United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 1996
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SUNGROUP, INC.
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(Exact name of registrant as specified in its charter)
_________________________________________
Tennessee 0-3851 62-0790469
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
9102 North Meridian Street, Suite 545, Indianapolis, Indiana 46260
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 844-7425
Item 5.
OTHER EVENTS
On January 26, 1996, SunMedia, Inc. ("SunMedia"), a wholly owned subsidiary
of SunGroup, Inc. ("SunGroup"), entered into an agreement to sell substantially
all of the assets of radio station WOWW-FM ("Radio Station") in Pensacola,
Florida, to Southern Broadcasting of Pensacola, Inc. ("Southern Broadcasting").
The Radio Station constitutes all of the operating assets of SunMedia, and the
assets being sold are exclusive of certain retained assets, including, without
limitation, accounts receivable. The sale price of the assets of the Radio
Station is $2.3 million in cash, plus certain closing costs up to $175,000. The
sale is contingent upon, among other conditions, consent by the Federal
Communications Commission to the assignment of SunMedia's broadcast license for
the Radio Station to Southern Broadcasting. SunMedia does not anticipate any
difficulty with the subsequent license renewal and transfer to Southern
Broadcasting. SunMedia's station license expired on February 1, 1996; however,
a license renewal application was filed on a timely basis with the Federal
Communications Commission. There exists no material relationship between
Southern Broadcasting and SunGroup, or any of its officers, directors or
affiliates.
In conjunction with SunMedia's sale of the assets of the Radio Station,
SunMedia and SunGroup have entered into an agreement with the Federal Deposit
Insurance Corporation ("FDIC"), the first lien holder of the assets, on the
disposition of the sale proceeds and release of its lien thereof. Once the FDIC
has received approximately $2.25 million from SunMedia from the Radio Station
sale proceeds and other required documentation then, SunMedia and SunGroup will
be discharged of indebtedness to the FDIC with a current book balance of
approximately $5 million.
Item 7.
FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
(2) Asset Purchase Agreement by and between SunMedia, Inc. and Southern
Broadcasting of Pensacola, Inc., dated January 26, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUNGROUP, INC.
Date: February 20, 1996 By: /s/ John E. Southwood, Jr.
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John E. Southwood, Jr.
Vice President, Finance
ASSET PURCHASE AGREEMENT
This Agreement has been made and entered into as of this 26th day of
January, 1996, by and between SunMedia, Inc., a Florida corporation, ("Seller")
and Southern Broadcasting of Pensacola, Inc. ("Buyer") a Florida Corporation, or
its assigns at its discretion.
RECITALS
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A. Seller is licensee of Station WOWW-FM (the "Station").
B. The parties desire that Buyer purchase certain assets used or useful in
the operation of Station and acquire the authorizations issued by the Federal
Communication (the "Commission") for the operation of the Station.
C. The authorizations issued by the Commission may not be assigned to Buyer
without the Commission's prior consent.
NOW THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties, intending to be legally bound, agree as follows:
1. DEFINITIONS As used in this Agreement, the following terms shall have
the following meanings:
1.1 ACCOUNTS RECEIVABLE means the cash accounts receivable arising from the
operation of the Station prior to Closing.
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1.2 ASSIGNMENT APPLICATIONS means the application or applications on FCC
Form 314 that Seller and Buyer shall join in and file with the Commission
requesting its consent to the assignment of the FCC Licenses from the Seller to
Buyer.
1.3 BUSINESS RECORDS means all business records of Seller relating to the
operation of Station and not pertaining to Seller's internal corporate affairs.
1.4 CLOSING means the consummation of the sale and assignment contemplated
by this Agreement.
1.5 CLOSING DATE means the date on which the Closing takes place.
1.6 CODE means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
1.7 CONTRACTS means the contracts, leases and other agreements listed or
described in Appendix A together with all other contracts, leases, and
agreements made between the date hereof and the Closing Date as permitted by the
terms of this Agreement.
1.8 EPA means the Federal Environmental Protection Agency.
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1.9 EQUIPMENT means all tangible personal property and fixtures used in the
operation of the Station including but not limited to the property listed or
described in Appendix B.
1.10 ERISA means the Employee Retirement Income Security Act of 1974 as
amended.
1.11 FAA means the Federal Aviation Administration.
1.12 FCC LICENSES means the licenses, permits and authorization issued by
the Commission for the present operation of the Station and their associated
broadcast auxiliary stations, as listed or described in Appendix C.
1.13 FINAL ORDER means any Commission action that, by lapse of time or
otherwise, is no longer subject to administrative or judicial reconsideration,
review, appeal or stay.
1.14 GOVERNMENTAL AUTHORITY means any agency, or other entity that
exercises regulatory, administrative, judicial, legislative or executive
functions including without limitation the FCC, the FAA, the EPA, the IRS, and
the NLRB.
1.15 HAZARDOUS SUBSTANCE means any pollutant, contaminant, or hazardous or
toxic substance, waste or material as those or similar terms are defined in (or
for the purpose of) the Environmental Laws or
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listed as such by the EPA, and includes without limitation asbestos and
asbestos-related products chlorofluorocarbons, oil or petroleum-derived
compounds, polychlorinated biphenyl, pesticides and radon.
1.16 INTANGIBLE PROPERTY means the goodwill and other intangible assets
used in the operation of the Station, including but not limited to the call
signs, slogans, jingles, logos, trade-names, service marks, copyrights, patents
and similar materials and rights, trade secrets, computer software, magnetic
media, and electronic data processing files, systems and programs.
1.17 IRS means the Internal Revenue Service.
1.18 MATERIAL CONTRACTS means those contracts, leases and agreements
specifically designated in Appendix A as being "Material Contracts."
1.19 NEGATIVE TRADE BALANCE means the aggregate value of time owed pursuant
to the Trade Agreements over and above the aggregate value of the goods and
services to be received pursuant to the Trade Agreements, as computed in
accordance with the Station's customary bookkeeping practices.
1.20 PURCHASED ASSETS means (i) the FCC Licenses, and all other
transferable licenses, permits and authorizations issued by Government
Authorities that are used in or necessary for the lawful operation of the
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Stations; (ii) the Equipment, as set forth in the inventory attached hereto as
Appendix B: (iii) the Contracts, Sales Agreements and Trade Agreements to the
extent assumed by Buyer pursuant to Section 5; (iv) the Real Property; (v) the
Intangible Property; (vi) the Business Records; (vii) a transfer of all
trademarks, copyrights, logos, and trade names; and (viii) all motor vehicles,
copies of the title to same being attached hereto as Exhibit 2. The Purchased
Assets do not, however, include any of the Retained Assets.
1.21 REAL PROPERTY means the FM transmitter sites, site one, 5610
Barrineau Park School Road, and site 2, 5805 Fairground Road, Molino, Florida
together with all of Seller's rights title and interest in and to any
improvements, fixtures, easements, right-of-way, privileges and appurtenances
belonging to and inuring to the benefit of that real estate, any strips and
gores, and any land lying in the bed of any street or road, open or proposed, in
front of or adjoining that real estate, to the center line thereof. The legal
description of the Real Property is set forth in Appendix D.
