ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of the 18th day of September,
1995 (this "AGREEMENT"), by and between PILOT COMMUNICATIONS OF
SYRACUSE, INC., a Delaware corporation ("BUYER"), and ORANGE
COMMUNICATIONS, INC., a Delaware corporation ("SELLER").
WITNESSETH:
WHEREAS, Seller is the licensee of radio stations WNTQ(FM) and
WNDR(AM), Syracuse, New York (each, a "STATION" and together, the
"STATIONS") pursuant to authorizations (the "FCC AUTHORIZATIONS")
issued by the Federal Communications Commission (the "FCC");
WHEREAS, on the terms and conditions described herein, Seller
desires to sell and Buyer desires to acquire substantially all of the
assets owned or leased by Seller and used or useful in connection
with the operation of the Stations; and
WHEREAS, simultaneously with the execution of this Agreement,
Seller and Buyer have entered into a time brokerage agreement (the
"TBA") pursuant to which Seller shall sell and Buyer shall purchase
substantially all of the Stations' time for the broadcast of
programming and for the sale of advertising included within that
programming pending consummation of the sale of the Stations to
Buyer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, for themselves, their
successors and assigns, agree as follows:
ARTICLE 1.
SALE OF ASSETS AND TERMS OF PAYMENT
1.1 TRANSFER OF ASSETS. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date (as defined in
Section 2.1 hereof) Seller shall sell and deliver to Buyer, and Buyer
shall purchase and accept from Seller, all of the assets and
properties owned or leased by Seller, tangible or intangible, of
every kind and description used or useful in connection with the
business and operation of the Stations as going concerns (but
excluding the Excluded Assets described in Section 1.2), including
without limitation, the following (collectively, the "ASSETS"):
(a) All of Seller's equipment, machinery, furniture,
furnishings, fixtures, office materials and other tangible personal
property used or useful in the conduct of the business or operations
of the Stations (the "TANGIBLE PERSONAL PROPERTY"), together with
such improvements and additions thereto and replacements thereof
between
Page 2
the date hereof and the Closing Date, including without
limitation, the property set forth on SCHEDULE 1 hereto;
(b) The real property, buildings, fixtures and other
improvements thereon, leasehold interests, easements, licenses,
rights of access, rights of way, improvements and other real property
interests, which are held or owned by the Seller and used or useful
in the business operations of the Stations as of the date hereof (the
"REAL PROPERTY"), as described in SCHEDULE 2 hereto;
(c) All of the licenses, permits and other
authorizations, including the FCC Authorizations (collectively, the
"LICENSES"), issued by the FCC, the Federal Aviation Administration
(the "FAA"), and any other federal, state or local governmental
authorities to Seller in connection with and necessary for the
conduct of the business and the full on-air operations of the
Stations in accordance with all applicable laws, rules and
regulations, including the rules, regulations and policies of the
FCC, including without limitation, those set forth on SCHEDULE 3
hereto;
(d) All rights of Seller under (i) the contracts,
leases and agreements in connection with the business and operations
of the Stations which are set forth on SCHEDULE 4 hereto, (ii) any
additional contracts, leases and agreements entered into by Seller in
the ordinary course of business of the Stations between the date of
this Agreement and the Closing Date which Buyer expressly agrees to
assume in writing, (iii) all cash advertising contracts of the
Stations entered into by Seller in the ordinary course of business of
the Stations together with those entered into between the date of
this Agreement and the Closing Date ("CASH SALES AGREEMENTS"), and
(iv) all contracts for the sale of time on the Stations in exchange
for goods or services which are listed on SCHEDULE 5 hereto ("TRADE
AGREEMENTS"), which schedule sets forth the value of time owed and
the value of goods and services to be received under each such Trade
Agreement (collectively, the "ASSUMED CONTRACTS").
(e) All of Seller's right, title and interest in and to
all copyrights, licenses, patents, trademarks, service marks, the
call letters WNTQ(FM) and WNDR(AM) and any variation thereof and
logotypes, trade names (including registrations and applications for
registration of any of the foregoing) and all goodwill associated
therewith, and other similar intangible rights and interests issued
to or owned by Seller and used in connection with the full on-air
broadcast operations of the Stations, including without limitation,
those set forth on SCHEDULE 6 hereto (the "INTELLECTUAL PROPERTY");
(f) All logs, books, files, data, software, equipment
manuals and warranties, and other records used or useful in the
conduct of the business and full on-air broadcast operations of the
Stations, including without limitation all electronic data processing
files and systems, advertiser lists, sales and operating plans, FCC
filings and all records required by the FCC to be kept by the
Stations; and
Page 3
(g) All accounts receivable relating to or arising out
of the operation of the Stations prior to the Adjustment Date (as
defined in Section 1.5 hereof).
1.2 EXCLUDED ASSETS. The following assets relating to the
business of the Stations shall be retained by Seller and shall not be
sold, assigned or transferred to Buyer (the "EXCLUDED ASSETS"):
(a) Cash on hand and in banks (or their equivalents)
and investment securities belonging to Seller and relating to the
Station as of the Closing Date;
(b) Claims by Seller with respect to the Excluded
Assets and liabilities not assumed by Buyer, including without
limitation claims for tax refunds and counter-claims with respect to
obligations and liabilities not being assumed by Buyer hereunder;
(c) All contracts of insurance and other contracts
which are not expressly assumed by Buyer hereunder;
(d) All contracts that have terminated or expired prior
to the Closing Date in the ordinary course of business and as
permitted hereunder;
(e) Any pension, profit-sharing, retirement, stock
purchase or savings plans or trusts and any assets thereof and all
other employee benefit plans; and
(f) All prepaid expenses and taxes (which shall be
prorated as provided in Section 1.5 hereof); and
(g) The assets, if any, listed on SCHEDULE 7 hereto.
1.3 LIABILITIES.
(a) The Assets shall be sold and conveyed to Buyer free
and clear of all liabilities (absolute or contingent), obligations,
liens (including tax, mechanics' and materialmen's liens), pledges,
conditional sales agreements, charges, mortgages, security interests,
encumbrances and restrictions of any type or amount (collectively,
"LIENS") created or suffered by Seller prior to the Closing Date,
whether existing now or in the future, other than Permitted Liens (as
defined in Section 8.9(c) hereof).
(b) As part of the consideration for the above sale,
Buyer shall assume, in writing, and agree to pay, perform and
discharge Seller's obligations arising or to be performed after
midnight local time on the Adjustment Date under the Assumed
Contracts (the "ASSUMED LIABILITIES"). Except as provided in the
preceding sentence,
Page 4
Buyer is not agreeing to, and shall not, assume
any other liability, obligation, undertaking, expense or agreement of
Seller of any kind, absolute or contingent, known or unknown, and the
execution and performance of this Agreement shall not render Buyer
liable for any such liability, obligation, undertaking, expense or
agreement. All of such liabilities and obligations shall be referred
to herein as the "RETAINED LIABILITIES." Without limiting the
generality of the foregoing, it is understood and agreed that Buyer
is not agreeing to, and shall not, assume (i) any liability or
obligation of Seller to Seller's employees under any existing written
or oral agreements with Seller, including any such liability or
obligation in respect of wages, salaries, bonuses, accrued vacation
or sick pay or any other matter other than liabilities and
obligations arising following the Closing, or (ii) any liability
arising out of any termination by Seller of the employment of any
employee of the Stations or any liability for any employee benefit
plan or arrangement of Seller for the Stations' employees.
1.4 CONSIDERATION.
(a) Upon the terms and subject to the conditions
contained in this Agreement, and in consideration of the sale of the
Assets, on the Closing Date Buyer shall pay to Seller, by wire
transfer of immediately available funds, an aggregate amount of
Twelve Million Five Hundred Thousand Dollars ($12,500,000) (the
"PURCHASE PRICE"). The parties agree that One Million Two Hundred
Fifty Thousand Dollars ($1,250,000) of the Purchase Price shall be
allocated to the Covenant Not to Compete (as defined in Section
1.4(c) hereof).
