Document/Exhibit Description Pages Size
1: 10-Q Paxson Communications Form 10-Q 22 143K
2: EX-4.2 Second Amendment, Dated May 2, 1997 With Respect 7 21K
3: EX-10.158 Loan Agreement by and Between Paxson Communication 22 82K
4: EX-10.159 Asset Purchase Agreement by and Between Paxson 33 123K
5: EX-10.160 Asset Purchase Agreement Dated May 5, 1997 by 41 169K
6: EX-10.161 Asset Purchase Agreement Dated April 15, 1997 32 126K
7: EX-10.162 Assignment and Acceptance Agreement Dated April 18 20 59K
8: EX-10.164 Asset Purchase Agreement Dated April 22, 1997 39 157K
9: EX-10.165 Asset Purchase Agreement Dated April 22, 1997 39 162K
10: EX-10.166 Asset Purchase Agreement Dated, April 30, 1997 40 168K
11: EX-10.167 Asset Purchase Agreement Dated May 12, 1997 50 147K
12: EX-10.167.1 Time Brokerage Agreement, Dated May, 1997 20 84K
13: EX-27 Financial Data Schedule 1 8K
EX-10.160 — Asset Purchase Agreement Dated May 5, 1997 by
Exhibit Table of Contents
EXHIBIT 10.160
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ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF CEDAR RAPIDS-48, INC.,
FANT BROADCASTING COMPANY OF IOWA, INC.
AND
PAXSON COMMUNICATIONS CORPORATION
FOR
TELEVISION STATION KTVC-TV
CEDAR RAPIDS, IOWA
* * *
May 5, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS...........................................................................................1
"Accounts Receivable"....................................................................................1
"Assets".................................................................................................1
"Assumed Contracts"......................................................................................1
"Closing"................................................................................................1
"Closing Date"...........................................................................................2
"Consents"...............................................................................................2
"Contracts"..............................................................................................2
"Escrow Agent"...........................................................................................2
"Escrow Agreement".......................................................................................2
"FCC"....................................................................................................2
"FCC Consent"............................................................................................2
"FCC Licenses"...........................................................................................2
"Final Order"............................................................................................2
"Intangibles"............................................................................................2
"Licenses"...............................................................................................3
"LPTV Purchase Agreement"................................................................................3
"PCC Shares".............................................................................................3
"Purchase Price".........................................................................................3
"Real Property"..........................................................................................3
"Tangible Personal Property".............................................................................3
"Time Brokerage Agreement"...............................................................................3
"To the best knowledge of Seller"........................................................................3
SECTION 2. PURCHASE AND SALE OF ASSETS...........................................................................4
2.1 Agreement to Sell and Buy.......................................................................4
2.2 Excluded Assets.................................................................................4
2.3 Purchase Price..................................................................................5
2.4 Payment of Purchase Price.......................................................................6
2.5 Assumption of Liabilities and Obligations.......................................................7
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER..............................................................7
3.1 Organization, Standing, and Authority...........................................................7
3.2 Authorization and Binding Obligation............................................................7
3.3 Absence of Conflicting Agreements...............................................................8
3.4 Governmental Licenses...........................................................................8
3.5 Title to and Condition of Real Property.........................................................9
3.6 Title to and Condition of Tangible Personal Property............................................9
3.7 Contracts......................................................................................10
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3.8 Consents.......................................................................................10
3.9 Intangibles....................................................................................10
3.10 Accredited Investor; Investment Knowledge; Distribution........................................10
3.11 Reports........................................................................................11
3.12 Personnel......................................................................................11
3.13 Taxes..........................................................................................12
3.14 Claims and Legal Actions.......................................................................12
3.15 Environmental Matters..........................................................................13
3.16 Compliance with Laws...........................................................................14
3.17 Full Disclosure................................................................................14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER..............................................................14
4.1 Organization, Standing, and Authority..........................................................14
4.2 Authorization and Binding Obligation...........................................................14
4.3 Absence of Conflicting Agreements..............................................................15
4.4 PCC Shares.....................................................................................15
4.5 Buyer Qualifications...........................................................................15
4.6 Full Disclosure................................................................................15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING...........................................................15
5.1 Generally......................................................................................15
5.2 Compensation...................................................................................16
5.3 Contracts......................................................................................16
5.4 Disposition of Assets..........................................................................16
5.5 Encumbrances...................................................................................16
5.6 Licenses.......................................................................................16
5.7 Rights.........................................................................................16
5.8 No Inconsistent Action.........................................................................16
5.9 Access to Information..........................................................................16
5.10 Maintenance of Assets..........................................................................17
5.11 Insurance......................................................................................17
5.12 Consents.......................................................................................17
5.13 Books and Records..............................................................................17
5.14 Notification...................................................................................18
5.15 Compliance with Laws...........................................................................18
5.16 Financing Leases...............................................................................18
5.17 Preservation of Business.......................................................................18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS.....................................................................18
6.1 FCC Consent....................................................................................18
6.2 Control of the Station.........................................................................19
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6.3 Risk of Loss...................................................................................19
6.4 Confidentiality................................................................................19
6.5 Environmental Audit............................................................................19
6.6 Engineering Study..............................................................................19
6.7 Cooperation....................................................................................19
6.8 Bulk Sales Law.................................................................................20
6.9 Title Insurance and Surveys....................................................................20
6.10 Sales Tax Filings..............................................................................21
6.11 Access to Books and Records....................................................................21
6.12 Noncompetition Agreement.......................................................................21
6.13 HSR Act Filing.................................................................................21
6.14 Broker.........................................................................................21
6.15 Cable Proceedings..............................................................................21
