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Exhibit 2(a)
ASSET PURCHASE AGREEMENT
by and among
MEDIA ONE GROUP-ERIE, LTD.,
CUZCO LLC,
XXXXX X. XXXXXXXXX,
XXXXXX X. XXXXXXXXX,
REGENT BROADCASTING OF ERIE, INC.
and
REGENT LICENSEE OF ERIE, INC.
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TABLE OF CONTENTS
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ARTICLE I - PURCHASE OF ASSETS
1.1 Transfer of Assets..............................................................................1
1.2 Excluded Assets.................................................................................2
ARTICLE 2 ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Obligations.......................................................................4
2.2 Retained Liabilities............................................................................4
ARTICLE 3 CONSIDERATION
3.1 Delivery of Consideration.......................................................................5
3.2 Escrow Deposit..................................................................................5
3.3 Proration of Income and Expenses................................................................6
3.4 Allocation of Purchase Price....................................................................6
3.5 Collection of Accounts Receivable...............................................................7
ARTICLE 4 CLOSING
4.1 Closing.........................................................................................8
ARTICLE 5 GOVERNMENTAL CONSENTS
5.1 FCC Consent.....................................................................................8
5.2 FCC Application.................................................................................8
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS
6.1 Organization and Standing.......................................................................9
6.2 Authorization and Binding Obligation............................................................9
6.3 Qualification As Assignee.......................................................................9
6.4 Absence of Conflicting Agreements or Required Consents..........................................9
6.5 Commissions or Finder's Fees...................................................................10
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6.6 Litigation.....................................................................................10
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Organization and Standing......................................................................10
7.2 Authorization and Binding Obligation...........................................................10
7.3 Absence of Conflicting Agreements or Required Consents.........................................10
7.4 Government Authorizations......................................................................11
7.5 Compliance with FCC Regulations................................................................12
7.6 Taxes ......................................................................................12
7.7 Personal Property..............................................................................13
7.8 Real Property..................................................................................13
7.9 Contracts......................................................................................14
7.10 Status of Contracts, etc.......................................................................14
7.11 Environmental..................................................................................14
7.12 Intellectual Property..........................................................................15
7.13 Financial Statements...........................................................................15
7.14 Personnel Information..........................................................................15
7.15 Litigation.....................................................................................16
7.16 Compliance With Laws...........................................................................16
7.17 Employee Benefit Plans.........................................................................16
7.18 Commissions or Finder's Fees...................................................................17
7.19 Conduct of Business in Ordinary Course; Adverse Change.........................................17
7.20 Instruments of Conveyance; Good Title..........................................................17
7.21 Undisclosed Liabilities........................................................................17
7.22 Full Disclosure................................................................................17
ARTICLE 8 COVENANTS OF BUYERS
8.1 Closing........................................................................................18
8.2 Notification...................................................................................18
8.3 No Inconsistent Action.........................................................................18
8.4 Other Erie Transactions........................................................................18
ARTICLE 9 COVENANTS OF SELLER
9.1 Pre-Closing Covenants............................................................................18
9.2 Notification.....................................................................................20
9.3 No Inconsistent Action...........................................................................20
9.4 Closing ......................................................................................21
9.5 Other Items......................................................................................21
9.6 Exclusivity......................................................................................21
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9.7 Supplements to Schedules.........................................................................21
ARTICLE 10 JOINT COVENANTS
10.1 Confidentiality................................................................................22
10.2 Cooperation....................................................................................22
10.3 Control of Stations............................................................................22
10.4 Consents to Assignment.........................................................................23
10.5 Filings ......................................................................................23
10.6 Bulk Sales Laws................................................................................23
10.7 Employee Matters...............................................................................23
ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS
11.1 Representations, Warranties and Covenants......................................................24
11.2 Governmental Consents..........................................................................24
11.3 Governmental Authorizations....................................................................24
11.4 Adverse Proceedings............................................................................25
11.5 Third-Party Consents...........................................................................25
11.6 Closing Documents..............................................................................25
11.7 Satisfactory Investigation of Station Facilities...............................................25
11.8 Environmental Studies..........................................................................25
11.9 No Adverse Change..............................................................................26
ARTICLE 12 CONDITIONS OF CLOSING BY SELLER
12.1 Representations, Warranties and Covenants......................................................26
12.2 Governmental Consents..........................................................................26
12.3 Adverse Proceedings............................................................................26
12.4 Closing Documents..............................................................................27
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES
13.1 Expenses.......................................................................................27
13.2 Specific Charges...............................................................................27
ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Seller's Documents.............................................................................27
14.2 Buyers' Documents..............................................................................28
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ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc...............................................................29
15.2 Indemnification................................................................................30
15.3 Procedures: Third Party and Direct Indemnification Claims......................................30
ARTICLE 16 TERMINATION RIGHTS
16.1 Termination....................................................................................31
16.2 Liability......................................................................................33
16.3 Monetary Damages, Specific Performance and Other Remedies......................................33
16.4 Seller's Liquidated Damages....................................................................33
ARTICLE 17 MISCELLANEOUS PROVISIONS
17.1 Risk of Loss...................................................................................33
17.2 Certain Interpretive Matters and Definitions...................................................34
17.3 Further Assurances.............................................................................34
17.4 Preservation of Records........................................................................34
17.5 Benefit and Assignment.........................................................................34
17.6 Amendments.....................................................................................35
17.7 Headings.......................................................................................35
17.8 Governing Law..................................................................................35
17.9 Notices........................................................................................35
17.10 Counterparts...................................................................................36
17.11 No Third Party Beneficiaries...................................................................36
17.12 Severability...................................................................................36
17.13 Entire Agreement...............................................................................36
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LIST OF SCHEDULES AND EXHIBITS
Schedule 1.2.8 Miscellaneous Excluded Assets
7.4 Stations Licenses, Etc.
7.7 Tangible Personal Property
7.8 Real Property
7.9 Contracts (including identification of
Material Contracts)
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Financial Statements
7.14 Personnel Information
7.15 Litigation
7.16 Compliance With Laws
7.17 Employee Benefit Plans
Exhibit A Indemnification Escrow Agreement
B Form Letter of Credit
C Deposit Escrow Agreement
D Assignment and Assumption Agreement
E Non-Competition Agreement
F Lease Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 18th day of May, 1999 by and among MEDIA ONE GROUP-ERIE, LTD., an Ohio
limited liability company (hereinafter referred to as " Seller "), REGENT
BROADCASTING OF ERIE, INC., a Delaware corporation ("RBI"), and REGENT LICENSEE
OF ERIE, INC., a Delaware corporation ("RLI") (RBI and RLI collectively referred
to as "Buyers"), and CUZCO LLC, an Ohio limited liability company, and XXXXX X.
XXXXXXXXX AND XXXXXX X. XXXXXXXXX.
RECITALS
WHEREAS, Seller owns and operates radio stations WXKC-FM and WRIE-AM
licensed to Erie, Pennsylvania, and WXTA-FM, licensed to Edinboro, Pennsylvania
(together the "Stations" and each individually, a "Station") pursuant to
licenses issued by the Federal Communications Commission ("FCC"), and
WHEREAS, Seller desires to sell, and Buyers desire to purchase, certain
assets and assume certain obligations associated with the ownership and
operation of the Stations, all on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 Transfer of Assets. On the terms and subject to the conditions
hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined),
Seller shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall
purchase and assume from Seller (provided that RLI shall only assume Seller's
rights and obligations under the Stations Licenses, as defined below), all of
the right, title and interest of Seller in and to all of the assets, properties,
interests and rights of Seller of whatsoever kind and nature, real and personal,
tangible and intangible, owned or leased (to the extent of Seller's leasehold
interest) by Seller as the case may be, wherever situated, which are used or
useful in the operation of the Stations (the "Stations Assets"), including but
not limited to all of Seller's right, title and interest in and to the assets,
properties, interests and rights described in this Section 1. 1:
1.1.1 all licenses, permits and other authorizations issued to
Seller by any governmental or regulatory authority including without limitation
those issued by the FCC (the licenses, permits and authorizations issued by the
FCC are hereafter referred to as the "Stations Licenses") used or useful in
connection with the operation of the Stations, including but not
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limited to those described in Schedule 7.4, along with renewals or
modifications of such items, and all applications pertaining thereto, between
the date hereof and the Closing Date;
1.1.2 all equipment, electrical devices, broadcast towers,
antennae, cables, buildings and other improvements on real property, tools,
hardware, office furniture and fixtures, office materials and supplies,
inventory, motor vehicles, spare parts and all other tangible personal property
of every kind and description, and Seller's rights therein, owned, leased (to
the extent of Seller's leasehold interest) or held by Seller and used or useful
in connection with the operations of the Stations, including but not limited to
those items described or listed in Schedule 7.7, together with any replacements
thereof and additions thereto, made between the date hereof and the Closing
Date, and less any retirements or dispositions thereof made between the date
hereof and the Closing Date in the ordinary course of business and consistent
with past practices of Seller; provided, however, Seller agrees that the value
of all such assets retired or disposed of and not replaced with an asset of like
kind and quality shall not exceed $10,000 in the aggregate unless Seller has
obtained the prior written approval of RBI which shall not be unreasonably
withheld;
1.1.3 all contracts, agreements, leases and legally binding
contractual rights of any kind, written or oral, relating to the operation of
the Stations and which are listed in Schedule 7.8 and Schedule 7.9, together
with (a) such additional existing contracts as may be added to Schedule 7.9
within fourteen (14) days following the execution of this Agreement with the
prior written consent of Buyers, (b) all advertising contracts entered into or
acquired by Seller between the date hereof and the Closing Date in the ordinary
course of business, consistent with past practices of Seller, and (c) any other
contracts, agreements, leases and legally binding contractual rights entered
into or acquired by Seller between the date hereof and the Closing Date, which
RBI specifically agrees at Closing to assume (collectively the "Contracts");
provided, however, that the parties acknowledge that the Seller currently has
Barter Payables (the aggregate value of time owed pursuant to contracts for the
sale of advertising in exchange, in whole or in part, for merchandise or
services ("Trade Agreements")) of approximately $170,000 in connection with the
Trade Agreements listed on Schedule 7.9. Seller shall use its best efforts to
reduce the Barter Payables by as much as reasonably possible between the date
hereof and the Closing Date.
