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Exhibit 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this " Agreement" ), made
as of October 1, 2006, is by and among NM Licensing LLC, a
Delaware limited liability company (" NM License "),
NextMedia Operating, Inc., a Delaware corporation (" NM
Operating ," which together with NM License may be referred to
herein as " Seller "), and Beasley FM Acquisition Corp., a
Delaware corporation or its permissible assignee (" Buyer"
).
RECITALS
NM License is the licensee of, and with NM Operating, operates
radio broadcast station WJBR-FM, 99.5 MHz, Wilmington, Delaware,
Facility ID No. 14374 (the " Station" ), pursuant to
licenses issued by the Federal Communications Commission (the "
FCC" ).
Seller and Buyer have agreed that Seller will sell and Buyer or
Buyer’s designee will acquire all of the tangible and
intangible assets used or useful in connection with the operation
of the Station, on the terms and subject to the conditions set
forth in this Agreement.
Seller and Buyer are, simultaneously with the execution and
delivery of this Agreement, entering into a Local Marketing
Agreement for the Station (the " Local Marketing Agreement
"), pursuant to which, following the effective date thereof, Buyer
shall provide programming on the Station pending the Closing of the
transactions contemplated by this Agreement.
Therefore, the parties agree as follows:
ARTICLE 1
ASSETS TO BE CONVEYED
1.1. Closing . Subject to Section 16.1 hereof and except as
otherwise mutually agreed upon by Seller and Buyer, the closing of
this transaction (the "Closing" ) shall take place on a date
agreed upon by Buyer and Seller within ten business (10) days
after all of the conditions specified in Sections 10.2 and 11.2
hereof have been fulfilled (or waived by the party entitled to
waive such condition). The Closing shall be held at 10:00 a.m.
local Washington D.C. time at the offices of Leventhal
Senter & Lerman PLLC ( "LS&L" ), or at such
other place and time, and in such manner as the parties may
otherwise agree. Notwithstanding the foregoing, the parties intend
that, to the extent possible, the Closing shall be conducted by
exchange of signatures by fax, mail, and/or overnight courier, and
wire transfer of funds.
1.2. Station Assets . At the Closing,
unless otherwise transferred on the effective date of the Local
Marketing Agreement, Seller shall sell, assign, transfer and convey
to Buyer or Buyer’s designated Affiliate, and Buyer shall
purchase from Seller, all of the assets (but excluding the Excluded
Assets) used in connection with the business and operation of the
Station, including but not limited to the following:
(a) Seller’s rights in and to all of the licenses, permits
and other authorizations, including any temporary waiver or special
temporary authorization, issued to Seller by the FCC or any other
governmental authority currently in effect and used in the conduct
of the business and operation of the Station, including those
listed in Schedule 1.2(a) , together with any additions
thereto (including renewals or modifications of such licenses,
permits and authorizations and applications therefor) between the
date hereof and the Closing Date (the " Station Licenses ")
and all of Seller’s rights in and to the call letters
"WJBR-FM";
(b) Seller’s right and interest in and to the leased real
property used in the conduct of the business and operation of the
Station, together with any additions thereto or modifications or
amendments thereof between the date hereof and the Closing Date
(the " Real Property ");
(c) all equipment, antennas, cables, hardware, office furniture
and fixtures, office materials and supplies, inventory, spare
parts, motor vehicles and other tangible personal property of every
kind and description, owned, leased or held by Seller and used or
useful in the conduct of the business and operation of the Station,
including but not limited to that listed on Schedule 1.2(c)
and, with respect to leased Personal Property, the equipment leased
under any equipment leases listed on Schedule 1.2(d) ,
together with any replacements thereof and additions thereto, made
between the date hereof and the Closing Date (the " Personal
Property ");
(d) subject to the provisions of Article 3 hereof, all Time
Sales Agreements, the Real Property Leases, and all of
Seller’s rights under and interest in all Contracts listed in
Schedule 1.2(d) hereto, together with all of Seller’s
rights under and interest in all Contracts entered into or acquired
by Seller between the date hereof and the Closing Date in
accordance with this Agreement (the " Assumed Contracts
");
(e) all of Seller’s rights in and to all registered and
unregistered trademarks, trade names, service marks, franchises,
copyrights, including registrations and applications for
registration of any of them, jingles, logos, slogans, licenses,
patents, Internet domain names, Internet URLs, Internet web sites,
content and databases, permits and privileges, and other intangible
property rights and interests applied for, issued to or owned by
Seller for use in the conduct of the business and operation of the
Station, including those listed in Schedule 1.2(e) ,
together with any additions thereto between the date hereof and the
Closing Date (the "Intellectual Property" );
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(f) all files, records, books of account,
employment records of Station personnel, and logs relating to the
operation of the Station, including, without limitation, receivable
records, the Station’s public inspection files, filings with
the FCC related to the Station, invoices, statements, technical
information and engineering data, sales correspondence, filings
with the FCC, programming information and studies, advertising
studies, marketing and demographic data, lists of advertisers,
credit and sales reports, and copies of all written Contracts to be
assigned hereunder;
(g) to the extent assignable, all rights under
manufacturers’ and vendors’ warranties as exist at
Closing and which relate to any of the Station Assets, as defined
herein;
(h) all computer software and programs used or held for use in
the operation of the Station;
(i) security deposits and prepaid expenses, to the extent that
Seller receives an adjustment to the Purchase Price for such
amounts pursuant to Section 5.1; and
(j) all other assets or properties not referred to above
reflected on the Financial Statements or acquired for use by the
Station or in connection with the operation of the Station after
the date the last Financial Statement was delivered to Buyer,
except any assets or properties disposed of after such date in the
ordinary course of business consistent with Section 8.1.
