ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made as of the 6th
day of November, 2000, among Infinity Broadcasting Corporation of Illinois, a
Delaware corporation, Infinity Broadcasting Corporation, a Delaware corporation
(collectively, "SELLER"), and Salem Communications Corporation, a Delaware
corporation (together with its permitted assignee, "BUYER").
Seller owns, operates and is the licensee of radio broadcast station
WXRT(AM), 1160 kHz, Chicago, Illinois (the "STATION").
Buyer desires to acquire certain assets used in the operation of the
Station.
Article 13 of this Agreement contains a glossary of defined terms.
Therefore, in consideration of the mutual promises set forth below, the
parties, intending to be legally bound, agree as follows:
ARTICLE 1
ASSETS TO BE CONVEYED
1.1. CLOSING. The closing of the sale and purchase of the Station
Assets (the "CLOSING") shall take place in the office of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ P.L.L.C., ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇., at 10:00
a.m., local time, ten business days following the date of satisfaction or waiver
of the conditions set forth in SECTION 7.1(b) (Governmental Consents).
1.2. TRANSFER OF ASSETS. Subject to the terms and conditions set
forth in this Agreement, at the Closing, Seller shall sell, assign, transfer and
convey to Buyer, and Buyer shall purchase, all of Seller's right, title and
interest in the following assets (the "STATION ASSETS"):
(a) the licenses, permits and other authorizations for the
Station issued to Seller by the FCC as set forth on SCHEDULE 1.2(a) (the "FCC
LICENSES") and, to the extent they are assignable, all other licenses, permits,
franchises, authorizations and other similar rights issued by any other federal,
state or local governmental authority that are used exclusively in the operation
of the Station;
(b) the equipment and other tangible personal property
set forth in SCHEDULE 1.2(b) (the "TANGIBLE PERSONAL PROPERTY");
(c) the owned real property (the "OWNED REAL PROPERTY")
and leased real
property (the "REAL PROPERTY LEASE", and together with the Owned Real Property,
the "REAL PROPERTY") identified on SCHEDULE 1.2(c); and
(d) the Station's public inspection and political files
and other records required by the FCC to be kept by the Station, filings and
correspondence with the FCC relating to the Station, and such log books,
technical information, engineering data and rights under manufacturers'
warranties, all as exist at Closing and as relate exclusively to the Station
Assets.
The Station Assets shall be conveyed to Buyer free and clear of all Liens,
except as otherwise expressly provided in this Agreement. The Station Assets
shall be delivered as is, where is, without any representation or warranty by
Seller except as expressly set forth in this Agreement, and Buyer acknowledges
that it has not relied on or been induced to enter into this Agreement by any
representation or warranty other than those expressly set forth in Article 3
hereof.
1.3. EXCLUDED ASSETS. The Station Assets shall not include any of
the following:
(a) cash, cash equivalents or similar type of investments
such as certificates of deposit, money market instruments, Treasury bills or
other marketable securities on hand and/or in banks, or deposits or prepaid
expenses of Seller;
(b) insurance policies, promissory notes, amounts due from
employees, bonds, letters of credit or other similar items, or any cash
surrender value in regard thereto;
(c) pension, profit sharing or cash or deferred (Section
401(k)) plans or trusts or assets thereof or other employee benefit plans or
arrangements or the assets thereof of Seller;
(d) duplicate copies of such records as necessary to
enable Seller to prepare and file tax returns and reports, original financial
statements or supporting materials, books or records that Seller is required by
law to retain, or records of Seller relating to the sale of the Station Assets,
the corporate organization, existence or capitalization of Seller, or related
solely to internal corporate matters of Seller;
(e) interest in and to refunds of Taxes for periods prior
to the Closing Date;
(f) accounts receivable relating to or arising out of the
operation of the Station prior to the Effective Time;
(g) tangible and intangible personal property disposed of
or consumed between the date of this Agreement and the Closing Date, as
permitted under this Agreement;
(h) the call sign WXRT(AM);
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(i) the studios and office facilities of the Station, all
equipment and furniture located therein, and all contracts relating to such
office or studio space or equipment located therein, unless such equipment,
furniture or contract is identified on SCHEDULE 1.2(b);
(j) personnel records of employees of the Station;
(k) all items of personal property owned by personnel at
the Station;
(l) the items identified on SCHEDULE 1.3(l);
(m) rights under any contract other than the Real
Property Lease;
(n) rights to any program or programming material;
(o) any trademark, trade name, service ▇▇▇▇, franchise,
copyright, jingle, logo and slogan or other intellectual property right or
interest; or
(p) the goodwill and value of the Station as a going
concern.
1.4. ASSUMPTION OF OBLIGATIONS. At the Closing, Buyer shall assume
and undertake to pay, satisfy or discharge (a) the liabilities, obligations and
commitments arising or accruing on and after the Effective Time under the Real
Property Lease, and (b) the liabilities, obligations and commitments arising
from or relating to the ownership of the Station on and after the Effective Time
(collectively, the "ASSUMED OBLIGATIONS").
1.5 NO OTHER OBLIGATIONS ASSUMED. Except as provided in SECTION
1.4, Buyer does not assume or agree to discharge or perform and will not be
deemed by reason 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 the consummation of the transactions
contemplated hereby to have assumed or to have agreed to discharge or perform
any liabilities, obligations or commitments of Seller of any nature whatsoever
whether accrued, absolute, contingent or otherwise.
1.6. SECTION 1031 ASSET EXCHANGE.
(a) Seller may desire to effect the transfer and conveyance of
the Station Assets as part of a deferred like-kind exchange under Section 1031
of the Code for other like-kind assets to be identified and acquired with the
Purchase Price. In order to effect the deferred like-kind exchange, Seller may
give written notice to Buyer of its intention to effect the deferred like-kind
exchange. Seller may at any time at or prior to the Closing assign its right to
receive the Purchase Price, or any part thereof, under this Agreement to a
"qualified intermediary" as defined in Treas. Reg. Sec. 1.1031(k)-1(g)(4),
subject to all of Buyer's rights and obligations hereunder, and shall promptly
provide written notice of such assignment to all parties hereto. Buyer shall
cooperate with all reasonable requests of Seller and Seller's qualified
intermediary in arranging and effecting the deferred like-kind exchange as one
which qualifies under Section 1031 of the Code; provided, however, that
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Buyer shall not incur any tax disadvantage as a result of its cooperation and
the Closing shall not be delayed. Buyer shall in no event be responsible for
Seller's failure to obtain Section 1031 treatment with respect to the
disposition of the Station Assets. Without limiting the generality of the
foregoing, at the Closing Buyer shall, at Seller's request, deliver to Seller an
Assignment, Acceptance and Notice and a Reassignment and Assumption Agreement
substantially in the form of Exhibit B and C (together, the "QUALIFIED
INTERMEDIARY DOCUMENTS").
(b) Buyer may desire to effect the acquisition of the
Station Assets as part of a deferred like-kind exchange under Section 1031 of
the Code in lieu of buying such assets hereunder. In order to effect the
deferred like-kind exchange, Buyer may give written notice to Seller of its
intention to effect the deferred like-kind exchange. Buyer may at any time at or
prior to the Closing assign its rights to purchase the Station Assets to a
"qualified intermediary" as defined in Treas. Reg. Sec. 1.1031(k)-1(g)(4),
subject to all of Seller's rights and obligations hereunder, and shall promptly
provide written notice of such assignment to all parties hereto. Seller shall
cooperate with all reasonable requests of Buyer and Buyer's qualified
intermediary in arranging and effecting the deferred like-kind exchange as one
which qualifies under Section 1031 of the Code; provided, however, that Seller
shall not incur any tax disadvantage as a result of its cooperation and the
Closing shall not be delayed. Seller shall in no event be responsible for
Buyer's failure to obtain Section 1031 treatment with respect to the acquisition
of the Station Assets. Without limiting the generality of the foregoing, at the
Closing Seller shall, at Buyer's request, accept payment of the Purchase Price
from Buyer's qualified intermediary rather than from Buyer, which payment shall
discharge the obligation of Buyer to pay the Purchase Price.
