<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 1, 1997
PAXSON COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-13452 59-3212788
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(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.
incorporation)
601 Clearwater Park Road, West Palm Beach, Florida 33401-6233
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (561) 659-4122
----------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On June 23, 1997, the Registrant announced that it entered into a letter of
intent to sell its radio division, including radio stations currently under
acquisition contracts, to Clear Channel Metroplex, Inc. and Clear Channel
Metroplex Licenses, Inc. (collectively "Clear Channel"). On August 25, 1997, the
Registrant entered into Asset Purchase Agreements (as amended, the "Asset
Purchase Agreements") with Clear Channel and L. Paxson, Inc. ("LPI") pursuant to
which the Registrant agreed to sell substantially all of its owned radio
division assets, in five groups, and stations under acquisition contracts for
approximately $629 million. LPI is controlled by Lowell W. Paxson ("Mr.
Paxson"), the Chairman of the Board, Chief Executive Officer and controlling
shareholder of the Registrant. The sale of certain of the assets was structured
as a tax free exchange, potentially permitting the Registrant to defer the gain
on the sale of those assets for tax purposes.
Pursuant to certain of the Asset Purchase Agreements, on October 1, 1997, the
Registrant sold its interests in its radio networks and Orlando, Florida
billboard operations to Clear Channel for $25.7 million and sold its interests
in 23 of its 42 radio stations to LPI for approximately $369.4 million in cash
and a note issued by LPI in the amount of $58.9 million. The note bears interest
at 7% and is payable upon the earlier of (i) eighteen months from the date of
issuance or (ii) the closing of the sale of the LPI owned radio stations to
Clear Channel under the Asset Purchase Agreements. The Registrant will also
receive $6.3 million in interest on the note if the note is outstanding for the
eighteen months or in the form of a prepayment penalty if the note is paid
before maturity. Also, on October 1, 1997, Clear Channel began operating the
Registrant's remaining 19 radio stations and all of LPI's radio stations
pursuant to Time Brokerage or Time Sales Agreements. The Registrant's and LPI's
radio station assets are expected to be sold to Clear Channel by the Registrant
and LPI in the fourth quarter of 1997 pursuant to the Asset Purchase Agreements
upon receipt of regulatory approvals. Additional consideration to be received by
the Registrant upon the sale of the remaining station assets is approximately
$140.2 million.
The Registrant previously contracted to purchase three radio stations in West
Palm Beach, Florida. The Registrant's rights pursuant to these agreements and
obligations to sell these stations to Clear Channel under the Asset Purchase
Agreements were assigned to LWP Radio, Inc. ("LWP"). LWP is also controlled by
Mr. Paxson. LWP purchased the assets of these radio stations for approximately
$28.6 million using funds loaned by Clear Channel for the acquisitions and Clear
Channel began operating LWP's radio stations pursuant to Time Brokerage
Agreements on October 3, 1997. These station assets are expected to be sold to
Clear Channel by LWP at their cost of approximately $28.6 million in the fourth
quarter of 1997 pursuant to the Asset Purchase Agreements upon receipt of
regulatory approvals.
LPI and LWP are not expected to realize any direct financial benefit from these
transactions with the Registrant.
2
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The Registrant has also entered into a letter of intent to sell the remainder of
its billboard assets located in Tampa, Florida to Universal Outdoor, Inc. for
total consideration of approximately $4.5 million. The Registrant expects this
transaction to close during the fourth quarter of 1997.
The Registrant intends to use the sale proceeds of the previously described
transactions primarily to complete announced television station acquisitions.
Item 7. Financial Statements and Exhibits.
(a) not applicable
(b) Pro Forma Financial Information.
Paxson Communications Corporation Unaudited Pro Forma
Consolidated Balance Sheet at June 30, 1997
Paxson Communications Corporation Unaudited Pro Forma
Consolidated Statements of Operations:
For the year ended December 31, 1996
For the year ended December 31, 1995
For the year ended December 31, 1994
Due to the Registrant's decision to sell the entire radio division, the results
of operations for the Registrant's radio segment, net of applicable income tax,
were presented as discontinued operations for the six and three month periods
ended June 30, 1997. Accordingly, the Registrant's Unaudited Pro Forma
Consolidated Statements of Operations for the six and three month periods ended
June 30, 1997 have not been presented with this Form 8-K. See Paxson
Communications Corporation Consolidated Statements of Operations and Note 2,
"Discontinued Operations," in the Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 1997, which was filed with the United States
Securities and Exchange Commission and is incorporated herein by reference.
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(c) Exhibits.
Exhibit Number Description
2.1 Asset Purchase Agreement, dated as of August 25,
1997, by and among Paxson Communications Corporation,
Clear Channel Metroplex, Inc., Clear Channel
Metroplex Licenses, Inc. and Clear Channel
Communications, Inc.
2.2 Asset Purchase Agreement, dated as of August 25,
1997, by and among Paxson Communications Corporation,
L. Paxson, Inc., Clear Channel Metroplex, Inc., Clear
Channel Metroplex Licenses, Inc. and Clear Channel
Communications, Inc.
4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAXSON COMMUNICATIONS
CORPORATION
(Registrant)
By:/S/ Arthur D. Tek
-----------------
Arthur D. Tek,
Vice President, Chief
Financial Officer, Director
Date: October 1, 1997
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PAXSON COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma balance sheet gives effect to: (i) the Asset
Purchase Agreements and the letter of intent to sell the Tampa billboard assets;
and the following post balance sheet events which have been included because in
the opinion of management, they provide meaningful disclosure: (ii) the
repayment of a related party note on July 31, 1997; (iii) the WTVX-TV sale to
Paramount Corporation on July 31, 1997; (iv) the acquisitions of The Travel
Channel and WVVI-TV in July 1997; (v) the conversion of Class A and B common
stock warrants into an aggregate of 1,800,000 shares of Class A common stock in
July and September 1997; and (vi) additional borrowings under the Registrant's
Senior Credit facility as if they had occurred on June 30, 1997. The following
unaudited pro forma statements of operations give effect to the Asset Purchase
Agreements as if such transactions had occurred on January 1, 1994.
The pro forma adjustments are based upon available information and certain
assumptions that the Registrant believes are reasonable under the circumstances,
including the completion of asset sales by the Registrant to Clear Channel, L.
Paxson, Inc. and LWP Radio, Inc. The unaudited pro forma statements of
operations data is not necessarily indicative of the results that would have
occurred if the radio segment sale had occurred on the dates indicated, nor are
they indicative of the Company's future results of operations.
6
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PAXSON COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
At June 30, 1997
-------------------------------------------------------------
Radio Other
Registrant Sale Activity Pro Forma
-------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 35,271 $ 165,894 $ 9,426 (a) $ 215,582
4,500 14,470 (a)
(28,979)(b)
15,000 (e)
Accounts receivable, net 27,770 (18,989) 8,781
Note receivable from related party 10,000 (10,000)(a) --
Prepaid expenses and other curent assets 4,027 (1,233) 2,794
Current program rights 697 (697)(a) --
-------- --------- -------- ----------
Total current assets 77,765 150,172 (780) 227,157
-------- --------- -------- ----------
Property and equipment, net 149,668 (54,309) 3,562 (b) 98,921
Intangible assets, net 319,789 (175,177) 36,437 (b) 181,049
Cash held by qualified intermediary -- 434,606 434,606
Investments in broadcast properties 93,561 (4,988) 88,573
Investment in cable channel -- 56,125 (c) 56,125
Program rights, net 491 (491)(a) --
Other assets, net 59,115 (1,804) (297)(a) 56,019
(995)(b)
-------- --------- -------- ----------
Total assets $700,389 $ 348,500 $ 93,561 $1,142,450
======== ========= ======== ==========
LIABILITIES, REDEEMABLE SECURITIES AND COMMON STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 15,693 $ 20,000 $ 25 (b) $ 35,718
Accrued interest 8,077 8,077
Current portion of program rights payable 813 (613)(a) --
Current portion of long-term debt 651 (183) 468
-------- --------- -------- ----------
Total current liabilities 25,234 19,817 (788) 44,263
-------- --------- -------- ----------
Program rights payable 381 (381)(a) --
Deferred income taxes -- 125,080 125,080
Deferred gain 12,100 12,100
Long-term debt 108,053 (474) 15,000 (e) 122,579
Senior subordinated notes, net 227,800 227,800
Redeemable Junior preferred stock 39,620 39,620
Redeemable Exchangeable preferred stock 157,738 157,738
Class A common stock 43 1 (b) 51
2 (d)
5 (c)
Class B common stock 8 8
Class C common stock -- --
Class A and B common stock warrants 6,863 (4,546)(d) 2,317
Class C common stock warrants -- --
Stock subscription notes receivable (2,813) (2,813)
Additional paid-in capital 212,970 4,544 (d) 283,633
9,999 (b)
56,120 (c)
Deferred option plan compensation (5,148) (5,148)
Retained earnings (accumulated deficit) (82,460) 204,077 13,605 (a) 135,222
Commitments and contingencies -- --
-------- --------- -------- ----------
Total liabilities, redeemable securities
and common stockholder's equity $700,389 $ 348,500 $ 93,561 $1,142,450
======== ========= ======== ==========
</TABLE>
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Paxson Communications Corporation
Notes to Unaudited Pro Forma Consolidated Balance Sheet
June 30, 1997
(in thousands)
The pro forma balance sheet at June 30, 1997 gives effect to the sale of the
radio division and Tampa billboard assets for total net cash consideration of
approximately $605 million. To implement the Registrant's tax free exchange,
consideration of approximately $434.6 million has been placed with a qualified
intermediary, to be used to fund television station acquisitions.
The gain on the sale is based on the book value of certain assets and
liabilities of the radio segment at June 30, 1997. The actual gain from the sale
may vary from the estimated gain at June 30, 1997. The Registrant has structured
the sale of most of the radio stations as a tax free exchange, potentially
permitting the Registrant to defer the gain on the sale of those stations for
tax purposes. Accordingly, the Registrant has provided for a deferred tax
liability on the book/tax difference of assets to be acquired in the tax free
exchange.
The pro forma balance sheet at June 30, 1997 also gives effect to: (i) the
repayment of WPBF Exchange, Inc.'s related party note to the Registrant on July
31, 1997 and the sale of WTVX-TV to the Paramount Corporation on July 31, 1997;
(ii) the acquisitions of The Travel Channel and WVVI-TV in July 1997; (iii) the
conversion of Class A and B common stock warrants into an aggregate of 1,800,000
shares of Class A common stock in July and September 1997; and (iv) additional
borrowings under the Registrant's Senior Credit facility as if such transactions
had taken place on June 30, 1997. These other post balance sheet events have
been included because in the opinion of management, they provide meaningful
disclosure.
(a) To reflect the net proceeds from the repayment of the related party
note of approximately $9.4 million and the WTVX-TV sale of
approximately $14.5 million; the assets and liabilities as if WTVX-TV
had been sold at June 30, 1997; and the gain on the sale of WTVX-TV,
net of tax. The gain on WTVX-TV's sale is based on the book value of
certain assets of WTVX-TV at June 30, 1997. The actual gain from the
sale may vary from the estimated gain at June 30, 1997. The Registrant
expects for the taxable gain on the sale of WTVX-TV to be fully offset
by net operating loss carryforwards generated through June 30, 1997.
The deferred tax assets associated with these net operating loss
carryforwards have been fully reserved for in the past as a result of
prior uncertainty surrounding their recoverability.
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(b) To reflect the use of cash and the issuance of $10 million of the
Registrant's Class A common stock for the acquisition of the assets of
WVVI-TV. Use of cash is net of $1 million escrowed at June 30, 1997.
<TABLE>
<S> <C>
Property and equipment $ 3,562
Intangible assets 36,437
Other assets (995)
Accrued expenses (25)
Class A common stock (1)
Additional paid in capital (9,999)
--------
Cash used for acquisition $(28,979)
========
</TABLE>
(c) To reflect the use of $56.1 million of the Registrant's Class A common
stock for the acquisition of The Travel Channel. Includes $1.1 million
in Class A common stock paid to Communications Equity Associates, Inc.
in connection with their role as financial advisor in the Travel
Channel acquisition.
(d) To reflect the conversion of Class A and B common stock warrants into
an aggregate of 1,800,000 shares of Class A common stock in July and
September 1997.
(e) To reflect additional borrowings under the Registrant's Senior Credit
facility.
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PAXSON COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
At December 31, 1996
----------------------------------------------------
Radio Pro Forma
Registrant Sale Adjustments Pro Forma
----------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Local and national advertising $137,035 $(76,678) $ 60,357
Other 4,252 (2,437) 1,815
Trade and barter 3,211 (3,050) 161
-------- -------- -------- --------
Total revenue 144,498 (82,165) -- 62,333
-------- -------- -------- --------
Operating expenses:
Direct 33,118 (22,508) 10,610
Programming 15,385 (12,777) 2,608
Sales and promotion 11,459 (7,817) 3,642
Technical 8,154 (3,142) 5,012
General and administrative 31,294 (10,479) 20,815
Trade and barter 3,248 (3,138) 110
Time brokerage agreement fees 7,264 (3,696) 3,568
Sports rights fees 3,676 (3,676) --
Option plan compensation 7,857 (881) 6,976
Depreciation and amortization 23,166 (10,279) 12,887
-------- -------- -------- --------
Total operating expenses 144,621 (78,393) -- 66,228
-------- -------- -------- --------
Operating (loss) income (123) (3,772) -- (3,895)
Other income (expense):
Interest expense (31,609) 83 (31,526)
Interest income 6,875 (134) 6,741
Other income, net (1,715) (40) (1,755)
-------- -------- -------- --------
Loss from continuing operations $(26,572) $ (3,863) -- $(30,435)
======== ======== ======== ========
Income (loss) from common share:
Loss from continuing operations $ (0.61) $ (0.69)
======== ========
Weighted average common stock outstanding 43,837 43,837
======== ========
</TABLE>
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PAXSON COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
At December 31, 1995
----------------------------------------------------
Radio Pro Forma
Registrant Sale Adjustments Pro Forma
----------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Local and national advertising $ 79,279 $(50,025) $ 29,254
Other 4,616 (2,275) 2,341
Trade and barter 2,641 (2,452) 189
-------- -------- -------- --------
Total revenue 86,536 (54,752) -- 31,784
-------- -------- -------- --------
Operating expenses:
Direct 21,293 (14,522) 6,771
Programming 10,325 (8,975) 1,350
Sales and promotion 7,888 (5,464) 2,424
Technical 4,498 (2,239) 2,259
General and administrative 20,293 (8,034) 12,259
Trade and barter 2,295 (2,177) 118
Time brokerage agreement fees 911 (12) 899
Sports rights fees 2,806 (2,806) --
Option plan compensation 10,803 (1,751) 9,052
Depreciation and amortization 14,668 (10,020) 4,648
-------- -------- -------- --------
Total operating expenses 95,780 (56,000) -- 39,780
-------- -------- -------- --------
Operating (loss) income (9,244) 1,248 -- (7,996)
Other income (expense):
Interest expense (17,251) 100 (17,151)
Interest income 1,709 (58) 1,651
Other income, net (650) 161 (489)
-------- -------- -------- --------
Loss from continuing operations before benefit
for income taxes (25,436) 1,451 -- (23,985)
Benefit for income taxes 1,280 -- 1,280
-------- -------- -------- --------
Loss from continuing operations $(24,156) $ 1,451 -- $(22,705)
======== ======== ======== ========
Income (loss) from common share:
Loss from continuing operations $ (0.70) $ (0.66)
======== ========
Weighted average common stock outstanding 34,430 34,430
======== ========
</TABLE>
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PAXSON COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
At December 31, 1994
----------------------------------------------------
Radio Pro Forma
Registrant Sale Adjustments Pro Forma
----------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Local and national advertising $ 49,382 $(46,208) $ 3,174
Other 2,646 (1,658) 988
Trade and barter 2,562 (2,497) 65
-------- -------- -------- --------
Total revenue 54,590 (50,363) -- 4,227
-------- -------- -------- --------
Operating expenses:
Direct 15,085 (13,435) 1,650
Programming 7,776 (7,352) 424
Sales and promotion 5,220 (5,000) 220
Technical 1,930 (1,541) 389
General and administrative 10,972 (6,937) 4,035
Trade and barter 2,356 (2,325) 31
Time brokerage agreement fees 504 (32) 472
Sports rights fees 2,380 (2,380) --
Depreciation and amortization 9,855 (8,202) 1,653
-------- -------- -------- --------
Total operating expenses 56,078 (47,204) -- 8,874
-------- -------- -------- --------
Operating (loss) income (1,488) (3,159) -- (4,647)
Other income (expense):
Interest expense (6,216) -- (6,216)
Interest income 335 24 359
Other income, net (5) 88 83
-------- -------- -------- --------
Loss from continuing operations before benefit
for income taxes (7,374) (3,047) -- (10,421)
Benefit for income taxes 1,680 -- 1,680
-------- -------- -------- --------
Loss from continuing operations $ (5,694) $ (3,047) -- $ (8,741)
======== ======== ======== ========
Income (loss) from common share:
Loss from continuing operations $ (0.17) $ (0.26)
======== ========
Weighted average common stock outstanding 33,430 33,430
======== ========
</TABLE>
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS CORPORATION,
CLEAR CHANNEL
METROPLEX, INC.,
CLEAR CHANNEL METROPLEX LICENSES, INC.
AND
CLEAR CHANNEL
COMMUNICATIONS, INC.
DATED AS OF AUGUST 25, 1997
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 1 CERTAIN DEFINITIONS...................................................2
1.1 Terms Defined in Appendix 1........................................2
1.2 Rule of Construction...............................................2
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE..............................2
2.1 Purchase and Sale..................................................2
2.2 Excluded Assets....................................................4
2.3 Group II/III Assets, Group IV Assets and Group V Assets............4
2.4 Purchase Price; Allocation.........................................4
2.5 Prorations and Adjustments.........................................4
2.6 Payment of Purchase Price and Prorations and Adjustments...........7
2.7 Assumption of Liabilities and Obligations..........................8
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER..............................9
3.1 Organization and Authority of Seller...............................9
3.2 Authorization and Binding Obligation...............................9
3.3 Absence of Conflicting Agreements; Consents........................9
3.4 Governmental Licenses.............................................10
3.5 Real Property.....................................................11
3.6 Tangible Personal Property........................................12
3.7 Assumed Contracts.................................................12
3.8 Intangibles.......................................................12
3.9 Financial Statements..............................................13
3.10 Taxes and Tax Returns.............................................13
3.11 Insurance.........................................................13
3.12 Personnel.........................................................13
3.13 Claims and Legal Actions..........................................13
3.14 Compliance with Laws..............................................14
3.15 Conduct of Business in Ordinary Course............................14
3.16 Environmental Matters.............................................14
3.17 Brokers...........................................................16
3.18 Transactions With Affiliates......................................16
3.19 Assets............................................................16
3.20 Employee Benefits.................................................16
3.21 Foreign Person....................................................17
3.22 Like-kind Exchange................................................17
3.23 Disclosure........................................................17
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER..............................17
4.1 Organization, Standing and Authority..............................17
4.2 Authorization and Binding Obligation..............................17
4.3 Absence of Conflicting Agreements and Required Consents...........18
4.4 Buyer Qualifications..............................................18
4.5 Brokers...........................................................18
</TABLE>
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ii
<TABLE>
<S> <C>
4.6 Availability of Funds.............................................19
4.7 Disclosure........................................................19
SECTION 5 CONDUCT OF THE BUSINESSES PRIOR TO EFFECTIVE TIME....................19
5.1 Generally.........................................................19
5.2 Dispositions......................................................21
5.3 Liens.............................................................21
5.4 Access to Information.............................................21
5.5 Financial Information.............................................22
5.6 Notice of Proceedings.............................................22
5.7 Representations and Warranties....................................22
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS.....................................23
6.1 FCC Consent.......................................................23
6.2 HSR Act Filing....................................................23
6.3 Confidentiality...................................................24
6.4 Cooperation.......................................................25
6.5 Access to Books and Records.......................................26
6.6 Employee Matters..................................................26
6.7 Cure..............................................................27
6.8 Environmental Reports.............................................27
6.9 Fees of CEA.......................................................28
6.10 Unwind Transaction................................................28
6.11 Updated Information...............................................29
6.12 Risk of Loss......................................................30
6.13 Miscellaneous.....................................................31
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER.........................32
7.1 Conditions to Obligations of Buyer at the Closing.................32
7.2 Conditions to Obligations of Seller at the Closing................33
SECTION 8 CLOSING AND CLOSING DELIVERIES.......................................34
8.1 Closing...........................................................34
8.2 Deliveries by Seller..............................................35
8.3 Deliveries by Buyer...............................................37
SECTION 9 TERMINATION..........................................................38
9.1 Termination of Agreement..........................................38
9.2 Procedure and Effect of Termination...............................39
9.3 Attorneys' Fees...................................................41
9.4 Specific Performance..............................................41
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.............................41
10.1 Survival.........................................................41
10.2 Indemnification by Seller........................................42
10.3 Indemnification by Buyer and Guarantor...........................45
</TABLE>
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iii
<TABLE>
<S> <C>
10.4 Procedure for Indemnification....................................47
SECTION 11 MISCELLANEOUS.......................................................49
11.1 Fees and Expenses................................................49
11.2 Notices..........................................................49
11.3 Benefit and Binding Effect.......................................50
11.4 Further Assurances...............................................51
11.5 GOVERNING LAW....................................................51
11.6 Entire Agreement.................................................51
11.7 Waiver of Compliance; Consents...................................52
11.8 Counterparts.....................................................52
11.9 Severability.....................................................52
11.10 Cooperation With Respect to Like-Kind Exchange...................52
11.11 Guaranty.........................................................53
</TABLE>
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iv
Appendices
Appendix 1 Definitions
Exhibits
Exhibit 2.3 Group II - V Asset Purchase Agreement
Exhibit 8.2(a) Assignment and Assumption Agreement
Schedules
Schedule 1.1(f) Excluded Contracts
Schedule 1.1(j) Excluded Assets
Schedule 3.1 Qualifications
Schedule 3.3 Absence of Conflicting Agreements; Consents
Schedule 3.4 FCC Licenses
Schedule 3.5 Real Property
Schedule 3.6 Tangible Personal Property
Schedule 3.7 Contracts
Schedule 3.8 Intangibles
Schedule 3.9 Financial Statements
Schedule 3.10 Tax and Tax Returns
Schedule 3.11 Insurance
Schedule 3.12 Personnel
Schedule 3.13 Claims and Legal Actions
Schedule 3.15 Conduct of Business in Ordinary Course
Schedule 3.16 Environmental
Schedule 3.18 Transactions with Affiliates
Schedule 3.20 Employee Benefits
Schedule 4.4 Buyer Qualifications
Schedule 5.1 Certain Changes
Schedule 5.2 Certain Dispositions
<PAGE> 6
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of August 25, 1997, by and
among Paxson Communications Corporation, a Delaware corporation ("PCC" or
"Seller"), Clear Channel Metroplex, Inc., a Nevada corporation ("Metroplex"),
Clear Channel Metroplex Licenses, Inc., a Nevada corporation ("CCL"; Metroplex
and CCL being referred to herein, collectively, as "Buyer"), and Clear Channel
Communications, Inc., a Texas corporation ("Guarantor" or "Clear Channel").
R E C I T A L S:
A. PCC owns certain assets used and useable in the following businesses
(collectively, the "PCC Billboard and Network Businesses"):
i. a commercial billboard outdoor advertising business
in the Orlando, Florida market (the "Orlando Billboard Business" or, the
"Billboard Business");
ii. the Alabama Radio Network (the "Alabama Radio
Network");
iii. the Tennessee Radio Network (the "Tennessee Radio
Network");
iv. the University of Miami Sports radio network (the
"University of Miami Sports Radio Network");
v. the Florida Radio Network (the "Florida Radio
Network");
vi. the University of Florida Sports radio network
(the "University of Florida Sports Radio Network"); and
vii. the Penn State Sports radio network (the "Penn
State Sports Radio Network").
Each of the Billboard Business, the Alabama Radio Network, the
Tennessee Radio Network, the University of Miami Sports Radio Network, the
Florida Radio Network, the University of Florida Sports Radio Network and the
Penn State Sports Radio Network are herein referred to, individually, as a
"Business" and, collectively, as the "Businesses."
B. Seller desires to sell, and Buyer desires to purchase, substantially
all of the Assets of the Businesses, on the terms and conditions hereinafter set
forth.
<PAGE> 7
2
C. If so elected by Seller, subject to the terms and conditions of this
Agreement, Seller may enter into an exchange agreement with an Intermediary
providing that the sale and purchase of some or all of the Assets described
herein be effected in a transaction that will qualify, to the extent
permissible, as a "like-kind exchange" under Section 1031 of the Code.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
SECTION 1 CERTAIN DEFINITIONS
1.1 Terms Defined in Appendix 1. The terms defined in Appendix 1
hereto, as used in this Agreement, have the meanings set forth in Appendix 1.
Section references in the definitions in the Appendix shall be deemed to refer
to this Agreement and the Appendix shall be deemed to be part of this Agreement.
Capitalized terms used, but not defined, herein or in Appendix 1 shall have the
meanings ascribed to such terms in the Group II-V Asset Purchase Agreement.
1.2 Rule of Construction. Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Schedule or
Exhibit is a reference to a Section of this Agreement or a Schedule or Exhibit
hereto, and the terms "hereof," "herein," and other like terms refer to this
Agreement as a whole, including the Schedules and Exhibits to this Agreement,
and not solely to any particular part of this Agreement. The Schedules and
Exhibits shall be deemed to be a part of this Agreement. The descriptive
headings in this Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE
2.1 Purchase and Sale.
(a) Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to transfer, convey, assign and deliver to
Buyer, and Buyer agrees to acquire, all of the following (collectively, the
"Assets"): all the tangible and intangible assets used or useful in connection
with the conduct
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of the business or operations of the Businesses, together with any additions
thereto between the date of this Agreement and the Closing Date in accordance
with the provisions of this Agreement, but excluding assets disposed of between
the date of this Agreement and the Closing Date in accordance with the terms and
provisions of this Agreement and excluding the Excluded Assets, free and clear
of any Liens, except for Permitted Liens, including
(i) the Tangible Personal Property;
(ii) the Real Property;
(iii) the Licenses;
(iv) the Assumed Contracts;
(v) the Intangibles;
(vi) all of Seller's proprietary information,
technical information and data, maps, computer discs and tapes, FCC logs, plans,
diagrams, blueprints and schematics, including filings with the FCC, relating to
the business and operations of the Businesses;
(vii) all books and records of Seller relating
solely to the business or operations of the Businesses, including executed
copies of the Assumed Contracts, other than account books of original entry and
such files and records that are maintained at Seller's corporate offices for tax
and accounting purposes;
(viii) all deposits and prepaid expenses of Seller
with respect to items in respect of the Businesses that are prorated in favor of
Seller pursuant to Section 2.5;
(ix) equipment warranties related to the Assets
to the extent transferable by Seller; and
(x) the Accounts Receivable due to Seller in
respect of the Businesses.
(b) It is understood and agreed that Metroplex shall acquire
the Non-License Assets included in the Assets and CCL shall acquire the License
Assets included in the Assets. Notwithstanding the foregoing, however, it is
understood and agreed that each of Metroplex and CCL shall be jointly and
severally liable to perform the obligations of Buyer provided for in this
Agreement and in the documents contemplated hereby.
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2.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the Assets shall not include the Excluded Assets. Notwithstanding
anything to the contrary set forth in this Agreement, no representations,
warranties or covenants or agreements of any nature whatsoever are made by
Seller to Buyer with respect to the Excluded Assets.
2.3 Group II/III Assets, Group IV Assets and Group V Assets.
Simultaneously with the execution and delivery of this Agreement, PCC, Buyer and
L. Paxson, Inc., a Delaware corporation ("LPI"), are entering into an Asset
Purchase Agreement (the "Group II-V Asset Purchase Agreement"), in the form
attached hereto as Exhibit 2.3, and dated as of the date hereof, pursuant to
which PCC (and, in certain cases, LPI) will sell to Buyer, and Buyer will
purchase from Seller (and, in certain cases, LPI), the Group II/III Assets, the
Group IV Assets and the Group V Assets, on the terms and subject to the
conditions set forth therein.
2.4 Purchase Price; Allocation.
(a) Purchase Price. The purchase price for the Assets shall be
Twenty-Five Million Six Hundred Eighty-Eight Thousand Dollars ($25,688,000) (the
"Estimated Purchase Price"), which sum shall be subject to upward or downward
adjustment, as the case may be, pursuant to Section 2.5(a) below (the Estimated
Purchase Price, as so adjusted, the "Purchase Price").
(b) Appraisal and Allocation. Seller shall retain, at Seller's
expense, Bond & Pecaro, or another recognized independent appraisal firm
selected by Seller and reasonably acceptable to Buyer, to appraise the
Businesses and the Assets. Seller shall provide Buyer with copies of the
appraisals for the Assets within 90 days after the Closing Date. Seller and
Buyer agree to allocate the Purchase Price among the Businesses and the Assets
for all purposes, including financial accounting and tax purposes, including
Section 1060 of the Code and Temporary Treasury Regulations Section 1.1060-IT,
in accordance with such appraisals. Buyer and Seller agree to file with their
respective federal income tax returns initial asset acquisition statements on
Internal Revenue Service Form 8594 required by Temporary Treasury Regulation
Section 1.1060-IT, all in accordance with, and accurately reflecting, such
appraisals and allocations.
2.5 Prorations and Adjustments.
(a) Prorations and Adjustments. The Purchase Price shall be
determined by increasing or decreasing the Estimated Purchase Price as required
to effectuate the proration of revenues and expenses as provided for herein. All
revenues and all expenses arising from the operation of any of the
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Businesses, including billboard rental, 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,
including program license payments, sales and service charges, taxes (except for
taxes arising from the transfer of the Assets under this Agreement), employee
compensation, including wages, salaries, accrued vacation, sick leave, personal
days, and commissions for each employee of Seller who becomes an employee of
Buyer, license fees and similar prepaid and deferred items, shall be prorated
between Buyer and Seller in accordance with GAAP and to effect the principle
that Seller shall receive all revenues (other than Accounts Receivable) and
shall be responsible for all expenses, costs and liabilities (including, without
limitation, performance bonuses payable to the Assumed Employees allocable to
the period prior to the Effective Time based on the pro rata accrual of such
bonuses over the calendar year on a straight line basis) allocable to the
operations of the Businesses for the period prior to the Effective Time, and
Buyer shall receive all revenues and shall be responsible for all expenses,
costs and liabilities (including, without limitation, performance bonuses
payable to the Assumed Employees allocable to the period after the Effective
Time based on the pro rata accrual of such bonuses over the calendar year on a
straight line basis) allocable to the operations of the Businesses for the
period after the Effective Time in accordance with GAAP, subject to the
following:
(1) There shall be no adjustment for, and Seller
shall remain solely liable with respect to, any Excluded Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.7.
(2) No adjustment or proration shall be made in favor
of Seller for the amount, if any, by which the value of the goods or services to
be received by all the Stations (as defined in the Group II-V Asset Purchase
Agreement) and the Businesses in the aggregate under their trade or barter
agreements as of the Effective Time exceeds the value of any advertising time
remaining to be run by such Stations and the Businesses as of the Effective
Time. For purposes of this Agreement, including, without limitation, this
Section 2.5 and Section 5.1, the liability for performance obligations relating
to advertising time under any trade or barter agreements shall be valued
according to the applicable prevailing rates as of the Effective Time, and
goods, services or other items being received shall be valued in accordance with
GAAP as of the Effective Time.
(3) An adjustment or proration shall be made in favor
of Buyer to the extent, if any, that (a) the value of the goods or services to
be received by all the Stations and the
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Businesses under their trade or barter agreements as of the Effective Time in
the aggregate is more than $150,000 less than the value of any advertising time
remaining to be run by such Stations and the Businesses thereunder as of the
Effective Time (a "Negative Balance") and (b) Buyer has not expressly consented
to the trade or barter agreements giving rise to such Negative Balance (and the
allocation of such Negative Balance among the Businesses, Group II/III Stations,
Group IV Stations and Group V Stations shall be made by Seller in its sole
discretion).
(b) Manner of Determining Prorations and Adjustments. The
Purchase Price, taking into account the adjustments and prorations pursuant to
Section 2.5(a), will be determined in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not
later than five (5) Business Days before the Closing Date a preliminary
settlement statement which shall set forth Seller's good faith estimate of the
adjustments or prorations under Section 2.5(a) (a "Preliminary Settlement
Statement"). The Preliminary Settlement Statement (A) shall contain all
information reasonably necessary to determine the adjustments or prorations
under Section 2.5(a), including appropriate supporting documentation and such
other information as may be reasonably requested by Buyer, to the extent such
adjustments or prorations can be determined or estimated as of the date of the
Preliminary Settlement Statement and (B) shall be certified by an officer (but
without personal liability to such officer) on behalf of Seller to be true and
complete to Seller's knowledge. The "Preliminary Purchase Price" shall be
determined by adjusting the Estimated Purchase Price for the adjustments and
prorations contained in the Preliminary Settlement Statement.
(2) Not later than ninety days after the Closing
Date, Buyer shall deliver to Seller a statement setting forth Buyer's
determination of any changes to the adjustments and prorations made at the
Closing. Buyer's statement (A) shall contain all information reasonably
necessary to determine the adjustments and prorations to the Purchase Price
under Section 2.5(a), including appropriate supporting documentation, and such
other information as may be reasonably requested by Seller, and (B) shall be
certified by an officer (but without personal liability to such officer) on
behalf of Buyer to be true and complete to Buyer's knowledge. Seller (and its
authorized representatives) shall have the right to visit the Businesses during
normal business hours to verify and review such documentation upon providing
reasonable notice to Buyer (such access not to unreasonably interfere with the
business or operations of the Businesses). If Seller disputes the adjustments
and prorations determined by Buyer, it shall deliver
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to Buyer, within fifteen (15) days after its receipt of Buyer's statement, a
statement setting forth its determination of such adjustments and prorations. If
Seller notifies Buyer of its acceptance of Buyer's statement, or if Seller fails
to deliver its statement within the fifteen-day period specified in the
preceding sentence, Buyer's determination of such adjustments and prorations
shall be conclusive and binding on the parties as of the last day of such
fifteen-day period.
(3) Buyer and Seller shall use good faith efforts to
resolve any dispute involving the determination of the adjustments and
prorations in connection with the Closing. If the parties are unable to resolve
any dispute within fifteen days following the delivery to Buyer of the statement
described in the penultimate sentence of Section 2.5(b)(2), Buyer and Seller
shall jointly designate an independent certified public accountant, who shall be
knowledgeable and experienced in the operation of businesses similar to the
Businesses, to resolve such dispute. If the parties are unable to agree on the
designation of an independent certified public accountant, the selection of the
accountant to resolve the dispute shall be submitted to arbitration in
accordance with 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 the accountant, and, if necessary, for
arbitration to select such accountant, shall be split equally between the
parties.
2.6 Payment of Purchase Price and Prorations and Adjustments.
(a) At the Closing, Buyer shall pay or cause to be paid to
Seller (or to such party or parties designated by Seller in writing) the
Preliminary Purchase Price for the Assets by federal wire transfer of same-day
funds in accordance with wire instructions delivered to Buyer by Seller at least
three (3) Business Days prior to such Closing.
(b) Payments to Reflect Prorations and Adjustments.
(1) If the Purchase Price for the Assets as finally
determined pursuant to Section 2.5(b)(2) exceeds the Preliminary Purchase Price,
Buyer shall pay to Seller (or to such party or parties designated by Seller in
writing), by federal wire transfer of same-day funds within five Business Days
after the date on which the Purchase Price is determined pursuant to Section
2.5(b)(2), the difference between such Purchase Price and the Preliminary
Purchase Price.
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(2) If the Purchase Price, as finally determined
pursuant to Section 2.5(b)(2), is less than the Preliminary Purchase Price,
Seller shall pay to Buyer, by federal wire transfer of same-day funds within
five Business Days after the date on which such Purchase Price is determined
pursuant to Section 2.5(b)(2), the difference between the Preliminary Purchase
Price and such Purchase Price.