The assets to be transferred to Buyer hereunder are hereinafter
collectively referred to as the " Station Assets ." The
Station Assets shall be transferred to Buyer free and clear of any
Liens, except for Permitted Liens.
1.3. Excluded Assets . Notwithstanding anything to the
contrary contained in Section 1.2, the Station Assets shall
not include the following (the " Excluded Assets" ):
(a) Seller’s books and records pertaining to the
organization, existence or capitalization of Seller, and duplicate
copies of such records as are necessary to enable Seller to file
tax returns and reports;
(b) all cash, cash equivalents, or similar type investments of
Seller, such as certificates of deposit, treasury bills, and other
marketable securities on hand and/or in banks, and any interest in
and to any refunds of federal, state or local franchise, income, or
other taxes related to periods prior to the Closing;
(c) all insurance policies, except for any rights that may be
assigned pursuant to Article 20 hereof, promissory notes, amounts
due from employees, bonds, letters of credit, certificates of
deposit, or other similar items, and any cash surrender value in
regard thereto;
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(d) all pension, profit sharing or cash or
deferred (Section 401(k)) plans and trusts and the assets thereof
and any other employee benefit plan or arrangement.
(e) subject to the Local Marketing Agreement, all accounts
receivable and notes receivable arising in connection with the
operation of the Station prior to the Closing Date and outstanding
and uncollected as of the Closing Date (the " Accounts
Receivable "); and
(f) the items listed on Schedule 1.3(f) hereof.
ARTICLE 2
PURCHASE PRICE
2.1. Purchase Price . The total consideration to be paid by
Buyer for the Station Assets shall be Forty-Two Million Dollars
($42,000,000) (the "Purchase Price" ), subject to upward or
downward adjustment, as the case may be, on and after the Closing
Date, pursuant to Article 5.
2.2. Payment of Purchase Price. Within two
(2) Business Days following the execution and delivery of this
Agreement by Buyer and Seller, Buyer shall deposit an Irrevocable
Letter of Credit in the principal amount of One Million Seven
Hundred Fifty Thousand Dollars ($1,750,000) (the " Initial
Letter of Credit ") with Star Media Group, Ltd. (" Escrow
Agent ") to be held pursuant to the terms and conditions of an
Escrow Agreement of date even herewith by and among Buyer, Seller,
and Escrow Agent. In the event that the Closing has not occurred by
March 1, 2007, Buyer shall deposit a second Irrevocable Letter
of Credit in the principal amount of Seven Hundred Fifty Thousand
Dollars ($750,000), with the Escrow Agent (the "Second Letter of
Credit" ). The Initial Letter of Credit and, if applicable, the
Second Letter of Credit shall be deemed the " Escrow Deposit
". At the Closing, Buyer and Seller shall jointly instruct Escrow
Agent to return Escrow Deposit to Buyer. Buyer shall pay the
Purchase Price, as adjusted pursuant to Article 5, by wire transfer
of immediately available federal funds pursuant to wire
instructions that shall be delivered by Seller to Buyer at least
two (2) Business Days prior to the Closing Date.
2.3. Holdback. There shall be no holdback of any portion
of the Purchase Price at the Closing, provided that Seller
maintains ownership of assets during the Survival Period
sufficient, in Buyer’s commercially reasonable judgment, to
secure potential claims that might arise under Section 15.1
hereto. In the event that, in Buyer’s reasonable judgment,
Seller does not maintain ownership of assets (excluding the Station
Assets) sufficient to secure potential claims that might arise
under Section 15.1 hereto, Seller shall pay, by wire transfer
of immediately available funds, Two Million Dollars ($2,000,000.00)
(the " Holdback ") to Escrow Agent to be held pursuant to
the terms and conditions of a Holdback Escrow Agreement. The
Holdback shall be maintained in an interest-bearing account pending
the expiration of the Survival Period, and shall be used to satisfy
Buyer’s claims, if any, that may arise under
Section 15.1 hereto. Upon the termination of the Survival
Period, the balance of the Holdback, and any interest accrued
thereon, shall be paid to Seller; provided, however, that in the
event Buyer has made a claim pursuant to Section 15.1 that has
not been resolved prior to the expiration of the Survival Period,
the amount of such unresolved claim shall be held by Escrow Agent
until such time that the claim has been resolved.