6.16 Allocation of Purchase Price...................................................................22
6.17 Parent Guaranty................................................................................22
6.18 Registration Rights............................................................................22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING.....................................................................................22
7.1 Conditions to Obligations of Buyer.............................................................22
7.2 Conditions to Obligations of Seller............................................................23
SECTION 8. CLOSING AND CLOSING DELIVERIES.......................................................................24
8.1 Closing........................................................................................24
8.2 Deliveries by Seller...........................................................................24
8.3 Deliveries by Buyer............................................................................25
SECTION 9. TERMINATION..........................................................................................26
9.1 Termination by Seller..........................................................................26
9.2 Termination by Buyer...........................................................................27
9.3 Rights on Termination..........................................................................28
9.4 Escrow Deposit.................................................................................28
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES............................................................29
10.1 Representations and Warranties.................................................................29
10.2 Indemnification by Seller......................................................................29
10.3 Indemnification by Buyer.......................................................................29
10.4 Procedure for Indemnification..................................................................30
10.5 Specific Performance...........................................................................31
10.6 Attorneys' Fees................................................................................31
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10.7 Limitation.....................................................................................31
SECTION 11. MISCELLANEOUS.......................................................................................31
11.1 Fees and Expenses..............................................................................31
11.2 Arbitration....................................................................................32
11.3 Notices........................................................................................32
11.4 Benefit and Binding Effect.....................................................................33
11.5 Further Assurances.............................................................................33
11.6 Governing Law..................................................................................33
11.7 Headings.......................................................................................34
11.8 Gender and Number..............................................................................34
11.9 Entire Agreement...............................................................................34
11.10 Waiver of Compliance; Consents.................................................................34
11.11 Press Release..................................................................................34
11.12 Counterparts...................................................................................34
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LIST OF SCHEDULES AND EXHIBITS
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Schedule 2.2 -- Excluded Assets
Schedule 2.4 -- Form of Promissory Note
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.12 -- Employee Matters
Schedule 6.12 -- Form of Noncompetition Agreement
Schedule 8.2(g) -- Form of Opinion of Seller's Counsel
Schedule 8.3(d) -- Form of Opinion of Buyer's Counsel
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the ___ day of
_________,1997, by and between Paxson Communications of Cedar Rapids-48,
Inc., a Florida corporation ("Buyer"), Fant Broadcasting Company of Iowa,
Inc., an Alabama corporation ("Seller"), and, for purposes of Section 6.17
hereof, Paxson Communications Corporation, a Delaware corporation ("PCC").
R E C I T A L S
A. Seller is the licensee of and owns and operates television
station KTVC(TV), Cedar Rapids, Iowa (the "Station") pursuant to licenses issued
by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights to payment for the sale of
advertising time run on the Station prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are specifically designated on Schedule 3.7 as Contracts that are to be assumed
by Buyer upon its purchase of the Station, and (ii) any Contracts entered into
by Seller between the date of this Agreement and the Closing Date that Buyer
agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
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"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or which are binding upon Seller and which
relate to or affect the Assets or the business or operations of the Station, and
(i) which are in effect on the date of this Agreement or (ii) which are entered
into by Seller between the date of this Agreement and the Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by Seller
or under which Seller is licensed or franchised and which are used or useful
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in the business and operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations issued
by the FCC, the Federal Aviation Administration, or any other federal, state, or
local governmental authorities to Seller in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"LPTV Purchase Agreement" means the Asset Purchase Agreement dated as
of the date hereof, among Paxson Communications of Buffalo-51, Inc., Fant
Broadcasting of New York, L.L.C. and Anthony J. Fant concerning the sale of the
construction permit for WAQF-TV, Batavia, New York, and the assets used or
useful in the business or operations of Low Power Television Stations W69CS,
Buffalo, New York, and W63BM, Rochester, New York.
"PCC Shares" means Six Hundred Thousand (600,000) shares of the Class A
Common Stock of Paxson Communications Corporation, par value $.001 per share,
listed for trading on the American Stock Exchange under the symbol "PXN."
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property which is owned by Seller and
is used or useful in the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as
of the date hereof between Buyer and Seller pursuant to which Buyer shall
provide programming for broadcast on the Station.
"To the best knowledge of Seller" means to the actual knowledge of
Anthony J. Fant after reasonable inquiry, including, where appropriate, inquiry
to the employee or agent of Seller with responsibility for the construction or
operation of the Station.
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SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer agrees to purchase, all of the tangible and
intangible assets used or useful in connection with the conduct of the business
or operations of the Station, together with any additions thereto between the
date of this Agreement and the Closing Date, but excluding the assets described
in Section 2.2, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges, or encumbrances of any nature
whatsoever (except for liens for current taxes not yet due and payable),
including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) The Accounts Receivable as of 11:59 p.m., Cedar
Rapids, Iowa time, on the day prior to the Closing Date;
(h) All choses in action of Seller relating to the
Station; and
(i) All books and records relating to the business or
operations of the Station (other than those books and records described in
Section 2.2(b)), including executed copies of the Assumed Contracts, and all
records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar
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items and cash surrender value in regard thereto; and any stocks, bonds,
certificates of deposit and similar investments;
(b) All books and records that Seller is required by law
to retain and that pertain to Seller's corporate organization and all books and
records that are required by Seller to prepare its tax returns or to
substantiate information reported to federal and state governmental authorities;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements; and
(d) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Seller set forth in the Noncompetition Agreement referred to in
Section 6.12 shall be Five Million Dollars ($5,000,000), adjusted as provided
below (as adjusted, the "Cash Purchase Price"), plus the PCC Shares:
(a) Prorations. The Cash Purchase Price shall be
increased or decreased as required to effectuate the proration of expenses,
other than expenses for which Buyer is obligated to reimburse Seller under the
Time Brokerage Agreement. All expenses arising from the operation of the Station
that are prepaid or deferred by Seller, including business and license fees,
utility charges, real and personal property taxes and assessments levied against
the Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, taxes (except for taxes arising from the transfer of
the Assets under this Agreement), FCC annual regulatory fees and similar prepaid
and deferred items, other than any such expenses for which Buyer is obligated to
reimburse Seller under the Time Brokerage Agreement, shall be prorated between
Buyer and Seller in accordance with the principle that Seller shall be
responsible for all expenses, costs, and liabilities allocable to the period
prior to the Closing Date (subject to reimbursement by Buyer to the extent
provided in the Time Brokerage Agreement), and Buyer shall be responsible for
all expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Cash
Purchase Price
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under Section 2.3(a). The preliminary settlement statement (i) shall contain all
information reasonably necessary to determine the adjustments to the Cash
Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects as
of the date thereof.