(3) If any dispute arises over the amount to be
refunded or paid pursuant to this Section 2.6(b), such refund or payment shall
nevertheless be made to the extent any amount is not in dispute.
(c) It is understood and agreed that Buyer shall not be
permitted to offset any amounts in respect of the Assets against any amounts in
respect of the Group II/III Assets, the Group IV Assets or the Group V Assets
that are the subject of the Group II-V Asset Purchase Agreement. Notwithstanding
the foregoing, nothing contained in this Section 2.6(c) shall in any manner
impair any right, remedy or recourse Buyer may have against PCC for fraud in
connection with this Agreement.
2.7 Assumption of Liabilities and Obligations.
(a) Buyer shall assume and undertake to pay, discharge and
perform the Assumed Liabilities as of the Closing Date.
(b) Buyer shall not be required to assume any of the
following: (i) any obligations or liabilities under any Excluded Contract, (ii)
any obligations or liabilities under the Assumed Contracts relating to the
period prior to the Effective Time, except insofar as a proration or adjustment
therefor is made in favor of Buyer under Section 2.5(a), (iii) any liability or
obligation arising out of any litigation, proceeding or claim by any person or
entity relating to the business or operations of any of the Businesses or any of
the Assets with respect to any events or circumstances that occur or exist prior
to the Effective Time relating to such Businesses or the Assets, (iv) any credit
agreements, note purchase agreements, indentures or other financing arrangements
(other than any Assumed Contracts) of Seller and (v) any other obligation or
liability of Seller that is not an Assumed Liability (including, without
limitation, any increase in the Assumed Liabilities in violation of Section
2.7(c)). Buyer shall perform all obligations arising out of the Assets
(including the Assumed Contracts and the Licenses) relating to the period on or
after the Effective Time. Seller shall retain all liabilities of Seller not
assumed by Buyer.
(c) Notwithstanding anything in this Agreement to the
contrary, the parties acknowledge that after the Effective Time,
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Seller shall not, by any voluntary act or omission, increase the Assumed
Liabilities other than as permitted in accordance with the terms and provisions
of this Agreement, without the prior written consent of Buyer.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows as of the date
hereof and as of the Effective Time:
3.1 Organization and Authority of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation and, in respect of the operations of the Businesses, is
qualified to conduct business in the States set forth in Schedule 3.1. Except as
set forth in Schedule 3.1, Seller has the requisite corporate power and
authority to own and operate the Assets owned and operated by it, to carry on
the business of the Businesses now being conducted by it, and to execute,
deliver and perform this Agreement according to its terms.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller have been duly and validly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, and the performance of the transactions contemplated
herein, by Seller will not require any consent, approval, authorization or other
action by, or filing with or notification to, any Person or governmental
authority, except as follows: (a) applicable requirements under the HSR Act; (b)
consents to the assignment of the FCC Licenses to Buyer by the FCC; (c) filings
with respect to real estate, sales and other transfer taxes; (d) consent of
third parties to assignment of certain of the Assumed Contracts as specified in
Schedule 3.3; and (e) other immaterial consents, approvals, authorizations,
actions, filings or notifications. Subject to obtaining the Consents, the
execution, delivery and performance by Seller of this Agreement (with or without
the giving of notice, the lapse of time, or both): (a) do not conflict with any
provision of the Certificate of Incorporation and Bylaws of
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Seller; (b) do not conflict with, result in a breach of, or constitute a default
in any material respect under, any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation or ruling of any court or governmental
authority applicable to Seller; (c) do not result in the breach in any material
respect of any contract or agreement to which Seller is a party or by which
Seller may be bound; and (d) will not create any Lien upon any of the Assets,
except for Permitted Liens.
3.4 Governmental Licenses.
(a) Schedule 3.4 identifies all FCC Licenses used in the
operation of the Businesses (collectively, "FCC Licenses") and the date on which
each expires. Except as described on Schedule 3.4, each FCC License is in full
force and effect, and Seller is the authorized legal holder thereof. Except as
set forth in Schedule 3.4, the conduct of the business and operations of each
earth station facility authorized by an FCC License (an "Earth Station") is in
accordance with the terms and conditions of the FCC Licenses for such Earth
Station and the Communications Act and the rules, regulations and policies of
the FCC in all material respects. Schedule 3.4 also sets forth a true and
complete list of all applications filed with respect to any Earth Station that
are pending at the FCC, true and complete copies of which have been delivered by
Seller to Buyer. All material reports and filings required to be filed with the
FCC by Seller with respect to each Earth Station have been timely filed in all
material respects. All such reports and filings are accurate and complete in all
material respects. Seller has received no notice or communication, formal or
informal, indicating that the FCC is considering revoking, suspending,
canceling, rescinding or terminating any FCC License. Seller's operation of the
Earth Stations complies in all material respects with the requirements set forth
in the "Radio Frequency Protection Guides" recommended in "America National
Standard Safety Levels with Respect to Human Exposure to Radio Frequency
Electromagnetic Fields 300 KHz to 100 GHz" (ANSI C95.1-1982), issued by the
American National Standards Institute.
(b) The FCC Licenses listed on Schedule 3.4 constitute all of
the material licenses and authorizations required under the Communications Act
or the current rules, regulations and policies of the FCC for the business and
operation of each Earth Station as currently operated. Except as set forth in
Schedule 3.13, and except for investigations or other proceedings affecting the
broadcasting industry generally, Seller has no knowledge of any pending or
threatened investigation by or before the FCC, or any order to show cause,
notice of violation, notice of apparent liability, notice of forfeiture or
material complaint by, before or with the FCC with respect to any Earth Station.
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Seller knows of no fact relating to Seller's ownership or operation of the Earth
Stations that would, under existing law and the existing rules, regulations,
policies and procedures of the FCC, cause the FCC to fail to approve in a timely
fashion any of the applications for the FCC Consents.
3.5 Real Property. Schedule 3.5 contains an accurate description as of
the date of this Agreement of all Real Property. Except as described in Schedule
3.5, Seller has good and marketable fee simple title to all fee estates included
in the Real Property and good title to Seller's interests in all other Real
Property, in each case free and clear of all Liens, except for Permitted Liens.
Schedule 3.5 lists all leases and subleases pursuant to which any of the Real
Property included in the Assets is leased by Seller. Seller has a valid
leasehold interest in all such Real Property. Subject to obtaining the consents
to assignment set forth on Schedule 3.3, such leases and subleases are
assignable to Buyer. Seller is in compliance with such leases and subleases in
all material respects and is not in breach or default in any material respect
thereunder, and, to the knowledge of Seller, each other party to any such lease
or sublease is not in default thereunder in any material respect. The Real
Property includes sufficient access to the Businesses' facilities to conduct the
operations of the Businesses in the manner in which they are currently operated
in all material respects without the need to obtain other access rights. Seller
has delivered to Buyer a true and complete copy of any and all title insurance
policies, surveys, plans and maps relating to the Real Property in the custody,
possession or control of Seller. None of the Real Property is subject to any
lease, sublease, license or other agreement pursuant to which Seller grants to
any other person any right to the use, occupancy or enjoyment of the Real
Property or any part thereof, except as set forth on Schedule 3.5. There is no
pending or, to the knowledge of Seller, threatened condemnation or similar
proceeding affecting any Real Property. All buildings, billboards and other
improvements included within the Real Property are in working order and repair.
The use of the Real Property as currently used is in compliance with applicable
zoning and land-use laws in all material respects. As of the date hereof, Seller
has received no actual written notice of any increase in property taxes
affecting any item of Real Property to an amount in excess of 110% of the
current taxes on such Real Property or of any other imposition which is not
materially consistent with existing impositions, the effect of which is, if
required, reflected on Seller's financial statements; provided that the
foregoing shall not relate to increases resulting from improvements to the
property made by Seller.
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3.6 Tangible Personal Property. Schedule 3.6 lists as of the date
hereof all material items of Tangible Personal Property included in the Assets
owned by Seller. Except as described in Schedule 3.6, Seller owns and has good
title to the Tangible Personal Property listed thereon and none of the Tangible
Personal Property included in the Assets is subject to any Liens, except for
Permitted Liens. The Tangible Personal Property listed on Schedule 3.6 owned by
Seller necessary for the normal operations of the Businesses as presently
conducted is in satisfactory operating condition and adequate repair (given the
age of such property and the use to which such property is put and ordinary wear
and tear excepted).
3.7 Assumed Contracts. Schedules 3.5, 3.7 and 3.12 include a complete
list as of the date of this Agreement of all Assumed Contracts except (a)
contracts with advertisers for production or the sale of advertising time on any
Network for cash that may be canceled by Seller on not more than ninety days'
notice without penalty, (b) trade or barter advertising agreements entered into
in the ordinary course of business, (c) oral employment contracts terminable at
will, (d) miscellaneous service contracts terminable on not more than thirty
(30) days' notice, and (e) other Contracts entered into in the ordinary course
of business, not involving liabilities exceeding Two Thousand Five Hundred
Dollars($2,500) per contract per year and One Hundred Twenty-Five Thousand
Dollars ($125,000) in the aggregate for all such other contracts for the
Stations and the Businesses per year. Seller has delivered or made available to
Buyer true and complete copies of all written Assumed Contracts and accurate
descriptions of all oral Assumed Contracts listed in Schedules 3.5, 3.7 and
3.12. The Assumed Contracts are in full force and effect in all material
respects. Subject to obtaining the consents to assignment set forth on Schedule
3.3, the Assumed Contracts are assignable to Buyer. Seller is in compliance with
the Assumed Contracts in all material respects and is not in breach or default
in any material respect thereunder, and, to the knowledge of Seller, each other
party to the Assumed Contracts is in compliance therewith in all material
respects and not in default in any material respect thereunder.
3.8 Intangibles. Schedule 3.8 is a complete list as of the date of this
Agreement of all material Intangibles (exclusive of Licenses listed on Schedule
3.4). Seller has provided or made available to Buyer copies of all documents
establishing or evidencing the Intangibles listed in Schedule 3.8. Other than
with respect to matters generally affecting the industry of the Businesses and
not particular to Seller, as of the date hereof, except as set forth in Schedule
3.8, Seller has not received any notice or demand alleging that Seller is
infringing upon any trademarks, trade names, service marks, service names,
copyrights
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or similar intellectual property rights owned by any other Person.
3.9 Financial Statements. Seller has furnished Buyer with true and
complete copies of the financial statements with respect to the Businesses
described in Schedule 3.9 (the "Financial Statements"). Except as set forth in
Schedule 3.9, the Financial Statements have been prepared in accordance with
GAAP, and present fairly in all material respects the financial condition of
Seller with respect to the Businesses included in such Financial Statements as
at their respective dates and the results of operations for the periods then
ended.
3.10 Taxes and Tax Returns. Except as set forth in Schedule 3.10 and
except where the failure to file, pay or accrue any Taxes does not result in a
Lien on the Assets or in the imposition of transferee or other liability on
Buyer for the payment of Taxes, (a) all Tax Returns have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and (b) all Taxes shown on such Tax Returns have been
properly accrued or paid to the extent such Taxes have become due.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller with respect to the Businesses. All policies of
insurance listed in Schedule 3.11 are in full force and effect.
3.12 Personnel. Schedule 3.12 contains a true and complete list as of
the date of this Agreement of all employees of Seller engaged in the business
and operations of the Businesses (collectively, the "Employees"), and a
description of the compensation arrangements affecting them. Except as described
in Schedule 3.12, as of the date hereof, Seller has no written or oral contracts
of employment with any employee of the Businesses, other than oral employment
contracts which are terminable at will. Except as set forth in Schedule 3.12,
Seller is not a party to or subject to any collective bargaining agreements with
respect to the Businesses, and, no labor union or other collective bargaining
unit represents or, to Seller's knowledge, claims to represent any of the
employees of the Businesses. Seller has made available to Buyer copies of all
employee handbooks and employee rules and regulations, if any.
3.13 Claims and Legal Actions. Except as disclosed in Schedule 3.13 and
for any FCC rulemaking proceedings generally affecting the industry of the
Businesses and not particular to Seller, as of the date hereof, there is no
material claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any material order,
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decree, or judgment, in progress or pending, or to the knowledge of Seller
threatened, against Seller, the Assets, or the business or operations of any of
the Businesses.
3.14 Compliance with Laws. Seller is in compliance in all material
respects with all federal, state and local laws, rules, regulations and
ordinances applicable or relating to the ownership and operation of the Assets
and the Businesses, including, without limitation, laws, rules, regulations and
ordinances related to the operations and content of billboards.
3.15 Conduct of Business in Ordinary Course. Except as set forth in
Schedule 3.15, from January 1, 1997 through the date of this Agreement, Seller
has conducted the business and operations of the Businesses in the ordinary
course consistent with past practice in all material respects and has not (a)
made any material increase in compensation payable or to become payable to any
of the employees of the Businesses, except as disclosed in Schedule 3.12, or any
material change in personnel policies, insurance benefits or other compensation
arrangements affecting the employees of the Businesses, (b) made any sale,
assignment, lease or other transfer of any of Seller's properties, other than
obsolete assets no longer usable in the operations of the Businesses, or other
assets sold or disposed of in the normal course of business with suitable
replacements being obtained therefor, (c) incurred material loss of, or material
injury to, any of the Assets as a result of any fire, explosion, windstorm,
earthquake, labor trouble, riot, accident, act of God or public authority or
armed forces or other casualty or waived any rights of substantial value related
to the Assets, (d) made any material change in any method of accounting or
accounting practice, or (e) transferred to any Affiliate of Seller any right,
property or interest which is necessary or useful in the operations of the
Businesses.
3.16 Environmental Matters.
(a) For purposes of this Agreement, the following definitions
shall be applicable:
(i) "Applicable Environmental Law" shall mean
any and all laws, statutes, regulations, and judicial interpretations thereof of
the United States, of any state in which the Assets, or any portion thereof, or
the business of the Businesses, are located, and of any other government or
quasi-government authority having jurisdiction, that relate to the prevention,
abatement and elimination of pollution and/or protection of the environment,
including, but not limited to, the federal Comprehensive Environmental Response,
Compensation, and Liability Act, the Resource Conservation and Recovery Act, the
Federal
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Water Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Hazardous Materials Transportation Act, the
Refuse Act and the Emergency Planning and Community Right to Know Act (each as
amended on or before the Effective Time), together with all state statutes
serving any similar or related purposes, as in effect on or before the Effective
Time.
(ii) "Hazardous Substance" means any substance
designated pursuant to Section 307(a) and 311(b)(2)(A) of the federal Clean
Water Act, 33 USCA Sections 1317(a), 1321(b)(2)(A), Section 112 of the federal
Clean Air Act, 42 USCA Section 3412, Section 3001 of the federal Resource
Conversation and Recovery Act, 42 USCA Section 6921, Section 7 of the federal
Toxic Substances Control Act, 15 USCA Section 2606, or Section 101(14) and
Section 102 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 USCA Sections 9601(14), 9602, as amended by the Superfund
Amendments and Reorganization Act of 1986.
(b) Seller has supplied to Buyer a true and complete copy of
the report for each environmental inspection or audit that Seller has caused to
be conducted with respect to any of the Real Property as listed in Schedule
3.16.
(c) (i) Except as set forth in Schedule 3.16, the
improvements owned or used by Seller on the owned Real Property and on the
leased Real Property do not contain any asbestos that would constitute a
violation of or noncompliance with any Applicable Environmental Law in any
material respect. The equipment owned or used by Seller on the owned Real
Property or any leased Real Property does not contain any polychlorinated
biphenyls that would constitute a violation of or noncompliance with any
Applicable Environmental Law in any material respect.
(ii) No contamination caused by Seller exists on
or under the owned Real Property or on or under any leased Real Property, or
affecting any natural resources therein that would constitute a violation of or
noncompliance with any Applicable Environmental Law in any material respect.
(iii) No contamination has been caused by Seller
on or under the owned Real Property or leased Real Property, or affecting any
natural resources therein that would constitute a violation of or noncompliance
with any Applicable Environmental Law in any material respect.
(iv) The Assets and the Businesses are in
compliance with all Applicable Environmental Laws in all material respects.
<PAGE> 21
16
(v) Seller has no material liability relating to
its ownership and operation of any of the Businesses as a result of
noncompliance with any Applicable Environmental Law. No charge, complaint,
action, suit, proceeding, hearing, investigation, claim, demand, or notice has
been filed or, to Seller's knowledge, commenced against Seller in connection
with its ownership or operation of any of the Businesses alleging any failure to
comply in any material respect with any Applicable Environmental Law.
3.17 Brokers. Except for the fees payable to Communications Equity
Associates ("CEA"), which fees shall be paid by Buyer and Seller as set forth in
Section 6.11 of the Group II-V Asset Purchase Agreement, neither Seller nor any
Person acting on its behalf has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transactions contemplated by
this Agreement.
3.18 Transactions With Affiliates. Except as set forth in Schedule
3.18, Seller is not, and since January 1, 1997, has not been a party, directly
or indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of the Businesses, whether for the
purchase, lease or sale of property, for the rendition of services or otherwise,
with any Affiliate of Seller, or any officer, director, employee, proprietor,
partner or shareholder of Seller, and no such Person has any interest in or
right to any of the Assets. The terms and conditions of the transactions
involving Seller and any Affiliate of Seller which are identified in Schedule
3.18 are described briefly therein.
3.19 Assets. Except for the Excluded Assets, the Assets include all of
the assets or property used in the conduct of the business of the Businesses as
currently operated.
3.20 Employee Benefits. Schedule 3.20 lists all Employee Plans covering
employees of the Businesses and, except as set forth in Schedule 3.20, copies of
such Employee Plans together with any trusts related thereto have previously
been made available to Buyer. All Employee Plans are in compliance with their
terms and with the applicable provisions of ERISA and the Code in all material
respects. No Employee Plan is, or within the past six years has been, subject to
Title IV of ERISA or Section 412 of the Code. Seller has at no time contributed
to, or been obligated to contribute to, any multi-employer plan (as defined in
ERISA Section 3(37)). There exists no action, suit or claim (other than routine
claims for benefits) with respect to any Employee Plan pending, or to the
knowledge of Seller threatened, against any Employee Plan which is reasonably
expected to result in any material liability to Seller. Except
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17
as required by ERISA Sections 601 et seq. and Code Section 4980B, Seller does
not sponsor, maintain or contribute to any Employee Plan which provides medical
coverage to retirees or other former employees of Seller. Seller has not engaged
in any transaction described in ERISA Section 4069 within the past five years.
There is no governmental audit or examination of any Employee Plan. All
contributions and premium payments required by law have been made in all
material respects to each Employee Plan. Each Employee Plan that is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter that it is so qualified.
3.21 Foreign Person. Seller is not a "foreign person" or a "foreign
corporation" as such terms are defined in Section 1445 of the Code.
3.22 Like-kind Exchange. If Seller elects under Section 11.10 to effect
the transfer of some or all of the Assets to Buyer in a manner qualifying as
part of a like-kind exchange of property by Seller within the meaning of Section
1031 of the Code, Buyer's tax basis in the Assets shall not be less than the tax
basis Buyer would have had in the Assets had Seller not made such an election
under Section 11.10.
3.23 Disclosure. None of the representations or warranties of Seller in
this Agreement contains or will contain any untrue or misleading statement of
material fact or omits or will omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows as of the date
hereof and as of the Effective Time:
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
Nevada and, at the Effective Time, will be duly qualified to conduct business in
each jurisdiction in which such qualification is necessary for Buyer to own the
Assets and operate the Businesses. Buyer has the requisite corporate power and
authority to (a) execute, deliver and perform this Agreement according to its
terms, and (b) own the Assets.
4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly and validly authorized by all
necessary corporate action on the
<PAGE> 23
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part of Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes legal, valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their respective terms, except as the enforceability of
this Agreement may be affected by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Except for
the applicable requirements of the HSR Act and subject to the receipt of the FCC
Consent, the execution, delivery and performance by Buyer of this Agreement
(with or without the giving of notice, the lapse of time, or both): (a) do not
require the consent of any third party; (b) do not conflict with the articles of
incorporation or bylaws of Buyer; (c) do not conflict in any material respect
with, result in a material breach of, or constitute a material default under,
any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental authority applicable to Buyer
or any material contract or agreement to which Buyer is a party or by which
Buyer may be bound.
4.4 Buyer Qualifications. To Buyer's knowledge, except as set forth on
Schedule 4.4, Buyer is legally, financially and otherwise qualified to be the
licensee of, acquire, own and operate the Earth Stations under the
Communications Act, 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 (a) disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of any of the Earth
Stations or (b) cause the FCC to fail to approve in a timely fashion any of the
applications for the FCC Consents.
4.5 Brokers. Except for the fees payable to CEA, which fees shall be
paid by Buyer and Seller as set forth in Section 6.11 of the Group II-V Asset
Purchase Agreement, neither Buyer nor any Person acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
<PAGE> 24
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4.6 Availability of Funds. Buyer will have available sufficient funds
to enable it to consummate the transactions contemplated hereby.
4.7 Disclosure. None of the representations or warranties of Buyer in
this Agreement contains or will contain any untrue or misleading statement of
material fact or omits or will omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading.
SECTION 5 CONDUCT OF THE BUSINESSES PRIOR TO EFFECTIVE TIME
The following covenants of Seller in Sections 5.1 through 5.7 below
shall apply between the date of this Agreement and the Effective Time with
respect to the Businesses and the Assets. Notwithstanding anything to the
contrary contained in this Agreement, Buyer and Seller acknowledge and agree
that nothing in this Agreement shall apply to, or in any way restrict or limit,
any of the businesses or operations of the Seller, other than the Businesses.
5.1 Generally. Seller shall conduct the Businesses in all material
respects in the ordinary course of business (except where such conduct would
conflict with the following covenants or with Seller's other obligations under
this Agreement). With respect to the Businesses, Seller shall maintain and
repair the facilities and equipment, maintain inventory of supplies, parts and
other materials and keep books of account, records and files, in each case in
the ordinary course of business consistent with past practice to the extent
commercially reasonable. Seller shall continue to operate the Businesses in
compliance in all material respects with all applicable laws and the FCC
Licenses, to the extent applicable.
Prior to the Effective Time, except as provided in Schedule 5.1 or as
otherwise permitted by any provision of this Section 5.1, Seller with respect to
the Businesses, will not, without the prior written consent of Buyer, which
consent shall not be unreasonably withheld:
(a) apply to the FCC for any construction permit that would
restrict any of the Earth Station's present operations, or make any material
change in any of the buildings, leasehold improvements or fixtures of the
Businesses that is not in the ordinary course of business;
(b) enter into, renew, amend or modify any contract, lease,
license or other agreement, provided that (1) Seller shall
<PAGE> 25
20
be permitted to enter into, renew, amend or modify any contract, lease, license
or other agreement in the ordinary course of business not involving liabilities
exceeding Two Thousand Five Hundred Dollars ($2,500) per contract, lease,
license or agreement per year and One Hundred Twenty-Five Thousand Dollars
($125,000) per year in the aggregate for the Businesses and the Stations (as
defined in the Group II-V Asset Purchase Agreement) for all such contracts,
leases, licenses and other agreements, (2) Seller shall be permitted to enter
into trade or barter agreements, in the ordinary course of business, consistent
with past practice, which do not result in a Negative Balance and as set forth
in Section 5.1(f) below, and (3) nothing contained herein shall be deemed to
prevent Seller from entering into any contract, lease, license or other
agreement not falling within the scope of the foregoing clauses of this Section
5.1(b), and, except as provided in clauses (1), (2) and (3) above and Schedule
5.1, any such contract, lease, license or other agreement entered into outside
the ordinary course of business shall not constitute an Assumed Contract, unless
expressly agreed to by Buyer;
(c) make any assignment for the benefit of creditors or take
any action in contemplation of, or which would constitute the basis for, the
institution of insolvency proceedings of any character, including, without
limitation, bankruptcy, receivership, reorganization, composition or arrangement
with creditors, voluntary or involuntary;
(d) except as required by law or the Assumed Contracts, (i)
hire any employee except in the ordinary course of business, (ii) enter into,
renew, amend or modify any contract of employment, collective bargaining
agreement or other labor contract or (iii) permit any increases in the
compensation of any of the employees of the Businesses, except for employees
without employment contracts, salary increases each January 1 and July 1
consistent with past practices not exceeding 5% per year; provided, however,
that Seller may pay bonuses to any of its employees so long as such bonuses do
not create any liability or obligation upon Buyer.
(e) discount or otherwise reduce any accounts receivable of
the Businesses, or collect any such receivables other than in the ordinary
course of business consistent with past practice; and
(f) enter into any trade or barter agreements which would
cause the value of goods or services to be received by all the Stations (as
defined in the Group II-V Asset Purchase Agreement) and the Businesses in the
aggregate to result in a Negative Balance; provided, however, that to the extent
that Seller determines in good faith that it is necessary to enter
<PAGE> 26
21
into such a trade or barter agreement, Seller may do so, but if such agreement
has not been consented to by Buyer and causes a Negative Balance, Buyer shall
have no obligation in respect of such agreement to the extent of the obligations
thereunder which cause such Negative Balance.
Whenever, pursuant to subsections (a) through (f) above, Seller shall request
the consent of Buyer, the request shall be sent in writing via facsimile to
Buyer in accordance with Section 11.2. With respect to requests for consent
under Section 5.1, unless Buyer gives or denies its written consent by the end
of the fifth Business Day after the request for consent is transmitted to Buyer,
Buyer's written consent will be presumed to have been given as of that deadline.
Prior to the Effective Time, Seller shall maintain in full force and effect the
insurance policies of Seller listed on Schedule 3.11 with respect to the
Businesses or policies providing similar coverage, and make and prosecute all
claims thereunder in respect of any loss or damage to any of the Assets in
accordance with past practice, and apply the proceeds thereof to the repair or
replacement of any such Assets.
5.2 Dispositions. Prior to the Effective Time, except as contemplated
by this Agreement or set forth on Schedule 5.2, Seller shall not sell, assign,
lease or otherwise transfer or dispose of any of the Assets, except any Assets
no longer used in the business or operations of the Businesses or any Assets
that are replaced with replacement property of equivalent value, kind and use.
Notwithstanding the foregoing or anything else contained in this Agreement, the
expiration by their terms of Contracts prior to the Effective Time shall not be
deemed to be a violation of this Agreement.
5.3 Liens. Prior to the Effective Time, Seller shall not create, assume
or permit to exist any Liens upon the Assets, except for Permitted Liens and
Liens that will be discharged prior to or on the Closing Date.
5.4 Access to Information. Prior to the Effective Time, Seller shall
give Buyer and its employees and other authorized representatives during normal
business hours and with reasonable prior notice, access to the Assets and to all
other books, records and documents of Seller relating to the Businesses (such
access not to unreasonably interfere with the business or operations of the
Businesses), including, without limitation, for purposes of conducting any
surveys and/or environmental assessments of Real Property included in the Assets
in accordance with Section 6.8, and will furnish or cause to be furnished to
Buyer or its authorized representatives, upon reasonable notice, all information
with respect to the business and operation of the Businesses that Buyer may
reasonably request; provided that the
<PAGE> 27
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foregoing do not unreasonably disrupt the business of Seller. As soon as
practicable after the date hereof, and in any case prior to August 29, 1997,
Seller shall provide Buyer with a list of the names under which any of the
Businesses have been conducted by Seller or any Affiliate of Seller.
5.5 Financial Information. For all periods prior to the Effective Time,
Seller shall furnish Buyer within twenty (20) days after the end of each
calendar month after the date hereof an unaudited statement of income and
expense for such month of the Businesses owned by Seller and such other
financial information prepared by Seller relating to the operations of the
Businesses, as Buyer may reasonably request (the "Monthly Financial
Information"). The Monthly Financial Information shall be prepared in accordance
with GAAP (except for the absence of footnotes and year-end adjustments
otherwise required by GAAP) and shall present fairly in all material respects
the financial condition of Seller with respect to the Businesses included in
such Monthly Financial Information as at the date thereof and for the periods
then ended, as appropriate.
5.6 Notice of Proceedings. Prior to the Effective Time, Seller and
Buyer will promptly notify the other in writing upon becoming aware of any order
or decree or any complaint praying for an order or decree restraining or
enjoining the consummation of this Agreement, or the transactions contemplated
hereunder, or upon receiving any notice from any court or government authority
of its intention to institute an investigation into, or institute a suit or
proceeding to restrain or enjoin the consummation of this Agreement or the
transactions contemplated hereunder, or to nullify or render ineffective this
Agreement, or such transactions if consummated. Seller and Buyer will each use
commercially reasonable efforts to contest, defend and resolve any such suit,
proceeding or injunction brought against it, and to cause any temporary
restraining order or preliminary injunction against such consummation to be
lifted, promptly, so as to permit the consummation of the transactions
contemplated hereby and thereby.
5.7 Representations and Warranties. Prior to the Effective Time, Seller
shall give Buyer detailed written notice promptly upon becoming aware (i) that
any representation or warranty of Seller under this Agreement, or under any
document, instrument or agreement made or delivered by Seller in connection
herewith, is untrue or misleading in any material respect and (ii) of any event
or condition that would render any such representation or warranty untrue or
misleading in any material respect if such event or condition were known to
Seller when such representation or warranty was made.
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SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) Buyer and Seller acknowledge that Buyer and Seller have
prepared and, on July 16, 1997, filed with the FCC appropriate applications for
the FCC Consent. Buyer and PCC shall prosecute the applications for the FCC
Consent with commercially reasonable diligence and otherwise use their
commercially reasonable efforts to obtain the grants of the applications as
expeditiously as practicable. Each party will promptly provide to the other
party a copy of any pleading, order or other document served on it relating to
such applications. Buyer and Seller shall oppose any petitions to deny or other
objections filed with respect to any application for FCC Consent and any
requests for reconsideration or review of any FCC Consent.
(b) If the FCC shall not have granted the FCC Consent by the
date that is five Business Days prior to the date otherwise scheduled for the
Closing pursuant to Section 8.1(a), Buyer and Seller shall cooperate and file
with the FCC such requests and supporting information as may be required to
obtain as expeditiously as possible special temporary authority to permit Buyer
to operate the Earth Stations pending receipt of the FCC Consent.
(c) If the Closing shall not have occurred for any reason
within the original effective period of any 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 effective period of the FCC Consent shall limit the exercise by either party
of its right to terminate the Agreement under Section 9.
6.2 HSR Act Filing. Seller and Buyer acknowledge that they have filed,
or caused to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") certain filings that are required in connection with
the transactions contemplated hereby under the HSR Act and submitted to the
other party, prior to the filing thereof, their respective HSR Act filings and
discussed with the other any comments the reviewing party may have had. Seller
and Buyer agree to file, or cause to be filed, on or before August 26, 1997 with
the DOJ and FTC all additional filings that are required in connection with the
transactions contemplated hereby under the HSR Act, including reflecting that
the assets used and usable in connection with the Tampa Billboard Business and
the Sports Teams Business are to be excluded from the Assets, and will submit to
the other party,
<PAGE> 29
24
prior to the filing thereof, their respective HSR Act filing and discuss with
the other any comments the reviewing party may have. Buyer and Seller hereby
agree that Buyer will not buy from Seller, and Seller will not sell to Buyer,
the assets relating to the Tampa Billboard Business and the Sports Teams
Business. Buyer and Seller agree to (a) cooperate with each other in connection
with all such HSR Act filings, which cooperation shall include furnishing the
other with any information or documents that may be reasonably required in
connection with such filings; (b) promptly file, after any request by the FTC or
DOJ and after appropriate negotiation with the FTC or DOJ of the scope of such
request, any information or documents requested by the FTC or DOJ; and (c)
furnish each other with any correspondence from or to, and notify each other of
any other communications with, the FTC or DOJ that 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.
6.3 Confidentiality.
(a) Each party will not use or disclose to third parties
(except as may be necessary for the consummation of the transactions
contemplated hereby, or as required by law, including, without limitation, in
connection with legal proceedings relating to this Agreement, documents
delivered in connection herewith or pursuant hereto and the transactions
contemplated hereby and thereby, or otherwise pursuant to subpoena or the
request of a governmental authority, and then only with prior notice to the
other parties hereto, including delivery of a copy of the subpoena or request,
if applicable) this Agreement or any information (including, without limitation,
financial information and information regarding program contracts and revenue)
received from the other parties hereto or their agents in the course of
investigating, negotiating and performing the transactions contemplated by this
Agreement and the documents delivered in connection herewith or pursuant hereto;
provided, however, that each party may disclose such information to such party's
officers, directors, employees, lenders, advisors, attorneys and accountants who
need to know such information in connection with the consummation of the
transactions contemplated by this Agreement and the documents delivered in
connection herewith or pursuant hereto and who are informed by such party of the
confidential nature of such information. Nothing shall be deemed to be
confidential information that: (1) is already in such party's possession,
provided that such information is not known by such party to be subject to
another confidentiality agreement with or other obligation of secrecy to the
other party hereto or another party, or (2) becomes generally available to the
public other than as a result of a disclosure by such party or such party's
officers, directors, employees, lenders,
<PAGE> 30
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advisors, attorneys or accountants, or (3) becomes available to such party on a
non-confidential basis from a source other than the other party hereto or its
advisors, provided that such source is not known by such party to be bound by a
confidentiality agreement with, or other obligation of secrecy to, the other
party hereto or another party, or (4) is developed independently by either party
without resort to the confidential information of the other party. In the event
this Agreement is terminated and the purchase and sale contemplated hereby
abandoned, Buyer will return to Seller all copies of documents, work papers and
other written confidential material obtained by Buyer in connection with the
transactions contemplated hereby. If this Agreement is terminated, each party
will return to the other party all information (including all documents, work
papers and other written confidential material) obtained by such party from any
other party in connection with the transactions contemplated by this Agreement.
(b) No party shall publish any press release or make any other
public announcement concerning this Agreement or the transactions contemplated
hereby without the prior written consent of each other party, which shall not be
withheld unreasonably; provided, however, that nothing contained in this
Agreement shall prevent any party, after notification to each other party, from
taking any action required by law or from making any filings with governmental
authorities that, in its judgment, may be required or advisable in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
6.4 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 or desirable to the implementation and consummation of this Agreement,
including, without limitation, obtaining any Consents and Estoppel Certificates
and otherwise use their commercially reasonable efforts to consummate the
transactions contemplated hereby and to fulfill their obligations under this
Agreement. Seller and Buyer shall each diligently make, and cooperate with the
other in making, all commercially reasonable efforts to obtain or cause to be
obtained prior to the Closing Date all Consents and Estoppel Certificates. Buyer
agrees to use all commercially reasonable efforts to assist Seller in obtaining
such Consents and Estoppel Certificates, and to take all commercially reasonable
actions necessary or desirable to obtain such Consents and Estoppel
Certificates, including, without limitation, executing such assumption
instruments and other
<PAGE> 31
26
documents as may be reasonably required in connection with obtaining the
Consents and Estoppel Certificates.
6.5 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 such Assets. Buyer shall
provide Seller access and the right to copy for a period of two (2) years after
the Closing Date any books and records relating to the Assets, that are included
in such Assets. Neither Buyer nor Seller will destroy any such books and records
during such two (2) year period. After the expiration of such two (2) year
period, Buyer and Seller shall use commercially reasonable efforts to give the
other parties to this Agreement reasonable prior written notice of their
intention to destroy any such books and records prior to destroying any such
books and records.
6.6 Employee Matters. The following provisions shall be for the
exclusive benefit of the parties to this Agreement and not for the benefit of
any other person or entity:
(a) (i) Effective as of the Effective Time, Buyer (A) shall
assume the Assumed Contracts listed on Schedule 3.12 and (B) may, in its sole
discretion, but shall not be obligated to, offer employment to any of Seller's
other employees with respect to the Businesses (collectively, those employees to
whom Buyer elects to offer employment and who are employed pursuant to Assumed
Contracts, the "Assumed Employees"). Except as otherwise provided in any Assumed
Contract, Buyer may offer employment to the Assumed Employees on any terms and
conditions that are determined by Buyer in its sole discretion, including with
respect to the provision of retirement and health care benefits. Buyer shall
assume the contracts of employment of the Assumed Employees and, notwithstanding
anything in the foregoing to the contrary, to the extent such employment
contracts assumed hereunder provide for terms and conditions in addition to
those referenced in the preceding sentence, Buyer shall assume the terms
thereof.