(b) Concurrently with the execution of this Agreement,
Buyer agrees to deliver to First Liberty National Bank, Washington,
D.C. ("ESCROW AGENT") an irrevocable standby letter of credit in the
amount of Five Hundred Thousand Dollars ($500,000) as an earnest
money deposit (the "EARNEST DEPOSIT"), which Earnest Deposit shall be
released to Buyer or otherwise be available to Seller in accordance
with the provisions of this Agreement.
(c) At Closing, Seller and Frank D. Osborn ("OSBORN")
shall execute and deliver to Buyer a Covenant Not to Compete in the
form attached hereto as EXHIBIT A (the "COVENANT NOT TO COMPETE"),
pursuant to which Seller and Osborn agree not to compete with Buyer
in the Syracuse radio market, as defined by Arbitron, for a period of
two (2) years following the Closing.
(d) The Purchase Price shall be allocated among the
Assets as mutually agreed upon by Buyer and Seller prior to Closing.
In the event that the parties shall be unable to mutually agree upon
the allocation by Closing, Buyer and Seller shall each select an
independent certified public accountant within ten (10) days after
the Closing and such independent certified public accountants shall
within ten (10) days select a third independent certified public
accountant who shall make a determination of
Page 5
the allocation within
sixty (60) days after his or her selection. Buyer and Seller agree
that the allocation determined by their mutual agreement or otherwise
by the independent certified public accountant, as the case may be,
shall be conclusive and binding on Buyer and Seller for all purposes,
including without limitation, reporting and disclosure requirements
of the Internal Revenue Service (including the reporting requirements
of Section 1060(b) of the Internal Revenue Code of 1986, as amended).
Buyer and Seller agree and acknowledge that no part of the Purchase
Price shall be allocated to the leasehold interests described on
SCHEDULE 2 hereto.
1.5 ADJUSTMENTS AND PRORATIONS.
(a) To the extent not already prorated under the TBA,
the parties agree to prorate all income from the operation of the
Stations and all expenses incurred, accrued or payable, as of 11:59
p.m. local time of the day preceding the Closing (the "ADJUSTMENT
DATE"). The items to be prorated shall include, but not be limited
to, power and utilities charges, real and personal property taxes
upon the basis of the most recent tax bills and information
available, property and equipment rentals, security deposits and
similar prepaid and deferred items.
(b) On the Closing Date, the adjustments and prorations
shall, insofar as feasible, be determined and paid on the Closing
Date, with final settlement and payment to be made in accordance with
the procedures set forth in this Section 1.5. Within forty (45) days
after the Closing Date, Buyer shall prepare a closing balance
sheet/income statement of the Stations (the "CLOSING BALANCE SHEET")
as of midnight local time of the Adjustment Date. Within sixty (60)
days after the Closing Date, final adjustments pursuant to this
Section 1.5 and any required refund or payment to Seller or Buyer, as
the case may be, shall be made on the basis of the Closing Balance
Sheet. If any dispute arises over the amount to be refunded or paid,
such refund or payment shall nonetheless be promptly made to the
extent such amount is not in dispute.
(c) If any such dispute cannot be resolved by the
parties within sixty (60) days after the Closing Date, it shall be
referred to a mutually satisfactory independent public accounting
firm which has not been employed by any party hereto for the two
years preceding the date of such referral. The determination of such
firm shall be conclusive and binding on each party, and judgment upon
any such determination can be entered in any court having
jurisdiction over the matter. One-half ( 1/2 )of the fees of such
firm shall be borne by Seller, and one-half ( 1/2 ) shall be borne
by Buyer. If the parties cannot select such accounting firm, then
the selection of such accounting firm shall be made by the American
Arbitration Association located in Washington, D.C., which accounting
firm shall be empowered to resolve such dispute among the parties.
1.6 FCC FILINGS AND MUTUAL COOPERATION. At the earliest
mutually agreeable date, but not later than five (5) business days
after the date of this Agreement,
Page 6
Buyer and Seller shall execute,
file and vigorously prosecute an application with the FCC (the "FCC
APPLICATION") requesting its consent to the assignment, from Seller
to Buyer, of all FCC Authorizations and applications pertaining to
the Stations (the "FCC CONSENT"). Buyer and Seller shall take all
reasonable steps to cooperate with each other and with the FCC to
secure such FCC Consent without delay, and to promptly consummate
this Agreement in full (but neither Seller nor Buyer shall have any
obligation to take any steps which would have a material adverse
effect upon it or upon any affiliated entity). Seller and Buyer
shall jointly oppose any petitions to deny, objections, requests for
reconsideration or judicial review of the FCC Consent and shall
jointly request from the FCC an extension of the effective period of
the FCC Consent if the Closing shall not have occurred prior to the
expiration of the original effective period of the FCC Consent;
PROVIDED, HOWEVER, that nothing in this Section 1.6 shall be
construed to limit Seller's or Buyer's right to terminate this
Agreement pursuant to Article 10 hereof.
ARTICLE 2.
THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing (the "CLOSING")
of the transactions contemplated by this Agreement shall be held at
the offices of Day, Berry & Howard, City Place One, Hartford,
Connecticut 06013 at 10:00 a.m. on a date fixed by Buyer but in no
event later than ten (10) business days following the date upon which
the FCC Consent shall have become a Final Order. For purposes of
this Agreement, the term "FINAL ORDER" means action by the FCC
consenting to an application which is not reversed, stayed, enjoined,
set aside, annulled or suspended, and with respect to which action no
timely request for stay, petition for rehearing or appeal is pending,
and as to which the time for filing any such request, petition or
appeal or for reconsideration by the FCC on its own motion has
expired.
2.2 DELIVERIES BY SELLER. Prior to or at the Closing, Seller
shall deliver to Buyer the following, each of which shall be in form
and substance reasonably satisfactory to Buyer and its counsel:
(a) Bills of sale, assignments, bargain and sale deeds
with lien covenants and other instruments of transfer and conveyance
in customary form and substance so as to effectively and legally
transfer and assign to Buyer the Assets and effectively vest in Buyer
good and marketable title to the Assets;
(b) Opinion of Seller's counsel dated as of the Closing
Date, and addressed to Buyer, substantially in the form attached
hereto as EXHIBIT B;
Page 7
(c) Current estoppel certificates and consents to
assignment, in substantially the form of EXHIBIT C attached hereto,
of the lease agreements set forth on SCHEDULE 2 hereto and the
original of all necessary consents to assignments obtained by Seller
from third parties relating to the Assumed Contracts;
(d) The Covenant Not to Compete duly executed by Seller
and Osborn;
(e) Certified copies of the resolutions of the Board of
Directors and, if necessary, shareholders of Seller authorizing and
approving the execution and delivery of this Agreement and each of
the other documents to be delivered in connection herewith and
authorizing the consummation of the transactions contemplated hereby
and thereby;
(f) An incumbency certificate of the officers of
Seller;
(g) A certificate, dated the Closing Date, executed by
the President of Seller, certifying the fulfillment of the conditions
set forth in Section 8.1 hereof;
(h) All keys to and actual possession of the Assets in
the condition required under this Agreement;
(i) Such other documents, instruments and agreements
necessary to consummate the transactions contemplated by this
Agreement, each in form and substance reasonably satisfactory to
Buyer and its counsel; and
(j) Receipt for the Consideration.
2.3 DELIVERIES BY BUYER. Prior to or at the Closing, Buyer
or the Escrow Agent, as applicable, shall deliver to Seller the
following, each of which shall be in form and substance reasonably
satisfactory to Seller and its counsel:
(a) The Consideration as provided in Section 1.4
hereof;
(b) An instrument of assumption of the Assumed
Liabilities;
(c) Certified copies of the resolutions of the Board of
Directors of Buyer authorizing and approving the execution and
delivery of this Agreement and each of the other documents to be
delivered in connection herewith and authorizing the consummation of
the transactions contemplated hereby and thereby;
(d) An incumbency certificate of the officers of Buyer;
Page 8
(e) A certificate, dated the Closing Date, executed by
the President of Buyer, certifying the fulfillment of the conditions
set forth in Section 7.1 hereof;
(f) Opinion of Buyers' counsel dated as of the Closing
Date, and addressed to Buyer, substantially in the form attached
hereto as EXHIBIT D; and
(g) Such other documents, instruments and agreements
necessary to consummate the transactions contemplated by this
Agreement, each in form and substance reasonably satisfactory to
Seller and its counsel.
