EXHIBIT 10.5
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated this day of April, 1996, is between Quality
Broadcasters of California, L.P. a California limited partnership, ("Seller"),
and Alta California Broadcasting, Inc., a corporation ("Buyer").
BACKGROUND
Seller holds certain licenses, permits and authorizations issued by the
Federal Communications Commission (the "Commission") for the operation of Radio
Station KNNN ("K9") licensed to Central Valley, California, and related
translator facilities and translator station applications (hereinafter, the
"Station"). Buyer and Seller have agreed that Seller shall transfer and Buyer
shall acquire the Station and the broadcasting business associated therewith,
including substantially all of the assets owned or held by Seller and used or
intended for use in the conduct of the business and operations of the Station,
on the terms and subject to the conditions specified herein.
NOW, THEREFORE, in consideration of the mutual representations, warranties
and covenants contained herein, the parties, intending to be legally bound, and
subject to the prior approval of the Commission, mutually agree as follows:
SECTION 1
CONVEYANCE OF ASSETS
1.1 Included Assets. Subject to Section 1.2 (Excluded Assets) below, on
the Closing Date (hereinafter defined), Seller shall sell, assign, transfer,
convey, set over, and deliver to Buyer, and Buyer shall purchase and/or accept
assignment of, all the assets, tangible and intangible, real, personal or
mixed, used and/or useful in the operation of the Station, including without
limitation all land, buildings, towers, antennas, transmitters, equipment and
furniture (including the business of the Station as a going concern), which are
owned or held by Seller and used or intended for use in the conduct of the
business and operations of the Station, including all such property acquired by
Seller between the date hereof and the Closing Date, consisting of the
following (hereinafter collectively the "Assets"), free and clear of all debts,
claims, liens, and encumbrances of any kind or nature whatsoever, except as to
any obligation or liability that Buyer expressly agrees herein to accept.
(a) Authorizations. All licenses, permits authorizations, waivers
and temporary authorizations, issued or granted by the Commission for the
operation of the Station, together with any additional or modified
authorizations pertaining to the Station, including authorizations issued
between the date hereof and the Closing Date, and any applications to the
Commission pertaining to the Station submitted prior to the Closing Date
(collectively, the "Commission Authorizations"), and all of Seller's rights in
and to the call letters, together with all other licenses, permits and
authorizations issued to Seller by any governmental authority which are used or
intended for use in the conduct of the business and operations of the Station,
including but not limited to the authorizations listed on Schedule A.
(b) Tangible Personal Property. The fixed assets and tangible
personal property, including but not limited to all towers, antennas,
transmitters, equipment, office furniture and fixtures, office materials and
supplies, tools, inventory, spare parts, music libraries and other tangible
personal property owned or held by Seller and used or intended for use in the
conduct of the business and operations of the Station, listed on Schedule B,
together with such replacements, additions and alterations thereto made between
the date hereof and the Closing Date (collectively the "Tangible Personal
Property").
(c) Real Property. The leasehold interests in real property
described on Schedule C, along with Seller's interest in the buildings,
structures and improvements located thereon, and any rights or appurtenances
thereto, together with any additions thereto between the date hereof and the
Closing Date (collectively the "Real Property").
(d) Agreements. Subject to Sections 1.3 and 1.4 hereof, those
business contracts, leases, including the leases for the studio and transmitter
sites, agreements, commitments, options, rights and interests, written or oral,
of Seller or to which Seller is a party, relating to the conduct of the
business and operations of the Station (collectively the "Agreements") which
are listed and contained in Schedule D.
(e) Intangibles. All right, title and interest of Seller in and to
all trademarks, tradenames, service marks, copyrights, jingles, licenses,
permits and privileges owned or held by Seller and used or intended for use in
the conduct of the business and operations of the Station, and to the call
letters, including but not limited to the intangible property listed on
Schedule E and intangible property acquired by Seller and used in the operation
of the Station between the date hereof and the Closing Date (collectively the
"Intangibles").
(f) Business Records. All files, records and logs relating to the
conduct of the business and operations of the Station as Buyer may reasonably
request, including but not limited to public file copies of all filings with
the Commission, executed copies of all Agreements and all research reports or
marketing studies (collectively the "Business Records").
1.2 Excluded Assets. It is expressly understood and agreed that the
Assets shall not include the following:
(a) Prepaid expenses, contract deposits (except to the extent Buyer
will be liable for obligations secured by such deposits), cash and liquid
investments, such as certificates of deposit, Treasury bills and other
marketable securities:
(b) Any federal, state or local income tax refunds and/or claims for
such refunds, any income tax benefits available as a result of operations for
periods prior to the Closing and any loss carryovers and income tax
prepayments;
(c) Seller's minute books, charter documents and other similar
organizational documents; and
(d) Seller's accounts receivable.
1.3 Assumption of Obligations. On the Closing Date and subject to
Section 1.4 below, Buyer shall assume and undertake to pay, satisfy or
discharge the liabilities, obligations and commitments of Seller under the
Agreements which first accrue and are to be performed or satisfied after the
Closing Date, to the extent that such obligations arise out of Buyer's conduct
of the business of the Station and/or ownership of the Assets after the Closing
Date. Except as expressly provided in this Agreement, Buyer shall not assume
or be deemed to assume any other liabilities or obligations of Seller, whether
known or unknown, including but not limited to obligations of Seller to its
employees.
1.4 Limitation. Notwithstanding the first clause in Section 1.3 above,
Buyer shall not be required or deemed to assume (a) any agreement for which
written consent to assignment is required but has not been obtained by the
Closing Date, or (b) any Material Agreement not listed on Schedule D.
"Material Agreements" includes all agreements except (a) agreements for the
sale of advertising time entered into in the ordinary course of business for
cash in accordance with established rates and with not more than thirteen (13)
weeks remaining in their present term; (b) agreements terminable by Seller
without payment of premium or penalty upon no more than thirty (30) days notice
and that do not require aggregate monthly monetary payments in excess of
$1,000; and (c) agreements that impose no material non-monetary obligation.
SECTION 2
CONSIDERATION
2.1 Assets. The purchase price for the Assets shall be Eight Hundred
Twenty-Five Thousand Dollars ($825,000) (the "Purchase Price").
2.2 Manner of Payment. The Purchase Price shall paid as follows:
(a) The sum of $325,000-00 on the Closing Date by or cashier's check
bank wire transfer of immediately available funds in accordance with Seller's
instructions.
(b) The sum of $500,000.00, plus interest at the rate of 8.5% per
annum, with monthly payments of principal and interest in the amount of
$6,199.28, with the remaining unpaid balance of principal and interest due and
payable 5 years from the Closing Date, pursuant to the terms of a promissory
note (the "Note") in the form as set forth in Schedule F of this Agreement.