1.22 RETAINED ASSETS means (i) all books and records that pertain solely
to the organization, existence, and capitalization of Seller; (ii) Seller's cash
and cash equivalents on hand or in banks, certificates of deposit, money market
funds, securities, and other current assets; (iii) the Accounts Receivable; (iv)
Seller's insurance policies in effect on the date of this Agreement or the
Closing Date.
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1.23 SALES AGREEMENTS means agreements for the sale of time on the Station
for cash.
1.24 TRADE AGREEMENTS means agreements for the sale of time on the Station
in exchange for merchandise or services.
1.25 ESCROW AGENT means media venture partners.
1.26 ESCROW DEPOSIT means the good faith deposit of $230,000.00 for a bank
letter of credit deposited with escrow agent pursuant to paragraph 3 of this
agreement.
1.27 LEASED PREMISES means the studio of the Seller located in Pensacola,
Escambia County, Florida.
1.28 OTHER DEFINITIONS Other capitalized terms used in this Agreement
shall have the meanings ascribed to them herein. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistently applied, except as otherwise
provided herein.
1.29 NUMBER AND GENDER Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be construed to mean or include any other gender or
genders.
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2. SALE OF ASSETS. On the Closing Date, subject to the terms and conditions
of the Agreement, Seller shall sell assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase, assume, and accept from Seller, all of the
Purchased Assets (including the business of the Station as a going concern) for
the Purchase Price to be paid as provided in Section 4.
3. ESCROW DEPOSIT. Upon execution and delivery of this Agreement, Buyer
shall deposit Two Hundred Thirty Thousand Dollars ($230,000.00) with Media
Venture Partners as Escrow Agent. The Escrow Deposit shall be held in escrow by
Escrow Agent pursuant to the terms of an Escrow Agreement in the form attached
hereto as Exhibit 1. The Escrow Agreement shall be signed by Seller, Buyer, and
Media Venture Partners simultaneously with the execution of this Agreement. At
Closing, Seller and Buyer shall join in causing the Escrow Deposit to be
released to Buyer to be applied against cash portion of the Purchase Price.
4. PURCHASE PRICE AND METHOD OF PAYMENT. The total consideration for the
Purchase Assets shall be as follows:
4.1 PAYMENT AT CLOSING. On the Closing Date, Seller shall pay to Buyer the
sum of Two Million Three Hundred Thousand Dollars ($2,300,000.00) cash of which
One Hundred Thousand Dollars ($100,000.00) shall be considered a prepaid
consulting agreement. Buyer also agrees to pay up to ($60,000.00) Sixty Thousand
Dollars in Seller's Legal Fees and up to ($115,000.00)
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Brokerage Commission. The net cash amount due from Buyer to Seller at Closing
shall be paid by cashiers check made payable to Seller or as otherwise
instructed in writing by Seller.
5. SELLER'S LIABILITIES. Buyer shall not assume any of Seller's
liabilities, including without limitations any liability under any single or
multiemployer "employee pension benefit plan" as defined in ERISA or for taxes,
except for liabilities accruing after Closing under the Contracts, Sales
Agreements, and Trade Agreements, subject to the following provisions:
(a) Buyer shall be obligated to assume only those Sales Agreements
that were entered into in the ordinary course of business at the Stations'
prevailing rates and that have terms extending for no more than thirteen weeks
after the Closing Date or that are cancelable without penalty on no more than
two (2) weeks notice.
(b) Buyer shall be obligated to assume only those Trade Agreements
that, as of the Closing Date, (i) are immediately pre-emptible for cash time
sales, (ii) obligate Buyer to provide advertising time only on a "run of
schedule" basis, (ii) do not obligate Buyer to provide more than Twelve Thousand
Five Hundred Dollars ($12,500.00) of advertising time in the aggregate. Buyer
shall assume a negative balance, in the aggregate of no more than Twenty-Five
Hundred Dollars ($2,500.00).
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(c) With respect to Contracts that require the consent of third parties for
assignment, but for which the consent of such third parties has not been
obtained as of the Closing Date, Buyer shall assume Seller's obligations to be
performed under those Contracts only for the period after Closing during which
Buyer receives the benefits to which Seller is currently entitled under such
Contracts.
(d) Buyer shall not be required to assume any liability to employees of
Seller except that certain contract of Michael P. McGough. Seller shall supply
an itemization of all such liabilities and evidence of satisfaction of the same
shall be supplied to Buyer by Seller at closing. Buyer shall receive a credit at
closing for any employee credit for vacation time or other benefits pursuant to
this contract.
(e) It is understood that Buyer shall collect Seller's accounts receivable
for a 120 day period after closing, and remit the amount collected, less a 20%
collection fee to be retained by Buyer, to Seller 135 days after closing. Seller
shall be responsible for the collection of remaining Accounts Receivable after
the expiration of the 120 day period. Buyer shall remit any Accounts Receivable
received after the 120 day period expires to Seller less the 20 (twenty) percent
retainage. The receivables which Buyer collects shall be sent to the Seller by
the 20th day of the following month in which the receivable is collected.
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(f) At Closing, Seller shall supply a tax clearance certificate from the
State of Florida attesting to payment of all employment security and other
related taxes due by the Station.
6. PRORATIONS.
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6.1 APPORTIONMENT OF INCOME AND EXPENSE.
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Seller shall be entitled to all income attributable to, and shall be responsible
for all expenses arising out of the operation of the Station until 11:59 p.m. on
the Closing Date. Buyer shall be entitled to all income attributable to, and
shall be responsible for all expenses arising out of, the operation of the
Station after 11:59 p.m. on the Closing Date. All overlapping items of income
or expense, including the following, shall be prorated or reimbursed, as the
case may be, as of 11:59 p.m. on the Closing Date ( the "Prorations"):
(a) Advanced payments received from advertisers prior to Closing, as
permitted by the terms hereof, for or in connection with goods or services where
all or part of such goods or services have not been received or used as of
Closing Date.
(b) Liabilities customarily accrued, arising from expenses incurred but
unpaid as of Closing (e.g., payroll, payroll taxes, and earned vacation time and
sick leave of any employees of Seller who enter into
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Buyer's employ after Closing, rents, sales commissions, and fees for business
and professional services);
(c) Taxes and utility charges related to the Station or in respect to any
of the Purchased Assets;
(d) Deposits and unearned prepayments received by Seller in connection with
any contract, lease, or other agreement assumed by Buyer: and
(e) All other items normally prorated in the sale of the assets of a
business and of a radio broadcast station in particular.
6.2 EMPLOYEE COMPENSATION. Seller shall pay all compensation owed to the
Station Employees through the Closing Date. Buyer may, after closing, employ
those employees of the Station as Buyer may elect on terms and conditions
determined by Buyer in Buyer's sole discretion.
6.3 DETERMINATION AND PAYMENT
(a) IN GENERAL Prorations shall be made, insofar as feasible, at Closing
and shall be paid by way of adjustment to the purchase price. As to Prorations
that cannot be made at Closing, Buyer shall, within one hundred twenty (120)
days after the Closing Date, determine all such Prorations and deliver a
statement of its determinations to Seller, which statement shall set forth in
reasonable detail the basis for such determinations. Within ten(10) days
thereafter, Buyer shall pay to Seller or Seller shall pay to Buyer, as the case
may be,
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the net amount due. If Seller does not concur with Buyer's determinations, the
parties shall confer with regard to the matter and appropriate adjustment and
payment shall be made as agreed upon by the parties. If the parties are unable
to resolve the matter, it shall be referred 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 paid one-half by Seller and
one-half by Buyer.
