AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1998
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SALEM COMMUNICATIONS CORPORATION
AND OTHER REGISTRANTS*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 4832,4899 77-0121400
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
4880 SANTA ROSA ROAD
SUITE 300
CAMARILLO, CALIFORNIA 93012
(805) 987-0400
|
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
JONATHAN L. BLOCK, ESQ.
SALEM COMMUNICATIONS CORPORATION
4880 SANTA ROSA ROAD
SUITE 300
CAMARILLO, CALIFORNIA 93012
(805) 987-0400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH COPIES TO:
ERIC H. HALVORSON, ESQ. THOMAS D. MAGILL, ESQ.
SALEM COMMUNICATIONS CORPORATION GIBSON, DUNN & CRUTCHER LLP
4880 SANTA ROSA ROAD, SUITE 300 4 PARK PLAZA, SUITE 1400
CAMARILLO, CALIFORNIA 93012 IRVINE, CALIFORNIA 92614
---------------
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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9 1/2% Series B Senior Subordinated
Notes Due 2007 (the "Notes")...... $150,000,000 100% $150,000,000 $44,250
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Guarantees of the Notes*........... $150,000,000 (2) (2) (2)
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(1) Estimated pursuant to Rule 457(f) solely for the purposes of computing the
registration fee.
(2)No separate consideration will be received for the Guarantees.
(Continued from previous page)
*OTHER REGISTRANTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRIMARY
STATE OR OTHER STANDARD I.R.S.
JURISDICTION OF INDUSTRIAL EMPLOYER
EXACT NAME OF REGISTRANT INCORPORATION OR CLASSIFICATION IDENTIFICATION
AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBERS NUMBER
--------------------------------------------------------------------------------
ATEP Radio, Inc. .............. California 4832 77-0132973
Beltway Media Partners......... Virginia 4832 77-0293196
Bison Media, Inc. ............. Colorado 4832 77-0434654
Caron Broadcasting, Inc. ...... Ohio 4832 77-0439370
Common Ground Broadcasting,
Inc. ......................... Oregon 4832 93-1079989
Golden Gate Broadcasting
Company, Inc. ................ California 4832 94-3082936
Inland Radio, Inc. ............ California 4832 77-0114987
Inspiration Media, Inc. ....... Washington 4832 77-0132974
Inspiration Media of Texas,
Inc. ......................... Texas 4832 75-2615876
New England Continental Media,
Inc. ......................... Massachusetts 4832 04-2625658
New Inspiration Broadcasting
Company, Inc. ................ California 4832 95-3356921
Oasis Radio, Inc. ............. California 4832 77-0061780
Pennsylvania Media Associates,
Inc. ......................... Pennsylvania 4832 94-3134636
Radio 1210, Inc. .............. California 4832 77-0052616
Salem Communications
Corporation................... Delaware 4832, 4899 77-0363592
Salem Media Corporation........ New York 4832 95-3482072
Salem Media of California,
Inc. ......................... California 4832 95-1581210
Salem Media of Colorado, Inc. . Colorado 4832 84-1239646
Salem Media of Louisiana,
Inc. ......................... Louisiana 4832 77-0114983
Salem Media of Ohio, Inc. ..... Ohio 4832 95-3690954
Salem Media of Oregon, Inc. ... Oregon 4832 77-0114986
Salem Media of Pennsylvania,
Inc. ......................... Pennsylvania 4832 77-0237182
Salem Media of Texas, Inc. .... Texas 4832 77-0379125
Salem Music Network, Inc. ..... Texas 4899 77-0434655
Salem Radio Network
Incorporated.................. Delaware 4899 77-0305542
Salem Radio Representatives,
Inc. ......................... Texas 4899 77-0281576
South Texas Broadcasting,
Inc. ......................... Texas 4832 77-0388924
SRN News Network, Inc. ........ Texas 4899 77-0426090
Vista Broadcasting, Inc. ...... California 4832 77-0389639
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + |
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 29, 1998
PROSPECTUS
[LOGO OF SALEM COMMUNICATIONS CORPORATION]
$150,000,000
SALEM COMMUNICATIONS CORPORATION
OFFER FOR OUTSTANDING 9 1/2% SERIES A SENIOR SUBORDINATED NOTES DUE 2007
IN EXCHANGE FOR 9 1/2% SERIES B SENIOR SUBORDINATED NOTES DUE 2007
Salem Communications Corporation, a California corporation (the "Company") hereby offers (the "Exchange Offer"), upon the terms and subject to the conditions set forth herein and in the related Letter of Transmittal, to exchange up to $150,000,000 aggregate principal amount of its 9 1/2% Series B Senior Subordinated Notes due 2007 (the "Notes") of the Company for a like amount of the privately placed 9 1/2% Series A Senior Subordinated Notes Due 2007 (the "Old Notes") of the Company issued on September 25, 1997, from the holders thereof.
The Notes are being offered hereunder in order to satisfy the obligations of the Company under a Registration Rights Agreement dated September 17, 1997 (the "Registration Rights Agreement") by and among the Company, the Guarantors (as defined herein), and Furman Selz LLC, Smith Barney Inc., BancBoston Securities, Inc., and BNY Capital Markets, Inc. (the "Initial Purchasers"). The Exchange Offer is designed to provide to holders an opportunity to acquire the Notes which, unlike the Old Notes, are expected to be freely transferable at all times, subject to state "blue sky" law restrictions, provided that the holder is not an "affiliate" of the Company within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and represents that the Notes are being acquired in the ordinary course of such holder's business and the holder, if not a broker-dealer, is not engaged in, and does not intend to engage in, a distribution of the Notes. With the exception of the freely transferable nature of the Notes, the Notes are substantially identical to the Old Notes. See "The Exchange Offer--Purpose of the Exchange Offer."
The Company will accept for exchange any and all validly tendered Old Notes on or prior to 5:00 P.M., New York time, on , 1998, unless extended (the "Expiration Date"). Tenders of Old Notes made pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. In the event the Company terminates the Exchange Offer and does not accept any Old Notes with respect to the Exchange Offer, the Company will promptly return such Old Notes to the holders thereof. The Company will not receive any proceeds from the Exchange Offer.
Interest on the Notes will accrue from the date of issuance and will be payable semi-annually on each April 1 and October 1, commencing April 1, 1998. The Notes will mature on October 1, 2007. The Notes are redeemable at the option of the Company, in whole or in part, at any time on or after October 1, 2002, at the redemption prices set forth herein, plus accrued and unpaid interest to the redemption date. In addition, the Company, at its option, may redeem up to $50.0 million in aggregate principal amount of the Notes at any time on or prior to October 1, 2000 at 109.50% of the aggregate principal amount so redeemed, plus accrued and unpaid interest thereon to the redemption date, with the proceeds of one or more Public Equity Offerings (as defined herein), provided that at least $100.0 million in aggregate principal amount of the Notes remain outstanding immediately after the occurrence of any such redemption. See "Description of the Notes--Optional Redemption." Upon a Change of Control (as defined herein), each holder of the Notes will be entitled to require the Company to purchase such holder's Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the purchase date. There can be no assurance that the Company will have sufficient funds to repurchase the Notes upon a Change of Control. See "Description of the Notes--Certain Covenants--Purchase of Notes Upon a Change of Control."
The Notes will be general unsecured obligations of the Company, subordinated in right of payment to all existing and future Senior Indebtedness (as defined herein), including the Company's obligations under the Credit Agreement (as defined herein), and senior in right of payment to all existing and future Subordinated Indebtedness (as defined herein) of the Company. See "Description of Certain Indebtedness" and "Description of the Notes--Subordination." The Notes will be guaranteed, jointly and severally (the "Guarantees"), on a senior subordinated basis by all of the Company's current subsidiaries (the "Guarantors"). See "Description of the Notes--Guarantees." The Guarantees will be general unsecured obligations of the Guarantors, subordinated in right of payment to all Guarantor Senior Indebtedness (as defined herein), including any guarantees by Guarantors of the Company's obligations under the Credit Agreement and senior in right of payment to any Subordinated Indebtedness of the Guarantors. As of September 30, 1997, the Company and the Guarantors had an aggregate of approximately $10.1 million of Senior Indebtedness outstanding under the Credit Agreement and no other Indebtedness (as defined herein) outstanding other than the Notes.
(Continued on following page)
SEE "RISK FACTORS" BEGINNING ON PAGE 14 HEREIN FOR A DISCUSSION OF CERTAIN RISKS THAT HOLDERS OF OLD NOTES SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
The Old Notes were sold by the Company on September 25, 1997 to the Initial Purchasers in a transaction not registered under the Securities Act in reliance upon an exemption under the Securities Act. The Initial Purchasers subsequently placed the Old Notes with qualified institutional buyers in reliance upon Rule 144A under the Securities Act. The Old Notes may not be reoffered, resold or otherwise transferred in the United States unless registered under the Securities Act or unless an applicable exemption from the registration requirements of the Securities Act is available.
Based on the interpretive letters Exxon Capital Holdings Corporation (May 13, 1998), Morgan Stanley & Co., Incorporated (June 5, 1991) and Shearman & Sterling (July 2, 1993) issued by the staff of the Securities and Exchange Commission (the "Commission"), the Company believes that a holder of Notes (other than (i) a broker-dealer who purchases such Notes directly from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act or (ii) a person who is an affiliate of the Company within the meaning of Rule 405 under the Securities Act) who exchanges Old Notes for Notes in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the Notes, will be allowed to resell the Notes to the public without further registration under the Securities Act and without delivering to the purchasers of the Notes a prospectus that satisfies the requirements of the Securities Act. See "The Exchange Offer--Purpose of the Exchange Offer" and "Resales of Notes." However, a broker-dealer that acquires Notes for its own account in the Exchange Offer in exchange for Old Notes that were acquired for its own account as a result of market-making or other trading activities may be deemed to be an "underwriter" within the meaning of the Securities Act and must, therefore, deliver in any resale of the Notes a prospectus meeting the requirements of the Securities Act. For a period of 180 days from the Expiration Date, the Company will make copies of this Prospectus, as amended or supplemented, available to any broker-dealer that receives Notes for its own account in the Exchange Offer in exchange for Old Notes that were acquired by the broker-dealer as a result of the market-making or other trading activities for use in connection with any such resale. See "Plan of Distribution." If any other holder is deemed to be an "underwriter" within the meaning of the Securities Act or acquires Notes in the Exchange Offer for the purpose of distributing or participating in a distribution of the Notes, such holder may not rely on the positions of the Commission's staff enunciated in Exxon Capital, Morgan Stanley and Shearman & Sterling and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction, unless an exemption from registration is otherwise available.
If a holder of Old Notes does not exchange such Old Notes for Notes pursuant to the Exchange Offer, such Old Notes will continue to be subject to the restrictions on transfer contained in the legend thereon. In general, the Old Notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.
The Old Notes are currently eligible for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market. Following commencement of the Exchange Offer but prior to its consummation, the Old Notes may continue to be traded in the PORTAL market. Following consummation of the Exchange Offer, the Notes will not be eligible for PORTAL trading.
It is not currently anticipated that an active public market for the Notes will develop. The Company currently does not intend to apply for the listing of the Notes on any securities exchange or to seek approval for quotation through any automated quotation system. No assurance can be given as to the liquidity of the trading market for the Notes.
The Exchange Offer is not conditioned upon any minimum principal amount of Old Notes being tendered for exchange. However, the Exchange Offer is subject to certain customary conditions. See "The Exchange Offer--Conditions to the Exchange Offer." Old Notes may be tendered only in integral multiples of $1,000.
AVAILABLE INFORMATION AND INCORPORATION BY REFERENCE
The Company and the Guarantors have filed with the Securities and Exchange Commission (the "Commission") a registration statement relating to the Notes offered hereby (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. Statements made in this Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement, reference is made to such exhibit for a more complete description thereof, and each such statement shall be deemed qualified by such reference.
Upon effectiveness of the Registration Statement, the Company and the Guarantors will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith must file periodic reports and other information with the Commission, unless granted relief from such requirements.
The Registration Statement and the exhibits and schedules thereto and any periodic reports or other information filed pursuant to the Exchange Act may be inspected without charge and copies at prescribed rates at the Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains a website that contains reports, proxy and information statements and other information filed electronically with the Commission at http://www.sec.gov.
The Company and the Guarantors have agreed to furnish to holders of the Notes and Old Notes and prospective purchasers and securities analysts, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE ATTORNEY GENERAL OR THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE ATTORNEY GENERAL OR THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements, including statements regarding, among other items, (i) the realization of the Company's business strategy, (ii) the sufficiency of cash flow to fund the Company's debt service requirements and working capital needs and (iii) the anticipated trends in the radio broadcasting industry. Forward-looking statements are typically identified by the words "believe," "expect," "anticipate," "intend," "estimate" and similar expressions. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's control. Actual results could differ materially from those contemplated by these forward-looking statements. There can be no assurance that the results and events contemplated by the forward-looking information contained in this Prospectus will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company does not undertake any obligation to update or revise any forward-looking statements.
The safeharbor under the Securities Act and the Exchange Act for certain "forward-looking statements" within the meaning of such Acts does not apply to initial public offerings.
MARKET DATA SOURCES
All metropolitan statistical area ("MSA") rank information set forth in this Prospectus has been obtained from the Spring 1997 Radio Market Survey Schedule & Population Ranking published by The Arbitron Company. According to the Survey, the population estimates used were based upon 1990 U.S. Bureau Census estimates updated and projected to January 1, 1997 by Market Statistics, based on the data from Sales & Marketing Management's 1996 Survey of Buying Power. Information regarding the number of radio stations in the United States featuring religious talk and music formats, including formats identified as Religious, Gospel, Christian, Inspirational or Sacred, the growth in the number of stations featuring religious formats from 1989 to 1997, the religious format as the third largest radio format in the United States, the size of the listening audience for religious programming and the number of stations owned and/or operated in the top 25 radio markets by competitors of the Company have been obtained from the 1997 Broadcasting & Cable Yearbook, The M Street Journal (November 26, 1997), Religion & Media Quarterly (July 1997) and the 1998 Directory of Religious Media.
PROSPECTUS SUMMARY
The following summary is qualified by, and should be read in conjunction with, the more detailed information and financial statements and notes thereto appearing elsewhere in this Prospectus. As used in this Prospectus, the term the "Company" refers to Salem Communications Corporation and its subsidiaries, unless the context otherwise requires. Edward G. Atsinger III and Stuart W Epperson are referred to herein as the "Principal Shareholders" and together with Nancy A. Epperson, the wife of Mr. Epperson and the sister of Mr. Atsinger, as the "Shareholders." The Shareholders reorganized the Company in August 1997 such that certain entities owned by the Shareholders became wholly owned by the Company. In addition to the historical information contained herein, this Prospectus contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from those discussed herein. Factors that might cause such a difference include, but are not limited to, those discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as those discussed elsewhere in this Prospectus. See "Special Cautionary Notice Regarding Forward-Looking Statements."
THE COMPANY
Salem Communications Corporation is the leading radio broadcast company in the United States, measured by number of stations owned and audience coverage, that focuses on serving the religious/conservative listening audience. The Company's two primary businesses include the ownership and operation of religious format radio stations and the development and expansion of a national radio network (the "Network") offering talk programming, news and music to affiliated stations. The Company owns and/or operates 43 radio stations concentrated in 28 geographically diverse markets across the United States.
The Company offers a variety of specialized talk programming emphasizing Bible study and Judeo-Christian values applied to family and community issues as well as contemporary and traditional religious music. The 1997 Broadcasting & Cable Yearbook identifies over 1,800 radio stations throughout the United States that feature religious talk and music formats, including formats identified as Religious, Gospel, Christian, Inspirational or Sacred. According to statistics appearing in The M Street Journal, a broadcast industry newsletter, the number of radio stations featuring religious formats has grown approximately 69% between 1989 and 1997 and the religious format is the third largest radio format in the United States after country and news/talk. According to Religion & Media Quarterly, religious format radio stations have an audience of approximately 20.6 million listeners.
The Company focuses on serving the top 25 markets in terms of audience size in the United States and has radio stations in nine of the top ten and 19 of the top 25 of those markets. The Company is also interested in serving certain mid-sized markets, which the Company considers to be markets that are among the 26th through 50th largest radio markets in the United States in terms of audience size. Since January 1, 1992, the Company has grown significantly by acquiring ownership of, or operating rights to, 29 radio stations in 20 markets, including 17 stations in 14 markets since January 1, 1996. Many of these recently acquired radio stations were previously broadcasting in non- religious formats and have been re-formatted by the Company. The Company's experience has been that changing the format of an acquired station typically requires a transition period during which the Company develops its program customer and listener base. During such transition period, these stations typically do not generate significant cash flow from operations. The Company's total gross revenue, broadcast cash flow and EBITDA (as defined herein) were $65.1 million, $25.5 million and $20.9 million, respectively, for the year ended December 31, 1996 and were $54.5 million, $20.7 million and $15 million, respectively, for the nine months ended September 30, 1997. The Company's results of operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 include the results of many stations in transition periods, which have not generated significant cash flow from operations in the aggregate.
Owned and/or Operated Stations. The following table sets forth information about the number of radio stations owned and/or operated by the Company and the markets served in order of market size:
NUMBER OF NUMBER OF
STATIONS STATIONS
--------- ------------
MARKET(1): MSA RANK(2) FM AM MARKET(1): MSA RANK(2) FM AM
---------- ----------- ---- ---- ---------- ----------- ---- ----
New York, NY............ 1 0 2 Pittsburgh, PA.......... 20 1 1
Los Angeles, CA......... 2 2 1 Cleveland, OH........... 22 0 2
Chicago, IL............. 3 1 0 Denver-Boulder, CO...... 23 1 2
San Francisco, CA....... 4 0 1 Portland, OR............ 24 1 1
Philadelphia, PA........ 5 0 2 Cincinnati, OH.......... 25 0 1
Riverside-San
Dallas-Ft. Worth, TX.... 7 1 0 Bernardino, CA.......... 26 0 1(5)
Washington, D.C. ....... 8 1 0 Sacramento, CA.......... 28 0 2
Houston-Galveston, TX... 9 1 1 Columbus, OH............ 32 0 1
Boston, MA.............. 10 0 1 San Antonio, TX......... 34 0 1
Seattle-Tacoma, WA...... 13 0 3(3) Akron, OH............... 67 0 1
San Diego, CA........... 14 0 1 Spokane, WA............. 87 1 0
Minneapolis-St. Paul, MN
........................ 16 0 1 Colorado Springs, CO.... 95 3 0
Phoenix, AZ............. 18 0 1 Oxnard, CA.............. 109 1 0
Baltimore, MD........... 19 0 1(4) Canton, OH.............. 120 1(6) 0
---- ----
TOTAL.............................. 15 28
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(2) "MSA" means metropolitan statistical area.
(3) The Company operates one of the stations, which is licensed to a corporation owned by the Principal Shareholders of the Company, under the terms of a local marketing agreement. See "Federal Regulation of Radio Broadcasting--Local Marketing Agreements" and "Certain Transactions."
(4) The station is simulcast with WAVA-FM, Washington, D.C.
(5) The station is simulcast with KKLA-FM, Los Angeles.
(6) The station is simulcast with WHK-AM, Cleveland.
For the year ended December 31, 1996 and the nine months ended September 30, 1997, the Company derived 57.5% and 53.4% of its gross revenue, or $37.5 million and $29.1 million, respectively, from the sale of nationally syndicated and local block program time. The Company believes that sales of block program time lessen its exposure to swings in general economic activity and thus make its revenue stream less volatile. The Company derives its nationally syndicated program revenue from a programming customer base consisting primarily of geographically diverse, well-established non-profit religious and educational organizations that purchase time on stations in a large number of markets in the United States. These nationally syndicated program producers typically purchase 13, 26 or 52 minute blocks on a Monday through Friday basis and may offer supplemental programming for weekend release. The recognized leading daily radio program featured on religious talk format stations is Focus on the Family, which according to the 1997 Directory of Religious Media is syndicated on 943 radio stations in the United States, including 35 Company stations as of November 1997. Other leading radio programs currently include Insight for Living (590 stations, including 26 Company stations), In Touch (490 stations, including 27 Company stations) and Grace to You (294 stations, including 22 Company stations).
For the year ended December 31, 1996 and the nine months ended September 30, 1997, the Company derived 26.7% and 27.6% of its gross revenue, or $17.4 million and $15.0 million, respectively, from the sale of local spot advertising and 6.3% and 9.4% of its gross revenue, or $4.1 million and $5.1 million (including $2.7 million of reclassified infomercial advertising revenue), respectively, from the sale of national spot advertising. The Company in recent years has begun to place greater emphasis on the development of local spot sales in all of its markets. The Company believes that the listening audience for its radio stations is responsive to
affinity advertisers that promote products targeted to the religious/conservative audience and is receptive to direct response appeals such as those offered through infomercials. The Company's stations all have affinity advertising customers in their respective markets. The Company also generates spot advertising revenue from general market retailers, including automobile dealers and grocery store chains, in many of its markets. Because the Company does not sell advertising based on market share, it does not subscribe to traditional audience measuring services, but instead sells advertising based upon the proven success of its other advertising customers. The Company's radio stations also receive revenue from national advertisers desiring to include selected Company stations in national buys covering multiple markets. These national advertising buys are placed through Salem Radio Representatives ("SRR"), a wholly owned subsidiary of the Company, which sells all national commercial advertising placed on the Network's commercial affiliate radio stations.
The Network. In 1993, the Company established the Network in connection with its acquisition of certain assets of the former CBN Radio Network. Establishment of the Network was a part of the Company's overall business strategy to develop a national network of affiliated radio stations anchored by the Company's owned and operated radio stations in major markets. The Network, which is headquartered in Dallas, is focused on the development, production and syndication of a broad range of programming specifically targeted to religious talk and music stations as well as general market news/talk stations. Currently, the Company has rights to six full-time satellite channels and all Network product is delivered to affiliates via satellite.
As of November 30, 1997, the Network had approximately 750 affiliate stations, including the Company's owned and operated stations, that broadcast one or more of the offered programming options. These programming options feature talk shows, such as The Oliver North Show and The Alan Keyes Show, news and music. Network operations also include commission revenue of SRR from unaffiliated customers and an allocation of operating expenses estimated to relate to such commission revenue. The Network's gross revenue for the year ended December 31, 1996 and the nine months ended September 30, 1997 were $5.3 million and $4.5 million, respectively. While the Network earned net operating income of $274,000 for the year ended December 31, 1996, it incurred a net operating loss of $542,000 for the nine months ended September 30, 1997, due primarily to continued costs associated with the development of a news programming production and distribution capability and reduced advertising revenue associated with syndicated talk programming.
The Company is a California corporation. Its principal offices are located at 4880 Santa Rosa Road, Suite 300, Camarillo, California 93012 and its telephone number is (805) 987-0400.
OPERATING STRATEGY
Maintain and Enhance Leadership Position in Religious Talk Format. The Company believes that an important factor in its ability to attract and retain quality programming customers is its demonstrated long-term commitment to the religious talk format. Program customers tend to be sophisticated purchasers of air time that recognize that building a listener base capable of generating revenue sufficient to cover programming costs may take several years. The Company's experience has been that such programmers are accordingly reluctant to make the commitment to building a new listener base unless they have a reasonable expectation that the format will remain in place. Management of the Company therefore intends to continue its long-term commitment to the religious talk format. Management believes its commitment to growing the religious talk format, increasing the number of owned and operated stations and developing network operations and national sales activities allows for future growth opportunities for the Company.
Identify and Develop New Program Producers. The Company recognizes that the ongoing success of its religious talk format is largely dependent on the continued availability of quality programs. Management of the Company is committed to assisting promising new program producers with advice on content and structuring of programs in addition to advice on levels of support staffing, engineering and programming delivery options. Station managers are encouraged to evaluate local talk programs with a view toward expansion of promising
programs into national syndication. The Company continues to emphasize this important development area with the goal of maintaining a backlog of quality programs available for placement in new markets and existing markets where the Company may add additional stations.
Emphasize Signal Quality and Market Coverage. The Company is committed to the ongoing evaluation and improvement of its technical facilities, including power increases, tower/antenna relocations and investment in state of the art equipment. The Company believes that its success is attributable in part to its ownership of broadcast facilities that provide broad signal coverage in its markets.
Build Station Identity Through Development of Strong Production Values. The Company believes that an important element in retaining and increasing the listening audience and expanding the base of potential advertisers for its stations is the development of local station identity. The Company believes that its emphasis on development of a station's identity during those times when the Company is not broadcasting its customers' block programming will allow it to compete with general format stations for listening audience and advertising customers. Station employees with responsibility for programming are encouraged to build identity through continual improvement of production values and to share their ideas with other Company stations. The Company assists local personnel and coordinates development of increased production values through its director of programming located at the corporate headquarters. Certain of the Company's stations have successfully adopted techniques that have built identity through the development of local on-air personalities associated with segments of the broadcast day, and these techniques are being implemented at other Company stations.
Expand and Diversify National Network. The Company is committed to expanding the Network by adding to its menu of Network product offerings and by actively promoting these products to Network affiliates. The Company believes that by continually increasing the quality of its Network product it will add to its affiliate base, thereby providing more audience reach that will attract more national advertising customers and potentially generate business from national advertising agencies. The Company competes aggressively for talk show talent it believes will be attractive to existing and potential affiliates, refines existing music formats and develops political commentary and public affairs programming that are complementary to the product offerings of the Network. The Company will continue to explore ways to better serve its customers and the religious/conservative listening audience by using the combined resources of its owned and operated stations and the Network. For example, unused Network inventory can be used as an incentive to potential or existing program producers to purchase block program time on the Company's radio stations. The Company has successfully implemented this strategy in the past and will continue to devote significant time and resources to find additional synergistic uses of its radio stations and the Network.
ACQUISITION STRATEGY
Expand Into New Markets. The Company continues to pursue an acquisition strategy of acquiring radio stations in the top 25 markets in which it currently does not have a presence and acquiring selected stations in mid-sized markets. The Company considers mid-sized markets to be the 26th through 50th largest radio markets in the United States in terms of audience size. In the early years of the Company's operations, and from time to time more recently, it has acquired radio stations in markets smaller than mid-sized markets. Generally, any recent acquisition of a station in a smaller market was undertaken (i) to access an audience that the Company believed would be particularly receptive to its format, such as the market in Colorado Springs, Colorado, where the headquarters of a number of religious organizations are located, or (ii) as part of an acquisition in which the Company was pursuing its strategy of acquiring a station in a major or mid-sized market but was required to acquire the smaller market station as part of a multiple station transaction.
The Company believes that its presence in large markets makes it attractive to national program syndicators and national advertisers. In addition, the geographic diversity of the Company's markets reduces its dependence on any single local economy. Over the past 20 years, the Company has developed and implemented a model for evaluating the desirability of entering a new market. Management considers the number of stations already serving the target market with religious formats, the programming within that format (music or talk), the quality
of talk programs offered and the signal strength of the competing stations. The signal strength of any station that becomes available for purchase is a critical factor in the evaluation process.
Expand in Existing Markets. The Company pursues the acquisition of additional stations in markets in which it already has a presence. The experience of the Company with existing duopolies and triopolies has been positive. Multiple stations making use of one general manager and sales staff and one broadcast facility have resulted in operational efficiencies in certain markets. In addition, the Company intends to develop more talk and music product at the Network level that will be available for use on additional stations in a market. The Company believes new religious music formats are gaining increased popularity and are complementary to the Company's religious talk format. Three separate music formats are produced by the Network and are available for use by Company stations. This strategy has been implemented successfully in Colorado Springs, where the Company owns three FM stations, two of which offer religious music formats and one of which features a religious talk format.
Upgrades in Existing Markets. The Company is continually looking for upgrade opportunities in existing markets to expand its audience reach. This strategy of acquiring upgraded facilities in existing markets has been an area of emphasis for senior management for many years and has been successfully demonstrated in such markets as Seattle and New York in prior years. More recently, the Company has significantly improved its position in Boston and Dallas through the acquisition of more powerful stations that have allowed the Company to continue its business strategy of operating stations that provide broad signal coverage in its markets.
Acquisition Financing. In the past, the Company has principally financed acquisitions of radio stations through borrowings, including borrowings under credit agreements with banks and, to a lesser extent, from cash flow from operations and selected asset dispositions. Taking into account certain restrictions under the Credit Agreement, however, the Company is not currently able to borrow for acquisitions. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources."
RECENT DEVELOPMENTS
The Company has completed the purchase of the following radio stations in 1997:
DATE MARKET STATION MSA RANK PURCHASE PRICE ---- ------ ------- -------- -------------- January 1997................ Dallas, TX KWRD-FM 7 $40,100,000(1) January 1997................ Cleveland, OH WHK-AM 22 6,220,000 February 1997............... Canton, OH WHK-FM 120 5,903,000 February 1997............... Akron, OH WHLO-AM 67 1,995,000 February 1997............... Boston, MA WEZE-AM 10 7,030,000 April 1997.................. Sacramento, CA KTKZ-AM 28 1,485,000 July 1997................... Baltimore, MD WITH-AM 19 1,114,000 July 1997................... Cincinnati, OH WTSJ-AM 25 1,114,000 October 1997................ Cleveland, OH WCCD-AM 22 700,000 |
In November 1997, the Company sold substantially all of the assets of radio station WPZE-AM, Boston, Massachusetts, for $5 million. Proceeds from the sale are being held by a qualified intermediary under a like-kind exchange agreement to preserve the Company's ability to effect a tax-deferred exchange. If the Company does not identify replacement property it will use the proceeds to reduce outstanding borrowings under the Credit Agreement.
THE EXCHANGE OFFER
Securities Offered......................... Up to $150,000,000 aggregate
principal amount of 9 1/2% Series
B Senior Subordinated Notes due
2007.
The Exchange Offer......................... The Notes are being offered in
exchange for a like principal
amount of the Company's Old
Notes. Old Notes may be exchanged
only in integral multiples of
$1,000. The issuance of the Notes
is intended to satisfy the
obligations of the Company under
the terms of the Registration
Rights Agreement.
Tenders; Expiration Date; Withdrawal....... The Exchange Offer will expire at
5:00 P.M., New York City time on
, 1998, or such later date
and time to which it is extended
by the Company (the "Expiration
Date"). Tenders of Old Notes
pursuant to the Exchange Offer
may be withdrawn at any time
prior to the Expiration Date. In
the event the Company terminates
the Exchange Offer and does not
accept for exchange any Old Notes
pursuant to the Exchange Offer,
the Company will promptly return
such Old Notes to the Holders
thereof.
Accrued Interest on the Notes.............. The Notes will bear interest from
and including the date of
issuance of the Old Notes.
Accordingly, Holders who receive
Notes in exchange for Old Notes
will forego accrued but unpaid
interest on their exchanged Old
Notes for the period from and
including the date of issuance of
the Old Notes to the date of
exchange, but will be entitled to
such interest under the Notes.
Conditions of the Exchange Offer........... The Exchange Offer is subject to
certain customary conditions, any
or all of which may be waived by
the Company. The Company
currently expects that each of
the conditions will be satisfied
and that no waivers will be
necessary. See "The Exchange
Offer--Conditions to the Exchange
Offer."
Procedures for Tendering Old Notes......... Each Holder wishing to accept the
Exchange Offer must complete and
sign the Letter of Transmittal,
in accordance with the
instructions contained therein,
and submit the Letter of
Transmittal to the Exchange Agent
identified below. In addition,
either (i) certificates for such
Old Notes must be received by the
Exchange Agent along with the
Letter of Transmittal, (ii) a
timely confirmation of a book-
entry transfer (by generating an
"agent message" via the Automated
Tender Offer Program System of
The Depository Trust Company (the
"DTC")) of such Old Notes, if
such procedure is available, into
the Exchange Agent's account at
the DTC pursuant to the procedure
of book-entry transfer described
herein, must be received by the
Exchange Agent on or prior to the
Expiration Date or (iii) the
holder must comply with the
guaranteed delivery procedures
described herein. See "The
Exchange Offer--Procedures for
Tendering."
|
Guaranteed Delivery Procedures............. Holders of Old Notes who wish to
tender their Old Notes and whose
Old Notes are not immediately
available or who cannot deliver
their Old Notes and the Letter of
Transmittal and any other
documents required by the Letter
of Transmittal to the Exchange
Agent prior to the Expiration
Date, must tender their Old Notes
according to the guaranteed
delivery procedures set forth in
"The Exchange Offer--Guaranteed
Delivery Procedures."
Acceptance of Old Notes and Delivery of
Notes..................................... The Company will accept for
exchange any and all Old Notes
which are properly tendered in
the Exchange Offer prior to 5:00
P.M., New York City time, on the
Expiration Date. See "The
Exchange Offer--Acceptance of Old
Notes for Exchange; Delivery of
Notes."
Rights of Dissenting Holders............... Holders of Old Notes do not have
any appraisal or dissenters'
rights under the California
General Corporation Law in
connection with the Exchange
Offer.
Exchange Agent............................. The Bank of New York; telephone
(212) 815-[TBD]. See "The
Exchange Offer--Exchange Agent."
|
TERMS OF THE NOTES
The terms of the Notes are identical in all material respects to the terms of the Old Notes, except that the Notes are generally expected to be freely transferable as described under "The Exchange Offer--Resales of Notes."
Maturity Date.............................. October 1, 2007.
Interest Payment Dates..................... April 1 and October 1 of each
year, commencing April 1, 1998.
Optional Redemption........................ The Notes are redeemable at the
option of the Company, in whole
or in part, at any time on or
after October 1, 2002, at the
redemption prices set forth
herein, plus accrued and unpaid
interest to the redemption date.
In addition, the Company, at its
option, may redeem up to $50.0
million in aggregate principal
amount of the Notes at any time
on or prior to October 1, 2000 at
109.50% of the aggregate
principal amount so redeemed,
plus accrued and unpaid interest
thereon to the redemption date,
with the proceeds of one or more
Public Equity Offerings, provided
that at least $100.0 million in
aggregate principal amount of the
Notes remain outstanding
immediately after the occurrence
of any such redemption. See
"Description of the Notes--
Optional Redemption."
Change of Control.......................... Upon a Change of Control, each
holder of the Notes will be
entitled to require the Company
to purchase such holder's Notes
at 101% of the principal amount
thereof, plus accrued and unpaid
interest to the purchase date.
See "Description of the Notes--
Certain Covenants--Purchase of
Notes Upon a Change of Control."
Guarantees................................. The Notes will be guaranteed,
jointly and severally, on a
senior subordinated basis by the
Guarantors. The Guarantees will
be general unsecured obligations
of the Guarantors, subordinated
in right of payment to all
Guarantor Senior Indebtedness,
including any guarantees by
Guarantors of the Company's
obligations under the Credit
Agreement, and senior in right of
payment to any Subordinated
Indebtedness of the Guarantors.
See "Description of Notes--
Guarantees."
Subordination.............................. The Notes will be general
unsecured obligations of the
Company, subordinated in right of
payment to all existing and
future Senior Indebtedness,
including the Company's
obligations under the Credit
Agreement, and senior in right of
payment to any Subordinated
Indebtedness of the Company. See
"Description of Notes--
Subordination."
Certain Covenants.......................... The Indenture under which the Old
Notes were and the Notes will be
issued contains certain covenants
that, among other things, limits
the incurrence of additional
indebtedness by the Company and
Restricted Subsidiaries
|
(as defined herein), the payment
of dividends, the use of proceeds
of certain asset sales and
certain transactions with
affiliates and contains certain
other restrictive covenants
affecting the Company and
Restricted Subsidiaries. See
"Description of Notes--Certain
Covenants."
Absence of a Public Market for the Notes... There has been no public market
for the Old Notes and it is not
currently anticipated that an
active public market for the
Notes will develop. No assurance
can be given as to the liquidity
of the trading market for the
Notes following the Exchange
Offer.
|
SUMMARY CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY
The summary consolidated financial information below should be read in conjunction with, and is qualified by reference to, the Company's consolidated financial statements and related notes, "Selected Consolidated Financial Information of the Company" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Prospectus. The financial results of the Company are not comparable from year to year because of the acquisition and disposition of various radio stations and radio networks by the Company.