2.3 Escrow. Buyer has deposited with the Exline Company, as Escrow
Agent, the sum of $40,000.00 as a Purchase Escrow which sum shall be held and
disbursed by the Escrow Agent pursuant to the terms of an Escrow Agreement
attached hereto and made a part hereof as Schedule G.
2.4 Security for Note. As security for the Note, Buyer shall deliver:
(a) A Security Agreement in the form as set forth in Schedule H to
this Agreement evidencing a senior security interest in the Assets, and UCC-1
Form(s) perfecting the security interest of Seller in the Assets acceptable for
filing with the Office of the California Secretary of State and the County
Recorder of Shasta County.
(b) A Pledge Agreement in the form as set forth in Schedule I to
this Agreement evidencing the pledge of all of the issued and outstanding
capital stock of Buyer to secure the payments due Seller under the Note.
(c) The Personal Guaranties of John Power [and all of the
shareholders of Buyer] in the form set forth in schedule J to this Agreement
guarantying the payments due Seller under the Note.
(The Security Agreement, Pledge Agreement and Personal Guaranties described in
this Section 2.4 are hereinafter collectively referred to as the "Security
Documents".)
2.5 Non-Competition. As additional consideration, Seller and principals
of Seller shall enter into the Non-Competition agreement substantially in the
form of Schedule K in which Seller agrees not to compete or have any interest
in a radio station licensed to any community in Shasta County after the Closing
for a three (3) year period. The agreement shall provide for termination of
obligations upon the sale of the Station by Buyer prior to the end of the three
(3) year period.
SECTION 3
CLOSING
3.1 Time and Place. Subject to the satisfaction of the conditions to
closing, the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Keck, Mahin & Cate at 10:00 A.M.,
on the earlier of (i) a date determined by mutual agreement of Buyer and
Seller, or (ii) ten (10) business days after the date on which the approvals of
the Commission required for the consummation of the transactions contemplated
hereby shall have become a Final Order, (the "Closing Date"). "Final Order"
means a published order or other published action by the Commission granting
its consent to the assignment of all licenses, permits and authorizations
issued or granted by the Commission for the operation of the Station to Buyer
without any conditions adverse to Seller or Buyer, and as to which order or
other action the time for filing a request for agency reconsideration or
judicial review or for the Commission's review of staff action or other appeal,
protest, request for stay, or petition for rehearing, reconsideration, or
review shall have expired without any such filing having been made or, if made,
such request or other action shall have been denied, dismissed or withdrawn and
the time for instituting any further proceedings shall have expired. The
foregoing notwithstanding, in the event Buyer waives the requirement that the
FCC's consent shall have become a Final Order, then the Closing shall take
place after FCC consent has been granted, on a date specified by Buyer on not
less than 10 days written notice to Seller and only in the event Buyer and
Seller enter into an agreement (the "Unwind Agreement") regarding the handling
of the proceeds and the Station during the period before the FCC's consent
becomes a Final Order.
3.2 Seller's Closing Deliveries. At the Closing, Seller shall deliver to
Buyer, in form and substance satisfactory to Buyer's counsel, the following
(collectively "Seller's Closing Documents"):
(a) Instruments of Conveyance. Deeds, bills of sale, endorsements,
assignments and other instruments of conveyance and transfer sufficient in form
and substance to convey the Assets to Buyer, including but not limited to the
following:
(i) Assignments of Seller's interest in all leasehold
interests in the Real Property (together with estoppel certificates in form and
substance satisfactory to Buyer);
(ii) Bills of sale for the Tangible Personal Property;
(iii) Assignments of the Commission Authorizations and any
other government authorizations;
(iv) Assignments of all Agreements;
(v) Assignments of the Intangibles;
(vi) The consents described in Section 10.1(f) hereof; and
(vii) Such other instruments or documents as Buyer may
reasonably request in connection with the transfer of the Assets.
(b) Opinion of Seller's Counsel. An opinion of Keck, Mahin & Cate,
counsel to Seller, in form and substance similar to the following:
(1) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of California.
(2) Seller has full power and authority to own and operate the
Station and to enter into and perform the Agreement and the transactions
contemplated thereby.
(3) The execution, delivery and performance of the Agreement by
Seller have been duly authorized by all necessary action of the partners of
Seller, including approval of the transaction by the requisite vote of Seller's
general and limited partners. The Agreement and Seller's Closing Documents
have been duly executed and delivered by Seller, and constitute valid and
binding obligations of Seller, enforceable in accordance with their terms,
except as they may be rendered unenforceable in the future by applicable
bankruptcy or other similar laws and the exercise of judicial discretion in
accordance with general equitable principles.
(4) The execution, delivery and performance of the Agreement
and the consummation of the transactions contemplated thereby, (a) will not
violate any provisions of Seller's limited partnership agreement, (b) will not
result in the breach of, constitute a default under, or result in the
imposition of any lien or encumbrance on any of the Assets pursuant to, any
contract or agreement known to counsel (after reasonable inquiry) and to which
Seller is a party or by which it is bound, and (c) to the best of their
knowledge, will not violate any laws, regulations, orders or judgments
applicable to Seller. Other than the Communications Act of 1934 and the rules
and regulations promulgated thereunder, no consent, approval or authorization
of, or any filing with, any governmental authority is required for the
execution, delivery and performance of this Agreement by Seller.
(5) To the best of their knowledge, (a) there is no litigation,
proceeding or investigation of any nature pending or threatened against Seller
(b) no judgment, award, order or decree has been rendered against Seller which
could affect, or which seeks to enjoin, prohibit or otherwise challenge, the
transactions contemplated by this Agreement or which would have an adverse
effect on Seller's ability to perform under this Agreement.
(c) Records. The Business Records or copies thereof.
(d) Certificates. Certificates of Seller, executed by its Managing
Partner certifying as to the matters set forth in Sections 10.1(c) and 10.1(d)
hereof.
3.3 Buyer's Closing Deliveries. At the Closing, Buyer shall deliver to
Seller, in form and substance satisfactory to Seller's counsel, the following
("Buyer's Closing Documents"):
(a) Cash. The cash portion of the Purchase Price.
(b) Note and Security Documents. The Note and the Security
Documents which have been duly executed.
(b) Opinion of Buyer's Counsel. An opinion of _________________,
counsel to Buyer, to the effect that:
(1) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of ________________________, and
is duly qualified as a foreign corporation and is in good standing under the
laws of the State of California.
(2) Buyer has full corporate power and authority to own and
operate the Station and to enter into and perform the Agreement and the
transactions contemplated thereby.
(3) The execution, delivery and performance of the Agreement by
Buyer have been duly authorized by all necessary corporate action, including
approval by the requisite vote of Buyer's board of directors. The Agreement
and Buyer's Closing Documents have been duly executed and delivered by Buyer
and constitute valid and binding obligations of Buyer, enforceable in
accordance with their terms, except as they may be rendered unenforceable in
the future by applicable bankruptcy or other similar laws and the exercise of
judicial discretion in accordance with general equitable principles.