1.7. STUDIOS EXCLUDED. The Station's studio is currently shared
with commonly owned Station WXRT(FM), Chicago, Illinois, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, in a building owned by an affiliate of Seller. The current
studio space will not, therefore, be available for use by Buyer, and Buyer will
obtain a new studio for the Station. To accomplish the relocation of the
Station's studio, the parties agree that (a) at the Effective Time, the Station
will cease operation; (b) as soon thereafter as Buyer desires, but no later than
three business days after the Closing, Buyer will remove from the Station's
current studio location any Tangible Personal Property that is located there;
provided that Seller may supervise such removal for the purpose of protecting
the personal property that will remain at the current studio location; (c) Buyer
will be responsible for relocating and reinstalling such Tangible Personal
Property, as it sees fit, and for resuming operation of the Station; and (d)
Seller shall reasonably cooperate with Buyer but shall not be liable for any
difficulties encountered in such removal, relocation or reinstallation of the
Tangible Personal Property or resumption of Station operation.
ARTICLE 2
PURCHASE PRICE
2.1. PURCHASE PRICE.
As consideration for the sale of the Station Assets, Buyer
shall (i) in addition
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to assuming the Assumed Obligations, pay Seller $29,000,000 (the "PURCHASE
PRICE") by wire transfer (initiated prior to 2:00 p.m., New York City time, on
the Closing Date) of immediately available funds in accordance with wire
transfer instructions that Seller shall deliver to Buyer prior to the Closing
and (ii) cause its affiliate to execute and deliver and perform under that
certain relocation agreement which the parties thereto are entering into
simultaneous with the execution of this Agreement. The Purchase Price shall be
subject to adjustment pursuant to SECTION 2.4.
2.2. [INTENTIONALLY OMITTED.]
2.3. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Station Assets in a manner as mutually agreed between the
parties based upon an appraisal prepared by Bond & ▇▇▇▇▇▇, BIA or such other
appraisal firm as the parties may mutually agree, and such appraisal and
allocation shall be completed prior to Closing unless otherwise agreed to by the
parties. Seller and Buyer agree to use the allocations determined pursuant to
this SECTION 2.3 for all tax purposes, including without limitation, those
matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended
(the "CODE"). The cost of such appraisal shall be shared equally by Buyer and
Seller.
2.4. ADJUSTMENTS TO PURCHASE PRICE; PRORATIONS.
(a) All income and expenses arising from the conduct of
the business or operation of the Station shall be prorated between Buyer and
Seller as of 12:01 a.m. local Chicago time, on the Closing Date (the "EFFECTIVE
TIME") in accordance with generally accepted accounting principles consistently
applied. Such prorations shall be based upon the principles that Seller shall be
entitled to all income earned and shall be responsible for all liabilities and
obligations accruing in connection with the operation of the Station until the
Effective Time, and Buyer shall be entitled to such income earned and be
responsible for such liabilities and obligations accruing in connection with the
operation of the Station thereafter. Such prorations shall include all AD
VALOREM and other property taxes (but excluding taxes arising by reason of the
transfer of the Station Assets as contemplated hereby, which shall be paid as
set forth in SECTION 12.1), deposits, utility expenses, liabilities and
obligations under the Real Property Lease, rents and similar prepaid and
deferred items and all other expenses attributable to the ownership and
operation of the Station. To the extent not known, real estate and personal
property taxes shall be apportioned on the basis of taxes assessed for the
preceding year, with a reapportionment as soon as the new tax rate and valuation
can be ascertained.
(b) Buyer and Seller shall use reasonable efforts to
complete the proration process within 60 days after Closing. If the parties are
unable to resolve a dispute regarding prorations within 60 days following
Closing, the dispute shall be submitted within 10 days to an independent
certified public accountant mutually agreed upon by Buyer and Seller (the
"REFEREE") for resolution of the dispute, such resolution to be made within 30
days after submission to the Referee and to be final, conclusive and binding on
Seller and Buyer. Buyer and Seller agree to share equally the cost and expense
of the Referee, but each party shall bear its own legal and other expenses, if
any. Payment by Buyer or Seller, as the case may be, for the proration amounts
determined pursuant to this SECTION 2.4 shall in no event
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be made later than fifteen days after the notice to Seller and Buyer of the
resolution of the disputed amount by the Referee. All proration payments shall
be treated as an adjustment to the Purchase Price.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1. ORGANIZATION; GOOD STANDING. Each Seller (a) is a corporation
duly incorporated, validity existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) is qualified to do business as a foreign
corporation and is in good standing in such jurisdictions in which the failure
to so qualify would have a material adverse effect on its abilities to perform
its obligations hereunder; and (c) has all requisite corporate power and
authority to lease, own and operate the Station Assets that it is conveying
hereunder, to carry on its business as now being conducted, to enter into this
Agreement and to perform its obligations hereunder.
3.2. AUTHORIZATION AND BINDING OBLIGATION. Seller has all necessary
corporate power and authority to enter into and perform its obligations under
this Agreement and the documents contemplated hereby and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller and constitutes its legal, valid and binding obligation
enforceable against Seller in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
3.3. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except
as set forth in ARTICLE 5 (Governmental Consents), the execution, delivery and
performance of this Agreement by Seller: (a) do not and will not violate any
provisions of Seller's organizational documents; (b) do not and will not require
the consent or approval of or any filing with any third party or governmental
authority; (c) do not and will not violate any applicable law, judgment, order,
injunction, decree, rule, regulation or ruling of any governmental authority;
and (d) do not and will not, either alone or with the giving of notice or the
passage of time, or both, conflict with, constitute grounds for termination or
acceleration of or result in a breach of the terms, conditions or provisions of,
or constitute a default under any agreement, lease, instrument, license or
permit to be included in the Station Assets.
3.4. LITIGATION. There is no claim, litigation, arbitration or
proceeding pending or, to the knowledge of Seller, threatened before or by any
court, governmental authority or arbitrator that seeks to enjoin or prohibit,
that questions the validity of, or that might materially hinder or impair
Seller's performance of its obligations under this Agreement.
3.5. FCC LICENSES.
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(a) SCHEDULE 1.2(a) lists the material FCC Licenses used
exclusively in the operation of the Station. Buyer acknowledges that Seller may
hold certain broadcast auxiliary and other ancillary FCC licenses, permits and
authorizations which the Station shares with other radio stations being retained
by Seller and that such licenses, permits or authorizations are not included in
the FCC Licenses. The FCC Licenses are valid and in full force and effect. All
required FCC regulatory fees with respect to the FCC Licenses have been paid.
Seller has filed or made all material applications, reports, and other
disclosures required by the FCC to be filed or made by Seller with respect to
the Station. The FCC Licenses have been issued for the full terms, expiring on
December 1, 2004, and the FCC Licenses are not subject to any condition except
for conditions shown on the face of the FCC Licenses, applicable to radio
broadcast licenses generally or as otherwise disclosed in SCHEDULE 1.2(a).
(b) Except as set forth in SCHEDULE 1.2(a), to Seller's
knowledge, there are no applications, petitions, complaints, proceedings or
other actions pending or threatened before the FCC relating to the Station,
other than proceedings affecting the radio broadcasting industry generally.
(c) Except as set forth in SCHEDULE 1.2(a), Seller has no
reason to believe that the FCC Application might be challenged or might not be
granted by the FCC in the ordinary course.
(d) The Station is being operated at full authorized power
in material compliance with the terms and conditions of the FCC Licenses
applicable to it and the rules and regulations of the FCC.
(e) Seller has maintained the Station's public inspection
file in substantial and material compliance with Section 73.3526 of the FCC's
rules.
3.6. TANGIBLE PERSONAL PROPERTY. Except as disclosed on SCHEDULE
1.2(b), Seller has good title to the Tangible Personal Property free and clear
of all Liens. Except for Tangible Personal Property that is obsolete or no
longer used in the operation of the Station, and except as set forth in SCHEDULE
1.2(b), the Tangible Personal Property in existence on the date of this
Agreement is in normal working condition, consistent with industry practices,
subject to ordinary wear and tear. To Seller's knowledge, there is no defect in
the condition or operation of any item of Tangible Personal Property which is
reasonably likely to have a material adverse effect on the operation of the
Station.
