6.5 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement or any other Transaction Document (to which Parent or Purchaser is or will be a party) by Parent and Purchaser does not, and subject to receipt of the consents, approvals, authorizations or permits, filings, registrations and notifications, expiration or termination of waiting periods after filings and other actions contemplated by Section 6.5(b), and assuming all other required filings, waivers, approvals, consents, authorizations, registrations and notices disclosed in Section 6.5(b) of the Parent Disclosure Schedule have been made, obtained or given, the performance of this Agreement or any other Transaction Document (to which Parent or Purchaser is or will be a party) by Parent and Purchaser, will not, with or without notice or lapse of time: (i) conflict with, result in a breach or default of any provision of, or violate, the Parent Organizational Documents or the organizational documents of any Parent Subsidiary, (ii) conflict with or violate any Law applicable to Parent or any Parent Subsidiary or by which any property or asset of Parent or any Parent Subsidiary is bound or affected or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of consent, notice, termination, amendment, acceleration or cancellation of (other than pursuant to any Parent Plan), or result in the creation of a material Encumbrance on any property or asset of Parent or any Parent Subsidiary pursuant to, any contract to which Parent or any Parent Subsidiary is a party or by which their respective assets are bound, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, reasonably be expected to be material to Parent and the Parent Subsidiaries, taken as a whole.
(b) The execution and delivery of this Agreement by Parent does not, and the performance of this Agreement by Parent will not, require any consent, approval, authorization, registration or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, the Securities Act, Blue Sky Laws and state takeover laws, or (ii) where the failure to obtain such consents, approvals, authorizations, registrations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to be material to Parent and the Parent Subsidiaries, taken as a whole.
6.6 Permits; Compliance. Each of Parent and the Parent Subsidiaries (i) is and, since January 1, 2022, has been in compliance in all material respects with any and all Laws applicable to Parent and the Parent Subsidiaries or its business, properties or assets, except for failures to comply or violations which would not be materially adverse to Parent and the Parent Subsidiaries, taken as a whole, or reasonably expected to materially interfere with the Transactions, and (ii) is in possession of all permits necessary for Parent or such Parent Subsidiary, as applicable to own, lease and operate its properties (including the Parent Leased Real Property) or carry on its business as it is now being conducted (the “Parent Permits”), except where the failure to have such Parent Permit would not be materially adverse to Parent and the Parent Subsidiaries, taken as a whole, and no suspension or cancellation of any of the Parent Permits is pending or, to the knowledge of Parent, threatened in writing. Since January 1, 2022, (x) neither Parent nor any Parent Subsidiary has been sanctioned, fined or penalized for any violation of or failure to comply with any applicable Law, (y) neither Parent nor any Parent Subsidiary is, or has been, in conflict with, or in default, breach or violation of, any Parent Permit and (z) neither Parent nor any Parent Subsidiary has received any written inspection, report, notice of adverse finding, warning letter, resolution, writ, untitled letter or other correspondence with or from any Governmental Authority alleging or asserting non-compliance with applicable Laws or any Parent Permit by Parent or any of the Parent Subsidiaries, except, with respect to clauses (x), (y) and (z), for any such conflicts, defaults, breaches or violations that would not, individually or in the aggregate, reasonably be expected to be materially adverse to Parent and the Parent Subsidiaries, taken as a whole.
6.7 SEC Filings: Financial Statements: Sarbanes-Oxley.
(a) Parent has timely filed all prospectuses, registration statements, forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed by it with the SEC since formation, together with any amendments, restatements or supplements thereto (collectively, the “Parent SEC Reports”), and will have filed all such forms, reports, schedules, statements and other documents, including any exhibits thereto required to be filed by it with the SEC subsequent to the date of this Agreement through the Closing Date (collectively, the “Additional Parent SEC Reports”), pursuant to the Exchange Act or the Securities Act. Parent has heretofore furnished to the Company true and correct copies of all amendments and modifications that have not been filed by Parent with the SEC to all agreements, documents and other instruments that previously had been filed by Parent with the SEC and are currently in effect. As of their respective dates, (i) the Parent SEC Reports were, and the Additional Parent SEC Reports will be, in compliance in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder and (ii) the Parent SEC Reports did not, at the time they were filed, or, if amended, as of the date of such amendment, and the Additional Parent SEC Reports will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, in the case of any Parent SEC Report or Additional Parent SEC Report that is a registration statement, or include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in the case of any other Parent SEC Report or Additional Parent SEC Report. Each director and executive officer of Parent has filed with the SEC on a timely basis all documents required with respect to Parent by Section 16(a) of the Exchange Act and the rules and regulations thereunder.
(b) Each of the financial statements (including, in each case, any notes thereto) contained or incorporated by reference in the Parent SEC Reports or Additional Parent SEC Reports (i) was or will be prepared in accordance with GAAP (applied on a consistent basis) and Regulation S-X and Regulation S-K, as applicable, throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC); (ii) complied or will comply, as applicable, in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act in effect as of the respective dates thereof; and (iii) fairly presents or will fairly present, in all material respects, the financial position, results of operations, changes in stockholders equity and cash flows of Parent as at the respective dates thereof and for the respective periods indicated therein.
(c) Except as and to the extent set forth in the Parent SEC Reports, none of Parent or any Parent Subsidiary has any liability or obligation of a nature (whether accrued, absolute, contingent or otherwise) required to be reflected on a balance sheet prepared in accordance with GAAP, except for liabilities and obligations arising in the ordinary course of business of Parent.
(d) Except as set forth on Section 6.7(d) of the Parent Disclosure Schedule, Parent is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq.
(e) Parent has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are reasonably designed to ensure that all material information relating to Parent and other material information required to be disclosed by Parent in the reports and other documents that it files or furnishes under the Exchange Act is recorded, processed, summarized and made known on a timely basis to the individuals responsible for the preparation of Parent’s filing with the SEC and the other public disclosure documents. Such disclosure controls and procedures are effective in timely alerting Parent’s principal executive officer and principal financial officer to material information required to be included in Parent’s periodic reports required under the Exchange Act. Parent has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 under the Exchange Act) designed to provide reasonable assurance regarding the reliability of Parent’s financial reporting and the preparation of Parent’s financial statements for external purposes in accordance with GAAP.
(f) There are no outstanding loans or other extensions of credit made by Parent to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of Parent, and Parent has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(g) Neither Parent (including any employee thereof) nor, to the knowledge of Parent, any of its independent auditors has identified, been made aware of, or received any written complaint, allegation, assertion or claim that, (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by Parent or Parent Subsidiary, (ii) any fraud, whether or not material, that involves Parent’s management or other employees of Parent or any Parent Subsidiary who have a role in the preparation of financial statements or the internal accounting controls utilized by Parent or any Parent Subsidiary or (iii) any claim or allegation regarding any of the foregoing.
(h) As of the date hereof, there are no outstanding comments from the SEC with respect to the Parent SEC Reports. To the knowledge of Parent and since January 1, 2022, none of the Parent SEC Reports filed on or prior to the date hereof has been or is subject to ongoing SEC review or investigation as of the date hereof.
(i) Notwithstanding the foregoing, none of the representations and warranties of Parent set forth herein shall apply to any statement or information in the Parent SEC Reports or in any filing made by Parent in connection with the Transactions that relates to changes to historical accounting policies of Parent in connection with any order, directive, guideline, comment or recommendation from the SEC or Parent’s auditor or accountant that is applicable to Parent (collectively, the “SEC Guidance”), nor shall any correction, revision, amendment or restatement of Parent’s financial statements due to the SEC Guidance result in a breach of any representation or warranty by Parent.
6.8 Absence of Certain Changes or Events. Since September 30, 2023, and on and prior to the date of this Agreement, except as otherwise reflected in the Parent SEC Reports, as set forth on Section 6.8 of the Parent Disclosure Schedule or expressly contemplated by this Agreement, (a) Parent and the Parent Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business, (b) there has not been a Material Adverse Effect on Parent and Purchaser, and (c) Parent and Purchaser have not taken any of the following actions:
(a) acquired (including by merger, consolidation or acquisition of shares), sold, leased, transferred, disposed of, mortgaged or assigned any assets, tangible or intangible, for an amount that exceeds $50,000 in the aggregate, other than sales of goods or services in the ordinary course of business;
(b) incurred, assumed, guaranteed or discharged any Liability constituting Indebtedness;
(c) canceled, compromised, knowingly waived or released any material right or claim (or series of related rights and claims) under any Material Contract, Parent Lease or Intellectual Property or any other material right or claim of Parent or Purchaser (which includes all rights under any confidentiality provisions of any Contract of Parent or any Parent Subsidiary), or disclosed any material trade secret of Parent or any Parent Subsidiary;
(d) canceled, compromised, knowingly waived or released any right, claim or Account Receivable involving amounts that exceed $100,000 in the aggregate;
(e) committed to make any capital expenditure (or series of related capital expenditures) involving amounts that exceed $100,000 in the aggregate;
(f) suffered any damages to or destruction or loss of any tangible assets, (whether or not covered by insurance), involving or reasonably expected to involve amounts that exceed $10,000 in the aggregate;
(g) modified the Parent Organizational Documents;
(h) implemented any material change in any method of accounting or accounting practice, except as required by GAAP or disclosed on Parent’s financial statements;
(i) implemented any material change to its cash management practices or its policies, practices or procedures with respect to collection of Accounts Receivable, establishment of reserves for uncollectible accounts, accrual of Accounts Receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;
(j) incurred any Lien (other than a Permitted Lien) upon its properties, share capital or assets, tangible or intangible;
(k) made any capital investment in, any loan to, or any acquisition of the securities or assets of any other Person other than acquisitions of inventory and supplies in the ordinary course of business;
(l) failed to maintain in full force and effect insurance policies on its properties or assets providing coverage and amounts of coverage comparable to the coverage and amounts of coverage provided under its policies of insurance;
(m) made any material change in the rate of compensation (including salary and wages), commission, bonus or other direct or indirect remuneration payable, or agreed to pay, conditionally or otherwise, any material bonus, incentive, retention or other compensation, any change in control payment, retirement, welfare, fringe or termination or severance benefit or vacation pay, to or in respect of any member of senior management of Parent or any Parent Subsidiary, other than increases and payments in the ordinary course of business consistent with past practice;
(n) encountered any labor union organizing activity or had any actual or overtly threatened employee strikes, work stoppages, slowdowns or lockouts;
(o) materially modified or changed its Business organization or materially and adversely modified or changed its relationship with its suppliers, customers and others having business relations with it;
(p) except as otherwise required by applicable Law or in the ordinary course of business consistent with past practice, entered into, amended, modified, varied, altered or otherwise changed or terminated any of the Parent Plans;
(q) entered into any Contract that is a Material Contract or Parent Lease, other than in the ordinary course of business;
(r) accelerated, terminated, materially modified or cancelled any Material Contract or Parent Lease, other than in the ordinary course of business;
(s) adopted a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other material reorganization;
(t) failed to file any income or other material Tax Return or pay any material Taxes when due; made or changed any material Tax election; changed any annual Tax accounting period; adopted or changed any material Tax accounting method; filed any amended Tax Return; entered into any closing agreement with respect to Taxes; settled any material Tax claim or Tax assessment relating to Parent or any Parent Subsidiary; or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to Parent or any Parent Subsidiary;
(u) settled any pending or threatened Proceeding requiring the payment of $25,000 individually or $50,000 in total, in each case, net of any insurance proceeds; or
(v) authorized, agreed, resolved or committed (on a contingent basis or otherwise) to any of the foregoing.
6.9 Absence of Litigation. There is no Action pending or, to the knowledge of Parent, threatened against Parent or any Parent Subsidiary, or any property or asset of Parent or any Parent Subsidiary, or any employee, officer or director of Parent or a Parent Subsidiary (in their capacity as such) that would, individually or in the aggregate, reasonably be expected to be material to Parent or any Parent Subsidiary. Neither Parent nor any Parent Subsidiary nor any property or asset of Parent or any Parent Subsidiary, nor any employee, officer or director of Parent or a Parent Subsidiary (in their capacity as such) is subject to any material continuing or outstanding obligation pursuant to any Order (excluding customary confidentiality, non-disparagement, and similar provisions) that would, individually or in the aggregate, reasonably be expected to be material to Parent or any Parent Subsidiary.
