SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2008
Cox Radio, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-12187 58-1620022
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(State or other (Commission (I.R.S. Employer
jurisdiction o File Number Identification No.)
incorporation)
6205 Peachtree Dunwoody Road
Atlanta, Georgia 30328
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(Address of principal executive offices) (Zip Code)
(678) 645-0000
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
As previously reported, Cox Radio exercised its option to purchase five
radio stations, and on February 4, 2008, Cox Radio entered into a definitive
Asset Purchase Agreement with the sellers to acquire the five stations, which
consist of: WPUP-FM in Royston, Georgia; WRFC-AM in Athens, Georgia; WNGC-FM in
Toccoa, Georgia; WGAU-AM in Athens, Georgia; and WGMG-FM in Crawford, Georgia.
In addition, under the Asset Purchase Agreement, Cox Radio will also acquire
WXKT-FM in Washington, Georgia from the sellers.
The following is a summary of the material terms of the Asset Purchase
Agreement. As a summary of the material terms of the Asset Purchase Agreement,
it does not purport to be complete and is subject to, and qualified in its
entirety by, the terms of the Asset Purchase Agreement attached hereto as
Exhibit 2.1 and incorporated herein by this reference. Pursuant to the terms of
the Asset Purchase Agreement, Cox Radio will acquire the six stations for $60
million in cash, less the previously disclosed option payments already made by
Cox Radio in the aggregate amount of $12 million. In addition, the purchase
price is subject to certain adjustments for changes in income and normal
operating expenses and other specified items.
The Asset Purchase Agreement contains customary representations and
warranties and covenants by each party and provides that all representations and
warranties shall survive the closing of the transaction for a period of one
year. Cox Radio, on the one hand, and the sellers, on the other hand, are
obligated, subject to certain limitations, to indemnify the other under the
Asset Purchase Agreement for certain customary and other specified matters,
including breaches of representations and warranties, nonfulfillment or breaches
of covenants and for certain liabilities and third-party claims.
Closing under the Asset Purchase Agreement is subject to customary
closing conditions and regulatory approvals from the Federal Communications
Commission and the Department of Justice and is not subject to a financing
condition. Cox Radio expects to complete the acquisition of all six stations in
the second quarter of 2008.
Forward-Looking Statements
Statements in this report relating to the expected completing and timing of our
acquisition of the five radio stations and other information related to the
acquisition, are "forward-looking" statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended, as well as any facts or
assumptions underlying these statements. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
cannot assure you that actual results or developments we anticipate will be
realized. Risks, uncertainties or other factors that may impact our
forward-looking statements include the occurrence of any event or other
circumstance that could give rise to the termination of the definitive
acquisition agreement, the failure to obtain regulatory approvals or to satisfy
other conditions to consummation of the acquisition, the effect of announcement
of exercise of the option on our relationships with parties we do business with
and the timing of the acquisition and impact on our capital resources,
profitability, cash requirements, management resources or liquidity, as well as
other risk factors described from time to time in Cox Radio's filings with the
Securities and Exchange Commission, including Cox Radio's Annual Report on Form
10-K for the year ended December 31, 2006. Cox Radio assumes no responsibility
to update the forward-looking statements contained in this release as a result
of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibit:
2.1 Asset Purchase Agreement, dated as of February 4, 2008,
by and among Cox Radio, Inc., Southern Broadcasting
of Athens, Inc., Southern Broadcasting of Pensacola, Inc.,
New Broadcast Investment Properties, Inc. and Southern
Broadcasting Companies, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COX RADIO, INC.
Date: February 6, 2008 By:/s/ Neil O. Johnston
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Name: Neil O. Johnston
Title: Vice President and
Chief Financial Officer
Exhibit 2.1
ASSET PURCHASE AGREEMENT
DATED AS OF FEBRUARY 4, 2008
BY AND AMONG
COX RADIO, INC.,
SOUTHERN BROADCASTING OF ATHENS, INC.,
SOUTHERN BROADCASTING OF PENSACOLA, INC.
NEW BROADCAST INVESTMENT PROPERTIES, INC.
AND
SOUTHERN BROADCASTING COMPANIES, INC.
TABLE OF CONTENTS
SECTION 1. DEFINITIONS......................................................1
"ACCOUNTS RECEIVABLE" .......................................................1
"ASSETS" ............................................................1
"ASSUMED CONTRACTS" .......................................................1
"CLOSING" ................................................................2
"CLOSING DATE"...............................................................2
"CONSENTS" .................................................................2
"CONTRACTS" .................................................................2
"FCC" .....................................................................3
"FCC CONSENT" ...............................................................3
"FCC LICENSES" ..............................................................3
"FINAL ORDER" ............................................................3
"HSR ACT" ............................................................3
"INTANGIBLES" ............................................................3
"LICENSES" ............................................................4
"OPTION AGREEMENT".......................................................... 4
"OPTION PAYMENT" .......................................................... 4
"PURCHASE PRICE" .......................................................... 4
"REAL PROPERTY" .......................................................... 4
SECTION 2. PURCHASE AND SALE OF ASSETS................................4
2.1 Agreement to Sell and Buy..................................4
2.2 Excluded Assets............................................5
2.3 Purchase Price.............................................6
2.4 Payment of Purchase Price..................................7
2.5 Assumption of Liabilities and Obligations..................8
2.6 [Intentionally Omitted]....................................8
2.7 Collection of Accounts Receivable..........................8
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS..............8
3.1 Organization, Standing, and Authority......................8
3.2 Authorization and Binding Obligation.......................9
3.3 Absence of Conflicting Agreements..........................9
3.4 Governmental Licenses......................................9
3.5 Title to and Condition of Real Property...................10
3.6 Title to and Condition of Tangible Personal Property......11
3.7 Contracts.................................................11
3.8 Consents..................................................12
3.9 Intangibles...............................................12
3.10 Employees.................................................12
3.11 Insurance.................................................12
3.12 Reports...................................................12
3.13 Taxes.....................................................12
3.14 Claims and Legal Actions..................................13
3.15 Environmental Matters.....................................13
3.16 Compliance with Laws......................................14
3.17 Conduct of Business in Ordinary Course....................15
3.18 Transactions with Affiliates..............................15
3.19 Broker....................................................15
3.20 Insolvency Proceedings....................................15
3.21 Labor Relations...........................................15
3.22 Employee Benefit Plans....................................16
3.23 Financial Statements......................................18
3.24 Full Disclosure...........................................18
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER...............18
4.1 Organization, Standing, and Authority.....................18
4.2 Authorization and Binding Obligation......................18
4.3 Absence of Conflicting Agreements.........................18
4.4 Broker....................................................19
4.5 FCC Qualifications........................................19
4.6 Full Disclosure...........................................19
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING...........19
5.1 Generally.................................................19
5.2 Contracts.................................................19
5.3 Assets....................................................19
5.4 Encumbrances..............................................19
5.5 Licenses..................................................20
5.6 Rights....................................................20
5.7 Preserve Accuracy of Representations and Warranties.......20
5.8 Access to Information.....................................20
5.9 Preservation of Business..................................21
5.10 Insurance.................................................21
5.11 Consents..................................................21
5.12 Books and Records.........................................21
5.13 Notification..............................................21
5.14 Compliance with Laws......................................21
5.15 Financing Leases..........................................21
5.16 Employees.................................................21
5.17 Intangibles...............................................22
5.18 Tax Filings...............................................22
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS......................22
6.1 Governmental Approvals....................................22
6.2 Control of the Stations...................................23
6.3 Risk of Loss..............................................23
6.4 Confidentiality...........................................23
6.5 Environmental Survey, Title Insurance and Survey..........23
6.6 Engineering Report........................................24
6.7 Cooperation...............................................24
6.8 Bulk Sales Law............................................25
6.9 Post-Closing Cooperation..................................25
6.10 Access to Books and Records...............................25
6.11 Employees; Employee Benefit Plans.........................25
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND
SELLERS AT CLOSING....................................26
7.1 Conditions to Obligations of Buyer........................26
7.2 Conditions to Obligations of Sellers......................27
SECTION 8. CLOSING AND CLOSING DELIVERIES........................28
8.1 Closing...................................................28
8.2 Deliveries by Sellers.....................................28
8.3 Deliveries by Buyer.......................................29
SECTION 9. TERMINATION...........................................30
9.1 Termination by Sellers....................................30
9.2 Termination by Buyer......................................30
9.3 Rights on Termination.....................................31
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;...........32
10.1 Representations and Warranties............................32
10.2 Indemnification by Sellers................................32
10.3 Indemnification by Buyer..................................32
10.4 Procedure for Indemnification.............................33
10.5 Specific Performance......................................34
10.6 Attorneys' Fees...........................................34
SECTION 11. MISCELLANEOUS.........................................34
11.1 Fees and Expenses.........................................34
11.2 Notices...................................................35
11.3 Benefit and Binding Effect................................35
11.4 Governing Law.............................................36
11.5 Partial Invalidity........................................36
11.6 Interpretation............................................36
11.7 Gender and Number.........................................36
11.8 No Strict Construction....................................36
11.9 Entire Agreement..........................................36
11.10 Waiver of Compliance; Consents............................36
11.11 Counterparts..............................................37
11.12 Press Releases............................................37
EXECUTION
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of February 4,
2008, by and among Cox Radio, Inc., a Delaware corporation ("Buyer"), Southern
Broadcasting of Athens, Inc., a Georgia corporation ("SBA"), Southern
Broadcasting of Pensacola, Inc., a Florida corporation ("SBP"), New Broadcast
Investment Properties, Inc., a Georgia corporation ("NBIP"), and Southern
Broadcasting Companies, Inc., a Georgia corporation ("SBC"; NBIP, SBA, SBP and
SBC are referred to herein individually as a "Seller" and collectively as
"Sellers").
RECITALS
A. SBA is the licensee of and owns and operates Radio Station
WPUP-FM, Royston, Georgia ("WPUP") and Radio Station WRFC-AM, Athens, Georgia
("WRFC"); SBP is the licensee of and owns and operates Radio Station WNGC-FM,
Toccoa, Georgia ("WNGC") and Radio Station WGAU-AM, Athens, Georgia ("WGAU");
NBIP is the licensee of and owns and operates Radio Station WGMG-FM, Crawford,
Georgia; and SBC is the licensee of and owns and operates Radio Station WXKT-FM,
Washington, Georgia ("WXKT-FM" and each of WPUP, WRFC, WNGC, WGAU, WGMG and
WXKT-FM, a "Station" and collectively, the "Stations") pursuant to licenses and
permits issued by the Federal Communications Commission for the Stations.