(b) To the extent the Purchase Price is reduced pursuant to
Section 2.5 in respect thereof, Buyer shall grant Assumed Employees credit for
and shall assume and be responsible for any liabilities with respect to sick
leave and personal days accrued but unused by any Assumed Employees as of the
Effective Time, and, to the extent of such Purchase Price reduction, Buyer shall
grant Assumed Employees credit for and shall assume and be responsible for any
liabilities with respect to any accrued but unused vacation for such employees
as of the Effective Time. No such credit shall exceed the number of sick,
personal and vacation days listed on Schedule 3.12.
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(c) Buyer agrees that Seller may inform its employees that
Buyer has agreed that the Assumed Employees will be offered employment as
provided in this Section 6.6; provided, however, that Buyer shall have the right
to approve any written statement to be made by Seller in connection therewith.
(d) Seller shall comply with the provisions of the Worker
Adjustment and Retraining and Notification Act (the "WARN Act") and similar laws
and regulations, if applicable, and shall be solely responsible for any and all
liabilities, penalties, fines, or other sanctions that may be assessed or
otherwise due under such applicable laws and regulations on account of the
dismissal or termination of any of the employees of any of the Businesses by
Seller prior to the Effective Time. Buyer shall employ at least that proportion
of the employees of each Station as shall be necessary to prevent a "mass
layoff" or a "plant closing" as such terms are defined in the WARN Act and Buyer
shall comply with all applicable laws and regulations applicable in connection
with Buyer's exercise of discretion in offering employment to employees of
Seller, including, without limitation, those relating to employment
discrimination.
(e) Within a reasonable period of time after the Effective
Time, Seller shall transfer from the Paxson Communications 401(k) Profit Sharing
Plan (the "Seller 401(k) Plan") to the 401(k) Plan maintained by the Guarantor
or its Affiliates for the benefit of the employees of the Buyer ("Buyer's 401(k)
Plan") an amount, in cash, equal to the aggregate account balances held in the
Seller 401(k) Plan as of the date of transfer with respect to all Assumed
Employees hired by Buyer as of the Effective Time, provided, however, that Buyer
shall have no obligation under this Section 6.6(e) if Buyer reasonably believes
such transfer shall cause Buyer's 401(k) Plan to not be qualified under the
Code. Prior to the date of any such transfer, and as preconditions thereto: (i)
Buyer shall use commercially reasonable efforts to deliver to Seller a copy of
the most recently issued Internal Revenue Service ("IRS") determination letter
(or other proof reasonably satisfactory to counsel for Seller) that Buyer's
401(k) Plan is qualified under the Code, and (ii) Seller shall use commercially
reasonable efforts to deliver to Buyer a copy of the most recently issued IRS
determination letter (or other proof reasonably satisfactory to counsel for
Buyer) that the Seller 401(k) Plan is qualified under the Code. 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 6.6(e).
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6.7 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances that constitutes or causes a breach of
a representation or warranty of Seller or Buyer (including, without limitation,
in the case of Seller, under the information disclosed in the Schedules hereto)
on the date such representation or warranty is made shall be deemed not to
constitute a breach of such representation or warranty if such event or
circumstance is cured in all material respects on or before 30 days after the
receipt by such party of written notice thereof from the other party.
6.8 Environmental Reports.
(a) Seller has ordered, at Seller's cost, a Phase I
environmental report with respect to Seller's office building located at 1460
33rd Street, Orlando, Florida and Buyer has ordered Phase I environmental
reports on the following parcels of owned Real Property for which Seller does
not currently have a Phase I environmental report: billboard sites O-13, O-14,
O-18, O-23, O-24, O-29, O-30, O-33(1), O-33(2), O-37, O-43, O-46 and O- 47 (the
"New Phase I Reports"). Buyer and Seller shall each pay one-half of the
aggregate cost of obtaining the New Phase I Reports relating to such billboard
sites. The respective parties shall deliver to the other copies of each New
Phase I Report promptly upon receipt thereof. There are no other environmental
reports with respect to the Real Property that are in the possession, custody or
control of Seller.
(b) Seller will cooperate with Buyer in obtaining, at Seller's
expense, a Phase II environmental report for any parcel of Real Property owned
by Seller with respect to the Businesses to the extent expressly recommended in
any New Phase I Report (a "Phase II Report"). Seller and Buyer shall use
commercially reasonable efforts to obtain the Phase II Reports as soon as
practicable thereafter; provided, however, that no such Phase II Reports (other
than the Phase II Report which has been authorized by Seller with respect to
Seller's office building) shall be ordered or obtained before the expiration of
five (5) Business Days after the date hereof. The New Phase I Reports and any
Phase II Reports are hereinafter referred to as the "Assessments."
(c) Copies of each Assessment shall be delivered to Seller by
Buyer promptly after receipt by Buyer. Seller and Buyer agree that the results
of any Assessment carried out pursuant to this Section shall not be disclosed to
any third party, unless such disclosure is required by law; provided, however,
that each party may disclose such information to such party's officers,
directors, employees, lenders, advisors, attorneys and accountants who need to
know such information in
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connection with the consummation of the transactions contemplated by this
Agreement and who are informed by such party of the confidential nature of such
information.
(d) From and after the Effective Time, in accordance with and
subject to the provisions of Section 10 hereof, Seller shall, at its sole cost,
either undertake, or reimburse Buyer for, any remediation or other action
required to eliminate noncompliance with Applicable Environmental Laws with
respect to any Real Property owned by Seller, in each case as specifically set
forth in any Phase II Report (irrespective of whether such Phase II Report is
received before or after the Effective Time).
6.9 Fees of CEA. No party shall have any liability to any other party
in respect of the fees of CEA to be paid by Buyer and Seller in accordance with
the terms of their respective agreements with CEA.
6.10 Unwind Transaction. (a) If the sale of the Repurchase Assets has
occurred hereunder and (i) the Group II-V Asset Purchase Agreement is terminated
with respect to (A) all Group Sales or (B) the Group II/III Sale and the Group V
Sale, or (ii) the Group II/III Closing and the Group V Closing have not occurred
on or before the Termination Date, the parties hereto shall have the following
rights and obligations:
(1) If the Group II-V Asset Purchase Agreement has
been terminated, other than as a result of Seller's breach or
default of its obligations thereunder, Seller shall have the
right, exercisable by written notice from Seller to Buyer
given within five (5) Business Days of such termination of the
Group II-V Asset Purchase Agreement or the Termination Date,
as the case may be, to cause Buyer to sell back to Seller, and
upon such request by Seller, Buyer shall sell back to Seller,
the Repurchase Assets.
(2) If the Group II-V Asset Purchase Agreement has
been terminated, other than as a result of Buyer's breach or
default of its obligations thereunder, Buyer shall have the
right, exercisable by written notice from Buyer to Seller
given within five (5) Business Days of such termination of the
Group II-V Asset Purchase Agreement, to cause Seller to
repurchase from Buyer, and upon the request of Buyer, Seller
shall repurchase from Buyer, the Repurchase Assets.
(b) Such sale and repurchase described in
Section 6.10(a) shall be effected on substantially the same terms as the terms
on which the Assets were acquired by Buyer pursuant
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30
to this Agreement, and the purchase price therefor shall be Three Million Six
Hundred Eighty-Eight Thousand Dollars ($3,688,000), subject to adjustment
consistent with Section 2.5(b)(2), paid by Buyer pursuant to this Agreement. The
consummation of such sale and repurchase shall be effected as soon as
practicable following such termination of the Group II-V Asset Purchase
Agreement or the Termination Date, as the case may be, subject to receipt of all
consents, permits and approvals of government authorities and other third
parties necessary to transfer the Assets back to Seller or otherwise to
consummate the sale and repurchase, including, without limitation, all necessary
consents of the FCC, DOJ and FTC pursuant to the HSR Act.
6.11 Updated Information. On the date which is three (3) Business Days
prior to the Closing Date, Seller shall deliver to Buyer a supplement to the
Schedules to this Agreement (the "Schedule Supplement"), certifying that Seller
has delivered to Buyer all notices required by Section 5.7 and setting forth any
matter which, if existing or occurring on the date hereof, would have been
required to be set forth or described on the Schedules hereto or that is
necessary to complete or correct any information contained therein. This Section
6.11 does not, and shall not be construed to, permit any actions or inactions by
Seller not otherwise permitted under this Agreement. For purposes of the
conditions to the Closing, if the matters disclosed in the Schedule Supplement
fall within the exceptions set forth in clauses (1), (2) or (3) to Section
7.1(a) or the exception to Section 7.1(b), then such exceptions shall apply, but
no such disclosure by Seller to Buyer shall otherwise affect any of Buyer's
rights or obligations hereunder, whether before or after the Closing. Without
limiting the foregoing, regardless of any such disclosure, all representations
and warranties of Seller in this Agreement shall survive the Closing to the
extent provided in Section 10.1 of this Agreement, and Buyer shall be entitled
to indemnification, in accordance with Section 10.2.
6.12 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation or
condemnation of any Assets prior to the Effective Time (collectively, a "Loss")
shall be borne by Seller. In the event of any Loss prior to the Effective Time
that interferes with the normal operation of any of the Businesses to which such
Assets relate, Seller shall promptly notify Buyer of same in writing, specifying
with particularity the Loss incurred, the cause thereof, if known or reasonably
ascertainable, and the insurance coverage, if any, applicable thereto.
(b) (i) Except as provided in Section 6.12(c), if
the Assets subject to such Loss have not been restored or replaced by
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the Effective Time, Buyer shall proceed to consummate the transactions to be
consummated at the Closing pursuant to this Agreement. Buyer and Seller shall
negotiate in good faith to agree on the amount of the costs necessary to
complete the restoration and replacement of such damaged Assets. To the extent
Buyer and Seller are unable to agree on the amount of such costs, Buyer and
Seller shall jointly designate an independent appraiser who shall be
knowledgeable and experienced in the operation of businesses similar to the
Businesses to resolve such dispute. If the parties are unable to agree on the
designation of an independent appraiser, the selection of the appraiser to
resolve the dispute shall be submitted to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association.
(ii) To the extent the parties agree to the
amount of such costs prior to the Effective Time or the appraiser is able to
determine the amount of such costs prior to the Effective Time, such amount
shall be deducted from the Preliminary Purchase Price. To the extent such amount
is not determined prior to the Closing Date, such amount shall be a Settled
Claim and shall be paid by Seller to Buyer pursuant to Section 10.2(a)(viii).
The appraiser's resolution of any such dispute shall be final and binding on the
parties. Any fees of the appraiser and, if necessary, for arbitration to select
such appraiser, shall be split equally between the parties.
(c) If any Assets have suffered a Loss which has had a
Material Adverse Effect, Seller shall give prompt written notice thereof to
Buyer. If on the Effective Time, such Loss continues to have a Material Adverse
Effect, (i) either and both of Buyer or Seller shall have the right, by giving
prompt written notice thereof to the other, to postpone the Closing Date for a
period of up to 90 days and shall close no later than such 90th day if the
Assets subject to such Loss have been repaired or replaced by such date;
provided, however, that the Closing shall occur as promptly as practicable after
such Assets are repaired or replaced. Notwithstanding the foregoing, if such
Assets are not repaired or replaced in all material respects by the expiration
of such 90-day period, Buyer shall have the right to terminate this Agreement;
such right to be exercised within ten (10) Business Days after the expiration of
such 90-day period.
In addition to the foregoing in this Section 6.12(c), if, prior to the
first applicable Effective Time under the Group II-V Asset Purchase Agreement,
the regular transmission of the Networks considered as a whole, are interrupted
for a period of five (5) or more consecutive days or fourteen (14) or more
periods of 24 consecutive hours, Seller shall give Buyer notice of such
interruption within five (5) Business Days of such
<PAGE> 37
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interruption. After receipt of such notice, Buyer may terminate this Agreement
by giving written notice thereof to Seller within ten (10) Business Days of
receipt by Buyer of such notice. If Buyer chooses not to terminate this
Agreement or fails to give written notice within such ten (10) Business Day
period, Buyer shall have no further right to terminate this Agreement in respect
of such interruption and the remaining provisions of this Agreement shall
govern.
(d) The risk of loss, damage, impairment, confiscation or
condemnation of any of the Assets arising after the Effective Time shall be
borne by Buyer and no such loss, damage, impairment, confiscation or
condemnation of such Assets shall (i) give Buyer any claim against Seller with
respect thereto, including, without limitation, any claim for indemnification
pursuant to Section 10.2, or (ii) otherwise affect Buyer's obligation to
consummate the Closing or pay the Purchase Price.
(e) If before the Effective Time, the regular transmission of
any Network in the normal and usual manner is interrupted for a period of 12
continuous hours or more, Seller shall give prompt written notice thereof to
Buyer.
6.13 Miscellaneous. (a) As soon as practicable after the date hereof,
Seller shall notify Buyer in writing if Seller is subject to any law, regulation
or ordinance with respect to amortization or limitation on any right to
maintain, repair or rebuild any of the billboard faces included in the Assets in
the event of damage or decay.
(b) To the extent that any of the Assets constitute billboard
faces which are under construction on the date hereof, Seller will have the
construction of any such billboard faces completed prior to Closing, at Seller's
sole cost and expense; provided that to the extent such construction is not
completed by Closing, Seller shall be responsible for the cost of completion of
such construction (and, notwithstanding anything to the contrary set forth
herein, such obligation shall not be subject to the Hurdle Amount, as defined
below in Section 10).
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer at the Closing. The obligations
of Buyer at the Closing hereunder are subject, at Buyer's option, to the
fulfillment prior to or at the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller shall be true and
<PAGE> 38
33
correct at and as of the Closing Date as though made at and as of that time,
except (1) to the extent any such representation or warranty is expressly stated
only as of a specified earlier date or dates, in which case such representation
or warranty shall be true and correct in all material respects as of such
earlier specified date or dates (subject to clause 3 below), (2) for changes
which are permitted or contemplated pursuant to this Agreement or (3) where the
consequence of the matter set forth in such representation or warranty having
failed to be true and correct as of the date when made, on the Closing Date or
on such earlier specified date, would not have a Material Adverse Effect.
(b) Covenants. Seller shall have performed and complied with
all covenants and agreements required by this Agreement to be performed or
complied with by it prior to or on the Closing Date, except to the extent that
the consequence of the failure of Seller to have so performed or complied would
not have a Material Adverse Effect.
(c) FCC Consent. The FCC Consent shall have been granted or,
if the FCC Consent shall not have been granted, special temporary authority
shall have been granted by the FCC to permit Buyer to operate the Earth Stations
pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect
of the transactions to be consummated at the Closing shall have expired or
terminated and there shall not be pending any action or request for information
instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Buyer from
consummating the transactions at the Closing contemplated by this Agreement.
(f) Deliveries. Seller shall have made, or stand willing to
make, all the deliveries to Buyer described in Section 8.2.
(g) Required Consents. All Required Consents shall have been
obtained and delivered to Buyer.
7.2 Conditions to Obligations of Seller at the Closing. The obligations
of Seller at the Closing hereunder are subject, at Seller's option, to the
fulfillment prior to or at such Closings of each of the following conditions:
<PAGE> 39
34
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects at and as of the Closing Date as though made at and as of that
time, except to the extent any such representation or warranty is expressly
stated only as of a specified earlier date or dates, in which case such
representation and warranty shall be true and accurate in all material respects
as of such earlier specified date or dates.
(b) Covenants. Buyer shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it prior to or on the Closing Date.
(c) FCC Consent. The FCC Consent shall have been granted or,
if the FCC Consent shall not have been granted, special temporary authority
shall have been granted by the FCC to permit Buyer to operate the Earth Stations
pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect
of the transactions to be consummated at the Closing shall have expired or
terminated and there shall not be pending any action or request for information
instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Seller from
consummating the transactions at the Closing contemplated by this Agreement.
(f) Deliveries. Buyer shall have made or stand willing to make
all the deliveries described in Section 8.3.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(i) Subject to the satisfaction or, to the
extent permissible by law, waiver (by the party for whose benefit the Closing
condition is imposed) on the date scheduled for the Closing of the conditions
precedent set forth in Section 7.1 or 7.2, as appropriate, the parties hereto
agree that the Closing of the transactions contemplated by this Agreement shall
take place at 10:00 a.m., Washington, D.C. time, on the later of (x) October
<PAGE> 40
35
1, 1997, and (y) the date reasonably agreeable to Seller and Buyer not less than
five (5) Business Days nor more than ten (10) Business Days, following the
expiration or termination of the waiting period under the HSR Act in respect of
the transactions contemplated by this Agreement; provided, however, that,
notwithstanding clause (y) above, if the waiting period under the HSR Act in
respect of the transactions contemplated by this Agreement expires or terminates
prior to October 1, 1997, the Closing of the transactions contemplated by this
Agreement shall take place no later than October 1, 1997, and, provided, further
that in no event shall the Closing hereunder occur prior to the earlier of (A)
the making of the Group V Loan (as defined in the Group II-V Asset Purchase
Agreement) and (B) the consummation of the Group II/III and Group V Closing (as
defined in the Group II-V Asset Purchase Agreement) and the Closing hereunder
shall be scheduled to occur concurrently with the date that is the earlier of
the foregoing dates in clauses (A) and (B).
(ii) Notwithstanding the foregoing, if on the
date otherwise scheduled for the Closing pursuant to the preceding paragraph,
the conditions precedent set forth in Sections 7.1(c), 7.1(e), 7.1(g), 7.2(c),
or 7.2(e) have not been satisfied, the party for whose benefit such conditions
have been imposed may elect to postpone the Closing, and the Closing shall
thereafter take place on a date specified by not less than five (5) Business
Days' prior written notice from such party, which date shall be not less than
five (5) Business Days nor more than ten (10) Business Days after the
satisfaction or waiver of such conditions precedent. Notwithstanding the
foregoing, if the Closing has been postponed pursuant to Section 6.12, the
Closing shall take place in accordance with the provisions of Section 6.12, on
the date specified by not less than five (5) Business Days' nor more than ten
(10) Business Days' prior written notice from Seller to Buyer until the
expiration of the period set forth in Section 6.12. The parties shall seek any
extension of the FCC Consent that may be required for any such postponement of
the Closing.
(iii) In no event shall the Closing hereunder
occur later than the Termination Date, except as provided in Section 9.1.
(b) Closing Place. The Closing shall be held at the offices of
Dow, Lohnes & Albertson, PLLC, 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
take the following actions and deliver to Buyer the
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following documents, in form and substance reasonably satisfactory to Buyer and
its counsel:
(a) Conveyancing Documents. Duly executed assignments and
other conveyancing documents that are sufficient to convey and vest good and, in
the case of owned Real Property, marketable, title to the Assets to the Buyer,
free and clear of all Liens, except for Permitted Liens. Such documents shall
include, but shall not be limited to, the following:
(i) Assignment and Assumption Agreement for the
Assumed Contracts, substantially in the form of Exhibit 8.2(a) annexed hereto
(the "Assignment and Assumption Agreement"), and assignment agreements in
recordable form for each Real Property lease (provided, however, that Seller
shall have no liability to Buyer with respect to the recording or recordability
of any such assignment agreements and the recording or recordability of any such
assignment agreements shall not be a condition to the satisfaction of this
Section 8.2(a)(i));
(ii) deeds (the "Deeds") in recordable form
conveying fee simple title to all Real Property owned by Seller and used in the
Businesses, subject to Permitted Liens and consistent with and subject to the
representations and warranties and the indemnity limitations set forth in this
Agreement;
(iii) bills of sale; and
(iv) an Assignment and Acceptance of FCC
Licenses.
(b) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by the President of Seller (but
without personal liability to such officer), certifying to the fulfillment of
the conditions set forth in Sections 7.1(a) and 7.1(b).
(c) Secretary's Certificate. A certificate, dated as of the
Closing Date, executed by the Secretary of Seller (but without liability to such
officer), certifying that the resolutions, as attached to such certificate, were
duly adopted by the Board of Directors and shareholders (if required) of Seller,
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated hereby and that such resolutions remain in full
force and effect and that attached thereto are true, correct and complete copies
of the Certificate of Incorporation and bylaws of Seller.
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(d) Consents and Estoppel Certificates. A copy of the Required
Consents and any other instrument evidencing any Consents and Estoppel
Certificates received.
(e) Releases. Any mortgage discharges or releases of Liens
that are necessary in order for the Assets to be free and clear of all Liens,
other than the Permitted Liens, or pay-off letters from any of Seller's lenders
providing for such discharges and releases upon payment by Seller of the
obligations owed to such lenders with the proceeds of the Preliminary Purchase
Price on the Closing Date.
(f) Good Standing Certificates. A certificate as to the
formation and good standing of Seller issued by the Secretary of State of the
state of its incorporation, dated not more than ten (10) days before the Closing
Date.
(g) Incumbency Certificate. A certificate signed by an officer
of Seller (but without personal liability to such officer) certifying the
signature and incumbency of the person executing this Agreement on behalf of
Seller.
(h) Title Commitments. ALTA title commitments issued by
Lawyers Title Insurance Corporation obtained by Seller at Buyer's expense (at
the minimum promulgated rates in the State of Florida plus reasonable title
search fees), insuring fee simple title in each fee estate included in the Real
Property, subject to standard survey exceptions and Permitted Liens, in an
amount reasonably determined by Buyer that permits such commitments to be
obtained.
(i) Lien Search Results. The results of a search for tax, lien
and judgment filings with respect to each of the names reasonably requested by
Buyer no later than 20 days before Closing, obtained by Seller, at Buyer's
expense, against the Secretary of State's records of the State of Florida,
Tennessee and Alabama (as applicable, with respect to such names) and in the
records of each county in Florida, Tennessee and Alabama (as applicable, with
respect to such names) in which any of the Assets are located, reflecting the
absence of Liens other than Permitted Liens and Liens removed concurrently with,
or prior to, Closing.
(j) Other. Such other documents expressly called for to be
delivered by Seller under the terms of this Agreement or as may reasonably be
requested by Buyer.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
take the following actions and deliver to Seller the
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38
following documents, in form and substance reasonably satisfactory to Seller and
its counsel:
(a) Closing Payment. Make the payment described in Section
2.6(a).
(b) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by the President of Buyer (but without
personal liability to such officer), certifying to the fulfillment of the
conditions set forth in Sections 7.2(a) and 7.2(b).
(c) Secretary's Certificate. A certificate, dated as of the
Closing Date, executed by Secretary of Buyer (but without personal liability to
such officer), certifying that the resolutions, as attached to such certificate,
were duly adopted by the Board of Directors and shareholders (if required) of
the Buyer, authorizing and approving the execution of this Agreement and the
consummation of the transactions contemplated hereby and that such resolutions
remain in full force and effect and that attached thereto are true, correct and
complete copies of the Certificate of Incorporation and bylaws of Buyer.
(d) Assignment and Assumption Agreements. The duly executed
Assignment and Assumption Agreement and the Assignment and Acceptances of FCC
Licenses referenced in Section 8.2(a)(iv).
(e) Good Standing Certificate. A certificate as to the
existence and good standing of Buyer issued by the Secretary of State of the
State of organization of Buyer, dated not more than ten (10) days before the
Closing Date, and certificates issued by the appropriate governmental authority
as to the qualification of Buyer to do business in each jurisdiction in which
such qualification is necessary for Buyer to own the Assets and operate the
Businesses.
(f) Incumbency Certificate. A certificate signed by an officer
of Buyer and Guarantor (but without liability to such officers) certifying the
signatures and incumbency of the persons executing this Agreement on behalf of
Buyer and the Guarantor.
(g) Other. Such other documents expressly called for to be
delivered by Buyer under the terms of this Agreement or as may be reasonably
requested by Seller.
<PAGE> 44
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SECTION 9 TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated only as
follows:
(a) at any time by written consent of each of Buyer, Guarantor
and Seller;
(b) by either Buyer or Seller, if the terminating party is not
in default or breach in any material respect of its obligations under this
Agreement, if the Closing hereunder has not taken place on or before the
Termination Date;
(c) by Seller, if Seller is not in default or breach in any
material respect of its obligations under this Agreement, if the conditions
precedent to Seller's obligations in Section 7.2 have not been satisfied (or
waived by Seller) by the date scheduled for such Closing pursuant to Section 8.1
(as such date may be postponed pursuant to Sections 6.12 and 8.1(a)(ii));
(d) by Buyer, if Buyer is not in default or breach in any
material respect of its obligations under this Agreement, if the conditions
precedent to Buyer's obligations in Sections 7.1 have not been satisfied (or
waived by Buyer) by the date scheduled for the Closing pursuant to Section 8.1
(as such date may be postponed pursuant to Sections 6.12 and 8.1(a)(ii));
(e) if the Closing under this Agreement has not occurred, by
either Buyer or Seller, if the terminating party is not in default or breach in
any material respect of its obligations under this Agreement and the Group II-V
Asset Purchase Agreement, if the Group II-V Asset Purchase Agreement is
terminated with respect to (i) the Group II/III Sale and the Group V Sale or
(ii) all Group Sales, in each case, pursuant to Section 9.1 thereof; and
(f) by Buyer, pursuant to Section 6.12(c).
Notwithstanding anything in this Section 9.1 to the contrary,
if on the Termination Date, the Closing has not occurred solely because any
required notice period for the Closing has not lapsed, the Termination Date
shall be extended until the lapse of such period.
Without limiting the generality of the foregoing or any
applicable law, neither Buyer, on the one hand, nor Seller, on the other hand,
may rely on the failure of any condition precedent set forth in Section 7 to be
satisfied as a ground for termination of this Agreement by such party if such
failure was caused by such party's failure to act in good faith, or a breach
<PAGE> 45
40
of or failure to perform its representations, warranties, covenants, agreements
or other obligations in accordance with the terms hereof.
9.2 Procedure and Effect of Termination.
(a) In the event of termination of this Agreement by
either or both of Buyer and/or Seller pursuant to Section 9.1, prompt written
notice thereof shall forthwith be given to the other party and this Agreement
shall terminate and the transactions contemplated hereby shall be abandoned
without further action by any of the parties hereto, but subject to and without
limiting any of the rights of the parties specified herein in the event a party
is in default or breach in any material respect of its obligations under this
Agreement. If this Agreement is terminated as provided herein:
(i) None of the parties hereto shall
have any liability or further obligation to any other
party or any of their respective directors, officers,
shareholders, employees, agents, or Affiliates
pursuant to this Agreement or otherwise, except as
stated in Sections 6.3, 6.9, 9.2, 9.3 and 11.1
hereof;
(ii) Except for Guarantor, which shall
have liability as Guarantor hereunder, if applicable,
and Mr. Lowell W. Paxson, who shall have liability as
guarantor pursuant to the Guaranty set forth in
Section 6.10(a)(i)(6) of the Group II-V Asset
Purchase Agreement to the extent set forth therein,
if applicable, notwithstanding anything herein or in
applicable law to the contrary, none of the
respective directors, officers, shareholders,
employees, agents or Affiliates of any of the parties
hereto shall have any liability or obligation to any
other party or any of their respective directors,
officers, shareholders, employees, agents or
Affiliates pursuant to this Agreement or otherwise;
and
(iii) All filings, applications and other
submissions relating to the transactions contemplated
hereby as to which termination has occurred shall, to
the extent practicable, be withdrawn from the agency
or other Person to which made.
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(b) With respect to terminations pursuant to Section 9.1
hereof:
(i) If this Agreement is terminated
pursuant to Sections 9.1(a) or 9.1(f), then and in
that event, none of the parties hereto shall have any
recourse against or liability to the other parties
hereto, except as stated in this Section 9.2(b) and
Sections 6.3, 6.9, 9.2(a), 9.3 and 11.1 hereof or in
any written agreement entered into by the parties in
connection with such termination.
(ii) If this Agreement is terminated by
Seller pursuant to Section 9.1(b), 9.1(c) or 9.1(e),
and Buyer is in breach or default of its obligations
under this Agreement, then Seller shall have the
right to pursue all legal and equitable remedies
available to it against Buyer and Guarantor for
breach of contract; provided, that, notwithstanding
the foregoing, in the case of termination under
Section 9.1(e) if the Group V Loan (as defined in the
Group II-V Asset Purchase Agreement) has been made,
Seller shall be entitled only to the remedies, if
any, specified in the Group II-V Asset Purchase
Agreement.
(iii) If this Agreement is terminated by
Buyer pursuant to Section 9.1(b), 9.1(d) or 9.1(e),
and Seller is in breach or default of its obligations
under this Agreement, then Buyer shall have the right
to pursue all legal and equitable remedies available
to it against Seller for breach of contract.
9.3 Attorneys' Fees. In the event of a default by either party that
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses incurred in connection
with
<PAGE> 47
42
such proceedings (whether incurred in arbitration, at trial, or on appeal).
9.4 Specific Performance. In the event of a breach or threatened breach
by Buyer, Guarantor or Seller of any representation, warranty, covenant or
agreement under this Agreement, in addition to any other remedy available to it
(but subject to the proviso in Section 9.2(b)(ii) hereof), Seller or Buyer, as
the case may be, shall be entitled to an injunction restraining any such breach
or threatened breach by the other parties to this Agreement and, subject to
obtaining any requisite approval of the FCC, to enforcement of this Agreement by
a decree of specific performance requiring such other parties to fulfill their
respective obligations under this Agreement, in each case without the necessity
of showing economic loss or other actual damages and without any bond or other
security being required.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES
10.1 Survival.
(a) The representations and warranties of Buyer, Guarantor and
Seller contained herein shall survive the Closing for a period expiring eighteen
(18) months after the Effective Time and shall terminate on such date, except to
the extent that any claims for indemnification in respect of a breach of any
such representation or warranty is made on or before the dates set forth in the
preceding clause, in which case such representation or warranty (but not any
others) shall survive until the resolution of such claim.
(b) Notwithstanding the foregoing, (1) any claims for
indemnification related to a breach of the representations and warranties
contained in Section 3.16 shall survive, and must be brought before the
expiration of the period expiring thirty-six (36) months after the Effective
Time and (2) any claims for indemnification pursuant to Section 10.2(a)(iv) or
related to a breach of the representations and warranties contained in Sections
3.10 and 3.22 shall survive, and must be brought before the expiration of, the
applicable statute of limitations.
(c) Buyer's obligation to pay, perform or discharge the
Assumed Liabilities shall survive until such Assumed Liabilities have been paid,
performed or discharged in full.
(d) Seller's obligations to pay, perform or discharge all
liabilities of Seller that are not Assumed Liabilities
<PAGE> 48
43
("Retained Liabilities"), and to indemnify Buyer in respect thereof, shall
survive until such liabilities have been paid, performed or discharged in full.
(e) Any claim for indemnification in respect of a covenant or
agreement of Buyer or Seller hereunder to be performed before the Closing shall
be made before the expiration of the eighteen (18) month anniversary of the
Effective Time. The covenants and agreements of the parties contained herein and
to be performed to any extent after the Closing Date shall survive the Closing
until fully paid, discharged and performed, and any claims for indemnification
in respect of a breach of such covenants to be performed after the Closing Date
shall survive until such covenants and agreements are so paid, discharged and
performed.
10.2 Indemnification by Seller. (a) After the Closing, Seller hereby
agrees to indemnify, defend and hold Buyer harmless against and with respect to,
and shall reimburse Buyer for:
(i) Any and all losses, liabilities or damages
resulting from any breach of any representation or warranty made pursuant to
this Agreement as of the date hereof or as of the Effective Time, or any failure
by Seller to perform any covenant of Seller set forth in this Agreement or in
any certificate, document or instrument prepared by Seller and delivered to
Buyer hereunder;
(ii) Any failure by Seller to pay, perform or
discharge any and all Retained Liabilities;
(iii) Any litigation, proceeding or claim by any
third party arising from the business or operations of the Businesses by Seller
prior to the Effective Time, except to the extent arising from the Assumed
Liabilities;
(iv) If Seller elects under Section 11.10 (the
"1031 Election") to effect the transfer of some or all of the Assets to Buyer in
a manner qualifying as part of a like-kind exchange of property by Seller within
the meaning of Section 1031 of the Code (a "Like-kind Exchange"), (A) the
excess, if any, of (1) all reasonable out-of-pocket costs and expenses of Buyer
in consummating the transfer of any of the Assets to Buyer in a Like-kind
Exchange, including, without limitation, reasonable legal fees and expenses for
the review of any additional documentation to be executed and delivered by Buyer
as a result of the Like-kind Exchange, over (2) the costs and expenses of Buyer
in consummating the transfer of such Assets to Buyer if the 1031 Election had
not been made and (B) the excess,
<PAGE> 49
44
if any, of (1) if the 1031 Election causes Buyer to obtain a tax basis in such
assets less than the tax basis Buyer would have had in such Assets had Seller
not made a 1031 Election, the Taxes payable by Buyer, over (2) the Taxes that
would have been payable by Buyer had Seller not made the 1031 Election;
(v) With respect to any leased Real Property for
which a Lease Consent or Estoppel Certificate are not obtained by the date which
is twelve (12) months after the Closing Date related to such leased Real
Property only, any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, arising from the termination of
any lease for such Real Property and the transfer of any Assets from the related
leased Real Property to a new site as a result thereof;
(vi) Any and all reasonable out-of-pocket costs
and expenses, including reasonable legal fees and expenses, of undertaking
remediation or such other action to eliminate any noncompliance with applicable
law with respect to any Real Property owned by Seller, in each case as
specifically set forth in any Phase II Report;
(vii) Any and all loss, liabilities or damages
resulting from those provisions of any employment contract between the
Businesses and an Assumed Employee which address the terms and conditions of any
grant by PCC to such Assumed Employee of an option to purchase common stock;
(viii) The amount finally determined pursuant to
Section 6.12(b)(ii); and
(ix) Any and all reasonable 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 reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
(b) Seller's obligation to indemnify Buyer pursuant to Section
10.2(a) shall be subject to all of the following limitations:
(i) (1) No indemnification shall be required to
be made by Seller as the Indemnifying Party under Section 10.2(a) until the
aggregate amount of all Settled Claims of Buyer as Claimant pursuant to this
Agreement (and any agreements executed in connection herewith or delivered
pursuant hereto) and the Group II-V Asset Purchase Agreement (and any agreements
executed in connection therewith or delivered pursuant thereto)
<PAGE> 50
45
exceeds Five Hundred Thousand Dollars ($500,000) in the aggregate (the "Hurdle
Amount"); provided, however, that such limitation shall not apply to claims made
by Buyer with respect to indemnification pursuant to Section 10.2(a)(iv), (v),
(vi), (vii) and (viii) and prorations and adjustments to the Estimated Purchase
Price pursuant to Sections 2.5 and 6.13(b). Once the aggregate amount of all
such Settled Claims exceeds the Hurdle Amount, Seller shall provide
indemnification to Buyer in respect of all Settled Claims, whether occurring
before or after such time.
(2) Notwithstanding anything in this
Agreement or applicable law to the contrary, in no event shall Seller's
obligation for indemnification under this Agreement and the Group II-V Asset
Purchase Agreement (and agreements executed in connection herewith or therewith
or delivered pursuant hereto or thereto) in the aggregate for all such
agreements, exceed $56,967,153, and Buyer waives, releases and shall have no
recourse against Seller for amounts in excess of $56,967,153; provided, however,
that such limitation shall not apply to claims made by Buyer pursuant to Section
10.2(a)(iv) and (viii).
(ii) Buyer shall be entitled to indemnification
only for those damages arising with respect to any claim as to which Buyer has
given Seller written notice within the appropriate time period set forth in
Section 10.1 hereof for such claim.
(iii) All of Buyer's damages sought to be
recovered under Section 10.2(a) hereof shall be net of (i) any insurance
proceeds received by Buyer as Claimant, with respect to events giving rise to
such damages, and (ii) tax benefits finally received by or accruing to Buyer in
connection with such events.
(iv) Following the Closing, the sole and
exclusive remedy for Buyer for any claim arising out of a breach of any
representation, warranty, covenant or other agreement herein or otherwise
arising out of or in connection with the transactions contemplated by this
Agreement (and agreements executed in connection herewith or delivered pursuant
hereto) or the operations of the Businesses, other than in respect of claims
arising in connection with the WHNZ Option Agreement, the WYCL Option Agreement,
the Services Agreements and the TSAs, whether such claim is framed in tort,
contract or otherwise, shall be a claim for indemnification pursuant to this
Section 10.