1.1.4 all of Seller's rights in and to the call letters of the
Stations, and any variation thereof, as well as all of Seller's rights in and to
all trademarks, trade names, service marks, franchises, copyrights, including
registrations and applications for registration of any of them, computer
software, programs and programming material of whatever form or nature, jingles,
slogans, the Stations' logos and all other logos or licenses to use same and all
other intangible property rights of Seller, which are used or useful in
connection with the operation of the Stations, including but not limited to
those listed in Schedule 7.12 (collectively, the "Intellectual Property")
together with any associated goodwill and any additions thereto between the date
hereof and the Closing Date;
1.1.5 all programming materials and elements of whatever form
or nature owned by Seller, whether recorded on tape or other medium or intended
for live performance, and all copyrights owned by or licensed to Seller that are
used or useful in connection with the operation
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of the Stations, including all such programs, materials, elements and copyrights
acquired by Seller between the date hereof and the Closing Date;
1.1.6 all of Seller's rights in and to all the files, documents,
records, and books of account relating to the operation of the Stations or to
the Stations Assets, including, without limitation, the Stations' local public
files, programming information and studies, blueprints, technical information
and engineering data, news and advertising studies or consulting reports,
marketing and demographic data, sales correspondence, lists of advertisers,
promotional materials, credit and sales reports and filings with the FCC and all
written Contracts to be assigned hereunder, logs, software programs and books
and records relating to employees, financial, accounting and operation matters,
but excluding records relating solely to any Excluded Asset (as hereinafter
defined);
1.1.7 all of Seller's rights under manufacturers' and vendors'
warranties relating to items included in the Stations Assets and all similar
rights against third parties relating to items included in the Stations Assets;
and
1.1.8 except for Excluded Assets, such other assets, properties,
interests and rights owned by Seller that are used or useful in connection with
the operation of the Stations.
The Stations Assets shall be transferred to RBI (except for the
Stations' Licenses which shall be transferred to RLI) free and clear of all
debts, security interests, mortgages, trusts, claims, pledges or other liens,
liabilities, encumbrances or rights of third parties whatsoever
("Encumbrances"), except for Assumed Liabilities and except as set forth in
Schedule 7.7. and Schedule 7.8.
1.2 Excluded Assets. Notwithstanding anything to the contrary contained
herein, it is expressly understood and agreed that the Stations Assets shall not
include the following assets along with all rights, title and interest therein
(the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Seller on hand and/or
in banks, including without limitation certificates of deposit, commercial
paper, treasury bills, marketable securities, asset or money market accounts and
all such similar accounts or investments;
1.2.2 all investment securities and accounts receivable or
notes receivable for services performed by Seller in connection with the
operation of the Stations prior to the Closing Date and all security deposits
paid and held under any contract or lease agreement;
1.2.3 subject to the limitation set forth in Section 1.1.2 of
this Agreement, all tangible and intangible personal property of Seller disposed
of or consumed in the ordinary course of business consistent with the past
practices of Seller between the date of this Agreement and the Closing Date;
1.2.4 all Contracts that have terminated or expired prior to
the Closing Date in the ordinary course of business consistent with the past
practices of Seller and any contract not listed on Schedule 7.8, or 7.9 unless
RBI agrees, in writing, to assume such contract;
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1.2.5 Seller's governing books and records and such other
books and records as pertain to the organization, existence or capitalization of
Seller and duplicate copies of such records as are necessary to enable Seller to
file its tax returns and reports, as well as any other records or materials
relating to Seller generally and not involving or relating to the Stations
Assets or the operation or operations of the Stations;
1.2.6 contracts of insurance, and any insurance proceeds or
claims made by, Seller relating to property or equipment repaired, replaced or
restored by Seller prior to the Closing Date;
1.2.7 all pension, profit sharing or cash or deferred (Section
401 (k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Seller; and
1.2.8 any right, property or asset described in Schedule
1.2.8.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Obligations. Subject to the provisions of this Section
2.1, Section 2.2 and Section 3.3, on the Closing Date, RBI shall assume the
obligations of Seller arising or to be performed on or after the Closing Date
(except to the extent such obligations represent liabilities for activities,
events or transactions occurring, or conditions existing, on or prior to the
Closing Date): (a) under the Contracts; (b) for operating expenses and other
liabilities of the Stations; (c) for accrued vacations of those of Sellers'
employees who become employees of RBI; and (d) all property taxes and other
governmental charges on the Stations Assets; and RLI shall assume the
obligations of Seller arising or to be performed on or after the Closing Date
(except to the extent such obligations represent liabilities for activities,
events or transactions occurring on or prior to the Closing Date) under the
Stations Licenses. All of the foregoing liabilities and obligations shall be
referred to herein collectively as the "Assumed Liabilities."
2.2 Retained Liabilities. Notwithstanding anything contained in this
Agreement to the contrary, Buyers expressly do not, and shall not, assume or
agree to pay, satisfy, discharge or perform and will not be deemed by virtue of
the execution and delivery of this Agreement or any agreement, instrument or
document delivered pursuant to or in connection with this Agreement or otherwise
by reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Seller of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed to Buyers, other than the Assumed
Liabilities. Seller will retain all liabilities and obligations of the Seller,
other than the Assumed Liabilities, including but not limited to, the obligation
to perform, satisfy or pay any liability, obligation, agreement, debt, charge,
claim, judgment or expense incurred by or asserted against Seller related to
taxes, environmental matters, pension or retirement plans or trusts,
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profit-sharing plans, employee benefits, severance of employees, product
liability or warranty, negligence, contract breach or default, or other
obligations, claims or judgments asserted against Buyers as successor in
interest to Seller. All of such liabilities, obligations and commitments of
Seller described in this Section 2.2 shall be referred to herein collectively as
the "Retained Liabilities."
ARTICLE 3
CONSIDERATION
3.1 Delivery of Consideration. In consideration for the sale of the
Stations Assets to Buyers, in addition to the assumption of certain obligations
of Seller pursuant to Section 2.1 above, Buyers shall, at the Closing (as
hereinafter defined), deliver to Seller Thirteen Million Five Hundred Thousand
Dollars ($13,500,000.00), subject to adjustment pursuant to the provisions of
Sections 3.2 and 3.3 below (the "Purchase Price"). The Purchase Price shall be
paid in cash by wire transfer of immediately-available funds to Seller, pursuant
to wire instructions provided by Seller. Notwithstanding the foregoing, the
parties agree that at the Closing, Buyers, Seller and Bank One Trust Company,
NA, Columbus, Ohio, as Escrow Agent (the "Indemnification Escrow Agent"), shall
enter into an Indemnification Escrow Agreement in the form of Exhibit A hereto
(the "Indemnification Escrow Agreement") pursuant to which Seller shall deposit
with the Indemnification Escrow Agent a letter of credit substantially in the
form attached as Exhibit B hereto in the amount of Three Hundred Thousand
Dollars ($300,000.00), which funds shall be held in escrow for a period of at
least one year from the Closing Date and will be used to satisfy indemnification
claims of Buyers pursuant to Section 15.2.1 hereof, and which funds shall
otherwise be administered and released as specifically provided for in the
Indemnification Escrow Agreement.
3.2 Escrow Deposit. (a) Within five (5) business days of the execution
and delivery of this Agreement, Buyers, Seller and Bank One Trust Company, NA,
Columbus, Ohio, as Escrow Agent (the "Deposit Escrow Agent"), shall enter into a
Deposit Escrow Agreement in the form of Exhibit C hereto (the "Deposit Escrow
Agreement") pursuant to which Buyers shall deposit the amount described below as
a deposit on the amount of the Purchase Price. Such amounts held in escrow shall
be applied as set forth herein and in the Deposit Escrow Agreement.
(b) Pursuant to the terms of the Deposit Escrow Agreement,
Buyers shall wire transfer Six Hundred Seventy-Five Thousand Dollars
($675,000.00), or alternatively, deliver an irrevocable, stand-by letter of
credit for such amount in form and substance acceptable to Seller, to an escrow
account established pursuant to the Deposit Escrow Agreement (the "Escrow
Deposit"). At the Closing, the Escrow Deposit if, in the form of cash, shall be
applied to the Purchase Price to be paid to Seller and the interest accrued
thereon shall be paid to Buyers, or if in the form of a letter of credit, shall
be returned to Buyers. As more fully described in the Deposit Escrow Agreement:
(a) in the event this Agreement is terminated because of Buyers' material breach
of this Agreement and all other conditions to Closing are at such time satisfied
or waived (other than such conditions as can reasonably be expected to be
satisfied by the Closing), the Escrow Deposit shall be paid to or delivered for
draw thereon to Seller as liquidated damages
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as provided in Section 16.4 hereto for Buyers' material breach of this Agreement
(the payment of such sum to Seller thereby discharging in full any liability
Buyers may have to Seller), and the interest accrued on the Escrow Deposit shall
be paid to Buyers; and (b) in the event this Agreement is terminated under any
circumstances other than those set forth in the immediately preceding clause
(a), the Escrow Deposit and the interest accrued thereon shall be paid or
returned to Buyers.
3.3 Proration of Income and Expenses.
3.3.1 Except as otherwise provided herein, all items of
income and expense, deposits, reserves and prepaid and deferred income and
expenses relating to the Stations Assets or the Assumed Liabilities and arising
from the conduct of the business and operations of the Stations shall be
prorated between Buyers and Seller in accordance with generally accepted
accounting principles as of 11:59 p.m. local Erie, Pennsylvania time, on the
date immediately preceding the Closing Date. Such prorations shall include,
without limitation, all ad valorem, real estate, property taxes and other
governmental charges on the Stations Assets (but excluding taxes arising by
reason of the transfer of the Stations Assets as contemplated hereby which shall
be paid as set forth in Section 13.2), business and license fees, frequency
discounts, music and other license fees (including any retroactive adjustments
thereof, which retroactive adjustments shall not be subject to the ninety-day
limitation set forth in Section 3.3.2), utility expenses, amounts due or to
become due under Contracts, rents and similar prepaid and deferred items, but
shall exclude any prorations for accrued vacation and sick leave.
3.3.2 Except as otherwise provided herein, the prorations
and adjustments contemplated by this Section 3.3, to the extent practicable,
shall be made on the Closing Date. As to those prorations and adjustments not
capable of being ascertained on the Closing Date, an adjustment and proration
shall be made within ninety (90) calendar days after the Closing Date.
3.3.3 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 3.3.2 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by Seller and
one-half by Buyers.
3.4 Allocation of Purchase Price. The parties shall in good faith
attempt to agree prior to Closing upon an allocation of the Purchase Price among
the Stations Assets. If the parties cannot agree upon an allocation, such
allocation shall be based upon an appraisal prepared by BIA Consulting, Inc. or
another appraiser mutually satisfactory to the parties, and such appraisal and
allocation shall be completed post-Closing unless otherwise agreed to by the
parties. Any costs of such appraisal shall be paid one-half by Buyers and
one-half by Sellers. Seller and Buyers agree to use the agreed upon allocation,
if any, for all tax purposes, including without limitation, those matters
subject to Section 1060 of the Internal Revenue Code of 1986, as amended.
Notwithstanding the foregoing, the allocation to any covenant not to compete
shall not exceed One Hundred Thousand Dollars ($100,000.00).