2.4. RISK OF LOSS. Risk of loss or damage to the Assets by
fire or other casualty up to the time of the Closing shall remain
with Seller, and after the Closing such risk of loss or damage shall
be borne by Buyer.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND AUTHORITY. Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware. Seller is duly licensed or qualified to do
business and is in good standing and authorized to do business in
each jurisdiction where the ownership or use of the Assets and the
conduct of the business of the Stations requires such licensing or
qualification. Seller has full corporate power to carry on the
business of the Stations as it is now being conducted and to own and
operate the Assets. Seller has the power and authority to execute
and deliver this Agreement and, subject to the receipt of the
necessary consents reflected on Schedule 4 hereto, to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by Seller and no other
proceedings on the part of Seller are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by
Seller and constitutes the legal, valid and binding obligation of
Seller enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting generally
the enforcement of creditors' rights or the application of principles
of equity.
3.2 FINANCIALS. Seller has delivered to Buyer copies of the
unaudited balance sheet and income statement of the Stations as of
and for the fiscal years ended December 31, 1993 and December 31,
1994, together with the unaudited balance sheet and income statement
of the Stations as of and for the period ending August 31, 1995, in
Page 9
each case certified by the chief financial officer of Seller. All
such financial statements are prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. All such financial statements
fairly present in all material respects: (i) the assets and
liabilities of the Stations as at the respective dates of the balance
sheets; and (ii) the revenues and expenses of the Stations for the
fiscal periods ended on such dates. August 31, 1995 is sometimes
referred to herein as the "BALANCE SHEET DATE."
3.3 BUSINESS SINCE THE BALANCE SHEET DATE. From the Balance
Sheet Date to the date of this Agreement, the business of the
Stations has been conducted in substantially the same manner as it
was before the Balance Sheet Date. Since the Balance Sheet Date
there has been no material adverse change in the business, condition
(financial or otherwise) or results of operations of the Stations
(other than Arbitron ratings performance).
3.4 NO DEFAULTS. The execution, delivery and performance of
this Agreement by Seller will not: (a) constitute a violation of or
conflict with Seller's articles of incorporation or by-laws; (b)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under or conflict with any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, agreement, lease or other instrument or obligation
relating to the business of the Stations and to which Seller is
subject or to which any of the Assets may be subject, except for such
defaults (or rights of termination, cancellation or acceleration) as
to which requisite waivers or consents have been obtained and
delivered to Buyer; (c) violate any law, statute, rule, regulation,
order, writ, injunction or decree of any federal, state or local
governmental authority or agency and which is applicable to Seller or
any of the Assets; or (d) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever on any of the
Assets.
3.5 LICENSES.
(a) SCHEDULE 3 hereto contains a true and complete list
of the FCC Authorizations and other licenses, permits or other
authorizations from governmental or regulatory authorities which are
required for the lawful conduct of the business and operations of the
Stations in the manner and to the full extent they are presently
operated. Seller is the authorized legal holder of the FCC
Authorizations and other licenses, permits and authorizations listed
on SCHEDULE 3, none of which is subject to any restrictions or
conditions which would limit in any respect the full operation of the
Stations as now operated. All reports and filings required to be
filed with the FCC by Seller with respect to the operation of the
Stations have been timely filed, and all such reports and filings are
accurate and complete in all material respects. Seller maintains
appropriate public inspection files for the Stations in accordance
with FCC rules.
Page 10
(b) The FCC Authorizations listed on SCHEDULE 3 are in
good standing, in full force and effect and have not been revoked,
canceled or rescinded. Seller is operating the Stations in
accordance in all material respects with the FCC Authorizations, the
underlying construction permits and all rules, regulations and
policies of the FCC. There is not now pending or, to the knowledge
of Seller, threatened any action by or before the FCC to revoke,
cancel, rescind, modify or refuse to renew any of such FCC
Authorizations, and no event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation,
cancellation or rescission of any of the FCC Authorizations. Seller
has no knowledge of any protests, mutually exclusive applications, or
proceedings of any kind, whether pending or threatened before the FCC
or other authority, which might adversely affect the Stations or
Seller's ability to assign all Assets to Buyer. There is not now
issued or outstanding, or to the knowledge of Seller, pending or
threatened, by or before the FCC, any order to show cause, notice of
violation, notice of apparent liability, or notice of forfeiture or
complaint against Seller with respect to the Stations. Neither
Station is short-spaced, on a grandfathered basis or otherwise, to
any existing station, outstanding construction permit or pending
application therefor, domestic or international, or to any existing
or proposed broadcast radio allotment, domestic or international. To
the knowledge of Seller, neither Station is causing interference in
violation of FCC rules to the transmissions of any other broadcast
station or communications facility or has received any complaints
with respect thereto, and no other broadcast station or
communications facility is causing interference in violation of FCC
rules to either Station's transmissions or the public's reception of
such transmissions.
3.6 CONTRACTS. SCHEDULE 4 hereto contains all contracts,
leases and agreements, written or oral (including any amendments and
other modifications thereto) relating to Seller's operation of the
Stations, other than cash advertising sales contracts and Trade
Agreements (the "CONTRACTS"). Seller has delivered to Buyer true and
complete copies of all written Contracts. All of the Contracts are
in full force and effect and are valid, binding and enforceable in
accordance with their terms. Seller is not in breach, nor to
Seller's knowledge is any other party in breach, of the terms of any
of such Contracts. SCHEDULE 4 specifies by asterisk those Contracts
the assignment of which shall require the consent of any third party,
and specifies with two asterisks those Contracts the assignment of
which shall be a condition precedent to Buyer's obligation to close
(the "REQUIRED CONTRACTS"). Except for any necessary third-party
consents as reflected on SCHEDULE 4 hereto, Seller has full legal
power and authority to assign its rights under the Assumed Contracts
to Buyer in accordance with this Agreement, and such assignment will
not affect the validity or enforceability of any of the Assumed
Contracts. Pursuant to the terms of each of the Trade Agreements set
forth in SCHEDULE 5, the scheduling of advertising thereunder is at
the Stations' discretion and is preemptible for cash advertising.
Except as disclosed on SCHEDULE 4 hereto, neither of the Stations is
subject to any joint sales agreement, joint operating agreement, time
brokerage agreement, local marketing agreement or similar arrangement
or agreement.
Page 11
3.7 CONDITION AND ADEQUACY OF THE ASSETS. The Assets used,
held for use in or required for the conduct of the business of the
Stations are all the assets and equipment required for the full on-
air broadcast operations by the Stations in accordance with all
applicable laws, rules and regulations, including the rules,
regulations and policies of the FCC. Except for the Excluded Assets,
Seller does not have any assets used, held for use in, related in any
way to, or required for, the conduct of the business of the Stations
which are not set forth in SCHEDULES 1 THROUGH 6 hereto or otherwise
described in subparagraphs (a) through (g) of Section 1.1 hereof, and
the Assets include all assets necessary for the conduct of the
business of the Stations as they are currently conducted by Seller.
3.8 TANGIBLE PERSONAL PROPERTY. SCHEDULE 1 hereto contains a
list of all material tangible personal property and assets owned or
leased by Seller for use in connection with the operation of the
Stations. Except as may be subject to lease agreements of Seller
listed on SCHEDULE 1 hereto, Seller owns and has, and will have on
the Closing Date, good and marketable title to all such property (and
to all other tangible personal property to be conveyed to Buyer
hereunder). The assets listed in SCHEDULE 1 hereto include all
material tangible personal property necessary to conduct the business
and operations of the Stations as now conducted. The Tangible
Personal Property (a) is in good condition and repair, ordinary wear
and tear excepted, (b) both individually and in the aggregate, has
been maintained in a manner consistent with generally accepted
standards of good engineering practice in all material respects, (c)
is operating in all material respects in compliance with the FCC
Authorizations and rules and regulations of the FCC and FAA, and (d)
does not contain any PCBs that are required by law to be removed and
if any equipment does contain PCBs such equipment is stored and
maintained in compliance with all applicable laws. For purposes of
this Section 3.8, material tangible property shall be such property
valued at Five Hundred Dollars ($500) or more.