(4) The execution, delivery and performance of the Agreement,
the consummation of the transactions contemplated thereby and the compliance
with the provisions thereof by Buyer (a) will not violate any provisions of
Buyer's corporate charter or bylaws, (b) will not result in the breach of, or
constitute a default under, any contract or agreement known to counsel (after
reasonable inquiry) and to which Buyer is a party or by which it is bound and
(c) to the best of their knowledge, will not violate any laws, regulations,
orders or judgments applicable to Buyer" Subject to the Communications Act of
1934 and the rules and regulations promulgated thereunder, no consent, approval
or authorization of, or any filing with, any governmental authority is required
for the execution, delivery and performance of the Agreement by Buyer.
(5) To the best of their knowledge, (a) there is no litigation,
proceeding or investigation of any nature pending or threatened against Buyer
(b) no judgment, award, order or decree has been rendered against Buyer which
could affect, or which seeks to enjoin, prohibit or otherwise challenge, the
transactions contemplated by this Agreement or which would have an adverse
effect on Buyer's ability to perform under this Agreement.
(c) Certificate. A certificate of Buyer executed by Buyer's Chief
Executive Officer or President certifying as to the matters set forth in
Sections 10.2(b) and 10.2(c).
SECTION 4
ADJUSTMENTS AND PRORATIONS
4.1 Proration of Income and Expenses. All income and expenses arising
from the conduct of the business and operations of the Station shall be
prorated between Buyer and Seller in accordance with generally accepted
accounting principles as of 11:59 p.m. on the day immediately preceding the
Closing Date. Such prorations shall include, without limitation, all ad
valorem, real estate and other property taxes (but excluding taxes arising by
reason of the transfer of the Assets, which shall be paid by Seller), business
and license fees, wages and salaries (and accruals for vacation and sick pay
only) of those employees Buyer is offering employment (but not including
accruals for bonuses, commissions and severance pay for any employee or
accruals for bonuses, commissions, vacation pay, sick pay, and severance pay
for any employee not hired by Buyer on Closing date, all of which obligations,
if any, shall remain the responsibility of Seller), utility expenses, time
sales agreements, trade and barter agreements (to the extent provided in
Section 4.2 below), license fees, and all other income and expenses
attributable to the ownership and operation of the Station. Prorations under
this Section 4.1 shall, insofar as feasible, be determined and paid on the
Closing Date, with Buyer and Seller to use best efforts to achieve final
settlement within thirty (30) days after the Closing Date.
4.2 Trade and Barter Agreements. Seller will use reasonable efforts to
cause its advertisers to use the broadcast time available under all existing
arrangements for the exchange of advertising time for consideration other than
money ("Trade-out Agreement") prior to Closing. Providing that Seller uses its
reasonable efforts to cause the trade to be used, the obligation to run
advertising not used prior to the Closing shall be assumed by Buyer and the
difference between the value of the spots to be run after Closing (valued at
the rate card in effect at the date of Closing) and the reasonable fair market
value of goods or serviceS still to be delivered after Closing by the
advertiser with respect to said Trade-out Agreements shall be deducted from the
price paid to Seller at Closing but only if and to the extent that Buyer shall
be obligated to broadcast advertising time valued at more than $10,000 over the
value of goods or services to be delivered to Buyer under the Trade-out
Agreements.
SECTION 5
APPLICATION TO AND CONSENT BY COMMISSION
5.l Commission Consent. Consummation of the purchase and sale provided
for herein and the performance of the obligations of Seller and Buyer under
this Agreement are subject to the condition that the Commission shall have
given its consent in writing to the assignment of the Commission Authorizations
to Buyer and such consent shall have become a Final Order.
5.2 Application for Commission Consent.
(a) Each party agrees to file with the Commission its respective
portion of an assignment application with respect to the Station (the
"Assignment Application") within ten (10) business days after the date hereof
and said application shall be substantially complete, in proper form and
substance. Seller and Buyer agree to prosecute the Assignment. Application
with diligence and to use their best efforts and to cooperate with each other
in seeking the Commission's approval of the transactions contemplated
hereunder. Each party further agrees to prepare expeditiously Assignment
Application amendments whenever such amendments are required by the Commission
or its rules or requested by the Commission's staff.
(b) Except as otherwise provided herein, each party will be solely
responsible for the expenses incurred by it in the preparation, filing and
prosecution of its respective portion of the Assignment Application. All
filing fees and grant fees imposed by the Commission shall be paid l/2 each by
Seller and Buyer Prior to Closing, Seller shall be responsible for the annual
regulatory fees.
SECTION 6
ACCOUNTS RECEIVABLE
At the Closing, Seller shall assign to Buyer, for purposes of collection
only, all accounts receivable arising out of the conduct of the business and
operations of the Station prior to the Closing Date. Seller shall deliver to
Buyer within ten (10) days after the Closing Date a complete and detailed
statement of such accounts receivable for the Station, showing the name, amount
and age of each such account receivable, and Buyer shall cause its employees to
cooperate with Seller in the preparation of such statement Buyer shall
undertake to bill such account debtors for any amounts unbilled by Seller by
reason of the occurrence of the Closing Date prior to the date on which Seller
normally and customarily would bill such account debtors. Buyer shall make
reasonable efforts on Seller's behalf to collect the accounts receivable
assigned hereunder for a period of one hundred twenty (120) days after the
Closing Date. On or before the tenth (10th) day following the end of such one
hundred twenty (120) day period, Buyer shall furnish Seller with a list of, and
pay over to Seller, the amounts collected during the one hundred twenty (120)
day period with respect to such accounts receivable. Any payment received by
Buyer during the one hundred twenty (120) day period from any customer owing
any such account receivable shall first be applied ln reduction of such
account, unless such customer disputes his obligation therefor, in which case
Buyer shall promptly return all records relating to such disputed account to
Seller and shall have no further obligation with respect to the collection
thereof. On or before the tenth (10th) day following the expiration of such
one hundred twenty (120)day period, Buyer shall (i) furnish to Seller an
accounting of, and remit to Seller, the amounts collected under such accounts
receivable, and (ii) furnish Seller with a list of, and shall reassign to
Seller, without recourse to Buyer, all of Seller's accounts receivable which
then remain uncollected and thereafter Buyer shall have no further obligation
under this Section 6. Buyer shall not be obligated to refer any of the
accounts receivable assigned to it for collection hereunder to a collection
agency or to an attorney for collection, and Buyer shall not make any such
referral or compromise, nor settle or adjust the amount of any such account
receivable, except with the approval of Seller. It is expressly understood and
agreed that Seller shall be free to take any action it may deem appropriate
with respect to any account receivable reassigned to it, whether before or
after the expiration of the one hundred twenty (120) day period, but that
Seller shall not take any action with respect to collecting any account
receivable during the 120 day period unless that account has been reassigned to
Seller.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
7.1 Organization and Standing. Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
California. Seller has full legal power and authority to own the Assets and to
carry on the business of the Station as it is presently conducted.
