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EXHIBIT 10.08.03
ASSET PURCHASE AGREEMENT
(WGKA-AM, ATLANTA, GEORGIA)
This AGREEMENT (this "Agreement") is dated as of November 29, 1999, by
and between JW BROADCASTING, INC., a Georgia corporation ("Seller") and SALEM
MEDIA OF GEORGIA, INC., a Delaware corporation ("Buyer"), and SALEM
COMMUNICATIONS CORPORATION, a Delaware corporation ("Parent").
RECITALS:
1. Seller owns and operates radio station WGKA-AM licensed to Atlanta,
Georgia (the "Station"), and holds the licenses and authorizations issued by the
FCC for the operation of the Station.
2. Buyer desires to acquire certain assets of the Station, including
the FCC Licenses (as hereinafter defined) and Seller is willing to convey such
assets to Buyer.
3. The acquisition of the Station is subject to prior approval of the
FCC.
4. Parent is willing to guarantee the obligations of Buyer hereunder.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
ARTICLE 1
TERMINOLOGY
1.1 ACT. The Communications Act of 1934, as amended.
1.2 ADJUSTMENT AMOUNT. As provided in Section 2.7, the amount by which
Buyer's account is to be credited or charged, as reflected on the Adjustment
List.
1.3 ADJUSTMENT LIST. As provided in Section 2.7, an itemized list of
all sums to be credited or charged against the account of Buyer, with a brief
explanation in reasonable detail of the credits or charges.
1.4 ASSUMED OBLIGATIONS. Such term shall have the meaning defined in
Section 2.3.
1.5 BUSINESS DAY. Any calendar day, excluding Saturdays and Sundays, on
which federally chartered banks in the city of Atlanta, Georgia, are regularly
open for business.
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1.6 BUYER'S THRESHOLD LIMITATION. As provided in Section 9.3 (b), the
threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and expenses that must be incurred by Buyer before Seller shall be
obligated to indemnify Buyer. The Buyer's Threshold Limitation shall be One
Hundred Thousand Dollars ($100,000).
1.7 CLOSING. The closing with respect to the transactions contemplated
by this Agreement.
1.8 CLOSING DATE. The date upon which the Closing shall occur as
provided in Section 8.1.
1.9 DOCUMENTS. This Agreement and all Exhibits and Schedules hereto,
and each other agreement, certificate, or instrument delivered pursuant to or in
connection with the Closing, including amendments thereto that are expressly
permitted under the terms of this Agreement, but excluding, in all cases,
documents, materials and things furnished to Buyer in connection with Buyer's
investigation of the Sale Assets and business of the Station.
1.10 EARNEST MONEY. The amount of Four Hundred Thousand Dollars
($400,000).
1.11 ENVIRONMENTAL ASSESSMENT. Such term shall have the meaning set
forth in Section 5.10.
1.12 ENVIRONMENTAL LAWS. The Comprehensive Environmental Response
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Clean Water Act, the Clean Air Act and the Toxic Substances Control Act, each as
amended, and any other applicable federal, state and local laws, statutes, rules
or regulations concerning the treating, producing, handling, storing, releasing,
spilling, leaking, pumping, pouring, emitting or dumping of Hazardous Materials.
1.13 ESCROW AGENT. Sailor & Associates.
1.14 ESCROW AGREEMENT. The Escrow Agreement in the form attached as
Exhibit A which Seller, Buyer and the Escrow Agent have entered into
concurrently with the execution of this Agreement relating to the deposit,
holding, investment and disbursement of the Earnest Money.
1.15 EXCLUDED ASSETS. Such term shall have the meaning defined in
Section 2.2.
1.16 FCC. Federal Communications Commission.
1.17 FCC LICENSES. The licenses, permits and authorizations of the FCC
for the operation of the Station as listed on Schedule 3.8.
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1.18 FCC ORDER. An action, order or decision of the FCC granting its
consent to the assignment of the FCC Licenses to Buyer.
1.19 FINAL ACTION. An action of the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; with respect to which no
timely petition for reconsideration or administrative or judicial appeal or sua
sponte action of the FCC with comparable effect is pending and as to which the
time for filing any such petition or appeal (administrative or judicial) or for
the taking of any such sua sponte action of the FCC has expired.
1.20 HAZARDOUS MATERIALS. Toxic materials, hazardous wastes, hazardous
substances, pollutants or contaminants, asbestos or asbestos-related products,
polychlorinated biphenyls ("PCBs"), petroleum, crude oil or any fraction or
distillate thereof in excess of legally-defined permissible limits (as such
terms are defined in any applicable federal, state or local laws, ordinances,
rules and regulations, and including any other terms which are or may be used in
any applicable environmental laws to define prohibited or regulated substances).
1.21 INDEMNIFIED PARTY. Any party described in Section 9.3(a) or
Section 9.4(a) against which any claim or liability may be asserted by a third
party which would give rise to a claim for indemnification under the provisions
of this Agreement by such party.
1.22 INDEMNIFYING PARTY. The party to the Agreement (not the
Indemnified Party) that, in the event of a claim or liability asserted by a
third party against the Indemnified Party which would give rise to a claim for
indemnification under the provisions of this Agreement, may at its own expense,
and upon written notice to the Indemnified Party, compromise or defend such
claim.
1.23 LIEN. Any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, lien, lease or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any Sale Assets
or property, including any written or oral agreement to give or grant any of the
foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.
1.24 MATERIAL ADVERSE CONDITION. A condition which would materially
restrict, limit, increase the cost or burden of or otherwise materially
adversely affect or materially impair the right of Buyer to the ownership, use,
control, enjoyment or operation of any of the Sale Assets or the Station, taken
as a whole; provided, however, that any condition which requires that the
Station be operated in accordance with a condition similar to those contained in
the FCC Licenses as of the date hereof shall not be deemed a Material Adverse
Condition.
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1.25 OSHA LAWS. The Occupational Safety and Health Act of 1970, as
amended, and all other federal, state or local laws or ordinances, including
orders, rules and regulations thereunder, regulating or otherwise affecting
health and safety of the workplace.
1.26 PARENT GUARANTEE shall mean the guarantee of the obligations of
Buyer hereunder by Parent in the form of Exhibit A attached hereto.
1.27 PERMITTED ENCUMBRANCES. For purposes hereof, "Permitted
Encumbrances" shall mean (i) easements, restrictions, and other similar matters
which will not materially adversely affect the use of the Real Property in the
ordinary course of business; (ii) liens for taxes not due and payable or, that
are being contested in good faith by appropriate proceedings; (iii) mechanics,
materialmen's, carriers', warehousemen's, landlords' or other similar liens in
the ordinary course of business for sums not yet due or which are being
contested in good faith by appropriate proceedings; (iv) deposits or pledges to
secure the performance of bids, tenders, contracts (other than for borrowed
money), leases, statutory obligations, surety or appeal bonds or other deposits
or pledges for purposes of a like general nature made or given in the ordinary
course of business: and (v) liens or mortgages that will be released at Closing;
(vi) zoning ordinances and regulations, including statutes and ordinances
relating to the liens of streets and to other municipal improvements, which
would not, individually or in the aggregate, result in a Material Adverse
Condition.
1.28 PERMITTED LIEN. Any statutory lien which secures a payment not yet
due that arises, and is customarily discharged, in the ordinary course of
Seller's business; any easement, right-of-way or similar imperfection in the
Seller's title to its assets or properties that, individually and in the
aggregate, are not material in character or amount and would not, individually
or in the aggregate, result in a Material Adverse Condition.
1.29 PURCHASE PRICE. The consideration to be paid by Buyer to Seller
for purchase of the Sale Assets in an amount equal to Eight Million Dollars
($8,000,000), as adjusted pursuant to Section 2.7.
1.30 REAL PROPERTY. Such term shall have the meaning defined in Section
3.7.
1.31 RULES AND REGULATIONS. The rules of the FCC as set forth in Volume
47 of the Code of Federal Regulations, as well as such other policies of the
Commission, whether contained in the Code of Federal Regulations, or not, that
apply to the Station.
1.32 SALE ASSETS. All of the tangible and intangible assets to be
transferred by Seller to Buyer as set forth in Section 2.1.
1.33 SELLER'S THRESHOLD LIMITATION. As provided in Section 9.4(b), the
threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and expenses that must be incurred by Seller before Buyer shall be
obligated to indemnify Seller. The Seller's Threshold Limitation shall be One
Hundred Thousand Dollars ($100,000).
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1.34 STATION AGREEMENTS. The agreements, commitments, contracts, leases
and other items described in Section 2.1(d) which relate to operation of the
Station.