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ARTICLE 3
ASSUMPTION OF OBLIGATIONS
3.1. Assumption of Obligations . Subject to the provisions of
this Article 3 and of Article 5 of this Agreement, unless otherwise
provided in the Local Marketing Agreement, at the Closing Buyer
shall assume and undertake to pay, satisfy or discharge the
liabilities, obligations and commitments of Seller under the
Station Assets, to the extent that either (1) the obligations
and liabilities accrue or arise out of events occurring after the
Effective Time or (2) the Purchase Price was reduced pursuant
to Article 5 as a result of the proration or adjustment of such
obligations and liabilities ( "Assumed Obligations" ).
3.2. Limitation . Except as set forth in Section 3.1
hereof, Buyer expressly does not, and shall not, assume or be
deemed to assume, under this Agreement or otherwise by reason of
the transactions contemplated hereby, any liabilities, obligations
or commitments of Seller of any nature whatsoever.
3.3. Effect of Local Marketing Agreement. Simultaneously
with the execution of this Agreement, Seller and Buyer are
executing and delivering the Local Marketing Agreement. The term of
the Local Marketing Agreement shall commence on October 1,
2006. To the extent that the Station Assets are assigned, the
Assumed Obligations are assumed or assets and liabilities are
prorated under the Local Marketing Agreement, any obligation of the
Seller under this Agreement to assign such Station Assets, of the
Buyer to assume such Assumed Obligations or of the parties to
prorate such assets or liabilities, shall be deemed satisfied.
ARTICLE 4
REQUIRED CONSENTS
4.1. FCC Application . The assignment of the Station Licenses as
contemplated by this Agreement is contingent upon the FCC Consent.
No later than ten (10) days after the date that the parties
execute this Agreement, Buyer and Seller shall file the FCC
Application. Buyer may, at its discretion, designate an Affiliated
entity to be the assignee of the Station Licenses, provided that
such designation would not be reasonably expected to cause a
material delay in obtaining the FCC Consent. Seller and Buyer shall
thereafter prosecute the FCC Application with all reasonable
diligence and otherwise use their commercially reasonable efforts
to obtain the grant of the FCC Application as expeditiously as
practicable. If reconsideration or judicial review is sought with
respect to the FCC Consent, the party affected shall, in good
faith, use its commercially reasonable efforts to oppose such
efforts for reconsideration or judicial review; provided, however,
that nothing herein shall be construed to limit either
party’s right to terminate this Agreement pursuant to Article
16 hereof.
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4.2. Other Governmental Consents .
Promptly after the date of this Agreement, the parties shall
prepare and file with the appropriate governmental authorities any
other requests for approval or waiver that are required from such
governmental authorities in connection with the transactions
contemplated hereby and shall diligently and expeditiously
prosecute, and shall cooperate fully with each other in the
prosecution of, such requests for approval or waiver and all
proceedings necessary to secure such approvals and waivers.
ARTICLE 5
PRORATIONS; ACCOUNTS RECEIVABLE
5.1. Proration of Expenses . All revenues and expenses arising
from the conduct of the business and operation of the Station and
ownership of the Station Assets shall be prorated between Buyer and
Seller as of the Effective Time. Such prorations shall be based
upon the principle that Seller shall be responsible for all
liabilities and obligations incurred or accruing in connection with
the operation of the Station and ownership of the Station Assets
until the Effective Time, and Buyer shall be responsible for such
liabilities and obligations incurred by Buyer thereafter. Such
prorations shall include, without limitation, all ad valorem, real
estate and other property taxes, business and license fees, FCC
regulatory fees, utility expenses, any accrued sick time or
vacation, liabilities and obligations under the Assumed Contracts,
rents and similar prepaid and deferred items, except taxes arising
by reason of the transfer of the Station Assets as contemplated
hereby, which shall be paid in accordance with Section 13.2.
To the extent not known, real estate taxes shall be apportioned on
the basis of taxes assessed for the preceding year, with a
reapportionment as soon as the new tax rate and valuation can be
ascertained. Notwithstanding the foregoing, there shall be no
adjustment for, and Seller shall remain solely liable with respect
to any obligations or liabilities not being assumed by Buyer in
accordance with Article 3 hereof. There shall be no adjustment for
Trade Agreements, provided, however, if Seller’s aggregate
obligations under the Trade Agreements, less the fair market value
of all goods or services to be received under such Trade
Agreements, exceeds $10,000 as of the Closing Date, then all
amounts in excess of $10,000 shall be considered an operating
expense of Seller to be pro-rated in accordance with this
Section 5.1.
