ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made and entered into as of November 18,
1996 by and among The Dorsey Group, Ltd., a Missouri corporation, or its assigns
("Buyer"), EZ Communications, Inc. ("EZCI"), a Virginia corporation,
Professional Broadcasting, Incorporated ("Professional"), a Virginia
corporation, and EZ St. Louis, Inc., a Virginia corporation ("EZ," and EZ,
together with EZCI and Professional, individually a "Seller" and collectively
the "Sellers").
PREMISES:
A. EZ holds a license from the Federal Communications Commission (the
"FCC") to operate AM radio broadcast station KSD in St. Louis, Missouri (the
"Station").
B. EZ is a wholly owned subsidiary of Professional, and Professional owns
many of the other assets used or useful in the operation of the Station.
C. Professional is a wholly owned subsidiary of EZCI.
D. Sellers desire to sell, and Buyer wishes to buy, certain of Sellers'
assets used or useful in the operation of the Station for the price and on the
terms and conditions hereafter set forth.
AGREEMENTS:
In consideration of the above premises and the covenants and agreements
contained herein, Buyer and Sellers agree as follows:
Article 1
DEFINED TERMS
The following terms shall have the following meanings in this Agreement:
1.1 "Accounts Receivable" means the rights of Sellers to payment for the
sale of advertising time or talent on the Station for cash by Sellers prior to
the LMA Date as reflected on the billing records of Sellers relating to the
Station.
1.2 "Assets" means the specific tangible and intangible assets owned and
used or useful in connection with the conduct of the business or the operations
of the Station, which assets are being sold, transferred, or otherwise conveyed
to Buyer hereunder, as specified in detail in Section 2.1.
1.3 "Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
hereto, and (ii) any Contracts entered into by Sellers in the ordinary course of
business between the date hereof and the Closing Date which would have been
listed on Schedule 3.7 had they been in existence on the date hereof and which
Buyer agrees in writing to assume.
1.4 "Closing" means the consummation of the transaction contemplated by
this Agreement in accordance with the provisions of Article 8 hereof.
1.5 "Closing Date" means the date of the Closing specified in Section 8.1
hereof.
1.6 "Consents" means all of the consents, permits, or approvals of
government authorities and other third parties necessary in order to transfer
the Assets to Buyer or otherwise to consummate the transaction contemplated
hereby, including without limitation the consents of the parties to those
Contracts designated in Schedule 3.7 hereto with an asterisk.
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1.7 "Contracts" means all material contracts, agreements, and leases,
written or oral (including any amendments and other modifications thereto) to
which any Seller is a party or which are binding upon any Seller and relate to
the assets or the business or the operations of the Station, and (i) which are
in effect on the date hereof, or (ii) which are entered into by any Seller in
the ordinary course of business between the date hereof and the Closing Date.
1.8 "Escrow Deposit" shall mean the sum of Five Hundred Thousand Dollars
($500,000.00) held by Gary Stevens as Escrow Agent pursuant to an Escrow
Agreement of even date herewith by and among Buyer, Sellers, and Escrow Agent in
the form of Schedule 1.8 hereto.
1.9 "Excluded Assets" shall mean those assets described or set forth in
Section 2.2 hereof and on Schedule 2.2 hereto.
1.10 "FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC licenses to Buyer as contemplated by this Agreement.
1.11 "FCC Licenses" means all of the licenses, permits, and other
authorizations issued by the FCC to Sellers in connection with the conduct of
the business or the operations of the Station.
1.12 "Final Order" means a written action, order, or public notice issued
by the FCC setting forth the FCC Consent (a) which shall not have been reversed,
stayed, enjoined, set aside, annulled, or suspended, and (b) with respect to
which (i) no request shall have been filed for administrative or judicial
review, reconsideration, rehearing, appeal, or stay, and with respect to which
the time for filing any such requests and for the FCC to have reviewed the
action on its own motion shall have expired, or (ii) in the event of review,
reconsideration,
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rehearing, or appeal that does not result in the FCC consent being reversed,
stayed, enjoined, set aside, annulled, or suspended, the time for further
review, reconsideration, rehearing, or appeal shall have expired.
1.13 "LMA Date" means the date of commencement of effectiveness of the
Local Marketing Agreement.
1.14 "Local Marketing Agreement" means the Local Marketing Agreement
entered into by and between Sellers and Buyer in substantially the form set
forth in Schedule 6.4 hereto.
1.15 "Licenses" means all of the licenses, permits, and other
authorizations, including the FCC Licenses, issued by the FCC, the Federal
Aviation Administration (the "FAA"), and any other federal, state, or local
governmental authorities to Sellers in connection with the conduct of the
business or the operations of the Station.
1.16 "Knowledge" in the case of any Seller for purposes of this Agreement,
the Schedules attached hereto, and the representations and warranties made
herein, means the actual knowledge of such Seller's officers, directors,
principals or agents after having made a good faith effort to ascertain the
fact(s) in question by inquiry to such officers or employees of such Seller as
would be reasonably likely to have the information relating to the fact(s) in
question.
1.17 "Personal Property" means all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, spare
parts, and other tangible personal property which are owned or leased by any of
the Sellers and used or useful as of the date hereof in the conduct of the
business or the operations of the Station, and are identified on
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Schedule 3.6, plus such additions thereto and deletions therefrom arising in the
ordinary course of business between the date hereof and the Closing Date.
1.18 "Purchase Price" means the purchase price specified in Section 2.3
hereof.
1.19 "Real Property" means all of the fee estates and buildings and other
improvements thereon, leasehold interest, easements, licenses, rights to access,
rights-of-way, and other real property interests owned by any of the Sellers and
identified on Schedule 3.5 hereto, plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
Article 2
SALE AND PURCHASE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Sellers hereby agree to transfer and deliver to Buyer
on the Closing Date, and Buyer agrees to purchase, all of the Assets, free and
clear of any claims, liabilities, mortgages, liens, pledges, conditions, charges
or encumbrances of any nature whatsoever (except for those permitted in
accordance with Sections 2.5, 3.5, or 3.6 hereof), more specifically described
as follows:
(a) The Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
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(e) All trademarks, trade names, service marks, and all other
intellectual property and similar intangible assets relating to the
Station, listed in Schedule 3.9 hereto;
(f) All of Sellers' proprietary information which relates to the
Station, including without limitation, technical information and data,
machinery and equipment warranties, maps, computer discs and tapes, plans,
diagrams, blueprints, schematics, and filings with the FCC which relate to
the Station, if any;
(g) All choses in action and rights under warranties of Sellers
relating to the Station or the Assets, if any;
(h) All books and records relating to the business or the operations
of the Station, including executed copies of the Assumed Contracts, and
all records required by the FCC to be kept, subject to the right of
Sellers to have such books and records made available to Sellers for a
reasonable period, not to exceed three (3) years after the Closing; and
(i) All intangible assets of Sellers relating to the Station not
specifically described above.
2.2 Excluded Assets. The Assets shall exclude the following assets, in
addition to those listed on Schedule 2.2 hereto:
(a) Sellers' cash on hand as of the Closing Date and all other cash
in any of Sellers' bank or savings accounts; any and all insurance
policies, letters of credit, or other similar items, and any cash
surrender value in regard thereto; and any stocks, bonds, certificates of
deposit, and similar investments.
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(b) Any Contracts other than the Assumed Contracts;
(c) All books and records of Sellers, other than those provided for
in Section 2.1(h) hereof, subject to the right of Buyer to have reasonable
access thereto during normal business hours and to copy therefrom for a
period of three (3) years from the Closing Date, and Sellers' corporate
records and other books and records related to internal corporate matters
of Sellers and financial relationships with Sellers' lenders;
(d) Any claims, rights, and interests in and to any refund of
federal, state, or local franchise, income, or other taxes or fees of any
nature whatsoever for periods prior to the Closing Date;
(e) Any pension, profit-sharing, or employee benefit plans, and any
employment or collective bargaining agreement, except to the extent that
any of the same shall be specifically assumed by Buyer pursuant to
Sections 2.4, 2.5, or 6.10 hereof;
(f) The Accounts Receivable;
(g) The call letters KSD.
(h) Any other asset of Sellers not located at either the studios and
offices or at the transmitter site of Sellers.
2.3 Purchase Price. The Purchase Price shall be Ten Million Dollars
($10,000,000.00) in cash or in immediately available funds. The Purchase Price
shall be adjusted to reflect any adjustments or prorations made and agreed to as
of the LMA Date as provided in Section 2.4 hereof.
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2.4 Adjustments and Prorations.
(a) Except to the extent that revenues and expenses at the Station are
allocated pursuant to the Local Marketing Agreement, all revenues arising from
the business and the operations of the Station up until midnight on the day
prior to the Closing Date, and all expenses arising from the business and the
operations of the Station up until midnight on the day prior to the Closing
Date, including business and licenses fees (including any retroactive
adjustments thereto), utility charges, real and personal property taxes and
assessments levied against the Assets, accrued employee benefits such as
vacation time and sick leave, property and equipment rentals, applicable
copyright or other fees, sales and service charges, taxes (except for taxes
arising from the transfer of the Assets hereunder), deposits, and similar
prepaid and deferred items, shall be prorated between Buyer and Sellers in
accordance with the principle that Sellers shall receive all revenues, all
refunds, and all returns of deposits held by third parties, and Sellers shall be
responsible for all expenses, costs, and liabilities allocable to the conduct of
the business or the operations of the Station for the period prior to the
Closing Date, and Buyer shall receive all revenues and shall be responsible for
all expenses, costs, and obligations allocable to the conduct of the business or
the operations of the Station on the Closing Date and for the period thereafter.