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3.5 Collection of Accounts Receivable. The accounts receivable of
Seller for the sale of advertising time on the Stations are not included among
the Stations Assets. Nevertheless, at Closing, Seller shall supply RBI with a
list of Seller's accounts receivable as of the Closing Date (the "Accounts"),
and RBI shall use such efforts as are reasonable and in the ordinary course of
business to collect the Accounts on Seller's behalf for a period of ninety (90)
days from the Closing Date (the "Collection Period"). This obligation, however,
shall not extend to the institution of litigation, employment of counsel, or any
other extraordinary means of collection. During the Collection Period, Seller
shall not solicit any monies from an account debtor who, after Closing,
continues to do business with the Stations, provided that during such period
Seller may act to preserve its rights against a bankrupt debtor or commence suit
or otherwise take action against any debtor that disputes the amount of, or
liability for, an Account. If Seller receives a payment from an account debtor
during the Collection Period, it shall so notify RBI. RBI may endorse and
deposit in its own name and collect any and all checks and other instruments for
the payment of money that RBI may receive in payment of Accounts. RBI shall
receive no remuneration for its services and shall not be liable for
non-collection, or failure of any such collection, except due to its own gross
negligence or intentional misconduct. Upon termination of its duties hereunder,
RBI shall deliver to Seller all of its correspondence and files concerning the
collection of the Accounts and all reports of attempts to collect the same.
Except as otherwise provided herein, amounts collected by RBI on account of
Seller's Accounts shall be remitted in full to Seller by the 15th day of each
month following the month during which such collections occurred. Buyer shall
deliver to Seller an accounting showing the amount it received during each
monthly period on each account. If both Seller and RBI are entitled to accounts
receivable from the same account debtor, all payments received during the
Collection Period shall be first applied to Seller's Accounts from such account
debtor until the same are paid in full, unless such account debtor has disputed
such account receivable in writing to the Seller or has specifically indicated
payment is intended to be to its account with RBI, in which event RBI shall be
entitled to apply the payment made by the account debtor to RBI's account
receivable, but RBI shall immediately return the disputed account to Seller for
collection. At the conclusion of the Collection Period and after remittance of
all amounts collected, RBI will thereafter have no further responsibility with
respect to the collection of the Accounts, and RBI may apply all collections
received by RBI from any Account party who continues business with RBI to
obligations owing to RBI, except for any payment received by RBI which such
Account party specifies is for amounts owed to Seller, in which event such
specified amounts shall be paid over to Seller. RBI shall not have the right to
compromise, settle or adjust the amounts of any one of the Accounts without
Seller's prior written consent. Seller shall promptly pay all sales commissions
relating to all of its accounts receivable whenever Seller receives payment
thereon.
ARTICLE 4
CLOSING
4.1 Closing. Except as otherwise mutually agreed upon by Buyers and
Seller, the consummation of the transactions contemplated herein (the "Closing")
shall occur within ten (10) business days after the later to occur of (a) the
satisfaction or waiver of each condition to closing contained herein, other than
such conditions as are reasonably anticipated to be satisfied at
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Closing (provided that each party hereto shall use its reasonable best efforts
to cause each condition to closing to be satisfied so that the Closing may occur
at the earliest possible date), and (b) the issuance of the Final Order (as
defined below); or such other date as may be mutually agreed by the parties
hereto (the "Closing Date"); provided, however, that Buyers may in their sole
discretion waive the requirement that a Final Order be issued and elect (subject
to clause (a) above) to close at any time (upon not less than ten (10) business
days' notice to Seller) after the release of a public notice of initial FCC
approval consenting to the transaction contemplated hereby (the "Initial
Approval"). For purposes of this Agreement, "Final Order" means an order or
grant by the FCC which is no longer subject to reconsideration or review by the
FCC or a court of competent jurisdiction and pursuant to which the FCC consents
to the assignments of the FCC Licenses contemplated by this Agreement, such
order or grant being without the imposition of any conditions materially adverse
to Buyers or any Affiliate (as hereinafter defined) of Buyers with respect to
the assignment of the FCC Licenses to RLI or the continued operation by Buyers
of the Stations or the Stations Assets, other than conditions applicable to the
radio broadcast industry as a whole. In the event that the parties close before
the Initial Approval has become a Final Order, the parties shall enter into a
mutually acceptable Unwind Agreement. The Closing shall be held by the exchange
of documents by overnight delivery or in the offices of Xxxxxxx & Xxxx, The
Federal Reserve Bank Building, East Fourth Street, Cincinnati, Ohio, or at such
place and in such manner as the parties hereto may agree.
ARTICLE 5
GOVERNMENTAL CONSENTS
5.1 FCC Consent. It is specifically understood and agreed by Buyers and
Seller that the Closing and the assignment of the Stations Licenses and the
transfer of the Stations Assets are expressly conditioned on and are subject to
the prior consent and approval of the FCC without the imposition of any
conditions materially adverse to Buyers or any Affiliate of Buyers other than
conditions applicable to the radio broadcast industry as a whole (the "FCC
Consent").
5.2 FCC Application. Within five (5) business days after the delivery of
the Escrow Deposit to the Escrow Agent, Buyers and Seller shall file an
application with the FCC for the FCC Consent (the "FCC Application"). Buyers and
Seller shall prosecute the FCC Application with all reasonable diligence and
otherwise use their best efforts to obtain the FCC Consent as expeditiously as
practicable (but neither Buyers nor Seller shall have any obligation to satisfy
complainants or the FCC by taking any steps which would have a material adverse
effect upon Buyers or Seller or upon any of their respective Affiliates). If the
FCC Consent imposes any condition on Buyers or Seller or any of their respective
Affiliates, such party shall use its best efforts to comply with such condition;
provided, however, that neither Buyers nor Seller shall be required hereunder to
comply with any condition that would have a material adverse effect upon it or
any of its Affiliates. If reconsideration or judicial review is sought with
respect to the FCC Consent, the party affected shall vigorously oppose such
efforts for reconsideration or judicial review; provided, however, that nothing
herein shall be construed to limit either party's right to terminate this
Agreement pursuant to Article 16 hereof.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers hereby make the following representations and warranties to
Seller, each of which is true and correct on the date hereof, shall survive the
Closing and shall be unaffected by any investigation heretofore or hereafter
made by Seller:
6.1 Organization and Standing. Buyers are corporations duly organized
validly existing and in good standing under the laws of the State of Delaware,
and by the Closing Date RBI will be authorized to conduct business within the
State of Pennsylvania.
6.2 Authorization and Binding Obligations. Buyers have all necessary
corporate power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and to own or lease the Stations Assets and to
carry on the business of the Stations upon the consummation of the transactions
contemplated by this Agreement. Buyers' execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary action on their part and, assuming the due
authorization, execution and delivery of this Agreement by Seller, this
Agreement will constitute the legal, valid and binding obligation of Buyers,
enforceable against them in accordance with its terms, except as limited by laws
affecting creditors' rights or equitable principles generally.
6.3 Qualification As Assignee. There are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and regulations of
the FCC, would disqualify RLI as an assignee of the Stations Licenses.
6.4 Absence of Conflicting Agreements or Required Consents. Except as
set forth in Article 5 hereof with respect to governmental consents, the
execution, delivery and performance of this Agreement by Buyers: (a) do not
conflict with the provisions of the articles of incorporation or by-laws of
Buyers; (b) do not require the consent of any third party not affiliated with
Buyers; (c) will not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority to which either
Buyer is a party; and (d) will not, either alone or with the giving of notice or
the passage of time, or both, conflict with, constitute grounds for termination
of or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any agreement, instrument, license or permit to
which either Buyer is now subject.
6.5 Commissions or Finder's Fees. Neither Buyers nor any person or
entity acting on behalf of Buyers has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity.
6.6 Litigation. Buyers are not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree prohibiting the consummation of
the transactions contemplated by this Agreement, and there are no suits, legal
proceedings or investigations of any nature pending,
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or to the best knowledge of Buyers, threatened against or affecting Buyers that
would affect Buyers' ability to carry out the transactions contemplated by this
Agreement.
6.7 Financial Qualifications. Buyers have sufficient financial ability on
their own or from committed sources (subject to customary closing conditions) to
complete the transactions contemplated by this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties to Buyers,
each of which is true and correct on the date hereof, shall survive the Closing
and shall be unaffected by any investigation heretofore or hereafter made by
Buyers:
7.1 Organization and Standing. Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Ohio, is authorized to conduct business within the State of
Pennsylvania, and has the requisite power and authority to own, lease and
operate the Stations Assets owned or leased by it and to carry on the business
of the Stations as now being conducted by it and as proposed to be conducted by
it between the date hereof and the Closing Date.
7.2 Authorization and Binding Obligation. Seller has the power and
authority, and has taken all necessary and proper action to enter into and
perform this Agreement and to consummate the actions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery of this Agreement by
Buyers, constitutes the legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as limited by laws
affecting the enforcement of creditors' rights or equitable principles
generally.
7.3 Absence of Conflicting Agreements or Required Consents. Except as
set forth in Article 5 with respect to governmental consents and in Schedule 7.9
with respect to consents required in connection with the assignment of certain
Contracts, the execution, delivery and performance of this Agreement by Seller:
(a) do not require the consent of any third party (including, without
limitation, the consent of any governmental, regulatory, administrative or
similar authority); (b) will not conflict with, result in a breach of, or
constitute a violation of or default under, the provisions of Seller's articles
of organization or operating agreement (or other charter or organizational
documents), or any applicable judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which Seller is a party or
by which Seller or any of the Stations Assets are bound; (c) will not either
alone or with the giving of notice or the passage of time, or both, conflict
with, constitute grounds for termination of or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any Contract,
agreement, instrument, license or permit to which Seller or any of the Stations
Assets is now subject; and (d) will not result in the creation of any lien,
charge or encumbrance on any of the Stations Assets.
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7.4 Government Authorizations.
7.4.1 Schedule 7.4 hereto contains a true and complete list of
the Stations Licenses and other licenses, permits or other authorizations from
governmental and regulatory authorities which are required for the lawful
conduct of the business and operations of the Stations in the manner and to the
full extent they are presently conducted (including, without limitation,
auxiliary licenses associated with each Station). Seller has delivered to Buyers
true and complete copies of the Stations Licenses and the other licenses,
permits and authorizations listed in Schedule 7.4, including any and all
amendments and other modifications thereto.
7.4.2 Seller is the authorized legal holder of the Stations
Licenses and other licenses, permits and authorizations listed in Schedule 7.4.
Except as set forth Schedule 7.4, none of the Stations Licenses and other
licenses, permits and authorizations listed in Schedule 7.4 is subject to any
restrictions or conditions which would materially limit the full operation of
the Stations as now operated.
7.4.3 Except as set forth in Schedule 7.4, and except for
matters affecting the radio broadcast industry generally, there are no
applications, complaints, petitions or proceedings pending or, to the best of
Seller's knowledge, threatened as of the date hereof before the FCC or any other
governmental or regulatory authority relating to the business or operations of
the Stations. Except as set forth in Schedule 7.4, the Stations Licenses and the
other licenses, permits and authorizations listed in Schedule 7.4 are in good
standing, are in full force and effect and are unimpaired by any act or omission
of Seller or its members, managers, officers, or employees. The operations of
the Stations are in accordance in all material respects with the Stations
Licenses and the underlying construction permits and the other licenses, permits
and authorizations listed in Schedule 7.4. No proceedings are pending or, to the
best of Seller's knowledge, threatened, and to the best of Seller's knowledge
there has not been any act or omission of Seller or any of its members,
managers, officers, or employees, which may result in the revocation,
modification, non-renewal or suspension of any of the Stations Licenses or the
other licenses, permits and authorizations listed in Schedule 7.4, the denial of
any pending applications, the issuance of any cease and desist order, the
imposition of any administrative actions by the FCC or any other governmental or
regulatory authority with respect to the Stations Licenses or the other
licenses, permits and authorizations listed in Schedule 7.4 or which may affect
Buyers' ability to continue to operate the Stations as they are currently
operated.