7.2 Authority. Seller has the legal power and authority to execute,
deliver and perform this Agreement and the transactions or documents
contemplated hereby. The execution, delivery and performance of this Agreement
and Seller's Closing Documents have been duly authorized by Seller's general
and limited partners.
7.3 Binding Effect of Agreement. This Agreement has been duly executed
and delivered by Seller and constitutes a valid and binding obligation of
Seller, enforceable against it in accordance with its terms. Upon execution,
the Seller's Closing DocumentS will constitute valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, except as
they may be rendered unenforceable in the future by applicable bankruptcy or
other similar laws and the exercise of judicial discretion in accordance with
general equitable principles.
7.4 Conflicts. Except as described in Schedule N, the execution,
delivery and performance by Seller of this Agreement do not violate any
charter, bylaw, or contract provision or other commitment to which Seller is a
party or under which it or its property are bound, or any law, judgment, order,
injunction, decree, rule, regulation or ruling of any governmental authority,
and will not result in the creation or imposition of any lien, charge, security
interest, or encumbrance of any nature whatsoever upon any of the Assets.
Seller will obtain all consents and discharges necessary to perform its
obligations hereunder on or prior to the Closing Date.
7.5 Financial Representations.
The Financial Statements have been prepared on an accrual basis in
accordance with accounting principles applied on a basis consistent with all
prior periods. The Financial Statements present fairly the financial
condition, assets, liabilities and results of the operations of the Station as
of their dates and for the periods indicated. "Financial Statements" shall
mean (i) an unaudited balance sheet of Seller as of 12\31\95, and (ii) an
unaudited income statement of Seller for the twelve months ended 12\31\95.
There have been no material changes to Seller's business or operation since the
date of preparation of the most recent Financial Statement which would render
the Financial StatementS misleading in any material respect.
7.6 Real Property. Schedule C contains descriptions of all real property
currently owned or leased by Seller, and used or intended for use in the
conduct of the business and operations of the Station. Seller has delivered to
Buyer true and complete copies of all leases listed in Schedule C (including
any and all amendments and other modifications of such leases), which leases
are valid, binding and enforceable in accordance with their terms, except as
they may be rendered unenforceable in the future by applicable bankruptcy or
other similar laws and the exercise of judicial discretion in accordance with
general equitable principles. Except with respect to those leases designated
in Schedule C as requiring the consent of a third party, Seller has full legal
power and authority to assign its rights under all of the leases listed in
Schedule C. All property listed in Schedule C (including the improvements
thereon) is in good condition and repair and available for immediate use in the
conduct of the business and operations of the Station. None of Seller's
property fails to comply in any material respect with any applicable building
or zoning code or regulation of any governmental authority having jurisdiction.
The property, whether owned or leased by Seller, described in Schedule C
includes all such property necessary to conduct the business and operations of
the Station as now conducted. To the best of Seller's knowledge, except as
disclosed on Schedule C, there is no condemnation pending or threatened against
any of the properties leased by Seller nor any pending or threatened
interruption in the provisions of utilities to any of the properties leased by
Seller.
7.7 Tangible Personal Property. Seller is the owner of and has
marketable title to all of the Tangible Personal Property listed in Schedule B,
free and clear of all liens, charges, encumbrances, restrictions, debts,
demands, or claims of any kind or nature whatsoever, except liens pursuant to
the agreements listed in Schedule D, which shall be discharged on the Closing
Date by application of the proceeds of the sale of the Assets. Schedule B
contains descriptions of all Tangible Personal Property and assets owned or
held by Seller and used or useful in the conduct of the business and operations
of the Station. The transmitting and studio equipment of the Station are in
good operating condition and repair (ordinary wear and tear excepted), have
been installed and maintained in accordance with good engineering practice, and
permit the Stations to operate in accordance with the Commission Authorizations
and the rules and regulations of the Commission. All other Tangible Personal
Property used in the operation of the Station is likewise in good operating
condition and repair (ordinary wear and tear excepted). The use of all
Tangible Personal Property is in compliance in all material respects with all
applicable statutes, ordinances, rules and regulations, federal, state and
local The Tangible Personal Property listed in Schedule B includes all such
property now used to conduct the business and operations of the Station, and is
sufficient to permit the operation of Station within the rules and regulations
of the Federal Communications Commission
7.8 Agreements. Schedule D accurately lists all Material Agreements.
Except as indicated in Schedule D, there is no material default by or claim of
material default against Seller or by Seller against any other party to the
Agreements listed in Schedule D, or any notice of termination existing or given
by Seller or, to Seller's knowledge, by any other party with respect to any
such Agreement or any renewal, extension or replacement thereof. All of the
Agreements are legal and binding on Seller and, to the best knowledge of
Seller, binding on the other parties thereto in all material respects. True
and correct copies of the Agreements listed in Schedule D are contained in
Schedule D.
7.9 Authorizations.
(a) Status. Seller is the holder of all licenses, permits and
authorizations necessary to operate the business of the Station as they now are
being conducted and necessary for the lawful operation of the Station,
including, without limitation, all Commission Authorizations. Seller is in
compliance with all such licenses, permits and authorizations, all of which are
in full force and effect. The Station are not operating pursuant to any
waiverS, special reporting conditions, special temporary authority, permission
to remain off the air, or any other similar permissions to operate in any
manner inconsistent with the commission Authorizations attached hereto. There
is no action pending or, to Seller's knowledge, threatened, before the
Commission or other body to revoke, refuse to renew, suspend or modify any of
the Commission Authorizations, or any action which may result in the denial of
any pending applications, the issuance of any cease and desist orders, or the
imposition of any administrative sanctions whatsoever with respect to the
Station or its operation, nor is Seller aware of any circumstances which, to
its knowledge, could result in an action to revoke, refuse to renew, suspend or
modify any of the Commission Authorizations, deny any pending applications, or
to issue of a cease and desist order, or impose any administrative sanctions
whatsoever with respect to the Station or its operation. All of the Licenses
have been renewed for the full term without conditions materially adverse to
Seller or the operations of the Business. Seller has no knowledge of any
reason why the Commission Authorizations would not be renewed or of any persons
who intend to oppose renewal of the Commission Authorizations.
(b) Reports. All material reports, applications and other documents
required to be filed by Seller with the Commission or any other administrative
body (and in the Public File) with respect to the Station or its operations
have been timely and properly filed and all such reports, applications and
documents are true and correct in all material respects.
7.10 Litigation; Compliance with Law. Seller is in compliance in all
material respects with all applicable federal, state and local laws, ordinances
and regulations, including compliance with the Communications Act of 1934, as
amended, and all rules and regulations issued thereunder. Other than
proceedings of general applicability to the broadcasting industry and except as
provided in Schedule M, there is no complaint, claim, litigation,
investigation, or judicial, administrative, or other proceeding of any nature,
including, without limitation, a grievance, arbitration, or insolvency or
bankruptcy proceeding, pending, or to the best knowledge of Seller, threatened
against Seller which could reasonably be expected to have a material adverse
effect on the Station. Except as provided in Section 5, no consent, approval
or authorization of, or any filing with, any governmental authority is required
for the execution, delivery and performance of this Agreement by Seller.
