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EXHIBIT 10.6.10
ASSET PURCHASE AGREEMENT
(KKOL-AM, SEATTLE, WASHINGTON)
AGREEMENT (the "Agreement") dated as of APRIL 1, 1999 by and between
INSPIRATION MEDIA, INC. ("Buyer"), and SONSINGER, INC. (collectively referred to
herein as "Seller").
RECITALS:
1. Seller is the owner of the licenses and authorizations issued by the
FCC for the operation of radio station KKOL(AM), Seattle, Washington, (the
"Station").
2. Buyer desires to acquire substantially all the assets of the Station,
and Seller is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to prior approval of the
FCC.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
ARTICLE 1
TERMINOLOGY
1.1 ACT. The Communications Act of 1934, as amended.
1.2 ASSUMED OBLIGATIONS. Such term shall have the meaning defined in
Section 2.3.
1.3 BUSINESS DAY. Any calendar day, excluding Saturdays and Sundays, on
which federally chartered banks in the city of Seattle, Washington, are
regularly open for business.
1.4 CLOSING. The closing with respect to the transactions contemplated
by this Agreement.
1.5 CLOSING DATE. The date determined as the Closing Date as provided
in Section 8.1.
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1.6 DOCUMENTS. This Agreement and all Exhibits and Schedules hereto, and
each other agreement, certificate, or instrument delivered pursuant to or in
connection with this Agreement, including amendments thereto that are expressly
permitted under the terms of this Agreement.
1.7 EXCLUDED ASSETS. Such term shall have the meaning defined in
Section 2.2.
1.8 FCC. Federal Communications Commission.
1.9 FCC LICENSES. The licenses, permits and authorizations of the FCC
for the operation of the Station.
1.10 FCC ORDER. An order or decisions of the FCC granting its consent to
the assignment of the FCC Licenses to Buyer.
1.11 FINAL ACTION. An action of the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; with respect to which no
timely petition for reconsideration or administrative or judicial appeal or sua
sponte action of the FCC with comparable effect is pending and as to which the
time for filing any such petition or appeal (administrative or judicial) or for
the taking of any such sua sponte action of the FCC has expired.
1.12 LIEN. Any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, lien, lease or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any assets or
property, including any written or oral agreement to give or grant any of the
foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.
1.13 PERMITTED LIEN. Any statutory lien which secures a payment not yet
due that arises, and is customarily discharged, in the ordinary course of
Seller's business; any easement, right-of-way or similar imperfection in the
Seller's title to its assets or properties that, individually and in the
aggregate, are not material in character or amount and do not and are not
reasonably expected to materially impair the value or materially interfere with
the use of any asset or property of the Seller material to the operation of its
business as it has been and is now conducted.
1.14 PURCHASE PRICE. One Million Three Hundred and Fifty Thousand
Dollars ($1,350,000).
1.15 RULES AND REGULATIONS. The rules of the FCC as set forth in Volume
47 of the Code of Federal Regulations, as well as such other policies of the
Commission, whether contained in the Code of Federal Regulations, or not, that
apply to the Station.
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1.16 SALE ASSETS. All of the tangible and intangible assets to be
transferred by Seller to Buyer as set forth in Section 2.1.
1.17 STATION AGREEMENTS. The agreements, commitments, contracts and
other items described in Section 2.1(c) which relate to operation of the
Station.
1.18 TANGIBLE PERSONAL PROPERTY. The personal property described in
Section 2.1(a).
ARTICLE II
PURCHASE AND SALE
2.1 SALE ASSETS. On the Closing Date, Seller will sell, transfer, assign
and convey to Buyer, and Buyer will purchase from Seller, free and clear of all
Liens, except Permitted Liens, all of Seller's right, title and interest, legal
and equitable, in and to all tangible and intangible assets (except Excluded
Assets) used or useful in the operation of the Station as it has been and is now
operated, including the following:
(a) TANGIBLE PERSONAL PROPERTY. All equipment, parts, supplies,
furniture, fixtures and other tangible personal property now or hereafter owned
by Seller and used and/or useful in the operation of the Station as it has been
and is now operated, together with such modifications, replacements,
improvements and additional items, and subject to such deletions therefrom, made
or acquired between the date hereof and the Closing Date in accordance with the
terms and provisions of this Agreement.