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
------------------------------------------------ ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS
DATA:
Net revenue............. $ 28,532 $ 32,423 $ 38,575 $ 48,168 $ 59,010 $ 42,465 $ 49,449
Operating expenses:
Station operating
expenses.............. 14,922 17,011 22,179 27,527 33,463 23,907 28,793
Corporate expenses..... 2,647 3,193 3,292 3,799 4,663 3,413 4,998
Tax reimbursements to
S corporation
shareholders.......... 1,029 1,311 977 2,057 2,038 1,529 1,780
Depreciation and
amortization.......... 6,441 6,601 7,633 7,884 8,394 6,148 9,382
-------- -------- -------- -------- -------- -------- --------
Operating expenses...... 25,039 28,116 34,081 41,267 48,558 34,997 44,953
-------- -------- -------- -------- -------- -------- --------
Net operating income... 3,493 4,307 4,494 6,901 10,452 7,468 4,496
Other income (expense):
Interest
income/expense, net... (2,516) (2,349) (3,438) (6,327) (6,838) (5,198) (8,392)
Gain (loss) on disposal
of assets............. (1,044) 1,603 (482) (7) 16,064 12,659 (190)
Other income (expense). (393) 2 (135) (255) (270) (209) (288)
-------- -------- -------- -------- -------- -------- --------
Total other income
(expense).............. (3,953) (744) (4,055) (6,589) 8,956 7,252 (8,870)
Income (loss) before
income taxes and
extraordinary item..... (460) 3,563 439 312 19,408 14,720 (4,374)
Provision (benefit) for
income taxes........... (415) 1,437 (247) (204) 6,655 5,046 (1,790)
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
extraordinary item..... (45) 2,126 686 516 12,753 9,674 (2,584)
Extraordinary gain
(loss)(1).............. 921 -- -- (394) -- -- (1,090)
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....... $ 876 $ 2,126 $ 686 $ 122 $ 12,753 $ 9,674 $ (3,674)
======== ======== ======== ======== ======== ======== ========
Pro forma net income
(loss)(2).............. $ 1,262 $ 2,917 $ 848 $ 1,024 $ 12,838 $ 9,727 $ (2,651)
======== ======== ======== ======== ======== ======== ========
OTHER DATA:
Cash flows provided by
operating activities... $ 6,030 $ 6,879 $ 7,482 $ 7,681 $ 10,495 $ 9,261 $ 1,928
Cash flows used in
investing activities... $(19,301) $(11,693) $(18,806) $(27,681) $(18,923) $(13,250) $(26,592)
Cash flows provided by
financing activities... $ 15,453 $ 3,612 $ 11,827 $ 19,227 $ 9,383 $ 3,332 $ 24,805
Broadcast cash flow(3).. $ 13,610 $ 15,412 $ 16,396 $ 20,641 $ 25,547 $ 18,558 $ 20,656
Broadcast cash flow
margin(4).............. 47.7% 47.5% 42.5% 42.9% 43.3% 43.7% 41.8%
EBITDA (excludes all
other income items)(3). $ 10,963 $ 12,219 $ 13,104 $ 16,842 $ 20,884 $ 15,145 $ 15,658
Capital expenditures.... $ 1,691 $ 912 $ 2,441 $ 3,040 $ 6,982 $ 4,119 $ 5,502
Purchase price of radio
stations............... $ 20,000 $ 15,500 $ 14,935 $ 24,550 $ 59,621 $ 8,302 $ 24,861
Earnings to fixed
charges ratio(5)....... 0.9x 2.1x 1.1x 1.0x 3.2x .5x
PRO FORMA RATIO:
Pro forma earnings to
fixed charges ratio(5). 1.7x .4x
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DECEMBER 31
----------------------------------------- SEPTEMBER 30
1992 1993 1994 1995 1996 1997
------- ------- ------- -------- -------- ------------
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 2,479 $ 1,277 $ 1,780 $ 1,007 $ 1,962 $ 2,103
Working capital......... 322 5,836 1,852 1,088 8,258 17,573
Intangible assets, net.. 32,146 39,296 46,748 61,923 106,781 121,833
Total assets............ 62,106 69,656 82,041 104,817 159,185 184,133
Long-term debt
(including current
portion)............... 44,915 48,656 60,656 81,020 121,790 160,100
Shareholders' equity.... 10,348 12,474 13,160 13,282 20,354 9,386
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(2) The Company's consolidated financial data for the periods presented include the results of operations, assets and liabilities of New Inspiration Broadcasting Company, Inc. ("New Inspiration") and Golden Gate Broadcasting Company, Inc. ("Golden Gate"), which were both S corporations under common ownership and control with the Company prior to the Reorganization (as defined herein). Federal and state income taxes (except for a 1.5% state franchise tax) are not provided for New Inspiration and Golden Gate in the consolidated statements of operations of the Company for the periods presented because the tax attributes of S corporations are passed through to their shareholders. Prior to the Reorganization, New Inspiration and Golden Gate reimbursed the S corporation shareholders for their individual income tax liabilities on the earnings of the S corporations. These tax reimbursements to S corporation shareholders are reflected as an operating expense in the Company's consolidated financial statements.
In August 1997, the Company, New Inspiration and Golden Gate effected the Reorganization pursuant to which the S corporations became wholly owned by the Company. The S corporation status of New Inspiration and Golden Gate was terminated in the Reorganization. To give effect to the Reorganization, including the termination of the S corporation status of New Inspiration and Golden Gate, pro forma net income excludes the tax reimbursements to S corporation shareholders (because such amounts would not have been paid had New Inspiration and Golden Gate been subject to income taxes) and includes a pro forma tax provision at an estimated combined federal and state income tax rate of approximately 40% (to reflect an estimated income tax provision (benefit) of the Company) as if the Reorganization had occurred at the beginning of each period presented in the Company's consolidated financial data. See "Business--Corporate Structure and Reorganization."
The following table reflects the pro forma adjustments to historical net income:
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
------------------------------------- ---------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------ ------ ------- ------- -------
Pro Forma Information:
Income (loss) before
income taxes and
extraordinary
item as reported
above............... $ (460) $3,563 $ 439 $ 312 $19,408 $14,720 $(4,374)
Add back tax
reimbursements to
S corporation
shareholders........ 1,029 1,311 977 2,057 2,038 1,529 1,780
------ ------ ------ ------ ------- ------- -------
Pro forma income
(loss) before income
taxes and
extraordinary item . 569 4,874 1,416 2,369 21,446 16,249 (2,594)
Pro forma income tax
provision (benefit). 228 1,957 568 951 8,608 6,522 (1,033)
------ ------ ------ ------ ------- ------- -------
Pro forma income
(loss) before
extraordinary item.. 341 2,917 848 1,418 12,838 9,727 (1,561)
Extraordinary gain
(loss).............. 921 -- -- (394) -- -- (1,090)
------ ------ ------ ------ ------- ------- -------
Pro forma net income
(loss).............. $1,262 $2,917 $ 848 $1,024 $12,838 $ 9,727 $(2,651)
====== ====== ====== ====== ======= ======= =======
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(3) "Broadcast cash flow" consists of net operating income before tax reimbursements to S corporation shareholders, depreciation and amortization and corporate expenses. "EBITDA" consists of net operating income before tax reimbursements to S corporation shareholders and depreciation and amortization. Although broadcast cash flow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that they are useful to an investor in evaluating the Company because they are measures widely used in the broadcast industry to evaluate a radio company's operating performance. However, broadcast cash flow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP as a measure of liquidity or profitability.
(4) Broadcast cash flow margin is broadcast cash flow as a percentage of net revenue.
(5) For purposes of computing the ratio of earnings to fixed charges, "earnings" consist of income from operations before income taxes plus fixed charges, and "fixed charges" consist of interest expense plus an allocation of a portion of rent expense representing interest. The pro forma earnings to fixed charges ratio assumes the issuance of the Notes and the repayment in full of the Company's outstanding indebtedness under the Company's prior credit agreement which was repaid in full upon issuance of the Old Notes on September 25, 1997 as if each occurred at the beginning of each period presented. For the years ended December 31, 1992 and 1995, and for the nine months ended September 30, 1997, the Company's earnings were inadequate to cover fixed charges; the coverage deficiency for the years ended December 31, 1992 and 1995 was $460,000 and $313,000, respectively, and for the nine months ended September 30, 1997 was $4.4 million (actual) and $7.2 million (pro forma).
RISK FACTORS
In addition to the other information set forth elsewhere in this Prospectus, the following risk factors should be carefully considered before making an investment in the Notes offered hereby.
SUBSTANTIAL LEVERAGE; SUBORDINATION; RESTRICTIONS IMPOSED BY CREDIT AGREEMENT; ASSET ENCUMBRANCE
The Company is highly leveraged with approximately $160.1 million of total
Indebtedness outstanding and approximately $9.4 million of shareholders'
equity. The degree to which the Company is leveraged could have important
consequences to holders of the Notes, including the following: (i) the
Company's ability to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be impaired; (ii)
the Company must pay interest on the Notes and interest and principal on its
other indebtedness, leaving less funds for other purposes, (iii) the Company
may be at a competitive disadvantage to its less leveraged competitors; and
(iv) the Company could be more vulnerable to a downturn in general economic
conditions.
The Notes are unsecured and thus, in effect, will rank junior to any secured indebtedness of the Company and the Guarantors. The payment of any amount owing in respect of the Notes will be subordinated to the prior payment in full of all existing and future Senior Indebtedness of the Company, including all amounts owing under the Credit Agreement. In addition, the Guarantees of the Notes will be subordinated to the prior payment in full of all existing and future Guarantor Senior Indebtedness of the Guarantors. Consequently, in the event of the liquidation, dissolution, reorganization or similar proceeding with respect to the Company or the Guarantors, assets of the Company and the Guarantors will be available to pay obligations on the Notes only after all Senior Indebtedness or Guarantor Senior Indebtedness, as applicable, has been paid in full, and there can be no assurance that sufficient assets to pay amounts due on all or any of the Notes will remain. See "Description of the Notes--Subordination." As of September 30, 1997, the Company and the Guarantors had an aggregate of $10.1 million of Senior Indebtedness outstanding under the Company's $75.0 million senior secured reducing revolving credit facility (the "Credit Agreement") and no other Indebtedness outstanding other than the Notes. Subject to restrictions in the Indenture and the Credit Agreement, the Company will be able to incur additional Senior Indebtedness, including indebtedness under the Credit Agreement.
The indebtedness outstanding under the Credit Agreement is secured by liens on substantially all of the assets of the Company and the Guarantors, constitutes Senior Indebtedness and will come due prior to the maturity of the Notes. Indebtedness under the Credit Agreement is at variable rates of interest, which will cause the Company to be vulnerable to increases in interest rates (except to the extent the Company has entered into certain Interest Rate Agreements (as defined herein) with respect thereto). The Credit Agreement includes certain restrictive covenants that, among other things and with certain exceptions, limit the Company's ability to incur additional indebtedness, enter into affiliate transactions, pay dividends, consolidate, merge or effect certain asset sales, make certain investments or loans and change the nature of its business. The Credit Agreement also requires satisfaction by the Company of certain financial covenants, which will require maintenance of specified financial ratios and compliance with certain financial tests, including ratios for maximum leverage, minimum interest coverage, minimum debt service coverage and minimum fixed charge coverage. The ability of the Company to comply with these and other provisions of the Credit Agreement may be affected by events beyond the Company's control. The breach of any of these covenants could result in a default under the Credit Agreement, in which case, depending on the actions taken by the lenders thereunder or their successors in interest, such lenders would be entitled to declare all amounts borrowed under the Credit Agreement, together with accrued interest, to be due and payable. If the Company were unable to repay such borrowings, such lenders could proceed against their collateral. See "Description of Certain Indebtedness--Credit Agreement." If the indebtedness under the Credit Agreement were accelerated, there can be no assurance that the assets of the Company would be sufficient to repay in full such indebtedness and the other indebtedness of the Company, including the Notes. See "Description of the Notes."
OPERATING AND GROWTH STRATEGY
Because the Company maintains a religious format at nearly all its owned and operated radio stations and offers religious programming options through the Network, the success of the Company is dependent upon the
popularity of religious formats, the financial success of the organizations purchasing block program time and spot advertising on the Company's stations and the financial success of religious format radio stations that purchase programming through the Network. The Company recognizes that this commitment may result in the foregoing of certain opportunities, such as switching to non-religious formats in certain markets that appear, or may appear in the future, to offer better profit opportunities. The Company believes, however, that this commitment is necessary in order to continue to obtain commitments from those quality program producers whose presence on the Company's stations will attract and retain the religious/conservative listening audience. While the Company has been successful in the past with the religious formats of its stations and Network programming, no assurance can be given that this format will be successful in the future.
Since January 1, 1992, the Company has grown significantly by acquiring ownership of, or operating rights to, 29 radio stations in 20 markets, nine of which were acquired after January 1, 1997. Typically the Company has acquired radio stations that operate under a different format than the religious/talk format the Company employs. The Company is committed to the religious/talk format and considers its commitment to have brought it success by allowing quality programmers to commit their resources to development of their programming based on the comfort that the format will exist long enough for such programmers to succeed in building an audience on the Company's stations. The Company intends to continue its growth and operating strategies through continued acquisitions of radio station groups and individual radio stations in selected markets and expects that, consistent with past practices, it will reformat most of these radio stations. See "Business--Acquisition Strategy." The Company's growth and operating strategy has a number of inherent risks including: (i) the Company may be unable to generate cash flow in reformatted stations as effectively as it has in the past, (ii) the Company's management team may be unable to manage a larger organization or may be unable to integrate newly acquired stations into its management structure as effectively as when it had fewer stations to manage, (iii) the acquisitions that the Company makes may not benefit the Company as expected, (iv) the Company may be unable to locate attractive acquisition opportunities or may be forced to pay higher prices due to increased competition for such radio stations and (v) to continue its acquisition strategy, the Company may need and be unable to obtain additional financing on terms acceptable to its management and in compliance with the Indenture and the Credit Agreement or at all. Taking into account certain restrictions under the Credit Agreement, the Company is not currently able to borrow for acquisitions. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." The Company currently is evaluating certain acquisitions but has no binding acquisition commitments other than as described in "Summary--Recent Developments."
DEPENDENCE ON KEY CUSTOMERS AND KEY MARKETS; MARKET GROWTH CONSTRAINTS
A substantial portion of the Company's historical revenue has been realized from the sale of block program time to independent producers of religious programming. While no single programming customer represented more than 7.5% of total program revenue for the year ended December 31, 1996 or the six months ended June 30, 1997, the top five revenue-producing program customers accounted for 20.7% and 22.2%, respectively, of gross program revenue and 11.9% of gross revenue for such periods. These top programmers purchase block program time on many of the Company's stations. The Company's contracts with program providers are not exclusive and, with limited exceptions, may be terminated by either party on 30 days' notice. The Company's operating results and business could be materially and adversely affected should any of its significant programmers experience financial difficulties or determine to move their programs to other radio broadcasters or media.
A substantial portion of the Company's historical revenue has been realized from the results of operations of several of its radio stations in certain key markets. The Company's top four revenue-producing stations accounted for 38.3% and 36.1%, respectively, of the Company's net revenue for the year ended December 31, 1996 and the nine months ended September 30, 1997 and 59.5% and 59.7%, respectively, of the Company's EBITDA for the same periods. A significant decline in net revenue from the Company's stations in these markets could have a material adverse effect on the Company's financial position and results of operations.
In addition, the Company's ability to enter new markets has been dependent to a significant degree upon the willingness of its core group of national programming customers to purchase air time in these new markets and thus expand the distribution of their programs. There can be no assurance that such core group will continue to support the Company's further expansion into new markets. Because of the substantial investment required to purchase block program time in new markets and the significant time lag involved in creating a listener base capable of generating revenue sufficient to cover these programming costs, these programming customers may not be willing to make the financial commitment associated with expanding into new markets, which may in turn affect the Company's ability to expand into new markets. In addition, the Company's ability to expand into new markets could be limited by programming customers having pre-existing relationships with other stations in such markets.
HOLDING COMPANY STRUCTURE; POSSIBLE UNENFORCEABILITY OF GUARANTEES; FRAUDULENT CONVEYANCES AND PREFERENTIAL TRANSFERS
The Company is a holding company that derives substantially all of its operating income from the Guarantors, including income used for the payment of principal of and interest on the Notes. The ability of the Guarantors to make such payments is restricted by, among other things, applicable state corporate laws, other laws and regulations or terms of agreements to which they may become party.
The Guarantees provided by the Guarantors may be subject to legal challenge in the event of the bankruptcy of a Guarantor. To the extent that the Guarantees are not enforceable, the rights of holders of the Notes to participate in any distribution of assets of any Guarantor upon liquidation, bankruptcy, reorganization or otherwise may, as is the case with other unsecured creditors of the Company, be subject to prior claims of creditors of the Guarantor.
Enforcement of the Guarantees may be limited by certain fraudulent
conveyance laws. Various fraudulent conveyance and similar laws have been
enacted for the protection of creditors and may be utilized by a court of
competent jurisdiction to avoid the Guarantees. The requirements for
establishing a fraudulent conveyance vary depending on the law of the
jurisdiction that is being applied. Generally, if in a bankruptcy,
reorganization, rehabilitation or similar proceeding in respect to the Company
or a Guarantor, or in a lawsuit by or on behalf of creditors against the
Company or a Guarantor, a court were to find that (i) the Company or a
Guarantor, as the case may be, incurred indebtedness in connection with the
Notes (including the Guarantees) with the intent of hindering, delaying or
defrauding current or future creditors of the Company or the Guarantor, as the
case may be, or (ii) the Company or a Guarantor, as the case may be, received
less than reasonably equivalent value or fair consideration for incurring such
indebtedness (including the Guarantees), as the case may be, and either
(a) was insolvent at the time of the incurrence of such indebtedness
(including the Guarantees), (b) was rendered insolvent by reason of incurring
such indebtedness (including the Guarantees), (c) was at such time engaged or
about to engage in a business or transaction for which its assets constituted
unreasonably small capital or (d) intended to incur, or believed that it would
incur, debts beyond its ability to pay such debts as they matured, such court
could, with respect to the Company or the Guarantor, as the case may be,
declare void in whole or in part the obligations of the Company or such
Guarantor in connection with the Notes (including the Guarantees). Generally,
an entity will be considered insolvent if the sum of its respective debts was
greater than the fair saleable value of all of its property at a fair
valuation or if the present fair saleable value of its assets is less than the
amount that will be required to pay its probable liability on its existing
debts, as they become absolute and mature.
Additionally, under federal bankruptcy or applicable state insolvency law, if certain bankruptcy or insolvency proceedings were initiated by or against the Company or any Guarantor within 90 days after any payment by the Company or such Guarantor with respect to the Notes or a Guarantee, respectively, or if the Company or such Guarantor anticipated becoming insolvent, all or a portion of such payment could be avoided as a preferential transfer and the recipient of such payment could be required to return such payment.
DEPENDENCE ON KEY PERSONNEL; CONTROL OF COMPANY
The Company's business is dependent upon the performance of certain key individuals, particularly Edward G. Atsinger III, the President, Chief Executive Officer and a director, and Stuart W. Epperson, the Chairman of the Board. The loss of the services of either Mr. Atsinger or Mr. Epperson, each of whom has been involved in the radio broadcasting industry for more than 25 years, could have a material adverse effect upon the Company. The Company has entered into Employment Agreements with Mr. Atsinger and Mr. Epperson which expire July 31, 2000. See "Management--Employment Agreements." In addition, the Company has purchased key-man life insurance covering Mr. Atsinger and Mr. Epperson in the amount of $5.0 million each.
The Principal Shareholders hold 86.8% of the outstanding common stock of the Company. See "Securities Ownership of Certain Beneficial Owners." As a result, the Principal Shareholders are effectively able to elect all of the members of the Board of Directors of the Company and therefore direct the management and policies of the Company. The Principal Shareholders may have interests different from those of holders of the Notes.
COMPETITION
The radio broadcasting industry, including the religious format segment of this industry, is a highly competitive business. The financial success of each of the Company's radio stations that features talk programming is dependent, to a significant degree, upon its ability to generate revenue from the sale of block program time to national and local religious and educational organizations. The Company competes for this program revenue with a number of different commercial and noncommercial radio station licensees. While no group owner specializing in the religious format approaches the Company in size of potential listening audience and presence in major markets, religious format stations exist and enjoy varying degrees of prominence and success in all markets. The Company owns and/or operates 30 radio stations in 19 of the top 25 radio markets in terms of audience size. Two competitors of the Company with the next highest presence in the top 25 markets own and/or operate only 15 stations in 7 of such major markets and 10 stations in 10 of such markets, respectively. While management believes that its commitment to acquiring full market coverage facilities, its reputation for quality programming and its relationships with key customers position it well for continued growth and stability of program revenue, there can be no assurance that the Company will be able to maintain or increase its current program revenue.
The Company also competes for revenue in the spot advertising market with other commercial religious format and general format radio station licensees. There can be no assurance that the Company will be able to maintain or increase its current advertising revenue. The Company competes in the spot advertising market with other media as well, including broadcast television, cable television, newspapers, magazines, direct mail coupons and billboard advertising. Competition may also come from new media technologies currently being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite and by digital audio broadcasting ("DAB"). DAB may deliver by satellite to national and regional audiences, multi-channel, multiformat digital radio services with quality equivalent to compact discs. The delivery of information through the Internet also could create new competition. The Federal Communications Commission (the "FCC") has recently authorized spectrum for the use of a new technology, satellite digital audio radio services ("DARS"), to deliver audio programming. DARS may provide a medium for the delivery by satellite or terrestrial means of multiple new audio programming formats to local and national audiences. The Company cannot predict at this time the effect, if any, that any such new technologies may have on the radio broadcasting industry.
The Network also faces competition. The Network competes with other commercial radio networks that offer news and talk programming to religious format stations and two noncommercial networks that offer religious music formats. The Network also competes with other radio networks for the services of talk show personalities. While management believes that the variety of products offered by the Network and its presence in major markets through affiliation with Company owned and operated stations gives the Network a strong competitive position, there can be no assurance that existing and new competitors will not adversely affect the Network's growth potential and profitability.
REGULATORY MATTERS
Each of the Company's radio stations operates pursuant to one or more licenses issued by the FCC that expire at different times. Although the Company can and intends to apply to renew these licenses, third parties may challenge the Company's renewal applications. There can be no assurance that the Company's licenses to operate its radio stations will be renewed.
The radio broadcasting industry is subject to extensive and changing regulation. Among other things, the Communications Act of 1934 (the "Communications Act") and FCC rules and policies require FCC approval for transfers of control of FCC licenses and assignments of FCC licenses. The filing of complaints against the Company or other FCC licensees could result in the FCC's delaying the grant of, or refusing to grant, its consent to the assignment of licenses to or from an FCC licensee against whom a complaint is pending. See "Business--Federal Regulation of Radio Broadcasting."
Further, in addition to the other risks associated with the acquisition of radio stations, the Company also is aware that the FCC and the Department of Justice (the "DOJ"), which evaluate transactions to determine whether those transactions should be challenged under the federal antitrust laws, have recently been increasingly active in their review of radio station acquisitions, particularly where an operator proposes to acquire additional stations in its existing markets. There can be no assurance that the DOJ or the Federal Trade Commission ("FTC") will not require the restructuring of future acquisitions. See "Business--Federal Regulation of Radio Broadcasting."
POTENTIAL INABILITY TO PURCHASE TENDERED NOTES UPON A CHANGE OF CONTROL
Each holder has the option to cause the Company to purchase its Notes, in whole or in part, at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon through the date of repurchase, following a Change of Control (as defined herein). In addition, a Change of Control would be an event of default under the Credit Agreement. The Company currently does not have sufficient funds available to it to purchase all of the outstanding Notes were they to be tendered in the event of a Change of Control. There can be no assurance that the Company will be able to repay all outstanding Senior Indebtedness and repurchase the Notes in the future upon a Change of Control. See "Description of the Notes--Certain Covenants-- Purchase of Notes Upon a Change of Control."
LACK OF PUBLIC MARKET; RESTRICTIONS ON RESALE
The Notes are new securities for which there is currently no market. The Old Notes are currently eligible for trading by qualified buyers in the PORTAL market. Following commencement of the Exchange Offer but prior to its consummation, the Old Notes may continue to be traded in the PORTAL market. Following consummation of the Exchange Offer, the Notes will not be eligible for PORTAL trading. Although the Initial Purchasers have informed the Company that they currently intend to make a market for the Notes, they are not obligated to do so and any such market may be discontinued at any time without notice. There can be no assurance that an active public market for the Notes will develop or, if developed, will continue to exist. If a public trading market for the Notes develops, future trading prices will depend on many factors, including, among other things, general market conditions, prevailing interest rates, the Company's results of operations and the market for similar securities. Depending upon such factors, the Notes may trade at a discount from their original issue price. Further, in the case of non-tendering holders of Old Notes, no assurance can be given as to the liquidity of the trading market for the Old Notes following the Exchange Offer.
USE OF PROCEEDS
The Company will receive no proceeds from the exchange of the Notes for the Old Notes pursuant to the Exchange Offer. The net proceeds to the Company from the private placement of the Old Notes were approximately $145.4 million (after deduction of the Initial Purchasers' discount and expenses of the Offering). The Company used the net proceeds from the sale of the Old Notes to repay substantially all of its outstanding indebtedness under the Old Credit Agreement (as defined herein). During the one-year period ended just prior to the Offering the Company had borrowed approximately $60.7 million under the Old Credit Agreement. The Company used the proceeds from borrowings under the Old Credit Agreement of approximately $60.7 million to purchase radio stations (approximately $49.3 million), to pay bank loan fees (approximately $0.7 million), and for general corporate purposes (approximately $10.7 million), including capital expenditures and payment of interest expenses.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Exchange Offer is designed to provide holders of the Old Notes with an opportunity to acquire Notes which, unlike the Old Notes, will be freely tradable at all times, subject to any restrictions on transfer imposed by state "blue sky" laws and provided that the holder is not an affiliate of the Company within the meaning of the Securities Act and represents that the Notes are being acquired in the ordinary course of such holder's business and the holder is not engaged in, and does not intend to engage in a distribution of the Notes. The outstanding Old Notes in the aggregate principal amount at maturity of $150.0 million were originally issued and sold on September 25, 1997 (the "Original Issue Date") in order to repay outstanding indebtedness. The original sale to the Initial Purchasers was not registered under the Securities Act in reliance upon the exemption provided by Section 4(2) of the Securities Act and the concurrent resale of the Old Notes to investors was not registered under the Securities Act in reliance upon the exemption provided by Rule 144A promulgated under the Securities Act. The Old Notes may not be reoffered, resold or transferred other than pursuant to a registration statement filed pursuant to the Securities Act or unless an exemption from the registration requirements of the Securities Act is available. Pursuant to Rule 144, Old Notes may generally be resold (a) commencing one year after the Original Issue Date, in an amount up to, for any three-month period, the greater of 1% of the Old Notes then outstanding or the average weekly trading volume of the Old Notes during the four calendar weeks immediately preceding the filing of the required notice of sale with the Commission and (b) commencing two years after the Original Issue Date, in any amount and otherwise without restriction by a holder who is not, and has not been for the preceding 90 days, an affiliate of the Company. The Old Notes are eligible for trading in the PORTAL Market, and may be resold to certain qualified institutional buyers pursuant to Rule 144A. Certain other exemptions may also be available under other provisions of the federal securities laws for the resale of the Old Notes.
In connection with the original issue and sale of the Old Notes, the Company and the Guarantors entered into a Registration Rights Agreement, pursuant to which they agreed to use their best efforts to file with the Commission and cause to become effective a registration statement covering the exchange of the Notes for the Old Notes (the "Exchange Offer Registration Statement").
In the event that (i) due to a change in applicable law or current interpretations by the Commission, the Company and the Guarantors are not permitted to effect the Exchange Offer for all of the Old Notes, (ii) the Exchange Offer is not for any other reason consummated within 180 days after the Original Issuance Date of the Old Notes, (iii) any holder of the Old Notes shall, within 30 days after commencement of the Exchange Offer, notify the Company that such holder (x) is prohibited by applicable law or Commission policy from participating in the Exchange Offer, (y) may not resell Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such holder or (z) is a broker-dealer and holds Old Notes acquired directly from the Company or any Guarantor or an "affiliate" of the Company or any Guarantor, then in addition
to or in lieu of conducting the Exchange Offer, or (iv) at the request of any of the Initial Purchasers, the Company and the Guarantors will be required to file a registration statement (a "Shelf Registration Statement") covering resales (a) by the holders of the Old Notes in the event the Company and the Guarantors are not permitted to effect the Exchange Offer pursuant to the foregoing clause (i) or the Exchange Offer is not consummated within 180 days after the Original Issuance Date of the Old Notes, pursuant to the foregoing clause (i) or (ii) or (b) by the holders of Old Notes with respect to which the Company receives notice pursuant to the foregoing clauses (iii) or (iv), and will use its best efforts to cause any such Shelf Registration Statement to become effective and to keep such Shelf Registration Statement continuously effective for two years from the effective date thereof or such shorter period that will terminate when all of the Notes covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. The Company and the Guarantors shall, if they file a Shelf Registration Statement, provide to each holder of the Old Notes copies of the related prospectus and notify each such holder when the Shelf Registration Statement has become effective. A holder that sells Old Notes pursuant to a Shelf Registration Statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a current prospectus to purchasers, and will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales.
Under the Registration Rights Agreement, the Company and the Guarantors have agreed to use their best efforts to: (i) file the Exchange Offer Registration Statement or a Shelf Registration Statement with the Commission as soon as practicable after the Original Issuance Date of the Old Notes or notice from holders in the event of clauses (iii) or (iv) of the prior paragraph, (ii) have such Exchange Offer Registration Statement or Shelf Registration Statement declared effective by the Commission as soon as practicable after the filing thereof, and (iii) commence the Exchange Offer and issue the Exchange Notes in exchange for all Old Notes validly tendered in accordance with the terms of the Exchange Offer prior to the close of the Exchange Offer, or, in addition or in the alternative, cause such Shelf Registration Statement to remain continuously effective for two years from the effective date thereof or such shorter period that will terminate when all of the Old Notes covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. Each holder of the Old Notes is bound by the provisions of the Registration Rights Agreement which may require the holder to furnish notice or other information to the Company as a condition to certain obligations of the Company and the Guarantors to file a Shelf Registration Statement by a particular date or to maintain its effectiveness for the prescribed two-year period.
If the Company or the Guarantors fail to comply with the above provisions, the Company and the Guarantors agree to pay liquidated damages to each holder of Old Notes or Notes as follows:
(i) (A) if an Exchange Offer Registration Statement (or, in the event of
a change in applicable law or due to current interpretations by the
Commission, the Company and the Guarantors are not permitted to effect the
Exchange Offer, a Shelf Registration Statement) is not filed within 75 days
following the Original Issuance Date of the Old Notes, (B) in the event
that within the 30 days after commencement of the Exchange Offer, any
holder of Old Notes shall notify the Company that such holder (x) is
prohibited by applicable law or Commission policy from participating in the
Exchange Offer, (y) may not resell Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such holder or (z) is a
broker-dealer and holds Old Notes acquired directly from the Company or any
Guarantor or an "affiliate" of the Company or any Guarantor and a Shelf
Registration Statement is not filed within 75 days after such notice, or
(C) upon the request of an Initial Purchaser, a Shelf Registration
Statement is not filed within 75 days after such request, then commencing
on either the 76th day after the Original Issuance Date of the Old Notes or
the expiration of the 75-day time periods set forth in clauses (B) and (C)
above (either a "Prescribed Time Period"), as the case may be, penalty
amounts shall be accrued on the Old Notes over and above the stated payment
rates thereon at a rate of 0.25% per annum for the first 90 days
immediately following the 76th day after either the Closing Date or the
expiration of the Prescribed Time Period, as the case may be (the "Penalty
Amounts"), such Penalty Amount rate increasing by an additional 0.25% per
annum at the beginning of each subsequent 90-day period;
(ii) if an Exchange Offer Registration Statement or a Shelf Registration Statement is filed pursuant to clause (i) above and is not declared effective within either 150 days following the Original Issuance Date of the Old Notes or 75 days following the expiration of the Prescribed Time Period, as the case may be, then commencing on the 151st day after the Original Issuance Date or the 76th day following the expiration of the Prescribed Time Period, as the case may be, Penalty Amounts shall be accrued on the Old Notes over and above the accrued stated payment rates thereon at a rate of 0.25% per annum for the first 90 days immediately following the 151st day after the Closing Date or the 76th day after the expiration of the Prescribed Time Period, as the case may be, such Penalty Amounts rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period; and
(iii) if either (A) the Company and the Guarantors have not exchanged Exchange Notes for all Old Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to 180 days after the Original Issuance Date or (B) if applicable, a Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective prior to two years from its original effective date or such shorter period that will terminate when all of the Old Notes covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement, then, subject to certain exceptions, Penalty Amounts shall be accrued on the Old Notes over and above the stated payment rates at a rate of 0.25% per annum for the first 90 days immediately following (x) the 181st day after the Original Issuance Date in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective in the case of (B) above, such Penalty Amounts rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period; provided, however, that the Penalty Amounts rate on the applicable Old Notes may not exceed 1.0% per annum; and provided further that (1) upon the filing of the Exchange Offer Registration Statement or a Shelf Registration Statement (in the case of (i) above), (2) upon the effectiveness of the Exchange Offer Registration Statement or a Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Notes for all Old Notes tendered in the Exchange Offer or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective prior to two years from its original effective date (in the case of (iii) above), Penalty Amounts as a result of such clause (i), (ii) or (iii) shall cease to accrue.
Any Penalty Amounts due pursuant to clause (i), (ii) or (iii) above will be payable in cash on the various payment dates related to the Old Notes. The Penalty Amounts will be determined by multiplying the applicable Penalty Amounts rate by the principal amount of the Old Notes, multiplied by a fraction, the numerator of which is the number of days such Penalty Amount rate was applicable during such period, and the denominator of which is 360.
The foregoing summary of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified by reference to, the provisions of the Registration Rights Agreement filed as an exhibit to the Registration Rights Agreement. Copies of the Registration Rights Agreement are available from the Company or the Initial Purchasers upon request.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth herein and in the accompanying Letter of Transmittal, the Company will exchange $1,000 principal amount of Notes for each $1,000 principal amount of its outstanding Old Notes. Notes will be issued only in integral multiplies of $1,000 to each tendering holder of Old Notes whose Old Notes are accepted in the Exchange Offer.
The Notes will bear interest from and including the Original Issue Date. Accordingly, holders who receive Notes in exchange for Old Notes will forego accrued but unpaid interest on their exchanged Old Notes for the period from and including the Original Issue Date to the date of exchange, but will be entitled to such interest under the Notes.
As of , 1998, $150.0 million aggregate principal amount at maturity of Old Notes were outstanding. This Prospectus, the Letter of Transmittal and Notice of Guaranteed Delivery are being sent to all
registered holders of Old Notes as of that date. Tendering holders will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than certain transfer taxes which may be imposed, in connection with the Exchange Offer. See "--Payment of Expenses."
Holders of Old Notes do not have any appraisal or dissenters' rights under the California General Corporation Law in connection with the Exchange Offer.
EXPIRATION DATE; EXTENSIONS; TERMINATION
The Exchange Offer will expire at 5:00 P.M., New York City time, on , 1998, subject to extension by the Company by notice to the Exchange Agent as herein provided. The Company reserves the right to extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the time and date on which the Exchange Offer as so extended shall expire. The Company shall notify the Exchange Agent of any extension by oral or written notice and shall mail to the registered holders of Old Notes an announcement thereof, each prior to 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date.
The Company reserves the right to extend or terminate the Exchange Offer and not accept for exchange any Old Notes if any of the events set forth below under "--Conditions to the Exchange Offer" occur and are not waived by the Company, by giving oral or written notice of such delay or termination to the Exchange Agent. See "--Conditions to the Exchange Offer." The rights reserved by the Company in this paragraph are in addition to the Company's rights set forth below under the caption "--Conditions to the Exchange Offer."
PROCEDURES FOR TENDERING
The tender to the Company of Old Notes by a holder thereof pursuant to one of the procedures set forth below and the acceptance thereof by the Company will constitute an agreement between such holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal.
Except as set forth below, a holder who wishes to tender Old Notes for
exchange pursuant to the Exchange Offer must transmit a properly completed and
duly executed Letter of Transmittal, including all other documents required by
such Letter of Transmittal, to the Exchange Agent at the address set forth
below under "Exchange Agent" on or prior to the Expiration Date. In addition,
either (i) certificates for such Old Notes must be received by the Exchange
Agent along with the Letter of Transmittal, (ii) a timely confirmation of a
book-entry transfer by generating an "agent message" via the Automated Tender
Offer Program ("ATOP") System of the DTC (a "Book-Entry Confirmation") of such
Old Notes, if such procedure is available, into the Exchange Agent's account
at the DTC pursuant to the procedure of book-entry transfer described below,
must be received by the Exchange Agent on or prior to the Expiration Date, or
(iii) the holder must comply with the guaranteed delivery procedures described
below. LETTERS OF TRANSMITTAL AND OLD NOTES SHOULD NOT BE SENT TO THE COMPANY.
Signatures on a Letter of Transmittal must be guaranteed unless the Old Notes tendered pursuant thereto are tendered (i) by a registered holder of Old Notes who has not completed the box entitled "Special Issuance and Delivery Instructions" on the Letter of Transmittal or (ii) for the account of any firm that is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or trust company having an office in the United States (an "Eligible Institution"). In the event that signatures on a Letter of Transmittal are required to be guaranteed, such guarantee must be by an Eligible Institution.
The method of delivery of Old Notes and other documents to the Exchange Agent is at the election and risk of the holder, but if delivery is by mail it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent before the Expiration Date.
If the Letter of Transmittal is signed by a person other than a registered holder of any Old Note tendered therewith, such Old Note must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name of the registered holder appears on the Old Note.
If the Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered Old Notes will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all tenders that are not in proper form or the acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders must be cured within such time as the Company shall determine. Neither the Company nor the Exchange Agent shall be under any duty to give notification of defects in such tenders or shall incur liabilities for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date.
The Company's acceptance for exchange of Old Notes tendered pursuant to the Exchange Offer will constitute a binding agreement between the tendering person and the Company upon the terms and subject to the conditions of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect to the Old Notes at the DTC for purposes of the Exchange Offer within two business days after the date of this Prospectus, and any financial institution that is a participant in the DTC's systems may make book-entry delivery of Old Notes by causing the DTC to transfer such Old Notes into the Exchange Agent's account at the DTC in accordance with such DTC's procedures for transfer. However, although delivery of Old Notes may be effected through book-entry transfer at the DTC, the Letter of Transmittal or facsimile thereof with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the Exchange Agent at one of the addresses set forth below under the caption "--Exchange Agent" on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available, or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date, or (iii) who cannot complete the procedures for delivery by book entry transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) On or prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) substantially in the form made available by the Company; and
(c) Such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as the certificate(s) representing all tendered Old Notes in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and all other documents required by the Letter of Transmittal are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date.
Upon request of the Exchange Agent, a Notice of Guaranteed Delivery (as well as a copy of this Prospectus and the Letter of Transmittal) will be sent to holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company shall not be required to accept for exchange, or to issue Notes in exchange for, any Old Notes and may terminate or amend the Exchange Offer if at any time before the acceptance of such Old Notes for exchange or the exchange of the Notes for such Old Notes, the Company determines that the Exchange Offer violates applicable law, and applicable interpretation of the staff of the Commission or any order of any governmental agency or court of competent jurisdiction.
The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances giving rise to any such condition or may be waived by the Company in whole or in part at any time and from time to time in its reasonable discretion. The failure by the Company at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes tendered, and no Notes will be issued in exchange for any such Old Notes, if at such time any stop order shall be threatened or in effect with respect to the Registration Statement of which this Prospectus constitutes a part or the qualification of the Indenture under the Trust Indenture Act of 1939. In any such event, the Company is required to use its reasonable best efforts to obtain the withdrawal of any stop order at the earliest possible time.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NOTES
Upon the terms and subject to the conditions of the Exchange Offer, the Company will accept all Old Notes validly tendered prior to 5:00 P.M., New York City time, on the Expiration Date. The Company will deliver Notes in exchange for Old Notes promptly following the Expiration Date.
For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purpose of receiving the Notes. Under no circumstances will interest be paid by the Company or the Exchange Agent by reason of any delay in making such payment or delivery.
