase Agreement. Comply with its obligations under
the Purchase Agreement.
Section 6.2 Negative Covenants. So long as the Note
shall remain unpaid and the Agreement shall not have been terminated, the
Borrower hereby covenants that it will not, without the Lender's prior written
approval:
(a) Indebtedness. Create or incur, assume or suffer to
exist any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness evidenced by the Note; (ii) indebtedness (other than for
borrowed money) incurred in the ordinary course of business not to exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate at any one time; (iii)
obligations or liabilities arising under the indemnification provisions of the
Purchase Agreement.
(b) Liens. Create, assume or suffer to exist, directly or
indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any
<PAGE> 14
- 11 -
nature whatsoever upon any of its properties or assets, now owned or
hereafter as acquired, excluding, however, from the operation of this covenant
with respect to property or assets other than the Stock (as defined in the
Pledge Agreement):
(i) any security interest or lien created pursuant to or
in connection with this Agreement or securing the Loan, the Security Agreement,
the Pledge Agreement, any Leasehold Mortgage or any Mortgage;
(ii) liens for taxes or assessments either not delinquent
or the validity of which are being contested in good faith by appropriate legal
or administrative proceedings and as to which adequate reserves shall have been
set aside on its books, in conformity with generally accepted accounting
principles;
(iii) materialmen's, mechanics', carriers', workmen's,
repairmen's, warehousemen's or other like liens arising in the ordinary course
of business and either not yet due and payable or being contested in good faith
by appropriate legal proceedings and as to which adequate reserves shall have
been set aside on its books, in conformity with generally accepted accounting
principles;
(iv) deposits or pledges to secure payment of workers'
compensation, unemployment insurance or other social security benefits or
obligations; or
(v) any judgment lien, singly or aggregated with other
judgment liens, in an amount less than $100,000, unless the judgment it secures
shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Sell, transfer, lease or
otherwise dispose of any of its assets or properties other than sales of assets
in the ordinary course of business (which shall expressly not include any
transfer or assignment of any FCC License).
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or assets
of any person or entity.
(e) Transfer or Issuance of Shares. Issue or permit the
transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock. The preceding sentence shall not apply to issuances or transfers to the
Lender.
<PAGE> 15
- 12 -
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured with
the proceeds of the borrowings provided for herein, or any replacements for such
assets, to a jurisdiction in which no financing statement on Form UCC-1 has been
filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make, directly
or indirectly, any payment or distribution, or incur any liability for the
purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution of
any kind to a shareholder of the Borrower or any affiliate of the Borrower
(other than any stock dividend or stock split or similar distribution payable
only in capital stock of the Borrower) in respect of the Borrower's capital
stock.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Five Thousand Dollars ($5,000.00) and contracts which can
be terminated without penalty on thirty (30) days' notice or less, or amend or
terminate any material contract (or waive any substantial right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse change in
the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material increase in
excess of the reasonable range in the broadcast industry in the same or similar
markets in compensation payable or to become payable to any employees, or any
bonus payment made or promised to any employee, or any material change in
personnel policies, insurance benefits or other compensation arrangements
affecting any employees, provided that nothing in this clause shall be construed
to limit or restrict the commission compensation of employees who may be selling
brokered time for the Borrower.
<PAGE> 16
- 13 -
(m) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(n) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender
except and as required by generally accepted accounting principles as required
to present accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service mark, trade name, franchise, or similar
right, or modify any existing right relating to the Borrower.
(p) Television Affiliation Agreement. In the event
Borrower acquires the Station, terminate, amend or waive any provision of the
Television Affiliation Agreement (as defined in Section 7.1(d) below), if any,
to which the Station is a party.
(q) Purchase Agreement. Terminate, amend, commit any
material breach or default under or waive any term of the Purchase Agreement or
Option Agreement.
(r) Subsidiaries. Create or acquire any subsidiary of
Borrower, unless Lender shall have approved such action in advance and
Borrower shall have taken all actions required by Lender to grant Lender a
first priority security interest in all of the issued and outstanding stock of
such subsidiary. Borrower acknowledges and agrees that until such time as such
security interest is granted and perfected, Lender shall have an equitable lien
in the stock of any subsidiary created or acquired by Borrower.
Section 6.3 Reporting Requirements. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, the Borrower shall,
unless the Lender shall otherwise consent in writing, furnish to the Lender:
(a) Default Certificate. As soon as possible and in any event
within five (5) business days after the occurrence of each Event of Default (as
defined in Section 7.1) of which the Borrower has knowledge, the statement of
the President of the Borrower setting forth details of such Event of Default and
the action which the Borrower proposes to take with respect thereto.
(b) Financial Statements. Beginning with the making of the
Final Installment, quarterly financial statements within thirty (30) days after
the end of each fiscal quarter; within ninety (90) days after the end of each
fiscal year of the Borrower, a copy of
<PAGE> 17
- 14 -
the audited financial statements for such year for the Borrower, including
therein a balance sheet of the Borrower as of the end of such fiscal
year, statements of income and expense of the Borrower for such fiscal year, and
a statement of cash flow of the Borrower for such fiscal year, in each case
prepared by an independent public accountant of recognized standing acceptable
to the Lender, except that the Lender may waive the audit requirement and accept
a review of the Borrower's financial records.
(c) Notice of Litigation. Promptly give written notice of
all actions, suits and proceedings before any court or governmental agency,
domestic or foreign, which may be commenced or threatened against the Borrower
in which the claim involved is Five Thousand Dollars ($5,000.00) or more and of
any other matter of the type described in Section 5.1(e).
(d) Budget. An annual budget within thirty (30) days of
the beginning of each fiscal year of the Borrower. Such budget shall be
satisfactory in form and substance to the Lender.
(e) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower as the Lender may from time to time reasonably request.
ARTICLE VII. EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, an Event of
Default shall be any of the following:
(a) The Borrower shall fail to pay any installment of
principal or interest on the Note, or any other obligation to the Lender when
due whether at the due date thereof or by acceleration or otherwise, and, in the
case of any installment of interest, such default shall remain unremedied for a
period of five (5) days; or
(b) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, Pledge
Agreement or any Leasehold Mortgage or Mortgage shall at any time not constitute
a legal, valid and enforceable security interest or lien; or
(c) Any representation or warranty made by the Borrower (or
any of its officers) herein, in the Security Agreement, any Leasehold Mortgage
or Mortgage or the Option Agreement, or by the Shareholder (or any of its
officers) herein or in the Pledge Agreement or in any certificate, agreement,
instrument or statement contemplated by or
<PAGE> 18
- 15 -
made or delivered pursuant to or in connection with this Agreement, the
Note, any Leasehold Mortgage or Mortgage, the Security Agreement the Option
Agreement, or the Pledge Agreement, shall prove to have been incorrect in any
material respect when made; or
(d) The Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement, the Note, the Security
Agreement, any Leasehold Mortgage or Mortgage, the Option Agreement or any
Television Affiliation Agreement relating to the Station (the "Television
Affiliation Agreement"), or the Shareholder shall fail to perform or observe any
term, covenant or agreement contained in the Pledge Agreement, and any such
failure remains unremedied for thirty (30) days after written notice thereof
shall have been given to the Borrower by the Lender; or
(e) The Borrower or the Shareholder shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Shareholder or any
interest or premium thereon, when due, whether such indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand or
otherwise, or the Borrower or the Shareholder shall fail to perform any term,
covenant or agreement under any agreement or instrument evidencing or securing
or relating to any such indebtedness owing by the Borrower or the Shareholder if
the effect of such failure is to accelerate, or to permit the holder of such
indebtedness to accelerate the maturity of such indebtedness; or
(f) The Borrower shall expend the proceeds of the Loan for
any purpose other than the purchase of the Station and working capital and
operating expenses relating to the Station without the prior written consent of
the Lender, which may be withheld in the Lender's sole discretion; or
(g) Either (i) Borrower or the Shareholder shall fail to
pay its debts as they mature in the ordinary course of business; or (ii)
Borrower or the Shareholder shall file a petition commencing a voluntary case
concerning it under any Chapter of Title 11 of the United States Code
entitled "Bankruptcy"; or (iii) Borrower or the Shareholder shall apply for or
consent to the appointment of any receiver, trustee, custodian or similar
officer for it or for all or any substantial part of its property; or (iv) such
receiver, trustee, custodian or similar officer shall be appointed without the
application or consent of the Borrower or the Shareholder and such appointment
shall continue undischarged for a period of thirty (30) days; or (v) an
involuntary case is commenced against the Borrower or the Shareholder under any
Chapter of the aforementioned Title 11 and an order for relief under such Title
11 is entered or the petition commencing the case is controverted but is not
dismissed within thirty (30) days after the commencement of the case; or (vi)
the Borrower or the Shareholder shall institute (by petition, application,
answer, consent or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or
<PAGE> 19
- 16 -
similar proceeding relating to it under the laws of any jurisdiction; or
(vii) any such proceeding shall be instituted against the Borrower or the
Shareholder and shall remain undismissed for a period of thirty (30) days; or
(viii) the Borrower or the Shareholder shall take any action for the purpose of
effectuating the foregoing; or
(h) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower; or
(i) There shall be a cancellation, denial or revocation of
any material FCC License for the Station, the Borrower shall be finally denied
renewal of any such License, or any such FCC License shall be renewed on terms
that materially adversely affect the economic or commercial value or usefulness
thereof; or
(j) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of One
Hundred Thousand Dollars ($100,000.00), or (ii) in the aggregate at any time an
amount in excess of One Hundred Thousand Dollars ($100,000.00), and in either
case not adequately covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against Borrower or its assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
30 days or in any event later than five days prior to the date of any proposed
sale thereunder; or
(k) The Shareholder shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to Article IX hereof or any obligation of the Shareholder
under Article IX hereof shall, for any reason other than the full satisfaction
thereof, not be or shall cease to be in full force and effect or is, or is
declared to be, null and void, or the Shareholder shall, or shall purport to,
terminate, revoke, repudiate, declare voidable or void, deny, disaffirm or
otherwise contest Article IX hereof or any term or provision thereof or any of
its obligations or liabilities under Article IX hereof.
Section 7.2 Effect of Event of Default. Should any Event of Default
occur, the Lender may at its option by written notice to the Borrower declare
the entire unpaid principal amount of the Note, together with all unpaid
interest and all other amounts payable under this Agreement and every other
obligation of the Borrower to the Lender, immediately due and payable, whereupon
the Note and all such obligations shall become and be forthwith due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower, anything contained herein or in the
Note or in such other note or evidence of indebtedness to the contrary
notwithstanding; provided,
<PAGE> 20
- 17 -
however, that in case of an Event of Default under Section 7.1(g), all
the obligations of the Borrower under this Agreement and the Note shall become
immediately due and payable as of the date of any such Event of Default
regardless of the cause of such Event of Default and without any notice to the
Borrower required from the Lender. The Lender shall have, in addition to all
other rights and remedies allowed by law, the rights and remedies of a secured
party under the Uniform Commercial Code and, without limiting the generality of
the foregoing, the rights and remedies provided for in the Security Agreement,
Pledge Agreements, and any Mortgage or Leasehold Mortgage, which provisions are
hereby incorporated by reference.
ARTICLE VIII. MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies. No failure
or delay on the part of the Lender in exercising any right, power or remedy
hereunder shall operate as a waiver, nor shall any single or partial exercise
of any such right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 8.2 Amendments. No amendment, modification,
termination or waiver of any provision of this Agreement, the Note, the
Security Agreement, the Pledge Agreement or any Mortgage or Leasehold Mortgage,
nor consent to any departure by the Borrower therefrom, shall in any event be
effective unless in writing, signed by the Lender and then only in the specific
instance and for the specific purpose for which given. No notice to or demand
on the Borrower in any case shall entitle it to any other or further notice or
demand in similar or other circumstances.
Section 8.3 Conflicts. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
Note, the Security Agreement, the Pledge Agreement or any Mortgage or Leasehold
Mortgage, the provisions of this Agreement shall control.
Section 8.4 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
If to the Borrower: James L. West
The Christian Network, Inc.
14444 66th Street North
Clearwater, Florida 34624
<PAGE> 21
- 18 -
If to the Lender: Lowell W. Paxson
Paxson Communications of Milwaukee-55, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
Section 8.5 Expenses. The Borrower agrees to pay on
demand all costs and expenses incurred by the Lender directly in the
enforcement of this Agreement, the Note, the Security Agreement, any Mortgage
or Leasehold Mortgage, the Pledge Agreement and other instruments and documents
to be delivered hereunder, including, without limitation, the reasonable fees
and expenses of any attorney to whom the Note is referred for collection
(whether or not litigation is commenced) or for representation out of court, in
trial, on appeal or in proceedings under any bankruptcy or insolvency law or
otherwise. In addition, the Borrower shall pay any and all taxes and fees
payable or determined to be payable in connection with the execution, delivery
or recordation of any instruments and documents to be delivered hereunder. In
addition, Borrower agrees to pay (i) all the actual and reasonable costs and
expenses of Lender in connection with the negotiation, preparation and
execution of this Loan Agreement, the Note, the Security Agreement, the Pledge
Agreement, any Mortgage or Leasehold Mortgage and all other documents and
instruments to be delivered hereunder (collectively, the "Loan Documents") and
all the costs of furnishing all opinions by counsel for Borrower, and of
Borrower's performance of and compliance with all agreements and conditions
contained herein and in the other Loan Documents on its part to be performed or
complied with including, without limitation, confirming compliance with
environmental and insurance requirements; (ii) the reasonable fees, expenses
and disbursements of counsel to Lender (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan and any consents, amendments,
waivers or other modifications hereto or thereto; and (iii) all the actual and
reasonable costs and expenses of creating and perfecting liens in favor of
Lender pursuant to any Loan Document.
Section 8.6 Binding Effect; Assignment. This Agreement
shall become effective when executed and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign any rights or obligations hereunder without the prior written consent of
the Lender. Lender shall be permitted to assign, without Borrower's consent,
all or any portion of Lender's rights and interests hereunder and under each
other document executed in
<PAGE> 22
- 19 -
connection with this Loan Agreement (x) to one or more other affiliates
of Lender, and, upon any such assignment, each reference herein or in such other
document to "Lender" shall be deemed to be and include a reference to such other
affiliate and (y) to creditors of Lender or its affiliates as security for
indebtedness of Lender or such affiliates. For purposes of this section, the
term affiliate shall mean, as applied to any entity or individual, any other
entity or individual directly or indirectly controlling, controlled by, or under
common control with, that entity or individual. For purposes of this
definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and under "common control with"), as applied to
any entity or individual, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
entity or individual, whether through the ownership of voting securities,
partnership interests or otherwise by contract.
Section 8.7 Governing Law. This Agreement, the Note, the
Security Agreement and related documents shall be governed by, and construed in
accordance with, the laws of the State of Florida with the exception of its
conflicts of laws provisions; provided that the effect of any recordation shall
be determined by the State thereof.
Section 8.8 Severability of Provisions. Any provision of
this Agreement, the Note, the Pledge Agreement, the Security Agreement, or any
Mortgage or Leasehold Mortgage that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions or affecting the validity or enforceability of any provisions in any
other jurisdiction.
Section 8.9 Headings. Article and Section headings in
this Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.10 Rights Affected by Extensions. The rights of
the Lender and its assigns shall not be impaired by any indulgence, release,
renewal, extension or modification which the Lender may grant with respect to
the indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower or any endorser, guarantee, or surety.
Section 8.11 Survival of Representations and Warranties.
All representations and warranties made in this Agreement and in any documents
or certificates delivered pursuant hereto or thereto shall survive the
execution and delivery of this Agreement and the Note and the making of the
Loan hereunder and continue in full force and effect, as of the respective
<PAGE> 23
- 20 -
dates as of which they were made, until all of the obligations of the Borrower
to the Lender hereunder have been paid in full.
Section 8.12 FCC Compliance. Notwithstanding anything
herein or in any of the other Loan Documents to the contrary, but without
limiting or waiving the Borrower's obligations hereunder or under any of the
other Loan Documents, the Lender's remedies hereunder and under the other Loan
Documents are subject to compliance with the Communications Act of 1934, as
amended, and all applicable rules, regulations and policies of the FCC, and the
Lender will not take any action pursuant to this Agreement or any of the other
Loan Documents that would constitute or result in any assignment of any FCC
authorization held by the Borrower or any change of control of the Station if
such assignment or change of control would require under then existing law
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC, without first obtaining such approval of the FCC. This
Agreement, the other Loan Documents and the transactions contemplated hereby
and thereby do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of the Borrower by the Lender or control, affirmative or negative, direct or
indirect, of the Borrower by the Lender, over the programming, management or
any other aspect of the operation of the Borrower, which ownership and control
remain exclusively and at all times in the Borrower until such time as the
Lender has complied with such law, rules, regulations and policies.
Section 8.13 Further Assurances. From time to time, the
Borrower shall execute and deliver to the Lender such additional documents as
the Lender may reasonably require to carry out the purposes of this Agreement
or any of the documents entered into in connection herewith, or to preserve and
protect the rights of the Lender hereunder or thereunder.
Section 8.14 Indemnification. The Borrower hereby indemnifies
and holds harmless the Lender and its directors, officers, shareholders,
employees, agents, counsel, subsidiaries and affiliates (the "Indemnified
Persons") from and against any and all losses, liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against any Indemnified Person in any way relating to or arising out
of this Agreement, the documents entered into in connection herewith, or any of
them or any of the transactions contemplated hereby or thereby; provided,
however, that the Borrower shall not be liable to any Indemnified Person, if
there is a judicial determination that such losses, liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of such
Indemnified Person.
Section 8.15 Waiver. EACH OF LENDER, BORROWER AND SHAREHOLDER
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY
<PAGE> 24
- 21 -
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF
THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF THIS LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOAN.
Section 8.16 Maximum Interest. Lender and Borrower intend
that this Agreement and the other Loan Documents conform to all applicable
usury laws. Accordingly, no provisions of the Loan Documents shall require the
payment or permit the collection of interest in excess of the maximum rate
permitted by applicable law ("Maximum Rate"), or obligate Borrower to pay any
taxes, assessments, charges, insurance premiums or other amounts which are held
to constitute interest to the extent that such payments, when added to the
other obligations under the Loan Documents, would be held to constitute
contracting for, or the payment by Borrower of, interest at a rate greater than
the Maximum Rate. Lender and Borrower further agree that:
(a) if any excess of interest in such respect is herein or
in any such other instrument provided for, or shall be adjudicated to be so
provided for herein or in any such instrument, the provisions of this subsection
8.16 shall govern, and neither Borrower nor its successors or assigns shall be
obligated to pay the amount of such interest to the extent it is in excess of
the Maximum Rate;
(b) if at any time the amount of interest under any of the
Loan Documents for a calendar year exceeds the Maximum Rate had the Maximum Rate
at all times been in effect, the interest chargeable under any such Loan
Document shall be limited to the amount of interest that could have been charged
if the Maximum Rate had at all times been in effect, but any subsequent
reductions in the interest due shall not reduce the rate of interest chargeable
under any such Loan Document below the Maximum Rate until the total amount of
interest accrued under any such Loan Document equals the amount of interest that
would have accrued if the interest provided for in any such Loan Document had at
all times been in effect and collectible;
(c) if the maturity of any Loan Document is accelerated for
any reason, or in the event of any prepayment by Borrower, or in any other
event, earned interest may never include more than the Maximum Rate, computed
from the date of disbursement of the funds evidenced by such Loan Document until
payment, and any interest otherwise payable
<PAGE> 25
- 22 -
under such Loan Document that is in excess of the Maximum Rate shall be
canceled automatically as of such acceleration or such other event and (if
theretofore paid) shall be credited against principal;
(d) if it should be held that any interest payable or
chargeable under any Loan Document is in excess of the Maximum Rate, the
interest payable or chargeable under such Loan Document shall be reduced to the
maximum amount permitted by applicable federal or state law, whichever shall
permit the higher lawful interest, as construed by courts having jurisdiction
thereof; and
(e) the spreading, prorating and amortizing of interest
over the term of the Loan Documents shall be allowed to the fullest extent
permitted by applicable law.
ARTICLE IX. GUARANTY
Section 9.1 Guaranty. In consideration for Lender's execution and
delivery of this Loan Agreement and Lender's agreement to make the Loan,
Shareholder agrees as follows:
(a) Shareholder hereby guarantees the full, complete and
timely payment and performance by Borrower of each and every obligation of
Borrower under this Loan Agreement, the Note, the Security Agreement, each
Mortgage and Leasehold Mortgage executed and delivered pursuant to this Loan
Agreement and each other agreement or instrument executed and delivered by
Borrower in connection with this Loan Agreement (individually, a "Borrower Loan
Document" and collectively, the "Borrower Loan Documents"). If any default shall
be made by Borrower in the payment or performance of any of such obligations,
then Shareholder will itself pay or perform or cause to be paid or performed
such obligation upon receipt of notice from Lender specifying in summary form
the default. Lender may proceed to enforce its rights against Shareholder from
time to time prior to, contemporaneously with, or after any enforcement against
Borrower, or without any enforcement against Borrower. The obligations of
Shareholder under this Guaranty shall be absolute and unconditional and shall
remain in full force and effect without regard to and shall not be released,
discharged, or in any way affected by (and Shareholder expressly waives any
and all defenses arising out of, or based on): (i) any amendment or
modification of or supplement to any Borrower Loan Document; (ii) any exercise
or non-exercise of, or delay in exercising any, right, remedy, power, or
privilege under or in respect of any Borrower Loan Document; (iii) any
bankruptcy, insolvency, arrangement, composition, assignment for the benefit of
creditors, or similar proceeding commenced by or against Borrower or
Shareholder; (iv) the dissolution (voluntarily or involuntarily) of Lender; (v)
the genuineness, validity, or enforceability of any Borrower Loan Document; or
(vi) any other circumstance which might otherwise constitute a legal or
equitable discharge of a guarantor
<PAGE> 26
- 23 -
or surety. If payment of any sum by Borrower pursuant to any Borrower
Loan Document is recovered as a preference or fraudulent transfer under any
applicable bankruptcy or insolvency law, the liability of Shareholder under such
Borrower Loan Document shall continue and remain in full force and effect
notwithstanding such recovery.
(b) Shareholder waives presentment, protest, demand, or
action or delinquency in respect of any of the obligations of Borrower under the
Borrower Loan Documents. Shareholder waives all set-offs and counterclaims and
all notices of nonperformance, notices of protest, notices of dishonor, and
notices of acceptance of this guaranty.
(c) This guaranty shall be deemed a continuing guaranty,
and the above consents and waivers of Shareholder shall remain in full force and
effect until the satisfaction in full of all obligations of Borrower under the
Borrower Loan Documents.
(d) Shareholder agrees that any and all claims in its favor
against Borrower, any endorser or any other guarantor of all or any part of the
obligations of Borrower under the Borrower Loan Documents, or against any of
their respective properties, arising by reason of any payment by Shareholder to
Lender pursuant to the provisions hereof or otherwise, shall be subordinate and
subject in right of payment to the prior payment, in full in cash, of all
obligations of Borrower under the Borrower Loan Documents. Shareholder agrees
that any right of subrogation arising as a result of its performance hereunder
shall not exist unless and until all obligations of the Borrower under the
Borrower Loan Documents are paid in full in cash.
Section 9.2 Representations and Warranties. Shareholder
hereby represents and warrants to Lender as follows:
(a) This Loan Agreement has been duly and validly executed
and delivered by Shareholder and constitutes its legal, valid, and
binding agreement with respect to the provisions contained in Article IX,
enforceable in accordance with its terms, except as the enforceability of this
Loan Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, and by judicial discretion in the
enforcement of equitable remedies.
(b) The execution, delivery, and performance by Shareholder
of this Loan Agreement: (i) do not require the consent of any third party; (ii)
will not conflict with any provision of the Articles of Incorporation or Bylaws
of Shareholder; (iii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
<PAGE> 27
- 24 -
instrumentality; and (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license, or permit to which Shareholder is a party or by
which Shareholder may be bound.
Section 9.3 Limited Recourse. Notwithstanding anything
to the contrary contained in this Article IX, in any action or proceeding
commenced with reference to any Loan Document, no judgment obtained against
Shareholder shall be enforced against any of its separate assets, other than
Shareholder's interest in all of the issued and outstanding capital stock of
Borrower (whether outstanding on the date hereof or hereafter), and
Shareholder's liability under any Loan Document shall be limited to such
interest. In any legal action or suit in equity which the Lender may undertake
against Shareholder to enforce its rights and remedies under any Loan Document,
any judgment obtained by Lender may be satisfied by recourse only to
Shareholder's interest in all of the issued and outstanding capital stock of
Borrower (whether outstanding on the date hereof or hereafter) and not by
recourse to any other assets of Shareholder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 28
- 25 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers, as of
the date first above written.
PAXSON COMMUNICATIONS OF
MILWAUKEE-55, INC.
By: /s/ William L. Watson
--------------------------------------
William L. Watson
Secretary
CHANNEL 55 OF MILWAUKEE, INC.
By: /s/ James L. West
--------------------------------------
James L. West
Chairman
THE CHRISTIAN NETWORK, INC. HEREBY
JOINS IN THE EXECUTION OF THE FOREGOING
AGREEMENT TO AGREE TO THE PROVISIONS OF
SECTION 8.15 AND ARTICLE X ONLY, AS OF
THE DATE FIRST ABOVE WRITTEN.
THE CHRISTIAN NETWORK, INC.
By: /s/ James L. West
--------------------------------------
James L. West
Chairman
<PAGE> 1
EXHIBIT 10.121
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT is dated as of July
___, 1996, by and between LeSea Broadcasting Corporation, an Indiana
not-for-profit corporation, and Channel 55 of Milwaukee, Inc., a Florida
corporation ("Buyer").
RECITALS
A. Seller and The Christian Network, Inc., a Florida
not-for-profit corporation ("CNI"), have entered into an Asset Purchase
Agreement dated as of March 31, 1995, as amended through the date hereof (the
"Purchase Agreement"), under which CNI agreed, subject to the terms and
conditions set forth therein, to purchase from Seller substantially all the
assets used or useful in the business or operations of television station
WHKE-TV, Kenosha, Wisconsin (the "Station").
B. As contemplated by the Purchase Agreement, CNI, Seller and
First Union National Bank of Florida entered into an Escrow Agreement dated
March 31, 1995 (the "Escrow Agreement").
C. Pursuant to its right under the Purchase Agreement, CNI
assigned its rights and interests under the Purchase Agreement to Buyer.
D. Seller, Paxson Communications Corporation and CNI have entered
into a letter agreement dated June 2, 1995, concerning certain claims of John
R. Miller ("Miller") arising under the terms of an employment agreement between
Miller and Seller (the "Indemnity Agreement").
E. Seller and CNI have entered into a letter agreement dated
February 29, 1996, pursuant to which Buyer and Seller agreed to amend the
Purchase Agreement as set forth therein (the "First Amendment").
F. Seller and Buyer desire to further amend the Purchase
Agreement as set forth herein.
G. All capitalized terms used herein and not otherwise defined
herein shall have the same meanings assigned to them in the Purchase Agreement.
AGREEMENTS
In consideration of the above premises and the covenants and
agreements contained in the Purchase Agreement and this Second Amendment, the
receipt and sufficiency of which are hereby acknowledged, Seller and Buyer,
intending to be legally bound, hereby agree as follows:
<PAGE> 2
SECTION 1. CLOSING DATE; ACCOUNTING MATTERS
(a) Notwithstanding the requirements of Section 8.1(a) of the
Purchase Agreement, Seller and Buyer agree that the Closing shall take place at
10:00 a.m. on July ___, 1996.
(b) Section 2.1(g) of the Purchase Agreement is hereby deleted and
the following Section 2.1(g) is substituted in its place:
(g) The Accounts Receivable as of 11:59 p.m., Kenosha,
Wisconsin, time on the Closing Date ("Seller's
Receivables");
(c) Section 2.3(a) of the Purchase Agreement shall be amended to
provide that Seller shall be responsible for all expenses, costs and
liabilities allocable to the period ending on the Closing Date, and Buyer shall
be responsible for all expenses, costs and obligations allocable to the period
commencing on the day following the Closing Date.
(d) The first sentence of Section 2.5 shall be deleted in its
entirety and the following sentence shall be substituted in its place:
Buyer shall assume and undertake to pay, discharge and perform
all obligations and liabilities of Seller under the Licenses
and the Assumed Contracts insofar as they relate to the time
on and after the day following the Closing Date and arise out
of events related to Buyer's ownership of the assets or its
operation of the Station on or after the day following the
Closing Date.
SECTION 2. ASSIGNMENT OF ESCROW AGREEMENT
Seller hereby consents to the assignment by CNI to Buyer of CNI's
rights and interests under the Escrow Agreement.
SECTION 3. LIST OF ACCOUNTS RECEIVABLE
Notwithstanding the requirement of Section 8.2(h) to the contrary,
Buyer agrees that Seller shall prepare and deliver to Buyer the list of the
Station's accounts receivable contemplated by Section 8.2(h) no later than five
business days following the Closing Date.
- 2 -
<PAGE> 3
SECTION 4. CERTIFICATIONS
(a) Buyer hereby certifies to Seller that the total amount of
actual legal fees and related expenses incurred by Paxson Communications
Corporation and/or CNI in connection with the defenses undertaken pursuant to
Paragraph 1 of the Indemnity Agreement exceeds $125,000.
(b) Seller hereby certifies to Buyer that Exhibit A hereto
contains an accurate list of the license fees owed by Seller as of July 1,
1996, pursuant to the Viacom Program License Agreements set forth in Schedule
2.3 to the Purchase Agreement.
SECTION 5. TANGIBLE PERSONAL PROPERTY
Seller represents and warrants to Buyer that Exhibit B hereto lists
all material items of Tangible Personal Property other than (a) such items of
Tangible Personal Property that have been acquired since March 31, 1995 and (b)
such items of Tangible Personal Property that have been disposed of by Seller
in connection with the acquisition of replacement property of equivalent kind
and value. Upon Buyer's request, Seller shall cooperate with Buyer in the
preparation as soon as practicable following the Closing of a revised list of
Tangible Personal Property as of the Closing Date.
SECTION 6. PURCHASE PRICE
Buyer and Seller agree that the first sentence of Section 2.3 of the
Purchase Agreement shall be deleted and the following sentence shall be
substituted in its place:
2.3 Purchase Price. The Purchase Price for the Assets and
the covenants of Seller set forth in the Noncompetition Agreement
referred to in Section 6.14 shall be THREE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($3,500,000) adjusted as provided below:
SECTION 7. MISCELLANEOUS
7.1 Other Provisions. Except where inconsistent with the express
terms of this Amendment, all provisions of the Purchase Agreement as originally
entered into shall remain in full force and effect.
7.2 Governing Law. This Amendment shall be governed, construed, and
enforced in accordance with the laws of the State of Wisconsin (without regard
to the choice of law provisions thereof).
7.3 Rules of Construction. The rules of construction set forth in
the Purchase Agreement shall apply to this Amendment.
- 3 -
<PAGE> 4
7.4 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns.
7.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Amendment.
7.6 Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 4 -
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment as of the date first above written.
LESEA BROADCASTING CORP.
By: /s/ Peter Sumrall
-------------------------------
Name: Peter Sumrall
Title: Vice President
CHANNEL 55 OF MILWAUKEE, INC.
By: /s/ James L. West
------------------------------
James L. West
Chairman
- 5 -
<PAGE> 6
EXHIBIT 10.122
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS LPTV, INC.
AND
ELECTRON COMMUNICATIONS CORPORATION
* * *
JULY 1, 1996
================================================================================
<PAGE> 1
EXHIBIT 10.122
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS LPTV, INC.
AND
ELECTRON COMMUNICATIONS CORPORATION
* * *
JULY 1, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Leasehold Interests" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.2 No Breach or Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Leasehold Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Environmental; Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.6 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
6.7 Weigner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(g) Tower Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(h) Seller Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Conditions to Obligations of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Tower Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
- iii -
<PAGE> 5
3
<TABLE>
<CAPTION>
Page
----
<S> <C>
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.12 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
- iv -
<PAGE> 6
<TABLE>
<CAPTION>
LIST OF SCHEDULES AND EXHIBITS
------------------------------
<S> <C> <C>
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Leasehold Interests
Schedule 3.6 - Personal Property
Schedule - Opinion of Seller's Counsel
Schedule 8.3(d) - Opinion of Buyer's Counsel
Schedule 9.3 - Escrow Agreement
</TABLE>
- v -
<PAGE> 7
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of July 1, 1996, by and
among Paxson Communications LPTV, Inc., a Florida corporation ("Buyer"), and
Electron Communications Corporation, a Wyoming corporation ("Seller").
RECITALS
A. Seller's sole stockholder is, and as of the Closing Date
Seller will be, the licensee of and owner and operator of WRAP-LP, Channel 33,
Boston, Massachusetts (the "Station"), pursuant to authorizations issued by the
Federal Communications Commission (the "FCC"). Seller's sole stockholder has
been issued Special Temporary Authority ("STA") to operate the Station on
Channel 54 and has pending before the FCC an application to operate the Station
on Channel 54 on a permanent basis and will assign the STA and application to
Seller prior to the Closing hereunder.
B. Seller desire to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller have a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the right of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under the Agreement, as specified in Section 2.1.
"Business Day" means any day other than Saturday, Sunday or other day
on which banks in Florida are authorized to close their regular banking
business.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
<PAGE> 8
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" shall have the meaning set forth in the Recitals to this
Agreement.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Leasehold Interests" means Seller's interests in leaseholds and
subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, which are used or useful in the business or operations of the
Station, together with any additions thereto between the date of this Agreement
and the Closing Date.
- 2 -
<PAGE> 9
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" shall have the meaning set forth in Section 2.3
hereof.
"Station" shall have the meaning set forth in the Recital to this
Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and/or deliver to Buyer on the Closing Date, and Buyer agrees to
purchase and accept, all of the assets and property interests owned by Seller
or in which Seller has a property interest which are used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2 hereof, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Leasehold Interests;
(c) The Licenses;
(d) The Intangibles, including the goodwill of the
Station, if any;
- 3 -
<PAGE> 10
(e) All choses in action of Seller relating to the
Station that are assignable to Buyer as provided herein; and
(f) All records required by the FCC to be kept by the
Station and copies of all other books and records which belong to Seller and
are within its possession and control relating to the business or operations of
the Station (exclusive of corporate, financial and accounting records).
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's Accounts Receivable, and cash or cash
equivalents on hand as of the Closing Date; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar securities or other
investments;
(b) Any pension, profit sharing or employee benefit plans
and all contracts related thereto, and any collective bargaining agreements;
(c) All books and records relating to Seller's internal
corporate organization or internal financial matters;
(d) Any Contracts including, without limitation, all
affiliation agreements relating to the Station;
(e) The Call Sign WRAP-LP;
(f) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees for periods
prior to the Closing Date; and
(g) Any equipment owned by Video Jukebox Network, Inc.
2.3 Purchase Price. The purchase price for the Assets shall be
One Million Three Hundred Thousand Dollars ($1,300,000) (the "Purchase Price"),
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of 11:59 p.m.,
Eastern Standard Time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, and prepaid and deferred items, shall be
prorated between Buyer and Seller in accordance with the principle that Seller
shall be responsible for
- 4 -
<PAGE> 11
all expenses, costs, and liabilities allocable to the period prior to the
Closing Date, and Buyer shall be responsible for all expenses, costs, and
obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Taxes. Except for real and personal property taxes
and assessments incurred against the Assets, there shall be no proration or
adjustment for income taxes or any other taxes with respect to the Station or
the Assets which shall be Seller's sole responsibility for all periods prior to
the Closing Date. All taxes arising from the transfer of the Assets hereunder
shall be Buyer's responsibility pursuant to Section 11.2 hereof.
(c) Manner of Determining Adjustments. The adjustments
and prorations to the Purchase Price pursuant to Section 2.3(a) will be
determined in accordance with the following procedures:
(i) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days prior to the Closing Date a preliminary
settlement statement, which statement shall set forth Seller's good faith
estimate of the adjustments to the Purchase Price under Section 2.3(a) hereof.
(ii) Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(a) hereof prior to the
Closing.
(iii) No later than forty-five (45) days after the
Closing Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the adjustments to the Purchase Price pursuant to Section
2.3(a) hereof. If Seller disputes the amount of the adjustments to the
Purchase Price determined by Buyer, they shall deliver to Buyer, within thirty
(30) days after their receipt of Buyer's statement, Seller's statement setting
forth their determination of the amount of the adjustments to the Purchase
Price and the basis for their dispute in reasonable detail. If Seller notifies
Buyer of their acceptance of Buyer's statement, or if Seller fail to deliver
the Seller's statement within the thirty (30) day period specified in the
preceding sentence, Buyer's determination of the adjustments pursuant to
Section 2.3(a) hereof shall be conclusive and binding on the parties.
(iv) After the Closing, Buyer and Seller shall use
good faith efforts to resolve any dispute involving the determination of the
adjustments to the Purchase Price under Section 2.3(a) hereof. If the parties
are unable to resolve the dispute within fifteen (15) days following the
delivery of Seller's statement described above, Buyer and Seller shall jointly
designate and retain, with fees and expenses to be borne equally by Seller and
Buyer, an independent certified public accountant mutually acceptable to Seller
and Buyer who shall be knowledgeable and experienced in the operation of
television broadcasting Station, to
- 5 -
<PAGE> 12
resolve the dispute within thirty (30) days. The accountant's resolutions of
the dispute shall be final and binding on the parties, and a judgment may be
entered thereon in any court of competent jurisdiction.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller the
Purchase Price adjusted pursuant to Section 2.3(a) hereof by federal wire
transfer of immediately available funds pursuant to wire instructions delivered
by Seller at least two (2) Business Days prior to the Closing Date.
(b) If as a result of the final determination of the
adjustments to the Purchase Price pursuant to Section 2.3(c) following the
Closing, (i) Buyer is determined to owe an amount to Seller, Buyer shall pay
such amount to Seller in immediately available funds within five (5) Business
Days of the date of such final determination or (ii) Seller is determined to
owe an amount to Buyer, Seller shall pay such amount to Buyer in immediately
available funds within five (5) Business Days of the date of such final
determination.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses to the extent that
either (i) the obligations and liabilities relate to the period from and after
the Closing Date or (ii) the Purchase Price was reduced pursuant to Section
2.3(a) hereof as a result of the proration of such obligations and liabilities.
Buyer shall not assume any other obligations or liabilities of Seller,
including (i) any obligations or liabilities under any Contract, (ii) any
claims or pending litigation or proceedings relating to the operation of the
Station prior to the Closing, (iii) any obligations or liabilities of Seller
under any employee pension, retirement, or other benefit plans or with respect
to commissions, wages, bonuses, incentive payments, vacation pay, sick leave,
severance benefits, or other benefits of employees or former employees of
Seller or their beneficiaries, (iv) any obligations or liabilities of Seller
with respect to any Excluded Assets, or (v) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Standing. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of Wyoming. Seller has all
requisite corporate power and authority to execute and deliver this Agreement
and the documents contemplated hereby, and to perform and comply with all of
the terms, covenants, and conditions to be performed and
- 6 -
<PAGE> 13
complied with by Seller hereunder and thereunder. Seller is controlled by
Randolph M. Weigner ("Weigner"), the current licensee of the Station. Seller
agrees to acquire all licenses and authorizations for the Station and all of
the Station's assets to be assigned and transferred to Buyer hereunder, prior
to the Closing Date.
3.2 No Breach or Violation. Neither the execution, delivery and
performance of this Agreement and all other agreements or instruments to be
executed in connection herewith, nor the compliance by Seller with the terms
and provisions hereof and thereof will conflict with or breach any judgment,
order, injunction, decree, regulation or ruling of any court or other
governmental authority to which he is subject or any agreement or contract to
which he is a party or to which he is subject, or constitute a default
thereunder.
3.3 Absence of Conflicting Agreements. The execution, delivery
and the performance of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iii) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (iv) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies
of the Licenses (including any and all amendments and other modifications
thereto) listed on Schedule 3.4. The Licenses listed on Schedule 3.4 have been
validly issued and the Seller is the authorized legal holder thereof. The FCC
Licenses comprise all of the licenses, permits and other authorizations
required from the FCC for the conduct of the business or operations of the
Station in accordance with applicable laws and in the manner and to the extent
they are now conducted. None of the Licenses listed on Schedule 3.4 is subject
to any restriction or condition which would limit the full operation of the
Station as presently operated. The Licenses listed on Schedule 3.4 are in full
force and effect. The business and operations of the Station are being
conducted in accordance with the Licenses listed on Schedule 3.4. Seller has
no reason to believe that the Licenses issued by the FCC will not be renewed by
the FCC in the ordinary course.
