EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
by and among
REGENT COMMUNICATIONS, INC.,
as the Purchaser,
and
BRILL MEDIA COMPANY, LLC
and
CERTAIN OF ITS SUBSIDIARIES
IDENTIFIED ON EXHIBIT A,
as the Sellers
Dated as of August 22, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE..................................................................2
Section 1.1 Purchase and Sale of Assets.............................................2
Section 1.2 Excluded Assets.........................................................4
Section 1.3 Assumed Liabilities.....................................................5
Section 1.4 Excluded Liabilities....................................................5
Section 1.5 Non-Assignment of Assumed Contracts.....................................6
Section 1.6 Purchase Price..........................................................6
Section 1.7 Prorations and Adjustments..............................................8
Section 1.8 Accounts Receivable.....................................................9
Section 1.9 Deferred Agreements.....................................................9
ARTICLE II THE CLOSING......................................................................11
Section 2.1 Closing................................................................11
Section 2.2 Time Brokerage Agreement...............................................12
Section 2.3 Acquisition Subsidiaries...............................................12
Section 2.4 Deposit................................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS...................................13
Section 3.1 Organization...........................................................14
Section 3.2 Authority Relative to this Agreement...................................14
Section 3.3 Consents and Approvals.................................................15
Section 3.4 No Violations..........................................................15
Section 3.5 Financial Statements...................................................15
Section 3.6 Litigation.............................................................16
Section 3.7 No Default.............................................................16
Section 3.8 No Violation of Law....................................................16
Section 3.9 FCC Licenses...........................................................17
Section 3.10 Environmental Matters.................................................18
Section 3.11 Employee Benefits; Labor Matters......................................18
Section 3.12 Real Property.........................................................19
Section 3.13 Title to and Use of Property..........................................20
Section 3.14 Contracts.............................................................21
Section 3.15 Intellectual Property.................................................22
Section 3.16 Bankruptcy Administrative Officer Approval and Recommendation.........23
Section 3.17 FAA Compliance........................................................23
Section 3.18 Investment............................................................23
Section 3.19 Access to Information.................................................24
Section 3.20 Offering Restrictions.................................................24
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Section 3.21 Condition of Equipment................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..................................24
Section 4.1 Organization...........................................................24
Section 4.2 Authority Relative to this Agreement...................................25
Section 4.3 Non-Contravention; Approvals and Consents..............................25
Section 4.4 Legal Proceedings......................................................25
Section 4.5 Financing..............................................................26
Section 4.6 Valid Issuance.........................................................26
ARTICLE V COVENANTS.........................................................................26
Section 5.1 Conduct of Business....................................................26
Section 5.2 Access and Information.................................................27
Section 5.3 Filings; Other Action..................................................27
Section 5.4 FCC Licenses...........................................................28
Section 5.5 FCC Applications.......................................................28
Section 5.6 Public Announcements...................................................38
Section 5.7 Bankruptcy Actions.....................................................29
Section 5.8 Tax Returns and Filings; Payment of Taxes..............................30
Section 5.9 Tax Matters............................................................30
Section 5.10 Employment Matters....................................................30
Section 5.11 Brokers or Finders....................................................32
Section 5.12 Audit.................................................................32
Section 5.13 Rejected Contracts....................................................32
Section 5.14 Additional Matters....................................................32
Section 5.15 Bidding Procedures....................................................32
ARTICLE VI ADDITIONAL POST-CLOSING COVENANTS................................................33
Section 6.1 Further Assurances.....................................................33
Section 6.2 Books and Records; Personnel...........................................33
Section 6.3 Third Party Rights.....................................................34
Section 6.4 Further Agreements.....................................................34
Section 6.5 Shelf Registration.....................................................34
ARTICLE VII CONDITIONS PRECEDENT............................................................35
Section 7.1 Conditions Precedent to Obligations of the Sellers and the Purchaser...35
Section 7.2 Conditions Precedent to Obligation of the Sellers......................36
Section 7.3 Conditions Precedent to Obligations of the Purchaser...................36
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER..............................................37
Section 8.1 Termination by Mutual Consent..........................................37
Section 8.2 Termination by Either the Purchaser or the Sellers.....................37
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Section 8.3 Termination by the Sellers.............................................37
Section 8.4 Termination by the Purchaser...........................................38
Section 8.5 Effect of Termination and Abandonment..................................38
ARTICLE IX DELIVERIES AT CLOSING............................................................38
Section 9.1 Sellers' Deliveries at Closing.........................................38
Section 9.2 Purchaser's Deliveries at Closing......................................39
Section 9.3 Required Documents.....................................................39
ARTICLE X GENERAL PROVISIONS................................................................39
Section 10.1 Notices...............................................................39
Section 10.2 Risk of Loss..........................................................40
Section 10.3 Descriptive Headings..................................................41
Section 10.4 Entire Agreement; Assignment..........................................41
Section 10.5 Governing Law.........................................................41
Section 10.6 Venue and Retention of Jurisdiction...................................41
Section 10.7 Expenses..............................................................41
Section 10.8 Amendment.............................................................41
Section 10.9 Waiver................................................................42
Section 10.10 Counterparts; Effectiveness..........................................42
Section 10.11 Parties in Interest..................................................42
Section 10.12 Enforcement of Agreement.............................................42
Section 10.13 Liability of the Bankruptcy Administrative Officer...................42
Section 10.14 Non-Survival of Representations, Warranties and Agreements...........43
Section 10.15 No Other Representations.............................................43
ARTICLE XI DEFINITIONS......................................................................43
Section 11.1 Defined Terms.........................................................43
Section 11.2 Other Definitional Provisions.........................................49
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of August 22, 2002 (this
"Agreement"), is made and entered into by and among REGENT COMMUNICATIONS, INC.,
a Delaware corporation (the "Purchaser"), BRILL MEDIA COMPANY, LLC, a Virginia
limited liability company ("Brill") and certain of its subsidiaries identified
on Exhibit A attached hereto (the "Brill Subsidiaries" and, together with Brill,
the "Sellers"). Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in Article XI.
WHEREAS, the Sellers are engaged in the business of owning and
operating the Radio Broadcast Stations (the "Business");
WHEREAS, on January 17, 2002, involuntary petitions for relief
under chapter 7 of title 11 of the United States Code, 11 U.S.C. Sections
101-1330 (as amended, the "Bankruptcy Code"), were filed against Brill, and
certain of its wholly-owned subsidiaries, Brill Media Management, Inc. ("BMM")
and BMC Holdings, LLC ("BMCH", collectively with BMM and Brill, the "Involuntary
Debtors"), by petitioning creditors ("Petitioning Creditors") in the United
States Bankruptcy Court for the Southern District of Indiana, Evansville
Division (the "Bankruptcy Court");
WHEREAS, on February 4, 2002, the Bankruptcy Court entered a
stipulated Order (the "Stipulated Order") pursuant to which the Involuntary
Debtors agreed, among other things, to consent to the relief sought by the
involuntary petitions, and, on February 6, 2002 (the "Conversion Date"), the
Involuntary Debtors converted their cases under chapter 7 of the Bankruptcy Code
to cases under chapter 11 of the Bankruptcy Code;
WHEREAS, on February 20, 2002, each Seller (other than Brill),
as well as other direct and indirect subsidiaries of Brill, pursuant to the
Stipulated Order, filed a voluntary petition (the "Petitions") for relief
commencing its own case under chapter 11 of the Bankruptcy Code before the
Bankruptcy Court (the cases under chapter 11 of the Bankruptcy Code of the
Involuntary Debtors and such subsidiaries of Brill, as consolidated for purposes
of administration by the Bankruptcy Court, the "Chapter 11 Case"); and
WHEREAS, the Purchaser desires to purchase and obtain the
assignment from the Sellers, and the Sellers desire to sell, convey, assign, and
transfer to the Purchaser substantially all of the assets and properties of the
Sellers relating to the Business, together with certain obligations and
liabilities relating thereto, all in the manner and subject to the terms and
conditions set forth herein and in accordance with Sections 105, 363, and 365 of
the Bankruptcy Code (collectively, the "Contemplated Transactions").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
Section 1.1 Purchase and Sale of Assets On the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Sellers shall sell,
assign, transfer, convey, and deliver to the Purchaser, and the Purchaser shall
purchase and accept from the Sellers, the Sellers' rights, title, and interests
in and to the Business, including, without limitation, all of the assets,
properties, rights and contractual rights of the Sellers, and claims of the
Sellers, used, held for use or useable in the Business (other than the Excluded
Assets), wherever located, whether tangible or intangible (such rights, title,
and interests in and to all such assets, properties, rights, contracts, and
claims being collectively referred to herein as the "Assets"), free and clear of
any and all Encumbrances as set forth in Section 363 of the Bankruptcy Code
other than Permitted Encumbrances on Real Property. The Assets shall include,
but shall not be limited to, all the Sellers' rights, title, and interests in
and to the assets, properties, rights, contracts, and claims described below,
but shall specifically exclude the Excluded Assets:
(a) the FCC licenses, permits and other authorizations,
including antenna structure registrations and any temporary waiver or special
temporary authorization, issued to or held by the Sellers exclusively in
connection with the conduct of the Business and operation of the Radio Broadcast
Stations, including any pending applications therefor, along with renewals or
modifications of such items between the date hereof and the Closing Date,
including, but not limited to those set forth in Section 1.1(a) of the Seller
Disclosure Letter (the "FCC Licenses");
(b) all equipment including, broadcast equipment, transmitters
and related equipment, broadcast tower, electrical devices, antennae, cables,
tools and hardware, including without limitation, such material assets which are
listed or referred to in Section 1.1(b) of the Seller Disclosure Letter,
together with any replacements thereof and additions thereto made between the
date hereof and the Closing Date (the "Station Equipment");
(c) each of the Radio Broadcast Station's public inspection
files, filings with the FCC related to the Business, and such technical
information, engineering data, and rights under manufacturers' warranties as
exist at Closing and relate to the Business;
(d) the permits, licenses, franchises, certificates of
occupancy, variances, exemptions, orders and other governmental authorizations,
consents, waivers, registrations and approvals (other than the FCC Licenses
which are covered by clause (a) above) necessary to conduct the Business as
presently conducted, including any pending applications therefor as set forth in
Section 1.1(d) of the Seller Disclosure Letter, in each case to the extent the
same are assignable (the "Permits," and together with the FCC Licenses, the
"Governmental Licenses");
(e) all furnishings, furniture, fixtures, office materials and
supplies, inventory, spare parts, vehicles, equipment, computers, and other
tangible personal property of every kind and description which are held for use,
used or usable in the operation of the Business, including, without limitation,
such material assets which are listed in Section 1.1(e) of the Seller Disclosure
Letter;
(f) all the Intellectual Property, including all trademarks,
trade names, service marks, franchises, patents, jingles, slogans, logotypes and
other intangible rights, used, held for use or useable in connection with the
Business (and all goodwill associated therewith), including without limitation
all right, title and interest in and to the marks consisting of each of the
Radio Broadcast Station's call letters and any and all variations thereof, and
all of those listed and described in Section 1.1(f) of the Seller Disclosure
Letter;
(g) all programs and programming materials and elements of
whatever form or nature used, held for use or useable in the Business, whether
recorded on tape or any other substance or intended for live performance, and
whether completed or in production, and all related common-law and statutory
copyrights used, held for use or useable in the Business;
(h) all internet web sites relating exclusively to the Radio
Broadcast Stations, including without limitation all internet domain leases and
domain names of the Radio Broadcast Stations, the unrestricted right to the use
of HTML content located and publicly accessible from those domain names, and the
"visitor" email database for those sites;
(i) all copies of marketing brochures and materials and other
printed or written materials in any form or medium relating to the Sellers'
ownership or operation of the Business that the Sellers are not required by law
to retain and duplicates of any such materials that the Sellers are required by
law to retain;
(j) all rights under all warranties, representations, and
guarantees made by suppliers, manufacturers, and contractors in connection with
the operation of the Business;
(k) all Time Sales Agreements, Trade Agreements, Real Property
Leases and those Contracts listed in Section 1.1(k) of the Seller Disclosure
Letter (collectively, the "Assumed Contracts"). Purchaser may, in its
discretion, require that additional Contracts related to the Business be added
to Section 1.1(k) of the Seller Disclosure Letter prior to the entry of the Sale
Order;
(l) all books and records of the Business, including, without
limitation, data processing records, employment and personnel records, customer
lists, files and records, advertising and marketing data and records, credit
records, records relating to suppliers, and other data;
(m) subject to Section 1.7, all credits, prepaid expenses,
deferred charges, advance payments, security deposits, and prepaid items (and,
in each case, security interests from third parties relating thereto);
(n) all computer software programs and databases used, held for
use or useable by the Sellers in the conduct of the Business, whether owned,
licensed, leased, or internally developed (in each case, subject to applicable
restrictions);
(o) all telephone numbers (other than "Brill Media" telephone
numbers) and all electronic mail addresses (other than brillmedia.com electronic
mail addresses and Brill Media web pages) used, held for use or useable by the
Sellers in the conduct of the Business;
(p) all real property owned in fee by Sellers as more fully
described in Section 1.1(p) of the Seller Disclosure Letter, and all of the
rights arising out of the ownership thereof or appurtenant thereto (the "Real
Property"), together with all buildings, structures, facilities, fixtures and
other improvements thereto (the "Improvements"); and
(q) (i) the leases and subleases of real property described in
Section 1.1(q)(i) of the Seller Disclosure Letter as to which a Seller is the
lessor or sublessor and (ii) the leases and subleases of real property described
in Section 1.1(q)(ii) of the Seller Disclosure Letter as to which a Seller is
the lessee or sublessee, together with any options to purchase the underlying
property and leasehold improvements thereon, and in each case all other rights,
subleases, licenses, permits, deposits and profits appurtenant to or related to
such leases and subleases (the leases and subleases described in subclauses (i)
and (ii), the "Real Property Leases").
Notwithstanding the foregoing, at or prior to the Closing, Purchaser may
decide, in the exercise of its sole discretion, not to purchase any one or more
of the Assets (and, in such event, not to assume any liability secured by,
arising from the acquisition of, or otherwise relating to, any such Asset);
provided, that, in no event shall such decision reduce the Purchase Price.
Section 1.2 Excluded Assets. The following assets, properties, and
rights (collectively, the "Excluded Assets") are not included in the Assets and
shall be retained by the Sellers:
(a) the capital stock of, general or limited partnership
interests in, limited liability company interests in and any other equity
interests of the Sellers;
(b) cash (including all cash residing in any collateral cash
account securing any obligation or contingent obligation of the Sellers or
rights to payments for indebtedness for borrowed money or other loans or
advances and rights to payments evidenced by chattel paper, documents or
investments), cash equivalents and bank deposits existing as of the Closing
Date;
(c) rights to any Tax refunds of any of the Sellers, whether
such refund is received as a payment or as a credit against future Taxes and any
net operating losses of the Sellers;
(d) any Contract not set forth in Section 1.1(k) of the Seller
Disclosure Letter;
(e) any claims, rights or causes of action arising under
Sections 544 through 550, inclusive, and Section 553 of the Bankruptcy Code;
(f) any proceeds or rights relating to any lawsuits, potential
lawsuits, contracts of insurance, and all insurance proceeds or claims made by
Sellers relating to property or equipment repaired, replaced or restored by
Seller prior to the Closing Date;
(g) all assets related to Sellers' Employee Benefit Plans;
(h) the Seller Accounts Receivable;
(i) the Promissory Notes; and
(j) any other asset, property, right, Contract, or claim set
forth in Section 1.2(j) of the Seller Disclosure Letter.
Section 1.3 Assumed Liabilities. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Purchaser shall
assume and/or accept assignment from the Sellers and thereafter pay, perform, or
discharge in accordance with their terms the following obligations of Sellers
(the "Assumed Liabilities"):
(a) the obligations of the Sellers under the Assumed Contracts
that, by the terms of such Assumed Contracts, arise after Closing, relate to or
are incurred in periods following the Closing and are to be observed, paid,
discharged, or performed, as the case may be, in each case at any time after the
Closing Date (except to the extent such obligations arise out of or are related
to activities, events or transactions occurring, or conditions existing, on or
prior to the Closing Date), including (a) all agreements for the sale of
advertising time on the Radio Broadcast Stations for cash and at prices
consistent with Sellers' ordinary course of business pricing policies for which
no payment has been received and which do not have more than twelve (12) months
remaining in their term ("Time Sales Agreements"); and (b) (subject to Section
1.7(f)) all agreements which are for consideration other than cash, such as
merchandise, services or promotional consideration arising in the ordinary
course of business consistent with the past practices of Sellers ("Trade
Agreements"); and
(b) all liabilities prorated against the Sellers pursuant to
Section 1.7.