(b) PROPERTY TAXES If the amount of any real or personal property tax to be
prorated is not known on the Closing Date, such tax shall be apportioned on the
basis of the most recent tax assessment. As soon as the new tax rate and
valuation can be ascertained, there shall be a reapportionment and adjustment
with respect to such tax even though that final proration and adjustment may
take place more than one hundred twenty (120) days after the Closing Date.
7. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Seller hereby makes the following representations, warranties, and covenants,
each of which shall be deemed to be a separate representation, warranty and
covenant, all of which have been made for the purpose of inducing Buyer to
execute this Agreement, and in reliance on which Buyer has agreed to enter into
and perform this Agreement:
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7.1 EXISTENCE AND POWER. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation, with full power under its articles of incorporation and by-laws
to enter into and perform this Agreement.
7.2 BINDING AGREEMENT The execution, delivery and performance of this
Agreement by Seller has been duly authorized by all necessary corporate action,
and certified copies of those authorizing resolutions shall be delivered to
Buyer at Closing. This Agreement has been duly executed and delivered to Buyer
and constitutes a legal, valid and binding obligation of Seller, enforceable in
accordance with its terms.
7.3 CONVEYANCE OF PURCHASED ASSETS At Closing, Seller shall convey to Buyer
good and marketable title to all the Purchased Assets, free and clear of all
mortgages, deeds of trust, liens, pledges, collateral assignments, security
interests, leases, easements, covenants, restrictions and encumbrances or other
defects of title except (i) the lien of any real estate or personal property
taxes that will not become due until after the Closing Date and that will be
prorated between Seller and Buyer pursuant to section 6; (ii) easements and
other rights or restrictions of record pertaining to the Real Property and
Leased Premises, (none of which, except as disclosed in the Title Commitment and
agreed to in writing by the Buyer, will individually or in combination with
others detract from the value of the Real Property or Leased Premises, will
affect the marketability of the
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same or will interfere with Buyer's use after Closing of such real estate for
the purposes for which it is currently being used by Seller).
7.4 CONTRACTS. Those Contracts whose stated duration extends beyond the
Closing Date will, at Closing, be in full force and effect, unimpaired by any
acts or omissions of Seller, Seller's employees or agents, or Seller's officers,
directors or shareholders. Seller will not cancel, terminate, modify, amend,
renew, or encumber any of the Contracts without Buyer's prior written consent.
If any Contract requires the consent of any third party in order for Seller to
assign that Contract to Buyer or to enable Buyer to enjoy the full benefit of
that Contract after Closing subject only to the Contracts present terms, Seller
shall use its best efforts to obtain all such required consents prior to
Closing.
7.5 EQUIPMENT The Equipment as set forth in Appendix B, together with any
improvements and additions thereto and replacements thereof less any retirements
or other disposition as permitted by this Agreement between the date hereof and
the Closing Date, will at Closing, be all the material tangible personal
property used in or necessary for the lawful operation of the Station as
presently operated by Seller. The Station transmitting and studio equipment is
in good operating condition and repair and is not in need of imminent repair or
replacement and complies with all FCC, FAA and OSHA requirements for safety and
operational standards.
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7.6 REAL ESTATE. Seller has and will convey good and marketable title by
special warranty deed to the real property, free and clear of all liens,
encumbrances and rights and claims of third parties. Seller has and, after
Closing Buyer will have, full legal and practical access to the Real Property
and Studio Premises. There are no encroachments upon the Real Property by any
buildings, structures, or improvements located on adjoining real estate. None of
the buildings, structures, or improvements that are constructed on the Real
Property and used or proposed to be used for the operation of the Station
(including without limitation all ground radial, guy wires and guy anchors)
encroaches upon adjoining real estate, and all such buildings, structures, and
improvements are constructed in conformity with and comply with all "set-back"
lines, easements and other restrictions or rights of record, and all applicable
land use, building or safety codes and zoning ordinances. There are no pending
or, to the best of Seller's knowledge, threatened, condemnation or eminent
domain proceedings that may affect the Real property.
7.7 GOVERNMENTAL LICENSES. Except for the FCC Licenses, no material
licenses, permits, or authorizations from any Governmental Authority are
required to operate the Station or to conduct Seller's business as presently
operated and conducted by Seller. The FCC Licenses are all the Commission
authorizations held by Seller with respect to the Station, and, are all
Commission authorizations used in the operation of the station as presently
operated by Seller. The FCC Licenses are in full force and effect and are
unimpaired by any
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acts or omissions of Seller, Seller's employees or agents, or Seller's officers,
directors, or shareholders. Seller is not aware of any reason why the FCC
Licenses might not be renewed by the Commission for full license term in the
ordinary course of business.
7.8 EMPLOYEES. No employee of the Station is represented by a union or
other collective bargaining unit, no application for recognition of a collective
bargaining unit, no application for recognition of a collective bargaining unit
is now pending before NLRB with respect to the Station's employees, and, to the
best of Seller's knowledge, no concerted effort to unionize any of the Stations'
employees is currently in progress. There are no material controversies pending
or threatened between Seller and any of the Station's employees, and Seller is
not aware of any fact that could reasonably result in any such controversy.
Seller has no retirement, pension, profit-sharing, bonus, severance pay,
disability, health, vacation, or other employee benefit plans, practices,
agreements or understandings. An accurate list of all current employees of
Station together with a description of the terms and conditions of their
respective employment as of the date of this Agreement is attached at Appendix
____. Material controversy as used within this paragraph shall mean a
controversy in an amount in excess of $25,000.00. Buyer will not accept the
health and disability insurance plans of the Seller and will substitute their
own plans.
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7.9 UTILITIES. All utilities that are required for the full and complete
occupancy and use of the Real Property for the purposes for which such real
estate is presently being used by Seller including without limitations electric,
water, sewer, telephone and similar services, have been connected to the Real
Property and are in good working order without limitation any "tie-in" charges
or connection fees, except for those charges that will not become due until
after the Closing Date and that are to be prorated between Seller and Buyer
pursuant to Section 6. To the best of Seller's knowledge, no utility lines
serving the Real Property pass over the lands of others except where appropriate
easements or licenses have been obtained.
7.10 TAXES. Seller has, or by the Closing Date will have, paid and
discharged all taxes, assessments, excises and other levies relating to the
Purchased Assets that, if due and not paid, would interfere with Buyer's full
enjoyment of the Purchased Assets after Closing, excepting such taxes,
assessments, and other levies as will not be due until after the Closing Date
and that are to be prorated between Seller and Buyer pursuant to Section 6.