3.5 Title to and Condition of Leasehold Interests. Schedule 3.5
contains a complete and accurate description of all Seller's leasehold
interests necessary to conduct the business and operations of the Station as
now conducted. With respect to each leasehold or subleasehold interest being
conveyed under this Agreement, so long as Seller fulfills its
- 7 -
<PAGE> 14
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest.
3.6 Title to and Condition of Tangible Personal Property. Except
for the equipment listed in Section 2.2(g) hereof, Schedule 3.6 contains
descriptions of all material items of the Personal Property which comprise all
material personal property necessary to conduct the business or operations of
the Station as now conducted. Seller owns and has good title to all Personal
Property, free and clear of any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for Permitted
Liens. Each item of material Personal Property is in operating condition and
repair (ordinary wear and tear excepted), and is available for immediate use in
the business or operations of the Station.
3.7 Contracts. Seller is not a party to any Contracts that will
impose any obligation on or adversely affect Buyer after the Closing Date.
3.8 Reports. All material returns, reports and statements which
the Station is currently required to file with the FCC and any other
governmental agency have been filed. All of such reports, returns and
statements are complete and correct as filed.
3.9 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by them to
the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
deemed by them to be adequate with respect thereto. No events have occurred
which could impose on Buyer any transferee liability for any taxes, penalties,
or interest due or to become due from Seller.
3.10 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller, the Assets, or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same.
3.11 Environmental; Hazardous Materials. There are no claims,
notices, suits, proceedings or investigations pending or, to Seller's
knowledge, threatened, and there are no judgments against Seller or the Station
by or before any governmental authority concerning environmental compliance.
To Seller's knowledge, after due inquiry, (i) no toxic materials, hazardous
waste, or hazardous substances, including any asbestos or asbestos-related
products, any oils, petroleum-derived compounds or pesticides (hereinafter
collectively referred to as the "Hazardous Materials") have been or are located
on or about the Real Property; (ii) the Real Property has not been previously
used for the storage, manufacture or
- 8 -
<PAGE> 15
disposal of Hazardous Materials; and (iii) no underground storage tank or
related equipment ("UST") is located at the Real Property.
3.12 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.13 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of
Florida. Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, the execution, delivery, and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) will not conflict with the Certificate
of Incorporation or Bylaws of Buyer; (ii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Buyer; (iii) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to
- 9 -
<PAGE> 16
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire the Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact, or omits or will
omit to state any material fact required to make any statement made herein or
therein not misleading.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of and acquire, own and operate the
Station under the Communications Act of 1934, as amended, and the rules,
regulations and policies of the FCC. Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC disqualify Buyer as assignee of the FCC Licenses or as the owner and
operator of the Station or would cause any significant delay in obtaining FCC
approval of its acquisition of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with their past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing without Buyer's
written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except in connection
with the acquisition of replacement property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date and, (ii) liens for current
taxes not yet due and payable.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked or suspended or take any action
- 10 -
<PAGE> 17
that could cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any of
the Licenses. Seller has filed with the FCC a major modification application
for the Station and shall prosecute with due diligence this and any other
applications before the FCC in connection with the operation of the Station.
5.6 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.7 Access to Information. Seller shall permit Buyer and its
authorized representatives to inspect the Station and its records upon
reasonable request.
5.8 Maintenance of Assets. Seller shall maintain all of the
Assets in good condition (ordinary wear and tear excepted).
5.9 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.10 Notification. Seller shall promptly notify Buyer in writing
of any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.11 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare the
appropriate application for the FCC Consent and shall file the application with
the FCC within ten (10) Business Days of the execution of this Agreement. The
parties shall prosecute the applications with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
applications as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by such party of any of its
- 11 -
<PAGE> 18
representations, warranties, or covenants under this Agreement, and (2)
compliance with the condition would have a material adverse effect upon it.
Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent, provided, however, that the parties shall continue
to have all rights available to them pursuant to Section 9 hereof. If the
Closing shall not have occurred for any reason within the original effective
period of the FCC Consent, and neither party shall have terminated this
Agreement under Section 9, the parties shall jointly request an extension of
the effective period of the FCC Consent. No extension of the FCC Consent shall
limit the exercise by either party of its rights under Section 9.
Notwithstanding the foregoing, neither party shall be required to participate
in a trial-type hearing before the FCC.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information of a confidential nature obtained from
the other party in connection with the transactions contemplated by this
Agreement. Except as provided in this Paragraph each party will refrain from
disclosing any such information to any third party. If this Agreement is
terminated, each party will return to the other party all copies of all
documents and other all information obtained by the such party from the other
party in connection with the transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement.
6.6 Broker. Each of Buyer and Seller represents and warrants that
neither they nor any person or entity acting on their behalf have incurred any
liability for any finders' or
- 12 -
<PAGE> 19
brokers' fees or commissions in connection with the transactions contemplated
by this Agreement.
6.7 Weigner. Seller and Weigner will take whatever actions and
execute whatever documents are necessary and appropriate to complete the
transactions contemplated by this Agreement.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(c) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any conditions imposed on them by the FCC Consent, and the FCC Consent
shall have become a Final Order.
(d) Governmental Authorizations. Seller shall be the
holder of all FCC Licenses and there shall not have been any modification of
any FCC License that could have a material adverse effect on the Station or the
conduct of its business and operations. Except for the FCC's proceeding on
Advanced Television Systems, no proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any FCC
License.
(e) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(f) Release of Liens. Seller shall have delivered to
Buyer evidence reasonably satisfactory to Buyer that all security interests,
mortgages, encumbrances, and liens on the Assets that are not Permitted Liens
have been released and removed.
(g) Tower Lease. Seller shall have executed a Tower Lease
for the Station, freely assignable to Buyer or shall have negotiated a Tower
Lease for that Station, ready and available for execution by Buyer not later
than the Closing Date, in form and substance reasonably satisfactory to Buyer
(monthly rent of $2,000.00 is acceptable to Buyer), which
- 13 -
<PAGE> 20
includes space for two 19-inch equipment racks, one 1,000 watt UHF transmitter,
one satellite dish, one 32-bay antenna, one STL receiving antenna, and 1-5/8
inch transmission line. Buyer shall pay any fees required by the tower owner
for structural analyses and studies to determine the tower's ability to support
the Station's antenna, for any tower strengthening or other modification
required for the tower to support the antenna, and for the purchase and
installation of all transmission equipment at the tower site.
(h) Seller Application. Seller's application for a
construction permit to operate on Channel 54, File No. BPTTL-940414NN, shall
have been granted by the FCC, and the Tower Lease shall be for the tower site
specified in the resulting construction permit.
7.2 Conditions to Obligations of Seller All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five (5) Business Days' written
notice to Seller, that is (1) not earlier than the first business day after the
FCC Consent is granted, and (2) not later than ten (10) Business Days following
the date upon which the FCC Consent has become a Final Order. If Buyer fails
to specify the date for Closing pursuant to the preceding sentence prior to the
fifth Business Day after the date upon which the FCC Consent becomes a Final
Order,
- 14 -
<PAGE> 21
the Closing shall take place on the tenth Business Day after the date upon
which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or such other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens;
(b) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the representations and warranties
of such Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that such Seller has in all material respects performed and complied
with all of its obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date and
such additional certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder;
(c) Licenses, Contracts, Business Records, Etc. Copies
of all documents described in Section 2.1(g) hereof;
(d) Opinion of Counsel. An opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(e)
hereto;
(e) Resolutions. Certified copy of resolutions of the
Board of Directors of Seller authorizing the execution, delivery and
performance of this Agreement;
(f) Tower Lease. If the Tower Lease is initially
executed by Seller rather than Buyer, an assignment of the Tower Lease to
Seller, in form and substance satisfactory to Buyer; and
(g) Other Instruments. Such other instruments and
certificates or other documentation as Seller are required by the terms hereof
to deliver or as Buyer may reasonably request.
- 15 -
<PAGE> 22
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date, executed by Buyer certifying (1) that the representations and warranties
of Buyer contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date, and (2)
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto;
(e) Resolutions. Certified copy of resolutions of
Buyer's Board of Directors authorizing the execution, delivery and performance
of this Agreement; and
(f) Other Instruments. Such other instruments and
certificates or other documentation as Buyer is required by the terms hereof to
deliver or as Seller may reasonably request.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Seller, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
- 16 -
<PAGE> 23
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order, not
caused by Buyer, that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
9.3 Escrow Deposit. On the date hereof, Buyer shall deposit with
First Union National Bank (the "Escrow Agent") One Hundred Twenty Five Thousand
Dollars ($125,000). All funds and documents deposited with the Escrow Agent
shall be held and disbursed in accordance with the terms of the Escrow
Agreement executed on the date hereof in the form of Schedule 9.3 (the "Escrow
Agreement") and the following provisions:
(a) At the Closing, Buyer shall be entitled to receive
all amounts held by the Escrow Agent pursuant to the Escrow Agreement,
including any interest or other proceeds from the investment of funds held by
the Escrow Agent.
(b) If this Agreement is terminated by Seller pursuant to
Section 9.1 hereof due to Buyer's material breach of this Agreement, and Seller
is not in material breach of any provision of this Agreement, Seller shall be
entitled to receive all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent.
(c) If this Agreement is terminated and all of the
conditions for the disbursement of the escrow fund to Seller under Section
9.3(b) are not satisfied, Buyer shall be entitled to receive all amounts held
by the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent.
9.4 Rights on Termination. (a) If this Agreement is terminated
pursuant to Section 9.1 or 9.2 and neither party is in material breach of any
provision of this Agreement, the parties hereto shall not have any further
liability to each other with respect to the purchase and sale of the Assets.
If this Agreement is terminated by Seller due to Buyer's material breach of
this Agreement and Seller is not in material breach of any provision of this
Agreement, then the payment to Seller pursuant to Section 9.3(b) hereof shall
be
- 17 -
<PAGE> 24
liquidated damages and shall constitute full payment and the exclusive remedy
for any damages suffered by Seller by reason of Buyer's material breach of this
Agreement. Seller and Buyer agree in advance that actual damages would be
difficult to ascertain and that the amount of the escrow in accordance with
Section 9.3 hereof, together with any interest or other proceeds from the
investment of that amount, is a fair and equitable amount to reimburse Seller
for damages sustained due to Buyer's material breach of this Agreement. If
this Agreement is terminated by Buyer due to Seller's material breach of any
provision of this Agreement, and Buyer is not in material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity, including the right to seek specific performance of this
Agreement.
(b) Seller agrees that the Assets include unique property
that cannot be readily obtained on the open market and that Buyer would be
irreparably injured if this Agreement is not specifically enforced after breach
if Seller shall have committed a material breach. Therefore, Buyer shall have
the right to specifically 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.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
eighteen (18) months.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets prior to the
Closing Date, including any liabilities arising under the Licenses or the Tower
Lease (unless executed directly by Seller) which relate to events occurring
prior to the Closing Date.
- 18 -
<PAGE> 25
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station and/or the Assets by Buyer on
and after the Closing including, but not limited to, the Tower Lease.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant as soon as
practicable after written notice of such action, suit, or proceeding was given
to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the
- 19 -
<PAGE> 26
validity and amount of such claim, the Indemnifying Party shall immediately pay
to the Claimant the full amount of the claim. If the Claimant and the
Indemnifying Party do not agree within the thirty-day period (or any mutually
agreed upon extension thereof), the Claimant may seek appropriate remedy at law
or equity.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Certain Limitations.
(a) Notwithstanding anything in this Agreement to the
contrary (i) neither party shall indemnify or otherwise be liable to the other
party with respect to any claim for indemnification in excess of the Purchase
Price; and (ii) neither party shall indemnify or otherwise be liable to the
other party with respect to any claim except to the extent the claim for
indemnification exceeds Five Thousand Dollars ($5,000.00).
(b) An Indemnifying Party shall not settle a claim by a
third party without the consent of the Claimant, provided, however, that if a
settlement agreed to by the Indemnifying Party and a third party would cause no
material harm to the Claimant but is rejected by the Claimant, the liability of
the Indemnifying Party for that claim shall be limited to the amount of the
agreed settlement amount.
- 20 -
<PAGE> 27
SECTION 11. MISCELLANEOUS
11.1 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
11.2 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Buyer. Buyer and Seller
shall each pay one-half of the fee payable to the FCC in connection with the
filing of the application for FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) sent by telecopy (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Buyer: Paxson Communications LPTV, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Mr. Lowell W. Paxson
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
- 21 -
<PAGE> 28
With copy to: John R. Feore, Jr., Esquire
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Telecopy: (202) 776-2222
Telephone: (202) 776-2786
If to Seller: Electron Communications Corporation
3761 East Lincolnway, Suite 126
Cheyenne, WY 82001
Attention: Mr. Randolph M. Weigner
Telecopy: (307) 632-7442
Telephone: (307) 632-7199
With copy to: Peter Tannenwald, Esquire
Irwin, Campbell & Tannenwald, P.C.
1730 Rhode Island Avenue, N.W., Suite 200
Washington, D.C. 20036-3101
Telecopy: (202) 728-0354
Telephone: (202) 728-0400
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a wholly-owned subsidiary or commonly controlled affiliate without
seeking or obtaining Seller's prior approval, provided, however, that Buyer
shall guarantee the performance by its assignee of all of Buyer's obligations
under this Agreement. Upon any permitted assignment by Buyer or Seller in
accordance with this Section 11.5, all references to "Buyer" herein shall be
deemed to be references to Buyer's assignee and all references to "Seller"
herein shall be deemed to be references to Seller's assignee. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
- 22 -
<PAGE> 29
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Press Releases. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the
- 23 -
<PAGE> 30
other party; provided, however, that nothing contained herein shall prevent
either party from promptly making all filings and, if required, press releases
with governmental authorities as may, in its judgment, be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, in which case the other
party shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 24 -
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS LPTV, INC.
By: /s/ Lowell W. Paxson
--------------------------------
Name: Lowell W. Paxson
Title: Chairman
ELECTRON COMMUNICATIONS CORPORATION
By: /s/ Randolph M. Weigner
----------------------------------
Name: Randolph M. Weigner
Title: President
RANDOLPH M. WEIGNER
By: /s/ Randolph M. Weigner
----------------------------------
<PAGE> 32
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Leasehold Interests" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Station" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
- i -
<PAGE> 33
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.2 No Breach or Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Leasehold Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Environmental; Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.6 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
- ii -
<PAGE> 34
<TABLE>
<CAPTION>
Page
----
<S> <C>
6.7 Weigner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(g) Tower Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(h) Seller Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Conditions to Obligations of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Tower Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
- iii -
<PAGE> 35
<TABLE>
<CAPTION>
Page
----
<S> <C>
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.12 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
- iv -
<PAGE> 36
<TABLE>
<CAPTION>
LIST OF SCHEDULES AND EXHIBITS
------------------------------
<S> <C>
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Leasehold Interests
Schedule 3.6 - Personal Property
Schedule - Opinion of Seller's Counsel
Schedule 8.3(d) - Opinion of Buyer's Counsel
Schedule 9.3 - Escrow Agreement
</TABLE>
- v -
<PAGE> 37
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of July 1, 1996, by and
among Paxson Communications LPTV, Inc., a Florida corporation ("Buyer"), and
Electron Communications Corporation, a Wyoming corporation ("Seller").
RECITALS
A. Seller's sole stockholder is, and as of the Closing Date
Seller will be, the licensee of and owner and operator of WRAP-LP, Channel 33,
Boston, Massachusetts (the "Station"), pursuant to authorizations issued by the
Federal Communications Commission (the "FCC"). Seller's sole stockholder has
been issued Special Temporary Authority ("STA") to operate the Station on
Channel 54 and has pending before the FCC an application to operate the Station
on Channel 54 on a permanent basis and will assign the STA and application to
Seller prior to the Closing hereunder.
B. Seller desire to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller have a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the right of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under the Agreement, as specified in Section 2.1.
"Business Day" means any day other than Saturday, Sunday or other day
on which banks in Florida are authorized to close their regular banking
business.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
<PAGE> 38
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" shall have the meaning set forth in the Recitals to this
Agreement.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Leasehold Interests" means Seller's interests in leaseholds and
subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, which are used or useful in the business or operations of the
Station, together with any additions thereto between the date of this Agreement
and the Closing Date.
- 2 -
<PAGE> 39
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or any
governmental entity.
"Purchase Price" shall have the meaning set forth in Section 2.3
hereof.
"Station" shall have the meaning set forth in the Recital to this Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and/or deliver to Buyer on the Closing Date, and Buyer agrees to
purchase and accept, all of the assets and property interests owned by Seller
or in which Seller has a property interest which are used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2 hereof, free
and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, or encumbrances of any nature whatsoever (except
for Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Leasehold Interests;
(c) The Licenses;
(d) The Intangibles, including the goodwill of the
Station, if any;
- 3 -
<PAGE> 40
(e) All choses in action of Seller relating to the
Station that are assignable to Buyer as provided herein; and
(f) All records required by the FCC to be kept by the
Station and copies of all other books and records which belong to Seller and
are within its possession and control relating to the business or operations of
the Station (exclusive of corporate, financial and accounting records).
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's Accounts Receivable, and cash or cash
equivalents on hand as of the Closing Date; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar securities or other
investments;
(b) Any pension, profit sharing or employee benefit plans
and all contracts related thereto, and any collective bargaining agreements;
(c) All books and records relating to Seller's internal
corporate organization or internal financial matters;
(d) Any Contracts including, without limitation, all
affiliation agreements relating to the Station;
(e) The Call Sign WRAP-LP;
(f) Any claims, rights and interest in and to any refunds
of federal, state or local franchise, income or other taxes or fees for periods
prior to the Closing Date; and
(g) Any equipment owned by Video Jukebox Network, Inc.
2.3 Purchase Price. The purchase price for the Assets shall be
One Million Three Hundred Thousand Dollars ($1,300,000) (the "Purchase Price"),
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses as of 11:59 p.m.,
Eastern Standard Time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, and prepaid and deferred items, shall be
prorated between Buyer and Seller in accordance with the principle that Seller
shall be responsible for
- 4 -
<PAGE> 41
all expenses, costs, and liabilities allocable to the period prior to the
Closing Date, and Buyer shall be responsible for all expenses, costs, and
obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Taxes. Except for real and personal property taxes
and assessments incurred against the Assets, there shall be no proration or
adjustment for income taxes or any other taxes with respect to the Station or
the Assets which shall be Seller's sole responsibility for all periods prior to
the Closing Date. All taxes arising from the transfer of the Assets hereunder
shall be Buyer's responsibility pursuant to Section 11.2 hereof.
(c) Manner of Determining Adjustments. The adjustments
and prorations to the Purchase Price pursuant to Section 2.3(a) will be
determined in accordance with the following procedures:
(i) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days prior to the Closing Date a preliminary
settlement statement, which statement shall set forth Seller's good faith
estimate of the adjustments to the Purchase Price under Section 2.3(a) hereof.
(ii) Buyer and Seller shall use their good faith
efforts to agree upon the adjustments under Section 2.3(a) hereof prior to the
Closing.
(iii) No later than forty-five (45) days after the
Closing Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the adjustments to the Purchase Price pursuant to Section
2.3(a) hereof. If Seller disputes the amount of the adjustments to the
Purchase Price determined by Buyer, they shall deliver to Buyer, within thirty
(30) days after their receipt of Buyer's statement, Seller's statement setting
forth their determination of the amount of the adjustments to the Purchase
Price and the basis for their dispute in reasonable detail. If Seller notifies
Buyer of their acceptance of Buyer's statement, or if Seller fail to deliver
the Seller's statement within the thirty (30) day period specified in the
preceding sentence, Buyer's determination of the adjustments pursuant to
Section 2.3(a) hereof shall be conclusive and binding on the parties.
(iv) After the Closing, Buyer and Seller shall use
good faith efforts to resolve any dispute involving the determination of the
adjustments to the Purchase Price under Section 2.3(a) hereof. If the parties
are unable to resolve the dispute within fifteen (15) days following the
delivery of Seller's statement described above, Buyer and Seller shall jointly
designate and retain, with fees and expenses to be borne equally by Seller and
Buyer, an independent certified public accountant mutually acceptable to Seller
and Buyer who shall be knowledgeable and experienced in the operation of
television broadcasting Station, to
- 5 -
<PAGE> 1
EXHIBIT 10.123
===============================================================================
ASSET EXCHANGE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS OF
BIRMINGHAM-44, INC.
AND
WNAL-TV, INC.
FOR
TELEVISION STATION WNAL-TV
GADSDEN, ALABAMA
* * *
AUGUST 7, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Asset Value" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Birmingham ADI" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"First Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"First Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Second Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Second Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FAA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Modification Application" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Exchangor's Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Time Brokerage Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"To the best of Exchangor's knowledge" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2 EXCHANGE AND TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Agreement to Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Asset Value Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Exchange Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 3 REPRESENTATIONS AND WARRANTIES OF EXCHANGOR . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.18 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4 REPRESENTATIONS AND WARRANTIES OF RECIPIENT . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Recipient Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.16 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.17 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Cable Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Allocation of Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Section 1031 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7 CONDITIONS TO OBLIGATIONS OF RECIPIENT AND
EXCHANGOR AT THE FIRST CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Conditions to Obligations of Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Conditions to Obligations of Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8 FIRST CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 First Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Deliveries by Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Deliveries by Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9 CONDITIONS AND OBLIGATIONS OF RECIPIENT AND
EXCHANGOR AT THE SECOND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.1 Conditions to Obligations of Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.2 Conditions to Obligations of Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10 SECOND CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.1 Second Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.2 Deliveries by Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Deliveries by Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION> Page
----
<S> <C> <C>
SECTION 11 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Termination by Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Termination by Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.2 Indemnification by Exchangor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.3 Indemnification by Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 13 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.3 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.4 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.7 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.9 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.10 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
LIST OF SCHEDULES
-----------------
<S> <C> <C>
Schedule 2.2 -- Excluded Property
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.11 -- Insurance Policies
Schedule 3.13 -- Employee Matters
Schedule 3.15 -- Claims
Schedule 3.17 -- Compliance Matters
Schedule 8.2(g) -- Form of Opinions of Exchangor's Counsel
(First Closing)
Schedule 8.3(d) -- Form of Opinions of Recipient's Counsel
(First Closing)
Schedule 10.2(d) -- Form of Opinions of Exchangor's Counsel
(Second Closing)
Schedule 10.3(d) -- Form of Opinions of Recipient's Counsel
(Second Closing)
</TABLE>
-v-
<PAGE> 7
ASSET EXCHANGE AGREEMENT
This ASSET EXCHANGE AGREEMENT is dated as of the 7th day of August,
1996, by and between Paxson Communications of Birmingham-44, Inc., a Florida
corporation ("Recipient"), and WNAL-TV, Inc., an Alabama corporation
("Exchangor").
RECITALS
A. Exchangor is the licensee of and owns and operates television
station WNAL-TV, Gadsden, Alabama (the "Station") pursuant to licenses issued
by the Federal Communications Commission ("FCC").
B. Exchangor desires to sell, and Recipient wishes to acquire,
substantially all the assets that are owned by Exchangor and are used or useful
in the business or operations of the Station, for the price and on the terms
and conditions set forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Recipient and Exchangor, intending
to be bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Recipient under this Agreement, as specified in Section 2.1.
"Asset Value" means the Asset Value specified in Section 2.3.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are specifically designated as Contracts that will be assumed by Recipient
at Closing, (ii) any Contracts entered into by Exchangor between the date of
this Agreement and the Closing Date that Recipient agrees in writing to assume,
and (iii) time sales contracts entered into by Exchangor in compliance with
Section 5.3.
"Birmingham ADI" means the Birmingham, Alabama Area of Dominant
Influence as defined in the 1991-1992 Area of Dominant Influence Market Guide
published by the Arbitron Co.
<PAGE> 8
"First Closing" means the consummation of the exchange and transfer of
the Assets pursuant to this Agreement in accordance with the provisions of
Section 8.
"First Closing Date" means the date on which the First Closing occurs,
as determined pursuant to Section 8.
"Second Closing" means the consummation of the exchange and transfer
of the Assets pursuant to this Agreement in accordance with the provisions of
Section 10.
"Second Closing Date" means the date on which the Second Closing
occurs, as determined pursuant to Section 10.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to
Recipient or otherwise to consummate the transactions contemplated by this
Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Exchangor is a party or which are binding upon
Exchangor and which relate to or affect the Assets or the business or
operations of the Station, and (i) which are in effect on the date of this
Agreement or (ii) which are entered into by Exchangor between the date of this
Agreement and the Second Closing Date.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Recipient as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Exchangor in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion under its rules and regulations
have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible
-2-
<PAGE> 9
property rights and interests (and any goodwill associated with any of the
foregoing) applied for, issued to, or owned by Exchangor or under which
Exchangor is licensed or franchised and which are used or useful in the
business and operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to Exchangor in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Loan Agreement" means the Loan Agreement dated as of August 7, 1996
by and between Exchangor and Recipient.
"LTEC" means Lawyers Title Exchange Company, a Delaware corporation,
which may serve, at the request of Exchangor, as a "qualified intermediary" as
contemplated by Section 1031 of the Code and the regulations promulgated
thereunder, with respect to the transfer of the assets to Recipient at Closing.
"Material Contracts" means Assumed Contracts designated on Schedule
3.7 as constituting material contracts.
"Modification Application" means the construction permit application
filed by Exchangor with the FCC on September 7, 1995 as amended on July 23,
1996 (FCC File No. BPCT-950907KE) seeking authority to relocate the Station's
transmitter to a site at 33 53' 49"/86 30' 22" or, if and only if the pending
construction permit is not approved by the FCC or the FAA, local or state
approvals cannot all be obtained, or the land owner refuses to perform, then
Exchangor may seek approval of the FCC, FAA and local and state authorities for
authorizations to construct modified facilities or facilities on a different
site for the Station in either case that would provide predicted City Grade
service to the entire city of Gadsden and predicted Grade A service to the
entire city of Birmingham (both coverages as determined in accordance with the
FCC's rules and regulations).
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, exchange
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
-3-
<PAGE> 10
"Exchangor's Accounts Receivable" means the rights of Exchangor to
payment for the transfer of advertising time run on the Station by Exchangor as
of 11:59 p.m., local time, on the day prior to the Time Brokerage Agreement.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is owned by
Exchangor and is used or useful in the conduct of the business or operations of
the Station, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Time Brokerage Agreement" means the Agreement between Exchangor and
Recipient dated August 7, 1996 whereby Recipient shall provide programming for
the Station effective September 2, 1996.
"To the best of Exchangor's knowledge" means to the actual knowledge
of Anthony J. Fant after reasonable inquiry, including where appropriate, the
inquiry of the Station Manager.
SECTION 2 EXCHANGE AND TRANSFER OF ASSETS
2.1 Agreement to Transfer and Exchange. Subject to the terms and
conditions set forth in this Agreement, Exchangor hereby agrees to transfer,
and deliver to Recipient on the Closing Date, and Recipient agrees to acquire
all of the tangible and intangible assets owned by Exchangor and used or useful
in connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2, free and clear
of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, or encumbrances of any nature whatsoever (except for liens
for current taxes not yet due and payable and liens that are removed at Closing
by assignment of a portion of the proceeds thereof), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of
Exchangor relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
-4-
<PAGE> 11
(f) All of Exchangor's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station; and
(g) All books and records relating to the business or
operations of the Station, (except as otherwise provided in Section 2.2(b))
including executed copies of the Assumed Contracts, and all records required by
the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Exchangor's cash on hand as of the Closing and all
other cash in any of Exchangor's bank or savings accounts; any insurance
policies, letters of credit, or other similar items and cash surrender value in
regard thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Exchangor is required by
law to retain and that pertain to Exchangor's corporate organization and all
books and records that are required by Exchangor to prepare its tax returns or
to substantiate information reported to federal and state governmental
authorities;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto; and
(e) The Exchangor's Accounts Receivable;
2.3 Asset Value Price. The Asset Value for the Assets ("Asset
Value") shall be Ten Million Dollars ($10,000,000), adjusted as provided below:
(a) Prorations. The Asset Value shall be increased or
decreased as required to effectuate the proration of expenses prepaid or
deferred by Exchangor after giving effect to the application of payments made
under the Time Brokerage Agreement. All expenses prepaid or delivered by
Exchangor after giving effect to the application of payments made under the
Time Brokerage Agreement arising from the operation of the Station, including
business and license fees, utility charges and deposits, real and personal
property taxes and assessments levied against the Assets, property and
equipment rentals, applicable copyright or other fees, transfers and service
charges, taxes (except for taxes arising from the transfer of the Assets under
this Agreement), and similar prepaid and deferred items, shall be prorated
between Recipient and Exchangor in accordance with the principle that Exchangor
shall be responsible for all expenses, costs, and liabilities allocable to the
period prior to the
- 5 -
<PAGE> 12
Second Closing Date, and Recipient shall be responsible for all expenses,
costs, and obligations allocable to the period on and after the Second Closing
Date. Notwithstanding the preceding sentence, there shall be no adjustment
for, and Exchangor shall remain solely liable with respect to, any Contracts
not included in the Assumed Contracts and any other obligation or liability not
being assumed by Recipient in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Second Closing Date,
with final settlement and payment by the appropriate party occurring no later
than ninety (90) days after the Second Closing Date or such other date as the
parties shall mutually agree upon.
2.4 Payment of Exchange Price. The Asset Value shall be paid by
Recipient to Exchangor as follows: At the First Closing, Recipient shall pay
to Exchangor or to LTEC (with any "boot" being paid to Exchangor) upon the
assignment by Exchangor to LTEC of Exchangor's rights hereunder in accordance
with Section 6.13 hereof, the sum of Three Million Dollars. At the Second
Closing, Recipient shall pay to Exchangor the sum of Seven Million Dollars,
with the adjustment, if any, pursuant to Section 2.3 above, or to LTEC (with
any "boot" being paid to Exchangor) upon the assignment by Exchangor to LTEC of
Exchangor's rights hereunder in accordance with Section 6.13 hereof; each of
the payments required to be made pursuant to the First Closing and the Second
Closing shall be made, by wire transfer of same-day funds pursuant to wire
instructions which shall be delivered by Exchangor to Recipient at least one
day prior to the each of the First Closing Date and Second Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the First
and Second Closing Dates, Recipient shall assume and undertake to pay,
discharge, and perform all obligations and liabilities of Exchangor under the
Licenses and the Assumed Contracts insofar as they relate to the time on and
after that respective Closing Date, and arise out of events related to
Recipient's ownership of the Assets or its operation of the Station on or after
that respective Closing Date. Recipient shall not assume any other obligations
or liabilities of Exchangor, including (i) any obligations or liabilities under
any Contract not included in the Assumed Contracts, (ii) any obligations or
liabilities under the Assumed Contracts relating to the period prior to the
First Closing Date, (iii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the First Closing Date, (iv)
any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Exchangor under any employee pension, retirement,
or other benefit plans or collective bargaining agreements, (vii) any
obligation to any employee of the Station for severance benefits, vacation
time, or sick leave accrued prior to the First Closing Date, or (viii) any
obligations or liabilities caused by, arising out of, or resulting from any
-6-
<PAGE> 13
action or omission of Exchangor prior to either Closing Date, and all such
obligations and liabilities shall remain and be the obligations and liabilities
solely of Exchangor.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF EXCHANGOR
Exchangor represents and warrants to Recipient as follows:
3.1 Organization, Standing, and Authority. Exchangor is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Alabama. Exchangor has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement and the documents contemplated hereby and
thereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Exchangor hereunder and
thereunder. Exchangor is not a participant in any joint venture or partnership
with any other person or entity with respect to any part of the operations of
the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Exchangor has been duly
authorized by all necessary actions on the part of Exchangor. This Agreement
has been duly executed and delivered by Exchangor and constitutes the legal,
valid, and binding obligation of Exchangor, enforceable against it in
accordance with its terms except as such enforceability may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
or by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby and thereby (with or
without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with any provision of
the Articles of Incorporation or By-Laws of Exchangor; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order, ordinance, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Exchangor is a
party or by which Exchangor may be bound, other than such conflicts,
terminations, breaches, defaults or accelerations that would not (x) have a
material adverse effect on the Assets, business or operations of Exchangor and
(y) delay or prevent the Closing; and (v) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
-7-
<PAGE> 14
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Exchangor has delivered to Recipient true and
complete copies of the Licenses (including any amendments and other
modifications thereto). The Licenses have been validly issued, and Exchangor
is the authorized legal holder thereof. The Licenses listed on Schedule 3.4
comprise all of the licenses, permits, and other authorizations required from
any governmental or regulatory authority for the lawful conduct of the business
and operations of the Station in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any restriction or condition
that would limit the full operation of the Station as now operated. The
Licenses are in full force and effect, and the conduct of the business and
operations of the Station is in accordance therewith. Exchangor has no reason
to believe that any of the Licenses would not be renewed by the FCC or other
granting authority in the ordinary course. Schedule 3.4 lists all cable
television systems located within the Birmingham ADI that currently carry the
Station's signal.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Exchangor's interests therein (including street address, legal description,
owner, and use and the location of all improvements thereon). The Real
Property listed on Schedule 3.5 comprises all real property interests necessary
to conduct the business and operations of the Station as now conducted.
Exchangor has good and marketable fee simple title, insurable at standard
rates, to all fee estates (including the improvements thereon) included in the
Real Property, free and clear of all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments, leases, charges, and other claims and
encumbrances of any nature whatsoever, and without reservation or exclusion of
any mineral, timber, or other rights or interests, except for liens for real
estate taxes not yet due and payable and liens disclosed on Schedule 3.5. With
respect to each leasehold or subleasehold interest included in the Real
Property being conveyed under this Agreement so long as Exchangor fulfills its
obligations under the lease therefor, Exchangor has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Exchangor's leasehold or
subleasehold interest. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. Exchangor has delivered to Recipient true and complete
copies of all deeds pertaining to the Real Property. All Real Property
(including the improvements thereon) to the best knowledge of Exchangor, (i) is
in good condition and repair consistent with its present use, (ii) is available
for immediate use in the conduct of the business and operations of the Station,
and (iii) complies with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction and Exchangor has
not received any notice (written or otherwise) that the Exchangor does not have
full legal and practical access to the Real Property. All easements,
rights-of-way, and real property licenses have been properly recorded in the
appropriate public recording
-8-
<PAGE> 15
offices except for those the failure of which to be recorded will not
adversely affect the full legal and practical access to the property.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists or includes invoices for all material items of Tangible
Personal Property. The Tangible Personal Property listed on Schedule 3.6
comprises all material items of tangible personal property necessary to conduct
the business and operations of the Station as now conducted. Except as
described in Schedule 3.6, Exchangor owns and has good title to each item of
Tangible Personal Property, and none of the Tangible Personal Property owned by
Exchangor is subject to any security interest, mortgage, pledge, conditional
transfer agreement, or other lien or encumbrance, except for liens for current
taxes not yet due and payable. Each item of Tangible Personal Property is
available for immediate use in the business and operations of the Station. All
items of transmitting and studio equipment included in the Tangible Personal
Property (i) is in good condition and repair consistent with its present use,
and (ii) will permit the Station and any unit auxiliaries thereto to operate in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts. Exchangor has delivered to Recipient true and complete copies of
all written Contracts, true and complete memoranda of all oral Contracts
(including any amendments and other modifications to such Contracts), and a
schedule summarizing Exchangor's obligations under trade and barter agreements
relating to the Station. Other than the Contracts listed on Schedule 3.7,
Exchangor requires no contract, lease, or other agreement to enable it to carry
on its business as now conducted. All of the Assumed Contracts are in full
force and effect, and are valid, binding, and enforceable in accordance with
their terms. There is not under any Assumed Contract any default by Exchangor
or, to the best of Exchangor's knowledge, any other party thereto or any event
that, after notice or lapse of time or both, could constitute a default.
Exchangor is not aware of any intention by any party to any Assumed Contract
(i) to terminate such contract or amend the terms thereof, (ii) to refuse to
renew the Assumed Contract upon expiration of its term, or (iii) to renew the
Assumed Contract upon expiration only on terms and conditions which are more
onerous than those now existing. Except for the need to obtain the Consents
listed in Schedule 3.3, Exchangor has full legal power and authority to assign
its rights under the Assumed Contracts to Recipient in accordance with this
Agreement, and such assignment will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Schedule 3.3, no consent, approval,
permit, or authorization of, or declaration to or filing with any governmental
or regulatory authority, or any other third party is required (i) to consummate
this Agreement and the
-9-
<PAGE> 16
transactions contemplated hereby, including, without limitation, the assignment
and transfer of the Assets to Recipient, (ii) to permit Exchangor to assign or
transfer the Assets to Recipient, or (iii) to enable Recipient to conduct the
business and operations of the Station in essentially the same manner as such
business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Exchangor has delivered to Recipient
copies of all documents establishing or evidencing all Intangibles. To the
best of Exchangor's knowledge, Exchangor is not infringing upon or otherwise
acting adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending or, to
the best of Exchangor's knowledge, threatened, with respect thereto. The
Intangibles listed on Schedule 3.9 comprise all intangible property interests
necessary to conduct the business and operations of the Station as now
conducted.
3.10 Financial Statements. Exchangor has furnished Recipient with
true and complete copies of its (i) financial report dated May 31, 1996,
including Exchangor's balance sheet as of May 31, 1996, and Exchangor's
statement of income for the ten months ended May 31, 1995 (collectively, the
"Financial Statements") as well as audited financial statements of The Fant
Broadcasting Companies for the two most recent fiscal years thereof. The
Financial Statements have been prepared from the books and records of
Exchangor, have been prepared in accordance with generally accepted accounting
principles consistently applied and maintained throughout the periods
indicated, accurately reflect the books, records, and accounts of the Station
(which books, records, and accounts are complete and correct), are complete and
correct in all material respects, and present fairly the financial condition of
the Station as at their respective dates and the results of operations for the
periods then ended. None of the Financial Statements understates the true
costs and expenses of conducting the business or operations of the Station,
fails to disclose any material contingent liabilities, or inflates the revenues
of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Exchangor that insure any part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.11 are
in full force and effect. The insurance policies listed in Schedule 3.11 are
adequate in amount with respect to, and for the full value (subject to
customary deductibles) of, the Assets, and insure the Assets and the business
of the Station against all customary and foreseeable risks.
3.12 Reports. All returns, reports, and statements that the
Station is currently required to file with the FCC or with any other
governmental agency have been filed,
-10-
<PAGE> 17
and all reporting requirements of the FCC and other governmental authorities
having jurisdiction over Exchangor and the Station have been complied with.
All of such returns, reports, and statements are substantially complete and
correct as filed. Exchangor has timely paid to the FCC all annual regulatory
fees payable with respect to the FCC Licenses. Neither the ownership or use of
the properties of the Station nor the conduct of the business or operations of
the Station conflicts with the rights of any other person or entity.
3.13 Personnel.
(a) Employees and Compensation. Schedule 3.13 contains a
true and complete list of all employees of the Station including their job
description, date of hire, salary, and date and amount of last salary raise.
Schedule 3.13 also contains a true and complete list as of the date of this
Agreement of all employee benefit plans or arrangements applicable to the
employees of the Station and all fixed or contingent liabilities or obligations
of Exchangor with respect to any person now or formerly employed by Exchangor
at the Station, including pension or thrift plans, individual or supplemental
pension or accrued compensation arrangements, contributions to hospitalization
or other health or life insurance programs, incentive plans, bonus
arrangements, and vacation, sick leave, disability and termination arrangements
or policies, including workers' compensation policies, and a description of all
fixed or contingent liabilities or obligations of Exchangor with respect to any
person now or formerly employed at the Station or any person now or formerly
retained as an independent contractor at the Station. At Recipient's request,
Exchangor will furnish Recipient with true and complete copies of all summary
plan descriptions of the written plans and arrangements listed in Schedule
3.13, and with descriptions, in writing, of the unwritten plans and
arrangements listed in Schedule 3.13. At Recipient's request, Exchangor will
furnish Recipient with true and complete copies of all applicable plan
documents, trust documents, and insurance contracts with respect to the plans
and arrangements listed on Schedule 3.13. All employee benefits and welfare
plans or arrangements listed in Schedule 3.13 were established and have been
executed, managed and administered in accordance with the Internal Revenue Code
of 1986, as amended, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and all other laws. Exchangor is not aware of the existence
of any governmental audit or examination of any of such plans or arrangements
or of any facts which would lead it to believe that any such audit or
examination is pending or threatened. No action, suit, or claim with respect
to any of such plans or arrangements (other than routine claims for benefits)
is pending or, to the best of Exchangor's knowledge, threatened, and Exchangor
possesses no knowledge of any facts which could give rise to any such action,
suit or claim.
(b) Labor Relations. Exchangor is not a party to or
subject to any collective bargaining agreements with respect to the Station.