(b) LICENSES AND PERMITS. The FCC Licenses and all other assignable
or transferable governmental permits, licenses and authorizations (and any
renewals, extensions, amendments or modifications thereof) now held by Seller or
hereafter obtained by Seller between the date hereof and the Closing Date, to
the extent such other permits, licenses and authorizations pertain to or are
used in the operation of the Station.
(c) STATION AGREEMENTS. All agreements which Seller is a party to or
bound by, including without limitation all leases, contracts for sale of air
time and trade agreements; any renewals, extensions, amendments or modifications
of those agreements being assumed which are made in the ordinary course of
Seller's operation of the Station and in accordance with the terms and
provisions of this Agreement; and any additional such agreements, contracts,
leases, commitments or orders (and any renewals, extensions, amendments or
modifications thereof) made or entered into between the date hereof and the
Closing Date in accordance with the terms and provisions of this Agreement and
which Buyer elects to assume in writing.
(d) RECORDS. True and complete copies of all of the books, records,
accounts, files, logs, ledgers, reports of engineers and other consultants or
independent contractors, pertaining to or used in the operation of the Station
(other than corporate records).
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(e) MISCELLANEOUS ASSETS. Any other tangible or intangible assets,
properties or rights of any kind or nature not otherwise described above in this
Section 2.1 and now or hereafter owned or used by Seller in the operation of the
Station, including but not limited to all goodwill of the Station.
2.2 EXCLUDED ASSETS. Notwithstanding any provision of this Agreement to
the contrary, Seller shall not transfer, convey or assign to Buyer, but shall
retain all of its right, title and interest in and to, the following assets
owned or held by it on the Closing Date ("Excluded Assets"):
(a) Any and all cash, cash equivalents, cash deposits to secure
contract obligations (except to the extent Seller receives a credit therefor
under Section 2.7, in which event the deposit shall be included as part of the
Sale Assets), all inter-company receivables from any affiliate of Seller and all
other accounts receivable, bank deposits and securities held by Seller in
respect of the Station at the Closing Date.
(b) Any and all claims of Seller with respect to transactions prior
to the Closing including, without limitation, claims for tax refunds and refunds
of fees paid to the FCC.
(c) All prepaid expenses (except to the extent Seller receives a
credit therefor under Section 2.5, in which event the prepaid expense shall be
included as part of the Sale Assets).
(d) All contracts of insurance and claims against insurers.
(e) All contracts that are terminated in accordance with the terms
and provisions of this Agreement or have expired prior to the Closing Date in
the ordinary course of business; and all loans and loan agreements.
(f) All tangible personal property disposed of or consumed between
the date hereof and the Closing Date in accordance with the terms and provisions
of this Agreement.
(g) All commitments, contracts and agreements not specifically
assumed by Buyer pursuant to Section 2.1(d), above.
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2.3 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to perform, without
duplication of Seller's performance, the following liabilities and obligations
of Seller (the "Assumed Obligations"):
(i) Current liabilities of Seller for which Buyer receives a
credit pursuant to Section 2.5, but not in excess of the amount of such credit.
(ii) Liabilities and obligations arising under the Station
Agreements assumed by and transferred to Buyer in accordance with this
Agreement, but only to the extent such liabilities and obligations relate to any
period of time after the Closing Date.
(b) Except for the Assumed Obligations, Buyer shall not assume or in
any manner be liable for any duties, responsibilities, obligations or
liabilities of Seller of any kind or nature, whether express or implied, known
or unknown, contingent or absolute, including, without limitation, any
liabilities to or in connection with Seller's employees whether arising in
connection with the transaction contemplated hereunder or otherwise..