7.11 ENVIRONMENTAL PROTECTION. To the best of Seller's knowledge: (i)
except as consistent with applicable Environmental Laws, and except for
hazardous materials necessary and appropriate to operate Seller's business,
stored and used in compliance with Applicable Environmental Laws... no Hazardous
Substances are present on or below the surface of the Real
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Property or the Leased Premises and such real estate has not previously been
used for the manufacture, refining, treatment, storage, or disposal of any
Hazardous Substances; (ii) none of the soil, ground water, or surface water of
the Real Property or the Leased Premises is contaminated by any Hazardous
Substance; and (iii) no Hazardous Substances are emitted, discharged or released
from the Real Property or the Leased Premises directly or indirectly, into the
atmosphere or any body of water. Neither Seller nor, to the best of Seller's
knowledge, any present or former owner or operator of the Real Property or the
Leased Premises has received any notice of liability, potential, liability, or
noncompliance from any governmental authority or any other entity for cleanup or
response costs with respect to the emission, discharge, or release of any
Hazardous Substance or for any other matter arising under the Environmental laws
due to its ownership or operation of the Real Property or the Leased Premises.
Seller has received no notice of contamination by Hazardous Substances on the
Real Property or Leased Premises. No "underground storage tanks" (as that term
is defined in regulations promulgated by the EPA) are used in the operation of
the Stations or, to the best of Seller's knowledge, are located on the Real
Property.
7.12 COMPLIANCE WITH LAW. There is no outstanding complaint, citation, or
notice issued by any Governmental Authority asserting that Seller is in
violation of any statute, regulation, order or other requirement (including any
applicable statutes, ordinances, or codes relating to
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zoning and land use, health and sanitation, environmental protection,
occupational safety, and the use of electrical power (affecting the Purchased
Assets or the business or operations of the Station, and, to the best of
Seller's knowledge, Seller is in material compliance with all such statutes,
regulations, orders, and requirements. Without limiting the generality of
foregoing:
(a) The Stations' transmitting and studio equipment is operating in
accordance with the terms and conditions of the FAA and FCC licenses and all
underlying construction permits, and the applicable rules, regulations and
policies of the Federal Communication Commission, including without limitation
all regulations concerning authorization and human exposure to radio frequency
radiation.
(b) All ownership reports, employment reports, tax returns and other
documents required to be filed by Seller with the Commission or other
Governmental Authorities have been filed.
7.13 LITIGATION. There is no complaint or proceeding pending or, to the
best of Seller's knowledge, threatened before or by the Commission, any other
Governmental Authority, or any arbitrator relating to the business or operations
of the Station. There is no litigation, action, suit, investigation or
proceeding pending or, to the best of Seller's knowledge, threatened that
presents exposure to a claim against any of the Purchased Assets or which could
adversely affect Seller's ability to perform in accordance with the terms of
this Agreement, and
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Seller is not aware of any facts that could reasonably result in any such
proceeding. The litigation with the FDIC is excepted.
7.14 INSOLVENCY PROCEEDINGS. No insolvency proceedings of any character,
including without limitation bankruptcy, receivership, reorganization, affecting
Seller or the Purchased Assets are pending or threatened.
7.15 NO MISLEADING STATEMENTS. All representations and warranties of Seller
set forth in this Agreement shall be true and correct as of the Closing Date as
if made on that date.
7.16 SELLER'S OPINION OF COUNSEL. An opinion of Seller's counsel in
substantial compliance with the form attached hereto as Exhibit 3.
8. BUYER'S REPRESENTATIONS. WARRANTIES AND COVENANTS. Buyer hereby makes
the following representations, warranties, and covenants to Seller for the
purpose of inducing Seller to enter into and perform this Agreement:
8.1 EXISTENCE AND POWER. Buyer is a corporation, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with full power under its articles of incorporation to enter into
and perform this Agreement.
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8.2 BINDING AGREEMENT. The execution, delivery, and performance of this
Agreement by Buyer has been duly authorized by all necessary corporate action,
and certified copies of those authorizing resolutions will be delivered to
Seller at Closing.
8.3 LICENSEE QUALIFICATIONS. To the best of Buyer's knowledge, there is no
fact that would, under present law (including the Communications Act of 1934, as
amended) and the present rules and regulations of the Commission, disqualify
Buyer from being the assignee of the FCC Licenses or the owner and operator of
the Station.
8.4 LITIGATION. There is no action, suit, investigation or other
proceeding pending or threatened that may adversely affect Buyer's ability to
perform its obligations under this Agreement.
8.5 BUYER REPRESENTS AND WARRANTS AND COVENANTS that it has the financial
strength to consummate this transaction under the terms and conditions of this
agreement.
9. PRE-CLOSING OBLIGATIONS. The parties covenant and agree as follows
with respect to the period prior to Closing:
9.1 APPLICATION FOR COMMISSION CONSENT. Within (15) business days from the
date of this Agreement, Seller and Buyer shall join in and file the Assignment
Application, and they will diligently take all steps
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necessary or desirable and proper to expeditiously prosecute the Assignment
Application and to obtain the Commission's consent to the Assignment.
9.2 FINANCIAL INFORMATION. Between the date hereof and Closing Date,
Seller shall furnish Buyer with monthly operating statements for the Station,
the last of which shall be as of a date no more than sixty (60) days before the
Closing Date, and such additional financial statements and data concerning the
Stations' financial condition as are prepared by Seller in the ordinary course
of business or as may be reasonably requested by Buyer. Such operating
statements and additional financial data shall be true and correct in all
material respects and shall be prepared in accordance with the Stations' normal
operating standards. The monthly operating statements and financial data shall
be certified by Seller's President or Vice President as true and correct to the
best of his knowledge. Seller shall provide financial statements including
income statement, for the 1995 calendar year to date. The financial statements
shall be substantially correct and shall be prepared utilizing, generally
accepted accounting principles. Seller's President shall certify in writing as
to the correctness and accuracy of the financial statements.
9.3 ACCESS. Between the date hereof and the Closing Date, Seller shall give
Buyer or representatives of Buyer reasonable access to the Purchased Assets and
to the books and records of the Station.
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9.4 OPERATIONS PRIOR TO CLOSING. Between the date of this Agreement and
the Closing Date:
(a) Seller shall operate the Station in the normal and usual manner,
consistent with the Seller's past practice and the rules, regulations, and
policies of the Commission, and shall conduct the Stations' business only in the
ordinary course. To the extent consistent with such operations, Seller shall
use its best efforts to: (i) keep available for Buyer the services of Stations'
present employees; (ii) preserve the stations' present customers and business
relations; and (iii) satisfy Seller's obligations under the Trade Agreements.
(b) Seller shall: (i) maintain the Purchased Assets in substantially
their present condition (reasonable wear and tear in normal use and damage due
to unavoidable casualty excepted); (ii) maintain all inventories of supplies,
tubes and spare parts at levels at least equivalent to those existing on the
date of this Agreement; (iii) maintain insurance upon the Purchased Assets and
with respect to the business operations of the Station comparable in amount,
scope and coverage to that in effect on the date of this Agreement; (iv)
promptly give Buyer written notice of any unusual or materially adverse
developments with respect to the Purchased Assets or the business or operations
of the Station.
(c) Seller shall maintain its books and records in the usual, regular and
ordinary manner, on a basis consistent with prior periods.
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(d) Seller shall comply in all material respects with all laws, rules,
ordinances and regulations applicable to it, to the Purchased Assets and to the
business and operations of the Station.
