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-10.159 — Asset Purchase Agreement by and Between Paxson
Exhibit Table of Contents
EXHIBIT 10.159
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS CORPORATION
AND
THE KRALOWEC CHILDREN'S FAMILY TRUST AND
KKAK-TV, INC.
FOR
TELEVISION STATION KKAG(TV)
PORTERVILLE, CALIFORNIA
APRIL 1, 1997
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 1ST day of April,
1997, by and between (i) Paxson Communications Corporation, a Delaware
corporation ("Buyer"), and (ii) Kralowec Children's Family Trust, Arthur C.
Kralowec as sole Trustee (the "Trust"), and (iii) KKAK-TV, Inc., a California
Corporation ("KKAK-TV", and collectively with the Trust, "Seller").
R E C I T A L S
A. Seller owns and operates television station KKAG(TV), Channel 61 in
Porterville, California serving the Fresno/Visalia, California market (the
"Station") under construction permit and Program Test Authority issued by the
Federal Communications Commission (the "FCC"), and,
B. Seller has pending with the FCC an application for issuance of a
license to cover the construction permit issued for Station, and,
C. 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 of Seller to payment for the
sale of advertising time run on the Station by Seller 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.
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"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, (ii) any Contracts entered into by
Seller between the date of this Agreement and the Closing Date that Buyer agrees
in writing to assume, and (iii) time sales contracts entered into by Seller in
compliance with Section 5.3.
"Closing" means the consummation of the purchase and sale of the assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"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 or Permits 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.
"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
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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 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 or K09XA, together with any additions
thereto between the date of this Agreement and the Closing Date.
"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 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.
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 Licenses;
(c) The Assumed Contracts;
(d) 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
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Station, if any;
(e) 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;
(f) All choses in action of Seller relating to the Station;
and
(g) All books and records relating to the business or
operations of the Station, 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 and accounts receivable 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 items and cash surrender
value in regard thereto; and any stocks, bonds, certificates of deposit and
similar investments;
(b) Any right or entitlement to the corporate entity "KKAK-TV,
Inc." or to "The Kralowec Children's Family Trust," or, except as otherwise
provided herein, books and records pertaining to those entities;
(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 shall be the sum of Seven Million Nine Hundred and Sixty Thousand
Dollars ($7,960,000.00) adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, 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, 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, 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
4
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 Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to the
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.
2.4 Payment of Purchase Price. Except as provided in Section 9.5, the
Purchase Price, as adjusted, shall be paid by Buyer to Seller at Closing by wire
transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer, at least two (2) days prior to the Closing Date.
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, (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 the Station 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.
2.6 Time Brokerage Agreement, Lease. As additional consideration for
the obligations contained herein, Buyer agrees to enter into a Time Brokerage
Agreement calling for brokerage of broadcast time on KKAG(TV) by Buyer,
consideration for which will be the payment of $25,000 per month plus
reimbursement of reasonable net operating expenses.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization. Standing. and Authority. The Trust is a trust duly
organized, validly existing, and in good standing under the laws of the State of
California. KKAK-TV is a corporation duly organized, validly existing and in
good standing under the laws of the State of California. Seller collectively has
all requisite power and authority (i) to own, lease, and use the Assets as now
owned, leased, and used, (ii) to conduct the business and operations of the
Station as now conducted, and (iii) to execute and deliver this Agreement, the
Escrow Agreement, Time Brokerage Agreement, Studio-Master Control 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 and the other documents
mentioned and contemplated herein have been duly approved by all necessary
actions, including but not limited to all necessary actions by the Trust and its
Trustee, and this Agreement constitutes the valid and binding obligation of
Seller enforceable against it in accordance with its terms. This Agreement, the
Escrow Agreement, and the Time Brokerage 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 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, 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 either the Articles of Incorporation of KKAK-TV, or the Trust
Agreement of the Trust; (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; 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, Permits, Authorizations. 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
6
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. Except as indicated in Schedule 3.4(a), the Licenses
are in full force and effect, and the conduct of the business and operations of
the Station is in accordance therewith. Other than as disclosed on Schedule
3.4(a), there is no pending or, to the knowledge of Seller, threatened action by
the FCC or any other entity or person to revoke, rescind, modify or refuse to
renew in the ordinary course any of the Licenses. The Station's city of license,
as determined by the FCC, is located within the Fresno Area of Dominant
Influence as defined by the 1991-1992 Area of Dominant Influence Market Guide
published by The Arbitron Co. and the Fresno Designated Market Area as defined
by the 1994 United States Television Household Estimates published by Nielsen
Media Research. On or before October 1, 1996, Seller made a valid election of
must carry with respect to each cable system located within the Station's Area
of Dominant Influence. Other than as provided on Schedule 3.4(b), no cable
system has advised Seller of any signal quality or 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.