2.4 ALLOCATION OF THE PURCHASE PRICE. Prior to Closing, Buyer and Seller
shall agree to an allocation of the Purchase Price. Buyer and Seller shall use
such allocation for all reporting purposes in connection with federal, state and
local income and, to the extent permitted under applicable law, franchise taxes.
Buyer and Seller agree to report such allocation to the Internal Revenue Service
in the form required by Treasury Regulation 1.10601T.
2.5 ADJUSTMENT OF PURCHASE PRICE.
(a) All operating income and operating expenses of the Station shall
be adjusted and allocated between Seller and Buyer, and an adjustment in the
Purchase Price shall be made as provided in this Section, to the extent
necessary to reflect the principle that all such income and expenses
attributable to the operation of the Station on or before the Closing Date shall
be for the account of Seller, and all income and expenses attributable to the
operation of the Station after the closing Date shall be for the account of
Buyer.
(b) To the extent not inconsistent with the express provisions of
this Agreement, the allocations made pursuant to this Section 2.5 shall be made
in accordance with generally accepted accounting principles.
(c) For purposes of making the adjustments pursuant to this Section,
Buyer shall prepare and deliver the Adjustment List to Seller within thirty (30)
days following the Closing Date, or such earlier or later date as shall be
mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the
Adjustment Amount. If the Adjustment Amount is a credit to the account of Buyer,
Seller shall pay such amount to Buyer, and if the Adjustment Amount is a charge
to the account of Buyer, Buyer shall pay such amount to Seller. In the event
Seller disagrees with the Adjustment Amount determined by Buyer or with any
other matter arising out of this subsection, and Buyer and Seller cannot within
sixty (60) days resolve the disagreement themselves, the parties will refer the
disagreement to a firm of independent certified public accountants, mutually
acceptable to Seller and Buyer, whose decision shall be final and whose fees and
expenses shall be allocated between and paid by Seller and Buyer, respectively,
to the extent that such party does not prevail on the disputed matters decided
by the accountants.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller has all requisite power to
own, operate and lease its properties and carry on its business as it is now
being conducted and as the same will be conducted until the Closing.
3.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. The execution and
delivery of, and the performance of its obligations under, this Agreement and
each of the other Documents by Seller, and the consummation by Seller of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary action on the part of Seller. This Agreement
constitutes (and each of the other Documents, when so executed and delivered,
will constitute) legal and valid obligations of Seller enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights or remedies generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
3.3 FCC LICENSES. Seller is the holder of the FCC Licenses, and the FCC
Licenses are valid, in good standing and in full force and effect and constitute
all of the licenses, permits and authorizations required by the Act, the Rules
and Regulations or the FCC for, or used in, the operation of the Station as now
operated.
3.4 STATION AGREEMENTS. All Station Agreements are legal, valid and
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles of
equity regardless of whether enforcement is sought in any proceeding at law or
in equity; (ii) neither Seller nor, to the knowledge of Seller, any other party
thereto, is in material breach of or in material default under any Station
Agreements; (iii) to the knowledge of Seller, there has not occurred any event
which, after the giving of notice or the lapse of time or both, would constitute
a material default under, or result in the material breach of, any Station
Agreements which are, individually or in the aggregate, material to the
operation of the Station; and (iv) Seller holds the right to enforce and receive
the benefits under all of the Station Agreements, free and clear of all Liens
(other than Permitted Liens) but subject to the terms and provision of each such
agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation validly
existing and in good standing under the laws of the State of Washington. Buyer
has all requisite corporate power to own, operate and lease its properties and
carry on its business as it is now being conducted and as the same will be
conducted following the Closing.
4.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Buyer's execution and
delivery of, and the performance of its obligations under, this Agreement and
each of the other Documents, and the consummation by Buyer of the transactions
contemplated hereby and thereby, have been duly authorized and approved by all
necessary corporate action on the part of Buyer. The Documents, when executed
and delivered by the parties hereto, will constitute the valid and legally
binding agreement of Buyer, enforceable against Buyer in accordance with their
terms, except as may be limited by bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights generally, and except as may be
limited by general principles of equity (regardless of whether such
enforceability is sought in a proceeding in equity or at law).