Exchangor has no written
-11-
<PAGE> 18
or oral contracts of employment with any employee of the Station, other than
those listed in Schedule 3.7. Except as set forth in Schedule 3.15, no
controversies, disputes, or proceedings are pending or, to the best of
Exchangor's knowledge, threatened, between it and any employee (singly or
collectively) of the Station. No labor union or other collective bargaining
unit represents or claims to represent any of the employees of the Station. To
the best of Exchangor's knowledge, there is no union campaign being conducted
to solicit cards from employees to authorize a union to request a National
Labor Relations Board certification election with respect to any employees at
the Station.
(c) Liabilities. Exchangor has no liability of any kind
to or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Exchangor has not incurred any accumulated
funding deficiency within the meaning of ERISA or Section 4971 of the Internal
Revenue Code of 1986, as amended (the "Code"). Exchangor has not failed to
make any required contributions to any employee benefit plan. The Pension
Benefit Guaranty Corporation has not asserted that Exchangor has incurred any
liability in connection with any such plan. No lien has been attached and no
person has threatened to attach a lien on any property of Exchangor as a result
of a failure to comply with ERISA.
3.14 Taxes. Exchangor has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes are due, or has set aside on its books adequate reserves
(segregated to the extent required by generally accepted accounting principles)
with respect thereto. Exchangor has not been notified of any governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which Exchangor is or could be made liable for any taxes, penalties, interest,
or other charges, the liability for which could extend to Recipient as
transferee of the business of the Station, and no event has occurred that could
impose on Recipient any transferee liability for any taxes, penalties, or
interest due or to become due from Exchangor.
3.15 Claims and Legal Actions. Except as listed on Schedule 3.15,
and except for any FCC rulemaking proceedings generally affecting the
broadcasting industry, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative, or tax
proceeding, nor any order, decree or judgment, in progress or pending or, to
the best of Exchangor's knowledge, threatened, against or relating to Exchangor
with respect to its ownership or operation of the Station or otherwise relating
to the Assets or the business or operations of the Station, nor does Exchangor
know of any basis for the same. In particular, but without limiting the
generality of the foregoing, except as listed on Schedule 3.15 there are no
applications, complaints or proceedings pending or, to the best of Exchangor's
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other
-12-
<PAGE> 19
than rule making proceedings which affect the broadcasting industry generally,
(ii) before any federal or state agency relating to the business or operations
of the Station involving charges of illegal discrimination under any federal or
state employment laws or regulations, or (iii) before any federal, state, or
local agency relating to the business or operations of the Station involving
zoning issues under any federal, state, or local zoning law, rule, or
regulation.
3.16 Environmental Matters.
(a) Exchangor has complied in all material respects with
all laws, rules, and regulations of all federal, state, and local governments
(and all agencies thereof) concerning the environment, public health and
safety, and employee health and safety, and no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or,
to the best of Exchangor's knowledge, commenced against Exchangor in connection
with its ownership or operation of the Station alleging any failure to comply
with any such law, rule, or regulation.
(b) To the best of Exchangor's knowledge, Exchangor has
no liability relating to its ownership and operation of the Station (and there
is no basis related to the past or present operations, properties, or
facilities of Exchangor for any present or future charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand against Exchangor
giving rise to any such liability) under any law, rule, or regulation of any
federal, state, or local government (or agency thereof) concerning release or
threatened release of hazardous substances, public health and safety, or
pollution or protection of the environment.
(c) To the best of Exchangor's knowledge, Exchangor has
no liability relating to its ownership and operation of the Station (and
Exchangor has not handled or disposed of any substance, arranged for the
disposal of any substance, or owned or operated any property or facility in any
manner that could form the basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand (under the
common law or pursuant to any statute) against Exchangor giving rise to any
such liability) for damage to any site, location, or body of water (surface of
subsurface) or for illness or personal injury.
(d) To the best of Exchangor's knowledge, Exchangor has
no liability relating to its ownership and operation of the Station (and there
is no basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against Exchangor giving
rise to any such liability) under any law, rule, or regulation of any federal,
state, or local government (or agency thereof) concerning employee health and
safety.
-13-
<PAGE> 20
(e) To the best of Exchangor's knowledge, Exchangor has
no liability relating to its ownership and operation of the Station (and
Exchangor has not exposed any employee to any substance or condition that could
form the basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand (under the common law or
pursuant to statute) against Exchangor giving rise to any such liability) for
any illness or personal injury to any employee.
(f) To the best of Exchangor's knowledge, in connection
with its ownership or operation of the Station, Exchangor has obtained and been
in compliance in all material respects with all of the terms and conditions of
all permits, licenses, and other authorizations which are required under, and
has complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all federal, state, and local laws, rules, and regulations
(including all codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety,
worker health and safety, and pollution or protection of the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
3.17 [Reserved].
3,18 Conduct of Business in Ordinary Course. Since May 31, 1996,
Exchangor has conducted the business and operations of the Station only in the
ordinary course and, subject to actions taken in connection with the Station's
CBS affiliation, has not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station other than is disclosed on Schedule 3.18;
(b) Other than as disclosed in Schedule 3.13, made any
material increase in compensation payable or to become payable to any of the
employees of the Station, or any bonus payment made or promised to any employee
of the Station, or any material change in personnel policies, employee
benefits, or other compensation arrangements affecting the employees of the
Station;
(c) Made any transfer, assignment, lease, or other
transfer of any of the Station's properties other than in the normal and usual
course of business with suitable replacements being obtained therefor;
-14-
<PAGE> 21
(d) Canceled any debts owed to or claims held by
Exchangor with respect to the Station, except inthe normal and usual course of
business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.19 Full Disclosure. No representation or warranty made by
Exchangor in this Agreement or in the Schedules to this Agreement or any
certificate furnished or to be furnished by Exchangor at Closing contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact required to make any statement made herein or therein
not misleading in any such case that was knowingly or willingly made or
omitted, as the case may be, by Exchangor (provided that this Section 3.19
shall not be applicable as to the Financial Statements).
SECTION 4 REPRESENTATIONS AND WARRANTIES OF RECIPIENT
Recipient represents and warrants to Exchangor as follows:
4.1 Organization, Standing, and Authority. Recipient is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and at Closing will be duly qualified to conduct
business as a foreign corporation in the State of Alabama. Recipient has all
requisite power and authority to execute and deliver this Agreement and the
Escrow Agreement and the documents contemplated hereby and thereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Recipient hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Recipient has been duly
authorized by all necessary actions on the part of Recipient. This Agreement
has been duly executed and delivered by Recipient and constitute the legal,
valid, and binding obligations of Recipient, enforceable against Recipient in
accordance with their respective terms except as such enforceability may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Recipient of this
Agreement and the documents contemplated hereby and thereby (with or without
the giving of notice, the
-15-
<PAGE> 22
lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with the Articles of Incorporation or Bylaws of
Recipient; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality; or (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Recipient is a party or by which Recipient may be bound, such
that Recipient could not acquire or operate the Assets.
4.4 Full Disclosure. No representation or warranty made by
Recipient in this Agreement or in any certificate, document, or other
instrument furnished or to be furnished by Recipient pursuant hereto contains
or will contain any untrue statement of a material fact, or omits or will omit
to state any material fact required to make any statement made herein or
therein not misleading.
4.5 Recipient Qualifications. Recipient is legally, financially
and otherwise qualified to be the licensee of, acquire, own and operate the
Station under the Communications Act of 1934, as now in effect, and the rules,
regulations and policies of the FCC as now in effect. Recipient knows of no
fact that would, under existing law and the existing rules, regulations,
policies and procedures of the FCC disqualify Recipient as an assignee of the
FCC Licenses or as the owner and operator of the Station.
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Exchangor agrees that, between the date of this
Agreement and the Second Closing Date, Exchangor shall operate the Station
diligently in the ordinary course of business in accordance with its past
practices (except where such conduct would conflict with the following
covenants, with Exchangor's other obligations under this Agreement or with the
terms of the Time Brokerage Agreement) and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Exchangor shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices or as disclosed in writing to
Recipient by Exchangor.
5.3 Contracts. Exchangor will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Recipient after the First Closing,
except for cash time sales agreements made in the ordinary course of business
or contracts relating to the performance of the CBS
-16-
<PAGE> 23
affiliation agreement; provided, however, Exchangor shall decline to renew or
extend any programming contracts where it can do so without penalty or other
cost. Prior to the First Closing Date, Exchangor shall deliver to Recipient a
list of all Contracts entered into between the date of this Agreement and the
First Closing Date that will be binding on Recipient after the First Closing,
together with copies of such Contracts.
5.4 Disposition of Assets. Exchangor shall not sell, assign,
lease, or otherwise transfer or dispose of any of the Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Exchangor shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed on or prior
to the First Closing Date, (ii) liens for current taxes not yet due and
payable, and (iii) mechanics' liens and other similar liens, which shall be
removed on or prior to the First Closing Date.
5.6 Licenses. Exchangor shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that would cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Exchangor shall not fail to prosecute
with due diligence any applications to any governmental authority in connection
with the operation of the Station.
5.7 Rights. Exchangor shall not waive any right relating to the
Station or any of the Assets.
5.8 No Inconsistent Action. Subject to Exchangor's obligations
under Section 5.15 hereof, Exchangor shall not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Exchangor shall give Recipient and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, and will furnish or cause to be furnished to Recipient or
its authorized representatives all information with respect to the affairs and
business of the Station that Recipient may reasonably request (including any
financial reports and operations reports produced with respect to the affairs
and business of the Station). Without limiting the generality of the
foregoing, Exchangor shall give Recipient and its counsel, accountants and
other authorized representatives reasonable access to Exchangor's financial
records and
-17-
<PAGE> 24
Exchangor's employees, counsel, accountants and other representatives for the
purpose of preparing and auditing such financial statements as Recipient
determines, in its sole judgment, are required or advisable to comply with
federal or state securities laws and the rules and regulations of securities
markets as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Subject to the Time Brokerage
Agreement, Exchangor shall use its best efforts and take all reasonable actions
to maintain all of the Assets in good condition (ordinary wear and tear
excepted), and use, operate, and maintain all of the Assets in a reasonable
manner and in accordance with the terms of the FCC Licenses, all rules and
regulations of the FCC and generally accepted standards of good engineering
practice. Exchangor shall maintain inventories of spare parts and expendable
supplies at levels consistent with past practices. If any loss, damage,
impairment, confiscation, or condemnation of or to any of the Assets occurs,
Exchangor shall repair, replace, or restore the Assets to their prior condition
as represented in this Agreement as soon thereafter as possible, and Exchangor
shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Exchangor shall maintain the existing insurance
policies on the Station and the Assets as contemplated by the Time Brokerage
Agreement.
5.12 Consents. Exchangor shall use its best efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Assumed Contract or License that could
be less advantageous to the Station than those pertaining under the Assumed
Contract or License as in effect on the date of this Agreement. Exchangor
shall promptly advise Recipient of any difficulties experienced in obtaining
any of the Consents and of any conditions proposed, considered, or requested
for any of the Consents. Upon Recipient's request, Exchangor shall cooperate
with Recipient and use it best efforts to obtain from the lessors under each
Real Property lease such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Recipient's senior
lenders may request.
5.13 Books and Records. Exchangor shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Exchangor shall promptly notify Recipient in
writing of any unusual or material developments with respect to the business or
operations of the Station.
-18-
<PAGE> 25
5.15 Compliance with Laws. Exchangor shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.16 Financing Leases. Exchangor will satisfy at or prior to the
First Closing all outstanding obligations under capital and financing leases
with respect to any of the Assets and obtain good title to the Assets leased by
Exchangor pursuant to those leases so that those Assets shall be transferred to
Recipient at the First Closing free of any interest of the lessors.
5.17 Preservation of Business. Subject to the Time Brokerage
Agreement, and any actions of Exchangor in winding up the Station's news
operations, Exchangor shall use its best efforts to preserve the business and
organization of the Station and use its best efforts to keep available to the
Station its present employees and to preserve the audience of the Station and
the Station's present relationships with suppliers, advertisers, and others
having business relations with it, to the end that the business, operations,
and prospects of the Station shall be unimpaired at the First Closing Date.
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the exchange and transfer of the Assets pursuant to this Agreement shall be
subject to the prior consent and approval of the FCC.
(b) Exchangor and Recipient shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC no later than September 30, 1996, although the application may be filed
sooner upon the agreement of Seller and Buyer. The parties shall prosecute the
application with all reasonable diligence and otherwise use their best efforts
to obtain a grant of the application as expeditiously as practicable. Each
party agrees to comply with any condition imposed on it by the FCC Consent,
except that no party shall be required to comply with a condition if (1) the
condition was imposed on it as the result of a circumstance the existence of
which does not constitute a breach by the party of any of its representations,
warranties, or covenants under this Agreement, and (2) compliance with the
condition would have a material adverse effect upon it. Recipient and
Exchangor shall oppose any requests for reconsideration or judicial review of
the FCC Consent. If the Second Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party
shall have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension
of the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
-19-
<PAGE> 26
6.2 Control of the Station. Prior to the Second Closing,
Recipient shall not, directly or indirectly, control, supervise, direct, or
attempt to control, supervise, or direct, the operations of the Station; such
operations, including complete control and supervision of all of the Station
programs, employees, and policies, shall be the sole responsibility of
Exchangor until the Second Closing, provided, however, that Recipient shall be
entitled to provide programming to the Station pursuant to the Time Brokerage
Agreement.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Exchangor at all times prior to the First Closing; provided,
however, that any such loss or damage that is caused by Recipient's actions
while the Time Brokerage Agreement is in effect shall not relieve Recipient of
its obligations to acquire the Assets in accordance with the terms hereof.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Recipient's obtaining
of financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Cooperation. Recipient and Exchangor shall cooperate fully
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their respective obligations under
this Agreement, and Recipient and Exchangor shall execute such other documents
as may be necessary and desirable to the implementation and consummation of
this Agreement, and otherwise use their best efforts to consummate the
transactions contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Recipient shall have no obligation
(i) to expend funds to obtain any of the Consents or (ii) to agree to any
adverse change in any License or Assumed Contract to obtain a Consent required
with respect thereto.
6.6 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Alabama shall be complied with by Exchangor. Any loss, liability,
obligation, or cost suffered by Exchangor or Recipient as the result of the
failure of Exchangor or Recipient to comply with the provisions of any bulk
transfer law applicable to the transfer of the Assets as contemplated by this
Agreement shall be borne by Exchangor.
-20-
<PAGE> 27
6.7 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to
each parcel of Real Property that Exchangor owns, Exchangor will cooperate with
Recipient to enable Recipient to obtain at its own expense at or prior to
Closing, an ALTA Owner's Policy of Title Insurance Form B-1987 (or equivalent
policy acceptable to Recipient), issued by a title insurer satisfactory to
Recipient, in an amount equal to the fair market value of the property and any
improvements thereon (as reasonably determined by Recipient), insuring title to
such parcel to be in the name of Recipient as of the Closing, subject only to
liens or encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Recipient pursuant to
this Agreement shall (1) insure title to the Real Property described in the
policy and all recorded easements benefitting such Real Property, (2) contain
an "extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel, and (7) not be subject to any survey exception
or any defect or encroachment disclosed by a survey delivered with respect to
the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Exchangor will cooperate with Recipient to enable Recipient to
procure at Recipient's expense, a current survey of the parcel, prepared by a
licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
6.8 Sales Tax Filings. Exchangor shall continue to file any
required Alabama sales tax returns with respect to the Station in accordance
with Exchangor's past practices and shall concurrently deliver copies of all
such returns to Recipient.
6.9 Access to Books and Records. Exchangor shall provide
Recipient access and the right to copy for a period of three years from the
Second Closing Date any books and records relating to the Assets but not
included in the Assets. Recipient shall provide Exchangor access and the right
to copy for a period of three years from the Second Closing Date any books and
records relating to the Assets that are included in the Assets.
-21-
<PAGE> 28
6.10 Broker. Recipient and Exchangor each represents and warrants
that neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except that Exchangor shall be
solely responsible for any fees or commissions owing to Communications Equity
Associates, Inc.
6.11 Cable Proceedings. Exchangor shall provide Recipient with
copies of all pleadings, correspondence and other documents filed by all
parties in connection with any matters involving cable carriage as identified
in Schedule 3.15. Exchangor shall promptly provide Recipient with copies of
all pleadings, correspondence and other documents filed or received by
Exchangor following the date hereof in any matters required to be disclosed on
Schedule 3.15 and shall promptly advise Recipient of any material developments
in any matters required to be disclosed on Schedule 3.15. Exchangor shall
consult with Recipient prior to making the October 1, 1996 election regarding
must-carry/retransmission control for cable systems within the Birmingham ADI
and Exchangor shall not make any such election without Recipient's approval,
which shall not be unreasonably withheld.
6.12 Allocation of Asset Value. Exchangor and Recipient shall use
their good faith efforts to agree to an allocation of the Asset Value among the
Assets for purposes of Section 1060 of the Code and Temporary Treasury
Regulation Section 1.1060-1T. Subject to such agreement, Recipient and
Exchangor agree to use such allocation in filing as part of their respective
federal income tax returns, an initial asset acquisition statement and any
supplemental statements on Internal Revenue Service Form 8594 required by
Temporary Treasury Regulation Section 1.1060-1T.
6.13 Section 1031 Exchange. Subsequent to the date hereof,
Exchangor anticipates that it shall execute the Exchange Agreement with LTEC
(the "Exchange Agreement"). Subject to and contingent upon the execution of
such Exchange Agreement, Exchangor shall assign to LTEC immediately prior to
Closing, and LTEC shall assume, certain rights and obligations under this
Agreement in accordance with the terms of a written assignment and assumption
agreement between Exchangor and LTEC, with the consent of Recipient (the "LTEC
Assignment"). Specifically, the LTEC Assignment shall provide (i) that,
subject to and upon the consummation of this Agreement, LTEC shall have the
right to receive a portion of the Estimated Asset Value paid by the Recipient,
(ii) that to the extent that LTEC assumes any obligations of Exchangor under
this Agreement, Recipient shall be a third-party beneficiary of such
assumptions so that following such assumption LTEC will be responsible directly
to Recipient for the performance of such assumed obligations, (iii) that
Exchangor shall indemnify and hold Recipient harmless from any breach by LTEC
of its obligations under the LTEC Assignment of this Agreement, and (iv) such
other terms as shall be necessary to effect a like-kind exchange through use of
a "qualified intermediary" under
-22-
<PAGE> 29
Code Section 1031. Upon such assignment, the following provisions of this
Section 6.13 shall apply.
(a) Closing Deliveries. At Closing Exchangor shall
transfer the Assets to Recipient as the designee of LTEC and deliver to
Exchangor the closing deliveries provided for in Section 8.2 hereof, and
Exchangor shall deliver to Recipient the closing deliveries provided for in
Sections 8.3(b) through (f) hereof.
(b) Assignment of Rights upon Closing. Subsequent to the
Closing, LTEC shall reassign to Exchangor, and Exchangor shall reassume, any
rights or obligations hereunder relating to the post-Closing period, to the
extent that such rights or obligations shall have been assigned by Exchangor to
LTEC under the terms of the Exchange Agreement, except that, subject to the
consent of Recipient, LTEC shall retain the obligation to make any payments
required to be made by Exchangor under Section 2.4(b)(2) hereof. Specifically,
such reassignment shall provide that subsequent to Closing, Exchangor (and
Exchangor alone) shall hold Exchangor's indemnity rights under Section 10
hereof, hold and be entitled to enforce all rights of Exchangor hereunder
(provided, though, that with Recipient's consent, LTEC may retain the right to
receive any payments required to be made by Recipient under Section 2.4(b)(1)
hereof), and reassume all of Exchangor's obligations and liabilities hereunder
except, with Recipient's consent, LTEC's obligation to make any payments
required to be made by Exchangor under Section 2.4(b)(2) hereof.
6.14. Parent Guaranty. Paxson Communications Corporation, a
Delaware corporation, of which Recipient is a wholly-owned subsidiary, hereby
fully and unconditionally guarantees all obligations of Recipient hereunder.
SECTION 7 CONDITIONS TO OBLIGATIONS OF RECIPIENT AND
EXCHANGOR AT THE FIRST CLOSING
7.1 Conditions to Obligations of Recipient. All obligations of
Recipient at the First Closing are subject at Recipient's option to the
fulfillment prior to or at the First Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations
and warranties of Exchangor contained in this Agreement shall be true and
complete in all material respects at and as of the First Closing Date as though
made at and as of that time.
(b) Covenants and Conditions. Exchangor shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the First Closing Date.
-23-
<PAGE> 30
(c) Consents. All Consents (other than any consents for
contracts which are not designated Material Contracts on Schedule 3.7) shall
have been obtained and delivered to Recipient without any adverse change in the
terms or conditions of any agreement or any governmental license, permit, or
other authorization.
(d) Governmental Authorizations. Exchangor shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on the Station or the conduct of its
business and operations. The FCC shall not have initiated any proceeding the
effect of which would be reasonably likely to revoke, cancel, fail to renew,
suspend, or modify adversely any License.
(e) Modification Application. The FCC shall have granted
the Modification Application of Exchangor and Exchangor shall have obtained FAA
approval and all local and state zoning and building permits for a site meeting
the requirements of the Modification Application.
(f) Deliveries. Exchangor shall have made or stand
willing to make all the deliveries to Recipient set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the First Closing Date, there shall have been no material adverse change in
the business, assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Agreements. The Exchangor is not in material default
under either the Time Brokerage Agreement or the Loan Agreement (taking into
account any applicable cure periods in those Agreements).
7.2 Conditions to Obligations of Exchangor. All obligations of
Exchangor at the First Closing are subject at Exchangor's option to the
fulfillment prior to or at the First Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations
and warranties of Recipient contained in this Agreement shall be true and
complete in all material respects at and as of the First Closing Date as though
made at and as of that time.
(b) Covenants and Conditions. Recipient shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the First Closing Date.
-24-
<PAGE> 31
(c) Deliveries. Recipient shall have made or stand
willing to make all the deliveries set forth in Section 8.3.
SECTION 8 FIRST CLOSING AND CLOSING DELIVERIES
8.1 First Closing.
(a) First Closing Date. The First Closing shall take
place at 10:00 a.m. on a date not earlier than September 3, 1996, to be set by
Recipient on at least five days' written notice to Exchangor, that is
reasonably acceptable to Exchangor and not later than ten business days
following the date upon which the conditions specified in Section 7.1(e) hereof
have been satisfied, unless Exchangor shall agree in writing to a later date.
(b) Closing Place. The First Closing shall be held at
the offices of Dow, Lohnes & Albertson, 1200 New Hampshire Ave., N.W.,
Washington, D.C. 20036, or any other place that is agreed upon by Recipient and
Exchangor.
8.2 Deliveries by Exchangor. Prior to or on the First Closing
Date, Exchangor shall deliver to Recipient the following, in form and substance
reasonably satisfactory to Recipient and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
transfer, deeds, assignments, and other transfer documents which shall be
sufficient to vest good and marketable title to the Assets in the name of
Recipient, free and clear of all mortgages, liens, restrictions, encumbrances,
claims, and obligations except for liens for current taxes not yet due and
payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. Photocopies of any instrument evidencing
receipt of any Consent;
(d) Certificate. A certificate, dated as of the First
Closing Date, executed on behalf of Exchangor by the President or any Vice
President of Exchangor's certifying (1) that the representations and warranties
of Exchangor contained in this Agreement are true and complete in all material
respects as of the First Closing Date as though made on and as of that date;
and (2) that Exchangor has in all material respects performed and complied with
all of its obligations, covenants, and agreements set forth
-25-
<PAGE> 32
in this Agreement to be performed and complied with on or prior to the First
Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of Alabama and in the records of those counties in Alabama in
which any of the Assets are located, such searches having been made no earlier
than fifteen days prior to the First Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Exchangor
in connection with its operations;
(g) Opinion of Counsel. An Opinion or Opinions of
Exchangor's counsel dated as of the First Closing Date, substantially in the
form of Schedule 8.2(g) hereto; and
(h) Lenders Certificates. Such certificates and
confirmations to Recipient's senior lenders as Recipient may reasonably request
in connection with obtaining financing for the performance of its payment
obligations hereunder.
8.3 Deliveries by Recipient. Prior to or on the First Closing
Date, Recipient shall deliver to Exchangor the following, in form and substance
reasonably satisfactory to Exchangor and its counsel:
(a) Exchange Price. The Asset Value as provided in
Section 2.4;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Recipient shall assume and undertake to perform
Exchangor's obligations under the Assumed Contracts arising on or after the
First Closing Date;
(c) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of Recipient by its President, certifying (1) that the
representations and warranties of Recipient contained in this Agreement are
true and complete in all material respects as of the First Closing Date as
though made on and as of that date, and (2) that Recipient has in all material
respects performed and complied with all of its obligations, covenants, and
agreements set forth in this Agreement to be performed and complied with on or
prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Recipient's
counsel dated as of the First Closing Date, substantially in the form of
Schedule 8.3(d) hereto.
-26-
<PAGE> 33
(e) Lease. Appropriate lease agreements pursuant to
which Recipient shall lease to Exchangor the Tangible Personal Property and
Real Property necessary for the operation of the Station by Exchangor as
Licensee.
SECTION 9 CONDITIONS AND OBLIGATIONS OF RECIPIENT AND
EXCHANGOR AT THE SECOND CLOSING
9.1 Conditions to Obligations of Recipient. All obligations of
Recipient at the Second Closing are subject at Recipient's option to the
fulfillment prior to or at the Second Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations
and warranties of Exchangor contained in this Agreement shall be true and
complete in all material respects at and as of the Second Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Exchangor shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement relating to the FCC Licenses to be
performed or complied with by it prior to or on the Second Closing Date.
(c) Consents. All Consents (other than any consents for
contracts that are not designated as Material Contracts on Schedule 3.7) shall
have been obtained and delivered to Recipient without any adverse change in the
terms or conditions of any agreement or any governmental license, permit, or
other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Recipient of any conditions that need not be compiled
with be (a) Recipient under Section 6.1 hereof, Exchangor shall have compiled
with any conditions imposed on it by the FCC Consent, and the FCC Consent shall
have become a Final Order.
(e) Governmental Authorizations. Exchangor shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on the Station or the conduct of its
business and operations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License.
(f) Deliveries. Exchangor shall have made or stand
willing to make all the deliveries to Recipient set forth in Section 10.2.
(g) Time Brokerage Agreement. The Exchangor shall not be
in default under the Time Brokerage Agreement.
-27-
<PAGE> 34
9.2 Conditions to Obligations of Exchangor. All obligations of
Exchangor at the Second Closing are subject at Exchangor's option to the
fulfillment prior to or at the Second Closing Date of each of the following
conditions:
(a) Representations and Warranties. All representations
and warranties of Recipient contained in this Agreement shall be true and
complete in all material respects at and as of the Second Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Recipient shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Second Closing Date.
(c) Deliveries. Recipient shall have made or stand
willing to make all the deliveries set forth in Section 10.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Exchangor of any conditions that need not be complied
with by Exchangor under Section 6.1 hereof and Recipient shall have complied
with any conditions imposed on it by the FCC.
SECTION 10 SECOND CLOSING AND CLOSING DELIVERIES
10.1 Second Closing.
(a) Second Closing Date. The Second Closing shall take
place at 10:00 a.m. on a date, to be set by Recipient on at least five days'
written notice to Exchangor, that is reasonably acceptable to Exchangor and (1)
not earlier than the first business day after the FCC Consent is granted, and
(2) not later than ten business days following the date upon which the FCC
Consent has become a Final Order. If Recipient fails to specify the date for
the Second Closing pursuant to the preceding sentence prior to the fifth
business day after the date upon which the FCC Consent becomes a Final Order,
the Second Closing shall take place on the tenth business day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Second Closing shall be held at
the offices of Dow, Lohnes & Albertson, 1200 New Hampshire Ave., N.W.,
Washington, D.C. 20036, or any other place that is agreed upon by Recipient and
Exchangor.
-28-
<PAGE> 35
10.2 Deliveries by Exchangor. Prior to or on the Second Closing
Date, Exchangor shall deliver to Recipient the following, in form and substance
reasonably satisfactory to Recipient and its counsel:
(a) Transfer Documents. Duly executed assignments, which
shall be sufficient to vest good and marketable title to the Licenses in the
name of Recipient, free and clear of all mortgages, liens, restrictions,
encumbrances, claims, and obligations;
(b) Certificate. A certificate, dated as of the Second
Closing Date, executed on behalf of Exchangor by the President or any Vice
President of Exchangor's certifying (1) that the representations and warranties
of Exchangor contained in this Agreement are true and complete in all material
respects as of the Second Closing Date as though made on and as of that date;
and (2) that Exchangor has in all material respects performed and complied with
all of its obligations, covenants, and agreements set forth in this Agreement
to be performed and complied with on or prior to the Second Closing Date;
(c) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, and all files and records used by Exchangor in connection with
its operations;
(d) Opinion of Counsel. An Opinion or Opinions of
Exchangor's counsel dated as of the Second Closing Date, substantially in the
form of Schedule 10.2(d`) hereto; and
(e) Lenders Certificates. Such certificates and
confirmations to Recipient's senior lenders as Recipient may reasonably request
in connection with obtaining financing for the performance of its payment
obligations hereunder.
10.3 Deliveries by Recipient. Prior to or on the Second Closing
Date, Recipient shall deliver to Exchangor the following, in form and substance
reasonably satisfactory to Exchangor and its counsel:
(a) Exchange Price. The Asset Value of Two Million
Dollars as provided in Section 2.4 subject to adjustments, if any, provided for
in Section 2.3;
(b) Officer's Certificate. A certificate, dated as of
the Second Closing Date, executed on behalf of Recipient by its President,
certifying (1) that the representations and warranties of Recipient contained
in this Agreement are true and complete in all material respects as of the
Second Closing Date as though made on and as of that date, and (2) that
Recipient has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Second Closing Date;
-29-
<PAGE> 36
(c) Opinion of Counsel. An opinion of Recipient's
counsel dated as of the Second Closing Date, substantially in the form of
Schedule 10.3(d) hereto.
SECTION 11 TERMINATION
11.1 Termination by Exchangor. This Agreement may be terminated by
Exchangor and the exchange and transfer of the Station abandoned, if Exchangor
is not then in material default, upon written notice to Recipient, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the First or Second Closing Date any of the conditions precedent to the
obligations of Exchangor set forth in this Agreement have not been satisfied by
Recipient or waived in writing by Exchangor.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the First or Second Closing Date any judgment, decree,
or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the First and Second Closings shall
not both have occurred by February 28, 1998.
11.2 Termination by Recipient. This Agreement may be terminated by
Recipient and the exchange and transfer of the Station abandoned, if Recipient
is not then in material default, upon written notice to Exchangor, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the First or Second Closing Date any of the conditions precedent to the
obligations of Recipient set forth in this Agreement have not been satisfied by
Exchangor or waived in writing by Recipient.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the First or Second Closing Date any judgment, decree,
or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the First or Second Closings shall
not both have occurred by February 28, 1998.
11.3 Rights on Termination. If this Agreement is terminated prior
to the First Closing, pursuant to Section 11.1 or Section 11.2 and neither
party is in material breach of this Agreement, the parties hereto shall not
have any further liability to each other with respect to the exchange and
transfer of the Assets; provided, however, that in the
-30-
<PAGE> 37
event of such termination, Recipient and Exchangor shall continue to have the
rights and obligations pursuant to the Time Brokerage Agreement and the Loan
Agreement. If this Agreement is terminated by Exchangor due to Recipient's
material breach of this Agreement prior to the First Closing, then Exchangor
shall have all the rights and remedies available at law or equity, including
recourse against Recipient's parent company. If Exchangor is in material
breach of this Agreement prior to the First Closing, Recipient shall have all
rights and remedies provided for in Section 12.5 hereof.
If this Agreement is terminated pursuant to Section 11.1 or Section
11.2 prior to the Second Closing (but subsequent to the First Closing), and
neither party is in material breach of this Agreement, the parties hereto shall
not have any further liability with respect to the exchange and transfer of the
Assets, provided, however, that in the event of such termination, Recipient
shall sell to Exchangor and Exchangor shall acquire from Recipient, the Assets
exchanged by Recipient at the First Closing from Exchangor for the Asset Value
of Three Million Dollars ($3,000,000). In the event of such termination, the
Recipient and Exchangor shall continue to have the rights and obligations
pursuant to the Time Brokerage Agreement and the Loan Agreement. If this
Agreement is terminated by Exchangor prior to the Second Closing (but
subsequent to the First Closing) due to Recipient's material breach of this
Agreement, Exchangor shall have all the rights and remedies available at law or
equity. If Exchangor is in material breach of this Agreement prior to the
Second Closing (and subsequent to the First Closing), Recipient shall have all
rights and remedies available in law and equity as set forth in Section 12.5
hereof.
SECTION 12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
12.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closings for a period of
eighteen months after the First Closing and for a period of Twelve months after
the Second Closing. Any investigations by or on behalf of any party hereto
shall not constitute a waiver as to enforcement of any representation,
warranty, or covenant contained in this Agreement. No notice or information
delivered by Exchangor shall affect Recipient's right to rely on any
representation or warranty made by Exchangor or relieve Exchangor of any
obligations under this Agreement as the result of a breach of any of its
representations and warranties.
12.2 Indemnification by Exchangor. Notwithstanding the Closings,
regardless of any investigation made at any time by or on behalf of Recipient
or any information Recipient may have, but subject to the survival provisions
of Section 12.1 Exchangor
-31-
<PAGE> 38
hereby agrees to indemnify and hold Recipient harmless against and with respect
to, and shall reimburse Recipient for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Exchangor contained in this Agreement or in any certificate,
document, or instrument delivered to Recipient under this Agreement.
(b) Any and all obligations of Exchangor not assumed by
Recipient pursuant to this Agreement, including any liabilities arising at any
time under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk
transfer law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closings, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior to the Closings Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity; provided Recipient shall substantially
prevail in pursuing any such claim.
12.3 Indemnification by Recipient. Notwithstanding the Closings,
and regardless of any investigation made at any time by or on behalf of
Exchangor or any information Exchangor may have, but subject to the survival
provisions of Section 12.1, Recipient hereby agrees to indemnify and hold
Exchangor harmless against and with respect to, and shall reimburse Exchangor
for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Recipient contained in this Agreement or in any certificate,
document, or instrument delivered to Exchangor under this Agreement.
(b) Any and all obligations of Exchangor assumed by
Recipient pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closings.
-32-
<PAGE> 39
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity, provided Exchangor shall substantially
prevail in pursuing any such claim.
12.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty- day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
-33-
<PAGE> 40
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the partners, shareholders, directors, officers,
employees, and representatives of any Claimant although for the purpose of the
procedures set forth in this Section 10.4, any indemnification claims by such
parties shall be made by and through the Claimant.
12.5 Specific Performance. The parties recognize that if Exchangor
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Recipient
for its injury. Recipient shall therefore be entitled, in addition to any
other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement. If any action is brought
by Recipient to enforce this Agreement, Exchangor shall waive the defense that
there is an adequate remedy at law.
12.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
12.7 Limitation. Neither Exchangor nor Recipient shall be required
to indemnify the other party under this Section 10, except to the extent that
the aggregate amount of all claims against the party exceeds One Hundred
Thousand Dollars ($100,000).
SECTION 13 MISCELLANEOUS
13.1 Fees and Expenses. Any federal, state, or local transfers or
transfer tax arising in connection with the conveyance of the Assets by
Exchangor to Recipient pursuant to this Agreement shall be paid by the party
upon which such tax is imposed by law. Recipient and Exchangor shall each pay
one-half of all fees required by the FCC in connection with the filing of
applications for the FCC Consent. Except as otherwise provided in this
Agreement, each party shall pay its own expenses incurred in connection with
the authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
13.2 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail,
-34-
<PAGE> 41
return receipt requested, (c) deemed to have been given on the date of personal
delivery or the date set forth in the records of the delivery service or on the
return receipt, and (d) addressed as follows:
If to Exchangor: WNAL-TV, Inc.
Fant Broadcasting Company
Corporate Headquarters
One Independence Plaza, Suite 720
Birmingham, Alabama 35209
Attention: Mr. Anthony Fant
With a copy to: Michael A. King, Esq.
Brown & Wood, LLP
One World Trade Center
New York, New York 10048
If to Paxson: Paxson Communications of Birmingham-44, Inc.
601 Clearwater Park North
W. Palm Beach, FL 33401
Attention: Mr. Lowell W. Paxson
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Ave., N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
13.2.
13.3 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Recipient may assign its rights and obligations under
this Agreement to one or more subsidiaries or commonly controlled affiliates of
Recipient or an entity qualified to hold the Station's FCC Licenses (provided,
however, that Recipient shall guarantee this assignee's performance under this
Agreement) without seeking or obtaining Exchangor's prior approval and
Recipient may collaterally assign its rights and interests hereunder to its
senior lenders without seeking or obtaining Exchangor's prior approval and
Exchangor may assign certain of its rights and obligations hereunder to a
"qualified intermediary" for purposes of Section 1031 of the Internal Revenue
Code without seeking or obtaining Recipient's prior approval. Upon any
permitted assignment
-35-
<PAGE> 42
by Recipient or Exchangor in accordance with this Section 13.3, all references
to"Recipient" herein shall be deemed to be references to Recipient's assignee
and all references to "Exchangor" herein shall be deemed to be references to
Exchangor's assignee, as the case may be. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
13.4 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Exchangor, any additional bills of transfer, deeds, or other transfer documents
that, in the reasonable opinion of Recipient, may be necessary to ensure,
complete, and evidence the full and effective transfer of the Assets to
Recipient pursuant to this Agreement.
13.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF). THE PARTIES AGREE TO THE
EXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR FEDERAL DISTRICT COURT FOR THE
DISTRICT INCLUDING JEFFERSON COUNTY, ALABAMA OR THE NORTHERN DISTRICT OF
ALABAMA.
13.6 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
13.7 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
13.8 Entire Agreement. This Agreement, the schedules, hereto, the
Loan Agreement and Time Brokerage Agreement and all documents, certificates,
and other documents to be delivered by the parties pursuant hereto,
collectively represent the entire understanding and agreement between Recipient
and Exchangor with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing that makes specific
reference to this Agreement and which is signed by the party against which
enforcement of any such amendment, supplement, or modification is sought.
13.9 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with
any obligation, representation, warranty, covenant, agreement, or condition
herein may be waived by
-36-
<PAGE> 43
the party entitled to the benefits thereof only by a written instrument signed
by the party granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 13.9.
13.10 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the Time Brokerage Agreement or the transactions
contemplated hereby or thereby without the prior written consent of the other
party; provided, however, that nothing contained herein shall prevent either
party from promptly making all filings with governmental authorities as may, in
its judgement be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
13.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 37 -
<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Exchange Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF WNAL-TV, INC.
BIRMINGHAM-44, INC.
By: /s/ James B. Bocock By: /s/ Anthony J. Fant
------------------------------ ----------------------------
Name: James B. Bocock Name: Anthony J. Fant
Title: President Title: President
For purposes of guarantying the performance
of Paxson Communications of Birmingham-44,
Inc., hereunder.