Buyer shall receive credit to the extent of the value (as calculated in Sellers'
financial statements consistent with past practice) of any and all advertising
time to be broadcasted following the Closing Date for which consideration in
cash, goods, or services shall have been received by Sellers prior to the
Closing Date.
(b) Notwithstanding the foregoing, there shall be no adjustment for, and
Sellers shall remain solely liable with respect to, any Contracts not included
in the Assumed
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Contracts, any and all employee benefits including, without limitation, vacation
time and sick leave, and any other obligation or liability not being expressly
assumed by Buyer in accordance with Section 2.5 hereof.
(c) Any adjustment or prorations will be determined and paid in accordance
with the procedures set forth in Section 2.4 (d) hereof.
(d) Within sixty (60) days after the Closing Date, Buyer shall deliver to
Sellers a certificate (the "Adjustment Certificate"), signed by a senior officer
of Buyer after due inquiry by such officer, but without any personal liability
on the part of such officer, providing a compilation of the adjustments and
prorations to be made pursuant to this Section 2.4, including any adjustments
and prorations made at the Closing Date, together with a copy of any working
papers relating to such Adjustment Certificate and such other supporting
evidence as Sellers may reasonably request. If Sellers shall conclude that the
Adjustment Certificate does not accurately reflect the adjustments and
prorations to be made pursuant to this Section 2.4, Sellers shall, within thirty
(30) days after its receipt of the Adjustment Certificate, provide to Buyer its
written statement of any discrepancies believed to exist (the "Sellers'
Discrepancy Statement"). Timothy C. Dorsey on behalf of Buyer, and Ronald Peele
on behalf of Sellers, or their respective designees, shall attempt jointly to
resolve the discrepancies within fifteen (15) days after Buyer's receipt of
Sellers' Discrepancy Statement, which resolution, if achieved, shall be binding
upon all parties to this Agreement and not subject to dispute or review. If the
above-named representatives or their designees shall not have resolved the
discrepancies in the Sellers' Discrepancy Statement to their common satisfaction
within such fifteen (15) day period, Buyer and Sellers shall, within the
following ten (10) days, jointly
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designate a nationally known independent public accounting firm to be retained
in order to review the Adjustment Certificate together with Sellers' Discrepancy
Statement and any other relevant documents. The cost of retaining such
independent public accounting firm shall be borne equally by Buyer and Sellers.
Such independent public account firm shall report its conclusions as to
adjustments pursuant to this Section 2.4, which report shall be conclusive on
all parties to this Agreement and not subject to dispute or review. If, after
adjustment as appropriate with respect to the amount of the aforesaid
adjustments paid or credited at the Closing Date, Buyer shall be determined to
owe an amount to Sellers, Buyer shall pay such amount to Sellers forthwith in
cash, and if Sellers shall be determined to owe an amount to Buyer, Sellers
shall pay such amount to Buyer forthwith in cash.
2.5 Assumption of Liabilities and Obligations. Except to the extent
otherwise allocated pursuant to the Local Marketing Agreement, as of the Closing
Date, Buyer shall pay, discharge, and perform (i) all of the obligations and
liabilities of Sellers under the Licenses and the Assumed Contracts insofar as
they relate to the time period on and after the Closing Date, and arising out of
events occurring on or after the Closing Date, (ii) all obligations and
liabilities arising out of events occurring on or after the Closing Date related
to Buyer's ownership of the Assets or its conduct of the business or the
operations of the Station on or after the Closing Date, and (iii) all
obligations and liabilities for which Buyer receives a proration adjustment
hereunder. All other obligations and liabilities of Sellers, including (i) any
obligations under any Contract not included in the Assumed Contract, (ii) any
obligations under the Assumed Contracts relating to the time period prior to the
Closing Date, (iii) any claims or pending litigation or proceedings relating to
the business or the operations of the
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Station prior to the Closing Date, and (iv) any claims or pending litigation or
proceedings related to employees as set forth in Section 6.9 hereof, shall
remain and shall be the obligations and liabilities solely of Sellers.
Article 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers jointly and severally represent and warrant to Buyer as
follows:
3.1 Organization, Standing and Authority.
(a) Professional is a corporation duly incorporated, validly existing, and
in good standing under the laws of the Commonwealth of Virginia, and is duly
qualified to conduct its business in the States of Missouri and Illinois, which
are the only jurisdictions where the conduct of the business or the operations
of the Station require such qualification. Professional has all requisite
corporate power and authority (i) to own, lease, and use the Assets as presently
owned, leased, and used, and (ii) to conduct the business or the operations of
the Station as presently conducted. Professional has all requisite corporate
power and authority to execute and deliver this Agreement and the documents and
instruments contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by
Professional hereunder and thereunder. Professional is not a participant in any
joint venture or partnership with any other person or entity with respect to any
part of the Station's business or operations or with respect to the Assets.
(b) EZ is a corporation duly incorporated, validly existing, and in good
standing under the laws of the Commonwealth of Virginia, and is duly qualified
to conduct its business in the States of Missouri and Illinois, which are the
only jurisdictions where the conduct of the
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business or the operations of the Station require such qualification. EZ has all
requisite corporate power and authority (i) to own, lease, and use the Assets as
presently owned, leased, and used, and (ii) to conduct the business or the
operations of the Station as presently conducted. EZ has all requisite corporate
power and authority to execute and deliver this Agreement and the documents and
instruments contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by EZ
hereunder and thereunder. EZ is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
Station's business or operations or with respect to the Assets.
(c) EZCI is a corporation duly incorporated, validly existing, and in good
standing under the laws of the State of Virginia. EZCI has all requisite
corporate power and authority (i) to own, lease, and use the Assets as presently
owned, leased, and used, and (ii) to conduct the business or the operations of
the Station as presently conducted. EZCI has all requisite corporate power and
authority to execute and deliver this Agreement and the documents and
instruments contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by EZCI
hereunder and thereunder. EZCI is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
Station's business or operations or with respect to the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement by each Seller has been duly authorized by all
necessary corporate action on the part of each Seller. This Agreement has been
duly executed and delivered by each Seller and constitutes the legal, valid, and
binding obligation of each Seller,
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enforceable against each Seller in accordance with its terms, except to the
extent that the enforceability hereof may be affected by bankruptcy, insolvency,
or similar laws affecting creditors' rights generally, or by court-applied
equitable principles.
3.3 Absence of Conflicting Agreements. Except as set forth in Schedule
3.3, subject to obtaining the Consents, the execution, delivery, and performance
of this Agreement and of the instruments and documents contemplated hereby by
Sellers (with or without the giving of notice, the lapse of time, or both): (i)
do not require the consent of any third party; (ii) will not conflict with any
provision of the Articles of Incorporation or By-Laws of any Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, decree, rule, regulation, or ruling of any
court or governmental instrumentality which is applicable to any Seller; (iv)
will not conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the acceleration
of any performance required by the terms of, any material agreement, instrument,
license, or permit to which any Seller is a party or by which any Seller or any
substantial portion of any Seller's property may be bound; or (iv) will not
create any claim, liability, mortgage, lien, pledge, condition, charge or,
encumbrance of any nature whatsoever upon the Assets.
3.4 Licenses. Schedule 3.4 hereto include a true and complete list of the
Licenses. Sellers shall deliver to Buyer true and complete copies of the
Licenses (including any and all amendments and other modifications thereto). The
Licenses were validly issued, with Sellers being the authorized legal holder
thereof. The Licenses comprise all of the licenses, permits, and other
authorizations required from any governmental or regulatory authority for the
lawful conduct of the business or the operations of the Station as presently
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operated. EZ filed an application for renewal of the Station's Licenses on
October 1, 1996 (the "Renewal Application"). On the Renewal Application, EZ
stated that the fencing around the base of the Station's tower was inadequate to
allow EZ to certify that the grant of the Renewal Application would not have a
significant environmental impact under the FCC's rules. Sellers are installing
new fencing and, upon completion of the project, Sellers have no reason to
believe that the Renewal Application will not be granted by the FCC or by any
other granting authority in the ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5 hereto
identifies all of the Real Property (including the location of all improvements
thereon), which comprises all real property interests necessary in order to
conduct the business or the operations of the Station as now and heretofore
conducted. All towers, guy anchors, buildings, and other improvements included
in the Assets are located entirely on the Real Property identified in Schedule
3.5. Sellers have identified on Schedule 3.5 and have delivered to Buyer true
and complete copies of all leases or other material instruments pertaining to
the Real Property (including any and all amendments and other modifications to
such instruments), all of which instruments are valid, binding, and enforceable
in accordance with their terms. Sellers are not in material breach, nor to the
knowledge of any Seller is any other party in material breach, of the terms of
any of such leases or other instruments. All Real Property (including the
improvements thereon) (i) is in good condition and repair, consistent with its
present use, reasonable wear and tear excepted, (ii) is available for immediate
use in the conduct of the business or the operations of the Station, and (iii)
materially complies with all applicable building, electrical, and zoning
ordinances and codes and all regulations of any governmental
14
authority having jurisdiction over the Real Property. Sellers have full legal
and practical access to the Real Property.