ARTICLE V
TRANSACTIONS PRIOR TO THE CLOSING DATE
5.1 CONDUCT OF THE STATION'S BUSINESS PRIOR TO THE CLOSING DATE. Seller
covenants and agrees with Buyer that between the date hereof and the Closing
Date, unless the Buyer otherwise agrees in writing (which agreement shall not be
unreasonably withheld), Seller shall:
(a) Use reasonable efforts to operate the Station in substantially
the manner in which it is currently being operated:
(b) Operate the Station and otherwise conduct its business in
accordance with the terms or conditions of its FCC Licenses, the Rules and
Regulations, the Act and all other rules and regulations, statutes, ordinances
and orders of all governmental authorities having jurisdiction over any aspect
of the operation of the Station, except where the failure to so operate the
Station would not have a material adverse effect on the Sale Assets or the
operation of the Station or on the ability of Seller to consummate the
transactions contemplated hereby;
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(c) Comply in all material respects with all Station Agreements now
or hereafter existing which are material, individually or in the aggregate, to
the operation of the Station;
(d) Not mortgage, pledge or subject to any Lien (except in the
ordinary course of business) any of the Sale Assets;
5.2 GOVERNMENTAL CONSENTS. Seller and Buyer shall file with the FCC,
within five (5) business days after the execution of this Agreement, such
applications and other documents in the name of Seller or Buyer, as appropriate,
as may be necessary or advisable to obtain the FCC Order. Seller and Buyer shall
take all commercially reasonable steps necessary to prosecute such filings with
diligence and shall diligently oppose any objections to, appeals from or
petitions to reconsider such approval of the FCC, to the end that the FCC Order
may be obtained as soon as practicable; provided, however, that in the event the
application for assignment of the FCC Licenses has been designated for hearing,
either Buyer or Seller may elect to terminate this Agreement pursuant to Section
10.1(c).
5.3 FCC REPORTS. Seller shall continue to file, on a current basis until
the Closing Date, all reports and documents required to be filed with the FCC
with respect to the Station. Seller shall provide Buyer with copies of all such
filings within five business days of the filing with the FCC.
5.4 CONVEYANCE FREE AND CLEAR OF LIENS. At or prior to the Closing,
Seller shall obtain executed releases, in suitable form for filing and otherwise
in form and substance reasonably satisfactory to Buyer, of any security
interests granted in the Sale Assets and properties as security for payment of
loans and other obligations or judgments and of any other Liens on the Sale
Assets. At the closing, Seller shall transfer and convey to Buyer all of the
Sale Assets free and clear of all Liens.
ARTICLE VI
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
Buyer's obligation to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, unless waived by Buyer in writing:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement or in any other Document shall
be complete and correct in all material respects on the date hereof and at the
Closing Date with same effect as though made at such time except for changes
that are not materially adverse to the Station or the Sale Assets taken as a
whole.
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6.2 PERFORMANCE OF AGREEMENTS. Seller shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
6.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC without any
Material Adverse Condition affecting Buyer and shall have become effective under
the rules of the FCC; provided that Buyer's obligations to close the transaction
contemplated by this Agreement shall be subject to the further condition that
the FCC Order shall have become a Final Order without any material adverse
condition affecting Buyer if:
(i) A petition to deny or other third party objection shall have
been filed with the FCC prior to the date on which the FCC Order shall
have been issued and become effective and such petition or objection is
not withdrawn prior to a scheduled closing date; or
(ii) Buyer does not receive consent from its lenders to close
the transaction contemplated by this Agreement prior to Final Action of
the FCC.
(b) Conditions which the FCC Order or any order, ruling or decree of
any judicial or administrative body relating thereto or in connection therewith
specifies and requires to be satisfied prior to transfer of the FCC Licenses to
Buyer shall have been satisfied.