(v) Anything in this Agreement or any applicable
law to the contrary notwithstanding, it is understood and agreed
<PAGE> 51
46
by Buyer that, other than with respect to Seller (but not including any
shareholder, director, officer, employee, agent or Affiliate of Seller) as
expressly provided for in Section 10.2(a) and this Section 10.2(b), no
shareholder, director, officer, employee, agent or Affiliate of Seller shall
have (i) any personal liability to Buyer as a result of the breach of any
representation, warranty, covenant or agreement of Seller contained herein or
otherwise arising out of or in connection with the transactions contemplated
hereby or the operations of the Businesses or (ii) any personal obligation to
indemnify Buyer for any of Buyer's claims pursuant to Section 10.2(a) and Buyer
waives and releases and shall have no recourse against any of such parties
described in this Section 10.2(b)(v) as a result of the breach of any
representation, warranty, covenant or agreement of Seller contained herein or
otherwise arising out of or in connection with the transactions contemplated
hereby or the operations of the Businesses; provided, however, that the
foregoing shall not affect the liability and obligations of any of the parties
to the Clear Channel Loan Agreement and the Guaranty delivered to Buyer pursuant
to Section 6.10(a)(i)(6) of the Group II-V Asset Purchase Agreement thereunder.
10.3 Indemnification by Buyer and Guarantor. (a) After the Closing,
Buyer and Guarantor hereby jointly and severally agree to indemnify, defend and
hold Seller harmless against and with respect to, and shall reimburse Seller
for:
(i) Any and all losses, liabilities or damages
resulting from any material breach of any representation or warranty made
pursuant to this Agreement, or any material failure by Buyer or Guarantor to
perform any covenant of Buyer or Guarantor set forth in this Agreement or in any
certificate, document or instrument delivered to Seller under this Agreement;
(ii) Any failure by Buyer or Guarantor to pay,
perform or discharge any and all Assumed Liabilities or any other liabilities of
Buyer or Guarantor pursuant to this Agreement;
(iii) Any litigation, proceeding or claim arising
from the business or operations of the Assets or the Businesses on or after the
Effective Time;
(iv) Any and all reasonable out-of-pocket costs
sand expenses, including reasonable legal fees and expenses, incident to any
action, suit, proceeding, claim, demand, assessment or judgment incident to the
foregoing or reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
<PAGE> 52
47
(b) Buyer's and Guarantor's obligation to indemnify Seller pursuant to
Section 10.3(a) shall be subject to all of the following limitations:
(i) (1) No indemnification shall be required to
be made by Buyer and Guarantor as the Indemnifying Party under Section
10.3(a)(i) relating solely to material breaches of representations and
warranties until the aggregate amount of all Settled Claims of Seller as
Claimant pursuant to this Agreement (and any agreements executed in connection
herewith or delivered pursuant hereto) and the Group II-V Asset Purchase
Agreement (and any agreements executed in connection therewith or delivered
pursuant thereto) exceeds the Hurdle Amount in the aggregate; provided, however,
that once the aggregate amount of all such Settled Claims exceeds the Hurdle
Amount, Buyer shall provide indemnification to Seller in respect of all such
Settled Claims, whether occurring before or after such time.
(2) Notwithstanding anything in this
Agreement or applicable law to the contrary, in no event shall Buyer's or
Guarantor's obligation for indemnification relating solely to representations
and warranties under Section 10.3(a)(i) and Section 10.3(a)(i) of the Group II-V
Asset Purchase Agreement (and agreements executed in connection herewith or
therewith or delivered pursuant hereto or thereto) in the aggregate for all such
agreements, exceed $56,967,153, and Seller waives, releases and shall have no
recourse against Buyer for amounts in excess of $56,967,153 relating solely to
such matters; provided, however, that such limitation shall not apply to claims
made by Seller pursuant to any subsection of Section 10.3 or Section 10.3 of the
Group II-V Purchase Agreement other than the provisions thereof relating solely
to material breaches of representations and warranties under Section
10.3(a)(i)of this Agreement and Section 10.3(a)(i) of the Group II-V Asset
Purchase Agreement.
(ii) Seller shall be entitled to indemnification
only for those damages arising with respect to any claim as to which Seller has
given Buyer written notice within the appropriate time period set forth in
Section 10.1 hereof for such claim.
(iii) All of Seller's damages sought to be
recovered under Section 10.3(a) hereof shall be net of (A) any insurance
proceeds received by Seller as Claimant, with respect to events giving rise to
such damages, and (B) any tax benefits finally received or accruing to Seller in
connection with such events.
<PAGE> 53
48
(iv) Following the Closing, the sole and
exclusive remedy for Seller for any claim arising out of a breach of any
representation, warranty, covenant or other agreement herein or otherwise
arising out of or in connection with the transactions contemplated by this
Agreement (and agreements executed in connection herewith or delivered pursuant
hereto) or the operations of the Businesses, other than in respect of claims
arising in connection with the WHNZ Option Agreement, the WYCL Option Agreement,
the Services Agreements and the TSAs, whether such claim is framed in tort,
contract or otherwise, shall be a claim for indemnification pursuant to this
Section 10.
(v) Anything in this Agreement or any applicable
law to the contrary notwithstanding, it is understood and agreed by Seller that,
other than with respect to Buyer and Guarantor (but not including any
shareholder, director, officer, employee, agent or other Affiliate of either of
them), as expressly provided for in Section 10.3(a) and this Section 10.3(b), no
shareholder, director, officer, employee, agent or Affiliate of Buyer or
Guarantor shall have (A) any personal liability to Seller as a result of the
breach of any representation, warranty, covenant or agreement of Buyer contained
herein or otherwise arising out of or in connection with the transactions
contemplated hereby or the operations of the Businesses or (B) personal
obligation to indemnify Seller for any of Seller's claims pursuant to Section
10.3(a), and Seller waives and releases and shall have no recourse against any
one of such parties described in this Section 10.3(b)(v) as the result of the
breach of any representation, warranty, covenant or agreement of Buyer contained
herein or otherwise arising out of or in connection with the transactions
contemplated hereby or the operations of the Businesses.
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,
the amount thereof, estimated in good faith, and the method of computation of
such claim, all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which such indemnification claim
shall have occurred. 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 ten Business Days after written notice of such action, suit, or
proceeding was given to Claimant.
<PAGE> 54
49
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized 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,
subject to the terms hereof (including Sections 10.2(b) and 10.3(b)). 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, subject to the limitations
of Sections 10.2(b) and 10.3(b).
(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, then the Claimant may defend through counsel of its own
choosing and (so long as it gives the Indemnifying Party at least fifteen (15)
days' prior written notice of the terms of the proposed settlement thereof and
permits the Indemnifying Party to then undertake the defense thereof) settle
such claim, action or suit, and to recover from the Indemnifying Party the
amount of such settlement or of any judgment and the costs and expenses of such
defense. The Indemnifying Party shall not compromise or settle any third party
claim, action or suit without the prior written consent of the Claimant, which
consent will not be unreasonably withheld or delayed.
(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 practicable.
<PAGE> 55
50
(e) Any claim for indemnity pursuant to this Section 10 with
respect to which (i) the Claimant and the Indemnifying Party agree as to its
validity and amount, (2) a final judgment, order or award of a court of
competent jurisdiction deciding such claim has been rendered, as evidence by a
certified copy of such judgment, provided that such judgment is not appealable
or the time for taking an appeal has expired or (3) the Indemnifying Party has
not given written notice to the Claimant disputing such claim in whole or in
part within thirty days of receiving notice thereof, is referred to as a
"Settled Claim."
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement and the documents and transactions contemplated hereby, including all
fees and expenses of counsel, accountants, agents and representatives; provided,
however, that all transfer taxes, recordation taxes, sales taxes and document
stamps in connection with the transactions contemplated by this Agreement and
all other filing fees (including all FCC and HSR Act filing fees) and other
charges levied by any governmental entity in connection with the transactions
contemplated by this Agreement shall be paid one-half by Buyer and one-half by
Seller. Notwithstanding the foregoing, Seller shall pay (a) all Florida state
sales tax, if any, arising from the conveyance of the Assets to Buyer pursuant
to this Agreement and (b) all federal, state or local income taxes payable by
Seller, and Buyer shall pay all federal, state or local income taxes payable by
Buyer. Buyer hereby waives compliance with the provisions of any applicable bulk
transfer laws.
11.2 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 facsimile (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 Metroplex, CCL Clear Channel Metroplex,
or Guarantor: Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
<PAGE> 56
51
Attention: Mark P. Mays, President
Kenneth E. Wyker, Senior
Vice President for
Legal Affairs
Telecopy: (210) 822-2299
Telephone: (210) 822-2828
with a copy Wiley Rein & Fielding
(which shall 1776 K Street, N.W.
not constitute Washington, D.C. 20006
notice) to: Attention: Richard J. Bodorff, Esq.
Telecopy: (202) 429-7049
Telephone: (202) 429-7000
To Seller: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Mr. Lowell W. Paxson
Mr. Anthony L. Morrison
Telecopy: (561) 655-9424
Telephone: (561) 659-4122
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
11.3 Benefit and Binding Effect. Except as otherwise provided in
Section 11.10 and the following sentence of this Section 11.3, no party hereto
may assign this Agreement without the prior written consent of the other parties
hereto. Buyer may assign all of its rights and obligations under this Agreement
to Clear Channel Radio, Inc. ("CCRI") and Clear Channel Radio License, Inc.
("CCRL"), so long as (i) CCRI and CCRL are wholly-owned subsidiaries of the
Guarantor and (ii) such assignment does not hinder, impair or delay in any
respect the grant by the FCC of the FCC Consent or the Closing; provided that
such assignment shall not release Buyer from any of its obligations hereunder.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
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52
11.4 Further Assurances. Subject to the terms and conditions of this
Agreement, from time to time prior to, at and after the Closing Date, each party
hereto will use commercially reasonable efforts to take, or cause to be taken,
all such actions and to do or cause to be done, all things, necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the purchase and sale contemplated by this Agreement and the consummation of the
other transactions contemplated hereby, including executing and delivering such
documents as the other party being advised by counsel shall reasonably request
in connection with the consummation of this Agreement and the consummation of
the other transactions contemplated hereby, including, without limitation, the
execution and delivery of any and all confirmatory and other instruments, in
addition to those to be delivered on the Closing Date.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF FLORIDA (WITHOUT REGARD TO THE CHOICE OF
LAW PROVISIONS THEREOF).
11.6 Entire Agreement. This Agreement, the Appendices, Exhibits and
Schedules hereto, the Group II-V Asset Purchase Agreement and all documents,
certificates and other documents to be delivered by the parties pursuant hereto
and thereto, collectively, represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter of this Agreement.
This Agreement supersedes the Letter of Intent dated June 16, 1997, as amended,
and 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. Buyer
acknowledges and agrees that Seller shall not be liable for or bound in any
manner by, and Buyer has not relied upon, any express or implied, oral or
written information, warranty, guaranty, promise, statement, inducement,
presentation or opinion (whether of, by or on behalf of Seller, any broker or
finder, or any officer, employee, agent or representative of any of the
foregoing, or any other person) pertaining to the transactions contemplated
hereby, the Seller, the Businesses, the Assets, or any part of any of the
foregoing (including, without limitation, any projections, budgets or other
financial forecasts or the physical condition of the Businesses or any of the
Assets, or the uses which can be made of the same or the value thereof), except
as is expressly set forth in this Agreement.
<PAGE> 58
53
11.7 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance 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 so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
11.10 Cooperation With Respect to Like-Kind Exchange. Seller may assign
some or all of its rights (but not its obligations) under this Agreement to an
escrow agent or other Person reasonably satisfactory to Buyer serving as a
Intermediary under United States Treasury Regulations promulgated under Section
1031 of the Code; provided that (i) such assignment shall not deprive Buyer of
rights or benefits, or relieve Seller of any obligations or liabilities, under
this Agreement, (ii) Buyer shall not be obligated to expend funds or incur
obligations or liabilities in connection therewith and (iii) Seller shall
indemnify and hold harmless Buyer from and against any and all loss, liability,
cost and expense arising or resulting from any such transaction. Seller intends
for such exchange to constitute a like-kind exchange pursuant to Section 1031 of
the Code. However, nothing in this Agreement shall be
<PAGE> 59
54
construed as a representation or warranty of any party to any other party as to
the tax characterization of the transaction.
11.11 Guaranty. (a) Guarantor irrevocably guarantees (the "Guarantee"),
as principal and not as surety, to Seller and its successors and permitted
assigns full and prompt performance by Buyer (which for all purposes hereof
shall include any assignee(s) of Buyer permitted under Section 11.3) of all of
its obligations under or pursuant to this Agreement and all documents and
instruments executed in connection herewith or delivered pursuant hereto in
accordance with the terms hereof and thereof (the "Guaranteed Obligations").
Such guarantee shall apply and survive until all obligations of Buyer under this
Agreement and all documents and instruments executed in connection herewith or
delivered pursuant hereto are performed and satisfied in accordance with the
terms thereof. Guarantor hereby waives any provision of any statute or judicial
decision otherwise applicable hereto which restricts or in any way limits the
rights of any obligee against a guarantor or surety following a default or
failure of performance by an obligor with respect to whose obligations the
guarantee is provided. To the fullest extent permitted by applicable law,
Guarantor hereby waives presentment to, demand of payment from and protest of
any Guaranteed Obligation, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment. To the fullest extent permitted by
applicable law, the obligations of Guarantor hereunder shall not be affected by
(a) the failure of the applicable obligee to assert any claim or demand or to
enforce any right or remedy against Guarantor pursuant to the provisions of this
Agreement or otherwise and (b) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of this Section 11.11,
unless consented to in writing by Buyer and Seller.
(b) Guarantor hereby represents and warrants to Seller as
follows: (i) Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has the requisite
corporate power and authority to execute, deliver and perform this Agreement
according to its terms; (ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by
Guarantor have been duly authorized by all necessary corporate action on the
part of Guarantor; (iii) this Agreement has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of Guarantor
enforceable against Guarantor 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; and (iv)
<PAGE> 60
55
the execution, delivery and performance of this Agreement: (1) do not require
the consent of any third party, (2) do not conflict with the Articles of
Incorporation or bylaws of Guarantor, and (3) do not conflict in any material
respect with, result in a material breach of, or constitute a material default
under any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court or governmental authority applicable to
Guarantor or any material contract or agreement to which Guarantor is a party or
by which Guarantor may be bound.
<PAGE> 61
56
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer, Seller and Guarantor of the date first written
above.
CLEAR CHANNEL METROPLEX, INC.
By: /s/ Mark P. Mays
---------------------------------------
Name: Mark P. Mays
Title: President/CEO
CLEAR CHANNEL METROPLEX LICENSES, INC.
By: /s/ Mark P. Mays
---------------------------------------
Name: Mark P. Mays
Title: President/CEO
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ Mark P. Mays
---------------------------------------
Name: Mark P. Mays
Title: President/CEO
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
---------------------------------------
Name: Lowell W. Paxson
Title: Chairman
<PAGE> 1
EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS CORPORATION,
L. PAXSON, INC.,
CLEAR CHANNEL
METROPLEX, INC.,
CLEAR CHANNEL
METROPLEX LICENSES, INC.
AND
CLEAR CHANNEL
COMMUNICATIONS, INC.
DATED AS OF AUGUST 25, 1997
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
<S> <C> <C>
SECTION 1 CERTAIN DEFINITIONS..................................................................................3
1.1 Terms Defined in Appendix 1.............................................................3
1.2 Rule of Construction....................................................................3
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE.............................................................3
2.1 Purchase and Sale.......................................................................3
2.2 Excluded Assets.........................................................................3
2.3 Group I Assets. .......................................................................3
2.4 Purchase Price; Allocation..............................................................4
2.5 Prorations and Adjustments..............................................................5
2.6 Payment of Purchase Price and Prorations and
Adjustments.............................................................................8
2.7 Assumption of Liabilities and Obligations...............................................9
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER............................................................10
3.1 Organization and Authority of Seller...................................................10
3.2 Authorization and Binding Obligation...................................................10
3.3 Absence of Conflicting Agreements; Consents............................................10
3.4 Governmental Licenses..................................................................11
3.5 Real Property..........................................................................12
3.6 Tangible Personal Property.............................................................13
3.7 Assumed Contracts......................................................................13
3.8 Intangibles............................................................................14
3.9 Financial Statements...................................................................14
3.10 Taxes and Tax Returns..................................................................14
3.11 Insurance..............................................................................14
3.12 Personnel..............................................................................14
3.13 Claims and Legal Actions...............................................................15
3.14 Compliance with Laws...................................................................15
3.15 Conduct of Business in Ordinary Course.................................................15
3.16 Environmental Matters..................................................................15
3.17 Brokers................................................................................17
3.18 Transactions With Affiliates...........................................................17
3.19 Assets.................................................................................17
3.20 Employee Benefits......................................................................17
3.21 Foreign Person.........................................................................18
3.22 Like-kind Exchange.....................................................................18
3.23 ARS APA................................................................................18
3.24 Disclosure.............................................................................19
3.25 Limitations............................................................................19
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................19
4.1 Organization, Standing and Authority...................................................19
4.2 Authorization and Binding Obligation...................................................19
4.3 Absence of Conflicting Agreements and Required
Consents...............................................................................20
4.4 Buyer Qualifications...................................................................20
4.5 Brokers................................................................................20
4.6 Availability of Funds..................................................................20
</TABLE>
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<TABLE>
<S> <C> <C>
4.7 Disclosure.............................................................................21
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO
EFFECTIVE TIME OR CLOSING...................................................................21
5.1 Generally..............................................................................21
5.2 Dispositions...........................................................................23
5.3 Liens..................................................................................23
5.4 Access to Information..................................................................24
5.5 Financial Information..................................................................24
5.6 Notice of Proceedings..................................................................24
5.7 ARS APA................................................................................25
5.8 Representations and Warranties.........................................................26
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS....................................................................27
6.1 FCC Consent............................................................................27
6.2 HSR Act Filing.........................................................................28
6.3 Confidentiality........................................................................28
6.4 Cooperation............................................................................30
6.5 Control of the Stations................................................................30
6.6 Access to Books and Records............................................................30
6.7 Employee Matters.......................................................................31
6.8 Cure...................................................................................32
6.9 Environmental Reports..................................................................32
6.10 Other Transactions.....................................................................33
6.11 Fees of CEA............................................................................43
6.12 Non-Competition Agreement..............................................................44
6.13 Updated Information....................................................................44
6.14 Miscellaneous..........................................................................44
6.15 Risk of Loss; Interruption of Broadcast
Transmission...........................................................................45
6.16 Computer Systems.......................................................................46
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER........................................................46
7.1 Conditions to Obligations of Buyer at Group
II/III and Group V Closings............................................................46
7.2 Conditions to Obligations of Seller at Group
II/III and Group V Closings............................................................48
7.3 Conditions to Obligations of Buyer and Seller
at Group IV Closing....................................................................49
SECTION 8 CLOSING AND CLOSING DELIVERIES......................................................................50
8.1 Closing................................................................................50
8.2 Deliveries by Seller...................................................................52
8.3 Deliveries by Buyer....................................................................54
SECTION 9 TERMINATION.........................................................................................56
9.1 Termination of Agreement...............................................................56
9.2 Procedure and Effect of Termination....................................................57
9.3 Other Agreements.......................................................................62
9.4 Attorneys' Fees........................................................................62
9.5 Specific Performance...................................................................62
</TABLE>
<PAGE> 4
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<TABLE>
<S> <C> <C>
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.....................................................62
10.1 Survival..............................................................................62
10.2 Indemnification by Seller.............................................................63
10.3 Indemnification by Buyer and Guarantor................................................66
10.4 Procedure for Indemnification.........................................................69
SECTION 11 MISCELLANEOUS......................................................................................70
11.1 Fees and Expenses.....................................................................70
11.2 Notices...............................................................................71
11.3 Benefit and Binding Effect............................................................72
11.4 Further Assurances....................................................................72
11.5 GOVERNING LAW.........................................................................73
11.6 Entire Agreement......................................................................73
11.7 Waiver of Compliance; Consents........................................................73
11.8 Counterparts..........................................................................73
11.9 Severability..........................................................................73
11.10 Cooperation With Respect to Like-Kind
Exchange..............................................................................74
11.11 Guaranty..............................................................................74
</TABLE>
<PAGE> 5
Appendices
<TABLE>
<CAPTION>
Appendix 1 Definitions
Exhibits
<S> <C>
Exhibit 2.3 Group I Purchase Agreement
Exhibit 6.10-A LPI Promissory Note to Seller
Exhibit 6.10-B Subordinated Guaranty
Exhibit 6.10-C Clear Channel Loan Agreement
Exhibit 6.10-D Intercreditor and Subordination
Agreement
Exhibit 6.10-E Security Agreement
Exhibit 6.10-F Guaranty
Exhibit 6.10-G Stock Pledge Agreement
Exhibit 6.10-H Group V TBA
Exhibit 6.10-I Group II/III TBA
Exhibit 6.10-J Forms of TSAs
Exhibit 6.10-K Form of Service Agreement
Exhibit 6.10-L Group IV TBA
Exhibit 6.12 Non-Competition Agreement
Exhibit 8.2(a)(i) Assignment and Assumption Agreement
Exhibit 8.2(j) WHNZ Option Agreement
Exhibit 8.2(k) WYCL Option Agreement
Exhibit 8.2(n) DP Media Assets
</TABLE>
<TABLE>
<CAPTION>
Schedules
<S> <C>
Schedule 1.1(f) Excluded Contracts
Schedule 1.1(j) Excluded Assets
Schedule 3.1 Qualifications
Schedule 3.3 Absence of Conflicting Agreements; Consents
Schedule 3.4 Governmental Licenses
Schedule 3.5 Real Property
Schedule 3.6 Tangible Personal Property
Schedule 3.7 Contracts
Schedule 3.8 Intangibles
Schedule 3.9 Financial Statements
Schedule 3.10 Tax and Tax Returns
Schedule 3.11 Insurance
Schedule 3.12 Personnel
Schedule 3.13 Claims and Legal Actions
Schedule 3.15 Conduct of Business in Ordinary Course
Schedule 3.16 Environmental
Schedule 3.18 Transactions with Affiliates
Schedule 3.20 Employee Benefits
Schedule 4.4 Buyer Qualifications
Schedule 5.1 Certain Changes
Schedule 5.2 Certain Dispositions
Schedule 6.14(b) WNLS(AM) Tower Remediation
</TABLE>
<PAGE> 6
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of August 25, 1997, by and
among Paxson Communications Corporation, a Delaware corporation ("PCC" or
"Seller"), L. Paxson, Inc., a Delaware corporation ("LPI"), Clear Channel
Metroplex, Inc., a Nevada corporation ("Metroplex"), Clear Channel Metroplex
Licenses, Inc., a Nevada corporation ("CCL"; Metroplex and CCL being referred
to herein, collectively, as "Buyer"), and Clear Channel Communications, Inc., a
Texas corporation ("Guarantor" or "Clear Channel").
R E C I T A L S:
A. Seller owns the following radio stations:
i. WTKS(FM), Cocoa Beach, FL; WPLL(FM), Ft. Lauderdale, FL;
WSHF(FM), Mexico Beach, FL; WJZT(FM), Midway, FL; WSHE(FM), Orlando, FL;
WDIZ(AM), Panama City, FL; WFSY(FM), Panama City, FL; WPAP-FM, Panama City, FL;
WPBH(FM), Parker, FL; WTLK(FM), Ponte Vedra Beach, FL; WXSR(FM), Quincy, FL;
WNLS(AM), Tallahassee, FL; WTNT(FM), Tallahassee, FL; WSNI(FM), Thomasville,
GA; WTKX-FM, Pensacola, FL (together with WKES, as defined below, each,
individually, a "Group II/III Station" and, collectively, the "Group II/III
Stations") and WYCL(FM), Pensacola, FL ("WYCL"); and
ii. WPLA(FM), Callahan, FL; WJRR(FM), Cocoa Beach, FL;
WFTL(AM), Ft. Lauderdale, FL; WNZS(AM), Jacksonville, FL; WROO(FM),
Jacksonville, FL; WZNZ(AM), Jacksonville, FL; WKRY(FM), Key West, FL; WZTM(AM),
Largo, FL; WAVK(FM), Marathon, FL; WSJT(FM), Lakeland, FL; WINZ(AM), Miami, FL;
WIOD(AM), Miami, FL; WLVE(FM), Miami Beach, FL; WZTA(FM), Miami Beach, FL;
WMGF(FM), Mount Dora, FL; WQTM(AM), Pine Hills, FL; WFKZ(FM), Plantation Key,
FL; WWNZ(AM), Orlando, FL; WHPT(FM), Sarasota, FL; WFSJ-FM, St. Augustine, FL;
WGIC(FM), Cookeville, TN; WGSQ(FM), Cookeville, TN; WHUB(AM), Cookeville, TN;
WPTN(AM), Cookeville, TN (each, individually, a "Group V Station" and,
collectively, the "Group V Stations") and the assets used or useful in
connection with the operation of Channel 7 of the Cookeville, TN cable
television system ("HUB-TV") and WHNZ(AM), Pinellas Park, FL ("WHNZ").
B. Seller is successor by merger to Paxson Broadcasting of Tampa,
Limited Partnership, a Florida limited partnership and wholly-owned subsidiary
of PCC ("PBT"), which is a party to an Asset Purchase Agreement dated as of
September 12, 1996, as amended by a First Amendment to Purchase Agreement dated
as of April 12, 1997 (as amended, the "WKES Purchase Agreement") with The Moody
Bible Institute of Chicago, an Illinois not-for-profit
<PAGE> 7
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corporation ("Moody"), pursuant to which Seller has acquired substantially all
of the assets of Radio Station WILV(FM), St. Petersburg, FL (for purposes of
this Agreement, "WKES").
C. Paxson Communications of West Palm Beach, Inc., a Florida
corporation and a wholly-owned subsidiary of Seller ("PCWPB"), is party to an
Asset Purchase Agreement, dated May 27, 1997 (the "ARS Asset Purchase
Agreement") with American Radio Systems Corporation, a Delaware corporation
("ARS"), pursuant to which PCWPB will acquire substantially all the assets of
Radio Stations WKGR(FM), Ft. Pierce, Florida; WOLL(FM), Riviera Beach, Florida;
and WBZT(AM), West Palm Beach, Florida (each of the foregoing, individually, a
"Group IV Station" and, collectively, the "Group IV Stations") and WEAT(AM),
West Palm Beach, Florida ("WEAT").
D. Seller desires to sell, and Buyer desires to purchase,
substantially all of the assets of the Group II/III Stations, Group IV Stations
and Group V Stations, on the terms and conditions hereinafter set forth.
E. Under certain circumstances, and subject to the terms and
conditions herein set forth, PCC may sell the Group V Stations to LPI, subject
to PCC's agreement to sell such Stations to Buyer and to allow Buyer to time
broker or sell commercial time on such Stations, as the case may be, pending
such sale, each of which obligations would be assumed by LPI as a condition to
any such sale.
F. If so elected by Seller, subject to the terms and conditions of
this Agreement, Seller may enter into an exchange agreement with an
Intermediary providing that the sale and purchase of some or all of the assets
described herein be effected in a transaction that will qualify, to the extent
permissible, as a "like-kind exchange" under Section 1031 of the Code.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, the parties to this Agreement,
intending to be bound legally, agree as follows:
<PAGE> 8
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SECTION 1 CERTAIN DEFINITIONS
1.1 Terms Defined in Appendix 1. The terms defined in Appendix 1 hereto,
as used in this Agreement, have the meanings set forth in Appendix 1. Section
references in the definitions in the Appendix shall be deemed to refer to this
Agreement and the Appendix shall be deemed to be part of this Agreement.
1.2 Rule of Construction. Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Schedule or
Exhibit is a reference to a Section of this Agreement or a Schedule or Exhibit
hereto, and the terms "hereof," "herein," and other like terms refer to this
Agreement as a whole, including the Schedules and Exhibits to this Agreement,
and not solely to any particular part of this Agreement. The Schedules and
Exhibits shall be deemed to be a part of this Agreement. The descriptive
headings in this Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE
2.1 Purchase and Sale. (a) Subject to the terms and conditions set forth
in this Agreement, Seller hereby agrees to transfer, convey, assign and deliver
to Buyer, and Buyer agrees to acquire all of Seller's right, title and interest
in the Group II/III Assets, the Group IV Assets and the Group V Assets.
(b) It is understood and agreed that Metroplex shall acquire the
Non-License Assets included in the Group II/III Assets, Group IV Assets and
Group V Assets and CCL shall acquire the License Assets included in the Group
II/III Assets, Group IV Assets and Group V Assets. Notwithstanding the
foregoing, however, it is understood and agreed that each of Metroplex and CCL
shall be jointly and severally liable to perform the obligations of Buyer
provided for in this Agreement and in the documents contemplated hereby.
2.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the Assets shall not include the Excluded Assets. Notwithstanding
anything to the contrary set forth in this Agreement, no representations,
warranties or covenants or agreements of any nature whatsoever are made by
Seller to Buyer with respect to the Excluded Assets.
2.3 Group I Assets. Simultaneously with the execution and delivery of
this Agreement, Seller and Buyer are entering into an Asset Purchase Agreement
(the "Group I Purchase Agreement"), in
<PAGE> 9
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the form attached hereto as Exhibit 2.3, and dated as of the date hereof,
pursuant to which Seller will sell to Buyer, and Buyer will purchase from
Seller, the Group I Assets, on the terms and subject to the conditions set
forth therein.
2.4 Purchase Price; Allocation.
(a) Group II/III Assets. Subject to the provisions of Section 6.10
hereof, the purchase price for the Group II/III Assets shall be One Hundred
Thirty-Seven Million Two Hundred Six Thousand Dollars ($137,206,000) (the
"Group II/III Estimated Purchase Price"), which sum shall be subject to upward
or downward adjustment, as the case may be, pursuant to Section 2.5(a) below
(the Group II/III Estimated Purchase Price, as so adjusted, the "Group II/III
Purchase Price").
(b) Group IV Assets. Subject to the last sentence of Section 5.7, the
purchase price for the Group IV Assets shall be Thirty-One Million Two Hundred
Fifty Thousand Dollars ($31,250,000), subject to adjustment as provided for in
Section 6.10(c) hereof (the "Group IV Estimated Purchase Price"), which sum
shall be subject to upward or downward adjustment, as the case may be, pursuant
to Section 2.5(a) below (the Group IV Estimated Purchase Price, as so adjusted,
the "Group IV Purchase Price").
(c) Group V Assets. The purchase price for the Group V Assets shall
be Four Hundred Thirty-Four Million Six Hundred Six Thousand Dollars
($434,606,000) (the "Group V Estimated Purchase Price"), which sum shall be
subject to upward or downward adjustment, as the case may be, pursuant to
Section 2.5(a) below (the Group V Estimated Purchase Price, as so adjusted, the
"Group V Purchase Price").
(d) Appraisal and Allocation. Seller shall retain, at Seller's
expense, Bond & Pecaro, or another recognized independent appraisal firm
selected by Seller and reasonably acceptable to Buyer, to appraise the Stations
and the Assets. Seller shall provide Buyer with copies of the appraisals for
the Group II/III Assets, Group IV Assets and Group V Assets within 90 days
after Group II/III Closing Date, Group IV Closing Date, and Group V Closing
Date, respectively. Seller and Buyer agree to allocate the Purchase Price among
the Stations and the Assets for all purposes, including financial accounting
and tax purposes, including Section 1060 of the Code and Temporary Treasury
Regulations Section 1.1060-IT, in accordance with such appraisals. Buyer and
Seller agree to file with their respective federal income tax returns initial
asset acquisition statements on Internal Revenue Service Form 8594 required by
Temporary Treasury Regulation Section 1.1060-IT, all in accordance with and
<PAGE> 10
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accurately reflecting such appraisals and allocations. No allocation of the
Purchase Price for any of the Assets shall be made to the Non-Competition
Agreement.
2.5 Prorations and Adjustments.
(a) Prorations and Adjustments. The Group II/III Purchase Price, the
Group IV Purchase Price and the Group V Purchase Price shall be determined by
increasing or decreasing the Estimated Purchase Price as required to effectuate
the proration of revenues and expenses as provided for herein and subject to
the provisions of Section 6.10 hereof with respect to the Group IV Stations.
All revenues and all expenses arising from the operation of any Station,
including tower rental, business and license fees, utility charges, real and
personal property taxes and assessments levied against its Assets, property and
equipment rentals, applicable copyright or other fees, including program
license payments, sales and service charges, taxes (except for taxes arising
from the transfer of the Assets under this Agreement), employee compensation,
including wages, salaries, accrued vacation, sick leave, personal days and
commissions for each employee of Seller who becomes an employee of Buyer, music
license fees and similar prepaid and deferred items, shall be prorated between
Buyer and Seller in accordance with GAAP and to effect the principle that
Seller shall receive all revenues (other than Accounts Receivable) and shall be
responsible for all expenses, costs and liabilities (including, without
limitation, performance bonuses payable to the Assumed Employees allocable to
the period prior to the Effective Time based on the pro rata accrual of such
bonuses over the calendar year on a straight line basis) allocable to the
operations of any Station for the period prior to the applicable Effective
Time, and Buyer shall receive all revenues and shall be responsible for all
expenses, costs and liabilities (including, without limitation, performance
bonuses payable to the Assumed Employees allocable to the period after the
Effective Time based on pro rata accrual of such bonuses over the calendar year
on a straight line basis) allocable to the operations of any Station for the
period after the applicable Effective Time in accordance with GAAP, subject to
the following:
(1) There shall be no adjustment for, and Seller shall
remain solely liable with respect to, any Excluded Contracts and any
other obligation or liability not being assumed by Buyer in
accordance with Section 2.7.
(2) No adjustment or proration shall be made in favor of
Seller for the amount, if any, by which the value of the goods or
services to be received by all the Stations in the aggregate under
their trade or barter agreements as
<PAGE> 11
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of the Effective Time for such Stations exceeds the value of any
advertising time remaining to be run by such Stations as of the
Effective Time. For purposes of this Agreement, including, without
limitation, this Section 2.5 and Section 5.1, the liability for
performance obligations relating to advertising time under any trade
or barter agreements shall be valued according to the applicable
Station's prevailing rates as of the Effective Time, and goods,
services or other items being received shall be valued in accordance
with GAAP as of the Effective Time.
(3) An adjustment or proration shall be made in favor of
Buyer to the extent, if any, that (a) the value of the goods or
services to be received by all the Group II/III Stations, the Group
IV Stations, the Group V Stations and the Businesses (as defined in
the Group I Purchase Agreement) under their trade or barter
agreements as of the applicable Effective Time in the aggregate is
more than $150,000 less than the value of any advertising time
remaining to be run by such Stations and Businesses (as defined in
the Group I Purchase Agreement) thereunder as of the applicable
Effective Time (a "Negative Balance") and (b) Buyer has not
expressly consented to the trade or barter agreements giving rise to
such Negative Balance (and the allocation of such Negative Balance
among the Businesses, Group II/III Stations, Group IV and Group V
Stations shall be made by Seller, in its sole discretion).
(b) Manner of Determining Prorations and Adjustments. The
Group II/III Purchase Price, Group IV Purchase Price and Group V Purchase
Price, taking into account the adjustments and prorations pursuant to Section
2.5(a), will be determined in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not later
than five (5) Business Days before each Closing Date a preliminary
settlement statement which shall set forth Seller's good faith
estimate of the adjustments or prorations under Section 2.5(a)
(each, a "Preliminary Settlement Statement"). The Preliminary
Settlement Statement (A) shall contain all information reasonably
necessary to determine the adjustments or prorations under Section
2.5(a), including appropriate supporting documentation and such
other information as may be reasonably requested by Buyer, to the
extent such adjustments or prorations can be determined or estimated
as of the date of the Preliminary Settlement Statement and (B) shall
be certified by an officer (but without personal liability to such
officer) on behalf of Seller to be true and complete to Seller's
knowledge. The "Preliminary
<PAGE> 12
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Purchase Price" shall be determined by adjusting the Estimated
Purchase Price for the adjustments and prorations contained in the
Preliminary Settlement Statement.