At Closing and pursuant to Section 365 of the Bankruptcy Code, Sellers shall
assume and sell, transfer and assign to Purchaser the Assumed Contracts
(including the Real Property Leases), and shall have obtained prior Bankruptcy
Court approval for same in the Sale Order. The cure amounts, as determined by
the Bankruptcy Court, if any (the "Cure Amounts"), necessary to cure all
defaults, if any, and to pay all actual or pecuniary losses that have resulted
from such defaults under the Assumed Contracts (including the Real Property
Leases), shall be paid prior to Closing by Sellers and not by the Purchaser and,
subject to Section 1.7(b), the Purchaser shall have no liability therefor.
Section 1.4 Excluded Liabilities. Notwithstanding anything contained in
this Agreement to the contrary, Purchaser expressly does not, and shall not,
assume or agree to pay, satisfy, discharge or perform and will not be deemed by
virtue of the execution and delivery of this Agreement or any agreement,
instrument or document delivered pursuant to or in connection with this
Agreement or otherwise by reason of or in connection with the consummation of
the transactions contemplated hereby or thereby, to have assumed or to have
agreed to pay, satisfy, discharge or perform, any liabilities, obligations or
commitments of Sellers of any nature whatsoever whether accrued, absolute,
contingent or otherwise and whether or not disclosed to Purchaser, other than
the Assumed Liabilities. Sellers will retain all liabilities and obligations of
the Sellers, other than the Assumed Liabilities, including but not limited to,
the obligation to assume, perform, satisfy or pay any liability, obligation,
agreement, debt, charge, claim, judgment or expense incurred by or asserted
against Seller related to taxes, environmental matters, pension or retirement
plans or trusts, profit-sharing plans, employment contracts,
employee benefits, severance of employees, product liability or warranty,
negligence, contract breach or default, or other obligations, claims or
judgments asserted against Purchaser as successor in interest to Sellers,
regardless of whether any such matters are disclosed on the Seller Disclosure
Letter hereto (the "Excluded Liabilities"). Without limiting the generality of
the foregoing, the Purchaser shall not assume, and the Sellers, shall remain
responsible for the following:
(a) any liabilities or obligations (whether absolute,
contingent, or otherwise) which accrue with respect to the Assets or Sellers'
operation of the Business on or prior to the Closing Date;
(b) any liability or obligation of the Sellers for any Taxes of
any kind (except for any Taxes subject to proration under Section 1.7 for which
Purchaser received a credit against the Purchase Price);
(c) any liabilities or obligations which accrue with respect to
the Excluded Assets, whether before, on or after the Closing Date;
(d) any liability or obligation in respect of any Employee
Benefit Plan or any other Seller Plan;
(e) any liabilities or obligations of the Sellers arising under
the Worker Adjustment and Retraining Notification Act or similar state law
("WARN"); and
(f) any liabilities and obligations of the Sellers arising under
Section 4980B of the Code ("COBRA") or similar state law.
Section 1.5 Non-Assignment of Assumed Contracts. Anything contained
herein to the contrary notwithstanding, but subject to Section 7.3(c) and (e),
this Agreement shall not constitute an agreement to assign any Assumed Contract,
if, notwithstanding the provisions of Sections 363 and 365 of the Bankruptcy
Code, an attempted assignment thereof, without the consent of the third party
thereto, would constitute a breach thereof or in any way negatively affect the
rights of the Sellers or the Purchaser, as the assignee of such Assumed
Contract, as the case may be, thereunder. If, notwithstanding the provisions of
Sections 363 and 365 of the Bankruptcy Code, such consent or approval is
required but not obtained, the Sellers will cooperate with the Purchaser without
further consideration in any reasonable arrangement designed to both (a) provide
the Purchaser benefits under any such Assumed Contract and (b) cause the
Purchaser to bear all costs and obligations of or under any such Assumed
Contract arising or incurred from and after the Closing. Any assignment to the
Purchaser of any Assumed Contract that shall, notwithstanding the provisions of
Sections 363 and 365 of the Bankruptcy Code, require the consent or approval of
any third party for such assignment as aforesaid shall be made subject to such
consent or approval being obtained.
Section 1.6 Purchase Price. (a) The aggregate purchase price for the
Assets shall be $62,029,000. The Purchase Price shall be payable (subject to
subparagraph (d) of this Section 1.6)at the Closing as follows: (i) $31,014,500
in cash (as adjusted pursuant to Sections 1.7 and 1.9(b)(iv)) payable in
immediately available United States funds (the "Cash Consideration"), and (ii)
$31,014,500, payable by delivery in the manner provided in Section 2.1, of that
number of
shares of Common Stock, rounded up to the nearest whole share, equal to the
result obtained by dividing (x) $31,014,500 by (y) the Per Share Price (the
"Stock Consideration"). The Cash Consideration and the Stock Consideration may
collectively be referred to at the "Purchase Price."
The Purchase Price shall be allocated among the Sellers in accordance
with the allocation set forth in a certificate approved by the Bankruptcy Court
and reasonably acceptable to Purchaser and delivered by Sellers to Purchaser not
less than two Business Days prior to the Closing Date. Following the Closing,
Sellers agree that any Stock Consideration received by the Sellers will only be
distributed (i) pursuant to a valid exemption from registration (or pursuant to
a registration statement), and (ii) only upon Purchasers' receipt of such
documents, materials and information (or copies thereof) as the Purchaser may
reasonably request to ensure Purchaser's compliance with any applicable state
and Federal securities laws. Sellers will use their reasonable best efforts to
limit distribution of the Stock Consideration to creditors who would receive not
less than a number of shares of Common Stock as agreed to by Purchaser and
Sellers.
The following legend shall be placed on each certificate representing
shares of Common Stock issued to Sellers or any creditor who receive shares of
Common Stock pursuant to an exemption from registration in a private offering
(or such other legend as Purchaser reasonably determines is appropriate):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION,
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN COMPLIANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THAT ACT AND
ANY SUCH APPLICABLE LAWS."
(b) The Purchase Price allocated to Sellers pursuant to Section
1.6(a) above shall be allocated in accordance with Section 1060 of the Code. On
or prior to the date ninety (90) days after the Closing Date, Purchaser shall
provide Sellers with Purchaser's proposed allocation of the total consideration
paid for the Assets. Such Allocation shall be binding on each Seller, its
Affiliates and the Purchaser for all Tax reporting purposes unless the relevant
Seller can establish that such allocation is unreasonable. Sellers and Purchaser
agree to file Internal Revenue Service Form 8594, and any other forms or
statements required by the Code (or state or local Tax law) consistent with such
allocation.
(c) The Purchaser and Sellers shall comply with the procedures
set forth in the Consent Order Approving Bidding Procedures dated June 25, 2002,
relating to the Brill bankruptcy, including but not limited to making any
deposits in a timely manner.
(d) Notwithstanding the foregoing, in the event that the Per
Share Price is less than $7.50 per share, Purchaser reserves the right, in its
sole discretion, to reallocate the Purchase Price at the Closing among the Cash
Consideration and the Stock Consideration to increase the allocation of the cash
portion of the Purchase Price in Section 1.6(a)(i).
Section 1.7 Prorations and Adjustments. (a) The following prorations
relating to the Assets and the ownership and operation of the Business and
adjustments to the Purchase Price will be made as of the Closing Date, to the
extent practicable, with the Sellers liable to the extent such items relate to
any time period prior to the Closing Date and the Purchaser liable to the extent
such items relate to periods beginning with and subsequent to the Closing Date:
(i) Ad valorem, real estate and other property taxes on
or with respect to the Assets.
(ii) Rents, additional rents, taxes and other items
payable by the Sellers under the Real Property Leases.
(iii) The amount of rents, taxes and charges for sewer,
water, telephone, electricity and other utilities relating to the Real Property
and the real property subject to the Real Property Leases.
(iv) Business and license fees, music and other license
fees (including any retroactive adjustments thereof).
(v) All other items normally adjusted in connection with
similar transactions.
(vi) Within ten (10) calendar days of the date of the
commencement of the Time Brokerage Agreement, Seller shall deliver to Purchaser
a report, dated as of the date of commencement of the Time Brokerage Agreement
(the "Commencement Date Trade Report") which report lists all Trade Agreements
included in the Assets and the contract end date for each Trade Agreement
together with an itemized statement, determined in accordance with generally
accepted accounting principles, of the aggregate value of time owed ("Barter
Payable") pursuant to each of the Trade Agreements and the aggregate value of
goods and services to be received ("Barter Receivable") pursuant to each of the
Trade Agreements. To the extent that the aggregate value as reflected on the
Commencement Date Trade Report of the Station's Barter Payable is greater than
the aggregate value as reflected on the Commencement Date Trade Report of the
Barter Receivable, Purchaser shall be entitled to receive the difference at
Closing as a credit against the Cash Consideration.
(b) The Cash Consideration payable pursuant hereto shall be
increased by: (i) the lesser of (A) $337,000, and (B) the amount necessary to
cover damages for any Contracts rejected by the Sellers, and (ii) the lesser of
(A) $134,000, and (B) the amount necessary to cover Sellers' obligation to pay
all Cure Amounts hereunder. Notwithstanding the foregoing, Sellers acknowledge
that they alone are responsible for the determination and payment of damages for
any Contracts rejected and any Cure Amounts. Sellers agree to keep Purchaser
advised of any claims for rejection damages and any disputes with third parties
regarding such claims or any Cure Payments and provide Purchaser with the
opportunity to participate in discussions regarding the determination of such
rejection claims and/or the resolution of any such disputes. Sellers will
provide prompt notice to Purchaser of the receipt of any claims for rejection
damages along with copies of relevant documentation and disclosure of any
defenses or offsets that may be available to Sellers.
(c) Except as otherwise agreed by the parties, the net amount of
all such prorations and adjustments shall be settled and paid on the Closing
Date by appropriate adjustment of the Cash Consideration. As to those prorations
and adjustments not readily ascertained on the Closing Date, Purchaser and
Sellers will use their commercially reasonable best efforts to resolve and pay
all adjustments and prorations hereunder within ninety (90) calendar days of the
Closing Date. Real and personal property Taxes with respect to any Assets shall
be pro-rated based on the ratio of number of days in the pre-Closing period to
the number of days in the actual taxable period with respect to which Tax is
assessed, irrespective of when such Taxes are due, become a lien or are
assessed. Sales and use Taxes shall be deemed to accrue as property is
purchased, sold, used, or transferred. All other Taxes shall accrue in
accordance with generally accepted accounting principles.
Section 1.8 Accounts Receivable.
Purchaser acknowledges that all accounts receivable arising prior to the
Effective Date of the Time Brokerage Agreement in connection with the operation
of the Stations shall remain the property of Sellers (the "Seller Accounts
Receivable") and that Purchaser shall not acquire any beneficial right or
interest therein or responsibility therefor. For a period of 120 days from the
Effective Date of the Time Brokerage Agreement (the "Collection Period").
Purchaser agrees to use reasonable efforts to collect the Seller Accounts
Receivable and pay such collections on a monthly basis (less any commissions
and/or other expenses due thereon which Purchaser is hereby directed to pay on
Sellers behalf), provided, that, Purchaser's obligation and authority shall not
extend to the institution of litigation, employment of counsel or a collection
agency or any other extraordinary means of collection. During the Collection
Period, Sellers and their agents shall not make any direct solicitation of any
account debtor for collection purposes or institute litigation for the
collection of amounts due. After the Collection Period, any remaining Seller
Accounts Receivable shall be returned to Sellers for collection.
Section 1.9 Deferred Agreements.
(a) (i) At any time prior to confirmation of the Bankruptcy
Plan, the Purchaser may designate any or all of the studio leases set forth in
Section 1.9(a) of the Seller Disclosure Letter (the "Deferred Leases") as an
additional real estate lease to be assumed by Sellers and assigned to the
Purchaser pursuant to Section 365 of the Bankruptcy Code. Upon any such
designation, Sellers shall promptly file a motion for an order (with such motion
and order in form and substance reasonably satisfactory to Purchaser)
authorizing and approving the assumption and assignment of such Deferred
Lease(s) to the Purchaser pursuant to Section 365 of the Bankruptcy Code and
Sellers shall be solely and exclusively liable for all Cure Amounts which arise
in connection with the Deferred Lease(s). Upon entry of a final order, which
shall be final and non-appealable, approving such assumption and assignment (the
"Deferred Real Property Lease Order"), the Deferred Lease(s) shall thereafter be
deemed as a Real Property Lease for all purposes of this Agreement. Sellers
shall be solely and exclusively liable for all payments and liabilities which
arise in connection with the Deferred Lease(s) whether before, on, or after the
Closing Date, until such time as the Deferred Real Property Lease Order is
entered. Prior to the entry of the Deferred Real Property Lease Order, Sellers
shall comply with all of its obligations under the Deferred Lease(s).
(ii) Prior to the assignment and assumption of the
Deferred Leases as described in Section 1.9(a)(i) above, Sellers and the
Purchaser shall take all actions and use their respective commercially
reasonable best efforts to enter into a sublease (the "Subleases") of the entire
demised premises with respect to the Deferred Leases (the "Subleased Premises"),
cancelable by Purchaser on thirty (30) days prior written notice, granting the
Purchaser the use of the Subleased Premises under the same material terms,
conditions, rights and obligations as the Sellers enjoy as of the Closing Date,
as such terms and conditions may be modified if deemed to be reasonably
acceptable to Sellers and the Purchaser. Purchaser shall have the option to
terminate the Subleases at any time without premium or penalty, by giving thirty
(30) days prior written notice of such election to Sellers.
(iii) With respect to the assignment and assumption of
the Deferred Lease described in Section 1.9(a)(i) above and/or the Sublease
described in Section 1.9(a)(ii), as the case may be, the Sellers also agree (x)
to take all actions and use commercially reasonable best efforts to cause the
Purchaser to enjoy the rights and benefits of the Deferred Lease and/or
Sublease, as the case may be, under the same terms and conditions as the Sellers
enjoys in effect as of the Closing Date, (y) not to disturb Purchaser's right to
quiet enjoyment of the Deferred Lease and/or the Sublease, as the case may be
and (z) defend against any injunction or other judgment that would disturb or in
any way impair Purchaser's right to quiet enjoyment of the Deferred Lease and/or
Sublease, as the case may be.
(iv) Sellers agree that they will diligently prosecute
the pending motion to extend the time to accept or reject their non-residential
real property leases so that the date for assumption or rejection of the
non-residential real property leases is extended beyond the current expiration
date of October 18, 2002. Sellers agree to use their best efforts to file and
diligently prosecute such additional motions as may be necessary or required to
continually extend the date for assumption or rejection of the non-residential
real property leases until the confirmation of the Bankruptcy Plan.
(b) (i) Listed in Section 1.9(b) of the Seller Disclosure Letter
are certain capital equipment and personal property leases that the Purchaser
may desire to treat as Assumed Contracts (the "Deferred Contracts"). The
Purchaser will have the option, exercisable until the Closing Date, to designate
in writing any or all Deferred Contracts as an Assumed Contract. Upon such
designation, Sellers shall promptly file a motion for one or more orders (with
each such motion and order in form and substance reasonably acceptable to the
Purchaser) authorizing and approving the assumption and assignment of such
Deferred Contracts to Purchaser pursuant to Section 365 of the Bankruptcy Code
and Sellers shall be solely and exclusively liable for all Cure Amounts which
arise in connection with the Deferred Contracts. Upon the entry of a final
order, which shall be final and non-appealable, approving such assumption and
assignment (the "Deferred Contracts Order"), such Deferred Contracts shall
thereafter be Assumed Contracts for all purposes of this Agreement. Sellers
shall be solely and exclusively liable for all payments and liabilities which
arise in connection with the Deferred Contracts until such time as the Deferred
Contracts Order is entered.
(ii) Prior to the assignment and assumption of the
Deferred Contracts as described in Section 1.9(b)(i) above, Sellers and the
Purchaser shall take all actions and use their respective commercially
reasonable best efforts to enter into a sublease (the "Equipment
Subleases") of the equipment and personal property with respect to the Deferred
Contracts (the "Subleased Equipment"), cancelable by Purchaser on thirty (30)
days prior written notice, granting the Purchaser the use of the Subleased
Equipment under the same material terms, conditions, rights and obligations as
the Sellers enjoy as of the Closing Date, as such terms and conditions may be
modified if deemed to be reasonably acceptable to Sellers and the Purchaser.
Purchaser shall have the option to terminate the Equipment Subleases at any time
without premium or penalty, by giving thirty (30) days prior written notice of
such election to Sellers.
(iii) With respect to the assignment and assumption of
the Deferred Contracts described in Section 1.9(b)(i) above and/or the Equipment
Subleases described in Section 1.9(b)(ii), as the case may be, the Sellers also
agree to take all actions and use commercially reasonable best efforts to cause
the Purchaser to enjoy the rights and benefits of the Deferred Contracts and/or
Equipment Subleases, as the case may be, under the same terms and conditions as
the Sellers enjoys in effect as of the Closing Date, and defend against any
injunction or other judgment that would disturb or in any way impair Purchaser's
right to use the equipment under the Deferred Contracts and/or Equipment
Subleases, as the case may be.