(c) Non-Dilution. If at any time after the date hereof
and prior to the Closing Date, PCC shall effect (i) a dividend or other
distribution upon the Class A Common Stock of PCC payable in Class A Common
Stock of PCC or other property (other than cash), including common stock,
preferred stock or other securities of PCC, (ii) a combination of the
outstanding shares of Class A Common Stock of PCC into a smaller number of such
shares, (iii) a subdivision of the outstanding shares of Class A Common Stock of
PCC into a larger number of such shares, or (iv) any other reorganization,
restructuring, recapitalization or reclassification of the Class A Common Stock
of PCC (or any merger, consolidation, business combination or other similar
transaction involving another entity), such that in any such event set forth in
(i)-(iv) the holders of the outstanding shares of Class A Common Stock of PCC
shall be entitled to receive (either directly or upon subsequent liquidation)
any combination of shares of stock, other securities, cash or other property
with respect to or in exchange for such shares of Class A Common Stock of PCC
(any such event set forth in (i)-(iv) above shall be referred to as a "Diluting
Event"), then Seller shall be entitled to receive on the Closing Date (under the
same terms and conditions otherwise applicable to its receipt of the PCC
Shares), the following:
(1) if the Diluting Event results in an exchange
of shares of Class A Common Stock of PCC for any combination of shares of stock,
other securities, cash or other property, Seller shall receive, in lieu of the
shares of Class A Common Stock of PCC to which it is entitled pursuant to the
terms of this Agreement, such shares of stock, other securities, cash or other
property as may be issued or payable by virtue of the Diluting Event in exchange
for that number of shares of Class A Common Stock of PCC which Seller would have
received had the Closing occurred immediately prior to the Diluting Event;
(2) if the Diluting Event results in an issuance
or payment with respect to the Class A Common Stock of PCC, Seller shall
receive, in addition to the shares of Class A Common Stock of PCC to which it is
entitled pursuant to the terms of this Agreement, such shares of stock, other
securities, cash or other property (or any combination thereof) as may be issued
or payable by virtue of the Diluting Event on the basis of the number of shares
of Class A Common Stock of PCC which Seller would have received had the Closing
occurred immediately prior to the Diluting Event.
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to Seller on the Closing Date as follows: (a) Buyer shall deliver to
Seller its Demand
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Promissory Note in the principal amount of the Cash Purchase Price, which Demand
Promissory Note shall be substantially in the form of Schedule 2.4 hereto, and
(b) Buyer shall cause PCC to issue and deliver to Seller the PCC Shares.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the Closing, (iv) any
obligations or liabilities arising under capitalized leases or other financing
agreements, (v) any obligations or liabilities arising under agreements entered
into other than in the ordinary course of business and not included in the
Assumed Contracts, (vi) any obligations or liabilities of Seller under any
employee pension, retirement, health and welfare or other benefit plans or
collective bargaining agreements, (vii) any obligation to any employee of Seller
for severance benefits, vacation time, or sick leave accrued prior to the
Closing Date, or (viii) any obligations or liabilities caused by, arising out
of, or resulting from any action or omission of Seller prior to the Closing, and
all such obligations and liabilities shall remain and be the obligations and
liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Alabama. Seller has all requisite power and authority (i) to own,
lease, and use the Assets as now owned, leased, or used, (ii) to conduct the
business and operations of the Station as now conducted, and (iii) to execute
and deliver this Agreement, the Escrow Agreement and the documents contemplated
hereby and thereby, and to perform and comply with all of the terms, covenants,
and conditions to be performed and complied with by Seller hereunder and
thereunder. Seller is not a participant in any joint venture or partnership with
any other person or entity with respect to any part of the operations of the
Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by Seller have been
duly authorized by all necessary actions on the part of Seller and its
shareholder. This Agreement and the Escrow Agreement have been duly executed and
delivered by Seller and constitute the legal, valid, and binding obligations of
Seller, enforceable against it in accordance with
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their respective terms except as the enforceability of this Agreement and the
Escrow Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, and by judicial discretion in the
enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3 and making any filing required under the HSR
Act, the execution, delivery, and performance of this Agreement and the Escrow
Agreement and the documents contemplated hereby and thereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent of
any third party; (ii) will not conflict with any provision of the Articles of
Incorporation or Bylaws of Seller; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (iv) will not conflict with, constitute grounds for termination
of, result in a breach of, constitute a default under, or accelerate or permit
the acceleration of any performance required by the terms of, any agreement,
instrument, license, or permit to which Seller is a party or by which Seller may
be bound, other than such conflicts, terminations, breaches, defaults or
accelerations that would not (x) have a material adverse effect on the Assets,
business or operations of Seller and (y) delay or prevent the Closing; and (v)
will not create any claim, liability, mortgage, lien, pledge, condition, charge,
or encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would limit
the full operation of the Station as now operated. The Licenses are in full
force and effect, and the conduct of the business and operations of the Station
is in accordance therewith. Seller has no reason to believe that any of the
Licenses would not be renewed by the FCC or other granting authority in the
ordinary course. The Station's city of license, as determined by the FCC, is
located within the Cedar Rapids-Waterloo-Dubuque Area of Dominant Influence as
defined by the 1991-1992 Area of Dominant Influence Market Guide published by
The Arbitron Co. and the Cedar Rapids-Waterloo-Dubuque Designated Market Area as
defined by the 1996 United States Television Household Estimates published by
Nielsen Media Research. As of the date hereof, Seller has made a valid election
of must carry with respect to each cable system located within the Station's
Area of Dominant Influence, no cable system has advised Seller of any copyright
indemnity or other prerequisite to cable carriage of the Station's signal, and
no cable system has declined or threatened to decline such carriage or failed to
respond to a request for carriage or sought any form of relief from carriage
from the FCC.