If any tendered Old Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, any such unaccepted Old Notes will be returned, at the Company's expense, to the tendering holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent at the address set forth below under "-- Exchange Agent." Any such notice of withdrawal must specify the name of the person or, if submitted via ATOP, the entity name and DTC participant number, having tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn (including the principal amount of such Old Notes), and (where certificates for Old Notes have been transmitted) specify the name in which such Old Notes are registered, if different from that of the withdrawing holder. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of such certificates the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such holder is an Eligible Institution. If
Old Notes have been tendered to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the DTC to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the DTC pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with the DTC for the Old Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described under "--Procedures for Tendering" above at any time on or prior to the Expiration Date.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. All correspondence in connection with the Exchange Offer and the Letter of Transmittal should be addressed to the Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL: BY HAND DELIVERY OR OVERNIGHT COURIER:
The Bank of New York The Bank of New York
101 Barclay Street - Floor 7E 101 Barclay Street - Ground Level
New York, NY 10286 Corporate Trust Services Window
Attn: Reorganization Section New York, NY 10286
Attn: Reorganization Section
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FACSIMILE TRANSMISSION:
(212) 815-6339
CONFIRM BY TELEPHONE:
(212) 815-[ TBD ]
Requests for additional copies of the Prospectus or the Letter of Transmittal should be directed to the Exchange Agent.
PAYMENT OF EXPENSES
The Company has not retained any dealer-manager or similar agent in connection with the Exchange Offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the Exchange Offer. The Company, however, will pay reasonable and customary fees and reasonable out- of-pocket expenses to the Exchange Agent in connection therewith. The Company will also pay the cash expenses to be incurred in connection with the Exchange Offer, including accounting, legal, printing, and related fees and expenses.
ACCOUNTING TREATMENT
The Notes will be recorded at the same carrying value as the Old Notes, as reflected in the Company's accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized.
RESALES OF NOTES
The staff of the Commission has issued the interpretive letters Exxon Capital Holdings Corporation (May 13, 1988), Morgan Stanley & Co., Incorporated (June 5, 1991) and Shearman & Sterling (July 2, 1993)
that conclude, in circumstances similar to those contemplated by the Exchange Offer, that new debt securities issued in a registered exchange for outstanding debt securities, which new securities are intended to be substantially identical to the securities for which they are exchanged, may be offered for resale, resold and otherwise transferred by a holder thereof (other than (i) a broker-dealer who purchases such securities from the issuer to resell pursuant to Rule 144A or any other available exemption under the Securities Act or (ii) a person who is an affiliate of the issuer within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provision of the Securities Act, provided that the new securities are acquired in the ordinary course of such holder's business and such holder, if not a broker-dealer, has no arrangement with any person to participate in the distribution of the new securities. A broker- dealer who holds outstanding debt securities that were acquired for its own account as a result of market-making or other trading activities may, however, be deemed to be an "underwriter" within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new securities received by the broker-dealer in any such exchange. For a period of 180 days from the Expiration Date, the Company will make a reasonable number of additional copies of this Prospectus, as amended or supplemented, available to any such broker-dealer for use in connection with any such resale.
The Company has not requested or obtained an interpretive letter from the Commission staff with respect to this Exchange Offer, and the Company and the holders are not entitled to rely on interpretive advice provided by the staff to other persons, which advice was based on the facts and conditions represented in such letters. However, the Exchange Offer is being conducted in a manner intended to be consistent with the facts and conditions represented in the Exxon Capital, Morgan Stanley and Shearman & Sterling letters. If any holder has any arrangement or understanding with respect to the distribution of the Notes to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission the Exxon Capital, Morgan Stanley and Shearman & Sterling letters and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. In addition, based upon the Shearman & Sterling letter each broker-dealer that receives Notes for its own account in exchange for the Old Notes, where such Old Notes were acquired by such broker-dealers as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Notes. See "Plan of Distribution." By delivering the Letter of Transmittal, a holder tendering Old Notes for exchange will be required to make certain representations, including among others, (i) that such holder is not an "affiliate" of the Company or any Guarantor within the meaning of Rule 405 under the Securities Act, (ii) that the Notes being acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Notes and (iii) that the holder, if not a broker-dealer, has no arrangement or understanding with any Person to participate in the distribution of the Notes. Holders who do not exchange their Old Notes pursuant to the Exchange Offer will continue to hold Old Notes that are subject to restrictions on transfer.
In addition, to comply with the securities laws of certain jurisdictions, if applicable, the Notes may not be offered or sold unless they have been registered or qualified for sale in such jurisdiction or an exemption from registration or qualification is available and the conditions thereto have been met. The Company has agreed, pursuant to the Registration Rights Agreement and subject to certain specified limitations therein, to register or qualify the Notes for offer or sale under the securities or blue sky laws of such jurisdictions as any holder of the Notes or the Old Notes reasonably requests in writing.
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY
The selected consolidated financial information of the Company presented below as of and for the years ended December 31, 1992, 1993, 1994, 1995, and 1996 is derived from the consolidated financial statements of the Company, which consolidated financial statements have been audited by Ernst & Young LLP, independent certified public accountants. The selected consolidated financial information of the Company presented below as of September 30, 1997, and for the nine months ended September 30, 1996 and 1997, is derived from unaudited consolidated financial statements of the Company which, in the opinion of management, contain all necessary adjustments of a normal recurring nature to present the financial statements in conformity with generally accepted accounting principles ("GAAP"). The consolidated financial statements of the Company as of December 31, 1995 and 1996 and for each of the years in the three-year period ended December 31, 1996, and the independent auditors' report thereon, as well as the unaudited consolidated financial statements of the Company as of September 30, 1997, and for the nine months ended September 30, 1996 and 1997, are included elsewhere in this Prospectus. The financial results of the Company are not comparable from year to year because of the acquisition and disposition of various radio stations and radio networks by the Company. The selected consolidated financial information below should be read in conjunction with, and is qualified by reference to, the Company's consolidated financial statements and related notes, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Prospectus.
NINE MONTHS
ENDED SEPTEMBER
YEAR ENDED DECEMBER 31 30
------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS
DATA:
Net revenue............. $28,532 $32,423 $38,575 $48,168 $59,010 $42,465 $49,449
Operating expenses:
Station operating
expenses.............. 14,922 17,011 22,179 27,527 33,463 23,907 28,793
Corporate expenses..... 2,647 3,193 3,292 3,799 4,663 3,413 4,998
Tax reimbursements to
S corporation
shareholders.......... 1,029 1,311 977 2,057 2,038 1,529 1,780
Depreciation and
amortization.......... 6,441 6,601 7,633 7,884 8,394 6,148 9,382
------- ------- ------- ------- ------- ------- -------
Operating expenses...... 25,039 28,116 34,081 41,267 48,558 34,997 44,953
------- ------- ------- ------- ------- ------- -------
Net operating income... 3,493 4,307 4,494 6,901 10,452 7,468 4,496
Other income (expense):
Interest
income/expense, net... (2,516) (2,349) (3,438) (6,327) (6,838) (5,198) (8,392)
Gain (loss) on disposal
of assets............. (1,044) 1,603 (482) (7) 16,064 12,659 (190)
Other income (expense). (393) 2 (135) (255) (270) (209) (288)
------- ------- ------- ------- ------- ------- -------
Total other income
(expense).............. (3,953) (744) (4,055) (6,589) 8,956 7,252 (8,870)
Income (loss) before
income taxes and
extraordinary item..... (460) 3,563 439 312 19,408 14,720 (4,374)
Provision (benefit) for
income taxes........... (415) 1,437 (247) (204) 6,655 5,046 (1,790)
------- ------- ------- ------- ------- ------- -------
Income (loss) before
extraordinary item..... (45) 2,126 686 516 12,753 9,674 (2,584)
Extraordinary gain
(loss)(1).............. 921 -- -- (394) -- -- (1,090)
------- ------- ------- ------- ------- ------- -------
Net income (loss)....... $ 876 $ 2,126 $ 686 $ 122 $12,753 $ 9,674 $(3,674)
======= ======= ======= ======= ======= ======= =======
Pro forma net income
(loss)(2).............. $ 1,262 $ 2,917 $ 848 $ 1,024 $12,838 $ 9,727 $(2,651)
======= ======= ======= ======= ======= ======= =======
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NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
------------------------------------------------ ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
OTHER DATA:
Cash flows provided by
operating activities... $ 6,030 $ 6,879 $ 7,482 $ 7,681 $ 10,495 $ 9,261 $ 1,928
Cash flows used in
investing activities... $(19,301) $(11,693) $(18,806) $(27,681) $(18,923) $(13,250) $(26,592)
Cash flows provided by
financing activities... $ 15,453 $ 3,612 $ 11,827 $ 19,227 $ 9,383 $ 3,332 $ 24,805
Broadcast cash flow(3).. $ 13,610 $ 15,412 $ 16,396 $ 20,641 $ 25,547 $ 18,558 $ 20,656
Broadcast cash flow
margin(4).............. 47.7% 47.5% 42.5% 42.9% 43.3% 43.7% 41.8%
EBITDA (excludes all
other income items)(3). $ 10,963 $ 12,219 $ 13,104 $ 16,842 $ 20,884 $ 15,145 $ 15,658
Capital expenditures.... $ 1,691 $ 912 $ 2,441 $ 3,040 $ 6,982 $ 4,119 $ 5,502
Purchase price of radio
stations............... $ 20,000 $ 15,500 $ 14,935 $ 24,550 $ 59,621 $ 8,302 $ 24,861
Earnings to fixed
charges ratio(5)....... 0.9x 2.1x 1.1x 1.0x 3.2x 0.5x
PRO FORMA RATIO:
Pro forma earnings to
fixed charges ratio(5). 1.7x 0.4x
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DECEMBER 31
-----------------------------------------
SEPTEMBER 30
1992 1993 1994 1995 1996 1997
------- ------- ------- -------- -------- ------------
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 2,479 $ 1,277 $ 1,780 $ 1,007 $ 1,962 $ 2,103
Working capital......... 322 5,836 1,852 1,088 8,258 17,573
Intangible assets, net.. 32,146 39,296 46,748 61,923 106,781 121,833
Total assets............ 62,106 69,656 82,041 104,817 159,185 184,133
Long-term debt
(including current
portion)............... 44,915 48,656 60,656 81,020 121,790 160,100
Shareholders' equity.... 10,348 12,474 13,160 13,282 20,534 9,386
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(2) The Company's consolidated financial data for the periods presented include the results of operations, assets and liabilities of New Inspiration and Golden Gate, which were both S corporations under common ownership and control with the Company prior to the Reorganization. The S corporation status of New Inspiration and Golden Gate was terminated in the Reorganization. Federal and state income taxes (except for a 1.5% state franchise tax) are not provided for New Inspiration and Golden Gate in the consolidated statements of operations of the Company for the periods presented because the tax attributes of S corporations are passed through to their shareholders. Prior to the Reorganization, New Inspiration and Golden Gate reimbursed the S corporation shareholders for their individual income tax liabilities on the earnings of the S corporations. These tax reimbursements to S corporation shareholders are reflected as an operating expense in the Company's consolidated financial statements.
In August 1997, the Company, New Inspiration and Golden Gate effected the Reorganization pursuant to which the S corporations became wholly owned by the Company. To give effect to the Reorganization, including the termination of the S corporation status of New Inspiration and Golden Gate, pro forma net income excludes the tax reimbursements to S corporation shareholders (because such amounts would not have been paid had New Inspiration and Golden Gate been subject to income taxes) and includes a pro forma tax provision at an estimated combined federal and state income tax rate of approximately 40% (to reflect an estimated income tax provision (benefit) of the Company) as if the Reorganization had occurred at the beginning of each period presented in the Company's consolidated financial data. See "Business--Corporate Structure and Reorganization."
The following table reflects the pro forma adjustments to historical net income:
NINE MONTHS
ENDED SEPTEMBER
YEAR ENDED DECEMBER 31 30,
------------------------------------- ---------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------ ------ ------- ------- -------
Pro Forma Information:
Income (loss) before
income taxes and
extraordinary
item as reported
above............... $ (460) $3,563 $ 439 $ 312 $19,408 $14,720 $(4,374)
Add back tax
reimbursements to S
corporation
shareholders........ 1,029 1,311 977 2,057 2,038 1,529 1,780
------ ------ ------ ------ ------- ------- -------
Pro forma income
(loss) before income
taxes and
extraordinary item.. 569 4,874 1,416 2,369 21,446 16,249 (2,594)
Pro forma income tax
provision
(benefit)........... 228 1,957 568 951 8,608 6,522 (1,033)
------ ------ ------ ------ ------- ------- -------
Pro forma income
(loss) before
extraordinary item.. 341 2,917 848 1,418 12,838 9,727 (1,561)
Extraordinary gain
(loss).............. 921 -- -- (394) -- -- (1,090)
------ ------ ------ ------ ------- ------- -------
Pro forma net income
(loss).............. $1,262 $2,917 $ 848 $1,024 $12,838 $ 9,727 $(2,651)
====== ====== ====== ====== ======= ======= =======
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(3) "Broadcast cash flow" consists of net operating income before tax reimbursements to S corporation shareholders, depreciation and amortization and corporate expenses. "EBITDA" consists of net operating income before tax reimbursements to S corporation shareholders and depreciation and amortization. Although broadcast cash flow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that they are useful to an investor in evaluating the Company because they are measures widely used in the broadcast industry to evaluate a radio company's operating performance. However, broadcast cash flow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP as a measure of liquidity or profitability.
(4) Broadcast cash flow margin is broadcast cash flow as a percentage of net revenue.
(5) For purposes of computing the ratio of earnings to fixed charges, "earnings" consist of income from operations before income taxes plus fixed charges, and "fixed charges" consist of interest expense plus an allocation of a portion of rent expense representing interest. The pro forma earnings to fixed charges ratio assumes the issuance of the Notes and the repayment in full of the Company's outstanding indebtedness under the Company's prior credit agreement which was repaid in full upon issuance of the Old Notes on September 25, 1997 as if each occurred at the beginning of each period presented. For the years ended December 31, 1992 and 1995, and for the nine months ended September 30, 1997, the Company's earnings were inadequate to cover fixed charges; the coverage deficiency for the years ended December 31, 1992 and 1995 was $460,000 and $313,000, respectively, and for the nine months ended September 30, 1997 was $4.4 million (actual) and $7.2 million (pro forma).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the Company's consolidated financial statements and notes thereto included elsewhere in this Prospectus.
The principal sources of the Company's revenue are (i) the sale of block program time, both to national and local program producers, (ii) the sale of broadcast time on its radio stations for advertising, both to national and local advertisers, and (iii) the sale of broadcast time on the Network for advertising. The following table shows gross revenue and the percentage of gross revenue for each revenue source.
NINE MONTHS
YEAR ENDED DECEMBER 31 ENDED
------------------------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
Block program time:
National.............. $19,182 45.0% $23,390 43.9% $26,610 40.8% $20,557 37.8%
Local................. 5,409 12.7 8,219 15.4 10,869 16.7 8,516 15.6
------- ----- ------- ----- ------- ----- ------- -----
24,591 57.7 31,609 59.3 37,479 57.5 29,073 53.4
Advertising:
National.............. 2,460 5.8 3,165 5.9 4,088 6.3 5,128 9.4
Local................. 12,154 28.5 14,072 26.4 17,416 26.7 15,014 27.6
------- ----- ------- ----- ------- ----- ------- -----
14,614 34.3 17,237 32.3 21,504 33.0 20,142 37.0
Network................. 2,619 6.1 3,423 6.4 5,270 8.1 4,486 8.2
Other................... 767 1.9 1,034 2.0 888 1.4 770 1.4
------- ----- ------- ----- ------- ----- ------- -----
Gross revenue........... 42,591 100.0% 53,303 100.0% 65,141 100.0% 54,471 100.0%
===== ===== ===== =====
Less agency commissions. 4,016 5,135 6,131 5,022
------- ------- ------- -------
Net revenue............. $38,575 $48,168 $59,010 $49,449
======= ======= ======= =======
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The Company's revenue is affected primarily by the program and advertising rates its radio stations and the Network charge. Correspondingly, the rates for block program time are based upon the stations' ability to attract audiences that will support the program producers through contributions and purchases of their products. Advertising rates are based upon the demand for on-air inventory, which in turn is based on the stations' and the Network's ability to produce results for its advertisers. Each of the Company's stations and the Network have a general pre-determined level of on-air inventory that it makes available for block programs and advertising, which may vary at different times of the day and tends to remain stable over time. Much of the Company's selling activity is based on demand for its radio stations' and the Network's on-air inventory.
The Company's revenue and cash flow are also affected by the transition period experienced by stations acquired by the Company that previously operated with formats other than religious formats. During the transition period when the Company develops its program customer and listener base, such stations typically do not generate significant cash flow from operations. The Company's quarterly revenue varies throughout the year, as is typical in the radio broadcasting industry. Quarterly revenue from the sale of block program time does not tend to vary, however, since program rates are generally set annually.
In the broadcasting industry, radio stations often utilize trade (or barter) agreements to exchange advertising time for goods or services (such as other media advertising, travel or lodging), in lieu of cash. In order to preserve most of its on-air inventory for cash advertising, the Company generally enters into trade agreements only if the goods or services bartered to the Company will be used in the Company's business. The Company has minimized its use of trade agreements and has generally sold over 90% of its advertising time for cash. In addition, it is the Company's general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade.
The primary operating expenses incurred in the ownership and operation of the Company's radio stations include employee salaries and commissions, and facility expenses (e.g., rent and utilities). The Company also incurs and will continue to incur significant depreciation, amortization and interest expense as a result of completed and future acquisitions of stations, and due to existing borrowings and future borrowings, including the Offering and borrowings under the Credit Agreement. The Company's consolidated financial statements tend not to be directly comparable from period to period due to the Company's acquisition activity.
The consolidated statements of operations of the Company include an operating expense called "tax reimbursements to S corporation shareholders." These amounts represent the income tax liability of the Shareholders created by the income of New Inspiration and Golden Gate, which prior to the recent Reorganization were each S corporations. See "Business--Corporate Structure and Reorganization." Management considers the nature of this operating expense to be essentially equivalent to an income tax provision and has excluded this expense from the calculation of broadcast cash flow and EBITDA. Commencing 1997, pretax income of New Inspiration and Golden Gate will be included in the Company's consolidated income tax return and in the Company's computation of the income tax provision included in its consolidated statement of operations.
The Company anticipates a net loss for the fourth quarter of 1997 in an amount substantially similar to the amount of net loss experienced in the third quarter of 1997 of $1.2 million.
PRO FORMA INFORMATION
To give effect to the private placement of the Old Notes, pro forma interest expense assumes issuance of the Old Notes on January 1, 1996, that amounts owing to the banks under the Credit Agreement as of September 30, 1997 had been outstanding since September 25, 1997, an interest rate on both the Old Notes and borrowings under the Credit Agreement of 9 1/2%, and the amortization over 10 years of costs incurred to issue the Old Notes. Pro forma net income (loss) gives effect to pro forma interest expense, net of income taxes at a combined federal and state tax rate of 40%. Pro forma interest expense for the year ended December 31, 1996 and for the nine months ended September 30, 1997 are approximately $14.7 million and $11.1 million, respectively. Pro forma net income (loss) for the year ended December 31, 1996 and for the nine months ended September 30, 1997 are approximately $8,341,000 and $(5,176,000), respectively.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996
Net Revenue. Net revenue increased approximately $6.9 million or 16.2% to $49.4 million for the nine months ended September 30, 1997 from $42.5 million for the nine months ended September 30, 1996. The inclusion of revenue from the acquisitions of radio stations and networks and revenue generated from the local marketing agreements ("LMAs"), see "Business--Federal Regulation of Radio Broadcasting--Local Marketing Agreements," entered into during 1996 and 1997 provided approximately $4.3 million of the increase. For stations and networks owned and operated over the comparable period in 1996 and 1997, net revenue improved approximately $2.6 million or 6.3% to $43.9 million in 1997 from $41.3 million in 1996 due primarily to program rate increases and to a lesser extent to increases in on-air inventory and improved selling efforts.
Station Operating Expenses. Station operating expenses increased approximately $4.9 million or 20.5% to $28.8 million for the nine months ended September 30, 1997 from $23.9 million for the nine months ended September 30, 1996. Approximately $4.1 million of such increase was due to the inclusion of expenses from the acquisitions of radio stations and networks and expenses incurred for LMAs entered into during 1996 and 1997. For stations and networks owned and/or operated over the comparable periods in 1996 and 1997, station operating expenses increased approximately $0.8 million or 3.6% to $23.1 million in 1997 from $22.3 million in 1996 primarily due to expenses incurred to produce the increased revenue in the periods, as described above.
Broadcast Cash Flow. Broadcast cash flow increased approximately $2.1 million or 11.3% to $20.7 million for the nine months ended September 30, 1997 from $18.6 million for the nine months ended
September 30, 1996. As a percentage of net revenue, broadcast cash flow decreased to 41.8% for the nine months ended September 30, 1997 from 43.7% for the nine months ended September 30, 1996. The decrease is primarily attributable to lower margins achieved during the transition period of the stations and networks acquired in 1996 and 1997 that previously operated with formats other than religious formats.
Corporate Expenses. Corporate expenses increased approximately $1.6 million or 47.1% to $5.0 million for the nine months ended September 30, 1997 from $3.4 million for the nine months ended September 30, 1996, primarily due to additional personnel and overhead costs associated with station and network acquisitions in 1996 and 1997 (approximately $611,000 of the increase), bonuses paid to corporate officers in 1997 (approximately $155,000 of the increase), the write-off of costs incurred for potential station acquisitions which were abandoned (approximately $292,000 of the increase), and expenses incurred for officers' life insurance (approximately $277,000 of the increase), in 1997.
EBITDA. EBITDA increased approximately $0.5 million or 3.3% to $15.7 million for the nine months ended September 30, 1997 from $15.2 million for the nine months ended September 30, 1996.
Tax Reimbursements to S Corporation Shareholders. Tax reimbursements to S corporation shareholders increased approximately $0.3 million or 20.0% to $1.8 million for the nine months ended September 30, 1997 from $1.5 million for the nine months ended September 30, 1996, primarily due to increased taxable income of the S corporations.
Depreciation and Amortization. Depreciation and amortization expense increased approximately $3.3 million or 54.1% to $9.4 million for the nine months ended September 30, 1997 from $6.1 million for the nine months ended September 30, 1996, primarily due to radio station and network acquisitions consummated during 1996 and 1997.
Other Income (Expense). Interest income decreased $156,000 to $156,000 for the nine months ended September 30, 1997 from $312,000 for the nine months ended September 30, 1996, primarily due to interest income earned in 1996 on a $14.0 million deposit from the sale of KDBX-FM, Portland. Gain (loss) on disposal of assets decreased $12.8 million from $12.7 million for the nine months ended September 30, 1996 to ($190,000) for the nine months ended September 30, 1997. The gain in 1996 was primarily due to the sale of KDBX-FM, Portland and WTJY-FM, Columbus. Interest expense increased approximately $3.0 million or 54.5% to $8.5 million for the nine months ended September 30, 1997 from $5.5 million for the nine months ended September 30, 1996, primarily due to interest expense associated with additional borrowings to fund acquisitions consummated during 1996 and 1997. Other expense was essentially unchanged for the 1997 period compared to the 1996 period.
Provision (Benefit) for Income Taxes. Income tax provision (benefit) as a
percentage of income before income taxes (i.e., effective tax rate) was
(40.9)% for the nine months ended September 30, 1997 and 34.3% for the nine
months ended September 30, 1996. The effective tax rates may differ from the
federal statutory income tax rate of 34.0% because of the effect of state
income taxes and the exclusion of federal income taxes relating to the
S corporations. The decrease in the effective tax rate for the nine months
ended September 30, 1997 as compared to the nine months ended September 30,
1996 is due to losses generated by the non-S corporation entities.
Net Income (Loss). The Company recognized a net loss of approximately ($3.7) million for the nine months ended September 30, 1997, compared to net income of $9.7 million for the nine months ended September 30, 1996. Included in net loss for 1997 is a $1.1 million extraordinary loss for the write off of deferred financing costs and termination fees related to the repayment of the Company's prior credit agreement (the "Old Credit Agreement") which was repaid in full upon issuance of the Old Notes on September 25, 1997.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Net Revenue. Net revenue increased approximately $10.8 million or 22.4% to $59.0 million in 1996 from $48.2 million in 1995. The inclusion of revenue from the acquisitions of radio stations and networks and revenue
generated from LMAs entered into during 1996 and 1995 provided approximately $5.2 million of the increase. For stations and networks owned and operated over the comparable period in 1995 and 1996, net revenue improved approximately $5.6 million or 12.3% to $51.1 million in 1996 from $45.5 million in 1995 due primarily to program rate increases and to a lesser extent to increases in on-air inventory and improved selling efforts at both the national and local level.
Station Operating Expenses. Station operating expenses increased approximately $6.0 million or 21.8% to $33.5 million in 1996 from $27.5 million in 1995. Approximately $4.6 million of such increase was due to the inclusion of expenses from the acquisitions of radio stations and networks and expenses incurred for LMAs entered into during 1996 and 1995. For stations and networks owned and/or operated over the comparable periods in 1996 and 1995, station operating expenses increased approximately $1.4 million or 5.7% to $26.1 million in 1996 from $24.7 million in 1995 primarily due to expenses incurred to produce the increased revenue in the periods, as described above.
Broadcast Cash Flow. Broadcast cash flow increased approximately $4.9 million or 23.8% to $25.5 million in 1996 from $20.6 million in 1995. As a percentage of net revenue, broadcast cash flow increased to 43.3% in 1996 from 42.9% in 1995.
Corporate Expenses. Corporate expenses increased approximately $0.9 million or 23.7% to $4.7 million in 1996 from $3.8 million in 1995, primarily due to additional personnel and overhead costs associated with station and network acquisitions in 1996.
EBITDA. EBITDA increased approximately $4.1 million or 24.4% to $20.9 million in 1996 from $16.8 million in 1995.
Tax Reimbursements to S Corporation Shareholders. Tax reimbursements to S corporation shareholders was essentially unchanged for the year ended December 31, 1996 compared to 1995.
Depreciation and Amortization. Depreciation and amortization expense increased approximately $0.5 million or 6.3% to $8.4 million in 1996 from $7.9 million in 1995, primarily due to radio station and network acquisitions consummated during 1996 and 1995.
Other Income (Expense). Interest income increased $204,000 to $523,000 in 1996 from $319,000 in 1995, primarily due to interest income earned on a $14.0 million deposit from the sale of KDBX-FM, Portland. Gain (loss) on disposal of assets increased $16.1 million from ($7,000) in 1995 to $16.1 million in 1996. The gain in 1996 was primarily due to the sales of KDBX-FM, Portland, KDFX-AM, Dallas and WTJY-FM, Columbus. Interest expense increased approximately $0.8 million or 12.1% to $7.4 million in 1996 from $6.6 million in 1995, primarily due to interest expense associated with additional borrowings to fund acquisitions consummated during 1996 and 1995. Other expense was essentially unchanged for the year ended December 31, 1996 compared to 1995.
Provision (Benefit) for Income Taxes. Income tax provision (benefit) as a percentage of income before income taxes (i.e., effective tax rate) was 34.3% for 1996 and (65.4%) for 1995. The effective tax rates may differ from the federal statutory income tax rate of 34.0% because of the effect of state income taxes and the exclusion of federal income taxes relating to the S corporations. The increase in the effective tax rate for 1996 as compared to 1995 is primarily due to the increase in income of the non-S corporation entities, including gains recognized on the sale of radio stations during 1996. In connection with the Reorganization of the Company, which resulted in the termination of the S corporation status of New Inspiration and Golden Gate, the Company will record a deferred tax liability and provision of approximately $600,000.
Net Income. The Company recognized net income of approximately $12.8 million in 1996, compared to net income of $122,000 in 1995. Included in net income for 1995 is a $394,000 extraordinary loss for the write off of deferred financing costs related to the repayment in March 1995 of outstanding indebtedness under certain credit agreements with banks, including the Old Credit Agreement, and a make-whole premium in connection with the repayment of certain senior subordinated notes to insurance companies.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Net Revenue. Net revenue increased approximately $9.6 million or 24.9% to $48.2 million in 1995 from $38.6 million in 1994 primarily due to the inclusion of revenue from the acquisitions of radio stations during 1995 and 1994 (approximately $6.2 million of the increase), and to a lesser extent, to program rate increases, and improved selling efforts at both the national and local level (approximately $3.4 million of the increase).
Station Operating Expenses. Station operating expenses increased approximately $5.3 million or 23.9% to $27.5 million in 1995 from $22.2 million in 1994, primarily due to the inclusion of operating expenses of the station acquisitions during 1995 and 1994 (approximately $4.3 million of the increase), and to a lesser extent, to expenses incurred to produce the increased revenue described above (approximately $1.0 million of the increase).
Broadcast Cash Flow. Broadcast cash flow increased approximately $4.2 million or 25.6% to $20.6 million in 1995 from $16.4 million in 1994. As a percentage of net revenue, broadcast cash flow increased to 42.9% in 1995 from 42.5% in 1994.
Corporate Expenses. Corporate expenses increased approximately $0.5 million or 15.2% to $3.8 million in 1995 from $3.3 million in 1994, primarily due to additional personnel and overhead costs associated with station acquisitions in 1995.
EBITDA. EBITDA increased approximately $3.7 million or 28.2% to $16.8 million in 1995 from $13.1 million in 1994.
Tax Reimbursements to S Corporation Shareholders. Tax reimbursements to S corporation shareholders increased approximately $1.1 million or 110.0% to $2.1 million in 1995 from $1.0 million in 1994, primarily due to increased taxable income of the S corporations.
Depreciation and Amortization. Depreciation and amortization expense increased approximately $0.3 million or 3.9% to $7.9 million in 1995 from $7.6 million in 1994, primarily due to radio station acquisitions consummated during 1995 and 1994.
Other Income (Expense). Interest income increased $89,000 to $319,000 in 1995 from $230,000 in 1994. Loss on disposal of assets decreased $475,000 from $482,000 in 1994 to $7,000 in 1995, primarily due to the write-off of leasehold improvements at abandoned office/studio locations in 1994. Interest expense increased approximately $2.9 million or 78.4% to $6.6 million in 1995 from $3.7 million in 1994, primarily due to interest expense associated with additional borrowings to fund acquisitions consummated during 1995 and 1994, and increases in interest rates. Other expense increased $120,000 to $255,000 in 1995 from $135,000 in 1994, primarily due to increased expenses related to bank loan fees in 1995.
Provision (Benefit) for Income Taxes. Income tax provision (benefit) as a percentage of income before income taxes (i.e., effective tax rate) was (135.4%) for 1995 and (56.3%) for 1994. The effective tax rates may differ from the federal statutory income tax rate of 34.0% because of the effect of state income taxes and the exclusion of federal income taxes relating to the S corporations. The decrease in the effective tax rate for 1995 as compared to 1994 is primarily due to losses of the non-S corporation entities, including an increase in interest expense in 1995.
Net Income. The Company recognized net income of approximately $122,000 in 1995, compared to net income of $686,000 in 1994. Included in net income for 1995 is a $394,000 extraordinary loss for the write off of deferred financing costs related to the repayment in March 1995 of outstanding indebtedness under certain credit agreements with banks, including the Old Credit Agreement, and a make-whole premium in connection with the repayment of certain senior subordinated notes to insurance companies.
LIQUIDITY AND CAPITAL RESOURCES
In the past, the Company principally financed acquisitions of radio stations through borrowings, including borrowings under credit agreements with banks, and, to a lesser extent, from cash flow from operations and
selected asset dispositions. The Company used the net proceeds from the sale of the Notes to repay substantially all of its outstanding indebtedness under a line of credit agreement, at which time such facility was canceled and the Company entered into the current Credit Agreement.
The Company anticipates funding future acquisitions from operating cash flow and borrowings, including borrowings under the Credit Agreement. At September 30, 1997, $10.1 million was outstanding under the Company's Credit Agreement. The maximum amount that the Company may borrow under the Credit Agreement is limited by the Company's debt to cash flow ratio, adjusted for recent radio station acquisitions as defined in the Credit Agreement (the "Adjusted Debt to Cash Flow Ratio"). At September 30, 1997, the maximum Adjusted Debt to Cash Flow Ratio allowed under the Credit Agreement was 7.0 to 1. The Company's ability to borrow for the purpose of acquiring a radio station is further limited by the Credit Agreement in that the Company may not borrow for an acquisition if the Adjusted Debt to Cash Flow Ratio is greater than 6.0 to 1. At September 30, 1997, the Adjusted Debt to Cash Flow Ratio was 6.07 to 1, resulting in total borrowing availability of approximately $19.9 million, none of which can currently be used for radio station acquisitions. In addition to debt service requirements under the Credit Agreement, the Company will be required to pay $14.3 million per annum in interest on the Notes. Management believes that cash flow from operations and borrowings under the Credit Agreement should be sufficient to permit the Company to meet its financial obligations and to fund its operations for at least the next twelve months.
The Credit Agreement contains certain additional restrictive covenants customary for credit facilities of the size, type and purpose contemplated which, among other things, and with certain exceptions, limits the Company's ability to enter into affiliate transactions, pay dividends, consolidate, merge or effect certain asset sales, make certain investments or loans and change the nature of its business. The Credit Agreement also requires the satisfaction by the Company of certain financial covenants, which will require the maintenance of specified financial ratios and compliance with certain financial tests, including ratios for maximum leverage as described above (not greater than 7.0 to 1 at September 30, 1997), minimum interest coverage (not less than 1.25 to 1 at September 30, 1997), minimum debt service coverage (a static ratio of not less than 1.1 to 1) and minimum fixed charge coverage (a static ratio of not less than 1.1 to 1). See "Description of Other Indebtedness."
For the nine months ended September 30, 1997, net cash provided by operations decreased to $1.9 million, compared to $9.3 million for the 1996 period due to the Company recording a net loss in the 1997 period primarily as a result of higher interest expense and changes in working capital items in 1997. Net cash provided by operations increased to $10.5 million for the year ended December 31, 1996, compared to $7.7 million in 1995 due primarily to increased net operating income in 1996. Net cash provided by operations was essentially unchanged for the year ended December 31, 1995 compared to 1994.
For the nine months ended September 30, 1997, net cash used in investing activities increased $13.3 million to $26.6 million from $13.3 million for the 1996 period due to radio station acquisitions (seven stations purchased for $18.8 million in the first nine months of 1997 compared to seven stations purchased for $8.3 million in the first nine months of 1996), and expenditures for a tower construction project held for sale, in 1997. Net cash used in investing activities decreased to $18.9 million for the year ended December 31, 1996, compared to $27.7 million for 1995 primarily due to the sale of KDBX-FM, Portland and KDFX-AM, Dallas in 1996. The sale of these two radio stations provided $15.9 million of cash, which offset the cash used by the Company to purchase radio stations in 1996. Net cash used in investing activities increased to $27.7 million for the year ended December 31, 1995, compared to $18.8 million for 1994 primarily due to the acquisition of higher priced radio stations in 1995 compared to 1994.
For the nine months ended September 30, 1997, net cash provided by financing activities increased $21.5 million to $24.8 million from $3.3 million for the 1996 period primarily from proceeds from long-term debt incurred in 1997, offset by the $30.5 million payment of the note payable associated with the acquisition of KWRD-FM, Dallas. Net cash provided by financing activities was $9.4 million for the year ended December 31, 1996, $19.2 million for 1995, and $11.8 million for 1994, primarily due to increased long-term debt borrowings for the higher priced radio stations acquired in 1995.
BUSINESS
GENERAL
Salem Communications Corporation is the leading radio broadcast company in the United States, measured by number of stations owned and audience coverage, that focuses on serving the religious/conservative listening audience. The Company's two primary businesses include the ownership and operation of religious format radio stations and the development and expansion of its national Network offering talk programming, news and music to affiliated stations. The Company owns and/or operates 43 radio stations concentrated in 28 geographically diverse markets across the United States. The Company offers a variety of specialized talk programming emphasizing Bible study and Judeo- Christian values applied to family and community issues as well as contemporary and traditional religious music.
The Company focuses on serving the top 25 markets in terms of audience size in the United States and has stations in nine of the top ten and 19 of the top 25 of those markets. The Company is also interested in serving certain mid- sized markets, which the Company considers to be markets that are among the 26th through 50th largest radio markets in the United States in terms of audience size. Since January 1, 1992, the Company has grown significantly by acquiring ownership of, or operating rights to, 29 radio stations in 20 markets, including 17 stations in 14 markets since January 1, 1996. Most of these recently acquired radio stations were previously broadcasting in non- religious formats and have been re-formatted by the Company. The Company's experience has been that changing the format of an acquired station typically requires a transition period during which the Company develops its program customer and listener base. During such transition period, these stations typically do not generate significant cash flow from operations. The Company's total gross revenue, broadcast cash flow and EBITDA were $65.1 million, $25.5 million and $20.9 million, respectively, for the year ended December 31, 1996 and were $54.5 million, $20.7 million and $15.7 million, respectively, for the nine months ended September 30, 1997.