6.10 Employee Benefit Plans.
(a) Section 6.10(a) of the Parent Disclosure Schedule includes a current, true and complete list of, as of the date of this Agreement, all material Parent Plans.
(b) With respect to each Parent Plan, Parent has made available to the Company, as applicable, (i) a true and complete copy of the current plan document and all amendments thereto and any summaries of material modifications, (ii) copies of the most recent IRS Form 5500 annual reports and (iii) copies of the most recently received IRS determination or opinion letter for each such Parent Plan.
(c) Neither Parent nor any Parent ERISA Affiliate contributes to or has any obligation to contribute to, or has at any time within six (6) years prior to the Closing Date contributed to or had an obligation to contribute to, or has or has had any Liability (contingent or otherwise) under, and no employee benefit plan of Parent or any Parent Subsidiary is or was within the past six (6) years, (i) a Multiemployer Plan, (ii) a plan subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA, (iii) a “multiple employer plan” within the meaning of Section 413(c) of the Code or (iv) a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA.
(d) None of the Parent Plans provide, nor does Parent or any Parent Subsidiary have any obligation to provide, retiree medical or life insurance to any current or former employee, officer, director or consultant of Parent or any Parent Subsidiary after termination of employment or service except as may be required under Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA and the regulations thereunder or any analogous state Law or for which the recipient pays the full cost of coverage.
(e) Except as would not result in a Material Adverse Effect, (i) each Parent Plan was established and has been adopted and administered in accordance with its terms and the requirements of all applicable Laws including ERISA and the Code and (ii) Parent and the Parent Subsidiaries have performed all obligations required to be performed by them under, are not in default under or in violation of, and have no knowledge of any default or violation by any party to, any Parent Plan.
(f) Except as would not result in a Material Adverse Effect, neither Parent nor any Parent Subsidiary or, to the knowledge of Parent, any other “fiduciary” (as defined in Section 3(21) of ERISA) has any Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any Parent Plan.
(g) No Action is pending or, to the knowledge of Parent, threatened with respect to any Parent Plan or the assets of any Parent Plan (other than claims for benefits in the ordinary course) and, to the knowledge of Parent, no fact or event exists that would reasonably be expected to give rise to any such Proceeding, except as would not reasonably be material to Parent and the Parent Subsidiaries, taken as a whole. To Parent’s knowledge, no Plan is, or in the last three (3) years has been, the subject of an examination or audit by any Governmental Authority or the subject of an application or filing under, or a participant in, a government-sponsored amnesty, voluntary compliance, self-correction or similar program, except as would not reasonably be material to Parent and the Parent Subsidiaries, taken as a whole.
(h) Each Parent Plan that is intended to be qualified under Section 401(a) of the Code either has received a favorable determination letter from the IRS or is a prototype plan that is subject to a favorable opinion letter from the IRS, in either case upon which Parent can rely, and to Parent’s knowledge nothing has occurred that has, or would reasonably be expected to, adversely affect the qualified status of any such Parent Plan or the exempt status of any related trust.
(i) Except as contemplated under this Agreement, neither the execution and delivery of this Agreement nor the consummation of the Transactions will, either alone or in connection with any other event: (i) result in any material payment or benefit becoming due to or result in the forgiveness of any material indebtedness of any current or former employee, officer, director, consultant and/or other service provider of Parent or any Parent Subsidiary under any Parent Plan, (ii) materially increase any amount of compensation or benefits otherwise payable to any current or former employee, officer, director, consultant or other service provider of Parent or any Parent Subsidiary under any Parent Plan, (iii) result in the acceleration of the time of payment, or trigger any funding or vesting of any benefits to any current or former employee, officer, director, consultant and/or other service provider of Parent or any Parent Subsidiary under any Parent Plan or (iv) result in any payments or benefits that, individually or in combination with any other payment or benefit, could reasonably be expected to result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code or in the imposition of an excise Tax under Section 4999 of the Code.
(j) Neither Parent nor any Parent Subsidiary has a material obligation to indemnify, “gross up,” compensate, reimburse or make whole any current or former employee, officer, director, consultant or other service provider of Parent or any Parent Subsidiary for any Taxes, including any Taxes imposed under Section 4999 or Section 409A of the Code.
(k) Except as would not result in a Material Adverse Effect, neither Parent nor any Parent Subsidiary has incurred any Liability for any Tax or civil penalty imposed under Chapter 43 of the Code or Sections 409 or 502 of ERISA that has not been satisfied in full.
(l) Except as would not result in a Material Adverse Effect, each Parent Plan that constitutes a deferred compensation plan within the meaning of Section 409A of the Code that is subject to Section 409A of the Code has been maintained in all respects, in form and operation, in accordance with the requirements of Sections 409A of the Code and applicable guidance thereunder.
(m) Except as would not result in a Material Adverse Effect, each Parent Plan subject to the Laws of any jurisdiction outside the United States (each, a “Non-U.S. Parent Plan”) (i) has within the past three (3) years been maintained and administered in accordance with its terms and the requirements of all applicable Laws, (ii) if intended to qualify for special tax treatment, meets all the requirements for such treatment, and (iii) if required by applicable Law or the terms of the Parent Plan, to any extent, to be funded, book-reserved or secured by an insurance policy, is funded, book-reserved or secured by an insurance policy, as applicable. No Non-U.S. Parent Plan or Employee Benefit Plan maintained by a Governmental Authority to which Parent or any Parent Subsidiary is required to contribute to pursuant to applicable Law is a “defined benefit plan” (as defined in ERISA, whether or not subject to ERISA).
6.11 Labor and Employment Matters.
(a) No employee of Parent or any Parent Subsidiary is, to the knowledge of Parent, represented by a Union and neither Parent nor any Parent Subsidiary is a party to, subject to, or bound by a Collective Bargaining Agreement, nor is there any duty on the part of Parent or any Parent Subsidiary to bargain or consult with, or provide notice to, any Union which is representing any employee of Parent or any Parent Subsidiary, in connection with the execution of this Agreement or the Transactions. There are and, for the prior three (3) years were, to the knowledge of Parent, no strikes lockouts, work stoppages, slowdowns, threatened unfair labor practice charges, material grievances, material labor arbitrations, picketing, hand billing or other material labor dispute with respect to any employees of Parent or any Parent Subsidiaries, in each case, pursuant to the National Labor Relations Act. There are and, for the prior three (3) years have been, no union certification or representation petitions or demands with respect to Parent or any Parent Subsidiaries or any of their employees and, to the knowledge of Parent, no union organizing campaign or similar effort is pending or threatened with respect to Parent, any Parent Subsidiaries, or any of their employees.
(b) Except, in each case, as would not result in a Material Adverse Effect, neither Parent nor any Parent Subsidiary is liable for any arrears of wages, penalties or other sums for failure to comply with any of the foregoing.
(c) Except, in each case, as would not result in a Material Adverse Effect, each of Parent and the Parent Subsidiaries: (i) has taken reasonable steps to properly classify and treat all of their employees as “employees” and independent contractors as “independent contractors”; (ii) has taken reasonable steps to properly classify and treat all of their employees as “exempt” or “non-exempt” from overtime requirements under applicable Law; (iii) has maintained legally adequate records regarding the service of all of their employees, including, where required by applicable Law, records of hours worked; (iv) is not delinquent in any material payments to, or on behalf of, any current or former employees or independent contractors for any services or amounts required to be reimbursed or otherwise paid; (v) has withheld, remitted and reported all material amounts required by Law or by agreement to be withheld, remitted and reported with respect to wages, salaries, end of service and retirement funds, superannuation and social security benefits and other payments to any current or former independent contractors or employees; and (vi) is not liable for any material payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for any current or former independent contractors or employees (other than routine payments to be made in the ordinary course of business).
(d) To the knowledge of Parent, (i) no employee or independent contractor of Parent or any Parent Subsidiary is in violation of any term of any employment contract, consulting contract, non-disclosure agreement, common law non-disclosure obligation, non-competition agreement, non-solicitation agreement, proprietary information agreement or any other agreement relating to confidential or proprietary information, intellectual property, competition or related matters; and (ii) the continued employment by Parent and the Parent Subsidiaries of their respective employees, and the performance of the contracts with Parent and the Parent Subsidiaries by their respective independent contractors, will not result in any such violation, that would, in each case, cause material liability to Parent.
6.12 Real Property; Title to Assets.
(a) Section 6.12(a) of the Parent Disclosure Schedule lists the owner entity and street address of all the real property owned by any Parent or Parent Subsidiary (the “Parent Owned Real Property”).
(b) Section 6.12(b) of the Parent Disclosure Schedule lists the street address of each of the Parent Leased Real Properties and also sets forth a list of each lease, sublease, license or other agreement pursuant to which Parent or any Parent Subsidiary leases, subleases, licenses or otherwise uses or occupies the Parent Leased Real Property (each, a “Parent Lease”), with the street address and name of each other party thereto.
(c) True and complete copies of all the Parent Leases and each guaranty, amendment, modification, restatement or supplement thereto (collectively, the “Parent Lease Documents”) have been made available to the Company.
(d) Except as set forth in Section 6.12(d) of the Parent Disclosure Schedule or that does not, individually or in the aggregate, constitute a Material Adverse Effect:
(i) there are no leases, subleases, sublicenses, concessions or other contracts granting to any person other than Parent or the Parent Subsidiaries the right to use or occupy all or any portion of the Parent Real Property;
(ii) all Parent Leases are in full force and effect, are valid, binding and enforceable in accordance with their respective terms, subject to the Remedies Exceptions, against Parent or the Parent Subsidiaries, as applicable, and, to the knowledge of Parent, the other parties thereto; and there is not, under any of such Parent Leases, any existing default or event of default by Parent or any Parent Subsidiary or, to the knowledge of Parent, by the other party to such Parent Leases; and
(iii) to Parent’s knowledge, there are no material disputes with respect to any of the Parent Lease Documents.
(e) Each of Parent and the Parent Subsidiaries has legal and valid title to, or, in the case of the Parent Leased Real Property, valid leasehold or sub-leasehold interests in, all of its assets, tangible and intangible, personal and mixed, used or held for use in its Business, except as would not reasonably be expected to be material to Parent and the Parent Subsidiaries, taken as a whole.
(f) Except as set forth on Section 6.12(f) of the Parent Disclosure Schedule or as would not reasonably be expected to be material to Parent and the Parent Subsidiaries, taken as a whole, the Parent Real Property is free and clear of all Liens other than Permitted Liens.
6.13 Intellectual Property; Data Privacy and Information Security.
(a) As of the date of this Agreement, Section 6.13(a) of the Parent Disclosure Schedule contains a true and complete list of all patents, patent applications, Trademark registrations and applications, copyright registrations and applications and domain name registrations, in each case, owned or purported to be owned by Parent or a Parent Subsidiary (“Parent Registered IP”). The Parent Registered IP is subsisting and, to the Company’s knowledge, valid and enforceable.
(b) Parent or one of the Parent Subsidiaries owns or otherwise has sufficient right to use all material Intellectual Property used in connection with the Business of Parent and the Parent Subsidiaries as currently conducted.
(c) Parent and the Parent Subsidiaries (i) have paid all fees associated with maintaining and advertising on and through social media accounts and handles, and (ii) to the knowledge of Parent, are in material compliance with all applicable Laws and terms of use, terms of service, and other Contracts and all associated policies and guidelines relating to its use of any social media platforms, sites, or services in the conduct of their respective Businesses. No Person has made any claims or allegations against Parent or one of the Parent Subsidiaries concerning any violation of law or any Person’s rights in connection with the use of those social media accounts and handles.