1.35 SURVIVAL Period. Such term shall have the meaning defined in
Section 9.1.
1.36 TANGIBLE PERSONAL PROPERTY. The personal property described in
Section 2.1(a).
1.37 TOWER COORDINATES. Such term shall have the meaning defined in
Section 3.15 hereof.
ARTICLE II
PURCHASE AND SALE
2.1 SALE ASSETS. On the Closing Date, Seller will sell, transfer,
assign and convey to Buyer, and Buyer will purchase from Seller, free and clear
of all Liens, except Permitted Liens and Liens that Buyer shall have
specifically waived in writing and accepted at Closing, all of Seller's right,
title and interest, legal and equitable, in and to the tangible and intangible
assets (except Excluded Assets) used or useful in the operation of the Station
as specifically set forth in the following:
(a) TANGIBLE PERSONAL PROPERTY. All equipment, parts, supplies,
furniture, fixtures and other tangible personal property owned by Seller prior
to Closing and used in the operation of the Station (excluding, in all events,
the Excluded Assets), including, but not limited to the tangible personal
property listed on Schedule 3.6, together with such modifications, replacements,
improvements and additional items, and subject to such deletions therefrom, made
or acquired between the date hereof and the Closing Date in accordance with the
terms and provisions of this Agreement;
(b) REAL PROPERTY AND LEASES. Seller's interests in the Real
Property including, without limitation, all right, title and interest of Seller
in and to the Station's transmitting facilities;
(c) LICENSES AND PERMITS. The FCC Licenses and all other assignable
or transferable governmental permits, licenses and authorizations (and any
renewals, extensions, amendments or modifications thereof) now held by Seller or
hereafter obtained by Seller between the date hereof and the Closing Date, to
the extent such other permits, licenses and authorizations pertain to or are
used in the operation of the Station;
(d) STATION AGREEMENTS. All agreements which are listed on Schedule
3.8 and any renewals, extensions, amendments or modifications of such agreements
that are made in the ordinary course of Seller's operation of the Station and in
accordance with the terms and provisions of this Agreement;
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(e) RECORDS. True and complete copies of all of the books, records,
accounts, files, logs, ledgers, reports of engineers and other consultants or
independent contractors, pertaining to or used in the operation of the Station
(other than corporate records);
(f) MISCELLANEOUS ASSETS. Intangible assets, properties or rights
of any kind or nature owned or used by Seller prior to the Closing in the
operation of the Station including, but not limited to, goodwill, call letters,
slogans and other intellectual property of the Station and listed on Schedule
2.1(f) hereto.
2.2 EXCLUDED ASSETS. Notwithstanding any provision of this Agreement to
the contrary, Seller shall not transfer, convey or assign to Buyer, but shall
retain all of its right, title and interest in and to, the following assets
owned or held by it on the Closing Date ("Excluded Assets"):
(a) Any and all cash, cash equivalents, cash deposits to secure
contract obligations (except to the extent Seller receives a credit therefor
under Section 2.7, in which event the deposit shall be included as part of the
Sale Assets), all inter-company receivables from any affiliate of Seller and all
other accounts receivable, bank deposits and securities held by Seller in
respect of the Station at the Closing Date.
(b) Any and all claims of Seller with respect to transactions prior
to the Closing including, without limitation, claims for tax refunds and refunds
of fees paid to the FCC.
(c) All prepaid expenses (except to the extent Seller receives a
credit therefor under Section 2.7, in which event the prepaid expense shall be
included as part of the Sale Assets).
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all
employment contracts.
(f) All contracts that are terminated in accordance with the terms
and provisions of this Agreement or have expired prior to the Closing Date in
the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed between
the date hereof and the Closing Date in accordance with the terms and provisions
of this Agreement.
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(h) Seller's corporate records except to the extent such records
pertain to or are used in the operation of the Station, in which case Seller
shall deliver materially accurate copies thereof to Buyer.
(i) All commitments, contracts and agreements not specifically
assumed by Buyer pursuant to Section 2.1(d), above.
(j) The list of approximately 5,000 listeners and containing such
listeners' names, addresses and other demographic information.
(k) All tangible personal property listed on Schedule 2.2, hereof.
2.3 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to perform,
without duplication of Seller's performance, the following liabilities and
obligations of Seller (the "Assumed Obligations"):
(i) Current liabilities of Seller for which Buyer receives a
credit pursuant to Section 2.7, but not in excess of the amount of such credit.
(ii) Liabilities and obligations arising under the Station
Agreements, if any, but only to the extent such liabilities and obligations
relate to any period of time after the Closing.
(b) Except for the Assumed Obligations, Buyer shall not assume or
in any manner be liable for any duties, responsibilities, obligations or
liabilities of Seller of any kind or nature, whether express or implied, known
or unknown, contingent or absolute, including, without limitation, any
liabilities to or in connection with Seller's employees whether arising in
connection with the transaction contemplated hereunder or otherwise.
2.4 EARNEST MONEY.
(a) Within five (5) days of the execution of this Agreement, Buyer
shall deposit with Escrow Agent under the Escrow Agreement, in immediately
available funds, the Earnest Money. The Escrow Agent shall hold the Earnest
Money under the terms of the Escrow Agreement in trust for the benefit of the
parties hereto. Interest and other earnings on the Earnest Money shall be
distributed by the Escrow Agent to Buyer from time to time upon the request of
Buyer.
(b) If Closing does not occur, the Earnest Money shall be delivered
to Seller or returned to Buyer in accordance with Section 10.2, and if Closing
does occur, the Earnest Money shall be applied to payment of the Purchase Price
at Closing as provided in Section 2.5.
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2.5 PAYMENTS.
(a) The Purchase Price shall be paid by Buyer as follows:
(i) At the Closing, the Earnest Money shall, subject to
execution and delivery of the closing documents described in Section 8.2, become
the property of Seller and shall, pursuant to the Escrow Agreement, be disbursed
to Seller by cashier's check or wire transfer of immediately available funds.
(ii) At the Closing the Purchase Price, less the amount of the
Earnest Money disbursed to Seller, shall be paid to Seller at Closing by wire
transfer of immediately available funds.
(b) Buyer shall pay to Seller, or Seller shall pay to Buyer, the
Adjustment Amount in accordance with Section 2.7.
2.6 ALLOCATION OF THE PURCHASE PRICE. Schedule 2.6 sets forth an
allocation of the Purchase Price. Buyer and Seller shall use, and Parent shall
cause Buyer to use, such allocation for all reporting purposes in connection
with federal, state and local income and, to the extent permitted under
applicable law, franchise taxes. Buyer and Seller agree, and Parent shall cause
Buyer to agree, to report such allocation to the Internal Revenue Service in the
form required by Treasury Regulation Section 1.1060-1T.
2.7 ADJUSTMENT OF PURCHASE PRICE.
(a) All operating income and operating expenses of the Station
shall be adjusted and allocated between Seller and Buyer, and an adjustment in
the Purchase Price shall be made as provided herein, to the extent necessary to
reflect the principle that all such income and expenses attributable to the
operation of the Station on or before the Closing Date shall be for the account
of Seller, and all income and expenses attributable to the operation of the
Station after the closing Date shall be for the account of Buyer.
(b) To the extent not inconsistent with the express provisions of
this Agreement, the allocations made pursuant to this Section 2.7 shall be made
in accordance with generally accepted accounting principles.
(c) For purposes of making the adjustments pursuant to this Section
2.7, Buyer shall prepare and deliver the Adjustment List to Seller within thirty
(30) days following the Closing Date, or such earlier or later date as shall be
mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the
Adjustment Amount. If the Adjustment Amount is a credit to the account of Buyer,
Seller shall pay such amount to Buyer within five (5) Business Days following
presentation of the Adjustment List to Seller, and if the Adjustment Amount is a
charge to the account of Buyer, Buyer shall pay such amount to Seller within
five (5) Business Days following presentation of the Adjustment List to Seller.
In the event Seller disagrees with the Adjustment Amount determined by Buyer or
with any other matter arising out of this subsection, and Buyer
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and Seller cannot within thirty (30) days resolve the disagreement themselves,
the parties will refer the disagreement to a Big Six accounting firm other than
one that regularly represents either party, whose decision shall be final and
whose fees and expenses shall be allocated between and paid by Seller and Buyer,
respectively, to the extent that such party does not prevail on the disputed
matters decided by the accountants.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Notwithstanding anything to the contrary in this Agreement, Seller
makes no representation or warranty other than as set forth in this Article III.