The following table sets forth information about each radio station owned and/or operated by the Company in order of market size:
MARKET(1) MSA RANK STATION CALL LETTERS YEAR ACQUIRED
--------- -------- -------------------- -------------
New York, NY................... 1 WMCA-AM; WWDJ-AM 1989; 1994
Los Angeles, CA................ 2 KKLA-FM; KLTX-AM; KAVC-FM 1985; 1986; 1983
Chicago, IL.................... 3 WYLL-FM 1990
San Francisco, CA.............. 4 KFAX-AM 1984
Philadelphia, PA............... 5 WFIL-AM; WZZD-AM 1993; 1994
Dallas-Ft. Worth, TX........... 7 KWRD-FM 1996
Washington, D.C. .............. 8 WAVA-FM 1992
Houston-Galveston, TX.......... 9 KKHT-FM; KENR-AM 1995; 1995
Boston, MA..................... 10 WEZE-AM 1997
Seattle-Tacoma, WA............. 13 KGNW-AM; KLFE-AM; KKOL-AM 1985; 1994; (2)
San Diego, CA.................. 14 KPRZ-AM 1986
Minneapolis-St. Paul, MN....... 16 KKMS-AM 1996
Phoenix, AZ.................... 18 KPXQ-AM 1996
Baltimore, MD.................. 19 WITH-AM(3) 1997
Pittsburgh, PA................. 20 WORD-FM; WPIT-AM 1989; 1993
Cleveland, OH.................. 22 WHK-AM; WCCD-AM 1997
Denver-Boulder, CO............. 23 KRKS-FM; KRKS-AM; KNUS-AM 1993; 1994; 1996
Portland, OR................... 24 KPDQ-FM; KPDQ-AM 1986; 1986
Cincinnati, OH................. 25 WTSJ-AM 1997
Riverside-San Bernardino, CA... 26 KKLA-AM(4) 1986
Sacramento, CA................. 28 KFIA-AM; KTKZ-AM 1995; 1997
Columbus, OH................... 32 WRFD-AM 1982
San Antonio, TX................ 34 KSLR-AM 1994
Akron, OH...................... 67 WHLO-AM 1997
Spokane, WA.................... 87 KTSL-FM 1996
Colorado Springs, CO........... 95 KGFT-FM; KBIQ-FM; KPRZ-FM 1996; 1996; 1996
Oxnard, CA..................... 109 KDAR-FM 1974
Canton, OH..................... 120 WHK-FM(5) 1997
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(2) The Company operates the station, which is licensed to a corporation owned by the Principal Shareholders of the Company, under the terms of a local marketing agreement. The Principal Shareholders and the Company are parties to an Option to Purchase Agreement whereunder the Company has been granted an option to purchase KKOL-AM from the Principal Shareholders at any time on or before December 31, 1999. See "Federal Regulation of Radio Broadcasting--Local Marketing Agreements" and "Certain Transactions."
(3) The station is simulcast with WAVA-FM, Washington, D.C.
(4) The station is simulcast with KKLA-FM, Los Angeles.
(5) The station is simulcast with WHK-AM, Cleveland.
CORPORATE STRUCTURE AND REORGANIZATION
The Company was incorporated in California in 1986 in connection with a combination of most of the radio station holdings of the Principal Shareholders. Each of the Principal Shareholders owned 50% of the Company's outstanding common stock. New Inspiration, the licensee of KKLA-FM, Los Angeles, and Golden Gate, the licensee of KFAX-AM, San Francisco, were owned by the Shareholders. New Inspiration and Golden Gate were both "S corporations," as that term is defined in the Internal Revenue Code. The Company, New Inspiration and Golden Gate are the general partners of Beltway Media Partners ("Beltway"), the licensee of WAVA-FM, Washington, D.C.
On August 13, 1997, the Company, New Inspiration and Golden Gate effected a reorganization (including the Shareholder Notes as defined below, the "Reorganization") pursuant to which New Inspiration and Golden Gate became wholly owned subsidiaries of the Company, with Beltway remaining a partnership owned by the Company, New Inspiration and Golden Gate. The S corporation status of New Inspiration and Golden Gate was terminated in the Reorganization. Prior to the Reorganization, New Inspiration and Golden Gate made distributions of cash and promissory notes to their respective shareholders in the aggregate amount of $8.5 million. Of such amount, $1.8 million, equal to the estimated federal and state income tax liability of the shareholders on the earnings of New Inspiration and Golden Gate, was paid by New Inspiration and Golden Gate in cash. The remainder, $6.7 million, the balance of the net income of New Inspiration and Golden Gate that had previously been taxed but not distributed to the shareholders, was distributed in the form of promissory notes to be paid to the shareholders immediately following the closing of the offering (the "Shareholder Notes"). The Company borrowed $6.7 million under the Credit Agreement and applied this amount to the payment of certain indebtedness owed to New Inspiration and Golden Gate by the Company. The cash made available to New Inspiration and Golden Gate from the repayment of such loans was then used by New Inspiration and Golden Gate to pay the Shareholder Notes. See "Certain Transactions" and "Description of Certain Indebtedness--Shareholder Notes."
To effect the Reorganization, the Shareholders contributed their shares of stock in New Inspiration and Golden Gate to the Company (which in turn effected the contribution to the Company of the Shareholders' interests in Beltway) in exchange for the new shares in the Company. The share conversion factors were based on the ratio of asset values of the Company, New Inspiration and Golden Gate to the combined asset value of such entities. The asset values were determined by an independent radio station broker. Following the Reorganization, Mrs. Epperson, who had been a 50% owner of New Inspiration, became a shareholder of the Company. All of the outstanding stock of the Company is currently owned by Mr. Atsinger (50%), Mr. Epperson (36.8%) and Mrs. Epperson (13.2%). See "Securities Ownership of Certain Beneficial Owners."
RELIGIOUS FORMAT OVERVIEW
The 1997 Broadcasting & Cable Yearbook identifies over 1,800 radio stations throughout the United States that feature religious talk and music formats, including formats identified as Religious, Gospel, Christian, Inspirational or Sacred. Approximately two-thirds of these stations are for-profit businesses. The balance of these stations broadcast from the noncommercial educational band (88.1MHz-91.9MHz) and are licensed to non-profit organizations.
Contrary to many mainstream formats which have experienced a decline in popularity in recent years, religious formats have experienced significant growth. According to statistics appearing in The M Street Journal, a broadcast industry newsletter, the number of radio stations featuring religious formats has grown approximately 69% between 1989 and 1997 and the religious format is the third largest radio format in the United States after country and news/talk. According to Religion & Media Quarterly, religious format radio stations have an audience of approximately 20.6 million listeners.
While a variety of music formats, including Southern Gospel, Black Gospel, Praise and Worship, and Contemporary Christian, are offered on religious format stations, the largest single category of religious format is talk programming emphasizing Bible preaching and teaching and other programming addressing family and community issues. Music and talk formats can be found on both commercial and noncommercial stations. Commercial stations that feature religious music formats generate nearly all of their revenue from the sale of advertising time to local and national spot advertisers and national network advertisers. Commercial stations that specialize in talk programming, including substantially all of the Company's stations, generate the majority of their revenue from the sale of block program time to national and local program producers. Noncommercial stations typically obtain revenue through tax-deductible contributions from listeners, the sale of block program time to national and local program producers and grants or sponsorships of specific programming that allow the sponsor's name to be featured. Sale of spot advertising is prohibited on noncommercial stations.
OPERATING STRATEGY
Maintain and Enhance Leadership Position in Religious Talk Format. The Company believes that an important factor in its ability to attract and retain quality programming customers is its demonstrated long-term commitment to religious talk formats. Program customers tend to be sophisticated purchasers of air time that recognize that building a listener base capable of generating revenue sufficient to cover programming costs may take several years. The Company's experience has been that such programmers are accordingly reluctant to make the commitment to building a new listener base unless they have a reasonable expectation that the format will remain in place. Management of the Company therefore intends to continue its long-term commitment to the religious talk format. Management believes its commitment to growing the religious talk format, increasing the number of owned and operated stations and developing network operations and national sales activities allows for future growth opportunities for the Company.
Identify and Develop New Program Producers. The Company recognizes that the ongoing success of its religious talk format is largely dependent on the continued availability of quality programs. Management of the Company is committed to assisting promising new program producers with advice on content and structuring of programs in addition to advice on levels of support staffing, engineering and programming delivery options. Station managers are encouraged to evaluate local talk programs with a view toward expansion of promising programs into national syndication. The Company continues to emphasize this important development area with the goal of maintaining a backlog of quality programs available for placement in new markets and existing markets where the Company may add additional stations.
Emphasize Signal Quality and Market Coverage. The Company is committed to the ongoing evaluation and improvement of its technical facilities, including power increases, tower/antenna relocations and investment in state of the art equipment. The Company believes that its success is attributable in part to its ownership of broadcast facilities that provide broad signal coverage in its markets.
Build Station Identity Through Development of Strong Production Values. The Company believes that an important element in retaining and increasing the listening audience and expanding the base of potential advertisers for its stations is the development of local station identity. The Company believes that its emphasis on development of a station's identity during those times when the Company is not broadcasting its customers' block programming will allow it to compete with general format stations for listening audience and advertising customers. Station employees with responsibility for programming are encouraged to build identity through continual improvement of production values and to share their ideas with other Company stations. The Company
assists local personnel and coordinates development of increased production values through its director of programming located at the corporate headquarters. Certain of the Company's stations have successfully adopted techniques that have built identity through the development of local on-air personalities associated with segments of the broadcast day, and these techniques are being implemented at other Company stations.
Expand and Diversify National Network. The Company is committed to expanding the Network by adding to its menu of Network product offerings and by actively promoting these products to Network affiliates. The Company believes that by continually increasing the quality of its Network product it will add to its affiliate base, thereby providing more audience reach that will attract more national advertising customers and potentially generate business from national advertising agencies. The Company competes aggressively for talk show talent it believes will be attractive to existing and potential affiliates, refines existing music formats and develops political commentary and public affairs programming that are complementary to the product offerings of the Network. The Company will continue to explore ways to better serve its customers and the religious/conservative listening audience by using the combined resources of its owned and operated stations and the Network. For example, unused Network inventory can be used as an incentive to potential or existing program producers to purchase block program time on the Company's radio stations. The Company has successfully implemented this strategy in the past and will continue to devote significant time and resources to find additional synergistic uses of its radio stations and the Network.
ACQUISITION STRATEGY
Expand Into New Markets. The Company continues to pursue an acquisition strategy of acquiring radio stations in the top 25 markets in which it currently does not have a presence and acquiring selected stations in mid- sized markets. The Company considers mid-sized markets to be the 26th through 50th largest radio markets in the United States in terms of audience size. In the early years of the Company's operations, and from time to time more recently, it has acquired radio stations in markets smaller than mid-sized markets. Generally, any recent acquisition of a station in a smaller market was undertaken (i) to access an audience that the Company believed would be particularly receptive to its format, such as the market in Colorado Springs, Colorado, where the headquarters of a number of religious organizations are located, or (ii) as part of an acquisition in which the Company was pursuing its strategy of acquiring a station in a major or mid-sized market but was required to acquire the smaller market station as part of a multiple station transaction.
The Company believes that its presence in large markets makes it attractive to national program syndicators and national advertisers. In addition, the geographic diversity of the Company's markets reduces its dependence on any single local economy. Over the past 20 years, the Company has developed and implemented a model for evaluating the desirability of entering a new market. Management considers the number of stations already serving the target market with religious formats, the programming within that format (music or talk), the quality of talk programs offered and the signal strength of the competing stations. The signal strength of any station that becomes available for purchase is a critical factor in the evaluation process.
Expand in Existing Markets. The Company pursues the acquisition of additional stations in markets in which it already has a presence. The experience of the Company with existing duopolies and triopolies has been positive. Multiple stations making use of one general manager and sales staff and one broadcast facility have resulted in operational efficiencies in certain markets. In addition, the Company intends to develop more talk and music product at the Network level that will be available for use on additional stations in a market. The Company believes new religious music formats are gaining increased popularity and are complementary to the Company's religious talk format. Three separate music formats are produced by the Network and are available for use by Company stations. This strategy has been implemented successfully in Colorado Springs, where the Company owns three FM stations, two of which offer religious music formats and one of which features a religious talk format.
Upgrades in Existing Markets. The Company is continually looking for upgrade opportunities in existing markets to expand its audience reach. This strategy of acquiring upgraded facilities in existing markets has been an area of emphasis for senior management for many years and has been successfully demonstrated in such markets as Seattle and New York in prior years. More recently, the Company has significantly improved its
position in Boston and Dallas through the acquisition of more powerful stations that have allowed the Company to continue its business strategy of operating stations that provide broad signal coverage in its markets.
Acquisition Financing. In the past, the Company has principally financed acquisitions of radio stations through borrowings, including borrowings under credit agreements with banks and, to a lesser extent, from cash flow from operations and selected asset dispositions. Taking into account certain restrictions under the Credit Agreement, however, the Company is not currently able to borrow for acquisitions. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources."
OWNED AND/OR OPERATED RADIO STATIONS
Program Revenue. For the year ended December 31, 1996 and the nine months ended September 30, 1997, the Company derived 57.5% and 53.4% of its gross revenue, or $37.5 million and $29.1 million, respectively, from the sale of nationally syndicated and local block program time. The Company derives its nationally syndicated program revenue from a programming customer base consisting primarily of geographically diverse, well-established non-profit religious and educational organizations that purchase time on stations in a large number of markets in the United States. These nationally syndicated program producers typically purchase 13, 26 or 52 minute blocks on a Monday through Friday basis and may offer supplemental programming for weekend release. The recognized leading daily radio program featured on religious talk format stations is Focus on the Family, which according to the 1997 Directory of Religious Media is syndicated on 943 radio stations in the United States, including 35 Company stations as of November 1997. Other leading radio programs currently include Insight for Living (590 stations, including 26 Company stations), In Touch (490 stations, including 27 Company stations), and Grace to You (294 stations, including 22 Company stations). Local program revenue is obtained from community organizations and churches that typically purchase time primarily for weekend release and from local speakers who purchase daily releases. The Company has been successful in assisting quality local programs to expand into national syndication.
Purchasers of block program time derive their income from two primary sources: (i) listener contributions, and (ii) product sales, including sales of inspirational material such as printed literature and periodicals, audio and video tapes and other miscellaneous items. Revenue from these sources is used in part to pay for the air time purchased from the Company. The nationally syndicated program producers carefully track the source of their donations and product sales and use this information to measure the return on their air time investment at each station. The Company's top five revenue- producing program customers accounted for $7.8 million of gross revenue for the year ended December 31, 1996 and $4.3 million of gross revenue for the six months ended June 30, 1997. These amounts represented 20.7% and 22.2%, respectively, of the Company's gross program revenue and 11.9% of the Company's gross revenue for such periods.
The Company's stations have enjoyed long-standing relationships with key customers. Focus on the Family and Insight for Living have been ongoing customers of the Company since 1977. Management attributes this continuity to the recognized commitment of the Company to concentrate its efforts in religious talk format stations and not to change formats or exit markets where it has acquired stations. Management believes that its key customers are willing to make the long-term commitment to build a base of support in Company markets largely because of the Company's commitment to build a religious talk format for its radio stations. As is typical in the radio industry, contracts may generally be canceled by either the station or the program producer on one month's notice. New program producers, however, are occasionally required to sign one-year contracts to demonstrate a commitment of resources to the program. Rate increases are typically negotiated on an annual basis.
The Company believes that sales of block program time lessen its exposure to swings in general economic activity and thus make its revenue stream less volatile. Because program customers derive their income primarily from various forms of listener support, and given the time period usually required for a program to obtain and develop an audience, management believes that program customers have generally found it to be in their best interest to retain a specific time slot on a long-term basis notwithstanding short-term financial results or economic conditions.
Advertising Revenue. For the year ended December 31, 1996, and the nine months ended September 30, 1997, the Company derived 26.7% and 27.5% of its gross revenue, or $17.4 million and $15.0 million, respectively, from the sale of local spot advertising and 6.3% and 9.4% of its gross revenue, or $4.1 million and $5.1 million (including $2.7 million of reclassified infomercial advertising revenue), respectively, from the sale of national spot advertising. Prior to 1997, classification of revenue (i.e. national program, national advertising, local program or local advertising) from infomercials was determined at the discretion of local station general managers. In 1997, the Company began including revenue from infomercials in the national advertising category in order to establish uniformity of classification of revenue. The Company in recent years has begun to place greater emphasis on the development of local spot sales in all of its markets. General managers and sales managers are encouraged to create more spot inventory for sale. Additional spot inventory can be created in a variety of ways, such as removing programming which generates marginal audience response and adjusting the start time of programs to add inventory in more desirable dayparts.
The Company believes that the listening audience for its radio stations, which provides the financial support for program producers purchasing time on these stations, is responsive to affinity advertisers that promote products targeted to the religious/conservative audience and is receptive to direct response appeals such as those offered through infomercials. The Company's stations all have affinity advertising customers in their respective markets. Local church groups and many community organizations such as rescue missions and family crisis support services can often effectively reach their natural constituencies by advertising on religious format stations. Significant advertising is also purchased by local and nationally affiliated religious bookstores, publishers specializing in inspirational and religious literature and other businesses that desire to specifically target the conservative adult religious community. The Company also generates spot advertising revenue from general market retailers, including automobile dealers and grocery store chains, in many of its markets. Management believes these results are consistent with an increased openness to the use of niche radio formats by general market retailers.
Because the Company does not sell advertising based on market share, it does not subscribe to traditional audience measuring services, but instead sells advertising based upon the proven success of its other advertising customers. A majority of advertisers on Company radio stations are "direct-response" advertisers (i.e., advertisers that solicit some type of response, typically the calling of a toll-free telephone number to purchase a product or service advertised). The typical advertiser on a Company radio station measures the effectiveness of its advertising on Company stations in terms of (a) the number of inquiries to the advertiser in which the caller reports having heard the advertiser's commercial on a Company radio station, (b) whether a sufficient volume of new customers for the advertiser is generated given a designated inquiry level (e.g., the advertiser may require that it experience a conversion rate of four new customers for every 10 inquiries), or (c) revenues attributable to sales by the advertiser that are identified as generated by the advertiser's commercial aired on Company stations. The sales staffs of the Company's radio stations obtain information from existing advertisers regarding the advertisers' level of satisfaction with the results generated by the advertisers' commercials aired on Company radio stations. The Company's sales staffs communicate such information, as well as information regarding the volume of existing advertisers' repeat advertising on Company stations, to prospective advertisers in marketing the Company's radio stations.
The Company's radio stations also receive revenue from national advertisers desiring to include selected Company stations in national buys covering multiple markets. These national advertising buys are placed through SRR, which receives a commission based on the gross dollar amount of all orders generated. Infomercials run regularly on Company stations, generally on weekends. In reviewing proposed purchases of air time by advertisers and infomercial producers, the Company considers the suitability of the content of the advertising and infomercials for its audience.
Operations. Each of the radio markets in which the Company has a presence has a general manager who is responsible for day-to-day operations, local spot advertising sales and, where applicable, local program sales for all Company stations in the market. General managers earn a base salary plus a percentage of the respective
station's net operating income. Each station also has a staff of full and part-time engineering, programming and sales personnel. Sales staffs are paid on a commission basis.
The Company has decentralized its operations in response to the rapid growth it has experienced in recent years. Operations vice presidents of the Company, some of whom are also station general managers, oversee several markets on a regional basis. The operations vice presidents are experienced radio broadcasters with expertise in sales, programming and production. The Company will continue to rely on this strategy of decentralization and encourage operations vice presidents to apply innovative techniques to the operations they oversee which, if successful, can be implemented in other Company stations.
Corporate headquarters personnel oversee the placement and rate negotiation for all nationally syndicated programs. Centralized oversight of this most critical component of Company revenue is necessary because the Company's key program customers purchase time on many of the Company's markets. Corporate headquarters personnel also are responsible for centralized reporting and financial functions, benefits administration, engineering oversight and other support functions designed to provide resources to local management.
NATIONAL NETWORK OPERATIONS
In 1993, the Company established the Network in connection with its acquisition of certain assets of the former CBN Radio Network. Establishment of the Network was a part of the Company's overall business strategy to develop a national network of affiliated radio stations anchored by the Company's owned and operated radio stations in major markets. The Network, which is headquartered in Dallas, is focused on the development, production and syndication of a broad range of programming specifically targeted to religious talk and music stations as well as general market news/talk stations. Currently, the Company has rights to six full-time satellite channels and all Network product is delivered to affiliates via satellite.
As of November 30, 1997, the Network had approximately 750 affiliate stations, including the Company's owned and operated stations, that broadcast one or more of the offered programming options. These programming options feature talk shows, news and music. Network operations also include commission revenue of SRR from unaffiliated customers and an allocation of operating expenses estimated to relate to such commissions. SRR is a wholly owned subsidiary of the Company, which sells all national commercial advertising placed on the Network's commercial affiliate radio stations. The Network's gross revenue for the year ended December 31, 1996 and the nine months ended September 30, 1997 was $5.3 million and $4.5 million, respectively. While the Network earned net operating income of $274,000 for the year ended December 31, 1996, it incurred a net operating loss of $542,000 for the nine months ended September 30, 1997, due primarily to continued costs associated with the development of a news programming production and distribution capability, and reduced advertising revenue associated with syndicated talk programming.
Talk Programming. The Network offers talk programming designed to attract listeners to affiliate stations by addressing current national issues from a religious/conservative perspective. The Network currently produces 20 daily and weekly long-form and short-form programs including The Oliver North Show, The Alan Keyes Show, The Dick Staub Show, Janet Parshall's America and a sports talk program titled Sharing the Victory. As of November 30, 1997, approximately 260 affiliate radio stations carried some form of Network talk programming.
Station affiliations for talk programming are non-exclusive, allowing a station to select specific Network programs it wishes to carry. Commercial affiliates are required to air five Network spots during each hour of Network programming carried. The Network affiliation contract generally provides a 90- day termination option for both parties.
News. The Network began the production and distribution of news in 1996 with the purchase of StandardNews. The name was subsequently changed to SRN News and the news product was repositioned to offer affiliates a family-focused news service, delivered three times each hour, providing coverage of national
and international news. SRN News began operating from a new, fully-digital headquarters located in the Washington, D.C. area in early 1997. SRN News has fully-equipped broadcast facilities at the White House, United States House of Representatives and United States Senate that are staffed by full-time correspondents. As of November 30, 1997, the Network provided SRN News to approximately 295 affiliate radio stations, compared with the 167 affiliates existing at the time the news service was acquired in 1996.
Commercial radio stations that affiliate with SRN News are required to air 12 Network spots between the hours of 6 AM and 11 PM daily. Because they are unable to clear commercial advertisements, noncommercial radio stations that affiliate with SRN News pay a monthly access fee. Affiliation agreements for the news service are two years in length.
Music. The Network offers three syndicated religious music formats. The Morningstar format, which originates from studios in Nashville, features adult contemporary Christian music targeted to the mainstream 25-to-54 year old audience. The Network also offers a contemporary Christian music format, The Word in Music, targeted to a younger audience, and a more traditional praise and worship format, The Word in Praise. Both of these formats originate from two of the Company's owned and operated stations in Colorado Springs. All music formats are available to affiliate stations on a 24-hour basis or in selected dayparts. As of November 30, 1997, the Morningstar format and The Word in Music format had 127 and 22 affiliates, respectively. As of the same date, The Word in Praise, established in the first quarter of 1997, had eight affiliates.
Each music network requires affiliates to air a minimum number of minutes per hour for network spots. In addition, fixed monthly affiliation fees are charged to both commercial and non-commercial stations which affiliate with the Morningstar format and non-commercial stations which affiliate with The Word in Music and The Word in Praise. In addition to these three 24-hour music formats, the Network provides weekly music programs, including CCM Countdown with Gary Chapman, CCM Radio Magazine and Rock Alive, to approximately 310 affiliate stations.
Salem Radio Representatives. The Company established SRR in 1992 as a sales representation company specializing in placing national advertising on religious format radio stations. The Network has an exclusive relationship with SRR, a wholly owned subsidiary of the Company, for the sale of available Network spot advertising. SRR receives a commission on all Network sales. SRR also contracts with individual radio stations to sell air time to national advertisers desiring to include selected Company stations in national buys covering multiple markets. See "--Owned and/or Operated Radio Stations-- Advertising Revenue." SRR administrative offices are located in Dallas, and its 12 commissioned sales personnel are located in field offices in Washington, D.C., Chicago, Nashville, Dallas, Seattle and Los Angeles.
COMPETITION
The radio broadcasting industry, including the religious format segment of this industry, is a highly competitive business. The financial success of each of the Company's radio stations that features talk programming is dependent, to a significant degree, upon its ability to generate revenue from the sale of block program time to national and local religious and educational organizations. The Company competes for this program revenue with a number of different commercial and noncommercial radio station licensees. While no group owner in the United States specializing in the religious format approaches the Company in size of potential listening audience and presence in major markets, religious format stations exist and enjoy varying degrees of prominence and success in all markets. The Company owns and/or operates 30 radio stations in 19 of the top 25 radio markets in terms of audience size. Two competitors of the Company with the next highest presence in the top 25 markets own and/or operate only 15 stations in 7 of such major markets and 10 stations in 10 of such markets, respectively.
The Company also competes for revenue in the spot advertising market with other commercial religious format and general format radio station licensees. The Company competes in the spot advertising market with
other media as well, including broadcast television, cable television, newspapers, magazines, direct mail coupons and billboard advertising.
Competition may also come from new media technologies currently being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite and by DAB. DAB may deliver by satellite to national and regional audiences, multi-channel, multiformat digital radio services with quality equivalent to compact discs. The delivery of information through the Internet also could create new competition. The FCC has recently authorized spectrum for the use of a new technology, satellite DARS, to deliver audio programming. DARS may provide a medium for the delivery by satellite or terrestrial means of multiple new audio programming formats to local and national audiences.
The Network competes with other commercial radio networks that offer news and talk programming to religious format stations and two noncommercial networks that offer religious music formats. The Network also competes with other radio networks for the services of talk show personalities.
SERVICEMARKS
The Company owns the federally registered service marks "Salem Communications Corporation" and "Salem Radio Network" and the related Salem Communications Corporation and Salem Radio Network logos. The Company considers these service marks to be important to its business.
EMPLOYEES
At November 30, 1997, the Company employed 513 full-time and 309 part-time employees. None of the Company's employees are covered by collective bargaining agreements, and the Company considers its relations with its employees to be good.
In certain of its larger markets, the Company employs on-air personalities with loyal audiences in their respective markets. The loss of one of these personalities could result in a short-term loss of audience share, but the Company does not believe that any such loss would have a material adverse effect on the Company's financial condition or results of operations.
FEDERAL REGULATION OF RADIO BROADCASTING
Introduction. The ownership, operation and sale of broadcast stations, including those licensed to the Company, are subject to the jurisdiction of the FCC, which acts under authority derived from the Communications Act. The Communications Act was amended by the Telecommunications Act of 1996 (the "Telecommunications Act") to make changes in several broadcast laws. Among other things, the FCC assigns frequency bands for broadcasting; determines whether to approve changes in ownership or control of station licenses; regulates equipment used by stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; and has the power to impose penalties for violations of its rules under the Communications Act.
The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short" (less than the maximum) license renewal terms or, for particularly egregious violations, the denial of a license renewal application, the revocation of a license or the denial of FCC consent to acquire additional broadcast properties. Reference should be made to the Communications Act, FCC rules and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations.
License Grant and Renewal. Radio broadcast licenses are granted for maximum terms of eight years. Licenses may be renewed through an application to the FCC. Prior to the Telecommunications Act, during certain periods when a renewal application was pending, competing applicants could file for the radio frequency
being used by the renewal applicant. The Telecommunications Act prohibits the FCC from considering such competing applications if the FCC finds that the station has served the public interest, convenience and necessity, that there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC, and that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse.
Petitions to deny license renewals can be filed by interested parties, including members of the public. Such petitions may raise various issues before the FCC. The FCC is required to hold hearings on renewal applications if the FCC is unable to determine that renewal of a license would serve the public interest, convenience and necessity, or if a petition to deny raises a "substantial and material question of fact" as to whether the grant of the renewal application would be prima facie inconsistent with the public interest, convenience and necessity. Also, during certain periods when a renewal application is pending, the transferability of the applicant's license is restricted. The Company is not currently aware of any facts that would prevent the timely renewal of its licenses to operate its radio stations, although there can be no assurance that the Company's licenses will be renewed.
The FCC classifies each AM and FM station. An AM station operates on either a clear channel, regional channel or local channel. A clear channel is one on which AM stations are assigned to serve wide areas. Clear channel AM stations are classified as either: Class A stations, which operate on an unlimited time basis and are designated to render primary and secondary service over an extended area; Class B stations, which operate on an unlimited time basis and are designed to render service only over a primary service area; and Class D stations, which operate either during daytime hours only, during limited times only or on an unlimited time basis with low nighttime power. A regional channel is one on which Class B and Class D AM stations may operate and serve primarily a principal center of population and the rural areas contiguous to it. A local channel is one on which AM stations operate on an unlimited time basis and serve primarily a community and the suburban and rural areas immediately contiguous thereto. Class C AM stations operate on a local channel and are designed to render service only over a primary service area that may be reduced as a consequence of interference.
The minimum and maximum facilities requirements for an FM station are determined by its class. FM class designations depend upon the geographic zone in which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1 and C.
The following table sets forth in order of market size the market, call letters, FCC license classification, antenna height above average terrain (HAAT), power and frequency of each of the stations owned or operated by the Company and the date on which each station's FCC license expires.
STATION EXPIRATION
CALL FCC HAAT POWER IN DATE OF
MARKET(1) LETTERS CLASS IN METERS KILOWATTS(2) FREQUENCY LICENSE
--------- ------- ----- --------- ------------ --------- ----------
New York, NY............ WMCA-AM B NA 5.0/5.0 570 kHz 6/1/1998
WWDJ-AM B NA 5.0/5.0 970 kHz 6/1/1998
Los Angeles, CA......... KKLA-FM B 878 10.5 99.5 MHz 12/1/2005
KAVC-FM A 94 2.9 105.5 MHz 12/1/2005
KLTX-AM B NA 5.0/3.6 1390 kHz 12/1/2005
Chicago, IL............. WYLL-FM B 91 50 106.7 MHz 12/1/2004
San Francisco, CA....... KFAX-AM B NA 50/50 1100 kHz 12/1/2005
Philadelphia, PA........ WFIL-AM B NA 5.0/5.0 560 kHz 8/1/1998
WZZD-AM B NA 50.0/10.0 990 kHz 8/1/1998
Dallas-Ft. Worth, TX.... KWRD-FM C 460 100 94.9 MHz 8/1/2005
Washington, D.C. ....... WAVA-FM B 131 50 105.1 MHz 10/1/2003
Houston-Galveston, TX... KENR-AM B NA 10.0/5.0 1070 kHz 8/1/2005
KKHT-FM C 344 100 106.9 MHz 8/1/2005
Boston, MA.............. WEZE-AM B NA 5.0/5.0 590 kHz (3)
Seattle-Tacoma, WA...... KGNW-AM B NA 50.0/5.0 820 kHz (3)
KLFE-AM B NA 5.0/5.0 1590 kHz (3)
KKOL-AM(4) B NA 5.0/5.0 1300 kHz (3)
San Diego, CA........... KPRZ-AM B NA 20.0/5.0 1210 kHz 12/1/2005
Minneapolis-St. Paul,
MN..................... KKMS-AM B NA 5.0/5.0 980 kHz 4/1/2004
Phoenix, AZ............. KPXQ-AM B NA 5.0/5.0 960 kHz 10/1/2005
Baltimore, MD........... WITH-AM C NA 1.0/1.0 1230 kHz 10/1/2003
Pittsburgh, PA.......... WORD-FM B 154 48 101.5 Mhz 8/1/1998
WPIT-AM D NA 5.0/0.024 730 kHz 8/1/1998
Cleveland, OH........... WCCD-AM D NA 0.5/0 1000 kHz 10/1/2004
WHK-AM B NA 5.0/5.0 1420 kHz 10/1/2004
Denver-Boulder, CO...... KNUS-AM B NA 5.0/5.0 710 kHz 4/1/2005
KRKS-AM B NA 5.0/0.39 990 kHz 4/1/2005
KRKS-FM C 387 100 94.7 MHz 4/1/2005
Portland, OR............ KPDQ-AM B NA 1.0/0.51 800 kHz (3)
KPDQ-FM C 387 100 93.7 MHz (3)
Cincinnati, OH.......... WTSJ-AM B NA 1.0/0.28 1050 kHz 10/1/2004
Riverside-San
Bernardino, CA......... KKLA-AM C NA 1.0/1.0 1240 kHz 12/1/2005
Sacramento, CA.......... KFIA-AM B NA 25.0/1.0 710 kHz 12/1/2005
KTKZ-AM B NA 5.0/5.0 1380 kHz 12/1/2005
Columbus, OH............ WRFD-AM D NA 23.0/6.1/0(5) 880 kHz 10/1/2004
San Antonio, TX......... KSLR-AM B NA 5.0/4.3 630 kHz 8/1/2005
Akron/Canton, OH........ WHLO-AM B NA 5.4/0.54 640 kHz 10/1/2004
Spokane, WA............. KTSL-FM C3 198 28.5 101.9 MHz (3)
Colorado Springs, CO.... KBIQ-FM C 695 57.0 102.7 MHz 4/1/2005
KGFT-FM C1 647 13 100.7 MHz 4/1/2005
KPRZ-FM C3 614 0.51 96.1 MHz 4/1/2005
Oxnard, CA.............. KDAR-FM B1 393 1.5 98.3 MHz 12/1/2005
Canton, OH.............. WHK-FM B 175 36 98.1 MHz 10/1/2004
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(5) Pursuant to FCC rules and regulations, many AM radio stations are licensed to operate at a reduced power during critical hours, the two-hour periods immediately following sunrise and preceding sunset. Both daytime power ratings are shown. WRFD-AM does not operate during nightime hours.
Ownership Matters. The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast license without the prior approval of the FCC. In determining whether to assign, transfer, grant or renew a broadcast license, the FCC considers a number of factors pertaining to the licensee, including compliance with various rules limiting common ownership of media properties, the "character" of the licensee and those persons holding "attributable" interests therein, and compliance with the Communications Act's limitation on alien ownership, as well as compliance with other FCC policies, including equal employment opportunity requirements.
Once a station purchase agreement has been signed, an application for FCC consent to assignment of license or transfer of control (depending upon whether the underlying transaction is an asset purchase or stock acquisition) is filed with the FCC. Approximately 10 to 15 days after this filing, the FCC publishes a notice assigning a file number to the application and advising that the application has been "accepted for filing." This begins a 30-day statutory public notice period during which third parties have the opportunity to file formal petitions to deny the proposed transaction. Informal objections to the transaction may be filed at any time prior to the grant of an application. During this 30-day period, the FCC staff generally begins its review of the application and may request additional information from the applicants in response to any questions the staff may have.
Assuming that no petitions are filed during the public notice period and that the proposed transaction poses no issues requiring higher level consent, the FCC staff often grants the application by delegated authority approximately 10 days after the end of the public notice period. If there is a back log of applications or the transaction proposes an issue requiring higher level consent, the 10-day period can extend to 30 days or more. The parties to the application are legally authorized to close on the transaction at any time after the application is granted. At this point, however, the grant is not a "final order."
Public notice of the FCC staff grant of an application is usually issued within seven days of the date on which the application is granted. For a period of 30 days following the date of this public notice interested parties may file petitions seeking staff reconsideration or full FCC review of the staff action. In addition, for a period of 40 days following the date of the public notice, the FCC, on its own, can review and reconsider the grant. In the event that review by the FCC is made, judicial review of the FCC action may be sought in the United States Court of Appeals for the District of Columbia within 30 days of the public notice of the FCC's action. In the event the court affirms the FCC's action, further judicial review may be sought by seeking rehearing en banc from the Court of Appeals or by certiorari from the United States Supreme Court.
Assuming that no petitions are filed by third parties and no action staying or reversing the grant is made by the FCC, then the grant will become a final order by operation of law at the close of business on the 40th day following the public notice of the grant. Upon a grant becoming a final order, counsel is able to deliver an opinion that the grant is no longer subject to administrative or judicial review, although such actions can nevertheless be set aside in rare circumstances (e.g., fraud on the agency by a party to the application).
The FCC will not issue an unconditional assignment or transfer grant if an application for renewal of license for the station is pending. Thus, the foregoing timetables will be altered in the event an application for assignment or transfer is filed while a license renewal application is pending.
Under the Communications Act, a broadcast license may not be granted to or held by a corporation that has more than one-fifth of its capital stock owned or voted by aliens or their representatives, by foreign governments or their representatives, or by non-U.S. corporations. Under the Communications Act, a broadcast license also may not be granted to or held by any corporation that is controlled, directly or indirectly, by any other corporation more than one- fourth of whose capital stock is owned or voted by aliens or their representatives, by foreign governments or their representatives, or by non- U.S. corporations. These restrictions apply in modified form to other forms of business organizations, including partnerships. The Company therefore may be restricted from having more than one-fourth of its stock owned or voted by aliens, foreign governments or non-U.S. corporations.
The Communications Act and FCC rules also generally restrict the common ownership, operation or control of radio broadcast stations serving the same local market, of a radio broadcast station and a television broadcast station serving the same local market, and of a radio broadcast station and a daily newspaper serving the same local market. Under these "cross-ownership" rules, absent waivers, the Company would not be permitted to acquire any daily newspaper or television broadcast station (other than low power television) in a local market where it then owned any radio broadcast station. The FCC's rules provide for the liberal grant of a waiver of the rule prohibiting common ownership of radio and television stations in the same geographic market in the top 25 television markets if certain conditions are satisfied. The Telecommunications Act extends this waiver policy to stations in the top 50 television markets, although the FCC has not yet implemented this change.
In response to the Telecommunications Act, the FCC amended its multiple ownership rules to eliminate the national limits on ownership of AM and FM stations. The FCC's broadcast multiple ownership rules restrict the number of radio stations one person or entity may own, operate or control on a local level. These limits are:
(i) in a market with 45 or more commercial radio stations, an entity may own up to eight commercial radio stations, not more than five of which are in the same service (FM or AM);
(ii) in a market with between 30 and 44 (inclusive) commercial radio stations, an entity may own up to seven commercial radio stations, not more than four of which are in the same service;
(iii) in a market with between 15 and 29 (inclusive) commercial radio stations, an entity may own up to six commercial radio stations, not more than four of which are in the same service;
(iv) in a market with 14 or fewer commercial radio stations, an entity may own up to five commercial radio stations, not more than three of which are in the same service, except that an entity may not own more than 50% of the stations in such market.
None of these multiple ownership rules requires any change in the Company's current ownership of radio broadcast stations; however, these rules will limit the number of additional stations that the Company may acquire in the future in certain of its markets.
Because of these multiple and cross-ownership rules, a purchaser of voting stock of the Company that acquires an "attributable" interest in the Company may violate the FCC's rule if it also has an attributable interest in other television or radio stations, or in daily newspapers, depending on the number and location of those radio or television stations or daily newspapers. Such a purchaser also may be restricted in the companies in which it may invest, to the extent that these investments give rise to an attributable interest. If an attributable shareholder of the Company violates any of these ownership rules, the Company may be unable to obtain from the FCC one or more authorizations needed to conduct its radio station business and may be unable to obtain FCC consents for certain future acquisitions.