(d) Parent and the Parent Subsidiaries have taken commercially reasonable measures to maintain in confidence all material Trade Secrets and other material Confidential Information constituting Parent Owned IP or otherwise possessed by Parent or any Parent Subsidiary in connection with the Businesses of Parent and the Parent Subsidiaries, including by requiring each Person who has had access to such Trade Secrets and Confidential Information to execute an agreement that requires such Person to maintain the confidentiality of the same. To Parent’s knowledge, there has been no unauthorized access to or disclosure of any such Trade Secrets or Confidential Information.
(e) As of the date of this Agreement, there are no Proceedings pending or, to Parent’s knowledge, threatened (including interference, re-examination, inter parties review, reissue, opposition, nullity or cancellation proceedings) (i) contesting the validity, ownership, scope or use of any Parent Owned IP or (ii) making a claim against Parent or any Parent Subsidiary alleging any infringement, misappropriation or other violation of any Intellectual Property rights of any person. Neither the operation of the respective Businesses of Parent and the Parent Subsidiaries, nor the use of the Parent Owned IP by Parent or any Parent Subsidiary, infringes, misappropriates or otherwise violates, or has infringed, misappropriated, or otherwise violated in the last three (3) years, any Intellectual Property of any person in any material respect. To the knowledge of Parent, no person is infringing, misappropriating or otherwise violating, or has infringed, misappropriated, or otherwise violated in the last three (3) years, any of the Parent Owned IP. Neither Parent nor any of the Parent Subsidiaries has received from or sent to any Person any written notice alleging any infringement, misappropriation or other violation of, including any invitations to license or desist from using any, Intellectual Property.
(f) All past and present employees, consultants, independent contractors, management employees, founders or other persons who have created, conceived or developed material Intellectual Property for Parent or a Parent Subsidiary have executed valid and enforceable written agreements with Parent or one of the Parent Subsidiaries, pursuant to which such persons assigned to Parent or the applicable Parent Subsidiary all of their entire right, title and interest in and to any Intellectual Property created, conceived or otherwise developed by such person in the course of and related to his, her or its relationship with Parent or the applicable Parent Subsidiary, or such rights have been solely and exclusively assigned to Parent or one of the Parent Subsidiaries by operation of law. To Parent’s knowledge, no such person (i) is in violation of any such agreement, (ii) owns any Intellectual Property used by or held for use by for Parent or a Parent Subsidiary or (iii) has made any claims with respect to, or has any right, license, claim or interest whatsoever in, such Intellectual Property.
(g) The consummation of the transactions contemplated by this Agreement or any Transaction Document will not (and no event has occurred that would with or without notice or lapse of time or both) (i) result in any third party having or receiving any license, right, permission, covenant-not-to-sue or other authorization in or to any Parent Owned IP, (ii) to Parent’s knowledge, result in a material violation of any Parent Data Privacy/Security Requirements, or (iii) except as would not otherwise be material to Parent or a Parent Subsidiary, taken as a whole, require the consent, waiver or authorization of, or declaration, filing or notification to, any Person under any Parent Data Privacy/Security Requirement.
(h) The Parent IT Systems, in all material respects, (i) are adequate for, and operate and perform in accordance with their documentation and functional specifications and otherwise as required in connection with, the operation of the Business of Parent and the Parent Subsidiaries, (ii) are free from bugs, errors or other defects, (iii) have not malfunctioned, crashed, failed, experienced denial of service attacks or continued substandard performance or other adverse events within the past three (3) years, and (iv) do not contain any Malicious Code. Parent and each Parent Subsidiary has implemented and maintains anti-malware, anti-virus, backup, security, business continuity, and disaster recovery measures and technology consistent with industry standard practices.
(i) Parent and each Parent Subsidiary complies, and has in the past three (3) years complied in all material respects, with (i) its internal and external privacy and data security policies, (ii) all applicable and binding rules of self-regulatory organizations and codes of conduct, including the Payment Card Industry Data Security Standard (PCI DSS), (iii) all Information Privacy and Security Laws, and (iv) all contractual obligations concerning information security and data privacy (including the Processing of Personal Information) (collectively, the “Parent Data Privacy/Security Requirements”). There are no, and have not been in the last three (3) years, any Proceedings pending by or, to the knowledge of Parent, threatened against either Parent or a Parent Subsidiary concerning any Parent Data Privacy/Security Requirement or compliance therewith or violation thereof.
(j) Parent and each of the Parent Subsidiaries has implemented and maintains a comprehensive information security plan (a “Parent Security Plan”), which includes commercially reasonable physical, technical, organizational and administrative data security safeguards designed to protect the confidentiality, availability, integrity and security of the Parent IT Systems and the information and data stored therein (including Personal Information and other sensitive information) from loss, damage, misuse or unauthorized use, access, modification, destruction, or disclosure, including cybersecurity and malicious insider risks. The Parent Security Plan conforms, and at all times has conformed in all material respects with, the Parent Data Privacy/Security Requirements and any public statements made by Parent or the Parent Subsidiaries regarding the Parent Security Plan. In the past three (3) years, there has been no (i) material loss, damage, misuse or unauthorized use, access, modification, destruction, or disclosure, or other breach of security of the Personal Information maintained by or on behalf of Parent or any of the Parent Subsidiaries (including, but not limited to, any event that would give rise to a breach or incident for which notification by Parent or a Parent Subsidiary to individuals and/or Governmental Authorities is required under Parent Data Privacy/Security Requirements), (ii) phishing, social engineering, or business email compromise incident that has resulted in a material monetary loss or that has otherwise been or would reasonably be expected to be, individually or in the aggregate, material to the Business of Parent or the Parent Subsidiaries, or (iii) material breaches or unauthorized intrusions of the security of any Parent IT Systems.
6.14 Taxes.
(a) All income and all other material Tax Returns required to be filed by, or on behalf of, Parent and each Parent Subsidiary have been duly and timely filed (taking into account any extension of time to file), and each such Tax Return is true, correct and complete in all material respects.
(b) All income and all other material Taxes owed by Parent and each Parent Subsidiary (whether or not shown on any Tax Return) have been paid in full.
(c) Parent and each Parent Subsidiary have withheld from amounts owing to any employee, creditor or other Person all Taxes required by Law to be withheld by Parent or such Parent Subsidiary, as applicable, and have paid over to the proper Tax Authority in a timely manner all such withheld amounts required to have been so paid over, and have complied with all applicable reporting requirements with respect to such Taxes.
(d) Neither Parent nor any Parent Subsidiary has received any written claim from any Tax Authority for unpaid Taxes of Parent or such Parent Subsidiary, as applicable, that has not been paid or resolved, and no assessment, deficiency or adjustment has been asserted, proposed or threatened in writing by any Tax Authority with respect to any Taxes or Tax Returns of Parent or any Parent Subsidiary, in each case that has not been paid or resolved.
(e) No audit, examination, investigation, litigation or other administrative or judicial proceeding in respect of Taxes or Tax matters is currently pending or being conducted, or has been threatened by any Tax Authority, against Parent or any Parent Subsidiary.
(f) Neither Parent nor any Parent Subsidiary has received written notice of any claim from a Tax Authority in a jurisdiction in which Parent or such Parent Subsidiary, as applicable, does not file Tax Returns that Parent or such Parent Subsidiary, as applicable, is or may be subject to Tax in such jurisdiction.
(g) There are no Liens for Taxes upon any of the assets of Parent or any Parent Subsidiary except for Permitted Liens.
(h) Neither Parent nor any Parent Subsidiary is party to, is bound by or has an obligation under any Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement, in each case, other than any agreement, contract or arrangement (i) the primary purpose of which does not relate to Taxes, or (ii) to which solely one or more of Parent and/or any Parent Subsidiary is a party.
(i) Neither Parent nor any Parent Subsidiary has engaged in or entered into a “listed transaction” within the meaning of Section 6707A(c) of the Code and Treasury Regulations Section 1.6011-4(b).
(j) Neither Parent nor any Parent Subsidiary has waived any statute of limitations or agreed to any extension of the period for assessment or collection of any Tax, in each case, which waiver or extension has not since expired.
(k) Neither Parent nor any Parent Subsidiary is or has been in the last five (5) years a “United States real property holding corporation” within the meaning of Section 897 of the Code.
(l) Neither Parent nor any Parent Subsidiary has any material liability for the Taxes of any person (other than, in the case of Parent, any Parent Subsidiary, and in the case of any Parent Subsidiary, each other Parent Subsidiary and Parent) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. law) or as a transferee or successor (or otherwise by operation of law).
(m) Neither Parent nor any Parent Subsidiary will be required to include any material amount, or exclude any material item of deduction or loss, from taxable income for any taxable period (or portion thereof) ending after the Closing Date (i) as a result of any installment sale or open transaction disposition made prior to the Closing, (ii) as a result of any prepaid amount received prior to the Closing, (iii) as a result of any change in method of accounting for a taxable period ending on or prior to the Closing Date, (iv) as a result of any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or non-U.S. Tax Law), (v) as a result of any use of an improper method of accounting prior to the Closing, or (vi) by reason of Section 965(a) of the Code or an election pursuant to Section 965(h) of the Code (or any similar provision of state, local or non-U.S. Tax Law).
6.15 Environmental Matters. Except for matters that are not and would not reasonably be expected to be material to Parent and the Parent Subsidiaries, taken as a whole:
(a) Parent and the Parent Subsidiaries are now, and have been during the three (3) years prior to the date hereof, in compliance with all Environmental Laws, which compliance includes obtaining and complying with any permits required by Environmental Law for the operations of Parent and the Parent Subsidiaries, and neither Parent nor any Parent Subsidiary has received any written communication from any Person that alleges that Parent or any Parent Subsidiary is in violation of, or has liability or obligations under, any Environmental Law or any permit issued pursuant to Environmental Law;
(b) there are no Environmental Claims or Orders pending or, to the knowledge of Parent, threatened, against Parent or any Parent Subsidiary;
(c) there have been no Releases of, or exposure to, any Hazardous Material at, on, under or migrating from any real property (including any facilities or structures located thereon) currently, or to the knowledge of Parent, formerly owned, leased or operated by Parent, any Parent Subsidiaries, or any of their respective predecessors, in each case, that would reasonably be expected to form the basis of any Environmental Claim against, or otherwise result in Liability under Environmental Law of, Parent or any Parent Subsidiaries; and
(d) neither Parent nor any Parent Subsidiary has retained or assumed, either contractually or, to the knowledge of Parent, by operation of Law, any Liabilities of another Person that would reasonably be expected to form the basis of any Environmental Claim against, or otherwise result in Liability under Environmental Law of, Parent or any Parent Subsidiaries.