B. Sellers desire to sell, and Buyer wishes to buy, substantially
all the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Sellers, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the accounts receivable arising out of the
business and operations of the Stations for periods prior to the Adjustment
Time.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are designated to indicate that they will be assumed by Buyer upon its purchase
of the Stations, (ii) Contracts with advertisers for the sale of advertising
time on the Stations for cash at prevailing rates and which may be canceled by
the Stations without penalty on not more than thirty days' notice, and (iii) any
Contracts entered into by Sellers between the date of this Agreement and the
Closing Date that Buyer agrees in writing to assume.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. ss.ss. 9601 et seq., any amendments thereto, any
successor statutes, and any regulations promulgated thereunder.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Code" means the Internal Revenue Code of 1986, as amended and the
regulations thereunder.
"Communications Act" means the Communications Act of 1934, as amended.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Sellers are parties or which are binding upon Sellers and
which relate to or affect the Assets or the business or operations of the
Stations, and (i) which are in effect on the date of this Agreement or (ii)
which are entered into by Sellers between the date of this Agreement and the
Closing Date.
"Environmental Conditions" means the state of the environment,
including soil, surface water, ground water, any drinking water supply,
subsurface strata or ambient air.
"Environmental Laws" means all applicable foreign, federal, state,
district and local laws, all applicable rules, policy statements and regulations
promulgated thereunder, and all applicable orders, consent decrees, judgments,
governmental notices, permits and governmental demand letters issued,
promulgated or entered pursuant thereto, relating to pollution or protection of
the environment (including, without limitation, ambient air, surface water,
ground water, land surface, or subsurface strata), including, without
limitation, (i) laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment and (ii) laws relating to
the identification, generation, manufacture, processing, distribution, use,
treatment, storage, disposal, recovery, transport or other handling of Hazardous
Materials. Environmental Laws shall include, without limitation, CERCLA, as
amended, Resource Conservation and Recovery Act, as amended, the Toxic
Substances Control Act, as amended, the Hazardous Materials Transportation Act,
as amended, the Clean Water Act, as amended, the Safe Drinking Water Act, as
amended, the Clean Air Act, as amended, the Occupational Safety and Health Act,
as amended, and all analogous laws promulgated or issued by any governmental
entity that are enacted and currently in effect.
"Environmental Reports" means any and all written analyses, summaries
or explanations, known by, and identified in the environmental records of,
Sellers of (i) any Environmental Conditions in, on or about the Real Property or
(ii) Sellers' compliance with, or liability under, any Environmental Laws.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer (or a permitted assignee of Buyer if
assigned pursuant to Section 11.3) as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Sellers in
connection with the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Financial Statements" shall mean (i) unaudited financial statements
that Sellers provide their lender, Athens First Bank & Trust Company (or any
successor lender) as follows: (a) the balance sheets and statements of income
and expense of the Stations as of, and for the years ended December 31, 2006 and
December 31, 2007, and (ii) such other financial statements that Sellers may
provide to their lender, Athens First Bank & Trust Company (or any successor
lender).
"Hazardous Materials" means all pollutants, contaminants, chemicals,
wastes, and any other carcinogenic, ignitable, corrosive, reactive, toxic,
infectious, radioactive or otherwise hazardous substances or materials (whether
solids, liquids or gases) subject to regulation, control or remediation under
Environmental Laws but excluding materials occurring naturally at or about any
facility. By way of example only, the term Hazardous Materials includes
petroleum, urea formaldehyde, flammable, explosive and radioactive materials,
PCBs, pesticides, herbicides, asbestos, acids, metals, solvents and waste
waters.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, logos, domain names,
call letters, proprietary information, technical information and data, machinery
and equipment warranties, and other similar intangible property rights and
interests (and any goodwill associated with any of the foregoing) applied for,
issued to, or owned by Sellers or under which Sellers are licensed or franchised
and which are used or useful in the business and operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Licenses" means all licenses, permits, and other authorizations issued
by the FCC, the FAA, or any other federal, state, or local governmental
authorities to Sellers in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Option Agreement" means the Option Agreement dated as of January 3 ,
2005 among Buyer and Sellers.
"Option Payment" means the sum of (i) the Two Million Dollar
($2,000,000) payment made by Buyer to Sellers under Section 1 of the Option
Agreement, (ii) the payment of Five Million Dollar ($5,000,000) made by Buyer to
Sellers pursuant to Section 2.1 of the Option Agreement, and (iii) the payment
of Five Million Dollar ($5,000,000) made by Buyer to Sellers pursuant to Section
2.2 of the Option Agreement.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests that are used or
useful in the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, auxiliary and translator facilities, transmitting towers,
transmitters, antennae and other tangible personal property that is used or
useful in the conduct of the business or operations of the Stations, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tax" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind imposed by any government or taxing
authority, including without limitation: federal, state, local, or foreign net
or gross income, gross receipts, windfall profits, severance, property,
production, sales, use, ad valorem, value added, license, excise, stamp,
franchise, capital, transfer, employment, withholding, payroll or other tax or
governmental assessment, including any amount payable with respect to
escheatable unclaimed property, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Sellers hereby agree to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer agrees to purchase, all of the tangible and
intangible assets used or useful in connection with the conduct of the business
or operations of the Stations, together with any additions thereto between the
date of this Agreement and the Closing Date, but excluding the assets described
in Section 2.2, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges, or encumbrances of any nature
whatsoever (except for liens for current Taxes not yet due and payable),
including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses (to the extent they are transferable) and all
applications for modification, extension or renewal thereof, and any
applications for any new licenses, permits or authorizations pending on the
Closing Date;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Sellers
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations;
(f) All of Sellers' proprietary information, promotional and
advertising materials, engineering plans, customer lists, mailing lists,
technical information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics, including
filings with the FCC relating to the business and operation of the Stations;
(g) All choses in action of Sellers relating to the Stations;
and
(h) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Sellers' cash on hand as of the Closing and all other cash
in any of Sellers' bank accounts;
(b) Any notes receivable, insurance policies, bonds, deposits,
letters of credit, or other similar items, and any cash surrender value in
regard thereto;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) All books and records that Sellers are required by law to
retain;
(e) Any interest in and to any refunds of federal, state, or
local franchise, income, or other Taxes for periods prior to the Closing Date;
(f) The Accounts Receivable;
(g) Each Seller's charter documents, stock record books and
such other books and records as pertain to the organization, existence or
capitalization of any Seller and duplicate copies of such records as are
necessary to enable each Seller to file its Tax returns and reports as well as
any other records or materials relating to Sellers generally and not involving
any Station's operations;
(h) all Contracts other than the Assumed Contracts;
(i) Contracts of insurance and all insurance proceeds or
claims made by any Seller relating to property or equipment repaired, replaced
or restored by any Seller prior to the Closing Date;
(j) Any trade name, trademarks, service marks or logos using
or incorporating the name "Southern Broadcasting" or its logo;
(k) Any rights of, or payment due to, Sellers under or
pursuant to this Agreement;
(l) All tangible and intangible personal property disposed of
or consumed between the date of this Agreement and the Closing Date in the
ordinary course of the Business in accordance with this Agreement;
(m) Any and all claims made by any Seller with respect to
transactions prior to the Closing Date and the proceeds thereof, except claims
with respect to obligations to be assumed by Buyer pursuant to Section 2.5
hereof; and
(n) The Real Property used by SBC in the operation of WXKT-FM.
2.3 Purchase Price. The Purchase Price for the Assets shall be
Sixty Million Dollars ($60,000,000), adjusted as provided below
(the "Purchase Price"):
(a) Prorations. All income and normal operating expenses
arising from the operation of the Stations, including, without limitation,
assumed liabilities and prepaid expenses, Taxes and assessments (but excluding
Taxes arising by reason of the sale of the Assets hereunder, which shall be paid
as set forth in Section 11.1), annual regulatory fees payable to the FCC, power
and utilities charges, and rents and similar prepaid and deferred items shall be
prorated between Sellers and Buyer in accordance with generally accepted
accounting principles to reflect the principle that Sellers shall be entitled to
all income and be responsible for all expenses arising from the operation of the
Stations through 12:01 a.m. on the Closing Date (the "Adjustment Time") and
Buyer shall be entitled to all income and be responsible for all expenses
arising from the operation of the Stations after the Adjustment Time. All
special assessments and similar charges or liens imposed against the Assets in
respect of any period of time through the Adjustment Time, whether payable in
installments or otherwise, shall be the responsibility of Sellers, and amounts
with respect to such special assessments, charges or liens in respect of any
period of time after the Adjustment Time shall be the responsibility of Buyer,
and such charges shall be adjusted as required hereunder.
(b) INTENTIONALLY OMITTED.
(c) Manner of Determining Adjustments. The Purchase Price,
taking into account the adjustments and prorations pursuant to Sections 2.3(a),
will be determined finally in accordance with the following procedures:
(1) Not later than five days before the Closing Date,
Sellers shall prepare and deliver to Buyer a preliminary statement which shall
set forth Sellers' good faith estimate of the prorations of Sellers as of the
Closing Date (the "Prorations Statement"). The Prorations Statement (A)
shall contain all information reasonably necessary to determine the adjustments
to the Purchase Price under Sections 2.3(a), to the extent such adjustments
can be determined or estimated as of the date of such statements, and such
other information as may be reasonably requested by Buyer, and (B) shall be
certified by Sellers, to be true and complete as of the date thereof.
(2) No later than 30 days after the Closing Date,
Buyer will deliver to Sellers a statement setting forth Buyer's determination
of the Purchase Price and the calculation thereof pursuant to Sections 2.3(a).
If Sellers dispute the amount of the Purchase Price determined by Buyer, they
shall deliver to Buyer within 30 days after their receipt of Buyer's statement
a statement setting forth Sellers' determination of the amount of the Purchase
Price. If Sellers notify Buyer of their acceptance of Buyer's statement, or if
Sellers fail to deliver their statement within the 30-day period specified in
the preceding sentence, Buyer's determination of the Purchase Price shall be
conclusive and binding on the parties as of the last day of the 30-day period.
(3) Buyer and Sellers shall use good faith efforts to
resolve any dispute involving the determination of the Purchase Price. If the
parties are unable to resolve the dispute within 15 days following the
delivery of Sellers' statement, Buyer and Sellers shall jointly designate an
independent certified public accountant, who shall be knowledgeable and
experienced in the operation of radio broadcasting stations, to resolve the
dispute. The accountant's resolution of the dispute shall be final and binding
on the parties, and a judgment may be entered thereon in any court of competent
jurisdiction. Any fees of this accountant shall be split equally between
Sellers on the one hand and Buyer on the other hand.
2.4 Payment of Purchase Price. The Purchase Price shall be paid by
Buyer to Sellers as follows:
(a) Payment of Estimated Purchase Price. At the Closing, Buyer
shall pay or cause to be paid to or for the account of Sellers the Purchase
Price as adjusted pursuant to Section 2.3 (the "Estimated Purchase Price") by
federal wire transfer of same-day funds pursuant to wire instructions which
shall be delivered by Sellers to Buyer at least two business days prior to the
Closing Date.