7.4.4 Each Station is operating at the authorized power level
specified in the respective Station License.
7.4.5 To the best of Seller's knowledge: (i) none of the
Stations is causing objectionable interference to the transmissions of any other
broadcast station or communications facility nor has any of the Stations
received any complaints with respect thereto; and (ii) no other broadcast
station or communications facility is causing objectionable interference to
respective transmissions of any Station or the public's reception of such
transmissions.
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7.4.6 Seller has no reason to believe that the Stations
Licenses and the other licenses, permits, or authorizations listed in Schedule
7.4 will not be renewed in their ordinary course.
7.4.7 All reports, forms, and statements required to be filed
by Seller with the FCC with respect to the Stations since the grant of the last
renewal of the Stations Licenses have been filed and are substantially complete
and accurate.
7.4.8 The operation of the Stations and all of the Stations
Assets are in compliance in all respects with ANSI Radiation Standards
C95.1-1992.
7.5 Compliance with FCC Regulations. Except as specified in Schedule 7.4,
the operation of the Stations and all of the Stations Assets are in compliance
in all material respects with: (a) all applicable engineering standards required
to be met under applicable FCC rules; and (b) all other applicable federal,
state and local rules, regulations, requirements and policies, including, but
not limited to, any applicable equal employment opportunity policies of the FCC,
and all applicable painting and lighting requirements of the FCC and the Federal
Aviation Administration to the extent required to be met under applicable FCC
rules and regulations, and to the best of Seller's knowledge, there are no filed
claims to the contrary.
7.6 Taxes. Seller has filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and other tax returns
required by law to be filed by it and has paid in full all taxes, estimated
taxes, interest, assessments, and penalties due and payable by it. All returns
and forms which have been filed have been true and correct in all material
respects and no tax or other payment in an amount other than as shown on such
returns and forms is required to be paid by Seller and has not been paid by
Seller. There are no present disputes as to taxes of any nature payable by
Seller which in any event could adversely affect any of the Stations Assets or
the operation of the Stations by Buyers. Seller has not been advised that any of
its tax returns, federal, state, local or foreign, have been or are being
audited. Seller does not and will not in the future have any liability, fixed or
contingent, for any unpaid federal, state or local taxes or other governmental
or regulatory charges whatsoever (including without limitation withholding and
payroll taxes) which could result in a lien on the Stations Assets after
conveyance thereof to Buyers or in any other form of transferee liability to
Buyers.
7.7 Personal Property. Schedule 7.7 hereto contains a list of all
material items of tangible personal property owned by Seller and used or useful
in the conduct of the business and operations of the Stations. Schedule 7.7 also
separately lists any material tangible personal property leased by Seller
pursuant to leases included within the Contracts. Except as disclosed in
Schedule 7.7, Seller has, and following the Closing, RBI will have, good and
marketable title to all of the items of tangible personal property which are
included in the Stations Assets (other than those subject to lease) and none of
such Stations Assets is, or at the Closing will be, subject to any security
interest, mortgage, pledge, lease, license, lien, encumbrance, title defect or
other charge, except for the Assumed Liabilities. The properties listed in
Schedule 7.7, along with those properties subject to lease and included among
the Contracts, constitute all material tangible personal property necessary to
operate the Stations as the same are now being operated. Except as set forth in
Schedule 7.7, all items of tangible personal property included in the
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Stations Assets are in good operating condition (considering their age), are
free from all material defect and damage, are suitable for the purposes for
which they are now being used, and have been properly maintained in a manner
consistent with generally accepted standards of good engineering practice.
7.8 Real Property .
7.8.1 Seller owns no real property although it does own
improvements on real property, such as transmitter buildings. Schedule 7.8
hereto contains a complete and accurate list and description of all real
property (including without limitation, real property on which is situated the
towers, transmitters, transmitter buildings, studio and offices of the Stations)
used by Seller in connection with the operations of the Stations, stating which
of the improvements thereon are leased and which are owned by Seller (the "Real
Estate").
7.8.2 Seller enjoys quiet possession of all Real Estate. There
are no present disputes or claims with respect to offsets or defenses by any
party against the other under any of the Contracts relating to the Real Estate.
Seller has delivered to Buyers true and complete copies of all Contracts
relating to the Real Estate. Except as set forth in Schedule 7.9 hereto, the
assignment of the Contracts relating to the Real Estate to RBI will not permit
the other party to accelerate the rent, cause the terms thereof to be
renegotiated or constitute a default thereunder, and will not require the
consent of any such party to the assignment thereof to RBI.
7.8.3 Seller has full legal and practical access to all of the
Real Estate, and all easements, rights of way, and real property licenses
relating to Seller's use thereof have been properly recorded in the appropriate
public recording offices. The Real Estate includes all the real property,
easements, rights of way, and other real property interests necessary to conduct
the business and operations of the Stations as they are now conducted. Except as
described in Schedule 7.8, none of the buildings, structures, improvements or
fixtures constructed on any Real Estate, in connection with the operation of the
Stations, including, but not limited to, all towers, guy wires and guy anchors
and ground radials, encroach upon adjoining real property, and all such
buildings, structures, improvements and fixtures are constructed and are
operated and used in conformance with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes. No utility lines serving such Real Estate pass over the
lands of a third party except where appropriate easements have been obtained.
Except as described in Schedule 7.8, all buildings, structures, towers,
antennae, improvements and fixtures used or useful in the operation of the
Stations and situated on the Real Estate are in good and technically sound
operating condition, ordinary wear and tear excepted, have no latent structural
mechanical or other defects of material significance, are reasonably suitable
for the purposes for which they are being used and each has adequate rights of
ingress and egress, utility service for water and sewer, telephone, electric
and/or gas, and sanitary service for the conduct of the business and operations
of the Stations as presently conducted. There is no pending or, to the best
knowledge of Seller, threatened condemnation or other legal proceeding or action
of any kind relating to such real property and/or title thereto.
7.9 Contracts. Schedule 7.9 lists all Contracts to which Seller is a
party, or which are binding on Seller, as of the date of this Agreement. Those
Contracts listed on Schedule 7.9, if
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any, requiring the consent of a third party to assignment are identified by an
asterisk in the left margin of Schedule 7.9. Those Contracts, if any, that
Seller and Buyers have agreed are material to the operation of the Stations
Assets and the valid assignment of which and receipt by Buyers of consents
thereto (along with appropriate estoppel certificates for the leases related to
the Real Estate) is a condition to the consummation of the transactions
contemplated hereby (the "Material Contracts") are identified by an "M" in the
left margin of Schedule 7.9.
7.10 Status of Contracts, etc. Seller has delivered to Buyers true and
complete copies of all written Contracts and true and complete memoranda of all
oral Contracts, including any and all amendments and other modifications
thereto. All of the Contracts are in full force and effect and are valid,
binding and enforceable in accordance with their respective terms, except as
limited by laws affecting creditors' rights or equitable principles generally.
Seller has complied in all material respects with all Contracts and is not in
material default beyond any applicable grace periods under any thereof and, to
the best of Seller's knowledge, no other contracting party is in default under
any thereof. All advertising time committed under Trade Agreements is
preemptible for cash sales and none is subject to any guaranteed fixed position.
7.11 Environmental. Except as set forth in Schedule 7.11, Seller has
complied with all federal, state and local environmental laws, rules and
regulations as in effect on the date hereof applicable to each of the Stations
and its operations, including but not limited to the FCC's guidelines regarding
RF radiation. To the best of the Seller's knowledge, the technical equipment
included in the Stations Assets does not contain any PCBs. No hazardous or toxic
waste, substance, material or pollutant (as those or similar terms are defined
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. Sections 9601 et seq., Toxic Substances
Control Act. 15 U. S. C. Section Section 2601 et seq., the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq. or any other
applicable federal, state and local environmental law, statute, ordinance,
order, judgment rule or regulation relating to the environment or the protection
of human health ("Environmental Laws")), including but not limited to, any
asbestos or asbestos-related products, oils, or petroleum-derived compounds,
CFCs, PCBs, or underground storage tanks (collectively Hazardous Materials"),
have been released, emitted or discharged in violation of applicable laws or
regulations, or are currently located in quantities in violation of applicable
laws and regulations in, on, or under or about the real property on which the
Stations Assets are situated, including without limitation the transmitter
sites, or contained in the tangible personal property included in the Stations
Assets. The Stations Assets and Seller's use thereof are not in violation of any
Environmental Laws or any occupational, safety and health or other applicable
law now in effect. With respect to Buyers, Seller shall be as of the Closing
Date and thereafter solely responsible for all environmental liabilities, of
whatsoever kind and nature, arising out of or attributable to the operation or
ownership of the Stations Assets prior to the Closing Date.
7.12 Intellectual Property. Schedule 7.12 hereto is a true and complete
list of all material Intellectual Property applied for, registered or issued to,
and owned by Seller or under which Seller is a licensee and which is used in the
conduct of Seller's business and operations with regard to the Stations. Except
as set forth on Schedule 7.12, to the best of Seller's knowledge: (a) Seller's
right, title and interest in the Intellectual Property as owner or licensee, as
applicable, is free and clear of all liens, claims, encumbrances, rights, or
equities whatsoever of any third party and, to the extent
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any of the Intellectual Property is licensed to Seller, such interest is valid
and uncontested by the licensor thereof or any third party; (b) all computer
software located at the Stations' facilities or used in the Stations' business
or operations is properly licensed to Seller, and all of Seller's uses of such
computer software are authorized under such licenses; (c) all of Seller's right,
title and interest in and to the Intellectual Property and computer software
shall be assignable to RBI at Closing, and upon such assignment, RBI shall
receive complete and exclusive right, title, and interest in and to all tangible
and intangible property rights existing in the Intellectual Property; and (d)
there are no infringements or unlawful use of such Intellectual Property by
Seller in connection with Seller's business or operations.
7.13 Financial Statements. Set forth in Schedule 7.13 are complete
copies of the financial statements of Seller relating to the Stations for the
years ended December 31, 1997 and 1998, together with monthly income statements
for the Stations for each month ended after January 1, 1999 (collectively, the
"Financial Statements"). The Financial Statements are prepared in accordance
with the books and records of Seller and in accordance with generally accepted
accounting principles consistently applied and maintained throughout the periods
indicated except for the absence of footnotes, standard year-end adjustments,
and as has been disclosed in Schedule 7.13. The Financial Statements present
fairly the financial condition, results of operations and cash flow of the
Stations for the periods indicated. None of the Financial Statements materially
understates the true costs and expenses of conducting the business and
operations of the Stations, fails to disclose any material liability, or
materially inflates (or will inflate) the revenues of the Stations for any
reason.