7.11 Insurance. Seller holds valid policies of insurance covering the
Assets and the Station' business for all risks and contingencies, and in such
amounts, as it considers normal and customary for its operations. Copies of
such policies have been delivered to Buyer. Seller is in compliance with the
requirements of its insurance policies in all material respects.
7.12 Employees and Labor Relations.
(a) Roster. A complete and accurate payroll roster for the Station
that sets forth names, job titles, annual or hourly rate of pay and commission
or bonus arrangements (as appropriate) for each employee or other person
rendering services to the Station has been provided to Buyer.
(b) Collective Bargaining Agreements. Seller is not a party to any
collective bargaining agreement or employment agreement covering or relating to
any of Station' employees, and has not recognized or received, and is not aware
of, a demand for recognition by any labor union or other collective bargaining
unit representing or claiming to represent any of the employees of the Station.
Seller is not aware of any circumstances which, to its knowledge, could result
in a claim of employment discrimination or an unfair labor practice.
(c) Employee Benefit Plans. Seller is not a party to any pension,
profit-sharing or bonus agreement or any other employee benefit plan or
compensation arrangement except as disclosed to Buyer in writing.
7.13 Payment of Taxes. Except for taxes not yet due and payable, all
returns and reports concerning income taxes, franchise taxes, unemployment
insurance, withholding and payroll taxes, sales taxes, personal property taxes,
license taxes, social security taxes, and all other reports required to have
been filed by the Seller relating to the Station have been duly filed, and all
taxes, interest, and penalties which are due to any taxing authority have been
duly paid or will be paid by the Closing Date.
7.14 Environmental. To the best of Seller's knowledge, no hazardous or
toxic materials (as hereinafter defined) exist in any structure located on, or
exist on or under the surface of, any of the real property to be conveyed to or
the leases assigned to Buyer pursuant to this Agreement. For purposes of this
Agreement, "hazardous or toxic material" shall mean waste, substances,
materials, smoke, gas, pollutants, contaminants, pollutants, asbestos or
asbestos related products, PCB's, petroleum, crude oil (or any fraction or
distillate thereof) or particulate matter designated as hazardous, toxic or
dangerous, or requiring special handling, treatment or storage whether or not
designated hazardous, toxic or dangerous under any environmental laws. For
purposes of this Agreement "environmental law" shall be interpreted to mean the
Comprehensive Environmental Response Compensation and Liability Act, any
successor to such law, and/or any other applicable federal, state, or local
environmental, health or safety law, rule or regulation concerning the
treating, producing, handling, storing, releasing, spilling, leaking, pumping,
pouring, emitting, or dumping of any waste, substance, materials, smoke, gas or
particulate matter or imposing liability or standards in connection therewith.
7.15 Intangibles. Schedule D is a true and complete list of all
copyrights, trademarks, trade names, licenses, patents, permits, jingles,
privileges and other similar intangible property rights and interests
(exclusive of those required to be listed in other Schedules) applied for,
issued to or owned by Seller or under which Seller is licensed or franchised
and used or useful in the conduct of the business and operations of the
station, all of which are, to the best of Seller's knowledge and except as
otherwise noted on Schedule D, valid and in good standing and uncontested.
Seller has received no notice and has no knowledge of any infringements or
unlawful use of such property.
7.16 Bankruptcy. No voluntary or involuntary petition in bankruptcy,
receivership, insolvency, or reorganization with respect to Seller, or petition
to appoint a receiver or trustee of Seller's property, has been filed by or
against Seller. Seller has not made any assignment for the benefit of its
creditors, and it is neither insolvent nor unable to pay its debts as they
become due and has not permitted any judgment, execution, attachment or levy
against it or against any of its properties to remain outstanding or
unsatisfied for more than thirty (30) days.
7.17 Disclosure. Neither this Agreement nor any other document,
certificate or schedule delivered pursuant hereto by or on behalf of Seller
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained herein and therein not misleading.
SECTION 8
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
8.1 Organization and Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
__________________. Buyer has full corporate power and authority to own the
Assets and to carry on the business of the Station as it is presently conducted
and at Closing will be qualified and in good standing in the State of
California.
8.2 Authority. Buyer has the corporate power and authority to execute,
deliver and perform this Agreement and the transactions or documents
contemplated hereby. The execution, delivery and performance of this Agreement
and Buyer's Closing Documents have been duly authorized by Buyer's board of
directors and shareholders.
8.3 Conflicts. The execution, delivery and performance by Buyer of this
Agreement do not violate any contract provision or other commitment to which
Buyer is a party or under which Buyer or its property is bound, or any law,
judgment, order, injunction, decree, rule, regulation or ruling of any
governmental authority.
8.4 Binding Effect of Agreement. This Agreement has been duly executed
and delivered by Buyer and constitutes a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms Upon execution, the
Buyer's Closing Documents will constitute valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their terms.
8.5 Litigation; Compliance with Law. There is no complaint, claim,
litigation, investigation, or judicial, administrative, or other proceeding of
any nature, including, without limitation, a grievance, arbitration, or
insolvency or bankruptcy proceeding, pending, or to Buyer's knowledge,
threatened against Buyer, which could have a material adverse effect on Buyer's
ability to perform its obligations hereunder. Except as provided in Section 5,
no consent, approval or authorization of, or any filing with, any governmental
authority is required for Buyer's execution, delivery and performance of this
Agreement.
8.6 Disclosure. Neither this Agreement nor any other document,
certificate or schedule delivered pursuant hereto by or on behalf of Buyer
contains or will contain any untrue statements of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained herein and therein not misleading.
8.7 Qualification. Buyer knows of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the Commission,
disqualify Buyer as an assignee of the Commission Authorizations or as the
owner and operator of the Station. Buyer shall not take any action which would
cause the Commission or any other governmental authority to institute
proceedings regarding Buyer's qualifications to become the licensee of the
Station or take any other action which would result in Buyer being in
noncompliance in any material respect with the requirements of the
Communications Act of 1934, as amended, or any other applicable law, or the
rules and regulations of the Commission (or any other governmental authority
having jurisdiction).
SECTION 9
COVENANTS
9.1 Covenants of Seller. Seller covenants and agrees that between the
date hereof and the Closing Date, except as contemplated by this Agreement or
with the prior consent of Buyer, the business and operations of the Station
will be conducted in accordance with the following:
(a) Negative Covenants.
(i) Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets except in the ordinary course
of business and consistent with the other provisions of this Agreements.
(ii) Disposition of Property. Seller will not sell, assign,
lease, encumber or otherwise transfer or dispose of any of the Assets except in
the ordinary course of business and shall replace any material property which
it transfers with an asset of comparable value and utility.