(b) Payments to Reflect Adjustments.
(1) If the Purchase Price as finally determined pursuant
to Section 2.3(c) exceeds the Estimated Purchase Price, Buyer shall pay to
Sellers, in immediately available funds within five days after the date on
which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
(2) If the Purchase Price as finally determined
pursuant to Section 2.3(c) is less than the Estimated Purchase Price, Sellers
shall pay to Buyer, in immediately available funds within five days after the
date on which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
2.5 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall assume and undertake to pay, discharge, and perform all obligations
and liabilities of Sellers under the Licenses and the Assumed Contracts insofar
as they relate to the time on and after the Closing Date. Buyer shall not assume
any other obligations or liabilities of Sellers, including (i) any obligations
or liabilities under any Contract not included in the Assumed Contracts, (ii)
any obligations or liabilities under the Assumed Contracts relating to the
period prior to the Closing Date, (iii) any liabilities, obligations, claims or
pending litigation or proceedings relating to the ownership or operation of the
Stations prior to the Closing, (iv) any obligations or liabilities arising under
capitalized leases or other financing agreements, (v) any obligations or
liabilities of Sellers under any employee pension, retirement, health and
welfare or other benefit plans or collective bargaining agreements, (vi) except
as provided in Section 6.12, any obligation to any employee of Sellers for
severance benefits, vacation time, or sick leave accrued prior to the Closing
Date, (vii) any Taxes that arise from Sellers' operation of the Stations, or the
ownership of the Assets for periods or portions of periods that end on or prior
to the Adjustment Time, (viii) any obligations or liabilities caused by, arising
out of, or resulting from any action or omission of Sellers prior to the
Closing, and all such obligations and liabilities shall remain and be the
obligations and liabilities solely of Sellers; or (ix) any of Sellers'
liabilities or obligations under this Agreement or the Sellers Ancillary
Agreements.
2.6 [Intentionally Omitted].
2.7 Collection of Accounts Receivable. All Accounts Receivable, if any,
outstanding as of the Adjustment Time shall be identified in a report to be
provided by Sellers to Buyer as soon as practicable following the Closing.
Sellers hereby assign to Buyer the Accounts Receivable, effective upon the
Adjustment Time, solely for the collection thereof. For a period of 90 days
after the Closing Date, Buyer shall use reasonable efforts to collect the
Accounts Receivable in the normal and ordinary course of business. Neither
Buyer's authority nor obligation shall extend to the compromise of any Accounts
Receivable or the institution of litigation, employment of counsel or a
collection agency or any other extraordinary means of collection. Buyer shall
apply all such amounts collected on the Accounts Receivable to the debtor's
oldest invoice not in dispute first (except that any such amounts collected by
Buyer from persons who are also indebted to Buyer for the purchase of
advertising time on the Stations may be applied to Buyer's account where there
is a preexisting bona fide dispute between Sellers and such account debtor with
respect to all of its invoices), and Buyer shall provide to Sellers an aging
report and a collections report and shall pay Sellers the full amount collected
on the Accounts Receivable, net of commissions, within fifteen (15) days after
the end of each calendar month during the above-mentioned 90 day period. Any of
the Accounts Receivable remaining uncollected at the end of such 90 day period
shall be re-assigned to Sellers for collection. All accounts receivable arising
out of the conduct of the business and operation of the Stations after the
Adjustment Time shall be and remain the property of Buyer.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Each Seller is a corporation
duly organized, validly existing, and in good standing under the laws of their
States of incorporation identified in the first paragraph of this Agreement.
Sellers have all requisite power and authority (i) to own, lease, and use the
Assets as now owned, leased, and used, (ii) to conduct the business and
operations of the Stations as now conducted, and (iii) to execute and deliver
this Agreement and all other agreements and documents to be executed and
delivered by Sellers pursuant hereto (the "Sellers Ancillary Agreements"), and
to perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Sellers hereunder and thereunder. No Seller is a
participant in any joint venture or partnership with any other person or entity
with respect to any part of the operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Sellers Ancillary Agreements by Sellers
have been duly authorized by all necessary actions on the part of Sellers and
their respective stockholders. This Agreement and the Sellers Ancillary
Agreements have been duly executed and delivered by Sellers and constitute the
legal, valid, and binding obligation of Sellers, enforceable against Sellers in
accordance with its terms except as the enforceability of this Agreement and the
Sellers Ancillary Agreements may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally, and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the FCC
Consent, the HSR Approval (as defined in Section 3.8) and the Consents listed on
Schedule 3.3, the execution, delivery, and performance by Sellers of this
Agreement and the Sellers Ancillary Agreements (with or without the giving of
notice, the lapse of time, or both): (i) do not require the approval or consent
of any third party; (ii) will not conflict with any provision of the
organizational documents of Sellers; (iii) to the best of Sellers' knowledge,
will not conflict with, result in a breach of, or constitute a default under,
any law, judgment, order, ordinance, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality 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,
termination or cancellation of any performance required by the terms of, any
agreement, instrument, license, or permit to which Sellers are parties or by
which Sellers are bound; and (v) will not create any claim, liability, mortgage,
lien, pledge, condition, charge, or encumbrance of any nature whatsoever upon
any of the Assets, except for, in the case of clauses (iii) and (iv), any such
conflict, breach, default, termination, cancellation or acceleration that would
not have a material adverse effect on the Assets or the ability of Sellers to
transfer the Assets to Buyer under this Agreement.
3.4 Governmental Licenses. Schedule 3.4(a) includes a true and complete
list of the Licenses and all applications for modifications, extensions or
renewals thereof and applications for any new licenses, permits, permissions or
authorizations. Sellers have delivered to Buyer true and complete copies of the
Licenses (including any amendments and other modifications thereto) and all
applications for modifications, extensions or renewals thereof and applications
for any new licenses, permits, permissions or authorizations. The FCC Licenses
have been validly issued pursuant to Final Orders, and Sellers are the
authorized legal holders thereof. The FCC Licenses comprise all of the licenses,
permits, and other authorizations required by the FCC for the lawful conduct of
the business and operations of the Stations in the manner and to the full extent
they are now conducted, and none of the FCC Licenses is subject to any
restriction or condition that would limit the full operation of any Station as
now operated. The Licenses are in full force and effect. The FCC Licenses are
valid for the balance of the current license term applicable generally to radio
stations licensed to communities in the state where the Stations are located,
and are free and clear of any restrictions that do, or could reasonably be
expected to, limit the full operation of the Stations in the manner and to the
full extent that they are now operated (other than restrictions under the terms
of the FCC Licenses themselves or generally applicable under the rules and
regulations of the FCC). The conduct of the business and operations of each
Station is in accordance with the Licenses in all material respects. Except as
set forth on Schedule 3.4(b), Sellers have not received any notice of any
violations of the FCC Licenses, the Communications Act or the rules and
regulations thereunder that remain pending and unresolved. Except as set forth
on Schedule 3.4(b), there is no action by or before the FCC currently pending
or, to the knowledge of Sellers, threatened to revoke, cancel, rescind, modify
or refuse to renew in the ordinary course any of the FCC Licenses. Except as set
forth on Schedule 3.4(b), there are no applications, proceedings, or complaints
pending at the FCC or, to the knowledge of Sellers, threatened which may have an
adverse effect on the Assets or the operation of the Stations (other than
rulemaking proceedings that apply to the radio broadcasting industry generally).
Except as set forth on Schedule 3.4(b), Sellers have no reason to believe that
any of the FCC Licenses would not be renewed for a full term with no materially
adverse conditions by the FCC or other granting authority in the ordinary
course. To the knowledge of Sellers, the Stations are in compliance with the
FCC's policy on human exposure to radio frequency radiation. To the knowledge of
Sellers, no renewal of any FCC License would constitute a major environmental
action under the rules and regulations of the FCC in existence as of the date of
this Agreement. To the knowledge of Sellers, there are no facts pertaining to
the Stations, Sellers, or any persons or entities affiliated therewith which,
under the Communications Act or the existing rules and regulations of the FCC,
would (i) disqualify Sellers from assigning the FCC Licenses to Buyer or from
consummating the transactions contemplated herein, or (ii) materially delay
obtaining of the approvals required for the transactions contemplated herein.
Sellers maintain an appropriate public inspection file at the studios of each
Station in accordance with FCC rules and regulations in all material respects.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains a
complete and accurate description of all the Real Property and each Seller's
interests therein (including whether the Seller's interest in the Real Property
is fee simple, leasehold, subleasehold or otherwise, and the street address of
each such tract of Real Property), and Seller's have provided Buyer with true
and correct copies of any and all leases, subleases, licenses and other
contracts (collectively, the "Leases") for any interest in the Real Property.
With respect to each leasehold or subleasehold interest included in the Real
Property, (i) each of the Leases are in full force and effect, (ii) to the best
of Sellers' knowledge, no landlord, sublandlord or licensor under any Lease is
in default thereunder, and (iii) so long as Sellers fulfill their obligations
under the lease therefor, Sellers have enforceable rights to nondisturbance and
quiet enjoyment, and no third party holds any interest in the leased premises
with the right to foreclose upon Sellers' leasehold or subleasehold interest
except as disclosed in Schedule 3.5. A Seller has good, indefeasible and
marketable fee simple title to all of the owned Real Property free and clear of
all liens, mortgages, pledges, covenants, easements, restrictions, leases,
charges and other claims and encumbrances of any nature whatsoever except for
recorded easements and subdivision restrictions of record and liens for taxes
not yet due and payable and mortgages described in Schedule 3.5. A Seller has
the right to quiet enjoyment and possession to the other interests in Real
Property. The Real Property is in compliance in all material respects with all
applicable ordinances, subdivision, building, zoning and other applicable laws.
No action or proceeding has been commenced or remains pending, nor to the best
knowledge of Sellers, is threatened or proposed, to condemn or take by eminent
domain or other governmental action all or any portion of the Real Property. The
Real Property includes all real property necessary to conduct the business and
operations of the Stations as now conducted and the Sellers have full legal and
practical access to all the Real Property. The Real Property has unrestricted
access to public roads which lie adjacent to and abut the Real Property or which
are accessible by, through or under a private easement in favor of a Seller, and
there are no encroachments onto or from the Real Property. All facilities on the
Real Property are supplied with utilities and other services necessary for the
operation of the Stations. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. All Real Property (including the improvements thereon)
(i) is in good condition and repair consistent with its present use (normal wear
and tear excepted), and (ii) is available for immediate use in the conduct of
the business and operations of the Stations.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property. Except as described in
Schedule 3.6, Sellers own and have good title to each item of Tangible Personal
Property, and none of the Tangible Personal Property owned by Sellers are
subject to any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for liens for current Taxes not yet due and
payable and liens in favor of Buyer. The Tangible Personal Property is in
satisfactory operating condition and repair (reasonable wear and tear excepted),
is available for immediate use and is otherwise sufficient to permit the
Stations to operate in accordance with the FCC Licenses and the rules and
regulations of the FCC in all material respects. All Tangible Personal Property
is type-approved or type-accepted where such type-approval or type-acceptance is
required.