3.7. REAL PROPERTY INTERESTS.
(a) The Real Property constitutes in all material respects
all real property interests, including all leases, used to any extent in the
operation of the Station's transmitter site in the manner in which it is now
operated. Seller does not owe any money to any architect, contractor,
subcontractor or materialman for labor or materials performed, rendered or
supplied to or in connection with the Real Property within the past four months
which shall not be paid in full on or before the Closing Date. To Seller's
knowledge, Seller's present use of the Real Property is in compliance with all
applicable zoning codes in
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effect as of the date hereof, and Seller has not received any notices of
uncorrected violations of the applicable housing, building, safety or fire
ordinances. The Real Property is served by electricity and water in capacities
adequate for the present use of the Real Property and improvements thereon.
Seller has not made any other agreement for the sale or lease of, or given any
other person an option to purchase or lease or a right of first refusal to
purchase or lease, all or any part of the Real Property, and Seller has not
subjected the Real Property to any Liens not of record. Seller has, or at the
Closing will have, title to the Owned Real Property free and clear of all Liens.
(b) Seller has delivered to Buyer a true and complete copy
of the Real Property Lease. The Real Property Lease is legally valid, binding
and enforceable by Seller in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. Seller has complied in all
material respects with the Real Property Lease. Neither Seller nor, to Seller's
knowledge, any other party is in material default under the Real Property Lease
as of the date hereof. Seller has full legal power and authority to assign its
rights under the Real Property Lease to Buyer in accordance with this Agreement,
and such assignment does not require the consent of any third party or affect
the validity, enforceability and continuity of the Real Property Lease. Seller
holds a valid leasehold interest under the Real Property Lease, free and clear
of all Liens, excluding Liens not created by Seller which affect the underlying
fee interest of the leased real property under the Real Property Lease and Liens
not objected to by Buyer pursuant to Section 6.7(c) of this Agreement. For so
long as Seller fulfills its obligations under the Real Property Lease, Seller
has enforceable rights to quiet enjoyment under such Real Property Lease.
3.8. ENVIRONMENTAL MATTERS.
(a) Seller has obtained all material, environmental,
health and safety permits necessary or required for either the operation of the
Station as currently operated or the ownership of the Station Assets and all
such permits are in full force and effect and Seller is in compliance with all
material terms and conditions of such permits.
(b) To Seller's knowledge, there is no proceeding pending
or threatened which may result in the reversal, rescission, termination,
modification or suspension of any environmental or health or safety permits
necessary for the operation of the Station as currently conducted or the
ownership of the Station Assets.
(c) With respect to the Station and the Station Assets,
Seller is in compliance in all material respects with the provisions of
Environmental Laws.
(d) Seller has not, and to Seller's knowledge, no other
person or entity has caused or permitted materials to be generated, released,
stored, treated, recycled, disposed of on, under or at such parcels, which
materials, if known to be present, would require clean up, removal or other
remedial or responsive action under Environmental Laws (other than normal
office, cleaning and maintenance supplies in reasonable quantities used and /or
stored appropriately in the buildings or improvements on the Real Property).
Seller has not caused the migration of any materials from the Station Assets
onto or under any property,
8
which materials, if known to be present, would require cleanup, removal or other
remedial or responsive action under Environmental Laws. To the best of Seller's
knowledge, there are no underground storage tanks and no PCBs or friable
asbestos in or on the Station Assets or Real Property.
(e) Seller is not subject to any judgment, decree, order
or citation with respect to the Station Assets related to or arising out of
Environmental Laws, and Seller has not received notice that it has been named or
listed as a potentially responsible party by any person or governmental body or
agency in any matter under Environmental Laws.
(f) Seller has not discharged or disposed of any petroleum
product or solid waste on the Real Property or on the property adjacent to the
Real Property owned by third parties, which, to Seller's knowledge, may form the
basis for any present or future claim based upon the Environmental Laws or any
demand or action seeking clean-up of any site, location, body of water, surface
or subsurface, under any Environmental Laws or otherwise, or which may subject
the owner of the Owned Real Property to claims by third parties (except to the
extent third party liability can be established) for damages.
(g) No portion of the Station Assets have ever been used
by Seller, nor, to the best of Seller's knowledge, by any previous owner of the
Station Assets, or any of them, in material violation of Environmental Laws or
as a landfill, dump site or any other use which involves the disposal or storage
of Hazardous Materials on-site or in any manner which may materially adversely
affect the value of the Real Property or the Station Assets.
(h) No pesticides, herbicides, fertilizers or other
materials have been used on, applied to or disposed of by Seller on or in the
Station Assets in material violation of any Environmental Laws (other than
normal office, cleaning and maintenance supplies in reasonable quantities used
and/or stored appropriately in the buildings or improvements on the Real
Property).
(i) With respect to the Station Assets, and to Seller's
knowledge, Seller has disposed of all waste in full compliance with all
Environmental Laws and, to Seller's knowledge, there is no existing condition
that may form the basis of any present or future claim, demand or action seeking
clean up of any facility, site, location or body of water, surface or
subsurface, for which the Buyer could be liable or responsible solely as a
result of the disposal of waste at such site by a prior owner of the Station
Assets.
(j) To Seller's best knowledge, Seller is in material
compliance with all OSHA Laws applicable to the Station Assets.
3.9. COMPLIANCE WITH LAWS. Seller has complied in all material
respects with, and as of the date hereof is not in any material respect in
violation of, any federal, state or local laws, statutes, rules, regulations or
orders relating to the operation of the Station.
3.10. TAXES. All material Taxes in connection with Seller's
ownership of the Station Assets which are due and payable or disputed in good
faith have been properly paid or accrued, or are being contested in good faith
by appropriate proceedings. There are no
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Liens for Taxes on the Station Assets. No Seller is a "foreign person" within
the meaning of Section 1445(b)(2) of the Code.
3.11. BROKER'S FEES. Neither Seller nor any person or entity acting
on Seller's behalf 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, and no person or entity is entitled to any such payment from
Seller in connection with the transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1. ORGANIZATION AND STANDING. Buyer (a) is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware; (b) is qualified, or by the Closing Date will be qualified, to do
business as a foreign corporation and is in good standing in the State of
Illinois; and (c) has, or by the Closing Date will have, all necessary corporate
power and authority to own, lease and operate the Station Assets and to carry on
the businesses of the Station from and after the Closing Date.
4.2. AUTHORIZATION AND BINDING OBLIGATION. Buyer has all necessary
corporate power and authority to enter into and perform its obligations under
this Agreement and the documents contemplated hereby and to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by Buyer and constitutes its legal, valid and binding
obligation enforceable against Buyer in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
4.3. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except
as set forth in ARTICLE 5, the execution, delivery and performance of this
Agreement by Buyer and the documents contemplated hereby (with or without the
giving of notice, the lapse of time or both) by Buyer: (a) do not and will not
violate any provision of Buyer's organizational documents; (b) do not and will
not require the consent or approval of or any filing with any third party or
governmental authority; (c) do not and will not conflict with, result in a
breach of, constitute a default under, or violate any applicable law, judgment,
order, ordinance, injunction, decree, rule, regulation or ruling of any court or
governmental authority; and (d) do not and will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of any agreement, lease, instrument, license or permit to which Buyer is
now a party or by which Buyer may be bound legally.
4.4. LITIGATION. There is no claim, litigation, arbitration or
proceeding pending or, to the knowledge of Buyer, threatened before or by any
court, governmental authority or arbitrator that seeks to enjoin or prohibit,
that questions the validity of, or that might materially hinder or impair
Buyer's performance of its obligations under this Agreement.
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4.5. FCC QUALIFICATIONS. Buyer is qualified under the
Communications Act of 1934, as amended, and the rules and regulations of the FCC
to be the assignee of the FCC Licenses. There are no facts known to Buyer that
would delay the consummation of the transactions contemplated by this Agreement.