(iv) This Section 1.9(b) shall be inapplicable to the
extent that the Deferred Contracts are determined not to be leases but rather
are financing agreements where the equipment and personal property are sold free
and clear of such financing agreements. Sellers agree that they will, at
Purchaser's request, seek a determination from the Bankruptcy Court on whether
the Deferred Contracts are leases or financing agreements prior to the Closing
Date. If Purchaser requests a determination as to whether any Deferred Contract
is a financing agreement and there is a determination that such Deferred
Contract is a financing agreement, and if there is a further determination that
there is an unsecured claim after the equipment and the personal property
subject of such Deferred Contract are valued by the Bankruptcy Court, Purchaser
will accept liability for the payment for the amount that would otherwise be
payable by the estate on the unsecured claim as reasonably estimated by the
Bankruptcy Administrative Officer and the Cash Consideration will be increased
by the amount of such payment.
(c) From and after the Effective Date of the Time Brokerage
Agreement, Sellers shall provide Purchaser with access to and the use of (i) the
equipment and personal property under the Deferred Contracts, and (ii) the
facilities under the Deferred Leases.
ARTICLE II
THE CLOSING
Section 2.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Greenebaum
Doll & McDonald PLLC, 3300 National City Tower, 101 South Fifth Street,
Louisville, Kentucky 40202 at 10:00 a.m., prevailing time, Louisville, Kentucky,
on the fifth Business Day after all the conditions set forth in Article VII
shall have been satisfied or waived in writing or at such other time, date and
place as the Purchaser and Sellers mutually agree upon in writing (the date of
the Closing being herein referred to as the "Closing Date"). Subject to the
terms and conditions hereof and of the Time Brokerage Agreement, at the Closing:
(a) the Purchaser shall:
(i) pay to the Sellers, by wire transfer of immediately
available funds to an account or accounts specified in writing by the Sellers,
the Cash Consideration (less the Deposit if then held in cash and any interest
accrued thereon);
(ii) deliver to Sellers a certificate or certificates
representing the Stock Consideration in the name or names designated by the
Sellers pursuant to Section 1.6(a); and
(iii) assume the Assumed Liabilities by delivery of (A)
an assumption agreement, and (B) such other good and sufficient instruments of
assumption, in form and substance reasonably acceptable to the Sellers' and the
Purchaser's respective counsels, as shall be effective to cause the Purchaser to
assume the Assumed Liabilities as and to the extent provided in Section 1.3 (all
such instruments referred to in this subclause (iii) being collectively referred
to herein as the "Assumption Instruments").
(b) the Sellers shall assign and transfer to Purchaser all of
their right, title and interest in and to the Assets (in each case, free and
clear of any and all Encumbrances (other than Permitted Encumbrances on Real
Property) by delivery of (i) a general assignment and bill of sale in form and
substance reasonably acceptable to the Sellers' and the Purchaser's respective
counsels (the "General Assignment"), duly executed by the Sellers, (ii) general
warranty deeds in proper statutory form for recording and otherwise in form and
substance reasonably satisfactory to Purchaser conveying title to the Real
Property and (iii) such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance reasonably acceptable to the
Purchaser's counsel, as shall be effective to vest in Purchaser good title to
the Assets (the General Assignment and the other instruments referred to in
clauses (ii) and (iii) being collectively referred to herein as the "Assignment
Instruments").
Section 2.2 Time Brokerage Agreement. The Sellers and the Purchaser
shall enter into a time brokerage agreement substantially in the form of Exhibit
B hereto (the "Time Brokerage Agreement") promptly after the Sale Order becomes
a Final Order. Upon execution of the Time Brokerage Agreement, Purchaser will
designate a commencement date (the "Effective Date") that will be within thirty
(30) days following such Final Order to allow for an orderly transition. At the
Closing the Time Brokerage Agreement shall terminate in accordance with its
terms.
Section 2.3 Acquisition Subsidiaries. On or before the Closing, the
Purchaser may designate (by written notice to the Sellers) one or more of its
subsidiaries (each an "Acquisition Subsidiary") to receive all or part of the
Assets; provided, however, that such designation shall not obviate the
Purchaser's obligations hereunder.
Section 2.4 Deposit. (a) Contemporaneously with the execution of this
Agreement, the Purchaser shall deposit with Greenebaum Doll & McDonald PLLC (the
"Escrow Agent") in immediately available funds, by wire transfer to a segregated
trust or escrow account designated by the Escrow Agent, an amount in cash equal
to $1,000,000 (the "First Deposit"). In addition, prior to the Auction, an
additional deposit of $4,300,000 will be deposited by the Purchaser with the
Escrow Agent (the "Second Deposit" and together with the First Deposit, the
"Deposit"). The Escrow Agent shall invest the Deposit in U.S. government
securities (or a fund comprised of such securities) selected by Escrow Agent and
approved by the Purchaser.
(b) Upon the Effective Date of the Time Brokerage Agreement,
Purchaser shall provide and maintain an irrevocable standby letter of credit in
the amount of $15,000,000 issued by Fleet Bank, or such other bank as reasonably
acceptable to the Bankruptcy Administrative Officer, which irrevocable standby
letter of credit will be in form and substance reasonably acceptable to the
Bankruptcy Administrative Officer (the "Letter of Credit"). The Letter of Credit
shall be for an initial term of six (6) months and will be renewable for
successive six (6) month periods up to a total of two (2) years from the date of
this Agreement, and will contain appropriate notice provisions to allow the
Escrow Agent to draw in the event the Letter of Credit is not so renewed, in
which case the Escrow Agent is hereby authorized and directed to so draw. The
Letter of Credit shall be considered for all purposes as the Deposit under this
Section 2.4. The Escrow Agent shall contemporaneously exchange the $5,300,000
cash deposit then on deposit for the Letter of Credit. In the event that the
Time Brokerage Agreement is terminated by Purchaser, the Letter of Credit shall
be returned to the Purchaser and Purchaser shall deposit the sum of $5,300,000
as provided for in Section 2.4(a) and thereafter that sum shall be considered
the Deposit. In the event that the Time Brokerage Agreement shall thereafter
recommence, the above procedure with respect to the Letter of Credit shall be
repeated in all respects.
(c) In the event that the Contemplated Transactions are
consummated, on the Closing Date the Escrow Agent shall return the Letter of
Credit to Purchaser.
(d) In the event that the Contemplated Transactions are not
consummated and this Agreement is terminated in accordance with Section 8.3(a)
or (b) hereof, the Escrow Agent shall be authorized and directed to fully draw
on the Letter of Credit (in accordance with the terms and procedures specified
therein) and pay the proceeds thereof to Sellers (or if the Escrow Agent is then
holding cash, the Escrow Agent will release the Deposit (and any interest
accrued thereon) to the Sellers). In the event that the Contemplated
Transactions are not consummated and this Agreement is terminated for any reason
other than as set forth in the immediately preceding sentence, the Escrow Agent
shall be authorized and directed to return the Letter of Credit (or release the
Deposit (and any interest accrued thereon)) to the Purchaser immediately
following the expiration of the five (5) day objection period described below.
The Escrow Agent shall not release monies from the Deposit (including any cash
received as a result of a draw on the Letter of Credit) as set forth above to
the Sellers unless and until it has received either Bankruptcy Court approval or
a written instruction from the Purchaser authorizing such release. The Escrow
Agent shall not return the Letter of Credit or release monies from the Deposit
as set forth above to the Purchaser if the Sellers object in writing to such
release within five (5) business days of the occurrence of the event providing
for such release, unless and until any dispute has been resolved by the
Bankruptcy Court or it receives a written instruction from the Sellers
authorizing such release. Notwithstanding anything to the contrary herein, in
the event of a Termination Fee Event, the Escrow Agent shall be authorized and
directed to immediately release the Deposit (and any interest accrued thereon)
to the Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Purchaser specifically acknowledges and agrees to the
following with respect to the representations and warranties of the Sellers:
A. Purchaser will not have any recourse to any Seller or to any
of the officers, directors, members or persons acting on behalf of any Seller in
the event any of the representations and warranties made herein or deemed made
are untrue as at any time of expression thereof (other than for representations
and warranties made herein or deemed made that are untrue due to willful
misconduct or fraud) and the only remedies for a breach of such representations
and warranties (other than for representations and warranties made herein or
deemed made that are untrue due to willful misconduct or fraud) shall be the
Purchaser's option, under certain circumstances, not to close in accordance with
and subject to the limitations in Sections 7.1, 7.3 and 8.4 hereof, and, without
limiting the foregoing, Purchaser shall have no remedy whatsoever for any such
breach of such representations and warranties after the Closing (other than for
representations and warranties made herein or deemed made that are untrue due to
willful misconduct or fraud).
B. If information provided in any section of the schedule
delivered by the Sellers to the Purchaser by separate letter dated as of the
date hereof and made a part hereof (which schedule contains appropriate
references to identify the representations and warranties herein to which the
information in such schedule relates) (the "Seller Disclosure Letter") is
applicable to any other sections for which it is appropriately cross-referenced
or otherwise clearly identified as applying to another section, then such
information shall be deemed to have been provided with respect to all such
sections.
Except as otherwise disclosed to the Purchaser in the Seller
Disclosure Letter, each of the Sellers, jointly and severally, represent and
warrant to the Purchaser as follows:
Section 3.1 Organization. Each Seller is a corporation or limited
liability company duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization or formation and
has the requisite corporate or limited liability company power and authority to
carry on its business as it is now being conducted except where the failure to
be so duly organized or formed, validly existing and in good standing would not
reasonably be expected to, individually or in the aggregate, result in a Seller
Material Adverse Effect. Each Seller is duly qualified as a foreign limited
liability company or corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified would not individually or in the aggregate
to have a Seller Material Adverse Effect.
Section 3.2 Authority Relative to this Agreement. Subject to the
requirement that the Sellers' entry into this Agreement and each Transaction
Document to which any of them is a party be approved by the Bankruptcy Court,
each of the Sellers has the corporate or limited liability company power and
authority to enter into and to carry out its obligations hereunder and
thereunder. Subject to the entry and effectiveness of the Sale Order, this
Agreement has been duly and validly executed and delivered by each of the
Sellers and (assuming this Agreement constitutes a valid and binding obligation
of the Purchaser) constitutes, and upon the execution and delivery by such
Seller of the Transaction Documents to which it is a party, such Transaction
Documents will constitute, a valid and binding agreement of each of the Sellers,
enforceable against each of the Sellers in accordance with their respective
terms.
Section 3.3 Consents and Approvals. To the knowledge of the Bankruptcy
Administrative Officer, no material consent, approval, authorization of,
declaration, filing, or registration with any Governmental or Regulatory
Authority is required to be made or obtained by any of the Sellers in connection
with the execution, delivery, and performance of this Agreement and the
Transaction Documents to which any Seller is a party and the consummation of the
transactions contemplated hereby and thereby, except for (a) the consents,
approvals, authorizations of, declarations, or filings with, the Bankruptcy
Court, (b) the filing of a notification and report form under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the expiration or earlier termination of the applicable waiting
period thereunder, (c) the FCC Consents, and (d) the consents, approvals,
authorizations, declarations, or rulings identified in Section 3.3 of the Seller
Disclosure Letter. The items referred to in clauses (a) through (d) of this
Section 3.3(a) are hereinafter referred to as the "Governmental Requirements."
(b) Except as disclosed in Section 3.3 of the Seller Disclosure
Letter, the execution and delivery by the Sellers of this Agreement do not and,
upon execution and delivery thereof in accordance with this Agreement, the
Transaction Documents will not, and the performance by the Sellers of their
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, result in a violation
or breach of, constitute (with or without notice or lapse of time or both) a
default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Encumbrance upon any of the Assets
or properties of the Sellers or require the consent of any other party, under
any of the terms, conditions or provisions of any Contracts listed in Section
3.14 of the Seller Disclosure Letter (other than any default referred to in
Section 365(b)(2) of the Bankruptcy Code).
Section 3.4 No Violations. Assuming that the Governmental Requirements
shall be satisfied, made, or obtained and will remain in full force and effect
and the conditions set forth in Article VII shall have been satisfied or waived
in writing, neither the execution, delivery, or performance by any Seller of
this Agreement or any Transaction Document to which such Seller is a party, nor
the consummation by any Seller of the transactions contemplated hereby or
thereby, nor compliance by any Seller with any of the provisions hereof or
thereof will (a) conflict with or result in any breach of any provisions of the
articles of incorporation or bylaws or certificate of formation or limited
liability company agreement of any Seller, (b) violate any order, award, writ,
injunction, decree, statute, rule, or regulation applicable to any Seller or to
any Seller's properties or assets or (c) result in the creation or imposition of
any Encumbrance other than Permitted Encumbrances on any asset of a Seller,
except in each case for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions, suspensions, or
revocations that (i) are excused by or unenforceable as a result of the filing
of the Petitions or the applicability of any provision of or any applicable law
of the Bankruptcy Code, or (ii) are set forth in Section 3.4 of the Seller
Disclosure Letter.
Section 3.5 Financial Statements. The audited consolidated financial
statements of Brill included in Brill's Annual Report on Form 10-K for the
fiscal year ended February 28, 2001 and the draft of the audited consolidated
financial statements of Brill for the fiscal year ended February 28, 2002
previously provided to Purchaser (a) have been prepared from, and are
in accordance with, the books and records of Brill and its consolidated
subsidiaries, (b) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (c) have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto),
and (d) fairly present the consolidated financial position and the consolidated
results of operations and cash flows of Brill and its consolidated subsidiaries
at the dates and for the periods covered thereby.
Section 3.6 Litigation. Except for the Chapter 11 Case and except as set
forth in Section 3.6 of the Seller Disclosure Letter, there is no suit, action,
proceeding, charges, citation, arbitration, or investigation (whether at law or
equity, before or by any Federal, state, or foreign commission, court, tribunal,
board, agency, or instrumentality, or before any arbitrator) pending or, to the
Sellers' or the Bankruptcy Administrative Officers' knowledge, threatened
against or affecting any Seller, the outcome of which would be reasonably
likely, individually or in the aggregate, to have a Seller Material Adverse
Effect, nor is there any judgment, decree, injunction, rule, or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against any Seller that would be reasonably likely to
have a Seller Material Adverse Effect.
Section 3.7 No Default. Except as set forth in Section 3.7 of the Seller
Disclosure Letter and except to the extent excused by or unenforceable as a
result of the commencement or pendency of the Chapter 11 Case or the application
of any provision of the Bankruptcy Code, no Seller is in violation, breach of,
or default under (and no event has occurred that with notice or the lapse of
time would constitute a violation, breach of, or a default under) any term,
condition, or provision of (a) its articles of incorporation or bylaws or
certificate of formation or limited liability company agreement or partnership
agreement or any other similar agreement, (b) any note, bond, mortgage, deed of
trust, security interest, indenture, license, agreement, plan, contract, lease,
commitment, or other instrument, or obligation to which such Seller is a party
or by which such Seller's properties or assets may be bound or affected, except
as would not reasonably be expected to, individually or in the aggregate, result
in a Seller Material Adverse Effect, (c) any order, award, writ, injunction,
decree, statute, rule, or regulation applicable to such Seller or to such
Seller's properties or assets, or (d) any permit, license, governmental
authorization, consent, or approval necessary for such Seller to conduct its
business as currently conducted, except in each case for breaches, defaults, or
violations that result from the filing of the Petitions or non-payment of
amounts owed prior to the filing of the Petitions.
Section 3.8 No Violation of Law. Except as disclosed in Section 3.8 of
the Seller Disclosure Letter and except to the extent excused by or
unenforceable as a result of the commencement or pendency of the Chapter 11 Case
or the application of any provision of the Bankruptcy Code, no Seller is in
violation of, or has been given notice or been charged with any violation of,
any law, statute, order, rule, regulation, ordinance, or judgment (including,
without limitation, any applicable environmental law, ordinance, or regulation)
of any Governmental or Regulatory Authority, any insurance company or fire
rating agency, or any other similar board, organization or authority except for
such violations, notices, or changes that would not, individually or in the
aggregate, reasonably be expected to have a Seller Material Adverse Effect.
Except as disclosed in Section 3.8 of the Seller Disclosure Letter or except as
would not reasonably be expected to, individually or in the aggregate, result in
a Seller Material Adverse
Effect and except for the Chapter 11 Case, no investigation or review by any
Governmental or Regulatory Authority is pending or, to the knowledge of the
Sellers or the Bankruptcy Administrative Officer, threatened in writing nor has
any Governmental or Regulatory Authority indicated to any Seller an intention to
conduct the same. The Radio Broadcast Stations' transmitting and studio
equipment is operating in material accord with the terms and conditions of the
FCC Licenses, and the rules, regulations and policies of the FCC, including
without limitation all regulations concerning equipment authorization and human
exposure to radio frequency radiation. The Radio Broadcast Stations are not
causing interference in violation of FCC rules to the transmission of any other
broadcast station or communications facility and have not received any
complaints with respect thereto and, to the Sellers' knowledge, no other
broadcast station or communications facility is causing interference in
violation of FCC rules to the Radio Broadcast Stations' transmissions or the
public's reception of such transmissions.