6.16 Material Contracts.
(a) Section 6.16(a) of the Parent Disclosure Schedule lists the following types of contracts and agreements to which Parent or any Parent Subsidiary is a party or by which any of their respective assets is bound (such contracts and agreements as are required to be set forth Section 6.16(a) of the Parent Disclosure Schedule (excluding any Parent Plan listed on Section 6.10(a) of the Parent Disclosure Schedule and excluding the Parent Leases) being the “Parent Material Contracts”):
(i) each contract and agreement with consideration paid to or payable by Parent or any of the Parent Subsidiaries of more than $100,000 (in cash or other consideration, including barter), in the aggregate, over any twelve (12)-month period (other than purchase orders, invoices or statements of work entered into in the ordinary course of business);
(ii) all contracts or agreements with any employee, consultant or other service provider of Parent or any of the Parent Subsidiaries that provide for change in control, retention or similar payments or benefits contingent upon, accelerated by or triggered by the consummation of the transactions contemplated hereby;
(iii) all contracts and agreements evidencing indebtedness for borrowed money in an amount greater than $100,000, and any pledge agreements, security agreements or other collateral agreements in which Parent or any Parent Subsidiary granted to any person a security interest in or Lien on any of the property or assets of Parent or any Parent Subsidiary, and all agreements or instruments guarantying the debts or other obligations of any person;
(iv) any Collective Bargaining Agreement between Parent or any of the Parent Subsidiaries, on the one hand, and any Union, on the other hand;
(v) all partnership, joint venture or similar agreements;
(vi) all “material contracts” (as such term is defined in Item 601(b)(10) of Regulation S-K);
(vii) all contracts and agreements related to any material acquisitions or dispositions by Parent or any Parent Subsidiary of any assets or business of any Person (whether by merger, sale of stock or assets or otherwise) in the past two (2) years;
(viii) all contracts and agreements that (A) limit, or purport to limit, the ability of Parent or any Parent Subsidiary to enter into, engage or compete in any line of business or with any person or entity or in any geographic area or during any period of time, excluding customary confidentiality agreements and agreements that contain customary confidentiality clauses, (B) contain exclusivity or most favored nation terms or covenants or (C) contain minimum supply or purchase terms or requirements, rights of first refusal, first offer or preemptive rights or similar terms;
(ix) all Orders, settlement agreements, or other contracts related to any Proceeding involving Parent or any Parent Subsidiary or any of their assets (x) entered into at any time the past two (2) years or (y) containing material outstanding or unsatisfied obligations (excluding customary confidentiality, non-disparagement, and similar provisions);
(x) all Parent IP Agreements that are material to the operation of the Business of Parent and the Parent Subsidiaries;
(xi) any contract relating to Program Rights under which it would reasonably be expected that Parent or any Parent Subsidiaries would make annual payments in excess of $10,000 (in cash or other consideration, including barter) per year;
(xii) any network affiliation or similar contract to which Parent or any Parent Subsidiary is a party;
(xiii) any option or similar agreement relating to ownership or control of a broadcast station; and
(xiv) any contract with a broker, finder or investment banker entitled to payment in connection with the consummation of the Transactions or reimbursement of expenses associated with services rendered in connection the Transactions.
(b) Each Parent Material Contract is in full force and effect and a legal, valid and binding obligation of Parent or the Parent Subsidiaries and, to the knowledge of Parent, the other parties thereto, and, except as would not be material to Parent and the Parent Subsidiaries, taken as a whole, (A) neither Parent nor any Parent Subsidiary is in breach or violation of, or default under, any Material Contract nor has any Material Contract been canceled by the other party, (B) to Parent’s knowledge, no other party is in breach or violation of, or default under, or has received or delivered any notice of termination of, any Material Contract and (C) to Parent’s knowledge, Parent and the Parent Subsidiaries have not received any written or oral notice of, claim, breach, termination, non-renewal, material change or default under any such Material Contract. Parent has made available to the Company true and complete copies of all Material Contracts.
6.17 Insurance.
(a) Section 6.17(a) of the Parent Disclosure Schedule sets forth, with respect to each currently in-force material insurance policy under which Parent or any Parent Subsidiary is an insured (the “Parent Insurance Policies”), (i) the names of the insurer and the policyholder, (ii) the policy number, (iii) the policy period, coverage line and amount of coverage, and (iv) the premium. Copies of the Parent Insurance Policies, which, to the knowledge of Parent, are correct and complete, have been made available to the Company.
(b) With respect to each Parent Insurance Policy, except as would not be expected to be material to Parent and the Parent Subsidiaries, taken as a whole: (i) the Parent Insurance Policy is legal, valid, binding and enforceable in accordance with its terms (subject to the Remedies Exceptions) and is in full force and effect; (ii) to the knowledge of Parent, neither Parent nor any Parent Subsidiary is in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the Parent Insurance Policy; (iii) to the knowledge of Parent, no insurer has been declared insolvent or placed in receivership, conservatorship or liquidation; (iv) the limits of the Parent Insurance Policy are sufficient to comply with Parent Material Contracts; (v) all premiums due and payable have been timely paid in full; and (vi) no written notice of denial of claim, termination or cancellation has been received by Parent or any Parent Subsidiary.
6.18 Board Approval; Vote Required.
(a) The Parent Board, by resolutions duly adopted by a majority vote of those voting at a meeting duly called and held, and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement and the Transactions are fair to and in the best interests of Parent and its stockholders, (ii) approved, among other things, the execution, delivery and performance of this Agreement, the other Transaction Documents and the Transactions and declared their advisability upon the terms and subject to the conditions set forth herein, (iii) resolved to recommend the approval of the issuance of the shares of Parent Class A Common Stock pursuant to the Warrant as contemplated by this Agreement and the issuance of the shares of Parent Class A Common Stock pursuant to the Option Agreement by the stockholders of Parent entitled to vote thereon and directed that such matter be submitted for consideration of the stockholders of Parent at the Parent Stockholders’ Meeting, and (iv) approved the Articles of Amendment to be filed on the Closing Date, subject to the terms and conditions set forth herein, and which designates a portion of the Company’s Preferred Stock as the Parent Series B Preferred Stock. The only vote of the holders of any class or series of shares of capital stock of Parent necessary to approve the Transactions is the Required Parent Stockholder Approval.
(b) Parent, as the sole member and manager of the Purchaser has (i) determined that this Agreement and the Transactions are fair to and in the best interests of the Purchaser, and (ii) approved, among other things, the execution, delivery and performance of this Agreement, the other Transaction Documents and the Transactions and declared their advisability upon the terms and subject to the conditions set forth herein.
(c) No “fair price,” “moratorium,” “control share acquisition,” “business combination” or other form of antitakeover statute or regulation or any anti-takeover provision in the Parent Organizational Documents is, and Parent has no rights plan, “poison pill” or similar agreement that is, or at the Effective Time will be, applicable to this Agreement or the Transactions.
6.19 Certain Business Practices. Since January 1, 2022:
(a) None of Parent, any Parent Subsidiary, or, to the knowledge of Parent, any of their respective directors, officers, employees or agents (in their capacities as such), has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of any applicable Anti-Corruption Law; or (iii) made any payment in the nature of criminal bribery.
(b) None of Parent, any Parent Subsidiary, or, to the knowledge of Parent, any of their respective directors, officers or employees, independent contractors or agents: (i) is or has been a Sanctioned Person; (ii) has directly or knowingly indirectly transacted business with or for the benefit of any Sanctioned Person in violation of applicable Sanctions or otherwise violated applicable Sanctions; or (iii) has violated any Ex-Im Laws in any material respect.
(c) The operations of Parent and each Parent Subsidiary are and have been conducted at all times in material compliance with applicable requirements of the Anti-Money Laundering Laws and Anti-Corruption Laws. No action, suit or Proceeding involving Parent or any Parent Subsidiary with respect to the Anti-Money Laundering Laws or Anti-Corruption Laws is pending or, to the knowledge of Parent, threatened by or before any Governmental Authority. To the extent required under applicable Anti-Money Laundering Laws, Parent and all Parent Subsidiaries have maintained a system or systems of internal control reasonably designed to promote compliance with Anti-Money Laundering Laws.
(d) There are not, and there have not been, any material internal or external investigations, audits, actions or proceedings pending, or any voluntary or involuntary disclosures made to a Governmental Authority, with respect to any apparent or suspected violation by Parent, any Parent Subsidiary, or, to the knowledge of Parent, any of their respective officers, directors, employees (in their capacities as such) or agents of any Anti-Corruption Laws, Sanctions or Ex-Im Laws.
6.20 Interested Party Transactions. Except as set forth in Section 6.20 of the Parent Disclosure Schedule and for employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business, no director, officer, manager, stockholder (including the Parent Holders) or other affiliate of Parent or any Parent Subsidiary, and none of their respective parents, siblings, descendants, spouses or descendants of their spouses, has or has had, directly or indirectly: (a) a beneficial interest in any Parent Material Contract, (b) any contractual or other arrangement with Parent or any Parent Subsidiary and (c) any interest in any property, assets or right, tangible or intangible, which is used by Parent or any Parent Subsidiary.
6.21 Brokers. Except as set forth on Section 6.20 of the Parent Disclosure Schedule, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or any Parent Subsidiary.
6.22 Personal Property. The personal property owned or leased by Parent or the Purchaser or any Parent Subsidiary has been reasonably maintained in accordance with good business practice, is in good operating condition and repair, ordinary wear and tear excepted, has been installed and maintained in accordance with good workmanlike practices prevailing in the industry at the time of installation and maintenance, and is substantially suitable for its present uses.
6.23 Independent Investigation. Parent has conducted its own independent investigation, review and analysis of the Business, operations, assets, liabilities, results of operations, financial condition, technology, management and prospects of the Company, which investigation, review and analysis were done by Parent and its Representatives. In entering into this Agreement, Parent acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of the Company, its respective Affiliates or any of their respective Representatives (except the representations and warranties of the Company expressly set forth in Article 5). Parent hereby acknowledges and agrees that none of the Company or its Affiliates or any of their respective Representatives or any other Person will have or be subject to any claim or Liability to Parent, its Affiliates or any of their respective Representatives or equityholders or any other Person resulting from the distribution to Parent, its Affiliates or their respective Representatives of, or Parent’s, its Affiliates’ or their respective Representatives’ use of, any information relating to the Company or its Affiliates, including any information, documents or material made available to Parent, its Affiliates or their respective Representatives, whether orally or in writing, in any data room (including the Virtual Data Room), any management presentations (formal or informal), functional “break-out” discussions, responses to questions submitted on behalf of Parent, its Affiliates or their respective Representatives or in any other form in connection with the transactions contemplated by this Agreement. Parent further acknowledges that no Representative of the Company, the Company Controlling Stockholder, or any of their respective Affiliates has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in Article 5 of this Agreement and subject to the limited remedies herein provided.
6.24 Conversion. Prior to or effective as of the Closing, Parent has converted all of the shares of Series A Preferred Stock into shares of Parent Class A Common Stock in accordance with the Amended and Restated Articles of Incorporation of Parent.
6.25 Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this Article 6 (as modified by the Parent Disclosure Schedule), Parent and Purchaser hereby expressly disclaim and negate any other express or implied representation or warranty whatsoever (whether at Law or in equity) with respect to Parent and the Parent Subsidiaries and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to the Company, or any of its Affiliates or Representatives by, or on behalf of Parent and the Parent Subsidiaries and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement or in any certificate delivered by Parent pursuant to this Agreement, none of Parent, the Purchaser, their respective Affiliates or Representatives have made any representation or warranty, whether express or implied, including with respect to any projections, forecasts, estimates or budgets of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of Parent (including the reasonableness of the assumptions underlying any of the foregoing), whether or not included in any management presentation or in any other information made available to the Company or any of its Affiliates or Representatives or any other person, and any such representations or warranties are expressly disclaimed.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AGGREGATOR
Except as set forth in the Company Disclosure Schedule delivered by the Company in connection with this Agreement, the Company Aggregator hereby represents and warrants to Parent as follows:
7.1 Organization; Authority Relative to this Agreement. The Company Aggregator is duly organized, validly existing and in good standing under the laws of Delaware. The Company Aggregator has all requisite limited liability power and authority to enter into this Agreement and any other Transaction Documents to which it is a party thereto and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, in each case, subject to the consents, approvals, authorizations and other requirements described in Section 5.5. This Agreement has been duly and validly executed and delivered by the Company Aggregator and, assuming due authorization and execution by each other Party, constitutes the valid and binding agreement of the Company Aggregator, enforceable against the Company Aggregator in accordance with its terms, subject to the Remedies Exceptions. Each Transaction Document to be executed by the Company Aggregator at or prior to the Closing will be, when executed and delivered by the Company Aggregator, duly and validly executed and delivered and, assuming due authorization and execution by each other Party thereto and the consummation of the Closing, will constitute a valid and binding obligation of the Company Aggregator, enforceable against the Company Aggregator in accordance with its terms, subject to any applicable Remedies Exception.