Buyer has no reason to believe that the FCC assignment contemplated herein might
be challenged or might not be granted by the FCC in the ordinary course because
of its qualifications.
4.6. BROKER'S FEES. Neither Buyer nor any person or entity acting
on Buyer's behalf 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, and no person or entity is entitled to any such payment from
Buyer in connection with the transactions contemplated by this Agreement.
ARTICLE 5
GOVERNMENTAL CONSENTS
5.1. FCC APPLICATION.
(a) The assignment of the FCC Licenses as contemplated by
this Agreement is subject to the prior consent and approval of the FCC. Between
the date of this Agreement and the Closing, Buyer shall not directly or
indirectly control the operation of the Station.
(b) No later than November 6, 2000, Buyer and Seller shall
each prepare and jointly file the FCC Application. Buyer and Seller shall share
equally the cost of any FCC filing fees for the FCC Application. Seller and
Buyer shall prosecute the FCC Application in good faith and with all reasonable
diligence and otherwise use their commercially reasonable best efforts to obtain
the grant of the FCC Application as expeditiously as practicable. If the FCC
Consent imposes any condition on any party hereto, such party shall use its
commercially reasonable best efforts to comply with such condition. If
reconsideration or judicial review is sought with respect to the FCC Consent,
the party or parties affected shall vigorously oppose such efforts for
reconsideration or judicial review.
5.2. HSR FILING. No later than fifteen business days after the date
of this Agreement, Seller and Buyer shall each make any and all required
governmental filings pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR ACT"), with respect to the transaction
contemplated herein. Buyer and Seller shall each pay one-half of the HSR Act
filing fee. The parties shall cooperate and take all steps necessary or proper
to comply with the applicable requirements under the HSR Act, including (a)
furnishing all information and filing all documents required thereunder as
promptly as practicable, and (b) furnishing to each other all such necessary
information, non-confidential correspondence and reasonable assistance as such
other party may request in connection with all preparation, filing and
compliance matters pursuant to the HSR Act.
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ARTICLE 6
COVENANTS
6.1. CONDUCT OF BUSINESS.
(a) AFFIRMATIVE COVENANTS. Between the date of this Agreement
and the Closing Date, except as expressly permitted by this Agreement or with
the prior written consent of Buyer, which consent shall not be unreasonably
withheld, Seller shall:
(i) comply in all material respects with all laws
applicable to Seller's use of the Station Assets, and operate
and maintain the Station in all material respects in
conformity with the FCC Licenses and all applicable laws,
ordinances, regulations, rules and orders;
(ii) maintain the Station Assets consistent with
Seller's past practices and repair or replace (subject to
SECTION 6.4) any Station Assets that may be damaged or
destroyed with items of equal or greater value or utility
unless Seller determines in good faith that such a repair or
replacement is not necessary or useful for the continued
operation of the Station consistent with past operation;
(iii) timely make or provide all payments, services
or other consideration due under the Real Property Lease so
that all payments required to be made as of the Closing Date
will have been paid, except for any amounts being contested by
Seller in good faith;
(iv) maintain in full force and effect the FCC
Licenses, and take any action necessary before the FCC,
including the preparation and prosecution of applications for
renewal of the FCC Licenses, if necessary, to preserve such
licenses without material adverse change;
(v) use reasonable commercial efforts to maintain
insurance upon all of the tangible Station Assets and the
Station in commercially reasonable amounts and types, with
insurers of a ▇▇▇▇▇ rating of "A" or better;
(vi) promptly notify Buyer of any material default
by, or claim of default against, any party under the Real
Property Lease and any event or condition which, with notice
or lapse of time or both, would constitute an event of default
under the Real Property Lease; and
(vii) notify Buyer of any material litigation pending
or threatened against the Station Assets or any material
damage to or destruction of any assets included or to be
included in the Station Assets.
(b) NEGATIVE COVENANTS. Between the date of this Agreement
and the Closing Date, except as expressly permitted by this Agreement or with
the prior written consent of Buyer, which consent shall not be unreasonably
withheld, Seller shall not:
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(i) take, or fail to take, any action which will cause
a breach of, or default under, or termination of the Real
Property Lease;
(ii) create, assume or permit to exist any Lien on any
of the Station Assets;
(iii) sell, assign, lease or otherwise transfer or
dispose of any of the material Station Assets, except for
assets consumed or disposed of in the ordinary course of
business; or
(iv) make any material changes in the broadcast hours of
the Station.
6.2. ACCESS; PUBLICITY.
(a) Between the date hereof and the Closing Date, upon
prior reasonable notice, Seller shall give Buyer and its representatives
reasonable access to the Station Assets. Buyer, at its sole expense, shall be
entitled to make such engineering and other inspections of the Station Assets as
Buyer may desire, so long as such inspections do not unreasonably interfere with
the operations of the Station.
(b) Neither party shall make any news release or other
public announcement pertaining to the transactions contemplated by this
Agreement prior to November 8, 2000, other than to file the FCC Application.
Thereafter, no news release or other public announcement pertaining to the
transactions contemplated by this Agreement will be made by or on behalf of any
party hereto without the prior written approval of the other party (such consent
not to be unreasonably withheld or delayed) unless otherwise required by law or
any regulation or rule of any stock exchange binding upon such party. Where any
announcement, communication or circular concerning the transactions contemplated
by this Agreement is required by law or any regulation or rule of any stock
exchange, it shall be made by the relevant party after consultation, where
reasonably practicable, with the other party and taking into account the
reasonable requirements (as to timing, contents and manner of making or dispatch
of the announcement, communication or circular) of the other party.
6.3. NO INCONSISTENT ACTION. Between the date of this Agreement and
the Closing, neither party shall take any action which is materially
inconsistent with its obligations under this Agreement or that would materially
hinder or delay the consummation of the transactions contemplated by this
Agreement. In particular, neither party shall take any action that would result
in its disqualification to hold the FCC Licenses or in any way delay grant of
the FCC Application. Should either party become aware of any such fact or
circumstance, such party shall promptly inform the other.
6.4. RISK OF LOSS. Seller shall bear the risk of any casualty loss
or damage to any of the Station Assets prior to the Effective Time. Seller shall
be responsible for repairing or replacing (as appropriate under the
circumstances) any lost or damaged Station Asset (the
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"DAMAGED ASSET") unless such Damaged Asset was obsolete and unnecessary for the
continued operation of the Station consistent with Seller's past practice. If
Seller is unable to repair or replace a Damaged Asset by the date on which the
Closing would otherwise occur under this Agreement, Seller shall reimburse all
reasonable costs incurred by Buyer in repairing or replacing the Damaged Asset
after Closing or turn over insurance proceeds plus the amount of any deductible,
provided that Seller's insurance coverage is in the amount customary for the
radio broadcasting industry.
6.5. TRANSMITTER BUILDING SPACE LEASE. The transmitter building
that houses the Station's transmitters is also used by Seller to store spare
parts, etc. for other stations. For one year following the Closing, Buyer will
permit Seller to utilize the entire basement portion of the transmitter building
for storage and will permit reasonable access to such storage space. There shall
be no separate consideration, other than this Agreement, for such arrangement.