3.7 Contracts. Schedule 3.7 is a true and complete (i) list of all
Contracts existing on the date hereof except contracts with advertisers for the
sale of advertising time on the Stations for cash at prevailing rates and which
have not been prepaid and which may be canceled by the Stations without penalty
on not more than thirty days' notice, and (ii) summary of Sellers' rights and
obligations as of the date hereof under trade and barter agreements relating to
the Stations. Sellers have delivered to Buyer true and complete copies of all
written Contracts, and true and complete memoranda of all oral Contracts
(including any amendments and other modifications to such Contracts). All of the
Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with their terms and may be transferred to Buyer
pursuant to this Agreement in terms and conditions no less favorable then those
currently in effect. There is not under any Assumed Contract any material breach
or any event that, after notice or lapse of time or both, could constitute a
material breach by Sellers or, to the best of Sellers' knowledge, any other
party thereto. Sellers have not received any written notice and no
management-level employee of Sellers has received any written or oral notice of
any intention by any party to any Assumed Contract (i) to terminate such Assumed
Contract or amend the terms thereof, (ii) to refuse to renew such Assumed
Contract upon expiration of its term, or (iii) to renew such Assumed Contract
upon expiration only on terms and conditions which are more onerous than those
now existing. Except for the need to obtain the Consents listed in Schedule 3.3,
Sellers have full legal power and authority to assign their rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1,
the approval of the United States Department of Justice and the Federal Trade
Commission pursuant to the HSR Act (the "HSR Approval"), and the other Consents
described in Schedule 3.3, no consent, approval, permit, or authorization of, or
declaration to or filing with any governmental or regulatory authority, or any
other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, or (ii) to permit Sellers to assign or
transfer the Assets to Buyer.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4(a)), all of which are
valid, enforceable and in good standing and uncontested. Sellers have delivered
to Buyer copies of all documents establishing or evidencing all Intangibles.
Sellers either: (i) own the entire right, title and interest in and to the
Intangibles, free and clear of any liens; or (ii) have the valid right and
license to use the Intangibles in the operation of the Stations. To the best of
Sellers' knowledge, Seller is not infringing upon or otherwise acting adversely
to any trademarks, trade names, service marks, service 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 best of
Sellers' knowledge, threatened, with respect thereto.
3.10 Employees. Schedule 3.10 contains a true and accurate list setting
forth: (i) the names of all individuals currently employed (whether active or on
leave of absence) in connection with the operation of the Stations as of the
date hereof; (ii) the titles and positions of such employees; (iii) the payroll
register with respect to the Stations as of December 31, 2007; (iv) the type of
employment of each employee (i.e., full-time or part-time) and (v) the
employment status of each employee (i.e., active or on specified leave by type).
To the knowledge of Sellers, each individual providing services relating to the
Stations has been properly classified as an employee or independent contractor
of Sellers.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Sellers that insure any part of the Assets or the business
of the Stations. All policies of insurance listed in Schedule 3.11 are in full
force and effect. No insurance policy of Sellers on the Assets or the Stations
has been canceled by the insurer and no application of Sellers for insurance has
been rejected by any insurer.
3.12 Reports. All returns, reports, and statements which Sellers are
required to file for each Station with the FCC or with any other governmental
agency have been filed, and Sellers have complied with all reporting
requirements of the FCC and other governmental authorities having jurisdiction
over Sellers and the Stations. All of such returns, reports, and statements are
substantially complete and correct as filed. Sellers have timely paid to the FCC
all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Taxes. Each Seller has filed or caused to be filed all federal
income Tax returns and all other federal, state, county, local, and foreign Tax
returns which are required to be filed by it, and each Seller has paid or caused
to be paid all Taxes shown as owing on those returns and all Taxes otherwise
required to be paid by such Seller. There are no governmental audits,
investigations or other legal, administrative, or Tax proceedings pursuant to
which any Seller is or could be made liable for any Taxes, the liability for
which could extend to Buyer as transferee of the business of the Stations, and
no event has occurred that could impose on Buyer any transferee liability for
any Taxes due or to become due from Sellers. The consummation of the
transactions contemplated by this Agreement will not constitute a sale by a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the radio broadcasting industry, and except as
disclosed on Schedule 3.14, 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 Sellers threatened, against Sellers with respect to their ownership
or operation of the Stations or otherwise relating to the Assets or the business
or operations of the Stations. In particular, but without limiting the
generality of the foregoing, except as disclosed on Schedule 3.14, there are no
applications, complaints or proceedings pending or, to the best of Sellers'
knowledge, threatened (i) before the FCC relating to the business or operations
of the Stations other than rule making proceedings which affect the radio
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Stations involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Stations involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters. In respect of the operation of the
Stations and the Assets, except as set forth in Schedule 3.15:
(a) The operation of the Stations by Sellers is and has been
in material compliance with all applicable Environmental Laws, Sellers hold all
Licenses required under Environmental Laws for Sellers' operation of the
Stations, and no modification or change to the operations of the Stations will
be required upon the renewal of any such Licenses other than modifications or
changes required due to changes in law occurring after the date hereof.
(b) (i) No claims arising under Environmental Laws are pending
or, to the knowledge of Sellers, threatened against Sellers, (ii) there are no
writs, injunctions, decrees, orders or judgments outstanding or, to the
knowledge of Sellers, threatened against Sellers relating to compliance with or
liability under any Environmental Law, and (iii) Sellers do not have any
material liability under any Environmental Law.
(c) There have been no releases of Hazardous Materials by
Sellers or by any of its affiliates or, to the knowledge of Sellers, by third
parties, in, on or under the Real Property that could result in any material
investigation or material remedial action by any governmental body pursuant to
any Environmental Law.
(d) No facility or property of Sellers nor, to the knowledge
of Sellers, any facility or property to which Sellers transported or arranged
for the transportation of any Hazardous Materials is listed or proposed for
listing on the National Priorities List promulgated pursuant to CERCLA, on
CERCLIS (as defined in CERCLA), or on any similar federal or state list of sites
requiring investigation or remediation.
(e) (i) There are no structures, improvements, equipment,
activities, fixtures or facilities on any Real Property that are constructed
with, use or otherwise contain radioactive materials, lead or urea formaldehyde
unless the same are in satisfactory condition, ordinary wear and tear excepted,
and in compliance in all material respects with Environmental Laws, (ii) there
are no asbestos-containing materials, polychlorinated biphenyls, or underground
storage tanks, or underground piping associated with such tanks on the Real
Property, except those that comply with applicable Environmental Laws and are
scheduled on Schedule 3.15(e), and (iii) there are no abandoned underground
storage tanks on the Real Property that have not been either abandoned in place
or removed pursuant to an Environmental Law.
(f) There are no liens, restrictive covenants or other land
use restrictions under Environmental Laws on any of the Real Property, and no
government actions have been taken, or, to the knowledge of Sellers, are in
process that could subject any of such properties to such liens, restrictive
covenants or other land use restrictions, and Sellers are not required to place
any notice or restriction relating to Hazardous Materials in any deed to such
property.
(g) Except for customary provisions relating to the
indemnification of the lessor by the lessee in respect of lessee's creation of
Environmental Conditions or violation of Environmental Laws that may be
contained in the Contracts relating to the lease of the Real Property, Sellers
have not released any person nor waived any rights or defenses with respect to
any Environmental Conditions or any claim arising under any Environmental Law.
(h) There is no Environmental Report in the possession or
control of Sellers or any of their affiliates relating to the Stations or the
Assets, that has not been delivered or made available to Buyer.
3.16 Compliance with Laws. Sellers have complied in all material
respects with (i) the Licenses and (ii) all federal, state, and local laws,
rules, regulations, writs, injunctions, franchises, orders, decrees and
ordinances of any court or of any foreign, federal, state, municipal or other
governmental entity applicable or relating to the ownership and operation of the
Assets and the Stations, and, without limiting the generality of the foregoing,
except as set forth on Schedule 3.16:
(a) Except as described in Schedule 3.4(b), each Station's
transmitting and studio equipment is operating in accordance with the terms and
conditions of the FCC Licenses and all underlying construction permits, and the
rules, regulations and policies of the FCC in all material respects. To the
knowledge of Sellers, no Station is causing interference in violation of FCC
rules to the transmission of any other broadcast station or communications
facility. Sellers have not received any written complaints with respect to any
such alleged interference, and, to the knowledge of Sellers, no other broadcast
station or communications facility is causing interference in violation of FCC
rules to any Station's transmissions.
(b) Sellers have not received any notification from the FCC
that Seller's employment practices fail to comply with FCC rules and policies
that remains pending and unresolved.
(c) All towers and other structures on the Real Property are
painted and lighted in accordance with the requirements of the FCC Licenses, the
FCC, FAA and all applicable requirements of federal, state and local law in all
material respects. Except as set forth on Schedule 3.4(b), appropriate
notification to the FAA has been filed for such towers where required by the
FCC's rules and regulations.
3.17 Conduct of Business in Ordinary Course. Since January 1, 2006,
Sellers have conducted the business and operations of the Stations only in the
ordinary course and have not:
(a) Made any sale, assignment, lease, or other transfer of the
Stations' properties other than in the normal and usual course of business with
suitable replacements being obtained therefor; or
(b) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Stations.
3.18 Transactions with Affiliates. Except as disclosed in Schedule
3.18, Sellers are not involved in any material business arrangement or
relationship relating to the Stations with any affiliate of Sellers, and no
affiliate of Sellers owns any property or right, tangible or intangible, which
is used in the business of the Stations. As used in this paragraph, "affiliate"
has the meaning set forth in Rule 12b-2 promulgated under the Securities and
Exchange Act of 1934.
3.19 Broker. Neither Sellers nor any person or entity acting on
Sellers' behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Insolvency Proceedings. Neither any Seller nor the Assets are the
subject of any pending or threatened insolvency proceedings of any character.
Sellers have not made an assignment for the benefit of creditors or taken any
action in contemplation of or which would constitute a valid basis for the
institution of any such insolvency proceedings.