3.6 Title to and Condition of Personal Property. Schedule 3.6 hereto
identifies all of the Personal Property, which comprises all personal property
necessary to conduct the business or the operations of the Station as now and
heretofore conducted. Sellers own and have good title to all Personal Property.
None of the Personal Property owned by Sellers is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for (i) liens for current taxes not yet due and payable, and
(ii) any other claims or encumbrances described in Schedule 3.6 that will be
removed prior to or at Closing. Except as shown in Schedule 3.6, the Personal
Property is in good operating condition and repair in all material respects
(ordinary wear and tear excepted) and is available for immediate use in the
business or the operations of the Station, and the transmitting and studio
equipment included in the Personal Property (i) has been maintained in all
material respects consistent with FCC rules and regulations, and (ii) will
permit the Station and any auxiliary broadcasting facilities associated with the
Station to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC, and with all other applicable federal, state,
and local statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 identifies all the Contracts, including
Contracts separately identified as the Assumed Contracts, except (i) contracts
with advertisers for the sale of advertising the time or talent on the Station
for cash and substantially at Sellers' established rates for the sale of such
time or talent, which are not prepaid, and which may be canceled by the Station
without penalty upon not more than thirty (30) days notice, (ii) employment
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contracts and miscellaneous service contracts terminable at will without
penalty, and (iii) other contracts not involving either aggregate liabilities
under all such contracts exceeding Five Thousand Dollars ($5,000.00) or any
material non-monetary obligation. Sellers shall deliver to Buyer true and
complete copies of all written Contracts and true and complete memoranda of all
oral Contracts (including any and all amendments and other modifications to such
Contracts). Other than the Assumed Contracts, the Sellers require no contract or
agreement to enable Sellers to carry on the business or operations of the
Station in all material respects as presently and heretofore conducted. All of
the Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with their terms, except to the extent that the
enforceability thereof may be affected by bankruptcy, insolvency, or similar
laws affecting creditors' rights generally or by court-applied equitable
principles. Sellers are not in material breach, nor to the knowledge of any
Seller is any other party in material breach, of the terms of any such Assumed
Contracts. Except as expressly set forth in Schedule 3.7, no Seller is aware of
any intention by any party to any Assumed Contract (i) to terminate such
contract or amend the terms thereof, (ii) to refuse to renew the same upon
expiration of its term, or (iii) to renew the same upon expiration only on terms
and conditions which are more onerous than those pertaining to such existing
contract. Except for the Consents, Sellers have full legal power and authority
to assign their respective rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, and continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
hereof and the other Consents described in Schedules 3.7 or 3.8 hereto, no
consent, approval, permit,
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or authorization of, or declaration to or filing with, any governmental or
regulatory authority or any other third party is required in order (i) for
Sellers to consummate this Agreement and the transaction contemplated hereby, or
(ii) to permit Sellers to assign or transfer the Assets to Buyer.
3.9 Trademarks, Trade Names, and Copyrights. Schedule 3.9 hereto
identifies all material copyrights, trademarks, trade names, licenses, patents,
permits, jingles, privileges, and other similar intangible property rights and
interests (exclusive of those required to be listed in Schedule 3.4 hereto)
applied for, issued to, or owned by Sellers, or under which Sellers are licensed
or franchised, and used or useful in the conduct of the business or the
operations of the Station, all of which are valid and in good standing and
uncontested. Sellers shall deliver to Buyer copies of all documents establishing
such rights, licenses, or other authority. To the knowledge of each Seller, no
Seller is infringing upon or otherwise acting adversely to any trademarks, trade
names, copyrights, patents, patent applications, know-how, methods, or processes
owned by any other person or persons, and there is no claim or action pending,
or to the knowledge of any Seller, threatened, with respect thereto.
3.10 Financial Statements. Attached hereto as Schedule 3.10 are the
following financial statements (collectively the "Financial Statements"): (i)
unaudited consolidated and consolidating balance sheets and statements of
income, changes in stockholders' equity, and cash flow as of and for the fiscal
year ended December 31, 1995 for each of the Sellers; and (ii) unaudited
consolidated and consolidating balance sheets and statements of income, changes
in stockholders' equity, and cash flow as of and for the month ended June 30,
1996 for each of
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the Sellers. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of each Seller
as of such dates and the results of operations of each Seller for such periods,
are correct and complete, and are consistent with the books and records of each
Seller (which books and records are correct and complete).
3.11 Insurance. All of the tangible property included in the Assets is
insured against loss or damage in amounts generally customary in the broadcast
industry. Schedule 3.11 hereto identifies all insurance policies of Sellers
which insure any part of the Assets. All policies of insurance listed in
Schedule 3.11 are in full force and effect. During the three-year period ending
on the date hereof, no insurance policy of any Seller covering the Assets or the
Station has been canceled by the insurer, and no application on the part of any
Seller for insurance relating to the Assets or the Station has been rejected by
any insurer.
3.12 Reports. All returns, reports, and statements which any Seller is
currently required to file in connection with the business or the operations of
the Station, with the FCC or with any other governmental agency have been filed,
and all reporting requirements of the FCC and other governmental authorities
having jurisdiction over Sellers, the Station, or the Assets have been
materially complied with; all of such reports, returns, and statements are
substantially complete and correct as filed; and the Station's public inspection
file is located in its community of license and is in material compliance with
the FCC's rules and regulations.
3.13 Employee Benefit Plans. Schedules 3.7 or 3.13 hereto identifies all
employee benefit plans or arrangements applicable to the employees of Sellers at
the Station, and all material fixed or contingent liabilities or obligations of
Sellers with respect to any
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person now or formerly employed by Sellers at the Station, including pension or
thrift plans, individual or supplemental pension or accrued compensation
arrangements, contributions to hospitalization or other health or life insurance
programs, incentive plans, bonus arrangements, and vacation, sick leave,
disability, and termination arrangements or policies, including workers'
compensation policies. Sellers shall furnish or make available to Buyer true and
complete copies of all written documents or information with respect to employee
matters and arrangements at the Station, including without limitation all
employee handbooks, rules, policies, plan documents, trust agreements,
employment agreements, summary plan descriptions, and descriptions of any
unwritten plans identified in Schedule 3.13. Any employee benefits and welfare
plans or arrangements identified in Schedule 3.13 were established and have been
executed, managed, and administered without material exception in accordance
with all applicable requirements of the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of 1974, as amended,
and other applicable laws. There is no governmental audit or examination of any
of such plans or arrangements pending, nor, to the knowledge of any Seller,
threatened. There exists no action, suit, or claim (other than routine claims
for benefits) with respect to any of such plans or arrangements pending, or, to
the knowledge of any Seller, threatened, against any of such plans or
arrangements, and no Seller knows of any facts which could give rise to any such
action, suit, or claim.
3.14 Labor Relations. No Seller is a party to or subject to any collective
bargaining agreement with respect to the Station. No Seller has any written or
oral contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7.
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Sellers shall provide Buyer with true and complete copies of all such written
contracts of employment and true and complete memoranda of any such oral
contracts. Each Seller, in the operation of the Station, has complied in all
material respects with all applicable laws, rules, and regulations relating to
the employment of labor, including those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll-related taxes, and no Seller has received any notice
alleging that it has failed to comply in any material respect with any such
laws, rules, us regulations. No material controversies, disputes, or proceedings
are pending, or, to the best of each Seller's knowledge, threatened, involving
any employee or the employees (collectively) of the Station. No labor union or
other collective bargaining unit represents any of the employees of the Station.
To the best of each Seller's knowledge there is no union campaign being
conducted to solicit cards from employees in order to authorize a union to
request a National Labor Relations Board certification election with respect to
any employees of any Seller at the Station.
3.15 Taxes. Except where the failure to do so would not have a material
adverse effect on the business or operations of the Station, each Seller has
filed or caused to be filed all federal income tax returns and all other
federal, state, county, local, or city tax returns which are required to be
filed, and each Seller has paid or caused to be paid all taxes shown on said
returns or on any tax assessment received by such Seller to the extent that such
taxes have become due, or has set aside on its books reserves (segregated to the
extent required by sound accounting practice) that are adequate with respect
thereto. No events have occurred which could impose upon Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from any
Seller.
20
3.16 Claims, Legal Actions. Except as set forth in Schedule 3.16 hereto,
and except for any investigations and rule making proceedings generally
affecting the broadcasting industry, there is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation, or other legal,
administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending, or, to the knowledge of any Seller, threatened, against or
relating to any Seller, the Assets, or the business or the operations of the
Station, nor does any Seller know of any basis for the same. In particular,
except as set forth in Schedule 3.16, but without limiting the generality of the
foregoing, there are no applications, complaints, or proceedings pending, or, to
the best of each Seller's knowledge, threatened, (i) before the FCC relating to
the business or the operations of the Station, other than applications,
complaints, or proceedings which affect the broadcasting industry generally,
(ii) before any federal or state agency involving charges of illegal
discrimination by the Station under any federal, state, or other employment laws
or regulations, or (iii) against any Seller or the Station before any federal,
state, or local agency involving environmental or zoning laws or regulations.
3.17 Compliance with Laws. Each Seller has complied in all material
respects with (i) the Licenses, and (ii) all applicable federal, state, and
local laws, rules, regulations, and ordinances relating to the Station. Neither
the ownership or use, nor the conduct of the business or the operations of the
Station conflicts with the rights of any other person, firm, or corporation in
any material respect.