The FCC generally applies its television/radio/newspaper cross-ownership rules and its broadcast multiple ownership rules by considering the "attributable," or cognizable interests held by a person or entity. A person or entity can have an interest in a radio station, television station or daily newspaper by being an officer, director, partner or shareholder of a company that owns that station or newspaper. Whether that interest is cognizable under the FCC's ownership rules is determined by the FCC's attribution rules. If an interest is attributable, the FCC treats the person or entity who holds that interest as an "owner" of the radio station, television station or daily newspaper in question, and therefore subject to the FCC's ownership rules.
With respect to a corporation, officers and directors and persons or entities that directly or indirectly can vote 5% or more of the corporation's stock (10% or more of such stock in the case of insurance companies, investment companies, bank trust departments and certain other "passive investors" that hold such stock for investment purposes only) generally are attributed with an ownership interest in whatever radio stations, television stations and daily newspapers the corporation owns.
With respect to a partnership, the interest of a general partner is attributable, as is the interest of any limited partner who is "materially involved" in the media-related activities of the partnership. Debt instruments, nonvoting stock, options and warrants for voting stock that have not yet been exercised, limited partnership interests where the limited partner is not "materially involved" in the media-related activities of the partnership, and minority (under 5%) voting stock, generally do not subject their holders to attribution.
The FCC has issued a Notice of Proposed Rulemaking (the "NPRM") that contemplates tightening attribution standards where parties have multiple nonattributable interests in and relationships with stations that would be prohibited by the FCC's cross-interest rules, if the interest/relationships were attributable. The NPRM contemplates that this change in attribution will apply only to persons holding debt or equity interests that exceed certain benchmarks. For further information, see "--Proposed Changes" below.
In addition, the FCC has a "cross-interest" policy that under certain circumstances could prohibit a person or entity with an attributable interest in a broadcast station or daily newspaper from having a "meaningful" nonattributable interest in another broadcast station or daily newspaper in the same local market. Among other things, "meaningful" interests could include significant equity interests (including nonvoting stock, voting stock and limited partnership interests) and significant employment positions. This policy may limit the permissible investments a purchaser of the Company's voting stock may make or hold.
Programming and Operation. The Communications Act requires broadcasters to serve the "public interest." The FCC has gradually relaxed or eliminated many of the more formalized procedures it had developed in the past to promote the broadcast of certain types of programming responsive to the needs of a station's community of license. Licensees continue to be required, however, to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Complaints from listeners concerning a station's programming will be considered by the FCC when it evaluates the licensee's renewal application, but such complaints may be filed and considered at any time.
Stations also must pay regulatory and application fees and follow various FCC rules that regulate, among other things, political advertising, the broadcast of obscene or indecent programming, sponsorship identification and technical operations (including limits on radio frequency radiation). In addition, licensees must develop and implement programs designed to promote equal employment opportunities and must submit reports to the FCC on these matters annually and in connection with a renewal application. The broadcast of contests and lotteries is regulated by FCC rules.
Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short" (less than the maximum) renewal terms or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license.
In 1985, the FCC adopted rules regarding human exposures to levels of radio frequency ("RF") radiation. These rules require applicants for new broadcast stations, renewals of broadcast licenses or modifications of existing licenses to inform the FCC at the time of filing such applications whether a new or existing broadcast facility would expose people to RF radiation in excess of certain guidelines. In August 1996, the FCC adopted more restrictive radiation limits. These limits will become effective on September 1, 1997 and will govern applications filed after that date. The Company anticipates that such regulations will not have a material effect on its business.
Local Marketing Agreements. Over the past five years, a number of radio stations, including certain of the Company's stations, have entered into what commonly are referred to as "local marketing agreements" ("LMAs") or "time brokerage agreements." These agreements take various forms. Separately-owned and licensed stations may agree to function cooperatively in terms of programming, advertising sales and other matters, subject to compliance with the antitrust laws and the FCC's rules and policies, including the requirement that the licensee of each station maintains independent control over the programming and other operations of its own station. The FCC has held that such agreements do not violate the Communications Act as long as the
licensee of the station that is being substantially programmed by another entity maintains complete responsibility for, and control over, operations of its broadcast stations and otherwise ensures compliance with applicable FCC rules and policies.
A station that brokers substantial time on another station in its market or engages in an LMA with a station in the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC's ownership rules. As a result, a broadcast station may not enter into an LMA that allows it to program more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the FCC's local multiple ownership rules. FCC rules also prohibit the broadcast licensee from simulcasting more than 25% of its programming on another station in the same broadcast service (i.e., AM-AM or FM-FM) where the two stations serve substantially the same geographic area, whether the licensee owns the stations or owns one and programs the other through an LMA arrangement.
Proposed Changes. In December, 1994, the FCC initiated a proceeding to solicit comment on whether it should revise its radio and television ownership "attribution" rules by among other proposals (i) raising the basic benchmark for attributing ownership in a corporate licensee from 5% to 10% of the licensee's voting stock, (ii) increasing from 10% to 20% of the licensee's voting stock the attribution benchmark for "passive investors" in corporate licensees, (iii) restricting the availability of the attribution exemption when a single party controls more than 50% of the voting stock; and (iv) considering LMAs, joint sales agreements, debt and non-voting stock interests to be attributable under certain circumstances. No decision has been made by the FCC in these matters. At this time, no determination can be made as to what effect, if any, this proposed rulemaking will have on the Company.
The Congress and the FCC from time to time have under consideration, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership and profitability of the Company's radio stations, result in the loss of audience share and revenue for the Company's radio stations, and affect the ability of the Company to acquire additional radio stations or finance such acquisitions. Such matters include: (i) proposals to impose spectrum use or other fees on FCC licensees; (ii) the FCC's equal employment opportunity rules and matters relating to political broadcasting; (iii) technical and frequency allocation matters; (iv) changes in the FCC's cross interest, multiple ownership and cross-ownership policies; (v) changes to broadcast technical requirements; (vi) proposals to allow telephone or cable television companies to deliver audio and video programming to the home through existing phone lines; (vii) proposals to limit the tax deductibility of advertising expenses by advertisers; and (viii) proposals to auction the right to use the radio broadcast spectrum to the highest bidder, instead of granting FCC licenses and subsequent license renewals without such bidding.
The Balanced Budget Act of 1997, enacted August 5, 1997, requires the FCC to resolve mutually-exclusive requests for use of the commercial radio broadcast spectrum by auction under most circumstances. On November 25, 1997, the FCC adopted a Notice of Proposed Rulemaking (the "November 25, 1997 NPRM") seeking to implement its statutory auction authority. The Balanced Budget Act of 1997 requires the use of auctions to resolve mutually-exclusive requests for new stations or major changes in the facilities of existing stations filed after June 30, 1997, where the stations propose to use the commercial radio broadcast spectrum. The FCC may use auctions to resolve such mutually- exclusive requests filed before July 1, 1997, which remain pending after a mandated period ending February 1, 1998, in which the applicants may enter into settlement agreements to resolve the mutual exclusivity of their applications. In connection with the November 25, 1997 NPRM, the FCC has imposed a temporary freeze on the filing of most requests for new commercial broadcast stations or for major changes of existing commercial broadcast facilities until it adopts auction rules.
The Company cannot predict whether any proposed changes will be adopted or what other matters might be considered in the future, nor can it judge in advance what impact, if any, the implementation of any of these proposals or changes might have on its business.
The FCC, on April 2, 1997, awarded two licenses for the provision of satellite DARS. Under rules adopted for this service, licensees must begin construction of their space stations within one year, begin operating within four years, and be operating their entire system within six years. The Company cannot predict whether the service will be subscription or advertiser supported. Digital technology also may be used in the future by terrestrial radio broadcast stations either on existing or alternate broadcasting frequencies, and the FCC has stated that it will consider making changes to its rules to permit AM and FM radio stations to offer digital sound following industry analysis of technical standards. In addition, the FCC has authorized an additional 100 kHz of bandwidth for the AM band and on March 17, 1997, adopted an allotment plan for the expanded band that identified the 88 AM radio stations selected to move into the band. At the end of a five-year transition period, those licensees will be required to return to the FCC either the license for their existing AM band station or the license for the expanded AM band station.
The foregoing summary of certain provisions of the Communications Act and of specific FCC rules and policies does not purport to be comprehensive. Reference should be made to the Communications Act, the FCC's rules and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of radio broadcast stations.
Federal Antitrust Considerations. The FTC and the DOJ, which evaluate transactions to determine whether those transactions should be challenged under the federal antitrust laws, have been increasingly active recently in their review of radio station acquisitions, particularly where an operator proposes to acquire additional stations in its existing markets.
For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino Improvements Act ("HSR Act") and the rules promulgated thereunder require the parties to file Notification and Report Forms with the FTC and the DOJ and to observe specified waiting period requirements before consummating the acquisition. At any time before or after the consummation of a proposed acquisition, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition or seeking divestiture of the business acquired or other assets of the Company. Acquisitions that are not required to be reported under the HSR Act may be investigated by the FTC or the DOJ under the antitrust laws before or after consummation. In addition, private parties may under certain circumstances bring legal action to challenge an acquisition under the antitrust laws.
As part of its increased scrutiny of radio station acquisitions, the DOJ has stated publicly that it believes that LMAs and other similar agreements customarily entered into in connection with radio station transfers prior to the expiration of the waiting period under the HSR Act could violate the HSR Act.
Although the Company does not believe that its acquisition strategy as a whole will be adversely affected in any material respect by antitrust review, there can be no assurance that this will be the case.
PROPERTIES AND FACILITIES
The types of properties required to support the Company's radio stations include offices, studios and tower and antenna sites. A station's studios are generally housed with its office in a downtown or business district. The Company's tower and antenna sites are generally selected to provide maximum market coverage. The Network operations are supported by offices and studios from which Network programming is originated or relayed from a remote point of origination.
The studios and offices of the Company's stations, its Network operations and its corporate headquarters are located in leased facilities. The Network leases satellite transponders used for delivery of its programming. The Company either owns or leases its radio station tower and antenna sites. The Company does not anticipate difficulties in renewing those leases that expire within the next several years or in obtaining other lease arrangements, if necessary.
The Company leases certain property from the Principal Shareholders or trusts and partnerships created for the benefit of the Principal Shareholders and their families. See "Certain Transactions." All such leases have cost of living adjustments. Based upon management's assessment and analysis of local market conditions for comparable properties, the Company believes such leases do not have terms that vary materially from those that would have been available from unaffiliated parties.
No one property is material to the Company's overall operations. The Company believes that its properties are in good condition and suitable for its operations; however, the Company continually evaluates opportunities to upgrade its properties. The Company owns substantially all of its equipment, consisting principally of transmitting antennae, transmitters, studio equipment and general office equipment.
LITIGATION
Neither the Company nor any of its subsidiaries are parties to any material pending legal proceedings, other than ordinary routine litigation incidental to their consolidated business operations.
MANAGEMENT
EXECUTIVE AND OTHER KEY OFFICERS AND DIRECTORS
The executive and other key officers and directors of the Company are as follows:
NAME AGE POSITION
---- --- --------
President, Chief Executive Officer and
Edward G. Atsinger III...... 58 Director
Stuart W. Epperson.......... 61 Chairman of the Board
Eric H. Halvorson........... 48 Executive Vice President, Chief Operating
Officer, General Counsel and Director
Greg R. Anderson............ 50 President, Salem Radio Network
Dirk Gastaldo............... 42 Vice President and Chief Financial Officer
Kenneth L. Gaines........... 59 Vice President-Operations
Dave Armstrong.............. 52 Vice President-Operations and General
Manager/KKLA-FM/AM
Joe D. Davis................ 53 Vice President-Operations and General
Manager/WMCA-AM and WWDJ-AM
Kenneth W. Sasso............ 51 Vice President-Operations
Donald V. Cartmell.......... 67 Vice President-National Programming and
Ministry Relations
Richard A. Riddle........... 53 Director
Roland S. Hinz.............. 58 Director
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All directors hold office until the next annual meeting of shareholders following their election, or until their successors are elected and qualified. Officers are elected annually by the Board of Directors and serve at the discretion of the Board.
Mr. Atsinger has been President, Chief Executive Officer and a Director of the Company since its inception. He has been engaged in the ownership and operation of radio stations since 1969 and is a member of the Board of Directors of the National Religious Broadcasters.
Mr. Epperson has been Chairman of the Company since its inception. Mr. Epperson has been engaged in the ownership and operation of radio stations since 1961. In addition, he is a member of the Board of Directors of the National Religious Broadcasters. Mr. Epperson is married to Nancy A. Epperson who is Mr. Atsinger's sister.
Mr. Halvorson has been Chief Operating Officer of the Company since 1995, Executive Vice President of the Company since 1991 and a Director of the Company since 1988. From 1991 to the present, Mr. Halvorson has also served as the General Counsel of the Company. Mr. Halvorson was the managing partner of the law firm of Godfrey & Kahn, S.C.-Green Bay from 1988 until 1991. From 1985 to 1988, he was Vice President and General Counsel of the Company. From 1976 until 1985, he was an associate and then a partner of Godfrey & Kahn, S.C.- Milwaukee. Mr. Halvorson was a Certified Public Accountant with Arthur Andersen & Co. from 1971 to 1973.
Mr. Anderson has been President of the Network since 1994. From 1993 to 1994, Mr. Anderson was the Vice President-General Manager of the Network. Mr. Anderson was employed by Multimedia, Inc. from 1980 to 1993. After serving as program director and general manager at Multimedia stations in Greenville, Shreveport and Milwaukee, he was named Vice President, Operations, of the Multimedia radio division in 1987 and was subsequently appointed as Executive Vice President and group head of Multimedia's radio division.
Mr. Gastaldo has been Chief Financial Officer of the Company since 1993, and a Vice President of the Company since 1992. From 1992 to 1993, Mr. Gastaldo was Vice President-Administration of the Company, and from 1989 to 1991 he was Manager-Internal Audit of the Company. He was a Certified Public Accountant with Ernst & Young from 1978 to 1989.
Mr. Gaines has been Vice President-Operations of the Company since 1994. Prior to that time, he served as General Manager of KKLA-FM from 1992 to 1994 and General Manager of WYLL-FM from 1990 to 1992. Mr. Gaines has been involved in the management of radio stations since 1964. He served as Executive Vice President of Commonwealth Communications from 1988 to 1990, Vice President of Penn Communications from 1985 to 1988, Executive Vice President of Broadstreet Communications from 1974 to 1985 and Vice President and General Manager of Metromedia from 1964 to 1974.
Mr. Armstrong has been Vice President-Operations of the Company since 1996 and General Manager of KKLA-FM/AM since 1994. He has also supervised operations of KLTX-AM since January 1997. Mr. Armstrong has 28 years of radio broadcast experience and has been general manager of stations in Santa Ana and Orange, California.
Mr. Davis has been Vice President-Operations of the Company since 1996 and General Manager of WMCA-AM since 1989. He has also been the General Manager of WWDJ-AM since 1994. He has previously served as Vice President and Executive Director of Christian Fund for the Disabled as well as President of Practice Resources, Inc., Davis Eaton Corporation and Vintage Specialty Advertising Company.
Mr. Sasso has been Vice President-Operations of the Company since 1996. Prior to that time, he served as General Manager of the Company's Colorado Springs stations from 1994 to present and General Manager of the Company's Denver stations from 1995 to 1996. Mr. Sasso is the former owner of eight radio stations in Florida, Mississippi and Louisiana which were sold in 1989. From 1969 to 1979 he served in various radio management capacities for King Broadcasting and The American Broadcasting Companies.
Mr. Cartmell has been Vice President-National Programming and Ministry Relations of the Company since 1996. He served as Vice President-Operations of the Company from 1988 to 1996 and as General Manager of KLTX-AM from 1987 to 1988. Prior to joining the Company, Mr. Cartmell was Vice President and Director of Marketing of Interstate Broadcasting Company.
Mr. Riddle has been a Director of the Company since September, 1997. Mr. Riddle is an independent businessman specializing in providing financial assistance and consulting to manufacturing companies. He was President and majority shareholder of I. L. Walker Company from 1988 to 1997 when the company was sold. He also was Chief Operating Officer and majority shareholder of Richter Manufacturing from 1970 to 1987.
Mr. Hinz has been a Director of the Company since September, 1997. Mr. Hinz has been the owner and President of Hi-Torque Publishing Company, a publisher of magazines covering the motorcycling and biking industries, since 1981. He is active in a number of non-profit organizations and serves as Chairman of the Fund Development Committee of English Language Institute China. Mr. Hinz also serves on the Board of Directors of Gordon Conwell Seminary.
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by the Company for the fiscal year ended December 31, 1997 to the Company's Chief Executive Officer and the four highest paid executive officers of the Company.
SUMMARY COMPENSATION TABLE
1997 ANNUAL COMPENSATION
----------------------------------
OTHER ANNUAL
COMPENSATION
-----------------
NAME AND PRINCIPAL POSITIONS SALARY BONUS 401(K) OTHER
---------------------------- -------- ------- ------ --------
Edward G. Atsinger III, President,
Chief Executive Officer and
Director............................ $400,000 $ -- $ -- $890,192(1)
Stuart W. Epperson, Chairman of the
Board............................... 400,000 -- -- 890,192(1)
Eric H. Halvorson, Executive Vice
President,
Chief Operating Officer and
Director............................ 270,000 12,500 950(2) --
Dave Armstrong, Vice President-
Operations.......................... 163,683 -- 19(2) --
Greg R. Anderson, Vice President;
President, the Network.............. 162,300 -- 950(2) --
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(1) Tax reimbursement payments made to satisfy individual federal and state income tax liabilities generated by New Inspiration and Golden Gate as a result of their S corporation status. See "Business--Corporate Structure and Reorganization."
(2) Represents employer matching contributions to individuals' 401(k) accounts.
EMPLOYMENT AGREEMENTS
Edward G. Atsinger III entered into an employment agreement with the Company effective as of August 1, 1997, pursuant to which he will serve as President and Chief Executive Officer of the Company for an annual salary of $400,000 and an annual bonus determined at the discretion of the Board of Directors, for an initial period of three years. The employment agreement with Mr. Atsinger provides the Company with a right of first refusal on corporate opportunities, which might include acquisitions of radio stations in any market in which the Company is interested, and includes a noncompete provision for a period of two years from the cessation of Mr. Atsinger's employment with the Company and a nondisclosure provision which is effective for the term of the employment agreement and indefinitely thereafter. In addition to the requirements of his employment agreement, since the inception of the Company Mr. Atsinger has been obligated under applicable state law to first present corporate opportunities to the Company before pursuing any such opportunity himself. Under the terms of his employment agreement, Mr. Atsinger is also entitled to participate in any benefit plans provided by the Company to its employees.
Stuart W. Epperson entered into an employment agreement with the Company effective as of August 1, 1997, pursuant to which he will serve as Chairman of the Company for an annual salary of $400,000 and an annual bonus determined at the discretion of the Board of Directors, for an initial period of three years. The employment agreement with Mr. Epperson provides the Company with a right of first refusal on corporate opportunities, which might include acquisitions of radio stations in any market in which the Company is interested, and includes a noncompete provision for a period of two years from the cessation of Mr. Epperson's employment with the Company and a nondisclosure provision which is effective for the term of the employment agreement and indefinitely thereafter. In addition to the requirements of his employment agreement, since the inception of the Company Mr. Epperson has been obligated under applicable state law to first present corporate opportunities to the Company before pursuing any such opportunity himself. Under the terms of his employment agreement, Mr. Epperson is also entitled to participate in any benefit plans provided by the Company to its employees.
Eric H. Halvorson entered into an employment agreement with the Company effective as of November 1991, pursuant to which he serves as Executive Vice President of the Company at an annual salary starting at
$175,000, with annual increases of $11,000 to $14,000, for a period of seven
years. The agreement was subsequently amended in April 1996 to extend the term
for one additional year and increase the base salary to $255,000, $270,000 and
$285,000 for 1996, 1997 and 1998, respectively, and was again amended in July
1997 to extend the term through December 2003 at a base salary of $300,000 for
each year after 1998. The employment agreement provides that Mr. Halvorson may
participate in any benefit plans provided by the Company to its employees. Mr.
Halvorson also entered into a deferred compensation agreement with the Company
effective as of November 1991, pursuant to which Mr. Halvorson will receive
(i) 50% of the average of his three highest years of compensation, payable for
a period of ten consecutive years, if he remains employed by the Company until
age 60, or (ii) a discounted amount, based upon the compensation he would have
received if he had remained employed until age 60, if his employment
terminates before he reaches age 60 by reason of death, disability or
termination by the Company without cause.
Greg R. Anderson entered into an employment agreement with SRN effective as of October 1994, pursuant to which he serves as President of SRN for a period of three years at an annual salary of $120,000, $126,000 and $132,300 for each year during the term of the agreement, respectively. The agreement was subsequently amended in December 1995 to increase Mr. Anderson's base salary to $162,300 and was amended again in August 1997 to extend the term for three additional years. Mr. Anderson is also entitled to participate in any benefit plans provided by SRN to its employees.
401(K) PLAN
The Company adopted a 401(k) Savings Plan ("Retirement Plan") in 1993 for the purpose of providing, at the option of the employee, retirement benefits to full-time employees of the Company and its subsidiaries. Contributions to the Retirement Plan are made by the employee and, on a voluntary basis, by the Company. The Company currently matches 10% of the employee's contributions to the Retirement Plan which do not exceed 10% of the employee's annual compensation. The Company made a contribution of $80,357 to the Retirement Plan during the year ended December 31, 1997.
CERTAIN TRANSACTIONS
REORGANIZATION
To effect the Reorganization, the Shareholders contributed their shares of stock in New Inspiration and Golden Gate to the Company (which in turn effected the contribution to the Company of the Shareholders' interests in Beltway) in exchange for new shares in the Company. The share conversion factors were based on the ratio of asset values of the Company, New Inspiration and Golden Gate to the combined asset value of such entities. The asset values were determined by an independent radio station broker. Following the Reorganization, Mrs. Epperson, who had been a 50% owner of New Inspiration, became a shareholder of the Company. All of the outstanding stock of the Company is currently owned by Mr. Atsinger (50%), Mr. Epperson (36.8%) and Mrs. Epperson (13.2%). See "Securities Ownership of Certain Beneficial Owners." See "Business--Corporate Structure and Reorganization."
DISTRIBUTIONS TO SHAREHOLDERS
In connection with the recent Reorganization, New Inspiration and Golden Gate, which were each S corporations prior to the Reorganization, distributed cash and promissory notes to their respective shareholders in the aggregate amount of $8.5 million. Of such amount, $1.8 million, equal to the estimated federal and state income tax liability of the shareholders on the earnings of New Inspiration and Golden Gate, was paid by New Inspiration and Golden Gate in cash. The remainder, $6.7 million, was paid in the form of promissory notes payable to the shareholders (the "Shareholder Notes") immediately following the closing of the Offering. After the closing of the Offering, the Company borrowed $6.7 million under the Credit Agreement and applied this amount to the payment of certain indebtedness owed to New Inspiration and Golden Gate by the Company. The cash made available from the repayment of such loans was then used by New Inspiration and Golden Gate to pay the Shareholder Notes. See "Business--Corporate Structure and Reorganization."
CERTAIN LOAN TRANSACTIONS
In December 1996, the Principal Shareholders repaid certain promissory notes and accrued interest owed to the Company in the approximate amount of $4.8 million (approximately $3.4 million principal and $1.4 million accrued interest). The Company had made these loans (approximately $1.7 million each to Messrs. Atsinger and Epperson) to the Principal Shareholders in 1991 to facilitate the repayment of personal indebtedness they had incurred in connection with prior radio station acquisitions. The notes bore interest at the Applicable Federal Rate. The repayments were made with the proceeds of a distribution to the Principal Shareholders from Golden Gate and New Inspiration of previously taxed S corporation income. Principal and accrued interest, divided equally between Messrs. Atsinger and Epperson, amounted to approximately $4.6 million at December 31, 1995. Interest earned on these notes in 1996, 1995 and 1994 was $188,687, $213,003 and $174,452, respectively.
In December 1996, the Company borrowed $1.9 million from Mr. Atsinger, who owns 50% of the outstanding stock of the Company. The note was repaid, including interest at 9 1/4%, in January 1997, with proceeds from a borrowing under the Credit Agreement.
In July 1997, the Company canceled certain indebtedness owed to the Company by Eric H. Halvorson, an executive officer and director of the Company, in the amount of $25,000 plus accrued interest calculated at the Applicable Federal Rate. The Company also made a distribution to Mr. Halvorson in an amount equal to the tax liability he incurred as a result of the cancellation of this debt.
In December 1997, the Company borrowed $2.0 million from Mr. Atsinger pursuant to a promissory note with a revolving principal amount of up to $2.5 million. The note is a demand note which bears interest at a floating rate that is currently 9%. During the term of the note, the interest rate will at all times be 1% lower than the rate for base rate borrowings under the Company's Credit Agreement. The Company will borrow under the Credit Agreement when Mr. Atsinger demands repayment. The note is outstanding as of the date hereof.
In January 1998, the Company borrowed $1.5 million from Mr. Epperson pursuant to a promissory note with a revolving principal amount of up to $2.5 million. The note is a demand note which bears interest at floating rate that is currently 9%. During the term of the note, the interest rate will at all times be 1% lower than the rate for base rate borrowings under the Company's Credit Agreement. The Company will borrow under the Credit Agreement when Mr. Epperson demands repayment. The note is outstanding as of the date hereof.
LEASES WITH PRINCIPAL SHAREHOLDERS
The Company leases the studios and tower and antenna sites described in the table below from the Principal Shareholders or trusts and partnerships created for the benefit of the Principal Shareholders and their families. All such leases have cost of living adjustments. Based upon management's assessment and analysis of local market conditions for comparable properties, the Company believes that such leases do not have terms that vary materially from those that would have been available from unaffiliated parties.
STATION
CALL CURRENT ANNUAL EXPIRATION
MARKET LETTERS FACILITIES LEASED RENTAL DATE(1)
------ ------- ----------------- -------------- ----------
Leases with both
Principal Shareholders:
Philadelphia, PA...... WFIL-AM/ Antenna/Tower/Studios $ 110,520 2004
WZZD-AM
Pittsburgh, PA........ WORD-FM/ Antenna/Tower 26,772 2003
WPIT-AM
Columbus, OH.......... WRFD-AM Antenna/Tower 44,220 2002
Chicago, IL........... WYLL-FM Antenna/Tower 41,460 2002
Denver-Boulder, CO.... KNUS-AM Antenna/Tower 18,480 2006
Houston-Galveston, TX. KKHT-FM/ Antenna/Tower 50,772 2005
KENR-AM
San Antonio, TX....... KSLR-AM Antenna/Tower 30,705 2007
Seattle-Tacoma, WA.... KGNW-AM Antenna/Tower 35,928 2002
KLFE-AM Antenna/Tower 26,112 2004
Portland, OR.......... KPDQ-AM/FM Studios 60,804 2002
Antenna/Tower 13,824 2002
Sacramento, CA........ KFIA-AM Antenna/Tower 79,764 2006
Los Angeles, CA....... KKLA-AM Studios 22,800 2002
Antenna/Tower 22,800 2002
KLTX-AM Antenna/Tower 138,130 2002
San Francisco, CA..... KFAX-AM Antenna/Tower 143,604 2003
Minneapolis, MN....... KKMS-AM Studios 66,000 2006
Tower/Antenna 66,000 2006
Cleveland, OH......... WHK-AM Antenna/Tower 33,600 2008
Akron, OH............. WHLO-AM Antenna/Tower 12,000 2007
Cincinnati, OH........ WTSJ-AM Antenna/Tower/Studios 24,000 2007
Canton, OH............ WHK-FM Antenna/Tower 12,000 2007
----------
1,080,345
----------
Leases with Mr.
Atsinger:
Los Angeles, CA....... KAVC-FM Antenna/Tower 12,348 2002
San Diego, CA......... KPRZ-FM Antenna/Tower 45,576 2002
----------
57,924
----------
$1,138,269
==========
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(1) The expiration date reported for certain facilities represents the expiration date assuming exercise of lease term extensions at the Company's option.
Rental expense paid by the Company to the Principal Shareholders or trusts or partnerships created for the benefit of their families for 1996, 1995 and 1994 amounted to approximately $827,000, $690,000 and $574,000, respectively. Rental expense paid by the Company to Mr. Atsinger or trusts created for the benefit of his family for 1996, 1995 and 1994 amounted to approximately $57,000, $56,000 and $67,000, respectively.
MANAGEMENT SERVICES CONTRACT
The Company provides management services for Sonsinger, Inc. ("Sonsinger") which is the licensee of KKOL-AM, Seattle. The Principal Shareholders are the owners of 100% of the outstanding shares of Sonsinger. The Principal Shareholders and the Company are parties to an Option to Purchase Agreement whereunder the Company has been granted an option to purchase KKOL-AM from the Principal Shareholders at any time on or before December 31, 1999 at a price equal to the lower of the cost of the station to the Principal Shareholders, $1.4 million, or its fair market value as determined by an independent appraisal. Pursuant to an LMA with Sonsinger, entered into June 13, 1997, the Company programs KKOL-AM and sells all the airtime. The Company retains all of the revenue (approximately $20,400 from June 13, 1997 through December 31, 1997) and incurs all of the expenses (approximately $56,500 for the same period) related to the operation of KKOL-AM and pays no fees or rent under the LMA.
TOWER CONSTRUCTION CONTRACT
In October 1997, in order to reduce the indebtedness under the Credit Agreement, the Company assigned its contract with a tower construction company to build a broadcast tower in Houston to the Principal Shareholders, subject to the Principal Shareholders obtaining financing. The Principal Shareholders will reimburse the Company for its costs and expenses, which amounted to approximately $2.9 million as of September 30, 1997. The antenna for the Company's station in Houston, KKHT-FM, will be located on the tower and the Company will pay rent to the Principal Shareholders. The Company and the Principal Shareholders have not agreed upon the rental rate. The Company intends to agree upon a rate based on management's assessment and analysis of local market conditions for comparable properties, such rate to be no less favorable to the Company than would be available in a comparable transaction with an unaffiliated party. Such agreement is subject to approval of a majority of the disinterested members of the Board of Directors.
RADIO STATIONS OWNED BY THE EPPERSONS
Mrs. Epperson has personally acquired a radio station in a small market in Virginia and has applied to the FCC for authorization to acquire a second station in that market. Additionally, Mr. Epperson has personally acquired certain radio stations in small markets in North Carolina. These Virginia and North Carolina markets are not currently served by stations owned and operated by the Company. Acquisitions in such markets are not part of the Company's current business and acquisition strategies.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the ownership of the Company's common stock by each of the Shareholders, who currently own all the outstanding common stock of the Company.
NUMBER OF SHARES PERCENTAGE OF SHARES
NAME OF INDIVIDUAL OR ENTITY(1) BENEFICIALLY OWNED OUTSTANDING
------------------------------- ------------------ --------------------
Edward G. Atsinger III.............. 40,836 50.00%
Stuart W. Epperson(2)............... 30,092 36.80%
Nancy A. Epperson(2)................ 10,744 13.20%
------ ------
81,672 100.00%
====== ======
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DESCRIPTION OF CERTAIN INDEBTEDNESS
As of September 25, 1997, the Company entered into a credit agreement with The Bank of New York (the "Bank") as the administrative agent for the $75.0 million senior secured reducing revolving credit facility (the "Credit Agreement"). At September 30, 1997, taking into account the leverage ratio requirement in the Credit Agreement, the Company had approximately $19.9 million available to it under the Credit Agreement. Taking into account certain restrictions under the Credit Agreement, the Company is not currently able to borrow for acquisitions.
Revolving Credit Commitment. The Company is, subject to certain conditions, able to draw upon the revolving credit available under the Credit Agreement for Permitted Acquisitions (as defined in the Credit Agreement), working capital and other permitted uses. The commitments under the Credit Agreement are to be reduced by $10.0 million in each of the years 1999 through 2003 and by $25.0 million in 2004. Any remaining principal balance will be due in August, 2004. At the Company's election, any portion of revolving loans which have been prepaid or repaid may be reborrowed up to the current commitment amount, and the commitment may be permanently reduced in whole or in part.
Prepayments. Mandatory reductions in the credit facility established by the Credit Agreement are required under certain circumstances. Commitments will be permanently reduced by the following amounts: (i) 100% of the net cash proceeds in excess of $1.0 million received from station sales or exchanges which are not reinvested within 360 days, (ii) to the extent that commitments under the Credit Agreement are at least $50.0 million, 100% of the net cash proceeds received from the issuance of equity when the Company's Total Leverage Ratio (as defined in the Credit Agreement) is greater than 6.0 to 1, and 50% of the net cash proceeds received from the issuance of equity when the Company's Total Leverage Ratio is greater than 4.5 to 1 but less than 6.0 to 1, (iii) 50% of Excess Cash Flow (as defined in the Credit Agreement) calculated for each fiscal year of the Company when the Total Leverage Ratio is greater than or equal to 3.5 to 1, (iv) 100% of all insurance or condemnation recoveries in excess of amounts used to replace or restore any properties or which are not used to replace or restore properties within one year after any casualty, and (v) in the event a radio station ceases operation for a period of more than 30 days by reason of FCC action, an amount equal to the Total Leverage Ratio (up to a ratio of 6.0 to 1) multiplied by the Operating Cash Flow (as defined in the Credit Agreement) of the station in question, unless such station was acquired within the preceding 18-month period in which case such amount will equal the purchase price of such station. Mandatory reductions will be applied among the remaining scheduled commitment reductions in inverse order. Loans shall be prepaid to the extent necessary to assure outstanding loans do not exceed the reduced commitment.
Interest Rates. The Credit Agreement gives the Company the option to borrow at either the Alternate Base Rate, defined as the higher of the Bank's Prime Rate and the Federal Funds Rate plus 0.5%, or the LIBOR Rate, in each case plus the Applicable Margin. The Applicable Margins for the Credit Agreement will range between 0% and 1.75% for the Alternate Base Rate and 1.00% and 3.00% for the LIBOR Rate, depending on the Total Leverage Ratio from time to time.
Fees. The Company is required to pay an annual fee, payable quarterly, on the unused portion of the facility at the annual rate of 0.50% (if the Total Leverage Ratio is greater than or equal to 4.5 to 1) or 0.375% (if the Total Leverage Ratio is less than 4.5 to 1).
Guaranty and Security. The Credit Agreement is guaranteed by each of the Company's present and future direct and indirect subsidiaries. Subject only to certain permitted liens incurred in the ordinary course of business, the Credit Agreement is secured by (i) a pledge of all of the capital stock of the Company's present and future direct and indirect subsidiaries, (ii) a pledge of all of the assets of the Company and its present and future direct and indirect subsidiaries and (iii) all proceeds of the foregoing.
Change of Control. A change in control or ownership is an event of default under the Credit Agreement. Under the Credit Agreement, a change in control or ownership occurs if (i) Mr. Epperson and/or Mr. Atsinger do not control in the aggregate at least 75% of the total voting power of all classes of capital stock of the Company, (ii) neither Mr. Epperson nor Mr. Atsinger is Chief Executive Officer of the Company or (iii) a Change of Control (as defined in the Indenture for the Notes) occurs.
Covenants. The Credit Agreement contains certain restrictive covenants customary for credit facilities of the size, type and purpose contemplated which, among other things, and with certain exceptions, limits the Company's ability to incur additional indebtedness, enter into affiliate transactions, pay dividends, consolidate, merge or effect certain asset sales, make certain investments or loans and change the nature of its business. The Credit Agreement also requires the satisfaction by the Company of certain financial covenants, which will require the maintenance of specified financial ratios and compliance with certain financial tests, including ratios for maximum leverage, minimum interest coverage, minimum debt service coverage and minimum fixed charge coverage.
Events of Default. The Credit Agreement contains certain events of default customary for credit facilities of the size, type and purpose contemplated, including without limitation: (i) failure to pay, when and as required to be paid, principal, interest or any other amount payable; (ii) failure to perform or observe any covenant; (iii) material inaccuracy with respect to certain representations made in or in connection with the Credit Agreement; (iv) insolvency or bankruptcy proceedings; (v) change of control; (vi) revocation or failure to renew any license material to the Company's business; and (vii) defaults under other outstanding indebtedness of the Company. Upon the occurrence of an event of default, subject to certain limitations, the Company's obligations under the Credit Agreement which are at that time outstanding may be automatically accelerated.
DESCRIPTION OF THE NOTES
The terms of the Notes are identical in all material respects to the Old Notes, except for certain transfer restrictions and registration rights relating to the Old Notes. The description of the Notes contained herein assumes that all Old Notes are exchanged for Notes in the Exchange Offer. To the extent that Old Notes remain outstanding after the consummation of the Exchange Offer, Old Notes and Notes will be redeemed or repurchased pro rata pursuant to the provisions contained herein. In addition, as the Old Notes were, and the Notes will be, issued under the Indenture, to the extent that Old Notes remain outstanding after consummation of the Exchange Offer, any action described herein as permitted or required to be taken thereunder by a specified portion of the holders of the Notes may only be taken by such portion of the holders of the Old Notes and the Notes, counted as a single series.
The definitions of certain terms used in the following summary are set forth below under "--Certain Definitions." For purposes of this summary, the term "Company" refers only to Salem Communications Corporation and not to any of its Subsidiaries.
The Notes offered hereby will be issued under an Indenture dated as of September 25, 1997 among the Company, the Guarantors and The Bank, as trustee (the "Trustee"). The following summary of the material provisions of the Indenture does not purport to be complete, and where reference is made to particular provisions of the Indenture, such provisions, including the definitions of certain terms, are qualified by reference to all of the provisions of the Indenture filed as an exhibit to the Registration Statement and those terms made a part of the Indenture by reference to the Trust Indenture Act. For definitions of certain capitalized terms used in the following summary, see "--Certain Definitions." A copy of the Indenture may be obtained from the Company or the Initial Purchasers.
GENERAL
The Notes will mature on October 1, 2007, will be limited to $150.0 million aggregate principal amount, and will be unsecured senior subordinated obligations of the Company. Each Note will bear interest at the rate set forth on the cover page hereof from the issue date or from the most recent interest payment date to which interest has been paid, payable semiannually on April 1 and October 1 each year, commencing April 1, 1998, to the Person in whose name the Note (or any predecessor Note) is registered at the close of business on the March 15 or September 15 next preceding such interest payment date.
Payment of the Notes is guaranteed by the Guarantors, jointly and severally, on a senior subordinated basis. The Guarantors are comprised of all of the Subsidiaries of the Company. See "--Guarantees."