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation, validly
existing and in good standing under the laws of the State of Georgia and
authorized to conduct business in the State of Georgia. Seller has all requisite
power to own, operate and lease its properties and carry on its business as it
is now being conducted and as the same will be conducted until the Closing.
3.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Seller's execution
and delivery of, and the performance of its obligations under, this Agreement
and each of the other Documents, and the consummation by Seller of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary corporate action on the part of Seller. Seller has the
power and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Documents and to consummate the transactions
hereby and thereby contemplated. This Agreement and each of the other Documents
have been, or at or prior to the Closing will be, duly executed by Seller. The
Documents, when executed and delivered by the parties hereto, will constitute
legal and valid obligations of Seller enforceable against it in accordance with
their terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors' rights or
remedies generally, and except as may be limited by general principles of equity
(regardless of whether enforceability is sought in a proceeding in equity or at
law).
3.3 ABSENCE OF CONFLICTS. Except with respect to the matters listed in
Schedule 3.4 hereof, the execution and delivery of, and the performance of its
obligations under, this Agreement and each of the other Documents by Seller, and
the consummation of the transactions contemplated hereby and thereby:
(a) do not, to Seller's actual knowledge, in any material respect
(with or without the giving of notice or the passage of time or both) violate
(or result in the creation of any Lien other than a Permitted Lien on any of the
Sale Assets under), any provision of law, rule or regulation or any order,
judgment, injunction, decree or ruling applicable to Seller;
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(b) do not (with or without the giving of notice or the passage of
time or both) conflict with or result in a breach or termination of, or
constitute a default or give rise to a right of termination or acceleration
under the Articles of Incorporation or Bylaws of Seller or pursuant to any
lease, agreement, commitment or other instrument which Seller is a party to, or
bound by, or by which any of the Sale Assets may be bound, or result in the
creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
3.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except for
such consents as are required by the FCC and as are disclosed on Schedule 3.4,
to Seller's actual knowledge, the execution and delivery of, and the performance
of its obligations under, this Agreement and each of the other Documents by
Seller, and the consummation by Seller of the transactions contemplated hereby
and thereby, do not require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration of filing with, any court or
public agency or other authority, or the consent of any person under any
agreement, arrangement or commitment of a nature to which Seller is a party or
by which it is bound or by which the Sale Assets are bound or to which they are
subject to, the failure of which to obtain would result in a Material Adverse
Condition.
3.5 TANGIBLE PERSONAL PROPERTY. Except for supplies and other
incidental items which in the aggregate are not of material value and studio
equipment, to Seller's actual knowledge, the list of Tangible Personal Property
set forth on Schedule 3.5 is a complete and correct list of all of the items of
tangible personal property used to a material extent in the operation of the
Station in the manner in which it is now operated, except for the Excluded
Assets.
(a) Seller has good, marketable and valid title to all of the items
of Tangible Personal Property free and clear of all Liens except Permitted
Liens, and including the right to transfer same.
(b) On the Closing Date, the Tangible Personal Property will be in
at least as good a condition as of the date hereof, reasonable wear and tear
excepted, and will be in a condition to be operated in accordance with the FCC
Licenses in all material respects.
3.6 REAL PROPERTY.
(a) The real property described on Schedule 3.6 constitutes a
complete and correct summary description in all material respects of all of the
interests including all leases, in real estate, used to any extent in the
operation of the Station in the manner in which it has been and is now operated.
Said real property, together with all improvements affixed thereto, is herein
defined as the "Real Property."
(b) Seller does not owe any money to any architect, contractor,
subcontractor or materialman for labor or materials performed, rendered or
supplied to or in connection with the Real Property within the past four (4)
months which shall not be paid in full on or before Closing.
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(c) To Seller's actual knowledge, Seller has not received any
notices of uncorrected violations of the applicable housing, building, safety or
fire ordinances. To Seller's actual knowledge, the Real Property is served by
electricity and water in capacities adequate for the present use of the Real
Property and improvements thereon.
(d) Seller has not made any other agreement for the sale or lease
of, or given any other person an option to purchase or lease or a right of first
refusal to purchase or lease, all or any part of the Real Property, and Seller
has not subjected the Real Property to any liens (other than Permitted Liens),
easements, rights, duties, obligations, covenants, conditions, restrictions,
limitations or agreements not of record.
3.7 FCC LICENSES. Seller is the holder of the FCC Licenses listed on
Schedule 3.7, and except as set forth therein, the FCC Licenses (i) are valid,
in good standing and in full force and effect, and (ii) constitute all the
current licenses and authorizations issued by the FCC to Seller for or in
connection with the current operation of the Station. To Seller's actual
knowledge, there is no condition imposed by the FCC as part of any FCC License
which is neither set forth on the face thereof as issued by the FCC nor
contained in the Rules and Regulations applicable generally to stations of the
type, nature, class or location of the Station. No proceedings are pending or,
to the knowledge of the Seller, are threatened which may result in the
revocation, modification, non-renewal or suspension of any of the FCC Licenses,
the denial of any pending applications, the issuance of any cease and desist
order or the imposition of any fines, forfeitures or other administrative
actions by the FCC with respect to the Station or its operation, other than
proceedings affecting the radio broadcasting industry in general. Seller has no
actual knowledge of any matters (i) which could reasonably be expected to result
in the suspension or revocation of or the refusal to renew any of the FCC
Licenses or the imposition of any fines or forfeitures by the FCC, or (ii)
against Seller which could reasonably be expected to result in the FCC's refusal
to grant approval of the assignment to Buyer of the FCC Licenses or the
imposition of any Material Adverse Condition in connection with approval of such
assignment.
3.8 STATION AGREEMENTS.
(a) Schedule 3.8 sets forth an accurate and complete list of all
material agreements, contracts, arrangements or commitments in effect as of the
date hereof, including all amendments, modifications and supplements thereto
which the Station or its assets or properties are bound by, except (A) employee
benefit plans and employment contracts, (B) contracts for the sale of time on
the Station, and (C) contracts which are cancelable by Seller or its assignee
without breach or penalty on not more than sixty (60) days' notice.
(b) To the actual knowledge of Seller, except as set forth in the
Schedules, (i) the Station Agreements are, in all material respects, valid and
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency,
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reorganization, moratorium and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity
regardless of whether enforcement is sought in any proceeding at law or in
equity; (ii) neither Seller nor any party thereto is in material breach of or in
material default under any Station Agreements; (iii) there has not occurred any
event which, after the giving of notice or the lapse of time or both, would
constitute a material default under, or result in the material breach of, any
Station Agreements which, individually or in the aggregate, would result in a
Material Adverse Condition.
(c) Schedule 3.8 indicates, for each Station Agreement listed
thereon which is being assumed by Buyer, whether consent or approval by any
party thereto is required thereunder for consummation of the transactions
contemplated hereby.
3.9 LITIGATION. There are no claims, investigations or administrative,
arbitration or other proceedings pending or, to the actual knowledge of Seller,
threatened against Seller which would, individually or in the aggregate if
adversely determined, result in a Material Adverse Condition, or which would
give any third party the right to enjoin the transactions contemplated by this
Agreement and Seller has no actual knowledge of any bases for any such claim or
action. There are no existing or pending orders, judgments or decrees of any
court or governmental agency affecting Seller, the Station or any of the Sale
Assets which would result in a Material Adverse Condition.
3.10 LABOR MATTERS. Seller is not a party to any collective bargaining
agreement, and there is no collective bargaining agreement that determines the
terms and conditions of employment of any employees of Seller.
3.11 COMPLIANCE WITH LAW. To Seller's actual knowledge, the operation
of the Station complies in all material respects with the applicable rules and
regulations of the FCC and all federal, state, local or other laws, statutes,
ordinances, regulations, and any applicable order, writ, injunction or decree of
any court, commission, board, agency or other instrumentality.
3.12 ENVIRONMENTAL MATTERS; OSHA. Except as disclosed on the 1997 Phase
I environmental report relating to the Real Property, a true and complete copy
of which has previously been provided to Buyer:
(a) Seller has not, and to Seller's actual knowledge, no other
person or entity has caused or permitted materials to be generated, released,
stored, treated, recycled, disposed of on, under or at such parcels, which
materials, if known to be present, would require clean up, removal or other
remedial or responsive action under Environmental Laws (other than normal
office, cleaning and maintenance supplies in reasonable quantities used and /or
stored appropriately in the buildings or improvements on the Real Property). To
Seller's actual knowledge, there are no underground storage tanks and no PCBs or
friable asbestos in or on the Sale Assets or the Real Property.