(e) Seller shall not: (i) sell or agree to sell or otherwise dispose of any
of the Purchased Assets other than in the ordinary course of business and only
if such assets are replaced prior to Closing by assets of equal or greater
worth, quality or utility; (ii) permit any infringement, unauthorized use or
impairment of the Intangible Property or change Stations' call sign; (iii)
cancel, terminate, modify or amend any Material Contract; (iv) enter into any
employment contract on behalf of Station unless the same is terminable at will
and without penalty; (v) enter into any other contract, lease or agreement that
will be binding on Buyer after Closing except for (a) Sales Agreements and Trade
Agreements to the extent consistent with Section 5, and (b) other contracts,
leases and agreements made in the ordinary course of business that will not,
individually or in the aggregate, impose any material obligations on Buyer after
Closing.
9.5 DAMAGE.
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(a) RISK OF LOSS. The risk of loss or damage to the Purchased Assets
shall be upon Seller at all times prior to Closing. In the event of material
loss or damage, Seller shall promptly notify Buyer thereof and use its best
efforts to repair, replace or restore the lost or damaged property to its former
condition as soon as possible. If the cost of repairing, replacing or restoring
27
any lost or damaged property is Twenty-Five Thousand Dollars ($25,000.00) or
less, Closing shall occur as scheduled and Seller shall assign to Buyer all
rights under any insurance policy theretofore received by Seller with respect
thereto. If the cost to repair, replace, or restore the lost or damaged
property exceeds Twenty-Five Thousand Dollars ($25,000.00), and Seller has not
repaired, replaced or restored such property prior to the Closing Date, Buyer
may, at its option:
(1) elect to consummate the Closing in which event Seller shall pay to the
Buyer the amount necessary to restore the lost or damaged property to its former
condition and against such obligation shall assign to Buyer all of Seller's
rights under any applicable insurance policies
(2) elect to postpone the Closing Date, with prior consent of the
Commission if necessary, for such reasonable period of time (not to exceed
ninety (90) days) as is necessary, for Seller to repair, replace, or restore the
lost or damaged property to its former condition. If, after the expiration of
that extension period, the lost or damaged property has not been adequately
repaired, replaced or restored, Buyer may terminate this Agreement, in which
event the Escrow Deposit shall be returned to Buyer and the parties shall be
released and discharged from any further obligation hereunder.
For purposes of this Section, loss or damage shall be deemed
"material" if the reasonable cost to repair, replace, or restore the lost or
damaged property exceeds Twenty-Five Thousand Dollars ($25,000.00).
28
(b) FAILURE TO BROADCAST TRANSMISSIONS. Seller shall give prompt written
notice to Buyer if the transmission of the regular broadcast programming of
WOWW-FM in the normal and usual manner is interrupted or discontinued.
(c) RESOLUTION OF DISAGREEMENTS. If the parties are unable to agree upon
the extent of any loss or damage, the cost to repair, replace or restore any
lost or damaged property, the adequacy of any repair, replacement, or
restoration of any lost or damaged property, or any other matter arising under
this Section, the disagreement shall be referred to a qualified consulting
communications engineer mutually acceptable by Seller and Buyer who is a member
of the Association of Federal Communications Consulting Engineers, whose
decision shall be final, and whose fees and expenses shall be paid one-half by
Seller and one-half by Buyer.
9.6 ADMINISTRATIVE VIOLATIONS. If Seller receives any finding, order,
complaint, citation or notice prior to Closing which states that any aspect of
the Stations' operations violates any rule or regulation of the Commission or of
any other Governmental Authority (an "Administrative Violation"), including
without limitation any rule or regulation concerning environmental protection,
the employment of labor, or equal employment opportunity, Seller shall promptly
notify Buyer of the Administrative Violation, use its best efforts to remove or
correct
29
the Administrative Violation, and be responsible for the payment of all costs
associated therewith, including any fines or back pay that may be assessed.
9.7 CONTROL OF STATION. This Agreement shall not be consummated until
after the Federal Communications Commission has given its written consent
thereto, and between the date of this Agreement and the Closing Date, Buyer
shall not directly or indirectly control, supervise or direct, or attempt to
control, supervise or direct the operations of the Station. Such operations
shall be the sole responsibility of Seller.
10. CONDITIONS PRECEDENT.
10.1 MUTUAL CONDITIONS. The obligations of both Seller and Buyer to
consummate this Agreement is subject to the satisfaction of each of the
following conditions:
(a) COMMISSION CONSENT. The Commission shall have granted the Assignment
Application, such grant shall have become a Final Order, and such grant shall be
in full force and effect on the Closing Date.
(b) Absence of Litigation. As of the Closing Date, no action, suit, or
proceeding seeking to enjoin, restrain, or prohibit the consummation of the
transaction contemplated by this Agreement shall be pending before any court,
the Commission, or any Governmental Authority; provided, however, that this
Paragraph may not be invoked by a party if any such action, suit,
30
or proceeding was solicited or encouraged by, or instituted as a result of any
act or omission of, such party.
10.2 CONDITIONS TO BUYER'S OBLIGATION. In addition to satisfaction of the
mutual conditions contained in Section 10.1, the obligation of Buyer to
consummate this Agreement is subject to the satisfaction of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Seller to Buyer shall be true, complete, and correct in all material respects as
of the Closing Date with the same force and effect as if then made.
(b) COMPLIANCE WITH CONDITIONS. All of the terms, conditions and covenants
to be complied with or performed by Seller on or before the Closing Date shall
have been duly complied with and performed in all material respects.
(c) ENVIRONMENTAL AUDIT. Prior to Closing, Buyer shall be entitled to
perform a Phase I environmental assessment of the Real Property and the Leased
Premises in accordance with Part X of the Federal National Mortgage
Association's Delegated Underwriting and Servicing Guide, including the
certificate of the environmental engineer stating in substance that, following
all appropriate inquiry into the previous ownership and uses of such real estate
consistent with good commercial or customary practice, the engineer has
31
concluded that there is no environmental condition on or affecting such real
estate that would materially impair the use of such real estate for the present
or proposed operation of the Station. In the event that either the Phase I
environmental assessment or other information brought to Buyer's attention shall
reasonably suggest that further study is necessary, Buyer may undertake such
testing and Buyer's failure to complete such further testing prior to closing
shall not be a waiver of this environmental audit provision. The leased
premises as herein used shall mean the leased premises wherein the studio is
located as previously set forth in this agreement.
(d) THIRD-PARTY CONSENTS. At Closing, Seller shall deliver to Buyer all
required third-party consents to Buyer's assumption of the Material Contracts
such that Buyer will enjoy all the rights and privileges of Seller under the
material Contracts subject only to the same obligations as are binding on Seller
pursuant to the Material Contracts' terms.
(e) ESTOPPEL CERTIFICATES. At Closing, Seller shall deliver to Buyer a
certificate executed by the lessor of the office and studio, dated no more than
fifteen (15) days prior to the Closing Date, stating (i) that all leases are in
full force and effect and have not been modified; (ii) the date to which all
rent and other sums due hereunder have been paid; (iii) that, to the best of
Lessor's knowledge, Seller is not in default under any leases.
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(f) CLOSING DOCUMENTS. Seller shall deliver to Buyer all of the closing
documents specified in paragraph 11.2 (a), all of which documents shall be dated
as of the Closing Date, duly executed, and in a form reasonably acceptable to
Buyer.