7.14 Personnel Information.
7.14.1 Schedule 7.14 contains a true and complete list of all
persons employed at the Stations, including date of hire, a description of
material compensation arrangements (other than employee benefit plans set forth
in Schedule 7.17) and a list of other material terms of any and all agreements
affecting such persons and their employment by Seller. Seller, as of the date of
this Agreement, has received no notice that any employee intends to terminate
his or her employment relationship with the Stations upon the execution of this
Agreement or after the Closing.
7.14.2 Seller, with respect to the Stations, is not a party to
any contract or agreement with any labor organization, nor has Seller agreed to
recognize any union or other collective bargaining unit, nor has any union or
other collective bargaining unit been certified as representing any employees of
Seller at the Stations. Seller has no knowledge of any organization effort
currently being made or threatened by or on behalf of any labor union with
respect to employees of Seller at the Stations.
7.14.3 Except as disclosed in Schedule 7.14, Seller, with
respect to the Stations, has complied in all material respects with all laws
relating to the employment of labor, including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and payment and withholding
of taxes.
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7.15 Litigation. Except as set forth in Schedule 7.15, Seller is not
subject to any judgment, award, order, writ, injunction, arbitration decision or
decree relating to the conduct of the business or the operation of the Stations
or any of the Stations Assets, and there is no litigation, administrative
action, arbitration, proceeding or investigation pending or, to the best
knowledge of Seller, threatened against Seller with respect to, related to or in
connection with the operation of the Stations in any federal, state or local
court, or before any administrative agency or arbitrator (including, without
limitation, any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the Stations Licenses), or before any other tribunal duly authorized
to resolve disputes. In particular, but without limiting the generality of the
foregoing, to the best knowledge of Seller, there are no applications,
complaints or proceedings pending or threatened before the FCC or any other
governmental organization with respect to the business or operations of the
Stations.
7.16 Compliance With Laws. Except as set forth in Schedule 7.16: (i)
Seller is not in material violation of, nor has Seller received any notice
asserting any non-compliance by it in connection with the operation of the
Stations or use or ownership of any of the Stations Assets with, any applicable
statute, rule or regulation, whether federal, state or local; (ii) Seller is not
in default with respect to any judgment, order, injunction or decree of any
court administrative agency or other governmental authority or any other
tribunal duly authorized to resolve disputes which relates to the transactions
contemplated hereby; and (iii) Seller is in compliance in all material respects
with all laws, regulations and governmental orders applicable to the conduct of
the business and operations of the Stations, and its present use of the Stations
Assets does not violate any of such laws, regulations or orders.
7.17 Employee Benefit Plans. Schedule 7.17 contains a true and complete
list as of the date of this Agreement of all employee benefit plans applicable
to the employees of Seller employed at the Stations, and a brief description
thereof. Seller does not maintain any other employee benefit plan as the term is
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended, applicable to the employees of Seller employed at the Stations.
7.18 Commissions or Finder's Fees. Neither Seller nor any person or
entity acting on behalf of Seller has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity, with the exception of Xxxxxxx & Co., whose fees
shall be paid by Seller.
7.19 Conduct of Business in Ordinary Course; Adverse Changes. Since
December 31, 1998: (a) Seller has conducted the business of the Stations only in
the ordinary course consistent with Seller's past practices; (b) there has not
been any material adverse change in the business, assets, properties, prospects
or condition (financial or otherwise) of the Stations, or any damage,
destruction, or loss affecting any of the Stations Assets; and (c) Seller has
not created, assumed, or suffered any mortgage, pledge, lien or encumbrance on
any of the Stations Assets.
7.20 Instruments of Conveyance: Good Title. The instruments to be
executed by Seller and delivered to Buyers at the Closing, conveying the
Stations Assets to Buyers, will transfer
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good and marketable title to the Assets free and clear of all liabilities
(absolute or contingent), security interests, mortgages, pledges, liens,
obligations and encumbrances, except for Assumed Liabilities and except as set
forth in Schedule 7.7 and Schedule 7.8 hereto.
7.21 Undisclosed Liabilities. Excepting only for the Assumed
Liabilities, no liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, relating to Seller, the Stations or the
Stations Assets exists which could, after the Closing result in any form of
transferee liability against Buyers or subject the Stations Assets to any lien,
encumbrance, claim, charge, security interest or imposition whatsoever or
otherwise affect the full, free and unencumbered use of the Stations Assets by
Buyers.
7.22 Full Disclosure. No representation or warranty made by Seller
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or shall omit to state any
material fact required to make any statement contained herein or therein not
misleading. To the best of Seller's knowledge, there is no impending or
contemplated event or occurrence that would cause any of the foregoing
representations not to be true and complete on the date of such event or
occurrence as if made on that date.
Whenever in this Article 7 a warranty or representation is qualified by
a word or phrase referring to the best of Seller's knowledge (or similar terms),
it shall mean to the actual knowledge of Xxxxx X. Xxxxxxxxx after having made
due inquiry of the employees, representatives and agents of Seller who would be
expected to have knowledge of the matter, and with respect to the condition of
any Stations Assets, records or other object, after having inspected it.
ARTICLE 8
COVENANTS OF BUYERS
8.1 Closing. Subject to Article 11 hereof, on the Closing Date, Buyers
shall purchase the Stations Assets from Seller as provided in Article I hereof
and Buyers shall assume the Assumed Liabilities of Seller as provided in Article
2 hereof.
8.2 Notification. Buyers will provide Seller prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 6. Buyers shall also notify Seller of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against Buyers which challenges the transactions contemplated hereby.
8.3 No Inconsistent Action. Neither Buyers nor their Affiliates shall
take any action which is materially inconsistent with Buyers' obligations under
this Agreement or take any action which would cause any representation or
warranty of Buyers contained herein to be or become false or invalid or which
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
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8.4 Other Erie Transactions. Between the date hereof and the Closing
Date or the earlier termination of this Agreement in accordance with its terms,
except with the prior written consent of Seller, neither Buyer nor any of
Buyer's Affiliates shall enter into any legally binding agreement to purchase or
enter into any legally binding local marketing agreement with, any radio station
licensed to Erie, Pennsylvania.
ARTICLE 9
COVENANTS OF SELLER
9.1 Pre-Closing Covenants. Seller covenants and agrees with respect to
the Stations that, between the date hereof and the Closing Date or the earlier
termination of this Agreement in accordance with its terms, except as expressly
permitted by this Agreement or with the prior written consent of Buyers, Seller
shall act in accordance with the following:
9.1.1 Seller shall use its reasonable best efforts to conduct
the business and operations of the Stations in the ordinary and prudent course
of business consistent with past practice and with the intent of preserving the
ongoing operations and assets of the Stations, including but not limited to
maintaining the independent identity of the Stations, retaining the current
format and programming (including the content thereof) of the Stations,
continuing at historical levels and frequencies spending for promotions,
advertising, and survey testing, and using its reasonable best efforts to retain
at the Stations the services of all active employees, consultants and agents of
the Stations.
9.1.2 Seller shall use its reasonable best efforts to: (i)
preserve the operation of the Stations intact; (ii) preserve the business of the
Stations' advertisers, customers, suppliers and others having business relations
with the Stations; and (iii) continue to conduct financial operations of the
Stations, including without limitation, their credit and collection and pricing
policies and practices, all in the ordinary course of business consistent with
past practices.
9.1.3 Seller shall operate the Stations in all material
respects in accordance with FCC rules and regulations and the Stations Licenses
and with all other laws, regulations, rules and orders, and shall not cause or
permit by any act, or failure to act, any of the Stations Licenses or other
licenses, permits or authorizations listed in Schedule 7.4 to expire, be
surrendered, adversely modified, or otherwise terminated, or the FCC to
institute any proceedings for the suspension, revocation or adverse modification
of any of the Stations Licenses, or fail to prosecute with due diligence any
pending applications to the FCC.
9.1.4 Should any fact relating to Seller which would cause the
FCC to deny its consent to the transactions contemplated by this Agreement come
to Seller's attention, Seller will promptly notify Buyers thereof and will use
its reasonable best efforts to take such steps as may be necessary to remove any
such impediment to the FCC's consent to the transactions contemplated by this
Agreement.
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9.1.5 Except for changes or actions in the ordinary course of
business consistent with past practices, Seller shall not: (a) sell broadcast
time on a prepaid basis (other than in the course of existing credit practices);
(b) except as required by the applicable law or written agreements currently in
effect, grant or agree to grant any general or specific increases in the rates
of salaries or compensation payable to employees of the Stations (that shall in
the aggregate exceed 5 % of such employee's compensation as set forth on
Schedule 7.14 hereto), (c) except as required by written agreements currently in
effect, grant or agree to grant any specific bonus or increase in compensation
to any executive management employee of the Stations (that shall in the
aggregate exceed 5 % of such employee's compensation as set forth on Schedule
7.14 hereto), (d) provide for any new pension, retirement or other employment
benefits for employees of the Stations or any increases in any existing
benefits, (e) modify, change or terminate any Contract, (f) decrease the
advertising rates in effect as of the date hereof, or (g) enter into any Trade
Agreements. For purposes of obtaining the consent of Buyers for the matters
described in Sections 1.1.3 and 9.1.5, Seller shall give Buyers written notice
by facsimile of the proposed barter agreement or operational change and if
Seller does not receive an objection within 72 hours of the giving of such
notice, then Buyers will be deemed to have consented to the matter covered by
such notice.
9.1.6 Seller shall give or cause the Stations to give Buyers
and Buyers' counsel, accountants, engineers and other representatives, at
Buyers' reasonable request and upon reasonable notice, full and reasonable
access during normal business hours to all of Seller's personnel, properties,
books, Contracts, reports and records (including, without limitation, financial
information and tax returns relating to the Stations, and environmental audits
in existence with respect to the Stations Assets), real estate, buildings and
equipment relating to the Stations and to the Stations' employees, and to
furnish Buyers with information and copies of all documents and agreements
relating to the Stations and the operation thereof (including but not limited to
financial and operating data and other information concerning the financial
condition, results of operations and business of the Stations to enable Buyers'
representatives to audit the Financial Statements or for any other purpose) that
Buyers may reasonably request. The rights of Buyers under this Section 9.1.6
shall not be exercised in such a manner as to interfere unreasonably with the
business of the Stations.
9.1.7 Seller shall use its reasonable best efforts to obtain
any third party consents necessary for the assignment of any Contract (which
shall not require any payment to any such third party except for such amounts
contemplated by the Contract to be assigned and any amount then owing by Seller
to such third party).