3.9 REAL PROPERTY.
(a) SCHEDULE 2 contains a complete description of all
real property currently owned or leased by Seller and Seller's
interests therein, including street address (if available), legal
description (if available), name of owner (or landlord, in the case
of leased property) and use. Attached to SCHEDULE 2 are all policies
of currently existing title insurance in favor of Seller and/or its
lenders with respect to the Real Property. The Real Property is all
of the real property required to operate the Stations in the manner
in which they are presently operated. Seller has full legal and
practical access to all Real Property, provided that with respect to
the Old Stonehouse Road property, Seller represents and warrants only
that it has full practical access to such property. All utilities
necessary for Buyer's use of the Real Property are installed and in
good working order and, to the best of Seller's knowledge, are
subject to valid easements, where necessary. The Real Property, as
well as the present uses thereof, conforms in all
Page 12
material respects with all material restrictive covenants and with all
applicable zoning, environmental, and building codes, laws, rules and
regulations. To the best of Seller's knowledge, except as disclosed
on SCHEDULE 8 hereto the buildings, towers, guys, ground systems and
other fixtures used in the operation of the Stations are free of
structural defects, are suitable for their intended use, are in a
good state of maintenance and repair (ordinary wear and tear
excepted), and do not encroach upon any property; provided, however,
that Seller makes no representation and warranty regarding whether
the buildings, towers, guys, ground systems and other fixtures
located on the Old Stonehouse Road studio property are contained
entirely within the bounds of that property and do not encroach upon
any other property. There is no pending condemnation or similar
proceeding affecting the Real Property or any portion thereof, and,
to Seller's knowledge, no such action is presently contemplated or
threatened.
(b) SCHEDULE 2 accurately and completely lists, and
sets forth a description of all real property leases (collectively,
the "LEASES") used in the operation of the Stations and the same
constitute the only Leases necessary in connection with the conduct
of the operations of the Stations as presently conducted. To the
best of Seller's knowledge, all of the Leases are legal, valid,
binding, enforceable and in full force and effect. Seller is not in
default under any of such Leases, nor to the knowledge of Seller is
any other party thereto, and Seller has no knowledge of any present
disputes or claims with respect to offsets or defenses by either
landlord or tenant against the other under any of such Leases.
Seller has delivered to Buyer true and complete copies of all Leases
or other instruments pertaining to Seller's interest in the Real
Property.
(c) All of the existing towers used in the operation of
the Stations are obstruction-marked and lighted to the extent
required by, and in accordance with, the
Page 13
rules and regulations of the FAA and the FCC. Appropriate
notification to the FAA has been filed for each such tower where
required by the FCC's rules and regulations.
3.10 TRADEMARKS, ETC. SCHEDULE 6 to this Agreement sets forth
a correct and complete list of all intellectual property used in the
operation of the Stations (whether owned or licensed). Except as set
forth in SCHEDULE 6 hereto and except for standard terms and
conditions under which computer software is licensed, Seller has, and
after the Closing Buyer will have, the right to use such Intellectual
Property, free and clear of any royalty or other payment obligations.
3.11 LITIGATION AND COMPLIANCE WITH LAWS. Except as disclosed
on SCHEDULE 9 hereto: (a) Seller is not subject to any order, writ,
injunction, judgment, arbitration decision or decree having binding
effect and affecting the business of the Stations or the Assets; (b)
there is no litigation pending by or against, or to the best of
Seller's knowledge after due inquiry, threatened against Seller which
relates to the Stations or could affect any of the Assets; (c)
Seller, with respect to the Stations, has complied in all material
respects with all laws, regulations, orders or decrees applicable to
it; (d) the present uses by Seller of the Assets do not violate any
such laws, regulations, orders or decrees in any material respect,
and (e) Seller has no knowledge of any basis for any claim for
compensation or damage or other relief from any violation of the
foregoing.
3.12 LABOR MATTERS; EMPLOYEE BENEFIT PLANS.
(a) Seller has delivered to Buyers a true and complete
list of the names of all persons who are then employed by Seller at
the Stations, their job titles, compensation, benefits and the
original dates of hire. Seller has no written or oral contracts of
employment with any employee of the Stations and the employment of
all such employees are terminable at will, except as otherwise
expressly provided in SCHEDULE 10. Seller is not a party to any
collective bargaining agreement, and there is no collective
bargaining agreement that determines the terms and conditions of
employment of any employees of Seller.
(b) Except as disclosed on SCHEDULE 10:
(i) there is no labor strike, dispute, slow-down
or stoppage pending or, to the knowledge of Seller, threatened
against either of the Stations;
(ii) there are neither pending nor, to the
knowledge of Seller threatened, any suits, actions, administrative
proceedings, union organizing activities, arbitrations, grievances or
other proceedings between Seller and any employees of any of the
Stations or any union representing such employees; and there are no
existing labor or employment or other controversies or grievances
involving employees of any of
Page 14
the Stations which have had or are
reasonably likely to have an adverse effect on the financial
condition or operation of any the Stations;
(iii)with respect to the Stations: (A) Seller is
in compliance in all material respects with all laws, rules and
regulations relating to the employment of labor, including those
relating to wages, hours, collective bargaining, affirmative action,
discrimination, sexual harassment, wrongful discharge and the
withholding and payment of taxes and contributions; and (B) all
amounts required to be withheld from Seller's employees' compensation
and wages for income taxes, FICA, unemployment insurance or any other
taxes or charges have been duly collected or withheld and submitted
to the appropriate taxing authorities; and
(iv) Buyer's consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
shall not, as a result of or in connection with the transactions
contemplated hereby, impose upon Buyer the obligation to pay any
severance or termination pay under any agreement, plan or arrangement
binding upon Seller.
(c) Buyer's consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
shall not, as a result of or in connection with the transactions
contemplated hereby, impose upon Buyer any obligation under any
benefit plan, contract or arrangement (regardless of whether they are
written or unwritten and funded or unfunded) covering employees or
former employees of Seller in connection with their employment by
Seller. For purposes of this Agreement, the term "BENEFIT PLANS"
shall include without limitation employee benefit plans within the
meaning of Section 3(3) of the Employment Retirement Income Security
Act of 1974, as amended, vacation benefits, employment and severance
contracts, stock option plans, bonus programs and plans of deferred
compensation.
3.13 INSTRUMENTS OF CONVEYANCE; GOOD TITLE. The instruments
to be executed by Seller and delivered to Buyer at the Closing,
conveying the Assets to Buyer, will transfer good and marketable
title to the Assets (other than the Real Property) free and clear of
all liabilities (absolute or contingent), security interests,
mortgages, pledges, liens, obligations and encumbrances other than
Permitted Liens, except with respect to such Assumed Contracts as to
which consents have not been received and which are not assignable
without the written consent of the other party thereto.
3.14 ENVIRONMENTAL MATTERS. No hazardous or toxic waste,
substance or material (as those or similar terms are defined under
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. <section><section> 9601 ET SEQ.,
Toxic Substances Control Act, 15 U.S.C. <section><section> 2601 ET
SEQ., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
<section><section> 6901 ET SEQ. or any other applicable federal,
state or local environmental law, statute, ordinance, order,
judgment,
Page 15
rule or regulation relating to the pollution or protection
of the environment ("ENVIRONMENTAL LAWS")), including without
limitation, any asbestos or asbestos-related products, oils or
petroleum-derived compounds, CFCs, or PCBs have been released,
emitted or discharged or are located at, upon or under the Real
Property in a condition, concentration or location which will require
the conduct of remedial action pursuant to the requirements of
Environmental Laws. There are no underground storage tanks located
at the Real Property. The Assets and Seller's use thereof are not in
violation of any Environmental Laws now in effect, the effect of
which violation, in any case or in the aggregate, could have a
material adverse effect on the Assets or require remedial action
under any Environmental Laws.