(c) All other authorizations, consents, approvals and clearances of
federal, state or local governmental agencies required to permit the
consummation by Buyer of the transactions contemplated by this Agreement shall
have been obtained; all statutory and regulatory requirements for such
consummation shall have been fulfilled; and no such authorizations, consents,
approvals or clearances shall contain any conditions that individually or in the
aggregate would have a material adverse effect on the operations of the Station.
ARTICLE VII
CONDITIONS PRECEDENT OF THE
OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the closing Date, of
each of the following conditions, unless waived by Seller in writing:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in this Agreement shall be complete and correct in
all
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material respects on the date hereof and at the Closing Date with the same
effect as though made at such time except for changes that are not materially
adverse to Seller.
7.2 PERFORMANCE OF AGREEMENTS. Buyer shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
7.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and shall have
become effective under the rules of the FCC without a material adverse condition
affecting Seller.
(b) Conditions which the FCC Order or any order, ruling or decree of
any judicial or administrative body relating thereto or in connection therewith
specifies and requires to be satisfied prior to transfer of the FCC Licenses to
Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and clearances of
all Federal, state and local governmental agencies required to permit the
consummation by Seller of the transactions contemplated by this Agreement shall
have been obtained; all statutory and regulatory requirements for such
consummation shall have been fulfilled; and no such authorizations, consents,
approvals or clearances shall contain any conditions that individually or in the
aggregate would have any material adverse effect on Seller.
ARTICLE VIII
CLOSING
8.1 TIME AND PLACE. The Closing shall take place at the offices of Salem
Communications Corporation or at such other place as the parties agree, at 10:00
A.M. on the date (the "Closing Date") that is the later of (i) the fifth
Business Day after the Applicable Date or (ii) the date as soon as practicable
following satisfaction or waiver of the conditions precedent hereunder. The
Applicable Date shall be (i) the date on which issuance of the FCC Order without
any Material Adverse Condition has been published, or (ii) the date on which the
FCC Order shall have become a Final Order, if:
(a) A petition to deny or other third party objection shall have
been filed with the FCC prior to the date on which the FCC Order shall have been
issued and become effective and such petition or objection is not withdrawn
prior to a scheduled closing date; or
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(b) Buyer does not receive consent from its lenders to close the
transaction contemplated by this Agreement prior to Final Action of the FCC.
8.2 DOCUMENTS TO BE DELIVERED TO BUYER BY SELLER. At the Closing, Seller
shall deliver or cause to be delivered to Buyer the following:
(a) Certified resolutions of Seller's shareholders and board of
directors approving the execution and delivery of this Agreement and each of the
other documents and authorizing the consummation of the transactions
contemplated hereby and thereby.
(b) A bill of sale and other instruments of transfer and conveyance
transferring to Buyer the Tangible Personal Property.
(c) Executed releases, in suitable form for filing and otherwise in
form and substance reasonably satisfactory to Buyer, of any security interests
granted in the Sale Assets as security for payment of loans and other
obligations and of any other Liens (other than Permitted Liens).
(d) An instrument or instruments assigning to Buyer all right, title
and interest of Seller in and to all Station Agreements being assumed by Buyer.
(e) An instrument assigning to Buyer all right, title and interest
of Seller in the FCC Licenses, all pending applications relating to the station
before the FCC, and any remaining Sale Assets not otherwise conveyed.
(f) An unwind agreement in form and substance to satisfactory to all
parties, in the event Closing occurs prior to the FCC Order becoming a Final
Action.
(g) Such additional information and materials as Buyer shall have
reasonably requested, including without limitation, evidence that all consents
and approvals required as a condition to Buyer's obligation to close hereunder
have been obtained.
8.3 DOCUMENTS TO BE DELIVERED TO SELLER BY BUYER. At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following:
(a) Certified resolutions of Buyer's Board of Directors approving
the execution and delivery of this Agreement and each of the other Documents and
authorizing the consummation of the transaction contemplated hereby and thereby.
(b) The Purchase Price.
(c) The agreement of Buyer assuming the obligations under any
Station Agreements being assumed by Buyer.
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(d) An unwind agreement in form and substance to satisfactory to all
parties, in the event Closing occurs prior to the FCC Order becoming a Final
Action.