Section 3.9 FCC Licenses. (a) Section 1.1(a) of the Seller Disclosure
Letter identifies each of the FCC Licenses (including auxiliary licenses
associated with the Stations and any pending applications with the FCC) as to
the licensee, city of license, and call sign (or, with respect to applications
therefor, the file number assigned by the FCC to such application). The FCC
Licenses identified in Section 1.1(a) of the Seller Disclosure Letter comprise
all of the material licenses, permits and other authorizations required from the
FCC for the normal and lawful broadcast operations of the Radio Broadcast
Stations in the manner now conducted.
(b) No action or proceeding is pending or threatened before the
FCC or other Governmental or Regulatory Authority for the revocation,
non-renewal, suspension or adverse modification of the FCC Licenses. The public
files which are required by the FCC to be maintained by the licensee of the
Radio Broadcast Stations are current and contain all information required to be
included therein. The Sellers are current with all reports, filings and other
matters that it is required to file with the FCC and is not delinquent in the
payment of any fees and charges due to the FCC. The material required by 47
C.F.R. Section 73.3526 to be kept in the public inspection files of the Radio
Broadcast Stations is in such files.
(c) Each of the FCC Licenses is validly issued in the name of
the Seller of the Radio Broadcast Station to which such FCC License applies.
Each of the Sellers has delivered to the Purchaser true and complete copies of
its respective FCC Licenses, including any and all amendments and other
modifications thereto. Each of the FCC Licenses is in full force and effect, is
valid for the balance of the current license term applicable generally to radio
stations licensed to communities in the state where the Radio Broadcast Station
is located, is unimpaired by any acts or omissions of the Sellers or any of
their affiliates, or the employees, agents, officers, directors, or shareholders
of the Sellers or any of their affiliates, and is free and clear of any
restrictions which would reasonably be expected to limit the full operation of
the Radio Broadcast Stations in the manner and to the full extent as now
operated (other than restrictions under the terms of the FCC Licenses themselves
or generally applicable under the rules and regulations of the FCC). The Sellers
are not aware of any reason why those of the FCC Licenses subject to expiration
would reasonably be expected not to be renewed in the ordinary course for a full
term without material qualifications, or of any reason why any of the FCC
Licenses would reasonably be expected to be revoked. Each of the Radio Broadcast
Stations is in compliance with the FCC's policy on exposure to radio frequency
radiation. No renewal of any FCC
License would constitute a major environmental action under the current rules of
the FCC. To Sellers' knowledge after due inquiry, there are no facts which,
under the Communications Act of 1934, as amended, or the existing rules of the
FCC, would disqualify any Seller from assigning its FCC Licenses or from
consummating the transactions contemplated herein within the times contemplated
herein. Access to the Radio Broadcast Stations' transmission facilities is
restricted in accordance with the policies of the FCC.
(d) Section 1.1(d) of the Seller Disclosure Letter accurately
identifies each of the Permits held by the Sellers. The Permits identified in
Section 1.1(d) of the Seller Disclosure Letter comprise all of the licenses,
permits and other authorizations required for the normal and lawful operations
of the Radio Broadcast Stations in the manner now conducted, except for the FCC
Licenses and except as would not cause a Seller Material Adverse Effect.
(e) The towers used in the operation of the Radio Broadcast
Stations are obstruction marked and lighted to the extent required by, and in
accordance with the rules and regulations of the FAA, the FCC and any other
applicable requirements of law existing as of the date of this Agreement.
Appropriate notification to the FAA has been filed for each such tower where
required by the FCC's rules and regulations, and such tower is in full
compliance with the terms of such notification.
Section 3.10 Environmental Matters. Except as set forth in Section 3.10
of the Seller Disclosure Letter, Sellers have complied in all material respects
with all Environmental Laws (as defined below) applicable to the Stations and
their operations, including but not limited to the FCC's guidelines regarding RF
radiation. The technical equipment included in the Station Assets does not
contain any PCBs. Except as set forth in Section 3.10 of the Seller Disclosure
Letter, with respect to the periods during which Sellers owned or occupied the
property on which the Assets are situated, and to the knowledge of Sellers at no
time prior thereto, has any hazardous or toxic waste, substance, material or
pollutant (as those or similar terms are defined under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sections 9601 et seq., Toxic Substances Control Act, 15 U.S.C. Sections
2601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6901 et seq. or any other applicable federal, state and local
environmental law, statute, ordinance, order, judgment, rule or regulation
relating to the environment or the protection of human health (" Environmental
Laws")), including but not limited to, any asbestos or asbestos related
products, oils or petroleum-derived compounds, CFCs, PCBs, or underground
storage tanks, been released, emitted or discharged or are currently located in,
on, under, or about the real property on which the Assets are situated including
the transmitter sites or contained in the tangible personal property included in
the Assets. Sellers shall be, as of the Closing Date and thereafter, solely
responsible for all environmental liabilities, of whatsoever kind and nature,
arising out of or attributable to the operation or ownership of the Assets prior
to the Closing Date.
Section 3.11 Employee Benefits; Labor Matters. (a) Sellers have made
available to Purchaser true and correct copies of each plan or arrangement
(including each "employee benefit plan" as defined in Section 3(3) of ERISA and
any "specified fringe benefit plan" as defined in Section 6039D of the Code)
maintained or contributed to by (i) any Seller or (ii) any entity which is (or
at the relevant time was) a member of a "controlled group of corporations" with,
under "common control" with or a member of an "affiliated service group" with,
any Seller as
defined in Code Section 414(b), (c), (m) or (o) (an "ERISA Affiliate") and which
provides benefits to any current or former employee of any Seller employed in
connection with the operation of the Radios Broadcast Stations (collectively,
"Employee Benefit Plans"), and any other "group health plan" (as defined in
Section 607 of ERISA) sponsored by the Seller or an ERISA Affiliate.
(b) Each Employee Benefit Plan complies in all material respects
in form and operation with all applicable law including without limitation ERISA
and the Code. Each Employee Benefit Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified. Neither the Sellers nor any ERISA
Affiliate has ever contributed to a "multiemployer plan" as defined in Section
3(37) or 4001(a) of ERISA and has no withdrawal liability under any such
multiemployer plan. Neither the Seller nor any ERISA Affiliate has incurred or
reasonably expects to incur any liability under Title IV of ERISA. Neither the
Sellers nor any ERISA Affiliate maintains or has ever maintained any employee
welfare benefit plan (as defined in ERISA) providing medical, health or life
insurance or other welfare-type benefits for current or future retired or
terminated employees, their spouses, or dependents. Neither the Sellers or any
ERISA Affiliate has any announced plan or legally binding commitment to
terminate or modify any Employee Benefit Plan and Sellers or any ERISA Affiliate
shall continue to maintain a group health plan for at least eighteen (18) months
after the Closing Date. It is expressly understood that Purchaser is not
assuming any obligation with respect to any Employee Benefit Plan.
(c) There is no pending claim, charge or litigation relating to
the employment, termination of employment, compensation or employee benefits of
any current or former employee of any Seller, nor, to the knowledge of any
Seller or the Bankruptcy Administrative Officer, is any such claim or litigation
threatened.
(d) None of Sellers' employees is subject to or covered by a
collective bargaining agreement or a labor union agreement, and there is no
strike, dispute, slowdown, work stoppage or other concerted activity pending or
threatened against or affecting the Business, and there has been no such job
action during the past three (3) years and, to the knowledge of any Seller or
the Bankruptcy Administrative Officer, no union represents, or is seeking to
represent or organize, any employee of any Seller.
(e) Sellers have made available to Purchaser a true and correct
list of all persons employed at the Stations, including information regarding
date of hire, a description of material compensation arrangements and a
description of any other terms of any and all agreements affecting such persons
and their employment by Sellers. Except as previously disclosed in writing to
Purchaser, no persons employed at the Stations are shared with any non-Seller
third party or entity (including any radio station directly or indirectly owned
or operated by Alan Brill).
Section 3.12 Real Property.
(a) Section 1.1(p) of the Seller Disclosure Letter contains a
true and correct list of each parcel of Real Property owned by the Sellers and
used, held for use or useable connection with the Business, and Section 1.1(q)
of the Seller Disclosure Letter contains a true
and correct list of each Real Property Lease with respect to real property
leased by the Sellers (as lessor or lessee) and used, held for use or useable
connection with the Business (except for the Deferred Leases).
(b) Except as disclosed in Section 3.12(b) of the Seller
Disclosure Letter, the Sellers have good, marketable and insurable title to the
Real Property, free and clear of all Encumbrances other than Permitted
Encumbrances. Except for the Real Property subject to Real Property Leases
described in Section 1.1(q)(i) of the Seller Disclosure Letter, the Sellers are
in possession of the Real Property.
(c) Each Real Property Lease is a legal, valid and binding
agreement, enforceable in accordance with its terms, of the Seller party thereto
and, except as set forth in Section 3.12(c) of the Seller Disclosure Letter,
there is no default (or any condition or event which, after notice or lapse of
time or both, would constitute a default) thereunder which would reasonably be
expected to, individually or in the aggregate, result in a Seller Material
Adverse Effect
(d) Seller has full legal and practical access to the Real
Property, and all easements, rights of way, and real property licenses relating
thereto have been properly recorded in the appropriate public recording offices.
None of the buildings, structures, improvements or fixtures constructed on any
Real Property, including, but not limited to, all towers, guy wires and guy
anchors and ground radials, encroach upon adjoining real property, and all such
buildings, structures, improvements and fixtures are constructed and are
operated and used in conformance with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes. No utility lines serving the Real Property pass over the
lands of a third party except where appropriate easements have been obtained.
All buildings, structures, towers, antennae, improvements and fixtures
comprising part of the real properties owned or leased by Seller are in good and
technically sound operating condition, have no latent structural mechanical or
other defects of material significance, are reasonably suitable for the purposes
for which they are being used and each has adequate rights of ingress and
egress, utility service for water and sewer, telephone, electric and/or gas, and
sanitary service for the conduct of the Business and operations of the Radio
Broadcast Stations as presently conducted.
Section 3.13 Title to and Use of Property.
(a) At the Closing, the Purchaser will acquire good, valid and
marketable title to all of the Assets, in each case free and clear of any and
all Encumbrances (including, without limitation, any and all claims that may
arise by reason of the execution, delivery or performance by the Sellers of this
Agreement) other than Permitted Encumbrances.
(b) Except for any assets that are Excluded Assets, the Assets
include, without limitation, all real property interests and related rights and
interests and all personal property of the Sellers, both tangible and
intangible, used, held for use or usable in the operation of the Business or
necessary to the conduct of the Business as it is currently conducted by the
Sellers. Except as identified on Section 3.13(b) of the Seller Disclosure
Letter, no Assets are shared with or used by any non-Seller third party or
entity (including any radio station directly or indirectly owned or operated by
Alan Brill).
(c) The Sellers have all Permits that are material to the
conduct of the Business. All such Permits are listed in Section 1.1(d) of the
Seller Disclosure Letter and are in full force and effect. Except as set forth
in Section 3.13(c) of the Seller Disclosure Letter, no material violations are
or have been committed in respect of any material Permit and no proceeding is
pending or, to the knowledge of the Sellers or the Bankruptcy Administrative
Officer, threatened to revoke or limit any material Permit.
Section 3.14 Contracts.
(a) Section 3.14 of the Seller Disclosure Letter (with paragraph
references corresponding to those set forth below) contains a true and complete
list of all Contracts material to the operation of Sellers' Business, including,
but not limited to the following Contracts (true and complete copies or, if
none, reasonably complete and accurate written descriptions of which, together
with all amendments and supplements thereto, have been delivered to Purchaser or
made available for inspection by Purchaser prior to the execution of this
Agreement) in connection with the Business to which any Seller is a party or by
which any of the Assets is bound:
(i) all Contracts (excluding Employee Benefit Plans)
providing for a commitment of employment or consultation services for a
specified or unspecified term to, or otherwise relating to employment or the
termination of employment of, any Employee, the name, position and rate of
compensation of each Employee party to such a Contract and the expiration date
of each such Contract;
(ii) all material partnership, joint venture,
shareholders' or other similar Contracts with any Person in connection with the
Business;
(iii) all Contracts with distributors, dealers,
manufacturer's representatives, sales agencies or franchises with whom any
Seller deals in connection with the Business which in any case involve the
payment or potential payment, pursuant to the terms of any such Contract, by or
to the Sellers of more than $25,000 annually;
(iv) all Contracts relating to the future disposition or
acquisition of any Assets individually or in the aggregate material to the
Condition of the Business;
(v) all collective bargaining or similar labor Contracts
covering any Employee, if any;
(vi) all Time Sales Agreements which are not made in the
ordinary course of business;
(vii) a complete and accurate list of all Trade
Agreements which are outstanding as of the date hereof setting forth Barter
Payable and Barter Receivable;
(viii) all other Contracts (other than Employee Benefit
Plans, the Real Property Leases and insurance policies with respect to the
Business) that (A) involve the payment or potential payment, pursuant to the
terms of any such Contract, by or to the Sellers of
more than $25,000 annually and (B) cannot be terminated within ninety (90) days
after giving notice of termination without resulting in any material cost or
penalty to Sellers.
(b) No Seller has received written notice, nor do the Sellers or
the Bankruptcy Administrative Officer otherwise have knowledge, that any party
to the Contracts required to be disclosed in Section 3.14 of the Seller
Disclosure Letter intends to cancel, terminate, or refuse to renew such Contract
or to exercise or decline to exercise any option or right thereunder. Each such
Contract is valid and binding upon all parties thereto in accordance with its
terms and, except as set forth in Section 3.14 of the Seller Disclosure Letter,
there is no default (or any condition or event which, after notice or lapse of
time or both, would constitute a default) thereunder; except (i) to the extent
excused by or unenforceable as a result of the commencement or pendency of the
Chapter 11 Case or the application of any provision of the Bankruptcy Code and
(ii) to the extent that the failure of such Contracts to be valid and binding
would not individually or in the aggregate, reasonably be expected to have a
Seller Material Adverse Effect.
Section 3.15 Intellectual Property.
(a) "Intellectual Property" shall mean all of the following as
they exist in all jurisdictions throughout the world, in each case, to the
extent used, held for use or useful in the conduct of the Business and owned by,
licensed to, or otherwise used or held for use by the Sellers:
(i) patents, patent applications, and other patent
rights (including any divisions, continuations, continuations-in-part,
substitutions, or reissues thereof, whether or not patents are issued on any
such applications and whether or not any such applications are modified,
withdrawn, or resubmitted);
(ii) trademarks, service marks, trade dress, trade
names, brand names, Internet domain names, designs, logos, or corporate names,
whether registered or unregistered, and all registrations and applications for
registration thereof;
(iii) copyright registrations and applications for
registration thereof and non-registered copyrights;
(iv) trade secrets, designs, research, processes,
procedures, techniques, methods, know-how, data, mask works, inventions, and
other proprietary rights (whether or not patentable or subject to copyright,
mask work, or trade secret protection); and
(v) computer software programs, including, without
limitation, all source codes, object codes, and material documentation related
thereto (the "Software").
(b) Intellectual Property Disclosure. Section 3.15(b) of the
Seller Disclosure Letter sets forth all patents and patent applications,
trademark and service mark registrations and applications, Internet domain name
registrations and applications, and copyright registrations and applications
owned or licensed by any Seller, specifying as to each licensed or owned item,
as applicable: (i) the nature of the item, including the title; (ii) the owner
of the item; (iii) the jurisdictions in which an owned item is issued or
registered or in which an application for
issuance or registration has been filed; and (iv) the issuance, registration, or
application numbers and dates, or instrument by which such item has been
licensed (as applicable).
(c) Ownership. Each Seller will own or have the right to use as
of the Closing Date and transfer to the Purchaser, free and clear of any and all
Encumbrances other than Permitted Encumbrances, and as of the Closing Date will
have the unrestricted right to use, sell, or license, all Intellectual Property
used, held for use or useable the conduct of the Business.
(d) Claims. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Seller Material Adverse Effect,
no Seller has been, during the three (3) years preceding the date hereof, a
party to any claim or action, nor, to the knowledge of the Sellers or the
Bankruptcy Administrative Officer, is any claim or action threatened that
challenges the validity, enforceability, ownership, or right to use, sell, or
license any Intellectual Property. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Seller Material Adverse Effect,
to the knowledge of the Sellers or the Bankruptcy Administrative Officer, no
third party is infringing upon any Intellectual Property.
(e) Administration and Enforcement. Except as would not
reasonably be expected to, individually or in the aggregate, result in a Seller
Material Adverse Effect, the Sellers have taken all necessary and desirable
action to maintain and protect each item of Intellectual Property owned by the
Sellers.