3.21 Labor Relations. Sellers are not a party to or subject to any
collective bargaining agreements with respect to the Stations. Sellers have no
contracts of employment, consulting, noncompete, severance, retention,
compensation, deferred compensation, stock or cash based incentive or other
similar agreement, arrangement, commitment or understanding (whether written or
oral) with any employee of the Stations, other than those listed in Schedule
3.7. Sellers have complied in all material respects with all 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, employment laws,
any employment Tax or withholding obligations, any obligations arising under a
collective bargaining agreement, any obligations arising under employee benefit
plans in each case with respect to the Stations, and Sellers have not received
any written notice alleging that they have failed to comply in any material
respect with any such laws, rules, or regulations. No disputes or proceedings
are pending or, to the best of Sellers' knowledge, threatened, between Sellers
and any employee (singly or collectively) of the Stations. No labor union or
other collective bargaining unit represents or claims, in a writing delivered to
Sellers, to represent any of the employees of the Stations. To the best of
Seller's knowledge, there is no union campaign being conducted to represent
employees of the Stations or to solicit cards from employees to authorize a
union to request a National Labor Relations Board certification election with
respect to any employees at the Stations. There are no unfair labor practice
charges pending or, to the knowledge of the Sellers, threatened against any of
the Sellers relating to the Stations. There is no pending or threatened strike,
slowdown, picket, work stoppage, or arbitration proceedings involving labor
matters or other labor disputes affecting the Stations. No Seller has
experienced any strike, work stoppage or other significant labor difficulties of
any nature at the Station during the period that Sellers have owned the
Stations.
3.22 Employee Benefit Plans.
(a) All of the Employee Benefit Plans and Compensation
Arrangements are listed and described in Schedule 3.22(a), and true and complete
copies of any such written Employee Benefit Plans and Compensation Arrangements
have been furnished to Buyer along with copies of any employee handbooks or
similar documents describing such plans and arrangements. Complete descriptions
of any such unwritten Employee Benefit Plans and Compensation Arrangements also
are provided in Schedule 3.22(a). Except as disclosed in Schedule 3.22(a), with
respect to the Stations, no Seller is party to, or now has in effect or has to
become effective after the date of this Agreement any Employee Benefit Plan or
Compensation Arrangement which provides compensation or benefits to current or
former employees or independent contractors of the Stations. Sellers have made
available to Buyer the Forms 5500 filed for each of the Employee Benefit Plans
(including all attachments and schedules), actuarial reports, summaries of
material modifications, summary annual reports, and any other employer notices
(including, governmental filings and descriptions of material changes to
Employee Benefit Plans or Compensation Arrangements) relating to the Employee
Benefit Plans since January 1, 2006, and the current summary plan descriptions.
(b) Each of the Employee Benefit Plans and Compensation
Arrangements has been administered in compliance in all material respects with
its own terms and with the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and the regulations thereunder, the Code, the Age
Discrimination in Employment Act and any other applicable Federal or state laws.
(c) There is no governmental inspection, investigation, audit,
or examination of any Employee Benefit Plan or Compensation Arrangement or, to
the knowledge of Sellers, any facts that would lead Sellers to believe that any
such governmental inspection, investigation, audit, or examination is pending or
threatened. There are no actions, suits or claims (other than routine claims for
benefits) with respect to any of the Employee Benefit Plans or Compensation
Arrangements pending or, to Sellers' knowledge, threatened against any of such
plans or arrangements, and Sellers possess no knowledge of any facts which could
reasonably give rise to any such action, suit or claim.
(d) No Employee Benefit Plan or Compensation Arrangement (i)
is a Multiemployer Plan; (ii) is subject to Title IV of ERISA, (iii) is subject
to the minimum funding requirements of Section 412 of the Code or Section 302 of
ERISA, or (iv) provides health or death benefits to former employees of any
Seller other than pursuant to an Employee Benefit Plan qualified under Section
401(a) of the Code or as required under Section 4980B of the Code.
(e) Except as set forth on Schedule 3.22(e), no Seller is a
party to any agreement, contract, arrangement or plan that has resulted or could
result, separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Section 280G of the Code.
(f) With respect to each Employee Benefit Plan and, to the
extent applicable, each Compensation Arrangement: (i) each plan that is intended
to be tax-qualified under Section 401(a) of the Code is the subject of a
favorable determination letter and no plan amendment has been made that would
affect the validity of a plan's letter, and (ii) no prohibited transaction,
within the definition of Section 4975 of the Code or Title 1, Part 4 of ERISA,
has occurred with respect to a plan which would subject any NVG Entity to any
liability. Except as set forth on Schedule 3.22(e), neither the execution nor
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation, severance,
unemployment compensation or parachute payment within the meaning of Section
280G of the Code) becoming due to any director or employee of the Stations or
any Seller, (ii) increase any benefits otherwise payable under any Employee
Benefit Plan or Compensation Agreement or (iii) result in the acceleration of
the time of payment or vesting of any such benefits.
(g) For purposes of this Agreement: (i) the term "Employee
Benefit Plan" shall mean any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as such term is defined in
Section 3(3) of ERISA (a) which was or is established or maintained by any
Seller or any ERISA affiliate to provide benefits to current or former employees
or independent contractors of the Stations; (b) to which either any Seller or
any ERISA affiliate contributed or was obligated to contribute or to fund or
provide benefits on behalf of current or former employees or independent
contractors of the Stations; or (c) which provides or promises benefits to any
person who performs or has performed services for the Stations and because of
those services is or has been (A) a participant therein or (B) entitled to
benefits thereunder; (ii) the term "Compensation Arrangement" shall mean any
plan or compensation arrangement other than an Employee Benefit Plan, whether
written or unwritten, which provides to employees, former employees, officers,
directors or shareholders of the Stations any compensation or other benefits,
whether deferred or not, in excess of base salary or wages (excluding overtime
pay), including, but not limited to, any bonus or incentive plan, stock rights
plan, employee stock ownership plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other perquisite and
employee fringe benefit plan; and (iii) the term "ERISA affiliate" shall mean
any corporation, partnership, sole proprietorship or other entity related to any
Seller within the meaning of Sections 414(b), (c), (m) or (o) of the Code; and
(iv) the term "Multiemployer Plan" shall mean any Employee Benefit Plan which is
a multiemployer plan within the meaning of Section 3(37) of ERISA."
3.23 Financial Statements. Schedule 3.23 contains true and complete
copies of the Financial Statements. Except as set forth on Schedule 3.23, the
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods, except
that, with respect to the quarterly and monthly financial statements, the
Financial Statements do not include footnotes or customary year-end adjustments.
The Financial Statements accurately reflect in all material respects the books,
records and accounts of the Stations and present fairly in all material respects
the financial condition, assets, liabilities and results of the operations of
the Stations as of the dates and for the periods indicated. No event has
occurred since January 1, 2006 that would make any of the Financial Statements
misleading in any material respect for the respective periods covered thereby.
The books and records of the Sellers from which the Financial Statements were
prepared accurately and fairly reflect, in all material respects, in reasonable
detail, the activities of the Stations for the respective periods covered
thereby and have been made available to Buyer for its inspection.
3.24 Full Disclosure. No representation or warranty made by Sellers in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Sellers pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading.
SECTION 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
Delaware and on or before the Closing Date will be duly qualified to conduct
business as a foreign corporation in the State of Georgia. Buyer has all
requisite power and authority to execute and deliver this Agreement and all
other agreements and documents to be executed by Buyer pursuant hereto (the
"Buyer's Ancillary Agreements), 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 and the Buyer's Ancillary Agreements by Buyer have
been duly authorized by all necessary actions on the part of Buyer. This
Agreement and the Buyer's Ancillary Agreements have been duly executed and
delivered by Buyer and constitute the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement and the Buyer's Ancillary Agreements may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the FCC
Consent and the HSR Approval, the execution, delivery, and performance by Buyer
of this Agreement and the Buyer's Ancillary Agreements (with or without the
giving of notice, the lapse of time, or both): (i) do not require the approval
or consent of any third party; (ii) will not conflict with the Certificate of
Incorporation or Bylaws 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, injunction, decree, rule, regulation, or ruling
of any court or governmental instrumentality applicable to Buyer; or (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,
termination or cancellation of any performance required by the terms of, any
agreement, instrument, license, or permit to which Buyer is a party or by which
Buyer is bound except in the case of clauses (iii) and (iv) where such conflict,
breach, default, termination, cancellation or acceleration would not have a
material adverse effect on Buyer's ability to acquire the Assets from Sellers
under this Agreement.
4.4 Broker. Neither Buyer nor any person or entity acting on Buyer's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 FCC Qualifications. To the best of Buyer's knowledge, (i) Buyer is
qualified under the rules and regulations of the FCC to enter into this
Agreement and consummate the transactions contemplated herein and (ii) Buyer
requires no waivers of such rules or regulations in order for the FCC to grant
the FCC Consent.
4.6 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document or other instrument furnished or
to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Sellers agree that, between the date of this Agreement
and the Closing Date, Sellers shall operate the Stations only in accordance with
the covenants in this Section 5.
5.2 Contracts. Sellers will not enter into any contract or commitment
relating to the Stations or the Assets, or amend or terminate any Contract (or
waive any material right thereunder), or incur any obligation (including
obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that, in the case of any of the foregoing, will be binding on
Buyer after Closing. Prior to the Closing Date, Sellers shall deliver to Buyer a
list of all Contracts entered into between the date of this Agreement and the
Closing Date, together with copies of such Contracts. Sellers shall perform all
Contracts without material default and pay all of their respective trade
accounts payables.
5.3 Assets. Sellers shall not sell, assign, lease, or otherwise
transfer or dispose of any of the Assets, except where no longer used or useful
in the business or operations of the Stations or in connection with the
acquisition of replacement property of equivalent kind and value. Sellers shall
maintain all supplies, tubes and spare parts at levels consistent with each
Station's past practice.
5.4 Encumbrances. Sellers shall not 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 liens for current Taxes not
yet due and payable and mortgages held by Athens First Bank & Trust Company or
any successor lender subject to Buyer's prior approval which should not be
unreasonably withheld or delayed.
5.5 Licenses. Sellers shall comply with the FCC Licenses and all other
Licenses. Sellers shall not cause or permit, by any act or failure to act, any
of the Licenses to expire or to be revoked, suspended, or modified, or take any
action that could cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any of
the Licenses.
5.6 Rights. Sellers shall not waive any right relating to the
Stations or any of the Assets.
5.7 Preserve Accuracy of Representations and Warranties. Sellers
shall refrain from taking any action that would result in the conditions
contained in Section 7 not being satisfied as of the Closing.