3.18 Environmental Matters.
(a) During Sellers' period of ownership of the Station, and, to the best
knowledge of each Seller, during those periods of ownership of the Station by
Sellers' predecessors, there
21
has been no production, storage, treatment, recycling, disposal, use,
generation, discharge, release, or other handling or disposition of any kind by
any Seller or any such predecessor (collectively, "Handling") of any material
amount of any toxic or hazardous wastes, substances, products, pollutants, or
materials of any kind, including, without limitation, petroleum and
petroleum-derived products, friable asbestos, polychlorinated biphenyls, or any
other wastes, substances, products, pollutants, or material regulated under any
Environmental Laws (as defined below) (collectively, "Hazardous Materials") at,
in, on, from, or under the Real Property or any structure or improvement on the
Real Property which in any event is in material violation of Environmental Laws.
The operations of Sellers with respect to the Station and the Assets and, to
each Seller's knowledge, those of Sellers' predecessors as the owners of the
Station are and have been conducted, as the case may be, in material compliance
with all applicable Environmental Laws. There are no pending or, to the best of
each Seller's knowledge, threatened actions, suits, claims, demands, legal
proceedings, administrative proceedings, requests for information, or other
notices, proceedings, or requests (collectively, "Claims") against or upon any
Seller based on or relating to any Pre-Closing Environmental Matters (as defined
below), and no Seller has any knowledge that any such Claims will be asserted.
"Environmental Laws" means any and all federal, state, or local laws, statutes,
rules, regulations, plans, ordinances, codes, licenses or other restrictions
relating to health, safety, or the environment, including without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act, the
Clean Air Act, the Safe Drinking Water Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, and the Occupational Safety and
Health Act. "Pre-Closing Environmental Matters" means (i) the
22
Handling of any Hazardous Materials on, at, in, from, or under the Real
Property prior to the Closing Date, including without limitation, the effects of
any Handling of Hazardous Materials within or outside the boundaries of the Real
Property, the presence of any Hazardous Materials at, on, or under the Real
Property or any improvements or structures thereon, regardless of how such
Hazardous Materials came to rest there, (ii) the failure of any Seller to be in
compliance with any Environmental Laws, or (iii) any other act, omission, event,
circumstance, or condition which could give rise to liability or potential
liability under any Environmental Laws with respect to the Real Property or the
present or prior business of Seller.
(b) Without in any manner limiting the representations and warranties of
Sellers continued in Section 3.18(a) hereof, Buyer shall be entitled to order
and to have undertaken on its behalf, but at Sellers' cost, prior to Closing a
Phase I Environmental Assessment (the "Environmental Assessment") of the Real
Property, and shall be granted all cooperation and access by Sellers reasonably
necessary in order to complete such Environmental Assessment. If the report of
such Environmental Assessment demonstrates a material breach on the part of any
Seller with respect to such Seller's warranties and representations in Section
3.18(a) hereof, or recommends remediation in order to cause the Real Property to
come into compliance with Environmental Laws, Seller shall immediately undertake
to arrange, at their own expense, such remediation prior to the Closing.
Notwithstanding the foregoing, in the event such remediation costs or is
estimated to cost in excess of Two Hundred Thousand Dollars ($200,000.00),
Seller shall not be obligated to expend such excess, but in such event Buyer may
thereafter, at its option, (i) accept the condition of the Real Property at
Closing as so
23
remediated, or (ii) terminate Buyer's obligations to purchase the Station under
this Agreement without liability in which event Buyer's Escrow Deposit plus all
interest or other proceeds from the investment thereof shall be immediately
returned to Buyer. If Sellers are required under this Section 3.18(b) to remedy
any environmental hazard at a site for which a person other than any Seller,
such as the owner or any other occupant of any real property, is primarily
responsible under applicable law, Buyer and Seller shall cooperate in seeking to
enforce any right of contribution or other remedy they may have against such
person. However, nothing in this section regarding Buyer's agreement to
cooperate with Sellers in seeking to enforce any right of contribution or other
remedy shall relieve Sellers of their obligation to remedy the environmental
hazard. Sellers shall have no obligation under this Section 3.18 (b) to
undertake any remediation of any environmental hazard disclosed in the
Environmental Assessment unless Buyer shall have notified Seller of the
existence of the environmental hazard within fifteen (15) days after Buyer
receives the Environmental Assessment.
3.19 Conduct of Business in Ordinary Course. Since the date of the most
recent Financial Statements for the period ended June 30, 1996, Sellers have
conducted the business and the operations of the Station only in the ordinary
course and have not:
(a) Suffered any material adverse change in the business assets or
properties or condition (financial or otherwise) of Sellers or of the
Station, including without limitation any damage, destruction, or loss
affecting the Assets and any material decreases in operating cash flow;
(b) Made any material increase in compensation payable or to become
payable to any of the employees of any Seller, or any bonus payment made
or promised to any employee of any Seller, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of any Seller; or
24
(c) Made any sale, assignment, lease, or other transfer of any of
the properties of any Seller relating to the Station, other than in the
normal and usual course of business with suitable replacements being
obtained therefor.
3.20 Full Disclosure. No representation or warranty made by any Seller
herein, nor in any certificate, document, or other instrument furnished or to be
furnished by any Seller pursuant hereto, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
known to any Seller and required to make the statements herein or therein not
misleading.
Article 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Missouri and shall be, at Closing, qualified to conduct business in the State of
Missouri and Illinois. Buyer has all requisite power and authority to execute
and deliver this Agreement and the documents and instruments contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement by Buyer have been duly authorized by all
necessary action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid, binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except to the
extent that the enforceability hereof may be affected by
25
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
or by court-applied equitable principles.
4.3 Absence of Conflicting Agreements. Except as set forth on Schedule
4.3, subject to obtaining the Consents, the execution, delivery, and performance
of this Agreement and the documents and instruments contemplated hereby by Buyer
(with or without the giving of notice, the lapse of time, or both): (i) does not
require the consent of any third party; (ii) will not conflict with the
organizational documents of Buyer; (iii) to the best of Buyer's knowledge will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, decree, rule or regulation, or ruling of any
court or governmental instrumentality which is applicable to Buyer; will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under or accelerate or permit the acceleration of any
performance required by the terms of, any material agreement, instrument,
license, or permit to which Buyer is a party or by which Buyer may be bound.
4.4 FCC Qualification. Buyer has no knowledge of any facts which would,
under present law (including the Communications Act of 1934, as amended) and the
present rules, regulations, and policies of the FCC, disqualify Buyer as an
assignee of the FCC Licenses listed on Schedule 3.4 hereto, or as an owner and
operator of the Station's Assets, and Buyer will not take, nor unreasonably fail
to take, any action which Buyer knows or has reason to know would cause such
disqualification (it being understood that Buyer has an active duty to attempt
to ascertain what would cause such disqualification). Should Buyer become aware
of any such facts, it will promptly notify Sellers in writing thereof and use
its best efforts to prevent or remove any such disqualification, as the case may
be. Buyer further represents and
26
warrants that it is financially qualified to meet all terms, conditions, and
undertakings contemplated by this Agreement.
Article 5
COVENANTS OF SELLERS
5.1 Pre-Closing Covenants. Except as contemplated by this Agreement or
with the prior written consent of Buyer, which consent may be withheld in
Buyer's sole discretion, between the date hereof and the Closing Date, Sellers
shall, subject to the terms of the Local Marketing Agreement, operate the
Station in the ordinary course of business in material accordance with Sellers'
past practices (except where such would conflict with the following covenants or
with Sellers' other express obligations hereunder), and shall abide by the
following negative and affirmative covenants:
A. Negative Covenants. No Seller shall do any of the following:
(1) Compensation. Increase the compensation, bonuses, or other
benefits payable or to be payable to any person employed in connection
with the conduct of the business or the operations of the Station, except
in accordance with past practices;
(2) Contracts. Enter into any new Contracts, except in the ordinary
course of business and in accordance with past practices, or with prior
notice to Buyer;
(3) Disposition of Assets. Sell, assign, lease, or otherwise
transfer or dispose of any of the Assets, except (i) for assets consumed
or disposed of in the ordinary course of business, or (ii) where such
assets are no longer used or useful in the business or the operations of
the Station, and, in the event of either (i) or (ii), in connection with
the acquisition by Sellers of replacement property of equivalent kind and
value; provided, however, that nothing contained herein shall be deemed to
prohibit the planned merger of EZCI into American Radio Systems
Corporation.
(4) Encumbrances. Create, assume, or permit to exist any claim,
liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon the Assets, except for (i) those in existence
on the date of this
27
Agreement disclosed in Schedules 3.5 and 3.6 hereto, (ii) those permitted
by Sections 2.5, 3.5, or 3.6 hereof, and (iii) mechanics' liens and other
similar liens which will be removed prior to the Closing Date;
(5) Licenses. Do any act or fail to do any act which might result in
the expiration, revocation, suspension, or adverse modification of any of
the Licenses, or fail to prosecute with due diligence any applications to
any governmental authority in connection with the operation of the
Station;
(6) Rights. Waive any material right relating to the Station or the
Assets; or
(7) No Inconsistent Action. Take any action which is inconsistent
with any Seller's obligations hereunder or which could hinder or delay the
consummation of the transaction contemplated by this Agreement.