Section 3.16 Bankruptcy Administrative Officer Approval and
Recommendation. The Bankruptcy Administrative Officer as appointed pursuant to
the Revised Consent Order, dated May 16, 2002, entered in the Chapter 11 Case
(the "Bankruptcy Administrative Officer") has determined, subject to further
review and approval by the Bankruptcy Court, that an immediate sale and
assignment of the Assets pursuant to this Agreement under Sections 363 and 365
of the Bankruptcy Code is in the best interests of the Sellers.
Section 3.17 FAA Compliance. The Radio Broadcast Stations are in
material compliance with all rules and regulations of the Federal Aviation
Administration applicable to the Stations.
Section 3.18 Investment.
The Sellers understand and acknowledge that (i) the Common Stock
is being issued without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities Act
under Regulation D and/or Section 4(2) of the Securities Act and (ii) the
availability of any such exemption depends in part on, and the Purchaser will
rely upon the accuracy and truthfulness of, the representations set forth in
this Section 3.18. Each Seller that will be receiving stock pursuant to Section
1.7(c) (each an "Acquiring Seller") is acquiring the Common Stock for investment
for its own account and not with a view to any distribution thereof in
contravention of applicable securities laws. On the date hereof and on the
Closing Date, each Acquiring Seller is and will be an Accredited Investor. Each
Acquiring Seller has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risk of
the prospective investment in the Common Stock and has so evaluated the merits
and risks of such investment to
its satisfaction. Each Acquiring Seller is able to bear the economic risk of an
investment in the Common Stock and is able to afford a complete loss of such
investment. Upon the confirmation by the Bankruptcy Court, and consummation, of
a chapter 11 plan of the Sellers to be filed by the Sellers and confirmed by the
Bankruptcy Court (the "Bankruptcy Plan"), Acquiring Sellers shall distribute the
Stock Consideration (including any adjustment thereof after the Closing as a
result of a stock split, stock dividend, reverse stock split, reclassification
or recapitalization) only to those creditors of the Sellers who satisfy the
requirements set forth in Section 1.6(a) at the time of the distribution.
Section 3.19 Access to Information.
Each Seller acknowledges that it has been afforded (i) the
opportunity to ask such questions of and to receive answers from representatives
of the Purchaser concerning the terms and conditions of the issuance of the
Common Stock, the operations of the Purchaser and the merits and risks of
investing in the Common Stock; (ii) access to information about the Purchaser
and the Purchaser's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
which the Purchaser possesses, or can acquire without unreasonable effort or
expense, that is necessary to make an informed investment decision with respect
to its investment.
Section 3.20 Offering Restrictions.
Each Seller understands and acknowledges: (i) that the shares of
Common Stock are "restricted securities" as defined in Rule 144 under the
Securities Act and (ii) that all offers and sales of the Common Stock shall be
made only pursuant to an available exemption from the registration requirements
of the Securities Act or pursuant to registration under the Securities Act.
Section 3.21 Condition of Equipment.
The Station Equipment listed on Schedule 1.1(b) constitutes all
of the material personal property that is used, held by the Sellers or others
for use or useable by the Radio Broadcast Stations, or necessary to operate the
Radio Broadcast Stations as they are now operated. The Station Equipment is
sufficient and suitable for the operation of the Radio Broadcast Stations as
they are currently being operated and is in proper condition and repair, normal
wear and tear excepted.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as follows:
Section 4.1 Organization. The Purchaser is a corporation validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to carry on
its business as it is now being conducted. The Purchaser is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
would not individually or in the aggregate have a Purchaser Material Adverse
Effect.
Section 4.2 Authority Relative to this Agreement. The Purchaser has the
corporate power and authority to enter into this Agreement and the Transaction
Documents to which it is a party and to carry out its obligations hereunder and
thereunder. The execution, delivery, and performance by the Purchaser of this
Agreement and the Transaction Documents to which it is a party and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby, including, but not limited to, the authorization, issuance, sale and
delivery of the shares of Common Stock, have been duly and validly approved by
the Board of Directors of the Purchaser, and no other corporate proceedings on
the part of the Purchaser or its stockholders are necessary to authorize the
execution, delivery and performance of this Agreement by the Purchaser and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby. This Agreement has been duly and validly executed and delivered by the
Purchaser and (assuming this Agreement constitutes a valid and binding
obligation of the Sellers) constitutes, and upon the execution and delivery by
the Purchaser of the Transaction Documents to which it is a party, such
Transaction Documents will constitute, a valid and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with their respective
terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium,
and other laws affecting creditors' rights generally from time to time in effect
and to general equitable principles.
Section 4.3 Non-Contravention; Approvals and Consents. The execution and
delivery by the Purchaser of this Agreement do not and, upon execution and
delivery thereof in accordance with this Agreement, the Transaction Documents to
which the Purchaser is a party will not, and the performance by the Purchaser of
its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby will not, conflict with, result in
a violation or breach of, constitute (with or without notice or lapse of time or
both) a default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Encumbrance upon any of the assets
or properties of the Purchaser or any of its Subsidiaries under, any of the
terms, conditions or provisions of (i) the certificates or articles of
incorporation or bylaws (or other comparable charter documents) of the Purchaser
or any of its Subsidiaries, or (ii) (x) any statute, law, rule, regulation or
ordinance (together, "Laws"), or any judgment, decree, order, writ, permit or
license (together, "Orders"), of any Governmental or Regulatory Authority
applicable to the Purchaser or any of its Subsidiaries or any of their
respective assets or properties, or (y) any Contracts to which the Purchaser or
any of its Subsidiaries is a party or by which the Purchaser or any of its
Subsidiaries or any of their respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) the approval of Purchaser's lenders under
its credit facility and any conflicts, violations, breaches, defaults,
terminations, modifications, accelerations and creations and impositions of
Encumbrances which, individually or in the aggregate, could not be reasonably
expected to have a Purchaser Material Adverse Effect or on the ability of the
Purchaser to consummate the transactions contemplated by this Agreement and the
Transaction Documents.
Section 4.4 Legal Proceedings. There are no actions, suits, arbitrations
or proceedings pending or, to the knowledge of the Purchaser, threatened
against, relating to or affecting, nor to the knowledge of the Purchaser are
there any Governmental or Regulatory Authority
investigations or audits pending or threatened against, relating to or
affecting, the Purchaser or any of its Subsidiaries or any of their respective
assets and properties which, individually or in the aggregate, could be
reasonably expected to have a material adverse effect on the ability of the
Purchaser to consummate the transactions contemplated by this Agreement and the
Transaction Documents to which it is a party, and (ii) neither the Purchaser nor
any of its Subsidiaries is subject to any order of any Governmental or
Regulatory Authority which, would individually or in the aggregate, reasonably
be expected to have a Purchaser Material Adverse Effect and/or a material
adverse effect on the ability of the Purchaser to consummate the transactions
contemplated by this Agreement.
Section 4.5 Financing. The Purchaser represents that as of the date
hereof it has, and as of the Closing Date it will (a) have access to sufficient
funds to deliver the Cash Consideration to the Sellers, (b) be able to deliver
the Stock Consideration, and (c) be able to operate the Business in accordance
with the terms of the Time Brokerage Agreement.
Section 4.6 Valid Issuance. The shares of Common Stock constituting the
Stock Consideration, when issued, sold and delivered in accordance with the
terms of this Agreement, will be duly and validly issued, fully paid, and
nonassessable.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business. Subject to any obligations as a debtor
in possession under the Bankruptcy Code and subject to actions taken by
Purchaser under the Time Brokerage Agreement, prior to the Closing Date:
(a) each of the Sellers shall use all commercially reasonable
best efforts to conduct its businesses in the ordinary course consistent with
past practice taking into account the filing of the Petitions, including,
without limitation, meeting its post-Petition obligations as they become due.
Prior to the Closing Date, each of the Sellers shall also use all commercially
reasonable best efforts to preserve intact its business organizations and
relationships with third parties and the goodwill and ongoing operations of the
Business and to keep available the services of its present officers and key
employees, subject only to the terms of this Agreement.
(b) Sellers shall operate the Stations in all respects in
accordance with FCC rules and regulations and the FCC Licenses.
(c) Seller shall not: (a) sell, lease or dispose of or commit to
sell, lease or dispose of any of the Assets; (b) sell broadcast time on a
prepaid basis (other than in the course of existing credit practices); (c)
except as required by applicable law, grant or agree to grant any general
increases in the rates of salaries or compensation payable to employees of the
Stations; (d) grant or agree to grant any specific bonus or increase in
compensation to any executive or management employee of the Stations; (e)
provide for any new pension, retirement or other employment benefits for
employees of the Stations or any increases in any existing benefits; (f) modify,
change, renew or terminate any Contract; (g) change the advertising rates in
effect as of the date hereof except in accordance with ordinary course of
business pricing policies; (h) create, assume or permit to exist any
Encumbrances or rights affecting any of the Assets, except for
those in existence on the date of this Agreement and disclosed in the Seller
Disclosure Letter (i) change the call letters of the Stations; or (j) take any
action which would cause any representation or warranty contained herein to be
or become false or invalid or which could hinder or delay the consummation of
the transactions contemplated by this Agreement.
(d) Prior to the Closing, the Purchaser shall take no action or
actions which would constitute the exercise of control over the FCC Licenses in
violation of applicable law.
Section 5.2 Access and Information. Each of the Sellers shall afford to
the Purchaser and to the Purchaser's financial advisors, legal counsel,
accountants, consultants, financing sources, and other authorized
representatives access during normal business hours and without material
disruption to the Business throughout the period prior to the Closing Date to
all of its owned and leased real property and its books, documents, records,
properties, plants, and personnel that relate to the Business and, during such
period, shall furnish as promptly as practicable to the Purchaser all other
information as the Purchaser reasonably may request in furtherance of the
Contemplated Transactions. Without limiting the foregoing, Sellers agree to
cooperate with Purchaser to allow Purchaser, or its representatives, to conduct
(i) environmental inspections, title exams and surveys with respect to the Real
Property and real estate subject to the Real Property Leases, and (ii)
engineering inspections of all buildings, towers, structures, improvements and
fixtures comprising part of the Real Property and the real estate subject to the
Real Property Leases and all of the Stations' equipment, studio and transmitter
facilities.
Section 5.3 Filings; Other Action. Subject to the terms and conditions
herein provided, as promptly as practicable, the Sellers and the Purchaser shall
(a) promptly make all filings and submissions under the HSR Act, (b) use all
commercially reasonable best efforts to cooperate with each other in (i)
determining which filings are required to be made prior to the Closing Date
with, and which material consents, approvals, permits, or authorizations are
required to be obtained prior to the Closing Date from, Governmental or
Regulatory Authorities in connection with the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions, and (ii) timely
making all such filings and timely seeking all such consents, approvals,
permits, or authorizations, and (c) use all commercially reasonable best efforts
to take, or cause to be taken, all other action and do, or cause to be done, all
other things reasonably necessary or appropriate to consummate the Contemplated
Transactions, as soon as reasonably practicable. The Sellers and the Purchaser
shall be responsible for making their own HSR Act filing(s) and shall cooperate
with each other to make any joint filings and all filing fees relating to such
HSR Act filing(s) shall be paid for by the party responsible for such fees, as
the case may be. In connection with the foregoing, the Sellers will promptly
provide the Purchaser, and the Purchaser will promptly provide the Sellers, with
copies of all correspondence, filings, or communications (or memoranda setting
forth the substance thereof) between such party or any of its representatives,
on the one hand, and any governmental agency or authority or members of their
respective staffs, on the other hand, with respect to all filings and
submissions under the HSR Act with respect to this Agreement and the
Contemplated Transactions. The parties acknowledge that certain actions may be
necessary with respect to the foregoing in making notifications and obtaining
clearances, consents, approvals, waivers, or similar third party actions that
are material to the consummation of the Contemplated Transactions, and each
party agrees to take all commercially reasonable actions as are necessary, to
complete such notifications and obtain such clearances, approvals, waivers, or
third party actions, except where such
consequence, event, or occurrence would have a Purchaser Material Adverse Effect
or a Seller Material Adverse Effect, as the case may be.
Section 5.4 FCC Licenses. Each Seller shall not, by any act or omission,
surrender, or permit an adverse modification of, forfeiture of, or failure to
renew under regular terms of, any of the FCC Licenses, cause the FCC or any
other Governmental or Regulatory Authority to institute any proceeding for the
revocation, suspension, or modification of any such authorization, or fail to
prosecute with due diligence any pending applications with respect to FCC
Licenses, including the FCC Applications, and including any renewals thereof.
Each Seller shall make all filings and reports and pay all fees necessary or
reasonably appropriate for the continued operation of the Business, as and when
such approvals, consents, permits, licenses, filings, or reports or other
authorizations are necessary or appropriate. If any of the Sellers receives any
finding, order, complaint, citation or notice prior to the Closing Date that
states that any aspect of any of the Radio Broadcast Stations' operations
violates any rule or regulation of the FCC 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, such Seller shall promptly notify the Purchaser of
the Administrative Violation, remove or correct the Administrative Violation,
and be responsible for the payment of all costs associated therewith, including
any fines or back pay that may be assessed.
Section 5.5 FCC Applications. (a) As promptly as practicable after the
execution of this Agreement, and in any event within ten (10) Business Days
thereafter, the Purchaser shall prepare and deliver to each Seller, the
Purchaser's completed portion of all appropriate applications for FCC approval,
and such other documents as may be required, with respect to the assignment of
each of the Seller's FCC Licenses set forth in Section 1.1(a) of the Purchaser
Disclosure Letter to the Purchaser (collectively, the "FCC Applications"). As
promptly as practicable thereafter and in any event within five (5) Business
Days thereafter, each Seller shall prepare and deliver to the Purchaser, such
Seller's completed portion of all appropriate FCC Applications. As soon as
practicable after the Sale Order has become a Final Order, and in any event
within five (5) Business Days, the parties shall file, or cause to be filed, the
FCC Applications.
(b) Each of the Purchaser and the Sellers shall bear its own
expenses in connection with the preparation and prosecution of the FCC
Applications. The Purchaser and the Sellers shall each use their commercially
reasonable best efforts to prosecute the FCC Applications in good faith and with
due diligence before the FCC and in connection therewith shall take such action
or actions as may be necessary or reasonably required in connection with the FCC
Applications, including furnishing to the FCC any documents, materials, or other
information requested by the FCC in order to obtain such approvals as
expeditiously as practicable.
Section 5.6 Public Announcements. The Sellers agree that they will not
issue any press release or respond in writing to any press inquiry with respect
to this Agreement or the Transaction Documents or the transactions contemplated
hereby without the prior approval of the Purchaser (which approval shall not be
unreasonably withheld), except as may be required by applicable law or the
Bankruptcy Court; provided, however, that the Sellers may make such
filings with the Bankruptcy Court and the SEC relating to such matters as it
deems necessary. Purchaser and its Affiliates shall, in accordance with their
respective legal obligations, including but not limited to filings permitted or
required by the Securities Act of 1933 and the Securities and Exchange Act of
1934, the Nasdaq National Market and other similar regulatory bodies, make (i)
such press releases and other public statements and announcements ("Releases")
as Purchaser or its Affiliates deems necessary and appropriate in connection
with this Agreement and the transactions contemplated hereby, and (ii) any and
all statements Purchaser deems in its sole judgment to be appropriate in any and
all filings, prospectuses and other similar documents. Purchaser shall provide
Sellers with a copy of any Releases.