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(b) Seller is not subject to any judgment, decree, order or
citation with respect to the Sale Assets related to or arising out of
Environmental Laws, and Seller has not received notice that it has been named or
listed as a potentially responsible party by any person or governmental body or
agency in any matter, under Environmental Laws.
3.13 FILING OF TAX RETURNS. Seller has filed all federal, state and
local tax returns which are required to be filed, and has paid all taxes and all
assessments to the extent that such taxes and assessments have become due, other
than such returns, taxes and assessments, the failure to file or pay would not,
individually or in the aggregate, have a material adverse effect on Buyer.
3.14 BROKER'S OR FINDER'S FEES. Except for as set forth on Schedule
3.14, no agent, broker, investment banker or other person or firm acting on
behalf of or under the authority of Seller or any affiliate of Seller is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee, directly or indirectly, in connection with the transactions contemplated by
this Agreement.
3.15 INSURANCE. There is now in full force and effect with reputable
insurance companies fire and extended coverage insurance with respect to all
material tangible Sale Assets and public liability insurance, all in
commercially reasonable amounts.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Parent, jointly and severally, represent and warrant to
Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer is authorized to conduct business in the State of Georgia.
Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of Parent and Buyer has all
requisite corporate power to own, operate and lease its properties and carry on
its business as it is now being conducted and as the same will be conducted
following the Closing.
4.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Each of Parent's and
Buyer's execution and delivery of, and the performance of its obligations under,
this Agreement and each of the other Documents, and the consummation by each of
Parent and Buyer of the transactions contemplated hereby and thereby, have been
duly authorized and approved by all necessary corporate action on the part of
each of Parent and Buyer. Each of Parent and Buyer has the power and authority
to execute, deliver and perform its obligations under this Agreement and each of
the other Documents and to consummate the transactions hereby and thereby
contemplated. This Agreement and each of the other Documents have been, or at or
prior to the Closing will be, duly executed by Buyer. This Agreement and each of
the other Documents to be executed by Each of Parent and Buyer have been, or at
or prior to the Closing will be, duly executed by Buyer.
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The Documents, when executed and delivered by the parties hereto, will
constitute the valid and legally binding agreement of each of Parent and Buyer,
enforceable against each of Parent and Buyer in accordance with their terms,
except as may be limited by bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights or remedies generally, and except
as may be limited by general principles of equity (regardless of whether such
enforceability is sought in a proceeding in equity or at law).
4.3 ABSENCE OF CONFLICTS. Each of Parent's and Buyer's execution and
delivery of, and the performance of its obligations under, this Agreement and
each of the other Documents and the consummation by each of Parent and Buyer of
the transaction contemplated hereby and thereby:
(a) Do not in any material respect (with or without the giving of
notice or the passage of time or both) violate (or result in the creation of any
claim, lien, charge or encumbrance on any of the assets or properties of either
Parent or Buyer under) any provision of law, rule or regulation or any order,
judgment, injunction, decree or ruling applicable to either Parent or Buyer in
any manner which would have a material adverse effect on the assets, business,
operation or financial condition or results of operations of either Parent or
Buyer;
(b) Do not (with or without the giving of notice or the passage of
time or both) conflict with or result in a breach or termination of, or
constitute a default or give rise to a right of termination or acceleration
under, the articles of incorporation or bylaws of Buyer or any lease, agreement,
commitment, or other instrument which each of Parent or Buyer is a party to,
bound by, or by which any of its assets or properties may be bound.
4.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except for the
required consent of the FCC, each of Parent's and Buyer's execution and delivery
of, and the performance of its obligations under, this Agreement and each of the
other Documents and the consummation by each of Parent and Buyer of the
transaction contemplated hereby and thereby, do not require the consent, waiver,
approval, permit, license, clearance or authorization of, or any declaration or
filing with, any court or public agency or other authority, or the consent of
any person under any agreement, arrangement or commitment of any nature to which
either Parent or Buyer is a party or by which it is bound, the failure of which
to obtain would have a material adverse effect on the assets, business,
operation or financial condition or results of operations of either Parent or
Buyer.
4.5 QUALIFICATION.
(a) Neither Parent nor Buyer has no knowledge after due inquiry of
any facts concerning Parent or Buyer or any other person with an attributable
interest in either Parent or Buyer (as such term is defined under the Rules and
Regulations) which, under present law (including the Act) and the Rules and
Regulations, would (i) disqualify either Parent or Buyer from being the holder
of the FCC Licenses, the owner of the Sale
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Assets or the operator of the Station upon consummation of the transactions
contemplated by this Agreement, or (ii) raise a substantial and material
question of fact (within the meaning of Section 309(e) of the Act) respecting
either Parent or Buyer's qualifications.
(b) Without limiting the foregoing Subsection (a), Buyer shall make
, and Parent shall cause Buyer to so make the affirmative certifications
provided in Section III of FCC Form 314, or as may be required on any form
required by the FCC to obtain its consent to this transaction, at the time of
filing of such form with the FCC as contemplated by Section 5.2.
4.6 BROKER'S OR FINDER'S FEES. No agent, broker, investment banker, or
other person or firm acting on behalf of or under the authority of Parent or
Buyer or any affiliate of Buyer is or will be entitled to any broker's or
finder's fee or any other commission or similar fee, directly or indirectly, in
connection with transactions contemplated by this Agreement.
4.7 LITIGATION. There are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or, to the knowledge of
either Parent or Buyer, threatened against Parent or Buyer that would give any
third party the right to enjoin the transactions contemplated by this Agreement.
ARTICLE V
TRANSACTIONS PRIOR TO THE CLOSING DATE
5.1 CONDUCT OF THE STATION'S BUSINESS PRIOR TO THE CLOSING DATE. Seller
covenants and agrees with Buyer that between the date hereof and the Closing
Date, unless the Buyer otherwise agrees in writing (which agreement shall not be
unreasonably withheld or delayed), Seller shall:
(a) Use reasonable commercial efforts to maintain insurance upon
all of the tangible Sale Assets in such amounts and of such kind comparable to
that in effect on the date hereof with respect to such Sale Assets and with
respect to the operation of the Station, with insurers of substantially the same
or better financial condition;
(b) Operate the Station and otherwise conduct its business in all
material respects in accordance with the terms or conditions of its FCC
Licenses, the Rules and Regulations, the Act and all other rules and
regulations, statutes, ordinances and orders of all governmental authorities
having jurisdiction over any aspect of the operation of the Station, except
where the failure to so operate the Station would not result in a Material
Adverse Condition or have a material and adverse effect on the ability of Seller
to consummate the transactions contemplated hereby;
(c) Comply in all material respects with all Station Agreements
which are material, individually or in the aggregate, to the operation of the
Station;
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(d) Promptly notify Buyer of any material default by, or claim of
default against, any party under any Station Agreements which are material,
individually or in the aggregate, to the operation of the Station, and any event
or condition which, with notice or lapse of time or both, would constitute an
event of default under such Station Agreements;
(e) Not mortgage, pledge or subject to any Lien other than a
Permitted Lien (except in the ordinary course of business) any of the Sale
Assets;
(f) Not sell, lease or otherwise dispose of, nor agree to sell,
lease or otherwise dispose of, any of the Sale Assets, except for dispositions
in the ordinary course of business;
(g) Not amend or terminate any Station Agreement, other than in the
ordinary course of business;
(h) Not introduce any material change with respect to the operation
of the Station including, without limitation, any material changes in the
broadcast hours of the Station or any other material change in the Station's
programming policies, except such changes as in the sole discretion of Seller,
exercised in good faith after consultation with Buyer, are required by the
public interest;
(i) Notify Buyer of any material litigation pending or threatened
against Station or any material damage to or destruction of any assets included
or to be included in the Sale Assets of which Seller receives actual knowledge.