B. Affirmative Covenants. Sellers shall do the following:
(1) Access to Information. Upon prior notice, allow Buyer and its
authorized representatives reasonable access at mutually agreeable times
at Buyer's expense during normal business hours to the Assets and to all
other properties, equipment, books, records, Contracts, and documents
relating to the Station for the purpose of audit and inspection, and
furnish or cause to be furnished to Buyer or to its authorized
representatives all information with respect to the affairs and business
of the Station as Buyer may reasonably request, it being understood that
the rights of Buyer hereunder shall not be exercised in such a manner as
to interfere with the operations of the business of Sellers; provided that
neither the furnishing of such information to Buyer or its
representatives, nor any investigation made heretofore or hereafter by
Buyer, shall affect Buyer's rights to rely on any representation or
warranty made by any Seller in this Agreement, each of which shall survive
any furnishing of information or any investigation;
(2) Maintenance of Assets. Maintain all of the Assets or
replacements thereof and improvements thereon in their current condition
(ordinary wear and tear excepted), and use, operate, and maintain all of
the Assets in a reasonable manner, with inventories of spare parts and
expendable supplies being maintained at levels consistent with past
practices;
(3) Insurance. Maintain the existing insurance policies on the
Station and the Assets;
(4) Consents. Use its best efforts to obtain the Consents;
28
(5) Notification. Promptly notify Buyer in writing of any unusual or
material developments with respect to the Assets or the Station, and of
any material change in any of the information contained in Sellers'
representations and warranties contained in Article 3 hereof or in the
schedules hereto, provided that such notification shall not relieve
Sellers of any obligations hereunder;
(6) Contracts. Prior to the Closing Date, deliver to Buyer a list of
all Contracts entered into between the date hereof and the Closing Date of
the type required to be listed is Schedule 3.7 hereto, together with the
copies of such Contracts;
(7) Compliance with Laws. Comply in all material respects with all
rules and regulations of the FCC, and all other laws, rules, and
regulations to which any Seller, the Station, and the Assets are subject;
(8) Real Property Title Insurance Commitment. Within 45 days of the
date hereof, obtain and deliver to Buyer, at Sellers' expense, with
respect to each parcel of Real Property identified in Schedule 3.5 hereto
for which a fee estate is to be conveyed by Sellers to Buyer hereunder, an
owner's preliminary report on title, issued by a reputable real estate
title insurance company reasonably acceptable to Buyer that is regularly
engaged in the business of insuring title to commercial real estate in the
States of Missouri and Illinois and (the "Title Company"). Within 60 days
of the date of this Agreement, Sellers will deliver to Buyer, at Sellers'
expense, the commitment of the Title Company to issue an owner's title
insurance policy insuring the fee simple title of Buyer in all such
parcels of real estate in the aggregate amount not to exceed the assessed
value of the real estate, subject only to (i) the standard exceptions to
title insurance that are customarily contained in such title insurance
policies, (ii) liens for current state and local property taxes which are
not yet delinquent nor subject to penalty, (iii) such other matters as are
disclosed in Schedule 5.1(B)(8) hereto, and (iv) any such other
imperfection of title, encroachment, easement, covenant, restriction,
zoning designation, or violation of existing zoning or building code,
ordinance, or law, as the case may be, as would not materially or
adversely affect, impair, or interfere with the use of any property
affected thereby as heretofore used by Sellers or by the Station.
(9) Real Property Survey. Within 60 days of the date of this
Agreement, obtain and deliver to Buyer, at Sellers' expense, with respect
to each parcel of Real Property identified in Schedule 3.5 hereto for
which a fee estate is to be conveyed by Sellers to Buyer hereunder, a
survey certified by a registered land surveyor, showing with respect to
each such parcel (i) the legal description of such parcel, (ii) any and
all buildings, structures, and other improvements located on such parcel
and all "setback" lines and other restrictions in respect thereof which
are of record or which have been established by any law, statute, code,
ordinance, rule, or regulation, (iii) any and all easements and
rights-of-way with respect to such parcel, and (iv) all entrances to and
exits from such parcel from public roads and highways.
29
5.2 Post-Closing Covenants. After the Closing, Sellers will take such
actions, and execute and deliver to Buyer such further deeds, bills of sale, or
other transfer documents as, in the reasonable opinion of counsel for Buyer, may
be necessary to ensure, complete, and evidence the full and effective transfer
of the Assets to Buyer pursuant to this Agreement.
Article 6
SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses as contemplated by this Agreement
is subject to the prior consent and approval of the FCC. Within twenty (20)
business days after the execution of this Agreement, Buyer and Sellers shall
file with the FCC an appropriate application for the FCC Consent approving the
assignment of the FCC Licenses from Sellers or from American Radio Systems
Corporation or its subsidiary to Buyer. The parties shall prosecute said
application with all reasonable diligence and otherwise use their best efforts
to obtain the grant of such application by the FCC as expeditiously as
practicable. If the FCC Consent shall impose any condition on any party hereto,
such party shall use its best efforts to comply with such condition, unless
compliance would be unduly burdensome or would have a material adverse effect
upon such party. If reconsideration or judicial review is sought with respect to
the FCC Consent, Buyer and Sellers shall oppose such reconsideration or judicial
review (but nothing herein shall be construed to limit any party's right to
terminate this Agreement pursuant to Article 9 of this Agreement).
30
(b) The transfer of the Assets hereunder is expressly conditioned upon (i)
the grant of the FCC Consent without any materially adverse conditions on
Sellers or Buyer, (ii) compliance by the parties hereto with the conditions (if
any) imposed in the FCC Consent, and (iii) the FCC Consent, through the passage
of time or otherwise, having become a Final Order; provided, however, that the
condition that the FCC Consent shall have become a Final Order may be waived by
Buyer, in its sole discretion.
6.2 Taxes, Fees, and Expenses. Sellers, on the one hand, and Buyer, on the
other, shall each pay one-half of all sales, transfer, documentary, recording,
and similar taxes and fees, if any, arising out of the transfer of the Assets
pursuant to this Agreement. All filing fees required by the FCC shall be paid
one-half by Sellers, on the one hand, and one-half by Buyer, on the other.
Except as otherwise provided in this Agreement, each party shall pay its own
expenses incurred in connection with the authorization, preparation, execution,
and performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and other representatives.
6.3 Brokers. Buyer, on the one hand, and Sellers, on the other, each
represents and warrants to the other that neither such warrantor, nor any person
or entity acting on its behalf, has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transaction contemplated by
this Agreement, except for Gary Stevens, whose fee shall be solely the
responsibility of Buyer.
6.4 Local Marketing Agreement. Buyer and Sellers shall enter into a Local
Marketing Agreement substantially in the form set forth in Schedule 6.4 hereto,
to be effective
31
as of a date to be determined by Buyer, which date shall be no sooner than
January 2, 1997 and no later than January 31, 1997.
6.5. Reserved.
6.6 Confidentiality. Except as necessary for the consummation of the
transaction contemplated hereby, including Buyer's obtaining financing in any
form or means of its choosing related hereto, each party hereto will keep
confidential any information which is obtained from the other party in
connection with the transaction contemplated hereby and which is not readily
available to members of the general public, and will not use such information
for any purpose other than in furtherance of the transactions contemplated
hereby, and will not divulge such information to any third party, except
pursuant to subpoena and thereupon only after providing written notice to the
other party and allowing the other party seven (7) business days to quash the
subpoena or obtain other appropriate judicial remedy. In the event that this
Agreement shall be terminated and the purchase and sale contemplated hereby
shall be abandoned, each party will return to the other party all documents,
work papers, and other written material obtained by it in connection with the
transaction contemplated hereby.
6.7 Cooperation. Buyer and Sellers shall cooperate fully with each other
and with their respective counsel and accountants in connection with any actions
required to be taken as a part of their respective obligations under this
Agreement, and Buyer and Sellers shall execute such other documents and
instruments as may be necessary and desirable to the implementation and
consummation of the transaction contemplated in this Agreement, and shall
otherwise use their best efforts to consummate the transaction contemplated
hereby and to fulfill their
32
obligations hereunder. Notwithstanding the foregoing, except as otherwise set
forth herein, Buyer shall have no obligation (i) to expend funds in order to
obtain the Consents, or (ii) to agree to any adverse change in any License or
Assumed Contract in order to obtain a Consent required with respect thereto.
6.8 Risk of Loss.
(a) Except as set forth in the Local Marketing Agreement, the risk
of loss, damage, impairment, confiscation, or condemnation of any of the Assets
from any cause whatsoever shall be borne by Sellers at all times prior to the
completion of the Closing.
(b) In the event that any damage or destruction of the Assets or any
other event shall occur which shall prevent signal transmission by the Station
in the normal and usual manner, and if Sellers shall not have restored or
replaced the Assets so damaged or destroyed such that the condition of damage
and destruction shall have been cured and the normal and usual signal
transmission by the Station shall have been resumed prior to the Closing Date,
the Closing Date shall be postponed for a period of up to one hundred and twenty
(120) days, in order to permit the repair or replacement of the damage or loss
and the restoration of the normal and usual signal transmission by the Station.