9.1.8 Not less than ten (10) business days prior to the
Closing Date, Seller, at its expense, shall provide to Buyers (a) title
insurance commitments, issued by a title insurance company reasonably
satisfactory to Buyers, agreeing to issue to Buyers and its senior lender, on
the most current standard ALTA form, leasehold owners and lenders policies of
title insurance with respect to all Real Estate which is used as a tower/antenna
site, together with a copy of each document to which reference is made in such
commitments, insuring title in full accordance with the representations and
warranties set forth herein and subject only to such conditions and exceptions,
and with such endorsements, as Buyers or its senior lenders may approve or
require, and (b) where needed to obtain title insurance commitments, up-to-date
surveys of all Real Estate
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which is used as a tower/antenna site, each prepared in accordance with
ALTA/ASCM standards and each detailing the legal description, the perimeter
boundaries, all improvements thereon, all easements and encroachments affecting
each parcel, and such other matters as may be reasonably requested by Buyers or
the title insurance company, each containing a surveyor certificate of recent
date reasonably acceptable to Buyer and the title insurance company, and each
prepared by a registered land surveyor.
9.2 Notification. Seller will provide Buyers prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 7 or any Schedule. Seller agrees to notify Buyers of
any litigation, arbitration or administrative proceeding pending or, to the best
of its knowledge, threatened, which challenges the transactions contemplated
hereby. Seller shall promptly notify Buyers if any of the normal broadcast
transmissions of any Station are interrupted, interfered with or in any way
impaired, and shall provide Buyers with prompt written notice of the problem and
the measures being taken to correct such problem. If such Station is not
restored so that operation is resumed within 72 hours or operations are returned
to full licensed power and antenna height within thirty (30) days of such event,
or if more than five (5) such events occur within any thirty (30) day period, or
if any of the Stations shall be off the air for more than seventy-two (72)
consecutive hours, then Buyers shall have the right to terminate this Agreement.
9.3 No Inconsistent Action. Seller shall not take any action which is
materially inconsistent with its obligations under this Agreement nor take any
action which would cause any representation or warranty of Seller contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
9.4 Closing. Subject to Article 12 hereof, on the Closing Date, Seller
shall transfer, convey, assign and deliver to Buyers the Stations Assets and the
Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this
Agreement.
9.5 Other Items. Until the Closing Date or the earlier termination of
this Agreement in accordance with the terms hereof, Seller shall not: (a) waive
or release any right relating to the business or operations of the Stations,
except for adjustments or settlements made in the ordinary course of business
consistent with its past practices; (b) transfer or grant any rights under any
of the Stations Licenses; (c) enter into any commitment for capital expenditures
for which Buyers would become liable after the Closing Date; (d) introduce any
material changes in the broadcast hours or in the format of the Stations or any
other material change in the Stations' programming policies; (e) change the call
letters of any Station; and (f) enter into any transaction or make or enter into
any contract or commitment with respect to any of the Stations or the Stations
Assets which by reason of its size or otherwise is not in the ordinary course of
business consistent with past practices.
9.6 Exclusivity. Seller agrees that, commencing on the date hereof
through the Closing or earlier termination of this Agreement, Buyers shall have
the exclusive right to consummate the transactions contemplated herein, and
during such exclusive period, Seller agrees that neither Seller, nor any member,
manager, officer, employee or other representative of
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Seller: (a) will initiate, solicit or encourage, directly or indirectly, any
inquiries, or the making or implementation of any proposal or offer with respect
to a merger, acquisition, consolidation or similar transaction involving, or any
purchase of, all or any portion of the Stations Assets (any such inquiry,
proposal or offer being hereinafter referred to as an "Acquisition Proposal" and
any such transaction being hereinafter referred to as an "Acquisition"); (b)
will engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; or (c) will continue any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal or Acquisition and will take the necessary steps to
inform the individuals or entities referred to above of the obligations
undertaken by them in this Section 9.6. Notwithstanding the foregoing, in the
event that Buyers default in any material respect in the observance or in the
due and timely performance of any of its covenants or agreements herein
contained and such default shall not be cured within ten (10) business days of
notice of default served by Seller, Seller's obligations under this Section 9.6
shall be null and void.
9.7 Supplements to Schedules. Seller shall have the right within
fourteen (14) days following the date of this Agreement to submit to Buyers
supplements to Schedules 7.7, 7.9, and 7.14, to submit complete copies of all
Contracts, and to asterisk those which require consent to assignment. Buyers
shall have ten (10) days thereafter to review copies of all Contracts, to
identify on Schedule 7.9 those Contracts which are "material", and to accept
such Schedules, as supplemented, in whole or in part, and to the extent modified
and accepted by Buyers, such Schedules, as accepted, shall become a part of this
Agreement. To the extent any Contract or the content of any supplement, or part
thereof, is rejected by Buyers, such Contract and/or the portion rejected shall
not become a part of the Schedules; provided, however, Buyers may not reject any
Contract on Schedule 7.9 which was entered into by Seller in the ordinary course
of business, would be terminable by RBI after Closing at no cost on not more
than thirty (30) days' notice, and which involves the expenditure of no more
than $10,000 annually.
ARTICLE 10
JOINT COVENANTS
Buyers and Seller each covenant and agree that between the date hereof
and the Closing Date, they shall act in accordance with the following:
10.1 Confidentiality. Subject to the requirements of applicable law,
Buyers and Seller shall each keep confidential all information obtained by it
with respect to the other parties hereto in connection with this Agreement and
the negotiations preceding this Agreement, and will use such information solely
in connection with the transactions contemplated by this Agreement, and if the
transactions contemplated hereby are not consummated for any reason, each shall
return to each other party hereto, without retaining a copy thereof, any
schedules, documents or other written information obtained from such other party
in connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, no party shall be required to keep confidential
or return any information which: (a) is known or available through other lawful
sources, not bound by a confidentiality agreement with the disclosing party; (b)
is or becomes
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publicly known through no fault of the receiving party or its agents; (c) is
required to be disclosed pursuant to an order or request of a judicial or
governmental authority (provided the non-disclosing party is given reasonable
prior notice of the order or request and the purpose of the disclosure); or (d)
is developed by the receiving party independently of the disclosure by the
disclosing party. Notwithstanding anything to the contrary herein, either party
may in accordance with its legal obligations, including but not limited to
filings permitted or required by the Securities Act of 1933 and the Securities
and Exchange Act of 1934, make such press releases and other public statements
and announcements as it deems necessary and appropriate in connection with this
Agreement and the transactions contemplated hereby; provided, however, that
prior to making any such unilateral press release or announcement, such party
shall first communicate the same in writing to the other.
10.2 Cooperation. Subject to express limitations contained elsewhere
herein, Buyers and Seller agree to cooperate fully with one another in taking
any reasonable actions (including without limitation, reasonable actions to
obtain the required consent of any governmental instrumentality or any third
party) necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the satisfaction of any condition to
closing set forth herein.
10.3 Control of Stations. Buyers shall not, directly or indirectly,
control, supervise or direct the operations of the Stations prior to the
Closing. Such operations, including complete control and supervision of all
Station programs, employees and policies, shall be the sole responsibility of
Seller.
10.4 Consents to Assignment. To the extent that any Contract identified
in the Schedules is not capable of being sold, assigned, transferred, delivered
or subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, offer, delivery or sublease thereof. Subject to the provisions
of Section 11.5, in those cases where consents, assignments, releases and/or
waivers have not been obtained at or prior to the Closing relating to the
assignment to RBI of the Contracts, this Agreement and any assignment executed
pursuant hereto, to the extent permitted by law, shall constitute an equitable
assignment by Seller to RBI of all of Seller's rights, benefits, title and
interest in and to the Contracts, and where necessary or appropriate, RBI shall
be deemed to be Seller's agent for the purpose of completing, fulfilling and
discharging all of Seller's rights and liabilities arising after the Closing
Date under such Contracts. Seller shall use its reasonable best efforts to
provide RBI with the financial and business benefits of such Contracts
(including, without limitation, permitting RBI to enforce any rights of Seller
arising under such Contracts), and RBI shall, to the extent RBI is provided with
the benefits of such Contracts, assume, perform and in due course pay and
discharge all debts, obligations and liabilities of Seller under such Contracts
to the extent that RBI was to assume those obligations pursuant to the terms
hereof.
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10.5 Filings. In addition to the covenants of the parties set forth in
Article 5 hereto, as promptly as practicable after the execution of this
Agreement, Buyers and Seller shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, consents,
orders and approvals of any governmental authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any governmental authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, any reports
or notifications that may be required to be filed with the FCC, and each shall
furnish to one another all such information in its possession as may be
necessary for the completion of the reports or notifications to be filed by the
other.
10.6 Bulk Sales Laws. Buyers hereby waive compliance by Seller with the
provisions of the "bulk sales" or similar laws of any state. Seller agrees to
indemnify Buyers and hold them harmless from any and all loss, cost, damage and
expense (including but not limited to, reasonable attorney's fees) sustained by
Buyers as a result of any failure of Seller to comply with any "bulk sales" or
similar laws.
10.7 Employee Matters. Seller shall be responsible for the payment of
all compensation and accrued employee benefits payable to all employees up to
the Closing Date. Seller acknowledges and agrees that it, and not Buyers, is and
shall be solely responsible for any and all severance, insurance, supplemental
pension, deferred compensation, retirement and any other benefits, and related
costs, premiums and claims, due, to become due, committed or otherwise promised
to any person who, as of the Closing Date, is a retiree, former employee, or
current employee of Seller, relating to the period up to the Closing Date.
Buyers, as purchaser of the Stations Assets, shall assume no employee benefit
plans, programs or practices, whether or not set forth in writing, maintained by
Seller at any time.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYERS
The obligations of Buyers hereunder are, at their option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
11.1 Representations, Warranties and Covenants.
11.1.1 All representations and warranties of Seller made in this
Agreement or in any Exhibit, Schedule or document delivered pursuant hereto,
shall be true and complete if limited by materiality, in accordance with the
terms thereof in all respects and if not so limited by materiality, in all
material respects, as of the date hereof and on and as of the Closing Date as if
made on and as of that date, except for changes (a) expressly permitted or
contemplated by the terms of this Agreement; or (b) in the ordinary course of
business which are not, either individually or in the aggregate, material and
adverse.
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11.1.2 All of the terms, covenants and conditions to be
complied with and performed by Seller on or prior to the Closing Date shall have
been complied with or performed in all material respects.
11.1.3 Buyers shall have received a certificate, dated as of the
Closing Date, from Seller, executed by the Manager of Seller to the effect that:
(a) the representations and warranties of Seller contained in this Agreement are
true and complete in all respects on and as of the Closing Date as if made on
and as of that date except for changes (i) expressly permitted or contemplated
by the terms of this Agreement; or (ii) in the ordinary course of business which
are not, either individually or in the aggregate, material and adverse; and (b)
Seller has complied with or performed in all material respects all terms,
covenants and conditions to be complied with or performed by it on or prior to
the Closing Date.
11.2 Governmental Consents. The FCC Consent shall have been obtained
and, subject to the provisions of Section 4. 1 hereof, shall have become a Final
Order.