5.2 GOVERNMENTAL CONSENTS. Seller and Buyer shall file with the FCC,
within ten (10) business days after the execution of this Agreement, such
applications and other documents in the name of Seller or Buyer, as appropriate,
as may be necessary or advisable to obtain the FCC Order. Seller and Buyer shall
take all commercially reasonable steps necessary to prosecute such filings with
diligence and shall diligently oppose any objections to, appeals from or
petitions to reconsider such approval of the FCC, to the end that the FCC Order
and a Final Action with respect thereto may be obtained as soon as practicable;
provided, however, that in the event the application for assignment of the FCC
Licenses has been designated for hearing, either Buyer or Seller may elect to
terminate this Agreement pursuant to Section 10.1(c). Buyer shall not knowingly
take, and Seller covenants that Seller shall not knowingly take, any action that
party knows or has reason to know would materially and adversely affect or
materially delay issuance of the FCC Order or materially and adversely affect or
materially delay its becoming a Final Action without a Material Adverse
Condition, unless such action is requested or required by the FCC, its staff or
the Rules and Regulations. Should Buyer or Seller become aware of any facts
which could reasonably be expected to materially and adversely affect or
materially delay issuance of the FCC Order without a Material Adverse Condition
(including but not limited to, in the case of Buyer, any facts which would
reasonably be expected to disqualify Buyer from controlling the Station), such
party shall promptly notify the other party thereof in writing and both parties
shall cooperate to take all steps necessary or desirable to resolve the matter
expeditiously and to obtain the FCC's approval of matters pending before it.
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5.3 OTHER CONSENTS. Seller shall use its reasonable best efforts to
obtain the consent or waivers to the transactions contemplated by this Agreement
required under the Station Agreements; provided that Seller shall not be
required to pay or grant any material consideration in order to obtain any such
consent or waiver.
5.4 TAX RETURNS AND PAYMENTS. All taxes pertaining to ownership of the
Sale Assets or operation of the Station prior to the Closing Date will be timely
paid; provided that Seller shall not be required to pay any such tax so long as
the validity thereof shall be contested in good faith by appropriate proceedings
and Seller shall have set aside adequate reserves with respect to any such tax.
5.5 ACCESS PRIOR TO THE CLOSING DATE. Prior to the Closing, Buyer and
its representatives may make such reasonable investigation of the assets and
business of the Station as it may desire; and Seller shall give to Buyer, its
engineers, counsel, accountants and other representatives reasonable access
during normal business hours throughout the period prior to the Closing to
personnel and all of the assets, books, records and files of or pertaining to
the Station, provided that (i) Buyer shall give Seller reasonable advance notice
of each date on which Buyer or any such other person or entity desires such
access, (ii) each person (other than an officer of Buyer) shall, if requested by
Seller, be accompanied by an officer or their representative of Buyer approved
by Seller, which approval shall not be unreasonably withheld, (iii) the
investigations at the offices of Seller shall be reasonable in number and
frequency, and (iv) all investigations shall be conducted in such a manner as
not to physically damage any property or constitute a disruption of the
operation of the Station or Seller. Seller shall furnish to Buyer during such
period all documents and copies of documents and information concerning the
business and affairs of Seller and the Station as Buyer may reasonably request.
5.6 CONFIDENTIALITY; PRESS RELEASE. All information, data and materials
furnished or to be furnished to either party with respect to the other party in
connection with this transaction or pursuant to this Agreement are confidential.
Each party agrees that prior to Closing (a) it shall not disclose or otherwise
make available, at any time, any such information, data or material to any
person who does not have a confidential relationship with such party; (b) it
shall protect such information, data and material with a high degree of care to
prevent the disclosure thereof; and (c) if, for any reason, this transaction is
not consummated, all information, data or material concerning the other party
obtained by such party, and all copies thereof, will be returned to the other
party. After Closing, neither party will disclose or otherwise make available to
any person any of such information, data or material concerning the other party,
except as may be necessary or appropriate in connection with the operation of
the Station by Buyer after delivering written notice not less than ten (10)
Business Days prior to such disclosure to Seller of Buyer's intention to make
such disclosure and the reasons therefor. Each party shall use its reasonable
efforts to prevent the violation of any of the foregoing
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confidentiality provisions by its respective representatives. Notwithstanding
the foregoing, nothing contained herein shall prohibit Buyer or Seller from:
(i) using such information, data and materials in connection
with any action or proceeding brought or any claim asserted by Buyer or Seller
in respect of any breach by the other of any representation, warranty or
covenant made in or pursuant to this Agreement; or
(ii) supplying or filing such information, data or materials to
or with the FCC or SEC or any other valid governmental or court authority to the
extent required by law or reasonably necessary to obtain any consent, waiver,
amendment, modification, approval, authorization, permit or license which may be
necessary to effectuate this Agreement, and to consummate the transaction
contemplated herein.
In the event that either party determines in good faith that a press release or
other public announcement is desirable under any circumstances, the parties
shall consult with each other to determine the appropriate timing, form and
content of such release or announcement and thereafter may make such release or
announcement.
5.7 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its reasonable best efforts
to take all action and to do all things necessary, proper or advisable to
satisfy any condition to the parties' obligations hereunder in its power to
satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement.
5.8 FCC REPORTS. Seller shall continue to file, on a current basis
until the Closing Date, all reports and documents required to be filed with the
FCC with respect to the Station. Seller shall provide Buyer with copies of all
such filings within five business days of the filing with the FCC.
5.9 CONVEYANCE FREE AND CLEAR OF LIENS. At or prior to the Closing,
Seller shall obtain executed releases, in suitable form for filing and otherwise
in form and substance reasonably satisfactory to Buyer, of any security
interests granted in the Sale Assets and properties as security for payment of
loans and other obligations or judgments and of any other Liens on the Sale
Assets. At the Closing, Seller shall transfer and convey to Buyer all of the
Sale Assets free and clear of all Liens except Permitted Liens.
5.10 ENVIRONMENTAL ASSESSMENT. Not later than forty-five (45) days
after execution of this Agreement, Buyer may obtain a Phase I ("the Phase I")
environmental assessment of the Sale Assets by an environmental engineer
selected by Buyer. Within fourteen (14) days after Buyer's receipt of the Phase
I, if the Phase I indicates environmental conditions may exist on, under or
affect such properties that may constitute a violation or breach of Seller's
representations and warranties contained in Section 3.12 of this Agreement (an
"Environmental Defect"), then Buyer shall be entitled to obtain a Phase II ("the
Phase II") environmental assessment of the Real Property, or any portion
thereof. (The Phase I and the Phase II, if obtained, shall be referred to herein
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as the "Environmental Assessment"). Buyer shall commission and pay the cost of
such Environmental Assessment and shall provide a copy to Seller. The
Environmental Assessment shall be subject to the confidentiality provisions of
Section 5.6. If after appropriate inquiry into the previous ownership of and
uses of the Real Property consistent with good commercial or customary practice,
the engineer concludes that environmental conditions exist on, under or
affecting such properties that would constitute an Environmental Defect, then
Buyer may elect to proceed with the Closing but shall not be obligated to close
under any circumstances which would require Buyer to assume ownership of the
Station under conditions where there exist any uncured violations of warranties,
representations or covenants with respect to environmental matters. If Buyer
elects to close with knowledge of an Environmental Defect, then Seller shall
have no obligation to indemnify Buyer with respect thereto or pursuant to
Article IX hereof following the Closing.
5.11 APPLICATIONS. Seller recognizes that Buyer's intended use of the
Station is subject to prior approval by federal, state and local authorities to
improve the current facilities of the Station and hereby permits Buyer to file
any application(s) in the name of Buyer to make changes in the Station's
facilities; provided that such application(s) shall be contingent on Closing
occurring. Seller will provide Buyer with a separate written statement of the
foregoing, should Buyer request such a separate written statement. Buyer shall
be responsible for all fees, permits, engineering, and filings and related costs
necessary for any and all of the application(s) contemplated by this Section.
Buyer shall indemnify and hold harmless Seller and any officer, director, agent,
employee and affiliate thereof with respect to any and all demands, claims,
actions, suits, proceedings, assessments, judgments, costs, losses, damages,
liabilities and expenses (including reasonable attorneys' fees) relating to or
arising out of any application, documents, filings or fees executed by Seller
pursuant to this Section.
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ARTICLE VI
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
Buyer's obligation to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, unless waived by Buyer in writing:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; CLOSING CERTIFICATE.
(a) The representations and warranties of Seller contained in this
Agreement or in any other Document shall be complete and correct in all material
respects on the date hereof and at the Closing Date with same effect as though
made at such time except for changes that are not materially adverse to the
Station or the Sale Assets taken as a whole.
(b) Seller shall have delivered to Buyer on the Closing Date a
certificate that (i) the condition specified in Section 6.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be materially adverse to the Station, the Sale Assets or
Seller's ability to consummate the transaction contemplated hereby), the
condition specified in Section 6.2 is satisfied as of the Closing Date.
6.2 PERFORMANCE OF AGREEMENTS. Seller shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
6.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and shall have
become a Final Action without any Material Adverse Condition.
(b) Seller shall have satisfied all material conditions which the
FCC Order or any order, ruling or decree of any judicial or administrative body
relating thereto or in connection therewith specifies and requires to be
satisfied by Seller prior to transfer of the FCC Licenses to Buyer.