5.8 Access to Information. Sellers shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other properties, equipment, books, records, Contracts,
and documents relating to the Stations for the purpose of audit and inspection,
including inspections incident to the environmental survey described in Section
6.5 and the engineering report described in Section 6.6, and will furnish or
cause to be furnished to Buyer or its authorized representatives all information
with respect to the affairs and business of the Stations that Buyer may
reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Stations). Without
limiting the generality of the foregoing, Sellers shall give Buyer and its
counsel, accountants and other authorized representatives reasonable access to
Sellers' financial records and Sellers' employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its judgment, are required or advisable to
comply with federal or state securities laws and the rules and regulations of
securities markets as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby. Within thirty (30)
days after the close of each month ending prior to the Closing Date, Sellers
shall furnish to Buyer an unaudited statement of income and expense for the
Stations for the month just ended, and within thirty (30) days after the close
of each fiscal quarter ending prior to the Closing Date, the Sellers shall
furnish to Buyer an unaudited quarterly statement of income and expense for such
quarter and an unaudited balance sheet as of the end of such quarter. Within
forty (40) days after the close of the fiscal year, Sellers shall furnish to
Buyer its unaudited quarterly statement of income and expense for such quarter,
an unaudited annual statement of income and expense for such year and an
unaudited balance sheet as of the end of such year for the Stations. Sellers
shall also furnish to Buyer such other financial statements that Sellers may
provide to their lender, Athens First Bank & Trust Company (or any successor
lender). The financial statements to be delivered hereunder shall be prepared on
an accrual basis in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods, and such financial statements
shall present fairly in all material respects the financial condition, assets,
liabilities and results of the operations of the Stations as of the dates and
for the periods indicated. Delivery of the financial statements to be delivered
hereunder shall constitute a representation that such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied, except that the unaudited financial statements do not
include footnotes or, with respect to the quarterly and monthly financial
statements, customary year-end adjustments, and that such financial statements
comply with the other requirements of this Section 5.8.
5.9 Preservation of Business. Sellers shall operate and carry on the
operations of the Stations only in the ordinary course consistent with past
practice (subject to, and except as modified by, compliance with the other
covenants contained in this Agreement) and maintain the Assets in their present
condition (reasonable wear and tear in normal use excepted). Sellers shall
continue to promote and advertise the Stations at levels substantially
consistent with Sellers' past practice and preserve the goodwill of landlords,
employees, customers and others having business relations with the Stations.
5.10 Insurance. Sellers shall maintain the existing insurance
policies on the Stations and the Assets.
5.11 Consents. Sellers shall obtain the Consents described in Section
7.1(c) and the estoppel certificates described in Section 8.2(b) without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Stations than those pertaining under the Contract or License
as in effect on the date of this Agreement. Sellers shall promptly advise Buyer
of any difficulties experienced in obtaining any of the Consents and of any
conditions proposed, considered, or requested for any of the Consents.
5.12 Books and Records. Sellers shall maintain the books and
records relating to the Stations in accordance with past practices.
5.13 Notification. Sellers shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Stations, and of any material change in any of the information contained
in Sellers' representations and warranties contained in Section 3 of this
Agreement; provided, however, that compliance with the disclosure requirements
of this Section 5.13 shall not relieve Sellers of any obligation with respect to
any representation, warranty or covenant of Sellers in this Agreement or waive
any condition to Buyer's obligations under this Agreement.
5.14 Compliance with Laws. Sellers shall comply with all laws, rules,
and regulations applicable or relating to the ownership and operation of the
Stations and the Assets.
5.15 Financing Leases. Sellers will satisfy at or prior to Closing all
outstanding obligations under capital and financing leases, if any, with respect
to any of the Assets and obtain good title to the Assets leased by Sellers
pursuant to those leases so that those Assets shall be transferred to Buyer at
Closing free of any interest of the lessors.
5.16 Employees. Sellers shall maintain the employment of such employees
who, in the exercise of commercially reasonable judgment, Sellers deem necessary
to operate the Stations (any voluntary departure of any employee between the
date hereof and the Closing excepted). Sellers shall not institute any material
increase in any profit-sharing, bonus, incentive, deferred compensation,
insurance, pension, retirement, medical, hospital, disability, welfare or other
employee benefit plan with respect to its employees, other than in the ordinary
course of the business or as required by any such plan or applicable law.
Sellers shall not make any material change in the compensation of its employees,
other than changes made in accordance with normal salary adjustments and
consistent with past compensation practices. Sellers shall not enter into any
employment agreement for services to be performed on behalf of the Stations,
except for those employment agreements that (i) are for employees who replace
former employees who resigned or who have been terminated, on similar terms and
conditions and at comparable rates of compensation to those terms and conditions
and rates of compensation provided to the former employees, and (ii) are
terminable at will and without penalty.
5.17 Intangibles. Sellers shall not acquiesce in any infringement,
unauthorized use or impairment of the Intangibles or change any Station's call
sign.
5.18 Tax Filings. Sellers shall continue to timely file all Tax returns
required to be filed with respect to the Stations and the Assets in accordance
with Sellers' past practices and shall concurrently deliver copies of all such
Tax returns to Buyer.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 Governmental Approvals
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Sellers and Buyer shall promptly prepare appropriate
applications for the FCC Consent and shall file the applications with the FCC
within fifteen business days of the date hereof. The parties shall prosecute the
applications with all reasonable diligence and otherwise use commercially
reasonable efforts to obtain a grant of the applications as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by the
FCC Consent, except that no party shall be required to comply with a condition
if (1) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by the party of any of its
representations, warranties, or covenants under this Agreement, and (2)
compliance with the condition would have a material adverse effect upon it.
Buyer and Sellers shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and no party shall have
terminated this Agreement under Section 9, the parties shall jointly request an
extension of the effective period of the FCC Consent. No extension of the FCC
Consent shall limit the exercise by any party of its rights under Section 9.
(c) The purchase and sale of the Assets pursuant to this
Agreement may be subject to obtaining the HSR Approval. Sellers and Buyer shall
use all reasonable efforts and cooperate with each other in promptly preparing
and filing within twenty (20) days of the date of this Agreement, such
notifications with the United States Department of Justice ("DOJ") and the
Federal Trade Commission ("FTC") as may be required under the HSR Act. Sellers
and Buyer shall respond as promptly as practicable to any inquiries or requests
received from the FTC and the DOJ with respect to the transactions contemplated
by this Agreement, and agree to provide the other party with a copy of any
inquiry or request for information or other document such party receives from
the DOJ or FTC. All fees to be paid to the FTC and the DOJ with respect to the
notifications described herein shall be paid by Buyer.
6.2 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations, and all such operations,
including complete control and supervision of all of the Stations' programs,
employees, and policies, shall be the sole responsibility of Sellers until the
Closing.
6.3 Risk of Loss. The risk of any 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 Closing.
6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement and except as and to the extent
required by law, including disclosure requirements of federal and state
securities laws and rules and regulations of securities markets, each party will
keep confidential any information obtained from the other party in connection
with the transactions contemplated by this Agreement. If this Agreement is
terminated, each party will return to the other party upon request all
information obtained by such party from the other party in connection with the
transactions contemplated by this Agreement.
6.5 Environmental Survey, Title Insurance and Survey.
(a) Buyer may, at its option and expense, retain an
environmental consultant to be selected by Buyer to perform a Phase I
environmental survey (the "Study") of the Real Property. If the Study recommends
a further investigation of the Real Property (a "Follow on Study"), Buyer shall
have the right to order a Follow on Study, to be completed not later than 90
days after the date hereof, as to such aspects of the Real Property and/or the
estimated cost of such remediation, the cost of which Follow on Study shall be
borne one-half by Buyer and one-half by Sellers. The Study and the Follow on
Study shall be conducted during regular business hours, upon reasonable advance
notice to Sellers, in a manner that does not substantially interfere with or
disrupt the business of Sellers or the Stations or cause substantial damage to
any assets or property of Sellers. Except as otherwise provided in this
subsection, if the Study and/or the Follow on Study reveals a remediable
Environmental Condition, then Sellers shall be obligated to pay the cost of
remediation of the Environmental Condition to the levels and extent then
required by the appropriate regulatory authorities under any Environmental Law
("Remediation"), and Buyer shall have no right to terminate this Agreement by
reason of the existence of such Environmental Condition. Notwithstanding the
foregoing, however, if in the judgment of the Engineer, the Remediation of the
Environmental Condition on the Real Property, including subsequent oversight and
management, cannot be accomplished at a cost of less than Five Million Dollars
($5,000,000.00), either Sellers or Buyer shall be entitled to terminate this
Agreement upon written notice to the other within thirty (30) days following the
receipt by such party of (i) the Study, or if a Follow on Study is obtained,
within thirty (30) days of receipt of the Follow On Study, and (ii) the
Engineer's estimated cost of Remediation, provided, however, Buyer shall not
have the right to terminate this Agreement, if within fifteen (15) days after
the receipt by both parties of the Study or Follow on Study and the Engineer's
estimate which projects Remediation costs in excess of Five Million Dollars
($5,000,000.00) Sellers shall have notified Buyer in writing of Sellers'
commitment to pay for all such Remediation costs. However, if Sellers elect to
terminate this Agreement as provided in the immediately preceding sentence,
Buyer shall be entitled to nullify Sellers' election to terminate this Agreement
by giving written notice to Sellers, within ten (10) business days after receipt
of Sellers' notice to Buyer terminating this Agreement, that it elects to
proceed to Closing hereunder. If Buyer shall make such election, Sellers shall
be obligated to pay up to Five Million Dollars ($5,000,000.00) of the cost of
the Remediation of the Environmental Condition, but shall have no further
responsibility or liability with respect to such Environmental Condition
whatsoever, whether under Section 10 of this Agreement or otherwise. In any
event, subject to the preceding sentence, to the extent that Sellers are
obligated to bear the cost of the Remediation of any Environmental Condition,
Sellers may elect either to remediate such condition and pay such costs directly
or to let Buyer handle such Remediation and indemnify Buyer against such costs
as and when such costs are incurred or required to be paid.
(b) Buyer may, at its option and expense, obtain commitments
from one or more title insurance companies acceptable to Buyer to issue an
owner's title insurance policy or policies in such form and in such amounts
reasonably acceptable to Buyer, insuring Buyer's good and marketable fee simple
interest or leasehold interest of Buyer with respect to the Real Property,
subject only to recorded easements and subdivision restrictions of record and
liens for taxes not yet due and payable. If the title insurance commitment
reveals any encumbrances to the title of the Real Property other than taxes not
yet due and payable, Buyer shall so notify Sellers within ten (10) days of
Buyer's receipt of such title insurance commitment.
(c) Buyer may, at its option and expense, obtain one or more
ALTA surveys on all or one or more portions of the Real Property. If such
surveys show a state of facts that affect the marketability of title to all or
one or more portions of the Real Property or that would materially and aversely
affect or interfere with the current use of the Real Property in the business or
operation of the Station, Buyer shall so notify Sellers within ten (10) days of
Buyer's receipt of such survey.
6.6 Engineering Report. Buyer may, at its option and expense, retain an
engineering firm to conduct a proof of performance study of the Stations and to
prepare a report on the Stations' compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. If the report discloses any material deficiencies in the
operations or equipment of the Stations, Buyer shall so notify Sellers within
ten (10) days of Buyer's receipt of such report.