Section 5.7 Bankruptcy Actions. Promptly following the date hereof, the
Sellers shall file with the Bankruptcy Court a form of order or orders pursuant
to Sections 105, 363, 365 and other applicable provisions of the Bankruptcy Code
in form and substance acceptable to the Purchaser in its reasonable discretion
(the "Sale Order") (v) ruling pursuant to Federal Rule of Bankruptcy Procedure
6004(g) that the Closing of the Contemplated Transactions may take place within
10 days of the entry of the Sale Order, (w) authorizing, directing and approving
the sale of the Assets to the Purchaser pursuant to this Agreement, the
assumption, cure by Sellers and assignment to Purchaser of the Assumed Contracts
(including the Real Property Leases) and the entering into of the Time Brokerage
Agreement by the Sellers, (x) approving the terms of this Agreement and the
terms of the Time Brokerage Agreement, (y) providing that the Common Stock shall
only be permitted to be transferred to creditors of the Sellers in accordance
with the requirements of Section 1.6(a); and (z) making the following findings:
(i) the Bankruptcy Court has "core" jurisdiction over the Chapter 11 Case; (ii)
due and proper notice of the sale of the Assets and to the Purchaser has been
given to all parties entitled thereto in accordance with all applicable
provisions of the Bankruptcy Code, any rules thereunder and orders of the
Bankruptcy Court; (iii) that the Bankruptcy Administrative Officer has complied
with all requirements imposed on it by any order of the Bankruptcy Court
relating to the sale of the Assets (iv)the Assets are property of Sellers'
estate, within the meaning of Section 541 of the Bankruptcy Code, and that upon
entry of the Sale Order, the Sellers will have the power to convey the property
to the Purchaser; (v) for each Encumbrance on the Assets and that does not
constitute a Permitted Encumbrance or an Assumed Liability, a subsection of
Section 363(f) of the Bankruptcy Code applies, and, upon consummation of the
transactions contemplated by this Agreement, the Assets will be sold to the
Purchaser free and clear of such Encumbrances; (vi) the Assets have been
reasonably marketed, and the offer of the Purchaser is the best offer received
by the Sellers' estate and, accordingly, it is in the best interest of the
Sellers' estate and its creditors that the sale of the Assets to the Purchaser
be approved; (vii) that each Assumed Contract (including each Real Property
Lease) has been assumed by Sellers, the cure claims relating to such Assumed
Contracts have been determined and payable by Sellers, and Sellers may assign
such Assumed Contracts to Purchaser (viii) the Purchaser is acting in good
faith, and is entitled to the protections of a Purchaser under Section 363(m) of
the Bankruptcy Code, which Section applies to the transactions contemplated by
this Agreement and reversal or modification of the Sale Order on appeal will not
affect the validity of the sale of the Assets to the Purchaser; (ix) each
objection to the sale of the Assets to the Purchaser has either been withdrawn
with prejudice or is specifically overruled on the merits; (x) any competitive
bidding in connection with the sale of the Assets has been non-collusive and the
sale of the assets to the Purchaser may not be set aside under Section 363(n) of
the Bankruptcy Code; (xi) the Contemplated Transactions are exempt from transfer
taxes pursuant to Section 1146(c) of the Bankruptcy
Code; (xii) this Agreement is approved, and the Sellers are authorized and
directed to enter into and perform it according to its terms; (xiii) the
Bankruptcy Court retains jurisdiction to construe and enforce the Sale Order;
(xiv) Purchaser has provided adequate assurance of future performance pursuant
to Section 365(f)(2)(B) of the Bankruptcy Code of the Assumed Contracts and all
other executory contracts assumed by Sellers and assigned to the Purchaser; and
(xv) such other findings and provisions as may be reasonably requested by the
Purchaser.
(b) The Sellers and the Purchaser shall each use their
commercially reasonable best efforts, and shall cooperate, assist and consult
with each other, to secure the Bankruptcy Court's approval of (i) the Sale Order
no later than thirty (30) Business Days after the date of this Agreement and
(ii) any other order of the Bankruptcy Court relating to this Agreement, the
Time Brokerage Agreement or the transactions contemplated hereby or thereby,
within five (5) Business Days following the date of filing of the motion for
approval thereof. The Sellers and the Purchaser shall consult with, and seek the
advice of, one another regarding pleadings which any of them intend to file, or
positions any of them intend to take, with the Bankruptcy Court in connection
with or which might reasonably affect, the Bankruptcy Court's approval of the
Sale Order. The Sellers shall promptly (and, in any event, within five (5)
Business Days after the receipt of any written request) provide the Purchaser
and its counsel with copies of all notices, filings and orders of the Bankruptcy
Court (and other courts) pertaining to the motion for approval of the Sale Order
or any other order relating to any of the transactions contemplated by this
Agreement.
(c) If the Sale Order or any other orders of the Bankruptcy
Court relating to this Agreement, the Time Brokerage Agreement or the
transactions contemplated hereby or thereby shall be appealed by any Person (or
if any petition for certiorari or motion for reconsideration, amendment,
clarification, modification, vacation, stay, rehearing or reargument shall be
filed with respect to the Sale Order or other such order), the Sellers and the
Purchaser shall cooperate in taking such steps diligently to prosecute such
appeal, petition or motion and each of the Sellers and the Purchaser shall use
its commercially reasonable best efforts to obtain an expedited resolution of
any such appeal, petition or motion.
Section 5.8 Tax Returns and Filings; Payment of Taxes. Each Seller (or
Brill, on any other Sellers' behalf) shall prepare all of its Tax Returns for
all periods and shall be responsible for paying all of its Taxes for all periods
(or portions thereof) ending on or prior to the Closing Date.
Section 5.9 Tax Matters. The parties acknowledge that the Contemplated
Transactions are exempt from all personal property transfer, documentary, sales,
use, registration, value-added and other similar Taxes (including interest,
penalties and additions to Tax) incurred in connection with the Contemplated
Transactions ("Transfer Taxes") pursuant to Section 1146 of the Bankruptcy Code.
Section 5.10 Employment Matters.
(a) Each of Brill and the Sellers shall use their commercially
reasonable best efforts to retain all of the Employees, and to maintain in good
standing through the Closing all relationships and agreements with the
Employees, independent contractors, or consultants
necessary to the Business, in each case from the date hereof through the Closing
Date, and to cooperate with the Purchaser in hiring the Employees engaged in the
Business who are offered employment by the Purchaser; provided, that the
foregoing shall not require that any Seller offer any compensation or other
incentives in addition to the compensation and benefits being provided or
required to be provided as of the date of this Agreement.
(b) The Sellers will terminate all of the Employees and agents
engaged in the Business as of the Closing Date. It is the intention of the
Purchaser to hire some, and perhaps all, of the persons employed by the Sellers
in the Business as of the Closing Date immediately following the termination of
employment by Sellers. Sellers agree that the Purchaser retains sole and
complete discretion with respect to which of the Employees the Purchaser shall
offer employment and sole and complete discretion with respect to the terms and
conditions of employment that may be offered. From the date hereof through the
Closing, the Sellers shall permit the Purchaser to communicate in writing with
the Employees and consultants engaged in the Business, at reasonable times and
upon reasonable notice, concerning the Purchaser's plans, operations, business,
customer relations, and general personnel matters and to interview the Sellers'
employees and consultants, provided that all such contacts shall be subject to
the prior review and approval of the Sellers, which approval shall not be
unreasonably withheld. The Sellers shall be solely responsible for any
notification and liability under WARN relating to any termination of any of
Sellers' employees occurring on or after the date of this Agreement. Employees
of the Sellers hired by the Purchaser effective on or after the Closing Date
shall be referred to herein as a "Transferred Employee."
(c) The Sellers shall be responsible for providing continuation
coverage as required by COBRA, under a group health plan maintained by the
Sellers, to those Employees and other qualified beneficiaries under COBRA with
respect to such Employees, who have a COBRA qualifying event (due to termination
of employment with Sellers or otherwise) prior to or in connection with the
transactions contemplated by this Agreement (the "Continuees").
(d) No provision of this Section 5.11 shall create any third
party beneficiary or other rights in any employee or former employee (including
any beneficiary or dependent thereof) of the Sellers or of any of its
subsidiaries in respect of continued employment (or resumed employment) with
either the Business, the Purchaser any of its Affiliates and no provision of
this Section 5.11 shall create any such rights in any such Persons in respect of
any benefits that may be provided, directly or indirectly, under any of the
benefit plans or any plan or arrangement which may be established by the
Purchaser or any of its Affiliates. No provision of this Agreement shall
constitute a limitation on rights to amend, modify or terminate after the
Closing Date any such plans or arrangements of the Purchaser or any of its
Affiliates.
(e) Sellers acknowledge and agree that they, and not Purchaser,
are and shall after the Closing remain responsible for any and all wages,
vacation pay, compensation, commission, bonuses, severance pay, insurance,
supplemental pension, deferred compensation, retirement and any other benefits,
premiums and claims, due, to become due, committed, accrued or otherwise
promised to any person who as of the Closing Date, is a retiree, former
employee, current employee of Sellers relating to the period up to the Closing
Date. Purchaser shall assume no Employee Benefit Plans, programs, policies or
practices, whether or not set forth in writing, maintained by Sellers or ERISA
Affiliates at any time.
Section 5.11 Brokers or Finders. Each of the Sellers and the Purchaser
represents, as to itself and its Affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement except Bridge
Associates, LLC, whose fees and expenses will be paid by the Sellers in
accordance with the Sellers' agreement with such firm, and S. G. Cowen whose
fees and expenses will be paid by the Purchaser in accordance with Purchaser's
agreement with such firm, and each of Sellers and the Purchaser shall indemnify
and hold the other harmless from and against any and all claims, liabilities or
obligations with respect to any other such fee or commission or expenses related
thereto asserted by any person on the basis of any act or statement alleged to
have been made by such party or its Affiliate.
Section 5.12 Audit. Sellers shall cooperate, and use its reasonable best
efforts to cause its independent auditors to reasonably cooperate, with
Purchaser in order to enable Purchaser to have independent auditors (as that
term is defined in the Securities Act and the published rules and regulations
thereunder) selected by Purchaser prepare audited financial statements for the
Stations for the most recently completed fiscal year-end which comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act and Exchange Act (at Purchaser's expense). Without limiting the
generality of the foregoing, Seller agrees that it will: (i) consent to the use
of such audited financial statements in any registration statement or other
document filed by Purchaser or any of its Affiliates under the Securities Act or
the Exchange Act, and (ii) execute and deliver, and cause its officers to
execute and deliver, such "representation" letters as are customarily delivered
in connection with audits and as Seller's or Purchaser's independent accountants
may reasonably request under the circumstances.
Section 5.13 Rejected Contracts. Sellers agree that they will not reject
any Assumed Contracts (including any Real Property Lease) in any bankruptcy
proceeding following the date hereof without Purchaser's written consent.
Section 5.14 Additional Matters. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all commercially
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper, or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including using all commercially reasonable best
efforts to obtain all necessary waivers, consents, and approvals in connection
with the Governmental Requirements and to effect all necessary registrations and
filings.
Section 5.15 Bidding Procedures. The Sellers hereby agree to use the
bidding procedures with respect to the sale of the Assets in the Chapter 11 Case
(the "Bidding Procedures") substantially in the form of Exhibit C hereto and
further agree not to amend or modify such bidding procedures without the prior
written consent of the Purchaser. Notwithstanding the foregoing, to the extent
of any inconsistency between this Agreement and the Bidding Procedures, this
Agreement shall govern.
ARTICLE VI
ADDITIONAL POST-CLOSING COVENANTS
Section 6.1 Further Assurances. In addition to the provisions of this
Agreement, from time to time after the Closing Date the Sellers and the
Purchaser shall use all commercially reasonable best efforts to execute and
deliver such other instruments of conveyance, transfer, or assumption, as the
case may be, and take such other action as may be reasonably requested to
implement more effectively the conveyance and transfer of the Assets to the
Purchaser and the assumption of the Assumed Liabilities by the Purchaser.
Section 6.2 Books and Records; Personnel. For a period ending upon the
earlier of (i) the third (3rd) anniversary of the Closing Date (or such later
date as may be required by any Governmental or Regulatory Authority or ongoing
Legal Proceeding) and (ii) the closure of the Chapter 11 Case:
(a) The Purchaser shall not dispose of or destroy any of the
business records and files of the Business other than in connection with a sale
or other disposition of the Business or any portion thereof. If the Purchaser
wishes to dispose of or destroy such records and files after that time, it shall
first give sixty (60) days prior written notice to the Sellers and the Sellers
shall have the right, at their option and expense, upon prior written notice to
the Purchaser within such sixty-day period, to take possession of the records
and files within ninety (90) days after the date of the notice from the Sellers.
(b) The Purchaser shall allow the Sellers and any of their
directors, officers, employees, legal counsel, financial advisors,
representatives, accountants, and auditors (collectively, "Sellers
Representatives") access to all business records and files of the Sellers or the
Businesses that are transferred to them in connection herewith, that are
reasonably required by such party in the administration of the Chapter 11 Case
anticipation of, or preparation for, any existing or future Legal Proceeding
involving any Seller, Tax Return preparation, litigation, or Excluded Liability,
during regular business hours and upon reasonable notice at the Purchaser's
principal place of business or at any location where such records are stored,
and the Sellers Representatives shall have the right to make copies of any such
records and files; provided, however, that any such access or copying shall be
had or done in such a manner so as not to interfere with the normal conduct of
the Purchaser's business or operations.
(c) The Sellers shall allow the Purchaser and any of its
directors, officers, employees, legal counsel, financial advisors,
representatives, accountants, and auditors (collectively, "Purchaser
Representatives") access to all business records and files of the Sellers or the
Businesses that are retained by them in connection herewith, that are reasonably
required by such party in the administration of the Chapter 11 Case anticipation
of, or preparation for, any existing or future Legal Proceeding involving the
Purchaser, Tax Return preparation, litigation, or Assumed Liability, during
regular business hours and upon reasonable notice at the Sellers' principal
place of business or at any location where such records are stored, and the
Purchaser Representatives shall have the right to make copies (at their expense)
of any such records and files; provided, however, that any such access or
copying shall be had or done in such a manner so as not to interfere with the
normal conduct of Sellers' business or operations.
Section 6.3 Third Party Rights. No provision of this Agreement shall
create any third party beneficiary rights in any employee or former employee of
a Seller or any other persons or entities (including any beneficiary or
dependent thereof), in respect of continued employment (or resumed employment)
for any specified period of any nature or kind whatsoever, and no provision of
this Agreement shall create such third party beneficiary rights in any such
persons or entities in respect of any benefits that may be provided, directly or
indirectly, under any Benefit Plan.
Section 6.4 Further Agreements. Sellers authorize and empower the
Purchaser on and after the Closing Date to receive and to open all mail received
by the Purchaser relating to the Assets, the Business or the Assumed Liabilities
and to deal with the contents of such communications in any proper manner.
Sellers shall promptly deliver to the Purchaser any mail or other communication
received by the Sellers after the Closing Date pertaining to the Assets, the
Business or the Assumed Liabilities and any cash, checks or other instruments of
payment in respect thereof. The Purchaser shall promptly deliver to the Sellers
any mail or other communication received by the Purchaser after the Closing Date
pertaining to the Excluded Assets or the Excluded Liabilities and any cash,
checks or other instruments of payment in respect thereof. From and after the
Closing Date, Sellers shall refer all inquiries with respect to the Business,
the Assets and the Assumed Liabilities to the Purchaser, and the Purchaser shall
refer all calls with respect to the Excluded Assets and the Excluded Liabilities
to Sellers.
Section 6.5 Shelf Registration.
(a) The shares of Common Stock distributed by Sellers to its
creditors in accordance with the requirements of Section 1.6(a) (the
"Registrable Shares") shall be entitled to the benefits of this Section 6.5
until such shares are either (a) effectively registered under the Securities Act
and disposed of in accordance with the Registration Statement covering it, or
(b) in the opinion of counsel to Purchaser, such shares are eligible for resale
pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act.
(b) Within five (5) business days after the Closing Date,
Purchaser shall prepare and file with the SEC a Shelf Registration covering the
resale of all of the Registrable Shares. "Shelf Registration" shall mean a shelf
registration statement on Form S-3 pursuant to Rule 415 (or similar rule that
may be adopted by the SEC) under the Securities Act, filed by Purchaser and
relating to the Registrable Shares. Purchaser agrees to use its reasonable
efforts to cause such Shelf Registration to become effective within 45 days
after the filing with the SEC and thereafter to keep it continuously effective
until a date that is one (1) year from the effective date (subject to any
extension required by Section 6.5(c) below) or for such earlier date on which
all of the Registrable Shares covered by the Shelf Registration have been sold
pursuant to such Shelf Registration or the status of such Registrable Shares
shall otherwise have terminated as provided in Section 6.5(a) above.
(c) Purchaser shall have the right, in its sole discretion,
based on any valid business purpose (including, without limitation, (i) upon the
request of the managing underwriter in a distribution of equity securities of
Purchaser, or (ii) to avoid disclosure of any corporate development that
Purchaser is not otherwise obligated to disclose or (iii) to coordinate such
distribution with other shareholders that have registration rights with respect
to any securities of
Purchaser or with other distributions of Purchaser (whether for the account of
Purchaser or otherwise)), to suspend the use of the Registration Statement for a
reasonable length of time (a "Delay Period") and from time to time. Purchaser
shall provide advance written notice to the extent reasonably possible to each
holder of Registrable Shares hereunder of the beginning and end of each Delay
Period and such holders shall cease all disposition efforts with respect to
Registrable Shares held by them immediately upon receipt of notice of the
beginning of any Delay Period. The effectiveness of the Registration Statement
shall be extended for a period of time equal to the Delay Period to allow the
shareholders to use the Registration Statement for a cumulative period of one
year unless such effectiveness is terminated at an earlier date under Section
6.5(a).