(c) All other material authorizations, consents, approvals and
clearances of federal, state or local governmental agencies required to permit
the consummation by Buyer of the transactions contemplated by this Agreement
including, without limitation, the assignment of any FCC Authorization requested
by Buyer, shall have been obtained; all material statutory and regulatory
requirements for such consummation shall have been fulfilled; and no such
authorizations, consents, approvals or clearances shall contain any conditions
that individually or in the aggregate would result in a Material Adverse
Condition.
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6.4 ADVERSE PROCEEDINGS. Neither Buyer nor any affiliate of Buyer shall
be subject to any ruling, decree, order or injunction restraining, imposing
material limitations on or prohibiting (i) the consummation of the transactions
contemplated hereby or (ii) its participation in the operation, management,
ownership or control of the Station; and no litigation, proceeding or other
action seeking to obtain any such ruling, decree, order or injunction shall be
pending. No governmental authority having jurisdiction shall have notified any
party to this Agreement that consummation of the transaction contemplated hereby
would constitute a violation of the laws of the United States or of any state or
political subdivision or that it intends to commence proceedings to restrain
such consummation or to force divestiture, unless such governmental authority
shall have withdrawn such notice. No governmental authority having jurisdiction
shall have commenced any such proceeding.
6.5 OPINION OF SELLER'S FCC COUNSEL. Buyer shall have received from
Seller's FCC counsel a letter, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer's FCC counsel, to the effect that:
(a) The FCC Licenses listed on Schedule 3.8 are valid, in good
standing and in full force and effect and include all material licenses, permits
and authorizations which are necessary under the Rules and Regulations for
Seller to operate the Station in the manner in which the Station is currently
being operated.
(b) To counsel's knowledge, no condition has been imposed by the
FCC as part of any FCC License which is not set forth on the face thereof as
issued by the FCC or contained in the Rules and Regulations applicable generally
to stations of the type, nature, class or location of the Station.
(c) No proceedings are pending or, to counsel's knowledge, are
threatened which may result in the revocation, modification, non-renewal of,
suspension of, or the imposition of a Material Adverse Condition upon, any of
the FCC Licenses, the denial of any pending applications, the issuance of any
cease and desist order or the imposition of any fines, forfeitures or other
administrative actions by the FCC which would materially adversely affect the
continued operation of the Station, other than proceedings affecting the radio
broadcasting industry in general.
Counsel shall be entitled to rely upon Seller's representations and
warranties in this Agreement and to limit its inquiry to its files and such FCC
files and records as are available to it as of 10:00 o'clock A.M. Eastern time
the business day immediately preceding the Closing Date. Counsel may state that,
as to any factual matters embodied in, or forming a basis for any legal opinion
expressed in, such opinion, counsel's knowledge is based solely on such inquiry.
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6.6 DELIVERY OF CLOSING DOCUMENTS. Seller shall have delivered or
caused to be delivered to Buyer on the Closing Date each of the Documents
required to be delivered pursuant to Section 8.2.
6.7 ENVIRONMENTAL CONDITIONS. The Environmental Assessment obtained by
Buyer pursuant to Section 5.10 hereof shall not have disclosed an Environmental
Defect that is not removed, remedied or cured by Seller prior to the Closing.
ARTICLE VII
CONDITIONS PRECEDENT OF THE
OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the closing Date, of
each of the following conditions, unless waived by Seller in writing:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of Parent and Buyer
contained in this Agreement shall be complete and correct in all material
respects on the date hereof and at the Closing Date with the same effect as
though made at such time except for changes that are not materially adverse to
Seller.
(b) Buyer and Parent, respectively, shall have delivered to Seller
on the Closing Date a certificate that (i) the condition specified in Section
7.1(a) is satisfied as of the Closing Date, and (ii) except as set forth in such
certificate (none of which exceptions shall be materially adverse to Buyer's
ability to consummate the transaction contemplated hereby), the conditions
specified in Section 7.2 are satisfied as of the Closing Date.
7.2 PERFORMANCE OF AGREEMENTS. Buyer and Parent shall have performed in
all material respects all of its covenants, agreements and obligations required
by this Agreement and each of the other Documents to be performed or complied
with by it prior to or upon the Closing Date.
7.3. FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and shall have
become effective under the rules of the FCC, without any condition materially
adverse to Seller.
(b) Conditions which the FCC Order or any order, ruling or decree
of any judicial or administrative body relating thereto or in connection
therewith specifies and requires to be satisfied by Buyer prior to transfer of
the FCC Licenses to Buyer shall have been satisfied by Buyer.
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(c) All other authorizations, consents, approvals and clearances of
all federal, state and local governmental agencies required to permit the
consummation by Seller of the transactions contemplated by this Agreement shall
have been obtained; all statutory and regulatory requirements for such
consummation shall have been fulfilled; and no such authorizations, consents,
approvals or clearances shall contain any conditions that individually or in the
aggregate would have any material adverse effect on Seller.
7.4 ADVERSE PROCEEDINGS. Seller shall not be subject to any ruling,
decree, order or injunction restraining, imposing material limitations on or
prohibiting the consummation of the transactions contemplated hereby. No
governmental authority having jurisdiction shall have notified any party to this
Agreement that consummation of the transactions contemplated hereby would
constitute a violation of the laws of the United States or of any state or
political subdivision or that it intends to commence proceedings to restrain
such consummation or to force divestiture, unless such governmental authority
shall have withdrawn such notice. No governmental authority having jurisdiction
shall have commenced any such proceeding.
7.5 DELIVERY OF CLOSING DOCUMENTS AND PURCHASE PRICE. Buyer shall have
delivered or caused to be delivered to Seller on the Closing Date each of the
Documents required to be delivered pursuant to Section 8.3, and Seller shall
have received payment of the Purchase Price with the form of payment set forth
in Section 2.5.
7.6 DELIVERY OF PARENT GUARANTEE. Parent shall have delivered the
Parent Guarantee, dated as of the Closing Date, to Seller.
ARTICLE VIII
CLOSING
8.1 TIME AND PLACE. Unless otherwise agreed to in advance by the
parties, Closing shall take place in person or via facsimile at the offices of
Buyer's counsel in Camarillo, California, or at such other place as the parties
agree, at 10:00 A.M. Pacific Time on the date (the "Closing Date") that is the
later of (i) the fifth Business Day after the Applicable Date or (ii) the date
as soon as practicable following satisfaction or waiver of the conditions
precedent hereunder. The "Applicable Date" shall be the date on which issuance
of the FCC Order without any Material Adverse Condition or condition materially
adverse to Seller has become effective.
8.2 DOCUMENTS TO BE DELIVERED TO BUYER BY SELLER. At the Closing,
Seller shall deliver or cause to be delivered to Buyer the following:
(a) Certified resolutions of Seller's Board of Directors and
Shareholders approving the execution and delivery of this Agreement and each of
the other Documents and authorizing the consummation of the transactions
contemplated hereby and thereby.
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(b) The certificate required by Section 6.1(b).
(c) A bill of sale and other instruments of transfer and conveyance
transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and otherwise in
form and substance reasonably satisfactory to Buyer, of any security interests
granted in the Sale Assets as security for payment of loans and other
obligations and of any other Liens (other than Permitted Liens).
(e) An instrument or instruments assigning to Buyer all right,
title and interest of Seller in and to all Station Agreements, including leases
for the Real Property, being assumed by Buyer.
(f) An instrument assigning to Buyer all right, title and interest
of Seller in the FCC Licenses, all pending applications relating to the Station
before the FCC, and any remaining Sale Assets not otherwise conveyed.
(g) An instrument assigning to Buyer all rights, title and interest
of Seller to the assets described in Section 2.1(f) hereof.
(h) The opinion of Seller's FCC counsel, dated the Closing Date, to
the effect set forth in Section 6.5.
(i) Such additional information and materials as Buyer shall have
reasonably requested, including without limitation, evidence that all consents
and approvals required as a condition to Buyer's obligation to close hereunder
have been obtained.
8.3 DOCUMENTS TO BE DELIVERED TO SELLER BY BUYER. At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following:
(a) Certified resolutions of Buyer's Board of Directors approving
the execution and delivery of this Agreement and each of the other Documents and
authorizing the consummation of the transaction contemplated hereby and thereby.
(b) The Purchase Price as set forth in Section 2.5.
(c) The agreement of Buyer assuming the obligations under any
Station Agreements being assumed by Buyer.