(e) Such additional information and materials as Seller shall have
reasonably requested.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. All representations,
warranties, covenants and agreements contained in this Agreement or in any other
Document shall survive the Closing for a period of ninety (90) days, and the
Closing shall not be deemed a waiver by either party of the representations,
warranties, covenants or agreements of the other party contained herein or in
any other Document. No claim may be brought under this Agreement or any other
Document unless written notice describing in reasonable detail the nature and
basis of such claim is given on or prior to the last day of the Survival Period.
In the event such a notice is so given, the right to indemnification with
respect thereto under this Article shall survive the Survival Period until such
claim is finally resolved and any obligations with respect thereto are fully
satisfied. Notwithstanding the foregoing, the provisions for survival and the
making of claims shall not apply to the agreements whereby Buyer assumes the
obligations under Subsections 8.3(c), each of which agreements shall be governed
by its own terms.
9.2 INDEMNIFICATION IN GENERAL. Buyer and Seller agree that the rights
to indemnification and to be held harmless set forth in this Agreement shall, as
between the parties hereto and their respective successors and assigns, be
exclusive of all rights to indemnification and to be held harmless that such
party (or its successors or assigns) would otherwise have by statute, common law
or otherwise.
9.3 INDEMNIFICATION BY SELLER. Seller shall indemnify and hold harmless
Buyer and any officer, director, agent, employee and affiliate thereof with
respect to any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) relating to or arising out of:
(a) Any breach or non-performance by Seller of any of its
representations, warranties, covenants or agreements set forth in this Agreement
or any other Documents; or
(b) The ownership or operation by Seller of the Station or the Sale
Assets on or prior to the Closing Date; or
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(c) All other liabilities and obligations of Seller other than the
Assumed Obligations; or
(d) Noncompliance by Seller with the provisions of the Bulk Sales
Act, if applicable, in connection with the transaction contemplated hereby.
9.4 INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold harmless
Seller and any officer, director, agent, employee and affiliate thereof with
respect to any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) relating to or arising out of:
(a) Any breach or non-performance by Buyer of any of its
representations, warranties, covenants or agreements set forth in this Agreement
or any other Document; or
(b) The ownership or operation of the Station after the Closing
Date; or
(c) All other liabilities or obligations of Buyer.
ARTICLE X
TERMINATION; LIQUIDATED DAMAGES
10.1 TERMINATION. If Closing shall not have previously occurred, this
Agreement shall terminate upon the earliest of:
(a) the giving of written notice from Seller to Buyer, or from Buyer
to Seller, if:
(i) Seller gives such termination notice and is not at such time
in material default hereunder, or Buyer gives such termination notice and Buyer
is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained
herein of Buyer (if such termination notice is given by Seller) or of Seller (if
such termination notice is given by Buyer) are inaccurate in any respect and
materially adverse to the party giving such termination notice, unless the
inaccuracy has been induced by or is the result of actions or omissions of the
party giving such termination notice; or
(B) Any material obligation to be performed by Buyer (if
such termination notice is given by Seller) or by Seller (if such termination
notice is
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given by Buyer) is not timely performed in any material respect, unless the lack
of timely performance has been induced by or is the result of actions or
omissions of the party giving such termination notice; or
(C) Any condition (other than those referred to in
foregoing Clauses (A) and (B)) to the obligation to close the transaction
contemplated herein of the party giving such termination notice has not been
timely satisfied; and any such inaccuracy, failure to perform or
non-satisfaction of a condition neither has been cured nor satisfied within
twenty (20) days after written notice thereof from the party giving such
termination notice nor waived in writing by the party giving such termination
notice.
(b) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time twelve (12) months after the execution of this Agreement
provided that termination shall not occur upon the giving of such termination
notice by Seller if Seller is at such time in material default hereunder or upon
the giving of such termination notice by Buyer if Buyer is at such time in
material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time following a determination by the FCC that the application
for consent to assignment of the FCC Licenses has been designated for hearing;
provided that the party which is the subject of the hearing (or whose alleged
actions or omissions resulted in the designation for hearing) may not elect to
terminate under this subsection (c).