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3.5 Title to and Condition of Real Property. Schedule 3.5 contains
a complete and accurate description of all the Real Property and Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. Seller has good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements thereon) included in the Real Property, free and
clear of all liens, mortgages, pledges, covenants, easements, restrictions,
encroachments, leases, charges, and other claims and encumbrances of any nature
whatsoever, and without reservation or exclusion of any mineral, timber, or
other rights or interests, except for liens for real estate taxes not yet due
and payable and liens disclosed on Schedule 3.5. With respect to each leasehold
or subleasehold interest included in the Real Property being conveyed under this
Agreement so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment, and no
third party holds any interest in the leased premises with the right to
foreclose upon Seller's leasehold or subleasehold interest. All towers, guy
anchors, and buildings and other improvements included in the Assets are located
entirely on the Real Property listed in Schedule 3.5. Seller has delivered to
Buyer true and complete copies of all deeds pertaining to the Real Property. All
Real Property (including the improvements thereon), to the best knowledge of
Seller, (i) is in good condition and repair consistent with its present use,
(ii) is available for immediate use in the conduct of the business and
operations of the Station, and (iii) complies with all applicable building or
zoning codes and the regulations of any governmental authority having
jurisdiction. Seller has not received any notice that it does not have full
legal and practical access to the Real Property. All easements, rights-of-way,
and real property licenses have been properly recorded in the appropriate public
recording offices, except for those the failure of which to be recorded will not
adversely affect the full legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Station as now conducted. Except as described in Schedule 3.6, Seller owns
and has good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Station. All items of transmitting and studio equipment
included in the Tangible Personal Property (i) is in good condition and repair
consistent with its present use and (ii) will permit the Station and any
auxiliary broadcast facilities related to the Station to operate in accordance
with the terms of the FCC Licenses and the rules and regulations of the FCC, and
with all other applicable federal, state, and local statutes, ordinances, rules,
and regulations.
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3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts. Seller has delivered to Buyer true and complete copies of all written
Contracts, true and complete memoranda of all oral Contracts (including any
amendments and other modifications to such Contracts), and a schedule
summarizing Seller's obligations under trade and barter agreements relating to
the Station. Other than the Contracts listed on Schedule 3.7, Seller requires no
contract, lease, or other agreement to enable it to carry on its business as now
conducted. All of the Assumed Contracts are in full force and effect, and are
valid, binding, and enforceable in accordance with their terms. There is not
under any Assumed Contract any default by Seller or, to the best knowledge of
Seller, any other party thereto or any event that, after notice or lapse of time
or both, could constitute a default. Seller is not aware of any intention by any
party to any Assumed Contract (i) to terminate such contract or amend the terms
thereof, (ii) to refuse to renew the Assumed Contract upon expiration of its
term, or (iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Seller has full legal power and
authority to assign its rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Schedule 3.3, and any filing required
under the HSR Act, no consent, approval, permit, or authorization of, or
declaration to or filing with any governmental or regulatory authority, or any
other third party is required (i) to consummate this Agreement and the
transactions contemplated hereby, including, without limitation, the assignment
and transfer of the Assets to Buyer, or (ii) to enable Buyer to conduct the
business and operations of the Station in essentially the same manner as such
business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. To the best knowledge
of Seller, Seller is not infringing upon or otherwise acting adversely to any
trademarks, trade names, service marks, service names, copyrights, patents,
patent applications, know-how, methods, or processes owned by any other person
or persons, and there is no claim or action pending, or to the knowledge of
Seller threatened, with respect thereto. The Intangibles listed on Schedule 3.9
comprise all intangible property interests necessary to conduct the business and
operations of the Station as now conducted.
3.10 Accredited Investor; Investment Knowledge; Distribution.
Seller is an accredited investor within the meaning of Rule 501 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). Seller has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the risks and merits of its investment in PCC, and it
is capable of bearing the economic risks of such investment.
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Seller has had an opportunity to discuss the business, management and financial
affairs of PCC with PCC's representatives and has had its questions concerning
PCC and its business answered to its full satisfaction. The PCC Shares to be
transferred hereunder to Seller are being acquired for Seller's own account for
the purpose of investment and not with a view to or for resale (other than to an
affiliate of Seller) in connection with any distribution thereof or interest
therein. Seller understands that (i) such PCC Shares have not been registered
under the Securities Act by reason of their issuance in a transaction exempt
from the registration requirements of the Securities Act pursuant to Section
4(2) thereof, (ii) such PCC Shares must be held indefinitely unless subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration, and (iii) such PCC Shares shall bear a legend to such effect.
3.11 Reports. All returns, reports, and statements that the Station
is currently required to file with the FCC or with any other governmental agency
have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller and the Station have
been complied with. All of such returns, reports, and statements are
substantially complete and correct as filed.
3.12 Personnel.
(a) Except as listed on Schedule 3.12, Seller does not
have any Employee Plan or Compensation Arrangement with respect to any employee
of the Station. Schedule 3.12 also contains a true and complete list of all
employees of the Station, their job description, date of hire, salary and amount
and date of last salary increase.