(2) Not later than ninety days after each Closing Date,
Buyer shall deliver to Seller a statement setting forth Buyer's
determination of any changes to the adjustments and prorations made
at such Closing. Buyer's statement (A) shall contain all information
reasonably necessary to determine the adjustments and prorations to
the Purchase Price under Section 2.5(a), including appropriate
supporting documentation, and such other information as may be
reasonably requested by Seller, and (B) shall be certified by an
officer (but without personal liability to such officer) on behalf
of Buyer to be true and complete to Buyer's knowledge. Seller (and
its authorized representatives) shall have the right to visit the
Stations during normal business hours to verify and review such
documentation upon providing reasonable notice to Buyer (such access
not to unreasonably interfere with the business or operations of any
Station). If Seller disputes the adjustments and prorations
determined by Buyer, it shall deliver to Buyer within fifteen days
after its receipt of Buyer's statement a statement setting forth its
determination of such adjustments and prorations. If Seller notifies
Buyer of its acceptance of Buyer's statement, or if Seller fails to
deliver its statement within the fifteen-day period specified in the
preceding sentence, Buyer's determination of such adjustments and
prorations shall be conclusive and binding on the parties as of the
last day of such fifteen-day period.
(3) Buyer and Seller shall use good faith efforts to
resolve any dispute involving the determination of the adjustments
and prorations in connection with the Closings. If the parties are
unable to resolve any dispute within fifteen days following the
delivery to Buyer of the statement described in the penultimate
sentence of Section 2.5(b)(2), 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 such dispute. If the parties are unable to
agree on the designation of an independent certified public
accountant, the selection of the accountant to resolve the dispute
shall be submitted to arbitration in accordance with 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
<PAGE> 13
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the accountant, and, if necessary, for arbitration to select such
accountant, shall be split equally between the parties.
2.6 Payment of Purchase Price and Prorations and
Adjustments.
(a) At each Closing, subject to the provisions of Section 6.10,
Buyer shall pay or cause to be paid to Seller (or to such party or parties
designated by Seller in writing) the Preliminary Purchase Price for the Assets
to be transferred at such Closing, by federal wire transfer of same-day funds
in accordance with wire instructions delivered to Buyer by Seller at least
three (3) Business Days prior to such Closing.
(b) Payments to Reflect Prorations and Adjustments.
(1) If the Purchase Price for any Assets transferred
pursuant to this Agreement as finally determined pursuant to Section
2.5(b)(2) and subject to any applicable provisions of Section 6.10
exceeds the Preliminary Purchase Price for such Assets, Buyer shall
pay to Seller (or to such party or parties designated by Seller in
writing), by federal wire transfer of same-day funds within five
Business Days after the date on which such Purchase Price is
determined pursuant to Section 2.5(b)(2), the difference between
such Purchase Price and such Preliminary Purchase Price.
(2) If the Purchase Price for any Assets transferred
pursuant to this Agreement, as finally determined pursuant to
Section 2.5(b)(2), and subject to any applicable provisions of
Section 6.10, is less than the Preliminary Purchase Price for such
Assets, Seller shall pay to Buyer, by federal wire transfer of
same-day funds within five Business Days after the date on which
such Purchase Price is determined pursuant to Section 2.5(b)(2), the
difference between such Preliminary Purchase Price and such Purchase
Price.
(3) If any dispute arises over the amount to be
refunded or paid pursuant to this Section 2.6(b), such refund or
payment shall nevertheless be made to the extent any amount is not in
dispute.
(c) It is understood and agreed that Buyer shall not be
permitted to offset any amounts in respect of the Group V Assets against any
amounts in respect of any other Assets that are the subject of this Agreement
or the Group I Purchase Agreement. Notwithstanding the foregoing, nothing
contained in this Section 2.6(c) shall in any manner impair any right, remedy
<PAGE> 14
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or recourse Buyer may have against PCC for fraud in connection with this
Agreement.
2.7 Assumption of Liabilities and Obligations.
(a) Without limiting any obligations of Buyer under any applicable
TBA, Buyer shall assume and undertake to pay, discharge and perform:
(i) the Group II/III Assumed Liabilities as of
the Group II/III Closing Date;
(ii) subject to the last sentence of Section 5.7,
the Group IV Assumed Liabilities as of the Group IV Closing Date;
and
(iii) the Group V Assumed Liabilities as of the
Group V Closing Date.
(b) Buyer shall not be required to assume any of the following:
(i) any obligations or liabilities under any Excluded Contract, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the applicable Effective Time, except insofar as a proration or
adjustment therefor is made in favor of Buyer under Section 2.5(a), (iii) any
liability or obligation arising out of any litigation, proceeding or claim by
any person or entity relating to the business or operations of any Station or
any of the Assets with respect to any events or circumstances that occur or
exist prior to the applicable Effective Time relating to such Station or
Assets, (iv) any credit agreements, note purchase agreements, indentures, or
other financing arrangements (other than any Assumed Contracts) of Seller and
(v) any other obligation or liability of Seller, LPI or the Assignee that is
not an Assumed Liability (including, without limitation, any increase in the
Assumed Liabilities in violation of Section 2.7(c)). Buyer shall perform all
obligations arising out of the Assets (including the Assumed Contracts and the
Licenses) relating to the period on or after the applicable Effective Time.
Seller shall retain all liabilities of Seller not assumed by Buyer.
(c) Notwithstanding anything in this Agreement to the contrary,
with respect to each Station, the parties acknowledge that after the Effective
Time with respect to such Station, Seller shall not, by any voluntary act or
omission, increase the Assumed Liabilities other than as permitted in
accordance with the terms and provisions of this Agreement or the TBAs, without
the prior written consent of Buyer.
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SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows(i) as of the date
hereof, (ii) (subject to the provisions of Section 7.1(a) hereof) as of the
Group II/III Effective Time and the Group V Effective Time and (iii) (subject
to the provisions of Section 7.1(a) hereof) to the extent specifically
contemplated by Section 6.10(a)(iv)(1) hereof and subject to the limitations
therein, as of the Group II/III Closing Date and the Group V Closing Date:
3.1 Organization and Authority of Seller. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and, in respect of the operations of the Stations, is
qualified to conduct business in the States set forth in Schedule 3.1. Except
as set forth in Schedule 3.1, Seller has the requisite corporate power and
authority to own and operate the Assets owned and operated by it, to carry on
the business of the Stations now being conducted by it, and to execute, deliver
and perform this Agreement according to its terms.
3.2 Authorization and Binding Obligation. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller have been duly and validly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, and the performance of the transactions
contemplated herein, by Seller will not require any consent, approval,
authorization or other action by, or filing with or notification to, any Person
or governmental authority, except as follows: (a) applicable requirements under
the HSR Act; (b) consents to the assignment of the FCC Licenses to Buyer (and,
as applicable, to LPI) by the FCC; (c) filings with respect to real estate,
sales and other transfer taxes; (d) consent of third parties to assignment of
certain of the Assumed Contracts as specified in Schedule 3.3; and (e) other
immaterial consents, approvals, authorizations, actions, filings or
notifications. Subject to obtaining the Consents, the execution, delivery and
performance by Seller of this Agreement (with or without the giving of notice,
the lapse of time, or both): (a) do not conflict with any provision of the
Certificate of
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Incorporation and Bylaws of Seller; (b) do not conflict with, result in a
breach of, or constitute a default in any material respect under, any
applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court or governmental authority applicable to
Seller; (c) do not result in the breach in any material respect of any contract
or agreement to which Seller is a party or by which Seller may be bound; and
(d) will not create any Lien upon any of the Assets, except for Permitted
Liens.
3.4 Governmental Licenses. (a) Schedule 3.4 identifies all FCC
Licenses used in the operation of the Stations (collectively, "Material
Licenses") and the date on which each expires. Except as described on Schedule
3.4, each Material License is in full force and effect, and Seller is the
authorized legal holder thereof. Except as set forth in Schedule 3.4, the
conduct of the business and operations of each Station is in accordance in all
material respects with the terms and conditions of the Material Licenses for
such Station and the Communications Act and the rules, regulations and policies
of the FCC. Schedule 3.4 also sets forth a true and complete list of all
applications filed with respect to any Station that are pending at the FCC
(other than applications for auxiliary broadcast authorizations), true and
complete copies of which have been delivered by Seller to Buyer. All material
reports and filings required to be filed with the FCC by Seller with respect to
each Station have been timely filed in all material respects. All such reports
and filings are accurate and complete in all material respects. Seller has
received no notice or communication, formal or informal, indicating that the
FCC is considering revoking, suspending, canceling, rescinding or terminating
any Material License. Seller's operation of the Stations complies in all
material respects with the requirements set forth in the "Radio Frequency
Protection Guides" recommended in "American National Standard Safety Levels
with Respect to Human Exposure to Radio Frequency Electromagnetic Fields 300
KHz to 100 GHz" (ANSI C95.1-1982), issued by the American National Standards
Institute, and renewal of the FCC Licenses would not constitute a "major
action" within the meaning of Section 1.1301, et seq. of the FCC's rules.
(b) The FCC Licenses listed on Schedule 3.4 constitute all of the
material licenses and authorizations required under the Communications Act or
the current rules, regulations and policies of the FCC for the business and
operation of each Station for which such FCC Licenses are issued as currently
operated, except as set forth in Schedule 3.4. Except as set forth in Schedule
3.13, and except for investigations or other proceedings affecting the
broadcasting industry generally, Seller has no knowledge of any pending or
threatened investigation by or
<PAGE> 17
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before the FCC, or any order to show cause, notice of violation, notice of
apparent liability, notice of forfeiture or material complaint by, before or
with the FCC with respect to any Station. Seller knows of no fact relating to
Seller's ownership or operation of the Stations that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC, cause
the FCC to fail to approve in a timely fashion any of the applications for the
FCC Consents. As of the date hereof, Seller knows of no fact relating to ARS's
ownership or operation of the Group IV Stations that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC, cause
the FCC to fail to approve in a timely fashion any of the applications for the
consent of the FCC to the assignment of the FCC Licenses included in the Group
IV Assets by ARS to PCWPB as contemplated by the ARS Asset Purchase Agreement.
3.5 Real Property. Schedule 3.5 contains an accurate description
as of the date of this Agreement of all Real Property. Except as described in
Schedule 3.5, Seller has good and marketable fee simple title to all fee
estates included in the Real Property and good title to Seller's interests in
all other Real Property, in each case free and clear of all Liens, except for
Permitted Liens. Schedule 3.5 lists all leases and subleases pursuant to which
any of the Real Property included in the Assets is leased by Seller. Seller has
a valid leasehold interest in all such Real Property. Subject to obtaining the
consents to assignment set forth on Schedule 3.3, such leases and subleases are
assignable to Buyer. Seller is in compliance with such leases and subleases in
all material respects and is not in breach or default in any material respect
thereunder, and, to the knowledge of Seller, each other party to any such lease
or sublease is not in default thereunder in any material respect. The Real
Property includes sufficient access to the Stations' facilities to conduct the
operations of the Stations in the manner in which they are currently operated
without the need to obtain other access rights, except where the failure to
have such access would not be material. Seller has delivered to Buyer a true
and complete copy of any and all title insurance policies, surveys, plans and
maps relating to the Real Property in the custody, possession or control of
Seller. None of the Real Property is subject to any lease, sublease, license or
other agreement pursuant to which Seller grants to any other person any right
to the use, occupancy or enjoyment of the Real Property or any part thereof,
except as set forth on Schedule 3.5. There is no pending or, to the knowledge
of Seller, threatened condemnation or similar proceeding affecting any Real
Property. All buildings, towers and other improvements included within the Real
Property are in working order and repair. The use of the Real Property to
operate the Stations is in compliance in all material respects with applicable
zoning and land-use laws. As
<PAGE> 18
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of the date hereof, Seller has received no actual written notice of any
increase in property taxes affecting any item of Real Property to an amount in
excess of 110% of the current taxes on such Real Property or of any other
imposition which is not materially consistent with existing impositions, the
effect of which is, if required, reflected on Seller's financial statements;
provided that the foregoing shall not relate to increases resulting from
improvements to the property made by Seller.
3.6 Tangible Personal Property. Schedule 3.6 lists as of the date
hereof all material items of Tangible Personal Property included in the Assets
owned by Seller. Except as described in Schedule 3.6, Seller owns and has good
title to the Tangible Personal Property listed thereon and none of the Tangible
Personal Property included in the Assets is subject to any Liens, except for
Permitted Liens. Except for the matters described on Schedule 6.14(b) with
respect to the WNLS(AM) transmitting towers, the Tangible Personal Property
listed on Schedule 3.6 owned by Seller necessary for the normal operations of
the Stations as presently conducted is in satisfactory operating condition and
adequate repair (given the age of such property and the use to which such
property is put and ordinary wear and tear excepted).
3.7 Assumed Contracts. Schedules 3.5, 3.7 and 3.12 include a
complete list as of the date of this Agreement of all Assumed Contracts except
(a) contracts with advertisers for production or the sale of advertising time
on any Station for cash that may be canceled by Seller on not more than ninety
days' notice without penalty, (b) trade or barter advertising agreements
entered into in the ordinary course of business, (c) oral employment contracts
terminable at will, (d) miscellaneous service contracts terminable on not more
than thirty (30) days' notice, and (e) other Contracts entered into in the
ordinary course of business, not involving liabilities exceeding Two Thousand
Five Hundred Dollars ($2,500) per contract per year and One Hundred Twenty-Five
Thousand Dollars ($125,000) per year in the aggregate for all Stations and the
Businesses for all such other contracts. Seller has delivered or made available
to Buyer true and complete copies of all written Assumed Contracts and accurate
descriptions of all oral Assumed Contracts listed in Schedules 3.5, 3.7 and
3.12. The Assumed Contracts are in full force and effect in all material
respects. Subject to obtaining the consents to assignment set forth on Schedule
3.3, the Assumed Contracts are assignable to Buyer. Seller is in compliance
with the Assumed Contracts in all material respects and is not in breach or
default in any material respect thereunder, and, to the knowledge of Seller,
each other party to the Assumed Contracts is
<PAGE> 19
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in compliance therewith in all material respects and not in default in any
material respect thereunder.
3.8 Intangibles. Schedule 3.8 is a complete list as of the date
of this Agreement of all material Intangibles (exclusive of Licenses listed in
Schedule 3.4). Seller has provided or made available to Buyer copies of all
documents establishing or evidencing the Intangibles listed in Schedule 3.8.
Other than with respect to matters generally affecting the radio broadcasting
industry and not particular to Seller, as of the date hereof, except as set
forth in Schedule 3.8, Seller has not received any notice or demand alleging
that Seller is infringing upon any trademarks, trade names, service marks,
service names, copyrights or similar intellectual property rights owned by any
other Person.
3.9 Financial Statements. Seller has furnished Buyer with true and
complete copies of the financial statements with respect to the Stations
described in Schedule 3.9 (the "Financial Statements"). Except as set forth in
Schedule 3.9, the Financial Statements have been prepared in accordance with
GAAP, and present fairly in all material respects the financial condition of
Seller with respect to the Stations included in such Financial Statements as at
their respective dates and the results of operations for the periods then
ended.
3.10 Taxes and Tax Returns. Except as set forth in Schedule 3.10
and except where the failure to file, pay or accrue any Taxes does not result
in a Lien on the Assets or in the imposition of transferee or other liability
on Buyer for the payment of Taxes, (a) all Tax Returns have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax
Returns are required to be filed, and (b) all Taxes shown on such Tax Returns
have been properly accrued or paid to the extent such Taxes have become due.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller with respect to the Stations' Business. All
policies of insurance listed in Schedule 3.11 are in full force and effect.
3.12 Personnel. Schedule 3.12 contains a true and complete list as
of the date of this Agreement of all employees of Seller engaged in the
business and operations of each Station (collectively, the "Employees"), and a
description of the compensation arrangements affecting them. Except as
described in Schedule 3.12, as of the date hereof, Seller has no written or
oral contracts of employment with any employee of the Stations other than oral
employment contracts which are terminable at will. Except as set forth in
Schedule 3.12, Seller is not a
<PAGE> 20
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party to or subject to any collective bargaining agreements with respect to the
Stations, and no labor union or other collective bargaining unit represents or,
to Seller's knowledge, claims to represent any of the employees of the
Stations. Seller has made available to Buyer copies of all employee handbooks
and employee rules and regulations, if any.
3.13 Claims and Legal Actions. Except as disclosed in Schedule 3.13
and for any FCC rulemaking proceedings generally affecting the radio
broadcasting industry and not particular to Seller, as of the date hereof,
there is no material claim, legal action, counterclaim, suit, arbitration, or
other legal, administrative, or tax proceeding, nor any material order, decree,
or judgment, in progress or pending, or to the knowledge of Seller threatened,
against Seller, the Assets, or the business or operations of any Station.
3.14 Compliance with Laws. Seller is in compliance in all material
respects with all federal, state and local laws, rules, regulations and
ordinances applicable or relating to the ownership and operation of the
Stations.
3.15 Conduct of Business in Ordinary Course. Except as set forth in
Schedule 3.15, from January 1, 1997 through the date of this Agreement, Seller
has conducted the business and operations of the Stations in the ordinary
course consistent with past practice in all material respects and has not (a)
made any material increase in compensation payable or to become payable to any
of the employees of the Stations except as disclosed in Schedule 3.12, or any
material change in personnel policies, insurance benefits or other compensation
arrangements affecting the employees of the Stations, (b) made any sale,
assignment, lease or other transfer of any of Seller's properties, other than
obsolete assets no longer usable in the operation of such Station, or other
assets sold or disposed of in the normal course of business with suitable
replacements being obtained therefor, (c) incurred material loss of, or
material injury to, any of the Assets as a result of any fire, explosion,
windstorm, earthquake, labor trouble, riot, accident, act of God or public
authority or armed forces or other casualty or waived any rights of substantial
value related to the Assets, (d) made any material change in any method of
accounting or accounting practice, or (e) transferred to any Affiliate of
Seller any right, property or interest which is necessary or useful in the
operation of the Stations' Business.
<PAGE> 21
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3.16 Environmental Matters.
(a) For purposes of this Agreement, the following
definitions shall be applicable:
(i) "Applicable Environmental Law" shall mean any
and all laws, statutes, regulations, and judicial interpretations thereof of
the United States, of any state in which the Assets, or any portion thereof, or
the business of any Station, are located, and of any other government or
quasi-government authority having jurisdiction, that relate to the prevention,
abatement and elimination of pollution and/or protection of the environment,
including, but not limited to, the federal 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 Hazardous
Materials Transportation Act, the Refuse Act and the Emergency Planning and
Community Right to Know Act (each as amended on or before the applicable
Effective Time), together with all state statutes serving any similar or
related purposes, as in effect on or before the applicable Effective Time.
(ii) "Hazardous Substance" means any substance
designated pursuant to Section 307(a) and 311(b)(2)(A) of the federal Clean
Water Act, 33 USCA ss.ss. 1317(a), 1321(b)(2)(A), Section 112 of the federal
Clean Air Act, 42 USCA ss. 3412, Section 3001 of the federal Resource
Conversation and Recovery Act, 42 USCA ss. 6921, Section 7 of the federal Toxic
Substances Control Act, 15 USCA ss. 2606, or Section 101(14) and Section 102 of
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
USCA ss.ss. 9601(14), 9602, as amended by the Superfund Amendments and
Reorganization Act of 1986.
(b) Seller has supplied to Buyer a true and complete copy
of the report for each environmental inspection or audit that Seller has caused
to be conducted with respect to any of the Real Property as listed in Schedule
3.16.
(c) (i) Except as set forth in Schedule 3.16, the
improvements owned or used by Seller on the owned Real Property and on the
leased Real Property do not contain any asbestos that would constitute a
violation of or noncompliance with any Applicable Environmental Law in any
material respect. The equipment owned or used by Seller on the owned Real
Property or any leased Real Property does not contain any polychlorinated
biphenyls that would constitute a violation of or noncompliance with any
Applicable Environmental Law in any material respect.
<PAGE> 22
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(ii) No contamination caused by Seller exists on
or under the owned Real Property or on or under any leased Real Property, or
affecting any natural resources therein that would constitute a violation of or
noncompliance with any Applicable Environmental Law in any material respect.
(iii) No contamination has been caused by Seller
on or under the owned Real Property or leased Real Property, or affecting any
natural resources therein that would constitute a violation of or noncompliance
with any Applicable Environmental Law in any material respect.
(iv) The Assets and the Stations' Business are in
compliance with all Applicable Environmental Laws in all material
respects.
(v) Seller has no material liability relating to
its ownership and operation of any of the Stations as a result of noncompliance
with any Applicable Environmental Law. No charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or,
to Seller's knowledge, commenced against Seller in connection with its
ownership or operation of any of the Stations alleging any failure to comply in
any material respect with any Applicable Environmental Law.
3.17 Brokers. Except for the fees payable to Communications Equity
Associates ("CEA"), which fees shall be paid by Buyer and Seller as set forth
in Section 6.11, neither Seller nor any Person acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
3.18 Transactions With Affiliates. Except as set forth in Schedule
3.18, Seller is not, and since January 1, 1997, has not been a party, directly
or indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of any Station, whether for the
purchase, lease or sale of property, for the rendition of services or
otherwise, with any Affiliate of Seller, or any officer, director, employee,
proprietor, partner or shareholder of Seller, and no such Person has any
interest in or right to any of the Assets. The terms and conditions of the
transactions involving Seller and any Affiliate of Seller which are identified
in Schedule 3.18 are described briefly therein.
3.19 Assets. Except for the Excluded Assets, the Assets include all
of the assets or property used in the conduct of the business of the Stations
as currently operated.
<PAGE> 23
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3.20 Employee Benefits. Schedule 3.20 lists all Employee Plans
covering employees of the Stations and, except as set forth in Schedule 3.20,
copies of such Employee Plans together with any trusts related thereto have
previously been made available to Buyer. All Employee Plans are in compliance
with their terms and with the applicable provisions of ERISA and the Code in
all material respects. No Employee Plan is, or within the past six years has
been, subject to Title IV of ERISA or Section 412 of the Code. Seller has at no
time contributed to, or been obligated to contribute to, any multi-employer
plan (as defined in ERISA Section 3(37)). There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan
pending, or to the knowledge of Seller threatened, against any Employee Plan
which is reasonably expected to result in any material liability to Seller.
Except as required by ERISA Sections 601 et seq. and Code Section 4980B, Seller
does not sponsor, maintain or contribute to any Employee Plan which provides
medical coverage to retirees or other former employees of Seller. Seller has
not engaged in any transaction described in ERISA Section 4069 within the past
five years. There is no governmental audit or examination of any Employee Plan.
All contributions and premium payments required by law have been made in all
material respects to each Employee Plan. Each Employee Plan that is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter that it is so qualified.
3.21 Foreign Person. Seller is not a "foreign person" or a "foreign
corporation" as such terms are defined in Section 1445 of the Code.
3.22 Like-kind Exchange. If Seller elects under Section 11.10 to
effect the transfer of some or all of the Assets to Buyer in a manner
qualifying as part of a like-kind exchange of property by Seller within the
meaning of Section 1031 of the Code, Buyer's tax basis in the Assets shall not
be less than the tax basis Buyer would have had in the Assets had Seller not
made such an election under Section 11.10.
3.23 ARS APA. Seller has delivered to Buyer a true, correct and
complete copy of the ARS Asset Purchase Agreement (including, without
limitation, all Schedules, Exhibits and other attachments thereto) as in effect
on the date hereof. The ARS Asset Purchase Agreement and the other agreements
and documents referred to therein set forth the entire agreement of PCWPB and
ARS with respect to the Group IV Stations. As of the date hereof, the ARS Asset
Purchase Agreement has not been terminated, amended or modified, and no
material rights of PCWPB or obligations of ARS thereunder have been waived.
PCWPB is in compliance with the ARS Asset Purchase Agreement in all material
<PAGE> 24
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respects and is not in material breach or default thereunder, and, to the
knowledge of Seller, as of the date hereof, ARS is in compliance therewith in
all material respects and not in material breach or default thereunder. To
Seller's knowledge, as of the date hereof, no event has occurred or condition
exists that with notice or the passage of time or both would result in a breach
or default thereunder by any party thereto.
3.24 Disclosure. None of the representations or warranties of
Seller in this Agreement contains or will contain any untrue or misleading
statement of material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
3.25 Limitations. Buyer acknowledges and agrees that
notwithstanding anything to the contrary contained in this Agreement, none of
the representations and warranties of Seller contained herein shall apply in
respect of or be made or deemed to be made in respect of WKES or the Group IV
Assets, or any matter or item relating to or attributable to or otherwise
arising in connection with WKES or the Group IV Assets, except as they relate
solely to any period of time during which Seller or any of its Affiliates owned
the Assets related to WKES or the Group IV Assets, as the case may be, and
performed the Assumed Liabilities related to WKES or the Group IV Assumed
Liabilities, as the case may be.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows (i) as of the date
hereof, (ii) (subject to the provisions of Section 7.2(a) hereof) as of the
Effective Time in respect of the Group II/III Assets and the Group V Assets and
(iii) (subject to the provisions of Section 7.2(a) hereof), to the extent
specifically contemplated by Section 6.10(a)(iv)(2) hereof, as of the Group
II/III Closing Date and the Group V Closing Date:
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 Nevada and, at the applicable Effective Time will be duly qualified to
conduct business in each jurisdiction in which such qualification is necessary
for Buyer to own the Assets and operate the Stations. Buyer has the requisite
corporate power and authority to (a) execute, deliver and perform this
Agreement according to its terms, and (b) own the Assets.
<PAGE> 25
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4.2 Authorization and Binding Obligation. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly and validly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents.
Except for applicable requirements of the HSR Act and subject to the receipt of
the FCC Consent, the execution, delivery and performance by Buyer of this
Agreement (with or without the giving of notice, the lapse of time, or both):
(a) do not require the consent of any third party; (b) do not conflict with the
articles of incorporation or bylaws of Buyer; (c) do not conflict in any
material respect with, result in a material breach of, or constitute a material
default under, any applicable law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental authority
applicable to Buyer or any material contract or agreement to which Buyer is a
party or by which Buyer may be bound.
4.4 Buyer Qualifications. To Buyer's knowledge, except as set
forth on Schedule 4.4 and subject to receipt of the waivers described in
Section 6.1 below, Buyer is legally, financially and otherwise qualified to
enter into and perform its obligations under each TBA and to be the licensee
of, acquire, own and operate each of the Stations under the Communications Act,
and the rules, regulations and policies of the FCC. Subject to receipt of the
waivers described in Section 6.1 below, Buyer knows of no fact that would,
under existing law and the existing rules, regulations, policies and procedures
of the FCC (a) prohibit Buyer from entering into and performing its obligations
under any TBA, (b) disqualify Buyer as an assignee of the FCC Licenses or as
the owner and operator of any Station or (c) cause the FCC to fail to approve
in a timely fashion any of the applications for the FCC Consents. To Buyer's
knowledge, except as described in Section 6.1 below, no waiver of any FCC rule
or policy is necessary to be obtained for the grant of the applications for the
assignment of the FCC Licenses to Buyer, nor will processing pursuant to any
exception to a rule of general applicability be requested or required in
connection with the consummation of the transactions contemplated hereby.
<PAGE> 26
4.5 Brokers. Except for the fees payable to CEA, which fees shall
be paid by Buyer and Seller as set forth in Section 6.11, neither Buyer nor any
Person acting on its behalf has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transactions contemplated
by this Agreement.
4.6 Availability of Funds. Buyer will have available sufficient
funds to enable it to consummate the transactions contemplated hereby,
including, without limitation, to make the loans under the Clear Channel Loan
Agreement.
4.7 Disclosure. None of the representations or warranties of Buyer
in this Agreement contains or will contain any untrue or misleading statement
of material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO EFFECTIVE TIME OR CLOSING
The following covenants of Seller in Sections 5.1 through 5.8 below
shall apply between the date of this Agreement and either the applicable
Effective Time or the applicable Closing, as specified, with respect to the
Stations. Notwithstanding anything to the contrary contained in this Agreement,
Buyer and Seller acknowledge and agree that nothing in this Agreement shall
apply to, or in any way restrict or limit, any of the businesses or operations
of the Seller, other than the businesses and operations of the Stations.
5.1 Generally. Between the date hereof and the relevant Effective
Time, Seller shall operate the Stations in all material respects in the
ordinary course of business (except where such conduct would conflict with the
following covenants or with Seller's other obligations under this Agreement).
Between the date hereof and the relevant Effective Time, Seller shall maintain
and repair Station facilities and equipment, maintain inventory of supplies,
parts and other materials and keep books of account, records and files, in each
case in the ordinary course of business consistent with past practice to the
extent commercially reasonable. Between the date hereof and the relevant
Effective Time, Seller shall continue to operate each Station in accordance
with the terms of its FCC Licenses in all material respects and in compliance
in all material respects with all applicable laws and FCC rules and
regulations.
<PAGE> 27
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Prior to the relevant Closing, except as provided in Schedule 5.1 or
as otherwise permitted by any provision of this Section 5.1, and subject to and
except as provided in any applicable TBA pursuant to which Seller may take
actions thereunder, and without limiting any of Buyer's obligations thereunder,
Seller, with respect to the Stations, will not, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld:
(a) apply to the FCC for any construction permit that would
restrict any Station's present operations, or make any material change in any
Station's buildings, leasehold improvements or fixtures that is not in the
ordinary course of business;
(b) enter into, renew, amend or modify any contract, lease,
license or other agreement; provided that prior to the relevant Effective Time
(1) Seller shall be permitted to enter into or renew, in the ordinary course of
business, any contract, lease, license or other agreement not involving
liabilities exceeding Two Thousand Five Hundred Dollars ($2,500) per contract,
lease, license or agreement per year and One Hundred Twenty-Five Thousand
Dollars ($125,000) per year in the aggregate for all Stations and the
Businesses (as defined in the Group I Purchase Agreement) for all such
contracts, leases, licenses and other agreements, (2) Seller shall be permitted
to enter into trade or barter agreements, in the ordinary course of business,
consistent with past practice, which do not result in a Negative Balance and as
set forth in Section 5.1(f) below, and (3) nothing contained herein shall be
deemed to prevent Seller from entering into any contract, lease, license or
other agreement not falling within the scope of the foregoing clauses of this
Section 5.1(b), provided, that, any such contract, lease, license or other
agreement shall not constitute an Assumed Contract unless expressly agreed to
by Buyer;
(c) make any assignment for the benefit of creditors or take
any action in contemplation of, or which would constitute the basis for, the
institution of insolvency proceedings of any character, including without
limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary;
(d) except as required by law or the Assumed Contracts, (i)
hire any employee except in the ordinary course of business, (ii) enter into,
renew, amend or modify any contract of employment, collective bargaining
agreement or other labor contract or (iii) permit any increases in the
compensation of any of the employees of any Station except for employees
without employment contracts, salary increases each January 1 and July 1
<PAGE> 28
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consistent with past practices not exceeding 5% per year; provided, however,
that (i) Seller may pay bonuses to any of its employees so long as such bonuses
do not create any liability or obligation upon Buyer, and (ii) Seller may amend
any contract of employment to delete the provisions thereof which grant to an
employee an option to purchase common stock of PCC;
(e) discount or otherwise reduce any accounts receivable of any
Station, or collect any such receivables other than in the ordinary course of
business consistent with past practice; and
(f) enter into any trade or barter agreements which would cause
the value of goods or services to be received by all the Stations and the
Businesses (as defined in the Group I Purchase Agreement) as of the related
Effective Time in the aggregate to result in a Negative Balance; provided,
however, that to the extent that Seller determines in good faith that it is
necessary to enter into such a trade or barter agreement, Seller may do so, but
if such agreement has not been consented to by Buyer and causes a Negative
Balance, Buyer shall have no obligation in respect of such agreement to the
extent of the obligations thereunder which cause such Negative Balance.
Whenever, pursuant to subsections (a) through (f) above, Seller shall request
the consent of Buyer, the request shall be sent in writing via facsimile to
Buyer in accordance with Section 11.2. With respect to requests for consent
under Section 5.1, unless Buyer gives or denies its written consent by the end
of the fifth Business Day after the request for consent is transmitted to
Buyer, Buyer's written consent will be presumed to have been given as of that
deadline. With respect to each Station, prior to the Closing applicable
thereto, Seller shall maintain in full force and effect the insurance policies
of Seller listed on Schedule 3.11 with respect to the Station or policies
providing similar coverage, and make and prosecute all claims thereunder in
respect of any loss or damage to any of the Assets in accordance with past
practice, and apply the proceeds thereof to the repair or replacement of any
such Assets. With respect to each Station, prior to the Effective Time
applicable thereto, Seller shall promote the Station in the ordinary course of
business, consistent with past practice.
5.2 Dispositions. Prior to the relevant Closing Date, except as
contemplated by this Agreement or set forth on Schedule 5.2, and subject to and
except as provided in any applicable TBA pursuant to which Seller may take
actions thereunder, and without limiting any of Buyer's obligations thereunder,
Seller shall not sell, assign, lease, or otherwise transfer or dispose of any
of the Assets, except any Assets no longer used in the business or
<PAGE> 29
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operations of any Station or any Assets that are replaced with replacement
property of equivalent value, kind and use. Notwithstanding the foregoing or
anything else contained in this Agreement, the expiration by their terms of
Contracts prior to such Closing shall not be deemed to be a violation of this
Agreement.
5.3 Liens. Prior to the relevant Closing Date, Seller shall not
create, assume or permit to exist any Liens upon the Assets, except for
Permitted Liens and Liens that will be discharged prior to or on the Closing
Date.
5.4 Access to Information. Prior to the relevant Closing Date,
Seller shall give Buyer and its employees and other authorized representatives
during normal business hours and with reasonable prior notice, access to the
Assets and to all other books, records and documents of Seller relating to the
Stations (such access not to unreasonably interfere with the business or
operations of any Station), including, without limitation, for purposes of
conducting any surveys and/or environmental assessments of Real Property
included in the Assets in accordance with Section 6.9, and will furnish or
cause to be furnished to Buyer or its authorized representatives, upon
reasonable notice, all information with respect to the business and operation
of the Stations owned by Seller that Buyer may reasonably request; provided
that the foregoing do not unreasonably disrupt the business of Seller. As soon
as practicable after the date hereof, and in any case prior to August 29, 1997,
Seller shall provide Buyer with a list of all names under which any of the
Stations' Businesses have been conducted by Seller or any Affiliates of Seller.
5.5 Financial Information. For all periods prior to the relevant
Effective Time, Seller shall furnish Buyer within twenty (20) days after the
end of each calendar month after the date hereof an unaudited statement of
income and expense for such month of the Stations owned by Seller and such
other financial information prepared by Seller relating to the operations of
the Stations owned by Seller, as Buyer may reasonably request (the "Monthly
Financial Information"). The Monthly Financial Information shall be prepared in
accordance with GAAP (except for the absence of footnotes and year-end
adjustments otherwise required by GAAP) and shall present fairly in all
material respects the financial condition of Seller with respect to the
Stations included in such Monthly Financial Information as at the date thereof
and for the periods then ended, as appropriate.
5.6 Notice of Proceedings. Prior to the last Closing hereunder,
Seller and Buyer will promptly notify the other in writing upon becoming aware
of any order or decree or any
<PAGE> 30
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complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement, or the transactions contemplated hereunder, or
upon receiving any notice from any court or government authority of its
intention to institute an investigation into, or institute a suit or proceeding
to restrain or enjoin the consummation of this Agreement or the transactions
contemplated hereunder, or to nullify or render ineffective this Agreement, or
such transactions if consummated. Seller and Buyer will each use commercially
reasonable efforts to contest, defend and resolve any such suit, proceeding or
injunction brought against it, and to cause any temporary restraining order or
preliminary injunction against such consummation to be lifted, promptly, so as
to permit the consummation of the transactions contemplated hereby and thereby.