Principal of, premium, if any, and interest on the Notes will be payable, and the Notes will be exchangeable and transferable (subject to compliance with transfer restrictions imposed by applicable securities laws for so long as the Notes are not registered for resale under the Securities Act), at the office or agency of the Company maintained for such purposes (which initially will be the Trustee); provided, however, that payment of interest may be made at the option of the Company by check mailed to the Person entitled thereto as shown on the security register. The Notes will be issued only in fully registered form without coupons, in denominations of $1,000 and any integral multiple thereof. No service charge will be made for any registration of transfer, exchange or redemption of Notes, except in certain circumstances for any tax or other governmental charge that may be imposed in connection therewith.
OPTIONAL REDEMPTION
The Notes will be subject to redemption at any time on or after October 1, 2002, at the option of the Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice by first-class mail in amounts of $1,000 or an integral multiple thereof at the following redemption prices (expressed as percentages
of the principal amount), if redeemed during the 12-month period beginning October 1 of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2002.......................................................... 104.75%
2003.......................................................... 103.17%
2004.......................................................... 101.59%
2005 and thereafter........................................... 100.00%
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in each case together with accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on relevant record dates to receive interest due on an interest payment date).
In addition, at any time on or prior to October 1, 2000, the Company may redeem up to $50.0 million aggregate principal amount of Notes with the net proceeds of a Public Equity Offering of the Company at a redemption price equal to 109.50% of the aggregate principal amount thereof, together with accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on relevant record dates to receive interest due on an interest payment date); provided that not less than $100.0 million aggregate principal amount of Notes remains outstanding immediately after the occurrence of such redemption.
If less than all of the Notes are to be redeemed, the Trustee shall select the Notes or portions thereof to be redeemed pro rata, by lot or by any other method the Trustee shall deem fair and reasonable.
SINKING FUND
There will be no sinking fund.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on, the Notes will be subordinated, as set forth in the Indenture, in right of payment to the prior payment in full of all Senior Indebtedness in cash or cash equivalents or in any other form as acceptable to the holders of Senior Indebtedness. The Notes will be senior subordinated indebtedness of the Company ranking pari passu with all other existing and future senior subordinated indebtedness of the Company and senior to all existing and future Subordinated Indebtedness of the Company.
During the continuance of any default in the payment of any Designated Senior Indebtedness, no payment (other than payments previously made pursuant to the provisions described under "--Defeasance or Covenant Defeasance of Indenture") or distribution of any assets of the Company of any kind or character (excluding certain permitted equity interests or subordinated securities) shall be made on account of the principal of, premium, if any, or interest on, the Notes or any other indenture obligation or on account of the purchase, redemption, defeasance or other acquisition of, the Notes unless and until such default has been cured, waived or has ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full in cash or cash equivalents or in any other form as acceptable to the holders of such Designated Senior Indebtedness.
During the continuance of any non-payment default with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated (a "Non-payment Default") and after the receipt by the Trustee from a representative of the holder of any Designated Senior Indebtedness of a written notice of such default, no payment (other than payments previously made pursuant to the provisions described under "--Defeasance or Covenant Defeasance of Indenture") or distribution of any assets of the Company of any kind or character (excluding certain permitted equity or subordinated securities) may be made by the Company on account of the principal of, premium, if any, or interest on, the Notes or any other indenture obligation or on account of the purchase, redemption, defeasance or other acquisition of, the Notes for the period specified below (the "Payment Blockage Period").
The Payment Blockage Period shall commence upon the receipt of notice of the Non-payment Default by the Trustee from a representative of the holder of any Designated Senior Indebtedness and shall end on the earliest of (i) the first date on which more than 179 days shall have elapsed since the receipt of such written notice (provided such Designated Senior Indebtedness as to which notice was given shall not theretofore have been accelerated), (ii) the date on which such Non-payment Default (and all Non-payment Defaults as to which notice is given after such Payment Blockage Period is initiated) are cured, waived or ceased to exist or on which such Designated Senior Indebtedness is discharged or paid in full in cash or cash equivalents or in any other form as acceptable to the holders of Designated Senior Indebtedness or (iii) the date on which such Payment Blockage Period (and all Non-payment Defaults as to which notice is given after such Payment Blockage Period is initiated) shall have been terminated by written notice to the Trustee from the representatives of holders of Designated Senior Indebtedness initiating such Payment Blockage Period, after which, in the case of clauses (i), (ii) and (iii), the Company shall promptly resume making any and all required payments in respect of the Notes, including any missed payments. In no event will a Payment Blockage Period extend beyond 179 days from the date of the receipt by the Trustee of the notice initiating such Payment Blockage Period (such 179-day period referred to as the "Initial Period"). Any number of notices of Non-payment Defaults may be given during the Initial Period; provided that during any 365- day consecutive period only one Payment Blockage Period during which payment of principal of, or interest on, the Notes may not be made may commence and the duration of the Payment Blockage Period may not exceed 179 days. No Non- payment Default with respect to Designated Senior Indebtedness which existed or was continuing on the date of the commencement of any Payment Blockage Period will be, or can be, made the basis for the commencement of a second Payment Blockage Period, whether or not within a period of 365 consecutive days, unless such default has been cured or waived for a period of not less than 90 consecutive days.
If the Company fails to make any payment on the Notes when due or within any applicable grace period, whether or not on account of the payment blockage provisions referred to above, such failure would constitute an Event of Default under the Indenture and would enable the holders of the Notes to accelerate the maturity thereof. See "--Events of Default."
The Indenture provides that in the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or its assets, or any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or any assignment for the benefit of creditors or any other marshalling of assets or liabilities of the Company, all Senior Indebtedness must be paid in full in cash or cash equivalents or in any other manner acceptable to the holders of Senior Indebtedness, or provision made for such payment, before any payment or distribution (excluding distributions of certain permitted equity or subordinated securities) is made on account of the principal of, premium, if any, or interest on the Notes.
By reason of such subordination, in the event of liquidation or insolvency, creditors of the Company who are holders of Senior Indebtedness may recover more, ratably, than the holders of the Notes, and funds which would be otherwise payable to the holders of the Notes will be paid to the holders of the Senior Indebtedness to the extent necessary to pay the Senior Indebtedness in full in cash or cash equivalents or in any other manner acceptable to the holders of Senior Indebtedness, and the Company may be unable to meet its obligations fully with respect to the Notes.
Each Guarantee of a Guarantor will be an unsecured senior subordinated obligation of such Guarantor, ranking pari passu with, or senior in right of payment to, all other existing and future Indebtedness of such Guarantor that is expressly subordinated to Guarantor Senior Indebtedness. The Indebtedness evidenced by the Guarantees will be subordinated to Guarantor Senior Indebtedness to the same extent as the Notes are subordinated to Senior Indebtedness and during any period when payment on the Notes is blocked by Designated Senior Indebtedness, payment on the Guarantees is similarly blocked.
"Senior Indebtedness" is defined as the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy law
whether or not allowable as a claim in such proceeding) on any Indebtedness of
the Company (other than as otherwise provided in this definition), whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or on a contingent basis,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Without limiting the generality of the foregoing, "Senior Indebtedness"
shall include (i) the principal of, premium, if any, and interest (including
interest accruing after the filing of a petition initiating any proceeding
under any state, federal or foreign bankruptcy law whether or not allowable as
a claim in such proceeding) and all other obligations of every nature of the
Company from time to time owed to the lenders (or their agent) under the Bank
Credit Agreement (provided, however, that any Indebtedness under any
refinancing, refunding or replacement of the Bank Credit Agreement shall not
constitute Senior Indebtedness to the extent that the Indebtedness thereunder
is by its express terms subordinate to any other Indebtedness of the Company)
and (ii) Indebtedness under Interest Rate Agreements. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced
by the Notes, (ii) Indebtedness that is subordinate or junior in right of
payment, by contract or otherwise, to any Indebtedness of the Company (iii)
Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 United States Code, is without recourse to the
Company, (iv) Indebtedness which is represented by Disqualified Equity
Interests, (v) any liability for foreign, federal, state, local or other taxes
owed or owing by the Company, (vi) Indebtedness of the Company to a Subsidiary
or any other Affiliate of the Company or any of such Affiliate's subsidiaries,
(vii) that portion of any Indebtedness which at the time of issuance is issued
in violation of the Indenture, (viii) Indebtedness evidenced by a guarantee of
any Subordinated Indebtedness or Pari Passu Indebtedness and (ix) Indebtedness
owed by the Company for compensation to employees or for services rendered by
employees.
"Guarantor Senior Indebtedness" is defined as the principal of, premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy laws whether or not allowable as a claim in such proceeding) on any Indebtedness of any Guarantor (other than as otherwise provided in this definition), whether outstanding on the date of the Indenture or thereafter created, incurred or assumed, and whether at any time owing, actually or contingent, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to any Guarantor. Without limiting the generality of the foregoing, "Guarantor Senior Indebtedness" shall include (i) the principal of, premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy law whether or not allowable as a claim in such proceeding) and all other obligations of every nature of any Guarantor from time to time owed to the lenders (or their agent) under the Bank Credit Agreement; provided, however, that any Indebtedness under any refinancing, refunding, or replacement of the Bank Credit Agreement shall not constitute Guarantor Senior Indebtedness to the extent that the Indebtedness thereunder is by its express terms subordinate to any other Indebtedness of any Guarantor and (ii) Indebtedness under Interest Rate Agreements. Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Guarantees, (ii) Indebtedness that is subordinate or junior in right of payment, by contract or otherwise, to any Indebtedness of any Guarantor, (iii) Indebtedness which when incurred and without respect to any election under Section 1111(b) of Title 11 United States Code, is without recourse to any Guarantor, (iv) Indebtedness which is represented by Disqualified Equity Interests, (v) any liability for foreign, federal, state, local or other taxes owed or owing by any Guarantor to the extent such liability constitutes Indebtedness, (vi) Indebtedness of any Guarantor to a Subsidiary or any other Affiliate of the Company or any of such Affiliate's subsidiaries, (vii) Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari Passu Indebtedness, (viii) that portion of any Indebtedness which at the time of issuance is issued in violation of the Indenture and (ix) Indebtedness owed by any Guarantor for compensation to employees or for services rendered by employees.
"Designated Senior Indebtedness" is defined as (i) all Senior Indebtedness outstanding under the Bank Credit Agreement and (ii) any other Senior Indebtedness which is incurred pursuant to an agreement (or series of related agreements) simultaneously entered into providing for indebtedness, or commitments to lend, of at least $25.0 million at the time of determination and is specifically designated in the instrument evidencing such Senior Indebtedness or the agreement under which such Senior Indebtedness arises as "Designated Senior Indebtedness" by the Company.
As of September 30, 1997, the aggregate amount of Senior Indebtedness that ranked senior in right of payment to the Notes was $10.1 million. The Company's and its Subsidiaries' ability to incur additional Indebtedness is restricted as set forth under "--Certain Covenants--Limitation on Indebtedness." Any Indebtedness which can be incurred may constitute additional Senior Indebtedness or Guarantor Senior Indebtedness. See "Risk Factors--Substantial Leverage; Subordination; Restrictions Imposed by Credit Agreement; Asset Encumbrance."
GUARANTEES
The Guarantors will, jointly and severally, fully and unconditionally guarantee the due and punctual payment of principal of, premium, if any, and interest on, the Notes. Such guarantees will be subordinated to the Guarantor Senior Indebtedness. See "--Subordination." As of September 30, 1997, the aggregate amount of Guarantor Senior Indebtedness that ranked senior in right of payment to the Guarantees was $10.1 million, all of which constitutes outstanding indebtedness representing guarantees of Senior Indebtedness. In addition, under certain circumstances described under "--Certain Covenants-- Limitations on Issuances of Guarantees of and Pledges for Indebtedness," the Company is required to cause the execution and delivery of additional Guarantees by Restricted Subsidiaries.
In addition, upon any sale, exchange or transfer, to any Person not an Affiliate of the Company, of all of the Company's Equity Interest in, or all or substantially all of the assets of, any Guarantor, which is in compliance with the Indenture, such Guarantor shall be released from all its obligations under its Guarantee.
The Guarantors consist of all of the Company's existing Subsidiaries.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Indebtedness. The Company will not, and will not permit any Restricted Subsidiary to, create, incur, assume or directly or indirectly guarantee or in any other manner become directly or indirectly liable for ("incur") any Indebtedness (including Acquired Indebtedness), except that the Company may incur Indebtedness and a Guarantor may incur Permitted Subsidiary Indebtedness if, in each case, the Debt to Operating Cash Flow Ratio of the Company and its Restricted Subsidiaries at the time of the incurrence of such Indebtedness, after giving pro forma effect thereto, is 7.0 to 1 or less.
The foregoing limitation will not apply to the incurrence of any of the following (collectively, "Permitted Indebtedness"):
(i) Indebtedness of the Company under the Bank Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $75.0 million;
(ii) Indebtedness of the Company pursuant to the Notes and Indebtedness of any Guarantor pursuant to a Guarantee;
(iii) Indebtedness of any Guarantor consisting of a guarantee of the Company's Indebtedness under the Bank Credit Agreement;
(iv) Indebtedness of the Company or any Restricted Subsidiary outstanding on the date of the Indenture and listed on Schedule I thereto;
(v) Indebtedness of the Company owing to a Restricted Subsidiary, provided that any Indebtedness of the Company owing to a Restricted Subsidiary that is not a Guarantor is made pursuant to an intercompany note in the form attached to the Indenture and is subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, by acceleration or otherwise) to the payment and performance of the Company's obligations under the Notes; provided further, that any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to a Wholly Owned Restricted Subsidiary or a pledge to or for the benefit of the lenders under the Bank Credit Agreement) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted by this clause (v);
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary owing to the Company or another Wholly Owned Restricted Subsidiary; provided that, with respect to Indebtedness owing to a Wholly Owned Restricted Subsidiary that is not a Guarantor, (x) any such Indebtedness is made pursuant to an intercompany note in the form attached to the Indenture and (y) any such Indebtedness shall be subordinated in right of payment from and after such time as the obligations under the Guarantee, if any, by such Wholly Owned Restricted Subsidiary shall become due and payable to the payment and performance of such Wholly Owned Restricted Subsidiary's obligations under its Guarantee; provided, further, that (a) any disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to the Company or a Wholly Owned Restricted Subsidiary or pledge to or for the benefit of the lenders under the Bank Credit Agreement) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted by this clause (vi) and (b) any transaction pursuant to which any Wholly Owned Restricted Subsidiary, which has Indebtedness owing to the Company or any other Wholly Owned Restricted Subsidiary, ceases to be a Wholly Owned Restricted Subsidiary shall be deemed to be the incurrence of Indebtedness by such Wholly Owned Restricted Subsidiary that is not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of "--Limitation on Issuances of Guarantees of and Pledges for Indebtedness;"
(viii) obligations of the Company entered into in the ordinary course of business pursuant to Interest Rate Agreements designed to protect the Company against fluctuations in interest rates in respect of Indebtedness of the Company as long as such obligations at the time incurred do not exceed the aggregate principal amount of such Indebtedness then outstanding or in good faith anticipated to be outstanding within 90 days of such occurrence;
(ix) any renewals, extensions, substitutions, refundings, refinancings or
replacements (collectively, a "refinancing") of any Indebtedness described
in clauses (ii), (iii), (iv) and (v) above, including any successive
refinancings so long as the aggregate principal amount of Indebtedness
represented thereby is not increased by such refinancing (except, in the
case of Guarantees under clause (iii), which Guarantees do not exceed the
aggregate principal amount of the Bank Credit Agreement) plus the lesser of
(I) the stated amount of any premium or other payment required to be paid
in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II) the amount of premium or other
payment actually paid at such time to refinance the Indebtedness, plus, in
either case, the amount of expenses of the Company incurred in connection
with such refinancing and, in the case of Pari Passu Indebtedness or
Subordinated Indebtedness, such refinancing does not reduce the Average
Life to Stated Maturity or the Stated Maturity of such Indebtedness; and
(x) Indebtedness of the Company in addition to that described in clauses
(i) through (ix) above, and any renewals, extensions, substitutions,
refinancings, or replacements of such Indebtedness, so long as the
aggregate principal amount of all such Indebtedness shall not exceed $5.0
million.
Limitation on Restricted Payments. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to holders of, any of the Company's Equity Interests (other than dividends or distributions payable solely in its Qualified Equity Interests);
(ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any Equity Interest of the Company or any Affiliate thereof (except Equity Interests held by the Company or a Wholly Owned Restricted Subsidiary);
(iii) make any principal payment on, or repurchase, redeem, defease, retire or otherwise acquire for value, prior to any scheduled principal payment, sinking fund or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Equity Interests of any Subsidiary to any Person (other than the Company or any of its Wholly Owned Restricted Subsidiaries);
(v) incur, create or assume any guarantee of Indebtedness of any Affiliate (other than a Wholly Owned Restricted Subsidiary of the Company); or
(vi) make any Investment in any Person (other than any Permitted Investments) (any of the foregoing payments described in clauses (i) through (vi), other than any such action that is a Permitted Payment, collectively, "Restricted Payments") unless after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a board resolution), (1) no Default or Event of Default shall have occurred and be continuing and such Restricted Payment shall not be an event which is, or after notice or lapse of time or both, would be, an "event of default" under the terms of any Indebtedness of the Company or its Restricted Subsidiaries; and (2) the aggregate amount of all such Restricted Payments declared or made after the date of the Indenture does not exceed the sum of:
(A) an amount equal to the Company's Cumulative Operating Cash Flow less 1.4 times the Company's Cumulative Consolidated Interest Expense; and
(B) the aggregate Net Cash Proceeds received after the date of the Indenture by the Company from capital contributions (other than from a Subsidiary) or from the issuance or sale (other than to any of its Subsidiaries) of its Qualified Equity Interests (except, in each case, to the extent such proceeds are used to purchase, redeem or otherwise retire Equity Interests or Subordinated Indebtedness as set forth below).
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through
(vi) below, so long as there is no Default or Event of Default continuing, the
foregoing provisions shall not prohibit the following actions (clauses (i)
through (vi) being referred to as "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment would be permitted by the provisions of paragraph (a) of this Section and such payment shall be deemed to have been paid on such date of declaration for purposes of the calculation required by paragraph (a) of this Section;
(ii) any transaction with an officer or director of the Company entered into in the ordinary course of business (including compensation or employee benefit arrangements with any officer or director of the Company);
(iii) the repurchase, redemption, or other acquisition or retirement of
any Equity Interests of the Company in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege
pursuant to which cash is paid in lieu of the issuance of fractional shares
or scrip), or out of the Net Cash Proceeds of, a substantially concurrent
issuance and sale for cash (other than to a Subsidiary) of other Qualified
Equity Interests of the Company; provided that the Net Cash Proceeds from
the issuance of such Qualified Equity Interests are excluded from clause
(2)(B) of paragraph (a) of this Section;
(iv) any repurchase, redemption, defeasance, retirement, refinancing or acquisition for value or payment of principal of any Subordinated Indebtedness in exchange for, or out of the Net Cash Proceeds of, a substantially concurrent issuance and sale for cash (other than to any Subsidiary of the Company) of any Qualified Equity Interests of the Company; provided that the Net Cash Proceeds from the issuance of such shares of Qualified Equity Interests are excluded from clause (2)(B) of paragraph (a) of this Section;
(v) the repurchase, redemption, defeasance, retirement, refinancing or
acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Disqualified Equity Interests) (a "refinancing")
through the issuance of new Subordinated Indebtedness of the Company, as
the case may be; provided that any such new Indebtedness (1) shall be in a
principal amount that does not exceed the principal amount so refinanced
or, if such Subordinated Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration or
acceleration thereof, then such lesser amount as of the date of
determination), plus the lesser of (I) the stated amount of any premium,
interest or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or
(II) the amount of premium, interest or other payment actually paid at such
time to refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such refinancing; (2)
has an Average Life to Stated Maturity greater than the remaining Average
Life to Stated Maturity of the Notes; (3) has a Stated Maturity for its
final scheduled principal payment later than the Stated Maturity for the
final scheduled principal payment of the Notes; and (4) is expressly
subordinated in right of payment to the Notes at least to the same extent
as the Indebtedness to be refinanced; and
(vi) the payment prior to maturity of Indebtedness outstanding on the date of the Indenture evidenced by those certain Promissory Notes dated March 1, 1994 by the Company to New Inspiration and by the Company to Golden Gate, in each case, in connection with the payment prior to maturity (which payment shall also be permitted under this clause (vi)) of Indebtedness outstanding on the date of the Indenture evidenced by those certain Promissory Notes dated August 12, 1997 by Golden Gate to Mr. Atsinger and Mr. Epperson in the principal amount, in each case, of $1.23 million and by New Inspiration to Mr. Atsinger and Mrs. Epperson in the principal amount, in each case, of $2.12 million.
Limitation on Transactions with Affiliates. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into or suffer to exist any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the Company
(other than the Company or a Wholly Owned Restricted Subsidiary) unless (a)
such transaction or series of transactions is in writing on terms that are no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than would be available in a comparable transaction in arm's-length
dealings with an unrelated third party and (b)(i) with respect to any
transaction or series of transactions involving aggregate payments in excess
of $1.0 million the Company delivers an officers' certificate to the Trustee
certifying that such transaction or series of related transactions complies
with clause (a) above and such transaction or series of related transactions
has been approved by a majority of the members of the Board of Directors of
the Company (and approved by a majority of Independent Directors or, in the
event there is only one Independent Director, by such Independent Director)
and (ii) with respect to any transaction or series of transactions involving
aggregate payments in excess of $5.0 million, an opinion as to the fairness to
the Company or such Restricted Subsidiary from a financial point of view
issued by an investment banking firm of national standing. Notwithstanding the
foregoing, this provision will not apply to (A) any transaction with an
officer or director of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any
officer or director of the Company), (B) any transaction entered into by the
Company or one of its Wholly Owned Restricted Subsidiaries with a Wholly Owned
Restricted Subsidiary of the Company, and (C) transactions in existence on the
date of the Indenture and any renewal, replacement or extension thereof on
substantially similar terms.
Limitation on Senior Subordinated Indebtedness. The Company will not, and will not permit any Guarantor to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise in any manner become directly or indirectly liable for or with respect to or otherwise permit to exist any Indebtedness that is subordinate in right of payment, by contract or otherwise, to any Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is also pari passu with the Notes or the Guarantee of such Guarantor, or subordinate in right of payment to the Notes or such Guarantee to at least the same extent as the Notes or such Guarantee are subordinate in right of payment to Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, as set forth in the Indenture.
Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, affirm or suffer to exist any Lien of any kind upon any of its property or assets (including any intercompany notes), now owned or acquired after the date of the Indenture, or any income or profits therefrom, except if the Notes are directly secured equally and ratably with (or prior to in the case of Liens with respect to Subordinated Indebtedness) the obligation or liability secured by such Lien, excluding, however, from the operation of the foregoing any of the following:
(a) any Lien existing as of the date of the Indenture and listed on a schedule thereto;
(b) any Lien arising by reason of (1) any judgment, decree or order of any court, so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (2) taxes not yet delinquent or which are being contested in good faith; (3) security for payment of workers' compensation or other insurance; (4) good faith deposits in connection with tenders, leases, contracts (other than contracts for the payment of money); (5) zoning restrictions, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions on the use of property or minor irregularities of title (and with respect to leasehold interests, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee), none of which materially impairs the use of any parcel of property material to the operation of the business of the Company or any Subsidiary or the value of such property for the purpose of such business; (6) deposits to secure public or statutory obligations, or in lieu of surety or appeal bonds; (7) certain surveys, exceptions, title defects, encumbrances, easements, reservations of, or rights of others for, rights of way, sewers, electric lines, telegraph or telephone lines and other similar purposes or zoning or other restrictions as to the use of real property not interfering with the ordinary conduct of the business of the Company or any of its Subsidiaries; or (8) operation of law in favor of mechanics, materialmen, laborers, employees or suppliers, incurred in the ordinary course of business for sums which are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof;
(c) any Lien now or hereafter existing on property of the Company or any of its Restricted Subsidiaries securing Senior Indebtedness or Guarantor Senior Indebtedness, in each case which Indebtedness is permitted under the provisions of "Limitation on Indebtedness" and provided that the provisions described under "Limitation on Issuances of Guarantees of and Pledges for Indebtedness" are complied with;
(d) any Lien securing Acquired Indebtedness created prior to (and not created in connection with, or in contemplation of) the incurrence of such Indebtedness by the Company or any Subsidiary, in each case which Indebtedness is permitted under the provisions of "Limitation on Indebtedness"; provided that any such Lien only extends to the assets that were subject to such Lien securing such Acquired Indebtedness prior to the related transaction by the Company or its Subsidiaries;
(e) any Lien securing Permitted Subsidiary Indebtedness; and
(f) any extension, renewal, refinancing or replacement, in whole or in part, of any Lien described in the foregoing clauses (a) through (e) so long as the amount of security is not increased thereby.
Limitation on Sale of Assets. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale unless (i) at least 80% of the consideration from such Asset Sale is received in cash and (ii) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the shares or assets sold (other than in the case of an involuntary Asset Sale, as determined by the Board of Directors of the Company and evidenced in a board resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are not required to be applied to repay permanently any Senior Indebtedness then outstanding as required by the terms thereof, or the Company determines not to apply such Net Cash Proceeds to the permanent prepayment of such Senior Indebtedness or if no such Senior Indebtedness is then outstanding, then the Company may within 12 months of the Asset Sale, invest the Net Cash Proceeds in properties and assets that (as determined by the Board of Directors) replace the properties and assets that were the subject of the Asset Sale or in properties and assets that will be used in the businesses of the Company or its Restricted Subsidiaries existing on the date of the Indenture or reasonably related thereto. The amount of such Net Cash Proceeds neither used to permanently repay or prepay Senior Indebtedness nor used or invested as set forth in this paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals $5.0 million or more, the Company shall apply the Excess Proceeds to the repayment of the Notes and any Pari Passu Indebtedness required to be repurchased under the instrument governing such Pari Passu Indebtedness as follows: (a) the Company shall make an offer to purchase (an "Offer") from all holders of the Notes in accordance with the procedures set forth in the Indenture in the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased out of an amount (the "Note Amount") equal to the product of such Excess Proceeds multiplied by a fraction, the numerator of which is the outstanding principal amount of the Notes, and the denominator of which is the sum of the outstanding principal amount of the Notes and such Pari Passu Indebtedness (subject to proration in the event such amount is less than the aggregate Offered Price of all Notes tendered) and (b) to the extent required by such Pari Passu Indebtedness to permanently reduce the principal amount of such Pari Passu Indebtedness, the Company shall make an offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the excess of the Excess Proceeds over the Note Amount, provided that in no event shall the Pari Passu Debt Amount exceed the principal amount of such Pari Passu Indebtedness plus the amount of any premium required to be paid to repurchase such Pari Passu Indebtedness. The offer price shall be payable in cash in an amount equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, to the date (the "Offer Date") such Offer is consummated (the "Offered Price"), in accordance with the procedures set forth in the Indenture. To the extent that the aggregate Offered Price of the Notes tendered pursuant to the Offer is less than the Note Amount relating thereto or the aggregate amount of Pari Passu Indebtedness that is purchased is less than the Pari Passu Debt Amount (the amount of such shortfall, if any, constituting a "Deficiency"), the Company shall use such Deficiency in the business of the Company and its Restricted Subsidiaries. Upon completion of the purchase of all the Notes tendered pursuant to an Offer and repurchase of the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the amount of Excess Proceeds, if any, shall be reset at zero.
(d) Whenever the Excess Proceeds received by the Company exceed $5.0 million such Excess Proceeds shall be set aside by the Company in a separate account pending (i) deposit with the depositary or a paying agent of the amount required to purchase the Notes or Pari Passu Indebtedness tendered in an Offer or a Pari Passu Offer, (ii) delivery by the Company of the Offered Price to the holders of the Notes or Pari Passu Indebtedness tendered in an Offer or a Pari Passu Offer and (iii) application, as set forth above, of Excess Proceeds in the business of the Company and its Restricted Subsidiaries. Such Excess Proceeds may be invested in Temporary Cash Investments; provided that the maturity date of any such investment made after the amount of Excess Proceeds exceeds $5.0 million shall not be later than the Offer Date. The Company shall be entitled to any interest or dividends accrued, earned or paid on such Temporary Cash Investments; provided that the Company shall not withdraw such interest from the separate account if an Event of Default has occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant to clause (c) above, the Notes shall be purchased by the Company, at the option of the holder thereof, in whole or in part, in integral multiples of $1,000, on a date that is not earlier than 45 days and not later than 60 days from the date the notice is given to holders, or such later date as may be necessary for the Company to comply with the requirements under the Exchange Act, subject to proration in the event the Note Amount is less than the aggregate Offered Price of all Notes tendered.
(f) The Company shall comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and any other applicable securities laws or regulations in connection with an Offer.
(g) The Company will not, and will not permit any Restricted Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under (i) Indebtedness as in effect on the date of the
Indenture listed on a schedule thereto as such Indebtedness may be refinanced
from time to time, provided that such restrictions are no less favorable to
the holders of the Notes than those existing on the date of the Indenture or
(ii) any Senior Indebtedness and any Guarantor Senior Indebtedness) that would
materially impair the ability of the Company to make an Offer to purchase the
Notes or, if such Offer is made, to pay for the Notes tendered for purchase.
Limitation on Asset Swaps. The Company will not, and will not permit any Restricted Subsidiary to, engage in Asset Swaps, unless: (i) at the time of entering into such Asset Swap, and immediately after giving effect to such Asset Swap, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (ii) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Swap at least equal to the Fair Market Value of the properties or assets exchanged as determined in writing by a nationally recognized investment banking or appraisal firm.
Limitation on Issuances of Guarantees of and Pledges for Indebtedness. (a) The Company will not permit any Restricted Subsidiary, other than the Guarantors, directly or indirectly, to secure the payment of any Senior Indebtedness of the Company and the Company will not, and will not permit any Restricted Subsidiary to, pledge any intercompany notes representing obligations of any Restricted Subsidiary (other than the Guarantors) to secure the payment of any Senior Indebtedness unless in each case such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the Indenture providing for a guarantee of payment of the Notes by such Restricted Subsidiary, which guarantee shall be on the same terms as the guarantee of the Senior Indebtedness (if a guarantee of Senior Indebtedness is granted by any such Restricted Subsidiary) except that the guarantee of the Notes need not be secured and shall be subordinated to the claims against such Restricted Subsidiary in respect of Senior Indebtedness to the same extent as the Notes are subordinated to Senior Indebtedness of the Company under the Indenture.
(b) The Company will not permit any Restricted Subsidiary, other than the Guarantors, directly or indirectly, to guarantee, assume or in any other manner become liable with respect to any Indebtedness of the Company (other than guarantees in existence on the date of the Indenture) unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the Indenture providing for a guarantee of the Notes on the same terms as the guarantee of such Indebtedness except that if the Notes are subordinated in right of payment to such Indebtedness, the guarantee under the supplemental indenture shall be subordinated to the guarantee of such Indebtedness to the same extent as the Notes are subordinated to such Indebtedness under the Indenture.
(c) Each guarantee created pursuant to the provisions described in the foregoing paragraph is referred to as a "Guarantee" and the issuer of each such Guarantee is referred to as a "Guarantor." Notwithstanding the foregoing, any Guarantee by a Restricted Subsidiary of the Notes shall provide by its terms that it shall be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer, to any Person not an Affiliate of the Company, of all of the Company's Equity Interest in, or all or substantially all the assets of, such Restricted Subsidiary, which is in compliance with the Indenture or (ii) (with respect to any Guarantees created after the date of the Indenture) the release by the holders of the Indebtedness of the Company described in clauses (a) and (b) above of their security interest or their guarantee by such Restricted Subsidiary (including any deemed release upon payment in full of all obligations under such Indebtedness), at a time when (A) no other Indebtedness of the Company has been secured or guaranteed by such Restricted Subsidiary, as the case may be, or (B) the holders of all such other Indebtedness which is secured or guaranteed by such Restricted Subsidiary also release their security interest in, or guarantee by, such Restricted Subsidiary (including any deemed release upon payment in full of all obligations under such Indebtedness).
Restriction on Transfer of Assets. The Company and the Guarantors will not sell, convey, transfer or otherwise dispose of their respective assets or property to any of the Company's Restricted Subsidiaries (other than any Guarantor), except for sales, conveyances, transfers or other dispositions made in the ordinary course of business. For purposes of this provision, any sale, conveyance, transfer, lease or other disposition of property or assets, having a Fair Market Value in excess of (a) $1.0 million for any sale, conveyance, transfer, leases or dispositions or series of related sales, conveyances, transfers, leases and dispositions and (b) $5.0 million in the aggregate for all such sales, conveyances, transfers, leases or dispositions in any fiscal year of the Company shall not be considered "in the ordinary course of business"; provided that sales by the Company of block program time and spot advertising time shall not be deemed not to be "in the ordinary course of business" solely because of the dollar volume of such sales.
Purchase of Notes Upon a Change of Control. If a Change of Control shall occur at any time, then each holder of Notes shall have the right to require that the Company purchase such holder's Notes in whole or in part in integral multiples of $1,000, at a purchase price (the "Change of Control Purchase Price") in cash in an amount equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Purchase Date"), pursuant to the offer described below (the "Change of Control Offer") and the other procedures set forth in the Indenture.
Within 30 days following any Change of Control, the Company shall notify the Trustee thereof and give written notice of such Change of Control to each holder of Notes, by first-class mail, postage prepaid, at his address appearing in the security register, stating, among other things, the purchase price and that the purchase date shall be a business day no earlier than 30 days nor later than 60 days from the date such notice is mailed, or such later date as is necessary to comply with requirements under the Exchange Act; that any Note not tendered will continue to accrue interest; that, unless the Company defaults in the payment of the purchase price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Purchase Date; and certain other procedures that a holder of Notes must follow to accept a Change of Control Offer or to withdraw such acceptance.
If a Change of Control Offer is made, there can be no assurance that the Company will have available funds sufficient to pay the Change of Control Purchase Price for all of the Notes that might be delivered by holders of the Notes seeking to accept the Change of Control Offer. A Change of Control will also result in an event of default under the Bank Credit Agreement and could result in the acceleration of all indebtedness under the Bank Credit Agreement. See "Description of Certain Indebtedness--Credit Agreement--Change of Control." The failure of the Company to make or consummate the Change of Control Offer or pay the Change of Control Purchase Price when due will result in an Event of Default under the Indenture.
The term "all or substantially all" as used in the definition of "Change of Control" has not been interpreted under New York law (which is the governing law of the Indenture) to represent a specific quantitative test. As a consequence, in the event the holders of the Notes elected to exercise their rights under the Indenture and the Company elected to contest such election, there could be no assurance as to how a court interpreting New York law would interpret the phrase.
The existence of a holder's right to require the Company to repurchase such holder's Notes upon a Change of Control may deter a third party from acquiring the Company in a transaction which constitutes a Change of Control.
"Change of Control" means the occurrence of any of the following events: (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 40% of the total outstanding Voting Stock of the Company, provided that the Permitted Holders "beneficially own" (as so defined) a lesser percentage of such Voting Stock than such other Person and do not
have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board or whose
nomination for election by the shareholders of the Company, was approved by a
vote of 66% of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors then in office; (iii) the Company consolidates with or
merges with or into any Person or conveys, transfers or leases all or
substantially all of its assets to any Person, or any corporation consolidates
with or merges into or with the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is changed
into or exchanged for cash, securities or other property, other than any such
transaction in which the outstanding Voting Stock of the Company is not
changed or exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation of the Company) or in which (A)
the outstanding Voting Stock of the Company is changed into or exchanged for
(x) Voting Stock of the surviving corporation which is not Disqualified Equity
Interests or (y) cash, securities and other property (other than Equity
Interests of the surviving corporation) in an amount which could be paid by
the Company as a Restricted Payment as described under "--Limitation on
Restricted Payments" (and such amount shall be treated as a Restricted Payment
subject to the provisions in the Indenture described under "--Limitation on
Restricted Payments") and (B) no "person" or "group" other than Permitted
Holders owns immediately after such transaction, directly or indirectly, more
than the greater of (1) 40% of the total outstanding Voting Stock of the
surviving corporation and (2) the percentage of the outstanding Voting Stock
of the surviving corporation owned, directly or indirectly, by Permitted
Holders immediately after such transaction; or (iv) the Company is liquidated
or dissolved or adopts a plan of liquidation or dissolution other than in a
transaction which complies with the provisions described under "--
Consolidation, Merger, Sale of Assets."
"Permitted Holders" means as of the date of determination (i) any of Stuart W. Epperson and Edward G. Atsinger III; (ii) family members or the relatives of the Persons described in clause (i); (iii) any trusts created for the benefit of the Persons described in clauses (i), (ii) or (iv) or any trust for the benefit of any such trust; or (iv) in the event of the incompetence or death of any of the Persons described in clauses (i) and (ii), such Person's estate, executor, administrator, committee or other personal representative or beneficiaries, in each case who at any particular date shall beneficially own or have the right to acquire, directly or indirectly, Equity Interests of the Company.
The Company will comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and any other applicable securities laws or regulations in connection with a Change of Control Offer.
The Company will not, and will not permit any Subsidiary to, create or permit to exist or become effective any restriction (other than restrictions existing under Indebtedness as in effect on the date of the Indenture) that would materially impair the ability of the Company to make a Change of Control Offer to purchase the Notes or, if such Change of Control Offer is made, to pay for the Notes tendered for purchase.
Limitation on Subsidiary Equity Interests. The Company will not permit any
Restricted Subsidiary of the Company to issue any Equity Interests, except for
(i) Equity Interests issued to and held by the Company or a Wholly Owned
Restricted Subsidiary, and (ii) Equity Interests issued by a Person prior to
the time (A) such Person becomes a Restricted Subsidiary, (B) such Person
merges with or into a Restricted Subsidiary or (C) a Restricted Subsidiary
merges with or into such Person; provided that such Equity Interests were not
issued or incurred by such Person in anticipation of the type of transaction
contemplated by subclause (A), (B) or (C).
Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to (i) pay dividends or make any other distribution on its Equity Interests, (ii) pay any Indebtedness owed to the Company or a Restricted Subsidiary of the Company, (iii) make any Investment in the Company or a Restricted Subsidiary of the Company or (iv) transfer any of its properties or assets to the Company or any
Restricted Subsidiary, except (a) any encumbrance or restriction pursuant to an agreement in effect on the date of the Indenture and listed as a schedule thereto, (b) any encumbrance or restriction, with respect to a Restricted Subsidiary that is not a Subsidiary of the Company on the date of the Indenture, in existence at the time such Person becomes a Restricted Subsidiary of the Company and not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary; (c) any encumbrance or restriction existing under any agreement that extends, renews, refinances or replaces the agreements containing the encumbrances or restrictions in the foregoing clauses (a) and (b), or in this clause (c), provided that the terms and conditions of any such encumbrances or restrictions are not materially less favorable to the holders of the Notes than those under or pursuant to the agreement evidencing the Indebtedness so extended, renewed, refinanced or replaced or are not more restrictive than those set forth in the Indenture; and (d) any encumbrance or restriction created pursuant to an asset sale agreement, stock sale agreement or similar instrument pursuant to which an Asset Sale permitted under "--Limitations on Sale of Assets" is to be consummated, so long as such restriction or encumbrance shall be effective only for a period from the execution and delivery of such agreement or instrument through a termination date not later than 270 days after such execution and delivery.
Limitation on Unrestricted Subsidiaries. The Company will not make, and will not permit any of its Restricted Subsidiaries to make, any Investments in Unrestricted Subsidiaries if, at the time thereof, the aggregate amount of such Investments would exceed the amount of Restricted Payments then permitted to be made pursuant to the "Limitation on Restricted Payments" covenant. Any Investments in Unrestricted Subsidiaries permitted to be made pursuant to this covenant (i) will be treated as the payment of a Restricted Payment in calculating the amount of Restricted Payments made by the Company and (ii) may be made in cash or property.
Provision of Financial Statements. The Indenture provides that, whether or
not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to such
Section 13(a) or 15(d) if the Company were so subject, such documents to be
filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event
(x) within 15 days of each Required Filing Date (i) transmit by mail to all
holders, as their names and addresses appear in the Note register, without
cost to such holders and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have
been required to file with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act if the Company were subject to such Sections and (y) if
filing such documents by the Company with the Commission is not permitted
under the Exchange Act, promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents
to any prospective holder at the Company's cost.
Additional Covenants. The Indenture also contains covenants with respect to the following matters: (i) payment of principal, premium and interest; (ii) maintenance of an office or agency; (iii) arrangements regarding the handling of money held in trust; (iv) maintenance of corporate existence; (v) payment of taxes and other claims; (vi) maintenance of properties; and (vii) maintenance of insurance.
CONSOLIDATION, MERGER, SALE OF ASSETS
The Company shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into any other Person or sell assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person or group of affiliated Persons, or permit any of its Subsidiaries to enter into any such transaction or transactions if such transaction or transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Company and its Subsidiaries on a Consolidated basis to any other Person or group of affiliated Persons, unless at the time and after giving effect thereto: (i) either (1) the Company shall be the continuing corporation or (2) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, conveyance, transfer, lease or disposition of all or substantially
all of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis (the "Surviving Entity") shall be a corporation duly
organized and validly existing under the laws of the United States of America,
any state thereof or the District of Columbia and such Person assumes, by a
supplemental indenture in a form reasonably satisfactory to the Trustee, all
the obligations of the Company under the Notes and the Indenture, and the
Indenture shall remain in full force and effect; (ii) immediately before and
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction on a pro forma basis, the Consolidated Net Worth of
the Company (or the Surviving Entity if the Company is not the continuing
obligor under the Indenture) is equal to or greater than the Consolidated Net
Worth of the Company immediately prior to such transaction; (iv) immediately
before and immediately after giving effect to such transaction on a pro forma
basis (on the assumption that the transaction occurred on the first day of the
four-quarter period immediately prior to the consummation of such transaction
with the appropriate adjustments with respect to the transaction being
included in such pro forma calculation), the Company (or the Surviving Entity
if the Company is not the continuing obligor under the Indenture) could incur
$1.00 of additional Indebtedness under the provisions of "--Certain
Covenants--Limitation on Indebtedness" (other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the transactions
described above, shall have by supplemental indenture confirmed that its
Guarantee shall apply to such Person's obligations under the Indenture and the
Notes; (vi) if any of the property or assets of the Company or any of its
Subsidiaries would thereupon become subject to any Lien, the provisions of "--
Certain Covenants--Limitation on Liens" are complied with; and (vii) the
Company or the Surviving Entity shall have delivered, or caused to be
delivered, to the Trustee, in form and substance reasonably satisfactory to
the Trustee, an officers' certificate and an opinion of counsel, each to the
effect that such consolidation, merger, transfer, sale, assignment, lease or
other transaction and the supplemental indenture in respect thereto comply
with the provisions of the Indenture and that all conditions precedent
provided for in the Indenture relating to such transaction have been complied
with.
Each Guarantor will not, and the Company will not permit a Guarantor to, in a single transaction or series of related transactions merge or consolidate with or into any other corporation (other than the Company or any other Guarantor) or other entity, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets on a Consolidated basis to any entity (other than the Company or any other Guarantor) unless at the time and after giving effect thereto: (i) either (1) such Guarantor shall be the continuing corporation or (2) the entity (if other than such Guarantor) formed by such consolidation or into which such Guarantor is merged or the entity which acquires by sale, assignment, conveyance, transfer, lease or disposition the properties and assets of such Guarantor shall be a corporation duly organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and shall expressly assume by a supplemental indenture, executed and delivered to the Trustee, in a form reasonably satisfactory to the Trustee, all the obligations of such Guarantor under its Guarantee and the Indenture; (ii) immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing, and (iii) such Guarantor shall have delivered to the Trustee, in form and substance reasonably satisfactory to the Trustee, an officers' certificate and an opinion of counsel, each stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or disposition and such supplemental indenture comply with the Indenture, and thereafter all obligations of the predecessor shall terminate. The provisions of this paragraph shall not apply to any transaction (including an Asset Sale made in accordance with "--Certain Covenants--Limitations on Sale of Assets" ) with respect to any Guarantor if the Guarantee of such Guarantor is released in connection with such transaction in accordance with paragraph (c) of "--Certain Covenants-- Limitations on Issuances of Guarantees of and Pledges for Indebtedness."
In the event of any transaction described in and complying with the conditions listed in the immediately preceding paragraphs in which the Company or any Guarantor is not the continuing corporation, the successor Person formed or remaining shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Guarantor, as the case may be, and the Company or such Guarantor, as the case may be, would be discharged from its obligations under the Indenture, the Notes or its Guarantee, as the case may be.
EVENTS OF DEFAULT
An Event of Default will occur under the Indenture if:
(i) there shall be a default in the payment of any interest on any Note (including any Penalty Amounts) when it becomes due and payable, and such default shall continue for a period of 30 days;
(ii) there shall be a default in the payment of the principal of (or premium, if any, on) any Note at its Maturity (upon acceleration, optional or mandatory redemption, required repurchase or otherwise);
(iii) (a) there shall be a default in the performance, or breach, of any covenant or agreement of the Company or any Guarantor under the Indenture (other than a default in the performance, or breach, of a covenant or agreement which is specifically dealt with in clause (i) or (ii) or in clause (b), (c) or (d) of this clause (iii)) and such default or breach shall continue for a period of 30 days after written notice has been given, by certified mail, (x) to the Company by the Trustee or (y) to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Notes; (b) there shall be a default in the performance or breach of the provisions described in "--Consolidation, Merger, Sale of Assets;" (c) the Company shall have failed to make or consummate an Offer in accordance with the provisions of "--Certain Covenants--Limitation on Sale of Assets;" or (d) the Company shall have failed to make or consummate a Change of Control Offer in accordance with the provisions of "--Certain Covenants--Purchase of Notes Upon a Change of Control;"
(iv) one or more defaults shall have occurred under any agreements, indentures or instruments under which the Company, any Guarantor or any Restricted Subsidiary then has outstanding Indebtedness in excess of $5.0 million in the aggregate and, if not already matured at its final maturity in accordance with its terms, such Indebtedness shall have been accelerated;
(v) any Guarantee shall for any reason cease to be, or be asserted in writing by any Guarantor or the Company not to be, in full force and effect, enforceable in accordance with its terms, except to the extent contemplated by the Indenture and any such Guarantee;
(vi) one or more judgments, orders or decrees for the payment of money in
excess of $5.0 million, either individually or in the aggregate (net of
amounts covered by insurance, bond, surety or similar instrument) shall be
entered against the Company, any Guarantor or any Restricted Subsidiary or
any of their respective properties and shall not be discharged and either
(a) any creditor shall have commenced an enforcement proceeding upon such
judgment, order or decree or (b) there shall have been a period of 60
consecutive days during which a stay of enforcement of such judgment or
order, by reason of an appeal or otherwise, shall not be in effect;
(vii) any holder or holders of at least $5.0 million in aggregate principal amount of Indebtedness of the Company, any Guarantor or any Restricted Subsidiary after a default under such Indebtedness shall notify the Trustee of the intended sale or disposition of any assets of the Company, any Guarantor or any Restricted Subsidiary that have been pledged to or for the benefit of such holder or holders to secure such Indebtedness or shall commence proceedings, or take any action (including by way of set- off), to retain in satisfaction of such Indebtedness or to collect on, seize, dispose of or apply in satisfaction of Indebtedness, assets of the Company or any Restricted Subsidiary (including funds on deposit or held pursuant to lock-box and other similar arrangements);
(viii) there shall have been the entry by a court of competent jurisdiction of (a) a decree or order for relief in respect of the Company, any Guarantor or any Restricted Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law or (b) a decree or order adjudging the Company, any Guarantor or any Restricted Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Company, any Guarantor or any Restricted Subsidiary under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company, any Guarantor or any Restricted Subsidiary or of any substantial part of their respective properties, or ordering the winding up or liquidation of their affairs,
and any such decree or order for relief shall continue to be in effect, or any such other decree or order shall be unstayed and in effect, for a period of 60 consecutive days; or
(ix) (a) the Company, any Guarantor or any Restricted Subsidiary commences a voluntary case or proceeding under any applicable Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or insolvent, (b) the Company, any Guarantor or any Restricted Subsidiary consents to the entry of a decree or order for relief in respect of the Company, any Guarantor or such Restricted Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or proceeding against it, (c) the Company, any Guarantor or any Restricted Subsidiary files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, (d) the Company, any Guarantor or any Restricted Subsidiary (x) consents to the filing of such petition or the appointment of, or taking possession by, a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official, of the Company, any Guarantor or such Restricted Subsidiary or of any substantial part of their respective property, (y) makes an assignment for the benefit of creditors or (z) admits in writing its inability to pay its debts generally as they become due or (e) the Company, any Guarantor or any Restricted Subsidiary takes any corporate action in furtherance of any such actions in this paragraph (ix).
If an Event of Default (other than as specified in clauses (viii) and (ix)
of the prior paragraph) shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes
outstanding may, and the Trustee at the request of such holders shall, declare
all unpaid principal of, premium, if any, and accrued interest on, all the
Notes to be due and payable immediately by a notice in writing to the Company
(and to the Trustee if given by the holders of the Notes), provided that so
long as the Bank Credit Agreement is in effect, such declaration shall not
become effective until the earlier of (a) five business days after receipt of
such notice of acceleration from the holders or the Trustee by the agent under
the Bank Credit Agreement or (b) acceleration of the Indebtedness under the
Bank Credit Agreement. Thereupon the Trustee may, at its discretion, proceed
to protect and enforce the rights of the holders of Notes by appropriate
judicial proceedings. If an Event of Default specified in clause (viii) or
(ix) of the prior paragraph occurs and is continuing, then all the Notes shall
ipso facto become and be immediately due and payable, in an amount equal to
the principal amount of the Notes, together with accrued and unpaid interest,
if any, to the date the Notes become due and payable, without any declaration
or other act on the part of the Trustee or any holder. The Trustee or, if
notice of acceleration is given by the holders of the Notes, the holders of
the Notes shall give notice to the agent under the Bank Credit Agreement of
such acceleration.
After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of a majority in aggregate principal amount of Notes outstanding, by written notice to the Company and the Trustee, may rescind and annul such declaration if (a) the Company has paid or deposited with the Trustee a sum sufficient to pay (i) all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (ii) all overdue interest on all Notes, (iii) the principal of and premium, if any, on any Notes which have become due otherwise than by such declaration of acceleration and interest thereon at a rate borne by the Notes and (iv) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Notes; and (b) all Events of Default, other than the non-payment of principal of the Notes which have become due solely by such declaration of acceleration, have been cured or waived.
The holders of not less than a majority in aggregate principal amount of the Notes outstanding may on behalf of the holders of all the Notes waive any past default under the Indenture and its consequences, except a default in the payment of the principal of, premium, if any, or interest on any Note, or in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each Note outstanding.
The Company is also required to notify the Trustee within five business days of the occurrence of any Default. The Company is required to deliver to the Trustee, on or before a date not more than 60 days after the
end of each quarter and not more than 120 days after the end of each fiscal year, a written statement as to compliance with the Indenture, including whether or not any default has occurred. The Trustee is under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the holders of the Notes unless such holders offer to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred thereby.
The Trust Indenture Act contains limitations on the rights of the Trustee, should it become a creditor of the Company or any Guarantor, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions, provided that if it acquires any conflicting interest it must eliminate such conflict upon the occurrence of an Event of Default or else resign.
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
The Company may, at its option, at any time, elect to have the obligations of the Company, each of the Guarantors and any other obligor upon the Notes discharged with respect to the outstanding Notes ("defeasance"). Such defeasance means that the Company, each of the Guarantors and any other obligor under the Indenture shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, except for (i) the rights of holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due, (ii) the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes, and the maintenance of an office or agency for payment and money for security payments held in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee, and (iv) the defeasance provisions of the Indenture. In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and any Guarantor released with respect to certain covenants that are described in the Indenture ("covenant defeasance") and any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to the Notes. In the event covenant defeasance occurs, certain events (not including non-payment, enforceability of any Guarantee, bankruptcy and insolvency events) described under "--Events of Default" will no longer constitute an Event of Default with respect to the Notes.
In order to exercise either defeasance or covenant defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Notes, cash in United States dollars, U.S. Government
Obligations (as defined in the Indenture), or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants or a nationally recognized investment
banking firm expressed in a written certification thereof delivered to the
Trustee, to pay and discharge the principal of, premium, if any, and interest
on the outstanding Notes on the Stated Maturity of such principal or
installment of principal or interest (or on any date after October 1, 2002
(such date being referred to as the "Defeasance Redemption Date"), if when
exercising either defeasance or covenant defeasance, the Company has delivered
to the Trustee an irrevocable notice to redeem all of the outstanding Notes on
the Defeasance Redemption Date); (ii) in the case of defeasance, the Company
shall have delivered to the Trustee an opinion of independent counsel in the
United States stating that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of the Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
independent counsel in the United States shall confirm that, the holders of
the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred; (iii)
in the case of covenant defeasance, the Company shall have delivered to the
Trustee an opinion of independent counsel in the United States to the effect
that the holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as clause
(viii) or
(ix) under the first paragraph under "--Events of Default" are concerned, at
any time during the period ending on the 91st day after the date of deposit;
(v) such defeasance or covenant defeasance shall not cause the Trustee for the
Notes to have a conflicting interest with respect to any securities of the
Company or any Guarantor; (vi) such defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a Default under, the
Indenture or any other material agreement or instrument to which the Company
or any Guarantor is a party or by which it is bound, (vii) the Company shall
have delivered to the Trustee an opinion of independent counsel to the effect
that (A) the trust funds will not be subject to any rights of holders of
Senior Indebtedness or Guarantor Senior Indebtedness, including, without
limitation, those arising under the Indenture and (B) after the 91st day
following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; (viii) the Company shall have delivered
to the Trustee an officers' certificate stating that the deposit was not made
by the Company with the intent of preferring the holders of the Notes or any
Guarantee over the other creditors of the Company or any Guarantor with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company, any Guarantor or others; (ix) no event or condition shall exist that
would prevent the Company from making payments of the principal of, premium,
if any, and interest on the Notes on the date of such deposit or at any time
ending on the 91st day after the date of such deposit; and (x) the Company
shall have delivered to the Trustee an officers' certificate and an opinion of
independent counsel, each stating that all conditions precedent provided for
relating to either the defeasance or the covenant defeasance, as the case may
be, have been complied with.
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Notes, and certain other
rights as expressly provided for in the Indenture) as to all outstanding Notes
when (a) either (i) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid) have
been delivered to the Trustee for cancellation or (ii) all Notes not
theretofore delivered to the Trustee for cancellation (x) have become due and
payable, or (y) will become due and payable at their Stated Maturity within
one year, or (z) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company and
the Company or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire indebtedness on the Notes not theretofore delivered to the Trustee
for cancellation, including principal of, premium, if any, and accrued
interest at such Stated Maturity or redemption date, (b) the Company or any
Guarantor has paid or caused to be paid all other sums payable under the
Indenture by the Company or any Guarantor, and (c) the Company has delivered
to the Trustee an officers' certificate and an opinion of counsel stating that
(i) all conditions precedent under the Indenture relating to the satisfaction
and discharge of the Indenture have been complied with and (B) such
satisfaction and discharge will not result in a breach or violation of, or
constitute a default under, the Indenture or any other material agreement or
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound.
MODIFICATIONS AND AMENDMENTS
Modifications and amendments of the Indenture may be made by the Company, any Guarantor and the Trustee with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding Notes; provided, however, that no such modification or amendment may, without the consent of the holder of each outstanding Note affected thereby: (i) change the Stated Maturity of the principal of, or any installment of interest on, any Note or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the coin or currency in which the principal of any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or in the case of redemption, on or after the redemption date); (ii) amend, change or modify the obligation of the Company to make and consummate an Offer with respect to any Asset Sale or Asset Sales in accordance with "--Certain Covenants--Limitation on Sale of Assets" or the
obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with "--Certain Covenants-- Purchase of Notes Upon a Change of Control," including amending, changing or modifying any deletions with respect thereto; (iii) reduce the percentage in principal amount of outstanding Notes, the consent of whose holders is required for any such supplemental indenture, or the consent of whose holders is required for any waiver or compliance with certain provisions of the Indenture or certain defaults or with respect to any Guarantee; (iv) modify any of the provisions relating to supplemental indentures requiring the consent of holders or relating to the waiver of past defaults or relating to the waiver of certain covenants, except to increase the percentage of outstanding Notes required for such actions or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of each Note affected thereby; (v) except as otherwise permitted under "--Consolidation, Merger, Sale of Assets," consent to the assignment or transfer by the Company or any Guarantor of any of its rights and obligations under the Indenture; or (vi) amend or modify any of the provisions of the Indenture relating to the subordination of the Notes or any Guarantee in any manner adverse to the holders of the Notes or any Guarantee.
The holders of a majority in aggregate principal amount of the Notes outstanding may waive compliance with certain restrictive covenants and provisions of the Indenture.
GOVERNING LAW
The Indenture, the Notes and the Guarantees will be governed by, and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof.
CERTAIN DEFINITIONS
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case, other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interests or
any officer or director of any such Person or other Person or, with respect to
any natural Person, any person having a relationship with such Person or other
Person by blood, marriage or adoption not more remote than first cousin or
(iii) any other Person 10% or more of the voting Equity Interests of which are
beneficially owned or held directly or indirectly by such specified person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other disposition (including, without limitation, by way of merger, consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"), directly or indirectly, in one or a series of related transactions, of (i) any Equity Interest of any Restricted Subsidiary; (ii) all or substantially all of the properties and assets of any division or line of business of the Company or its Restricted Subsidiaries; or (iii) any other properties or assets of the Company or any Restricted Subsidiary, other than in the ordinary course of business. For the purposes of this definition, the term "Asset Sale" shall not include any transfer of properties and assets (A) that is governed by the provisions described under " --Consolidation, Merger, Sale of Assets" or "Limitations on Asset Swaps," (B) that is by the Company to any Wholly Owned Restricted Subsidiary, or by any Restricted Subsidiary to the Company or any Wholly Owned Restricted Subsidiary in accordance with the terms of the Indenture or (C) that aggregates not more than $1.0 million in gross proceeds.
"Asset Swap" means an Asset Sale by the Company or any Restricted Subsidiary in exchange for properties or assets that will be used in the business of the Company and its Restricted Subsidiaries existing on the date of the Indenture or reasonably related thereto.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the
sum of the products of (a) the number of years from the date of determination
to the date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment by
(ii) the sum of all such principal payments.
"Bank Credit Agreement" means the Credit Agreement dated as of September 25, 1997 among the Company, the lenders named therein and The Bank of New York as agent, as such agreement may be amended, renewed, extended, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time (including, without limitation, any successive renewals, extensions substitutions, refinancings, restructurings, replacements, supplementations or other modifications of the foregoing). For all purposes under the Indenture, "Bank Credit Agreement" shall include any amendments, renewals, extensions, substitutions, refinancings, restructurings, replacements, supplements or any other modifications that increase the principal amount of the Indebtedness or the commitments to lend thereunder and have been made in compliance with "--Certain Covenants--Limitation on Indebtedness;" provided that, for purposes of the definition of "Permitted Indebtedness," no such increase may result in the principal amount of Indebtedness of the Company under the Bank Credit Agreement exceeding the amount permitted by clause (i) of the definition of "Permitted Indebtedness."
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.
"Capital Lease Obligation" means any obligation of the Company and its Restricted Subsidiaries on a Consolidated basis under any capital lease of real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of the Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"Company" means Salem Communications Corporation, a corporation incorporated under the laws of California, until a successor Person shall have become such pursuant to the applicable provisions of the Indenture, and thereafter "Company" shall mean such successor Person.
"Consolidated Interest Expense" means, without duplication, for any period, the sum of (a) the interest expense of the Company and its Consolidated Restricted Subsidiaries for such period, on a Consolidated basis, including, without limitation, (i) amortization of debt discount, (ii) the net cost under Interest Rate Agreements (including amortization of discounts), (iii) the interest portion of any deferred payment obligation and (iv) accrued interest, plus (b) the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by the Company during such period, and all capitalized interest of the Company and its Consolidated Restricted Subsidiaries, in each case as determined in accordance with GAAP consistently applied.
"Consolidated Net Income" means, for any period, the Consolidated net income (or loss) of the Company and its Consolidated Restricted Subsidiaries for such period as determined in accordance with GAAP consistently applied, adjusted, to the extent included in calculating such net income (or loss), by excluding, without duplication, (i) all extraordinary gains but not losses (less all fees and expenses relating thereto), (ii) the portion of net income (or loss) of the Company and its Consolidated Restricted Subsidiaries allocable to interests in
unconsolidated Persons or Unrestricted Subsidiaries, except to the extent of
the amount of dividends or distributions actually paid to the Company or its
Consolidated Restricted Subsidiaries by such other Person during such period,
(iii) net income (or loss) of any Person combined with the Company or any of
its Restricted Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) any gain or loss, net of
taxes, realized upon the termination of any employee pension benefit plan, (v)
net gains but not losses (less all fees and expenses relating thereto) in
respect of dispositions of assets other than in the ordinary course of
business, or (vi) the net income of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its shareholders.
"Consolidated Net Worth" means the Consolidated equity of the holders of Equity Interests (excluding Disqualified Equity Interests) of the Company and its Restricted Subsidiaries, as determined in accordance with GAAP consistently applied.
"Consolidation" means, with respect to any Person, the consolidation of the accounts of such Person and each of its subsidiaries (other than any Unrestricted Subsidiaries) if and to the extent the accounts of such Person and each of its subsidiaries (other than any Unrestricted Subsidiaries) would normally be consolidated with those of such Person, all in accordance with GAAP consistently applied. The term "Consolidated" shall have a similar meaning.
"Cumulative Consolidated Interest Expense" means, as of any date of determination, Consolidated Interest Expense from the date of the Indenture to the end of the Company's most recently ended full fiscal quarter prior to such date, taken as a single accounting period.
"Cumulative Operating Cash Flow" means, as of any date of determination, Operating Cash Flow from the date of the Indenture to the end of the Company's most recently ended full fiscal quarter prior to such date, taken as a single accounting period.
"Debt to Operating Cash Flow Ratio" means, as of any date of determination,
the ratio of (a) the aggregate principal amount of all outstanding
Indebtedness of the Company and its Restricted Subsidiaries as of such date on
a Consolidated basis plus the aggregate liquidation preference or redemption
amount of all Disqualified Equity Interests of the Company (excluding any such
Disqualified Equity Interests held by the Company or a Wholly Owned Restricted
Subsidiary of the Company), to (b) Operating Cash Flow of the Company and its
Restricted Subsidiaries on a Consolidated basis for the four most recent full
quarters ending immediately prior to such date, determined on a pro forma
basis (and after giving pro forma effect to (i) the incurrence of such
Indebtedness and (if applicable) the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was incurred, and the application of such proceeds occurred, at the beginning
of such four-quarter period; (ii) the incurrence, repayment or retirement of
any other Indebtedness by the Company and its Restricted Subsidiaries since
the first day of such four-quarter period as if such Indebtedness was
incurred, repaid or retired at the beginning of such four-quarter period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such four-quarter period);
(iii) in the case of Acquired Indebtedness, the related acquisition, as if
such acquisition had occurred at the beginning of such four-quarter period;
and (iv) any acquisition or disposition by the Company and its Restricted
Subsidiaries of any company or any business or any assets out of the ordinary
course of business, or any related repayment of Indebtedness, in each case
since the first day of such four-quarter period, assuming such acquisition or
disposition had been consummated on the first day of such four-quarter
period).
"Default" means any event which is, or after notice or passage of any time or both would be, an Event of Default.
"Disqualified Equity Interests" means any Equity Interests that, either by their terms or by the terms of any security into which they are convertible or exchangeable or otherwise, are or upon the happening of an event or passage of time would be required to be redeemed prior to any Stated Maturity of the principal of the Notes or are redeemable at the option of the holder thereof at any time prior to any such Stated Maturity, or are convertible into or exchangeable for debt securities at any time prior to any such Stated Maturity at the option of the holder thereof.
"Equity Interest" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) corporate stock or other equity participations, including partnership interests, whether general or limited, and limited liability company interests of such Person, including any Preferred Equity Interests.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset or property, the sale value that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, consistently applied, which are in effect on the date of the Indenture.
"Guarantee" means the guarantee by any Guarantor of the Company's Indenture Obligations pursuant to a guarantee given in accordance with the Indenture.
"Guaranteed Debt" of any Person means, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to supply funds to, or in any other manner invest in, the debtor (including any agreement to pay for property or services without requiring that such property be received or such services be rendered), (iv) to maintain working capital or equity capital of the debtor, or otherwise to maintain the net worth, solvency or other financial condition of the debtor or (v) otherwise to assure a creditor against loss; provided that the term "guarantee" shall not include endorsements for collection or deposit, in either case in the ordinary course of business.
"Guarantor" means the Subsidiaries listed as guarantors in the Indenture or any other guarantor of the Indenture Obligations. The Guarantors currently consist of all the Company's Subsidiaries.
"Indebtedness" means, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities arising in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit issued under letter of credit facilities, acceptance facilities or other similar facilities and in connection with any agreement to purchase, redeem, exchange, convert or otherwise acquire for value any Equity Interests of such Person, or any warrants, rights or options to acquire such Equity Interests, now or hereafter outstanding, (ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business, (iv) all obligations under Interest Rate Agreements of such Person, (v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred to in clauses (i) through (v) above of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien, upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, (vii) all Guaranteed Debt of such Person, (viii) all Disqualified Equity Interests valued at the greater of their voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends, and (ix) any amendment, supplement, modification, deferral, renewal, extension, refunding or refinancing of any liability of the types referred to in clauses (i) through (viii) above. The amount of Indebtedness of any Person at any date shall be, without duplication, the principal amount that would be shown on a balance sheet of such Person prepared as of such date in accordance with GAAP and the maximum determinable liability of any Guaranteed Debt referred to in clause (vii) above at such date. The Indebtedness of the Company and its Restricted Subsidiaries shall not include any Indebtedness of Unrestricted Subsidiaries so long as such Indebtedness is non-recourse to the Company and the Restricted Subsidiaries. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Equity Interests which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Equity Interests, such Fair Market Value to be determined in good faith by the Board of Directors of the issuer of such Disqualified Equity Interests.
"Indenture Obligations" means the obligations of the Company and any other obligor under the Indenture or under the Notes, including any Guarantor, to pay principal, premium, if any, and interest when due and payable, and all other amounts due or to become due under or in connection with the Indenture, the Notes and the performance of all other obligations to the Trustee and the holders under the Indenture and the Notes, according to the terms thereof.
"Independent Director" means a director of the Company other than a director
(i) who (apart from being a director of the Company or any Subsidiary) is an
employee, insider, associate or Affiliate of the Company or a Subsidiary or
has held any such position during the previous five years or (ii) who is a
director, an employee, insider, associate or Affiliate of another party to the
transaction in question.
"Interest Rate Agreements" means one or more of the following agreements which shall be entered into by one or more financial institutions: interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements) and/or other types of interest rate hedging agreements from time to time.
"Investments" means, with respect to any Person, directly or indirectly, any advance, loan (including guarantees), or other extension of credit or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase, acquisition or ownership by such Person of any Equity Interests, bonds, notes, debentures or other securities or assets issued or owned by any other Person and all other items that would be classified as investments on a balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation or other encumbrance upon or with respect to any property of any kind (including any conditional sale or other title retention agreement, any leases in the nature thereof, and any agreement to give any security interest), real or personal, movable or immovable, now owned or hereafter acquired.
"Maturity," when used with respect to any Note, means the date on which the principal of such Note becomes due and payable as provided in the Note or as provided in the Indenture, whether at Stated Maturity, the offer date, or the redemption date and whether by declaration of acceleration, Offer in respect of Excess Proceeds, Change of Control, call for redemption or otherwise.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person, the proceeds thereof in the form of cash or Temporary Cash Investments including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed of for, cash or Temporary Cash Investments (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary) net of (i) brokerage commissions and other reasonable fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale, (iii) payments made to retire Indebtedness where payment of such Indebtedness is secured by the assets or properties the subject of such Asset Sale or would cause a required repayment under the Bank Credit Agreement, (iv) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale and (v) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post- employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an officers' certificate delivered to the Trustee and (b) with respect to any issuance or sale of Equity Interests, or debt securities or Equity Interests that have been converted into or exchanged for Equity Interests, as referred to under "--Certain Covenants--Limitation on Restricted Payments," the proceeds of such issuance or sale in the form of cash or Temporary Cash Investments, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed for, cash or Temporary Cash Investments (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of attorney's fees, accountant's fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.
"Operating Cash Flow" means, for any period, the Consolidated Net Income of the Company and its Restricted Subsidiaries for such period, plus (a) extraordinary net losses and net losses on sales of assets outside the ordinary course of business during such period, to the extent such losses were deducted in computing Consolidated Net Income, plus (b) provision for taxes based on income or profits, to the extent such provision for taxes was included in computing such Consolidated Net Income, and any provision for taxes utilized in computing the net losses under clause (a) hereof, plus (c) Consolidated Interest Expense of the Company and its Restricted Subsidiaries for such period, plus (d) depreciation, amortization and all other non-cash charges, to the extent such depreciation, amortization and other non-cash charges were deducted in computing such Consolidated Net Income (including amortization of goodwill and other intangibles).
"Pari Passu Indebtedness" means any Indebtedness of the Company or any Guarantor that is pari passu in right of payment to the Notes or any Guarantee, as the case may be.
"Permitted Investments" means any of the following:
(i) Temporary Cash Investments;
(ii) Investments by the Company or any of its Restricted Subsidiaries in a Guarantor and Investments by any Restricted Subsidiary in the Company;
(iii) Investments by the Company or any of its Restricted Subsidiaries in another Person, if as a result of such Investment (a) such other Person becomes a Restricted Subsidiary that is or would be a Guarantor or (b) such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary that is or would be a Guarantor;
(iv) Promissory notes received as a result of Asset Sales permitted under the provisions of "Limitation on Sales of Assets."
(v) Investments in assets owned or used in the ordinary course of business;
(vi) Investments in existence on the date of the Indenture;
(vii) Direct or indirect loans to employees, or to a trustee for the benefit of such employees, of the Company or any of its Restricted Subsidiaries in an aggregate amount outstanding at any time not exceeding $1.0 million;
(viii) Permitted Non-Commercial Educational Station Investments; provided that immediately after giving effect to any such Investment, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the restrictions under the "--Certain Covenants-- Limitation on Indebtedness" covenant; and
(ix) Other Investments that do not exceed $5.0 million at any one time outstanding.
"Permitted Non-Commercial Educational Station Investment" means a loan made by the Company or a Restricted Subsidiary to a non-profit entity, the proceeds of which are used to acquire assets used in the operation of a radio station; provided that so long as any such Investment remains outstanding (i) such loan shall be evidenced by a promissory note and shall not be subordinated to any other Indebtedness of such non-profit entity; (ii) at least 40% of the board seats (or other comparable governing body) of such non-profit entity shall be held by executive officers of the Company, and (iii) a technical and professional services agreement shall be in full force and effect between such non-profit entity and the Company pursuant to which the Company shall be compensated for providing engineering, accounting, legal and other assistance in connection with the operation of the station licensed to such non-profit entity (which agreement shall contain customary terms and conditions for technical and professional services agreements in the radio broadcasting industry generally).
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of any Guarantor under Capital Lease Obligations incurred in the ordinary course of business; and
(ii) Indebtedness of any Guarantor (a) issued to finance or refinance the purchase or construction of any assets of such Guarantor or (b) secured by a Lien on any assets of such Guarantor where the lender's sole recourse is to the assets so encumbered, in either case (x) to the extent the purchase or construction prices for such assets are or should be included in "property and equipment" in accordance with GAAP and (y) if the purchase or construction of such assets is not part of any acquisition of a Person or business unit.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof.
"Preferred Equity Interest," as applied to the Equity Interest of any Person, means an Equity Interest of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over Equity Interests of any other class of such Person.
"Public Equity Offering" means, with respect to any Person, an underwritten public offering by such Person of some or all of its Equity Interests (other than Disqualified Equity Interests), the net proceeds of which (after deducting any underwriting discounts and commissions) exceed $10.0 million.
"Qualified Equity Interests" of any Person means any and all Equity Interests of such Person other than Disqualified Equity Interests.
"Restricted Subsidiary" means a Subsidiary of the Company other than an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any transaction or series of related transactions pursuant to which the Company or a Restricted Subsidiary sells or transfers any property or asset in connection with the leasing, or the resale against installment payments, of such property or asset to the seller or transferor.
"Securities Act" means the Securities Act of 1933, as amended.
"Stated Maturity," when used with respect to any Indebtedness or any installment of interest thereon, means the date specified in such Indebtedness as the fixed date on which the principal of such Indebtedness or such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any Guarantor subordinated in right of payment to the Notes or any Guarantee, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Temporary Cash Investments" means (i) any evidence of Indebtedness, maturing not more than one year after the date of acquisition, issued by the United States of America, or an instrumentality or agency thereof and guaranteed fully as to principal, premium, if any, and interest by the United States of America, (ii) any certificate of deposit, maturing not more than one year after the date of acquisition, issued by, or time deposit of, a commercial banking institution (including the Trustee) that is a member of the Federal Reserve System and that has combined capital and surplus and undivided profits of not less than $500.0 million, whose debt has a rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's Investors Service, Inc. ("Moody's") or any successor rating agency or "A-1" (or higher) according to Standard & Poor's Corporation ("S&P") or any successor rating agency, (iii) commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate or Subsidiary of the Company, but including the Trustee) organized and existing under the laws of the United States of America with a rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P and (iv) any money market deposit accounts issued or offered by a domestic commercial bank having capital and surplus in excess of $500.0 million.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at the time of determination shall be an Unrestricted Subsidiary (as designated by the Board of Directors of the Company, as provided below) and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if all of the following conditions apply: (a) such Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness and (b) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary shall not violate the provisions of the "--Certain Covenants--Limitation on Unrestricted Subsidiaries" covenant. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a board resolution giving effect to such designation and an officers' certificate certifying that such designation complies with the foregoing conditions. The Board of Directors of the Company may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that immediately after giving effect to such designation, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the restrictions under the "--Certain Covenants--Limitation on Indebtedness" covenant.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary means Indebtedness of such Unrestricted Subsidiary (i) as to which neither the Company nor any Restricted Subsidiary is directly or indirectly liable (by virtue of the Company or any such Restricted Subsidiary being the primary obligor on, guarantor of, or otherwise liable in any respect to, such Indebtedness), except Guaranteed Debt of the Company or any Restricted Subsidiary to any Affiliate, in which case (unless the incurrence of such Guaranteed Debt resulted in a Restricted Payment at the time of incurrence) the Company shall be deemed to have made a Restricted Payment equal to the principal amount of any such Indebtedness to the extent guaranteed at the time such Affiliate is designated an Unrestricted Subsidiary and (ii) which, upon the occurrence of a default with respect thereto, does not result in, or permit any holder of any Indebtedness of the Company or any Restricted
Subsidiary to declare, a default on such Indebtedness of the Company or any Restricted Subsidiary or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.
"Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the Equity Interests of which are owned by the Company or another Wholly Owned Restricted Subsidiary. The Wholly Owned Restricted Subsidiaries of the Company currently consist of all the Company's Subsidiaries.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion of the material United States federal income tax consequences of the Exchange Offer is for general information only. It is based on the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), existing and proposed Treasury regulations, and judicial and administrative determinations, all of which are subject to change at any time, possibly on a retroactive basis. The following relates only to Old Notes, and Notes received therefor, that are held as "capital assets" within the meaning of Section 1221 of the Code by persons who are citizens or residents of the United States. It does not discuss state, local, or foreign tax consequences, nor does it discuss tax consequences to categories of holders that are subject to special rules, such as foreign persons, tax-exempt organizations, insurance companies, banks, and dealers in stocks and securities. Tax consequences may vary depending on the particular status of an investor. No rulings will be sought from the Internal Revenue Service ("IRS") with respect to the federal income tax consequences of the Exchange Offer.
THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A HOLDER'S DECISION TO PARTICIPATE IN THE EXCHANGE OFFER. EACH HOLDER SHOULD CONSULT WITH ITS OWN TAX ADVISOR CONCERNING THE APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO ITS PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO PARTICIPATE IN THE EXCHANGE OFFER.