10.2 OBLIGATIONS UPON TERMINATION.
(a) In the event this Agreement is terminated pursuant to
Section 10.1(a)(ii)(A) or (B), the aggregate liability of Buyer for breach
hereunder shall be limited as provided in Subsections (b), below and the
aggregate liability for Seller for breach hereunder shall be limited as provided
in Subsections (c), below. In the event this Agreement is terminated for any
other reason, neither party shall have any liability hereunder.
(b) If this Agreement is terminated by Seller's giving of valid
written notice to Buyer pursuant to Subsection 10.1(a)(ii)(A) or (B), Buyer
agrees that Seller shall be entitled to receive upon such termination, as
liquidated damages and not as a penalty, the $100,000 (the "Liquidated Damages
Amount"). SELLER'S RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL CONSTITUTE
PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL BE SELLER'S
SOLE REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH HEREUNDER IF CLOSING DOES NOT
OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE THAT THE LIQUIDATED DAMAGE
AMOUNT IS REASONABLE IN LIGHT OF THE ANTICIPATED HARM WHICH WILL BE CAUSED BY
BUYER'S BREACH OF THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS, THE
INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND
THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
(c) If this Agreement is terminated by Buyer's giving of written
notice to Seller pursuant to Subsection 10.1(a)(ii)(A) or (B), Buyer shall be
entitled to receive, upon such termination, direct and actual damages.
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ARTICLE XI
CONTROL OF STATION
Between the date of this Agreement and the Closing Date, Buyer shall not
control, manage or supervise the operation of the Station or conduct of its
business, all of which shall remain the sole responsibility and under the
control of Seller, subject to Seller's compliance with this Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 FURTHER ACTIONS. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents to the other party as the other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
12.2 PAYMENT OF EXPENSES.
(a) Any fees assessed by the FCC in connection with the filings
contemplated by Section 5.2(a) or consummation of the transactions contemplated
hereby shall be shared equally between Seller and Buyer.
(b) All state or local sales or use, stamp or transfer, grant and
other similar taxes payable in connection with consummation of the transactions
contemplated hereby shall be paid by the party primarily liable under applicable
law to pay such tax.
(c) Except as otherwise expressly provided in this Agreement,
each of the parties shall bear its own expenses, including the fees of any
attorneys and accountants engaged by such party, in connection with this
Agreement and the consummation of the transactions contemplated herein.
12.3 SPECIFIC PERFORMANCE. Seller acknowledges that the Station is of a
special, unique, and extraordinary character, and that any breach of this
Agreement by Seller could not be compensated for by damages. Accordingly, if
Seller shall breach its obligations under this Agreement, Buyer shall be
entitled, in addition to any of the remedies that it may have, to enforcement of
this Agreement (subject to obtaining any
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required approval of the FCC) by decree of specific performance or injunctive
relief requiring Seller to fulfill its obligations under this Agreement. In any
action by Buyer to equitably enforce the provisions of this Agreement, Seller
shall waive the defense that there is an adequate remedy at law or equity and
agrees that Buyer shall have the right to obtain specific performance of the
terms of this Agreement without being required to prove actual damages, post
bond or furnish other security.
12.4 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits
hereto, and the other Documents constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements, understandings or
arrangements between the parties with respect to the subject matter hereof.
12.5 BINDING EFFECT; BENEFITS. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors or assigns. Except to the extent specified
herein, nothing in this Agreement, express or implied, shall confer on any
person other than the parties hereto and their respective successors or assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
12.6 GOVERNING LAW. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Washington, including
all matters of construction, validity and performance.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written.
SELLER: BUYER:
SONSINGER, INC. INSPIRATION MEDIA, INC.
By: /s/ ERIC H. HALVORSON By: /s/ ERIC H. HALVORSON
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Eric H. Halvorson Eric H. Halvorson
Vice President Vice President