5.2. Payment of Proration Items . Three (3) Business
Days prior to Closing, Seller shall deliver to Buyer a preliminary
list of all items to be prorated pursuant to Section 5.1 (the
" Preliminary Proration Schedule" ), and, to the extent
feasible, such prorations shall be credited against or added to the
Purchase Price, as applicable, at Closing. In the event Buyer and
Seller do not reach a final agreement on such prorations and
adjustments at Closing, Seller shall deliver to Buyer a schedule of
its proposed prorations and adjustments (the " Proration
Schedule" ) no later than forty-five (45) days after the
Closing Date. The Proration Schedule shall be conclusive and
binding upon Buyer unless Buyer provides Seller with written notice
of objection (the " Notice of Disagreement" ) within ten
(10) days after Buyer’s receipt of the Proration
Schedule, which notice shall state the prorations of expenses
proposed by Buyer (the " Buyer’s Proration Amount" ).
Seller shall have ten (10) days from receipt of a Notice of
Disagreement to accept or reject Buyer’s Proration Amount. If
Seller rejects Buyer’s Proration Amount, and the amount in
dispute exceeds
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$10,000, the dispute shall be submitted within
ten (10) days to an accounting firm, mutually agreeable to the
parties, that is unaffiliated with either party (the "
Referee" ) for resolution, such resolution to be made within
twenty (20) days after submission to the Referee and to be
final, conclusive and binding on Seller and Buyer. Buyer and Seller
agree to share equally the cost and expenses of the Referee, but
each party shall bear its own legal and other expenses, if any. If
the amount in dispute is equal to or less than $10,000, such amount
shall be divided equally between Buyer and Seller. Payment by Buyer
or Seller, as the case may be, of the proration amounts determined
pursuant to this Section 5.2 shall be due five (5) days
after the last to occur of (i) Buyer’s acceptance of the
Proration Schedule or Buyer’s failure to give Seller a timely
Notice of Disagreement; (ii) Seller’s acceptance of
Buyer’s Proration Amount or failure to reject Buyer’s
Proration Amount within ten (10) days after receipt of a
Notice of Disagreement; (iii) Seller’s rejection of
Buyer’s Proration Amount in the event the amount in dispute
equals or is less than $10,000; and (iv) notice to Seller and
Buyer of the resolution of the disputed amount by the Referee in
the event that the amount in dispute exceeds $10,000. Any payment
required by Seller to Buyer or by Buyer to Seller, as the case may
be, under this Section 5.2 shall be paid by check or wire
transfer of immediately available federal funds to the account of
the payee with a financial institution in the United States as
designated by Seller in the Proration Schedule or by Buyer in the
Notice of Disagreement (or by separate notice in the event that
Buyer does not send a Notice of Disagreement). If either Buyer or
Seller fails to pay when due any amount under this
Section 5.2, interest on such amount will accrue from the date
payment was due to the date such payment is made at a per annum
rate equal to the Prime Rate plus two percent (2%), and such
interest shall be payable upon demand.
5.3 . Allocation. The parties shall use reasonable
efforts to agree to an allocation of the Purchase Price pursuant to
the requirements of Section 1060 of the Internal Revenue Code
of 1986, as amended, prior to Closing. For purposes of allocating
the Purchase Price, Buyer shall obtain an appraisal, a copy of
which Buyer shall provide to Seller within five (5) Business
Days after Buyer’s receipt thereof. In the event the parties
are unable to agree on an allocation of the Purchase Price, then
Buyer and Seller shall use separate allocations in completing and
filing Internal Revenue Code Form 8594 for federal income tax
purposes.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF
BUYER
Buyer represents and warrants to Seller as follows:
6.1. Organization and Standing . Buyer is a corporation
organized, validly existing and in good standing under the laws of
the State of Delaware and qualified to do business in the State of
Delaware.
6.2. Authorization and Binding Obligation . Buyer has all
necessary power and authority to enter into and perform under this
Agreement and the transactions contemplated hereby, and
Buyer’s execution, delivery and performance of this Agreement
has been duly and validly authorized by all necessary action on its
part. This Agreement has been duly executed and delivered by Buyer
and constitutes its valid and binding obligation, enforceable in
accordance with its terms, except as limited by laws affecting
creditors’ rights or equitable principles generally.