PAXSON COMMUNICATIONS CORPORATION
By: /s/ James B. Bocock
---------------------------------
Name: James B. Bocock
Title: President
<PAGE> 45
SCHEDULE 2.2
Excluded Property
<PAGE> 46
Schedule 2.2 -- Excluded Property
Prints in General Manager's Office: framed map, four animal prints, three
horse prints, two telescope prints, and one polo print
Globe in General Manager's office
Antique books (9) and clock in reception area
Framed horse prints (2), leather desk pad, and antique books (3), located in
Sales Manager's office
Marble top vanity and framed prints (2) in upstairs bathroom
Framed parrot print
Cox Furniture, including Partner's desk, located at One Independence Plaza,
Birmington, AL
Airplane Piper N1277T and Rebuilt Engine for N1277T
One Zeos Computer, purchased in 2-15-90 (described as a Zero computer on
schedule 3.6)
1982 Mercedes automobile
Table, chairs, paintings (2), chicken of wood and screen in Station's kitchen
Chinese screen in lobby
Rolled rug (stored in Sales Manager's office)
Map, hat, magnifying glass, and personal table pieces
Personal belongings of Anthony Fant
<PAGE> 47
SCHEDULE 3.3
Consents
<PAGE> 48
Schedule 3.3 -- Contracts Requiring Consent for Assignment
1. Agreement relating to Real Estate
Alabama Power Company Non-exclusive Lease, dated August, 1993,
for tower and antenna site
Alabama Power Company Lease, dated July 1, 1995
Tom A. Carden Building Lease, dated November 1, 1992,
office space and broadcasting facilities, as
extended on July 1, 1996
Chateau Apartments Rental apartment
LB Chemical Company Warehouse\storage area
2. General Contracts and Agreements
Associated Press AP NewsCenter 96-98
AP NewsPower 96-98
GraphicsBank 96-98
ASCAP Blanket License Fee 1996
Broadcast Music, Inc. Blanket License Fee 1996
Center Capital Corporation Avid AirPlay and Media Composer
CBS Affiliation Agreement, Newspath Agreement,
ServiceMark License Agreement
FOX (1) Affiliation Agreement
Luckie and Company Public Relations Firm
NAB Member of National Association of Broadcasters
Network Music License renewed
Nielsen Media Research Index Service Agreement 94-99
<PAGE> 49
Petry, Inc. Representation Agreement 94-99
SESAC Performance License Fees 1996
Software Systems, Inc. Summit television system 95-98
UPS Network service 95-96
WB Communications (1) Affiliation Agreement
Xerox Xerox 5028 96-97
3. Programming Agreements
Company Property Season
Allied Communications, Inc. FilmLeader 3 95-96
HighTide 95-96
Beyond Reality 95-96
FilmLeader Encore 1 96-99
FilmLeader Encore 2 96-00
Active Entertainment Bruno the Kid 96-98
Sky Dancers 96-97
Dragon Flyz 96-97
Monster Mania 96-97
All American Television Baywatch Strip 95-97
CBS/Group W Greatest Moments of the
Olympiad 1996
Columbia Pegasus 2 96-99
Columbia Gold 96-99
Showcase 96-00
Gold II 96-99
Pegasus 3 96-01
The Jeffersons 96-99
Good Times 96-99
Who's the Boss 96-00
All in the Family 96-99
Benson 96-99
Hunter 96-99
<PAGE> 50
Conus Communications All News Channel 95-96
Don Taffner's Entertainment The Wanderer 96-96
First Baptist Church of Gadsden Sunday service 95-96
Genesis Scrooge 96
Marvel Action 94-96
ITC Distribution Mom V Movie Deal Memo 96-97
Kelly News and Entertainment Strong against Crime 96-97
Fire Rescue 96-97
Rebecca's Garden 96-97
MCA Airwolf 97-99
A - Team 96-99
B.J. Lobo 96-99
Black Sheep 96-99
Gimme A Break 96-99
Simon and Simon 96-99
Mediacast Backyard America 95-96
Multimedia Entertainment Damn Taxes 96-97
95-96
Damn Right 95-96
Donahue 95-96
Jerry Springer 95-97
Muller Media Prime Target 2 96-97
MG Perin, Inc. Coast Guard 96-97
Miracles 96-97
Prevention's Body Wise 96-97
Paramount Distribution The Complete Perry Mason 94-99
Perry Mason Features 96-99
The Complete Lucy 94-99
The Andy Griffith Show 94-99
The Complete Matlock 94-98
<PAGE> 51
Rainbow Church of Christ Sunday Service renewed
Rysher Entertainment Saved by the Bell 94-96
Lifestyles 95-96
Highlander 95-96
Samuel Goldwyn Theatre 2 95-96
American Gladiators 94-96
Gladiators 2000 95-96
New Adventures of Flipper 95-96
Starcom Entertainment, Inc. Best Picture Show monthly
Tel-A-Cast Backyard America 96-97
Telecast License Agreement Network One 800\900
TELCO Productions Emergency 96-97
Telepictures Distribution This Old House 96-97
Tradewinds Television Live Entertainment Premiere One 95-98
The Classic Collection 95-96
The Night They Saved Christmas 96-96
Tribune Entertainment Macy's 1996
Gladiators 2000 96-97
Hollywood Christmas 1996
Live from the Academy Awards 1996
Geraldo 95-96
Out of the Blue 95-96
U.S. Farm Report 95-96
Charles Perez 95-96
Flipper 96-97
Turner Program Services Jacques Cousteau 96-96
National Geographic on Assignment 96-96
The World of National Geographic 95-96
Turner Pictures II; Captain Planet
Strip; National Geographic Presents;
The World of National Geographic;
Rediscovery of the World
Turner Pictures III 94-96
<PAGE> 52
Twentieth Century Television M*A*S*H 96-98
Gordon Elliott Show 96-97
United Artists The Bradshaw Difference 96-97
L.A.P.D. 96-97
The Good, The Bad and The Ugly
For a Few Dollars More
Jack the Giant Killer
Marty
The Lion's Pride 96-99
Warner Brothers TV4 Package 96-00
Volume 18 96-98
Volume 19 96-00
Volume 31 96-02
Premiere Edition II 96-98
Premiere Edition Three 96-01
Word of Life Church Services renewed
WorldVision Beverly Hills 90210 94-96
Little House on the Prairie 96-01
4. Oral Agreements
There are no oral agreements relating to the Station or its
operations.
(1) The Affiliation Agreements with FOX and The WB have been terminated by
Exchanger, effective September 2, 1996.
<PAGE> 53
SCHEDULE 3.4
Licenses
<PAGE> 54
Schedule 3.4 -- Licenses
1. Television Broadcast Station License, granted on May 25, 1996
by the Federal Communications Commission, expiration date: April 1, 1997
2. Radio Broadcast Station License, granted on March 24, 1994 by
the Federal Communications Commission, expiration date: April 1, 1997
3. License Renewal Authorization, granted by Federal
Communications Commission on March 31, 1992, expiration date: April 1, 1997
4. City of Gadsden Business License, expiration date: December
31, 1996.
5. Corporate Permit for the year ending December 31, 1996, issued
by the Corporate Tax Division of the State of Alabama.
<PAGE> 55
Continued
Schedule 3.4 to the Asset Exchange Agreement
BIRMINGHAM ADI CABLE COVERAGE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COUNTY CABLE COMPANY CITY CH # CABLE HH
CHEROKEE TCI OF ALABAMA CENTRE 9 1,116
FALCON CABLE CEDAR BLUFF 10 660
LOOKOUT CABLE ALPINE 2 N/A
GAYLESVILLE 2
WEISS LAKE CABLE PREWITT'S CAMP 2 N/A
ETOWAH COMCAST GADSDEN 2 21,000
GLENCOE 2
RAINBOW CITY 2
CABLE SOUTH HOKES BLUFF 4 1,251
SOUTHSIDE 4 1,700
FALCON CABLE ATTALLA 3 2,755
GALLANT 3
REECE CITY 3
RIDGEVILLE 3
ST. CLAIR ST. CLAIR CABLEVISION ASHVILLE 33 1,860
STEELE 33
SPRINGFIELD 33
UNICORP OF ST. CLAIR CO. 33
ST CLAIR CABLEVISION MARGARET 33 N/A
ARGO 33
PORTIONS OF:
ST. CLAIR CO. 33
JEFFERSON CO. 33
TRUSSVILLE 33
SPRINGFIELD 33
TALLADEGA NEWCHANNELS MUNFORD 11 N/A
</TABLE>
<PAGE> 56
SCHEDULE 3.5
Real Property
<PAGE> 57
Schedule 3.5 -- Real Property
1. WNAL does not own any real property in fee simple.
2. WNAL does have a leasehold interest in certain real estate pursuant to
the terms of the following leases:
A. Non-exclusive Lease, dated August 1, 1993, with Alabama
Power Company;
B. Carden Building Lease, dated November 1, 1992, with
Tom A. Carden;
C. Chateau Apartment Residential Lease, dated July 10, 1996;
d. Warehouse Space Rental Agreement, dated October 8, 1996;
and WNAL is not in breach of any term thereof. Neither the Leases nor a
notation of Leases have been recorded.
NOTE: All leasehold interests secure Loan to AmSouth Bank
(see schedule 3.15)
<PAGE> 58
SCHEDULE 3.6
Tangible Personal Property
<PAGE> 59
Schedule 3.6 -- Tangible Personal Property
WNAL-TV, INC. - PHYSICAL INVENTORY(1)
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- ------------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
-----------------
<S> <C> <C> <C> <C> <C> <C>
1 Moseley 1600 RMC1600 Remote Control Eng. M/C
2 Video Tek APM2000/05940060 Audio Monitor Eng. M/C
3 Shure M267 Audio Mixer Eng. M/C Two Units
4 Gorman Redlich CEO/6096 EBS Encoder Eng. M/C Includes Radio
5 Sony PVM 1341/2000178 Monitor Eng. M/C
6 DPS DPS-220/9207220026 TBC-Fr. Sync. Eng. M/C Two Units
7 Tektronix 1740/B029824 VFM/Vect. 90 Eng. M/C 2 Units/Diff. Models
8 Scientific Atlanta 6250/3075 Demodulator Eng. M/C Two Units
9 Tektronix 1910/Bolo 878 Digital Gen. Eng. M/C
10 Pesa 1602 16x2 Switcher Eng. M/C
11 Tektronix TSG-100/Bolo 251 Signal Gen. Eng. M/C
12 Video Tek RS10A 10x1 Switcher Eng. M/C
13 Sony VO5800/27891 Videotape Recorder Eng. M/C
14 Sony VP5000/63225 Videotape Player Eng. M/C
15 Sony VP5000/62346 Videotape Player Eng. M/C
16 Sony VP5000/62389 Videotape Player Eng. M/C
17 JVC TM/9U(A)/06935877 Color Monitor Eng. M/C
18 JVC TM9U(A)/06935362 Color Monitor Eng. M/C
19 JVC TM9U(A)/06935397 Color Monitor Eng. M/C
20 JVC TM9U(A)/10070665 Color Monitor Eng. M/C
21 JVC BA-9622U/08013868 S-VHS Videotape Rec. Eng. M/C Two Units
22 JVC BR-9622U/08013853 S-VHS Videotape Rec. Eng. M/C
23 DPS DPS-220/5E220006 TPC - Fr. Sync. Eng. M/C
24 JVC TM-9U(A)/09937224 Color Monitor Eng. M/C
25 JVC TM-9U(A)/06936149 Color Monitor Eng. M/C
26 JVC TM-9U(A)/06935524 Color Monitor Eng. M/C
27 JVC TM-9U(A)/06935386 Color Monitor Eng. M/C
28 Panasonic CT-1330V/UG4342750 Color Monitor Eng. M/C
29 Zenith SC3361S/721-05170239 Color Monitor Eng. M/C
30 JVC BR-S378U/168X0139 S-VHS Videotape Rec. Eng. M/C
31 JVC BR-S378U/159X0192 S-VHS Videotape Rec. Eng. M/C
32 JVC BR-S378U/069X0214 S-VHS Videotape Rec. Eng. M/C
33 JVC BR-S378U/168X0119 S-VHS Videotape Rec. Eng. M/C
34 JVC BR-S378U/168X0017 S-VHS Videotape Rec. Eng. M/C
35 JVC BR-S378U/069X349 S-VHS Videotape Rec. Eng. M/C
36 JVC BR-S378U/168X0011 S-VHS Videotape Rec. Eng. M/C
37 Cross Point Latch 6109/0216 Production Switcher Eng. M/C
38 Gen. Instrument 5501 Eng. M/C
39 President Video Cypher II Sat. Rec. Eng. M/C
40 Uniden UST-4400/15004171 Sat. Rec. Eng. M/C
41 Link StarFlex Video-Audio DA Eng. M/C
42 Leading Edge CMC 1417 AE Computer Monitor Eng. M/C
43 Leading Edge CPC2603/33/WIN7102 Computer Eng. M/C
44230705984
44 Avid (2) Airplay/FC4390E41MI Computer Spot Player Eng. M/C Inc. all components
except monitor
45 Avid (2) HL7955SKTA/ Color Monitor Eng. M/C
407007384
46 Iris Tech Video Commander Routing Switcher 16x16 Eng. M/C Inc. 3 Boxes & Software
</TABLE>
as of August 1, 1996
Page 1 of 7
<PAGE> 60
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- ------------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
-------------------
<S> <C> <C> <C> <C> <C> <C>
47 Tektronix 1750/B030956 Waveform monitor Eng. M/C
Vectorscope
48 Shure M-267 Audio Mixer Eng. M/C
49 Hewlett-Packard C2163A/VS4CT16029 Printer Eng. M/C
50 Grass Valley 3252/73637 Sync. Gen. Eng. M/C
51 Chyron VP2 Character Gen. Eng. M/C
52 Magnavox (4) RR1352 C403/33293645 Color TV & Monitor Eng. M/C
53 Digital Clock Kit Built Master Clock Eng. M/C 1 Master/2 Slaves
54 3M AT-60 Audio Amp. Eng. M/C
55 Werner PT374-46 Rolling Ladder Eng. M/C
56 Number Destroyed
57 Detroit Diesel 1271 Diesel Engine - V-12 & Eng. Xmtr. Inc. Fuel Tank
Generator set
58 Central Tower 3600 400' Tower Eng. Outside Includes Lighting,
Static Cut & Ice
Bridge
59 Andrew Ant. ATW32G4-HSS-44 UHF Antenna Eng. Tower
60 Andrew Trans. Line MaxiLine 6-1/8" Coax Eng. Xmtr.
61 Building (Xmtr.) Built '94 by Phillip Smith 30'x30 Metal/Concrete Eng. Xmtr. Inc. lights, wiring,
Floor disconnect, etc.
62 General 87AC 1062/4318 ABT Switch, 600V 600A Eng. Xmtr.
63 Siemens 3F3Y075ST Dry Transformer/75KVA Eng. Xmtr.
480/208-120
64 Larcan TTC HDR-30-A1 IOT Transmitter Eng. Xmtr. Inc. control cab &
3353-MIA-94 0-0011 blowers
65 Larcan TTC 3353-MIA-9410-001C Driver Cabinet Eng. Xmtr. Inc. Mod, UPCON, PS,
Controller, 3 AMPS
66 Peter Dahl 8162-765 33KV PS Eng. Xmtr.
Transformer Co.
67 Goodman CE60-3B/9406123149 A/C Outside Unit Eng. Xmtr.
68 Goodman A6020/9410036444 Air Handler - Inside Eng. Xmtr.
69 EEV 7340R/47-9451 IOT Eng. Xmtr.
70 EEV MA22388/014 Magnet Assembly Eng. Xmtr.
71 EEV MA2611A Input Cavity Eng. Xmtr.
72 Altronic 5825E4/140 Dummy Load/Aircooler Eng. Xmtr. Inc. Thru-Line Meter
73 MCI 49300/5280 Band Pass Filter Eng. Xmtr. Includes 4-1/16 Coax
& Step
74 MCI 31502/5281 4-1/16 Panel - 5 Pont Eng. Xmtr. Reducer Harmonic
Filter
75 Andrew 50 to 75 R 6-1/8" Eng. Xmtr.
Transformer
76 Macom MA-KA 845200-1/T103F2101.5 M/U Rec. Eng. Xmtr.
77 Macom MA-KA Pac-12 Audio Demodulator Eng. Xmtr.
78 Andrew Heliax 7/8" Coax, Approx. 325' Eng. Outside
79 Mark Ant. 6' Grid M/W Rec. Dish Eng. Tower
80 Tektronix 1480/B093331 Waveform monitor Eng. Xmtr.
81 Tektronix 520A/B43937 Vector Scope Eng. Xmtr.
82 Grass Valley 3252-796 Sync. Gen. Eng. Xmtr. Inc. 4 Cards SF,
I.P.S.
83 Grass Valley 3240/2710 Proc. Amp Eng. Xmtr. Inc. 5 Cards, IPS
84 VideoTek DM154/12940B19 Demodulator Eng. Xmtr.
85 Tektronix TSG170A/B030415 Signal Gen. Eng. Xmtr.
86 Sony PUM 1380/2007466 Color Monitor Eng. Xmtr.
87 Moseley MAC1600/9103722 Remote Control Eng. Xmtr.
88 Orban 275A Auto Stereo Synthesizer Eng. Xmtr.
89 Bird 4388/0160 RF Power Analyst Eng. Xmtr. Inc. Thru-line
mounted in Trans-
mission Line
90 Orban 8182A/56/800191 Optimod TV, Stereo Gen. Eng. Xmtr.
</TABLE>
as of August 1, 1996
Page 2 of 7
<PAGE> 61
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- -----------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
------------------
<S> <C> <C> <C> <C> <C> <C>
91 Orban 8182A/885523 Optmod TV, Compress Etc. Eng. Xmtr.
92 Lightning Prot. Corp LPC20716/2253 Surge Supressor Eng. Xmtr.
93 Larcan TTC 5014-9410-003/1908L Surge Supressor Eng. Xmtr.
94 Ratelco VR24202-1908L Battery Charger Eng. Xmtr.
95 Dayton 2C785B Shutter Exhuast fan Eng. Xmtr. Inc. Remote Shutter
96 Tektronix An/USM-281C/445M 7603 O Scope Eng. Xmtr. Inc. 1 Time Base/2 Vent Amp
97 Leader LDC-825/3100294 Digital Counter Eng. Xmtr.
98 Avid (2) Med. Composer/ 1000 Digital Editing System Eng. Prod. Inc. Keyboard, HO,
XB437076672 Cabler, CD Rom
99 Avid (2) HC3925KTK Color Monitor Eng. Prod. Two Units
40600159
100 Avid (2) HC3925KTK Color Monitor Eng. Prod.
406005166
101 Roland MA-12/EG63060 Micro Mon. (Audio) Eng. Prod. Two Units
102 Roland MA-12/EG63060 Micro Mon. (Audio) Eng. Prod.
103 Mackie 1202/D75192 Audio Mixer Eng. Prod. Two Units
104 Sony CDP215/8858036 CD Player Eng. Prod.
105 JVC BR-S378U/168X0010 S-VHS Video Tape Rec. Eng. Prod.
106 JVC KY27BU/10950243 Color Camera Eng. Prod.
107 JVC BR-S42U/15810854 S-VHS Tape Recorder Eng. Prod.
108 Fujinon A12X9 BFRM-8C 12X Lens Eng. Prod.
08C5900135
109 JVC VF-P1154/16751115 View Finder Eng. Prod.
110 JVC AA-P250U/14852007 AC Power Adapter Eng. Prod. Inc. 3 Batt. NB-G11
111 Lowell Trans-Kit/TI-92 Light Kit Eng. Prod.
112 Peter Ligamd JRA-83ML Tripod Eng. Prod.
113 Peter Ligamd UL1-321 Fluid Head Eng. Prod.
114 Nady 151VR/151139276 Wireless Microphone Eng. Prod. Rec. & Xmtr. 11265
115 Electro-Voice 635A/9448 Microphone Eng. Prod.
116 Scientific Atlanta 6250/010260 Demodulator Eng.
117 Olson OTD-2000/1465 Demod (Cable) Eng.
118 Mark Ant. 4' Grid. M/W Dish Eng. Tower 510 Chestnut Street
119 Rohn SSV 90' Tower/M/W Xmt. Eng. Outside 510 Chestnut Street
120 Andrew Heliax 7/8", approx. 150', M/W Outside 510 Chestnut Street
121 Macom MA-K6 M/W Transmitter Eng. Upstairs Inc. T-Rack
122 Macom PAC10 Audio Modulator Eng. Upstairs Inc. LP Video Filter
123 RCA DRD102RW/451513244 DBS Sat. Rec. Eng. Upstairs Inc. 18" dish
124 1400' Fiber Optic Cable Eng. Outside Strung on Poles
125 Clarke Cable 400' Video/6 Audio Eng. Outside Dee Ford Protect
126 Telephone Cable 12 Pr. Telephone Eng. Outside Dee Ford Protect
127 Mackie 1202/DO91471 Audio Mixer Eng. Dee Ford Remote Studio
128 Fujinon SRD-92B Zoom Control Eng. Prod.
129 JVC VF-P400U/09053f168 Viewfinder Studio Eng. Prod.
130 Sencore SL750/6096961M TV Signal Stre. Meter Eng. Eng. Inc. Ant, Pg. & Case
131 Sat. Dish 12' (Moves) Sat. Dish Eng. Outside Rickles
132 Sat. Dish 10' (Moves) Sat. Dish Eng. Outside
133 Sat. Dish 10' (Does not move) Sat. Dish Eng. Outside
134 GoldStar (4) CMT4842N/XC00005913 13" Color TV Eng. Inc. Remote
135 GoldStar CMT9325/KC60402781 19" Color TV Sales GSM Off. Inc. Remote
136 Sharp (4) VC-A102U/353796 VCR Sales GSM Off.
137 Sharp 13A-M050/515294 13" Color TV P&O Traffic Inc. Remote
138 Sharp 13A-M050/514199 13" Color TV G&A GM Off. Inc. Remote
139 Emerson VCR910/E746649 VCR G&A GM Off.
</TABLE>
as of August 1, 1996
Page 3 of 7
<PAGE> 62
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- -----------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
-------------------
<S> <C> <C> <C> <C> <C> <C>
140 Quasar T6278YW/AQ52269349 19" Color TV P&O Lobby
141 CTX CVP5429A 14" Color Comp Monitor Sales
K20-22202774
142 Smile Int'l CA1716DS 17" Color Comp. Monitor Sales GSM Off.
ALKKU5357940
143 No Name 9200533 386 Computer Sales GSM Off. Inc. Keyboard & Mouse
144 Trip-Lite CCI Plus/BBT4A Surge Supressor Sales GSM Off.
145 Hewlett-Packard DeskJet 560C Color Printer Sales GSM Off.
US4721G19N
146 Packard Bell PB85385VGA 13" Color Monitor P&O Traffic Inc. Keyboard & Mouse
12131428
147 Packard Bell PB1120/L033034757 Computer P&O Traffic Inc. Keyboard & Mouse
148 Micro-Lan Computer P&O Traffic Inc. Keyboard & Mouse
T90051278/110494
149 CTX 1451/090-43000110 14" Color Monitor P&O Traffic
150 Brother IntelliFax 950M Fax Machine P&O Traffic
K31959103
151 Brother GX6750/H56253885 Electronic Typewriter P&O Traffic
152 Hewlett Packard DeskJet 500 Printer P&O Traffic
US3576110SV
153 Alton AL142856/205C101708 12" Color Comp. Monitor G&A Admin
154 Kensinton Microwave/I696U Surge Supressor G&A Admin.
155 No Name T90022348-71592 Computer G&A Inc. Keyboard & Mouse
156 Xerox PA-/68H-523667 5028 Copier
157 Xerox 7024 Fax Terminal G&A
158 Sony CDP-70/851674 CD Player G&A
159 IBM PS-1 23ZCW02 Computer G&A GM Off. Inc. Kyd., Mouse, Speak (2)
160 IBM-PS-1 2112 001/23-46433 14" Color Comp. Monitor G&A GM Off.
161 PC Concepts MT-767/ED1088 Surge Supressor G&A GM Off.
162 Hewlett Packard DeskJet 520 Printer G&A GM Off.
US417170V1
163 Panasonic KX-P2123 Printer G&A Not Used-Inc. Cable
3GSBNF445997
164 Rack #1 Black Equipment Rack, 19" W. Eng. M/C
165 Rack #2 Black Rack, 19" W. Eng. M/C
166 Rack #3, Avid (2) White Rack, 19" W. Eng. M/C
167 Rack #4 Black Rack, 19" W. Eng. M/C
168 Rack #5 Blue Rack, 19" W. Eng. M/C
169 Rack #6 Grey Rack, 19" W. Eng. M/C
170 Rack #7 Black Double Rack - 19" Wide Eng. M/C
171 Northern Telecom Meridan/0404369135 Telephone G&A Eng. Off
172 Northern Telecom Meridan/0409179134 Telephone G&A Sales
173 Northern Telecom Meridan/04112409206 Telephone G&A Sales
174 Northern Telecom Meridan/0404249135 Telephone G&A Sales
175 Northern Telecom Meridan/0403249135 Telephone G&A Sales
176 Northern Telecom Meridan/0404329135 Telephone G&A GSM Off.
177 Northern Telecom Meridan/0417298951 Telephone G&A Prod.
178 Northern Telecom Meridan/0402269135 Telephone G&A M/C
179 Northern Telecom Meridan/0407519134 Telephone G&A Sales
180 Northern Telecom Meridan/0401438129 Telephone G&A Lobby Master Set
181 Northern Telecom Meridan/0403529135 Telephone G&A Kitchen
182 Northern Telecom Meridan/0403129135 Telephone G&A Traffic
183 Northern Telecom Meridan/0403449135 Telephone G&A Traffic
</TABLE>
as of August 1, 1996
Page 4 of 7
<PAGE> 63
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- ----------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
--------------------
<S> <C> <C> <C> <C> <C> <C>
184 Northern Telecom Meridian/0403489135 Telephone G&A Conf. Rm.
185 Northern Telecom Meridian/0404289131 Telephone G&A Admin.
186 Northern Telecom Meridian/0413699206 Telephone G&A Fax Phone
187 Northern Telecom Meridian/0407109134 Telephone G&A GM Off.
188 Northern Telecom Meridian/0403649135 Telephone G&A GM Off.
189 Northern Telecom Meridian/0401809134 PBX Control Unit G&A Kitchen Inc. Accessories Mt. on Wall
190 AT&T HT-5300/890127 Cordless Telephone G&A Kitchen
191 Rack #1 Black Rack, 19" W. Eng. Xmtr.
192 Rack #2 Black Rack, 19" W. Eng. Xmtr.
193 Oxy. Welding Equip Welding Equipment Eng. Xmtr. 2 Bottles, gauges, hoses, cart
194 AT&T 700/CS6601601D Telephone Eng. Xmtr.
195 Werner W-336 Ladder, 6' Wood Eng. Xmtr.
196 Werner W-368 Ladder, 8' Metal Folding Eng. Xmtr.
197 Werner D1124-2 Ladder, 24' Metal Ext. Eng. Xmtr.
198 Desk Wood 2-Drawer, Brown G&A Eng. Off.
199 Chair Cloth Bottom Wooden Arms G&A Eng. Off.
200 File Cabinet White 2-Drawer Metal G&A Sales
201 File Cabinet White 2-Drawer Metal G&A Sales
202 File Cabinet White 2-Drawer Metal G&A Sales
203 File Cabinet White 2-Drawer Metal G&A Sales
204 SwinTec 1146CM Typewriter, Electric G&A Lobby
205 Desk Red Wood, 3-Drawer G&A Lobby
206 Typewriter Table Wood, Oak G&A Lobby
207 Chair Green Wood Legs G&A Lobby
208 United Chair 109084 Grey, Adj. w/ Wheels G&A Lobby
209 Table White Metal G&A Prod.
210 File Cabinet Black 2-Drawer Wood G&A Prod.
211 United Chair Red Adj. w/ Wheels G&A Prod.
212 Desk Brown Top 6-Drawer, Metal G&A M/C
213 Brother AX-250/LI6527063 Elec. Typewriter G&A M/C
214 Cabinet Black 7 Sliding Shelves G&A M/C
215 Hon S720WNN24/ALIML3 Chair. Brown G&A M/C
216 United Chair Red Adj. w/ Wheels G&A M/C
217 United Chair 109084 Grey, Adj. w/ Wheels G&A M/C
218 Desk Black 4-Drawer, Wood G&A Sales
219 File Cabinet Tan 4-Drawer, Metal G&A Eng.
220 Chair Grey Adj. w/ Wheels G&A Sales Wal-Mart
221 Kitchen Table Wood G&A Kitchen
222 Chair Green Bottom Wood G&A Kitchen
223 Chair Green Bottom Wood G&A Kitchen
225 Scotsman Auto. Ice Machine G&A Kitchen
226 Scotsman RF33A-1B-276181-06J Refrigerator G&A Kitchen
227 Amana Radar Range Microwave Oven G&A Kitchen
P7733207M
228 Vanity Marble Top/wood G&A Bathroom
229 Conference Table Wood G&A Conf. Rm.
230 Chair Green Bottom Wood G&A Conf. Rm.
231 Chair Green Bottom Wood G&A Conf. Rm.
232 Chair Green Bottom Wood G&A Conf. Rm.
233 Chair Green Bottom Wood G&A Conf. Rm.
234 Chair Green Bottom Wood G&A Conf. Rm.
235 Chair Green Bottom Wood G&A Conf. Rm.
236 Cabinet Shelves & Drawers Wood./2-Drawer G&A Conf. Rm.
as of August 1, 1996
</TABLE>
Page 5 of 7
<PAGE> 64
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- ------------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
-----------------
<S> <C> <C> <C> <C> <C> <C>
237 Desk Red Wood G&A Admin.
238 File Cabinet Blonde 2-Drawer, Wood G&A Admin.
239 Credenza Red 4-Drawer G&A Admin.
240 Chair Green/Red Wood G&A Admin.
241 Chair Green/Red Wood G&A Admin.
242 Desk Red/Gray Wood Top, 5-Drawer G&A Fax Rm.
243 Chair Red Leather High Back w/ Wheels G&A Admin.
244 Desk Wood, 9 Drawer Sales GSM Off
245 Credenza Brown Wood Sales GSM Off
246 Chair Red Leather High Back w/ Wheels Sales GSM Off
247 Cabinet Brown Wood, 4-Drawer Sales GSM Off
248 Chair Red Leather Wood Sales GSM Off
249 Chair Red Leather Wood Sales GSM Off
250 TV Table Brown Wood Sales GSM Off
251 G.E. SC4SJB/HV810701 Refrigerator, Compact G&A Dn. Kit.
252 Quasar MQ5516AU Microwave Oven G&A Dn. Kit.
NM635390293
253 Mr. Coffee Coffee Maker G&A Dn. Kit.
254 Desk Wood, 9 Drawer G&A GM Off.
255 Chair Red Leather High BAck w/ Wheels G&A GM Off.
256 Computer Table Metal, Wood Top G&A GM Off.
257 Chair Red Leather Wood Legs G&A GM Off.
258 Chair Red Leather Wood Legs G&A GM Off.
259 Chair Cloth/Wood G&A GM Off.
260 Chair Cloth/Wood G&A GM Off.
261 Fellows PS50/392372 Paper Shredder G&A GM Off. Inc. PS
262 Cabinet Book Case Wood, 3 Shelf/2 Drawer G&A GM Off.
263 Chair Green Cloth/Wood G&A Upstairs
264 Chair Green Cloth/Wood G&A Upstairs
265 Chair Green Cloth/Wood G&A Upstairs
266 Sofa 1 Cushion Cloth w/ Wood Legs G&A Upstairs
267 End Table 1-Drawer Wood G&A Upstairs
268 Chest 3-Drawer Wood G&A Upstairs
269 Table 3-Drawer Wood G&A Upstairs
270 Table Glass Top Green Bottom G&A Upstairs
271 Werner W336 6' Wood Ladder Eng.
272 File Cabinet Black 4-Drawer G&A Traffic
273 File Cabinet Black 3-Drawer G&A Traffic
274 Desk Brown 7-Drawer G&A Traffic
275 Table Comp. Keybd. Shelf White Top/Red Metal G&A Traffic
276 Table Computer White Top/Red Metal G&A Traffic
277 Table Computer White Top/Red Metal G&A Traffic
278 Steelcase Chair Metal & Cloth w/ Wheels G&A Traffic
279 United Chair 82083 Cloth w/ Wheels G&A Traffic
280 United Chair Red Cloth w/ Wheels G&A Traffic
281 Chair Brown Cloth & Wood G&A Traffic
282 Comfort Edge TY-12/CET1712 Oscillating Fan G&A Traffic
283 Book Case Brown Wood, 3-Shelf G&A Traffic
284 Hewlett Packard Laser Jet 4 Plus Printer G&A Traffic
285 Tektronix 7L12/B202845 Spectrum Analyzer Eng. Xmtr.
286 Tektronix 7603/B328265 Oscilliscope, Main Frame Eng. Xmtr.
287 Tektronix Type 200-l, Model M Mobile Cart Eng. Xmtr.
288 Fluke 87/30101306 Digital Voltmeter Eng. Xmtr.
</TABLE>
as of August 1, 1996
Page 6 of 7
<PAGE> 65
<TABLE>
<CAPTION>
# NAME OF ITEM MODEL/SERIAL # DESCRIPTION LOCATION NOTES
- ------------------------------------------------------------------------------------------------------------------------------------
DEPT. PHYSICAL
-----------------
<S> <C> <C> <C> <C> <C> <C>
289 Gen. Control Panel P5A06002/3566 TLA Cont. Panel for Diesel Eng. Xmtr.
290 Demco Prod. None 375KW Gen. Eng. Xmtr.
291 Water Cooler TB9-AC4/950178610 Cordley/Elkay G&A Dn. Kit.
292 FM Systems VM771/R02075 Video Processor Eng. M/C
293 Ford Bronco XLT (3) 1FMCU12TILUA62627 1989 G&A Eng.
294 JVC BMH1300SU/12030203 13" Color Monitor Eng. Xmtr.
295 Tektronix TAS465/BO32301 100 MHL Oscope Eng. Xmtr.
296 JVC TM-A9U/17070024 9" Color Monitor Eng. Prod.
297 JVC TM-A9U/17070022 9" Color Monitor Eng. M/C
298 JVC AA-P25OU/12053839 AC P.S. for Camera Eng. Prod.
299 Gen. Instrument CU59OI/150049506 Satellite Receiver Eng. M/C
300 Andrew LDF-5-50A 105' Heliax, 7/8" Dia. Eng. MW Twr. L45F, L5NF, N-Connector
301 Credenza Mahogany w/Comp. Kbd. Shelf G&A GM Off.
302 File Cabinet Mahogany 2-Drawer G&A GM Off.
303 Hand Truck Sm. Silver Eng. Xmtr.
304 Hand Truck Pneumatic Tires Eng. M/C
305 Natl. Comp. Outlet 900L2545AMD0895 Server Traffic Sales Inc. Keyboard
</TABLE>
(1) All property secures a loan to AmSouth Bank, as more fully described in
Schedule 3.15.
(2) Airplay and Color Monitor subject to that Master Lease Agreement number
15215 dated April 6, 1995 with Central Capital Corporation.
(3) Certificate of title individually held by Anthony Fant (will be executed
and delivered).
(4) Property is in disrepair; it is not feasible to repair and is to be
discarded.
as of August 1, 1996
Page 7 of 7
<PAGE> 66
SCHEDULE 3.7
Contracts
<PAGE> 67
Schedule 3-7 -- Contracts and Agreements
Except where expressly noted, all of the following contracts are "Assumed
Contracts."
<TABLE>
<S> <C> <C>
1. Agreements relating to Real Estate
M Alabama Power Company Non-exclusive Lease, dated August 1,
1993, for tower and antenna site
M Alabama Power Company Lease, dated July 1, 1995
M Tom A. Carden Building Lease, dated November 1, 1992,
office space and broadcasting facilities, as
extended on July 1, 1996
Chateau Apartments Rental apartment *
LB Chemical Company Warehouse/storage area *
2. General Contracts and Agreements
Associated Press AP NewsCenter * 96-98
AP NewsPower * 96-98
GraphicsBank * 96-98
ASCAP Blanket License Fee 1996
Broadcast Music, Inc. Blanket License Fee 1996
Center Capital Corporation Avid AirPlay and Media Composer
CBS Affiliation Agreement, Newspath
Agreement, ServiceMark License
Agreement
FOX (1) Affiliation Agreement
Luckie and Company Public Relations Firm *
NAB Member of National Association of
Broadcasters
Network Music License Renewed *
Nielsen Media Research Index Service Agreement 94-99 *
</TABLE>
<PAGE> 68
Petry, Inc. Representative Agreement 94-99
SESAC Performance License Fees 1996
Software Systems, Inc. Summit television system 95-98
UPS Network servce 95-96
WP Communications (1) Affiliation Agreement
Xerox Xerox 5028 96-97
3. Programming Agreements
Company Property Season
Allied Communications, Inc. FilmLeader 3 95-96
High Tide 95-96
Beyond Reality 95-96
FilmLeader Encore 1 96-99
FilmLeader Encore 2 96-00
Active Entertainment Bruno the Kid 96-98
Sky Dancers 96-97
Dragon Flyz 96-97
Monster Mania 96-97
All American Television Baywatch Strip 95-97
CBS/Group W Greatest Moments of the 1996
Olympiad
Columbia Pegasus 2 * 96-99
Columbia Gold * 96-99
Showcase * 96-00
Gold II * 96-99
Pegasus 3 * 96-01
The Jeffersons * 96-99
Good Times * 96-99
Who's the Boss * 96-00
All in the Family 96-99
Benson * 96-99
Hunter * 96-99
Conus Communications All News Channel 95-96
<PAGE> 69
Don Taffner's Entertainment The Wanderer 96-96
First Baptist Church of Gadsden Sunday service 95-96
Genesis Scrooge 96
Marvel Action 94-96
ITC Distribution Mom V Movie Deal Memo 96-97
Kelly News and Entertainment Strong against Crime 96-97
Fire Rescue 96-97
Rebecca's Garden 96-97
MCA Airwolf 97-99
A - Team 96-99
B.J. Lobo 96-99
Black Sheep 96-99
Gimme A Break 96-99
Simon and Simon 96-99
Mediacast Backyard America 95-96
Multimedia Entertainment Damn Taxes 96-97
95-96
Damn Right 95-96
Donahue 95-96
Jerry Springer 95-97
Muller Media Prime Target 2 96-97
MG Perin, Inc. Coast Guard 96-97
Miracles 96-97
Preventions' Body Wise 96-97
Paramount Distribution The Complete Perry Mason 94-99
Perry Mason Features 96-99
The Complete Lucy 94-99
The Andy Griffith Show 94-99
The Complete Matlock 94-98
<PAGE> 70
Rainbow Church of Christ Sunday Service renewed
Rysher Entertainment Saved by the Bell 94-96
Lifestyles 95-96
Highlander 95-96
Samuel Goldwyn Theatre 2 95-96
American Gladiators 94-96
Gladiators 2000 95-96
New Adventures of Flipper 95-96
Starcom Entertainment, Inc. Best Picture Show monthly
Tel-A-Cast Backyard America 96-97
Telecast License Agreement Network One 800\900
TELCO Productions Emergency 96-97
Telepictures Distribution This Old House 96-97
Tradewinds Television Live Entertainment Premiere One 95-98
The Classic Collection 95-96
The Night They Saved Christmas 96-96
Tribune Entertainment Macy's 1996
Gladiators 2000 96-97
Hollywood Christmas 1996
Live from the Academy Awards 1996
Geraldo 95-96
Out of the Blue 95-96
U.S. Farm Report 95-96
Charles Perez 95-96
Flipper 96-97
Turner Program Services Jacques Cousteau 96-96
National Geographic on Assignment 96-96
The World of National Geographic 95-96
Turner Pictures II; Captain Planet
Strip; National Geographic Presents;
The World of National Geographic:
Rediscovery of the World
Turner Pictures III 94-96
<PAGE> 71
Twentieth Century Television M*A*S*H 96-98
Gordon Elliott Show 96-97
United Artists The Bradshaw Difference 96-97
L.A.P.D. 96-97
The Good, The Bad and The Ugly
For a Few Dollars More
Jack the Giant Killer
Marty
The Lion's Pride 96-99
Warner Brothers TV4 Package 96-00
Volume 18 96-98
Volume 19 96-00
Volume 31 96-02
Premiere Edition II 96-98
Premiere Edition Three 96-01
Word of Life Church Services renewed
WorldVision Beverly Hills 90210 94-96
Little House on the Prairie 96-01
4. Oral Agreements
There are no oral agreements relating to the Station or its operation.
(1) The Affiliation Agreements with FOX and The WB have been terminated by
Exchanger, effective September 2, 1996.
* -- Not Assumed by Recipient
M -- Material Contract
<PAGE> 72
TRADES
AUG. 1, 1995 - JULY 31, 1996
<TABLE>
<CAPTION>
CLIENT TOTAL THEY OWE STATION OWES BALANCE
TRADE STATION CLIENT
<S> <C> <C> <C> <C>
T.A.P. Mkt
Gatlinburg $ 3,000 $ 0 $ 0 $ 0
Oleander Resort $ 10,000 $ 10,000 $ 7,000 $ 7,000
(T.A.P. timebank) $ 3,000 $ 3,000
---------
Total $ 10,000
"The Warehouse" $ 1,015 $ 1,015 $ 0 $ 1,015
Baker Tires $ 1,610 $ 0 $ 0 $ 0
Automotive
International $ 750 $ 0 $ 0 $ 0
Timberlake
Pet World $ 3,600 $ 0
Merry Maids $ 6,300 $ 0 $ 0 $ 0
Delaney's Furniture $ 2,650 $ 0 $ 790 $ 790
Visions Technology $ 1,925 $ 0 $ 0 $ 0
Bell South Mobility $ 5,132.40 $ 2,182.40 $ 0 $2,182.40
WVOK Radio $ 7,140 $ 0 $ 770 $ 770
WHMA Radio $ 19,855 $ 0 $ 10,228 $ 10,228
WGAD Radio $ 2,296 $ 0 $ 2,296 $ 2,296
WKXX Radio $ 2,550 $ 0 $ 1,600 $ 1,600
---------- ---------- --------
$67,823.40 $13,197.40 $ 25,684
</TABLE>
<PAGE> 73
SCHEDULE 3.9
Intangibles
<PAGE> 74
Schedule 3.9 -- Intangibles
There are no intangibles being conveyed herein.