(d) As a condition to Purchaser's obligations under this Section
6.5 to cause the Registration Statement to be filed and kept effective, each
holder of Registrable Shares shall provide such information, make such
representations, execute such documents, make such agreements (including
appropriate indemnification provisions) and take or refrain from taking such
actions, consistent with this Agreement, as may reasonably be required by
Purchaser in connection with such registration, and, each holder further agrees
not to utilize any material other than the applicable current prospectus in
connection with the offering of Registrable Shares pursuant to a Registration
Statement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions Precedent to Obligations of the Sellers and the
Purchaser. The respective obligations of each party to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
in writing by such party) at or prior to the Closing Date of the following
conditions:
(a) any waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act shall have expired
or been terminated, and no action shall have been instituted by the Department
of Justice or the Federal Trade Commission challenging or seeking to enjoin the
consummation of the transactions contemplated by this Agreement, which action
shall not have been withdrawn or terminated without requiring the Purchaser to
dispose of or divest any of its assets or businesses (including, without
limitation, any material Asset following the Closing), or discontinue or refrain
from conducting any of its operations or those acquired hereunder;
(b) no statute, rule, regulation, executive order, decree,
ruling, or preliminary or permanent injunction shall have been enacted, entered,
promulgated, or enforced by any Governmental or Regulatory Authority that
prohibits, restrains, enjoins, or restricts the consummation of the transactions
contemplated by this Agreement that has not been withdrawn or terminated; and
(c) no claim, action, suit, arbitration, inquiry, proceeding or
investigation (each, an "Action") shall have been commenced by or before any
United States federal, state, or local or any foreign government, governmental,
regulatory, or administrative authority, agency, or commission or any court,
tribunal or judicial or arbitral body against the Purchaser or any
Seller, seeking to restrain or materially and adversely alter the transactions
contemplated by this Agreement; provided, however, that the provisions of this
Section 7.1(c) shall not apply to any party that has directly or indirectly
solicited or encouraged any such Action.
Section 7.2 Conditions Precedent to Obligation of the Sellers. The
obligation of the Sellers to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing Date
of the following additional conditions (compliance with which or the occurrence
of which may be waived in whole or in part in a writing executed by the Sellers,
unless such waiver is prohibited by law):
(a) the Purchaser shall have performed in all material respects
its obligations under this Agreement required to be performed by it at or prior
to the Closing Date, the representations and warranties of the Purchaser
contained in this Agreement that are qualified with respect to materiality
(i.e., with respect to the occurrence or likely occurrence of a Purchaser
Material Adverse Effect or materiality) shall be true and correct in all
respects, and such representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date as if made at and as of such dates,
except with respect to representations and warranties which speak solely as to
an earlier date, which shall be at and as of such dates, and the Sellers shall
have received a certificate signed by an officer of the Purchaser as to the
satisfaction of this condition;
(b) the Purchaser shall have duly executed and delivered each of
the Transaction Documents to which it is a party;
(c) the FCC Consent shall have been granted.
Section 7.3 Conditions Precedent to Obligations of the Purchaser. The
obligation of the Purchaser to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing Date
of the following additional conditions (compliance with which or the occurrence
of which may be waived in whole or in part in a writing executed by the
Purchaser, unless such a waiver is prohibited by law):
(a) each Seller shall have performed in all material respects
their obligations under this Agreement and the Time Brokerage Agreement required
to be performed by them at or prior to the Closing Date, the representations and
warranties of the Sellers contained in this Agreement that are qualified with
respect to materiality (i.e., with respect to the occurrence or likely
occurrence of a Seller Material Adverse Effect or materiality) shall be true and
correct in all respects, and such representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date as if made at and as of
such dates, except with respect to representations and warranties which speak
solely as to an earlier date, which shall be at and as of such date; and the
Purchaser shall have received a certificate signed by an authorized
representative of each of the Sellers as to the satisfaction of this condition;
(b) each of the Sellers shall have duly executed and delivered
each Transaction Document to which it is a party;
(c) the Sale Order shall have been entered by the Bankruptcy
Court in substantially the form contemplated by this Agreement (unless the
Sellers and Purchaser shall have mutually agreed to modify such form) and shall
be a Final Order; and
(d) the FCC Consent shall have become a Final Order and all
other Governmental Requirements shall have been satisfied;
(e) Sellers shall have delivered valid third party consents to
the assignment of those Real Property Leases set forth in Section 1.1(q)(ii) of
the Seller Disclosure Letter to the extent Purchaser determines that such Real
Property Leases require such consent pursuant to the terms thereof.
(f) Purchaser shall have completed the audit contemplated by
Section 5.12, and such Purchaser's and/or Sellers' auditors shall have agreed to
execute any and all consents to the incorporation of the audited financial
statements by Purchaser in any of Purchaser's or its Affiliates filings under
the Securities Act or the Exchange Act.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by mutual written agreement of
the Purchaser and the Sellers.
Section 8.2 Termination by Either the Purchaser or the Sellers. This
Agreement may be terminated at any time prior to the Closing Date by either the
Purchaser or the Sellers (by written notice) if: (a) a United States federal or
state court of competent jurisdiction or United States federal or state
governmental regulatory or administrative agency or commission shall have
entered or issued an order, decree, or ruling or taken any other action
permanently restraining, enjoining, or otherwise prohibiting the consummation of
the transactions contemplated by this Agreement and either (i) thirty (30) days
shall have elapsed from the entry or issuance of such order, decree, or ruling
or other action and such order, decree, or ruling or other action has not been
removed or (ii) such order, decree, ruling, or other action shall have become
final and non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this clause (ii) shall have used all commercially
reasonable best efforts to remove such order, decree or ruling; or (b) the
Closing Date shall not have occurred on or before two (2) years after the date
of this Agreement; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.2(b) shall not be available to any party to this
Agreement whose failure to fulfill any obligation under this Agreement shall
have been the cause of the failure of the Closing Date to have occurred on or
prior to such date.
Section 8.3 Termination by the Sellers. This Agreement may be terminated
at any time prior to the Closing Date by action of the Bankruptcy Administrative
Officer if: (a) there has been a breach by the Purchaser of any representation
or warranty contained in this Agreement that is qualified as to materiality
(i.e., with respect to the occurrence or likely occurrence of a Purchaser
Material Adverse Effect or materiality) or a material breach of any
representation and warranty that is not so qualified, which breach is not
curable, or if curable, is not cured within thirty (30) days after written
notice of such breach is given by any Seller to the
Purchaser; (b) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of the Purchaser, which
breach is not curable or, if curable, is not cured within thirty (30) days after
written notice of such breach is given by any Seller to the Purchaser; or (c) if
the Bankruptcy Administrative Officer determines in good faith that termination
of this Agreement is required for the Bankruptcy Administrative Officer to
comply with its fiduciary duties imposed by law by reason of a bona fide
alternative proposal with respect to the Assets and the Business having been
made; provided, however, that the Sellers' ability to terminate this Agreement
pursuant to this clause (c) is conditioned upon the prior payment by the Sellers
to the Purchaser of any amounts owed by the Sellers pursuant to Section 8.5(b).
Section 8.4 Termination by the Purchaser. This Agreement may be
terminated at any time prior to the Closing Date by the Purchaser if: (a) there
has been a breach by any Seller of any representation or warranty contained in
this Agreement that is qualified as to materiality (i.e., with respect to the
occurrence or likely occurrence of a Seller Material Adverse Effect or
materiality) or a material breach of any representation and warranty that is not
so qualified, which breach is not curable, or if curable, is not cured within
thirty (30) days after notice of such breach is given by the Purchaser to the
Sellers; or (b) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of any Seller, which breach
is not curable or, if curable, is not cured within thirty (30) days after
written notice of such breach is given by the Purchaser to the Sellers.
Section 8.5 Effect of Termination and Abandonment.
(a) If this Agreement is validly terminated by either the
Sellers or the Purchaser pursuant to Sections 8.1, 8.2, 8.3 or 8.4, this
Agreement will forthwith become null and void and there will be no liability or
obligation on the part of either the Sellers or the Purchaser (or any of their
respective representatives or Affiliates), except (i) that the provisions of
Section 5.11 and this Section 8.5 will continue to apply following any such
termination and (ii) that nothing contained herein shall relieve any party
hereto from liability for willful breach of its representations, warranties,
covenants or agreements contained in this Agreement.
(b) In the event that this Agreement is terminated by the
Sellers pursuant to Section 8.3(c) ("Termination Fee Event") then the Sellers
shall pay to the Purchaser, by wire transfer of same day funds, within two (2)
Business Days after such amount becomes due, a termination fee equal to three
percent (3%) of the Purchase Price.
ARTICLE IX
DELIVERIES AT CLOSING
Section 9.1 Sellers' Deliveries at Closing. In addition to the other
things required to be done hereby, at the Closing, the Sellers shall deliver, or
cause to be delivered, to the Purchaser the following:
(a) a certificate dated the Closing Date and validly executed on
behalf of the Sellers to the effect that the conditions set forth in Section
7.3(a) have been satisfied;
(b) all documents, certificates, and agreements reasonably
necessary to transfer to the Purchaser good and marketable title to the Assets
free and clear of any and all Encumbrances thereon other than Permitted
Encumbrances, including the General Assignment and the other Assignment
Instruments; and
(c) certified copies of all orders of the Bankruptcy Court
pertaining to the Contemplated Transactions, including the Sale Order.
Section 9.2 Purchaser's Deliveries at Closing. In addition to the other
things required to be done hereby, at the Closing, the Purchaser shall deliver,
or cause to be delivered, to the Sellers the following:
(a) a certificate dated the Closing Date and validly executed on
behalf of the Purchaser to the effect that the conditions set forth in Section
7.2(a) have been satisfied;
(b) a copy of the resolutions of the Board of Directors of the
Purchaser, or similar enabling document, authorizing the execution, delivery,
and performance hereof by the Purchaser, and a certificate of its secretary or
assistant secretary, dated as of the Closing Date, that such resolutions were
duly adopted and are in full force and effect; and
(c) the Assumption Agreement and the other Assumption
Instruments.
Section 9.3 Required Documents. All documents to be delivered by the
Sellers or to be entered into by the Sellers and the Purchaser necessary to
carry out the transactions contemplated by this Agreement or contemplated by the
terms of this Agreement shall be reasonably satisfactory in form and substance
to the Purchaser and counsel to the Purchaser and all documents to be delivered
by the Purchaser necessary to carry out the transactions contemplated by this
Agreement or to be entered into by the Sellers and the Purchaser necessary to
carry out the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Sellers and counsel to the Sellers.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Notices. All notices, claims, demands, and other
communications hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand, or (c) the expiration of
three (3) Business Days after the day when mailed by registered or certified
mail (postage prepaid, return receipt requested), addressed to the respective
parties at the following addresses (or such other address for a party as shall
be specified by like notice):
(i) If to the Purchaser, to:
Regent Communications, Inc.
100 E. RiverCenter Blvd., 9th Floor
Covington, KY 41011
Telecopy: (859) 292-0352
Telephone: (859) 292-0030
Attention: Terry S. Jacobs, CEO
with a copy to:
Graydon Head & Ritchey LLP
511 Walnut Street, Suite 1900
Cincinnati, OH 45202
Telecopy: (513) 651-3836
Telephone: (513) 629-2820
Attention: John J. Kropp, Esq.
(ii) If to Brill or any Seller prior to Closing, to it:
Bridge Associates, LLC
747 Third Ave., Suite 20A
New York, NY 10017
Telecopy: (212) 207-9294
Telephone: (212) 207-4710
Attention: Mr. Anthony Schnelling
with a copy to:
McGuire Woods LLP
One James Center
901 East Cary Street
Richmond, VA 23219
Telecopy: (804) 698-2037
Telephone: (804) 775-4311
Attention: H. Slayton Dabney, Jr., Esq.
and:
Greenebaum Doll & McDonald PLLC
3300 National City Tower
101 South Fifth Street
Louisville, KY 40202-3197
Telecopy: (502) 540-2140
Telephone: (502) 587-3540
Attention: Michael G. Shaikun, Esq.
Section 10.2 Risk of Loss. The risk of loss, damage or destruction to
any of the Assets shall be borne by Sellers at all times up to the Closing, and
it shall be the responsibility of Sellers to repair or cause to be repaired and
to restore the property to its condition prior to any such loss, damage, or
destruction. In the event of any such loss, damage, or destruction, the proceeds
of any claim for any loss, payable under any insurance policy with respect
thereto, shall be used to repair, replace, or restore any such property to its
former condition, subject to the conditions
stated below. In the event of any loss or damage to any of the Assets, Sellers
shall notify Purchaser thereof in writing immediately. Such notice shall specify
with particularity the loss or damage incurred, the cause thereof (if known or
reasonably ascertainable), and the insurance coverage. In the event that the
property is not completely repaired, replaced or restored on or before the
scheduled Closing Date, Purchaser at its option: (a) may elect to postpone
Closing until such time as the property has been completely repaired, replaced
or restored (and, if necessary, Sellers shall join Purchaser in requesting from
the FCC any extensions of time in which to consummate the Closing that may be
required in order to complete such repairs); or (b) may elect to consummate the
Closing and accept the property in its then condition, and deduct from the
Purchase Price that amount which Purchaser reasonably determines to be
sufficient to cover any remediation costs and Damages (net of such insurance
proceeds which Sellers shall pay to Purchaser and the assignment to Purchaser of
the right to any unpaid proceeds).
Section 10.3 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.4 Entire Agreement; Assignment. This Agreement (including the
Schedules and Exhibits, the Seller Disclosure Letter, the Transaction Documents,
and the other documents and instruments referred to herein) (a) constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, between the parties, with respect to the subject matter
hereof, including, without limitation, any transaction between the parties
hereto, and (b) shall not be assigned, directly or indirectly, by operation of
law or otherwise; provided, however, that the Purchaser may assign its rights
and obligations hereunder to any Subsidiary, but the Purchaser shall not be
relieved of its obligations hereunder as a result of such assignment; provided,
further, however, that the certain Confidentiality and Limited Use Agreement
between certain Sellers and the Purchaser will remain in full force and effect.
Section 10.5 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
the rules of conflict of laws of the State of Delaware or any other
jurisdiction.
Section 10.6 Venue and Retention of Jurisdiction. All actions brought,
arising out of, or related to the Contemplated Transactions shall be brought in
the Bankruptcy Court, and the Bankruptcy Court shall retain jurisdiction to
determine any and all such actions; provided, that if the Bankruptcy Court
abstains from exercising, declines to exercise or lacks jurisdiction with
respect to any such action, such abstention, refusal or lack of jurisdiction
shall have no affect upon, and shall not control, prohibit or limit the exercise
of, jurisdiction by any other court having competent jurisdiction with respect
to such action.
Section 10.7 Expenses. Except as otherwise provided herein, whether or
not the actions contemplated by this Agreement are consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated thereby shall be paid by the party incurring such expenses.
Section 10.8 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
Section 10.9 Waiver. At any time prior to the Closing Date, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
Section 10.10 Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by all the other parties hereto.
Section 10.11 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any person not a party to this Agreement any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 10.12 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with its specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to all
other remedies available at law or in equity.
Section 10.13 Liability of the Bankruptcy Administrative Officer. (a)
Limitation on Liability. No provision of this Agreement shall be construed to
impose any liability upon the Bankruptcy Administrative Officer, Bridge
Associates LLC, or its officers, directors, owners, members, employees, agents,
legal counsel, advisors and representatives unless a court of competent
jurisdiction has determined by final, non-appealable order that such Person's
actions or omissions constituted fraud or willful misconduct in the exercise of
or failure to exercise any right, power or duty vested in the Bankruptcy
Administrative Officer under this Agreement or otherwise.
(b) Reliance on Orders, Statements, Certificates or Opinions. In
the absence of fraud or willful misconduct on the part of the Bankruptcy
Administrative Officer, the Bankruptcy Administrative Officer may conclusively
rely, as to the truth of the statements and correctness of the opinions
expressed therein, upon any Orders, statements, certificates or opinions
furnished to the Bankruptcy Administrative Officer and conforming to the
requirements of this Agreement.
(c) Discretion of Bankruptcy Administrative Officer. Within the
limitations and restrictions expressed herein and imposed hereby and so long as
the Bankruptcy Administrative Officer has not caused the Sellers to breach any
covenant or agreement in this Agreement, the Bankruptcy Administrative Officer
may take all actions reasonably necessary in order to exercise any or all of the
rights, powers and authority conferred on him hereby in all matters concerning
this Agreement after forming his best judgment based upon the
circumstances without the necessity of obtaining the consent or permission or
authorization of Brill or of the Bankruptcy Court.
(d) Reliance on Professionals. The Bankruptcy Administrative
Officer may consult with legal counsel and with such public accountants and
other professionals of the Debtors, on any matter related to this Agreement. The
Bankruptcy Administrative Officer shall not be liable for any action taken or
suffered by it or omitted to be taken by it without fraud or willful misconduct
in reasonable reliance on any opinion or certification of such accountants or in
accordance with the advice of such counsel or experts.
Section 10.14 Non-Survival of Representations, Warranties and
Agreements. All representations and warranties of the Purchaser and the Sellers
contained in this Agreement shall survive until the Closing Date (other than
representations and warranties made herein or deemed made that are untrue due to
willful misconduct or fraud which shall survive for the applicable statute of
limitations); provided, however, that, the covenants and agreements of the
parties hereto shall survive in accordance with their terms, provided, further,
however, that the representation and warranty set forth in Section 4.6 shall
survive indefinitely.