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6.3. Absence of Conflicting Agreements or
Required Consents . Except as set forth in Article 4 with
respect to FCC and other governmental consents, the execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby by Buyer: (a) do not and
will not require the consent of any third party; (b) do not
and will not violate any provisions of Buyer’s organizational
documents; (c) do not and will not violate any applicable law,
judgment, order, injunction, decree, rule, regulation or ruling of
any governmental authority binding upon Buyer or its assets; and
(d) do not and will not, either alone or with the giving of
notice or the passage of time, or both, conflict with, constitute
grounds for termination of or result in a breach of the terms,
conditions or provisions of, or constitute a default under any
agreement, instrument, license or permit to which Buyer is now
subject.
6.4. Qualifications; Absence of Litigation .
(a) There are no facts which, under the Communications Act of
1934, as amended, or the existing rules and regulations of the FCC,
would disqualify Buyer as the assignee of the Station Licenses.
Except as set forth in Schedule 6.4 , Buyer has no reason to
believe that the FCC assignment contemplated herein will not be
granted by the FCC in the ordinary course based upon Buyer’s
qualifications to be the FCC licensee of the Station.
(b)There is no claim, litigation, proceeding or investigation
pending or, to Buyer’s Knowledge, threatened against Buyer
which seeks to enjoin or prohibit the transactions contemplated by
this Agreement.
6.5. Bankruptcy . No insolvency proceedings of any
character, including without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors,
voluntary or involuntary, affecting Buyer, are pending or, to the
best of Buyer’s Knowledge, threatened, and Buyer has not made
any assignment for the benefit of creditors or taken any action
which would constitute the basis for the institution of such
insolvency proceedings.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF
SELLER
Seller represents and warrants to Buyer as follows:
7.1. Organization and Standing . NM Operating is a
corporation duly formed, validly existing and in good standing
under the laws of the State of Delaware. NM License is a limited
liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware. Seller has all
necessary power and authority to own, lease and operate the Station
Assets and to carry on the business of the Station as now being
conducted and as proposed to be conducted by Seller between the
date hereof and the Closing Date.
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7.2. Authorization and Binding
Obligation . Seller has all necessary power and authority to
enter into and perform this Agreement and the transactions
contemplated hereby, and Seller’s execution, delivery and
performance of this Agreement has been duly and validly authorized
by all necessary action on its part. This Agreement has been duly
executed and delivered by Seller and constitutes its valid and
binding obligation, enforceable in accordance with its terms,
except as limited by laws affecting the enforcement of
creditors’ rights or equitable principles generally.
7.3. Absence of Conflicting Agreements or Required
Consents . Except as set forth in Article 4 with respect to FCC
and other governmental consents and/or as disclosed on Schedule
7.3 , the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby by
Seller (a) do not and will not require the consent of any
third party; (b) do not and will not violate any provisions of
Seller’s organizational documents; (c) do not and will
not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority
binding upon Seller or its assets or by which it or the Station
Assets are bound; (d) do not and will not, either alone or
with the giving of notice or the passage of time, or both, conflict
with, constitute grounds for termination of or result in a breach
of the terms, conditions or provisions of, or constitute a default
under any lease, contract, agreement, instrument, license or permit
to which either Seller or the Station Assets are now subject; and
(e) do not and will not result in the creation of any lien,
charge or encumbrance on any of the Station Assets.
7.4. Station Licenses .
(a) Schedule 1.2(a) contains a true and complete list of
the Station Licenses, including their expiration dates. Seller has
delivered to Buyer true and complete copies of the Station
Licenses. The antenna structures used by the Station are in
compliance with the Communications Act and the requirements of the
Federal Aviation Administration, and are registered with the FCC,
if required. The location of the Station’s main studio
complies with the FCC’s rules. All FCC regulatory fees
assessed with respect to the Station Licenses have been timely
paid. Except as set forth on Schedule 7.4(a) :
(i) there are no licenses, permits or authorizations other
than the Station Licenses required from any government or other
entity for the lawful operation of the Station in the manner now
operated; (ii) the Station Licenses and other licenses,
permits and authorizations listed in Schedule 1.2(a) are
validly held by NM License pursuant to a Final Order, are in full
force and effect, have been issued for the full terms customarily
issued to radio broadcast stations in the State of Delaware, and
none is subject to any restriction or condition which would limit
in any material respect the full operation of the Station as now
operated; (iii) the Station, its physical facilities,
electrical and mechanical systems, and transmitting and studio
equipment are operating in accordance with the terms and conditions
of the Station Licenses and the rules and regulations of the FCC;
and (iv) all reports and other filings required by the FCC
with respect to the Station Licenses and the Station, including,
without limitation, material required to be placed in the
Station’s local public inspection files or other records,
have been timely filed.