3.15 CHANGES. Except as shown on SCHEDULE 11 to this
Agreement, since the Balance Sheet Date, Seller has not, with respect
to the Stations:
(i) mortgaged, pledged or subjected to lien or any
other encumbrance, any of the Assets other than mortgages in favor of
Society National Bank ("SNB") encumbering the Real Property;
(ii) sold or transferred any of the Assets other than in
the ordinary course of business;
(iii) increased the compensation payable or to become
payable to the Stations' employees or agents except in the ordinary
course of business and except as disclosed to Buyer in writing;
(iv) suffered any material damage, destruction or loss
(whether or not covered by insurance) or the acquisition or taking of
property by any governmental authority; or
(v) experienced any work stoppage.
3.16 ACCOUNTS RECEIVABLE. Seller's accounts receivable are on
the date hereof bona fide claims against debtors for sales, services
or other charges, free from counterclaims or rights of set-off other
than claims for returns in the ordinary course of business. Subject
to Seller's normal reserves for bad debt, to the best of Seller's
knowledge each of its accounts receivable are on the date hereof
collectible in the book amounts thereof.
3.17 BROKERS. There is no broker or finder or other person
who would have any valid claim against Buyer for a commission or
brokerage in connection with this Agreement or the transaction
contemplated hereby as a result of any agreement, understanding or
action by Seller.
Page 16
3.18 CONSENTS. No consent, approval, authorization or order
of (or registration or filing with) any governmental authority,
lending institution or other third party is required in connection
with the execution, delivery or performance by Seller of this
Agreement or in connection with the transactions contemplated hereby
(including transfer of any or all of the Assets), except for the FCC
Consent, the consent of SNB, and the consent of third parties to the
assignment of those contracts designated with an asterisk on SCHEDULE
4 hereto.
3.19 FULL DISCLOSURE. No representation or warranty made by
Seller in this Agreement, and no statement made in any certificate,
document, exhibit or schedule furnished or to be furnished in
connection with the transactions herein contemplated, contains or
will contain any untrue statement of a material fact or omits or will
omit to state any material fact necessary to make such representation
or warranty or any such statement not misleading to Buyer.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted.
4.2 AUTHORITY. Buyer has the power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have
been duly and validly authorized by Buyer and no other proceedings on
the part of Buyer are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Buyer and constitutes
the legal, valid and binding agreement of Buyer enforceable in
accordance with its terms, except as may be limited by bankruptcy,
insolvency or other laws affecting generally the enforcement of
creditors' rights or the application of principles of equity.
4.3 NO DEFAULTS. The execution, delivery and performance of
this Agreement by Buyer will not: (a) constitute a violation of or
conflict with Buyer's articles of incorporation or by-laws; or (b)
violate any law, statute, rule, regulation, order, writ, injunction
or decree of any federal, state or local governmental authority or
agency and which is applicable to Buyer.
Page 17
4.4 LITIGATION. There are no lawsuits, actions,
administrative or arbitration or other proceedings pending or, to the
best knowledge of Buyer, threatened against Buyer which question the
validity of this Agreement or any action taken or to be taken in
connection herewith.
4.5 QUALIFICATION. To the best knowledge of Buyer, there are
no facts which, under the Communications Act of 1934, as amended, or
the existing rules and regulations of the FCC, would disqualify Buyer
as an assignee of the FCC Authorizations.
4.6 CONSENTS. No consent, approval, authorization or order
of (or registration or filing with) any governmental authority,
lending institution or other third party is required in connection
with the execution, delivery or performance by Buyer of this
Agreement or in connection with the transactions contemplated hereby,
except for the FCC Consent.
4.7 BROKERS. There is no broker or finder or other person
who would have any valid claim against Seller for a commission or
brokerage in connection with this Agreement or the transactions
contemplated hereby as a result of any agreement, understanding or
action by Buyer.
4.8 FULL DISCLOSURE. No representation or warranty made by
Buyer in this Agreement, and no statement made in any certificate,
document, exhibit or schedule furnished or to be furnished in
connection with the transactions herein contemplated, contains or
will contain any untrue statement of a material fact or omits or will
omit to state any material fact necessary to make such representation
or warranty or any such statement not misleading to Seller.
ARTICLE 5.
COVENANTS OF SELLER
Seller covenants and agrees with Buyer that from the date hereof
to and including the Closing Date:
5.1 MAINTENANCE OF BUSINESS AND ASSETS. Seller shall not:
(a) make any material change in the Stations' buildings, leasehold
improvements or fixtures except in the ordinary course of business;
(b) sell, lease, transfer or agree to sell, lease or transfer any of
the Assets without replacement thereof with an equivalent asset of
equivalent kind, condition and value that satisfies industry
standards for such assets; (c) create any Lien on the Assets other
than in the ordinary course of business; or (d) solicit, initiate or
encourage submission of any proposal of offer from any person or
entity relating to the
Page 18
purchase of the Stations or any of the Assets
of any equity interest in Seller, or to any merger, consolidation or
other business combination with Seller. Seller shall maintain the
Stations' facilities and equipment in good condition (ordinary wear
and tear excepted), keep the Stations' books of account, records and
files in the same manner as heretofore maintained by Seller and in a
manner which satisfies all requirements for the lawful full power on-
air broadcasting by the Stations in accordance with the rules,
regulations and policies of the FCC, and maintain in full force and
effect through the Closing Date adequate property damage, liability
and other insurance with respect to the Assets. Subject to the
actions contemplated by the TBA, Seller shall: (a) continue to carry
on the business of the Stations; (b) maintain the Stations' supply of
programming, advertising and technical materials and supplies; (d)
continue all promotional and marketing efforts and campaigns
currently in effect, and shall promote the Stations between the date
hereof and the Closing Date in the same manner as it has done prior
to the execution of this Agreement; and (e) give prompt written
notice to Buyer if any significant problems or developments occur
with respect to the Stations or the Assets, or if any of the Assets
suffer damage on account of fire, explosion or other cause of any
nature which is sufficient to prevent operation of the Stations.
5.2 ORGANIZATION; GOOD WILL. Subject to the actions
contemplated by the TBA, Seller shall use all reasonable efforts to
preserve the business organization of the Stations intact and
preserve the goodwill of each of the Station's suppliers, customers
and others having business relations with it.
5.3 FCC MATTERS. Seller shall operate and maintain the
Stations in accordance with the terms of the FCC Authorizations and
in material compliance with all applicable laws and FCC rules and
regulations. Seller shall deliver to Buyer, promptly after filing,
copies of any material reports, applications or responses to the FCC
or any communications from the FCC or any other party directed to the
FCC related to the Stations which are filed between the date of this
Agreement and the Closing Date. Seller shall not apply to the FCC
for any construction permit with respect to the Stations except as
may be required in order to maintain the Stations in accordance with
the terms of the FCC Authorizations and in compliance with all
applicable laws and FCC rules and regulations. Seller shall promptly
and fully cure all violations of Commission rules and regulations
which come to its attention and shall pay any fines which may be
assessed by the FCC for any such violation when such fines are
ultimately due.
5.4 BROADCAST TRANSMISSION INTERRUPTION. Seller shall give
prompt written notice to Buyer if (i) the transmission of the regular
broadcast programming of either the Stations in the normal and usual
manner is interrupted or discontinued other than as a result of
weekly routine maintenance or public utility company activity, or
(ii) either of the Stations is operated at less than seventy-five
percent (75%) of its licensed operating power, in either event for a
period in excess of (A) twenty-four (24)
Page 19
consecutive hours or (B) an aggregate of seventy-two (72) hours in
any thirty (30) day period.
5.5 CONTRACTS. Subject to Buyer's full performance of its
obligations under the TBA, Seller shall perform on a timely basis all
obligations required to be performed by it under all Contracts
according to their respective terms and, in consultation with Buyer,
renew the Assumed Contracts if necessary, and, at Buyer's request,
give protective notices of cancellation with respect to any Contracts
which are not Assumed Contracts. Seller shall not renegotiate,
modify, amend or terminate any existing Contracts except in the
ordinary and usual course of business, or waive any right under any
of the Contracts. Without limiting the generality of the foregoing,
in consultation with Buyer, Seller shall renew in a timely fashion
that certain Lease, dated August 27, 1991, by and between Seller and
Charles Andrews, Jr. (the "AM TOWER LEASE").