(g) NO ADVERSE CHANGES. There shall have been no change subsequent to the
date of this Agreement in the operation or condition, financial or otherwise, of
the Station except for changes in the ordinary course of business or as
contemplated by this Agreement, none of which, individually or in the aggregate,
shall be materially adverse. Material adverse change for the purpose of this
paragraph is defined as an amount greater than $25,000.00 in the aggregrate.
(h) STUDIO LEASE. Seller shall use its best efforts to negotiate on
terms and conditions acceptable to Buyer, a commitment from the landlord for a
period of at least ninety (90) days, post closing, for the studio site location.
If the Seller is required to move before closing, they will pay the cost of the
move. If the Buyer is required to move within thirty-one (31) days of the date
of closing, the Seller will reimburse reasonable moving expenses of the Buyer up
to Twenty Thousand Dollars ($20,000.00).
10.3 CONDITIONS TO SELLER'S OBLIGATIONS. In addition to satisfaction
of the mutual conditions contained in Section 10.1, the
33
obligation of Seller to consummate this Agreement is subject to satisfaction of
each of the following conditions
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Buyer to Seller shall be true, complete, and correct in all material respects as
of the Closing Date with the same force and effect as if then made.
(b) COMPLIANCE WITH CONDITIONS. All of the terms, conditions and covenants
to be complied with or performed by Buyer on or before the Closing Date shall
have been duly complied with and performed in all material respects.
(c) Buyer representing and certifying that it is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power under its articles of
incorporation and by-laws to enter into and perform this Agreement.
(d) Buyer certifying in writing that this Agreement has been duly executed
by Buyer and such action has been duly authorized by all necessary corporate
action and this Agreement constitutes the legal, valid, and binding obligation
of Buyer.
(e) Buyer certifying in writing that none of (i) the execution and delivery
of this Agreement by Buyer, (ii) the consummation of the transactions
contemplated by the Agreement, or (iii) compliance
34
with the terms and conditions hereof will conflict with, breach the terms and
conditions of, constitute a default under, or violate Buyer's articles of
incorporation or by-laws, or any judgment, decree, order, agreement, lease, or
other instrument to which Buyer is a party or by which Buyer is legally bound.
(f) Buyer certifying in writing no suit, action or proceeding is pending or
threatened that questions or may affect the validity of any action to be taken
by Buyer pursuant to this Agreement, or that seeks to restrain Buyer from
carrying out the transaction contemplated by this Agreement or Buyer's
obligations hereunder.
(g) PAYMENT. Buyer shall pay the Purchase Price as provided in Section 4.
(h) CLOSING DOCUMENTS. Buyer shall deliver to Seller all the closing
documents specified in Paragraph 11.2 (b), all of which shall be dated as the
Closing Date, duly executed, and in a form reasonably acceptable to Seller.
11. CLOSING
11.1 CLOSING DATE. The Closing Date of this Agreement shall be no later
than the thirtieth (30th) business day after the date on which the Commission's
grant of the Assignment Application becomes Final Order. In the absence of a
mutual agreement by Seller and buyer to the contrary, Closing shall take place
at 10:00 a.m. on such thirtieth (30th) business day at the
35
offices of Buyer's counsel in Tallahassee, Florida, or such other place as
designated by the parties. However, closing of this agreement shall take place
no greater than nine months from the date of the agreement.
11.2 PERFORMANCE AT CLOSING The following documents shall be executed and
delivered in form reasonably satisfactory to counsel for the parties at Closing:
(a) BY SELLER. Seller shall deliver to Buyer:
(1) A certificate executed by Seller's President attesting to (i) Seller's
compliance with the matters set forth in Paragraphs 10.2 (a) and 10.2 (b) and
(ii) the total amount of advertising time owed in respect of the Trade
Agreements and the Negative Trade balance, if any.
(2) One or more assignments transferring to Buyer all of the interests
of Seller in and to the FCC licenses, and all other transferable Licenses,
permits, and authorizations issued by any other Governmental Authorities that
are used in or necessary for the lawful operation of the Station.
(3) One or more bills of sale conveying to Buyer all of the Equipment,
Intangible Property and Business Records.
(4) One or more assignments assigning to Buyer all of the Contracts, Sales
Agreements and Trade Agreements.
36
(5) One or more special warranty deeds (with all required documentary
stamps attached and in proper form for recording) conveying to Buyer all of the
Real Property.
(6) The corporate resolution of the Seller, properly authorizing the
corporation to sell the assets set forth pursuant to the terms of the Asset
Purchase Agreement.
(7) Any and all other such documentation as reasonably deemed by Buyer's
counsel or Buyer to be necessary to transfer title to assets conveyed.
(b) BY BUYER. Buyer shall deliver to Seller:
(1) The Purchase Price;
(2) A certificate executed by Buyer's President attesting to Buyer's
compliance with the matters set forth in paragraphs 10.3 (a) and 10.3 (b); and
(3) Such assumption agreements and other instruments and documents as are
required to make, confirm and evidence Buyer's assumption of an obligation to
pay, perform, or discharge Seller's obligations under Contracts, Sales
Agreements, Trade Agreements to the extent the same are to be assumed by Buyer
pursuant to the terms of this Agreement.
37
The parties will also execute such other documents and perform such other
acts, before and after Closing as may be necessary for the complete
implementation and consummation of this Agreement.
12. INDEMNIFICATION.
12.1 BUYER'S RIGHT TO INDEMNIFICATION. Seller undertakes and agrees to
reimburse and indemnify Buyer for, and to defend and hold Buyer harmless against
any and all losses, costs, liabilities, fines, penalties, obligations, and
expenses, including reasonable attorney's fees arising from (i) the breach,
misrepresentation, or other violation of any of Seller's representations,
warranties, or covenants contained in this Agreement; (ii) the operation of the
Station or ownership of the Purchased Assets prior to Closing; (iii) all
liabilities of Seller not expressly assumed by Buyer in writing; (iv) all liens,
charges, or encumbrances on any of the Purchased Assets that are not expressly
permitted by this Agreement or otherwise consented to by buyer in writing; (v)
all Administrative Violations and alleged Administrative Violations occurring
prior to Closing; (vi) any breach or default by Seller under any Contract, Sales
Agreement or Trade Agreement prior to Closing; and (vii) the failure to obtain
any third-party consents that were required in order for Seller to assign any
Contract to Buyer or to enable Buyer to enjoy the full benefit of the Contract
after Closing subject only to the Contract's present terms. The foregoing
indemnity is intended by Seller to cover all acts, suits, proceedings, claims,
38
demands, assessments, and adjustments, with respect to any and all of the
specific matters set forth in this indemnity and shall be without limitations as
to amount.
12.2 SELLER'S RIGHT TO INDEMNIFICATION. Buyer undertakes and agrees to
reimburse and indemnify Seller for, and to defend and hold Seller harmless
against any and all losses, costs, liabilities, fines, penalties, obligations,
and expenses including reasonable attorney's fees, arising from (i) the breach,
misrepresentation, or other violation of any of Buyer's representations,
warranties or covenants contained in this Agreement; (ii) the operation of the
Station or ownership of the Purchased Assets after Closing; (iii) all
liabilities of Buyer; (iv) all liabilities under Contracts, Sales Agreement, and
Trade Agreements to the extent specifically assumed by Buyer pursuant to this
Agreement; (v) any breach or default by Buyer under any Contract, Sales
Agreement, or Trade Agreement after Closing; and (vi) any damages or injuries
caused by inspecting agents of Buyer. The foregoing indemnity is intended by
Buyer to cover all acts, suits, proceedings, demands, assessments, adjustments,
costs and expenses with respect to any and all of the specific matters set forth
in this indemnity and shall be without limitations as to amount.