(b) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan as
defined in Section 3(3) of ERISA to which Seller or any entity related to Seller
(under the terms of Section 414(b), (c), (m) or (o) of the Code) contributes or
to which Seller or any entity related to Seller (under the terms of Sections
414(b), (c), (m) or (o) of the Code) sponsors, maintains or otherwise is bound
which provides benefits to persons employed or previously employed at the
Station; (ii) "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor thereto and any regulations promulgated thereunder; (iii)
"Compensation Arrangement" shall mean any plan or compensation arrangement other
than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of Seller or
any entity related to Seller (under the terms of Section 414(b), (c), (m) or (o)
of the Code) employed or previously employed at the Station any compensation or
other benefits, whether deferred or not, in excess of base salary or wages,
including, but not limited to, any bonus or incentive plan, stock rights plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other employee fringe benefit
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plan; and (iv) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, any successor thereto and any regulations promulgated
thereunder.
(c) Seller is not a party to or subject to any collective
bargaining agreements with respect to the Station. Seller has no written or oral
contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7. No controversies, disputes, or proceedings are pending
or, to the best of Seller's knowledge, threatened, between Seller and any
employee (singly or collectively) of the Station. No labor union or other
collective bargaining unit represents or claims to represent any of the
employees of the Station. To the best knowledge of Seller, there is no union
campaign being conducted to represent any employees of the Station or to solicit
cards from employees to authorize a union to request a National Labor Relations
Board certification election with respect to any employees at the Station.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid all
taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and no event has occurred that could impose on Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from
Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the best knowledge of Seller threatened,
against or relating to Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of the
Station, nor does Seller know of any basis for the same. In particular, but
without limiting the generality of the foregoing, there are no applications,
complaints or proceedings pending or, to the best knowledge of Seller,
threatened (i) before the FCC relating to the business or operations of the
Station other than rule making proceedings which affect the broadcasting
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
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3.15 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or, to the best
of Seller's knowledge, commenced against Seller in connection with its ownership
or operation of the Station alleging any failure to comply with any such law,
rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and there is
no basis related to the past or present operations, properties, or facilities of
Seller for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Seller giving rise to any such
liability) under any law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning release or threatened release of
hazardous substances, public health and safety, or pollution or protection of
the environment.
(c) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and Seller has
not handled or disposed of any substance, arranged for the disposal of any
substance, or owned or operated any property or facility in any manner that
could form the basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand (under the common law or
pursuant to any statute) against Seller giving rise to any such liability) for
damage to any site, location, or body of water (surface of subsurface) or for
illness or personal injury.
(d) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and there is
no basis for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Seller giving rise to any such
liability) under any law, rule, or regulation of any federal, state, or local
government (or agency thereof) concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has no
liability relating to its ownership and operation of the Station (and Seller has
not exposed any employee to any substance or condition that could form the basis
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to statute)
against Seller giving rise to any such liability) for any illness or personal
injury to any employee.
(f) To the best of Seller's knowledge, in connection with
its ownership or operation of the Station, Seller has obtained and been in
compliance in all material respects with all of the terms and conditions of all
permits, licenses, and other authorizations which
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are required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health and
safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes.
3.16 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. To the best knowledge of Seller, neither the ownership
or use of the properties of the Station nor the conduct of the business or
operations of the Station conflicts with the rights of any other person or
entity.
3.17 Full Disclosure. No representation or warranty made by Seller
in this Agreement or any certificate to be furnished by Seller at Closing
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact required to make any statement made herein
or therein not misleading in any such case that was knowingly or willfully made
or omitted, as the case may be, by Seller.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of Iowa. Buyer has all requisite power and
authority to execute and deliver this Agreement and the Escrow Agreement and the
documents contemplated hereby and thereby, and to perform and comply with all of
the terms, covenants, and conditions to be performed and complied with by Buyer
hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by Buyer have been
duly authorized by all necessary actions on the part of Buyer. This Agreement
and the Escrow Agreement have been duly executed and delivered by Buyer and
constitute the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement
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may be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and by judicial discretion in the enforcement of equitable
remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and making any filing required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the Escrow Agreement
and the documents contemplated hereby and thereby (with or without the giving of
notice, the lapse of time, or both): (i) do not require the consent of any third
party; (ii) will not conflict with the Articles of Incorporation or Bylaws of
Buyer; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality; or (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Buyer is a party or by which Buyer may be bound, such that Buyer
could not acquire or operate the Assets.
4.4 PCC Shares. The PCC Shares to be transferred to Seller under
Section 2.3 will be duly authorized, validly issued, fully paid and
nonassessable when transferred to Seller pursuant to this Agreement.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, and the rules,
regulations and policies of the FCC as now in effect. Buyer knows of no fact
that would, under existing law and the existing rules, regulations, policies and
procedures of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as
the owner and operator of the Station.
4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business (except where such conduct (a) has been
delegated to Buyer pursuant to the terms of the Time Brokerage Agreement or (b)
would conflict with the following covenants or with Seller's other obligations
under this Agreement), and in accordance with the other covenants in this
Section 5.
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5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station, except
in accordance with past practices or as disclosed in writing to Buyer.
5.3 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that will be binding on Buyer after Closing, except for cash time
sales agreements made in the ordinary course of business. Prior to the Closing
Date, Seller shall deliver to Buyer a list of all Contracts entered into between
the date of this Agreement and the Closing Date, together with copies of such
Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with due
diligence any applications to any governmental authority in connection with the
operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets.