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(b) There are no applications, complaints or
proceedings pending or, to Seller’s Knowledge, threatened
before the FCC relating to the operation of the Station or that may
result in the revocation, materially adverse modification,
non-renewal or suspension of any of the Station Licenses, or the
imposition of any fines, forfeitures, or other administrative
actions with respect to the Station or its operation other than
proceedings affecting the broadcasting industry generally. Should
any such filing be made or action initiated, Seller shall promptly
notify Buyer and shall take all commercially reasonable steps to
protect the Station and Station Licenses from material adverse
impacts. Seller is not subject to any outstanding judgment or order
of the FCC relating to the Station. Except as otherwise noted on
Schedule 7.4(b), Seller is not aware of any action other
than rule-making proceedings of general applicability to the radio
industry which would adversely affect the FCC protected service
area of the Station as such service area is presently authorized by
the FCC.
(c) There are no facts which, under the Communications Act of
1934, as amended, or the existing rules and regulations of the FCC,
would disqualify Seller as the assignor of the Station Licenses.
Seller has no reason to believe that the FCC assignment
contemplated herein will not be granted by the FCC in the ordinary
course based upon Seller’s qualifications as the licensee and
assignor of the Station Licenses.
(d) Except as set forth in Schedule 7.4(d) , the Station
is operating with power and facilities specified in its FCC
Licenses, within the power tolerances permitted in FCC Rule
73.1560(b) and to Seller’s Knowledge, the Station is not
causing objectionable interference to the transmissions of any
other broadcast station or communications facility, and no other
broadcast station or communications facility is causing
objectionable interference to the transmissions of the Station.
(e) To Seller’s actual knowledge, without further
investigation (i) no governmental entity has proposed any law
that may affect either Seller, the Station Assets, operations or
business, or Seller’s rights thereto, except to the extent
that any such law, if adopted or otherwise put into effect,
individually or in the aggregate, will not have an adverse effect
on Seller or the Station Assets, as applicable, and (ii) there
are no facts or circumstances that could reasonably give rise to
the same.
7.5. Real Property Leases .
(a) Schedule 7.5 contains descriptions of all of the Real
Property Leases. The Real Property subject to the Real Property
Leases listed on Schedule 7.5 are all of the real property
interests necessary to conduct the business and operate the Station
as conducted and operated on the date hereof.
(b) Seller has valid and subsisting leasehold interests,
insurable at standard rates, pursuant to the Real Property Leases
which shall at the Closing be free and clear of all Liens, except
for Permitted Liens. With respect to each leasehold interest under
the Real Property Leases, as long as Seller fulfills its
obligations under the lease therefor, Seller has enforceable rights
to non-disturbance and quiet enjoyment.
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(c) Any improvements upon the Real Property that
are included in the Station Assets, and Seller’s use of the
Real Property comply in all material respects with all federal,
state and local laws, regulations and ordinances, and no permits,
licenses or certificates pertaining to the operation of the Station
upon the Real Property are required by any federal, state or local
government, agency, board or other governmental authority having
jurisdiction over the Real Property. All such improvements included
in the Station Assets are in good working condition and repair, are
insurable at standard rates, and, except as noted on Schedule
7.4(a) , are in compliance with the rules and regulations of
the FCC, the Federal Aviation Administration and all other
applicable federal, state and local statutes, ordinances, rules and
regulations. There are no structural, electrical, mechanical,
plumbing, air conditioning, heating or other defects in the
improvements on the Real Property included in the Station
Assets.
(d) Seller has delivered to Buyer true and complete copies of
all Real Property Leases.
(e) To Seller’s Knowledge, all towers, guy anchors and
buildings and other improvements included in the Station Assets are
located entirely on the Real Property.
(f) Seller has not received any notice of any appropriation,
condemnation or like proceeding, or of any violation of any
applicable zoning law, regulation or other law, order, regulation
or requirement affecting the Real Property or the improvements
thereon that are included in the Station Assets, or of the need for
any material repair, remedy, construction, alteration or
installation with respect to any improvements included in the
Station Assets.
(g) The Real Property is leased at the rates and for terms
ending on the dates set forth in the Real Property Leases, which
are the sole and complete agreements concerning the Seller’s
use of the leased Real Property. Neither the Seller, nor to the
Knowledge of Seller, any other party, is in default, violation or
breach in any material respect under any Real Property Lease, and
no event has occurred and is continuing that constitutes or, with
notice or the passage of time or both, would constitute a default,
material violation or material breach by the Seller, or to the
Knowledge of Seller, by any other party thereunder. No amount
payable under any Real Property Lease is past due. Seller has not
received any notice of a default, offset or counterclaim under any
Real Property Lease or any other communication asserting material
non-compliance with any Real Property Lease. Subject to the rights
of the landlords under the Real Property Leases, Seller has the
exclusive right to use and occupy the premises leased under each
Real Property Lease as they are now currently being used and
occupied and for the purposes necessary to operate the Station.