11.3 Governmental Authorizations. Seller shall be the holder of the
Stations Licenses and all other licenses, permits and other authorizations
listed in Schedule 7.4, and there shall not have been any modification of any of
such licenses, permits and other authorizations which has a material adverse
effect on any of the Stations or the operations thereof. No application shall be
pending for the renewal of any of the Stations Licenses. No proceeding shall be
pending which seeks, or the effect of which reasonably could be, to revoke,
cancel, fail to renew, suspend or adversely modify any of the Stations Licenses
or any other licenses, permits or other authorizations listed in Schedule 7.4.
11.4 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no order, decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; (d) seeks material damages on account of
the consummation of any transaction contemplated hereby; or (e) is a petition of
bankruptcy by or against Seller, an assignment by Seller for the benefit of its
creditors, or other similar proceeding.
11.5 Third-Party Consents. All Material Contracts shall be in full
force and effect on the Closing Date, and Seller shall have obtained and shall
have delivered to RBI all appropriate third-party consents in form and substance
acceptable to RBI (including estoppel certificates for the leases related to the
Real Estate) in connection with the assignment of the Material Contracts to RBI.
11.6 Closing Documents. Seller shall have delivered or caused to be
delivered to Buyers, on the Closing Date, all bills of sale, general warranty
deeds, endorsements, assignments and other instruments of conveyance reasonably
satisfactory in form and substance to Buyers, effecting the sale, transfer,
assignment and conveyance of the Stations Assets to Buyers,
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including, without limitation, each of the documents required to be delivered by
it pursuant to Article 14.
11.7 Satisfactory Investigation of Station Facilities. Buyers shall
have conducted such examination and investigation of the Real Estate and title
thereto, studios, transmitter facilities, and other Stations Assets and
personnel on matters as Buyers deem advisable or appropriate and shall have
determined that the findings and results of such examination and investigation
are satisfactory in its sole discretion. If Buyers do not advise Seller in
writing within thirty (30) days after the date of this Agreement of any
unsatisfactory findings or results, this condition shall be deemed waived. If
Buyers do advise Seller of any unsatisfactory findings or results involving
costs to cure the same in excess of $5,000 in the aggregate, and such are
capable of being cured by Seller to Buyers' reasonable satisfaction, Seller
shall cause the same to be cured to Buyers' reasonable satisfaction prior to
Initial Approval; provided, however, if the costs to cure are in excess of
$175,000 in the aggregate, Seller may instead terminate this Agreement.
11.8 Environmental Studies. Buyers shall have obtained within
forty-five (45) days following the date of this Agreement Phase I environmental
assessment reports on the Real Estate confirming the representations and
warranties of Seller on environmental matters; provided, however, if Buyers
elect not to obtain such environmental reports, Buyers shall be deemed to have
waived the condition of Closing contained in this Section 11.8.
11.9 Revenue Decline. The cash advertising sales of the Stations for
the current year through the end of the month preceding the Closing Date shall
be no less than 90% of the amount of cash revenue for the corresponding period
of 1998.
ARTICLE 12
CONDITIONS OF CLOSING BY SELLER
The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
12.1 Representations, Warranties and Covenants.
12.1.1 All representations and warranties of Buyers made in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, shall be true and complete in all material respects as of the date
hereof and on and as of the Closing Date as if made on and as of that date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
12.1.2 All the terms, covenants and conditions to be complied
with and performed by Buyers on or prior to the Closing Date shall have been
complied with or performed in all material respects.
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12.1.3 Seller shall have received a certificate, dated as of
the Closing Date, executed by the President of Buyers, to the effect that: (a)
the representations and warranties of Buyers contained in this Agreement are
true and complete in all material respects on and as of the Closing Date as if
made on and as of that date; and (b) Buyers have complied with or performed in
all material respects all terms, covenants and conditions to be complied with or
performed by it on or prior to the Closing Date.
12.2 Governmental Consents. The FCC Consent shall have been obtained
and, subject to the provisions of Section 4.1 hereof, shall have become a Final
Order.
12.3 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no other decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; or (d) seeks material damages on account of
the consummation of any transaction contemplated hereby.
12.4 Closing Documents. Buyers shall have delivered or caused to be
delivered to Seller, on the Closing Date, the Purchase Price and each of the
documents required to be delivered by them pursuant to Article 14.
ARTICLE 13
TRANSFER TAXES: FEES AND EXPENSES
13.1 Expenses. Except as set forth in Section 13.2 hereof or otherwise
expressly set forth in this Agreement, each party hereto shall be solely
responsible for all costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement including, but not limited to, the costs and expenses incurred
pursuant to Article 5 hereof and the fees and disbursements of counsel and other
advisors.
13.2 Specific Charges. All costs of transferring the Stations Assets in
accordance with this Agreement, including recordation, transfer and documentary
taxes and fees, and any excise, sales or use taxes, shall be shall be paid
one-half by Buyers and one-half by Seller. The filing or grant fees for the FCC
Application shall be paid one-half by Buyers and one-half by Seller. Each party
shall pay any other filing or grant fees imposed upon it by any governmental
authority the consent of which or the filing with which is required for the
consummation of the transactions contemplated hereby. Any fees or commission due
Xxxxxxx & Co. as a result of this transaction shall be paid by Seller.
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ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Seller's Documents. At the Closing, Seller shall deliver or cause
to be delivered to Buyers the following:
14.1.1 Certified resolutions of all requisite action of the
members and manager of Seller approving the execution and delivery of this
Agreement and authorizing the consummation of the transactions contemplated
hereby;
14.1.2 A certificate of Seller, dated the Closing Date, in the
form described in Section 11.1.3;
14.1.3 Governmental certificates showing that Seller: (a) is
duly organized and in good standing in the State of Ohio; and (b) has filed all
returns, paid all taxes due thereon and is currently subject to no assessment
and is in good standing in the State of Pennsylvania, each certified as of a
date not more than thirty (30) days before the Closing Date;
14.1.4 Such certificates, bills of sale, general warranty
deeds, assignments, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents to
conveyance, assignment or transfer required to be delivered hereunder), and lien
releases, all in form satisfactory to Buyers and Buyers' counsel, as shall be
effective to vest in Buyers good and marketable title in and to the Stations
Assets in accordance with the terms of this Agreement, free, clear and
unencumbered except for Assumed Liabilities or as set forth on Schedule 7.7 and
Schedule 7.8.
14.1.5 An Assignment and Assumption Agreement in the form of
Exhibit D effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
14.1.6 The Indemnification Escrow Agreement;
14.1.7 At the time and place of Closing, originals and all
copies of all program, operations, transmission or maintenance logs and all
other records required by the FCC to be maintained with respect to the Stations,
including the public files of the Stations, shall be left at the Stations and
thereby delivered to Buyers;
14.1.8 A written opinion of Seller's corporate counsel, on
which Buyers' lenders shall be entitled to rely, in a form reasonably acceptable
to Buyers, dated as of the Closing Date;
14.1.9 A written opinion of Seller's FCC counsel, on which
Buyers' lenders shall be entitled to rely, in a form reasonably acceptable to
Buyers, dated as of the Closing Date;
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14.1.10 A Non-Competition Agreement in the form of Exhibit E
(the "Non-Competition Agreement") executed by Seller and Seller's Affiliates,
including Xxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxxx;
14.1.11 A Lease Agreement in the form of Exhibit F (the "Lease
Agreement") executed by CUZCO LLC; and
14.1.12 Such additional information, materials, agreements,
documents and instruments as Buyers and their counsel may reasonably request in
order to consummate the Closing.
14.2 Buyers' Documents. At the Closing, Buyers shall deliver or cause
to be delivered to Seller the following:
14.2.1 Certified resolutions of the Board of Directors of
Buyers approving the execution and delivery of this Agreement and authorizing
the consummation of the transactions contemplated hereby;
14.2.2 A certificate of Buyers, dated the Closing Date, in
the form described in Section 12.1.3;
14.2.3 The Assignment and Assumption Agreement;
14.2.4 The Indemnification Escrow Agreement;
14.2.5 A written opinion of Buyer's counsel in a form
reasonably acceptable to Seller, dated as of the Closing Date;
14.2.6 The Purchase Price in accordance with Section 3. 1
hereof;
14.2.7 The Non-Competition Agreement;
14.2.8 The Lease Agreement; and
14.2.9 Such additional information, materials, agreements,
documents and instruments as Seller and its counsel may reasonably request in
order to consummate the Closing.
ARTICLE 15
SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc. It is the express intention and
agreement of the parties to this Agreement that all covenants and agreements
(together, "Agreements") and all representations and warranties (together,
"Warranties") made by Buyers and Seller in this
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Agreement shall survive the Closing (regardless of any knowledge, investigation,
audit or inspection at any time made by or on behalf of Buyers or Seller) as
follows:
15.1.1 All Agreements and the Warranties in Sections 6.2, 6.5,
7.2, the third sentence of 7.7, 7.18 and 7.20 shall survive the Closing for a
period from the Closing Date equal to the statute of limitations for written
contracts in Pennsylvania.
15.1.2 The Warranties in Section 7.11 relating to
environmental matters and in Section 7.6 or otherwise relating to the federal,
state, local or foreign tax obligations of Seller shall survive the Closing for
the period of the applicable statute of limitations plus any extensions or
waivers granted or imposed with respect thereto.
15.1.3 All other Warranties shall survive for a period of one
(1) year from the Closing Date.
15.1.4 The right of any party to recover Damages (as defined
in Section 15.2.1) pursuant to Section 15.2 shall not be affected by the
expiration of any Warranties as set forth herein, provided that notice of the
existence of any Damages (but not necessarily the fixed amount of any such
Damages) has been given by the indemnified party to the indemnifying party prior
to such expiration.
15.1.5 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyers or Seller may bring any
action for actual fraud (a "Fraud Action"), regardless of whether such actual
fraud also included a breach of any Agreement or Warranty; provided, however,
that any Fraud Action must be brought within the period of the applicable
statute of limitations plus any extensions or waivers granted or imposed with
respect thereto.
15.2 Indemnification.
15.2.1 Seller shall defend, indemnify and hold harmless Buyers
from and against any and all losses, costs, damages, liabilities and expenses,
including reasonable attorneys' fees and expenses ("Damages") incurred by Buyers
arising out of or related to: (a) any breach of the Warranties given or made by
Seller in this Agreement; (b) any breach of the Agreements made by Seller in the
Agreement; (c) the Retained Liabilities; (d) any failure of the parties to
comply with any "bulk sales" laws applicable to the transactions contemplated
hereby; and (e) the conduct of the business and operations of the Stations or
any portion thereof or the use or ownership of any of the Stations Assets prior
to the Closing Date.
15.2.2 Each Buyer shall defend, indemnify and hold harmless
Seller from and against any and all Damages incurred by Seller arising out of or
related to: (a) any breach of the Agreements and Warranties given or made by it
in this Agreement; (b) those Assumed Liabilities assumed by it, and (c) the
conduct of the business and operations of the Stations or any portion thereof or
the use or ownership of any of the Stations Assets on or after the Closing Date.