3.5 Real Property; Lease of Studio-Master Control Area. No real
property is being conveyed hereby. However, in consideration hereof, Buyer is
Leasing to Seller for a period of 120 days after Closing, space for Studio,
Master Control and other operations as more particularly described in that
certain "Lease Agreement" attached as Schedule 3.5 and dated as of the date
hereof between Buyer and the Kralowec Children's Family Trust.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property being conveyed hereby.
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) have been maintained in
a manner consistent with generally accepted standards of good engineering
practice, 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.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the
7
Station without penalty on not more than thirty days' notice. 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 and cash programming contracts, 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 any 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, 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, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) 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. 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 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of financial statements including balance sheets, statements of
operations and a statement of changes in financial position for the period
ending November 30, 1996 (collectively, the "Financial Statements"). Except as
disclosed in the Financial Statements, the Financial Statements have been
prepared from the books and records of Seller, have been prepared in accordance
with generally accepted accounting principles consistently applied and
maintained throughout the periods indicated, accurately reflect the books,
records, and accounts of the Station (which books, records, and accounts are
complete and correct), are complete and correct in all material respects, and
present
8
fairly the financial condition of the Station as at their respective dates and
the results of operations for the periods then ended. None of the Financial
Statements understates the true costs and expenses of conducting the business or
operations of the Station, fails to disclose any material contingent
liabilities, or inflates the revenues of the Station. It is expressly understood
that Buyer is not relying on the financial condition or the financial aspects of
Seller's prior or future operation of the Station in executing this Agreement.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate in
amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and foreseeable risks. During the past three
years, no insurance policy of Seller on the Assets or the Station has been
canceled by the insurer and no application of Seller for insurance has been
rejected by any insurer.
3.12 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. Seller has timely paid to the FCC
all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.13. Schedule 3.13 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) Each Employee Plan and Compensation Arrangement has been
administered in compliance with its own terms and in material compliance with
the provisions of ERISA, the Code, the Age Discrimination in Employment Act and
any other applicable Federal or state laws. Seller is not aware of the existence
of any governmental audit or examination of any Employee Plan or Compensation
Arrangement or of any facts which would lead it to believe that any such audit
or examination is pending or threatened. There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan or
Compensation Arrangement pending or, to the best knowledge of Seller, threatened
against any of such plans or arrangements, and Seller possesses no knowledge of
any facts which could give rise to any such action, suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any
9
Multi-employer Plan with respect to the employees of the Station, and neither
Seller nor any other trade or business under common control with Seller (within
the meaning of Sections 414(b), (c), (m) or to) of the Code) has incurred or
reasonably expects to incur any "withdrawal liability," as defined under Section
4201 et seq. of ERISA.
(d) Except as described in Schedule 3.13, neither Seller nor
any other trade or business under common control with Seller (within the meaning
of Sections 414(b), (c), (m) or to) of the Code) sponsors, maintains or
contributes to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of Seller
at the Station.
(e) Except as described in Schedule 3.13, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is intended to be tax-qualified, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
affect the validity of an Employee Plan's letter; (ii) no prohibited
transaction, within the definition of section 4975 of the Code or Title 1, Part
4 of ERISA, has occurred which would subject Seller to any liability; and (iii)
all contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by the Seller prior to the Closing, including, but not
limited to, contributions thereto with respect to the plan year ending
immediately prior to the Closing.
(f) 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 to) of the Code) contributes or
to which Seller or any entity related to Seller (under the terms of Sections
414(b), (c), (m) or to) 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 to)
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 plan; (iv) "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended, any
successor thereto and any regulations promulgated thereunder; and (v)
"Multi-employer Plan" means a plan, as defined in ERISA Section 3(37), to which
Seller or any entity related to Seller (under the terms of Section 414(b) or (c)
of the Code) contributes or is required to contribute.
10
(g) 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. Seller has complied with all laws, rules, and
regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and Seller has
not received any notice alleging that it has failed to comply in any material
respect with any such laws, rules, or regulations. 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 of Seller's
knowledge, 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.
3.14 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.
3.15 Claims and Legal Actions. Except as provided in Schedule 3.4(a),
and 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
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 or have reason
to be aware of any basis for the same. In particular, but without limiting the
generality of the foregoing, except as provided in Schedule 3.4(a), there are no
applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the television
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.