<PAGE> 75
SCHEDULE 3.11
Insurance Policies
<PAGE> 76
Schedule 3.11 -- Insurance Policies
<TABLE>
<CAPTION>
Type of Insurance Policy No. Effective Expiration
Date Date
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Commercial General
Liability CPP 0663996 2-27-95 2-27-98
2. See Insurance policies described within Scheduled 3.13
</TABLE>
<PAGE> 77
SCHEDULE 3.13
Employee Matters
<PAGE> 78
Schedule 3.13 -- Employee Matters
1. List of all employees of the station.
<TABLE>
<CAPTION>
Name Title Salary Hire Date Last Salary Increase Prior Salary
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bedford, Lisa 20,000 7/15/96 N/A N/A
Bellew, Leonard Switcher/Master Control 5/hr 11/9/94 N/A N/A
Black, Jabal J. Switcher/Master Control 5/hr 10/25/95 N/A N/A
Brogden, Gregg M. Sales 15,600 * 5/16/95 N/A N/A
Chivers, Jimmy C. Chief Engineer 26,832 7/22/91 10/11/95 26,250
Coats, Roy A. Switcher/Master Control 5/hr 7/13/95 N/A N/A
DeMarco, Shelia Receptionist 5.75/hr 5/25/94 10/11/95 5/50/hr
Hood, David 21,000 7/29/96 N/A N/A
Humphries, Laurie Sales 15,600 * 9/26/94 N/A N/A
Jones-Correy, Jennifer Traffic 6.5/hr 11/3/94 3/27/96 6.25/hr
Mason, Sandra P. Sales 15,600 * 5/7/96 N/A N/A
McCoy, Jr., Samuel Switcher/Master Control 5/hr temp. 11/7/94 N/A N/A
McLeod, Tim Switcher/Master Control 5.5/hr 1/1/90 N/A N/A
Milam, Chris Switcher/Master Control 5/hr 5/29/95 N/A N/A
Otwell, Bobby Production/MC Supervisor 6.25/hr 6/3/94 10/11/95 6/hr
Parks, William Sales Manager 80,000 * 11/15/95 5/8/96 75,000
Phillips, John T. Switcher/Master Control 5/hr temp. 1/31/96 N/A N/A
Roundtree, Charles General Manager 75,000 7/11/94 5/8/96 51,984
Scott, Lee Switcher/Master Control 5/hr temp. as needed N/A N/A
Thrash, Deanine Switcher/Master Control 4.75/hr 6/13/95 N/A N/A
White, Debra A. Traffic 18,512 5/13/92 10/11/95 18,000
Winsor, Fredrick National Sales Operator 30,000 7/9/96 N/A N/A
</TABLE>
* subject to sales commissions
2. List of employee benefit arrangements.
A. Company pays one-half of the health insurance premium with Mutual of
Omaha, Group Number UWE-7DV9.
B. Life insurance in the amount of $15,000 furnished employee through
Mutual of Omaha.
C. Opportunity afforded employee to purchase disability insurance with CICA
Insurance Group, Group Number 04227.
D. Opportunity afforded employee to purchase dental insurance through Blue
Cross Blue Shield, Account number 36646-999.
E. Cancer insurance available to employee, at their expense, through AFLAC,
Account A6473.
F. In addition to certain specified paid holidays, employees receive one
week of vacation after one full year of service and two weeks vacation
after five years of service.
G. Employee is entitled to up to five days of sick leave.
3. There are no fixed or contingent liabilities or obligations with respect to
any person now or formerly employed.
<PAGE> 79
SCHEDULE 3.15
Claims
<PAGE> 80
Schedule 3.15 -- Claims
1. WNAL-TV, Inc. v. Stainless, Inc. Case Number: CV 96-S-437-S, in the
United States District Court for the Northern District of Alabama, Southern
Division. Suit filed on January 16, 1996 by WNAL against Stainless for breach
of contract. Lawsuit is in the discovery stage.
2. WNAL-TV v. WTTO, Case number: CV 94 734 DWS, in the Circuit Court of
Etowah County, arising out of a title dispute to certain property. Case has
been settled and final paperwork is in the process of preparation.
3. Gadsden Broadcasting Company v. WNAL-TV, Case Number: CV 95 807 WHR,
in the Circuit Court of Etowah County, Alabama. In December, 1994, WNAL
terminated the employment agreement with Donna Baker in response to the
written demands to do so from Gadsden Broadcasting (owner of a local radio
station), which contended the continued employment of Donna Baker was a
violation of a previous non-competition agreement with Ms. Baker. Donna Baker
subsequently filed suit against Gadsden Broadcasting Company for several causes
of action, including interference with her contract with WNAL, she did not,
and has not, sued WNAL. Gadsden Broadcasting has filed a third party complaint
against WNAL, claiming that any damage to Baker was the result of WNAL's
termination and not the result of anything it has done.
4. Douglas Rowe v. WNAL-TV, Inc. 1994 case in the Small Claims Court for
Etowah County, Alabama, arising from a dispute between the Company and
employee. Judgment entered in favor of Employee and against Company in the
amount of $1,150: Case No. SM94 1934. Company disputes validity of judgment
obtained.
5. To the best of Exchangor's knowledge there are no controversies,
disputes or proceedings pending, or threatened, between it and any employee
(singularly or collectively) of the Station.
6. To the best of Exchangor's knowledge there are (except for any FCC
rule-making proceedings generally affecting the broadcasting industry) no
claims, legal actions, counterclaims,
<PAGE> 81
suits, arbitration, governmental investigations or other legal administrative,
or tax proceedings, nor any order, decree or judgment, in progress or pending,
nor, to the best of Exchangor's knowledge, threatened, against or relating the
Exchangor with respect to its ownership or operation of the Station, or
otherwise relating to the Assets or the business or operation of the Station,
nor does Exchangor know or have reason to be aware of any basis for the same.
7. To the best of Exchangor's knowledge, there are no charges, complaints,
actions, suits, proceedings, hearing investigations, claims or demands against
Exchangor under any law, rule, or regulation of any federal, state or local
government or agency thereof concerning release or threatened release of
hazardous substances, public health and safety, or pollution or protection of
the environment, or alleging any failure to comply with any law, rule, or
regulation dealing with the environment or the public health and safety or
employee health and safety.
8. To the best of Exchangor's knowledge, neither the ownership or use of
the properties of the Station nor the conduct of the business of the Station
has conflicted with the rights of any other person or entity.
9. There are certain claims and accounts payables, which have been
incurred in the normal course of business, for which Exchangor has made
arrangements for satisfaction and payment.
10. Exchangor has incurred certain indebtedness to The AmSouth Bank, N.A.,
evidenced by a Promissory Note, dated January 31, 1995, in the amount of
$353,000, a portion of which remains outstanding. Any unpaid balance will be
paid at the first closing, as defined herein. This note is secured by
Collateral described in that certain loan and Security Agreement of like date,
said Collateral comprised of all of the assets of WNAL.
11. A dispute exists between Exchangor and Larcan TTC, arising out of the
purchase of a transmitter in 1994. The matter has been referred to insurance
carrier, Cincinnati Insurance Company.
<PAGE> 82
SCHEDULE 3.17
Compliance Matters
<PAGE> 83
Schedule 3.17 -- Compliance with Laws
To the best of Exchangor's knowledge, it has complied in all material respects
with the Licenses and all federal, state and local laws, rules, regulations,
and ordinances applicable to it. Further, neither the ownership or use of the
properties of the Station nor the conduct of the Business or operations of the
Station conflicts with the rights of any other person entity.
<PAGE> 84
SCHEDULE 8.2(g)
Form of Opinions of Exchangor's Counsel (First Closing)
<PAGE> 85
SCHEDULE 8.2(g)
SELLER'S OPINION
1. Exchangor is a corporation duly organized and in good standing
under the laws of the State of Alabama.
2. Exchangor has full corporate power and authority to execute,
deliver and perform the Purchase Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing] to which it is a party. Exchangor's execution, delivery, and
performance of the Purchase Agreement and the other Transaction Documents to
which it is a party have been duly and validly authorized by all necessary
corporate action on the part of Exchangor.
3. The Purchase Agreement and each of the other Transaction
Documents to which Exchangor is a party have been duly executed and delivered
by Exchangor and constitute the valid and binding obligation of Exchangor,
enforceable against Exchangor in accordance with their respective terms subject
to (i) bankruptcy, insolvency, reorganization, moratorium and other similar
laws now or hereinafter in effect relating to creditors' rights and (ii) the
possibility that the remedies of specific performance or injunctive or other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
4. The execution, delivery and performance by Exchangor of the
Purchase Agreement and the other Transaction Documents to which Exchangor is a
party (a) do not require the consent of any third party under any of the
Exchangor Agreements [Exchangor Agreements shall mean such agreements that are
certified by Exchangor to Exchangor's counsel to be material to the operation of
the business of Exchangor or the transactions contemplated by the Purchase
Agreement], other than consents set forth on Schedule 3.3 of the Purchase
Agreement; (b) do not violate Applicable Law [Applicable Law means those laws
and regulations that a lawyer exercising customary professional diligence would
recognize as being applicable to the transactions contemplated by the
Transaction Documents] or any law, judgment, order, injunction, decree, which
is applicable to Exchangor and known to us; (c) do not, either alone or with
the giving of notice or the passage of time or both, conflict with, constitute
grounds for termination of, or result in a breach of the terms, conditions or
provisions of, or constitute a default under any of the Exchangor Agreements;
and (d) do not result in the creation of any lien, charge or encumbrance on any
of the Assets pursuant to the terms of any of the Exchangor Agreements.
<PAGE> 86
- 2 -
5. All bills of sale, assignments, and other conveyancing
documents delivered by Exchangor to Buyer on the date hereof are in proper form
to convey and assign all of Exchangor's right, title and interest in and to the
Tangible Personal Property to Buyer.
6. The Licenses listed on Exhibit A hereto (the "FCC Licenses")
were validly issued to Exchangor, are in full force and effect and are not
subject to any condition other than such conditions that are set forth in the
FCC Licenses.
Opinion 6 to be provided by Exchangor's FCC counsel.
<PAGE> 87
SCHEDULE 8.3(d)
Form of Opinions of Recipient's Counsel (First Closing)
<PAGE> 88
SCHEDULE 8.3(d)
BUYER'S OPINION
1. Recipient is a corporation duly organized and in good standing
under the laws of the State of ________________.
2. Recipient has full corporate power and authority to execute,
deliver and perform the Exchange Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing] to which it is a party. Recipient's execution, delivery, and
performance of the Purchase Agreement and the other Transaction Documents to
which it is a party have been duly and validly authorized by all necessary
corporate action on the part of Recipient.
3. The Purchase Agreement and each of the other Transaction
Documents to which Recipient is a party have been duly executed and delivered by
Recipient and constitute the valid and binding obligation of Recipient,
enforceable against Recipient in accordance with their respective terms subject
to (i) bankruptcy, insolvency, reorganization, moratorium and other similar laws
now or hereinafter in effect relating to creditors' rights and (ii) the
possibility that the remedies of specific performance or injunctive or other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Recipient of the
Purchase Agreement and the other Transaction Documents to which it is a party
(a) do not require the consent of any third party under any of the Recipient
Agreements [Recipient Agreements shall mean such agreements that are certified
by Recipient to Recipient's counsel to be material to the operation of
Recipient's business or the transactions contemplated by the Purchase
Agreement]; (b) do not violate any provisions of Recipient's corporate charter
or bylaws; (c) do not violate any Applicable Law [Applicable Law means those
laws and regulations that a lawyer exercising customary professional diligence
would recognize as being applicable to the transactions contemplated by the
Transaction Documents], or judgment, order, injunction, or decree, which is
applicable to Recipient and known to us; and (d) do not, either alone or with
the giving of notice or the passage of time or both, conflict with, constitute
grounds for termination of, or result in a breach of the terms, conditions or
provisions of, or constitute a default under any of the Buyer Agreements.
<PAGE> 89
SCHEDULE 10.2(d)
Form of Opinions of Exchangor's Counsel (Second Closing)
<PAGE> 90
SCHEDULE 10.2(d)
EXCHANGOR'S OPINION
1. Exchangor is a corporation duly organized and in good standing
under the laws of the State of Alabama.
2. Exchangor has full corporate power and authority to execute,
deliver and perform the Purchase Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing] to which it is a party. Exchangor's execution, delivery, and
performance of the Purchase Agreement and the other Transaction Documents to
which it is a party have been duly and validly authorized by all necessary
corporate action on the part of Exchangor.
3. The Purchase Agreement and each of the other Transaction
Documents to which Exchangor is a party have been duly executed and delivered
by Exchangor and constitute the valid and binding obligation of Exchangor,
enforceable against Exchangor in accordance with their respective terms
subject to (i) bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereinafter in effect relating to creditors' rights and
(ii) the possibility that the remedies of specific performance or injunctive
or other forms of equitable relief may be subject to certain equitable
therefor defenses and to the discretion of the court before which any
proceeding may be brought.
4. The execution, delivery and performance by Exchangor of the
Purchase Agreement and the other Transaction Documents to which Exchangor is a
party (a) do not require the consent of any third party under any of the
Exchangor Agreements [Exchangor Agreements shall mean such agreements that are
certified by Exchangor to Exchangor's counsel to be material to the operation
of the business of Exchangor or the transactions contemplated by the Purchase
Agreement], other than consents set forth on Schedule 3.3 of laws and
regulations that a lawyer exercising customary professional diligence would
recognize as being applicable to the transactions contemplated by the
Transaction Documents] or any law, judgment, order, injunction, decree, which
is applicable to Exchangor and known to us; (c) do not, either alone or with
the giving of notice or the passage of time or both, conflict with, constitute
grounds for termination of, or result in a breach of the terms, conditions or
provisions of, or constitute a default under any of the Exchangor Agreements;
and (d) do not result in the creation of any lien, charge or encumbrance on any
of the Assets pursuant to the terms of any of the Exchangor Agreements.
<PAGE> 91
- 2 -
5. All bills of sale, assignments, and other conveyancing
documents delivered by Exchangor to Buyer on the date hereof are in proper form
to convey and assign all of Exchangor's right, title, and interest in and to
the Tangible Personal Property to Buyer.
6. The Licenses listed on Exhibit A hereto (the "FCC Licenses")
were validly issued to Exchangor, are in full force and effect and are not
subject to any condition other than such conditions that are set forth in the
FCC Licenses.
7. The FCC has granted its consent to the assignment of the FCC
Licenses from Exchangor to Buyer (the "FCC Consent"). To the best of the our
knowledge based solely on a review of the FCC's files and records and the
Officer's Certificate, the FCC Consent has not been reversed, stayed, enjoined,
set aside, annulled or suspended, no requests have been filed for
administrative or judicial review, reconsideration, appeal or stay of the FCC
Consent, and the time periods for filing any such requests and for the FCC to
set aside the FCC Consent on its own motion have expired.
Opinion 6-7 to be provided by Exchangor's FCC counsel.
<PAGE> 92
SCHEDULE 10.3(d)
Form of Opinions of Recipient Counsel (Second Closing)
<PAGE> 93
SCHEDULE 10.3(d)
RECIPIENT'S OPINION
1. Recipient is a corporation duly organized and in good standing
under the laws of the State of Florida.
2. Recipient has full corporate power and authority to execute,
deliver and perform the Exchange Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing] to which it is a party. Recipient's execution, delivery, and
performance of the Purchase Agreement and the other Transaction Documents to
which it is a party have been duly and validly authorized by all necessary
corporate action on the part of Recipient.
3. The Purchase Agreement and each of the other Transaction
Documents to which Recipient is a party have been duly executed and delivered by
Recipient and constitute the valid and binding obligation of Recipient,
enforceable against Recipient in accordance with their respective terms subject
to (i) bankruptcy, insolvency, reorganization, moratorium and other similar
laws now or hereinafter in effect relating to creditors' rights and (ii) the
possibility that the remedies of specific performance of injunctive or other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
4. The execution, delivery and performance by Recipient of the
Purchase Agreement and the other Transaction Documents to which it is a party
(a) do not require the consent of any third party under any of the Recipient
Agreements [Recipient Agreements shall mean such agreements that are certified
by Recipient to Recipient's counsel to be material to the operation of
Recipient's business or the transactions contemplated by the Purchase
Agreement]; (b) do not violate any provisions of Recipient's corporate charter
or bylaws; (c) do not violate any Applicable Law [Applicable Law means those
laws and regulations that a lawyer exercising customary professional diligence
would recognize as being applicable to the transactions contemplated by the
Transaction Documents], or judgment, order, injunction, or decree, which is
applicable to Recipient and known to us; and (d) do not, either alone or with
the giving of notice or the passage of time or both, conflict with, constitute
grounds for termination of, or result in a breach of the terms, conditions or
provisions of, or constitute a default under any of the Buyer Agreements.
<PAGE> 94
resolve the dispute within thirty (30) days. The accountant's resolutions of
the dispute shall be final and binding on the parties, and a judgment may be
entered thereon in any court of competent jurisdiction.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller the
Purchase Price adjusted pursuant to Section 2.3(a) hereof by federal wire
transfer of immediately available funds pursuant to wire instructions delivered
by Seller at least two (2) Business Days prior to the Closing Date.
(b) If as a result of the final determination of the
adjustments to the Purchase Price pursuant to Section 2.3(c) following the
Closing, (i) Buyer is determined to owe an amount to Seller, Buyer shall pay
such amount to Seller in immediately available funds within five (5) Business
Days of the date of such final determination or (ii) Seller is determined to
owe an amount to Buyer, Seller shall pay such amount to Buyer in immediately
available funds within five (5) Business Days of the date of such final
determination.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses to the extent that
either (i) the obligations and liabilities relate to the period from and after
the Closing Date or (ii) the Purchase Price was reduced pursuant to Section
2.3(a) hereof as a result of the proration of such obligations and liabilities.
Buyer shall not assume any other obligations or liabilities of Seller,
including (i) any obligations or liabilities under any Contract, (ii) any
claims or pending litigation or proceedings relating to the operation of the
Station prior to the Closing, (iii) any obligations or liabilities of Seller
under any employee pension, retirement, or other benefit plans or with respect
to commissions, wages, bonuses, incentive payments, vacation pay, sick leave,
severance benefits, or other benefits of employees or former employees of
Seller or their beneficiaries, (iv) any obligations or liabilities of Seller
with respect to any Excluded Assets, or (v) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Standing. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of Wyoming. Seller has all
requisite corporate power and authority to execute and deliver this Agreement
and the documents contemplated hereby, and to perform and comply with all of
the terms, covenants, and conditions to be performed and
- 6 -
<PAGE> 1
EXHIBIT 10.124
================================================================================
LOAN AGREEMENT
BY AND BETWEEN
WNAL-TV, INC.
AND
PAXSON COMMUNICATIONS OF
BIRMINGHAM-44, INC.
RELATING TO
TELEVISION STATION WNAL-TV
GADSDEN, ALABAMA
* * *
AUGUST 7, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I AMOUNT AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 The Promissory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.7 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.8 Payment on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.1 Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.1 Conditions Precedent to Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.2 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.1 Existence and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.2 Authorizations, Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.4 No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.5 Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.11 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.13 Material Misstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 6.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.4 Lender Consent to Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.4 Address for Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.10 Rights Affected by Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.11 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.12 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.14 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.15 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.16 Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
LIST OF EXHIBITS
Exhibit 1 -- Promissory Note
Exhibit 2 -- Security Agreement
Exhibit 3 -- Pledge Agreement
- ii -
<PAGE> 4
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 7th day of August, 1996, is by
and between PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC., a Florida corporation
having its principal offices at 601 Clearwater Park Road, West Palm Beach,
Florida 33401 ("Lender"), WNAL-TV, INC., an Alabama corporation having its
principal offices at 510 Chestnut Street, Gadsden, Alabama 35901 ("Borrower").
W I T N E S E T H :
WHEREAS, the Borrower is the licensee of television station WNAL-TV,
Channel 44, Gadsden, Alabama (the "Station");
WHEREAS, the Lender and the Borrower have entered into a Time
Brokerage Agreement dated as of August 7, 1996 relating to the Station;
WHEREAS, the Lender and the Borrower have entered into an Asset
Exchange Agreement dated as of August 7, 1996 (the "Exchange Agreement;
capitalized terms used herein and not otherwise defined shall have the meaning
set forth in Exchange Agreement"), pursuant to which, among other things,
Borrower has agreed to sell and Lender has agreed to purchase substantially all
of the assets used or useful in the operations of the Station subject to the
prior approval of the Federal Communications Commission ("FCC") and the terms
and conditions set forth in the Exchange Agreement;
WHEREAS, Lender has agreed to make a loan to Borrower in the total
principal amount of Eight Million Dollars ($8,000,000);
WHEREAS, such Loan shall be evidenced by a promissory note in the same
amount, which shall be issued by the Borrower and dated as of the date hereof;
WHEREAS, the Borrower has agreed to secure its obligations under this
Agreement and the Note by (i) granting Lender a first party security interest
in the Station's assets, ("Security Interest") and (ii) by the pledge of all of
the Borrower's stock (the "Pledged Shares");
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, Lender, and the Borrower agree as follows:
<PAGE> 5
- 2 -
ARTICLE I AMOUNT AND TERMS OF THE LOANS
Section 1.1 The Loan. Lender agrees, upon the terms and
conditions hereinafter set forth, to make a loan to Borrower in an aggregate
principal amount of Eight Million Dollars ($8,000,000) (the "Loan").
Section 1.2 The Promissory Note. The outstanding principal
amount of the Loan shall be evidenced by and subject to the terms of a
promissory note, dated of even date herewith, substantially in the form set
forth as Exhibit 1 hereto (as amended, renewed, restated, increased,
consolidated or substituted from time to time, the "Note"), payable to the
order of Lender and representing the obligation of Borrower to pay Lender the
amount of the Loan, with interest thereon, as prescribed in Section 1.4. All
references to the "Note" in this Loan Agreement, the Security Agreement and the
Pledge Agreement (each as defined in this Loan Agreement) and in such other
agreements and documents executed and delivered in connection with this Loan
Agreement shall be deemed to be references to the Note referred to in this
Section.
Section 1.3 Interest. The Loan shall bear interest on the unpaid
principal amount thereof at a rate per annum at all times equal to the
applicable Federal rate in effect as of the Closing Date. Interest shall be
calculated on the basis of a year of three-hundred and sixty (360) days and the
actual number of days elapsed during the period for which such interest is
payable. Interest shall begin to accrue on the outstanding principal amount of
the Loan on the Closing Date and shall be paid on a monthly basis commencing
thirty (30) days after the Station begins broadcasting pursuant to the Time
Brokerage Agreement with Lender.
Section 1.4 Principal. The outstanding principal balance of the
Loan plus any accrued and unpaid interest thereon shall be due and payable on
the earlier of the Second Closing and March 1, 1998 (the "Maturity Date").
Section 1.5 Mandatory Prepayment. Concurrently with the First
Closing, the Borrower shall repay $3,000,000 of the principal amount of the
Loan, together with accrued and unpaid interest thereon. Notwithstanding
anything in this Agreement to the contrary, upon a termination of the Exchange
Agreement for any reason other than a repudiation by Lender of its obligation
to consummate the Second Closing thereunder, the entire outstanding principal
balance and all accrued interest thereon shall immediately be due and payable.
Section 1.6 Information. Borrower agrees to furnish to Lender
such information as Lender may reasonably request in connection with the Loan
or the Station.
<PAGE> 6
- 3 -
Section 1.7 Prepayment. Borrower may prepay the Note in whole at
any time, or from time to time in part, with accrued interest to the date of
prepayment on the amount prepaid, without penalty, provided that each payment,
other than that for the full amount of the outstanding balance, shall be in the
amount of Ten Thousand Dollars ($10,000) or an integral multiple thereof. Each
prepayment on the Note shall be applied to installments of principal payable on
the Note in the inverse order of maturity.
Section 1.8 Payment on Non-Business Days. Whenever any payment to
be made hereunder or under the Note shall be due on a Saturday, Sunday or
public holiday, such payment may be made on the next succeeding business day,
and such extension of time in such case shall be included in the computation of
interest hereunder and under the Note.
Section 1.9 Taxes. All sums payable by Borrower hereunder or
under the Note, whether of principal, interest, fees, expenses or otherwise,
shall be paid in full, free of any deductions or withholdings for any and all
present and future taxes, levies, imposts, stamps, duties, fees, assessments,
deductions, withholdings, and other governmental charges and all liabilities
with respect thereto. If Borrower is prohibited by law from making payments
hereunder or under the Note free of such deductions or withholdings, then
Borrower shall pay such additional amount as may be necessary in order that the
actual amount received by Lender after such deduction or withholding shall
equal the full amount stated to be payable hereunder or under the Note.
ARTICLE II CLOSING
Section 2.1 Closing Date. Closing of the transactions
contemplated by this Agreement shall occur, subject to the satisfaction of all
of the conditions set forth in Article IV, on September 2, 1996 (the "Closing
Date").
ARTICLE III SECURITY
Section 3.1 Security Interest. As partial security for the Loan,
Borrower shall execute and deliver to Lender, on or before the Closing Date, a
security agreement in the form of Exhibit 2 hereto (the "Security Agreement").
Section 3.2 Pledge Agreement. As further security for the Loan,
on or before the Closing Date, the owners of the Borrower shall each execute
and deliver to Lender a pledge agreement in the form of Exhibit 3 hereto (the
"Pledge Agreement"), pursuant to which they pledge to Lender all of their
rights and interests in the Borrower.
<PAGE> 7
- 4 -
ARTICLE IV CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Loan. The obligation of
Lender to disburse the Loan hereunder is subject to the following conditions
precedent:
(a) The Exchange Agreement and Time Brokerage Agreement
shall be duly executed by Lender and the Borrower and shall be in full force
and effect; and
(b) Borrower shall have entered into a written agreement
for the purchase, option to purchase or lease of the site specified in the
Modification Application (as defined in the Asset Exchange Agreement) on terms
and conditions acceptable to Lender; and
(c) Lender shall have received all of the following, on
or before the Closing Date, in form and substance satisfactory to Lender:
(i) The Note, duly executed and delivered by
Borrower;
(ii) The Security Agreement, together with
appropriate UCC-1 forms duly executed and delivered by the Borrower;
(iii) The Pledge Agreement, duly executed and
delivered by the owners of the Borrower, together with ownership certificates;
(iv) Certified copies of the resolutions of the
Borrower evidencing approval of the execution, delivery and performance of this
Agreement and the Security Agreement and other matters contemplated hereby;
(v) Certificates of Good Standing for the
Borrower from the State of Alabama issued no more than ten (10) days prior to
the Closing Date;
(vi) Copies of UCC, judgment and tax lien searches
in each jurisdiction in which Collateral covered by the Security Agreement is
located;
(vii) Copies of the certificates evidencing the
insurance required to be maintained by the Borrower pursuant to Section 6.1(e);
and
(viii) Such other agreements, certificates, opinions
of counsel and documents that Lender may reasonably require.
<PAGE> 8
- 5 -
Section 4.2 Compliance. All of the representations and
warranties of Borrower in this Loan Agreement shall be true and accurate in all
material respects on and as of the Closing Date and the date of any subsequent
disbursement of any portion of the Loan, as if made on and as of such date and
time. Borrower shall be in material compliance with all of the applicable
terms and provisions of this Agreement and no Event of Default or any event
which with the lapse of any applicable grace period or the giving of notice or
both would constitute an Event of Default shall have occurred and be
continuing. Borrower shall have, in all material respects, performed all
obligations and taken all actions required to have been performed or taken by
it hereunder on or prior to such date. On the Closing Date, Borrower shall
deliver to Lender a certificate, dated as of such date and signed by Borrower,
certifying compliance with the conditions of this Section 4.2. Each
disbursement of all or a portion of the Loan to Borrower shall in and of
itself, constitute a representation and warranty that Borrower as of the date
of such Loan, is in compliance with this Section and if Borrower is not in
compliance with this Section, Lender shall not be required to disburse such
Loan to Borrower.
ARTICLE V REPRESENTATIONS AND WARRANTIES
The following representations and warranties of Borrower (none of
which is given as of the date hereof) will be true and correct as of the
Closing Date:
Section 5.1 Existence and Standing. Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Alabama and is qualified to do business and in good standing under the
laws of any other jurisdiction in which it conducts its business (except where
the failure to be so qualified would not reasonably be expected to have a
material adverse effect on the Borrower) and has all requisite power and
authority, corporate or otherwise, to conduct its business, to own its
properties and to execute and deliver, and to perform all of their obligations
under this Agreement, the Note, the Security Agreement, and all other documents
that have been or will be executed and delivered by Borrower pursuant to this
Agreement (the foregoing documents, together with the Pledge Agreement, are
collectively, the "Loan Documents").
Section 5.2 Authorizations, Compliance with Laws. The execution,
delivery and performance by Borrower of this Agreement, the Note, any Mortgage,
the Security Agreement, and all other documents required to be executed and
delivered by Borrower pursuant to this Agreement, and the execution, delivery
and performance of the Pledge Agreement, have been duly authorized by all
necessary action and do not and will not (i) violate (A) any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Borrower; or the
Station or (B) any provision of the Articles of Incorporation or By-Laws of
<PAGE> 9
- 6 -
Borrower; or (ii) result in a breach of or constitute a default under any
agreement or instrument to which Borrower is a party or by which its properties
may be affected; or (iii) result in the creation of a lien, charge or
encumbrance of any nature upon Borrower's properties or assets other than as
contemplated by this Agreement.
Section 5.3 Capitalization. All of the issued and outstanding
Stock of the Borrower have been duly and validly issued are fully paid and
nonassessable and are free and clear of any liens, security interests or other
claims or encumbrances, except those granted to Lender pursuant to the terms of
this Loan Agreement. Except as provided in the Exchange Agreement, neither the
Borrower nor any of its Shareholders have any commitment or obligation, either
firm or conditional, to issue, deliver, purchase or sell, under any offer,
option agreement, bonus agreement, purchase plan, incentive plan, compensation
plan, warrant, conversion rights, contingent share agreement, stockholders
agreement, partnership agreement or otherwise, any ownership or other equity
securities or securities convertible into shares of ownership of the Borrower.
Section 5.4 No Consent. Except for such filings with and
approvals of the FCC that may be required in connection with the exercise by
Lender of its rights under the Loan Documents, upon an Event of Default, no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department or agency, is or will be
necessary for the valid execution, delivery and performance by Borrower of this
Agreement, the Note, the Security Agreement, or any other document required to
be executed and delivered by Borrower pursuant to this Agreement or the Pledge
Agreement.
Section 5.5 Binding Obligations. This Agreement, the Note, the
Security Agreement, the Pledge Agreement and all other documents required to be
executed and delivered by Borrower pursuant to this Agreement have been
executed and delivered by Borrower and constitute legal, valid and binding
obligations of Borrower.
Section 5.6 Litigation. Except as set forth on Schedule 3.15 to
the Exchange Agreement, there are no actions, suits or proceedings pending, or,
to the knowledge of Borrower, threatened against or affecting the Borrower or
its properties before any court or governmental department or agency which
materially adversely affects the transactions contemplated by this Agreement or
which would have a material adverse effect on the business, properties,
prospects, operation or condition (financial or otherwise) of the Station or
the Borrower.
Section 5.7 No Default. Except as set forth on Schedule 3.15 of
the Exchange Agreement, Borrower is not in default in the performance,
observance or fulfillment of any of the obligations or conditions contained in
any material agreement or instrument
<PAGE> 10
- 7 -
to which they are a party, nor with respect to any order, judgment, writ,
injunction or decree of any court, governmental authority or arbitration board.
Section 5.8 Compliance with Laws. The Borrower has complied with
all applicable federal, state and local laws. The Borrower has obtained all
necessary licenses and permits required for the conduct of its business and
operations or such licenses and permits have been applied for and are now being
diligently pursued.
Section 5.9 Taxes. The Borrower has filed all tax returns and
reports (federal, state and local) required to be filed by it, and has paid all
taxes shown thereon, including interest and penalties, and all assessments
received by it (except to the extent that the same are being contested in good
faith by appropriate proceedings diligently prosecuted and as to which adequate
reserves have been set aside on the books of the Borrower in conformity with
generally accepted accounting principles).
Section 5.10 Title to Properties. The Borrower has good and
marketable title to all of its property and assets and valid and enforceable
leasehold interests in the property which it holds under lease, all such
property, assets and leasehold interests being free and clear of any and all
mortgages, deeds of trust, assignments, liens, security interests, charges or
encumbrances of any nature whatsoever, except for those created hereby, and no
mortgages, deeds of trust, financing statements or other evidences of security
interests covering all or any of the aforesaid property are on file among the
records of any public office, except those evidencing a security interest in
favor of Lender.
Section 5.11 Absence of Undisclosed Liabilities. Except for (i)
obligations arising under the Loan Documents, (ii) liabilities and obligations
incurred pursuant to the terms of the Exchange Agreement, and (iii) liabilities
incurred in the ordinary course of business (other than for borrowed money),
Borrower has on the date hereof no material liabilities or obligations relating
to the Station or otherwise of any nature, whether accrued, absolute,
contingent or otherwise.
Section 5.12 Solvency. Borrower has received, or has the right to
receive, consideration which is the reasonable equivalent value of the
obligations and liabilities that Borrower has incurred to Lender. Borrower is
not insolvent as defined in Section 101 of Title 11 of the United States Code
or any applicable state insolvency statute, nor, after giving effect to the
consummation of the transactions contemplated herein, will Borrower be rendered
insolvent by the execution and delivery of this Agreement, the Note or the
other Loan Documents to Lender. Borrower is not engaged, and Borrower is not
about to engage, in any business or transaction for which the assets retained
by it shall be an unreasonably small capital, taking into consideration the
obligations to
<PAGE> 11
- 8 -
Lender incurred hereunder and under the Loan Documents. Borrower does not
intend to, and Borrower does not believe that they will, incur debts beyond its
ability to pay them as they mature.
Section 5.13 Material Misstatement. No representation or warranty
made by Borrower in this Agreement, in the Schedules and Exhibits to this
Agreement and in certificates delivered at the Closing contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the foregoing not misleading in any such case that was knowingly or
willingly made or omitted, as the case may be, by Borrower.
ARTICLE VI COVENANTS OF BORROWER
Section 6.1 Affirmative Covenants. So long as the Note shall
remain unpaid, Borrower hereby covenants and agrees that it will, unless Lender
shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
for the Borrower when due: (i) all indebtedness heretofore or hereafter
incurred; (ii) all taxes, assessments and governmental charges or levies
imposed upon it or its income or profits, or upon any properties belonging to
it; (iii) claims or demands of materialmen, mechanics, carriers, warehousemen,
landlords and other like persons which, if unpaid might become a lien or charge
upon the property of the Borrower; provided that this covenant shall not
require the payment of any of the matters set forth in (i), (ii) and (iii)
above if the same shall be contested in good faith and by proper proceedings
diligently pursued and as to which adequate reserves have been set aside on the
books of the Borrower in accordance with generally accepted accounting
principles.
(b) Preservation of Existence. Preserve and maintain the
Borrower's corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all
of the Borrower's properties necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
<PAGE> 12
- 9 -
(e) Maintenance of Insurance. Maintain with responsible
and reputable insurance companies policies on all of the Borrower's properties
and covering such risks, including public liability and workers' compensation,
in such amounts as are usually carried by companies engaged in similar
businesses and owning similar properties as the Borrower and promptly upon
execution thereof provide to Lender copies of all such policies and any riders
or amendments thereto. The policies of insurance required hereunder shall name
Lender as an additional loss payee or additional insured, as applicable, and
shall provide that Lender shall receive at least thirty (30) days' written
notice prior to the cancellation, termination or alteration of any such policy.
(f) Operations in Ordinary Course. Continue to operate
the Borrower's business in the ordinary course.
(g) Perfection of Liens. Do all things requested by
Lender to preserve and perfect as first liens and security interests the liens
and security interests of Lender arising pursuant to the Security Agreement,
the Pledge Agreement, or any other agreement required hereunder.
(h) FCC Approval. If counsel to Lender reasonably
determines that the consent of the FCC is required in connection with the
execution, delivery and performance of this Agreement, the Pledge Agreement,
the Security Agreement, or any other document delivered to Lender in connection
herewith or therewith or as a result of any action which may be taken pursuant
hereto or thereto, then, subject to Section 8.5 herein, Borrower and Lender
shall share the cost and expense, and agree to use their best efforts to secure
such consent.
(i) Agreements. Comply with the Borrower's obligations
under the Exchange Agreement and Time Brokerage Agreement.
(j) Information and Inspection. Insure that the Borrower
shall furnish to Lender from time to time, upon request, full information
pertaining to any covenant, provision or condition hereof, or to any matter
connected with its books, records, operations, financial condition, properties,
activities or business. At all reasonable times, Borrower shall permit any
authorized representatives designated by Lender to visit and inspect any of the
properties of the Borrower and its books and records, and to take extracts
therefrom and make copies thereof, and to discuss the Borrower's affairs,
finances and accounts with the management and independent accountants of the
Borrower.
<PAGE> 13
- 10 -
Section 6.2 Negative Covenants. So long as the Note shall remain
unpaid and the Agreement shall not have been terminated, Borrower hereby
covenants that it will not, without Lender's prior written approval.
(a) Indebtedness. Create or incur, assume or suffer to
exist any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness (other than for borrowed money) incurred in the ordinary
course of business not to exceed Three Hundred Thousand Dollars ($300,000) in
the aggregate at any one time; provided, however, that such debt shall not be
secured and if, in connection with consummation of the transactions
contemplated under the Exchange Agreement, Lender elects to repay such debt,
the purchase price payable under the Exchange Agreement shall be reduced by the
amount paid to satisfy the Borrower's obligations in respect of such debt; (ii)
obligations or liabilities arising under the indemnification provisions of the
Exchange Agreement.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant:
(i) any security interest or lien created
pursuant to or in connection with this Agreement or securing the Loan, the
Security Agreement or Pledge Agreement;
(ii) liens for taxes or assessments either not
delinquent or the validity of which are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves shall have been set aside on its books, in conformity with generally
accepted accounting principles;
(iii) materialmen's, mechanics', carriers',
workmen's, repairmen's, warehousemen's or other like liens arising in the
ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set aside on its books, in conformity with
generally accepted accounting principles;
(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
<PAGE> 14
- 11 -
(v) any judgment lien, singly or aggregated with
other judgment liens, in an amount less than Fifty Thousand Dollars ($50,000),
unless the judgment it secures shall not, within thirty (30) days after the
entry thereof, have been discharged, vacated, reversed, or execution thereof
stayed pending appeal, or shall not have been discharged, vacated or reversed
within thirty (30) days after the expiration of any such stay.
(c) Disposition of Assets. Except pursuant to the terms
of the Exchange Agreement, sell, transfer, lease or otherwise dispose of any of
its assets or properties other than sales of assets in the ordinary course of
business (which sales in the ordinary course of business shall expressly not
include any transfer or assignment of any FCC License).
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or assets
of any person or entity.
(e) Transfer or Issuance of Ownership Interests. Issue
or permit the transfer of any Shares of the Borrower, or any options, warrants,
convertible securities or other rights to purchase an ownership interest in the
Borrower. The preceding sentence shall not apply to issuances or transfers to
Lender.
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form
UCC-1 has been filed by Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution to the Shareholders, or
incur any liability for the purchase, acquisition, redemption or retirement of
any ownership interest of the Borrower or as a dividend, return of capital or
other payment or distribution of any kind to the Shareholders or any affiliate
of the Borrower.
(i) Transactions with Affiliates. Enter into any
transaction or agreement, other than the Transaction Documents, with any
affiliate of the Borrower.
(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Twenty
<PAGE> 15
- 12 -
Thousand Dollars ($20,000) and contracts which can be terminated without
penalty on thirty (30) days' notice or less, or amend or terminate any material
contract (or waive any substantial right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or guarantee of
indebtedness).
(k) Adverse Change. Suffer any material adverse change
in the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Cancellation of Debts. Cancel any debts owed to or
claims held by the Borrower.
(m) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of Lender except and as
required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(n) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service mark, trade name, franchise, or similar
right, or modify any existing right relating to the Borrower.
(o) Agreements. Terminate, amend or commit any material
breach or default under the Exchange Agreement.
Section 6.3 Reporting Requirements. So long as the Note shall
remain unpaid and the Agreement shall not have been terminated, the Borrower
shall, unless Lender shall otherwise consent in writing, furnish to Lender:
(a) Default Certificate. As soon as possible and in any
event within five (5) business days after the occurrence of each Event of
Default (as defined in Section 7.1) of which the Company has knowledge, the
statement of an authorized official of the Borrower setting forth details of
such Event of Default and the action which the Company proposes to take with
respect thereto.
(b) Financial Statements. At the First Closing, a
certificate of Borrower that there has been no change in the Station's
financial obligations since the date of this Agreement.
<PAGE> 16
- 13 -
(c) Notice of Litigation. Promptly give written notice
of all actions, suits and proceedings before any court or governmental agency,
domestic or foreign, which may be commenced or threatened against the Borrower
in which the claim involved is Five Thousand Dollars ($5,000) or more and of
any other matter of the type described in Section 5.6.