(iii) Employee Benefits. Seller will not increase the
compensation or other benefits or bonuses payable or to become payable to any
of the employees of the Station, and will not enter into any employment
agreements other than those terminable at will or terminable prior to Closing,
and Seller may perform the employment agreements listed on Schedule D.
(iv) Licenses. Seller will not cause or permit, by any act
or failure to act, the licenses, permits and other authorizations listed in
Schedule A to expire or to be surrendered or modified, or take any action which
would cause the Commission or any other governmental authority to institute
proceedings for the suspension, revocation or adverse modification of any of
said licenses, permits and authorizations, or fail to prosecute with due
diligence any pending applications to any governmental authority, or take any
other action within its control which would result in the Station being in
material noncompliance with the requirements of the Communications Act of 1934,
as amended, or any other applicable law, or the rules and regulations of the
Commission (or any other governmental authority having jurisdiction).
(b) Affirmative Covenants.
(i) Preservation of Business. Seller will conduct the
business and operations of the Station ln substantially the same manner as
heretofore in all matters concerning Station operation and in conformity with
all applicable laws, rules and regulations. It will exercise reasonable
commercial efforts to preserve the business and organization of the Station
intact, to keep available to the Station its present employees, to preserve for
the Station its respective present relationships with suppliers and customers
and others having business relations with it, and to maintain the Station's
goodwill and operating facilities. Seller will continue its promotional
activities at a level consistent with past practices.
(ii) Access to Information. From the date of this Agreement
to the Closing Date, upon reasonable notice, Seller will give to Buyer and its
respective counsel, accountants, engineers and other authorized representatives
reasonable access during normal business hours to the Assets and to the books
and records of the Station, and will furnish or cause to be furnished to Buyer
and its authorized representatives all information relating to the Assets as
they may reasonably request.
(iii) Maintenance of Assets. Seller will (a) maintain all of
the Assets or replacements thereof in their present condition, ordinary wear
and tear excepted: (b) maintain in effect music service agreements, program
contracts and rights, and advertising and promotion activities at levels
consistent with past operations of the Station; and (c) maintain supplies of
inventory and spare parts consistent with past practice.
(iv) Authorizations. Seller will conduct the business and
operations of the Station in accordance with applicable rules and regulations
of the Commission and the licenses, permits and other authorizations issued to
it by the Commission or by any other governmental authority.
(v) Insurance. Seller will maintain in force the existing
hazard and liability insurance policies, or comparable coverage, for the
Station and the Assets, and will use the proceeds of any such policies to
repair or restore any damaged Assets.
(vi) Contracts. Prior to the Closing Date, Seller shall
deliver to Buyer a list and complete copies of all Material Agreements entered
into between the date hereof and the Closing Date. Buyer shall have the right,
but not the obligation (unless Buyer shall have consented in writing to
Seller's execution of any such Material Agreement), to assume such Material
Agreements. Seller will perform its obligations under the Contracts and will
not fail to renew any Contract without prior notice to, and discussion with,
Buyer.
(vii) Consents and Approvals. Where the consent of any third
party is required under the terms of any of the Agreements to be assigned by it
hereunder, Seller will use its best efforts to obtain such consent.
(viii) Commission Notices. Seller shall provide Buyer with
copies of all filings it makes with the Commission and any notices from the
Commission relating to the Station or the Commission Authorizations.
(ix) Litigation. Seller shall give Buyer notice of any
litigation or proceedings against Seller that would have a material adverse
effect on Seller, the Assets or Seller's ability to perform its obligations
hereunder, together with copies of all pleadings relating thereto.
9.2 Joint Covenants. Buyer and Seller covenant and agree that they shall
act in accordance with the following:
(a) Conditions. The parties hereto will use their reasonable best
efforts to fulfill the conditions to their obligations hereunder and to cure
any event that may occur which would prevent the fulfillment of such
conditions.
(b) Confidentiality. The parties shall use their best efforts to
keep confidential all information obtained by them with respect to the other in
connection with this Agreement. None of the parties shall disclose, or make
any public statements regarding, the existence of this Agreement or any of the
terms and conditions hereof, without obtaining the prior consent of the others.
(c) Cooperation. The parties hereto shall cooperate fully with each
other in taking any actions, including actions to obtain the required consent
of any governmental instrumentality or any third party, necessary or helpful to
accomplish the transactions contemplated by this Agreement.
(d) Governmental Consents. If the consent of any governmental
instrumentality contains any condition, the party upon which such condition is
imposed shall use its best, diligent and good faith efforts to comply therewith
before the Closing Date; provided, however, that no party hereto shall be
required hereunder to comply with any condition where compliance would be
unduly burdensome or would have a material adverse effect upon it.
(e) Control of the Station. Notwithstanding any other provision of
this Agreement, prior to the Closing Date Buyer shall not directly or
indirectly control, supervise or direct the operations of the Station; such
operations, including complete control and supervision of all programs,
employees, and policies, shall be the sole responsibility of Seller.
(f) Further Assurances. Each party hereto covenants on and after
the Closing Date to execute such documents or instruments or take such other
steps as may be reasonably requested by any other party hereto to confirm,
perfect or document the transactions contemplated hereunder.
SECTION 10
CONDITIONS
10.1 Conditions Precedent to Obligations of Buyer. The obligations of the
Buyer under this Agreement are subject to the satisfaction of each of the
following express conditions precedent on the Closing Date;
(a) Final Order. Unless the requirement for finality is waived by
Buyer, the Final Order of the commission for the assignment of the Commission
Authorizations shall be in effect with no condition materially adverse to
Buyer.
(b) Closing Documents Seller shall have delivered to Buyer all of
Seller's Closing Documents.
(c) Representations and Warranties. Each of the representations and
warranties of Seller contained in this Agreement or in any schedule,
certificate, or document delivered pursuant to the provisions hereof shall be
true, correct and complete in all material respects at and as of the Closing
Date with the same force and effect as if made on and as of the Closing Date
(d) Performance. Seller shall have performed and complied with, in
all material respects, all covenants, agreements and obligations required by
this Agreement to be performed or complied with by it prior to the Closing
Date.
(e) Liens. Following application of the proceeds of the sale of the
Assets, there shall be no outstanding mortgages, liens, security agreements, or
other charges and encumbrances on the Assets.
(f) Consents. Seller shall have obtained all consents required for
the assignment of the Agreements to Buyer without any material change and
without any condition (i) adverse to Buyer "exclusive of conditions expressly
set forth in the Agreements), or (ii) requiring that defaults under such
Agreements arising prior to the Closing Date be cured. The form of the consent
for the assignment of the leases for the studio and transmitter sites shall be
reasonably acceptable to Buyer.
(g) Litigation. There shall be no pending litigation seeking to
prohibit or otherwise enjoin the transactions contemplated by this Agreement.