11
3.16 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 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, after due
investigation, 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, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station and 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, after due
investigation, 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, after due
investigation, 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) 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 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,
12
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.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.17 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. 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.
3.18 Conduct of Business in Ordinary Course. Seller has conducted the
business and operations of the Station only in the ordinary course and, except
as provided on Schedule 3.18, has not:
(a) Suffered any 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;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment made
or promised to any employee of the Station, or any material change in personnel
policies, employee benefits, or other compensation arrangements affecting the
employees of the Station;
(c) Made any sale, assignment, lease, or other transfer of any
of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by Seller with
respect to the Station, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade
13
name, franchise, or similar right, or modified any existing right relating to
the Station.
3.19 Transactions with Affiliates. Seller has not been involved in any
business arrangement or relationship relating to the Station with any affiliate
of Seller, and no affiliate of Seller owns any property or right, tangible or
intangible, which is used in the business of the Station. As used in this
paragraph, "affiliate" has the meaning set forth in Rule 12b-2 promulgated under
the Securities and Exchange Act of 1934.
3.20 Broker. Neither Seller nor any person acting on Seller's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement, except for a
commission payable by Seller to Media Venture Partners. The claims of Patrick
Communications Corporation, if any, will be the sole responsibility of Buyer.
3.21 Full Disclosure. No representation or warranty made by Seller in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Seller 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 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
Delaware and at Closing will be duly qualified to conduct business as a foreign
corporation in the State of California. Buyer has all requisite power and
authority to execute and deliver this Agreement, the Escrow Agreement, Time
Brokerage Agreement, Studio-Master Control Lease 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 by Buyer of this Agreement, the Escrow Agreement and the other
documents mentioned and contemplated herein have been duly authorized by all
necessary actions on the part of Buyer. This Agreement, the Escrow Agreement and
the Time Brokerage 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 thereof 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, the execution, delivery, and performance by Buyer of this Agreement,
the Escrow Agreement and the other agreements and 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
14
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 Broker. Neither Buyer nor any person acting on Buyer's behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement, except for a
commission payable by Buyer, if any, to Patrick Communications Corporation.
4.5 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 in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), or in accordance with the Time Brokerage
Agreement to be entered into, and in accordance with the other covenants in this
Section 5.
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.
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.
15
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 as provided in Section
9.5, (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. Notwithstanding the foregoing, Seller is under no obligation to
construct K09XA, for which a request for extension of time in which to commence
construction has been filed with the FCC, but not yet acted on.
5.7 Rights. Seller shall not waive any right relating to the Station or
any of the Assets. Seller shall not cause, by any act or failure to act, any
cable system located within the Station's Area of Dominant Influence to refuse
to carry the Station's signal.
5.8 No Inconsistent Action. 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 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. Seller shall use its best efforts and take
all reasonable actions to maintain all of the Assets in their present 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
16
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.
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 its 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.
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, and of any material change in any of the information contained in
Seller's representations and warranties contained in Section 3 of this
Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within twenty
days after the end of each month ending between the date of this Agreement and
the Closing Date a Monthly Profit and Loss Statement for the month just ended in
the form of Schedule 5.15 and such other financial information as Buyer may
reasonably request. However, as provided in Section 3.10, it is expressly
understood that Buyer is not relying on the financial condition or the financial
aspects of Seller's prior or future operation of the Station in executing this
Agreement.
5.16 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.
5.17 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.
5.18 Programming. Seller shall not make any material changes in the
broadcast hours or in the percentages of types of programming broadcast by the
Station, or make
17
any other material change in the Station's programming policies, except such
changes as in the good faith judgment of the Seller are required by the public
interest or which are in accordance with the Time Brokerage Agreement.
5.19 Preservation of Business. 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. The ordinary and customary operating, marketing, promotional,
sales, and advertising practices of the Station shall be maintained.
5.20 Collection of Accounts Receivable. Seller shall collect the
accounts receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to accelerate
the collection of its accounts receivable.
5.21 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
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 filed by third parties. 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.
6.2 Control of the Station. Prior to Closing, Buyer shall not, directly
or
18
indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Station except consistent with the provisions of
the Time Brokerage Agreement being entered into contemporaneously herewith; 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.
6.3 Risk of Loss
(a) 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.