Subject to the terms of the Real Property Leases, Seller enjoys
peaceful and undisturbed possession of the premises leased under
the Real Property Leases. To Seller’s actual knowledge,
except as set forth on Schedule 7.5(g) , no third party,
other than the lessor under any lease, holds any interest in the
leased premises with the right to foreclose upon Seller’s
leasehold interest. Subject to the terms and conditions of the
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applicable Real Property Lease, Seller has full
legal power and authority to transfer control of the Real Property
Leases to Buyer in accordance with this Agreement on terms and
conditions no less favorable than those in effect on the date
hereof, and, subject to the terms and conditions of the applicable
Real Property Lease, such assignment will not affect the validity,
enforceability and continuity of any Real Property
Lease.
(h) All utilities that are required for the full and complete
occupancy and use of the Real Property for the purposes for which
such properties are presently being used by the Station pursuant to
the terms and conditions of the Real Property Leases, including
without limitation, electric, water, sewer, telephone and similar
services, have been connected and are in good working order.
7.6. Title to and Condition of Personal Property .
Schedule 1.2(c) lists all material items of Personal
Property whether owned, leased, used or held for use in conducting
the business and operations of the Station as now conducted. Seller
is the sole owner or lessee, as applicable, of the Personal
Property and has good and marketable title to and/or a valid
leasehold interest in all Personal Property free and clear of all
Liens, except for Permitted Liens. All of the material items of
tangible Personal Property are in good operating condition and
repair (reasonable wear and tear excepted), are insurable at
standard rates, and have been properly maintained in accordance
with industry standards, are performing satisfactorily and in
accordance with standards of good engineering practice, unless
otherwise noted on Schedule 7.4(a), materially comply in all
respects with applicable rules and regulations of the FCC, the
terms of the Station Licenses, and with other applicable federal,
state and local statutes, ordinances, rules and regulations, and
are available for immediate use in the operation of the Station.
Seller has no Knowledge of any defect in the condition or operation
of any item of Personal Property which is reasonably likely to have
a material adverse effect on the operations of the Station.
7.7. Assumed Contracts . Seller has delivered to Buyer
true and complete copies of all Assumed Contracts, including any
amendments and other modifications to such Assumed Contracts. The
Assumed Contracts constitute valid and binding obligations of
Seller and of all other parties thereto, and are in full force and
effect as of the date hereof. Seller is not in material breach or
default under any of the Assumed Contracts and, to Seller’s
Knowledge, the other parties to such Assumed Contracts are not in
material breach or default thereunder. Seller has not received or
given written notice of any default thereunder from or to any of
the other parties thereto, and no event has occurred which with
notice or lapse of time or both would constitute a material breach
or default thereunder. Except as set forth on Schedule
1.2(d) , Seller has all requisite power and authority to assign
its rights under the Assumed Contracts to Buyer in accordance with
this Agreement on terms and conditions no less favorable than those
in effect on the date hereof, and such assignment will not affect
the validity, enforceability or continuity of any such Assumed
Contracts. There are no Trade Agreements, except as disclosed on
Schedule 1.2(d) . There are no inter-company Contracts
between Seller (or either NM Operating or NM License individually)
and any Affiliate of Seller (or either NM Operating or NM License
individually), except as disclosed on Schedule 7.7 .
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7.8. Personnel Information .
(a) Schedule 7.8 contains a true and complete list of all
persons employed at the Station, including each person’s job
title or the capacity in which employed, date of hire, and a
description of all compensation including bonus arrangements and
employee benefit plans or arrangements applicable to each such
employee, including without limitation, accrued by unused sick and
vacation leave and service credited for purposes of vesting and
eligibility to participate under any benefit plan. Seller is not a
party to any agreement, written or oral, with employees except as
described on Schedule 1.2(d) or Schedule 7.8 . Except
as described on Schedule 7.8 , Seller has no employment
agreement of any kind, oral or written, express or implied, that
would require Buyer to employ any employee of Seller after the
Closing, or that would otherwise confer any obligation on
Buyer.
(b) Seller is not a party to any collective bargaining agreement
covering any of the employees at the Station. Seller is not a party
to any Contract with any labor organization, nor has Seller agreed
to recognize any union or other collective bargaining unit, nor has
any union or other collective bargaining unit been certified as
representing any of Seller’s employees at the Station, nor
has Seller received any demands or any other requests from a labor
organization for representative status with respect to any persons
employed at the Station.
(c) Except as set forth in Schedule 7.8 , Seller is not a
party to or bound by any employee benefit plan within the meaning
of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (" ERISA" ), whether or not such plan is
otherwise exempt from the provisions of ERISA, and no employee or
spouse of an employee is entitled to any benefits that would be
payable pursuant to any such plan.