7.2 No Conflict.
(a) The execution and delivery of this Agreement or any other Transaction Document (to which the Company Aggregator is a party) by the Company Aggregator does not, and subject to receipt of the consents, approvals, authorizations or permits, filings, registrations and notifications, expiration or termination of waiting periods after filings and other actions contemplated by Section 5.5(b), and assuming all other required filings, waivers, approvals, consents, authorizations, registrations and notices disclosed in Section 5.5(b) of the Company Disclosure Schedule have been made, obtained or given, and the performance of this Agreement or any other Transaction Document (to which the Company Aggregator is a party) by the Company Aggregator, will not (i) conflict with, result in a breach or default of any provision of, or violate, the organizational documents of the Company Aggregator, or (ii) conflict with or violate any Law applicable to the Company Aggregator, except, with respect for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, reasonably be expected to be material to the Company Aggregator.
(b) The execution and delivery of this Agreement by the Company Aggregator does not, and the performance of this Agreement by the Company Aggregator will not, require any consent, approval, authorization, registration or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any U.S. Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, the Securities Act, Blue Sky Laws and state takeover laws, or (ii) where the failure to obtain such consents, approvals, authorizations, registrations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to be material to the Company Aggregator and its Subsidiaries, taken as a whole.
7.3 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions that would be required to be paid by Parent or its Affiliates based upon arrangements made by or on behalf of the Company Aggregator.
7.4 Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this Article 7, the Company Aggregator, on behalf of itself and its Affiliates, hereby expressly disclaims and negates any other express or implied representation or warranty whatsoever (whether at Law or in equity) with respect to the Company Aggregator or its Affiliates and any matter relating to it, including its affairs, the condition, value or quality of the assets, liabilities, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to Parent or Purchaser or any of their Affiliates or any of their Representatives by, or on behalf of the Company Aggregator and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement or in any certificate delivered by the Company Aggregator pursuant to this Agreement, none of the Company Aggregator or its Affiliates or Representatives has not made any representation or warranty, whether express or implied, including with respect to any projections, forecasts, estimates or budgets of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company Aggregator (including the reasonableness of the assumptions underlying any of the foregoing), and any such representations or warranties are expressly disclaimed.
ARTICLE 8. ADDITIONAL AGREEMENTS
8.1 Delivery of Financial Statements.
(a) After the date hereof, the Company Aggregator and the Company shall, and the Company shall cause the Company Subsidiaries to, and shall direct their respective Representatives (including their respective auditors) to, use their respective reasonable best efforts to assist Parent in causing to be prepared, as promptly as practicable, any financial statements that Parent is required to file with the SEC pursuant to Form 8-K and Rule 3-05 under the Exchange Act or that are necessary in order for Parent to comply with Article 11 of Regulation S-X under the Exchange Act (which, for the avoidance of doubt, shall include: (i) audited financial statements of the Business for the fiscal years ended December 31, 2023 and December 31, 2022, together with all related notes and schedules thereto, accompanied by the reports thereon of the independent auditors of the Businesses (the “Business Audited Financial Statements”); (ii) unaudited financial statements of the Businesses for the fiscal quarter ending March 31, 2024 (including the comparable information for the comparable prior-year end), in each case prepared on the same basis as the Business Audited Financial Statements (except that they contain the notes required by GAAP as applicable to interim financial statements and are subject to normal year-end adjustments); and (iii) in connection with each of the foregoing clauses (i) and (ii) all other financial data regarding the Business reasonably required to permit Parent to prepare pro forma financial statements required under Regulation S-X under the Securities Act; and in the case of clauses (i) and (ii), that would meet the requirements of Rule 3-05 of Regulation S-X under the Securities Act, and that would satisfy the requirements of Item 9.01 of Form 8-K with respect to financial statements of the business acquired if included on a Form 8-K/A filed by Parent on the 75th day after the Closing (a “Closing Form 8-K/A”) to amend a Form 8-K filed by Parent announcing the Closing on the date hereof (assuming such filings are made on such dates, without regard to whether actually made on such dates)).
(b) The Company Aggregator and the Company shall, and shall direct their respective accountants, auditors and employees to use their respective reasonable best efforts to, (i) discuss, cooperate and provide information reasonably requested by Parent or its Representatives, that is reasonably necessary for Parent to prepare unaudited pro forma financial statements of Parent for the periods described in Section 8.1(a) above, and (ii) reasonably cooperate with Parent with regards to responding to any comments from the SEC concerning such pro forma financial statements. Purchaser shall reimburse the Company Aggregator and the Company for their reasonable out-of-pocket costs and expenses associated with this Section 8.1(b).
(c) Following the delivery of the Business Audited Financial Statements, the Company shall use its reasonable best efforts to promptly enable, and shall direct, its auditors to provide to Parent (and not withdraw) their consent to incorporation by reference into any registration statements filed by Parent or its Affiliates under the Securities Act of their audit reports with respect to the Business Audited Financial Statements.
8.2 Proxy Statement.
(a) As promptly as practicable after the filing by Parent of a Closing Form 8-K/A, (i) Parent shall prepare and file with the SEC a proxy statement (as amended or supplemented, the “Proxy Statement”) in preliminary form to be sent to the stockholders of Parent relating to the special meeting of Parent’s stockholders (the “Parent Stockholders’ Meeting”) to be held to consider approval of the issuance of shares of Parent Class A Common Stock upon exercise of the Warrant and the issuance of shares of Parent Class A Common Stock pursuant to the Option Agreement (the “Parent Proposal”), and (ii) Parent, shall prepare and file any other filings required under the Securities Act or the Exchange Act in connection with the transactions contemplated by this Agreement. Parent shall not file the Proxy Statement (or any amendments or supplements thereto) or any other filings required under the Securities Act or the Exchange Act in connection with the transactions contemplated by this Agreement with the SEC without first providing the Company and its counsel a reasonable opportunity to review and comment thereon, and Parent shall give due consideration to, and consider in good faith, all reasonable additions, deletions or changes suggested by the Company and its counsel. Each of the Company Aggregator and the Company shall promptly furnish all information concerning itself as Parent may reasonably request in connection with such actions and the preparation of the Proxy Statement. Parent shall use its reasonable best efforts to (A) cause the Proxy Statement when filed with the SEC to comply in all material respects with all legal requirements applicable thereto, and (B) respond as promptly as reasonably practicable to and resolve all comments received from the SEC concerning the Proxy Statement.
(b) No filing of, or amendment or supplement to, the Proxy Statement will be made by Parent without the approval of the Company (such approval not to be unreasonably withheld, conditioned or delayed). Parent will advise the Company promptly after it receives notice of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information. Each of Parent and the Company shall cooperate and mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed) any response to comments of the SEC or its staff with respect to the Proxy Statement and any amendment to the Proxy Statement filed in response thereto.
(c) If, at any time prior to the Parent Stockholders’ Meeting, any event or circumstance relating to Parent or its officers or directors, should be discovered by Parent which should be set forth in an amendment or a supplement to the Proxy Statement, Parent shall promptly inform the Company. All documents that Parent is responsible for filing with the SEC in connection with the Transactions will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder.
(d) Each of the Company Aggregator and the Company represent that the information supplied by such Person for inclusion in the Proxy Statement shall not, at (i) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the stockholders of Parent, and (ii) the time of the Parent Stockholders’ Meeting, contain any untrue statement of a material fact or fail to state any material fact required to be stated therein or necessary in order to make the statements therein (in the light of the circumstances under which they were made) not misleading; provided, however, notwithstanding the foregoing, no representation or warranty is made by the Company Aggregator or the Company (as applicable) with respect to information or statements made or incorporated by reference in the Proxy Statement that were not supplied by or on behalf of the Company Aggregator or the Company, as applicable, for use therein. If, at any time prior to the Parent Stockholders’ Meeting, any event or circumstance relating to the Company Aggregator or the Company, or their respective Affiliates, officers or directors, should be discovered by the Company Aggregator or the Company (as applicable) which should be set forth in an amendment or a supplement to the Proxy Statement, the Company Aggregator or the Company, as applicable, shall promptly inform Parent.
(e) Parent represents that the Proxy Statement shall not, at (i) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the stockholders of Parent, and (ii) the time of the Parent Stockholders’ Meeting, contain any untrue statement of a material fact or fail to state any material fact required to be stated therein or necessary in order to make the statements therein (in light of the circumstances under which they were made) not misleading; provided, however, notwithstanding the foregoing, no representation or warranty is made by Parent with respect to information or statements made or incorporated by reference in the Proxy Statement that were supplied by the Company Aggregator or the Company. If, at any time prior to the Parent Stockholders’ Meeting, any event or circumstance should be discovered by Parent which should be set forth in an amendment or a supplement to the Proxy Statement, Parent shall promptly inform the Company and the Company Aggregator and file with the SEC an appropriate amendment or supplement to the Proxy Statement describing such information and, to the extent required by applicable Law, disseminate such amendment or supplement to the stockholders of Parent. All documents that Parent is responsible for filing with the SEC in connection with the Transactions will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder.
8.3 Parent Stockholders’ Meeting.
(a) Parent shall cause the Proxy Statement to be mailed to Parent’s stockholders as promptly as practicable (but in any event within five (5) days) (such date, the “Mailing Date”) after the earliest to occur of (i) clearance of the Proxy Statement by the SEC, (ii) confirmation by the SEC that it will not review the Proxy Statement, or (iii) the tenth (10th) calendar day after the filing of the preliminary Proxy Statement if the SEC fails to notify Parent of its intent to review the Proxy Statement (such earliest date, the “SEC Clearance Date”).
(b) Parent shall establish a record date for, duly call, give notice of, convene and hold the Parent Stockholders’ Meeting as promptly as practicable after the SEC Clearance Date for the purpose of voting solely upon the Parent Proposal (but in any event the Parent Stockholders’ Meeting shall be held within forty-five (45) days of the Mailing Date). Parent shall use its reasonable best efforts to obtain the Required Parent Stockholder Approval at the Parent Stockholders’ Meeting, including by soliciting from its stockholders proxies as promptly as possible in favor of the Parent Proposal, and shall take all other action necessary or advisable to secure the required vote or consent of its stockholders. Parent shall cooperate with and keep the Company Aggregator and the Company informed on a reasonably current basis regarding its solicitation efforts and voting results following the dissemination of the Proxy Statement to its stockholders. Notwithstanding the foregoing, Parent may adjourn or postpone the Parent Stockholders’ Meeting with the consent of the Company (not to be unreasonably withheld, conditioned or delayed) (i) to the extent necessary to ensure that any required supplement or amendment to the Proxy Statement is provided to Parent’s stockholders within a reasonable amount of time in advance of the Parent Stockholders’ Meeting, (ii) as otherwise required by applicable Law, (iii) if as of the time for which the Parent Stockholders’ Meeting is scheduled as set forth in the Proxy Statement, there are insufficient shares of Parent Common Stock represented (in person or by proxy) to constitute a quorum necessary to conduct the business of the Parent Stockholders’ Meeting or (iv) if there are insufficient proxies in favor of adoption of the Parent Proposal. In no event will the record date of the Parent Stockholders’ Meeting be changed without the Company’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), unless required by applicable Law or the bylaws of Parent. The Parent Board shall recommend to its stockholders that they approve the Parent Proposal and shall include such recommendation in the Proxy Statement.