(d) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower or the Station as Lender may from time to time reasonably
request.
Section 6.4 Lender Consent to Subsidiary. Notwithstanding
anything to the contrary contained in this Loan Agreement or in the Note, the
Security Agreement or the Pledge Agreement, (a) Borrower may contribute the
proceeds of the Loan to a subsidiary to be organized as a corporation or
limited liability company in exchange for all of the common stock (in the case
of a corporation) or 99% of the equity interest (in the case of a limited
liability company) of such subsidiary, and (b) such subsidiary shall not be
subject to any of the covenants or other provisions of this Loan Agreement or
of such other agreements.
ARTICLE VII EVENTS OF DEFAULT
Section 7.1 Events of Default. Under this Agreement, an Event of
Default shall be any of the following:
(a) Borrower shall fail to pay any installment of
principal or interest on the Note, or any other obligation to Lender when due
whether at the due date thereof or by acceleration or otherwise, and, in the
case of any installment of interest, such default shall remain unremedied for a
period of five (5) days provided, however, that only to the extent such
non-payment is not the result of Lender's breach of its obligations to make
payments under the Time Brokerage Agreement; or
(b) The security interest or lien of Lender in any
material portion of the collateral covered by the Security Agreement or Pledge
Agreement shall at any time not constitute a legal, valid and enforceable
security interest or lien; or
(c) Any representation or warranty made by Borrower
herein, in the Security Agreement or in the Pledge Agreement or in any
certificate, agreement, instrument or statement contemplated by or made or
delivered pursuant to or in connection with this Agreement, the Note, the
Security Agreement or the Pledge Agreement, shall prove to have been incorrect
in any material respect when made; or
<PAGE> 17
- 14 -
(d) Borrower shall fail to perform or observe in any
material respect any other term, covenant or agreement contained in this
Agreement, the Note, the Security Agreement, and any such failure remains
unremedied for thirty (30) days after written notice thereof shall have been
given to Borrower by Lender; or
(e) The Borrower shall fail to pay any indebtedness for
borrowed money owing by the Borrower or any interest or premium thereon, when
due, whether such indebtedness shall become due by scheduled maturity, by
required prepayment, by acceleration, by demand or otherwise, or the Borrower
shall fail to perform any term, covenant or agreement under any agreement or
instrument evidencing or securing or relating to any such indebtedness owing by
the Borrower if the effect of such failure is to accelerate, or to permit the
holder of such indebtedness to accelerate the maturity of such indebtedness; or
(f) Either (i) the Borrower shall fail to pay its debts
as they mature in the ordinary course of business; or (ii) the Borrower shall
file a petition commencing a voluntary case concerning it under any Chapter of
Title 11 of the United States Code entitled "Bankruptcy"; or (iii) the Borrower
shall apply for or consent to the appointment of any receiver, trustee,
custodian or similar officer for it or for all or any substantial part of its
property; or (iv) such receiver, trustee, custodian or similar officer shall be
appointed without the application or consent of the Borrower and such
appointment shall continue undischarged for a period of thirty (30) days; or
(v) an involuntary case is commenced against the Borrower under any Chapter of
the aforementioned Title 11 and an order for relief under such Title 11 is
entered or the petition commencing the case is controverted but is not
dismissed within thirty (30) days after the commencement of the case; or (vi)
the Borrower shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating
to it under the laws of any jurisdiction; or (vii) any such proceeding shall be
instituted against the Borrower and shall remain undismissed for a period of
thirty (30) days; or (viii) the Borrower shall take any action for the purpose
of effectuating the foregoing; or
(g) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower; or
(h) There shall be a cancellation, denial or revocation
of any material FCC License for the Station (including the Construction
Permit), the Borrower shall be finally denied renewal of any such FCC License,
or any such FCC License shall be renewed on terms that materially adversely
affect the economic or commercial value or usefulness thereof; or
<PAGE> 18
- 15 -
(i) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in excess of
Fifty Thousand Dollars ($50,000), or (ii) in the aggregate at any time an
amount in excess of Fifty Thousand Dollars ($50,000), and in either case not
adequately covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against the Borrower or its
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 30 days or in any event later than five days prior to the date of any
proposed sale thereunder; or
(j) Any material adverse effect upon or change in (a) the
properties, assets, business, operations, financial condition, prospects,
liabilities or capitalization of the Borrower or on the ability of the Borrower
to conduct its business other than as may result from a termination of
Borrower's CBS affiliation, (b) the validity or enforceability of this
Agreement, the Note, any other Loan Document or the Pledge Agreement, (c) the
rights or remedies of Lender under this Agreement, the Note, any other Loan
Document, the Pledge Agreement or at law or in equity or (d) the value of any
material collateral granted to Lender pursuant to any Loan Document or the
Pledge Agreement shall occur.
Section 7.2 Effect of Event of Default. Should any Event of
Default occur, Lender may at its option by written notice to Borrower declare
the entire unpaid principal amount of the Note, together with all unpaid
interest and all other amounts payable under this Agreement and every other
obligation of Borrower to Lender, immediately due and payable, whereupon the
Note and all such obligations shall become and be forthwith due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by Borrower, anything contained herein or in the
Note or in such other note or evidence of indebtedness to the contrary
notwithstanding; provided, however, that in case of an Event of Default under
Section 7.1(g), all the obligations of Borrower under this Agreement and the
Note shall become immediately due and payable as of the date of any such Event
of Default regardless of the cause of such Event of Default and without any
notice to Borrower required from Lender. Lender shall have, in addition to all
other rights and remedies allowed by law, the rights and remedies of a secured
party under the Uniform Commercial Code and, without limiting the generality of
the foregoing, the rights and remedies provided for in the Security Agreement
and Pledge Agreements, which provisions are hereby incorporated by reference.
<PAGE> 19
- 16 -
ARTICLE VIII MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies. No failure or delay
on the part of Lender in exercising any right, power or remedy hereunder shall
operate as a waiver, nor shall any single or partial exercise of any such
right, power or remedy hereunder. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
Section 8.2 Amendments. No amendment, modification, termination
or waiver of any provision of this Agreement, the Note, the Security Agreement
or the Pledge Agreement nor consent to any departure by Borrower therefrom,
shall in any event be effective unless in writing, signed by Lender and then
only in the specific instance and for the specific purpose for which given. No
notice to or demand on Borrower in any case shall entitle it to any other or
further notice or demand in similar or other circumstances.
Section 8.3 Conflicts. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
Note, the Security Agreement or the Pledge Agreement, the provisions of this
Agreement shall control.
Section 8.4 Address for Notices. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof by registered or certified mail,
return receipt requested, to the applicable party at the addresses indicated
below:
If to Borrower: Mr. Anthony Fant
WNAL-TV, Inc.
c/o Fant Broadcasting Company
Corporate Headquarters
One Independence Plaza, Suite 720
Birmingham, AL 35209
If to Lender: Mr. Lowell W. Paxson
Paxson Communications of Birmingham-44, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
<PAGE> 20
- 17 -
Section 8.5 Expenses. Borrower agrees to pay on demand all costs
and expenses incurred by Lender directly in the enforcement of this Agreement,
the Note, the Security Agreement, the Pledge Agreement and other instruments
and documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of any attorney to whom the Note is referred for
collection (whether or not litigation is commenced) or for representation out
of court, in trial, on appeal or in proceedings under any bankruptcy or
insolvency law or otherwise. In addition, Borrower agrees to pay all the
actual and reasonable costs and expenses of Borrower in connection with the
negotiation, preparation and execution of the Loan Documents and all the costs
of furnishing all opinions by counsel for Borrower, and of Borrower's
performance of and compliance with all agreements and conditions contained
herein and in the other Loan Documents on its part to be performed or complied
with including, without limitation, confirming compliance with environmental
and insurance requirements.
Section 8.6 Binding Effect; Assignment. This Agreement shall
become effective when executed and thereafter shall be binding upon and inure
to the benefit of Borrower, Lender and their respective successors and assigns,
except that Borrower shall not have the right to assign any rights or
obligations hereunder without the prior written consent of Lender. Lender
shall be permitted to assign, without Borrower's consent, all or any portion of
Lender's rights and interests hereunder and under each other document executed
in connection with this Loan Agreement (x) to one or more other affiliates of
Lender, and, upon any such assignment, each reference herein or in such other
document to "Lender" shall be deemed to be and include a reference to such
other affiliate and (y) to creditors of Lender or its affiliates as security
for indebtedness of Lender or such affiliates. For purposes of this section,
the term affiliate shall mean, as applied to any entity or individual, any
other entity or individual directly or indirectly controlling, controlled by,
or under common control with, that entity or individual. For purposes of this
definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and under "common control with"), as applied to
any entity or individual, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
entity or individual, whether through the ownership of voting securities,
partnership interests or otherwise by contract.
Section 8.7 Governing Law. This Agreement, the Note, the
Security Agreement, the Pledge Agreement and related documents shall be
governed by, and construed in accordance with, the laws of the State of New
York with the exception of its conflicts of laws provisions; provided that the
effect of any recordation shall be determined by the State thereof. The
parties agree to the exclusive jurisdiction and
<PAGE> 21
- 18 -
venue of the state or federal district court for the district including
Jefferson County, Alabama or the Northern District of Alabama.
Section 8.8 Severability of Provisions. Any provision of this
Agreement, the Note, the Pledge Agreement or the Security Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions or affecting the validity or
enforceability of any provisions in any other jurisdiction.
Section 8.9 Headings. Article and Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.10 Rights Affected by Extensions. The rights of Lender
and its assigns shall not be impaired by any indulgence, release, renewal,
extension or modification which Lender may grant with respect to the
indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of
Borrower or any endorser, guarantee, or surety.
Section 8.11 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and in any documents or
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the Note and the making of the Loan
hereunder and continue in full force and effect, as of the respective dates as
of which they were made, until all of the obligations of Borrower to Lender
hereunder have been paid in full.
Section 8.12 FCC Compliance. Notwithstanding anything herein or
in any of the other Loan Documents to the contrary, but without limiting or
waiving Borrower's obligations hereunder or under any of the other Loan
Documents, Lender's remedies hereunder and under the other Loan Documents are
subject to compliance with the Communications Act of 1934, as amended, and all
applicable rules, regulations and policies of the FCC, and Lender will not take
any action pursuant to this Agreement or any of the other Loan Documents that
would constitute or result in any assignment of any FCC authorization held by
the Borrower or any change of control of the Station if such assignment or
change of control would require under then existing law (including the written
rules and regulations promulgated by the FCC), the prior approval of the FCC,
without first obtaining such approval of the FCC. This Agreement, the other
Loan Documents and the transactions contemplated hereby and thereby do not and
will not constitute, create, or have the effect of constituting or creating,
directly or indirectly, actual or practical ownership of the Borrower by Lender
or control, affirmative or negative, direct or indirect, of the Borrower by
Lender, over the programming,
<PAGE> 22
- 19 -
management or any other aspect of the operation of the Borrower which ownership
and control remain exclusively and at all times in the Borrower until such time
as Lender has complied with such law, rules, regulations and policies.
Section 8.13 Further Assurances. From time to time, Borrower
shall execute and deliver to Lender such additional documents as Lender may
reasonably require to carry out the purposes of this Agreement or any of the
documents entered into in connection herewith, or to preserve and protect the
rights of Lender hereunder or thereunder.
Section 8.14 Indemnification. Borrower hereby indemnifies and
holds harmless Lender and its directors, officers, shareholders, employees,
agents, counsel, subsidiaries and affiliates (the "Indemnified Persons") from
and against any and all losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against any
Indemnified Person arising from any material breach by Borrower of the
provisions of this Agreement, the documents entered into in connection
herewith, or any of them or any of the transactions contemplated hereby or
thereby; provided, however, that Borrower shall not be liable to any
Indemnified Person, if there is a judicial determination that such losses,
liabilities, obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of such Indemnified Person.
Section 8.15 Waiver. EACH OF LENDER AND BORROWER HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
Section 8.16 Maximum Interest. Lender and Borrower intend that
this Agreement and the other Loan Documents conform to all applicable usury
laws. Accordingly, no provisions of the Loan Documents shall require the
payment or permit the collection of interest in excess of the maximum rate
permitted by applicable law ("Maximum Rate"), or obligate Borrower to pay any
taxes, assessments, charges, insurance premiums or other amounts which are held
to constitute interest to the extent
<PAGE> 23
- 20 -
that such payments, when added to the other obligations under the Loan
Documents, would be held to constitute contracting for, or the payment by
Borrower of, interest at a rate greater than the Maximum Rate. Lender and
Borrower further agree that:
(i) if any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be adjudicated to
be so provided for herein or in any such instrument, the provisions of this
subsection 8.16 shall govern, and neither Borrower nor its successors or
assigns shall be obligated to pay the amount of such interest to the extent it
is in excess of the Maximum Rate;
(ii) if at any time the amount of interest under
any of the Loan Documents for a calendar year exceeds the Maximum Rate had the
Maximum Rate at all times been in effect, the interest chargeable under any
such Loan Document shall be limited to the amount of interest that could have
been charged if the Maximum Rate had at all times been in effect, but any
subsequent reductions in the interest due shall not reduce the rate of interest
chargeable under any such Loan Document below the Maximum Rate until the total
amount of interest accrued under any such Loan Document equals the amount of
interest that would have accrued if the interest provided for in any such Loan
Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document is
accelerated for any reason, or in the event of any prepayment by Borrower, or
in any other event, earned interest may never include more than the Maximum
Rate, computed from the date of disbursement of the funds evidenced by such
Loan Document until payment, and any interest otherwise payable under such Loan
Document that is in excess of the Maximum Rate shall be canceled automatically
as of such acceleration or such other event and (if theretofore paid) shall be
credited against principal;
(iv) if it should be held that any interest
payable or chargeable under any Loan Document is in excess of the Maximum Rate,
the interest payable or chargeable under such Loan Document shall be reduced to
the maximum amount permitted by applicable federal or state law, whichever
shall permit the higher lawful interest, as construed by courts having
jurisdiction thereof; and
(v) the spreading, prorating and amortizing of
interest over the Maturity Date of the Loan Documents shall be allowed to the
fullest extent permitted by applicable law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be executed by their respective duly authorized officers as of the date
first above written.
PAXSON COMMUNICATIONS
OF BIRMINGHAM-44, INC.
By: /s/ James B. Brock
----------------------------
Name: James B. Brock
Title: President
WNAL-TV, INC.
By: /s/ Anthony J. Fant
----------------------------
Name: Anthony J. Fant
Title: President
<PAGE> 25
EXHIBIT 1
PROMISSORY NOTE
$8,000,000 _____________, 1996
FOR VALUE RECEIVED, the undersigned, WNAL-TV, Inc., a Alabama
corporation with its address at 510 Chestnut Street, Gadsden, Alabama 35901
(the "Maker"), promises to pay to the order of PAXSON COMMUNICATIONS OF
BIRMINGHAM-44, INC., a Florida corporation with its address at 601 Clearwater
Park Road, West Palm Beach, Florida, 33401 (the "Payee"), or its designee, in
the manner set forth below, the principal sum of Eight Million Dollars
($8,000,000), together with interest thereon as provided herein. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to such terms in the Loan Agreement (as defined below).
1. The holder of this Note is authorized to endorse the
date and amount of each loan evidenced hereby and each payment of principal
and/or interest with respect thereto on Schedule A annexed hereto and made a
part hereof, but the failure of the holder of this Note to make such
endorsement shall not affect the rights of the Payee or the obligations of the
Maker under this Note, the Loan Agreement dated as of August __, 1996, between
Maker and Payee (the "Loan Agreement") and any documents executed in connection
therewith or under applicable law.
2. The principal balance of and all interest on the Loan
evidenced hereby shall be due and payable as provided in Sections 1.3 and 1.4
of the Loan Agreement.
3. This Note evidences indebtedness of the Maker to the
Payee arising under the Loan Agreement, to which reference is hereby made for a
statement of the rights of the Payee and the duties and obligations of the
Maker in relation thereto. Neither this reference to the Loan Agreement nor
any provision thereof shall affect or impair the absolute and unconditional
obligation of the Maker to pay the principal of or interest on this Note when
due.
4. In the event any installment of principal or interest
on this Note is not paid when due, whether such installment comes due by
acceleration or otherwise, such installment shall bear interest equal to the
lower of the highest rate permitted by law or 15% per annum from and after the
due date thereof until paid in full.
<PAGE> 26
- 2 -
5. The payment of this Note is secured by a Security
Agreement and Pledge Agreement, all as more fully identified in the Loan
Agreement.
6. Payment upon this Note shall be made by check or
checks payable to the Payee at 601 Clearwater Park Road, West Palm Beach,
Florida, 33401, or such other place as the Payee or a subsequent holder of this
Note shall designate to the Maker in writing, in lawful money of the United
States of America.
7. This Note may be prepaid by the Maker, in whole or in
part in integral multiples of Ten Thousand Dollars ($10,000), at any time
without premium or penalty. Each prepayment on this Note shall be applied to
installments of principal payable on this Note in the inverse order of
maturity.
8. The Maker hereby waives any defenses based upon, and
specifically assents to, any and all extensions and postponements of the time
of payment and all other indulgences or forbearances which may be granted to
any party liable hereon by the Payee or any subsequent holder of this Note.
9. The Maker hereby waive presentment, demand for
payment, notice of protest, notice of non- payment, protest, and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note.
10. No delay or omission on the part of the Payee or any
subsequent holder of this Note in exercising any right hereunder shall operate
as a waiver of such right or of any other right of the Payee or such holder,
nor shall any delay, omission or waiver on any one occasion be deemed a bar to
or waiver of the same or any other right on any other occasion.
11. No single or partial exercise by the Payee or any
subsequent holder hereof of any power hereunder shall preclude any other or
future exercise thereof or the exercise of any other power.
12. If any Event of Default shall occur, the Payee shall
be under no further obligation to make any Loan or advances of any Loan under
the Loan Agreement and the Payee may at its option by written notice to the
Maker declare the entire unpaid principal amount of this Note, together with
all unpaid interest and all other amounts payable under the Loan Agreement and
every other obligation of the Maker to the Payee, immediately due and payable,
whereupon this Note and all such obligations shall become and be forthwith due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are, except as expressly provided in the Loan Agreement, hereby
expressly waived by the Maker; provided, however, that in the case
<PAGE> 27
- 3 -
of an Event of Default under Section 7.1(g) of the Loan Agreement, all of the
obligations of the Maker under the Loan Agreement and this Note shall become
immediately due and payable as of the date of any such Event of Default
regardless of the cause of such Event of Default and without any notice to the
Maker required from the Payee. The Payee shall have, in addition to all other
rights and remedies allowed by law, the rights and remedies of a secured party
under the Uniform Commercial Code and, without limiting the generality of the
foregoing, the rights and remedies provided for in the Loan Agreement, the
Security Agreement or Pledge Agreement.
13. The Maker shall pay on demand of the Payee or any
subsequent holder of this Note all costs of collection, including reasonable
attorneys' fees incurred by the Payee or such holder in enforcing collection of
this Note on default. However, if any litigation arises between the parties in
connection with this Note, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to all other damages and remedies.
14. No provision of this Note shall be modified except by
a written instrument executed by the Maker and by the Payee or a subsequent
holder hereof expressly referring to this Note and to the provision modified.
15. This Note and the provisions hereof are to be binding
on the assigns or successors of the Maker and shall be enforceable in
accordance with the laws of the State of Alabama (without regard to the
conflicts of law provisions thereof).
<PAGE> 28
- 4 -
16. The provisions of this Note are hereby declared to be
severable and if any such provision or the application of any such provision to
any person or in any circumstances shall be held to be invalid or
unconstitutional, such invalidity or unconstitutionality shall not be construed
to affect the validity or constitutionality of any of the remaining provisions
as applied to such person, or in circumstances other than those as to which it
is held invalid.
[SEAL] WNAL-TV, INC.
By: /s/ Anthony J. Fant
---------------------------------
President
<PAGE> 29
SCHEDULE A
<TABLE>
<CAPTION>
Date Amount of Loan Amount Repaid Unpaid Balance Notation Made By
<S> <C> <C> <C> <C>
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
_____ ______________ _____________ ______________ ________________
</TABLE>
<PAGE> 30
EXHIBIT 2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is dated as of this ____ day of _____, 1996,
by and between WNAL-TV, INC., an Alabama corporation (the "Debtor"), and PAXSON
COMMUNICATIONS OF BIRMINGHAM-44, INC., a Florida corporation (the "Secured
Party").
W I T N E S S E T H:
WHEREAS, Debtor and Secured Party are parties to various Agreements
dated as of August __, 1996 relating to Television Station WNAL-TV, Gadsden,
Alabama ("Station");
WHEREAS, Debtor and Secured Party have also entered into a Loan
Agreement dated as of August __, 1996 (the "Loan Agreement"), pursuant to which
Secured Party has agreed to make a loan (the "Loan") to the Debtor in the
amount of Eight Million Dollars ($8,000,000);
WHEREAS, the Debtor has executed a promissory note of even date
herewith (as amended, renewed, restated, increased, consolidated or substituted
from time to time, the "Note"), evidencing its indebtedness to the Secured
Party under the Loan Agreement; and
WHEREAS, the Loan Agreement requires Debtor to execute and deliver to
Lender this Security Agreement to secure its obligations under the Loan
Agreement and the Note by granting Secured Party a security interest in
substantially all of Debtor's personal property.
NOW, THEREFORE, in consideration of the promises and agreements
contained herein and the Secured Party's extension of the Loan pursuant to the
Note and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Secured Party and the Debtor agree as follows:
ARTICLE 1. GRANT OF SECURITY INTEREST
In order to secure the payment of any and all amounts (a) loaned by
Secured Party to the Debtor pursuant to the Agreement and the Note, plus
interest accrued thereon and all other obligations of the Debtor to Secured
Party (being hereinafter collectively referred to as the "Obligations"), Debtor
hereby grants to Secured Party a
<PAGE> 31
first priority security interest in all of Debtor's right, title and interest
in and to all of its personal property, both tangible and intangible and of
every kind and description, whether now or hereafter existing, or now owned or
hereafter acquired, and wherever located, and all proceeds, products,
replacements, additions, accessions and/or substitutes therefor, including,
without limitation, all goods, machinery, equipment, furniture, furnishings,
fixtures, inventory, accounts, chattel paper, instruments and general
intangibles, as such terms, may be defined in the Uniform Commercial Code in
the jurisdiction in which such assets are located, including, without
limitation, all properties and assets of Debtor used or useful in the
construction and operation of the Station, and the proceeds and products of any
and all of the foregoing assets and properties described in this Article 1,
including proceeds of insurance policies relating to any and all of the
foregoing assets and properties; provided, however, that such security interest
does not include any permits or licenses granted by the FCC to the extent that
Debtor is prohibited from granting a security interest therein pursuant to the
Communications Act of 1934, as amended, and the regulations promulgated
thereunder, and any other licenses to the extent the transfer or pledging
thereof is prohibited by the granting authority.
All of the foregoing shall be hereinafter referred to as the
"Collateral."
ARTICLE 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR
Without limiting the terms and conditions of transactions contemplated
under the Time Brokerage Agreement, Debtor represents, warrants and covenants
that:
(a) the Collateral (and all records pertaining thereto)
will at all times be kept at the locations specified on Exhibit A hereto and
Debtor will not change the location at which any of the Collateral is usually
kept or the location of its chief executive office or principal place of
business without giving thirty (30) days' prior written notice to Secured
Party;
(b) Debtor owns and has possession of the Collateral
except that portion to be hereafter acquired;
(c) all the Collateral is genuine and enforceable and
free from liens, adverse claims, charges, encumbrances, taxes or assessments,
other than the liens created hereby, and Debtor shall defend the same against
all claims and demands of all persons at any time claiming against the same or
any interests therein adverse to Secured Party;
(d) all items of the Collateral comply with applicable
laws, including, where applicable, Federal Reserve Regulations and any state
consumer credit and usury laws;
- 2 -
<PAGE> 32
(e) no financing statement covering any of the
Collateral, and naming any secured party other than Secured Party, is on file
in any public office;
(f) Debtor will, at its sole cost and expense, maintain,
replace, repair, service and take other action as may be necessary from time to
time to keep and preserve its inventory, machinery and equipment in general
repair and good working order and any inventory, machinery or equipment which
wears out or is destroyed will be replaced or restored if necessary for the
operation of the business of Debtor in the ordinary course. Debtor will within
10 days notify Secured Party of any event comprising loss or decrease in the
value of the Collateral in excess of $20,000;
(g) Debtor will comply with all laws, rules and
regulations relating to, and shall pay prior to delinquency, all license fees,
registration fees, taxes and assessments and all other charges, which may be
levied upon or assessed against, or which may become security interests, liens
or other encumbrances upon the ownership, operation, possession or maintenance
of the Collateral; provided that Debtor shall not be required to comply with
any such law, rule or regulation or to pay any such tax or assessment or other
such charge, the validity of which is being contested by Debtor in good faith
by appropriate proceedings commenced and prosecuted with due diligence and with
respect to which adequate reserves have been established and are being
maintained in accordance with generally accepted accounting principles;
(h) Debtor will execute and at its expense file and
refile such financing statements, continuation statements and other documents
in such offices as Secured Party may deem necessary or appropriate in order to
protect or preserve Secured Party's security interest in the Collateral;
(i) Debtor will not sell, offer to sell, hypothecate or
otherwise dispose of any material part of the Collateral (including proceeds)
subject hereto, or any part thereof or interest therein at any time other than
in the ordinary course of business and in exchange for Collateral of like value
in which Secured Party shall have a security interest except to the extent
expressly contemplated under the Acquisition Agreement;
(j) Debtor will at all times keep accurate records with
respect to the Collateral which are as complete and comprehensive as those
which are customarily maintained by those engaged in similar businesses, and
Secured Party will have the right to inspect such records at such times and
from time to time as Secured Party may reasonably request;
(k) Debtor will provide any service and do any other acts
or things necessary to keep the Collateral free and clear of all defenses,
rights of offset and counterclaims. Secured Party may, at any time prior to
termination hereof, require Debtor from time to time to deliver to Secured
Party (i) schedules describing all the Collateral subject hereto, and (ii)
instruments and chattel paper included in the Collateral, appropriately
assigned and endorsed to Secured Party;
- 3 -
<PAGE> 33
(l) Debtor will maintain such insurance on the Collateral
as may be reasonably required by Secured Party. In the event
of failure to provide and maintain insurance as herein provided, Secured Party
may, at its option, provide such insurance and Debtor hereby promises to pay
Secured Party on demand the amount of any disbursements made by Secured Party
for such purpose. Risk of loss or damage shall accrue to Debtor to the extent
of any deficiency in any effective insurance. Debtor shall furnish to Secured
Party certificates or other evidence satisfactory to Secured Party of
compliance with the foregoing insurance provisions. Debtor shall give
immediate written notice to Secured Party and to the insurers of any loss or
damage to the Collateral or any part thereof in excess of $20,000 and shall
promptly file all necessary or appropriate proof of loss with the insurers.
Any amounts collected or received under any such insurance policies may be
applied by Debtor either to the replacement or restoration of the Collateral or
to any of the Obligations secured hereby in the manner provided in Article 8
hereof; and
(m) Debtor shall not change its name, identity or
corporate structure, voluntarily or involuntarily, without giving 30 days'
prior written notice to Secured Party.
ARTICLE 3. AUTHORITY TO COLLECT
Except as otherwise hereinafter set forth, unless and until the
occurrence of an event which constitutes an Event of Default under the Loan
Agreement, Debtor shall continue to collect, and upon the occurrence of such an
event, Debtor may, at the direction of Secured Party, continue to collect, at
its own expense, all amounts due and to become due under any accounts, chattel
paper, instruments or general intangibles and in connection therewith may take
such action as it may deem necessary, advisable, convenient or proper for the
enforcement, collection, adjustment, settlement or compromise thereof.
ARTICLE 4. REMEDIES
Upon the occurrence of an Event of Default, as defined in the Loan
Agreement, Secured Party shall have the right to declare immediately due and
payable all of the Obligations, without other notice or demand, and to
terminate any commitments to make loans or otherwise extend credit to Debtor.
Secured Party shall have all the rights and remedies of a secured party under
the Uniform Commercial Code and all other rights, privileges, powers and
remedies provided by law or equity.
Without limiting the generality of the foregoing, after the
occurrence of an Event of Default:
(a) Secured Party shall have the power to notify the
account debtor or debtors obligated under any accounts, chattel paper,
instruments and general intangibles of the assignment of such accounts, chattel
paper, and general intangibles
- 4 -
<PAGE> 34
to Secured Party and of its security interest therein and to direct such
account debtor or debtors to make payment of all amounts due or to become due
to Debtor thereunder directly to Secured Party and, upon such notification to
the account debtor or debtors, to enforce collection of any thereof in the same
manner and to the same extent as Debtor might have done. The funds so
collected shall be held as security for the payment of the Obligations secured
hereby and applied in the manner provided in Article 8 hereof.
Debtor hereby constitutes and appoints Secured Party as its
true and lawful attorney, in the place and stead of Debtor and with full power
of substitution, either in Secured Party's own name or in the name of Debtor,
to ask for, demand, collect, receive and give acquittance for any and all
monies due or to become due under and by virtue of any account, chattel paper,
instruments and general intangibles, to endorse checks, drafts, orders and
other instruments for the repayment of monies payable to Debtor on account
thereof, and to settle, compromise, prosecute or defend any action, claim or
proceeding with respect thereto and to sell, assign, pledge, transfer and make
any agreement respecting, or otherwise deal with, the same; provided, however,
that nothing herein contained shall be construed as requiring or obligating
Secured Party to make any demand, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or to present or file any claim or
notice or to take any action with respect to any account, chattel paper,
instruments or general intangible or the monies due or to become due thereunder
or the property covered thereby, and no action taken or omitted to be taken by
Secured Party with respect to any account, chattel paper, instruments or
general intangible shall give rise to any defense, counterclaim or set off in
favor of Debtor or to any claim or action against Secured Party;
(b) Debtor will deliver to Secured Party from time to
time, as requested by Secured Party, current lists of the Collateral;
(c) Debtor will not dispose of the Collateral, except on
terms approved in writing by Secured Party;
(d) Debtor will collect, assemble and deliver all of the
Collateral and books and records pertaining thereto, to Secured Party at a
reasonably convenient place designated by Secured Party; and
(e) Secured Party may, to the extent permitted by law,
enter onto Debtor's premises and take possession of the Collateral, and assign,
sell, lease or otherwise dispose of Debtor's interest in the Collateral for the
account of Debtor and Debtor shall then be liable for the difference between
the payments and other amounts due under the Note and amounts received pursuant
to such assignment or contract of sale or lease or other disposition of
Debtor's interest in the Collateral and the amount of such difference shall
then be immediately due and payable. Secured Party may, in its sole
discretion, designate a custodian or agent to take physical possession of the
Collateral. Secured Party shall give Debtor reasonable notice of the time and
place of
- 5 -
<PAGE> 35
any public sale of the Collateral or the time after which any private sale or
other intended disposition thereof is to be made. The requirement of
reasonable notice shall be met if notice of the sale or other intended
disposition is mailed, by first class mail, postage prepaid, to Debtor at its
address set forth in Article 15 hereof or such other address as Debtor may by
notice have furnished Secured Party in writing for such purpose, at least
fifteen (15) days prior to the time of such sale or other intended disposition.
All notices of public or private sale shall specify that the
assignment of any FCC permit or license for the Station must first be approved
by the FCC and such notice shall be given to all persons attending a public
sale. Debtor agrees that it will join and cooperate fully with Secured Party
or with the successful bidder or bidders at any public or private sale in the
filing of an application, and furnishing any additional information that may be
required in connection with such application, requesting the FCC's prior
approval of the assignment of such license or permit for the Station to Secured
Party or the successful bidder or bidders. Debtor will take such further
actions, or cause such further actions to be taken that may be necessary or
desirable to obtain such FCC approval and will execute and deliver, or will
cause the execution and delivery of, all applications, certificates,
instruments and other documents that may be necessary or desirable in
connection with such approval. The parties agree that the Collateral and the
permit or license shall not be assigned and transferred to separate parties.
Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Debtor, and Debtor
hereby waives (to the extent permitted by law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
ARTICLE 5. POWERS OF SECURED PARTY
Debtor appoints Secured Party as its true attorney in fact to perform
any of the following powers, which are coupled with an interest, and are
irrevocable until termination of this Security Agreement and may be exercised
by Secured Party's officers and employees, or any of them, upon the occurrence
of an Event of Default under the Loan Agreement:
(a) to perform any obligation of Debtor hereunder in
Debtor's name or otherwise;
(b) to give notice of Secured Party's rights in the
Collateral, to enforce the same, and make extension agreements with respect
thereto;
(c) to release persons liable on the Collateral and to
give receipts and acquittance and compromise disputes in connection therewith;
- 6 -
<PAGE> 36
(d) to release security;
(e) to resort to security in any order;
(f) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing statements,
continuation statements, termination statements, statements of assignment and
applications or registration or like papers to perfect, preserve or release
Secured Party's interest in the Collateral;
(g) to verify facts concerning the Collateral by inquiry
of obligors thereon, or otherwise;
(h) to endorse, collect, deliver and receive payment
under instruments for the payment of money constituting or relating to
Collateral;
(i) to prepare, adjust, execute, deliver and receive
payment under insurance claims;
(j) to exercise all rights, powers and remedies which
Debtor would have, but for this Security Agreement, under all of the Collateral
subject to this Security Agreement; and
(k) to do all acts and things and execute all documents
in the name of Debtor or otherwise deemed by Secured Party as necessary, proper
and convenient in connection with the preservation, perfection or enforcement
of its rights hereunder.
ARTICLE 6. REMITTANCES
Debtor agrees that upon the occurrence and during the continuance of
an event which constitutes an Event of Default under the Loan Agreement, all
cash or proceeds received by Debtor as a result of the sale, lease or other
disposition of any Collateral, whether received by Debtor in the exercise of
its collection rights hereunder or otherwise, shall be, at Secured Party's
discretion, remitted to Secured Party or deposited to an account for the
benefit of Secured Party (according to its instructions) in the form received
(properly endorsed to the order of Secured Party or for collection in
accordance with Secured Party's instructions) not later than the banking
business day following the day of receipt, to be held as security for the
payment of the Obligations secured hereby and applied by Secured Party as
provided in Article 7 hereof. Debtor agrees not to commingle any such
collections or proceeds with any of its other funds or property and agrees to
hold the same upon an express trust for Secured Party until remitted to Secured
Party.
- 7 -
<PAGE> 37
ARTICLE 7. APPLICATION OF PROCEEDS
Except as expressly provided elsewhere in this Security Agreement, all
proceeds of the sale of the Collateral by Secured Party hereunder, and all
other monies received by Secured Party pursuant to the terms of this Security
Agreement (whether through the exercise by Secured Party of its rights of
collection or otherwise), including, but not limited to, any awards or other
amounts payable upon any condemnation or taking by eminent domain, shall be
applied, as promptly as is practicable after the receipt thereof by Secured
Party as follows:
FIRST: to the payment of all fees and expenses incurred by Secured
Party or any custodian appointed hereunder, if not previously paid by Debtor,
and all expenses incurred by Secured Party in connection with any sale of the
Collateral, including, but not limited to, the expenses of taking, advertising,
processing, preparing and storing the Collateral to be sold, all court costs
and fees and expenses of counsel to Secured Party in connection therewith, to
the payment of all expenses to be paid by Debtor pursuant to Article 16 of this
Security Agreement, and to the payment of all amounts for which Secured Party
is entitled to indemnification hereunder and all advances made by Secured Party
hereunder to the account of Debtor and the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any right
or remedy hereunder, to the extent that such advances, costs and expenses shall
not theretofore have been reimbursed to Secured Party by Debtor;
SECOND: to the payment to Secured Party of the interest then due and
payable on the Note;
THIRD: to the payment to Secured Party of the principal then due and
payable on the Note;
FOURTH: to the payment to Secured Party of any other amount owing to
Secured Party under any other agreement of Debtor with Secured Party; and
FIFTH: only if all of the foregoing have been paid in full, to
Debtor.
Notwithstanding the sale or other disposition of any Collateral by
Secured Party hereunder, Debtor shall remain liable for any deficiency.
ARTICLE 8. RIGHTS CUMULATIVE
The rights, privileges, powers and remedies of Secured Party shall be
cumulative and no single or partial exercise of any of them shall preclude the
further or other exercise of the same or any other of them. No delay or
failure of Secured Party in exercising any right, power, privilege or remedy
hereunder shall affect such right, power, privilege or remedy. Nor shall any
single or partial exercise of any right, power, privilege or remedy or any
abandonment or discontinuance of steps to enforce such right, power, privilege
or remedy affect such right, power,
- 8 -
<PAGE> 38
privilege or remedy. Any waiver, permit, consent or approval of any kind by
Secured Party of any default hereunder, or any such waiver of any provisions or
conditions hereof, must be in writing and shall be effective only to the extent
set forth in writing and shall not constitute a waiver of any subsequent or
other default. Failure of Secured Party to insist upon strict performance or
compliance by Debtor of any covenants, warranties or agreements in this
Security Agreement shall not constitute a waiver of any subsequent or other
failure to perform or comply with any covenants, warranties or agreements.
ARTICLE 9. CONTINUING AGREEMENT
This is a continuing agreement and shall remain in full force and
effect and be binding upon Debtor and the successors and assigns of Debtor
until all of the Obligations shall have been fully satisfied and discharged.
ARTICLE 10. REINSTATEMENT OF AGREEMENT
If Secured Party shall have proceeded to enforce its rights under this
Security Agreement and such proceedings shall have been discontinued or
abandoned for any reason prior to the issuance of any judgment or award, then
Debtor and Secured Party shall be restored respectively to their positions and
rights hereunder, and all rights, remedies and powers of Debtor and Secured
Party shall continue as though no such proceeding had been initiated. In the
event of litigation arising under this Security Agreement, the prevailing party
shall be entitled to, in addition to all other damages and remedies, reasonable
attorneys' fees.
ARTICLE 11. ASSIGNMENT
Secured Party may assign and transfer any of the Obligations of Debtor
and may deliver the Collateral, or any part thereof, to the assignee or
transferee of any such obligation, who shall become vested with all the rights,
remedies, powers, security interests and liens herein granted to Secured Party
in respect thereto; and Secured Party shall thereafter be relieved and fully
discharged from any liability or obligation under this Security Agreement.
Debtor shall not have the right to assign this Security Agreement without the
prior written consent of Secured Party.
ARTICLE 12. DUTIES WITH RESPECT TO COLLATERAL
With respect to the Collateral, Secured Party shall be under no duty
to send notices, perform services, pay for insurance, taxes or other charges or
take any action of any kind in connection with the management thereof and its
only duty with respect thereto shall be to use reasonable care in its custody
and preservation while in its
- 9 -
<PAGE> 39
possession, which shall not include any steps necessary to preserve rights
against prior parties.
ARTICLE 13. PERFORMANCE OF OBLIGATIONS BY SECURED PARTY
If Debtor shall fail to do any act or thing which it has covenanted to
do hereunder, or if any representation or warranty of Debtor shall be breached,
Secured Party may (but shall not be obligated to) perform such act or thing on
behalf of Debtor or cause it to be done or remedy any such breach, and there
shall be added to the liabilities of Debtor hereunder the cost or expense
incurred by Secured Party in so doing, and any and all amounts expended by
Secured Party in taking any such action shall be repayable to it upon demand
being made to Debtor therefore and shall bear interest at the rate provided for
in the Note, from and including the date advanced to the date of repayment.
ARTICLE 14. MISCELLANEOUS
After due consideration and consultation with its attorneys, Debtor
voluntarily and knowingly, to the extent permitted by law, agree as follows:
(a) Debtor waives presentment, protest, notice of protest, notice of dishonor
and notice of nonpayment with respect to the Collateral to which Secured Party
is entitled hereunder; (b) Debtor waives any right to direct the application of
payments or security for the Obligations of Debtor hereunder, or the
indebtedness of customers of Debtor, and any right to require proceedings
against others or to require exhaustion of the security; (c) Debtor consents to
the extension or forbearance of the terms of the Obligations or indebtedness of
customers, the release or substitution of security, and the release of
guarantors, if any; and (d) Debtor waives notice or a judicial hearing prior to
the exercise by Secured Party of any right or remedy provided by this Security
Agreement and also waives its rights, if any, to set aside or invalidate any
sale duly consummated in accordance with the provisions of this Security
Agreement on the grounds that the sale was consummated without a prior judicial
hearing.
ARTICLE 15. NOTICES
All notices or demands of any kind which may be required or which
Secured Party desires to serve upon Debtor under the terms of this Security
Agreement shall be served upon Debtor by personal service or by mailing a copy
thereof by first class mail, postage prepaid, addressed to Debtor, at the
address set forth in Article 8 of the Loan Agreement.