(c) In the event of any damage or destruction of the Assets
described above, if such Assets shall not have been restored or replaced and the
Station's normal and usual signal transmission resumed within the one hundred
and twenty (120) day period specified above, Buyer may terminate this Agreement
forthwith without any further obligation hereunder (except for liability for any
pre-termination breaches of this Agreement on the part of Buyer), by delivering
written notice thereof to Sellers, in which event the Escrow Deposit plus all
33
interest or other proceeds from the investment thereof shall be immediately
returned to Buyer. Alternatively, Buyer may, at its option, proceed to close the
transaction contemplated by this Agreement and complete the restoration and
replacement of such damaged Assets after the Closing Date, in which event
Sellers shall deliver to Buyer all insurance proceeds received by any Seller in
connection with such damage or destruction, to the extent not already expended
by Sellers toward such restoration and replacement.
(d) Notwithstanding the foregoing, Buyer may terminate this
Agreement forthwith without any further obligation hereunder, except for
liability for any pre-termination breaches of this Agreement on the part of
Buyer, by delivering written notice thereof to Sellers, if any event occurs
which shall prevent signal transmission by the Station in a manner generally
equivalent to the Station's current signal transmission for a consecutive period
of five (5) days or for a cumulative period of fourteen (14) days after the date
hereof, in which event the Escrow Deposit plus all interest or other proceeds
from the investment thereof shall be immediately returned to Buyer.
6.9 Employee Matters.
(a) Sellers shall provide to Buyer an accurate list of all current
employees of the Station, together with a description of the terms and
conditions of their employment (including salary, bonus, and other benefit
arrangements) and their duties as of the date of this Agreement. Sellers shall
promptly notify Buyer of any material changes that occur prior to Closing with
respect to such information.
(b) Nothing contained in this Agreement shall confer upon any
employee of any Seller any right with respect to continued employment by Buyer,
nor shall anything herein
34
interfere with any right the Buyer may have after the LMA Date or after the
Closing Date to (i) terminate the employment of any of the employees of any
Seller at the Station at any time, with or without cause, or (ii) establish or
modify any of the terms and conditions of the employment of the employees of
Sellers at the Station, in the exercise of Buyer's independent business
judgment.
(c) Except as otherwise set forth herein, Buyer will not incur any
liability on account of any Seller's employees in connection with the
transaction contemplated by this Agreement, including without limitation, any
liability on account of unemployment insurance contributions, termination
payments, retirement, pension, profit-sharing, bonus, severance pay, disability,
health, accrued vacation, accrued sick leave or other employee benefit plans,
practices, agreements, or understandings. It is hereby expressly agreed and
understood that Sellers shall be solely responsible for payments to their
respective employees relating to vacation and sick leave and that there shall be
no pro-rated adjustment with respect to such items.
6.10 Accounts Receivable. At the LMA Date, Sellers shall assign to
Buyer, for collection purposes only, all Accounts Receivable. Sellers shall
deliver to Buyer on or as soon as practicable after the LMA Date a complete and
detailed statement showing the name, amount, and age of each Account Receivable.
Subject to and limited by the following, collections of the Accounts Receivable
by Buyer following the LMA Date will be for the account of Sellers. Buyer shall
endeavor in the ordinary course of business to collect the Accounts Receivable
for a period ending upon the later of (i) ninety (90) days after the LMA Date,
or (ii) the Closing Date (the "Collection Period"). Any payment received by
Buyer
35
during the Collection Period from any customer with an account which is an
Account Receivable shall first be applied in reduction of the Account
Receivable, unless the customer otherwise directs in writing. During the
Collection Period, on a monthly basis, Buyer shall furnish Sellers with a list
of, and shall pay over to Sellers, the amounts collected during the preceding
month with respect to the Accounts Receivable. Buyer shall provide Sellers with
a final accounting on or before the fifteenth (15th) day following the end of
the Collection Period. Upon the request of either party at and after such time,
Buyer and Sellers shall meet to analyze in good faith any uncollected Account
Receivable in order to determine if the same, in their reasonable business
judgment, is deemed to be collectible and if Buyer desires to retain a business
relationship with the customer carrying such Account Receivable. As to each such
customer carrying an Account Receivable with whom Buyer, in its sole discretion,
elects to retain a business relationship, Buyer and Sellers shall negotiate a
good-faith value of the Account Receivable, which Buyer shall pay to Sellers.
Sellers shall retain the right to collect any Account Receivable as to which the
parties are unable to reach agreement as to a good-faith value, and Buyer agrees
to turn over to Sellers any payments received against any such Account
Receivable. As Sellers' agent, Buyer shall not be obligated to use any
extraordinary efforts or expend any sums to collect any of the Accounts
Receivable assigned to it for collection hereunder or to refer any of such
Accounts Receivable to a collection agency or to any attorney for collection,
and Buyer shall not make any such referral, nor compromise, settle, or adjust
the amount of any such Account Receivable, except with the approval of Sellers.
Buyer shall incur no liability to Sellers for any uncollected Account
Receivable, unless Buyer shall have engaged in willful misconduct or gross
negligence in the collection of
36
such Account Receivable. During and after the Collection Period, without
specific agreement with Buyer to the contrary, no Seller nor any agent of any
Seller shall make any direct contact for purposes of collection with any
customer carrying an Account Receivable, except for Accounts Receivable retained
by any Seller after the Collection Period.
6.11 Audit Cooperation. Sellers agree to cooperate fully, and to use
reasonable efforts to cause its accounting firm to cooperate fully, with Buyer
and at Buyer's expense, to the extent required for Buyer to prepare audited
financial statements for the Station for the period of Sellers' ownership
thereof.
6.12 Allocation of Purchase Price. On or before the Closing, Buyer and
Sellers will endeavor in good faith to agree to an allocation of the Purchase
Price paid by Buyer to Sellers for the Assets, in accordance with Section 1060
of the Internal Revenue Code of 1986, as amended by Temporary Treasury
Regulation Section 1.1060-1T. Buyer and Sellers further agree to file with their
respective Federal income tax returns an initial asset acquisition statement and
any supplemental statement on Internal Revenue Service Form 8594 required by
Temporary Treasury Regulation Section 1.1060-1T, all in accordance with and
accurately reflecting any agreed upon allocation of the Purchase Price as
described above.
Article 7
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing hereunder are subject to the fulfillment as of the Closing Date of each
of the following conditions, any of which may be waived by Buyer in whole or in
part in its sole discretion in writing:
37
A. Representations and Warranties. The representations and
warranties of each Seller in this Agreement shall be true and complete in all
material respects at and as of the Closing Date, except for changes contemplated
by this Agreement or as contemplated by the Local Marketing Agreement, as though
such representations and warranties were made at and as of the Closing Date.
B. Covenants and Conditions. Each Seller shall have in all material
respects performed and complied with the covenants, agreements, and conditions
required by this Agreement or by the Local Marketing Agreement to have been
performed or complied with by such Seller prior to or on the Closing Date.
C. Consents. Each of the Consents marked as "material" on Schedule
3.7 hereto shall have been duly obtained and delivered to Buyer, with no
material adverse change to the terms of the License or Assumed Contract with
respect to which such Consent shall have been obtained.
D. Licenses. Sellers shall be the holder of the Licenses, and there
shall not have been any modification of any of such Licenses which shall have a
material adverse effect on the Station or on the conduct of its business or its
operations. No proceeding shall be pending, the effect of which would be to
revoke, cancel, fail to renew, suspend, or modify adversely any of the Licenses.
E. Deliveries. Sellers shall have made, or shall stand ready,
willing, and able to make, all of the deliveries to Buyer set forth in Section
8.2 hereof.
F. Approval of Documents. Sellers shall have delivered to Buyer for
inspection all documents, statements and information required to be delivered
pursuant to
38
Sections 3.4, 3.5, 3.7, 3.9, 3.13, 3.14 and 6.9 hereof, and Buyer shall have
approved in form and content such documents, statements and information, which
approval shall not be unreasonably withheld.
G. No Material Change. No material adverse change shall have
occurred (whether or not covered by insurance) in the assets, financial
condition or prospects of the business and operations of the Station.
H. No Suit. No suit, action or other proceeding or investigation
shall, to the knowledge of any party to this Agreement, be threatened or pending
before or by any governmental agency or by any third party questioning the
legality of this Agreement or the consummation of the transactions contemplated
hereby in whole or in part.
7.2 Conditions to Obligations of Sellers. The obligations of Sellers
at the Closing hereunder are subject to the fulfillment as of the Closing Date
of each of the following conditions, any of which may be waived by Sellers in
whole or in part in their sole discretion in writing:
A. Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date, except for changes
contemplated by this Agreement or contemplated by the Local Marketing Agreement,
as though such representations and warranties were made at and as of the Closing
Date.
B. Covenants and Conditions. Buyer shall have in all material
respects performed and complied with the covenants, agreements, and conditions
required by this
39
Agreement or by the Local Marketing Agreement to have been performed or complied
with by Buyer prior to or on the Closing Date.
C. Deliveries. Buyer shall have made, or shall stand ready, willing,
and able to make, all of the deliveries set forth in Section 8.3 hereof.
Article 8
CLOSING AND CLOSING DELIVERIES
8.1 Closing. The Closing shall take place on a date to be set by Buyer,
upon five (5) days' advance written notice to Sellers, no later than ten (10)
days following the date upon which the FCC Consent shall have become a Final
Order (the "Closing Date"); provided, however, that Buyer may waive the
requirement for a Final Order and may schedule the Closing Date, upon five (5)
days' advance written notice to Sellers, at any time after the receipt of the
FCC Consent. Closing shall be conducted by facsimile and wire transmission, and
shall be coordinated from the offices of Sellers' attorneys at 1751 Pinnacle
Drive, McLean, Virginia 22102, or from such other place as shall be agreed to by
Buyer and Sellers.