5.8 No Inconsistent Action. Subject to Seller's obligations under
Section 5.15 hereof, Seller shall not take any action that is inconsistent with
its obligations under this Agreement or that could hinder or delay the
consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives reasonable
access to the Assets and to all
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other properties, equipment, books, records, Contracts, and documents relating
to the Station for the purpose of audit and inspection, including inspections
incident to the environmental study described in Section 6.5 and the engineering
study described in Section 6.6, and will furnish or cause to be furnished to
Buyer or its authorized representatives all information with respect to the
affairs and business of the Station that Buyer may reasonably request (including
any financial reports and operations reports produced with respect to the
affairs and business of the Station). Without limiting the generality of the
foregoing, Seller shall give Buyer and its counsel, accountants and other
authorized representatives reasonable access to Seller's financial records and
Seller's employees, counsel, accountants and other representatives for the
purpose of preparing and auditing such financial statements as Buyer determines,
in its sole judgment, are required or advisable to comply with federal or state
securities laws and the rules and regulations of securities markets as a result
of the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5.10 Maintenance of Assets. Subject to the Time Brokerage
Agreement, Seller shall use its best efforts and take all reasonable actions to
maintain all of the Assets in good condition (ordinary wear and tear excepted),
and use, operate, and maintain all of the Assets in a reasonable manner and in
accordance with the terms of the FCC Licenses, all rules and regulations of the
FCC and generally accepted standards of good engineering practice. Seller shall
maintain inventories of spare parts and expendable supplies at levels consistent
with past practices. If any loss, damage, impairment, confiscation, or
condemnation of or to any of the Assets occurs, Seller shall repair, replace, or
restore the Assets to their prior condition as represented in this Agreement as
soon thereafter as possible, and Seller shall use the proceeds of any claim
under any insurance policy solely to repair, replace, or restore any of the
Assets that are lost, damaged, impaired, or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets as contemplated by the Time Brokerage
Agreement.
5.12 Consents. Seller shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
senior lenders may request.
5.13 Books and Records. Seller shall maintain its books and records
relating to the Station in accordance with past practices.
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5.14 Notification. Seller shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Station.
5.15 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.16 Financing Leases. Seller will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.17 Preservation of Business. Subject to the Time Brokerage
Agreement, Seller shall use its best efforts to preserve the business and
organization of the Station and use its best efforts to keep available to the
Station its present employees and to preserve the audience of the Station and
the Station's present relationships with suppliers, advertisers, and others
having business relations with it, to the end that the business, operations, and
prospects of the Station shall be unimpaired at the Closing Date.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party shall
have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension of
the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
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6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing;
provided, however, that Buyer shall be entitled to provide programming to the
Station pursuant to the Time Brokerage Agreement.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing; provided, however,
that any such loss or damage that is caused by Buyer's actions while the Time
Brokerage Agreement is in effect shall not relieve Buyer of its obligations to
acquire the Assets in accordance with the terms hereof.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable.
6.6 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the survey discloses any material
deficiencies in the operations or equipment of the Station, Buyer shall so
notify Seller as soon as practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding
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the foregoing, Buyer shall have no obligation (i) to expend funds to obtain any
of the Consents or (ii) to agree to any adverse change in any License or Assumed
Contract to obtain a Consent required with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the State
of Iowa shall be complied with by Seller. Any loss, liability, obligation, or
cost suffered by Seller or Buyer as the result of the failure of Seller or Buyer
to comply with the provisions of any bulk sales law applicable to the transfer
of the Assets as contemplated by this Agreement shall be borne by Seller.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each
parcel of Real Property that Seller owns, Seller will cooperate with Buyer to
enable Buyer to obtain, at Buyer's expense, at or prior to Closing, an ALTA
Owner's Policy of Title Insurance Form B-1987 (or equivalent policy acceptable
to Buyer), issued by a title insurer satisfactory to Buyer, in an amount equal
to the fair market value of the property and any improvements thereon (as
reasonably determined by Buyer), insuring title to such parcel to be in the name
of Buyer as of the Closing, subject only to liens or encumbrances expressly
permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall (1) insure title to the Real Property described in the policy
and all recorded easements benefitting such Real Property, (2) contain an
"extended coverage endorsement" insuring over the general exceptions customarily
contained in title policies, (3) contain an ALTA Zoning Endorsement 3.1 (or
equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6) contain
a "contiguity" endorsement with respect to any Real Property consisting of more
than one record parcel, and (7) not be subject to any survey exception or any
defect or encroachment disclosed by a survey delivered with respect to the
property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Seller will cooperate with Buyer to enable Buyer to procure, at
Buyer's expense, a current survey of the parcel, prepared by a licensed surveyor
and conforming to current ALTA Minimum Detail Requirements for Land Title
Surveys, disclosing the location of all improvements, easements, party walls,
sidewalks, roadways, utility lines, and other matters customarily shown on such
surveys, and showing access affirmatively to public streets and roads.
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6.10 Sales Tax Filings. Seller shall file Iowa sales tax returns
with respect to the Station as required by law and shall concurrently deliver
copies of all such returns to Buyer.
6.11 Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets that are not included in the Assets.
Buyer shall provide Seller access and the right to copy for a period of three
years from the Closing Date any books and records relating to the Assets.
6.12 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.12, and $100,000
of the Purchase Price shall be allocated to the covenants of Seller set forth
therein on the Closing Date.
6.13 HSR Act Filing. Seller and Buyer agree to (a) file, or cause
to be filed, with the U.S. Department of Justice ("DOJ") and Federal Trade
Commission ("FTC") all filings, if any, which are required in connection with
the transactions contemplated hereby under the HSR Act within ten (10) business
days of the date of this Agreement; (b) submit to the other party, prior to
filing, their respective HSR Act filings to be made hereunder, and to discuss
with the other any comments the reviewing party may have; (c) cooperate with
each other in connection with such HSR Act filings, which cooperation shall
include furnishing the other with any information or documents in such party's
possession that may be reasonably required in connection with such filings; (d)
promptly file, after any request by the FTC or DOJ, any information or documents
requested by the FTC or DOJ; and (e) furnish each other with any correspondence
from or to, and notify each other of any other communications with, the FTC or
DOJ which relates to the transactions contemplated hereunder, and to the extent
practicable, to permit each other to participate in any conferences with the FTC
or DOJ.