5.7 ARS APA. Except as otherwise set forth in the last sentence of
this Section 5.7, until the Group IV Closing, Seller shall cause PCWPB to
(i)use commercially reasonable efforts to maintain the ARS Asset Purchase
Agreement in full force and effect in accordance with its terms, (ii) use
commercially reasonable efforts to comply with the terms of the ARS Asset
Purchase Agreement applicable to it, (iii) not terminate, amend, modify or
waive any of Seller's rights, or ARS's obligations under, the ARS Asset
Purchase Agreement, without Buyer's prior written consent which shall not be
unreasonably withheld, (iv) at Seller's sole cost, use commercially reasonable
efforts to enforce PCWPB's rights thereunder, (v) use commercially reasonable
efforts to cause all conditions precedent to PCWPB's obligation to close under
the ARS Asset Purchase Agreement to be satisfied, (vi) as soon as practicable
after the time of receipt or delivery by PCWPB, deliver to Buyer copies, of all
notices and other documents received or delivered by PCWPB under the ARS Asset
Purchase Agreement, including, without limitation, all written information
received by PCWPB from ARS or any Affiliate of ARS regarding the cash flow of
the Group IV Stations which is relevant to the applicability of Section 7.1G of
the ARS Asset Purchase Agreement or to the mechanism under Section 2.4 thereof
pursuant to which the purchase price under the ARS Asset Purchase Agreement may
be reduced, (vii) notify Buyer promptly upon learning of any (A) noncompliance
with the ARS Asset Purchase Agreement, (B) material breach or default under the
ARS Asset Purchase Agreement (or any event or condition that with notice or the
passage of time or both would constitute a material breach or default
thereunder), or (C) event or condition that renders any representation or
warranty in the ARS Asset Purchase Agreement untrue or misleading in any
material respect (or would have rendered any such representation or warranty
untrue or misleading in any material respect if such event or condition had
been known to the party making the same at the time made), (viii) use
commercially reasonable efforts to consummate the closing under
<PAGE> 31
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the ARS Asset Purchase Agreement on the earliest date permitted thereunder, and
(ix) use commercially reasonable efforts to otherwise afford Buyer the benefits
received by PCWPB under the ARS Asset Purchase Agreement. Notwithstanding
anything to the contrary contained herein, Seller, in its sole discretion and
without any liability to Buyer, may cause PCWPB to terminate the ARS Asset
Purchase Agreement in accordance with its terms; provided, however, that if the
condition set forth in Section 7.1G of the ARS Asset Purchase Agreement is not
satisfied, but Seller elects not to cause PCWPB to terminate the ARS Asset
Purchase Agreement, Seller shall (x) timely notify Buyer in writing of such
election and (y) provide Buyer with the opportunity, in Buyer's sole
discretion, upon timely written notice to Seller, to cause Seller to cause
PCWPB to terminate the ARS Asset Purchase Agreement in accordance with such
written notice and the provisions of the ARS Asset Purchase Agreement. If the
ARS Asset Purchase Agreement is terminated pursuant to this Section 5.7, the
Group IV Closing shall not take place and all provisions of this Agreement
related to the purchase of the Group IV Assets by Buyer and the Group IV TBA
shall terminate and be of no further force and effect.
5.8 Representations and Warranties. Prior to the relevant
Effective Time with respect to all representations and warranties contained in
this Agreement, and, with respect to the representations and warranties of
Seller set forth in Sections 3.1 and 3.2, the second sentence of Section 3.4
(with respect to Main Station FCC Licenses only and other than as a result of
any action or inaction by Buyer), the second and fourth sentences of Section
3.5, the second sentence of Section 3.6 and Section 3.10 only, prior to the
relevant Closing Date, Seller shall give Buyer detailed written notice promptly
upon becoming aware (i) that any such representation or warranty of Seller
under this Agreement, or under any document, instrument or agreement made or
delivered by Seller in connection herewith, is untrue or misleading in any
material respect and (ii) of any event or condition that would render any such
representation or warranty untrue or misleading in any material respect if such
event or condition were known to Seller when such representation or warranty
was made.
5.9 Marketing. Prior to the related Effective Time, Seller shall
provide Buyer with reasonable access to its senior management at the Stations
to enable Buyer to develop marketing plans to be implemented by Buyer after
such Effective Time; provided, however, that such access shall be upon
reasonable prior notice and shall not unreasonably interfere with Seller's
operations.
<PAGE> 32
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SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The purchase and sale of the Assets as contemplated by this
Agreement is subject to the prior consent and approval of the FCC.
(b) Buyer and Seller acknowledge that (i) Seller and LPI have
prepared and, on June 23, 1997, filed with the FCC appropriate applications for
the FCC Pro Forma Consent and (ii) Buyer and Seller have prepared and, on June
27, 1997, filed with the FCC appropriate applications for the FCC Consents.
Buyer and PCC shall prosecute the applications to which they are a party with
commercially reasonable diligence and otherwise use their commercially
reasonable efforts to obtain the grants of the applications as expeditiously as
practicable. Each party will promptly provide to the other party a copy of any
pleading, order or other document served on it relating to such applications.
(c) Buyer's portion of the applications for the FCC Consents
included a request for a waiver of the FCC's one-to-a- market rule (47 C.F.R.
73.3555(c)) to permit the common ownership of radio stations WFSJ(FM),
WZNZ(AM), WNZS(AM), WROO(FM), WTLK(FM) and WPLA(FM) and Buyer's existing
television station WAWS(TV) (the "Jacksonville One-To-A-Market Waiver"). Buyer
filed with the FCC on July 25, 1997 a request for waiver of the FCC's
one-to-a-market rule (47 C.F.R. 73.3555(c)) to permit common ownership of radio
station WTKX(FM) and Buyer's existing television station WPMI-TV (the
"Pensacola One-To-A-Market Waiver"). Notwithstanding any provision in this
Agreement to the contrary, Buyer's obligations to consummate the transactions
contemplated by this Agreement shall not be affected by the imposition of any
condition in an FCC Consent requiring compliance with the outcome in the
pending television ownership rulemaking proceeding, Review of Commission's
Regulations Governing Television Broadcast Ownership, Second Further Notice of
Proposed Rulemaking, MM Docket Nos. 91-221 and 87-8, FCC 96- 438 (released
November 7, 1996); should divestiture be required as a result of that
proceeding, Buyer will file an application for FCC consent to sell the
necessary station(s) within any period specified by the FCC from the release of
the final Order in that proceeding. Furthermore, each party agrees to comply
with any other condition imposed on it by any FCC Consent, provided that,
except to the extent provided in the previous sentence of this Section 6.1, no
party shall be required to comply with a condition if compliance with the
condition would materially adversely affect it. Buyer shall promptly provide to
the FCC any information requested by the FCC in connection with its
consideration of the Jacksonville One-To-A-Market Waiver and
<PAGE> 33
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the Pensacola One-To-A-Market Waiver. Buyer and Seller shall oppose any
petitions to deny or other objections filed with respect to any application for
FCC Consent and any requests for reconsideration or review of any FCC Consent.
(d) If any Closing shall not have occurred for any reason within
the original effective period of any FCC Consent applicable to such Closing,
and neither party shall have terminated this Agreement under Section 9, the
parties shall jointly request an extension of the effective period of such FCC
Consent. No extension of the effective period of any FCC Consent
shall limit the exercise by either party of its right to terminate the
Agreement under Section 9.
6.2 HSR Act Filing. Seller and Buyer acknowledge that they have filed,
or caused to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") certain filings that are required in connection with
the transactions contemplated hereby under the HSR Act and submitted to the
other party, prior to the filing thereof, their respective HSR Act filings and
discussed with the other any comments the reviewing party may have had. Seller
and Buyer agree to file, or cause to be filed, on or before August 26, 1997,
with the DOJ and FTC all additional filings that are required in connection
with the transactions contemplated hereby under the HSR Act, including
reflecting that the assets used and useable in connection with the Tampa
Billboard Business (as defined in the Group I Purchase Agreement) are to be
excluded from the Group I Assets and, will submit to the other party, prior to
the filing thereof, their respective HSR Act filing and discuss with the other
any comments the reviewing party may have. Buyer and Seller agree to (a)
cooperate with each other in connection with all such HSR Act filings, which
cooperation shall include furnishing the other with any information or
documents that may be reasonably required in connection with such filings; (b)
promptly file, after any request by the FTC or DOJ and after appropriate
negotiation with the FTC or DOJ of the scope of such request, any information
or documents requested by the FTC or DOJ; and (c) furnish each other with any
correspondence from or to, and notify each other of any other communications
with, the FTC or DOJ that 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.
6.3 Confidentiality.
(a) Each party will not use or disclose to third parties (except as
may be necessary for the consummation of the transactions contemplated hereby,
or as required by law, including, without limitation, in connection with legal
<PAGE> 34
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proceedings relating to this Agreement, documents delivered in connection
herewith or pursuant hereto and the transactions contemplated hereby and
thereby, or otherwise pursuant to subpoena or the request of a governmental
authority, and then only with prior notice to the other parties hereto,
including delivery of a copy of the subpoena or request, if applicable) this
Agreement or any information (including, without limitation, financial
information and information regarding program contracts and revenue) received
from the other parties hereto or their agents in the course of investigating,
negotiating and performing the transactions contemplated by this Agreement and
the documents delivered in connection herewith or pursuant hereto; provided,
however, that each party may disclose such information to such party's
officers, directors, employees, lenders, advisors, attorneys and accountants
who need to know such information in connection with the consummation of the
transactions contemplated by this Agreement and the documents delivered in
connection herewith or pursuant hereto and who are informed by such party of
the confidential nature of such information. Nothing shall be deemed to be
confidential information that: (1) is already in such party's possession,
provided that such information is not known by such party to be subject to
another confidentiality agreement with or other obligation of secrecy to the
other party hereto or another party, or (2) becomes generally available to the
public other than as a result of a disclosure by such party or such party's
officers, directors, employees, lenders, advisors, attorneys or accountants, or
(3) becomes available to such party on a non-confidential basis from a source
other than the other party hereto or its advisors, provided that such source is
not known by such party to be bound by a confidentiality agreement with, or
other obligation of secrecy to, the other party hereto or another party, or (4)
is developed independently by either party without resort to the confidential
information of the other party. In the event this Agreement is terminated and
the purchase and sale contemplated hereby abandoned, Buyer will return to
Seller all copies of documents, work papers and other written confidential
material obtained by Buyer in connection with the transactions contemplated
hereby. If this Agreement is terminated, each party will return to the other
party all information (including all documents, work papers and other written
confidential material) obtained by such party from any other party in
connection with the transactions contemplated by this Agreement.
(b) No party shall publish any press release or make any other
public announcement concerning this Agreement or the transactions contemplated
hereby without the prior written consent of each other party, which shall not
be withheld unreasonably; provided, however, that nothing contained in this
Agreement shall prevent any party, after notification to each
<PAGE> 35
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other party, from taking any action required by law or from making any filings
with governmental authorities that, in its judgment, may be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
6.4 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 or desirable to the implementation and consummation of this
Agreement, including, without limitation, obtaining any Consents and Estoppel
Certificates, and otherwise use their commercially reasonable efforts to
consummate the transactions contemplated hereby and to fulfill their
obligations under this Agreement. Seller and Buyer shall each diligently make,
and cooperate with the other in making, all commercially reasonable efforts to
obtain or cause to be obtained prior to the relevant Closing Date all Consents
and Estoppel Certificates. Buyer agrees to use all commercially reasonable
efforts to assist Seller in obtaining such Consents and Estoppel Certificates,
and to take all commercially reasonable actions necessary or desirable to
obtain such Consents and Estoppel Certificates, including, without limitation,
executing such assumption instruments and other documents as may be reasonably
required in connection with obtaining the Consents and Estoppel Certificates.
6.5 Control of the Stations. Nothing contained in this Agreement shall
give Buyer any right from this date forward or at any time thereafter to
control the operations of any Station, and Seller shall have complete control
of the operations, consistent with, and subject to, the provisions of any
applicable TBA.
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 applicable Closing
Date any books and records relating to the Assets sold at such Closing, but not
included in such Assets. Buyer shall provide Seller access and the right to
copy for a period of two (2) years after the applicable Closing Date any books
and records relating to the Assets sold at such Closing, that are included in
such Assets. Neither Buyer nor Seller will destroy any such books and records
during such two (2) year period. After the expiration of such two (2) year
period, Buyer and Seller shall use commercially reasonable efforts to give the
other parties to this Agreement reasonable prior written notice of their
intention to destroy any such books and records prior to destroying any such
books and records.
<PAGE> 36
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6.7 Employee Matters. The following provisions shall be for the
exclusive benefit of the parties to this Agreement and not for the benefit of
any other person or entity:
(a) (i) Effective as of the applicable Effective Time, (but subject
to rescission if the applicable Closing does not occur), with respect to each
Station, except with respect to employees retained by Seller under any
applicable TBA ("Retained Employees"), Buyer (A) shall assume the Assumed
Contracts listed on Schedule 3.12 and (B) may, in its sole discretion, but
shall not be obligated to, offer employment to any of Seller's other employees
with respect to such Station and (ii) (1) effective as of any applicable
Closing Date, Buyer (A) shall assume any Retained Employee's Assumed Contracts
listed on Schedule 3.12 that are not assumed at the Effective Time and (B) may,
in its sole discretion, but shall not be obligated to, offer employment to any
of the other Retained Employees (collectively, those employees to whom Buyer
elects to offer employment and who are employed pursuant to Assumed Contracts,
the "Assumed Employees"). Except as otherwise provided in any Assumed Contract,
Buyer may offer employment to the Assumed Employees on any terms and conditions
that are determined by Buyer in its sole discretion, including with respect to
the provision of retirement and health care benefits. Buyer shall assume the
contracts of employment of the Assumed Employees and notwithstanding anything
in the foregoing to the contrary, to the extent such employment contracts
assumed hereunder provide for terms and conditions in addition to those
referenced in the preceding sentence, Buyer shall assume the terms thereof.
(b) To the extent the Purchase Price is reduced pursuant to Section
2.5 in respect thereof, Buyer shall grant Assumed Employees credit for and
shall assume and be responsible for any liabilities with respect to sick leave
and personal days accrued but unused by any Assumed Employees as of the
applicable Effective Time, and, to the extent of such Purchase Price reduction,
shall grant Assumed Employees credit for and shall assume and be responsible
for any liabilities with respect to any accrued but unused vacation for such
employees as of such Effective Time. No such credit shall exceed the number of
sick, personal and vacation days listed on Schedule 3.12.
(c) Buyer agrees that Seller may inform its employees that Buyer has
agreed that the Assumed Employees will be offered employment as provided in
this Section 6.7; provided, however, that Buyer shall have the right to approve
any written statement to be made by Seller in connection therewith.
(d) Seller shall comply with the provisions of the Worker Adjustment
and Retraining and Notification Act (the "WARN
<PAGE> 37
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Act") and similar laws and regulations, if applicable, and shall be solely
responsible for any and all liabilities, penalties, fines, or other sanctions
that may be assessed or otherwise due under such applicable laws and
regulations on account of the dismissal or termination of any of the employees
of any of the Stations by Seller prior to the applicable Effective Time or
Closing Date, as the case may be. Buyer shall employ at least that proportion
of the employees of each Station as shall be necessary to prevent a "mass
layoff" or a "plant closing" as such terms are defined in the WARN Act and
Buyer shall comply with all applicable laws and regulations applicable in
connection with Buyer's exercise of discretion in offering employment to
employees of Seller, including, without limitation, those relating to
employment discrimination.
(e) With respect to any Assumed Employees, within a reasonable
period of time after the related Effective Time or within a reasonable period
of time after the related Closing Date, as the case may be, Seller shall
transfer from the Paxson Communications 401(k) Profit Sharing Plan (the "Seller
401(k) Plan") to the 401(k) Plan maintained by the Guarantor or its Affiliates
for the benefit of the employees of the Buyer ("Buyer's 401(k) Plan") an
amount, in cash, equal to the aggregate account balances held in the Seller
401(k) Plan as of the date of transfer with respect to all Assumed Employees
hired by the Buyer as of such Effective Time or such Closing Date, as the case
may be; provided, however, that Buyer shall have no obligation under this
Section 6.7(e) if Buyer reasonably believes such transfer shall cause Buyer's
401(k) Plan to not be qualified under the Code. Prior to the date of any such
transfer, and as preconditions thereto: (i) Buyer shall use commercially
reasonable efforts to deliver to Seller a copy of the most recently issued
Internal Revenue Service ("IRS") determination letter (or other proof
reasonably satisfactory to counsel for Seller) that Buyer's 401(k) Plan is
qualified under the Code, and (ii) Seller shall use commercially reasonable
efforts to 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 Seller 401(k) Plan is qualified under the Code. 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 6.7(e).
6.8 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances that constitutes or causes a breach
of a representation or warranty of Seller or Buyer (including, without
limitation, in the case of Seller, under the information disclosed in the
Schedules hereto) on the date such representation or warranty is made shall be
<PAGE> 38
deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured in all material respects on or before 30 days
after the receipt by such party of written notice thereof from the other party.
6.9 Environmental Reports.
(a) Seller has delivered to Buyer, at Seller's cost, copies of
the Phase I environmental reports that have been prepared by Dames and Moore
with respect to certain parcels of owned Real Property and all other
environmental reports with respect to the Real Property that are in the
possession, custody or control of Seller (collectively, the "Existing Phase I
Reports").
(b) Buyer, at its election and cost, may obtain any updates of
the Existing Phase I Reports (the "Updated Reports"). Seller will cooperate
with Buyer in obtaining, at Seller's expense, a Phase II environmental report
for any parcel of Real Property owned by Seller with respect to the Stations to
the extent expressly recommended in any Existing Phase I Reports or any Updated
Report (a "Phase II Report"); provided, however, that no such Phase II Report
shall be ordered or obtained before the expiration of five (5) Business Days
after the date hereof. Notwithstanding the foregoing, Seller acknowledges that
Buyer has ordered, at Seller's expense, an analysis, to be performed by Dames &
Moore, of suspected asbestos containing materials (ACM) and suspected PCB
containing transformer dielectric fluid; provided, however, that in the event
such analysis confirms the presence of the suspected ACM and PCB containing
fluids, (i) Seller shall have no liability for the remediation of any ACM
unless and to the extent Dames & Moore recommends the immediate remediation of
any friable ACM and (ii) Seller shall have no liability for the remediation of
any PCB containing equipment which is not owned by Seller or which does not
require immediate remediation as recommended by Dames & Moore. Seller and Buyer
shall use commercially reasonable efforts to obtain the Phase II Reports as
soon as practicable thereafter. The Existing Phase I Reports, any Updated
Reports and any Phase II Reports are hereinafter referred to as the
"Assessments."
(c) Copies of each Assessment shall be delivered to Seller by
Buyer promptly after receipt by Buyer. Seller and Buyer agree that the results
of any Assessment carried out pursuant to this Section shall not be disclosed
to any third party, unless such disclosure is required by law; provided,
however, that each party may disclose such information to such party's
officers, directors, employees, lenders, advisors, attorneys and accountants
who need to know such information in connection with the consummation of the
transactions contemplated
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by this Agreement and who are informed by such party of the confidential nature
of such information.
(d) From and after the applicable Effective Time, in accordance
with and subject to the provisions of Section 10 hereof, Seller shall, at its
sole cost, either undertake, or reimburse Buyer for, any remediation or other
action required to eliminate noncompliance with Applicable Environmental Laws
with respect to any Real Property owned by Seller, in each case as specifically
set forth in any Phase II Report (irrespective of whether such Phase II Report
is received before or after the relevant Effective Time).
6.10 Other Transactions.
(a) Sale of Group V Assets to LPI. Notwithstanding any provision
of this Agreement to the contrary, Buyer and Seller hereby agree as follows:
(i) if the Group II/III Closing and Group V Closing have not
occurred, then and in such event, on the later of (x) October 1, 1997 and (y)
the date reasonably agreeable to Seller and Buyer not less than five (5)
Business Days nor more than ten (10) Business Days following the later of (1)
the grant by the FCC of the FCC Pro Forma Consent and (2) the date on which the
waiting period under the HSR Act in respect of the transactions to be
consummated under this Agreement shall have expired or terminated and there
shall not be pending any action or request for information instituted by the
FTC or the DOJ under the HSR Act relating to such transactions (the foregoing,
the "LPI Sale Date"), subject to the terms and conditions set forth in this
Section 6.10(a), the following provisions shall apply:
(1) PCC shall sell and transfer, on the LPI
Sale Date, the Group V Assets and Group V Assumed Liabilities to
LPI, and, concurrently therewith, PCC shall, pursuant to
documentation reasonably acceptable to PCC and Buyer (which
documentation shall be submitted by Seller to Buyer for review by
Buyer a reasonable period of time prior to the LPI Sale Date),
assign all of its rights, liabilities and obligations under this
Agreement in respect of the Group V Sale to LPI, and LPI shall
purchase the Group V Assets and assume the liabilities and
obligations of PCC under the Group V Assumed Liabilities and the
Group V Sale under this Agreement (the "LPI Sale"); provided that
such sale and assignment shall not release PCC from any of its
liabilities and obligations hereunder to Buyer. For purposes hereof,
except as otherwise provided in this Agreement or as the context
otherwise requires, in the event of such assignment,
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LPI shall be treated as the "Seller" hereunder in respect of the
Group V Assets and/or the Group V Sale.
(2) The LPI Sale shall be consummated between
PCC and LPI on the terms and conditions set forth in this Section
6.10(a), pursuant to assignments and other conveyancing documents
that are sufficient to convey and vest good title to the Group V
Assets to LPI, free and clear of all Liens, other than Permitted
Liens, in form and substance reasonably acceptable to PCC, LPI and
Buyer.
(3) LPI shall purchase the Group V Assets from
PCC for a purchase price of Four Hundred Twenty-Eight Million Two
Hundred Eighty Thousand Eight Hundred Seventy- Three Dollars
($428,280,873), which shall be paid by LPI on the LPI Sale Date by
federal wire transfer of same-day funds to such account or accounts
as PCC designates in writing to LPI on or before the LPI Sale Date,
including the account of any Intermediary referred to in Section
6.10(a)(i)(8) hereof, in an amount equal to Three Hundred Sixty-Nine
Million Four Hundred Fifteen Thousand One Hundred Dollars
($369,415,100) and by execution and delivery by LPI to PCC (or to
any such Intermediary) of a promissory note substantially in the
form of Exhibit 6.10-A hereto (the "LPI Note"), in a principal
amount of Fifty-Eight Million Eight Hundred Sixty-Five Thousand
Seven Hundred Seventy-Three Dollars ($58,865,773).
(4) In connection with the execution and
delivery of the LPI Note, LPI shall cause to be executed and
delivered to PCC a subordinated Guaranty from Mr. Lowell W. Paxson,
substantially in the form of Exhibit 6-10B hereto (the "Subordinated
Guaranty") and PCC shall execute and deliver, and LPI shall
acknowledge, the Intercreditor Agreement.
(5) Proration and adjustments relating to the
Group V Assets shall be made in accordance with the provisions of
Section 2.5 as follows:
(A) On the Group V Closing Date, Buyer shall
pay LPI the Preliminary Purchase Price for the Group V
Assets based upon the prorations and adjustments
reflected in the Preliminary Settlement Statement for the
Group V Assets, as required by Sections 2.5(b)(1) and
2.6(a). If the Preliminary Purchase Price for the Group V
Assets exceeds $434,606,000, then LPI shall pay the
amount of such excess to PCC (or to any party designated
by PCC in writing to Buyer). If $434,606,000 exceeds the
Preliminary Purchase Price for
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the Group V Assets, then PCC shall pay (or cause to be
paid) the amount of such excess to LPI.
(B) The Purchase Price for the Group V Assets
shall be finally determined pursuant to Section
2.5(b)(2). If the Purchase Price as so determined for the
Group V Assets exceeds the Preliminary Purchase Price as
so determined for the Group V Assets, Buyer shall pay the
amount of such excess to LPI in accordance with Section
2.6(b)(1), and LPI shall thereafter pay the amount of
such excess to PCC (or to any party designated by PCC in
writing to LPI). If the Preliminary Purchase Price for
the Group V Assets exceeds the Purchase Price as so
determined for the Group V Assets, PCC shall pay (or
cause to be paid) the amount of such excess to LPI, and
LPI shall thereafter pay the amount of such excess to
Buyer in accordance with Section 2.6(b)(2).
(6) On the LPI Sale Date (A) Buyer and LPI
shall enter into the Clear Channel Loan Agreement, substantially in
the form of Exhibit 6.10-C hereto (the "Clear Channel Loan
Agreement") and pursuant to the terms thereof, LPI shall make two
promissory notes in favor of Buyer in the forms of Exhibit A-1 and
Exhibit A-2 to the Clear Channel Loan Agreement; (B) Buyer and PCC
shall execute and deliver, and LPI shall acknowledge, the
Intercreditor and Subordination Agreement, substantially in the form
of Exhibits 6.10-D hereto (the "Intercreditor Agreement"); LPI shall
execute and deliver to Buyer the Security Agreement, substantially
in the form of Exhibit 6.10-E hereto, and Mortgages on the owned
Real Property included in the Group V Assets, in forms enforceable
under Florida law and otherwise reasonably satisfactory to the
parties, and cause to be executed and delivered to Buyer a Guaranty
from Mr. Lowell W. Paxson, substantially in the form of Exhibit
6.10-F hereto, and Stock Pledge Agreement, substantially in the form
of Exhibit 6.10-G hereto, together with UCC-1's and such other
documents in connection therewith as Buyer may reasonably request
(collectively with the Intercreditor Agreement, the "Security
Documents"); (C) Buyer and LPI shall execute and deliver the Group V
Time Brokerage Agreement, substantially in the form of Exhibit
6.10-H hereto, (the "Group V TBA"); (D) Buyer and PCC shall execute
and deliver the Group II/III Time Brokerage Agreement,
substantially, in the form of Exhibit 6.10-I hereto, (the "Group
II/III TBA"); (E) Buyer and LPI shall execute and deliver a TSA with
respect to WFSJ(FM) and Buyer and PCC shall execute and deliver a
TSA with respect to WHNZ(AM), each substantially in the form of
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Exhibit 6.10-J; (F) Buyer and PCC shall execute and deliver a TSA
with respect to WTLK(FM), substantially in the form of Exhibit
6.10-J; and (G) if requested by PCC or LPI, Buyer, PCC and LPI shall
execute and deliver separate Service Agreements for logging,
traffic, payroll, accounting and similar services, with respect to
each of WHNZ, WFSJ, WTLK, WYCL and WEAT, substantially in the form
of Exhibit 6.10-K hereto (collectively, the "Services Agreements").
The "Group II/III TBA Date" and the "Group V TBA Date" shall mean
the dates on which the Group II/III TBA and Group V TBA,
respectively, are executed and delivered.
(7) Funding of the Clear Channel Loan shall be
subject to satisfaction of the conditions set forth in the Clear
Channel Loan Agreement. Subject to satisfaction of the conditions
set forth in Section 6.10(a)(ii) below on the LPI Sale Date, Buyer
shall advance to LPI, by federal wire transfer of same-day funds, an
amount equal to the Group V Loan Amount pursuant to the Clear
Channel Loan Agreement.
(8) PCC may assign some or all of its rights
(but not its obligations) under the LPI Sale as set forth in this
Section 6.10(a) (including its right to receive the LPI Note) to an
Intermediary; provided that (i) such assignment shall not deprive
LPI or Buyer of rights or benefits, or relieve PCC of any
obligations or liabilities, under this Agreement, (ii) neither LPI
nor Buyer shall be obligated to expend funds or incur obligations or
liabilities in connection therewith and (iii) PCC shall indemnify
and hold harmless LPI and Buyer from and against any and all loss,
liability, cost and expense arising or resulting from any such
assignment to an Intermediary; provided that such indemnification of
LPI shall be subordinated to prior satisfaction in full of any
applicable indemnification of Buyer in respect of the Like-Kind
Exchange (as hereinafter defined) as provided in this Agreement. PCC
intends to effect a like-kind exchange pursuant to Section 1031 of
the Code. However, nothing in this Agreement shall be construed as a
representation or warranty of any party to any other party as to the
tax characterization of the transactions contemplated by this
Agreement.
(9) Notwithstanding the foregoing, if on the
date otherwise scheduled for the LPI Sale pursuant to paragraph
6.10(a)(i) above, the conditions precedent set forth herein, with
respect to the LPI Sale, the Clear Channel Loan and the other
transactions to be consummated concurrently therewith, have not been
satisfied, the party for whose benefit such conditions have been
imposed may
<PAGE> 43
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elect to postpone the LPI Sale, the Clear Channel Loan, and the
other transactions to be consummated concurrently therewith, and the
LPI Sale, the Clear Channel Loan, and such transactions shall
thereafter take place on a date specified by not less than five (5)
Business Days' prior written notice from such party, which date
shall be not less than five (5) Business Days nor more than ten (10)
Business Days after the satisfaction or waiver of such conditions
precedent, but in no event later than the Termination Date. The
parties shall seek extension of the applicable FCC Consents that may
be required for any such postponement.
(10) Notwithstanding anything to the contrary
set forth herein, in the event LPI elects not to draw down the Clear
Channel Loan, such election shall not affect the parties'
obligations to enter into the Group II/III TBA or the Group V TBA.
(ii) The obligations of Buyer to consummate the
transactions contemplated under paragraphs (6) and (7) of Section 6.10(a)(i) on
the LPI Sale Date are subject, at Buyer's option, to the fulfillment at or
prior to such date, of each of the following conditions:
(1) PCC shall have satisfied the conditions
precedent set forth in Sections 7.1(a) and (b), and the condition
precedent set forth in Sections 7.1(d) and (e) shall apply, and for
purposes of Sections 7.1(a) and (b), the phrase "LPI Sale Date"
shall be substituted for the phrase "Closing Date for such
Closings";
(2) each of PCC and LPI shall have taken, or
stand ready, willing and able to take, the actions contemplated
under this Section 6.10(a);
(3) the conditions precedent set forth in the
Clear Channel Loan Agreement to the obligations of Buyer to make the
Group V Loan shall have been satisfied; and
(4) to the extent the conditions precedent to
the obligations of PCC to the consummation of the Group I Purchase
Agreement have been satisfied (or would be satisfied at consummation
by delivery of documents and the purchase price by Buyer), PCC shall
stand ready, willing and able to consummate the closing under the
Group I Purchase Agreement concurrently with the LPI Sale and the
making of the Group V Loan; provided it is understood and agreed
that if such
<PAGE> 44
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conditions precedent are not satisfied, Closing of the Group I Sale
shall not be a condition to consummation of the LPI Sale and the
making of the Group V Loan.
(iii) The obligations of PCC and LPI to consummate
the transactions contemplated under this Section 6.10(a) on the LPI Sale Date
are subject, at PCC's and LPI's option, to the fulfillment at or prior to such
date, of each of the following conditions:
(1) the conditions precedent set forth in
Sections 7.2(a), (b), (d) and (e) shall apply and, for purposes of
Sections 7.2(a) and (b), the phrase "LPI Sale Date" shall be
substituted for the phrase "Closing Date for such Closings";
(2) Buyer shall have taken, or stand ready,
willing and able to take, the actions contemplated under this
Section 6.10(a); and
(3) to the extent the conditions precedent to
the obligations of Buyer to the consummation of the Group I Purchase
Agreement have been satisfied (or would be satisfied at consummation
by delivery of documents by the Sellers thereunder), Buyer shall
stand ready, willing and able to consummate the Closing under the
Group I Purchase Agreement concurrently with the LPI Sale and the
making of the Group V Loan; provided it is understood and agreed
that if such conditions precedent are not satisfied, Closing of the
Group I Sale shall not be a condition to consummation of the LPI
Sale and the making of the Group V Loan.
(iv) It is understood and agreed by Buyer, PCC and
LPI that from and after the LPI Sale Date (assuming the LPI Sale occurs),
notwithstanding anything in this Agreement to the contrary, the only conditions
precedent applicable to the obligations of the parties at the Group II/III
Closing and the Group V Closing are as follows:
(1) for Buyer, (A) Sections 7.1(a), (b),
(c), (e), (f) (provided, however, that the officer's certificate
required by Section 8.2(b) shall apply only with respect to the
representations and warranties identified in clause (B) below), (g),
(h), (i) and (j); provided, however that (B) Section 7.1(a) shall
apply only with respect to the representations and warranties set
forth in Sections 3.1 and 3.2, the second sentence of Section 3.4
(with respect to Main Station FCC Licenses only and other than as a
result of any action or inaction by Buyer), the second and fourth
<PAGE> 45
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sentences of Section 3.5, the second sentence of Section 3.6,
Section 3.10 and Section 7.1(b) shall apply only with respect to
those covenants and agreements expressly to be performed or complied
with after the applicable Effective Time and prior to the applicable
Closing;
(2) for PCC and LPI, Sections 7.2(a), (b), (c), (e),
(f), (g), (h) and (i);
(3) for Buyer, that, concurrently with the Group
II/III Closing and the Group V Closing, the LPI Note shall have been
discharged in full; provided that Buyer's right to reliance upon
this condition precedent is conditioned upon its compliance with its
obligation to fund the Clear Channel Loan and the Preliminary
Purchase Price for the Group II/III Assets and the Group V Assets on
the Group II/III Closing Date and Group V Closing Date; and
(4) for PCC and LPI, that, concurrently with the
Group II/III Closing and the Group V Closing, the Group V Loan (and
related promissory note) have been discharged in full and the
related security interests of Buyer pursuant to the Security
Documents shall have been released; provided, that PCC's and LPI's
right to reliance upon this condition precedent is conditioned upon
PCC's compliance with its obligation to consummate the LPI Sale.
(v) Notwithstanding anything in this Agreement or in any
of the documents or instruments delivered pursuant hereto or in connection
herewith or in any applicable law to the contrary, Buyer agrees that under no
circumstances shall PCC have any liability or obligation of any nature
whatsoever with respect to repayment of the Group V Loan or any other
obligations of LPI pursuant to the Clear Channel Loan, the related security
interests of Buyer pursuant to the Security Documents or any other documents
delivered in connection therewith or pursuant thereto and Buyer hereby waives
and releases all such claims. Notwithstanding the foregoing, nothing contained
in this Section 6.10(a)(v) shall in any manner impair any right, remedy or
recourse Buyer may have against PCC for fraud in connection with this
Agreement.