12.3 LIMITATIONS ON INDEMNIFICATION RIGHTS. Indemnification shall be due
only to the extent of the loss or damage actually suffered (i.e., reduced by any
offsetting or related asset or service received and by any recovery from any
third party, such as an insurer). Neither party shall be
39
entitled to assert any claim for indemnification until the aggregate amount of
indemnity payments otherwise due that party exceed $1,000; provided, however,
that this limitation shall not apply with respect to third party claims and
provided, further, that the Indemnitor shall be liable for the full amount of
indemnification due the Indemnified Party once such amount exceeds $1,000.
12.4 CONDUCT OF PROCEEDINGS. If any claim or proceeding covered by the
foregoing agreements to indemnity and hold harmless shall arise, the party who
seeks indemnification (the "Indemnified Party") shall give written notice
thereof to the other party (the "Indemnitor") promptly after the Indemnified
Party learns of the existence of such claim or proceeding; provided, however,
that the Indemnified Party's failure to give the Indemnitor prompt notice shall
not bar the Indemnified Party's right to indemnification unless such failure has
materially prejudiced the Indemnitor's ability to defend the claim or
proceeding. The Indemnitor shall have the right to employ counsel reasonably
acceptable to the Indemnified Party to defend against any such claim or
proceeding, or to compromise, settle or otherwise dispose of the same, if the
Indemnitor deems it advisable to do so, all at the expense of the Indemnitor.
The parties will fully cooperate in any such action, and shall make available to
each other any books or records useful for the defense of any such claim or
proceeding. If the Indemnitor fails to acknowledge in writing its obligation to
defend against or settle such claim or proceeding within twenty (20) days after
receiving notice thereof from the Indemnified Party (or such
40
shorter time specified in the notice as the circumstances of the matter may
dictate) the Indemnified Party shall be free to dispose of the matter, at the
expense of the Indemnitor, in any way in which the Indemnified Party deems to be
in its best interest. Provided the Indemnitor has acknowledged in writing its
obligation as aforesaid, then any compromise or settlement of the claims to be
made by the Indemnitor shall only occur upon the prior consent of the
Indemnified Party, which consent shall not be unreasonably withheld,
conditioned, or delayed.
12.5 INDEMNIFICATION NOT SOLE REMEDY. The right to indemnification
hereunder shall not be the exclusive remedy of either party in connection with
any breach by the other party of its representations, warranties, or covenants,
nor shall such indemnification be deemed to prejudice or operate as a waiver of
any remedy to which either party may otherwise be entitled as a result of any
such breach by the other party.
13. DEFAULT AND REMEDIES.
13.1 MATERIAL BREACHES. A party shall be deemed to be in default under this
Agreement only if such party has materially breached or failed to perform its
obligations hereunder, and, no non-material breaches or failures shall be
grounds for declaring a party to be in default, postponing the Closing, or
terminating this Agreement.
13.2 OPPORTUNITY TO CURE. If either party believes the other to be in
default hereunder, the former party shall provide the other
41
with written notice specifying in reasonable detail the nature of such default.
If the default has not been cured by the earlier of: (i) the Closing Date, or
(ii) within (10) days after delivery of that notice or such additional
reasonable time as the circumstances may warrant provided the party in default
undertakes diligent, good faith efforts to cure the default within such ten (10)
day period and continues such efforts thereafter), then the party giving such
notice may exercise the remedies available to such party pursuant to this
Section, subject to the right of the other party to contest such action through
appropriate proceedings.
13.3 SELLER'S REMEDIES. Buyer recognizes that if the transaction provided
for in this Agreement is not consummated as a result of Buyer's default, Seller
would be entitled to compensation, the extent of which is extremely difficult
and impractical to ascertain. To avoid this problem the parties agree that if
this Agreement is not consummated due to the default of Buyer, Seller, provided
that Seller is not in default and has otherwise complied with its obligations
under this Agreement, shall be entitled to the Escrow Deposit. The parties agree
that this sum shall constitute liquidated damages and shall be in lieu of any
other relief to which Seller might otherwise be entitled due to Buyer's Default.
Seller shall have the right to enforce performance under this agreement in the
event of Buyer's default by the right to specifically enforce Buyer's
performance. Buyer hereby agrees to waive the defense in any such suit that
Seller has an adequate remedy at law and
42
to interpose no opposition, legal or otherwise as to the propriety of specific
performance as a remedy.
13.4 BUYER'S REMEDIES. Seller agrees that the Purchased 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, notwithstanding the provisions of Section 13.5, Buyer shall
have the right specifically to enforce Seller's performance under this
Agreement, and Seller agrees to waive the 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. In the event Buyer
elects to terminate this Agreement as a result of Seller's default instead of
seeking specific performance, Buyer shall be entitled to the return of the
Escrow Deposit. The remedies described in this Section shall be in addition to,
and not in lieu of, any other remedies that Buyer may select to pursue.
13.5 ARBITRATION. Except for the special arbitration provision of Sections
6.3 and 9.6 (c), and as otherwise provided to the contrary below, any dispute
arising out of or related to this Agreement that Seller and Buyer are unable to
resolve by themselves shall be settled by arbitration in Tallahassee, Florida by
a panel of three arbitrators. Seller and Buyer shall each designate one
disinterested arbitrator, and the two arbitrators so designated shall select the
third arbitrator. The arbitration hearing shall be conducted in accordance
43
with the commercial arbitration rules of the American Arbitration Association.
The written decision of a majority of the arbitrators shall be final and binding
on Seller and Buyer. The costs and expenses of the arbitration proceeding shall
be assessed between Seller and Buyer in a manner to be decided by a majority of
the arbitrators, and the assessment shall be set forth in the decision and award
of the arbitrators. Judgment on the award, if it is not paid within thirty (30)
days, may be entered in any court having jurisdiction over the matter. No
action at law or suit in equity based upon any claim arising out of or related
to this Agreement shall be instituted in any court by Seller or Buyer against
the other except (i) an action to compel arbitration pursuant to this Section,
(ii) an action to enforce the award of the arbitration panel rendered in
accordance with this Section, or (iii) a suit for specific performance pursuant
to Section 13.4.
14. TERMINATION.
14.1 Absence of Commission Consent. This Agreement may be terminated at the
option of either party upon written notice to the other if a Final Order
approving the Assignment Application has not been obtained within 9 months after
the date on which the Assignment Application is accepted for filing by the
Commission; provided, however, that neither party may terminate this Agreement
if such party is in default hereunder, or if a delay in any decision or
determination by the Commission respecting the Assignment Application has been
caused or materially contributed to (i) by any failure of such party to furnish,
file or
44
make available to the Commission information within its control; (ii) by the
willful furnishing by such party of incorrect, inaccurate or incomplete
information to the Commission; or (iii) by any other action taken by such party
for the purposes of delaying the Commission's decision or determination
respecting the Assignment Application. In the event of termination pursuant to
this Section, Escrow Deposit shall be returned to Buyer and the parties shall be
released and discharged from any further obligation hereunder unless the failure
to obtain such Final Order is attributable to Buyer, as provided in this
Section, and Seller is not in default and has otherwise complied with its
obligations under this Agreement, in which case Escrow Deposit shall be released
to Seller as liquidated damages pursuant to Section 13.3.