6.14 Broker. Buyer represents and warrants that neither it nor any
person or entity acting on its behalf has incurred any liability for any
finders' or brokers' fees or commissions in connection with the transactions
contemplated by this Agreement. Seller shall be solely responsible for any
brokerage commissions due and payable with respect to this transaction and shall
hold Buyer harmless from any such liability.
6.15 Cable Proceedings. Seller shall promptly provide Buyer with
copies of all pleadings, correspondence and other documents filed or received by
Seller that involve the rights of the Station to be carried on cable television
systems and shall promptly advise Buyer of any material developments with
respect to such carriage. Seller shall consult with Buyer prior to making the
election regarding must-carry/retransmission consent for cable systems within
the Cedar Rapids-Waterloo-Dubuque ADI, and Seller shall not make any such
election without Buyer's approval, which shall not be unreasonably withheld.
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6.16 Allocation of Purchase Price. Seller and Buyer shall use their
good faith efforts to agree to an allocation of the Purchase Price among the
Assets for purposes of Section 1060 of the Code and Temporary Treasury
Regulation Section 1.1060-1T. Subject to such agreement, Buyer and Seller agree
to use such allocation in filing as part of their respective federal income tax
returns, an initial asset acquisition statement and any supplemental statements
on Internal Revenue Service Form 8594 required by Temporary Treasury Regulation
Section 1.1060-1T.
6.17 Parent Guaranty. Paxson Communications Corporation, a Delaware
corporation, of which Buyer is an indirect, wholly-owned subsidiary, hereby
fully and unconditionally guarantees all obligations of Buyer hereunder.
6.18 Registration Rights. Buyer agrees to cause PCC to register
with the Securities and Exchange Commission the PCC Shares to be issued and
delivered to Buyer hereunder pursuant to the Securities Act in accordance with
and subject to the terms and conditions set forth on Schedule 6.18.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Consents. All Consents (other than any Consents for
Contracts that are not designated as "Material Consents" on Schedule 3.7) shall
have been obtained and delivered to Buyer without any material adverse change in
the terms or conditions of any agreement or any governmental license, permit, or
other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
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(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have a material adverse effect on the Station or the conduct
of its business and operations. No proceeding shall be pending or threatened the
effect of which would be reasonably likely to revoke, cancel, fail to renew,
suspend, or modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Material Adverse Change. Between the date of this
Agreement and the Closing Date, there shall have been no material adverse change
in the business, assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Time Brokerage Agreement. Seller shall not be in
material default of its obligations under the Time Brokerage Agreement (taking
into account any applicable cure period thereunder).
(i) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
(j) Concurrent Closing. The transactions contemplated by
the LPTV Purchase Agreement shall have been consummated in accordance with the
terms thereof contemporaneously with the Closing.
7.2 Conditions to Obligations of Seller. All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section
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6.1 hereof and Buyer shall have complied with any conditions imposed on it by
the FCC Consent.
(e) Time Brokerage Agreement. Buyer shall not be in
material default of its obligations under the Time Brokerage Agreement (taking
into account any applicable cure period thereunder).
(f) HSR Act. The waiting period under the HSR Act shall
have expired without unresolved action by the DOJ or the FTC to prevent the
Closing.
(g) Concurrent Closing. The transactions contemplated by
the LPTV Purchase Agreement shall have been consummated in accordance with the
terms thereof contemporaneously with the Closing.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order, subject to satisfaction or
waiver of all other conditions precedent to the holding of the Closing. If Buyer
fails to specify the date for Closing prior to the fifth business day after the
date upon which the FCC Consent becomes a Final Order, the Closing shall take
place on the tenth business day after the date upon which the FCC Consent
becomes a Final Order. Notwithstanding the foregoing, if the waiting period
under the HSR Act shall not have expired on or before the date that is tenth
business day after the date on which the FCC Consent becomes a Final Order, the
Closing shall take place at 10:00 a.m. on a date to be set by Buyer, on at least
five days' written notice to Seller, that is not earlier than the first business
day and not later than the tenth business day after the date such waiting period
shall have expired.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to
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vest good and marketable title to the Assets in the name of Buyer, free and
clear of all claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges or encumbrances, except for liens for current taxes not yet
due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A copy of any instrument evidencing receipt
of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by the President or any Vice
President of Seller, certifying (1) that the representations and warranties of
Seller contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date; and (2)
that Seller has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a search
for tax, lien, and judgment filings in the Secretary of State's records of the
State of Iowa as well as the records of those counties in Iowa in which any of
the Assets are located, such searches having been made no earlier than fifteen
days prior to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations;
(g) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(g)
hereto;
(h) Noncompetition Agreement. The Noncompetition
Agreement in the form as Schedule 6.12, duly executed on behalf of Seller; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
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(a) Purchase Price. The Demand Promissory Note in the
form of Schedule 2.4 and the PCC Shares, as provided in Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts insofar as they
relate to the time on and after the Closing Date and arise out of events related
to Buyer's ownership of the Assets or its operation of the Station on or after
the Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying (1)
that the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though made
on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to the
Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.12 duly executed by Buyer and the payment of
$100,000 to Seller thereunder.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
June 1, 1998.
(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer has failed to cure any material
breach of any of its representations,
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warranties or covenants under this Agreement within fifteen days after Buyer
received written notice of such breach from Seller.
(e) Time Brokerage Agreement. Upon Seller's termination
of the Time Brokerage Agreement in accordance with the terms thereof.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
June 1, 1998.