6.7 Cooperation. Buyer and Sellers shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of and shall not take any action that would
be materially inconsistent with their respective obligations under this
Agreement, and Buyer and Sellers shall take such actions and execute such other
documents as may be reasonably necessary and desirable to the timely
implementation and consummation of this Agreement. Notwithstanding the
foregoing, Buyer shall have no obligation (i) to expend funds or deliver any
other consideration to obtain any of the Consents or (ii) to agree to any
adverse change in any License or Assumed Contract to obtain a Consent required
with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Georgia shall be complied with by Sellers.
6.9 Post-Closing Cooperation. Buyer shall, at any time, and from time
to time, after the Closing Date, but at no cost to Buyer (other than the
salaries or wages of its employees) use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and to do, all things necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement, including, without limitation, executing and delivering any
additional instruments, certificates or other documents. Sellers shall, at any
time, and from time to time, after the Closing Date, but at no cost to Sellers
(other than the salaries or wages of its employees) use their reasonable best
efforts to: (i) take, or cause to be taken, all appropriate action, and to do,
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including, without limitation, executing and
delivering any additional instruments, certificates or other documents and (ii)
have the present and future officers, directors, members, managers, employees
and agents of Sellers cooperate with Buyer in furnishing information, evidence,
testimony and other assistance in connection with any Tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters relating to the Stations for all periods prior to the Closing
Date.
6.10 Access to Books and Records. Sellers shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Sellers access and the right to copy for a period of three years
from the Closing Date any books and records relating to the Assets that are
included in the Assets.
6.11 Employees; Employee Benefit Plans.
(a) Effective as of the Closing Date, Buyer shall extend
offers of employment to employees listed on Schedule 3.10 whom it desires to
offer employment on such terms and conditions that Buyer shall determine in its
own discretion (such employees who accept Buyer's offer of employment
hereinafter referred to as the "Transferred Employees"). Nothing in this
Agreement shall obligate Buyer to hire any such employees. Sellers shall
terminate the employment of all Transferred Employees effective upon the Closing
Date and shall cooperate with, and use all reasonable efforts to assist, and not
interfere with or impede Buyer in its efforts to secure satisfactory employment
arrangements with the Transferred Employees to whom Buyer makes offers of
employment.
(b) Sellers shall vest all Transferred Employees in all
benefits accrued through the Closing Date under any Employee Plan.
(c) Sellers shall be solely responsible for the Employee
Benefit Plans and Compensation Arrangements and all obligations and liabilities
thereunder. Buyer shall not assume any of the Employee Benefit Plans and
Compensation Arrangements or any obligation or liability thereunder. Sellers
shall be solely responsible for all obligations and liabilities associated with
any employees of Sellers who are not Transferred Employees and for all
obligations and liabilities associated with any Transferred Employees that arise
from or relate to facts, circumstances or conduct of Sellers, or any ERISA
affiliate of Sellers that occurred or is deemed to occur on or prior to the
Closing; provided that Buyer shall assume the liability of paying vacation
benefits and sick leave which were accrued by employees of any Seller during the
year in which the Closing Date occurs, but which remain unused as of the Closing
Date, with respect to the Transferred Employees, so long as Buyer receives a
downward adjustment to the Purchase Price pursuant to Section 2.3 hereof.
(d) Sellers shall be responsible for all liabilities or
obligations under the Worker Adjustment and Retraining Notification Act and any
state law equivalent statutes resulting from their actions contemplated by this
Agreement.
(e) Seller shall retain full responsibility and liability for
offering and providing "continuation coverage" to any "covered employee" and any
"qualified beneficiary" who is covered by a "group health plan" sponsored or
contributed to by Sellers whose coverage under such group health plan was
attributable to a covered employee's employment performing services in
connection with the Stations and who has experienced a qualifying event or is
receiving continuation coverage on or prior to the Closing. "Continuation
coverage," "covered employee," "qualified beneficiary, "qualifying event" and
"group health plan" all shall have the meanings given such terms under Section
4980B of the Code and Section 601 et seq. of ERISA.
(f) Sellers will remain responsible for (i) all benefits
payable to its employees who, as of the close of business on the day immediately
preceding the Closing Date, were determined to be disabled in accordance with
the applicable provisions of the health, accident, sickness, salary
continuation, or short-term or long-term disability benefit plans or programs of
Sellers, (ii) all benefits payable to its employees, who as of the close of
business on the business day immediately preceding the Closing Date, were
receiving short-term disability benefits in accordance with the applicable
provisions of the short term disability benefit plans or programs of Sellers;
and (iii) all benefits payable to employees of Sellers who, as of the close of
business on the business day immediately preceding the Closing Date, were on any
type of leave other than vacation leave.
(g) Nothing contained herein, expressed or implied, is
intended to confer upon any Transferred Employee any right to continued
employment for any period of time by reason of this Agreement. Nothing contained
herein is intended to confer upon any Transferred Employee any particular term
or condition of employment.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Sellers contained in this Agreement shall be true and complete in
all material respects (without regard to any materiality limitation in any
representation or warranty) at and as of the Closing Date as though made at and
as of that time.
(b) Covenants and Conditions. Sellers shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by Sellers prior to
or on the Closing Date.
(c) Consents. All Consents designated in Schedule 3.3 by Buyer
as material consents shall have been obtained and delivered to Buyer without any
adverse change in the terms or conditions of any agreement or any governmental
license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof, Sellers shall have complied with any
conditions imposed on Sellers by the FCC Consent except for any conditions that
need not be complied with by Sellers under Section 6.1 hereof, and the FCC
Consent shall have become a Final Order.
(e) Governmental Authorizations. Sellers shall be the holder
of all FCC Licenses and there shall not have been any modification of any FCC
License that could have a material adverse effect on the Stations or the conduct
of the business and operations of the Stations. No proceeding shall be pending
the effect of which could be to revoke, cancel, fail to renew, suspend, or
modify adversely any FCC License.
(f) Deliveries. Sellers shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement and the
Closing Date, there shall have been no material adverse change in the assets,
properties, business or prospects of the Stations, including any unrepaired
damage, destruction, or loss (in excess of $50,000) affecting any assets used or
useful in the conduct of the business of the Stations.
(h) HSR Act Approval for the Sale of the Stations. The waiting
period under the HSR Act shall have expired without action by DOJ or the FTC to
prevent the Closing.
(i) Environmental, Title and/or Survey Matters. Subject to
Section 6.5(a), Sellers shall have fully remedied and cured, to the reasonable
satisfaction of Buyer, each environmental, title and survey related problem of
which Seller's were notified by Buyer pursuant to Section 6.5 hereof, and Buyer
shall have obtained the environmental survey, title policy and ALTA survey in
the forms described in such Section 6.5.
7.2 Conditions to Obligations of Sellers. All obligations of Sellers at
the Closing are subject at Sellers' option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects (without regard to any materiality limitation in any
representation or warranty) at and as of the Closing Date as though made at and
as of that time.
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by Buyer prior to or
on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to make
all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Sellers of any conditions that need not be complied
with by Sellers under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent except for any conditions that need
not be complied with by Buyer under Section 6.1 hereof.
(e) HSR Act Approval for the Sale of the Stations. The waiting
period under the HSR Act shall have expired without action by DOJ or the FTC to
prevent the Closing.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.
on a date not earlier than the first business day after the FCC Consent is
granted and not later than twenty-five business days following the date upon
which (i) the FCC Consent has become a Final Order, or (ii) Buyer has waived the
condition that the FCC Consent become a Final Order, to be set by Buyer on at
least ten days' written notice to Sellers. If Buyer fails to specify the date
for Closing pursuant to the preceding sentence prior to the third day after the
date upon which the FCC Consent becomes a Final Order, the Closing shall take
place on the fifth day after the date upon which the FCC Consent becomes a Final
Order. If the date of Closing determined in accordance with the requirements of
this Section 8.1(a) falls on a date that is not a business day, the Closing
shall occur on the next business day.
(b) Closing Place. The Closing shall be held at the offices of
Dow Lohnes PLLC, 1200 New Hampshire Ave., N.W., Suite 800, Washington, D.C.
20036, or any other place that is agreed upon by Buyer and Sellers.
8.2 Deliveries by Sellers. Prior to or 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 warranty bills of sale,
limited warranty deeds, 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, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges and encumbrances,
except for liens for Taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are reasonably designated by Buyer to
indicate that estoppel certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent, together with an original of such Consent,
including, without limitation, Consents from each landlord and sublandlord under
the Leases;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of each Seller by its President or any Vice
President, certifying (1) that the representations and warranties of Sellers
contained in this Agreement are true and complete in all material respects
(without regard to any materiality limitation in any representation or warranty)
as of the Closing Date as though made on and as of that date; and (2) that
Sellers have in all material respects performed and complied with all of the
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with by Sellers on or prior to the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a search for
tax, lien, and judgment filings in the Secretary of State's records of the State
of Georgia and in the records of those counties within the State of Georgia in
which the Assets are located, such searches having been made no earlier than ten
days prior to the Closing Date; provided, however, that the cost of the tax,
lien and judgment searches shall be paid for by Buyer;
(f) Licenses, Contracts, Business Records, Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Sellers in
connection with the business and operation of the Stations;
(g) Opinions of Counsel. An opinion of Mallernee & Branch, LLP
and FCC counsel reasonably acceptable to Buyer, both dated as of the Closing
Date, in a form reasonably satisfactory to Buyer; and
(h) Authorizing Resolutions. Certified copies of the
resolutions of Sellers' stockholders and Board of Directors approving the
transactions contemplated by this Agreement.
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 Estimated Purchase Price as provided
in Section 2.4(a);
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Sellers'
obligations under the Licenses and Assumed Contracts in accordance with Section
2.5;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by its President or any Vice
President, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects
(without regard to any materiality limitation in any representation or warranty)
as of the Closing Date as though made on and as of that date, and (2) that Buyer
has in all material respects performed and complied with all of the obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with by Buyer on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Dow Lohnes PLLC dated as
of the Closing Date, in a form reasonably satisfactory to Sellers; and
(e) Authorizing Resolutions. Certified copies of the
resolutions of Buyer's Board of Directors approving the transactions
contemplated by this Agreement.
SECTION 9. TERMINATION
9.1 Termination by Sellers. This Agreement may be terminated by Sellers
and the purchase and sale of the Stations abandoned, if Sellers are not then in
material breach of this Agreement, upon written notice to Buyer, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Sellers set
forth in this Agreement have not been satisfied or waived in writing by Sellers.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
the date that is 365 days after the date of this Agreement.