(b) If any damage or destruction of the Assets or any other
event occurs which (i) causes the Station to cease broadcasting operations for a
period of sixty or more days or (ii) prevents in any material respect signal
transmission by the Station in the normal and usual manner and Seller fails to
restore or replace the Assets so that normal and usual transmission is resumed
within sixty days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon 10 days advance written notice to Seller, in which
event all funds held by the Escrow Agent pursuant to the Escrow Agreement,
including all interest and other proceeds from the investment of such funds,
shall be immediately returned to Buyer, or (y) proceed to consummate the
transaction contemplated by this Agreement and complete the restoration and
replacement of the Assets after the Closing Date, in which event Seller shall
deliver to Buyer all insurance proceeds received in connection with such damage,
destruction or other event, provided, however, that in the event of any damage
or destruction, Buyer shall cooperate with Seller to restore normal operations
of the Station as soon as possible and Seller shall promptly apply all insurance
proceeds to restoring such service.
6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, inducing 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
19
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 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
California 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 obtain and deliver to
Buyer, at Seller'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 procure a current survey of the parcel, prepared by a licensed
surveyor and conforming to current
20
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.
6.10 Sales Tax Filings. Seller has not operated the Station in a manner
that requires the filing of California sales tax returns with respect to the
Station.
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 Allocation of Purchase Price. Buyer and Seller hereby agree that
for state and federal income tax reporting purposes the Purchase Price shall be
allocated among the Acquired Assets as set forth in Schedule 3.14. With regard
to such allocation, Buyer and Seller agree to file Form 8594 and all other
required forms, if any, with the Internal Revenue Service when due.
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 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 other than those 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.
(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 an adverse effect on the Station or the conduct of its business and
operations. No
21
proceeding shall be pending or threatened the effect of which could be 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) 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 which loss is not covered by insurance and/or which has been repaired as
called for herein.
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 other than those that need
not be complied with by Seller under Section 6.1 hereof and Buyer shall have
complied with any conditions imposed on it by the FCC Consent.
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.
(b) Closing Place. The Closing shall be held at the offices of
Dow,
22
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 following removal of liens as provided in Section 9.5 to
vest good and marketable title to the Assets in the name of Buyer, free and
clear of all claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges 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 manually executed 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 an officer of KKAG-TV, Inc and the
trustee of the Kralowec Children's Family Trust, 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) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.9;
(f) 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 California as well as the records of those counties in California in which
any of the Assets are located, such searches having been made no earlier than
fifteen days prior to the Closing Date;
(g) 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 ;
(h) Opinion of Counsel. An Opinion of Seller's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(i) hereto;
(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.
23
(j) Lease Agreement. The Lease Agreement Studio, Master
Control and other operations, in the form attached hereto as as Schedule 3.5.
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:
(a) Purchase Price. The Purchase Price 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) the 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) Lease Agreement. The Lease Agreement Studio, Master
Control and other operations, in the form attached hereto as as Schedule 3.5.
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 24
months from the date hereof.
(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, warranties or covenants under this Agreement
within fifteen days after
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Buyer received written notice of such breach from Seller.
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 24
months from the date hereof.
(d) Interruption of Service. If any event shall have occurred
that prevented signal transmission of the Station in the normal and usual manner
for a continuous period of sixty 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 45 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 45 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.
9.3 Rights on Termination.
(a) Seller's Right to Terminate. In the event of a material
breach hereunder by Buyer prior to Closing of any Buyer agreement, covenant,
representation, or warranty hereunder, and the continuation of said breach
without cure for a period of thirty (30) consecutive days following the date on
which Seller shall have given to Buyer written notice of such breach, then
Seller may in its discretion terminate this Agreement by giving written notice
of termination to Buyer. The rights conferred by the above sentence may not be
exercised unless Seller is not in material breach hereunder and Seller has given
Buyer thirty (30) days written notice of the specific nature of such breach and
25
Buyer has failed to correct such breach within that period. In the event of
Seller's termination hereof pursuant to this Section 9.3(a) Seller shall be
entitled to seek all available legal and equitable relief that Seller may have
against Buyer.
(b) Buyer's Right to Terminate. In the event of a material
breach hereunder by Seller prior to Closing of any Seller agreement, covenant,
representation, or warranty hereunder, and the continuation of said breach
without cure for a period of thirty (30) consecutive days following the date on
which Buyer shall have given to Seller written notice of such breach, then Buyer
may in its discretion, by giving written notice of termination to Seller,
terminate this Agreement without cost, penalty, or liability on Buyer's part of
any kind, whereupon Buyer shall be entitled to seek all available legal and
equitable relief that Buyer may have against Seller. The rights conferred by the
above sentence may not be exercised unless Buyer is not in material breach
hereunder and Buyer has given Seller thirty (30) days written notice of the
specific nature of such breach and Seller has failed to correct such breach
within that period. In the event of Buyer's termination hereof pursuant to this
Section 9.3(b), Buyer shall be entitled to seek all available legal and
equitable relief that Buyer may have against Seller.