(b) Group IV. On the date (the "Group IV Date") which is the
latest of (w) October 1, 1997, (x) the LPI Sale Date (assuming the LPI Sale
occurs), (y) the date agreeable to Buyer and Seller not less than five (5)
Business Days nor more than ten (10) Business Days following the date on which
the waiting period under the HSR Act in respect of the transaction to be
consummated under this Section 6.10(b) shall have expired or terminated and
there shall not be pending any action or request for information
<PAGE> 46
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instituted by the FTC or the DOJ relating to such transaction and (z) provided
Seller has given Buyer not less than (5) Business Days' prior written notice
thereof, and, provided, further, that the provisions of Section 5.7 above have
been complied with in all material respects and the ARS Asset Purchase
Agreement has not been terminated, the date of Seller's acquisition of the
Group IV Assets, if the Group IV Closing has not yet occurred, then and in such
event: (1) Buyer and Seller shall execute and deliver the Group IV Time
Brokerage Agreement, substantially in the form of Exhibit 6.10-L hereto (the
"Group IV TBA"); (2) Buyer and Seller (or, if the Assignee is the owner of
WEAT, the Assignee) shall execute and deliver a TSA with respect to WEAT
substantially in the form of Exhibit 6.10-J hereto (the "WEAT TSA"); and (3)
Buyer shall loan to Seller the sum of Thirty-Three Million Dollars
($33,000,000), as adjusted pursuant to the provisions of the ARS Asset Purchase
Agreement, including, without limitation, pursuant to Section 2.4 thereof (the
"Group IV Advance"), evidenced by three (3) promissory notes (the "Group IV-A
Note," the "Group IV-B Note" and the "Group IV-C Note," respectively), by
federal wire transfer of same-day funds. The Group IV-A Note shall be in the
principal amount of Twenty-Eight Million One Hundred Twenty-Five Thousand
Dollars ($28,125,000), the Group IV-B Note shall be in the principal amount of
Three Million One Hundred Twenty-Five Thousand Dollars ($3,125,000) and the
Group IV-C Note shall be in the principal amount of One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000), in each case, as adjusted in the aggregate
to reflect adjustment to the purchase price under the ARS Asset Purchase
Agreement. The Group IV Advance, the Group IV Loan Agreement, the Group IV-A
Note, the Group IV-B Note and the Group IV-C Note are hereinafter collectively
referred to as the "Group IV Loan." The terms and conditions of the Group IV
Loan shall be substantially similar to the terms and conditions of the Clear
Channel Loan and the promissory notes and Security Documents delivered pursuant
thereto; provided, however, that (a) the Group IV Loan shall be secured by the
Group IV Assets prior to the Group IV Closing Date and the WEAT Assets prior to
the transfer of WEAT by Seller; it being understood and agreed that (i) nothing
herein shall impair Seller's right to transfer WEAT to a third party and Buyer
shall immediately release all liens in the WEAT Assets in favor of Buyer in
connection with any such transfer and (ii) Buyer shall immediately release all
liens in the Group IV Assets in favor of Buyer in connection with the
acquisition by Buyer of the Group IV Assets notwithstanding that the Group IV-C
Note may still be outstanding hereunder; (b) the Group IV Loan shall bear
interest at a rate of ten percent (10%) per annum accruing from the date such
loan is made; provided that payments of interest in respect of the principal
amount of the Group IV Loan evidenced by the Group IV-C Note shall accrue and
be payable monthly in arrears in cash and not as an offset against any other
payments; (c) no
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payments in respect of interest shall be due with respect to that portion of
the principal of the Group IV Loan evidenced by the Group IV-A Note and the
Group IV-B Note if Buyer has not yet paid the programming fee due under the
Group IV TBA; (d) the Group IV- C Note shall be due and payable on the earlier
of twelve (12) months after the Group IV Effective Time and the date on which
Seller sells WEAT; (e) any Event of Default as defined in the Clear Channel
Loan Agreement shall be a default under the Group IV Loan Agreement; and (f)
the Group IV Loan and the Group IV-A Note, the Group IV-B Note and the Group
IV-C Note shall receive the benefit of a loan agreement (the "Group IV Loan
Agreement"), a security agreement and related financing statements, a stock
pledge agreement, a guaranty agreement of Mr. Lowell W. Paxson, and an
intercreditor subordination agreement, each substantially similar to the forms
of agreements referred to in Section 6.10(a)(i)(6) and attached hereto,
together with such other documents in connection therewith in substantially
similar forms as those contemplated by the Clear Channel Loan Agreement to the
extent requested by Buyer; provided, however, that references in the Clear
Channel Loan Agreement to the Group V TBA and TSA Agreements shall mean the
Group IV TBA and the TSA for WEAT, respectively. On the Group IV Date, the
following provisions shall also apply:
(1) PCC may elect, in its sole discretion, to transfer,
on the Group IV Date, the Group IV Assets and the Group IV Assumed
Liabilities, together with the tangible and intangible assets used
or useful in connection with the conduct of the business or
operations of WEAT (the "WEAT Assets") and certain related
liabilities, to an entity controlled by Mr. Lowell W. Paxson (the
"Assignee"), and concurrently therewith, PCC shall, pursuant to
documentation reasonably acceptable to Buyer (which documentation
shall be submitted by Seller to Buyer for review by Buyer a
reasonable period of time prior to the Group IV Date), assign all of
its rights, liabilities and obligations under this Agreement in
respect of the Group IV Sale to the Assignee, and the Assignee shall
accept such transfer and assignment of the Group IV Assets and
assume the liabilities and obligations of PCC under the Group IV
Assumed Liabilities and the Group IV Sale under this Agreement (the
"Group IV Transfer"); provided that such assignment shall not
release PCC from any of its liabilities and obligations hereunder to
Buyer. For purposes hereof, except as otherwise provided in this
Agreement or as the context otherwise requires, in the event of such
assignment, the Assignee shall be treated as the "Seller" hereunder
in respect of the Group IV Assets and/or the Group IV Transfer.
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(2) The Group IV Transfer shall be consummated between
PCC and the Assignee on the terms and conditions set forth in this
Section 6.10(b)for a purchase price of Thirty-Three Million Dollars
($33,000,000), and, to the extent applicable, as adjusted pursuant
to the ARS Asset Purchase Agreement, including, without limitation,
pursuant to Section 2.4 thereof, pursuant to assignments and other
conveyancing documents that are sufficient to convey and vest good
title to the Group IV Assets and the WEAT Assets to the Assignee,
free and clear of all Liens, other than Permitted Liens, in form and
substance reasonably acceptable to PCC, the Assignee and Buyer.
Prorations and adjustments relating to the Group IV Assets and WEAT
Assets shall be made in accordance with the provisions of Section
2.5 in substantially the same manner as prorations and adjustments
made in connection with the LPI Sale.
(3) The funding of the Group IV Loan shall be subject to
satisfaction of the conditions set forth in the Group IV-A Note and
the Group IV-B Note (which shall be substantially similar to those
set forth in Section 6.10(a)(ii)) and Buyer shall advance to the
Assignee, by federal wire transfer of same-day funds, the amount of
the Group IV Loan upon satisfaction of conditions substantially
similar to those set forth in Section 6.10(a)(ii), but with respect
to the Group IV Sale and/or the Group IV Assets and WEAT Assets.
(4) Notwithstanding anything in this Agreement or in any
of the documents or instruments delivered pursuant hereto or in
connection herewith or in any applicable law to the contrary, Buyer
agrees that, if the Group IV Transfer is consummated, under no
circumstances shall PCC have any liability or obligation of any
nature whatsoever with respect to repayment of the Group IV Loan or
the indebtedness evidenced by Group IV-A Note and the Group IV-B
Note or any other obligations of the Assignee pursuant thereto, the
related security documents or any other documents delivered in
connection therewith or pursuant thereto and Buyer hereby waives and
releases all such claims. Notwithstanding the foregoing, nothing
contained in this Section 6.10(b)(4) shall in any manner impair any
right, remedy or recourse Buyer may have against PCC for fraud in
connection with this Agreement.
In the event of termination of this Agreement with respect to the Group IV Sale
and the Group IV Assets, the Group IV Loan shall be repaid as provided for in
the Group IV-Loan Agreement and the Group IV-A Note, the Group IV-B Note and
the Group IV-C Note
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(subject to reduction as provided for in Section 9.2, the Group IV Loan
Agreement and the Group IV-B Note).
(c) Adjustments and Other Matters Relating to Group IV and
WKES. Notwithstanding any other provision of this Agreement to the contrary,
Buyer and Seller agree as follows:
(i) The Group IV Purchase Price shall be determined by
increasing or decreasing the Group IV Estimated Purchase Price under Section
2.5(a) hereof, to take account of any adjustments or prorations (upward or
downward) to the purchase price under the ARS Asset Purchase Agreement
(including any preliminary adjustments or prorations thereunder and any final
adjustments or prorations thereunder, including, without limitation or
duplication, pursuant to the first sentence of Section 2.4 of the ARS Asset
Purchase Agreement); provided, however, that no purchase price increase shall
be taken into account to the extent Buyer does not receive the benefit giving
rise thereto.
(ii) For purposes of the WKES Purchase Agreement and the
ARS Asset Purchase Agreement, after the Group II/III Closing with respect to
WKES and the Group IV Closing with respect to the Group IV Stations, Seller
shall provide Buyer with all of the rights and benefits received by Seller and
its Affiliates under the WKES Purchase Agreement and the ARS Asset Purchase
Agreement, as the case may be, and Buyer shall perform on behalf of PCC all
obligations of, and actions to be performed by, Seller and its Affiliates
arising after such Closings under such agreements and any agreements, documents
and instruments executed in connection therewith, including, without
limitation, the liabilities and obligations of Seller's Affiliates under
Sections 2.3(b), 2.5, 6.4, 6.7, 6.11, 10.3, 10.6 and 11.1 of the WKES Purchase
Agreement and Sections 2.4B, 2.5, 5.2, 6.3, 6.5, 6.6, 6.9, 6.10, 6.16 and 10.3
of the ARS Asset Purchase Agreement; provided, however, that (w) Buyer shall
not assume Seller's obligations under Section 6.13 of the WKES Purchase
Agreement, (x) Buyer's obligations pursuant to Section 10.3 of the WKES
Purchase Agreement and Section 10.3 of the ARS Asset Purchase Agreement shall
not extend to any such obligations arising (A)with respect to WKES or the Group
IV Stations, as the case may be, during the period of Seller's or its
Affiliates' ownership of WKES or the ARS Stations, if any, or (B) any
indemnification obligations of Seller or its Affiliates, as applicable,
relating to any breach by Seller or its Affiliates of any of their
representations or warranties, as applicable, or the failure to perform any
covenant to be performed by Seller or its Affiliates, as applicable, under the
WKES Purchase Agreement or the ARS Asset Purchase Agreement, respectively, to
be performed by them prior to the Group II/III Effective Time with respect to
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WKES and the Group IV Effective Time with respect to the Group IV Stations; (y)
Buyer shall not be responsible for payment of any applicable FCC fees or fees
payable in respect of HSR Act filings under the WKES Purchase Agreement or the
ARS Asset Purchase Agreement; and (z) except as otherwise provided herein,
Buyer shall have no, and Seller shall retain all, obligations with respect to
WEAT. Buyer shall execute such documentation evidencing Buyer's obligations
hereunder as Seller may reasonably request.
(iii) The conveyance of the Group IV Assets to Buyer by
Seller shall be effected by delivery of conveyancing documents substantially
similar to those used for the conveyance of the Group II/III Assets and Group V
Assets, modified to be consistent with the provisions of Section 6.10(c)(iv)
below.
(iv) Except in respect of any liabilities arising out of
the operations of WKES or the Group IV Stations, as the case may be, after the
consummation of the acquisition of WKES or the Group IV Stations by Seller or
its Affiliates, as the case may be, but prior to the earlier of (1) the entry
by Buyer and Seller into the Group II/III TBA with respect to WKES or the Group
IV TBA with respect to the Group IV Stations, as the case may be, or (2) the
consummation of the purchase of the Group II/III Stations or the Group IV
Stations, as the case may be, by Buyer, and not assumed by Buyer hereunder
(which liabilities shall be subject to indemnification pursuant to the
provisions of Section 10 hereof and all limitations set forth therein), Seller
shall have no liability or obligation of any nature whatsoever to Buyer in
respect of WKES or the Group IV Stations, except to the extent that Seller or
its Affiliates receive indemnification in respect of any such liability or
obligation from Moody with respect to WKES or ARS with respect to the Group IV
Stations, as the case may be, and, in connection therewith, Seller shall
reasonably cooperate with Buyer (at Buyer's expense, except to the extent
Seller receives reimbursement of any such expenses by Moody or ARS, as the case
may be, under such agreements) in enforcing any rights that Seller may have
under the WKES Purchase Agreement or the ARS Asset Purchase Agreement, against
Moody and ARS, respectively.
6.11 Fees of CEA. No party shall have any liability to any other
party in respect of the fees of CEA to be paid by Buyer and Seller in
accordance with the terms of their respective agreements with CEA.
6.12 Non-Competition Agreement. At the Group II/III Closing and the
Group V Closing, Seller shall cause Mr. Lowell W. Paxson to execute and deliver
the Non-Competition Agreement, substantially in the form of Exhibit 6.12. No
portion of the
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Purchase Price (as defined in the Group I Purchase Agreement), Group II/III
Purchase Price, Group IV Purchase Price or Group V Purchase Price shall be
allocated to the Non-Competition Agreement.
6.13 Updated Information. On the date which is three (3) Business
Days prior to the relevant Effective Time, Seller shall deliver to Buyer a
supplement to the Schedules to this Agreement (the "Schedule Supplement"),
certifying that Seller has delivered to Buyer all notices required by Section
5.8 and setting forth any matter which, if existing or occurring on the date
hereof, would have been required to be set forth or described on the Schedules
hereto or that is necessary to complete or correct any information contained
therein. This Section 6.13 does not, and shall not be construed to, permit any
actions or inactions by Seller not otherwise permitted under this Agreement.
For purposes of the conditions to any Closing, if the matters disclosed in the
Schedule Supplement fall within the exceptions set forth in clauses (1), (2) or
(3) to Section 7.1(a) or the exception to Section 7.1(b), then such exceptions
shall apply, but no such disclosure by Seller to Buyer shall otherwise affect
any of Buyer's rights or obligations hereunder, whether before or after any
Closing. Without limiting the foregoing, regardless of any such disclosure, all
representations and warranties of Seller in this Agreement shall survive the
Closing to which they relate to the extent provided in Section 10.1 of this
Agreement, and Buyer shall be entitled to indemnification, in accordance with
Section 10.2.
6.14 Miscellaneous.
(a) Buyer hereby grants to Seller the unlimited, exclusive right
to use the four court-side seats at the present Miami Arena for so long as
Buyer or its Affiliates have such right in consideration of the payment of an
amount equal to the stated cost of the tickets therefor as printed on the face
thereof by Seller to Buyer to the extent Seller conveys to Buyer as a part of
the Assets all rights necessary to enable Buyer to perform Buyer's obligations
under this Section 6.14.
(b) Notwithstanding any provision herein to the contrary, Buyer
hereby acknowledges and agrees that, at any time after the date hereof, Seller
may, in its sole discretion, cancel the broadcast of the Ron & Ron Show on any
Station and terminate all affiliation and other agreements relating to the
production or broadcast of such show.
(c) Seller shall use commercially reasonable efforts to complete,
as soon as reasonably practicable, the replacement and repair work for the
WNLS(AM) transmitting towers as described
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in Schedule 6.14(b) and any FCC filings which may be necessary as a result
thereof and, if such work or filings have not been completed by the Group
II/III Effective Time, Seller shall, at the Group II/III Effective Time, pay
Twenty-Two Thousand Dollars ($22,000) to Buyer in immediately available funds.
Upon (i) the completion of such work and filings or (ii) the payment of such
amount to Buyer, as the case may be, Seller shall have no further obligation or
liability to Buyer hereunder with respect to the repair or replacement of the
WNLS(AM) transmitting towers; provided, however, that if any FCC filings are
required as a result of such work and have not been made by Seller, Seller
shall reimburse Buyer for expenses related thereto (including, without
limitation, antenna proof of performance, FCC filing fees and legal and
engineering costs) up to and including the sum of Ten Thousand Dollars
($10,000).
(d) Seller shall use commercially reasonable efforts to defend
against the World Class Rock Claims; provided, however, that Seller shall not
be obligated to appeal any judgment or award in connection therewith.
6.15 Risk of Loss; Interruption of Broadcast Transmission.
(a) The risk of any loss, damage, impairment, confiscation or
condemnation of any Assets prior to the Effective Time therefor (collectively,
a "Loss") shall be borne by Seller. In the event of any Loss prior to the
Effective Time that interferes with the normal operation of any of the Stations
to which such Assets relate, Seller shall promptly notify Buyer of same in
writing, specifying with particularity the Loss incurred, the cause thereof, if
known or reasonably ascertainable, and the insurance coverage, if any,
applicable thereto.
(b) (i) Except as provided in Section 6.15(c), if the Assets
subject to such Loss have not been restored or replaced by the applicable
Effective Time, Buyer shall proceed to consummate the transactions to be
consummated at such Effective Time pursuant to this Agreement. Buyer and Seller
shall negotiate in good faith to agree on the amount of the costs necessary to
complete the restoration and replacement of such damaged Assets. To the extent
Buyer and Seller are unable to agree on the amount of such costs, Buyer and
Seller shall jointly designate an independent appraiser who shall be
knowledgeable and experienced in the operation of radio broadcasting stations
to resolve such dispute. If the parties are unable to agree on the designation
of an independent appraiser, the selection of the appraiser to resolve the
dispute shall be submitted to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association.
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(ii) To the extent the parties agree upon the amount of
such costs prior to the applicable Closing Date or the appraiser is able to
determine the amount of such costs prior to the applicable Closing Date, such
amount shall be deducted from the applicable Preliminary Purchase Price. To the
extent such amount is not determined prior to such Closing Date, such amount
shall be a Settled Claim and shall be paid by Seller to Buyer pursuant to
Section 10.2(a)(ix). The appraiser's resolution of any such dispute shall be
final and binding on the parties. Any fees of the appraiser and, if necessary,
for arbitration to select such appraiser, shall be split equally between the
parties.
(c) In the event of a Loss prior to the Effective Time which
results in a Material Broadcast Interruption, Seller shall give written notice
thereof (a "Broadcast Interruption Notice") to Buyer within five (5) Business
Days of such Loss resulting in a Material Broadcast Interruption. After receipt
of a Broadcast Interruption Notice, Buyer may terminate this Agreement by
giving written notice thereof to Seller within ten (10) Business Days of
receipt by Buyer of such Broadcast Interruption Notice. If Buyer chooses not to
terminate this Agreement or fails to give written notice within such ten (10)
Business Day period, Buyer shall have no further right to terminate this
Agreement in respect of such Material Broadcast Interruption and the remaining
provisions of this Agreement shall govern.
(d) The risk of loss, damage, impairment, confiscation or
condemnation of any of the Assets arising after the related Effective Time
shall be borne by Buyer and no such loss, damage, impairment, confiscation or
condemnation of such Assets shall (i) give Buyer any claim against Seller with
respect thereto, including, without limitation, any claim for indemnification
pursuant to Section 10.2, or (ii) otherwise affect Buyer's obligation to
consummate the related Closing or pay the related Purchase Price.
(e) If before the Effective Time for any Assets, the regular
broadcast transmission of any Station related thereto in the normal and usual
manner is interrupted for a period of 12 continuous hours or more, Seller shall
give prompt written notice thereof to Buyer.
6.16 Computer Systems. From each Effective Time through the Closing
Date for each Group Sale, Buyer shall not dismantle and shall keep in operation
the computer systems (which term includes the existing e-mail, traffic
accounting and wide area network system) currently operating at the Stations
included in such Group Sale. If the Group II/III Closing Date and the Group V
Closing Date is prior to January 1, 1998, for a period of four
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(4) months therefrom, upon request of Buyer, Seller shall provide Buyer,
without cost, with access to, and the right to use, the wide area network
system currently used by the Stations. Buyer and Seller agree to take all
reasonable steps required to maintain the integrity and security of their
respective computer and electronic data systems.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer at Group II/III and Group V
Closings. Subject to the provisions of Section 6.10 hereof limiting such
conditions following the LPI Sale Date (assuming the LPI Sale occurs), the
obligations of Buyer at the Group II/III and the Group V Closings hereunder are
subject, at Buyer's option, to the fulfillment prior to or at such Closings of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true and correct at
and as of the Closing Date for such Closings as though made at and as of that
time, except (1) to the extent any such representation or warranty is expressly
stated only as of a specified earlier date or dates, in which case such
representation or warranty shall be true and correct in all material respects
as of such earlier specified date or dates (subject to clause 3 below), (2) for
changes which are permitted or contemplated pursuant to this Agreement or (3)
where the consequence of the matter set forth in such representation or
warranty having failed to be true and correct as of the date when made, on the
Closing Date or on such earlier specified date would not have a Material
Adverse Effect.
(b) Covenants. Seller shall have performed and complied with
all covenants and agreements required by this Agreement to be performed or
complied with by it prior to or on such Closing Date for such Closings, except
to the extent that the consequence of the failure of Seller to have so
performed or complied would not have a Material Adverse Effect.
(c) FCC Consent. The FCC Consent with respect to the FCC
Licenses to be transferred at such Closings shall have been granted or, if FCC
Consent for the assignment of an FCC License for any satellite earth station or
private operational fixed microwave station shall not have been granted,
special temporary authority shall have been granted to permit Buyer to operate
such Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect
of the transactions to be consummated at such Closings
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shall have expired or terminated and there shall not be pending any action or
request for information instituted by the FTC or the DOJ under the HSR Act
relating to such transactions.
(e) Legal Proceedings. No injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Buyer from
consummating the transactions at such Closings contemplated by this Agreement.
(f) Deliveries. Seller shall have made, or stand willing to
make, all the deliveries to Buyer described in Section 8.2 applicable to such
Closings.
(g) Simultaneous Closing. The Group II/III Closing and the
Group V Closing shall occur simultaneously.
(h) Discharge of Loans. The condition set forth in Section
6.10(a)(iv)(3) shall have been satisfied.
(i) Group I Closing. If the Group I Closing has not
previously occurred, to the extent the conditions precedent to the obligations
of PCC to the consummation of the Group I Purchase Agreement have been
satisfied (or would be satisfied at consummation by delivery of documents and
the purchase price by Buyer), PCC shall stand ready, willing and able to
consummate the Closing under the Group I Purchase Agreement concurrently with
the Group II/III Closing and the Group V Closing; provided it is understood and
agreed that if such conditions precedent are not satisfied, Closing of the
Group I Sale shall not be a condition to consummation of the Group II/III
Closing and the Group V Closing.
(j) Required Consents. All Required Consents shall have been
obtained and delivered to Buyer.
7.2 Conditions to Obligations of Seller at Group II/III and Group
V Closings. Subject to the provisions of Section 6.10 hereof limiting such
conditions following the LPI Sale Date (assuming the LPI Sale occurs), the
obligations of Seller at the Group II/III and Group V Closings hereunder are
subject, at Seller's option, to the fulfillment prior to or at such Closings of
each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date for such Closings as though
made at and as of that time, except to the extent any such representation or
warranty is expressly stated only as of a specified earlier
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date or dates, in which case such representation and warranty shall be true and
accurate in all material respects as of such earlier specified date or dates.
(b) Covenants. Buyer shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it prior to or on such Closing Date.
(c) FCC Consent. The FCC Consent with respect to the FCC Licenses to
be transferred at such Closings shall have been granted or, if FCC Consent for
the assignment of an FCC License for any satellite earth station or private
operational fixed microwave station shall not have been granted, special
temporary authority shall have been granted to permit Buyer to operate such
Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect of the
transactions to be consummated at such Closings shall have expired or
terminated and there shall not be pending any action or request for information
instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or decree of
any nature of any court or governmental authority of competent jurisdiction
shall be in effect which restrains or prohibits Seller from consummating the
transactions at such Closings contemplated by this Agreement.
(f) Deliveries. Buyer shall have made or stand willing to make all
the deliveries described in Section 8.3 applicable to such Closings.
(g) Simultaneous Closings. The Group II/III Closing and the Group V
Closing shall occur simultaneously.
(h) Discharge of Loans. The condition set forth in Section
6.10(a)(iv)(4) shall have been satisfied.
(i) Group I Closing. If the Group I Closing has not previously
occurred, to the extent the conditions precedent to the obligations of Buyer to
the consummation of the Group I Purchase Agreement have been satisfied (or
would be satisfied at consummation by delivery of documents by the Sellers
thereunder), Buyer shall stand ready, willing and able to consummate the
Closing under the Group I Purchase Agreement concurrently with the Group II/III
Closing and the Group V Closing; provided it is understood and agreed that if
such conditions precedent are not satisfied, Closing of the Group I Sale shall
not be a condition
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to consummation of the Group II/II Closing and the Group V Closing.
7.3 Conditions to Obligations of Buyer and Seller at Group IV
Closing. Notwithstanding anything in this Agreement to the contrary, the
obligations of Buyer and Seller at the Group IV Closing hereunder are subject
to the fulfillment prior to or at such Closing of each of the following
conditions only:
(a) The Group II/III Closing and the Group V Closing shall have
occurred prior to, or shall occur simultaneously with, the Group IV Closing;
(b) For the benefit of Seller, cancellation and termination of
all indebtedness of Seller pursuant to the Group IV-A Note;
(c) For the benefit of Buyer, Seller shall have made, or stand
willing to make, all the deliveries described in Section 8.2 applicable to such
Closing;
(d) For the benefit of Seller, Buyer shall have made or taken, or
stand willing to make or take, all the actions and deliveries described in
Section 8.3 applicable to such Closing;
(e) For the benefit of Buyer, no injunction, restraining order
or decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Buyer from
consummating the transactions contemplated at the Group IV Closing;
(f) For the benefit of Seller, no injunction, restraining
order or decree of any nature of any court or governmental authority of
competent jurisdiction shall be in effect which restrains or prohibits Seller
from consummating the transactions contemplated at the Group IV Closing;
(g) For the benefit of Buyer, the conditions set forth in Section
7.1(c) and 7.1(d) as applicable to the Group IV Assets shall have been
satisfied;
(h) For the benefit of Seller, the conditions set forth in
Section 7.2(c) and 7.2(d) applicable to the Group IV Assets shall have been
satisfied; and
(i) For the benefit of Buyer, Seller shall have complied in all
material respects with its obligations under Section 5.7 hereof, and the
representations set forth in Section 3.23 shall be true and correct in all
material respects as though made at and as of that time, except to the extent
any such representation is expressly stated only as of a specified earlier date
or dates, in which case such representation shall be true
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and correct in all material respects as of such earlier specified date or
dates.
(j) For the benefit of Seller, to the extent not previously made,
Buyer shall have made that portion of the Group IV Loan evidenced by the Group
IV-C Note to Seller or the Assignee, as the case may be.
(k) For the benefit of Buyer, to the extent that the Group IV
Loan is made by Buyer and not previously delivered the Group IV-C Note (and the
related security agreements and guaranty), duly executed by Seller or the
Assignee, as the case may be.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(i) Subject to (1) the provisions of Section 6.10
hereof and (2) the satisfaction or, to the extent permissible by law, waiver
(by the party for whose benefit the Closing condition is imposed) on the date
scheduled for the applicable Closing of the applicable conditions precedent set
forth in Section 7.1, 7.2 or 7.3, as appropriate, the parties hereto agree as
follows:
(A) The Closing of the Group II/III Sale and
Group V Sale shall take place at 10:00 a.m., Washington, D.C. time, on the
later of (x) October 1, 1997 and (y) the date reasonably agreeable to Seller
and Buyer not less than five (5) Business Days nor more than ten (10) Business
Days following the grant of the Group II/III FCC Consent and the Group V FCC
Consent; provided, however, that if the Group II/III FCC Consent and the Group
V FCC Consent are granted prior to October 1, 1997, notwithstanding clause (y)
above, the Closing of the Group II/III Sale and the Group V Sale shall take
place no later than October 1, 1997.
(B) The Closing of the Group IV Sale shall
take place at 10:00 a.m., Washington, D.C. time, on the latest of (x) the
Closing of the Group II/III Sale and the Group V Sale; (y) the date reasonably
agreeable to Seller and Buyer not less than five (5) Business Days nor more
than ten (10) Business Days following the grant of the Group IV FCC Consent and
(z) the date specified by Seller to Buyer, upon five (5) Business Days' prior
written notice to Buyer, that is concurrent with the date of consummation of
the ARS Asset Purchase Agreement and the acquisition of the Group IV Stations
by Seller. Notwithstanding clause (y) of the previous sentence, Buyer shall use
commercially reasonable efforts to consummate the Group IV Closing on the same
date that Seller or any of its Affiliates, as the case may be,
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acquires the Group IV Stations from ARS pursuant to the ARS Asset Purchase
Agreement.
(ii) Notwithstanding the foregoing, if on the
date otherwise scheduled for any Closing pursuant to the preceding paragraphs,
the conditions precedent set forth in Sections 7.1(d), 7.1(e), 7.1(i), 7.1(j),
7.2(d), 7.2(e), 7.2(i), 7.3(e), 7.3(f), 7.3(g) or 7.3(h) if applicable, with
respect to such Closing, have not been satisfied, the party for whose benefit
such conditions have been imposed may elect to postpone such Closing, and such
Closing shall thereafter take place on a date specified by not less than five
(5) Business Days' prior written notice from such party, which date shall be
not less than five (5) Business Days nor more than ten (10) Business Days after
the satisfaction or waiver of such conditions precedent. The parties shall seek
extensions of the applicable FCC Consents that may be required for any such
postponement of such Closing.
(iii) In no event shall any Closing hereunder
occur later than the Termination Date, except as provided in
Section 9.1.
(b) Closing Place. Each Closing shall be held at the
offices of Dow, Lohnes & Albertson, PLLC, 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. With respect to the Closing for each Group
Sale, prior to or on the related Closing Date, Seller shall take the following
actions and deliver to Buyer the following documents, in form and substance
reasonably satisfactory to Buyer and its counsel:
(a) Conveyancing Documents. Subject to the provisions of
Section 6.10, duly executed assignments and other conveyancing documents that
are sufficient to convey and vest good and, in the case of owned Real Property,
marketable, title to the Assets which are part of such Group Sale to the Buyer,
free and clear of all Liens, except for Permitted Liens. Such documents shall
include, but shall not be limited to, the following:
(i) Assignment and Assumption Agreements for
the Assumed Contracts substantially in the form of Exhibit 8.2(a)(i) annexed
hereto and assignment agreements in recordable form for each Real Property
lease (provided, however, that Seller shall have no liability to Buyer with
respect to the recording or recordability of any such assignment agreements and
the recording or recordability of any such assignment agreements shall not be a
condition to the satisfaction of this Section 8.2(a)(i));
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(ii) deeds (the "Deeds") in recordable form
conveying fee simple title to all Real Property owned by Seller and used in the
business of the Stations which is part of such Group Sale, subject to Permitted
Liens and consistent with and subject to the representations and warranties and
the indemnity limitations set forth in this Agreement;
(iii) bills of sale; and
(iv) Assignment and Acceptances of FCC Licenses.
(b) Officer's Certificate. At the Group II/III and Group V
Closing, a certificate, dated as of such Closing Date, executed on behalf of
Seller by the President of Seller (but without personal liability to such
officer), certifying to the fulfillment of the conditions set forth in Sections
7.1(a) and 7.1(b) with respect to such Group Sale.
(c) Secretary's Certificate. At the Group II/III and Group V
Closing, a certificate, dated as of the relevant Closing Date, executed by the
Secretary of Seller (but without personal liability to such officer),
certifying that the resolutions, as attached to such certificate, were duly
adopted by the Board of Directors and shareholders (if required) of Seller,
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated hereby and that such resolutions remain in
full force and effect and that attached thereto are true, correct and complete
copies of the Certificate of Incorporation and bylaws of Seller.
(d) Consents and Estoppel Certificates. Any instruments
evidencing any Consents and any Estoppel Certificates received with respect to
such Group Sale, including any Required Consents.
(e) Releases. Subject to the provisions of Section 6.10,
any mortgage discharges or releases of liens that are necessary in order for
the Assets which are part of such Group Sale to be free and clear of all Liens,
other than the Permitted Liens or a pay-off letter from any of Seller's lenders
providing for such discharges and releases upon payment by Seller of the
obligations owed to such lenders with the proceeds of the Preliminary Purchase
Price on such relevant Closing Date.
(f) Good Standing Certificates. At the Group II/III and
Group V Closings, a certificate as to the formation and good standing of Seller
issued by the Secretary of State of the State of Delaware, dated not more than
ten (10) days before such Closing Date.
(g) Incumbency Certificate. A certificate signed by an
officer of Seller (but without personal liability to such
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officer) certifying the signature and incumbency of the person executing this
Agreement on behalf of Seller.
(h) Title Commitments. ALTA Title commitments issued by
Lawyers Title Insurance Corporation obtained by Seller at Buyer's expense,
insuring fee simple title in each fee estate included in the Real Property
being conveyed as part of such Group Sale, subject to standard survey
exceptions and Permitted Liens, in an amount reasonably determined by Buyer
that permits such commitments to be obtained; provided that if the Group II/III
Closing and Group V Closing take place hereunder without the Group V Loan being
made, Seller shall pay for the costs of the foregoing title commitments.
(i) Lien Search Results. The results of a search for tax,
lien and judgment filings with respect to each of the names reasonably
requested by Buyer no later than 20 days before such Closing, obtained by
Seller, at Buyer's expense, against the Secretary of State's records of the
State of Florida and Tennessee (as applicable, with respect to such names) and
in the records of each county in Florida and Tennessee (as applicable, with
respect to such names) in which any of the Assets being conveyed as part of
such Group Sale are located, reflecting the absence of Liens other than
Permitted Liens on such Assets and Liens removed concurrently with, or prior
to, such Closing; provided that if the Group II/III Closing and Group V Closing
takes place hereunder without the Group V Loan being made, Seller shall pay for
the costs of the foregoing lien searches.
(j) WHNZ Option Agreement. The Option Agreement related to
the purchase of WHNZ, substantially in the form of Exhibit 8.2(j) annexed
hereto (the "WHNZ Option Agreement").
(k) WYCL Option Agreement. The Option Agreement related to
the purchase of WYCL, substantially in the form of Exhibit 8.2(k) annexed
hereto (the "WYCL Option Agreement"), duly executed by Seller.
(l) Services Agreements. The Services Agreements, duly
executed by Seller.
(m) TSAs. To the extent not previously delivered at the
Effective Time, the TSAs with respect to WHNZ, WYCL and WEAT, duly executed by
Seller, LPI or the Assignee, as the case may be.
(n) DP Media Lease Agreement. A lease agreement between DP
Media, Inc. ("DP Media") and Buyer pursuant to which DP Media shall lease from
Buyer (i) that portion of the Seller's studio building located at 2515 15th
Street, Panama City, Florida which DP Media currently uses and (ii) the assets
set forth in Exhibit 8.2(n) (the "DP Media Assets"), in each case
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for a period of six (6) months from the Group II/III Closing Date and without
charge (the "DP Media Agreement") to the extent that the foregoing does not
unreasonably interfere with Buyer's operations at such premises, duly executed
by DP Media.
(o) Other. Such other documents expressly called for to
be delivered by Seller under the terms of this Agreement or as may reasonably
be requested by Buyer.
8.3 Deliveries by Buyer. With respect to the Closing for each
Group Sale, prior to or on the related Closing Date, Buyer shall take the
following actions and deliver to Seller the following documents, in form and
substance reasonably satisfactory to Seller and its counsel:
(a) Closing Payment. Make the payment described in
Section 2.6(a) to be made with respect to such Group Sale.
(b) Officer's Certificate. At the Group II/III and
Group V Closings, a certificate, dated as of such Closing Date,
executed on behalf of Buyer by the President of Buyer (but without personal
liability to such officer), certifying to the fulfillment of the conditions set
forth in Sections 7.2(a) and 7.2(b) with respect to such Group Sale.
(c) Secretary's Certificate. At the Group II/III and
Group V Closings, a certificate, dated as of such Closing Date, executed by
Secretary of Buyer (but without personal liability to such officer), certifying
that the resolutions, as attached to such certificate, were duly adopted by the
Board of Directors and shareholders (if required) of the Buyer, authorizing and
approving the execution of this Agreement and the consummation of the
transactions contemplated hereby and that such resolutions remain in full force
and effect and that attached thereto are true, correct and complete copies of
the Certificate of Incorporation and bylaws of Buyer.
(d) Assignment and Assumption Agreements and Assignment
and Acceptance Agreements. The Assignment and Assumption Agreements referenced
in Section 8.2(a)(i) and the Assignment and Acceptances of FCC Licenses
referenced in Section 8.2(a)(iv).
(e) Good Standing Certificate. At the Group II/III and
Group V Closings, a certificate as to the existence and good standing of Buyer
issued by the Secretary of State of the State of organization of Buyer, dated
not more than ten (10) days before such Closing Date, and certificates issued
by the appropriate governmental authority as to the qualification of Buyer to
do business in each jurisdiction in which such qualification is necessary for
Buyer to own the Assets and operate the Stations which are part of such Group
Sale.
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(f) Incumbency Certificate. A certificate signed by an
officer of Buyer and Guarantor (but without liability to such officer)
certifying the signatures and incumbency of the persons executing this
Agreement on behalf of Buyer and the Guarantor.
(g) WHNZ Option Agreement. The WHNZ Option Agreement,
duly executed by Buyer.
(h) WYCL Option Agreement. The WYCL Option Agreement,
duly executed by Buyer.
(i) Services Agreements. The Services Agreements, duly
executed by Buyer.
(j) TSAs. To the extent not previously delivered at the
Effective Time, the TSAs with respect to WHNZ, WYCL and WEAT, duly executed
by Buyer.
(k) DP Media Agreement. The DP Media Agreement, duly
executed by Buyer.
(l) Other. Such other documents expressly called for to be
delivered by Buyer under the terms of this Agreement or as may be reasonably
requested by Seller.