(d) Interruption of Service. If any event shall have
occurred, other than any event resulting from any action taken by Buyer under
the Time Brokerage Agreement, that prevented signal transmission of the Station
in the normal and usual manner for a continuous period of three days.
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs, as indicated in the environmental study
described in Section 6.5, within 30 days prior to the Closing Date, and the
cause thereof shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
(g) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller has failed to cure any material
breach of any of its representations, warranties or covenants under this
Agreement within fifteen days after Seller received written notice of such
breach from Buyer.
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(h) Time Brokerage Agreement. Upon Buyer's termination of
the Time Brokerage Agreement in accordance with the terms thereof.
9.3 Rights on Termination.
(a) If this Agreement is terminated pursuant to Section
9.1 or Section 9.2 and neither party is in material breach of this Agreement,
the parties hereto shall not have any further liability to each other with
respect to the purchase and sale of the Assets.
(b) If this Agreement is terminated by Seller due to
Buyer's material breach of this Agreement and Seller has fully complied in all
material respects with the terms of this Agreement, the payment to Seller of
$500,000 pursuant to Section 9.4 below shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Seller by reason of Buyer's material breach of this Agreement. Seller and Buyer
agree in advance that actual damages would be difficult to ascertain and that
the amount of $500,000 is a fair and equitable amount to reimburse Seller for
damages sustained due to Buyer's material breach of this Agreement. If this
Agreement is terminated by Buyer due to Seller's material breach of this
Agreement, Buyer shall have all rights and remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the
sum of $500,000 in accordance with the Escrow Agreement. All such funds
deposited with the Escrow Agent shall be held and disbursed in accordance with
the terms of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or 9.2 and Buyer is not in material breach of this Agreement, all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, shall be disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's material breach of this Agreement, then $500,000 of the amount held by
the Escrow Agent pursuant to the Escrow Agreement shall be disbursed to or at
the direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow Agent
shall be disbursed by the Escrow Agent to or at the direction of Buyer.
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SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty made
by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which relate
to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have,
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Buyer hereby agrees to indemnify and hold Seller harmless against and with
respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration provisions
of this Agreement, as applicable.
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(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in or
assume control of the defense of such claim, and the Claimant shall cooperate
fully with the Indemnifying Party, subject to reimbursement for actual
out-of-pocket expenses incurred by the Claimant as the result of a request by
the Indemnifying Party. If the Indemnifying Party elects to assume control of
the defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. 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.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other remedies
that may be available, including money damages, to obtain specific performance
of the terms of this Agreement. If any action is brought by Buyer to enforce
this Agreement, Seller shall waive the defense that there is an adequate remedy
at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
10.7 Limitation. Neither Buyer nor Seller shall be required to
indemnify the other party under this Section 10, except to the extent that the
aggregate amount of all claims against the party exceeds Fifty Thousand Dollars
($50,000).
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of any fees payable to the
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Escrow Agent, all filing fees required by the FCC in connection with the FCC
Consent, and any filing fee required by the FTC under the HSR Act. Except as
otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution, and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives. Seller shall pay at the Closing any
brokerage commissions due and payable with respect to this transaction.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers shall
be acceptable. Before undertaking to resolve the dispute, each arbitrator shall
be duly sworn faithfully and fairly to hear and examine the matters in
controversy and to make a just award according to the best of his or her
understanding. The arbitration hearing shall be conducted in accordance with the
commercial arbitration rules of the American Arbitration Association in
Washington, D.C. The written decision of a majority of the arbitrators shall be
final and binding on Seller and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Seller and Buyer in a manner to be decided
by a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not paid
within thirty days, may be entered in any court having jurisdiction over the
matter. No action at law or suit in equity based upon any claim arising out of
or related to this Agreement shall be instituted in any court by Seller or Buyer
against the other except (i) an action to compel arbitration pursuant to this
Section, (ii) an action to enforce the award of the arbitration panel rendered
in accordance with this Section, or (iii) a suit for specific performance
pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed to
have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:
If to Seller: Anthony J. Fant, President
Fant Broadcasting Company
2154 Highland Avenue
Birmingham, Alabama 35205
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With a copy to: Michael A. King, Esq.
Brown & Wood, LLP
One World Trade Center
New York, NY 10048
If to Buyer: Mr. Lowell W. Paxson
Paxson Communications of Cedar Rapids-48, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, DC 20036
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer or any other entity qualified to hold the FCC
Licenses (provided, however, that Buyer shall guarantee such assignee's
performance hereunder) without seeking or obtaining Seller's prior approval in
which event Buyer shall have no further obligation hereunder and Buyer may
collaterally assign its rights and interests hereunder to its senior lenders
without seeking or obtaining Seller's prior approval. Upon any permitted
assignment by Buyer or Seller in accordance with this Section 11.4, all
references to"Buyer" herein shall be deemed to be references to Buyer's assignee
and all references to "Seller" herein shall be deemed to be references to
Seller's assignee, as the case may be. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
- 34 -
STATE OF FLORIDA (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS
THEREOF).
11.7 Headings. The headings in this Agreement are included for ease
of reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement, or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF CEDAR
RAPIDS-48, INC.
By:
-------------------------------------
Name:
Title:
FANT BROADCASTING COMPANY OF
IOWA, INC.
By:
-------------------------------------
Name:
Title:
PAXSON COMMUNICATIONS CORPORATION JOINS IN THE EXECUTION OF THE FOREGOING ASSET
PURCHASE AGREEMENT SOLELY FOR THE PURPOSE OF SECTION 6.17 THEREOF.
PAXSON COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
Title:
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-Q’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 6/1/98 | | 32 | | 33 |
| Filed on: | | 5/15/97 |
| | 5/5/97 | | 1 |
| For Period End: | | 3/31/97 | | | | | | | NT 10-K |
| List all Filings |
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