14.2 DESIGNATION FOR HEARING. The time for Commission approval provided in
Section 14.1 notwithstanding, either party may terminate this Agreement upon
written notice to the other, if, for any reason, the Assignment Application is
designated for hearing by the Commission, provided, however, that written notice
of termination must be given within twenty (20) days after release of the
hearing designation order and that the party giving such notice is not in
default and has otherwise complied with its obligations under this Agreement.
Upon termination pursuant to this Section, the Escrow Deposit shall be returned
to Buyer and the parties shall be released and discharged from any further
obligation hereunder.
GENERAL PROVISIONS
45
15.1 EXPENSES. Except as otherwise provided herein, all expenses involved
in the preparation and consummation of this Agreement shall be borne by the
party incurring same whether or not the transaction contemplated herein is
consummated. All Commission filing fees for the Assignment Application will be
paid one half by Seller and one half by Buyer. All recording costs for deeds and
other instruments of transfer, and all documentary stamps, sales, use and
transfer taxes shall be paid by Seller. Seller shall pay all title insurance
premiums and shall furnish an owner's policy of title insurance from an
acceptable underwriter to the Buyer in the minimum amount of $500,000.00.
15.2 NOTICES. All notices, requests, demands, and other communications
pertaining to this Agreement shall be in writing and shall be deemed duly given
when delivered personally (which shall include delivery by Federal Express or
other recognized overnight courier service that issues a receipt or other
confirmation of delivery) to the party for whom such communication is intended,
or three(3) business days after the date mailed by certified mail, return
receipt requested, postage pre-paid, addressed as follows:
(a) If to Seller:
Mr. John W. Biddinger, President
SunCap Media, Inc.
9102 North Meridian, Suite 545
Indianapolis, Indiana 46260
With copy to
Mr. Charles Sanger, Esquire
46
Boult, Cummings, Conners & Berry
414 Union Street, Suite 1600
Post Office Box 198062
Nashville, Tennessee 37219
(b) If to Buyer:
Mr. Paul Stone, President
Southern Broadcasting Companies, Inc.
3360 Capital Circle, N.E.
Suite D
Tallahassee, FL 32308
with copy to:
Mark S. Levine, Esquire
Levine & Stivers
245 East Virginia Street
Tallahassee, Florida 32301
Either party may change its address for notices by written notice to the other
given pursuant to this Section. Any notice purportedly given by a means of other
than as set forth in this Section shall be deemed ineffective.
15.3 ASSIGNMENT. Neither party may assign its rights or obligations
hereunder without the prior written consent of the other party except: (i) at
Closing, Buyer may designate another party to take title to the Real property;
and (ii) Buyer may make a collateral assignment of its rights under this
Agreement to any institutional lender(s) who provides funds to Buyer for the
acquisition or operation of the Station; (iii) Buyer may prior to Closing assign
this contract and all rights thereunder to an entity in which Paul Stone and
Charles
47
Giddens, or Southern Broadcasting Companies, Inc. is the controlling equity
owner; and Seller may assign its rights hereunder to its institutional lenders.
Seller agrees to execute acknowledgments of such assignment(s) and collateral
assignment(s) in any such forms as Buyer or Buyer's institutional lender(s) may
from time to time request. Subject to the foregoing, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective successors and assignees.
15.4 EXCLUSIVE DEALINGS. For so long as this Agreement remains in effect,
neither Seller nor any person acting on Seller's behalf shall solicit or
initiate any offer from, or conduct any negotiations with, any person concerning
the acquisition of the Station, directly or indirectly, by any party other than
Buyer or Buyer's permitted assignees.
15.5 THIRD PARTIES. Except for Buyer's institutional lender(s) to the
extent specifically provided herein, nothing in this Agreement, whether express
or implied, is intended to: (i) confer any rights or remedies on any person
other than Seller, Buyer, and their respective successors and permitted
assignees; (ii) to relieve or discharge the obligation or liability of any third
party; or (iii) to give any third party any right of subrogation or action
against either Seller or Buyer.
15.6 WAIVER. Unless otherwise specifically agreed in writing to the
contrary: (i) the failure of either party at any time to require
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performance by the other of any provision of this Agreement shall not affect
such party's right thereafter to enforce the same; (ii) no waiver by either
party of any default by the other shall be taken or held to be a waiver by such
party of the other preceding or subsequent default; and (iii) no extension of
time granted by either party for the performance of any obligation or act by the
other party shall be deemed to be an extension of time for the performance of
any other obligation or act hereunder.
15.7 SURVIVAL OF REPRESENTATIVES AND WARRANTIES. The several
representations, warranties, and covenants of the parties contained herein shall
survive the Closing.
15.8 PRIOR NEGOTIATIONS. This Agreement supersedes in all respects all
prior and contemporaneous oral and written negotiations, understandings and
agreements between the parties with respect to the subject matter hereof. All of
said prior and contemporaneous negotiations, understandings and agreements are
merged herein and superseded hereby.
15.9 EXHIBITS AND APPENDICES. The Exhibits and Appendices attached hereto
or referred to herein are a material part of this Agreement, as if set forth in
full herein.
15.10 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Exhibits and
Appendices to this Agreement set forth the entire understanding between the
parties in connection with the transaction contemplated
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herein, and there are no terms, conditions, warranties, or representations other
than those contained, referred to or provided for herein and therein. Neither
this Agreement nor any term or provision hereof may be altered or amended in any
manner except by an instrument in writing signed by the party against whom the
enforcement of any such change is sought.
15.11 CHOICE OF LAWS. This Agreement is to be construed and governed by the
laws of the State of Florida, except for the choice of law rules utilized in
that jurisdiction.
15.12 LEGAL FEES. In the event that litigation is necessary as a result of
a breach or failure to comply with the terms and conditions of this agreement,
the prevailing party shall be entitled to legal fees, including legal fees on
appeal, and costs.
15.13 SEVERABILITY. If any term of this Agreement is illegal or
unenforceable at law or in equity, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. Any illegal or unenforceable term shall be deemed to be void
and of no force and effect only to the minimum extent necessary to bring such
term within the provisions of applicable law and such term, as so modified, and
the balance of this Agreement shall then be fully enforceable.
15.14 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on
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each such counterpart were on the same instrument. Each fully executed set of
counterparts shall be deemed to be an original, and all of the signed
counterparts together shall be deemed to be one and the same instrument. This
Agreement shall become effective only after the execution hereof (or
counterparts hereof) by all parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SELLER:
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SunMedia, Inc., a Florida corporation
By: /s/ John C. Biddinger
-----------------------------------------
John C. Biddinger
Its President
BUYER:
------
Southern Broadcasting of Pensacola, Inc.
By: /s/ Paul Stone
------------------------------------------------
Paul Stone
Its President
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