ARTICLE 16. EXPENSES
Debtor agrees to pay on demand all fees, costs and expenses of Secured
Party, or of any custodian or agent designated by Secured Party, including the
fees and out-of-
- 10 -
<PAGE> 40
pocket expenses of legal counsel, independent public accountants and other
outside experts retained by Secured Party in connection with the enforcement of
this Security Agreement or any other instrument or document delivered pursuant
hereto.
ARTICLE 17. LAW APPLICABLE
This Security Agreement shall be governed by and construed in
accordance with the laws of the State of New York other than the conflicts of
law provisions thereof. The parties agree to the exclusive jurisdiction and
venue of the state or federal district court for the district including
Jefferson County, Alabama or the Northern District of Alabama.
ARTICLE 18. SEVERABILITY OF PROVISIONS
If any provision of this Security Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any remaining provisions of
this Security Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 11 -
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed as of the day and year first written
above.
WNAL-TV, INC.
By: /s/ Anthony J. Fant
---------------------
Name:
Title:
PAXSON COMMUNICATIONS OF
BIRMINGHAM-44, INC.
By: /s/ James B. Bocock
---------------------
Name:
Title
<PAGE> 42
EXHIBIT A
LOCATION OF THE COLLATERAL
1) 510 Chestnut Street
Gadsden, Alabama 35901
2) 499 Towers Road
Chandler Mountain
Steele, Alabama 35987
<PAGE> 43
EXHIBIT 3
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, made and entered into as of this ___
day of August, 1996 by and among Anthony J. Fant, James Stanly Fant, Kyla Beth
Fant, (the "Pledgors"), and PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC., a
Florida corporation (the "Pledgee");
W I T N E S S E T H:
WHEREAS, WNAL-TV, Inc., (the "Company"), and the Pledgee have
entered into certain Agreements of even date herewith (the "Agreements")
relating to Television Station WNAL-TV, Gadsden, Alabama.
WHEREAS, the Pledgors are the stockholders of the Company and
therefore will obtain a material benefit from the agreements of the Company
with Pledgee;
WHEREAS, Pledgee has entered into a Loan Agreement dated as of
August __, 1996 herewith (the "Loan") with the Company; and
WHEREAS, the Agreement provides for the Pledgors to enter into
this Pledge Agreement as additional security for the Loan;
NOW, THEREFORE, in consideration of loans, credit or other
financial accommodation extended or continued from time to time to the Company
by the Pledgee, the Pledgors do hereby agree as follows:
1. Pledge.
(a) The Pledgors hereby grant to the Pledgee a
first priority security interest in and pledge, assign and deliver the
Certificate(s) described in Exhibit A annexed hereto, constituting all the
issued and outstanding ownership interests of the Company owned by the Pledgors
(the "Certificates"), accompanied by all powers, duly executed in blank.
(b) The Pledgors and the Pledgee agree that the
Certificates shall be held on the terms and conditions hereinafter set forth as
collateral security for the obligations of the Company to the Pledgee under the
Agreement and the promissory note issued pursuant thereto (the "Note").
2. Representations and Warranties. The Pledgors
represent and warrant to the Pledgee as follows:
<PAGE> 44
- 2 -
a) that the Certificates constitute all outstanding
stock ownership of the Company;
b) that the Certificates are fully paid and
nonassessable and are not subject to any liens, charges or encumbrances
whatsoever;
c) that there are no existing options, warrants or
other rights to purchase any Company interests;
d) that the execution, delivery and performance of
this Pledge Agreement will not conflict with, result in a breach of or
constitute a default under any indenture or agreement to which the Pledgors or
the Company is a party or by which it is bound, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever on any
of its property or assets;
e) this Pledge Agreement constitutes the legal,
valid and binding obligation of the Pledgors, enforceable in accordance with
its terms;
f) the Pledgors have all requisite power and
authority to enter into this Pledge Agreement and to carry out the transactions
contemplated hereby; and
g) no consent or approval of any person or
entity, other than the Federal Communications Commission (the "FCC"), is or
will be required in connection with the execution, delivery and performance of
this Pledge Agreement.
3. Term. The Pledgee shall hold the Certificates as
security for the performance by the Pledgors of their obligations and
liabilities under the Agreement and the Note, and the Certificates shall be
held by the Pledgee until the principal and interest due on the Note are paid
in full and the Loan Agreement shall have terminated, at which time the Pledgee
shall deliver the Certificates to the Pledgors free and clear of this Pledge
Agreement, and this Pledge Agreement shall thereupon terminate.
4. Voting. While the Certificates continue to be held
by the Pledgee, such Certificates shall remain in the name of the Pledgors and
the Pledgors shall have and exercise all rights of ownership. If an Event of
Default, as such term is defined in the Agreement, the provisions of which
Agreement are hereby incorporated by reference herein, shall occur, in
addition to the remedies set forth in Section 6 hereof, the Pledgee shall be
entitled, subject to the prior approval of the FCC, to exercise all of the
power of an owner with respect to the Certificates and receive, on account of
the obligations evidenced by the Note, all sums distributed by the Company with
respect to the Certificates.
<PAGE> 45
- 3 -
5. Certificate Adjustments. The Pledgors agree that in
the event that during the term of this Pledge Agreement any reclassification,
readjustment or other change is declared or made with respect to the
Certificates, or any subscription, warrant or other right is exercisable with
respect to the Certificates, it shall cause all new, substituted or additional
ownership interests issued by reason of any such change to be delivered to the
Pledgee and to be held by the Pledgee under the terms of this Pledge Agreement
in the same manner as the Certificates originally pledged hereunder. There
likewise shall be deposited with the Pledgee, to be added to the pledged
property and subject to the pledge, any and all additional issued interests in
the Company to the Pledgors by way of dividends, new securities or otherwise,
to the end that the Pledgee will at all times hold, subject to the pledge, all
issued and outstanding ownership of the Company owned by the Pledgors.
6. Remedies. If an Event of Default, as such term is
defined in the Agreement, shall occur, the Pledgee may, after fifteen (15)
days' prior notice to the Pledgors, sell, assign and deliver the whole or, from
time to time, any part of the Certificates or any interest or part thereof, at
any private sale or at public auction, for cash, or credit or for other
property, for immediate or future delivery, and for such price or prices and on
such terms as the Pledgee reasonably may determine to be commercially
reasonable. The Pledgee shall give the Pledgors reasonable notice of the time
and place of any public sale of the Certificates or the time after which any
private sale or other intended disposition thereof is to be made. The
requirement of reasonable notice shall be met if notice of such sale or other
intended disposition is mailed, by certified or registered mail, return receipt
requested, to the Pledgors at the address set forth in Section 9 at least
fifteen (15) days prior to the time of such sale or other intended disposition;
provided that all notices of such sale shall specify that transfer of any
interest representing control of the Company must first be approved by the FCC
and similar notice shall be given to all those attending such sale. The
Pledgors hereby waive and release any and all right or equity of redemption
whether before or after sale hereunder. At any such sale the Pledgee may bid
for and purchase for its own account the whole or any part of the Certificates
so sold, free from any such right or equity of redemption. After obtaining all
required consents from the FCC and upon completion of the sale, Pledgee shall
deliver the Certificates, or any portion thereof, to the purchaser or
purchasers thereof. The net proceeds of any such sale shall be applied as
follows:
i) First, to the expenses of the sale and enforcement
of this Pledge Agreement, including but not limited to, the expenses of
advertising, preparing and prosecuting any necessary FCC application, and
attorneys' fees and expenses;
ii) Second, to the payment of interest under the
Note;
iii) Third, to the payment of the principal of the
Note; and
<PAGE> 46
- 4 -
iv) Fourth, only after payment in full of the
above, to the payment to the Pledgors of any excess proceeds, subject to the
receipt of notice of and the provisions of any other agreement between the
parties with respect to the disposition of said excess proceeds or unsold
shares. Notwithstanding the sale or other disposition of the Certificate by
the Pledgee hereunder, the Company shall remain liable for any deficiency.
All notices of public or private sale shall specify that the
assignment of the broadcast licenses(s) of the Television Station WNAL-TV,
Gadsden, Alabama must first be approved by the FCC and such notice shall be
given to all persons attending a public sale. The Pledgors agree that they
will join and cooperate fully with the Pledgee or with the successful bidder or
bidders at any public or private sale in the filing of an application, and
furnishing any additional information that may be required in connection with
the application with the FCC, requesting the FCC's prior approval of the
assignment of the licenses of the Station to the Pledgee or the successful
bidder or bidders. The Pledgors will take such further actions, or cause such
further actions to be taken that may be necessary or desirable to obtain such
FCC approval and will execute and deliver, or will cause the execution and
delivery of, all applications, certificates, instruments and other documents
that may be necessary or desirable in connection with such approval. The
parties agree that the assets and license(s) shall not be assigned and
transferred to separate parties.
Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the Pledgors, and the
Pledgors hereby waive (to the extent permitted by law) all rights of
redemption, stay and/or appraisal which they now have or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
The Pledgors and the Pledgee hereby agree to use good faith
efforts to answer FCC inquiries, if any, with respect to obtaining the
aforementioned FCC approvals and shall otherwise seek said approvals
diligently, each taking all steps reasonably necessary or desirable to expedite
the procurement of such approvals. Neither failure nor delay on the part of
the Pledgee to exercise any right, remedy, power or privilege provided for
herein or by statute or at law or in equity shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. Notwithstanding any other provision
of this Pledge Agreement to the contrary, any foreclosure of or disposal of the
Certificates under the terms of this Pledge Agreement upon the occurrence of an
Event of Default under the
<PAGE> 47
- 5 -
Agreement shall be made pursuant to Section 310 of the Communications Act of
1934, as amended, and to the applicable rules and regulations of the FCC, as
amended, and, if and to the extent required, after prior written approval of
the FCC.
7. Encumbrances. During the term of this Pledge
Agreement specified in Section 3, the Pledgors shall not sell, assign,
transfer or otherwise dispose of, grant any option with respect to, or
mortgage, pledge or otherwise encumber the partnership interests represented by
the Certificates unless said mortgage, pledge or encumbrance is subject to a
subordination agreement satisfactory to the Pledgee.
8. Miscellaneous.
8.1 Transfer taxes, if any, applicable to any
transfer of the Certificates upon the occurrence of an Event of Default or upon
termination of the Pledge Agreement shall be payable by the person or persons
to whom the shares are being transferred, provided, however, that the Pledgors
agree to reimburse the Pledgee promptly for all such transfer taxes which the
Pledgee may be required to pay.
8.2 No single or partial exercise of any power
hereunder shall preclude other or future exercise thereof or the exercise of
any other power. The holder of the Note may proceed against any portion of the
security held therefor in such order and in such manner as the holder may see
fit, without waiver of any rights with respect to any other security.
8.3 The Pledgee may deal in any manner with the
Note, the Agreement or any other agreement required thereby without notice to
or the consent of the Pledgors, including, without limitation, in the following
manner:
(a) to modify, supplement or otherwise
change any terms of the Note, the Agreement or any such other agreement; to
grant any extension or renewal of the Note, the Agreement or such other
agreement; to grant any other waiver or indulgence with respect to the Note,
the Agreement or such other agreement and to effect any release, compromise or
settlement with respect to the Note, the Agreement or such other agreement; and
(b) to consent to the substitution,
exchange or release of all or any part of any other security at any time held
by the Pledgee as security or surety for the obligations secured hereby.
<PAGE> 48
- 6 -
9. Notices. All notices required to be sent hereunder
shall be in writing and shall be sent by registered mail, return receipt
requested, to the parties as follows:
To the Pledgors:
Anthony J. Fant
WNAL-TV, Inc.
c/o Fant Broadcasting Company
Corporate Headquarters
One Independence Plaza, Suite 720
Birmingham, Alabama 35209
Kyla Beth Fant
James Stanly Fant
P.O. Box 67
Crossville, Alabama 35962
To the Pledgee:
Paxson Communications of Birmingham-44, Inc.
601 Clearwater Park North
West Palm Beach, Florida 33401
Addresses may be changed by notice in writing to the other parties. All such
notices and other communications shall be effective on the date set forth on
the return receipt.
10. Choice of Law, etc. This Pledge Agreement shall be
construed and enforced under and governed by the laws of the State of New York
other than the conflicts of law provisions thereof. The parties agree to the
exclusive jurisdiction and venue of the state or federal district court for the
district including Jefferson County, Alabama or the Northern District of
Alabama. This Pledge Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof, and this Pledge Agreement may not be
modified or amended or any term or provision hereof waived or discharged except
in writing signed by the party against whom such amendment, modification,
waiver or discharge is sought to be enforced. This Pledge Agreement shall be
binding on the successors, assigns, and legal representatives of the parties
hereto and shall inure to the benefit of and be enforceable by their
successors, assigns, and legal representatives; provided, however, that neither
the Certificates nor this Pledge Agreement may be assigned or transferred in
whole or in part, voluntarily or
<PAGE> 49
- 7 -
involuntarily, by the Pledgors without the prior written consent of the
Pledgee, and the Pledgee may assign this Pledge Agreement and all of its rights
hereunder without any consent of the Pledgors. The headings of this Pledge
Agreement are for the purpose of reference only and shall not limit or
otherwise affect the meaning hereof. The Pledgors shall take such further
actions as may be reasonably requested by the Pledgee from time to time in
order to perfect the security interest of the Pledgee hereunder and to assure
and confirm onto the Pledgee its rights, powers and remedies hereunder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed on their behalf all as of the day and year first
above mentioned.
WITNESS: ANTHONY J. FANT
/s/ Anthony J. Fant
____________________________ _____________________________
WITNESS: JAMES STANLY FANT
/s/ James Stanly Fant
____________________________ _____________________________
WITNESS: KYLA BETH FANT
/s/ Kyla Beth Fant
____________________________ _____________________________
WITNESS: PAXSON COMMUNICATIONS
OF BIRMINGHAM-44, INC.
_____________________________ By: /s/ James B. Bocock
---------------------
Name:________________________
Title: President
------------------
<PAGE> 51
EXHIBIT A
DESCRIPTION OF COMPANY INTERESTS
<PAGE> 52
complied with by Seller hereunder and thereunder. Seller is controlled by
Randolph M. Weigner ("Weigner"), the current licensee of the Station. Seller
agrees to acquire all licenses and authorizations for the Station and all of
the Station's assets to be assigned and transferred to Buyer hereunder, prior
to the Closing Date.
3.2 No Breach or Violation. Neither the execution, delivery and
performance of this Agreement and all other agreements or instruments to be
executed in connection herewith, nor the compliance by Seller with the terms
and provisions hereof and thereof will conflict with or breach any judgment,
order, injunction, decree, regulation or ruling of any court or other
governmental authority to which he is subject or any agreement or contract to
which he is a party or to which he is subject, or constitute a default
thereunder.
3.3 Absence of Conflicting Agreements. The execution, delivery
and the performance of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with, result in
a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iii) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (iv) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies
of the Licenses (including any and all amendments and other modifications
thereto) listed on Schedule 3.4. The Licenses listed on Schedule 3.4 have been
validly issued and the Seller is the authorized legal holder thereof. The FCC
Licenses comprise all of the licenses, permits and other authorizations
required from the FCC for the conduct of the business or operations of the
Station in accordance with applicable laws and in the manner and to the extent
they are now conducted. None of the Licenses listed on Schedule 3.4 is subject
to any restriction or condition which would limit the full operation of the
Station as presently operated. The Licenses listed on Schedule 3.4 are in full
force and effect. The business and operations of the Station are being
conducted in accordance with the Licenses listed on Schedule 3.4. Seller has
no reason to believe that the Licenses issued by the FCC will not be renewed by
the FCC in the ordinary course.
3.5 Title to and Condition of Leasehold Interests. Schedule 3.5
contains a complete and accurate description of all Seller's leasehold
interests necessary to conduct the business and operations of the Station as
now conducted. With respect to each leasehold or subleasehold interest being
conveyed under this Agreement, so long as Seller fulfills its
- 7 -
<PAGE> 1
EXHIBIT 10.125
================================================================================
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
WNAL-TV, INC.
AND
PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC.
FOR
TELEVISION STATION WNAL-TV
GADSDEN, ALABAMA
* * *
AUGUST 7, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. LEASE OF STATION AIR TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Option to Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Licensee Operation of the Station. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Licensee Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Programmer Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Licensee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Additional Licensee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Responsibility for Employees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. STATION PROGRAMMING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Broadcast Station Programming Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Licensee Control of Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Programmer Compliance with Copyright Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Payola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Cooperation on Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.7 Staffing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Trade and Barter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Children's Television Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Programmer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Licensee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Time Brokerage Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Confidential Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Political Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.10 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
- ii -
<PAGE> 4
TIME BROKERAGE AGREEMENT
TIME BROKERAGE AGREEMENT, made this 7th day of August, 1996, by and
between WNAL-TV, INC., an Alabama corporation (the "Licensee") and PAXSON
COMMUNICATIONS OF BIRMINGHAM-44, INC., a Florida corporation (the
"Programmer").
WHEREAS, Licensee is the owner and operator of Television Station
WNAL-TV, Gadsden, Alabama (the "Station") pursuant to authorizations issued by
the Federal Communications Commission ("FCC").
WHEREAS, Programmer is involved in television station ownership and
operation and has entered into an Asset Exchange Agreement with Licensee
relating to the Station;
WHEREAS, the Licensee wishes to retain Programmer to provide
programming for the Station that is in conformity with the Station's policies
and procedures, FCC policies for time brokerage arrangements, and the
provisions hereof.
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station.
WHEREAS, Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and Programmer represent that
they are legally qualified, empowered and able to enter into this Agreement and
that the execution, delivery, and performance hereof shall not constitute a
breach or violation of any material agreement, contract or other obligation to
which either party is subject or by which it is bound.
1.2 Effective Date; Term. The effective date of this Agreement
shall be September 2, 1996 and it shall continue in force from that date until
February 28, 1998 unless otherwise extended or terminated as set forth below.
<PAGE> 5
- 2 -
1.3 Scope. During the term of this Agreement and any renewal
thereof, Licensee shall make available to Programmer broadcast time upon the
Station as set forth in this Agreement. Programmer shall deliver such
programming, at its expense, to the Station's transmitter facilities or other
authorized remote control points as reasonably designated by Licensee.
Programmer shall have the right to produce its programming (including
commercial amounts and related production activities) from the Licensee's
existing studio and production facilities. Subject to Licensee's reasonable
approval, as set forth in this Agreement, Programmer shall provide programming
of Programmer's selection complete with commercial matter, news, public service
announcements and other suitable programming to the Licensee up to one hundred
sixty two hours per week but at least one hundred twenty six hours per week.
Licensee, at its discretion, may program the Station at other times and the
Licensee may designate such additional time as it may require for the broadcast
of programming necessary for the Station to broadcast news, public affairs,
religious and non-entertainment programming as required by the FCC all at such
times to be mutually agreed to by Licensee and Programmer. All program time
not reserved by or designated for Licensee shall be available for use by
Programmer and no other party.
1.4 Option to Renew. Subject to the termination provisions of
Section 6 hereof, this Agreement may be renewed for an additional term as
mutually agreed upon by the Licensee and the Programmer and consistent with FCC
requirements.
1.5 Consideration. As consideration for the air time made
available hereunder Programmer shall make payments to Licensee as set forth in
Attachment I.
1.6 Licensee Operation of the Station. Licensee will have full
authority, power and control over the management and operations of the Station
during the term of this Agreement and during any renewal of such term.
Licensee will bear all responsibility for the Station's compliance with all
applicable provisions of the Communications Act of 1934, as amended, (the
"Act") the rules, regulations and policies of the FCC and all other applicable
laws. Licensee shall be solely responsible for and pay in a timely manner all
customary operating costs of the Station, including but not limited to
maintenance of the studio and transmitting facility and costs of electricity,
except that Licensee shall be entitled to reimbursement pursuant to Attachment
I hereof and Programmer shall be responsible for the costs of its programming
and its personnel as provided in Sections 1.8 and 2.3 hereof. Licensee shall
employ at its expense management level and other employees consisting of a
General Manager who will direct the day-to-day operations of the Station and
such other personnel as required by the FCC, and who will report to and be
accountable to the Licensee. Licensee shall be responsible for the salaries,
taxes, insurance and related costs for all personnel employed by the Station
and shall maintain insurance reasonably
<PAGE> 6
- 3 -
satisfactory to Programmer covering the Station's transmission facilities.
During the term of the Agreement and any renewal hereof, Programmer agrees to
perform, without charge, routine monitoring of the Station's transmitter
performance and tower lighting by remote control, if and when requested by
Licensee.
1.7 Licensee Representations and Warranties. Licensee represents
and warrants as follows:
(a) Licensee owns and holds or will hold all licenses and
other permits and authorizations necessary for the current operation of the
Station, and such licenses, permits and authorizations are and will be in full
force and effect throughout the term of this Agreement. There is not now
pending, or to Licensee's best knowledge, threatened, any action by the FCC or
by any other party to revoke, cancel, suspend, refuse to renew or modify
adversely any of such licenses, permits or authorizations. Licensee is not in
material violation of any statute, ordinance, rule, regulation, policy, order
or decree of any federal, state or local entity, court or authority having
jurisdiction over it or the Station, which would have a material effect upon
the Licensee, the Station or upon Licensee's ability to perform this Agreement.
Licensee shall not take any action or omit to take any action which would have
a material impact upon the Licensee, the Station or upon Licensee's ability to
perform this Agreement. All reports and applications required to be filed with
the FCC or any other governmental body have been, and during the course of the
term of this Agreement or any renewal thereof, will be filed in a timely and
complete manner. During the term of this Agreement and any renewal thereof,
Licensee shall not dispose of, transfer, assign or pledge any of Licensee's
assets and properties without the prior written consent of the Programmer which
consent shall not be unreasonably withheld, if such action would have a
materially adverse affect on Licensee's performance hereunder or the business
and operations of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including salaries and benefits of
its two employees, lease payments, utilities, taxes, programming expenses,
etc., as set forth in Attachment I (except those for which a good faith dispute
has been raised with the vendor or taxing authority), and shall provide
Programmer with a schedule of such timely payments (including invoices) within
twenty (20) days following the end of each month and Programmer shall reimburse
Licensee for those payments pursuant to the procedures set forth in Attachment
I hereof within five (5) days of Programmer's receipt of Licensee's schedule
(including invoices).
1.8 Programmer Responsibility. Programmer shall be solely
responsible for any expenses incurred in the origination and/or delivery of
programming
<PAGE> 7
- 4 -
from any remote location and for any publicity or promotional expenses incurred
by Programmer, including, without limitation, ASCAP and BMI music license fees
for all programming provided by Programmer and shall employ and be responsible
for the salaries, commission, taxes, insurance and all other related expenses
for all personnel involved in the production and broadcast of its Programs
(including but not limited to air personalities, engineering personnel, sales
personnel, traffic personnel, board operators and other programmers and
production staff members. Such payments by Programmer shall be in addition to
any other payments to be made by Programmer under this Agreement.
1.9 Contracts. Programmer will enter into no third-party
contracts, leases or agreements which will bind Licensee in any way except with
Licensee's prior written approval.
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any other provision of
this Agreement, Programmer recognizes that Licensee has certain obligations to
broadcast programming to meet the needs and interests of viewers in Gadsden,
Alabama, the Station's community of license. From time to time the Licensee
may air specific programming on issues of importance to the local community.
Nothing in this Agreement shall abrogate the unrestricted authority of the
Licensee to discharge its obligations to the public and to comply with the Act
and the rules and policies of the FCC.
2.2 Additional Licensee Obligations. Although both parties shall
cooperate in the broadcast of emergency information over the Station, Licensee
shall also retain the right to interrupt Programmer's programming in case of an
emergency or for programming which, in the good faith judgment of Licensee, is
of greater local or national public importance. Licensee shall also coordinate
with Programmer the Station's hourly Station identification and any other
announcements required to be aired by FCC rules. Licensee shall continue to
maintain a main studio, as that term is defined by the FCC, within the
Station's principal community contour, shall maintain its local public
inspection file in accordance with FCC rules, regulations and policies, and
shall prepare and place in such inspection file or files in a timely manner all
material required by Section 73.3526 of the FCC's Rules, including without
limitation the Station's quarterly issues and program lists. Programmer shall,
upon request by Licensee, provide Licensee with such information concerning
Programmer's programs and advertising as is necessary to assist Licensee in the
preparation of such information. Licensee shall also maintain the Station's
logs, receive and respond to telephone
<PAGE> 8
- 5 -
inquiries, and control and oversee any remote control point which may be
established for the Station.
2.3 Responsibility for Employees and Expenses. Programmer shall
employ and be solely responsible for the salaries, commission, taxes, insurance
and related costs for all personnel used in the production of its programming
(including, but not limited to, salespeople, technical staff, traffic
personnel, board operators, programming staff and air personalities). Licensee
will provide and be responsible for the Station's personnel necessary for the
broadcast transmission of its own programs (including, without limitation, the
Station's General Manager and such operational and other personnel as may be
necessary or appropriate), and will be responsible for the salaries, taxes,
benefits, insurance and related costs for all the Licensee's employees used in
the broadcast transmission of its programs and necessary to other aspects of
the Station operation. Whenever on the Station's premises, all personnel shall
be subject to the overall supervision of Licensee's General Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy Statement. Licensee has
adopted and will enforce a Broadcast Station Programming Policy Statement (the
"Policy Statement"), a copy of which appears as Attachment II hereto and which
may be amended in a reasonable manner from time to time by Licensee upon notice
to Programmer. Programmer agrees and covenants to comply in all material
respects with the Policy Statement, to all rules and regulations of the FCC,
and to all changes subsequently made by Licensee or the FCC. Programmer shall
furnish or cause to be furnished the artistic personnel and material for the
programs as provided by this Agreement and all programs shall be prepared and
presented in conformity with the rules, regulations and policies of the FCC and
with the Policy Statement set forth in Attachment II hereto. All advertising
spots and promotional material or announcements shall comply with applicable
federal, state and local regulations and policies and shall be produced in
accordance with quality standards established by Programmer. If Licensee
determines that a program supplied by Programmer is for any reason, within
Licensee's sole discretion, unsatisfactory or unsuitable or contrary to the
public interest, or does not comply with the Policy Statement it may, upon
prior written notice to Programmer (to the extent time permits such notice),
suspend or cancel such program without incurring liability to Programmer.
Licensee will use reasonable efforts to provide such written notice to
Programmer prior to the suspension or cancellation of such program.
3.2 Licensee Control of Programming. Programmer recognizes that
the Licensee has full authority to control the operation of the Station. The
parties agree
<PAGE> 9
- 6 -
that Licensee's authority includes but is not limited to the right to reject or
refuse such portions of the Programmer's programming which Licensee believes to
be unsatisfactory, unsuitable or contrary to the public interest. Programmer
shall have the right to change the programming supplied to Licensee and shall
give Licensee at least twenty-four (24) hours notice of substantial and
material changes in such programming, provided that such programming is
consistent with the Policy Statement and FCC regulations.
3.3 Programmer Compliance with Copyright Act. Programmer
represents and warrants to Licensee that Programmer has full authority to
broadcast its programming on the Station, and that Programmer shall not
broadcast any material in violation of the Copyright Act. All music supplied
by Programmer shall be: (i) licensed by ASCAP, SESAC or BMI; (ii) in the
public domain; or (iii) cleared at the source by Programmer. Licensee will
maintain ASCAP, BMI and SESAC licenses as necessary. The right to use the
programming and to authorize its use in any manner shall be and remain vested
in Programmer.
3.4 Sales. Programmer shall retain all of the Station's network
compensation revenues, any revenues received from any network or program
supplier with respect to affiliation or use of programming by Programmer, and
all revenues from the sale of advertising time within the programming it
provides to the Licensee. Programmer shall be responsible for payment of all
expenses attributable thereto, including, but not limited to, the commissions
due to any national sales representative engaged by it for the purpose of
selling national advertising which is carried during the programming it
provides to Licensee. Unless otherwise agreed between the parties, Licensee
shall retain all revenues from the sale of Station's advertising during the
hours each week in which the Licensee airs its own programming pursuant to
Section 1.3 hereof including revenues from the sale of time by Licensee to the
First Baptist Church of Gadsden.
3.5 Payola. Programmer agrees that it and its employees will not
accept any consideration, compensation, gift or gratuity of any kind
whatsoever, regardless of its value or form, including, but not limited to, a
commission, discount, bonus, material, supplies or other merchandise, services
or labor (collectively "Consideration"), whether or not pursuant to written
contracts or agreements between Programmer and merchants or advertisers, unless
the payer is identified in the program for which Consideration was provided as
having paid for or furnished such Consideration, in accordance with the Act and
FCC requirements. Programmer agrees to annually, or more frequently at the
request of the Licensee, execute and provide Licensee with a Payola Affidavit
from each of its employees involved with the Station substantially in the form
attached hereto as Attachment III.
<PAGE> 10
- 7 -
3.6 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Station serve the needs and
interests of listeners in Gadsden and the surrounding service area and agree to
cooperate to provide such service. Licensee shall, on a regular basis, assess
the issues of concern to residents of Gadsden and the surrounding area and
address those issues in its public service programming. Programmer, in
cooperation with Licensee, will endeavor to ensure that programming responsive
to the needs and interests of the community of license and surrounding area is
broadcast, in compliance with applicable FCC requirements and will assist
Licensee, if requested, in the production of Licensee-provided programming.
Licensee will describe those issues and the programming that is broadcast in
response to those issues and place issues/programs lists in the Station's
public inspection file as required by FCC rules. Further, Licensee may
request, and Programmer shall provide, information concerning such of
Programmer's programs as are responsive to community issues so as to assist
Licensee in the satisfaction of its public service programming obligations.
Programmer shall also provide Licensee upon request such other information
necessary to enable Licensee to prepare records and reports required by the
Commission or other local, state or federal government entities.
3.7 Staffing Requirements. Licensee will be in full compliance
with the main studio staff requirements as specified by the FCC.
3.8 Accounts Receivable. As soon as practicable after the
Effective Date, Licensee shall deliver to Programmer a complete and detailed
list of all the Accounts Receivable of the Station. During the four (4) month
period following the Effective Date (the "Collection Period"), Programmer shall
use its best efforts, as Licensee's agent, to collect the Accounts Receivable
in the usual and ordinary course of business. Programmer shall not be required
to institute any legal proceedings to enforce the collection of any Accounts
Receivable or to refer any of the Accounts Receivable to a collection agency.
Programmer shall not adjust any Accounts Receivable or grant credit without
Licensee's written consent, and any amounts collected pursuant to this Section
during any calendar month shall be paid to Licensee by the 10th of the
following calendar month. Programmer further agrees not to pledge, secure or
otherwise encumber such Accounts Receivable or the proceeds therefrom. On the
second day of January, 1997, Programmer shall turn back the uncollected
Accounts Receivable, together with all files concerning the collection or
attempts to collect the Accounts Receivable, and Programmer's responsibility
and liability for the collection of the Accounts Receivable shall cease.
Unless otherwise specifically designated by the customers, payments received
from customers shall be applied first to obligations such customers incurred up
until midnight on the day prior to the Effective Date and shall not be applied
to any obligations incurred by such customer after
<PAGE> 11
- 8 -
midnight on the Effective Date until the amount of the Accounts Receivable has
been paid in full, unless Accounts Receivable are disputed by the account
debtor, in which event such disputed Account Receivable, to the extent
disputed, and all records pertaining thereto, shall be turned back to Licensee
for resolution within sixty (60) days. Programmer shall incur no liability to
Licensee for any uncollected account unless Programmer shall have engaged in
willful misconduct or gross negligence in the collection of such account.
During the Collection Period, except for disputed accounts, neither Licensee
nor its agents shall make any direct solicitation of the account debtors for
collections purposes. The accounting for the Accounts Receivable shall follow
the same method and practices as now employed by Licensee for the Station,
using where reasonable, the computer now being used by Licensee, with
Licensee's software programs, Licensee's General Manager shall have the right
to review and audit the Accounts Receivable record keeping and collection
process to verify the accuracy of the amount(s) to be paid over the Licensee.
3.9 Trade and Barter. To the extent they are assignable, Licensee
shall on the Effective Date assign all of its trade and bargaining agreements
for the sale of advertising time, other than for cash, with respect to the
Station (the "Assigned Trade and Barter Agreements"). If on the Effective
Date, the aggregate value of the Station's obligations on or after the
Effective Date under the Assigned Trade and Barter Agreements minus the
aggregate value of the goods, services or other items to be received on or
after the Effective Date under the Assigned Trade and Barter Agreements,
exceeds $25,000 then Programmer shall receive a credit against the Monthly Fee
(see Attachment I) for the amount of such excess. The liability of the Station
for unperformed time for purposes of this Section shall be valued according to
the Station's prevailing rates as of the Effective Date. Programmer shall be
entitled to any goods, services, or other items to be received after the
Effective Date, and shall be obligated to include in its programming and to air
the advertising as required under the trade, barter, or similar arrangement.
3.10 Children's Television Advertising. Programmer agrees that it
will not broadcast advertising within programs originally designed for children
aged 12 years and under in excess of the amounts permitted under applicable FCC
rules, and will take all steps necessary to pre-screen children's programming
broadcast during the hours it is providing such programming, to establish that
advertising is not being broadcast in excess of the applicable FCC rules.
SECTION 4. INDEMNIFICATION
4.1 Programmer's Indemnification. Programmer shall indemnify and
hold harmless Licensee from and against any and all claims, losses, costs,
liabilities,
<PAGE> 12
- 9 -
damages, forfeitures and expenses (including reasonable legal fees and other
expenses incidental thereto) of every kind, nature and description
(collectively, "Damages") resulting from (i) Programmer's breach of any
representation, warranty, covenant or agreement contained in this Agreement, or
(ii) any action taken by Programmer or its employees and agents with respect to
the Station, or any failure by Programmer or its employees and agents to take
any action with respect to the Station, including, without limitation, damages
relating to violations of the Act or any rule, regulation or policy of the FCC,
slander, defamation or other claims relating to programming provided by
Programmer and Programmer's broadcast and sale of advertising time on the
Station.
4.2 Licensee's Indemnification. Licensee shall indemnify and hold
harmless Programmer from and against any and all claims, losses, consents,
liabilities, damages, FCC forfeitures and expenses (including reasonable legal
fees and other expenses incidental thereto) of every kind, nature and
description, arising out of Licensee's operations and broadcasts to the extent
permitted by law and any action taken by the Licensee or its employees and
agents with respect to the Station, or any failure by Licensee or its employees
and agents to take any action with respect to the Station.
4.3 Limitation. Neither Licensee nor Programmer shall be entitled
to indemnification pursuant to this section unless such claim for
indemnification is asserted in writing delivered to the other party.
4.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give written notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant no later than
five (5) business days after written notice of such action, suit, or proceeding
was given to Claimant provided that the failure to timely give notice shall not
extinguish the Claimant's right to indemnification unless such failure
materially adversely affects the Indemnifying Party's rights.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
or its authorized representatives the
<PAGE> 13
- 10 -
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree in writing at or prior to the
expiration of the thirty-day period (or any mutually agreed upon extension
thereof) to the validity and amount of such claim, the Indemnifying Party shall
immediately pay to the Claimant the full amount of the claim or such amount as
agreed to by the parties. If the Claimant and the Indemnifying Party do not
agree within the thirty-day period (or any mutually agreed upon extension
thereof), the Claimant may seek appropriate remedy under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided herein shall extend
to the shareholders, directors, officers, employees, representatives and
successors and assigns of any Claimant although for the purpose of the
procedures set forth in this Section 4.4, any indemnification claims by such
parties shall be made by and through the Claimant.
4.5 Time Brokerage Challenge. If this Agreement is challenged at
the FCC, whether or not in connection with the Station's license renewal
application, counsel for the Licensee and counsel for the Programmer shall
jointly defend the Agreement and the parties' performance thereunder throughout
all FCC proceedings at the sole expense of the Programmer. If portions of this
Agreement do not receive the approval of the FCC Staff, then the parties shall
reform the Agreement as necessary to satisfy the FCC Staff's concerns or, at
Programmer's option and expense, seek reversal of the Staff's decision and
approval from the full Commission or a court of law.
<PAGE> 14
- 11 -
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the commencement of any
programming by Programmer under this Agreement, Programmer shall acquaint the
Licensee with the nature and type of the programming to be provided. Licensee
shall be entitled to review at its discretion from time to time on a
confidential basis any of Programmer's programming material it may reasonably
request. Programmer shall promptly provide Licensee with copies of all
correspondence and complaints received from the public (including any telephone
logs of complaints called in), and copies of all program logs and promotional
materials. However, nothing in this section shall entitle Licensee to review
the internal corporate or financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate with
Licensee to assist Licensee in complying with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be
necessary to comply with FCC rules and policies, including the lowest unit
rate, equal opportunities, reasonable access, political file and related
requirements of federal law. Licensee, in consultation with Programmer, shall
develop a statement which discloses its political broadcasting policies to
political candidates, and Programmer shall follow those policies and rates in
the sale of political programming and advertising. In the event that
Programmer fails to satisfy the political broadcasting requirements under the
Act and the rules and regulations of the FCC and such failure inhibits Licensee
in its compliance with the political broadcasting requirements of the FCC, then
to the extent reasonably necessary to assure such compliance, Programmer shall
either provide rebates to political advertisers or release broadcast time
and/or advertising availabilities to Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination.
A. In addition to other remedies available at law or equity,
this Agreement may be terminated as set forth below by either Licensee or
Programmer by written notice to the other if the party seeking to terminate is
not then in material default or material breach hereof, upon the occurrence of
any of the following:
(a) subject to the provisions of Section 7.9,
this Agreement is declared invalid or illegal in whole or substantial part by
an order or decree of an administrative agency or court of competent
jurisdiction and such order or
<PAGE> 15
- 12 -
decree has become final and no longer subject to further administrative or
judicial review;
(b) the other party is in material breach of its
obligations hereunder and has failed to cure such breach within thirty (30)
days of notice from the non-breaching party;
(c) the mutual consent of both parties;
(d) there has been a material change in FCC
rules, policies or precedent that would cause this Agreement to be in violation
thereof and such change is in effect and not the subject of an appeal or
further administrative review and this Agreement cannot be reformed, in a
manner acceptable to Buyer and Seller, to remove and/or eliminate the
violation; or
(e) upon the sale of the Station to Programmer
by Licensee.
B. During any period prior to the effective date of any
termination of this Agreement, Programmer and Licensee agree to cooperate in
good faith to ensure that Station's operations will continue, to the extent
possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to
the extent possible, the resulting disruption of the Station's ongoing
operations.
6.2 Force Majeure. Any failure or impairment of the Station's
facilities or any delay or interruption in the broadcast of programs, or
failure at any time to furnish facilities, in whole or in part, for broadcast,
due to Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, or for power reductions necessitated for
maintenance of the Station or for maintenance of other Station located on the
tower from which the Station will be broadcasting, shall not constitute a
breach of this Agreement and Licensee will not be liable to Programmer for
reimbursement or reduction of the consideration owed to Licensee.
6.3 Other Agreements. During the term of this Agreement or any
renewal hereof, Licensee will not enter into any other agreement with any third
party that would conflict with or result in a material breach of this Agreement
by Licensee.
<PAGE> 16
- 13 -
SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
(b) Neither this Agreement nor any of the rights,
interests or obligations of either party hereunder shall be assigned,
encumbered, hypothecated or otherwise transferred without the prior written
consent of the other party, such consent not to be unreasonably withheld.
7.2 Call Letters. Upon request of Programmer, subject to the
consent of the Licensee, Licensee shall apply to the FCC for authority to
change the call letters of the Station (with the consent of the FCC) to such
call letters that Programmer shall reasonably designate. Licensee must
coordinate with Programmer any such proposed changes to the call letters of the
Station before taking any action to change such letters.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement (including the Attachments
hereto) embodies the entire agreement and understanding of the parties relating
to the operation of the Station. No amendment, waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement will be
effective unless evidenced by an instrument in writing signed by the parties.
7.5 Taxes. Licensee and Programmer shall each pay its own ad
valorem taxes, if any, which may be assessed on such party's respective
personal property for the periods that such items are owned by such party.
Programmer shall pay all taxes, if any, to which the consideration specified in
Section 1.5 herein is subject, provided that Licensee is responsible for
payment of its own income taxes.
7.6 Headings. The headings are for convenience only and will not
control or affect the meaning or construction of the provisions of this
Agreement.
7.7 Governing Law. The obligations of Licensee and Programmer are
subject to applicable federal, state and local law, rules and regulations,
including, but not limited to, the Act and the Rules and Regulations of the
FCC. The construction and performance of the Agreement will be governed by the
laws of the State of New York with the exception of its conflicts of law
provision. Both parties hereby waive their right to a trial by jury. The
parties agree to the exclusive jurisdiction and venue of the state or
<PAGE> 17
- 14 -
federal district court for the district including Jefferson County, Alabama or
the Northern District of Alabama.