(d) There are no unfair labor practice charges pending against
Seller.
(e) Seller acknowledges that Buyer has no obligation hereunder
to offer employment to any employee of Seller and Seller shall
remain fully liable for all costs of terminating such employees,
including accrued vacation or accrued sick leave or other accrued
time or benefits; however, Buyer shall have the right to hire such
of the Station’s employees as Buyer may select. With respect
to any employees that Buyer hires, Seller further acknowledges that
Buyer shall have no obligation for, and shall not assume as part of
the act of hiring such employees, any obligation for accrued
benefits, and Seller will retain liability therefor.
(f) With respect to the Station’s employees, Seller is in
material compliance with all applicable foreign, federal, state and
local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment, worker
classification, wages and hours, equal employment opportunity,
collective bargaining, pension and welfare benefit plans, and the
payment of Social Security and similar taxes, and neither Seller
nor the Station are liable for any arrearages of wages or any tax
penalties due to any failure to comply with any of the foregoing,
nor have any of them received notification that their employment
practices fail to comply with the foregoing.
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7.9. Intellectual Property .
Schedule 1.2(e) lists all Intellectual Property applied for,
issued to or owned by Seller for use in the operation of the
Station, or under which Seller is licensed or franchised to be
assigned hereunder, all of which rights and interests are issued to
or owned by Seller, or if licensed or franchised to Seller, are, to
the Knowledge of Seller, valid and uncontested. Seller has
delivered to Buyer copies of all documents, if any, establishing
such rights, licenses or other authority. There is no pending or,
to the best of Seller’s Knowledge, threatened proceeding or
litigation affecting or with respect to the Intellectual Property.
Seller is not knowingly infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service
names, copyrights, patents, patent applications, internet domain
names, 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
Intellectual Property listed on Schedule 1.2(e) comprise all
material intangible property interests used or held for use in
conducting the business and operations of the Station as now
conducted.
7.10. Compliance With Laws . Except as noted on
Schedule 7.10 , Seller has operated and is operating in
material compliance with all laws, regulations and governmental
orders applicable to the operation of the Station, and its present
use of the Station Assets does not materially violate any such
laws, regulations or orders. Seller has not received any notice
asserting any noncompliance with any applicable statute, rule or
regulation, in connection with the operation of the Station. Seller
is not in default or in violation of any law, regulation, court
order, or order of any federal, state, municipal, foreign or other
government department, board, bureau, agency, or instrumentality,
wherever located, that would materially adversely affect
construction or operation of the Station or Station Assets,
including but not limited to state and federal environmental laws
and regulations. There is no pending or threatened investigation,
audit, review or other examination of the Station or Station
Assets, and Seller is not subject to any order, agreement,
memorandum of understanding or other regulatory enforcement action
or proceeding with or by the FCC or any other federal or state
governmental agency having supervisory or regulatory authority with
respect to the Station or Station Assets.
7.11. Taxes . Seller has duly, timely and in the required
manner filed all federal, state, local and foreign income,
franchise, sales, use, property, excise, payroll and other tax
returns and forms required to be filed, and has paid in full or
discharged all taxes, assessments, excises, interest, penalties,
deficiencies and losses required to be paid. There are no liens or
other encumbrances for taxes on the Station Assets. As of the time
of filing, such returns were true, complete and correct in all
material respects. There are no governmental investigations or
other legal, administrative, or tax proceedings pending, or to
Seller’s Knowledge, threatened 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, or could result in a
Lien on any of the Station Assets, 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.
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7.12. Bankruptcy . No insolvency
proceedings of any character, including, without limitation,
bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting
Seller or any of the Station Assets, are pending or, to
Seller’s Knowledge, threatened, and Seller has not made any
assignment for the benefit of creditors or taken any action which
would constitute the basis for the institution of such insolvency
proceedings.
7.13. Location of Station Assets . All of the Station
Assets are and have been located in the State of Delaware since the
Station Assets were acquired by Seller.
7.14 Insurance . The business, properties (including the
Station Assets) and employees of the Station are insured against
loss, damage, or injury in the amounts shown on Schedule
7.14 hereto. All insurance policies listed on Schedule
7.14 are in full force and effect and there is no default with
respect to provisions in any such policy. There are no pending
insurance claims concerning the Station or Station Assets, nor are
there any claims as to which any insurer has denied liability or
declined coverage or which have not been properly and timely
submitted to the appropriate insurers.
7.15 Financial Statements . Seller has provided Buyer
with true and complete copies of statements of broadcast cash flow
of the Station for its most recently concluded two fiscal years, by
quarter, and for all full months since elapsed (the "Financial
Statements"). The Financial Statements were prepared in accordance
with GAAP, except for th
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