(d) Material Breach. If Buyer is in material breach of this
Agreement and Buyer has not cured the breach within 30 days (the "Cure Period")
after delivery of written notice from Sellers specifying in reasonable detail
the nature of the material breach, or undertaken to cure the material breach in
a commercially reasonable manner during the Cure Period (if it cannot be
reasonably cured during the Cure Period), and such party fails to pursue said
cure with reasonable diligence after the Cure Period.
9.2 Termination by Buyer. This Agreement may be terminated by Buyer and
the purchase and sale of the Stations abandoned, if Buyer is not then in
material breach of this Agreement, upon written notice to Sellers, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by the date that is 365 days after the date of this Agreement.
(d) Interruption of Service. If any event shall have occurred
that prevented signal transmission by any Station in the normal and usual manner
for a continuous period of seven days and Seller shall have failed to pursue
making necessary repairs to restore signal transmission of any such Station with
commercially reasonable diligence.
(e) Environmental Hazards. Buyer shall have notified Sellers
of material environmental hazards or the material possibility of environmental
damages or clean-up costs, as indicated in the environmental survey described in
Section 6.5, and the cause thereof shall not have been remedied prior to the
date that would be the Closing Date. Subject to the requirements of Section
6.5(a), Buyer acknowledges that Sellers have no affirmative obligation under
this Agreement to remedy the cause of any such hazard, damages or clean-up
costs.
(f) Technical Deficiencies. Buyer shall have notified Sellers
of material deficiencies in the operations or equipment of any Station, as
indicated in the engineering report described in Section 6.6, and the cause
thereof shall not have been remedied prior to the date that would be the Closing
Date. Buyer acknowledges that Sellers have no affirmative obligation to remedy
any such operational or equipment deficiency.
(g) Material Breach. If Sellers are in material breach of this
Agreement and Sellers have not cured the breach within 30 days (the "Cure
Period") after delivery of written notice from Buyer specifying in reasonable
detail the nature of the material breach, or undertaken to cure the material
breach in a commercially reasonable manner during the Cure Period (if it cannot
be reasonably cured during the Cure Period), and such party fails to pursue said
cure with reasonable diligence after the Cure Period.
9.3 Rights on Termination. If this Agreement is terminated by Seller
pursuant to Section 9.1(c) or (d) or by Buyer pursuant to Section 9.2(a) because
the closing conditions set forth in Sections 7.1(d) or (h) have not been met and
(ii) Sellers have not breached any of their material obligations under this
Agreement or Sellers are in breach of material obligations under this Agreement
but such breach was caused by circumstances beyond Sellers' reasonable control,
Buyer shall pay to Sellers Twelve Million Dollars ($12,000,000) minus the Option
Payment ("Termination Fee") as liquidated damages resulting from such
termination. Such Termination Fee shall be paid by Buyer by federal wire
transfer of same-day funds within five (5) days of notice of termination
pursuant to wire instructions which shall be delivered by Sellers to Buyer on
the termination date. Upon termination, as aforesaid, this Agreement shall
become null and void, and neither CRI nor Sellers shall have any further
obligation to each other. Buyer and Sellers agree that any recovery by Sellers
for a breach under Section 9.1(d) shall be limited solely to the Termination Fee
paid to Sellers, except as provided in Section 10.6.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties and shall survive the Closing for a period of one year. Any
investigations by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty, or covenant contained in this
Agreement. No notice or information delivered by Sellers shall affect Buyer's
right to rely on any representation or warranty made by Sellers or relieve
Sellers of any obligations under this Agreement as the result of a breach of any
of their respective representations and warranties.
10.2 Indemnification by Sellers. From and after the Closing, Sellers
hereby agree to 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 covenant
by Sellers contained in this Agreement or in any certificate, document, or
instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Sellers not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting from
the failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Stations prior to the Closing, including any
liabilities arising under the Licenses or the Assumed Contracts which relate to
events occurring prior to the Closing Date.
(e) Subject to the provisions of Section 10.4 of this
Agreement, any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. From and after the Closing, Buyer hereby
agrees to 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 covenant
by Buyer contained in this Agreement or in any certificate, document, or
instrument delivered to Sellers under this Agreement.
(b) Any and all obligations of Sellers assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Stations on and after the Closing.
(d) Subject to the provisions of Section 10.4 of this
Agreement, any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five business
days after written notice of such action, suit, or proceeding was given to
Claimant. No Claimant hereunder shall have any liability for failure to give the
notice required under this paragraph unless the failure to give such notice
materially prejudices the rights and interests of the Indemnifying Party.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense; provided, however, that the
Indemnifying Party may not settle a third party claim without the prior consent
of Claimant. If the Indemnifying Party does not elect to assume control or
otherwise participate in the defense of any third party claim within 30 days
after receipt of the notice provided for in paragraph (a), it shall be bound by
the results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant 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 Claimant.
(f) The indemnification rights of Buyer hereunder shall be
Buyer's sole and exclusive remedy with respect to the losses, liabilities,
damages and costs described in Section 10.2 hereof. The indemnification rights
of Sellers hereunder shall be Sellers' sole and exclusive remedy with respect to
the losses, liabilities, damages and costs described in Section 10.3 hereof.
(g) No party shall be entitled to indemnification hereunder
unless and until the amount for which indemnification is owing exceeds Fifty
Thousand Dollars ($50,000) for all such matters and indemnification shall be
made by the Indemnifying Party only to the extent of such excess over Fifty
Thousand Dollars ($50,000).
(h) In no event shall Sellers' or Buyer's right to
indemnification hereunder exceed the Purchase Price.
10.5 Specific Performance. The parties recognize that if, prior to
Closing, Sellers breach this Agreement and refuse to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for its injury. Buyer shall therefore be entitled, in addition
to any other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement, provided that Buyer shall
be ready, willing and able to perform under the provisions of this Agreement. If
any action is brought by Buyer to enforce this Agreement, Sellers shall waive
the defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by any party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any transfer Taxes, recordation Taxes, sales or
use Taxes, document stamps, or other charges, including FCC filing fees, levied
by any governmental entity on account of the transfer of the Assets from Sellers
to Buyer shall be divided equally between Sellers on the one hand and Buyer on
the other hand, except that Buyer will pay any HSR filing fees that may be due.
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 representatives.
11.2 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Sellers: Southern Broadcasting Companies, Inc.
1010 Tower Place
Bogart, GA 30622
Attention: Mr. Paul C. Stone
With a copy to: Mallernee & Branch, L.L.P.
400 Colony Square, Suite 1750
Atlanta, Georgia 30361
Attention: Rollin E. Mallernee, II, Esq.
If to Buyer: Cox Radio, Inc.
6205 Peachtree Dunwoody Road
Atlanta, Georgia 30328
Attention: Mr. Robert F. Neil
With a copy to: Dow Lohnes PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: Kevin F. Reed, Esq.
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
11.3 Benefit and Binding Effect. None of the parties hereto may assign
this Agreement without the prior written consent of the other parties hereto,
except that Buyer may assign its rights and obligations under this Agreement
without Sellers' consent to (a) any entity controlled by or under common control
with Buyer or (b) any other entity designated by Buyer, so long as Buyer
determines in the exercise of reasonable business judgment that such entity will
possess the financial capacity to consummate the transactions contemplated by
this Agreement. Any assignment by Buyer of its rights and obligations under this
Agreement shall (i) be to a party legally qualified under the Communications Act
and the published rules, regulations and policies of the FCC to assume and carry
out Buyer's obligations under this Agreement, (ii) be effective only upon
written assumption by the assignee of the obligations of Buyer hereunder, and
(iii) not relieve Buyer of its obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Seller and Buyer do not intend by the
execution, delivery or performance of this Agreement to confer a benefit upon
any Person not a party to this Agreement.
11.4 Governing Law. This agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Georgia (without regard to
any choice of law or conflict of law provisions (whether of the State of Georgia
or any other jurisdiction) that would cause the application of laws of any
jurisdiction other than the State of Georgia).
11.5 Partial Invalidity. Wherever possible, each provision hereof shall
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.
11.6 Interpretation. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement. The Schedules referred to
herein shall be construed with and as an integral part of this Agreement to the
same extent as if they were set forth verbatim herein. As used in this
Agreement, the word "including" is not limiting, and the word "or" is not
exclusive.
11.7 Gender and Number. Words used in this Agreement, 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 requires.
11.8 No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
person or entity by virtue of the authorship of any of the provisions of this
Agreement.
11.9 Entire Agreement. This Agreement, the schedules and exhibits
hereto, all documents, certificates, and other documents to be delivered by the
parties pursuant hereto, and the Option Agreement collectively represent the
entire understanding and agreement between Buyer and Sellers with respect to the
subject matter hereof. This Agreement supersedes all prior negotiations between
the parties with respect to the subject matter hereof and cannot be amended,
supplemented, or changed except by an agreement in writing that makes specific
reference to this Agreement and which is signed by the party against which
enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. 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 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Press Releases. None of the parties hereto shall publish any
press release, make any other public announcement or otherwise communicate with
any news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other parties hereto; provided,
however, that nothing contained herein shall prevent any party from promptly
making all filings with governmental authorities as may, in its judgment, be
required or advisable in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, in which
case the other parties shall be first notified in writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed by Sellers and
Buyer as of the date first written above.
SOUTHERN BROADCASTING OF ATHENS, INC.
/s/Paul C. Stone
By: __________________________________________
Name: Paul C. Stone
Title: President
SOUTHERN BROADCASTING OF PENSACOLA, INC.
/s/Paul C. Stone
By: __________________________________________
Name: Paul C. Stone
Title: President
NEW BROADCAST INVESTMENT PROPERTIES, INC.
/s/Paul C. Stone
By: __________________________________________
Name: Paul C. Stone
Title: President
SOUTHERN BROADCASTING COMPANIES, INC.
/s/Paul C. Stone
By: __________________________________________
Name: Paul C. Stone
Title: President
COX RADIO, INC.
/s/Neil O. Johnston
By: _____________________________________
Name: Neil O. Johnston
Title: Vice President
and Chief Financial Officer
The following schedules have been omitted pursuant to Item 601(b)(2) of
Regulation S-K and will be furnished supplementally to the Commission upon
request.
SCHEDULES
Schedule 3.3 -- Consents
Schedule 3.4(a) -- Governmental Licenses
Schedule 3.4(b) -- Renewal of Governmental Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Employees
Schedule 3.11 -- Insurance Matters
Schedule 3.14 -- Claims and Legal Actions
Schedule 3.15 -- Environmental Matters
Schedule 3.15(e) -- Underground Tanks
Schedule 3.16 -- Compliance with Laws
Schedule 3.18 -- Transactions with Affiliates
Schedule 3.22(a) -- Employee Benefit Plans
Schedule 3.22(e) -- Excess Parachute Payments
Schedule 3.23 -- Financial Statements