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15.3 Procedures: Third Party and Direct Indemnification Claims. The
indemnified party agrees to give written notice within a reasonable time to the
indemnifying party of any demand, suit, claim or assertion of liability by third
parties or other circumstances that could give rise to an indemnification
obligation hereunder against the indemnifying party (hereinafter collectively
"Claims," and individually a "Claim"), it being understood that the failure to
give such notice shall not affect the indemnified party's right to
indemnification and the indemnifying party's obligation to indemnify as set
forth in this Agreement, unless the indemnifying party's ability to contest,
defend or settle with respect to such Claim is thereby demonstrably and
materially prejudiced. The parties also agree that any claim for Damages arising
directly between the parties relating to this Agreement may be brought at any
time within the applicable survival period specified in Section 15.1, and that
the only notice required with respect thereto shall be as specified in Section
15.1.5.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to Section 15.2 resulting from any Claim
shall be subject to the following additional terms and conditions:
15.3.1 The indemnifying party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
or opposition to such Claim.
15.3.2 In the event that the indemnifying party shall elect
not to undertake such defense or opposition, or within (10) days after notice of
any such Claim from the indemnified party shall fail to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
15.3.3 Anything contained in this Section 15.3 to the contrary
notwithstanding: (a) the indemnified party shall have the right, at its own cost
and expense, to participate in the defense, opposition, compromise or settlement
of the Claim; (b) the indemnifying party shall not, without the indemnified
party's written consent, settle or compromise any Claim or consent to entry of
any judgment which does not include as an unconditional term thereof the giving
by the claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such Claim, and (c) in the event that the indemnifying
party undertakes defense of or opposition to any Claim, the indemnified party,
by counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party and its
counsel or other representatives concerning such Claim and the indemnifying
party and the indemnified party, and their respective counsel or other
representatives, shall cooperate in good faith with respect to such Claim.
15.3.4 No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
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15.3.5 Notwithstanding the provisions in Section 15.2, neither
Seller nor Buyers shall have the obligation to defend, indemnify and hold
harmless under Section 15.2.1(a) and 15.2.2(a) until the aggregate Damages on
account thereof exceed $25,000.00, but then the indemnification shall apply to
all Damages.
ARTICLE 16
TERMINATION RIGHTS
16.1 Termination. This Agreement may be terminated at any time prior to
Closing as follows:
16.1.1 Upon the mutual written consent of Buyers and Seller,
this Agreement may be terminated on such terms and conditions as so agreed; or
16.1.2 By written notice of Buyers to Seller if Seller
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Buyers; or
16.1.3 By written notice of Seller to Buyers if either Buyer
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Seller; or
16.1.4 By written notice of Buyers to Seller or by Seller to
Buyers if the FCC denies the FCC Application or designates the FCC Application
for evidentiary hearing; or
16.1.5 By written notice of Buyers to Seller, or by Seller to
Buyers, if any court of competent jurisdiction shall have issued an order,
decree or ruling (which then remains in effect) or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, or by Buyers, if any court, legislative body or governmental or
regulatory authority has taken, or is reasonably expected to take, action that
would make the consummation of the transactions contemplated hereby inadvisable
or undesirable as determined by Buyers in their sole discretion reasonably
exercised; or
16.1.6 By written notice of Buyers to Seller, or by Seller to
Buyers, if the Closing shall not have been consummated on or before November 30,
1999; or
16.1.7 By written notice of Buyers to Seller if it shall
become apparent in both Seller's and Buyers' judgment reasonably exercised that
any condition to Buyers' obligation to close as set forth in Article 11 hereof
will not be satisfied on or before November 30, 1999; or
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16.1.8 By written notice of Buyers to Seller under the
conditions set forth in Section 9.2 hereof;
16.1.9 By written notice of Seller to Buyers under the
conditions set forth in Section 11.7 hereof; OR
16.1.10 By written notice of Seller to Buyers if the Escrow
Deposit has not been timely delivered by Buyers in accordance with Section 3.2
hereof by reason of a default by Buyers.
Notwithstanding the foregoing, no party hereto may effect a termination
hereof if such party is in material default or breach of this Agreement.
16.2 Liability. Except as set forth in Section 16.4 below, the
termination of this Agreement under Section 16.1 shall not relieve any party of
any liability for breach of this Agreement prior to the date of termination.
16.3 Monetary Damages, Specific Performance and Other Remedies. The
parties recognize that if Seller refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate Buyers for
their injury. Buyers shall therefore be entitled to obtain specific performance
of the terms of this Agreement in addition to any other remedies, including but
not limited to monetary damages, that may be available to it. If any action is
brought by Buyers to enforce this Agreement, Seller shall waive the defense that
there is an adequate remedy at law. In the event of a default by Seller, which
results in the filing of a lawsuit for damages, specific performance, or other
remedy, Buyers shall be entitled to reimbursement by Seller of reasonable legal
fees and expenses incurred by Buyers.
16.4 Seller's Liquidated Damages. As more fully described in the
Deposit Escrow Agreement, in the event this Agreement is terminated because of
Buyers' material breach of this Agreement, and all other conditions to Closing
are at such time satisfied or waived (other than such conditions as can
reasonably be satisfied by Closing), then the Escrow Deposit shall be delivered
to Seller, and the proceeds thereof shall constitute liquidated damages. It is
understood and agreed that such liquidated damages amount represents Buyers' and
Seller's reasonable estimate of actual damages and does not constitute a
penalty. Recovery of liquidated damages shall be the sole and exclusive remedy
of Seller against Buyers for failing to consummate this Agreement as a result of
Buyers' material breach hereof, and shall be applicable regardless of the actual
amount of damages sustained and all other remedies are deemed waived by Seller.
ARTICLE 17
MISCELLANEOUS PROVISIONS
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17.1 Risk of Loss. The risk of loss or damage to any of the Stations
Assets prior to the Closing Date shall be upon Seller. Seller shall repair,
replace and restore any such damaged or lost Stations Asset to its prior
condition as soon as possible following the loss or damage; provided, however,
that in the event any such loss or damage of the Stations Assets exists on the
Closing Date, then notwithstanding any other provision hereto, Buyers at their
option may extend the Closing Date for a period of up to sixty (60) days until
such time as Seller shall have repaired, replaced and restored any such damaged
or lost Stations Asset to its prior condition or deduct from the Purchase Price
that amount which Buyers and Seller reasonably determine to be sufficient to
cover any such loss or damage and close the transaction on the Closing Date.
17.2 Certain Interpretive Matters and Definitions. Unless the context
otherwise requires: (a) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof, (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to "$" or dollar amounts will be to lawful currency of the United
States of America.
17.3 Further Assurances. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyers, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order more effectively to
consummate the transactions contemplated hereby to vest in Buyers good and
marketable title to the Stations Assets being transferred hereunder in
accordance with the terms hereof, and RBI shall from time to time, at the
request of and without further cost or expense to Seller, execute and deliver
such other instruments and take such other actions as may reasonably be
requested in order more effectively to relieve Seller of any obligations being
assumed by RBI hereunder.
17.4 Preservation of Records. Subject to Section 10.1 hereof, RBI
hereby agrees that it will preserve and make available to Seller and its
attorneys and accountants (including the right to inspect and copy at Seller's
cost), during normal business hours and upon reasonable advance notice, for
three (3) years after the Closing Date, such of the books, records, files,
correspondence, memoranda and other documents referred to in this Agreement as
Seller may reasonably require for the preparation of tax reports and returns,
the preparation of financial statements, or the preparation of a response to any
claim by a third party against Seller.
17.5 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Seller may not voluntarily or involuntarily assign its
interest under this Agreement without the prior written consent of Buyers.
Buyers shall have the right to assign and/or delegate all or any portion of its
rights and obligations under this Agreement, including without limitation,
assignments as collateral, provided that no such assignment and/or delegation
shall relieve Buyers of their obligations hereunder in the event that its
assignee fails to perform the obligations delegated. All
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xxxxxxxxx, xxxxxxxxxx, xxxxxxxxxx, representations, warranties and indemnities
in this Agreement by and on behalf of any of the parties hereto shall bind and
inure to the benefit of their respective successors and permitted assigns of the
parties hereto. In the event Buyers find it necessary or are required to provide
to a third party a collateral assignment of the Buyers' interest in this
Agreement and/or any related documents, Seller shall cooperate with the Buyers
and any third party requesting such assignment including but not limited to
signing a consent and acknowledgment of such assignment.
17.6 Amendments. No amendment, waiver of compliance with any provision
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
17.7 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.8 Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of Ohio, without giving effect to the
choice of law provisions thereof.
17.9 Notices. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been duly delivered and received on the
date of personal delivery, on the third day after deposit in the U.S. mail if
mailed by registered or certified mail, postage prepaid and return receipt
requested, on the day after delivery to a nationally recognized overnight
courier service if sent by an overnight delivery service for next morning
delivery or when dispatched by facsimile transmission (with the facsimile
transmission confirmation being deemed conclusive evidence of such dispatch) and
shall be addressed to the following addresses, or to such other address as any
party may request, in the case of Seller, by notifying Buyers, and in the case
of Buyers, by notifying Seller:
To Seller: Media One Group-Erie, Ltd.
Four Commerce Park Square, Suite 600
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxxxxxxx
Copy to: Xxxxxx Xxxxxxx Xxxxxx Leader &
Zargoza L.L.P.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
To Buyers: Regent Broadcasting of Erie, Inc.
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c/o Regent Communications, Inc.
00 Xxxx XxxxxXxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxxxx
Copy to: Xxxxxxx & Xxxx
The Federal Reserve Building
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
For purposes of obtaining the consent of Buyers for the matters discussed in
Section 9.1.5, Seller shall give Buyers written notice by facsimile of the
proposed action and, if Seller does not receive an objection by 6:00 p.m., local
Pennsylvania time, on the sixth (6th) business day after the date on which such
notice is sent, then Buyers will be deemed to have consented to the matter which
is the subject of such notice.
17.10 Counterparts. This Agreement may be executed in one or more
counterparts and by facsimile, each of which will be deemed an original and all
of which together will constitute one and the same instrument.
17.11 No Third Party Beneficiaries. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns any
rights or remedies under or by reason of this Agreement.
17.12 Severability. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.13 Entire Agreement. This Agreement and the schedules and exhibits
hereto embody the entire agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and understandings relating
to the matters provided for herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT BROADCASTING OF ERIE, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: /s/ Xxxxx X. Xxxxxx
Title: Chairman and Chief Financial Officer
REGENT LICENSEE OF ERIE, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: /s/ Xxxxx X. Xxxxxx
Title: Chairman and Chief Financial Officer
MEDIA ONE GROUP-ERIE, LTD.
By: /s/ Xxxxx X. Xxxxxxxxx
Name: /s/ Xxxxx X. Xxxxxxxxx
Title: Manager
CUZCO LLC, solely for the purpose of agreeing
to execute and deliver the Lease Agreement at
the Closing
By: /s/ Xxxxx X. Xxxxxxxxx
Name: /s/ Xxxxx X. Xxxxxxxxx
Title: Manager
and,
Solely for the purpose of
agreeing to execute and
deliver the Non-Competition
Agreement:
/s/ Xxxxx X. Xxxxxxxxx
XXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
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