8.2 Deliveries By Sellers. On the Closing Date, Sellers shall deliver to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
its counsel:
(a) Transfer Documents. Duly executed general warranty deeds, bills
of sale, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets
in the name of Buyer or its permitted assigns, free and clear of any
claims, liabilities, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for those permitted in
accordance with Sections 2.5, 3.5, or 3.6 hereof);
(b) Consents. The original of each Consent marked as "material" on
Schedule 3 7 hereto;
(c) Officer's Certificate. A certificate, dated as of the Closing
Date, executed by a duly authorized officer of each Seller, certifying:
(i) that the representations and warranties of such Seller contained in
this Agreement are true and
40
complete in all material respects as of the Closing Date, except for
changes contemplated by this Agreement or by the Local Marketing
Agreement, as though made on and as of such date, and (ii) that such
Seller has, in all material respects, performed its obligations and
complied with its covenants set forth in this Agreement to have been
performed and complied with prior to or on the Closing Date;
(d) Secretary's Certificate. A certificate, dated as of the Closing
Date, executed by each Seller's Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by such
Seller's Board of Directors and shareholders, authorizing, ratifying, and
approving the execution and delivery of this Agreement by such Seller and
the consummation of the transaction contemplated hereby, and that such
resolutions remain in full force and effect, and (ii) providing, as
attachments thereto, a certificate of good standing certified by an
appropriate state official of the state of such Seller's incorporation, as
of a date not more than fifteen (15) days prior to the Closing Date, and
further certified by such Seller's Secretary as of the Closing Date, and a
copy of such Seller's Articles and By-Laws as in effect on the date
thereof, certified by such Seller's Secretary as of the Closing Date;
(e) Tax, Lien, and Judgment Searches. A report on the results of a
search for Uniform Commercial Code financing statements, tax liens,
judgment liens, and similar filings in the Secretary of State's records
for the States of Missouri and Illinois, and in the records of those
jurisdictions where the Assets are located, such searches having been made
no earlier than fifteen (15) days prior to the Closing Date;
(f) Licenses, Contracts. Business Records Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, statistics, engineering records, and all material
files and records used by Sellers in connection with the business and the
operations of the Station;
(g) Reserved
(h) Opinions of Counsel. Opinions of Sellers' counsel and of
Sellers' special federal communications legal and regulatory counsel,
dated as of the Closing Date, addressed to Buyer and, at Buyer's
directions, to Buyer's lenders, substantially in the form of Schedule
8.2(h) hereto;
(i) Escrow Instructions. Joint instructions with Buyer to Escrow
Agent with respect to the payment of the Escrow Deposit to Sellers as a
portion of the Purchase Price;
(j) Reserved
(k) Real Property Title Insurance Policy. At Seller's expense, an
owner's real estate title insurance policy dated as of the Closing Date
with respect to each parcel of the Real Property identified in Schedule
3.5 hereto for which a fee estate
41
is to be conveyed by Seller to Buyer hereunder, issued by the Title
Company and insuring the fee-simple estate of Buyer in all such parcels in
the aggregate amount set forth in Section 5.1(B)(8), and subject only to
the conditions and exceptions described in Section 5.1(B)(8).
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Sellers the following, in form and substance reasonably satisfactory
to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in Section 2.3
hereof, reduced by the amount of the Escrow Deposit, by wire transfer of
same day funds to an account designated in writing by Sellers.
(b) Assumption Agreement. An Assumption Agreement, pursuant to which
Buyer shall assume and undertake to perform Sellers' obligations under the
Licenses and the Assumed Contracts arising on or after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of the Closing
Date, executed by Buyer's Secretary, (i) certifying that the
representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date, except
for changes contemplated by this Agreement or by the Local Marketing
Agreement, as though made on and as of such date, (ii) certifying that
Buyer has, in all material respects, performed its obligations and
complied with its covenants set forth in this Agreement to have been
performed or complied with on or prior to the Closing Date, (iii)
certifying that the resolution, as attached to such certificate, was duly
adopted by Buyer's Board of Directors authorizing, ratifying, and
approving the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby, and that such
resolution remains in full force and effect, and (iv) providing a copy of
the Articles of Incorporation and By-Laws of Buyer as in effect on the
date thereof, certified as of the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as of
the Closing Date, substantially in the form of Schedule 8.3(d) hereto;
(e) Reserved; and
(f) Escrow Instructions. Joint instructions with Sellers to Escrow
Agent with respect to the payment of the Escrow Deposit to Sellers as a
portion of the Purchase Price.
42
Article 9
RIGHTS OF BUYER AND SELLERS UPON TERMINATION OR BREACH
9.1 Termination Right
A. This Agreement may be terminated by either Buyer or Sellers, if
the terminating party is not then in breach of any material provision of this
Agreement, upon written notice to the other party, upon the occurrence of any of
the following:
(a) If on the Closing Date, (i) any of the conditions precedent to
the obligations of the terminating party set forth in Article 7 of this
Agreement shall not have been materially satisfied, and (ii) satisfaction
of such condition(s) shall not have been waived by the terminating party;
(b) If the application for the FCC Consent shall be designated for
an evidentiary hearing by the FCC for any reason;
(c) If the Closing shall not have occurred on or before October 31,
1997;
(d) If the non-terminating party shall have breached its obligations
under the Local Marketing Agreement, and the terminating party shall have
exercised its right to terminate the Local Marketing Agreement as a result
of such breach; or
(e) If the non-terminating party shall have breached any of its
representations or warranties, or shall have defaulted with respect to its
or their covenants, obligations, or required undertakings set forth in
this Agreement, and if such non-terminating party shall have failed to
cure such breach or default within fifteen (15) days after having received
notice of such breach or default from the terminating party.
43
B. Upon termination: (i) if neither party hereto shall be in breach of any
material provision of this Agreement, the parties hereto shall not have any
further liability to each other, except as set forth in Sections 6.2 and 6.6
hereof; (ii) if any Seller shall be in breach of any material provision of this
Agreement or the Local Marketing Agreement, Buyer shall have the rights and
remedies provided in Section 9.3 hereof; and (iii) if Buyer shall be in breach
of any material provision of this Agreement or the Local Marketing Agreement,
Sellers shall be entitled only to liquidated damages as provided in Section 9.2
hereof. If, upon termination, Buyer shall not be in breach of any material
provision of this Agreement, the Escrow Deposit, plus all interest or other
proceeds from the investment thereof shall be paid to Buyer.
9.2 Liquidated Damages. In the event that this Agreement shall be
terminated by Sellers due to a material breach by Buyer of its representations,
warranties, covenants, or other obligations under this Agreement or the Local
Marketing Agreement, then the Escrow Deposit shall be paid to Sellers as
liquidated damages and as Sellers' sole and exclusive remedy for such breach, it
being agreed that actual damages to Sellers on account of such breach would be
difficult if not impossible to ascertain and that the amount of the Escrow
Deposit is a fair and equitable amount to reimburse Sellers for any injury
sustained by Sellers due to Buyer's breach of its obligations under this
Agreement. All interest or other proceeds from the investment of the Escrow
Deposit shall be paid to Sellers.
9.3 Specific Performance. The parties recognize that in the event that
Sellers should breach or refuse to perform its material obligations under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for Buyer's injury sustained as a result of such breach or
refusal, inasmuch as the Assets and the Station
44
are unique and there are no readily available substitutes for such Assets and
for such Station that Buyer could purchase on the open market. Buyer shall
therefore be entitled, in addition to any other remedies which may be available
by statute, at law, or in equity, to obtain a decree of specific performance of
the terms of this Agreement from a court of competent jurisdiction. In the event
of any action to enforce this Agreement, Sellers hereby waive the defense that
there is an adequate remedy at law.
9.4 Expenses Upon Default. In the event of a default by a party hereto
(the "Defaulting Party") which results in the filing of a lawsuit for damages,
specific performance, or other remedy, the other party (the "Nondefaulting
Party") shall be entitled to reimbursement by the Defaulting Party of any and
all reasonable legal fees and expenses incurred by the Nondefaulting Party in
the event that the Nondefaulting Party shall prevail in such lawsuit.
Article 10
SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
AND INDEMNIFICATION
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties, and together with the covenants contained herein, shall survive the
Closing Date for a period of eighteen (18) months after the Closing Date (the
"Survival Period"). No claim for indemnification may be made under this Article
10 (except for claims under Section 10.3(b)) after the expiration of the
Survival Period. Any investigations by or on behalf of a party hereto shall not
constitute a waiver of such party's right to enforce any representation or
warranty by
45
the other party contained herein, unless a party shall have actual knowledge of
any misrepresentation or breach of warranty at the Closing on the part of the
other party, and such knowledge shall be documented in writing at the Closing,
in which case the party having such knowledge shall be deemed to have waived
such misrepresentation or breach.