(d) The certificate required under Section 7.1(b).
(e) The agreement ("Internet Agreement") by Buyer, or its
affiliates, to provide technical assistance, without cost, to establish and
operate a radio station that streams audio content over the Internet, in the
form set forth in Exhibit B attached hereto.
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(f) The agreement by Buyer, to allow Mr. Joseph Weber to produce
and broadcast on the Station, without cost, up to one (1) hour of programming
each week for one (1) year between the hours of 10:00 a.m. and 3:00 p.m. on
Saturday, in substantially the form set forth in Exhibit C attached hereto.
(g) Such additional information and materials as Seller shall have
reasonably requested.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. All representations,
warranties, covenants and agreements contained in this Agreement or in any other
Document shall survive the Closing for the Survival Period and the Closing shall
not be deemed a waiver by either party of the representations, warranties,
covenants or agreements of the other party contained herein or in any other
Document. No claim may be brought under this Agreement or any other Document
unless written notice describing in reasonable detail the nature and basis of
such claim is given on or prior to the last day of the Survival Period. In the
event such a notice is so given, the right to indemnification with respect
thereto under this Article shall survive the Survival Period until such claim is
finally resolved and any obligations with respect thereto are fully satisfied.
For purposes of this agreement the "Survival Period" shall be twelve (12) months
except as follows: as to any representation and warranty contained in Section
3.1, Section 3.2, Section 3.3, Section 3.6(a), Section 3.14, Section 4.1,
Section 4.2, Section 4.3 and Section 4.4 (collectively "Surviving Warranties"),
the Survival Period shall be indefinite.
9.2 INDEMNIFICATION IN GENERAL. Buyer and Seller agree that the rights
to indemnification and to be held harmless set forth in this Agreement shall, as
between the parties hereto and their respective successors and assigns, be
exclusive of all rights to indemnification and to be held harmless that such
party (or its successors or assigns) would otherwise have by statute, common law
or otherwise.
9.3 INDEMNIFICATION BY SELLER.
(a) Subject to the provisions of Subsection (b) below and Section
10.2 below, Seller shall indemnify and hold harmless Buyer and any officer,
director, agent, employee and affiliate thereof with respect to any and all
demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Seller of any of its
representations or warranties set forth in this Agreement; or
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(ii) The ownership or operation by Seller of the Station or the
Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller other
than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of the Bulk
Sales Act, if applicable, in connection with the transaction contemplated
hereby.
(b) Except for any amounts owed by Seller to Buyer under Section
9.3(a) (iv), and Section 2.7, if Closing occurs, Seller shall not be obligated
to indemnify Buyer pursuant to Section 9.3(a) hereof until the aggregate amount
of such claims, liabilities, damages, losses, costs and expenses exceeds Buyer's
Threshold Limitation, in which case Buyer shall then be entitled to
indemnification of the excess of the Buyer's Threshold Limitation.
9.4 INDEMNIFICATION BY BUYER.
(a) Subject to the provisions of Subsection (b) below and Section
10.2 below, Buyer shall indemnify and hold harmless Seller and any officer,
director, agent, employee and affiliate thereof with respect to any and all
demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Buyer of any of its
representations or warranties set forth in this Agreement or any other Document;
or
(ii) The ownership or operation of the Station after the
Closing Date; or
(iii) The Assumed Obligations and all other liabilities or
obligations of Buyer.
(b) Except for any amounts owed by Buyer to Seller under Section
2.7, if Closing occurs, Buyer shall not be obligated until the aggregate amount
of such claims, liabilities, damages, losses, costs and expenses exceeds
Seller's Threshold Limitation, in which case Seller shall then be entitled to
indemnification of excess of the Seller's Threshold Limitation.
9.5 INDEMNIFICATION PROCEDURES. In the event that an Indemnified Party
may be entitled to indemnification hereunder with respect to any asserted claim
of, or obligation or liability to, any third party, such party shall notify the
Indemnifying Party thereof, describing the matters involved in reasonable
detail, and the Indemnifying Party shall be entitled to assume the defense
thereof upon written notice to the Indemnified Party with counsel reasonably
satisfactory to the Indemnified Party; provided, that once the defense thereof
is assumed by the Indemnifying Party, the Indemnifying Party shall
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keep the Indemnified Party advised of all developments in the defense thereof
and any related litigation, and the Indemnified Party shall be entitled at all
times to participate in the defense thereof at its own expense. If the
Indemnifying Party fails to notify the Indemnified Party of its election to
defend or contest its obligation to indemnify under this Article IX, the
Indemnified Party may pay, compromise, or defend such a claim without prejudice
to any right it may have hereunder.
ARTICLE X
TERMINATION; LIQUIDATED DAMAGES
10.1 TERMINATION. If Closing shall not have previously occurred, this
Agreement shall terminate upon the earliest of:
(a) the giving of written notice from Seller to Buyer, or from
Buyer to Seller, if:
(i) Seller gives such termination notice and is not at such
time in material default hereunder, or Buyer gives such termination notice and
Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained
herein of Buyer (if such termination notice is given by Seller), or of Seller
(if such termination notice is given by Buyer), are inaccurate in any material
respect and would, in the case of Buyer, result in a Material Adverse Condition,
or, in the case of Seller, would be materially adverse to Seller unless the
inaccuracy has been induced by or is the result of actions or omissions of the
party giving such termination notice; or
(B) Any material obligation to be performed by Buyer (if
such termination notice is given by Seller) or by Seller (if such termination
notice is given by Buyer) is not timely performed in any material respect unless
the lack of timely performance has been induced by or is the result of actions
or omissions of the party giving such termination notice; or
(C) Any condition (other than those referred to in
foregoing Clauses (A) and (B)) to the obligation to close the transaction
contemplated herein of the party giving such termination notice has not been
timely satisfied; and any such inaccuracy, failure to perform or
non-satisfaction of a condition neither has been cured nor satisfied within
twenty (20) days after written notice thereof from the party giving such
termination notice nor waived in writing by the party giving such termination
notice.
(b) Written notice from Seller to Buyer, or from Buyer to Seller,
at any time after twelve (12) months from the date this Agreement is executed;
provided that
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termination shall not occur upon the giving of such termination notice by Seller
if Seller is at such time in material default hereunder or upon the giving of
such termination notice by Buyer if Buyer is at such time in material default
hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to Seller,
at any time following a determination by the FCC that the application for
consent to assignment of the FCC Licenses has been designated for hearing;
provided that the party which is the subject of the hearing (or whose alleged
actions or omissions resulted in the designation for hearing) may not elect to
terminate under this subsection (c).
(d) The written election by Buyer under Section 5.10 or Article XI.
10.2 OBLIGATIONS UPON TERMINATION.
(a) In the event this Agreement is terminated pursuant to Section
10.1(a)(ii)(A) or (B), the aggregate liability of Buyer for breach hereunder
shall be limited as provided in Subsections (c) and (e), below and the aggregate
liability for Seller for breach hereunder shall be limited as provided in
Subsections (d) and (e), below. In the event this Agreement is terminated for
any other reason, neither party shall have any liability hereunder.
(b) Upon termination of this Agreement, Buyer shall be entitled to
the return of the Earnest Money from the Escrow Agent under the Escrow Agreement
(i) if such termination is effected by Buyer's giving of valid written notice to
Seller pursuant to Subsections 10.1(a), (b) (c) or (d) , or (ii) if such
termination is effected by Seller's giving of valid written notice to Buyer
pursuant to Subsections 10.1(a)(ii)(C), 10.1(b) or 10.1(c). If Buyer is entitled
to the return of the Earnest Money, Seller shall cooperate with Buyer in taking
such action as is required under the Escrow Agreement in order to effect such
return from the Escrow Agent.