SECTION 9 TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated only
as follows:
(a) at any time by written consent of each of Buyer, Guarantor,
PCC and LPI;
(b) by PCC, if PCC is not in default or breach in any material
respect of its obligations under this Agreement to consummate the transactions
contemplated under Section 6.10(a) and the other transactions to be consummated
on the LPI Sale Date under Section 6.10, if Buyer defaults under or breaches
its obligations under Section 6.10(a) or the other provisions of Section 6.10
that are applicable on the LPI Sale Date;
(c) by Buyer, if Buyer is not in default or breach in any
material respect of its obligations under this Agreement to consummate the
transactions contemplated under Section 6.10(a) and the other transactions to
be consummated on the LPI Sale Date under Section 6.10, if either PCC or LPI
defaults under or breaches its respective obligations under Section 6.10(a) or
under the other provisions of Section 6.10 that are applicable on the LPI Sale
Date;
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(d) by Seller, with respect only to the Group Sale to be
consummated at any applicable Closing, if Seller is not in default or breach in
any material respect of its obligations under this Agreement with respect to
such Group Sale, if the applicable conditions precedent to Seller's obligations
in Sections 7.2 or 7.3 (as modified by the provisions of Section 6.10) with
respect to the Closing of such Group Sale have not been satisfied (or waived by
Seller) by the date scheduled for such Closing pursuant to Section 8.1 (as such
date may be postponed pursuant to Section 8.1(a)(ii)); provided that
notwithstanding the foregoing, if termination pursuant to this Section 9.1(d)
is in respect of the Group II/III Sale or the Group V Sale, such termination
shall then be effective with respect to this entire Agreement and all Group
Sales hereunder;
(e) by Buyer, with respect only to the Group Sale to be
consummated at any applicable Closing, if Buyer is not in default or breach in
any material respect of its obligations under this Agreement with respect to
such Group Sale, if the applicable conditions precedent to Buyer's obligations
in Sections 7.1 or 7.3 (as modified by the provisions of Section 6.10) with
respect to the Closing of such Group Sale have not been satisfied (or waived by
Buyer) by the date scheduled for such Closing pursuant to Section 8.1 (as such
date may be postponed pursuant to Section 8.1(a)(ii)); provided that
notwithstanding the foregoing, if termination pursuant to this Section 9.1(e)
is in respect of the Group II/III Sale or the Group V Sale, such termination
shall then be effective with respect to this entire Agreement and all Group
Sales hereunder;
(f) by either Buyer or Seller with respect only to such
transactions which are to be consummated at any Closing which have not occurred
on or before the Termination Date, except where the Closing related to such
transactions has been postponed pursuant to the provisions of Section
8.1(a)(ii), in which case the applicable date shall be upon the expiration of
the period referred to in Section 8.1(a)(ii), if the terminating party is not
in default or breach in any material respect of its obligations under this
Agreement in respect of such Closings hereunder that have not taken place on or
before the Termination Date; and
(g) by Buyer, pursuant to Section 6.15(c).
Notwithstanding anything in this Section 9.1 to the contrary, if
on the Termination Date, a Closing has not occurred solely because any required
notice period for such Closing has not lapsed, the Termination Date shall be
extended until the lapse of such period.
Without limiting the generality of the foregoing, or any
applicable law, neither Buyer, on the one hand, nor Seller,
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on the other hand, may rely on the failure of any condition precedent set forth
in Section 7 to be satisfied as a ground for termination of this Agreement by
such party if such failure was caused by such party's failure to act in good
faith, or a breach of or failure to perform its representations, warranties,
covenants or other obligations in accordance with the terms hereof.
9.2 Procedure and Effect of Termination.
(a) In the event of termination of this Agreement in whole
(or in part with respect only to any particular Group Sale as expressly
provided herein) by either or both of Buyer and/or PCC or LPI pursuant to
Section 9.1, prompt written notice thereof shall forthwith be given to the
other party and this Agreement shall terminate (in whole or in part, as the
case may be) and, to the extent this Agreement is terminated, the transactions
contemplated hereby shall be abandoned without further action by any of the
parties hereto, but subject to and without limiting any of the rights of the
parties specified herein in the event a party is in default or breach in any
material respect of its obligations under this Agreement. If this Agreement is
terminated as provided herein, to the extent this Agreement is terminated:
(i) None of the parties hereto shall have any liability or
further obligation to any other party or any of their respective
directors, officers, shareholders, employees, agents, or Affiliates
pursuant to this Agreement or otherwise, except as stated in
Sections 6.3, 6.11 (if applicable), 9.2, 9.3, 9.4 and 11.1 hereof;
(ii) Except for Guarantor, which shall have liability as
Guarantor hereunder to the extent set forth herein, if applicable,
and Mr. Lowell W. Paxson, who shall have liability as guarantor
pursuant to the Guaranty described in Section 6.10(a)(i)(6) to the
extent set forth therein, if applicable, notwithstanding anything
herein or in applicable law to the contrary, none of the respective
directors, officers, shareholders, employees, agents or Affiliates
of any of the parties hereto shall have any liability or obligation
to any other party or any of their respective directors, officers,
shareholders, employees, agents or Affiliates pursuant to this
Agreement or otherwise;
(iii) All filings, applications and other submissions
relating to the transactions contemplated hereby as to which
termination has occurred shall, to the extent practicable, be
withdrawn from the agency or other Person to which made.
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(b) With respect to terminations pursuant to Section 9.1
hereof:
(i) If this Agreement is terminated pursuant to Sections
9.1(a) or 9.1(g), then and in that event, none of the parties hereto
shall have any recourse against or liability to the other parties
hereto, except as stated in Sections 6.3, 6.11, 9.2, 9.3, 9.4 and
11.1 hereof or in any written agreement entered into by the parties
in connection with such termination.
(ii) If this Agreement is terminated by PCC pursuant to
Sections 9.1(b), PCC shall have the right to pursue all legal and
equitable remedies available against Buyer and Guarantor for breach
of contract; provided, however, that to the extent Buyer has
defaulted or breached in the manner referenced in Section 9.1(b), in
determining Seller's damages hereunder, Buyer shall be deemed to
have breached its obligations to make the Group V Loan and to
consummate the Group I Sale, the Group II/III Sale, the Group IV
Sale and the Group V Sale.
(iii) If this Agreement is terminated by Buyer pursuant
to Section 9.1(c), Buyer shall have the right to pursue all legal
and equitable remedies available to it for breach of contract.
(iv) If this Agreement is terminated by Seller pursuant
to Section 9.1(d) or (f), and Buyer is in breach or default of its
obligations under this Agreement, then the following provisions
shall apply:
(1) If termination is with respect to all Group
Sales, and the LPI Sale has not occurred, Seller shall have
the right to pursue all legal and equitable remedies
available to it against Buyer or Guarantor for breach of
contract.
(2) If the LPI Sale has been consummated and
termination is with respect to all Group Sales, then and in
that event (A) the Group V Loan shall be reduced in a
principal amount of $56,967,153, which reduction shall also
be provided for in the Clear Channel Loan Agreement; and (B)
the principal amount of the Group IV Loan shall be reduced by
$3,125,000 and the Group IV-B Note shall be canceled in
connection therewith. The foregoing remedies shall constitute
liquidated damages and the exclusive remedies of Seller and
LPI for Buyer's breach; provided, however, that if the LPI
Sale has been consummated, nothing contained herein shall
limit or otherwise restrict the rights and liabilities of PCC
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and LPI with respect to each other in connection with a
termination of this Agreement with respect to any of the
Group Sales. Notwithstanding the foregoing, to the extent
the following agreements have been entered into and to
the extent expressly provided therein (but subject to the
acceleration, termination and other provisions thereof),
the provisions of the TBAs applicable in the event of
termination, the Intercreditor Agreement, the Clear
Channel Loan Agreement (and the promissory note and
Security Documents delivered pursuant thereto), the LPI
Note (and the Subordinated Guaranty delivered therewith),
the Group IV Loan Agreement, the Group IV-A Note, the
Group IV-B Note and the Group IV-C Note (and the security
documents delivered pursuant thereto) shall remain in
full force and effect and shall be unimpaired by any
termination of this Agreement or payments made by Buyer
or Guarantor pursuant to this Section.
(3) If the Group II/III Closing and Group V
Closing have occurred, and Buyer is in breach of its
obligations to consummate the Group IV Sale, then the
principal amount of the Group IV Loan shall be reduced by
$3,125,000 and the Group IV-B Note shall be canceled in
connection therewith. The foregoing remedies shall
constitute liquidated damages and the exclusive remedies
of PCC in respect of Buyer's breach of its obligations
with respect to the Group IV Sale, but, to the extent
they do not relate to such sale, without impairing any of
PCC's other rights under this Agreement and the documents
related hereto or delivered in connection therewith.
(v) If this Agreement is terminated by Seller pursuant to
Section 9.1(d) or (f), and Buyer is not in breach of its obligations
under this Agreement, then the following provisions shall apply:
(1) If the LPI Sale has occurred, and to the extent
expressly provided therein (but subject to the acceleration,
termination and other provisions thereof) the provisions of
the TBAs applicable in the event of termination, the
Intercreditor Agreement, the Clear Channel Loan Agreement
(and the promissory note and the Security Documents delivered
pursuant thereto), and the LPI Note (and the Subordinated
Guaranty delivered therewith) shall remain in full force and
effect and shall be unimpaired by any termination of this
Agreement.
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(2) If termination is effective with respect to the
Group IV Assets, and to the extent expressly provided in the
Group IV Loan (but subject to the acceleration, termination
and other provisions thereof), the Group IV Loan shall be
repaid in accordance with the terms of the Group IV Loan.
(vi) If this Agreement is terminated by Buyer pursuant to
Section 9.1(e) or (f), then the following provisions shall apply:
(1) If termination is with respect to all Group
Sales and if Seller is in breach of its obligations under
this Agreement to consummate such Group Sales, Buyer shall
have the right to pursue all legal and equitable remedies
available to it.
(2) If termination is with respect only to the Group
IV Sale and if Seller is in breach of its obligations under
this Agreement to consummate such Group Sale, Buyer shall
have the right to pursue all legal and equitable remedies
available to it in respect of the Group IV Sale.
(3) If and to the extent the following agreements
have been entered into and to the extent expressly provided
therein (but subject to the acceleration, termination and
other provisions thereof), the provisions of the TBAs
applicable in the event of termination, the Intercreditor
Agreement, the Clear Channel Loan Agreement (and the
promissory note and the Security Documents delivered pursuant
thereto), and the Group IV-A Note and the Group IV-B Note
(and the security documents delivered pursuant thereto) shall
remain in full force and effect and shall be unimpaired by
any termination of this Agreement.
(c) If the Group I Sale has been consummated pursuant to the
Group I Purchase Agreement with respect to any of the Repurchase Assets, and
(i) this Agreement is terminated with respect to (A) all Group Sales or (B) the
Group II/III Sale and the Group V Sale or (ii) the Group II/III Closing and the
Group V Closing have not occurred on or before the Termination Date, the
parties shall have the following rights and obligations:
(1) If this Agreement has been terminated other than
as a result of Seller's breach or default of its obligations
hereunder, PCC shall have the right to cause Buyer to sell
back to PCC, and upon request by PCC, Buyer shall sell back
to PCC, the Group I Repurchase Assets in accordance
with and subject to
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the terms and conditions set forth in Section 6.10 of
the Group I Purchase Agreement.
(2) If this Agreement has been terminated other than
as a result of Buyer's breach or default of its obligations
hereunder, Buyer shall have the right to cause PCC to
repurchase from Buyer, and upon the request of Buyer, PCC
shall repurchase from Buyer, the Group I Repurchase Assets in
accordance with and subject to the terms and conditions set
forth in Section 6.10 of the Group I Purchase Agreement.
9.3 Other Agreements. Notwithstanding anything in this Agreement
to the contrary, if the transactions contemplated by this Agreement are not
consummated in whole or in part, as a result of termination of this Agreement
pursuant to Section 9.1 hereof, then, to the extent expressly provided therein
(but subject to the acceleration, termination and other provisions thereof),
the provisions of the TBAs applicable in the event of termination, the
Intercreditor Agreement, the Clear Channel Loan Agreement (and the promissory
notes and Security Documents delivered pursuant thereto), the Group IV Loan
Agreement, the Group IV-A Note, the Group IV-B Note and the Group IV-C Note
(and the security documents delivered pursuant thereto) shall remain in effect.
9.4 Attorneys' Fees. In the event of a default by either party
that results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses incurred in
connection with such proceedings (whether incurred in arbitration, at trial, or
on appeal).
9.5 Specific Performance. In the event of a breach or threatened
breach by Buyer, Guarantor or Seller of any representation, warranty, covenant
or agreement under this Agreement, in addition to any other remedy available to
it, Seller or Buyer, as the case may be, shall be entitled to an injunction
restraining any such breach or threatened breach by the other parties to this
Agreement and, subject to obtaining any requisite approval of the FCC, to
enforcement of this Agreement by a decree of specific performance requiring
such other parties to fulfill their respective obligations under this
Agreement, in each case without the necessity of showing economic loss or other
actual damages and without any bond or other security being required.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
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10.1 Survival. (a) The representations and warranties of Buyer,
Guarantor and Seller with respect to each Group Sale contained herein shall
survive the Closing related thereto for a period expiring eighteen (18) months
after the related Effective Time and shall terminate on such date, except to
the extent that any claims for indemnification in respect of a breach of any
such representation or warranty is made on or before the applicable dates set
forth in the preceding clause, in which case such representation or warranty
(but not any others) shall survive until the resolution of such claim.
(b) Notwithstanding the foregoing, (1) any claims for
indemnification related to a breach of the representations and warranties
contained in Section 3.16 shall survive, and must be brought before the
expiration of, the period expiring thirty-six (36) months after the applicable
Effective Time in respect of the Group Sale pursuant to which such claim is
brought and (2) any claims for indemnification pursuant to Section 10.2(a)(iv)
or related to a breach of the representations and warranties contained in
Sections 3.10 and 3.22 shall survive, and must be brought before the expiration
of, the applicable statute of limitations.
(c) Buyer's obligation to pay, perform or discharge the Assumed
Liabilities shall survive until such Assumed Liabilities have been paid,
performed or discharged in full.
(d) Seller's obligations to pay, perform or discharge all
liabilities of Seller that are not Assumed Liabilities ("Retained
Liabilities"), and to indemnify Buyer in respect thereof, shall survive until
such liabilities have been paid, performed or discharged in full.
(e) Any claim for indemnification in respect of a covenant or
agreement of Buyer or Seller hereunder to be performed before the Closing
related thereto shall be made before the expiration of the eighteen month
anniversary of the related Effective Time. The covenants and agreements of the
parties contained herein and to be performed to any extent after any Closing
Date shall survive the related Closing until fully paid, discharged and
performed, and any claims for indemnification in respect of a breach of such
covenants to be performed after such Closing Date shall survive until such
covenants and agreements are so paid, discharged and performed.
10.2 Indemnification by Seller. (a) With respect to any Group Sale,
after the Closing therefor, Seller hereby agrees to indemnify, defend and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(i) Any and all losses, liabilities or damages resulting from
any breach of any representation or warranty made
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pursuant to this Agreement as of the date hereof or as of the applicable
Effective Time or, to the extent specifically contemplated by Section
6.10(a)(iv)(1) hereof and subject to the limitations therein, as of the
applicable Closing Date, or any failure by Seller to perform any covenant of
Seller set forth in this Agreement or in any certificate, document or
instrument prepared by Seller and delivered to Buyer hereunder;
(ii) Any failure by Seller to pay, perform or
discharge any and all Retained Liabilities;
(iii) Any litigation, proceeding or claim by any
third party arising from the business or operations of the Assets by Seller
prior to the Effective Time for the Group Sale in which such Assets were
included, except to the extent arising from Assumed Liabilities;
(iv) If Seller elects under Section 11.10 (the
"1031 Election") to effect the transfer of some or all of the Assets to Buyer
in a manner qualifying as part of a like-kind exchange of property by Seller
within the meaning of Section 1031 of the Code (a "Like-kind Exchange"), (A)
the excess, if any, of (1) all reasonable out-of-pocket costs and expenses of
Buyer in consummating the transfer of any of the Assets to Buyer in a Like-kind
Exchange, including, without limitation, reasonable legal fees and expenses for
the review of any additional documentation to be executed and delivered by
Buyer as a result of the Like-kind Exchange, over (2) the costs and expenses of
Buyer in consummating the transfer of such Assets to Buyer if the 1031 Election
had not been made and (B) the excess, if any, of (1) if the 1031 Election
causes Buyer to obtain a tax basis in such assets less than the tax basis Buyer
would have had in such Assets had Seller not made a 1031 Election, the Taxes
payable by Buyer, over (2) the Taxes that would have been payable by Buyer had
Seller not made the 1031 Election;
(v) With respect to any leased Real Property for
which a Lease Consent or Estoppel Certificate are not obtained by the date
which is twelve (12) months after the Closing Date related to such leased Real
Property only, any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, arising from the termination of
any lease for such Real Property and the transfer of any Assets from the
related leased Real Property to a new site as a result thereof;
(vi) Any and all reasonable out-of-pocket costs
and expenses, including reasonable legal fees and expenses, of undertaking
remediation or such other action to eliminate any noncompliance with applicable
law with respect to any Real Property owned by Seller, in each case as
specifically set forth in any Phase II Report;
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(vii) Any and all losses, liabilities or damages
resulting from any claim by Marketing Magic, Inc. in respect of
trade or barter agreements for any period prior to January 1,
1997;
(viii) Any and all loss, liabilities or damages
resulting from those provisions of any employment contract between any Station
and an Assumed Employee which address the terms and conditions of any grant by
PCC to such Assumed Employee of an option to purchase common stock;
(ix) The amount finally determined pursuant to
Section 6.15(b)(ii);
(x) Any and all losses, liabilities or damages
which Buyer pays to Citicasters Co. or its Affiliates as a
result of a judgment in the World Class Rock Claims attributable
to Seller's actions or inactions prior to the relevant Effective
Time; and
(xi) Any and all reasonable 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 reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
(b) Seller's obligation to indemnify Buyer pursuant to
Section 10.2(a) shall be subject to all of the following limitations:
(i) (1) No indemnification shall be required to
be made by Seller as the Indemnifying Party under Section 10.2(a) until the
aggregate amount of all Settled Claims of Buyer as Claimant pursuant to this
Agreement (and any agreements executed in connection herewith or delivered
pursuant hereto) and the Group I Purchase Agreement (and any agreements
executed in connection therewith or delivered pursuant thereto) exceeds Five
Hundred Thousand Dollars ($500,000) in the aggregate (the "Hurdle Amount");
provided, however, that such limitation shall not apply to claims made by Buyer
with respect to indemnification pursuant to Sections 10.2(a)(iv),(v), (vi),
(vii), (viii) and (ix) and prorations and adjustments to the Estimated Purchase
Price pursuant to Section 2.5. Once the aggregate amount of all such Settled
Claims exceeds the Hurdle Amount Seller shall provide indemnification to Buyer
in respect of all Settled Claims, whether occurring before or after such time.
(2) Notwithstanding anything in this Agreement
or applicable law to the contrary, in no event shall Seller's
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obligation for indemnification under this Agreement and the Group I Purchase
Agreement (and agreements executed in connection herewith or therewith or
delivered pursuant hereto or thereto) in the aggregate for all such agreements,
exceed $56,967,153, and Buyer waives, releases and shall have no recourse
against Seller for amounts in excess of $56,967,153; provided, however, that
such limitation shall not apply to claims made by Buyer pursuant to Section
10.2(a)(iv) or (ix).
(ii) Buyer shall be entitled to indemnification
only for those damages arising with respect to any claim as to which Buyer has
given Seller written notice within the appropriate time period set forth in
Section 10.1 hereof for such claim.
(iii) All of Buyer's damages sought to be
recovered under Section 10.2(a) hereof shall be net of (i) any insurance
proceeds received by Buyer as Claimant, with respect to events giving rise to
such damages, and (ii) tax benefits finally received by or accruing to Buyer in
connection with such events.
(iv) Following the Closing with respect to any
Group Sale, the sole and exclusive remedy for Buyer for any claim arising out
of a breach of any representation, warranty, covenant or other agreement herein
or otherwise arising out of or in connection with the transactions contemplated
by this Agreement (and agreements executed in connection herewith or delivered
pursuant hereto) related to such Group Sale or the operations of the Stations
included in such Group Sale, other than in respect of claims arising in
connection with the WHNZ Option Agreement, the WYCL Option Agreement, the
Services Agreements and the TSAs, whether such claim is framed in tort,
contract or otherwise, shall be a claim for indemnification pursuant to this
Section 10.
(v) Anything in this Agreement or any applicable
law to the contrary notwithstanding, it is understood and agreed by Buyer that,
other than with respect to Seller (but not including any shareholder, director,
officer, employee, agent or Affiliate of Seller) as expressly provided for in
Section 10.2(a) and this Section 10.2(b), no shareholder, director, officer,
employee, agent or Affiliate of Seller shall have (i) any personal liability to
Buyer as a result of the breach of any representation, warranty, covenant or
agreement of Seller contained herein or otherwise arising out of or in
connection with the transactions contemplated hereby or the operations of the
Stations or (ii) any personal obligation to indemnify Buyer for any of Buyer's
claims pursuant to Section 10.2(a) and Buyer waives and releases and shall have
no recourse against any of such parties described in this Section 10.2(b)(v) as
a result of the breach of any representation, warranty, covenant or
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agreement of Seller contained herein or otherwise arising out of or in
connection with the transactions contemplated hereby or the operations of the
Stations; provided, however, that the foregoing shall not affect the liability
and obligations of any of the parties to the Clear Channel Loan Agreement and
the Guaranty delivered to Buyer pursuant to Section 6.10(a)(i)(6) thereunder.
(vi) Any obligations of Seller in respect of WKES
and the Group IV Stations shall be subject to the limitations set forth in
Section 6.10 hereof.
(vii) Except as specifically provided in Section
10.2(a)(x) and notwithstanding any other provision of this Agreement to the
contrary, Seller shall have no obligation to indemnify or hold harmless Buyer
for or against any loss, liabilities, damages, costs or expenses resulting from
or relating to the World Class Rock Claims.
10.3 Indemnification by Buyer and Guarantor.
(a) With respect to any Group Sale, after the Closing therefor,
Buyer and Guarantor hereby jointly and severally agree to indemnify, defend and
hold Seller harmless against and with respect to, and shall reimburse Seller
for:
(i) Any and all losses, liabilities or damages resulting
from any material breach of any representation or warranty made pursuant to
this Agreement, or any material failure by Buyer or Guarantor to perform any
covenant of Buyer or Guarantor set forth in this Agreement or in any
certificate, document or instrument delivered to Seller under this Agreement;
(ii) Any failure by Buyer or Guarantor to pay, perform or
discharge any and all Assumed Liabilities or any other liabilities of Buyer or
Guarantor pursuant to this Agreement;
(iii) Any litigation, proceeding or claim arising from the
business or operations of the Assets or the Stations on or after the Effective
Time related thereto, other than as a result of any action or inaction by
Seller in violation of its obligations under this Agreement and the TBAs; and
(iv) Any and all reasonable 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 reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
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(b) Buyer's and Guarantor's obligation to indemnify
Seller pursuant to Section 10.3(a) shall be subject to all of
the following limitations:
(i) (1) No indemnification shall be required to
be made by Buyer and Guarantor as the Indemnifying Party under Section
10.3(a)(i) relating solely to material breaches of representations and
warranties until the aggregate amount of all Settled Claims of Seller as
Claimant pursuant to this Agreement (and any agreements executed in connection
herewith or delivered pursuant hereto) and the Group I Purchase Agreement (and
any agreements executed in connection therewith or delivered pursuant thereto)
exceeds the Hurdle Amount in the aggregate; provided, however, that once the
aggregate amount of all such Settled Claims exceeds the Hurdle Amount, Buyer
shall provide indemnification to Seller in respect of all such Settled Claims,
whether occurring before or after such time.
(2) Notwithstanding anything in this Agreement
or applicable law to the contrary, in no event shall Buyer's or Guarantor's
obligation for indemnification relating solely to representations and
warranties under Section 10.3(a)(i) of this Agreement and Section 10.3(a)(i) of
the Group I Purchase Agreement (and agreements executed in connection herewith
or therewith or delivered pursuant hereto or thereto) in the aggregate for all
such agreements, exceed $56,967,153, and Seller waives, releases and shall have
no recourse against Buyer for amounts in excess of $56,967,153 relating solely
to such matters; provided, however, that such limitation shall not apply to
claims made by Seller pursuant to any subsection of Section 10.3 of this
Agreement or Section 10.3 of the Group I Purchase Agreement other than the
provisions thereof relating solely to material breaches of representations and
warranties under Section 10.3(a)(i) of this Agreement and Section 10.3(a)(i) of
the Group I Purchase Agreement.
(ii) Seller shall be entitled to indemnification
only for those damages arising with respect to any claim as to which Seller has
given Buyer written notice within the appropriate time period set forth in
Section 10.1 hereof for such claim.
(iii) All of Seller's damages sought to be
recovered under Section 10.3(a) hereof shall be net of (A) any insurance
proceeds received by Seller as Claimant, with respect to events giving rise to
such damages, and (B) any tax benefits finally received or accruing to Seller
in connection with such events.
(iv) Following the Closing with respect to any
Group Sale, the sole and exclusive remedy for Seller for any claim arising out
of a breach of any representation, warranty,
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covenant or other agreement herein or otherwise arising out of or in connection
with the transactions contemplated by this Agreement (and agreements executed
in connection herewith or delivered pursuant hereto) related to such Group Sale
or the operations of the Stations included in such Group Sale, other than in
respect of claims arising in connection with the WHNZ Option Agreement, the
WYCL Option Agreement, the Services Agreements and the TSAs, whether such claim
is framed in tort, contract or otherwise, shall be a claim for indemnification
pursuant to this Section 10.
(v) Anything in this Agreement or any applicable
law to the contrary notwithstanding, it is understood and agreed by Seller
that, other than with respect to Buyer and Guarantor (but not including any
shareholder, director, officer, employee, agent or other Affiliate of either of
them), as expressly provided for in Section 10.3(a) and this Section 10.3(b),
no shareholder, director, officer, employee, agent or Affiliate of Buyer or
Guarantor shall have (A) any personal liability to Seller as a result of the
breach of any representation, warranty, covenant or agreement of Buyer
contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Stations or (B)
personal obligation to indemnify Seller for any of Seller's claims pursuant to
Section 10.3(a), and Seller waives and releases and shall have no recourse
against any one of such parties described in this Section 10.3(b)(v) as the
result of the breach of any representation, warranty, covenant or agreement of
Buyer contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Stations.
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,
the amount thereof, estimated in good faith, and the method of computation of
such claim, all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which such indemnification claim
shall have occurred. 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 ten 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
<PAGE> 77
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such investigation of the claim as the Indemnifying Party deems necessary or
desirable. For the purposes of such investigation, the Claimant agrees to make
available to the Indemnifying Party and its authorized 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, subject to the terms hereof
(including Sections 10.2(b) and 10.3(b)). 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, subject to the limitations of Sections 10.2(b) and 10.3(b).
(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, then the Claimant may defend through
counsel of its own choosing and (so long as it gives the Indemnifying Party at
least fifteen (15) days' prior written notice of the terms of the proposed
settlement thereof and permits the Indemnifying Party to then undertake the
defense thereof) settle such claim, action or suit, and to recover from the
Indemnifying Party the amount of such settlement or of any judgment and the
costs and expenses of such defense. The Indemnifying Party shall not compromise
or settle any third party claim, action or suit without the prior written
consent of the Claimant, which consent will not be unreasonably withheld or
delayed.
(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 practicable.
(e) Any claim for indemnity pursuant to this Section 10 with respect
to which (i) the Claimant and the Indemnifying Party agree as to its validity
and amount, (2) a final judgment, order or award of a court of competent
jurisdiction deciding such claim has been rendered, as evidence by a certified
copy of such judgment, provided that such judgment is not appealable or
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the time for taking an appeal has expired or (3) the Indemnifying Party has not
given written notice to the Claimant disputing such claim in whole or in part
within thirty days of receiving notice thereof, is referred to as a "Settled
Claim."
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement and the documents and transactions contemplated hereby, including all
fees and expenses of counsel, accountants, agents and representatives;
provided, however, that all transfer taxes, recordation taxes, sales taxes and
document stamps in connection with the transactions contemplated by this
Agreement and all other filing fees (including all FCC and HSR Act filing
fees), and other charges levied by any governmental entity in connection with
the transactions contemplated by this Agreement shall be paid one-half by Buyer
and one-half by Seller. Notwithstanding the foregoing, Seller shall pay (a) all
Florida state sales tax, if any, arising from the conveyance of the Assets to
Buyer pursuant to this Agreement and (b) all federal, state or local income
taxes payable by Seller, and Buyer shall pay all federal, state or local income
taxes payable by Buyer. Buyer hereby waives compliance with the provisions of
any applicable bulk transfer laws.
11.2 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 facsimile (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 Metroplex, CCL Clear Channel Metroplex, Inc.
or Guarantor: 200 Concord Plaza
San Antonio, Texas 78216
Attention: Mark P. Mays, President and
Kenneth E. Wyker, Senior
Vice President for Legal
Affairs
Telecopy (210) 822-2299
Telephone: (210) 822-2828
with a copy Wiley, Rein & Fielding
</TABLE>
<PAGE> 79
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(which shall 1776 K Street, N.W.
not constitute Washington, DC 20006
notice) to: Attention: Richard J. Bodorff, Esq.
Telecopy: (202) 429-7049
Telephone: (202) 429-7000
To PCC: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson and
Mr. Anthony L. Morrison
Telecopy: (561) 655-9424
Telephone: (561) 659-4122
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
To LPI: L. Paxson, Inc.
500 Australian Avenue South, Suite 501
West Palm Beach, FL 33401
Attention: Mr. James B. Bocock
Telecopy: (561) 655-3655
Telephone: (561) 655-9444
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.2.
11.3 Benefit and Binding Effect. Except as otherwise provided in
Sections 6.10 and 11.10 and the following sentence of this Section 11.3, no
party hereto may assign this Agreement without the prior written consent of the
other parties hereto. Buyer may assign its rights and obligations under this
Agreement to Clear Channel Radio, Inc. ("CCRI") and Clear Channel Radio
License, Inc. ("CCRL") so long as (i) CCRI and CCRL are wholly-owned
subsidiaries of the Guarantor and (ii) such assignment
<PAGE> 80
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does not hinder, impair or delay in any respect the grant by the FCC of any FCC
Consent or any Closing hereunder; provided that such assignment shall not
release Buyer from any of its obligations hereunder. 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. Subject to the terms and conditions of this
Agreement, from time to time prior to, at and after the Closing Date, each
party hereto will use commercially reasonable efforts to take, or cause to be
taken, all such actions and to do or cause to be done, all things, necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the purchase and sale contemplated by this Agreement and the
consummation of the other transactions contemplated hereby, including executing
and delivering such documents as the other party being advised by counsel shall
reasonably request in connection with the consummation of this Agreement and
the consummation of the other transactions contemplated hereby, including,
without limitation, the execution and delivery of any and all confirmatory and
other instruments, in addition to those to be delivered on the Closing Date.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF FLORIDA (WITHOUT REGARD TO THE CHOICE
OF LAW PROVISIONS THEREOF).
11.6 Entire Agreement. This Agreement, the Appendices, Exhibits and
Schedules hereto and thereto, 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 of this Agreement. This Agreement supersedes the
Letter of Intent dated June 16, 1997, as amended, and 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. Buyer acknowledges and agrees that
Seller shall not be liable for or bound in any manner by, and Buyer has not
relied upon, any express or implied, oral or written information, warranty,
guaranty, promise, statement, inducement, presentation or opinion (whether of,
by or on behalf of Seller, any broker or finder, or any officer, employee,
agent or representative of any of the foregoing, or any other person)
pertaining to the transactions contemplated hereby, the Seller, the Stations,
the Assets, or any part of any of the foregoing (including, without limitation,
any projections, budgets or other financial forecasts or the physical condition
of the Stations or any of the Assets, or the uses which can be made of the same
or the
<PAGE> 81
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value thereof), except as is expressly set forth in this Agreement.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance 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
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
11.10 Cooperation With Respect to Like-Kind Exchange. Seller may
assign some or all of its rights (but not its obligations) under this Agreement
to an escrow agent or other Person reasonably satisfactory to Buyer serving as
a Intermediary under United States Treasury Regulations promulgated under
Section 1031 of the Code; provided that (i) such assignment shall not deprive
Buyer of rights or benefits, or relieve Seller of any obligations or
liabilities, under this Agreement, (ii) Buyer shall not be obligated to expend
funds or incur obligations or liabilities in connection therewith and (iii)
Seller shall indemnify and hold harmless Buyer from and against any and all
loss, liability, cost and expense arising or resulting from any such
transaction. Seller intends for such exchange to constitute a like-kind
exchange pursuant to Section 1031 of the Code. However, nothing in this
Agreement shall be
<PAGE> 82
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construed as a representation or warranty of any party to any other party as to
the tax characterization of the transaction.
11.11 Guaranty. (a) Guarantor irrevocably guarantees (the
"Guarantee"), as principal and not as surety, to Seller and its successors and
permitted assigns full and prompt performance by Buyer (which for all purposes
hereof shall include any assignee(s) of Buyer permitted under Section 11.3) of
all of its obligations under or pursuant to this Agreement and all documents
and instruments executed in connection herewith or delivered pursuant hereto in
accordance with the terms hereof and thereof (the "Guaranteed Obligations").
Such guarantee shall apply and survive until all obligations of Buyer under
this Agreement and all documents and instruments executed in connection
herewith or delivered pursuant hereto are performed and satisfied in accordance
with the terms thereof. Guarantor hereby waives any provision of any statute or
judicial decision otherwise applicable hereto which restricts or in any way
limits the rights of any obligee against a guarantor or surety following a
default or failure of performance by an obligor with respect to whose
obligations the guarantee is provided. To the fullest extent permitted by
applicable law, Guarantor hereby waives presentment to, demand of payment from
and protest of any Guaranteed Obligation, and also waives notice of acceptance
of its guarantee and notice of protest for nonpayment. To the fullest extent
permitted by applicable law, the obligations of Guarantor hereunder shall not
be affected by (a) the failure of the applicable obligee to assert any claim or
demand or to enforce any right or remedy against Guarantor pursuant to the
provisions of this Agreement or otherwise and (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms or
provisions of this Section 11.11, unless consented to in writing by Buyer and
Seller.
(b) Guarantor hereby represents and warrants to Seller as follows:
(i) Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and has the requisite corporate
power and authority to execute, deliver and perform this Agreement according to
its terms; (ii) the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Guarantor have been
duly authorized by all necessary corporate action on the part of Guarantor;
(iii) this Agreement has been duly executed and delivered by Guarantor and
constitutes the legal, valid and binding obligation of Guarantor enforceable
against Guarantor 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; and (iv) the execution, delivery and
performance of this Agreement: (1) do not require the consent of any third
party, (2) do not
<PAGE> 83
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conflict with the Articles of Incorporation or bylaws of Guarantor, and (3) do
not conflict in any material respect with, result in a material breach of, or
constitute a material default under any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation or ruling of any court or
governmental authority applicable to Guarantor or any material contract or
agreement to which Guarantor is a party or by which Guarantor may be bound.
<PAGE> 84
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer, Seller and Guarantor as of the date first written
above.
CLEAR CHANNEL METROPLEX, INC.
By:/s/ Mark P. Mays
---------------------------------------
Name: Mark P. Mays
Title: President/COO
CLEAR CHANNEL METROPLEX LICENSES, INC.
By:/s/ Mark P. Mays
--------------------------------------
Name: Mark P. Mays
Title:President/COO
PAXSON COMMUNICATIONS CORPORATION
By:/s/ Lowell W. Paxson
-------------------------------------
Name: Lowell W. Paxson
Title: Chairman
L. PAXSON, INC.
By:/s/ James B. Bocock
-------------------------------------
Name: James B. Bocock
Title: President
CLEAR CHANNEL COMMUNICATIONS, INC.
By:/s/ Mark P. Mays
-------------------------------------
Name: Mark P. Mays
Title: President/COO