10.2 Indemnification by Sellers. Sellers, jointly and severally, shall
indemnify and hold Buyer harmless against and with respect to, and shall
reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting from any
untrue representation, breach of warranty, or nonfulfillment of any
covenants by any Seller contained herein or in any certificate delivered
to Buyer hereunder;
(b) Any and all obligations of any Seller not assumed by Buyer
pursuant to the terms hereof;
(c) Any and all losses, liabilities, or damages resulting from
Sellers' operation or ownership of the Station prior to the LMA Date,
including any and all liabilities arising under the Licenses or the
Assumed Contracts which relate to events occurring or conditions existing
prior to the LMA Date; and
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, and reasonable costs and expenses incident to any
of the foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof.
10.3 Indemnification by Buyer. Buyer shall indemnify and hold Sellers
harmless against and with respect to, and shall reimburse Sellers for:
(a) Any and all losses, liabilities, or damages resulting from any
untrue representation, breach of warranty, or nonfulfillment of any
covenants by Buyer contained herein or in any certificate delivered to
Sellers hereunder;
(b) Any and all losses, liabilities, or damages resulting from
Buyer's operation or ownership of the Station on or after the LMA Date,
including any and all liabilities or obligations arising under the
Licenses or the Assumed Contracts which relate to events occurring or
conditions existing on or after the LMA Date or otherwise assumed by Buyer
under this Agreement; and
(c) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, and reasonable costs and expenses, including
reasonable legal fees and
46
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof.
10.4 Procedures for Indemnification. The procedures for indemnification
shall be as follows:
(a) The party claiming the indemnification (the "Indemnified Party")
shall promptly give notice to the party from whom the indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party against the Indemnified Party, specifying (i) the factual basis
for such claim, and (ii) the amount of the claim. If the claim relates to an
action, suit, or proceeding filed by a third party against the Indemnified Party
such notice shall be given by the Indemnified Party to the Indemnifying Party
within five (5) days after written notice of such action, suit, or proceeding
shall have been given to the Indemnified Party.
(b) Following receipt of notice from the Indemnified Party of a
claim, the Indemnifying Party shall have thirty (30) days in which to make such
investigation of the claim as the Indemnifying Party shall deem necessary or
desirable. For the purposes of such investigation, the Indemnified Party agrees
to make available to the Indemnifying Party and/or its authorized
representative(s) the information relied upon by the Indemnified Party to
substantiate the claim. If the Indemnified Party and the Indemnifying Party
agree at or prior to the expiration of said thirty (30) day period (or any
agreed upon extension thereof) to the validity and amount of such claim, or if
the Indemnifying Party does not respond to such notice, the Indemnifying Party
shall immediately pay to the Indemnified Party the full amount of the claim.
Buyer shall be entitled to apply any or all of the Accounts Receivable collected
on behalf of Sellers to a claim as to which Buyer is entitled to indemnification
hereunder. If the
47
Indemnified Party and the Indemnifying Party do not agree within said period (or
within any agreed-upon extension thereof), the Indemnified Party may seek
appropriate legal remedy.
(c) With respect to any claim by a third party as to which the
Indemnified Party is entitled to indemnification hereunder, the Indemnifying
Party shall have the right at its own expense to participate in or to assume
control of the defense of such claim, and the Indemnified Party shall cooperate
fully with the Indemnifying Party, subject to reimbursement for reasonable
actual out-of-pocket expense incurred by the Indemnified Party as the result of
a request by the Indemnifying Party to so cooperate. If the Indemnifying Party
elects to assume control of the defense of any third-party claim, the
Indemnified Party shall have the right to participate in the defense of such
claim at its own expense.
(d) If a claim, whether between the parties or by a third party,
requires immediate action, the parties will make all reasonable efforts to reach
a decision with respect thereto as expeditiously as possible.
(e) If the Indemnifying Party does not elect to assume control or
otherwise participate in the defense of any third-party claim, the Indemnifying
Party shall be bound by the results obtained in good faith by the Indemnified
Party with respect to such claim.
(f) The indemnification rights provided in Sections 10.2 and 10.3
hereof shall extend to the shareholders, directors, officers, members, partners,
agents, employees, and representatives of the Indemnified Party, although for
the purpose of the procedures set forth in this Section 10.4, any
indemnification claims by such parties shall be made by and through the
Indemnified Party.
48
10.5 Limitation on Indemnification. Notwithstanding the foregoing, no
Indemnifying Party shall have any indemnification payment obligations hereunder
unless and until all such obligations exceed Fifty Thousand Dollars ($50,000.00)
in the aggregate, at which point all amounts to be paid hereunder shall be due
and owing. Each Indemnifying Party's indemnification obligations hereunder shall
be limited to in the aggregate, Five Million Dollars ($5,000,000.00). The
foregoing limitation shall not apply to indemnification obligations arising from
fraudulent or willful misrepresentations.
Article 11
MISCELLANEOUS
11.1 Notices. All notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be (i) in writing, (ii)
delivered by personal delivery, or sent by a nationally recognized commercial
delivery service, or by registered or certified U.S. mail, return receipt
requested, or by facsimile transmission, with receipt confirmation, (iii) deemed
to have been given on the date of personal delivery, the date set forth in the
records of the delivery service for delivery to the addressee, the date set
forth on the return receipt, or the date set forth on the facsimile transmission
confirmation, and (iv) addressed as follows:
If to Sellers: c/o Professional Broadcasting, Incorporated
10800 Main Street
Fairfax, VA 22030
Attention: Alan Box, President
Fax: (703) 934-1200
with a copy to (which shall not constitute notice to Sellers):
49
Joseph W. Conroy, Esq.
Hunton & Williams
Suite 1700
1751 Pinnacle Drive
McLean, VA 22102
Fax: (703) 714-7410
If to Buyer: The Dorsey Group, Ltd.
Attn: Timothy C. Dorsey
c/o William T. Dowd
100 N. Broadway, Suite 1580
St. Louis, MO 63102
Fax: (314) 621-2503
with a copy to (which shall not constitute notice to Buyer):
William Dowd, Esq.
Dowd & Dowd, P.C.
100 N. Broadway, Suite 1580
St. Louis, MO 63102
Fax: (314) 621-2503
or to such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.1.
11.2 Benefit and Binding Effect. Neither party hereto may assign its
rights or delegate its duties under this Agreement without the prior written
consent of the other party hereto, except that Buyer may assign its rights and
delegate its duties under this Agreement to any affiliated or unaffiliated
entity; provided, however, that following such assignment, Buyer shall remain
liable to Sellers for all of Buyer's obligations hereunder; and provided
further, that no such assignment shall cause a material delay in the Closing
Date. Upon such assignment, Buyer shall give notice thereof in writing to
Sellers, and Buyer's assignee shall provide to Sellers a certificate in writing
of such assignee, acknowledging such assignee's receipt of true, correct, and
complete copies of this Agreement, the Local Marketing
50
Agreement, all Schedules, Exhibits, and Appendices hereto and thereto, and
agreeing to be bound hereby and thereby. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The parties acknowledge that American Radio
Systems Corporation ("ARSC") may become the successor in interest of Sellers
prior to the Closing Date, and agree that all rights and obligations of Sellers
hereunder shall inure to ARSC without the requirements of consent by or notice
to Buyer.
11.3 Governing Law. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Missouri with respect to
contracts made in, and to be performed entirely within, such State, without
reference to the choice-of-law principles of such State.
11.4 Headings. The headings herein are included for ease of reference only
and shall not control or affect the meaning or construction of the provisions of
this Agreement.
11.5 Gender and Number. Words used herein, regardless of the gender and
number specifically used, shall be deemed and construed to include any other
gender, masculine, feminine, or neuter, and any other number, singular or
plural, as the context may require.
11.6 Entire Agreement. This Agreement, the Local Marketing Agreement, all
Schedules, Exhibits, and Appendices hereto and thereto, and all documents and
certificates specifically referred to herein and therein collectively represent
the entire understanding and agreement between Buyer and Sellers with respect to
the subject matter hereof and thereof. All Schedules, Exhibits, and Appendices
attached to this Agreement shall be deemed to be a part of this Agreement and
shall be deemed to be incorporated herein as if fully set forth herein.
51
This Agreement supersedes all prior negotiations between Buyer and Sellers, and
all letters of intent and other writings related to such negotiations, and
cannot be amended, supplemented, augmented, or modified except by an instrument
in writing which makes specific reference to this Agreement and which is signed
by the party against whom enforcement of any such amendment, supplement,
augmentation, or modification is sought.
11.7 Waiver of Compliance: Consents. Except as otherwise provided in this
Agreement, any failure on the part of any party at any time to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver shall not
operate as a waiver of, or an estoppel with respect to, any subsequent or other
failure on the part of the other party. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be executed by the parties hereto in
any number of counterparts, with the same effect as if the execution of each
such counterpart were upon the same instrument. If this Agreement is executed
and transmitted by facsimile, the original signature page shall thereupon be
provided to all parties by regular mail.
IN WITNESS WHEREOF, this Agreement has been executed by Buyer and Sellers
as of the date first above written.
52
SELLERS: PROFESSIONAL BROADCASTING, INCORPORATED
By: /s/ Alan Box
--------------------------------
Print Name: Alan Box
Title: President
EZ ST. LOUIS, INC.
By: /s/ Alan Box
--------------------------------
Print Name: Alan Box
Title: President
EZ COMMUNICATIONS, INC.
By: /s/ Alan Box
--------------------------------
Print Name: Alan Box
Title: President
53
BUYER: THE DORSEY GROUP, LTD.
By: /s/ Timothy C. Dorsey
--------------------------------------
Print Name: TIMOTHY C. DORSEY
Title: PRESIDENT