Section 10.15 No Other Representations. Notwithstanding anything to the
contrary contained in this Agreement, it is the explicit intent of each party
hereto that the Sellers are making no representation or warranty whatsoever,
express or implied, except those representations and warranties contained in
Article III above. IT IS UNDERSTOOD THAT EXCEPT TO THE EXTENT OTHERWISE PROVIDED
HEREIN, THE PURCHASER ACCEPTS THE CONDITION OF THE ASSETS "AS IS," "WHERE IS"
AND "WITH ALL FAULTS" WITHOUT ANY IMPLIED REPRESENTATION, WARRANTY OR GUARANTEE
AS TO THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR AS TO THE
CONDITION OF THE ASSETS, TYPE OR VALUE OF SUCH PROPERTY, AND SELLERS HEREBY
EXPRESSLY DISCLAIM ANY AND ALL SUCH IMPLIED REPRESENTATIONS, WARRANTIES OR
GUARANTIES.
ARTICLE XI
DEFINITIONS
Section 11.1 Defined Terms. As used herein, the terms below shall have
the following meanings.
"Accredited Investor" means an "accredited investor" as defined
in Rule 501(a) under the Securities Act.
"Acquisition Subsidiary" has the meaning set forth in Section
2.3.
"Acquiring Seller" has the meaning set forth in Section 3.18.
"Action" has the meaning set forth in Section 7.1(c).
"Affiliate" means any Person that directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
Contract or otherwise and, in any event and without limitation of the previous
sentence, any Person owning ten percent (10%) or more of the voting securities
of another Person shall be deemed to control that Person.
"Agreement" has the meaning set forth in the Preamble.
"Assets" has the meaning set forth in Section 1.1.
"Purchase Price" has the meaning set forth in Section 1.6(a).
"Assignment Instruments" has the meaning set forth in Section
2.1(b).
"Assumed Contracts" has the meaning set forth in Section 1.1(k).
"Assumed Liabilities" has the meaning set forth in Section 1.3.
"Assumption Agreement" has the meaning set forth in Section
2.1(a)(iii).
"Assumption Instruments" has the meaning set forth in Section
2.1(a)(iii).
"Bankruptcy Administrative Officer" has the meaning set forth in
Section 3.16.
"Bankruptcy Code" has the meaning set forth in the Recitals.
"Bankruptcy Court" has the meaning set forth in the Recitals.
"Bankruptcy Plan" has the meaning set forth in Section 3.18.
"Bidding Procedures" has the meaning set forth in Section 5.11.
"BMCH" has the meaning set forth in the Recitals.
"BMM" has the meaning set forth in the Recitals.
"Brill" has the meaning set forth in the Preamble.
"Brill Subsidiaries" has the meaning set forth in the Preamble.
"Business" has the meaning set forth in the Recitals.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which banking institutions in New York, New York are authorized or
required by law or executive order to close.
"Chapter 11 Case" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 2.1.
"Closing Date" has the meaning set forth in Section 2.1.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended..
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock of the Purchaser, par
value $.01 per share.
"Communications Act" means the Communications Act of 1934, as
amended, and the rules and regulations (including those issued by the FCC)
promulgated thereunder.
"Condition of the Business" means the business, financial
condition and results of operations of the Business.
"Contemplated Transactions" has the meaning set forth in the
Recitals.
"Continuees" has the meaning set forth in Section 5.11(c).
"Contract" means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract.
"Conversion Date" has the meaning set forth in the Recitals.
"Cure Amounts" has the meaning set forth in Section 1.3(a).
"Damages" means any and all demands, suits, claims, losses,
costs, damages, liabilities and expenses, including reasonable attorneys' fees
and expenses.
"Deposit" has the meaning set forth in Section 2.4.
"Employee" means each employee, officer or consultant of the
Sellers engaged primarily in the conduct of the Business, but excluding Alan
Brill.
"Encumbrance" means any claim (as such term is defined in the
Bankruptcy Code), lien, pledge, option, charge, hypothecation, easement,
security interest, right-of-way, encroachment, mortgage, deed of trust,
imperfection of title, prior assignments or other encumbrance or charge of any
kind or nature whatsoever including, without limitation, claims under theories
of successor liability or similar doctrines.
"Encumbrances" has the meaning set forth in Section 1.1.
"Environmental Law" has the meaning set forth in Section 3.10.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended.
"Escrow Agent" has the meaning set forth in Section 2.4.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" has the meaning set forth in Section 1.2.
"Excluded Liabilities" has the meaning set forth in Section 1.4.
"FCC" means the Federal Communications Commission (or any
successor Governmental or Regulatory Authority).
"FCC Applications" has the meaning set forth in Section 5.6(a).
"FCC Consents" means the granting by the FCC of its consent to
the assignment of the FCC Licenses in connection with the consummation of the
Contemplated Transactions.
"FCC Licenses" has the meaning set forth in Section 1.1(a).
"Final Order" shall mean either (i) an order or determination by
the FCC, or other regulatory authority, other than the Bankruptcy Court, (x)
that is not reversed, stayed, enjoined, set aside, annulled, or suspended within
the deadline, if any, provided by applicable statute or regulation, (y) with
respect to which no request for stay, motion or petition for reconsideration,
application or request for review, or notice of appeal or other judicial
petition for review that is filed within such period is pending, and (z) as to
which the deadlines, if any, for filing any such request, motion, petition,
application, appeal or notice, and for the entry by the FCC or other regulatory
authority of orders staying, reconsidering, or reviewing on its own motion have
expired, and in the case of an FCC Final Order, pursuant to which the FCC
consents to the assignment of the FCC Licenses, without the imposition of any
conditions adverse to Purchaser or any Affiliate of Purchaser or the continued
operation of the Radio Broadcast Stations; or (ii) an order by the Bankruptcy
Court approving the sale which finds that Purchaser is a good faith Purchaser
for purposes of 11 U.S.C. Section 363(m) and has not been stayed by a Court of
competent jurisdiction pending an appeal, writ of certiorari, reargument or
rehearing of the Order.
"GAAP" has the meaning set forth in Section 3.5.
"General Assignment" has the meaning set forth in Section
2.1(b).
"Governmental Licenses" has the meaning set forth in Section
1.1(d).
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official, department,
agency, commission, body or other instrumentality of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision.
"Governmental Requirements" has the meaning set forth in Section
3.3.
"HSR Act" has the meaning set forth in Section 3.3.
"Intellectual Property" has the meaning set forth in Section
3.15(a).
"Involuntary Debtors" has the meaning set forth in the Recitals.
"IRS" means the Internal Revenue Service.
"knowledge of the Sellers and the Bankruptcy Administrative
Officer" means the actual knowledge of the Bankruptcy Administrative Officer.
"Laws" has the meaning set forth in Section 4.4.
"Legal Proceeding" means any judicial, administrative,
regulatory or arbitral proceeding, investigation or inquiry or administrative
charge or complaint pending at law or in equity before any Governmental or
Regulatory Authority.
"Loss" or "Losses" means any and all damages, fines, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, reasonable fees of attorneys, accountants and other experts or other
reasonable expenses of litigation or other proceedings or of any claim, default
or assessment).
"Orders" has the meaning set forth in Section 4.4.
"Permits" has the meaning set forth in Section 1.1(d).
"Permitted Encumbrances" means (i) statutory liens for current
Taxes or assessments not yet due or delinquent, (ii) zoning, entitlement,
conservation restriction and other land use and environmental regulations by
Governmental Authorities related to the Real Property and which do not
materially interfere with the present or continued use of the Assets or the Real
Property, (iii) all recorded exceptions, recorded restrictions, recorded
easements and rights-of-way related to the Real Property and which do not
materially interfere with the present use of the Assets or the Real Property.
"Per Share Price" means the average daily closing price for the
Common Stock (as adjusted for any dividends, stock splits, right offerings,
stock reclassifications, reorganizations or reclassifications of its stock, or
any other distribution or other property rights delivered to holders of Common
Stock) for the ten (10) consecutive trading days on which such shares are
actually traded on the Nasdaq Stock Exchange (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
the Purchaser) ending at the close of trading on the second trading day
immediately preceding the Closing Date.
"Person" means any natural person, firm, partnership, limited
liability company, association, corporation, trust, business trust or other
entity.
"Petitioning Creditors" has the meaning set forth in the
Recitals.
"Petitions" has the meaning set forth in the Recitals.
"Plan" means any employment, bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation rights, phantom stock, leave
of absence, layoff, vacation, day or dependent
care, legal services, cafeteria, life, health, medical, accident, disability,
workmen's compensation or other insurance, severance, separation, termination,
change of control or other benefit plan, agreement, practice, policy, program or
arrangement of any kind, whether written or oral, including, but not limited to
any "employee benefit plan" within the meaning of Section 3(3) of ERISA.
"Promissory Notes" means those certain promissory notes
described below:
Promissor Promissee Amount of Note Date of Note
--------- --------- -------------- ------------
Lancaster-York Broadcasting, Brill Radio, Inc. $775,000.00 November 6, 2001
LLC
Brill Media Company, L.P. Central Michigan $70,000.00 November 6, 2001
Newspapers, Inc.
Brill Media Company, L.P. Reading Radio, Inc. $260,000.00 November 6, 2001
Brill Media Company, L.P. NCR II, Inc. $65,000.00 November 6, 2001
Brill Media Company, L.P. Northern Colorado $55,000.00 November 6, 2001
Radio, Inc.
Brill Media Company, L.P. Tri-State $45,000.00 November 6, 2001
Broadcasting, Inc.
Lancaster-York Broadcasting, Reading Radio, Inc. $3,000,000.00 August 11, 1998
LLC
TSB III, LLC Brill Radio, Inc. $9,000,000.00 February 28,2001
(Revolving Credit
Note)
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Material Adverse Effect" means any event, change or
effect that is materially adverse to the business, properties, assets,
liabilities, prospects, financial condition or results of operations of the
Purchaser and its Subsidiaries taken as a whole.
"Radio Broadcast Stations" or "Stations" means KUAD-FM in
Windsor, CO with Facility ID 49538; KTRR-FM in Loveland, CO with Facility ID
50375; new FM station on Channel 232C3 held in Wellington, CO with Facility ID
84497 (FCC File No. BPH-19961127MF); WOMI-AM in Owensboro, KY with Facility ID
67777; WBKR-FM in Owensboro, KY with Facility ID 67778; WKDQ-FM in Henderson, KY
with Facility ID 6871, WEBC-AM in Duluth, MN with Facility ID 49689; KKCB-FM in
Duluth, MN with Facility ID 49686; KLDJ-FM in Duluth, MN with Facility ID 53999;
KBMX-FM (previously KUSZ-FM) in Proctor, MN with Facility ID 4588; WIOV-FM in
Ephrata, PA with Facility ID 55308; and WIOV-AM in Reading, PA with Facility ID
55307.
"Real Property Leases" has the meaning set forth in Section
1.1(q).
"Sale Order" has the meaning set forth in Section 5.7.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Disclosure Letter" has the meaning set forth in Article
III.
"Seller Material Adverse Effect" means any events, changes,
conditions or matters in respect of the Business, individually or in the
aggregate, other than the filing of the Petitions and the pendency of the
Chapter 11 Case and any proceedings with respect thereto which would result in
or would reasonably be expected to result in either: (i) a material adverse
effect to the business, properties, assets, liabilities, prospects, financial
condition or results of operations of the Sellers, taken as a whole or (ii) a
material adverse effect on the ability of the Sellers to perform their
obligations hereunder or (iii) Damages relating to the Assets or the operation
of the Business or Stations in an amount in excess of $200,000.
"Sellers" have the meaning set forth in the Preamble.
"Sellers Representatives" has the meaning set forth in Section
6.2(b).
"Stipulated Order" has the meaning set forth in the Recitals.
"Software" has the meaning set forth in Section 3.15(a)(v).
"Stock Consideration" has the meaning set forth in Section
1.6(a).
"Subsidiary" shall mean any subsidiary of the Purchaser.
"Taxes" means all federal, state, local, and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.
"Tax Returns" means all federal, state, local, and foreign tax
returns, declarations, statements, reports, schedules, forms, and information
returns and any amended Tax Returns relating to Taxes.
"Time Brokerage Agreement" has the meaning set forth in Section
2.2.
"Transaction Documents" means the Assumption Agreement, the
General Assignment and the Time Brokerage Agreement.
"Transfer Taxes" has the meaning set forth in Section 5.10.
"Transferred Employee" has the meaning set forth in Section
5.12(b).
"WARN" has the meaning set forth in Section 1.4(e).
Section 11.2 Other Definitional Provisions. (a) The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both singular and plural forms of such terms.
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused
this Agreement to be executed on their behalf by their officers thereunto duly
authorized, as of the date first above written.
PURCHASER
REGENT COMMUNICATIONS, INC.
By: /s/ William L. Stakelin
-----------------------
Name: William L. Stakelin
Title: President
SELLERS
BRILL MEDIA COMPANY, LLC
By: Bridge Associates, LLC as Bankruptcy
Administrative Officer
By: /s/ Anthony H. N. Schnelling
----------------------------
Anthony H. N. Schnelling
BRILL RADIO, INC.
CRH I, INC.
CRH, LLC
IRH I, INC.
IRH, LLC
MMRH, LLC
MRH I, INC.
NB II, INC.
NB III, LLC
NB III HOLDINGS, LLC
NB III HOLDINGS MANAGEMENT, INC.
NB III MANAGEMENT, INC.
NCH II, LLC
NCR II, INC.
NCR III, LLC
NCR IV, LLC
NCR IV HOLDINGS, LLC
NCR IV HOLDINGS MANAGEMENT, INC.
NCR IV MANAGEMENT, INC.
NORTHERN COLORADO HOLDINGS, LLC
NORTHERN COLORADO HOLDINGS MANAGEMENT, INC.
NORTHERN COLORADO RADIO, INC.
NORTHLAND BROADCASTING, LLC
NORTHLAND BROADCASTING MANAGEMENT, INC.
NORTHLAND HOLDINGS, LLC
NORTHLAND HOLDINGS
MANAGEMENT, INC.
PRH, LLC
PRH I, INC.
READING RADIO, INC.
TBR I, LLC
TBR I HOLDINGS, LLC
TBR I HOLDINGS MANAGEMENT, INC.
TBR I MANAGEMENT, INC.
TSB IV, LLC
TSB IV MANAGEMENT, INC.
TRI-STATE BROADCASTING, INC.
By: Bridge Associates, LLC as Bankruptcy
Administrative Officer
By: /s/ Anthony H. N. Schnelling
----------------------------
Anthony H. N. Schnelling
EXHIBIT A
BRILL SUBSIDIARIES
1. Brill Radio, Inc. (BRI), Case No. 02-70287
2. CRH I, Inc. (CRI), Case No. 02-70328
3. CRH, LLC (CRL), Case No. 02-70336
4. IRH I, Inc. (IRI), Case No. 02-70293
5. IRH, LLC (IRL), Case No. 02-70292
6. MMRH, LLC (MRL), Case No. 02-70295
7. MRH I, Inc. (MRI), Case No. 02-70338
8. NB II, Inc. (NB2), Case No. 02-70307
9. NB III, LLC (B3L), Case No. 02-70300
10. NB III Holdings, LLC (3HL), Case No. 02-70301
11. NB III Holdings Management, Inc. (B3H), Case No. 02-70306
12. NB III Management, Inc. (B3M), Case No. 02-70299
13. NCH II, LLC (C2L), Case No. 02-70322
14. NCR II, Inc. (NR2), Case No. 02-70321
15. NCR III, LLC (N3L), Case No. 02-70289
16. NCR IV, LLC (N4L), Case No 02-70341
17. NCR IV Holdings, LLC (4HL), Case No. 02-70323
18. NCR IV Holdings Management, Inc. (N4H), Case No. 02-70324
19. NCR IV Management, Inc. (N4M), Case No. 02-70342
20. Northern Colorado Holdings, LLC (NCL), Case No. 02-70290
21. Northern Colorado Holdings Management, Inc. (CHM), Case No. 02-70291
22. Northern Colorado Radio, Inc. (NCR), Case No. 02-70325
23. Northland Broadcasting, LLC (NBL), Case No. 02-70308
24. Northland Broadcasting Management, Inc. (NBM), Case No. 02-70337
25. Northland Holdings, LLC (NHL), Case No. 02-70326
26. Northland Holdings Management, Inc. (NHM), Case No. 02-70335
27. PRH, LLC (PRL), Case No. 02-70286
28. PRH I, Inc. (PRI), Case No. 02-70285
29. Reading Radio, Inc. (RRI), Case No. 02-70288
30. TBR I, LLC (TBL), Case No. 02-70297
31. TBR I Holdings, LLC (TRL), Case No. 02-70282
32. TBR I Holdings Management, Inc. (TBH), Case No. 02-70283
33. TBR I Management, Inc. (TBM), Case No. 02-70281
34. TSB IV, LLC (T4L), Case No. 02-70294
35. TSB IV Management, Inc. (T4M), Case No. 02-70296
36. Tri-State Broadcasting, Inc. (TSB), Case No. 02-70284
EXHIBIT A TO THE
BRILL ASSET PURCHASE AGREEMENT