6.6. ENVIRONMENTAL AUDIT. Within 45 days of the date of this
Agreement, Buyer may at its sole expense obtain a Phase I environmental audit
report (the "PHASE I REPORT") for the Real Property. Buyer shall provide copies
of any Phase I Report to Seller promptly after it is completed. If the Phase I
Report contains a recommendation that Buyer obtain a Phase II environmental
audit report ("PHASE II REPORT"), Buyer may at its sole expense obtain a Phase
II Report within 60 days of the date of this Agreement (and promptly thereafter
provide it to Seller). Notwithstanding anything in this Agreement to the
contrary, Seller shall have no liability to Buyer under this Agreement as to any
matter arising under the Environmental Laws actually disclosed by such Phase I
or Phase II Reports (if obtained) except as provided in this SECTION 6.6. In the
event that a Phase I Report and/or a Phase II Report discloses an environmental
condition or matter that is a violation of or requires remediation under an
Environmental Law and that materially and adversely affects Buyer's continued
use of the Real Property in the manner currently used by Seller or that could
reasonably be expected to expose Buyer to any material liability, Buyer shall
notify Seller in writing of such matter at the ▇▇▇▇ ▇▇▇▇▇▇ delivers the Phase I
or Phase II Report, as the case may be, and Seller shall have 45 days from
Seller's receipt of such notice to remediate or eliminate such condition or
matter, PROVIDED, that such matters and conditions can be remediated or
eliminated by Seller's expenditure of $300,000 or less, in the aggregate. If the
environmental conditions or matters cannot be remediated or eliminated by
Seller's expense of $300,000 or less, in the aggregate, Seller shall notify
Buyer within 10 days after the end of the 45-day period. Buyer may elect, by
providing Seller with notice thereof within 10 days after Buyer's receipt of
Seller's notification either (a) to terminate this Agreement, or (b)
notwithstanding anything herein to the contrary, to waive all non-compliant
environmental conditions and matters and any claims it may have against Seller
with respect to any such non-remediated or non-compliant condition or matter
actually disclosed in the Phase I Report or Phase II Report, in which case the
Closing will proceed as contemplated by this Agreement (subject to its terms and
conditions) and Buyer shall receive a $300,000 credit against the Purchase Price
otherwise payable pursuant to SECTION 2.1 hereof.
6.7. REAL PROPERTY SURVEY AND TITLE COMMITMENTS.
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(a) Within 45 days after the date of this Agreement, Buyer
may obtain at its sole expense a current survey of the Real Property, prepared
by a licensed surveyor and conforming to current ALTA Minimum Detail
Requirements for Land Title Surveys, disclosing the location of all improvements
(including guy wire and anchors), easements, party walls, sidewalks, roadmaps,
utility lines and other matters customarily shown on such surveys, and showing
access affirmatively to public streets and roads (the "SURVEY").
(b) Within 45 days after the date of this Agreement, Buyer
may at its sole expense obtain for the Real Property (either owned or leased)
standard ALTA Form B commitments for owner's or lessor's title insurance the
Real Property (the "TITLE COMMITMENTS").
(c) Buyer shall provide Seller with a copy of the Survey
and the Title Commitments within 15 business days of receipt by Buyer, but in no
event later than 60 days after the date of this Agreement. Buyer shall give
Seller notice of any exception or defect to title in the Title Commitments or
any matter revealed by the Survey that materially and adversely affects the use
of the Real Property as currently used by Seller (the "OBJECTIONABLE
EXCEPTIONS") (i) with respect to the Title Commitments, at the time that Buyer
provides Seller with a copy of the Title Commitments, and (ii) with respect to
the Survey, within 15 business days of Buyer's receipt of the Survey, but in no
event later than 60 days after the date of this Agreement. If Buyer fails to
give such notice in a timely manner, Buyer shall be deemed to have accepted all
title exceptions or defects in title reported or that would be reported in the
Title Commitments or matters revealed or that would be revealed by the Survey
other than the Objectionable Exceptions expressly set forth in the notice.
(d) Seller shall cure or remove any Objectionable
Exception within 45 days from the date of Buyer's notice; provided, however,
that if Seller reasonably determines that the cost of removing such
Objectionable Exception would exceed $300,000, in the aggregate, or that Seller
will be unable to cure or remove an Objectionable Exception within such 45-day
period, Seller shall provide Buyer with written notice of such determination
within 15 days after the end of such 45-day period. Buyer may then elect, by
providing Seller with notice thereof within 10 days after Buyer's receipt of
Seller's determination, to either: (a) terminate this Agreement without further
obligation or liability hereunder, or (b) notwithstanding anything herein to the
contrary, waive all Objectionable Exceptions and any claims it may have against
Seller with respect to any such Objectionable Exception and accept the real
property covered by such Title Commitment or Survey subject to such
Objectionable Exception, in which case the Closing will proceed as contemplated
by this Agreement (subject to its terms and conditions) and Buyer shall receive
a $300,000 credit against the Purchase Price otherwise payable pursuant to
SECTION 2.1.
(e) Notwithstanding the foregoing, none of the following
shall constitute an Objectionable Exception: (i) the preprinted or standard
exceptions on the current ALTA owner's or lessee's form; and (ii) Permitted
Liens; provided, however, that any Lien securing a monetary obligation of Seller
(other than any Lien arising under the Real Property Lease assumed by Buyer
pursuant to SECTION 1.4), including any Lien for Taxes, shall be deemed an
Objectionable Exception whether or not Buyer gives written notice of such, and
shall be
15
removed by Seller at or before the Closing.
6.8. ESTOPPEL CERTIFICATE. Between the date of this Agreement and
the Closing Date, Seller shall use commercially reasonable efforts to obtain an
estoppel certificate from the landlord with respect to the Real Property Lease.
ARTICLE 7
CONDITIONS PRECEDENT
7.1. TO BUYER'S OBLIGATIONS. The obligations of Buyer hereunder
are, at its option, subject to satisfaction or waiver by Buyer, at or prior to
the Closing Date, of each of the following conditions:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by Seller in this Agreement shall be true
and correct in all material respects on and as of the Closing Date as if made on
and as of that date (except to the extent they expressly relate to an earlier
time, in which case they shall have been true and correct only as of such
earlier time), except to the extent changes are permitted under SECTION 6.1 of
this Agreement. All of the terms, covenants and conditions to be complied with
or performed by Seller under this Agreement on or prior to the Closing Date
shall have been complied with or performed by Seller in all material respects.
(b) GOVERNMENTAL CONSENTS. The FCC shall have granted the
FCC Consent, and the FCC Consent shall have become a Final Order. All applicable
waiting periods under the HSR Act with respect to the transaction contemplated
by this Agreement (including any extensions thereof) shall have expired or been
terminated and no actions shall have been instituted which are pending on the
Closing Date by the Federal Trade Commission or the Department of Justice
challenging or seeking to enjoin the consummation of the transactions
contemplated by this Agreement.
(c) NO INJUNCTION. No order of any court or
administrative agency shall be in effect which restrains or prohibits the
transactions contemplated by this Agreement in accordance with its terms.
(d) DELIVERIES. Seller shall have made or stand willing
to make all deliveries required under SECTION 8.1.
7.2. TO SELLER'S OBLIGATIONS. The obligations of Seller hereunder
are, at its option, subject to satisfaction or waiver by Seller, at or prior to
the Closing Date, of each of the following conditions:
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(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by Buyer in this Agreement shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of that date (except to the extent they expressly relate to an earlier time,
in which case they shall have been true and correct only as of such earlier
time). All of the terms, covenants and conditions to be complied with or
performed by Buyer under this Agreement on or prior to the Closing Date shall
have been complied with or performed by Buyer in all material respects.
(b) GOVERNMENTAL CONSENTS. The FCC shall have granted the
FCC Consent. All applicable waiting periods under the HSR Act with respect to
the transaction contemplated by this Agreement (including any extensions
thereof) shall have expired or been terminated and no actions shall have been
instituted which are pending on the Closing Date by the Federal Trade Commission
or the Department of Justice challenging or seeking to enjoin the consummation
of the transactions contemplated by this Agreement.
(c) NO INJUNCTION. No order of any court or
administrative agency shall be in effect which restrains or prohibits the
transactions contemplated by this Agreement in accordance with its terms.
(d) DELIVERIES. Buyer shall have made or stand willing to
make all deliveries required under SECTION 8.2 and shall have paid or stand
willing to pay the Purchase Price as provided in ARTICLE 2.