10.2 Conditions Precedent to Obligations of Seller. The performance of
the obligations of the Seller under this Agreement is subject to the
satisfaction of each of the following express conditions precedent on the
Closing Date:
(a) Final Order. Unless the requirement for finality is waived by
Buyer, the Final Order of the Commission for the assignment of the Commission
Authorizations shall be in effect.
(b) Representations and Warranties Each of Buyer's representations
and warranties contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true, correct and complete
in all material respects at and as of Closing Date with the same force and
effect as if made on and as of the Closing Date.
(c) Performance. Buyer shall have performed and complied with, in
all material respects, all covenants, agreements and obligations required by
this Agreement to be performed or complied with by it prior to or on the
Closing Date.
(d) Closing Documents. Buyer shall have delivered to Seller all of
Buyer's Closing Documents.
(e) Litigation. There shall be no pending litigation seeking to
prohibit or otherwise enjoin the transactions contemplated by this Agreement.
SECTION 11
BROKERAGE
Buyer and Seller represent and warrant to each other that they know of no
broker, finder, or intermediary which has been involved in the transactions
provided for in this Agreement or which might be entitled to a fee or
commission upon the consummation of such transactions other than The Exline
Company, and Seller acknowledges that The Exline Company's fees are the sole
responsibility of Seller and shall be paid by Seller in accordance with the
agreement between them. Seller hereby agrees to indemnify, defend and hold
Buyer harmless from and against any claim of any such obligation or liability,
and any expense incurred in defending against any such claim, including
reasonable attorneys' fees, that shall have resulted from any contract,
agreement, or action by the Seller in connection with this Section 11.
SECTION 12
INDEMNIFICATION
12.1 Seller. Seller covenants and agrees to defend, indemnify, defend and
hold harmless Buyer from and against any and all loss, cost, liability, claim,
damage and expense (including legal and other expenses incident thereto)
arising out of (a) the breach of any representation or warranty of Seller set
forth in this Agreement (including the inaccuracy of any schedules hereto or
other written information provided to Buyer); (b) the breach of any of the
covenants or other agreements of Seller contained in or arising out of this
Agreement or the transactions contemplated hereby; (c) the operations of
Station prior to the Closing Date; and (d) any liabilities of Seller not
assumed by Buyer hereunder and as to which Buyer incurs liability.
12.2 Buyer. Buyer covenants and agrees to indemnify, defend and hold
harmless Seller from and against any and all losses, cost, liability, claim,
damage and expense (including legal and other expenses incident thereto)
arising out of (a) the breach of any representation or warranty of Buyer set
forth in this Agreement; (b) the breach of any of Buyer's covenants or other
agreements contained in or arising out of this Agreement or the transactions
contemplated hereby; (c) any liabilities assumed by Buyer herein; or (d) the
conduct of the business and operations of the Station following the Closing.
12.3 Notice of Claim. Buyer and Seller, upon discovery of the breach of
any of the representations, warranties or covenants of the other under this
Agreement, shall each give to the other prompt written notice of the discovery
of such breach. If any action, suit or proceeding shall be commenced, or any
claim or demand be asserted in respect of which a party proposes to seek
indemnification from the other under this Section 12, then such party
(hereinafter the "Claimant") shall notify the party or parties from whom
indemnification is sought (hereinafter the "Indemnifying Party") to that effect
in writing with reasonable promptness and in any event, if such claim arises
out of a claim by a person or entity other than the Claimant, then within ten
(10) days after notice of such claim was given to the Claimant; provided,
however, that the Claimant's failure to give such notice to the Indemnifying
Party shall not relieve the Indemnifying Party of its obligations hereunder
unless, and only to the extent that, it has a prejudicial effect on the
Indemnifying Party's ability to defend the claim.
12.4 Assumption and Defense of Third-Party Action. If any claim hereunder
arises out of a claim against the Claimant by a third party, the Indemnifying
Party shall have the right, at its own expense, to participate in or assume
control of the defense or settlement of such claim, and the Claimant shall
fully cooperate with the Indemnifying Party subject to reimbursement for actual
out-of-pocket expenses incurred 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. If a claim requires immediate
action, the parties will make every effort to reach a decision with respect
thereto as expeditiously as possible. If the Indemnifying Party does not elect
to assume control or otherwise participate in the defense of any third-party
claim, it shall be bound by the results obtained by the Claimant with respect
to such claim
12.5 Limitation. No claim for indemnification may be brought under
Section 12 hereof unless such claim is first asserted in writing prior to the
first anniversary of the Closing Date; provided, however, that the foregoing
limitation shall not apply to claims by third parties with respect to
liabilities of Seller not assumed by Buyer.
SECTION 13
TERMINATION RIGHTS
13.1 General. This Agreement may be terminated by either Buyer or Seller,
if the terminating party is not then in material default, upon written notice
to the other upon the occurrence of any of the following:
(a) If the purchase of the Assets by Buyer pursuant to this
Agreement shall not have been closed on or before a date six (6) months from
the date of the acceptance by the FCC of the application for consent to the
assignment of the License;
(b) Subject to Section 14 hereof, if the non-terminating party
materially defaults in the observance or in the due and timely performance of
any of its covenants or agreements herein contained;
(c) Subject to Section 14 hereof, if on the closing Date any of the
conditions precedent to the obligations of the terminating party have not been
satisfied or waived by the terminating party; or
(d) If there shall be in effect on the Closing Date any judgment,
decree or order that would prevent or make unlawful the closing of this
Agreement, provided that no party shall be allowed to terminate pursuant to
this section if it is responsible for the judgment or decree that prevents
Closing.
13.2 Notwithstanding any other provision of this Section 13, any
termination pursuant to paragraphs (b) or (c) of Section 13.1 shall not be
effective unless and until (1) the terminating party shall have given to the
other party written notice of termination so as to afford the other party the
opportunity to cure, and (2) the non-terminating party shall have failed to
cure the default or the failure of the condition within thirty (30) days after
its receipt of the notice from the terminating party.
SECTION 14
RISK OF LOSS
14.1 Generally. The risk of any loss or damage to the Assets by any
casualty or cause, reasonable wear and tear excepted, prior to Closing Date, is
assumed and shall be borne by the Seller at all times before Closing Date. If
any such loss or damage occurs, Seller shall give prompt written notice of the
loss or damage to Buyer. Buyer shall have the right in the event the loss or
damage exceeds $50,000 and the property will not be substantially repaired or
restored within sixty (60) days at Seller's expense, which right shall be
exercisable within ten (10) days after receipt of notice from Seller, to (i)
terminate this Agreement, or (ii) elect to consummate the Closing and accept
the property in its "then" condition, in which event Seller shall assign all
rights under any insurance claims covering the loss theretofore received by
Seller with respect thereto. If Seller seeks to restore any damaged property
and the restoration extends beyond the period within which the Commission has
approved the transfer of the Commission Authorizations to Buyer, the parties
agree to join in an application to the Commission to extend such period.