5.6 CONSENTS. Seller shall use reasonable efforts to obtain
prior to the Closing Date consents to the assignment to or assumption
by Buyer of all Assumed Contracts which require the consent of any
third party by reason of the transactions provided for in this
Agreement.
5.7 EMPLOYEE MATTERS. Seller shall cause its employees to
use, or shall pay its employees for, vacation or other compensation
days. Seller shall not enter into any contract of employment or
collective bargaining agreement, or permit any increases or changes
in the compensation (including bonuses) of any of the Stations'
employees, except in accordance with past practices.
5.8 ACCESS TO FACILITIES, FILES AND RECORDS. At the
reasonable request of Buyer, Seller shall from time to time give or
cause to be given to the officers, employees, accountants, counsel
and accredited representatives of Buyer (i) full access during normal
business hours to all facilities, property, accounts, books, deeds,
title papers, insurance policies, licenses, agreements, contracts,
commitments, records and files of every character, equipment,
machinery, fixtures, furniture, vehicles, notes and accounts payable
and receivable and inventories related to the Stations, and (ii) all
such other information concerning the affairs of the Stations as
Buyer may reasonably request.
5.9 CONFIDENTIAL INFORMATION. If for any reason the
transactions contemplated in this Agreement are not consummated,
Seller shall not disclose to third parties any information designated
as confidential and received from Buyer or its agents in the course
of investigating, negotiating and completing the transactions
contemplated by this Agreement. Nothing shall be deemed to be
confidential information which: (i) is or becomes publicly known or
available other than through disclosure by Seller; (ii) is rightfully
received by Seller from a third party; or (iii) is independently
developed by Seller.
Page 20
5.11 ENVIRONMENTAL SITE ASSESSMENT. Buyer shall be entitled
to obtain a Phase I environmental audit of the Real Property ("PHASE
I AUDIT REPORT"). In the event that such Phase I Audit Report
discloses any noncompliance with any Environmental Laws, then Buyer
shall be entitled to elect, upon written notice to Seller within
thirty (30) days after receipt of such Phase I Audit Report, either
to require Seller to undertake remedial action to correct such
noncompliance up to but not exceeding an aggregate amount of Five
Hundred Thousand Dollars ($500,000), or to terminate this Agreement.
5.12 [INTENTIONALLY OMITTED].
5.13 REAL PROPERTY MATTERS. Seller shall execute, and agrees
to use all reasonable efforts to cause Charles Andrews, Jr.
("ANDREWS") to execute, and record in the Onondaga County Clerk's
Office a memorandum of lease with respect to the AM Tower Lease,
which memorandum shall include a revised legal description for the
leased property which conforms to the survey previously delivered to
Buyer (the "AM MEMORANDUM OF LEASE").
5.14 RISK OF LOSS. The risk of loss or damage to any item of
Tangible Personal Property prior to the Closing shall be upon Seller
and subsequent to the Closing shall be upon Buyer. In the event of
loss or damage to any item of Tangible Personal Property prior to the
Closing, at Buyer's election, (i) Seller shall repair, replace and
restore such damaged or lost item to its prior condition as soon as
possible and in no event later than the Closing Date, or (ii) Buyer
shall be entitled to a reduction in the Purchase Price equal to the
fair market value of such damaged or lost item in which event Seller
shall be entitled to any insurance proceeds.
5.15 CONSUMMATION OF AGREEMENT. Seller shall use its best
efforts to fulfill and perform all conditions and obligations on its
part to be fulfilled and performed under this Agreement, to cause the
transactions contemplated by this Agreement to be fully carried out.
5.16 REPRESENTATIONS AND WARRANTIES. Seller shall give prompt
written notice to Buyer if Seller shall become aware of the impending
or threatened occurrence of any event which would cause or constitute
a breach, or would have caused a breach had such event occurred or
been known to Seller prior to the date hereof, of any of Seller's
representations or warranties contained in this Agreement or in any
Schedule.
5.17 SNB CONSENT. Seller agrees to use all reasonable efforts
to obtain the consent of SNB to the transactions contemplated hereby.
ARTICLE 6.
Page 21
COVENANTS OF BUYER
Buyer covenants and agrees that from the date thereof to and
including the Closing Date:
6.1 CONFIDENTIAL INFORMATION. If for any reason the
transactions contemplated in this Agreement are not consummated,
Buyer shall not disclose to third parties any information received
from Seller or its agents in the course of investigating, negotiating
and completing the transactions contemplated by this Agreement,
except as may otherwise be required by law. Nothing shall be deemed
to be confidential information which: (i) is or becomes publicly
known or available other than through disclosure by Buyer; (ii) is
rightfully received by Buyer from a third party; or (ii) is
independently developed by Buyer.
6.2 CONSUMMATION OF AGREEMENT. Buyer shall use all
reasonable efforts to fulfill and perform all conditions and
obligations on its part to be fulfilled and performed under this
Agreement, to cause the transactions contemplated by this Agreement
to be fully carried out.
6.3 REPRESENTATIONS AND WARRANTIES. Buyer shall give
detailed written notice to Seller promptly upon the occurrence of or
becoming aware of the impending or threatened occurrence of, any
event which would cause or constitute a breach or would have caused a
breach had such event occurred or been known to Buyer prior to the
date hereof, of any of Buyer's representations or warranties
contained in this Agreement.
ARTICLE 7.
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its
option, subject to the fulfillment of the following conditions prior
to or at the Closing Date:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Each of the representations and warranties of Buyer
contained in this Agreement and in any statement, certificate,
schedule or other document delivered by Buyer pursuant hereto or in
connection with the transactions contemplated hereby, shall have been
true and accurate in all material respects as of the date when made
and shall be true and accurate in all material respects as of the
Closing Date.
(b) Buyer shall have performed and complied in all
material respects with each and every covenant and agreement required
by this Agreement to be
Page 22
performed or complied with by it prior to or at the Closing Date,
other than payment of the Purchase Price to Seller.
7.2 NO VIOLATION. The transaction contemplated by this
Agreement shall not be in violation of any law, rule or regulation
and shall not be subject to any injunction, restraining order,
litigation or other proceeding before any court or government
authority.
7.3 FCC CONSENT. The FCC Consent shall have been issued
without any condition that would have a material adverse effect upon
Seller or any affiliated entity.
7.4 CLOSING DOCUMENTS. Buyer shall have delivered the
documents required by Section 2.3 hereof.
7.5 SNB CONSENT. SNB shall have granted its consent to the
consummation of the transactions contemplated hereby.
ARTICLE 8.
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are, at its
option, subject to the fulfillment of the following conditions prior
to or at the Closing Date:
8.1 REPRESENTATIONS, WARRANTIES, COVENANTS.
(a) Each of the representations, warranties and
covenants of Seller contained in this Agreement and in any statement,
deed, certificate, schedule or other document delivered pursuant to
this Agreement or in connection with the transactions contemplated
hereby, shall have been true and accurate in all material respects as
of the date when made and shall be true and accurate in all material
respects as of the Closing Date; and
(b) Seller shall have performed and complied in all
material respects with each and every covenant and agreement required
by this Agreement to be performed or complied with by it prior to or
at the Closing Date, other than delivery to Buyer of the instruments
conveying the Assets to Buyer.
8.2 NO VIOLATION. The transaction contemplated by this
Agreement shall not be in violation of any law, rule or regulation
and shall not be subject to any injunction, restraining order,
litigation or other proceeding before any court or government
authority.
Page 23
8.3 NO MATERIAL ADVERSE CHANGE. Since the date of this
Agreement, there shall not have occurred any material adverse change
in the Assets (other than accounts receivable) to the extent not
caused by Buyer or attributable to any act or omission of Buyer.
8.6 FCC CONSENT. The FCC Consent shall have been issued
without any condition that would have a material adverse effect upon
Buyer or any affiliated entity, and shall have become a Final Order.
g20
8.7 CONTRACT CONSENTS. Seller shall have obtained and shall
have delivered to Buyer all necessary third-party consents to
assignment of the Required Contracts to Buyer.