8.4 Employee Matters.
(a) From Closing through May 31, 2024 (the “Transition End Date”), the Company agrees to continue to employ each person employed by the Company or a Company Subsidiary as of the Closing Date who is not identified on Schedule 8.4(a)(i) (each identified on Schedule 8.4(a)(i), a “Transferred Employee”, and each person excluded from Schedule 8.4(a)(i) who is employed by the Company or a Company Subsidiary as of the Closing Date and listed on Schedule 8.4(a)(ii), a “Company Operational Employee”), subject to the terms and conditions of the Employee Leasing Arrangement, entered into by the Company and Purchaser, dated as of the date hereof (the “Employee Leasing Agreement”). Prior to the Transition End Date, Parent (or a Subsidiary thereof) shall make offers of employment, effective as of the day following the Transition End Date, to all Transferred Employees employed by the Company or a Company Subsidiary as of the Transition End Date. From the day following the Transition End Date through the first anniversary of the Closing Date, Parent shall provide, or shall cause one of its Subsidiaries to provide, to each Transferred Employee who accepts such offer of employment (each, a “Continuing Employee”), (i) salary (or hourly base wage rate) that is no less favorable than was provided to the applicable Continuing Employee as of the Transition End Date, (ii) severance benefit protections for each Continuing Employee that are no less favorable than, at Parent’s election, (x) the severance benefit protections that such Continuing Employee would be eligible to receive under the Plan in which such Continuing Employee participates as of the Effective Time or (y) the severance benefit protections provided by Parent or its Subsidiaries, as the case may be, to similarly situated employees of Parent or its Subsidiaries, as applicable, as of the date of the Transferred Employee’s termination, (iii) annual target cash bonus opportunities as determined by the Parent Board or management of Parent (as applicable) following the Transition End Date, and (iv) other health and welfare employee benefits that are substantially comparable in the aggregate to, at Parent’s election, (x) the health and welfare benefits such Continuing Employee would be eligible to receive under the Plan in which such Continuing Employee participates as of the Effective Time or (y) the health and welfare benefits provided by Parent or its Subsidiaries, as the case may be, to similarly situated employees of Parent or its Subsidiaries, as applicable, from time to time. In connection with the Option Closing (as defined in the Option Agreement), Parent will determine in good faith whether any Company Operational Employee shall be offered employment by Parent or one of its Subsidiaries; provided, that Parent shall be under no obligation to make any such offer of employment; provided, however, that Parent shall be solely responsible for any severance or similar termination payments or benefits that may become payable to any Company Operational Employee who does not receive an offer of employment from Parent or one of its Subsidiaries pursuant to this Section 8.4(a).
(b) Following the Transition End Date, Parent shall, or shall cause one of its Subsidiaries to, cause each employee benefit or compensation plan or program sponsored or maintained by Parent or its Subsidiaries in which a Continuing Employees is eligible to participate following the Transition End Date to recognize the service of such Continuing Employee with the Company or a Company Subsidiary (and any predecessor thereto) prior to the Transition End Date for purposes of eligibility, vesting and level of benefits (other than for purposes of benefit accrual under any defined benefit pension plans or retiree health or welfare plans or rights to participate in any frozen plan) under such plans or programs, except to the extent that such recognition of service would operate to duplicate any benefits of a Continuing Employee with respect to the same period of service. With respect to any Employee Benefit Plan sponsored or maintained by Parent or its Subsidiaries in which a Continuing Employee is eligible to participate following the Transition End Date, Parent shall use commercially reasonable efforts to (i) cause any preexisting condition limitations or eligibility waiting periods under such plan to be waived with respect to such Continuing Employee to the extent that such limitation would have been waived or satisfied under the Employee Benefit Plan in which such Continuing Employee participated immediately prior to the Effective Time and (ii) credit each Continuing Employee for any co-payments or deductibles incurred by such Continuing Employee in such plan year for purposes of any applicable deductible and annual out-of-pocket expense requirements under any such Employee Benefit Plan. Such credited expenses shall also count toward any annual or lifetime limits, treatment or visit limits or similar limitations that apply under the terms of the applicable plan.
(c) As soon as practicable following the Transition End Date, each Continuing Employee shall be eligible to effect a “direct rollover” (as described in Section 401(a)(31) of the Code) of his or her account balances (in cash, including participant loans) under the Company 401(k) Plan to the Parent 401(k) Plan in the form of cash and participant loan notes. For the avoidance of doubt, the contribution of any such eligible rollover distributions must be at the request of the Continuing Employee and shall not be automatic.
(d) Notwithstanding anything contained herein to the contrary, with respect to any Continuing Employees who are covered by a Collective Bargaining Agreement or who are subject to Laws outside of the United States, Parent shall provide compensation and benefits at least as favorable as those required by any obligations under the applicable Collective Bargaining Agreement or under the Laws of the countries and political subdivisions thereof under which such Continuing Employee is subject.
(e) Nothing in this Agreement shall confer upon any employee or other service provider any right to continue in the employ or service of Parent or any of its Subsidiaries, the Company, any Company Subsidiary or any Affiliate of Parent. In no event shall the terms of this Agreement be deemed to (i) establish, amend, or modify any Employee Benefit Plan maintained or sponsored by Parent or any of its Subsidiaries or Affiliates or the Company or any of its Subsidiaries or Affiliates, or (ii) alter or limit the ability of Parent or any of its Subsidiaries or Affiliates or the Company or any of its Subsidiaries or Affiliates to amend, modify or terminate any Employee Benefit Plan or any other compensation or benefit or employment plan, program, agreement or arrangement. Nothing in this Section 8.4 shall create any third-party beneficiary rights in any employee or other service provider (or any beneficiaries or dependents thereof).
8.5 Taxes.
(a) The Purchaser shall be responsible for and shall pay any and all Transfer Taxes when due, and shall, at its own expense, file all necessary Tax Returns and other documentation with respect to such Transfer Taxes; provided, however, that, if required by Law, the Sellers will join in the execution of any such Tax Returns.
(b) The Sellers shall prepare and file all Tax Returns relating to Seller Taxes in a manner consistent with past practice (except as otherwise required by Law), and the Sellers shall pay all Taxes due with respect to such Tax Returns. In addition, each Seller shall, at the cost and expense of the Purchaser, prepare and timely file all Tax Returns (in a manner consistent with past practice, except as otherwise required by Law) required to be filed with respect to such Seller that reflect Taxes other than Seller Taxes (each such Tax Return, a “Purchaser Reviewed Return”). With respect to any Purchaser Reviewed Return, such Seller shall submit such Purchaser Reviewed Return to the Purchaser for the Purchaser’s review and comment as soon as reasonably practicable, and in no event less than ten (10) Business Days, prior to the due date for filing such Purchaser Reviewed Return (including any applicable extension), and such Seller shall incorporate the Purchaser’s reasonable comments thereto, and the Purchaser shall be responsible for the payment of, and timely pay, any Taxes set forth on such Tax Returns. If any Tax Authority shall notify any Seller of any audit, contest, claim, proceeding or inquiry with respect to any Purchaser Reviewed Return, such Seller shall promptly notify the Purchaser in writing and shall provide the Purchaser with copies of any notices and other documents received from any Tax Authority in respect thereof. The Purchaser shall control the conduct of any audit, contest, claim, proceeding or inquiry with respect to any Purchaser Reviewed Return and shall be responsible for all costs (including Taxes) resulting therefrom.
(c) The Purchaser shall prepare and timely file all Tax Returns with respect to the Business and the Purchased Assets for all Straddle Periods and for all taxable periods beginning after the date hereof, and shall pay all Taxes reflected on such Tax Returns. For the avoidance of doubt, the Sellers shall timely pay all income Taxes imposed on the Sellers as a result of the Transactions.
(d) The Company shall not make any election, or take or permit to be taken any other action, the result of which is any direct or indirect Subsidiary of Estrella Media ceasing to be disregarded as an entity separate from Estrella Media within the meaning of Treasury Regulations Section 301.7701-3.
8.6 Insurance Matters.
(a) Purchaser acknowledges and agrees that the Company Insurance Policies are part of the corporate insurance program maintained by the Company and the Company Subsidiaries, and that such policies will not be transferred to the Purchaser. From and after the date hereof, except as set forth in Section 2.1(a), the Company shall retain all right, title and interest in and to the Company Insurance Policies, including the right to any credit or return premiums due, paid or payable in connection with the termination thereof.
(b) With respect to any events or circumstances pertaining to the Business that relate to the period prior to the date hereof and are eligible for coverage under any occurrence-based Company Insurance Policy in effect as of the date hereof (such events or circumstances, a “Pre-Closing Insurance Matter”), until claims can no longer be made under such Company Insurance Policies pursuant to their terms, the Company will use its commercially reasonable efforts to provide the Purchaser with access to such Company Insurance Policies and shall reasonably cooperate with the Purchaser, and take commercially reasonable actions to assist the Purchaser in submitting claims with respect to such Pre-Closing Insurance Matter (including with respect to any collateral requirements under any Company Insurance Policy with respect to a Pre-Closing Insurance Matter). Until the earlier of (A) the date that is eighteen months after the date hereof, and (B) the Option Closing, if requested by Purchaser, the Company will, at the Purchaser’s sole cost and expense (which shall include all insurance renewal costs, including insurance premiums), renew on substantially similar terms all claims made and discovery-based Company Insurance Policies that are in effect at the Effective Time that would provide coverage for the Business for events or circumstances pertaining to the Business that relate to the period prior to the Closing and will use its commercially reasonable efforts to provide Purchaser with access to such policies. The Purchaser and its Affiliates shall be solely responsible for (i) any deductibles, premiums, co-payments, similar cost-sharing payments or self-insured retentions with respect to such Pre-Closing Insurance Matter and (ii) any out-of-pocket costs and expenses of the Company or its Subsidiaries (including reasonable attorneys’ fees) with respect to such Pre-Closing Insurance Matter that are not covered under the relevant Company Insurance Policy. For the avoidance of doubt, neither the Purchaser nor any of its Affiliates shall have, and the Purchaser shall not and shall cause its Affiliates not to seek, any rights to cause the Company or any Company Subsidiaries to pay any deductible or self-insured retention amount with respect to any claim. The Purchaser shall notify the Company promptly of any such Pre-Closing Insurance Matter for which it seeks coverage on behalf of the Purchased Assets and Assumed Liabilities and each party shall keep the other fully informed regarding the status of the Pre-Closing Insurance Matter. From and after the Closing, the Purchaser shall be responsible for securing all insurance it considers appropriate for the Purchased Assets.
8.7 Post-Closing Cooperation; Privilege.
(a) Subject to Section 8.7(b), for a period of seven (7) years after the Closing, upon reasonable notice, the Purchaser and the Company shall furnish or cause to be furnished to each other and their employees, counsel, auditors and other Representatives reasonable access (including the ability to make copies), during normal business hours, to such employees, counsel, auditors and other Representatives, books and records within the control of such party or any of its Affiliates as is reasonably necessary for (i) financial reporting, Tax matters, accounting matters and reporting obligations promulgated by any Governmental Authority or stock exchange, and (ii) defense or prosecution of litigation and disputes with third parties; provided, that, subject to Section 8.7(b), notwithstanding anything to the contrary in this Agreement, neither the Purchaser nor the Company shall be required to provide access to or disclose information to the other party or any of their respective Representatives where (A) upon the advice of counsel, such access or disclosure would reasonably be expected to jeopardize any Privilege (as defined in Section 8.7(b) below), (B) upon the advice of counsel, such disclosure would reasonably be expected to contravene any applicable Law, fiduciary duty or binding agreement; provided that such Party shall use reasonable best efforts to provide such information in a manner that does not violate such applicable Law, duty or agreement; or (C) the Purchaser or any of its Affiliates, on the one hand, and the Company, Company Aggregator or any of their respective Affiliates, on the other hand, are adverse parties in an Action and such access or information is reasonably pertinent thereto.
(b) The Parties agree that their respective rights and obligations to maintain, preserve, assert or waive any attorney-client, work product or similar privileges belonging to any Party with respect to the Businesses, the Purchased Assets, the Assumed Liabilities, the Excluded Assets, or the Excluded Liabilities (collectively, “Privileges”), shall be governed by the provisions of this Section 8.7(b). With respect to (i) Seller Taxes, and (ii) business records of the Sellers or any of their Affiliates prepared in connection with any Transaction Document or the Transactions (the foregoing clauses (i) - (iii), collectively, the “Specified Matters and Information”), the Sellers shall, subject to Section 8.7(a), have sole authority to determine whether to assert or waive any Privileges, including the right to assert any Privilege against the Purchaser and its Affiliates. After the date hereof, the Purchaser shall have sole authority to determine whether to assert or waive any Privileges with respect to matters relating to the Purchased Assets and Assumed Liabilities except for the Specified Matters and Information. The rights and obligations created by this Section 8.7(b) shall apply to all Specified Matters and Information as to which Sellers or their Affiliates would be entitled to assert or has asserted a Privilege without regard to the effect, if any, of the transactions contemplated hereby (the “Privileged Information”). Upon receipt by the Sellers or their Affiliates, or the Purchaser and its Affiliates, as the case may be, of any subpoena, discovery or other request from any Person that actually calls for the production or disclosure of Privileged Information of the other Party, the Sellers or the Purchaser, as applicable, shall promptly notify the other Party of the existence of the request and shall provide such other Party a reasonable opportunity to review the Privileged Information and to assert any rights it may have under this Section 8.7(b) or otherwise to prevent the production or disclosure of Privileged Information. The access to books and records and other information being granted pursuant to this Section 8.7 shall not be asserted by the Sellers or the Purchaser or their respective Affiliates to constitute, or otherwise deemed, a waiver of any Privilege that has been or may be asserted under this Section 8.7(b) or otherwise.