ARTICLE 8
DOCUMENTS TO BE DELIVERED AT THE CLOSING
8.1. DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, Seller
shall deliver to Buyer the following:
(a) a certificate, dated as of the Closing Date, executed
by an officer of Seller, certifying that the closing conditions specified in
SECTION 7.1(a) have been satisfied;
(b) a certificate of good standing for Seller and
certified copies of any required resolutions of the board of directors or
shareholder of Seller, as applicable;
(c) instruments of conveyance and transfer, in form and
substance reasonably satisfactory to Buyer's counsel, effecting the sale,
transfer, assignment and conveyance of the Station Assets to Buyer, including
the following:
(i) an assignment of the FCC Licenses;
(ii) a ▇▇▇▇ of sale for the Tangible Personal
Property;
(iii) a warranty deed in the form customarily used in
commercial real property transactions in the
State of Illinois; and
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(iv) an assignment of Seller's rights under the Real
Property Lease;
(d) a properly executed statement from each Seller
pursuant to Treasury Regulation Section 1.1445-2(b)(2) for purposes of
satisfying Buyer's obligations under Section 1445 of the Internal Revenue Code
of 1986 and the regulations thereunder; and
(e) such other documents as may reasonably be requested by
Buyer.
8.2. DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, Buyer
shall deliver to Seller the following:
(a) a certificate, dated as of the Closing Date, executed
by an officer of Buyer, certifying that the closing conditions specified in
SECTION 7.2(a) have been satisfied;
(b) a certificate of good standing for Buyer and certified
copies of any required resolutions of the board of directors or shareholder of
Buyer, as applicable;
(c) an assumption agreement, in form and substance
reasonably satisfactory to Seller's counsel pursuant to which Buyer shall assume
and undertake to perform Seller's obligations under the Real Property Lease;
(d) the Purchase Price in immediately available wire
transferred federal funds as provided in ARTICLE 2;
(e) the Qualified Intermediary Documents; and
(f) such other documents as may reasonably be requested by
Seller.
ARTICLE 9
INDEMNIFICATION, SURVIVAL
9.1. SELLER'S INDEMNITIES. From and after the Closing, Seller shall
indemnify, defend and hold harmless Buyer, its affiliates and their respective
directors, officers, employees and representatives, and the successors and
assigns of any of them, from and against, and reimburse them for, all claims,
damages, liabilities, losses, costs and expenses, including interest, penalties,
court costs and reasonable attorneys' fees and expenses ("CLAIMS"), resulting
from:
(a) any liabilities of Seller not assumed by Buyer
hereunder; or
(b) any untrue representation, breach of warranty or
nonfulfillment of any covenant by Seller contained herein or in any instrument
delivered by Seller to Buyer hereunder.
9.2. BUYER'S INDEMNITIES. From and after the Closing, Buyer shall
indemnify,
18
defend and hold harmless Seller, its affiliates and their respective directors,
officers, employees and representatives, and the successors and assigns of any
of them, from and against, and reimburse them for, all Claims, resulting from:
(a) the Assumed Obligations; or
(b) any untrue representation, breach of warranty or
nonfulfillment of any covenant by Buyer contained herein or in any instrument
delivered by Buyer to Seller hereunder.
9.3. PROCEDURE FOR INDEMNIFICATION. The procedure for
indemnification shall be as follows:
(a) The party seeking indemnification under this ARTICLE 9
(the "CLAIMANT") shall give notice to the party from whom indemnification is
sought (the "INDEMNITOR") of any claim, whether solely between the parties or
brought by a third party, reasonably specifying (i) the factual basis for the
claim, and (ii) the amount of the claim if then known. If the claim relates to
an action, suit or proceeding filed by a third party against Claimant, notice
shall be given by Claimant within fifteen (15) days after written notice of the
action, suit or proceeding was given to Claimant. In all other circumstances,
notice shall be given by Claimant within thirty (30) days after Claimant
becomes, or should have become, aware of the facts giving rise to the claim.
Notwithstanding the foregoing, Claimant's failure to give Indemnitor timely
notice shall not preclude Claimant from seeking indemnification from Indemnitor
if Claimant's failure has not materially prejudiced Indemnitor's ability to
defend the claim or litigation.
(b) With respect to claims between the parties, following
receipt of notice from the Claimant of a claim, the Indemnitor shall have thirty
(30) days to make any investigation of the claim that the Indemnitor deems
necessary or desirable. For the purposes of this investigation, the Claimant
agrees to make available to the Indemnitor and/or its authorized representatives
the information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnitor cannot agree as to the validity and amount of the
claim within the 30-day period (or any mutually agreed upon extension thereof),
the Claimant may seek appropriate legal remedy.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification hereunder, the Indemnitor shall have
the right at its own expense to participate in or assume control of the defense
of the claim with counsel reasonably acceptable to Claimant, and the Claimant
shall cooperate fully with the Indemnitor, subject to reimbursement for
reasonable expenses incurred by the Claimant as the result of a request by the
Indemnitor. If the Indemnitor elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of the claim at its own expense. If the Indemnitor does not elect to
assume control or otherwise participate in the defense of any third party claim,
Claimant may, but shall have no obligation to, defend or settle such claim or
litigation in such a manner as it deems appropriate, and in any event Indemnitor
shall be bound by the results obtained by the Claimant with respect to the claim
(by default or otherwise) and shall promptly reimburse Claimant for the amount
of all
19
expenses (including the amount of any judgment rendered), legal or otherwise,
incurred in connection with such claim or litigation. The Indemnitor shall be
subrogated to all rights of the Claimant against any third party with respect to
any claim for which indemnity was paid.
9.4. LIMITATIONS.
(a) Neither Seller nor Buyer shall have any obligation to
the other party for any matter described in SECTION 9.1 or SECTION 9.2, as the
case may be, except upon compliance by the other party with the provisions of
this ARTICLE 9, particularly SECTION 9.3.
(b) Neither party shall be required to indemnify the other
party under this ARTICLE 9 unless (i) written notice of a claim under this
ARTICLE 9 was received by the party within the pertinent survival period
specified in SECTION 9.5 and (ii) unless and until the aggregate amount of
claims (other than indemnification obligations pursuant to SECTION 9.1(b) OR
9.2(b) for which there shall be no "basket") against the party to which the
other party (as a Claimant) is entitled to be indemnified under this Agreement
exceeds $25,000, and then only for the excess over $25,000. Neither party shall
have any liability to the other party under any circumstances for special,
consequential, punitive or exemplary damages, and in no event shall Seller's
total liability to Buyer under this Agreement exceed $5,000,000.
9.5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties, covenants, indemnities and other agreements
contained in this Agreement or in any certificate, document or instrument
delivered pursuant to this Agreement are and will be deemed and construed to be
continuing representations, warranties, covenants, indemnities and agreements
and shall survive the Closing for a period of twelve months after the Closing
Date (the "SURVIVAL PERIOD"). No claim may be brought under this Agreement
unless written notice describing in reasonable detail the nature and basis of
such claim is given on or prior to the last day of the Survival Period. In the
event such notice is given, the right to indemnification with respect thereto
shall survive the Survival Period until such claim is finally resolved and any
obligations thereto are fully satisfied. Any investigation by or on behalf of
any party hereto shall not constitute a waiver as to enforcement of any
representation, warranty, covenant or agreement contained herein.
9.6. SOLE REMEDY. After the Closing, the right to indemnification
under this ARTICLE 9 shall be the exclusive remedy of any party in connection
with any breach or default by another party under this Agreement.
ARTICLE 10
TERMINATION RIGHTS
10.1. TERMINATION.
(a) This Agreement may be terminated by either Buyer or
Seller, if the party seeking to terminate is not in material default or breach
of this Agreement, upon written notice to the other upon the occurrence of any
of the following:
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(i) if the other party is in material breach of
this Agreement and such breach has not been
waived by the party giving such termination
notice;
(ii) if there shall be in effect any final judgment,
decree or order that would prevent or make
unlawful the Closing or if the FCC denies the
FCC Application or designates that application
for a trial-type hearing; or
(iii) if the Closing has not occurred by the date
that is twelve months after the date on which
the FCC Application was accepted for filing by
the FCC (the "UPSET DATE").
(b) This Agreement may be terminated by mutual written
consent of Buyer and Seller.