9.4 Specific Performance. Notwithstanding anything to the contrary set
out above, as an alternative to the remedies set forth in Sections 9.3(a) and
9.3(b), each party shall have the right specifically to enforce the other
party's performance under this Agreement so long as the party enforcing such
right is not then in material breach of this Agreement, and each party agrees to
waive the defense in any such suit that the other party has an adequate remedy
at law and to interpose no opposition, legal or otherwise, as to the propriety
of specific performance as a remedy.
9.5 Escrow Deposit. Upon closing, Buyer will deposit with the Escrow
Agent the sum of $1,200,000.00 at the date of close to insure discharge of all
liens and encumbrances set out in Schedule 3.5 and 3.6. 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, after payments of the liens set out on
Schedule 3.5, and after satisfying Buyer that all the Tangible Property can be
conveyed to Buyer free of liens and encumbrances, 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.
26
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, 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
27
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.
(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
28
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 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.
10.6 Must Carry. Buyer hereby acknowledges its awareness of the
existence of litigation concerning the legality of the FCC's must-carry rules
currently in effect. Buyer agrees that any modification or extinguishment of any
such rights shall not constitute grounds for modification, rescission, or
failure to comply with this Agreement.
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 Buyer. Buyer and Seller shall each
pay one-half of any fees payable to the Escrow Agent and all filing fees
required by the FCC in connection with the FCC Consent. 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. However, the parties shall share the costs of defending
this Agreement and the Assignment Application at the FCC and elsewhere. Seller
shall pay at the Closing all brokerage fees and commissions payable to Media
Venture Partners, and Buyer shall be responsible for all fees or commissions
payable to any other finder, broker, advisor, or similar person retained by or
on behalf of Buyer.
11.2 Venue. Venue for any action to interpret or enforce any of the
provisions hereof, including all Schedules related hereto, shall be in the
Superior or Federal Courts of Florida.
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:
29
If to Seller: Arthur C. Kralowec, Esq., Trustee/President
1077 West Morton Avenue
Porterville, California 93257
With a copy to: Dan J. Alpert, Esq.
Law Office of Dan J. Alpert
2120 N. 21st Road
Arlington, Virginia 22201
If to Buyer: Lowell W. Paxson, Chairman
Paxson Communications Corporation
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, D.C. 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 Assignment, Benefit and Binding Effect.
(a) Assignment. With the exception of Seller's assignment to a
qualified intermediary as provided below, 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 hereunder without the
consent of Seller, on five (5) days prior written notice to Seller, to one or
more subsidiaries or commonly controlled affiliates of Buyer, whereupon Buyer
shall be relieved of all obligations hereunder except the obligation to
guarantee the performance of such entity under this Agreement, including its
Schedules, the Escrow Agreement and the Time Brokerage Agreement. Each attempted
assignment, if any, not in compliance with this Section 11.4 shall be null and
void.
(b) Seller's IRS Section 1031 Election. Seller intends to
appoint a qualified intermediary or qualified escrow in accordance with the
"safe harbor" Rules under Section 1031 of the Internal Revenue Code. Buyer shall
provide reasonable cooperation to Seller in order to accomplish Seller's IRS
Section 1031 Election and the realization by Seller of a tax free exchange in
connection with the transaction contemplated hereunder, it being understood,
however, that such realization of a tax free exchange shall not be a condition
precedent to Seller's and/or Buyer's obligation to consummate the transaction
contemplated hereunder.
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
30
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 STATE OF CALIFORNIA (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 judgment be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
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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.
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
BUYER:
PAXSON COMMUNICATIONS
CORPORATION
By: /s/ Lowell Paxson
-----------------------------------------
Lowell Paxson
Chairman
SELLER:
THE KRALOWEC CHILDREN'S FAMILY
TRUST
By: /s/ Arthur C. Kralowec
-----------------------------------------
Arthur C. Kralowec,
Trustee
KKAK-TV, INC.
By: /s/ Arthur C. Kralowec
-----------------------------------------
Arthur C. Kralowec,
President
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Dates Referenced Herein and Documents Incorporated by Reference
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