8.8 CLOSING DOCUMENTS. Seller shall have delivered the
documents required by Section 2.2 hereof.
8.9 REAL PROPERTY MATTERS.
(a) The AM Memorandum of Lease shall have been recorded
as contemplated by Section 5.13, and Seller shall have caused Andrews
to execute and deliver to Buyer's title insurance company a
Unilateral Declaration of Termination, in form and substance
satisfactory to Buyer's title company, with respect to the expiration
of the lease between Charles Andrews, Sr. and Syracuse Broadcasting
Company and the title company shall have agreed to remove from
Buyer's title insurance policy the exceptions specified in items 11
and 12 of the Schedule B from the commitment previously delivered to
Buyer.
(b) The survey of the Old Stonehouse Road studio
property delivered by Seller shall show that: (i) the buildings,
towers, guys, ground systems and other fixtures located on the Old
Stonehouse Road studio property are contained entirely within the
bounds of that property and do not encroach upon any other property;
and (ii) all easements and other matters affecting the Old Stonehouse
Road property, including those disclosed on Schedule 8 hereto, do not
materially impair the value of the property and could not interfere
in any material respect with Buyer's use or enjoyment of the property
in the operation of the Stations.
(c) Seller shall have delivered to Buyer, at Buyer's
expense, (i) new and current title commitments relating to all of its
owned and leased Real Property (the "TITLE COMMITMENTS"), (ii) copies
of all documents, filings and information disclosed in the Title
Commitments, and (iii) a current survey of the Old Stonehouse Road
studio property in form satisfactory to the title companies to delete
the standard current survey exception in the Title Commitments and
showing all easements and other matters
Page 24
affecting the owned Real
Property which are disclosed in the Title Commitments. Each Title
Commitment shall insure Buyer's ownership of good and marketable fee
title without any of the Schedule B standard preprinted exceptions
(other than taxes not yet due and payable) and free and clear of all
title defects or exclusions from coverage other than Permitted Liens.
For the purposes of this Agreement, the term "PERMITTED LIENS" means:
(i) matters listed on SCHEDULE 8 hereto; and (ii) encumbrances that
do not individually or in the aggregate interfere in any material
respect with the use of the Real Property. Seller shall cause the
title companies issuing the Title Commitments to issue to Buyer at
Closing, at Buyer's expense, title insurance policies with respect to
the owned Real Property insuring good, indefeasible fee simple title
in Buyer to such owned Real Property subject only to Permitted Liens.
ARTICLE 9.
INDEMNIFICATION
9.1 SURVIVAL. The several representations and warranties of
Seller and Buyer contained in or made pursuant to this Agreement
shall be deemed to have been made on the date of this Agreement and
on the Closing Date, shall survive the Closing Date and shall remain
operative and in full force and effect for a period of nine months
following the Closing Date; PROVIDED, HOWEVER, that the
representations and warranties contained in Section 3.14 hereof
relating to environmental matters and Section 3.13 hereof relating to
title shall survive indefinitely.
9.2 INDEMNIFICATION OF BUYER. Seller shall indemnify and
hold Buyer and its officers and directors harmless from and against
any and all damages, claims, losses, expenses, costs, obligations,
and liabilities including, without limiting the generality of the
foregoing, liabilities for reasonable attorneys' fees and
disbursements ("LOSS AND EXPENSE"), suffered, directly or indirectly,
by Buyer by reason of, or arising out of: (i) any breach of
representation or warranty made by Seller in this Agreement; (ii) any
failure by Seller to perform or fulfill any of its covenants or
agreements set forth in this Agreement; (iii) the Retained
Liabilities; (iv) any non-compliance by Seller with any bulk transfer
law; and (v) any compensation or other fee due to a broker or finder
separately and independently retained by Seller.
9.3 INDEMNIFICATION OF SELLER. Buyer shall indemnify and
hold Seller and its officers and directors harmless from and against
any and all Loss and Expense suffered, directly or indirectly, by
Seller by reason of, or arising out of: (i) any breach of
representation or warranty made by Buyer in this Agreement; (ii) any
failure by Buyer to perform or fulfill any of its covenants or
agreements set forth in this Agreement; (iii) the Assumed
Liabilities; and (iv) any compensation or other fee due to a broker
or finder separately and independently retained by Buyer.
Page 25
9.4 NOTICE OF CLAIMS. If Seller or Buyer believes that it
has suffered or incurred any Loss and Expense, such party shall
notify the other promptly in writing describing such Loss and
Expense, the amount thereof, if known, and the method of computation
of such Loss and Expense, all with reasonable particularity and
containing a reference to the provisions of this Agreement in respect
of which such Loss and Expense shall have occurred; PROVIDED,
HOWEVER, that the amount of the Loss and Expense set forth in the
notice shall not be a limitation on any claim for the actual amount
of such Loss and Expense. If any action at law or suit in equity is
instituted by a third party with respect to which any of the parties
intends to claim any liability or expense as Loss and Expense under
this Article 9, such party shall promptly notify the indemnifying
party of such action or suit.
9.5 DEFENSE OF THIRD PARTY CLAIMS. The indemnifying party
under this Article 9 shall have the right to conduct and control,
through counsel of its own choosing, the defense of any third party
claim, action, or suit, but the indemnified party may, at its
election, participate in the defense of any such claim, action, or
suit at its sole cost and expense. If the indemnifying party does
not notify the indemnified party within twenty (20) days after
receipt of the notice specified in Section 9.4 hereof that it is
defending any such claim, action, or suit, then the indemnified party
may defend, through counsel of its own choosing, such claim, action,
or suit and settle such claim, action, or suit, and recover from the
indemnifying party the amount of such settlement or of any judgment
and the costs and expenses of such defense, including, but not
limited to reasonable attorneys' fees and disbursements.
Notwithstanding the foregoing, the failure by a party to abide by
these terms and conditions shall not affect the other party's
obligations to indemnify such party against Loss and Expense under
this Article 9 except to the extent that the other party is
prejudiced thereby.
ARTICLE 10.
TERMINATION
10.1 TERMINATION.
(a) This Agreement may be terminated by either Buyer or
Seller, if the party seeking to terminate is not in breach of any of
its material obligations under this Agreement, upon written notice to
the other upon the occurrence of any of the following:
(i) if, on or prior to the Closing Date, the
other party breaches any of its material obligations contained
herein, and such breach is not cured by the earlier of the Closing
Date or twenty (20) business days after receipt of the notice of
breach from the non-breaching party; or
Page 26
(ii) if the FCC Application is designated for
hearing or denied by Final Order; or
(iii) if there shall be in effect any judgment,
final decree or order that would prevent or make unlawful the Closing
of this Agreement; or
(iv) if the Closing has not occurred within one
(1) year after the date on which the FCC Application is accepted for
filing.
(b) This Agreement may be terminated by Buyer if (i)
the transmission of the regular broadcast programming of either
Station in the normal and usual manner is interrupted or discontinued
other than as a result of weekly routine maintenance or public
utility company activity or (ii) either Station is operated at less
than seventy-five percent (75%) of its licensed operating power, in
either event for a period in excess of (A) twenty-four (24)
consecutive hours or (B) an aggregate of seventy-two (72) hours in
any thirty (30) day period.
(c) This Agreement may be terminated by Buyer pursuant
to Section 5.11 hereof.
(d) Either party may terminate this Agreement if the
other party defaults in the performance of its obligations under the
TBA and fails to cure such default within the applicable cure period,
in which case such default shall be deemed a material default of such
party hereunder.
10.2 EFFECT OF TERMINATION.
(a) Upon a termination of this Agreement by Seller due
to a breach by Buyer of any of its material obligations under this
Agreement, Seller shall be entitled to draw upon the Earnest Deposit
as liquidated damages and not as a penalty, provided that if Seller
terminates this Agreement due to Buyer's default under the TBA,
Seller shall be entitled to receive the Earnest Deposit in addition
to any other remedies Seller may have at law or in equity under the
TBA. Seller and Buyer each acknowledge and agree that these
liquidated damages are reasonable in light of the anticipated harm
which will be caused by Buyer's breach of any of its material
obligations under this Agreement and the difficulty of ascertaining
damages and proof of loss. In placing their initials below, Buyer
and Seller each specifically confirm the accuracy of these statements
and the fact that each was independently represented by counsel who
explained the consequence of this liquidated damages provision at the
time this Agreement was made.