14.2 Broadcast Transmission of Station Prior to Closing. If, prior to the
Closing Date, the Station incurs any unusual operating problems which affects
its ability to provide uninterrupted broadcast service at substantially full
licensed power and antenna height, Seller shall provide Buyer, as soon as
practicable, with written notice of such problem and the measures being taken
to correct same. If any event occurs which prevents the broadcast transmission
of the Station with substantially full licensed power and antenna height as
described in the licenses in the manner in which it has heretofore been
operating, and (i) such facilities are not restored so that operations are
resumed within three (3) days of such event or so that operations are not
resumed with substantially full licensed power and antenna height within five
(5) days of such event, or (ii) in the case of more than one event the
aggregate number of days preceding such restoration from all such events
exceeds five (5) days, or (iii) if any one of the Station are off the air more
than four separate days for a period, in each case, exceeding three (3) hours,
then Seller shall be deemed to be in breach of this Agreement and Buyer may
terminate this Agreement forthwith without any further obligation hereunder
upon written notice to Seller.
SECTION 15
NOTICES
All notices, requests, demands, waivers, consents and other communications
required or permitted hereunder shall be in writing and be deemed to have been
duly given on the earlier of receipt of such communications or three (3) days
after deposit in the United States Mail, registered or certified, postage
prepaid, addressed to the party to be notified as follows:
If to Seller:
With a copy to:
If to Buyer:
With a copy to:
Any party may change its address for notice purposes by providing a notice
in accordance with this Section.
SECTION 16
LIQUIDATED DAMAGES
In the event that the conditions to Buyer's obligations set forth in
Section 10.1 have been satisfied or waived and the parties do not consummate
the transactions contemplated by this Agreement as a result of Buyer's breach
hereof, then upon termination of this Agreement under Section 13 hereof Buyer
shall pay Seller $40,000 as liquidated damages as its sole remedy for Buyer's
breach of this Agreement. The payment from Buyer to Seller shall be made by
the Escrow Agent from the sums deposited into the Purchase Escrow. The parties
hereto agree that liquidated damages payable to Seller under this section are
to be the sole and exclusive remedy of Seller hereunder and are to be paid as
complete, reasonable, and adequate liquidated damages and not as a penalty or
forfeiture and that the reason for the inclusion of such provisions in this
Agreement is that, at the time of the execution of this Agreement, the
determination of the actual damages to Seller resulting from any action
requiring the payment of such liquidated damages would be impracticable or
extremely difficult to ascertain. Seller waives any other remedy or claim for
damages it may have.
SECTION 17
MISCELLANEOUS
17.1 Headings. The headings of the Sections of this Agreement are for
convenience of reference only, and do not form a part thereof, and do not in
any way modify, interpret or construe the meaning of the sections themselves or
the intentions of the parties.
17.2 Entire Agreement. This Agreement, together with the Schedules hereto
which are incorporated herein by reference, and any other agreements entered
into contemporaneously herewith, set forth the entire agreement of the parties
and are intended to supersede all prior negotiations, understandings, and
agreements and cannot be altered, amended, changed or modified in any respect
or particular unless each such alteration, amendment, change or modification
shall have been agreed to by each of the parties hereto and reduced to writing
in its entirety and signed and delivered by each party.
17.3 No Waiver. No provision, condition or covenant of this Agreement
shall be waived by either party hereto except by a written instrument delivered
to the other party and signed by the party consenting to and to be charged with
such waiver.
17.4 Third Party Rights. Nothing in this Agreement, express or implied,
is intended to or shall confer on any person other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
17.5 Other and Further Documents. The parties hereto agree to execute,
acknowledge and deliver, at or after the Closing Date, such other and further
instruments and documents as may be reasonably necessary to implement,
consummate and effectuate the terms of this Agreement, the effective vesting in
Buyer of title to the Assets and/or the successful processing by the Commission
of the application to be filed with it.
17.6 Counterparts. This Agreement may be executed in counterparts, all of
which together shall comprise one and the same instrument.
17.7 Good Faith. All parties hereto shall act in good faith in performing
and discharging their respective duties and obligations hereunder.
17.8 Time. Time shall be of the essence in this Agreement.
17.9 Governing Law. The parties agree that this Agreement will be
interpreted, construed, and enforced under and according to the laws of the
State of California.
17.10 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns. Except as provided herein, neither of the parties
hereto may voluntarily or involuntarily assign their interest under this
Agreement prior to the Closing Date without the prior written consent of the
other party, provided that such consent shall hot be unreasonably withheld, and
further provided that Buyer may assign its rights and obligations hereunder to
a corporation or limited partnership with respect to which it is the primary
shareholder.
17.11 Attorneys' Fees. Each party shall pay its own attorneys' fees and
expenses which it initiates, creates, or incurs in connection with the
negotiation, preparation and execution of this Agreement.
17.12 Specific Performance. Seller acknowledges that the Assets and the
business of the Station constitute unique property, and that there is no
adequate remedy at law for the damage which Buyer might sustain for the failure
of Seller to consummate the transactions contemplated by this Agreement.
Accordingly, Buyer shall be entitled, at its option, to the remedy of specific
performance to enforce the sale of the Assets pursuant to this Agreement, or to
damages in the event of a breach hereof by Seller.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and executed by their proper officers "hereunto duly authorized as of
the day and year first above written.
SELLER: BUYER:
QUALITY BROADCASTERS OF CALI- ALTA CALIFORNIA BROADCASTING,
FORNIA, L.P. INC.
By : /s/ By: /s/ John C. Power
------------------------ ------------------------------------
May 3, 1996
SUPPLEMENT
The attached Purchase Agreement is signed by Alta California Broadcasting,
Inc. ("Alta") and Quality Broadcasts of Redding, L.P. ("Quality") subject to
the following conditions:
1. Alta may, at its election, assign its rights but not its obligations under
the Purchase Agreement either to Northern California Broadcasting, Inc., a
Colorado corporation which is a wholly owned subsidiary of Alta;
2. In the event of any such assignment, Alta will guaranty the full
performance of the subsidiary of all obligations under the Purchase Agreement,
including but not limited to full payment of the Promissory Note and full
performance or all security agreements and documents;
3. Any pledge of stock required under the Purchase Agreement will be a pledge
of all the stock of the entity or entities which acquire the license and the
assets being sold under the Purchase Agreement; and
4. All security agreements will be senior security agreements with no other
entity holding a security interest senior to or pari passu with the security
interest of Quality.
5. Replace the reference to John Power in 2.4(c) with a reference to Redwood
Broadcasting, Inc., a California corporation, the parent of Alta.
Alta Quality
By: /s/ John C. Power By: /s/
------------------------- ---------------------------------------
Date: May 3, 1996 Date: May 3, 1996
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Agreed: /s/ John C. Power
Redwood Broadcasting, Inc.
May 3, 1996
Date: John C. Power
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