(c) If either party believes the other to be in breach or
default of this Agreement, the non-defaulting party shall, prior to exercising
its right to terminate under SECTION 10.1(a)(i), provide the defaulting party
with notice specifying in reasonable detail the nature of such breach or
default. Except for a failure to pay the Purchase Price, the defaulting party
shall have twenty days from receipt of such notice to cure such default;
provided, however, that if the breach or default is due to no fault of the
defaulting party and is incapable of cure within such 20-day period, the cure
period shall be extended as long as the defaulting party is diligently and in
good faith attempting to effectuate a cure. Nothing in this SECTION 10.1(c)
shall be interpreted to extend the Upset Date.
10.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to SECTION 10.1, this Agreement (other than SECTION 6.2(b),
which shall remain in full force and effect) shall forthwith become null and
void, and no party hereto (nor any of their respective affiliates, directors,
officers or employees) shall have any liability or further obligation, except as
provided in this ARTICLE 10 and in ARTICLE 11.
ARTICLE 11
REMEDIES UPON DEFAULT; SPECIFIC PERFORMANCE
11.1. DEFAULT BY SELLER; SPECIFIC PERFORMANCE. If Seller breaches or
defaults in its obligations under this Agreement, Buyer may pursue any legal or
equitable remedies available to it and shall be entitled to obtain from Seller
court costs and reasonable attorneys' fees and expenses incurred by it in
enforcing its rights hereunder. Seller recognizes that, in the event Seller
defaults in the performance of its obligations under this Agreement, monetary
damages alone will not be adequate. In such event, Buyer shall be entitled to
obtain specific performance of the terms of this Agreement. As a condition to
seeking specific performance, Buyer shall not be required (i) to post bond,
prove actual damages or furnish other security or (ii) to have tendered the
Purchase Price specified in ARTICLE 2 of this Agreement, but shall be ready,
willing and able to do so.
11.2. DEFAULT BY BUYER. If this Agreement is terminated by Seller
pursuant to
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SECTION 10.1(a)(i), and if Buyer shall be in material breach or
default of any of its obligations set forth in this Agreement, then Buyer shall
pay Seller $3,000,000 as liquidated damages, in full settlement of any damages
of any kind or nature that Seller may suffer as a result thereof, it being
understood and agreed that the amount of liquidated damages represents the
reasonable estimate of the parties of actual damages and does not constitute a
penalty. In addition, Seller shall be entitled to obtain from Buyer court costs
and reasonable legal fees and expenses incurred by it in enforcing its rights
hereunder.
ARTICLE 12
OTHER PROVISIONS
12.1. TRANSFER TAXES AND EXPENSES. All recordation, transfer,
documentary, excise, sales or use taxes or fees imposed on this transaction
shall be paid by the party so responsible under applicable law. Except as
otherwise provided in this Agreement, each party shall be solely responsible for
and shall pay all other costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement.
12.2. BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Buyer may not assign its rights under this Agreement
without Seller's prior written consent, which consent may be withheld in
Seller's sole discretion, other than to a wholly subsidiary of Buyer, provided
that such assignment does not delay the Closing and will not relieve Buyer of
its obligations hereunder.
12.3. ENTIRE AGREEMENT; SCHEDULES; AMENDMENT; WAIVER. This
Agreement, and the exhibits and schedules hereto and thereto, embody the entire
agreement and understanding of the parties hereto and supersede any and all
prior agreements and understandings relating to the matters provided for herein.
Any matter that is disclosed in a schedule hereto in such a way as to make its
relevance to the information called for by another schedule readily apparent
shall be deemed to have been included in such other schedule, notwithstanding
the omission of an appropriate cross-reference. 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. No failure or delay on the part of Buyer or
Seller in exercising any right or power under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.
12.4. HEADINGS. The headings set forth in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
12.5. COMPUTATION OF TIME. If after making computations of time
provided for in
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this Agreement, a time for action or notice falls on Saturday, Sunday or a
federal holiday, then such time shall be extended to the next business day.
12.6. GOVERNING LAW; WAIVER OF JURY TRIAL. The construction and
performance of this Agreement shall be governed by the law of the State of New
York without regard to its principles of conflict of law, and the exclusive
forum for the resolution of any disputes arising hereunder shall be the federal
or state courts located in the State of New York. BUYER AND SELLER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM
MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE DECIDED SOLELY BY A JUDGE. Buyer and Seller hereby acknowledge that
they have each been represented by counsel in the negotiation, execution and
delivery of this Agreement and that their lawyers have fully explained the
meaning of the Agreement, including in particular the jury-trial waiver. Any
question of doubtful interpretation shall not be resolved by any rule providing
for interpretation against the party who causes the uncertainty to exist or
against the drafter of this Agreement.
12.7. ATTORNEY FEES. In the event of any dispute between the parties
to this Agreement, Seller or Buyer, as the case may be, shall reimburse the
prevailing party for its reasonable attorneys' fees and expenses incurred in
enforcing its rights or exercising its remedies under this Agreement. Such right
of reimbursement shall be in addition to any other right or remedy that the
prevailing party may have under this Agreement.
12.8. SEVERABILITY. If any term or provision of this Agreement, or
the application thereof to any person or circumstance shall, to any extent be
held invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each such term and provision of this Agreement shall be valid and
be enforced to the fullest extent permitted by law.
12.9. NOTICES. Any notice, demand or request required or permitted
to be given under the provisions of this Agreement shall be in writing,
addressed to the following addresses, or to such other address as any party may
request:
If to Seller:
Infinity Broadcasting Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.C.
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: 202-293-7783
If to Buyer:
Salem Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Block, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any such notice, demand or request shall be deemed to have been duly delivered
and received (a) on the date of personal delivery, or (b) on the date of
transmission, if sent by facsimile (but only if a hard copy is also sent by
overnight courier), or (c) on the date of receipt, if mailed by registered or
certified mail, postage prepaid and return receipt requested, or (d) on the date
of a signed receipt, if sent by an overnight delivery service, but only if sent
in the same manner to all persons entitled to receive notice or a copy.
12.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument. Faxed copies of the Agreement and
faxed signature pages shall be binding and effective as to all parties and may
be used in lieu of the original Agreement, and, in particular, in lieu of
original signatures, for any purpose whatsoever.
ARTICLE 13
DEFINITIONS
13.1. DEFINED TERMS. Unless otherwise stated in this Agreement, the
following terms when used herein shall have the meanings assigned to them below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined).
"AGREEMENT" shall have the meaning set forth in the preamble to this
Agreement.
"ASSUMED OBLIGATIONS" shall have the meaning set forth in SECTION 1.4.
"BUYER" shall have the meaning set forth in the preamble to this
Agreement.
"CLAIMANT" shall have the meaning set forth in SECTION 9.3.
"CLAIMS" shall have the meaning set forth in SECTION 9.1.
"CLOSING" shall have the meaning set forth in SECTION 1.1.
"CLOSING DATE" shall mean the date on which the Closing is completed.
24
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"DAMAGED ASSET" shall have the meaning set forth in SECTION 6.4.
"EFFECTIVE TIME" shall have the meaning set forth in SECTION 2.4.
"ENVIRONMENTAL LAWS" shall mean all applicable local, state and federal
statutes and regulations relating to the protection of human health or the
environment including the FCC's regulations concerning radio frequency
radiation.
"FCC" shall mean the Federal Communications Commission.
"FCC APPLICATION" shall mean the application or applications that
Seller and Buyer must file with the FCC requesting its consent to the assignment
of the FCC Licenses from Seller to Buyer.
"FCC CONSENT" shall mean the action by the FCC granting the FCC
Application.
"FCC LICENSES" shall have the meaning set forth in SECTION 1.2.
"FINAL ORDER" shall mean an action by the FCC (i) which has not yet
been vacated, reversed, stayed or suspended; (ii) with respect to which no
timely appeal, request for stay or petition for rehearing, reconsideration or
review by any party or by the FCC on its own motion, is pending; and (iii) as to
which the time for filing any such appeal, request, petition, or similar
document or for the reconsideration or review by the FCC on its own motion under
Communications Act and the rules and regulations of the FCC, has expired.