Seller initial here _________
Page 27
Buyer initial here _________
(b) Upon a termination of this Agreement due to a
breach by Seller of any of its material obligations under this
Agreement, Buyer shall be entitled to the release of the Earnest
Deposit and to seek all rights and remedies that it may have in
equity or at law.
(c) Upon a termination of this Agreement other than due
to a breach by either party of any of its material obligations under
this Agreement, Buyer shall be entitled to the release of the Earnest
Deposit, and neither party shall have any further obligation to the
other under this Agreement.
ARTICLE 11.
POST-CLOSING COVENANTS
11.1 FURTHER CONSENTS. Following the Closing, Seller shall
use reasonable efforts to obtain any necessary third party consents
to the assignment to Buyer of the Assumed Contracts for which Seller
did not deliver third party consents on or prior to the Closing Date.
11.2 EMPLOYEE AND EMPLOYEE BENEFITS.
(a) The parties acknowledge and agree that Buyer shall
have the right to elect which of the Stations' employees it shall
hire. Seller shall be responsible for payment of all compensation,
liabilities and obligations (including accrued vacation and sick pay
and severance pay) payable to all employees through the Closing Date.
Seller shall indemnify, defend and hold Buyer harmless from and
against all direct or indirect costs, expenses and liabilities
arising from or relating to claims made by the Stations' employees in
respect of termination of employment by Seller with the Stations by
reason of the transactions contemplated by this Agreement.
(b) For purposes of employee benefits under Seller's
employee benefit plans, all of Seller's employees who accept
employment with Buyer shall be considered terminated employees and
Seller acknowledges and agrees that it, and not Buyer, is and shall
after the Closing remain solely responsible for any and all
insurance, supplemental pension, deferred compensation, retirement
and any other benefits, and related costs, premiums and claims, due,
to become due, committed or otherwise promised to any person who, as
of the Closing Date, is a retiree, former employee, or current
employee of Seller, relating to the period up to and including the
Closing Date.
11.3 FURTHER ASSURANCES. From time to time after the Closing
Date, without further consideration, Seller shall, at its expense,
execute and deliver, or cause to
Page 28
be executed and delivered, such
documents to Buyer as Buyer may reasonably request in order to more
effectively consummate the transactions contemplated hereby.
ARTICLE 12.
MISCELLANEOUS PROVISIONS
12.1 CONTROL OF STATIONS. Nothing contained in this Agreement
shall give Buyer any right to control the programming or operations
of the Stations prior to the Closing Date, and Seller shall have
complete control of the programming and operations of the Stations up
to the Closing Date.
12.2 EXPENSES. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring
such costs and expenses. Each of Buyer and Seller shall be solely
responsible (without recourse to the other) for any compensation or
other fee due to any broker or finder separately and independently
retained by such party in connection with the transactions
contemplated hereby. Buyer and Seller shall each pay one-half
( 1/2 ) of the FCC filing fees and any sales, use, transfer,
recording, documentary taxes or other similar fees imposed in
connection with the sale and delivery of the Assets to Buyer pursuant
to this Agreement; PROVIDED, HOWEVER, that Seller shall be solely
responsible for any property gains taxes imposed in connection with
the sale and delivery of the Assets to Buyer pursuant to this
Agreement.
12.3 WAIVER OF COMPLIANCE. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the party entitled to the benefits
thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, representation, warranty, covenant,
agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
12.4 NOTICES.All notices, elections and other communications
permitted or required under this Agreement shall be in writing and
shall be deemed effectively given or delivered upon personal delivery
or twenty-four (24) hours after delivery to a courier service which
guarantees overnight delivery or five (5) days after deposit with the
U.S. Post Office, by registered or certified mail, postage prepaid,
and, in the case of courier or mail delivery, addressed as follows
(or at such other address for a party as shall be specified by like
notice):
If to Seller, to:
Orange Communications, Inc.
Page 29
130 Mason Street
Greenwich, CT 06830
Attn: Frank D. Osborn, President
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attn: Robert M. Hirsh, Esq.
If to Buyer, to:
Pilot Communications of Syracuse, Inc.
1054 James Street
Syracuse, NY 13202
Attn: James L. Leven, President
With a copy to:
Robert C. Fisher, Esq.
Fisher Wayland Cooper Leader & Zaragoza L.L.P.
2001 Pennsylvania Avenue, N.W., Suite 400
Washington, D.C. 20006
12.5 SPECIFIC PERFORMANCE. Notwithstanding anything to the
contrary in this Agreement, Seller agrees that the Assets include
unique property that cannot be readily obtained on the open market
and that Buyer will be irreparably injured if this Agreement is not
specifically enforced. Therefore, in the event that Seller defaults
in the performance of any of its obligations hereunder (it being
understood that the failure of a condition precedent to closing shall
not be construed to be any such default by Seller), and provided that
Buyer is willing and able to perform its obligations hereunder and is
not otherwise in breach of the terms of this Agreement, Buyer shall
have the right, in addition to and not in limitation of any other
remedies available to Buyer at law or in equity, specifically to
enforce Seller's performance under this Agreement. Seller agrees to
waive any defense in any such suit that Buyer has an adequate remedy
at law and to interpose no opposition, legal or otherwise, as to the
propriety of specific performance as a remedy.
12.6 ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Notwithstanding the foregoing, neither party may assign its rights or
delegate its duties under this Agreement without the prior written
consent of the other,
Page 30
except that Buyer may assign its rights or
delegate its duties under this Agreement to any affiliate or
subsidiary of Buyer, provided that the FCC would consider such
transfer or assignment eligible for PRO FORMA treatment and provided
that any such transfer or assignment shall not delay the Closing.
12.7 GOVERNING LAW. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
New York, without regard to the choice of law provisions thereof.
12.8 COUNTERPARTS. This Agreement may be executed in
counterpart originals, which collectively shall have the same legal
effect as if all signatures had appeared on the same physical
document. This Agreement may be executed and exchanged by facsimile
transmission, with the same legal effect as if the signatures had
appeared in original handwriting on the same physical document.
12.9 CAPTIONS. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part
of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement.
12.10 NO THIRD PARTY BENEFICIARIES. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give
to any person or entity other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by
reason of this Agreement.
12.11 PARTIAL INVALIDITY. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any provision contained
herein shall, for any reason, be held to be invalid or unenforceable,
such provision shall be ineffective to the extent of such invalidity
or unenforceability without invalidating the remainder of such
provision or any other provisions hereof, unless such a construction
would be unreasonable; PROVIDED, HOWEVER, that if the removal of such
offending provision materially alters the burdens or benefits of
either party, the parties agree to negotiate in good faith such
modifications to this Agreement as are appropriate to insure the
burdens and benefits of each party are reasonably comparable to those
originally contemplated and expected.
12.12 ATTORNEYS' FEES. If any suit, appeal, or other action is
commenced by a party to establish, maintain, or enforce any right or
remedy arising from this Agreement, the losing party shall pay all
reasonable attorneys' fees and litigation or appeal expenses incurred
therein by the prevailing party, to the extent awarded by the court
or other decision-maker.
12.13 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules hereto and documents delivered pursuant to this
Agreement, embodies the
Page 31
entire agreement and understanding of the
parties hereto in respect of the subject matter hereof. This
Agreement supersedes all prior agreements and understandings between
the parties with respect to the transactions contemplated by this
Agreement, and may not be amended except in a writing signed by both
parties.
Page 32
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement
to be executed as of the date first above written.
ORANGE COMMUNICATIONS, INC.
By:____________________________
Thomas S. Douglas
Senior Vice President
PILOT COMMUNICATIONS OF
SYRACUSE, INC.
By:_____________________________
James L. Leven
President