(c) Each party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other pursuant to this Section 8.7. Neither party shall be required by this Section 8.7 to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations.
8.8 Confidentiality; Public Announcements.
(a) From and after the date hereof, each of the Company Aggregator and the Company shall, and shall cause their respective Subsidiaries and use their reasonable best efforts to direct their respective Representatives and Affiliates, to keep confidential and not use (other than with respect to the Company and its Subsidiaries and their respective Representatives, in respect of the ownership and operation of the Excluded Assets and the Excluded Liabilities) any non-public information primarily relating to the Purchased Assets and the Assumed Liabilities (such information, the “Business Confidential Information”). In the event that the Company Aggregator, the Company or any Company Subsidiary is required by any judicial, administrative, legislative or regulatory body (a “Legal Process”) to disclose any of the Business Confidential Information, such Person shall provide the Purchaser with prompt prior written notice of any such requirement, to the extent permitted by such Legal Process, so that the Purchaser may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Section 8.8(a). If, in the absence of a protective order or other remedy or the receipt of a waiver by the Purchaser, the Company Aggregator, the Company or a Company Subsidiary are nonetheless required by such Legal Process to disclose Business Confidential Information, such Person may disclose to the applicable Governmental Authority only that portion of the Business Confidential Information which counsel to such Person advises is legally required to be disclosed; provided, however, that such Person shall use its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded to the disclosed portion of such Business Confidential Information.
(b) The initial press release relating to this Agreement shall be a joint press release, the text of which has been agreed to by each of Parent and the Company prior to the execution of this Agreement and such initial press release (the “Closing Press Release”) shall be released as promptly as reasonably practicable after the execution of this Agreement. Promptly after the execution of this Agreement, Parent shall file a current report on Form 8-K (the “Closing Form 8-K”) with the Closing Press Release and a description of this Agreement as required by, and in compliance with, the applicable securities Laws, which the Company shall have the opportunity to review and comment upon prior to filing and Parent shall consider such comments in good faith. From and after the date hereof, each of Parent, the Company Aggregator and the Company shall not make any public statements (including through social media platforms) with respect to this Agreement or the Transactions without the prior written consent of the other Party (not to be unreasonably withheld, conditioned or delayed) except (i) after prior consultation and good faith consideration of the other Party’s comments to the extent practicable in the circumstances, to the extent required by applicable Law or stock exchange rules (in which case such Party shall, to the extent practicable, consult in good faith with the other Parties before making such public statement), or (ii) for any statement made by a Party in connection with a dispute between the Parties regarding this Agreement or the Transactions. Furthermore, nothing contained in this Section 8.8 shall prevent Parent, the Company or the Company Aggregator and/or their respective Affiliates from furnishing customary or other reasonable information concerning the Transactions to their direct or indirect current or prospective general and limited partners, equity holders, members, managers and investors, in each case, who are subject to customary confidentiality restrictions.
8.9 Restrictive Legends. The Company acknowledges and agrees that the Parent Contributed Securities and any securities issued or issuable with respect to such securities by way of stock dividend or stock split or in connection with a combination of shares, conversion of such securities, recapitalization, merger, consolidation, going private, tender offer, amalgamation, change of control, other reorganization or otherwise, shall bear restrictive legends in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAWS OR DOCUMENTATION REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR APPLICABLE SECURITIES LAWS.
The legend set forth above shall be removed and Parent shall issue a certificate without such legend to the holder of any such securities upon which it is stamped, if (i) such securities are registered for sale under an effective registration statement filed under the Securities Act, (ii) such securities are eligible for resale pursuant to Rule 144 promulgated under the Securities Act, or (iii) if such securities are proposed to be sold pursuant to an exemption from registration and Parent receives an opinion of counsel reasonably satisfactory to Parent and any other documentation reasonably requested by Parent with respect to compliance with such exemption.
8.10 Retained Enforcement Rights. During the period from and after the date hereof and prior to the Option Closing, the Company shall, and shall cause its Subsidiaries to, to the extent permitted by applicable Law, consult with Purchaser with respect to the potential enforcement of the Retained Enforcement Rights with respect to any employee of the Company or any Subsidiary of the Company that is not a Transferred Employee; provided, that, notwithstanding the foregoing, any decision to enforce the Retained Enforcement Rights shall be in the sole discretion of the Company (following consultation with Purchaser as provided in this Section 8.10).
8.11 Further Assurances. At any time and from time to time following the Closing, at the request of any party hereto and without further consideration, Parent, the Purchaser and the Sellers, as applicable, shall execute and deliver, or cause to be executed and delivered, such further documents and instruments and shall take, or cause to be taken, such further actions as the other party may reasonably request or as otherwise may be necessary or desirable to evidence and make effective the Transactions.
8.12 Wrong Pockets; Mail.
(a) Following the Closing, all payments and reimbursements received by the Sellers with respect to any Purchased Asset or Assumed Liability and the Purchaser with respect to any Excluded Assets or Excluded Liabilities, shall be held by such Person in trust for the benefit of the applicable Seller or the Purchaser, as applicable, and, promptly following receipt thereof (and in any case within ten (10) Business Days) paid over to such other Person.
(b) Following the Closing, in the event that through inadvertence, mistake, or otherwise, the Purchaser or the Company discovers that any Purchased Asset or Assumed Liability was retained by a Seller and, as a result, was not transferred, assigned, conveyed, and delivered to the Purchaser at the Closing, the Company shall (and shall cause the other Sellers to) transfer, assign, convey and deliver such Purchased Asset or Assumed Liability, as applicable, to the Purchaser for no additional consideration (with any related cost and expense to be equally borne by the Purchaser and the applicable Seller), and shall execute such further documents and instruments necessary to give effect to and evidence such transfer, assignment, conveyance and delivery to the Purchaser.
(c) Following the Closing, in the event that through inadvertence, mistake, or otherwise, the Purchaser or the Company discovers that any Excluded Asset or Excluded Liability was transferred, assigned, conveyed and delivered to the Purchaser at the Closing, the Purchaser shall transfer, assign, convey and deliver such Excluded Asset or Excluded Liability, as applicable, to the applicable Seller for no additional consideration (with any related cost and expense to be equally borne by the Purchaser and such Seller) and shall execute such further documents and instruments necessary to give effect to and evidence such transfer, assignment, conveyance and delivery to such Seller.
(d) For income Tax purposes, the Parties shall treat any transfer set forth in this Section 8.12 as having occurred at the Closing, except to the extent otherwise required by Law.
(e) The Company and the Sellers authorize the Purchaser, on and after the Closing Date, to receive and open all mail and other communications received by the Purchaser relating to the Business and, except where related to the Excluded Assets or the Excluded Liabilities (discussed below), to deal with the contents of such communications in good faith and in a proper manner. The Company shall (and shall cause the other Sellers to) promptly deliver to the Purchaser any mail or other communication received by the Sellers or their Affiliates after the Closing Date pertaining to the Purchased Assets or the Assumed Liabilities. Parent and the Purchaser authorize the Company and the Company Aggregator, on and after the Closing Date, to receive and open all mail and other communications received by the Company or the Company Aggregator relating to the Excluded Assets and Excluded Liabilities and to deal with the contents of such communications in good faith and in a proper manner. Parent and the Purchaser shall (and shall cause their Affiliates to) promptly deliver to the Company and the Company Aggregator any mail or other communication received by Parent, the Purchaser or their respective Affiliates after the Closing Date pertaining to the Excluded Assets or the Excluded Liabilities.
8.13 Bulk Sales Laws. Each party hereto hereby waives compliance by the Sellers with the provisions of any applicable “bulk sales,” “bulk transfer” or similar laws in connection with the consummation of the Transactions (other than any such law relating to Taxes); provided, that any Liability resulting or arising from any violation of or failure to comply with any bulk sales, bulk transfer or similar law (other than any such law relating to Taxes) of any jurisdiction in connection with the consummation of the Transactions shall be an Assumed Liability for all purposes under this Agreement.
8.14 Release.
(a) Effective as of the Closing, each of the Company and the Company Aggregator, for and on behalf of themselves and their respective Affiliates and their respective successors and assigns (the “Seller Releasing Parties”), hereby releases, acquits and forever discharges Parent, the Purchaser, and their respective Affiliates from any and all manner of Proceedings and Liabilities whatsoever in law or equity, whether known or unknown, liquidated or unliquidated, fixed, contingent, direct or indirect, that any Seller Releasing Party ever had, has or may have against Parent, the Purchaser, or any of their Affiliates by reason of the allocation of the Purchase Price, or any other amounts payable or paid by either Parent or the Purchaser hereunder, among the Sellers or any of their Affiliates. Notwithstanding anything herein to the contrary, nothing in this Section 8.14(a) shall operate to release, acquit or discharge any of the obligations, covenants and agreements arising under this Agreement or any other Transaction Documents. The Company and the Company Aggregator each acknowledge and agree that the agreements contained in Section 8.14(a) are an integral part of the transactions contemplated by this Agreement and that, without such agreements, neither Parent nor Purchaser would enter into this Agreement.
(b) Effective as of the Closing, each of Parent and the Purchaser, for and on behalf of themselves and their respective Affiliates and their respective successors and assigns (the “Purchaser Releasing Parties”), hereby releases, acquits and forever discharges Parent, the Purchaser, and their respective Affiliates from any and all manner of Proceedings and Liabilities whatsoever in law or equity, whether known or unknown, liquidated or unliquidated, fixed, contingent, direct or indirect, that any Purchaser Releasing Party ever had, has or may have against the Company, the Company Aggregator, or any of their Affiliates by reason of the allocation of the Purchase Price, or any other amounts payable or paid by either Parent or the Purchaser hereunder, among the Sellers or any of their Affiliates. Notwithstanding anything herein to the contrary, nothing in this Section 8.14(b) shall operate to release, acquit or discharge any of the obligations, covenants and agreements arising under this Agreement or any other Transaction Documents. Parent and the Purchaser each acknowledge and agree that the agreements contained in Section 8.14(b) are an integral part of the transactions contemplated by this Agreement and that, without such agreements, neither the Company noir the Company Aggregator would enter into this Agreement.
(c) Notwithstanding anything to the contrary set forth herein, nothing in this Agreement shall limit a claim for Fraud.
8.15 Legal Entity Names. Effective immediately after Closing, Purchaser, on behalf of itself and its Affiliates, hereby grants a limited, non-exclusive, non-sublicensable right to Sellers and their Affiliates to use “ESTRELLA” as part of each of their legal entity names solely in the form used in such legal entity names immediately prior to the Closing Date (“Approved Entity Names”) solely to the extent and only for the time period during which any Seller or any of Sellers’ Affiliates require such Approved Entity Name to maintain its or their Company FCC Licenses. If any Seller or any Seller Affiliate no longer requires such Approved Entity Name to maintain its Company FCC License, such entity shall, as soon as practicable, make all filings with any and all offices, agencies and bodies and take all other actions reasonably necessary to adopt a new legal entity name that does not include “ESTRELLA” or any term or Trademark that is confusingly similar thereto.