"HAZARDOUS MATERIALS" shall mean all hazardous or toxic substance,
material or waste which, because of its quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled.
"Hazardous Materials" shall not include ordinary quantities of consumer or
commercial products used in the normal course of broadcast station operations,
including grounds and building operation and maintenance.
"HSR ACT" shall have the meaning set forth in SECTION 5.2.
"INDEMNITOR" shall have the meaning set forth in SECTION 9.3.
"LIENS" shall mean mortgages, deeds of trust, liens, security
interests, pledges, collateral assignments, conditional sales agreements,
leases, encumbrances, claims or other defects of title, but shall not include
(i) liens for current Taxes not yet due and payable; (ii) other inchoate liens
imposed by law (such as landlord's, materialman's, mechanic's, carrier's,
worker's and repairman's liens) arising in the ordinary course of business
(provided that such liens do not interfere in any material respect with the use
of the Station Assets as currently used and that Seller remains liable for
paying such liens); (iii) income-
25
producing leases or subleases to third parties; and (iv) defects in title or
other matters that do not materially adversely affect the continued use of the
property as currently used by Seller (the exceptions set forth in clauses (i)
through (iv) being collectively referred to herein as "Permitted Liens").
"OBJECTIONABLE EXCEPTIONS" shall have the meaning set forth in SECTION
6.7.
"OWNED REAL PROPERTY" shall have the meaning set forth in SECTION 1.2.
"PHASE I REPORT" shall have the meaning set forth in SECTION 6.6.
"PHASE II REPORT" shall have the meaning set forth in SECTION 6.6.
"PURCHASE PRICE" shall have the meaning set forth in SECTION 2.1.
"QUALIFIED INTERMEDIARY DOCUMENTS" shall have the meaning set forth in
SECTION 1.6.
"REAL PROPERTY" shall have the meaning set forth in SECTION 1.2.
"REAL PROPERTY LEASE" shall have the meaning set forth in SECTION 1.2.
"REFEREE" shall have the meaning set forth in SECTION 2.4.
"SELLER" shall have the meaning set forth in the preamble to this
Agreement.
"STATION" shall have the meaning set forth in the preamble to this
Agreement.
"STATION ASSETS" shall have the meaning set forth in SECTION 1.2.
"SURVEY" shall have the meaning set forth in SECTION 6.7.
"SURVIVAL PERIOD" shall have the meaning set forth in SECTION 9.5.
"TANGIBLE PERSONAL PROPERTY" shall have the meaning set forth in
SECTION 1.2.
"TAXES" means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions, levies and
liabilities, including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, gains, franchise, withholding, payroll, recapture,
employment, excise, unemployment, insurance, social security, business license,
occupation, business organization, stamp, environmental and property taxes,
together with all interest, penalties and additions imposed with respect to such
amounts.
"TITLE COMMITMENTS" shall have the meaning set forth in SECTION 6.7.
"TO BUYER'S KNOWLEDGE" or words of similar import, shall mean to the
actual knowledge of the president or chief financial officer of Buyer.
26
"TO SELLER'S KNOWLEDGE" or words of similar import, shall mean to the
actual knowledge of the president or chief financial officer of Seller or the
general manager of the Station.
"UPSET DATE" shall have the meaning set forth in SECTION 10.1.
13.2. MISCELLANEOUS TERMS. The term "OR" is disjunctive; the term
"AND" is conjunctive. The term "SHALL" is mandatory; the term "MAY" is
permissive. Masculine terms apply to females; feminine terms apply to males. The
term "INCLUDES" or "INCLUDING" is by way of example and not limitation.
[Signatures follow this page]
27
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed as of the date first written above.
SELLER:
INFINITY BROADCASTING
CORPORATION OF ILLINOIS
By:
--------------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
INFINITY BROADCASTING
CORPORATION
By:
--------------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BUYER:
SALEM COMMUNICATIONS
CORPORATION
By:
--------------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------------------------------
28
EXHIBIT A
FORM OF ASSIGNMENT, ACCEPTANCE AND NOTICE
EXHIBIT B
FORM OF REASSIGNMENT AND ASSUMPTION AGREEMENT
---------------------------------------------------------
ASSET PURCHASE AGREEMENT
among
INFINITY BROADCASTING CORPORATION
OF ILLINOIS,
INFINITY BROADCASTING CORPORATION
and
SALEM COMMUNICATIONS CORPORATION
Dated as of November 6, 2000
---------------------------------------------------------
EXHIBITS
A Form of Assignment, Acceptance and Notice
B Form of Reassignment and Assumption Agreement
SCHEDULES
1.2(a) FCC Licenses
1.2(b) Tangible Personal Property
1.2(c) Real Property
1.3(l) Excluded Assets
DISCLOSURE SCHEDULES
TO
ASSET PURCHASE AGREEMENT
AMONG
INFINITY BROADCASTING CORPORATION
OF ILLINOIS,
INFINITY BROADCASTING CORPORATION,
AND
SALEM COMMUNICATIONS CORPORATION
FOR
WXRT(AM), CHICAGO, IL
DATED AS OF NOVEMBER 6, 2000
Reference is made to the Asset Purchase Agreement (the
"AGREEMENT"), dated as of November 6, 20000, among Infinity
Broadcasting Corporation of Illinois, Infinity Broadcasting Corporation
and Salem Communications Corporation. These Schedules are the
"Schedules" referred to in the Agreement. Capitalized terms used in
these Schedules and not otherwise defined herein are used as defined in
the Agreement.
These Schedules are qualified in their entirety by reference
to specific provisions of the Agreement and are not intended to
constitute, and shall not be construed as constituting, any
representation or warranty of Seller except as and to the extent
expressly provided in the Agreement. The fact that any item of
information is contained herein shall not be construed to mean that
such information is required to be disclosed in or by the Agreement.
Such information shall not be used as a basis for interpreting the term
"material", "materially" or "materiality" in the Agreement. Any matter
disclosed in one section or subsection hereof shall be deemed to be
disclosed in all sections or subsections hereof and for all purposes of
these Schedules and the Agreement. The headings in these Schedules are
for convenience of reference only and shall not be deemed to alter or
affect the express description of the sections of these Schedules as
set forth in the Agreement.
SCHEDULE 1.2(a) - FCC LICENSES
WXRT(AM), CHICAGO, ILLINOIS
Main Station License BR-19960731ZZ Exp. December 1, 2004
BL-19930420AC
Tower Registrations: FCC numbers 1009053, 1009054, 1009055 and 1009056.
Note: As set forth in SCHEDULE 1.3(l), call sign WXRT(AM) is an
Excluded Asset.
SCHEDULE 1.2(b) - TANGIBLE PERSONAL PROPERTY
5 towers (four are registered - - FCC registration numbers 1009053,
1009054, 1009055 and 1009056 - - one is not required to be registered)
and associated directional phasing equipment
Transmitter building that houses the WXRT(AM) transmitters (note:
building is in disrepair)
See also attached list
SCHEDULE 1.2(c) - REAL PROPERTY
OWNED REAL PROPERTY
Parcels (Permanent Real Estate Index Numbers 09-16-402-041-0000,
09-16-402-042-0000 and 09-16-402-043-0000) located in Des Plaines,
Illinois, and identified in deed from Plough Broadcasting Company, Inc.
to Infinity Broadcasting Corporation of Illinois filed on July 20, 1984
LEASED REAL PROPERTY
Lease dated March 23, 1965, by and between LaSalle National Bank and
Plough Broadcasting Company, Inc. (consent to assignment not required)
BUILDING
Transmitter building that houses the WXRT(AM) transmitters (note:
building is in disrepair)
Notes:
1. Prior to Closing, Seller will advise Buyer, based on the
Survey, whether the towers and transmitter building are
located on the Owned Real Property or the Leased Real
Property.
2. Seller has been unable to locate any title insurance
policies or commitments, surveys or environmental
assessments for the Real Property.
SCHEDULE 1.3(l) - EXCLUDED ASSETS
All time sales agreements
All trade agreements
All programming agreements and other intellectual property associated
with the Station