7.8 Notices. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, (ii) sent by telecopy (with receipt personally confirmed by
telephone), delivered by personal delivery, or sent by commercial delivery
service or certified mail, return receipt requested, (iii) deemed to have been
given on the date telecopied with receipt confirmed, the date of personal
delivery, or the date set forth in the records of the delivery service or on
the return receipt, and (iv) addressed as follows:
To Programmer: Paxson Communications of
Birmingham-44, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson
To Licensee: WNAL-TV, Inc.
c/o Fant Broadcasting Company
One Independence Plaza, Suite 720
Birmingham, Alabama 35209
Attention: Mr. Anthony Fant
7.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
In the event that the FCC alters or modifies its rules or policies in a fashion
which would raise substantial and material question as to the validity of any
provision of this Agreement, the parties hereto shall negotiate in good faith
to revise any such provision of this Agreement with a view toward assuring
compliance with all then existing FCC rules and policies which may be
applicable, while attempting to preserve, as closely as possible, the intent of
the parties as embodied in the provision of this Agreement which is to be so
modified.
7.10 No Joint Venture. Nothing in this Agreement shall be deemed
to create a joint venture between the Licensee and the Programmer.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have executed this Time
Brokerage Agreement the day and year first above written.
LICENSEE: WNAL-TV, INC.
By: /s/ Anthony J. Fant
-------------------------------------
Name: Anthony J. Fant
Title: President
PROGRAMMER: PAXSON COMMUNICATIONS OF
BIRMINGHAM-44, INC.
By: /s/ James B. Bolock
-------------------------------------
Name: James B. Bolock
Title: President
<PAGE> 19
ATTACHMENT I
Station's Expenses
Programmer shall reimburse Licensee for Licensee's payment of the
Station expenses included in Reimbursable Expenses as defined below. Upon the
Effective Date of this Agreement, Programmer shall pay Licensee an imprest
deposit of $68,500.
The reimbursement payments shall be made delivery of checks to
Licensee at the address specified in Section 7.8 hereof, covering the expenses
included in the following categories.
(1) Lease and Utility Payments
(2) Employee Salaries and Benefits (2 employees)
(3) Property Insurance and Taxes
(4) Business and Regulatory Fees and Licenses
(5) Miscellaneous Station Expenses
(6) Equipment Maintenance, and Repair
(7) Interest payments due under Loan Agreement dated
August 7, 1996 between Programmer and Licensee.
<PAGE> 20
ATTACHMENT II
Broadcast Station Programming Policy Statement
<PAGE> 21
BROADCAST STATION PROGRAMMING POLICY STATEMENT
The following sets forth the policies generally applicable to the
presentation of programming and advertising over Television Station WNAL-TV,
Gadsden, Alabama. All programming and advertising broadcast by the station
must conform to these policies and to the provisions of the Communications Act
of 1934, as amended [the "Act"], and the Rules and Regulations of the Federal
Communications Commission ["FCC"].
Station Identification
The station must broadcast a station identification announcement once an hour
as close to the hour as feasible in a natural break in the programming. The
announcement must include (1) the station's call letters; followed immediately
by (2) the station's city of license.
Broadcast of Telephone Conversations
Before recording a telephone conversation for broadcast or broadcasting such a
conversation simultaneously with its occurrence, any party to the call must be
informed that the call will be broadcast or will be recorded for later
broadcast, and the party's consent to such broadcast must be obtained. This
requirement does not apply to calls initiated by the other party which are made
in a context in which it is customary for the station to broadcast telephone
calls.
Sponsorship Identification
When money, service, or other valuable consideration is either directly or
indirectly paid or promised as part of an arrangement to transmit any
programming, the station at the time of broadcast shall announce (1) that the
matter is sponsored, either whole or in part; and (2) by whom or on whose
behalf the matter is sponsored. Products or services furnished to the station
in consideration for an identification of any person, product, service,
trademark or brand name shall be identified in this manner.
In the case of any political or controversial issue broadcast for which any
material or service is furnished as an inducement for its transmission, an
announcement shall be made at the beginning and conclusion of the broadcast
stating (1) the material or service that has been furnished; and (2) the
person(s) or association(s) on whose behalf the programming is transmitted.
However, if the broadcast is 5 minutes duration or less, the required
announcement need only be made either at its beginning or end.
Prior to any sponsored broadcast involving political matters or controversial
issues, the station shall obtain a list of the chief executive officers,
members of the executive committee or board of directors of the sponsoring
organization and shall place this list in the station's public inspection file.
<PAGE> 22
- 2 -
Payola/Plugola
The station, its personnel, or its programmers shall not accept or agree to
accept from any person any money, service, or other valuable consideration for
the broadcast of any matter unless such fact is disclosed to the station so
that all required station identification announcements can be made. All
persons responsible for station programming must, from time to time, execute
such documents as may be required by station management to confirm their
understanding of and compliance with the FCC's sponsorship identification
requirements.
Rebroadcasts
The station shall not rebroadcast the signal of any other broadcast station
without first obtaining such station's prior written consent to such
rebroadcast.
Fairness
Station shall seek to afford coverage to contrasting viewpoints concerning
controversial issues of public importance.
Personal Attacks
The station shall not air attacks upon the honesty, character, integrity or
like personal qualities of any identified person or group. If such an attack
should nonetheless occur during the presentation of views on a controversial
issue of public importance, those responsible for programming shall submit a
tape or transcript of the broadcast to station management and to the person
attacked within 48 hours, and shall offer the person attacked a reasonable
opportunity to respond.
Political Editorials
Unless specifically authorized by station management, the station shall not air
any editorial which either endorses or opposes a legally qualified candidate
for public office.
Political Broadcasting
All "uses" of the station by legally qualified candidates for elective office
shall be in accordance with the Act and the FCC's Rules and policies, including
without limitation, equal opportunities requirements, reasonable access
requirements, lowest unit charge requirements and similar rules and
regulations.
<PAGE> 23
- 3 -
Obscenity and Indecency
The station shall not broadcast any obscene material. Material is deemed to be
obscene if the average person, applying contemporary community standards in the
local community, would find that the material, taken as a whole, appeals to the
prurient interest; depicts or describes in a patently offensive way sexual
conduct specifically defined by applicable state law; and taken as a whole,
lacks serious literary artistic, political or scientific value.
The station shall not broadcast any indecent material outside of the periods of
time prescribed by the Commission. Material is deemed to be indecent if it
includes language or material that, in context, depicts or describes, in terms
patently offensive as measured by contemporary community standards for the
broadcast medium, sexual or excretory activities or organs.
Billing
No entity which sells advertising for airing on the station shall knowingly
issue any bill, invoice or other document which contains false information
concerning the amount charged or the broadcast of advertising which is the
subject of the bill or invoice. No entity which sells advertising for airing
on the station shall misrepresent the nature or content of aired advertising,
nor the quantity, time of day, or day on which such advertising was broadcast.
Contests
Any contests conducted on the station shall be conducted substantially as
announced or advertised. Advertisements or announcements concerning such
contests shall fully and accurately disclose the contest's material terms. No
contest description shall be false, misleading or deceptive with respect to any
material term.
Hoaxes
The station shall not knowingly broadcast false information concerning a crime
or catastrophe.
Emergency Information
Any emergency information which is broadcast by the station shall be
transmitted both aurally and visually or only visually.
<PAGE> 24
- 4 -
Lottery
The station shall not advertise or broadcast any information concerning any
lottery (except the Alabama State Lottery and any other state lottery). The
station may advertise and provide information about lotteries conducted by
non-profit groups, governmental entities and in certain situations, by
commercial organizations, if and only if there is no state or local restriction
or ban on such advertising or information and the lottery is legal under state
or local law. Any and all lottery advertising must first be approved by
station management.
Advertising
Station shall comply with all federal, state and local laws concerning
advertising, including without limitation, all laws concerning misleading
advertising, and the advertising of alcoholic beverages.
Programming Prohibitions.
Knowing broadcast of the following types of programs and announcements is
prohibited:
False Claims. False or unwarranted claims for any product or service.
Unfair Imitation. Infringements of another advertiser's rights
through plagiarism or unfair imitation of either program idea or copy,
or any other unfair competition.
Commercial Disparagement. Any unfair disparagement of competitors or
competitive goods.
Profanity. Any programs or announcements that are slanderous, obscene,
profane, vulgar, repulsive or offensive, as evaluated by station
management.
Violence. Any programs which are excessively violent.
Unauthenticated Testimonials. Any testimonials which cannot be
authenticated.
<PAGE> 25
ATTACHMENT III
Payola Statement
<PAGE> 26
FORM OF PAYOLA AFFIDAVIT
City of ________________________ )
)
County of ______________________ ) SS:
)
State of _______________________ )
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
________________________, being first duly sworn, deposes and says as follows:
1. He is _____________________ for _____________________.
Position
2. He has acted in the above capacity since ____________.
3. No matter has been broadcast by Station _____ for which service, money
or other valuable consideration has been directly or indirectly paid,
or promised to, or charged, or accepted, by him from any person, which
matter at the time so broadcast has not been announced or otherwise
indicated as paid for or furnished by such person.
4. So far as he is aware, no matter has been broadcast by Station _____
for which service, money, or other valuable consideration has been
directly or indirectly paid, or promised to, or charged, or accepted
by Station ____or by any independent contractor engaged by Station
_____ in furnishing programs, from any person, which matter at the
time so broadcast has not been announced or otherwise indicated as
paid for or furnished by such person.
5. In future, he will not pay, promise to pay, request, or receive any
service, money, or any other valuable consideration, direct or
indirect, from a third party, in exchange for the influencing of, or
the attempt to influence, the preparation of presentation of broadcast
matter on Station _____.
6. Nothing contained herein is intended to, or shall prohibit receipt or
acceptance of anything with the expressed knowledge and approval of my
employer, but henceforth any such approval must be given in writing by
someone expressly authorized to give such approval.
7. He, his spouse and his immediate family do___ do not___ have any
present direct or indirect ownership interest in (other than an
investment in a corporation whose stock is publicly held), serve as an
officer or director of,
<PAGE> 27
- 2 -
whether with or without compensation, or serve as an employee of, any
person, firm or corporation engaged in:
1. The publishing of music;
2. The production, distribution (including wholesale and retail
sales outlets), manufacture or exploitation of music, films,
tapes, recordings or electrical transcriptions of any program
material intended for radio broadcast use;
3. The exploitation, promotion, or management or persons
rendering artistic, production and/or other services in the
entertainment field;
4. The ownership or operation of one or more radio or television
Station;
5. The wholesale or retail sale of records intended for public
purchase;
6. Advertising on Station _____, or any other station owned by
its licensee (excluding nominal stockholdings in publicly
owned companies).
8. The facts and circumstances relating to such interest are none____ as
follows___:
_______________________________________________________________________
_______________________________________________________________________
---------------------------
Affiant
Subscribed and sworn to before me
this day of , 19 .
------ --------------- ---
- ------------------------------------------
Notary Public
My Commission expires: .
-------------------
<PAGE> 28
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest.
3.6 Title to and Condition of Tangible Personal Property. Except
for the equipment listed in Section 2.2(g) hereof, Schedule 3.6 contains
descriptions of all material items of the Personal Property which comprise all
material personal property necessary to conduct the business or operations of
the Station as now conducted. Seller owns and has good title to all Personal
Property, free and clear of any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for Permitted
Liens. Each item of material Personal Property is in operating condition and
repair (ordinary wear and tear excepted), and is available for immediate use in
the business or operations of the Station.
3.7 Contracts. Seller is not a party to any Contracts that will
impose any obligation on or adversely affect Buyer after the Closing Date.
3.8 Reports. All material returns, reports and statements which
the Station is currently required to file with the FCC and any other
governmental agency have been filed. All of such reports, returns and
statements are complete and correct as filed.
3.9 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local or city tax
returns which are required to be filed, and they have paid or caused to be paid
all taxes shown on said returns or on any tax assessment received by them to
the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
deemed by them to be adequate with respect thereto. No events have occurred
which could impose on Buyer any transferee liability for any taxes, penalties,
or interest due or to become due from Seller.
3.10 Claims and Legal Actions. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller, the Assets, or the business or operations of the Station,
nor does Seller know or have reason to be aware of any basis for the same.
3.11 Environmental; Hazardous Materials. There are no claims,
notices, suits, proceedings or investigations pending or, to Seller's
knowledge, threatened, and there are no judgments against Seller or the Station
by or before any governmental authority concerning environmental compliance.
To Seller's knowledge, after due inquiry, (i) no toxic materials, hazardous
waste, or hazardous substances, including any asbestos or asbestos-related
products, any oils, petroleum-derived compounds or pesticides (hereinafter
collectively referred to as the "Hazardous Materials") have been or are located
on or about the Real Property; (ii) the Real Property has not been previously
used for the storage, manufacture or
- 8 -
<PAGE> 1
EXHIBIT 10.126
================================================================================
OPTION AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
SALT LAKE CITY-16, INC.
AND
ROBERTS BROADCASTING OF
SALT LAKE CITY, L.L.C.
* * *
AUGUST 5, 1996
================================================================================
<PAGE> 2
OPTION AGREEMENT
This OPTION AGREEMENT is entered into as of August 5, 1996, by and
among Paxson Communications of Salt Lake City-16, Inc., a Florida corporation
(the "Purchaser"), Roberts Broadcasting Company of Utah, a Delaware corporation
(the "Company"), Roberts Broadcasting of Salt Lake City, L.L.C., a Delaware
limited liability company (the "LLC"), Michael Roberts ("M. Roberts"), and
Steven Roberts ("S. Roberts" and together with M. Roberts, individually, an
"Optionor" and collectively, the "Optionors").
WHEREAS, the Purchaser and the LLC have entered into a Loan
Agreement dated as of April 19, 1996, as amended on the date hereof (the "Loan
Agreement"), pursuant to which the Purchaser has agreed to loan to the LLC up
to $3,703,000 (the "Loan") for the purpose of constructing television station
KZAR(TV), Provo, Utah (the "Station") and for other corporate purposes;
WHEREAS, the Company is currently the permittee of the Station
pursuant to a construction permit and other authorizations (the "Permits")
issued by the Federal Communications Commission (the "FCC");
WHEREAS, the Company has agreed to assign to the LLC the Permits
and any other Assets (as defined below) immediately upon the grant by the FCC
of its consent to the assignment of the Permits to the LLC;
WHEREAS, the Optionors own all of the issued and outstanding
shares of the capital stock of the Company and all of the issued and
outstanding membership interests of the LLC; and
WHEREAS, the Optionors desire to grant to the Purchaser the
exclusive and irrevocable option to purchase (i) up until the Assignment
Closing (as defined below), a 50% interest in all of the issued and outstanding
shares of the capital stock of the Company (the "Company Interest") and (ii)
immediately following the Assignment Closing, a 50% interest in all of the
issued and outstanding membership interest in the LLC (the "LLC Interest").
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth, the parties,
intending to be legally bound, agree as follows:
ARTICLE 1. DEFINITIONS
As used herein, the following terms shall have the meanings set
forth below:
"Agreement" means this Option Agreement, as amended, supplemented,
or modified from time to time.
<PAGE> 3
- 2 -
"Assets" means collectively all the tangible and intangible
assets, real, personal or mixed, owned or held by the Company prior to the
Assignment Closing and the LLC after the Assignment Closing and used or useful
in the business or operations of the Station, including personal property, real
property, contracts, intangibles, and all other information relating to the
Station.
"Assignment Closing" mean the consummation of the assignment of
the Permits and the other Assets from the Company to the LLC following the
grant by the FCC of its consent to such assignment.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 2.3.
"Option" has the meaning set forth in Section 2.1.
"Option Period" has the meaning set forth in Section 2.2.
"Purchase Price" has the meaning set forth in Section 2.4.
All other capitalized terms used in this Agreement shall have the
meanings set forth elsewhere in this Agreement.
ARTICLE 2. OPTION
2.1 Option. In consideration of the payment by Purchaser to
the Optionors of an aggregate amount of Three Hundred Twenty-Five Thousand
Dollars ($325,000), the receipt and sufficiency of which are hereby
acknowledged, the Optionors hereby grant to the Purchaser an irrevocable and
exclusive option (the "Option") to purchase, at the Purchaser's sole
discretion, (i) up until the Assignment Closing, the Company Interest and (ii)
immediately following the Assignment Closing, the LLC Interest, in each case
free and clear of all debts, liens, encumbrances or other liabilities, subject
to the terms and conditions set forth herein.
2.2 Option Period. The Option shall run for a period of
seven (7) years (the "Option Period") commencing on the date of execution of
this Agreement. The Purchaser in its sole discretion may exercise the Option
at any time during this period.
2.3 Option Exercise. The Purchaser, in its sole discretion,
may exercise the Option by delivering a written notice of its election to
exercise the Option to the
<PAGE> 4
- 3 -
Optionors, specifying the date of purchase and if the exercise happens after
the Assignment Closing, agreeing to accept and assume all the terms and
provisions of the Company's Operating Agreement attached hereto as Exhibit 1.
In the event that the acquisition of the Company Interest or the LLC Interest,
as applicable, pursuant to the Option requires the prior consent of the FCC,
then the Closing Date for such acquisition shall be the fifth day following the
date of such FCC consent or, at the option of Purchaser in its sole discretion,
the fifth day following the date on which such FCC consent shall have become a
final order no longer subject to administrative or judicial review,
reconsideration or appeal ("Final Order").
2.4 Purchase Price. The purchase price (the "Purchase
Price") for the Company Interest or the LLC Interest, as applicable, shall be:
One Thousand Dollars ($1,000).
ARTICLE 3. CLOSING
3.1 Closing. Except as otherwise mutually agreed upon by the
Purchaser and the Optionors, the closing of this transaction (the "Closing")
shall take place at 10:00 a.m. on the Closing Date, in the offices of Dow,
Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Washington, D.C., or at
such other place as the parties hereto may agree.
3.2 Delivery of Certificate and Payment of Purchase Price.
At the Closing, the Optionors shall deliver to the Purchaser stock or
membership certificates representing the Company Interest or the LLC Interest,
as applicable, and any assignment documents necessary to vest in the Purchaser
good and marketable title to the Company Interest or the LLC Interest, as
applicable, all in form and substance reasonably satisfactory to the Purchaser,
and the Purchaser shall pay the Purchase Price by wire transfer of immediately
available federal funds to a bank or other financial institution designated by
the Optionors.
ARTICLE 4. COVENANTS
4.1 Authorization of Interests. The LLC, the Company and the
Optionors hereby represent that prior to the date of execution of this
Agreement, they have taken all actions necessary to authorize the Company
Interest and LLC Interest and that such interests are fully paid and
nonassessable and were issued in compliance with all laws. The LLC and the
Optionors further covenant that they shall not amend the Operating Agreement of
the LLC without the prior written consent of the Purchaser, except as required
by this Agreement and until the Assignment Closing, the Company and the
Optionors covenant that they shall not amend the Company's organizational
documents without the prior written consent of the Purchaser.
<PAGE> 5
- 4 -
4.2 Member Transfer Restrictions. From the date hereof until
the earlier of the Closing Date or the end of the Option Period, the
Optionholders shall not transfer (as such term is defined herein) and shall
cause the LLC not to issue any interests in the LLC without the prior written
consent of the Purchaser and from the date hereof until the Assignment Closing,
the Optionors shall not transfer and shall cause the Company not to issue any
interest in the Company without the prior written consent of the Purchaser. For
purposes of this Section 4.2, the term "transfer" shall include any sale,
pledge, gift, assignment or other disposition, including a disposition under
judicial order, legal process, execution, attachment or enforcement of a
pledge, trust or other encumbrance.
4.3 Governmental Licenses and Franchises. The Company and
the LLC shall not, and the Optionors shall not permit the Company or the LLC to
cause or permit, by any act or failure to act, any of the licenses, permits, or
other authorizations issued by the FCC or any other governmental authority in
connection with the Station (the "Governmental Licenses") to expire or to be
surrendered or modified, or take any action that would cause any governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Governmental Licenses, or fail to prosecute with due
diligence any pending applications to any governmental authority in connection
with the construction and operation of the Station, or take any other action
within their control that would result in the Station being in noncompliance
with the requirements of any law, the rules and regulations of any governmental
authority, or the terms of any Governmental License.
4.4 Access to Information. The Optionors, the Company and
the LLC shall give to Purchaser and its counsel, accountants, engineers, and
other authorized representatives access to the Assets, to the officers,
employees, and agents of the Company and the LLC, and to all books and records
relating thereto, and will furnish or cause to be furnished to Purchaser and
its authorized representatives all information relating to the Assets, the
Company, the LLC and the Station that they reasonably request at any time
during the Option Period (including any FCC or Copyright Office filings,
financial reports and operations reports produced with respect to the Station).
4.5 Notification. The Optionors, the LLC and the Company
shall give Purchaser prompt written notice of any material change in any of the
information contained in their representations and warranties in this
Agreement.
4.6 Preservation of Business. The Optionors shall use their
best efforts to cause until the Assignment Closing the Company to preserve the
business and organization of the Company intact and use their best efforts to
keep available to the Company its employees and to preserve its relationships
with suppliers and advertisers and others having business
<PAGE> 6
- 5 -
relations with it, to the end that the business, operations, and prospects of
the Company shall be unimpaired at the earlier to occur of the Assignment
Closing or the Closing Date. Optionors shall use their best efforts to cause
the LLC to preserve the business and organization of the LLC intact and use
their best efforts to keep available to the LLC its employees and to preserve
its relationships with suppliers and advertisers and others having business
relations with it, to the end that the business, operations, and prospects of
the LLC shall be unimpaired at the Closing Date. The ordinary and customary
operating, marketing, promotional, sales, and advertising practices of the
Company until the earlier to occur of the Assignment Closing or the Closing
Date and of the LLC at all times until the Closing Date shall be maintained.
4.7 Confidentiality. Each party hereto shall keep
confidential any information obtained from the other party in connection with
the transactions contemplated by this Agreement, except as and to the extent
required by applicable law and, in the case of Purchaser, as disclosure may be
required in connection with Purchaser's review and financing of this
transaction.
4.8 Cooperation. Purchaser, the Optionors, the LLC and the
Company shall cooperate fully with each other and their respective counsel and
accountants in connection with any actions required to be taken as part of
their obligations under this Agreement, and the parties will use their best
efforts to consummate the transactions contemplated hereby and to fulfill their
obligations hereunder. No party shall take any action that is inconsistent
with its obligations under this Agreement, that would render any of its
representations or warranties herein untrue or incomplete or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
4.9 Representations and Warranties True at Closing. Each
party hereto shall take all actions necessary to make its respective
representations and warranties hereunder true and correct as of the Closing.
4.10 Assignment of Permits. The Optionors shall cause the
Company and the LLC to file, and the Company and the LLC shall file, within
five days of the date of this Agreement an application with the FCC for the
grant by the FCC of its consent to the assignment of the Permit from the
Company to the LLC (the "FCC Consent"). The Optionors, the Company and the LLC
shall use their best efforts to obtain a grant of the application as
expeditiously as practicable and shall oppose any requests for reconsideration
or judicial review of the FCC Consent. As expeditiously as practicable
following the grant of the FCC Consent, the Optionors shall cause the Company
to, and the Company shall, transfer, assign and convey to the LLC the Permit
and any other assets used or useful in
<PAGE> 7
- 6 -
connection with the construction, business or operation of the Station free and
clear of all liens, security interests, pledges, claims, demands and other
encumbrances.
4.11 No Inconsistent Actions. The Optionors shall cause the
LLC during the term of this Agreement and the Company until the Assignment
Closing not to take the following actions and the Optionors shall not take the
following actions: (i) any actions that would be inconsistent with the terms of
this Agreement or that could have an adverse effect or hinder or delay the
rights of the Purchaser hereunder, (ii) any merger, consolidation or
restructuring of the Company or the LLC, (iii) the sale, transfer or
distribution of any of the Assets, including the Permit, by the Company or the
LLC or (iv) any actions that could have an adverse effect on the Station.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE OPTIONORS
The Optionors hereby represent and warrant to the Purchaser that:
5.1 Authority; Binding Obligation. The Optionors have all
requisite capacity, power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. This Agreement constitutes a
legal, valid and binding obligation of the Optionors, enforceable in accordance
with its terms.
5.2 Title. The Optionors are the sole direct owners,
beneficially and of record, of all of the issued and outstanding equity
interest in the Company and the LLC, and have good, valid and marketable title
to such equity interest, free and clear of all liens and other encumbrances
other than encumbrances created by the Loan Agreement. There are no
outstanding agreements, arrangements, commitments or understandings of any kind
affecting or relating to any interests of the Company or the LLC other than as
set forth herein and in the Loan Agreement.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE LLC
6.1 Authority; Binding Obligation. The execution, delivery
and performance of this Agreement and all transactions contemplated hereby have
been and shall be duly and validly authorized by all necessary action on the
part of the Company and the LLC (none of which actions have been modified or
rescinded and all of which actions are in full force and effect). This
Agreement constitutes a legal, valid and binding obligation of the Company and
the LLC, enforceable in accordance with its terms.
<PAGE> 8
- 7 -
6.2 Business of the Company and the LLC. The sole business
of the Company and the LLC is the acquisition and the operation of the Station,
and the Company and the LLC have taken, and at Closing will have taken, no
actions that are not in furtherance of the operation of the Station.
6.3 Organization, Standing, and Authority. The LLC is a
limited liability company duly organized, validly existing, and in good
standing under the laws of the State of Delaware and the Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and each of the LLC and the Company and has the
requisite power and authority to (i) own, lease, and use its assets as now and
hereafter owned, leased and used by it, and (ii) conduct its business as now
and hereafter conducted. The LLC has delivered to the Purchaser true and
complete copies of its Operating Agreement and the Company has delivered to the
Purchaser true and complete copies of its organizational documents.
6.4 Absence of Conflicting Agreements. The execution,
delivery, and performance of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a)
do not require the consent of any third party; (b) will not conflict with any
provision of the organizational documents of the Company or the LLC; (c) will
not conflict with, result in a breach of, or constitute a default under any
applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (d) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, franchise, instrument,
license, or permit to which the Company or the LLC is a party or by which the
Company or the LLC is bound; and (e) will not create any claim, lien, charge,
or encumbrance upon any of the Company Interest, LLC Interest or Assets.
6.5 Consents. No consent, approval, permit, or authorization
of or declaration to or filing with any governmental or regulatory authority or
any other public or private third party is required (a) to render this
Agreement and the transactions contemplated hereby valid and effective or (b)
to permit this Agreement and the transactions contemplated hereby to be
consummated.
6.6 Claims and Legal Actions. There is no claim, legal
action, counterclaim, suit, arbitration, governmental investigation, or other
legal, administrative, or tax proceeding, nor any order, decree, or judgment,
in progress or pending, or, to the best knowledge of the Company or the LLC,
threatened, against or relating to the Company, the LLC, the Station, the
Assets, or the business of the Company or the LLC, nor does the Company or the
LLC know or have reason to be aware of any basis for the same.
<PAGE> 9
- 8 -
6.7 Compliance with Laws. In its operation of the Station
and its ownership and maintenance of the Assets, the Company has complied and
is complying fully with the terms of all Governmental Licenses and with all
laws, rules, regulations, and ordinances, including all trademark, service
mark, trade name, or copyright rules and regulations, all building and zoning
laws, codes, and regulations, all rules and regulations of the Federal Aviation
Administration relating to tower heights, lighting and marking, all
environmental and other land use laws and all laws relating to the employment
of labor. Neither the ownership nor use of any properties nor the conduct of
its business conflicts with the rights of any other person or entity.
6.8 Full Disclosure. No representation or warranty made by
the Company or the LLC in this Agreement or in any certificate, document, or
other instrument furnished or to be furnished by the Company or the LLC
pursuant hereto contains or shall contain any untrue statement of a material
fact, or omits or shall omit to state any material fact required to make any
statement contained herein or therein not misleading. The Company or the LLC
is not aware of any impending or contemplated event or occurrence that would
cause any of the foregoing representations not to be true and complete on the
date of such event or occurrence as if made on that date.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
7.1 Authority; Binding Obligation. The Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida. On the Closing Date, the Purchaser shall be duly
qualified to conduct business in the State of Utah. The Purchaser has all
requisite corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. This Agreement constitutes a
legal, valid and binding obligation of the Purchaser, enforceable in accordance
with its terms.
7.2 Financial and Character Qualifications. The Purchaser
has the financial qualifications to make the payments to the Optionors called
for in this Agreement.
7.3 Absence of Conflicting Agreements and Required Consents.
The execution, deliver, and performance by Purchaser of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (a) do not require the consent of any third party, (b) will
not conflict with the Bylaws or Certificate of Incorporation of Purchaser, (c)
will not conflict with, result in a breach of, or constitute a default under,
any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; and (d)
will not conflict
<PAGE> 10
- 9 -
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license or permit to which
Purchaser is a party or by which Purchaser may be bound, such that Purchaser
could not acquire the Company Interest or the LLC Interest, as applicable.
ARTICLE 8. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION TO
CLOSE
The obligations of the Purchaser to purchase the Company Interest
or the LLC Interest, as applicable, and pay the Purchase Price to the Optionors
are subject to the satisfaction at or prior to Closing of each of the following
conditions:
8.1 Representations, Warranties and Covenants. The
representations and warranties of the Company, the LLC, and the Optionors made
herein and in the Loan Agreement and any documents or agreements executed
pursuant thereto shall have been true and correct when made and shall be true
and correct on the date of Closing as though such representations and
warranties were made on and as of such date, except for changes in the ordinary
course of business or of which Purchaser has received notice; and the Company,
the LLC and the Optionors shall have performed and complied with all covenants
and agreements required to be performed or complied with by them prior to
Closing.
8.2 No Breach or Default. There shall be no existing default
under, or breach by the Company, the LLC or the Optionors of, this Agreement or
the Loan Agreement or any agreement or document entered into pursuant thereto.
8.3 Governmental Licenses. If the Closing occurs prior to
the Assignment Closing, the Company shall be, or if the Closing occurs after
the Assignment Closing, the LLC shall be, the holder of all Governmental
Licenses, and there shall not have been any modification of any of the
Governmental Licenses that could have an adverse effect on the conduct of the
business and operations of the Station. No proceeding shall be pending the
effect of which would be to revoke, cancel, fail to renew, suspend or modify
adversely any of the Governmental Licenses.
8.4 FCC Consent. If required, the FCC shall have consented
to the Purchaser's acquisition of the Company Interest or the LLC Interest, as
applicable, and, at the option of the Purchaser, such consent shall have become
a Final Order.
<PAGE> 11
- 10 -
ARTICLE 9. CONDITIONS PRECEDENT TO THE
OPTIONORS' OBLIGATION TO CLOSE
The obligation of the Optionors to sell the Company Interest or
the LLC Interest, as applicable, to the Purchaser is subject to the
satisfaction at or prior to Closing of each of the following conditions:
9.1 Representations and Warranties. The representations and
warranties of the Purchaser made herein and in the Loan Agreement and any
agreement or document entered into pursuant thereto shall be true and correct
on the date of Closing as though such representations and warranties were made
as of such date; and the Purchaser shall have performed and complied with all
covenants and agreements required to be performed or complied with by the
Purchaser prior to Closing.
9.2 Payment of Purchase Price. The Purchaser shall be ready,
willing and able to deliver the Purchase Price pursuant to Section 3.3.
9.3 FCC Consent. If required, the FCC shall have consented
to the Purchaser's acquisition of the Company Interest or the LLC Interest, as
applicable.
ARTICLE 10. TERMINATION
This Agreement may be terminated by the Purchaser without
liability, if the Purchaser is not then in material default, upon written
notice to the other parties, upon the occurrence of any of the following:
(a) Conditions. If on the Closing Date any of the
conditions precedent to the obligations of the Purchaser set forth in this
Agreement have not been satisfied or waived in writing by the terminating
party;
(b) Judgments. If there shall be in effect on the
Closing Date any judgment, decree, or order that would prevent or make unlawful
the Closing of this Agreement; or
(c) Expiration of Option. The Option has not been
exercised before the end of the Option Period.
<PAGE> 12
- 11 -
ARTICLE 11. INDEMNIFICATION
11.1 Indemnification By the Optionors, the LLC and the
Company. The Optionors, the LLC and the Company shall, jointly and severally,
indemnify, defend and hold harmless the Purchaser and its officers, directors,
agents, employees and shareholders from and against any and all demands,
claims, complaints, actions or causes of action, suits, proceedings,
investigations, arbitrations, assessments, losses, damages, liabilities, costs
and expenses, including, but not limited to, interest, penalties and attorneys'
fees and disbursements (collectively, "Damages"), asserted against, imposed
upon or incurred by the Purchaser, or its officers, directors, agents,
employees or shareholders, directly or indirectly, by reason of or resulting
from (a) any breach of the representations and warranties of the Optionors, the
LLC or the Company contained in or made in connection with this Agreement; or
(b) any noncompliance by the Optionors, the LLC or the Company with any
covenants, agreements or undertakings of the Optionors, the LLC or the Company
contained in or made in connection with this Agreement. In the event of any
indemnification of the Purchaser pursuant to this Section 11.1, the Purchaser
shall be entitled, in addition to its rights and remedies pursuant to this
Agreement, or otherwise at law or in equity, to deduct the amount of such
indemnification from any payment otherwise due to the Optionors in connection
with the transactions contemplated hereunder or hereby.
11.2 Indemnification By the Purchaser. The Purchaser shall
indemnify, defend and hold harmless the Optionors, the LLC and the Company and
its partners, agents and employees from and against any Damages asserted
against, imposed upon or incurred by the Optionors, the LLC or the Company,
directly or indirectly, by reason of or resulting from (a) any breach of the
representations and warranties of the Purchaser contained in or made in
connection with this Agreement; or (b) any noncompliance by the Purchaser with
any covenants, agreements or undertakings of the Purchaser contained in or made
in connection with this Agreement.
11.3 Conditions of Indemnification. The obligations and
liabilities of the parties hereunder with respect to their indemnities pursuant
to this Article 11, resulting from any claim or other assertion of liability by
third parties (collectively, "Claims"), shall be subject to the following terms
and conditions:
(a) The party seeking indemnification (the
"Indemnified Party") must give the other party or parties, as the case may be
(the "Indemnifying Party"), notice of any such Claim promptly after the
Indemnified Party receives notice thereof.
<PAGE> 13
- 12 -
(b) The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
of such claim.
(c) In the event that the Indemnifying Party shall
elect not to undertake such defense, or within a reasonable time after notice
of any such Claim from the Indemnified Party shall fail to defend, the
Indemnified Party (upon further written notice to the Indemnifying Party) shall
have the right to undertake the defense, compromise or settlement of such
Claim, by counsel or other representatives of its own choosing, on behalf of
and for the account and risk of the Indemnifying Party (subject to the right of
the Indemnifying Party to assume defense of such Claim at any time prior to
settlement, compromise or final determination thereof).
(d) Anything in this Article 11 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense, compromise
or settlement of the Claim, (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Claim or consent
to entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party of
a release from all liability in respect of such Claim, and (iii) in the event
that the Indemnifying Party undertakes defense of any Claim, the Indemnified
Party, by counsel or other representative of its own choosing and at its sole
cost and expense, shall have the right to consult with the Indemnifying Party
and its counsel or other representatives concerning such Claim and the
Indemnifying Party and the Indemnified Party and their respective counsel or
other representatives shall cooperate with respect to such claim.
ARTICLE 12. CERTAIN REMEDIES
12.1 Specific Performance. The Optionors, the LLC and the
Company recognize that if either of them refuses to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Purchaser. Purchaser shall therefore be entitled, in addition to
any other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement. If any action is brought
to enforce this Agreement, the Optionors, the LLC and the Company agree to
waive the defense that there is an adequate remedy at law.
12.2 Attorney's Fees. In the event of an alleged default by
any party which results in the filing of a lawsuit for damages, specific
performance, or other remedy, the
<PAGE> 14
- 13 -
prevailing party shall be entitled to reimbursement by the other party of
reasonable legal fees and expenses incurred by the prevailing party.
ARTICLE 13. MISCELLANEOUS
13.1 Additional Actions and Documents. Each of the parties
hereto hereby agrees to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement.
13.2 Expenses. Each party shall pay such party's expenses
incident to this Agreement and the transactions contemplated hereunder,
including all legal and accounting fees and disbursements.
13.3 Notices. All notices, requests, demands or other
communications which may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be (a) hand delivered, (b) mailed by first class, registered or certified
mail, return receipt requested, postage prepaid, or (c) delivered by an
overnight commercial courier service such as Federal Express, in each case
addressed as follows:
(i) If to the Company, the LLC or the Optionors:
Roberts Broadcasting Company of
Salt Lake City, L.L.C.
1408 N. Kings Highway
Suite 300
St. Louis, Missouri 63113
(ii) If to the Purchaser:
Paxson Communications of
Salt Lake City-16, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
13.4 Each party may designate by notice in writing a new
address to which any notice, demand, request or communication may thereafter be
so given, served or sent. Each notice, demand, request or communication which
shall be mailed or delivered in the
<PAGE> 15
- 14 -
manner described above shall be deemed sufficiently given, served, sent and
received for all purposes at such time as it is delivered to the addressee
(with the return receipt, the delivery receipt or the affidavit of messenger
being deemed conclusive evidence of such delivery) or at such time as delivery
is refused by the addressee upon presentation.
13.5 Assignment. This Agreement shall not be assignable by
the Optionors, the LLC or the Company without prior written consent of the
Purchaser. This Agreement shall be assignable by the Purchaser to a
wholly-owned subsidiary of the Purchaser or to any other person who is able to
demonstrate its financial and other qualifications to perform the Purchaser's
obligations hereunder.
13.6 Amendment. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.
13.7 Headings. Article and section headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way define
or affect the meaning, construction or scope of any of the provisions hereof.
13.8 Binding Effect. Subject to any provision hereof
restricting assignment, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
13.9 Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the laws of the
State of Florida (excluding the choice-of-law rules thereof), and exclusive
venue and jurisdiction shall be in the state or federal district court for the
district including Palm Beach, Florida.
13.10 Execution in Counterparts. This Agreement may be
executed in two or more counterparts, none of which need contain the signatures
of all parties hereto and each of which shall be deemed an original.
13.11 Survival of Representations. The representations,
warranties, covenants and agreements made by the parties in this Agreement and
in any document or instrument delivered in connection herewith or the
transaction contemplated hereby, shall survive without limitation except as
imposed by law.
<PAGE> 16
- 15 -
13.12 Attorneys' Fees. If any litigation should arise among
the parties in connection with the transactions contemplated by this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees in
addition to all other damages and remedies.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 17
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement, or has caused this Agreement to be duly executed on its behalf, on
the day and year first hereinabove set forth.
LLC:
WITNESS: ROBERTS BROADCASTING OF SALT LAKE
CITY, L.L.C.
/s/ ?
By: /s/ Michael V. Roberts
- ------------------- ---------------------------
Name: Michael V. Roberts
Title: Member
COMPANY:
WITNESS: ROBERTS BROADCASTING COMPANY OF UTAH
/s/ ?
By: /s/ Michael V. Roberts
- ------------------- ---------------------------
Name: Michael V. Roberts
Title: Secretary
WITNESS: OPTIONORS:
/s/ ? /s/ Michael Roberts
- ------------------- ---------------------------------
MICHAEL ROBERTS
WITNESS:
/s/ ? /s/ Steven Roberts
- ------------------- ---------------------------------
STEVEN ROBERTS
<PAGE> 18
PURCHASER:
WITNESS: PAXSON COMMUNICATIONS OF
SALT LAKE CITY-16, INC.
___________________________ By: /s/ William L. Watson
---------------------
Name: William L. Watson
Title: Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 115,577,127
<SECURITIES> 0
<RECEIVABLES> 20,391,552
<ALLOWANCES> 1,087,349
<INVENTORY> 0
<CURRENT-ASSETS> 138,083,690
<PP&E> 137,731,767
<DEPRECIATION> 27,302,057
<TOTAL-ASSETS> 437,448,651
<CURRENT-LIABILITIES> 14,890,388
<BONDS> 227,507,455
55,473,598
0
<COMMON> 46,977
<OTHER-SE> 135,488,413
<TOTAL-LIABILITY-AND-EQUITY> 437,448,651
<SALES> 69,370,266
<TOTAL-REVENUES> 69,370,266
<CGS> 0
<TOTAL-COSTS> 65,753,077
<OTHER-EXPENSES> 3,475,623
<LOSS-PROVISION> 427,256
<INTEREST-EXPENSE> 15,098,141
<INCOME-PRETAX> (8,005,329)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,005,329)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,005,329)
<EPS-PRIMARY> (.38)
<EPS-DILUTED> (.38)
</TABLE>