(c) If this Agreement is terminated by Seller's giving of valid
written notice to Buyer pursuant to Subsection 10.1(a)(ii)(A) or (B), Buyer
agrees that Seller shall be entitled to receive upon such termination, as
liquidated damages and not as a penalty, the Earnest Money ("Liquidated Damages
Amount"). SELLER'S RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL CONSTITUTE
PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL BE SELLER'S
SOLE REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH HEREUNDER IF CLOSING DOES NOT
OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE THAT THE LIQUIDATED DAMAGE
AMOUNT IS REASONABLE IN LIGHT OF THE ANTICIPATED HARM WHICH WILL BE CAUSED BY
BUYER'S BREACH OF THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS, THE
INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND
THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
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(d) Notwithstanding any provision of this Agreement to the
contrary, but subject to the provisions of the following sentences, if this
Agreement is terminated by Buyer's giving of written notice to Seller pursuant
to Section 10.1(a) (ii) (A) or (B), Buyer shall not be entitled to damages or
indemnification from Seller. Subject to the following sentence, if Seller
attempts to terminate this Agreement under circumstances where it is not
entitled to do so, or if Seller, by its own action, causes a breach of warranty
or fails to satisfy a condition (including without limitation a refusal to
consummate the transaction after Buyer has satisfied all conditions to Seller's
obligation to close and Buyer has demonstrated its willingness and ability to
close on the terms set forth in this Agreement and Buyer is not in default
hereunder) with the intent of creating a situation whereby Buyer elects to
terminate under Section 10.1(a) (ii) (A) or (B) and Buyer does so elect to
terminate, the monetary damages, if any, to which Buyer shall be entitled shall
be limited to direct and actual damages and shall in no event exceed the
Liquidated Damages Amount in the aggregate. If a circumstance described in the
preceding sentence should arise and if Buyer establishes that the action of
Seller described therein was taken intentionally in order to allow Seller to
sell or enter into negotiations to sell the Station to another party, the
damages to which Buyer shall be entitled shall not be limited to direct and
actual damages.
(e) In any dispute between Buyer and Seller as to which party is
entitled to all or a portion of the Earnest Money, the prevailing party shall
receive, in addition to that portion of the Earnest Money to which it is
entitled, an amount equal to interest on that portion at the rate of 10% per
annum, calculated from the date the prevailing party's demand for all or a
portion of the Earnest Money is received by the Escrow Agent.
10.3 TERMINATION NOTICE. Each notice given by a party pursuant to
Section 10.1 to terminate this Agreement shall specify the Subsection (and
clause or clauses thereof) of Section 10.1 pursuant to which such notice is
given.
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ARTICLE XI
CASUALTY
Upon the occurrence of any casualty loss, damage or destruction
material to the operation of the Station prior to the Closing, Seller shall
promptly give Buyer written notice setting forth in detail the extent of such
loss, damage or destruction and the cause thereof if known. Seller shall use its
reasonable efforts to promptly commence and thereafter to diligently proceed to
repair or replace any such lost, damaged or destroyed property. In the event
that such repair or replacement is not fully completed prior to the Closing
Date, Buyer may elect to postpone the Closing until Seller's repairs have been
fully completed or to consummate the transactions contemplated hereby on the
Closing Date, in which event Seller shall assign to Buyer the portion of the
insurance proceeds (less all reasonable costs and expenses, including without
limitation attorney's fees, expenses and court costs incurred by Seller to
collect such amounts), if any, not previously expended by Seller to repair or
replace the damaged or destroyed property (such assignment of proceeds to take
place regardless of whether the parties close on the scheduled or deferred
Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged
condition. In the event the loss, damage or destruction causes or will cause the
Station to be off the air for more than seven (7) consecutive days or fifteen
(15) total days, whether or not consecutive, then Buyer may elect either (i) to
consummate the transactions contemplated hereby on the Closing Date, in which
event Seller shall assign to Buyer the portion of the insurance proceeds (less
all reasonable costs and expenses, including without limitation attorney's fees,
expenses and court costs, incurred by Seller to collect such amounts), if any,
not previously expended by Seller to repair or replace the damaged or destroyed
property, and Buyer shall accept the damaged Sale Assets in their damaged
condition, or (ii) to terminate this Agreement.
ARTICLE XII
CONTROL OF STATION
Between the date of this Agreement and the Closing Date, Buyer shall
not control, manage or supervise the operation of the Station or conduct of its
business, all of which shall remain the sole responsibility and under the
control of Seller, subject to Seller's compliance with this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.1 FURTHER ACTIONS. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents to the other party as the other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
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13.2 ACCESS AFTER THE CLOSING DATE. After the Closing and for a period
of twelve (12) months, Buyer shall provide Seller, Seller's counsel, accountants
and other representatives with reasonable access during normal business hours to
the books, records, property, personnel, contracts, commitments and documents of
the Station pertaining to transactions occurring prior to the Closing Date when
requested by Seller, and Buyer shall retain such books and records for the
normal document retention period of Buyer. At the request and expense of Seller,
Buyer shall deliver copies of any such books and records to Seller.
13.3 PAYMENT OF EXPENSES.
(a) Any fees assessed by the FCC in connection with the filings
contemplated by Section 5.2 or consummation of the transactions contemplated
hereby shall be shared equally between Seller and Buyer.
(b) All state or local sales or use, stamp or transfer, grant and
other similar taxes payable in connection with consummation of the transactions
contemplated hereby shall be paid by the party primarily liable under applicable
law to pay such tax.
(c) Except as otherwise expressly provided in this Agreement, each
of the parties shall bear its own expenses, including the fees of any attorneys
and accountants engaged by such party, in connection with this Agreement and the
consummation of the transactions contemplated herein.
13.4 SPECIFIC PERFORMANCE. Seller acknowledges that the Station is of a
special, unique, and extraordinary character, and that any breach of this
Agreement by Seller could not be compensated for by damages. Accordingly, if
Seller shall breach its obligations under this Agreement, Buyer shall be
entitled, in addition to any of the remedies that it may have, to enforcement of
this Agreement (subject to obtaining any required approval of the FCC) by decree
of specific performance or injunctive relief requiring Seller to fulfill its
obligations under this Agreement. In any action by Buyer to equitably enforce
the provisions of this Agreement, Seller shall waive the defense that there is
an adequate remedy at law or equity and agrees that Buyer shall have the right
to obtain specific performance of the terms of this Agreement without being
required to prove actual damages, post bond or furnish other security.
13.5 NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier or sent by registered or certified mail, first class, postage prepaid,
or by telex, cable, telegram, facsimile machine or similar written means of
communication, addressed as follows:
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(a) If to Seller, to:
Mr. Joseph Weber, President
JW Broadcasting, Inc.
3406 Old Plantation Road
Atlanta, GA 30327
With a copy to:
Rogers & Hardin, LLP
2700 International Tower
229 Peachtree Street NE
Atlanta, GA 30303
Attention: Michael Rosenzweig, Esq.
Telephone: (404) 420-2609
Facsimile: (404) 525-2224
(b) if to Buyer, to:
c/o Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Esq.
Associate General Counsel
Telephone: (805) 987-0400 ext. 106
Facsimile No.: (805) 384-4505
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third (3rd) business day following the date
mailed, and (ii) if personally delivered or otherwise sent as provided above, on
the date received.
13.6 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits
hereto, and the other Documents constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements, understandings or
arrangements between the parties with respect to the subject matter hereof.
13.7 BINDING EFFECT; BENEFITS. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or assigns. Except to the extent
specified herein, nothing in this Agreement, express or implied, shall confer on
any person other than the parties hereto and their respective successors or
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
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13.8 ASSIGNMENT. This Agreement and any rights hereunder shall not be
assignable by either party hereto without the prior written consent of the other
party.
13.9 GOVERNING LAW. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Georgia, including all
matters of construction, validity and performance.
13.10 BULK SALES. Buyer hereby waives compliance by Seller with the
provisions of the Bulk Sales Act and similar laws of any state or jurisdiction,
if applicable. Seller shall, in accordance with Article IX, indemnify and hold
Buyer harmless from and against any and all claims made against Buyer by reason
of such non-compliance.
13.11 AMENDMENTS AND WAIVERS. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.
13.12 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is invalid or
unenforceable in any jurisdiction, (i) a suitable and equitable provision shall
be substituted therefor in order to carry out, so far as may be valid and
enforceable, the extent and purpose of such invalid and unenforceable provision,
and (ii) the remainder of this Agreement and the application of such provision
to other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
13.13 HEADINGS. Except as provided in Article I, the captions in this
Agreement are for convenience of reference only and shall not define or limit
any of the terms or provisions hereof.
13.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by either party on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
13.15 REFERENCES. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.
13.16 SCHEDULES AND EXHIBITS. Unless otherwise specified herein, each
Schedule and Exhibit referred to in this Agreement is attached hereto, and each
such Schedule and Exhibit is hereby incorporated by reference and made a part
hereof as if fully set forth herein.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written.
"SELLER" "BUYER "
JW BROADCASTING, INC. SALEM MEDIA OF GEORGIA, INC.
By: By:
------------------------------- --------------------------------
Name: Joseph Weber Eric H. Halvorson
Title: President Executive Vice President
"PARENT"
SALEM COMMUNICATIONS CORPORATION
By:
--------------------------------
Eric H. Halvorson
Executive Vice President
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