8.16 Intellectual Property Chain of Title Clean-Up. Within three (3) months after the Closing Date, at Purchaser’s sole cost and expense, the Sellers shall use their reasonable best efforts to, and shall reasonably cooperate and consult in advance with Parent to, take all steps necessary or advisable under applicable Laws to submit for recording with the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable, filings to: (i) release the security interests in favor of CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH recorded at Reel/Frames 5426/0935, 3543/0664, 3305/0528, 2909/589, and 2544/857; (ii) release the security interest in favor of WELLS FARGO FOOTHILL INC. recorded at Reel/Frame 3188/0462; and (iii) change the named owner of U.S. copyrights #PA0001383676 and #PAU003112933 to a Seller mutually-agreed to by the Company and Purchaser.
ARTICLE 9. GENERAL PROVISIONS
9.1 Survival. None of the representations or warranties contained in this Agreement shall survive the Closing and all such representations and warranties shall terminate and expire upon the occurrence of the Closing (and there shall be no liability after the Closing in respect thereof); provided, that nothing in the foregoing shall affect: (i) those covenants and agreements contained herein that contemplate performance after the Closing or by their terms expressly apply in whole or in part after the Closing, and (ii) this Article 9 and any corresponding definitions set forth in Article 1, each of which shall survive the Closing.
9.2 Notices. All notices (including notices for consent under this Agreement), requests, claims, demands and other communications hereunder shall be: (a) in writing; (b) sent by messenger, certified or registered mail, a reliable overnight delivery service or email, charges prepaid as applicable, to the appropriate address(es) (including with a copy) set forth below; and (c) deemed to have been given on the date of delivery to the addressee (or, if the date of delivery is not a Business Day, on the first (1st) Business Day after the date of delivery), as evidenced by: (i) a receipt executed by the addressee (or a responsible person in his or her office), the records of the person delivering such communication or a notice to the effect that such addressee refused to claim or accept such communication, if sent by messenger, mail or express delivery service; or (ii) confirmation of transmission or receipt generated by the sender’s computer showing that such communication was sent to the appropriate electronic mail address on a specified date, if sent by email. All such communications shall be sent to the following addresses, or to such other addresses as any party may inform the others by giving five (5) Business Days’ prior written notice pursuant to this Section 9.2:
if to Parent or the Purchaser:
MediaCo Holding Inc.
48 West 25th Street, Floor 3
New York, NY 10010
Attention: Chief Financial Officer and Vice President of Legal
Email: legal@mediacoholding.com with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention: Philip Richter; Colum J. Weiden
Email: Philip.Richter@friedfrank.com; Colum.Weiden@friedfrank.com
if to the Company:
Estrella Broadcasting, Inc
1 Estrella Way
Burbank, CA 91504
Attention: Peter Markham
Email: pmarkham@EstrellaMedia.com
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Attention: Brian Scrivani; Jeffrey Marell
Email: bscrivani@paulweiss.com; jmarell@paulweiss.com
if to the Company Aggregator:
SLF LBI Aggregator, LLC
40 West 57th Street, 32nd Floor
New York, NY 10019
Attention: Colbert Cannon
Email: colbert.cannon@hpspartners.com
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Attention: Brian Scrivani; Jeffrey Marell
Email: bscrivani@paulweiss.com; jmarell@paulweiss.com
9.3 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.
9.4 Entire Agreement; Successors and Assigns. This Agreement (including the Disclosure Schedules (as defined below) and the Exhibits, schedules and annexes hereto and thereto) and the Transaction Documents constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that no Party may assign, delegate or otherwise transfer any of its rights or obligations pursuant to this Agreement without the prior written consent of the other Parties. Any attempted assignment of this Agreement not in accordance with the terms of this Section 9.4 shall be void ab initio.
9.5 No Third-Party Beneficiaries. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any person, other than the Parties, any right or remedies under or by reason of this Agreement. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties and may represent an allocation of risk among the Parties associated with particular matters regardless of the knowledge of any of the Parties. Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
9.6 Disclosure Schedules. The Company Disclosure Schedule, the Parent Disclosure Schedule (collectively, the “Disclosure Schedules”) and the Exhibits and Schedules attached hereto and thereto shall be construed with, and as an integral part of, this Agreement. Each capitalized term used in any Exhibit, Schedule or Disclosure Schedule but not otherwise defined therein shall be defined as set forth in this Agreement. The Disclosure Schedules have been arranged in numbered and lettered sections and subsections corresponding to the applicable numbered and lettered sections and subsections contained in this Agreement. Each item disclosed in the applicable Disclosure Schedule shall constitute an exception to, or as applicable, disclosure for the purposes of, the representations and warranties (or covenants, as applicable) to which it makes reference and shall also be deemed to be constructively disclosed or set forth in any other section in such Disclosure Schedule relating to other sections of this Agreement to the extent a cross-reference is expressly made to such other section in such Disclosure Schedule or to the extent that the relevance of such item as an exception to, or as applicable, disclosure for the purposes of, another section of this Agreement is reasonably apparent from the face of such disclosure that such disclosure also qualifies or applies to, or is disclosed for the purposes of, such other section of this Agreement. The fact that any item of information is disclosed in any Disclosure Schedule shall not be construed to mean that such information is required to be disclosed hereby. Such information and the dollar thresholds set forth herein shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect,” or other similar terms in this Agreement. The inclusion of any item in the Disclosure Schedules shall not constitute an admission by the Company Aggregator, the Company or Parent, as applicable, that such item is or is not material. No disclosure in any Disclosure Schedule relating to any possible breach or violation of any Contract, Law or order shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. The Disclosure Schedules and the information contained in the Disclosure Schedules are intended only to qualify or provide disclosure for the purposes of the applicable representations, warranties and covenants contained in this Agreement and shall not be deemed to expand in any way the scope or effect of any such representations, warranties or covenants.
9.7 Governing Law; Consent to Jurisdiction.
(a) This Agreement, and any and all claims arising directly or indirectly out of or otherwise concerning this Agreement (whether based in contract, tort or otherwise) shall be governed by, and construed and enforced in accordance with, the Laws of the State of Delaware (without regard to any choice or conflicts of laws principles, whether of the State of Delaware or any other jurisdiction, that might direct the application of another substantive Law to govern this Agreement).
(b) With respect to any and all Proceedings arising directly or indirectly out of or otherwise relating to this Agreement or the Transactions, each of the Parties: (i) irrevocably and unconditionally submits and consents to the exclusive jurisdiction of: (A) the Court of Chancery of the State of Delaware or, if such Court of Chancery lacks subject matter jurisdiction, the Complex Commercial Division of the Superior Court of the State of Delaware or (B) in the event that a Proceeding involves claims exclusively within the jurisdiction of the federal courts, in the United States District Court for the District of Delaware (all such courts, collectively, the “Chosen Courts” and, individually, each a “Chosen Court”), for itself and with respect to its property; (ii) agrees that all claims in respect of such Proceeding shall be heard and determined only in any Chosen Court (and the appropriate respective appellate courts therefrom); (iii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court; (iv) agrees that, except in connection with any Proceeding brought against a party in another jurisdiction by an independent third person, it shall not bring any Proceeding directly or indirectly relating to this Agreement or any of the transactions contemplated hereby in any forum other than a Chosen Court, except for the purpose of enforcing any award or judgment; and (v) agrees that it shall not assert and waives any objection it may have based on inconvenient forum to the maintenance of any action or proceeding so brought. Each Party may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9.2. Nothing in this Section 9.7, however, shall affect the right of any person to serve legal process in any other manner permitted by Law.
9.8 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY (A) ARISING UNDER THIS AGREEMENT OR UNDER ANY TRANSACTION DOCUMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH OF THE PARTIES (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.8.
9.9 Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
9.10 Counterparts; Effectiveness. This Agreement may be executed in two (2) or more counterparts (which may be delivered by electronic transmission), each of which (when executed) shall be deemed an original, and all of which together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.
9.11 Fees and Expenses. Except as expressly set forth herein, each Party shall bear its own expenses incurred in connection with this Agreement and the Transactions, including all fees of its legal counsel, financial advisors, auditors and accountants; provided, that, for the avoidance of doubt, the Purchaser shall pay all Transfer Taxes in accordance with Section 8.5(a).
9.12 Specific Performance. The Parties agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, shall occur in the event that the Parties do not perform the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the Transactions) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the Parties acknowledge and agree that (i) the Parties shall be entitled to an injunction, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof (which, for the avoidance of doubt, includes the Parties’ obligation to consummate the Transactions), in addition to any other remedy to which they are entitled at Law or in equity and (ii) the right to seek specific enforcement is an integral part of the Transactions and without that right, none of the Parties would have entered into this Agreement. Each of the Parties agrees that it shall not oppose the granting of an injunction, specific performance and/or other equitable relief on the basis that any other Party has an adequate remedy at Law or that any award of an injunction, specific performance and/or other equitable relief is not an appropriate remedy for any reason at Law or in equity. Each of the Parties further agrees that the only permitted objection that it may raise in response to any action for an injunction, specific performance, or other equitable relief is that it contests the existence of a breach or threatened breach of this Agreement. Any Party seeking: (A) an injunction or injunctions to prevent breaches of this Agreement; (B) to enforce specifically the terms and provisions of this Agreement; and/or (C) other equitable relief, shall not be required to show proof of actual damages or to provide any bond or other security in connection with any such remedy.
9.13 No Recourse. All claims, obligations, liabilities or causes of action (whether in contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement or the other Transaction Documents, or the negotiation, execution or performance or non-performance of this Agreement or the other Transaction Documents (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement or the other Transaction Documents), may be made only against (and such representations and warranties are those solely of) the persons that are expressly identified as parties to this Agreement or the applicable Transaction Document (the “Contracting Parties”) except as set forth in this Section 9.13 or otherwise in this Agreement. In no event shall any Contracting Party have any shared or vicarious liability for the actions or omissions of any other person. Except as otherwise expressly set forth in this Agreement or any other Transaction Document, no person who is not a Contracting Party, including any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, financing source, attorney or Representative or assignee of any Contracting Party, or any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, financing source, attorney or Representative or assignee of any of the foregoing (collectively, the “Nonparty Affiliates”), shall have any liability (whether in contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) for any obligations or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or the other Transaction Documents or for any claim based on, in respect of, or by reason of this Agreement or the other Transaction Documents or their negotiation, execution, performance or breach and, to the maximum extent permitted by applicable Law; and each party hereto waives and releases all such liabilities, claims, causes of action and obligations against any such Nonparty Affiliates. The Parties acknowledge and agree that the Nonparty Affiliates are intended third-party beneficiaries of this Section 9.13. Notwithstanding anything to the contrary herein, none of the Contracting Parties or any Nonparty Affiliate shall be responsible or liable for any multiple, consequential, indirect, special, statutory, exemplary or punitive damages which may be alleged as a result of this Agreement, the Transaction Documents or any other agreement referenced herein or therein or the transactions contemplated hereunder or thereunder, or the termination or abandonment of any of the foregoing.
[Signature Page Follows.]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| | PARENT: |
| | | |
| | MEDIACO HOLDING INC. |
| | | |
| | By: | /s/ Kudjo Sogadzi |
| | Name: | Kudjo Sogadzi |
| | Title: | Interim President and Chief Operating Officer |
| | | |
| | PURCHASER: |
| | | |
| | MEDIACO OPERATIONS LLC |
| | | |
| | By: | /s/ Kudjo Sogadzi |
| | Name: | Kudjo Sogadzi |
| | Title: | President and Chief Operating Officer |
| | | |
| | COMPANY: |
| | | |
| | ESTRELLA BROADCASTING, INC. |
| | | |
| | By: | /s/ Brian Kei |
| | Name: | Brian Kei |
| | Title: | Chief Financial Officer |
| | | |
| | COMPANY AGGREGATOR: |
| | | |
| | SLF LBI AGGREGATOR, LLC |
| | | |
| | By: | /s/ Colbert Cannon |
| | Name: | Colbert Cannon |
| | Title: | Managing Director |
[Signature Page to Asset Purchase Agreement]