THE EXCHANGE OFFER
The exchange of the Old Notes for the Notes pursuant to the Exchange Offer will not constitute a material modification of the terms of the Old Notes or the Notes and, thus, such exchange will not constitute an exchange for federal income tax purposes. Accordingly, such exchange will have no federal income tax consequences to the holders of the Old Notes or the Notes, regardless of whether such holders participate in the Exchange Offer, and each holder will continue to be required to include interest on the Notes or the Old Notes, if not exchanged, in its gross income in accordance with its method of accounting for federal income tax purposes. The Company intends, to the extent required, to treat the Exchange Offer for federal income tax purposes in accordance with the position described in this paragraph.
BACKUP WITHHOLDING
Under the Code, a holder of a Note may be subject, under certain circumstances, to "backup withholding" at a 31% rate with respect to payments in respect of interest thereon or the gross proceeds from the disposition thereof. This withholding generally applies only if the holder (i) fails to furnish his or her social security or other taxpayer identification number ("TIN") within a reasonable time after request therefor, (ii) furnishes an incorrect TIN, (iii) is notified by the IRS that he or she has failed to report properly payments of interest and dividends and the IRS has notified the Company that he or she is subject to backup withholding, or (iv) fails, under certain circumstances, to provide a certified statement, signed under penalty of perjury, that the TIN provided is his or
her correct number and that he or she is not subject to backup withholding. Any amount withheld from a payment to a holder under the backup withholding rules is allowable as a credit against such holder's federal income tax liability, provide that the required information is furnished to the IRS. Corporations and certain other entities described in the Code and Treasury regulations are exempt from such withholding if their exempt status is properly established.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Notes for its own account pursuant to the Exchange Offer in exchange for Old Notes that were acquired by such broker- dealer for its own account as a result of market-making activities or other trading activities (a "Participating Broker") must acknowledge that it will deliver a prospectus in connection with any resale of such Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker in connection with any resale of Notes. For a period of 180 days after the Expiration Date, the Company will make a reasonable number of additional copies of this Prospectus, as amended or supplemented, available to any Participating Broker requesting the same through the Exchange Agent for use in connection with any such resale. In addition, until , 1998 (90 days after the date of this Prospectus), all dealers effecting transactions in the Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Notes by broker- dealers. Notes received by any Participating Broker may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Notes. Any Participating Broker that resells Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus as required, a Participating Broker will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
The Company has agreed to pay all expenses incident to the Exchange Offer (which shall not include the expenses of any holder in connection with resales of the Notes). The Company has agreed to indemnify the holders of the Notes, including any Participating Broker, against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Notes and Guarantees offered hereby will be passed upon for the Company by Gibson, Dunn & Crutcher LLP, Orange County, California.
EXPERTS
The consolidated financial statements of Salem Communications Corporation at December 31, 1995 and 1996, and for each of the three years in the period ended December 31, 1996, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Report of Independent Auditors............................................ F-2
Audited Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1995 and 1996 and September
30, 1997 (unaudited)..................................................... F-3
Consolidated Statements of Operations for the years ended December 31,
1994, 1995 and 1996 and the nine months ended September 30, 1996 and 1997
(unaudited).............................................................. F-4
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1994, 1995 and 1996 and the nine months ended September 30,
1996 and 1997 (unaudited)................................................ F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1994, 1995 and 1996 and the nine months ended September 30, 1996 and 1997
(unaudited).............................................................. F-6
Notes to Consolidated Financial Statements................................ F-7
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REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Salem Communications Corporation
We have audited the accompanying consolidated balance sheets of Salem Communications Corporation as of December 31, 1995 and 1996, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Salem Communications Corporation at December 31, 1995 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles.
Ernst & Young LLP May 9, 1997, except for basis of presentation and reorganization under Note 1 as to which the date is August 13, 1997
Woodland Hills, California
SALEM COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
DECEMBER 31
----------------- SEPTEMBER 30
1995 1996 1997
-------- -------- ------------
(UNAUDITED)
ASSETS
------
Current assets:
Cash and cash equivalents..................... $ 1,007 $ 1,962 $ 2,103
Accounts receivable (less allowance for
doubtful accounts of $704 in 1995, $1,005 in
1996 and $1,249 in 1997)..................... 9,215 10,542 10,991
Other receivables............................. 151 194 110
Prepaid expenses.............................. 197 308 964
Prepaid income taxes.......................... 24 70 39
Tower construction project held for sale...... -- -- 2,943
Deferred income taxes......................... 1,071 537 3,170
-------- -------- --------
Total current assets............................ 11,665 13,613 20,320
Property, plant and equipment, net.............. 24,595 30,307 36,172
Intangible assets:
Broadcast licenses............................ 69,169 117,081 138,460
Noncompetition agreements..................... 14,887 14,893 14,893
Customer lists and contracts.................. 3,144 4,094 4,094
Favorable and assigned leases................. 1,798 1,800 1,800
Goodwill...................................... 5,152 5,795 6,002
Organizational costs and other intangible
assets....................................... 974 972 972
-------- -------- --------
95,124 144,635 166,221
Less accumulated amortization................. 33,201 37,854 44,388
-------- -------- --------
Intangible assets, net........................ 61,923 106,781 121,833
Notes receivable from shareholders and accrued
interest....................................... 4,642 28 --
Bond issue costs................................ -- -- 4,638
Other assets.................................... 1,992 8,456 1,170
-------- -------- --------
Total assets.................................... $104,817 $159,185 $184,133
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable.............................. $ 2,786 $ 1,935 $ 884
Accrued expenses.............................. 295 485 592
Accrued compensation and related.............. 1,224 1,589 1,615
Accrued interest.............................. 252 1,157 11
Income taxes.................................. 20 189 --
Current portion of long-term debt............. 6,000 -- --
-------- -------- --------
Total current liabilities....................... 10,577 5,355 3,102
Long-term debt, less current portion ........... 75,020 121,790 160,100
Deferred income taxes........................... 5,829 11,427 11,490
Other liabilities............................... 109 79 55
Shareholders' equity:
Common stock, no par value; authorized 100,000
shares; issued and outstanding 81,672 shares. 5,832 5,832 5,832
Retained earnings............................. 7,450 14,702 3,554
-------- -------- --------
Total shareholders' equity...................... 13,282 20,534 9,386
-------- -------- --------
Total liabilities and shareholders' equity...... $104,817 $159,185 $184,133
======== ======== ========
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See accompanying notes.
SALEM COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
NINE MONTHS
ENDED SEPTEMBER
YEAR ENDED DECEMBER 31 30
------------------------- ----------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
(UNAUDITED)
Gross broadcasting revenue........ $42,591 $53,303 $65,141 $46,974 $54,471
Less agency commissions........... 4,016 5,135 6,131 4,509 5,022
------- ------- ------- ------- -------
Net broadcasting revenue.......... 38,575 48,168 59,010 42,465 49,449
Operating expenses:
Station operating expenses...... 22,179 27,527 33,463 23,907 28,793
Corporate expenses (including
$800 in shareholder salaries in
1994, 1995 and 1996)........... 3,292 3,799 4,663 3,413 4,998
Tax reimbursements to S
corporation shareholders....... 977 2,057 2,038 1,529 1,780
Depreciation and amortization... 7,633 7,884 8,394 6,148 9,382
------- ------- ------- ------- -------
Operating expenses.............. 34,081 41,267 48,558 34,997 44,953
------- ------- ------- ------- -------
Net operating income.............. 4,494 6,901 10,452 7,468 4,496
Other income (expense):
Interest income................. 230 319 523 312 156
Gain (loss) on disposal of
assets......................... (482) (7) 16,064 12,659 (190)
Interest expense................ (3,668) (6,646) (7,361) (5,510) (8,548)
Other expense................... (135) (255) (270) (209) (288)
------- ------- ------- ------- -------
Income (loss) before income taxes
and extraordinary item........... 439 312 19,408 14,720 (4,374)
Provision (benefit) for income
taxes............................ (247) (204) 6,655 5,046 (1,790)
------- ------- ------- ------- -------
Income (loss) before extraordinary
item............................. 686 516 12,753 9,674 (2,584)
Extraordinary loss on early
extinguishment of debt (net of
income tax benefit of $263 in
1995 and $755 in 1997)........... -- (394) -- -- (1,090)
------- ------- ------- ------- -------
Net income (loss)................. $ 686 $ 122 $12,753 $ 9,674 $(3,674)
======= ======= ======= ======= =======
Pro forma information (unaudited):
Income (loss) before income taxes
and extraordinary item as
reported above................... $ 439 $ 312 $19,408 $14,720 $(4,374)
Add back tax reimbursements to S
Corporation shareholders......... 977 2,057 2,038 1,529 1,780
------- ------- ------- ------- -------
Pro forma income (loss) before
income taxes and extraordinary
item ............................ 1,416 2,369 21,446 16,249 (2,594)
Pro forma provision (benefit) for
income taxes..................... 568 951 8,608 6,522 (1,033)
------- ------- ------- ------- -------
Pro forma income (loss) before
extraordinary item............... 848 1,418 12,838 9,727 (1,561)
Extraordinary loss................ -- (394) -- -- (1,090)
------- ------- ------- ------- -------
Pro forma net income (loss)....... $ 848 $ 1,024 $12,838 $ 9,727 $(2,651)
======= ======= ======= ======= =======
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See accompanying notes.
SALEM COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
COMMON RETAINED
STOCK EARNINGS TOTAL
------ -------- -------
Shareholders' equity, January 1, 1994.............. $5,832 $ 6,642 $12,474
Net income......................................... -- 686 686
------ ------- -------
Shareholders' equity, December 31, 1994............ 5,832 7,328 13,160
Net income......................................... -- 122 122
------ ------- -------
Shareholders' equity, December 31, 1995............ 5,832 7,450 13,282
Net income......................................... -- 12,753 12,753
Shareholder distributions.......................... -- (5,501) (5,501)
------ ------- -------
Shareholders' equity, December 31, 1996............ 5,832 14,702 20,534
Net loss (unaudited)............................... -- (3,674) (3,674)
Shareholder distributions (unaudited).............. -- (7,474) (7,474)
------ ------- -------
Shareholders' equity, September 30, 1997
(unaudited)....................................... $5,832 $ 3,554 $ 9,386
====== ======= =======
|
See accompanying notes.
SALEM COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
---------------------------- -------------------
1994 1995 1996 1996 1997
-------- -------- -------- -------- ---------
(UNAUDITED)
OPERATING ACTIVITIES
Net income (loss)........... $ 686 $ 122 $ 12,753 $ 9,674 $ (3,674)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization.............. 7,633 7,884 8,394 6,148 9,382
Amortization of bank loan
fees...................... 85 104 109 82 165
Deferred income taxes...... (214) (341) 6,133 4,335 (2,570)
(Gain) loss on sale of
assets.................... 482 7 (16,064) (12,659) 190
Accrued interest from
shareholders.............. (174) (213) -- (172) --
Income recognition on
noncompetition
agreements................ (80) -- -- -- --
Loss on early
extinguishment of debt.... -- 657 -- -- 1,845
Changes in operating
assets and liabilities:
Accounts receivable...... (931) (2,539) (1,370) 511 (365)
Prepaid expenses and
other current assets.... (81) 9 (111) (275) (798)
Accounts payable and
accrued expenses........ 401 1,950 558 1,639 (2,065)
Other liabilities........ (5) (30) (30) (22) (25)
Income taxes............. (320) 71 123 -- (157)
-------- -------- -------- -------- ---------
Net cash provided by
operating activities....... 7,482 7,681 10,495 9,261 1,928
INVESTING ACTIVITIES
Capital expenditures....... (2,441) (3,040) (6,982) (4,119) (5,502)
Purchases of radio
stations.................. (14,935) (24,454) (21,160) (8,329) (18,806)
Deposits on radio station
acquisitions.............. (1,050) (125) (6,314) (16,288) --
Proceeds from disposal of
property, plant and
equipment and intangible
assets.................... 47 38 15,867 15,831 133
Expenditures for tower
construction project held
for sale.................. -- -- -- -- (2,943)
Other assets............... (427) (100) (334) (345) 526
-------- -------- -------- -------- ---------
Net cash used in investing
activities................. (18,806) (27,681) (18,923) (13,250) (26,592)
FINANCING ACTIVITIES
Proceeds from issuance of
long-term debt and notes
payable to shareholders... 17,300 42,840 23,800 17,500 222,710
Payments of long-term
debt...................... (5,300) (22,220) (15,430) (10,630) (182,500)
Payments of bank loan
fees...................... (175) (856) -- -- (1,003)
Payments of costs related
to debt refinancing....... -- (228) -- -- (418)
Payments of bond issue
costs..................... -- -- -- -- (4,638)
Repayments (additions) of
shareholder notes and
repayment of accrued
interest receivable--net.. 2 (309) 4,614 (2,838) (1,872)
Proceeds from shareholder
notes payable............. -- -- 1,900 -- --
Distributions to
shareholders.............. -- -- (5,501) (700) (7,474)
-------- -------- -------- -------- ---------
Net cash provided by
financing activities...... 11,827 19,227 9,383 3,332 24,805
-------- -------- -------- -------- ---------
Net (decrease) increase in
cash and cash
equivalents............... 503 (773) 955 (657) 141
Cash and cash equivalents
at beginning of year...... 1,277 1,780 1,007 1,007 1,962
-------- -------- -------- -------- ---------
Cash and cash equivalents at
end of year................ $ 1,780 $ 1,007 $ 1,962 $ 350 $ 2,103
======== ======== ======== ======== =========
Supplemental disclosures of
cash flow information:
Cash paid during the year
for:
Interest................. $ 3,425 $ 6,816 $ 6,158 $ 4,475 $ 9,288
Income taxes............. 287 288 400 227 221
Noncash transactions:
Acquisition of radio
station (KWRD-FM)
Fair market value of
assets acquired......... $ -- $ -- $ 40,100 $ -- $ --
Debt to seller........... -- -- (30,500) -- --
Fair market value of
assets exchanged........ -- -- (8,000) -- --
-------- -------- -------- -------- ---------
Cash paid (reflected in
Deposits on radio station
acquisitions).............. $ -- $ -- $ 1,600 $ -- $ --
======== ======== ======== ======== =========
|
See accompanying notes.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND REORGANIZATION
The accompanying consolidated financial statements of Salem Communications Corporation (Salem or the Company) include the Company and its wholly-owned subsidiaries. Prior to the reorganization described below (the Reorganization) the financial statements had been presented on a combined basis and included Salem, New Inspiration Broadcasting Company, Inc. (New Inspiration), Golden Gate Broadcasting Company, Inc. (Golden Gate) and Beltway Media Partners (Beltway), all of these entities were under common control. New Inspiration and Golden Gate were S corporations for income tax purposes. Salem, New Inspiration and Golden Gate are the partners of Beltway. The combined financial statements were entitled Salem Broadcasting Entities. Pursuant to the Reorganization the financial statements have been renamed and the disclosure of common stock information has been retroactively restated for all periods presented as if the Reorganization had been completed as of the beginning of the earliest period presented. All significant intercompany balances and transactions have been eliminated.
The Company is a holding company with substantially no assets, operations or cash flows other than its investment in subsidiaries. All of the Company's subsidiaries are Guarantors of the 9 1/2% Senior Subordinated Notes due 2007 (the Notes) and the exchange notes (the Exchange Notes) discussed in Note 4. The Guarantors (i) are wholly owned subsidiaries of the Company, (ii) comprise all the Company's direct and indirect subsidiaries and (iii) have and will fully and unconditionally guarantee, on a joint and several basis, the Notes and the Exchange Notes, respectively. The Company has not presented separate financial statements and other disclosures concerning the Guarantors because management has determined that such information is not material to investors.
In August 1997, the Company, New Inspiration and Golden Gate effected the Reorganization pursuant to which New Inspiration and Golden Gate became wholly-owned subsidiaries of the Company, with Beltway remaining a partnership. The Company accounted for the Reorganization as a combination of entities under common control, which is a method similar to a pooling of interests.
The S corporation status of New Inspiration and Golden Gate was terminated in the Reorganization. Prior to the Reorganization, New Inspiration and Golden Gate distributed cash and promissory notes to their respective shareholders in the aggregate amount of $8.5 million. Of such amount, $1.8 million, equal to the estimated federal and state income tax liability of the S corporation shareholders on the earnings of New Inspiration and Golden Gate, was paid by New Inspiration and Golden Gate in cash. The balance, $6.7 million representing the balance of the net income of New Inspiration and Golden Gate that had previously been taxed, but not distributed to the shareholders, was paid in the form of promissory notes. In September 1997, the Company financed the repayment of these promissory notes by an additional borrowing.
DESCRIPTION OF BUSINESS
Salem operated 39 and 31 radio stations across the United States at December 31, 1996 and 1995, respectively. The Company also owns and operates Salem Radio Network (SRN), SRN News Network (SNN), Salem Music Network (SMN) and Salem Radio Representatives (SRR). SRN, SNN and SMN are radio networks which produce and distribute talk, news and music programming to Salem's radio stations and other affiliated independent radio stations. SRR sells commercial air time to national advertisers for Salem's radio stations and networks, and for affiliated independent radio stations.
The significant accounting policies of Salem are summarized below and conform with generally accepted accounting principles and reflect practices appropriate to the radio broadcasting industry.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INTERIM FINANCIAL DATA
The unaudited financial statements of the Company for the nine months ended September 30, 1996 and 1997 have been prepared on the same basis as the audited financial statements and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with generally accepted accounting principles.
The results of operations for the nine months ended September 30, 1997 are not necessarily indicative of the results to be expected for the full fiscal year.
REVENUE RECOGNITION
Revenue from radio programs and commercial advertising is recognized when broadcast. Salem's customers principally include not-for-profit charitable organizations and commercial advertisers.
Advertising by the radio stations exchanged for goods and services is recorded as the advertising is broadcast and is valued at the fair market value of goods or services received or to be received. The value of the goods and services received in such barter transactions is charged to expense when used. Barter revenue for the years ended December 31, 1994, 1995 and 1996, was approximately $1,431,000, $1,467,000 and $1,498,000, respectively. Barter expenses were approximately the same.
CASH EQUIVALENTS
Salem considers all highly liquid debt instruments with a maturity of three months or less when purchased to be cash equivalents. The recorded amount for cash and cash equivalents approximates the fair market value.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives as follows:
Buildings..................................... 40 years Office furnishings and equipment.............. 5-10 years Antennae, towers and transmitting equipment... 20 years Studio and production equipment............... 10 years Record and tape libraries..................... 20 years Automobiles................................... 5 years Leasehold improvements........................ 15 years |
The carrying value of property, plant and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and businesses for indicators of impairment. When indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying value of these assets an adjustment to reduce the carrying value (if necessary) to the fair market value of the assets is recorded. No adjustments to the carrying amounts of property, plant and equipment have been made during the years ended December 31, 1994, 1995 and 1996.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INTANGIBLE ASSETS
Intangible assets acquired in conjunction with the acquisition of various radio stations are being amortized over the following estimated useful lives using the straight-line method:
Broadcast licenses..................... 10-25 years Noncompetition agreements.............. 3-5 years Customer lists and contracts........... 10 years Favorable and assigned leases.......... Life of the lease Goodwill............................... 15-40 years Organizational costs and other......... 5-10 years |
The carrying value of intangibles is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and businesses for indicators of impairment. When indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying amounts of these assets, an adjustment to reduce the carrying value (if necessary) to the fair market value of these assets is recorded. No adjustments to the carrying amounts of intangible assets have been made during the year ended December 31, 1994, 1995 and 1996.
BOND ISSUE COSTS
Bond issue costs are being amortized over the term of the Notes as an adjustment to interest expense.
TAX REIMBURSEMENTS TO S CORPORATION SHAREHOLDERS
"Tax reimbursements to S Corporation shareholders" represents additional salary payments made in the amount necessary to satisfy individual federal and state income tax liabilities of the S Corporation shareholders on the earnings of New Inspiration and Golden Gate.
INCOME TAXES
The Company accounts for income taxes in accordance with the Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." SFAS No. 109 prescribes the liability method of providing for deferred income taxes. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.
Federal and state income taxes (except for 1.5% state franchise tax) have not been provided through August 12, 1997 for New Inspiration and Golden Gate because they were S Corporations and income tax attributes of S Corporations are passed through to their shareholders.
Income taxes for the nine months ended September 30, 1996 and 1997 were provided for using the estimated annual effective tax rate. The income tax provision for the nine months ended September 30, 1997 includes a charge of $612,000 for the reinstatement of deferred taxes upon the reorganization and conversion of New Inspiration and Golden Gate from S Corporation to C Corporation status effective August 13, 1997.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
CONCENTRATIONS OF BUSINESS AND CREDIT RISKS
The majority of the Company's operations are conducted in several locations across the country. The Company's credit risk is spread across a large number of customers, none of which accounted for a significant volume of revenue or outstanding receivables. The Company does not normally require collateral on credit sales; however, credit histories are reviewed before extending substantial credit to any customer. The Company establishes an allowance for doubtful accounts based on customers' payment history and perceived credit risks. Bad debts have been within management's expectations.
INTEREST RATE SWAP AGREEMENTS
The Company enters into interest-rate swap agreements to modify the interest characteristics of its outstanding debt. Each interest-rate swap agreement is designated with all or a portion of the principal balance and term of a specific debt obligation. These agreements involve the exchange of amounts based on a fixed interest rate for amounts based on variable interest rates over the life of the agreement without an exchange of the notional amount upon which the payments are based. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment of interest expense related to the debt. The related amount payable to or receivable from counterparties is included in other liabilities or assets. The fair value of the swap agreements and changes in the fair value as a result of changes in market interest rates are not recognized in the financial statements.
Gains and losses on terminations of interest-rate swap agreements are deferred as an adjustment to the carrying amount of the outstanding debt and amortized as an adjustment to interest expense related to the debt over the remaining term of the original contract life of the terminated swap agreement. In the event of the early extinguishment of a designated debt obligation, any realized or unrealized gain or loss from the swap would be recognized in income coincident with the extinguishment gain or loss.
INTEREST RATE CAP AGREEMENTS
The Company purchases interest-rate cap agreements that are designed to limit its exposure to increasing interest rates. An interest rate cap entitles the Company to receive a payment from the counter-party equal to the excess, if any, of the hypothetical interest expense (strike price) on a specified notional amount at a current market interest rate over an amount specified in the agreement. The only amount the Company is obligated to pay to the counterparty is an initial premium. The strike price of these agreements exceeds the current market levels at the time they are entered into. The cost of these agreements is included in other assets and amortized to interest expense ratably during the life of the agreement.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications were made to the prior year financial statements to conform to the current year presentation.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
2. ACQUISITIONS AND DISPOSITIONS OF ASSETS
Pro forma information to present operating results as if the acquisitions discussed below had occurred at the beginning of the year acquired is not presented because the Company, generally, changes the programming format of the radio stations such that the source and nature of revenue and operating expenses are significantly different than they were prior to the acquisition and, accordingly, historical and pro forma financial information is not considered meaningful by management. Pro forma and historical financial information of radio stations acquired where the format was not changed is not significant to the consolidated financial position or operating results of the Company.
During the nine months ended September 30, 1997, the Company purchased the assets (principally intangibles) of the following radio stations:
ACQUISITION MARKET PURCHASE
DATE STATION SERVED PRICE
----------- ------- ------ --------------
(IN THOUSANDS)
January 21, 1997............. WHK-AM Cleveland, OH $ 6,220
February 20, 1997............ WHK-FM Canton, OH 5,903
February 20, 1997............ WHLO-AM Akron, OH 1,995
February 28, 1997............ WEZE-AM Boston, MA 7,030
April 2, 1997................ KTKZ-AM Sacramento, CA 1,485
July 18, 1997................ WITH-AM Baltimore, MD 1,114
July 18, 1997................ WTSJ-AM Cincinnati, OH 1,114
-------
$24,861
=======
|
The purchase price has been allocated to the assets acquired as follows:
ASSET AMOUNT
----- ------
(IN THOUSANDS)
Property and equipment...................................... $ 3,534
Broadcast licenses and other intangibles.................... 21,327
-------
$24,861
=======
|
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
2. ACQUISITIONS AND DISPOSITIONS OF ASSETS, CONTINUED
During the year ended December 31, 1996, the Company purchased the assets (principally intangibles) (and in the case of KBIQ-FM, all of the outstanding shares of common stock) of the following radio stations:
ACQUISITION MARKET PURCHASE
DATE STATION SERVED PRICE
----------- ------- ------ --------------
(IN THOUSANDS)
February 1, 1996........ KTSL-FM Seattle, WA $ 900
February 1, 1996........ KLTE-FM Kirksville, MO 550
February 1, 1996........ KPRZ-FM Colorado Springs, CO 1,400
March 1, 1996........... KGFT-FM Colorado Springs, CO 3,000
March 15, 1996.......... KNUS-AM Denver, CO 1,100
October 5, 1996......... KPXQ-AM Phoenix, AZ 6,500
October 25, 1996........ KBIQ-FM Colorado Springs, CO 2,825
December 6, 1996........ KKMS-AM Minneapolis, MN 1,894
December 30, 1996....... KWRD-FM Dallas, TX 40,100
April 3, 1996........... Standard News Network Washington, D.C. --
August 1, 1996.......... The Word in Music Colorado Springs, CO 120
August 23, 1996......... Morningstar Radio Network Nashville, TN 1,232
-------
$59,621
=======
|
The purchase price has been allocated to the assets acquired as follows:
ASSET AMOUNT
----- ------
(IN THOUSANDS)
Property and equipment...................................... $ 3,767
Broadcast licenses.......................................... 53,116
Goodwill and other intangibles.............................. 2,738
-------
$59,621
=======
|
In 1996, the Company sold the assets (principally intangibles) of radio stations WTJY-FM (Johnstown, Ohio), for $1.5 million, KLTE-FM (Kirksville, Missouri), for $550,000 and KDBX-FM (Banks, Oregon), for $14 million. In addition, KDFX-AM (Dallas, Texas), was exchanged as part of the purchase price of KWRD-FM. The Company received approximately $8 million of value of KDFX-AM towards the total purchase price of KWRD-FM of $40.1 million, resulting in a gain recognized of approximately $4.0 million.
In 1995, the Company purchased the assets (principally intangibles) (and in the case of KDBX-FM, all of the outstanding shares of common stock) of the following radio stations:
ACQUISITION MARKET PURCHASE
DATE STATION SERVED PRICE
----------- ------- ------ --------------
(IN THOUSANDS)
August 1, 1995................... KDBX-FM Portland, OR $ 1,850
August 9, 1995................... KDFX-AM Dallas, TX 4,500
April 14, 1995................... KFIA-AM Sacramento, CA 3,850
March 4, 1995.................... KKHT-FM Houston, TX 11,850
March 4, 1995.................... KENR-AM Houston, TX 2,500
-------
$24,550
=======
|
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 IS
UNAUDITED)
2. ACQUISITIONS AND DISPOSITIONS OF ASSETS, CONTINUED
The purchase price has been allocated to the assets acquired as follows:
ASSET AMOUNT
----- ------
(IN THOUSANDS)
Property and equipment...................................... $ 5,125
Broadcast licenses.......................................... 17,572
Goodwill and other intangibles.............................. 1,853
-------
$24,550
=======
|
In 1994, the Company purchased the assets (principally intangibles) of the following radio stations:
ACQUISITION MARKET PURCHASE
DATE STATION SERVED PRICE
----------- ------- ------ --------------
(IN THOUSANDS)
January 3, 1994................. KRKS-AM Denver, CO $ 400
August 5, 1994.................. WWDJ-AM New York, NY 7,985
August 5, 1994.................. WZZD-AM Philadelphia, PA 4,600
August 5, 1994.................. KSLR-AM San Antonio, TX 1,000
April 24, 1994.................. WTJY-FM Columbus, OH 650
August 23, 1994................. KLFE-AM Seattle, WA 300
-------
$14,935
=======
|
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following at December 31:
DECEMBER 31 SEPTEMBER 30
--------------- 1997
1995 1996 (UNAUDITED)
------- ------- ------------
(IN THOUSANDS)
Land............................................ $ 352 $ 356 $ 391
Buildings....................................... 1,744 2,084 1,783
Office furnishings and equipment................ 5,336 7,057 7,676
Antennae, towers and transmitting equipment..... 20,068 23,210 25,582
Studio and production equipment................. 9,127 11,545 12,694
Record and tape libraries....................... 442 442 442
Automobiles..................................... 82 81 62
Leasehold improvements.......................... 1,892 2,997 3,141
Construction-in-progress........................ 1,679 1,633 6,202
------- ------- -------
40,722 49,405 57,973
Less accumulated depreciation................... 16,127 19,098 21,801
------- ------- -------
$24,595 $30,307 $36,172
======= ======= =======
|
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
4. LONG-TERM DEBT
Long-term debt consisted of the following at:
DECEMBER 31 SEPTEMBER 30
---------------- 1997
1995 1996 (UNAUDITED)
------- -------- ------------
(IN THOUSANDS)
Note payable to banks and revolving line of
credit....................................... $81,020 $ 89,390 $ 10,100
9 1/2% Senior Subordinated Notes due 2007..... -- -- 150,000
Note payable to seller of KWRD-FM............. -- 30,500 --
Unsecured notes payable to shareholder with
interest at a bank's prime rate plus 1 1/4%.. -- 1,900 --
------- -------- --------
81,020 121,790 160,100
Less current portion.......................... 6,000 -- --
------- -------- --------
$75,020 $121,790 $160,100
======= ======== ========
|
Since the note payable to banks and revolving line of credit carry floating interest rates, the carrying amount approximates their fair market value. The Notes were issued in September 1997 at par; the carrying amount approximates their fair market value.
CREDIT AGREEMENTS WITH BANKS
In January 1997, Salem amended and restated its credit agreement with five banks to provide for a $150 million revolving line of credit. Interest was payable quarterly. Commencing June 30, 1999, the commitment under the credit agreement reduced by $12.5 million semiannually through December 31, 2002, and by $25 million semiannually through December 31, 2003, when the credit agreement was to expire. The classification of the notes payable to banks and revolving line of credit in the accompanying balance sheet at December 31, 1996 is based on the terms of this credit agreement. The interest rate on amounts outstanding at December 31, 1996 under this credit agreement was 7.83%.
In September 1997, Salem entered into a new credit agreement with the five banks (the Credit Agreement) to provide for borrowing capacity of up to $75 million under a revolving line of credit. The maximum amount that the Company may borrow under the Credit Agreement is limited by the Company's debt to cash flow ratio, adjusted for recent radio station acquisitions as defined in the Credit Agreement (the Adjusted Debt to Cash Flow Ratio). At September 30, 1997, the maximum Adjusted Debt to Cash Flow Ratio allowed under the Credit Agreement was 7.00 to 1.00. The Company's ability to borrow for the purpose of acquiring a radio station is further limited by the Credit Agreement in that the Company may not borrow for an acquisition if the Adjusted Debt to Cash Flow Ratio is greater than 6.00 to 1.00. At September 30, 1997, the Adjusted Debt to Cash Flow Ratio was 6.07 to 1.00, resulting in total borrowing availability of approximately $19.9 million, none of which can currently be used for radio station acquisitions. The note evidencing the indebtedness bears interest at a fluctuating base rate plus a spread that was determined by Salem's Adjusted Debt to Cash Flow Ratio. At Salem's option, the base rate is either a bank's prime rate or LIBOR. For purposes of determining the interest rate the prime rate spread ranges from 0% to 1.75%, and the LIBOR spread ranges from 1% to 3%. Interest is payable quarterly. Commencing March 31, 1999, the commitment under the Credit Agreement reduces by $2.5 million quarterly through December 31, 2003, and by $6.25 million quarterly through June 30, 2004. The Credit Agreement expires August 31, 2004. The classification of the amounts due under the revolving line of credit in the accompanying balance sheet at September 30, 1997 is based on the terms of the Credit Agreement.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
4. LONG-TERM DEBT, CONTINUED
The Credit Agreement with the banks (a) provides for restrictions on additional borrowings and leases; (b) prohibits Salem, without prior approval from the banks, from paying dividends, liquidating, merging, consolidating or selling its assets or business, and (c) requires Salem to maintain certain financial ratios and other covenants. Salem has pledged all of its assets as collateral under the Credit Agreement. Additionally, all the Company's stock holdings in its subsidiaries are pledged as collateral.
In September 1997, in connection with the issuance of the Notes and the Credit Agreement the Company repaid all amounts due under the revolving line of credit with the banks. The Company wrote off certain deferred financing costs and terminated all of its interest rate swap and cap agreements associated with the line of credit (see Note 5). The write-off and termination fees of $1,090,000, net of a $755,000 income tax benefit, was recorded as an extraordinary item in the accompanying statement of operations for the nine months ended September 30, 1997.
In March 1995, Salem amended and restated its then existing credit agreement with two banks. The number of banks which were parties to the credit agreement was increased to five, and the credit facility was structured to provide for a $50 million term loan and a $50 million revolving line of credit. In connection with the refinancing the Company repaid all amounts due under the then existing credit agreement with the two banks and senior subordinated notes payable to insurance companies and wrote off certain deferred financing costs as well as a make-whole premium to the insurance companies. The write- off of $394,000, net of a $263,000 income tax benefit, was recorded as an extraordinary item in the accompanying statement of operations for 1995.
SENIOR SUBORDINATED NOTES
The Notes bear interest at 9 1/2% per annum, with interest payment dates on April 1 and October 1, commencing April 1, 1998. Principal is due on the maturity date, October 1, 2007. The Notes are redeemable at the option of the Company, in whole or in part, at any time on or after October 1, 2002, at the redemption prices specified in the indenture. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis by the Guarantors (the Company's subsidiaries). The Notes are general unsecured obligations of the Company, subordinated in right of payment to all existing and future senior indebtedness, including the Company's obligations under the Credit Agreement. The indenture limits the incurrence of additional indebtedness by the Company, the payment of dividends, the use of proceeds of certain asset sales, and contains certain other restrictive covenants affecting the Company. The Company has filed a registration statement under the Securities Act of 1933, relating to an exchange offer for the Notes (the Exchange Offer). If such registration statement has not become effective or the Exchange Offer is not consummated within the time periods set forth in the registration rights agreement, the interest rate on the Notes will be increased. The exchange notes (the Exchange Notes) will be identical in all material respects to the Notes except that the Exchange Notes will not contain terms with respect to transfer restrictions or provide for penalty amounts for future periods. The Exchange Notes are fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis by the Guarantors. The Exchange Notes would in general be freely transferable after the Exchange Offer without further registration under the Securities Act of 1933.
OTHER DEBT
The $30,500,000 note payable to the seller of KWRD-FM represents amounts payable at December 31, 1996, under a purchase agreement. The amount was paid in January 1997 with the proceeds from a borrowing under the revolving line of credit with the banks; accordingly, the amount is reflected as long-term debt in the accompanying balance sheet at December 31, 1996, consistent with the terms of the January 1997 credit agreement.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
4. LONG-TERM DEBT, CONTINUED
In December 1996, the Company borrowed $1.9 million from one of its shareholders. The note was repaid, including interest at 9 1/4%, on January 10, 1997, with proceeds from a borrowing under the revolving line of credit with the banks; accordingly, the amount is reflected as long-term debt in the accompanying balance sheet at December 31, 1996, consistent with the terms of the January 1997 credit agreement.
MATURITIES OF LONG-TERM DEBT
Principal repayment requirements under all long-term debt agreements outstanding at December 31, 1996 and September 30, 1997, for each of the next five years and thereafter are as follows:
SEPTEMBER 30
DECEMBER 31 1997
1996 (UNAUDITED)
----------- ------------
(IN THOUSANDS)
1997............... $ -- $ --
1998............... -- --
1999............... -- --
2000............... 21,790 --
2001............... 25,000 --
Thereafter......... 75,000 160,100
-------- --------
$121,790 $160,100
======== ========
|
The repayment requirements as of December 31, 1996 are per the revolving line of credit agreement with the banks that the Company entered into in January 1997. The repayment requirements as of September 30, 1997 are per the Credit Agreement and the Notes.
5. INTEREST RATE CAP AND SWAP AGREEMENTS
Salem had entered into interest rate swap and cap agreements to reduce the impact of changes in interest rates on its floating-rate long-term debt. At December 31, 1996, Salem had two outstanding interest rate cap agreements with commercial banks, having a notional principal amount of $35 million. The agreements effectively changed Salem's interest rate exposure on $35 million of its senior secured notes to a fixed rate of 11.75% (including the interest rate spread of 2.25%). In addition, Salem had two interest rate swap agreements with two other commercial banks, having an aggregate notional principal amount of $10 million. These agreements effectively changed Salem's interest rate exposure on $5 million of its senior secured notes to a fixed rate of 11.36% (including the interest rate spread of 2.25%) and on $5 million of its senior secured notes to a fixed rate of 9.035% (including the interest rate spread of 2.25%). The interest rate cap agreements were to mature in March 1998, and the interest rate swap agreements were to mature in March 1999. Salem is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap and cap agreements. However, Salem does not anticipate nonperformance by the counterparties.
The fair value of the above interest rate swap agreements which are not recognized in the financial statements reflected a negative value of the swaps of $400,955 at December 31, 1996. The fair market value of the interest rate cap agreements was $2,000 at December 31, 1996.
In March 1997, Salem amended its swap agreements to an aggregate notional amount of $21.5 million, expiring in March 2001. These agreements effectively changed Salem's interest rate exposure on $11.5 million
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
5. INTEREST RATE CAP AND SWAP AGREEMENTS, CONTINUED
of its senior secured notes to a fixed 9.405% (including the interest rate spread of 2.25%), and on $10 million of its senior secured notes to a fixed 8.885% (including the interest rate spread of 2.25%). Also in March 1997, Salem entered into two cap agreements having an aggregate notional amount of $38.5 million, expiring in March 2000. The agreements effectively changed Salem's interest rate exposure on $38.5 million of its senior secured notes to a fixed rate of 11.75% (including the interest rate spread of 2.25%).
Salem assigned its obligation under a $5 million swap agreement to another bank on January 8, 1996, for a fee of $426,000. This fee was being amortized to interest expense over the term of the original agreement of three years. In September 1997, in connection with the issuance of the Notes and the Credit Agreement the Company terminated all of its interest rate swap and cap agreements for aggregate fees of $417,000. The Company wrote off these costs (unamortized swap fee of $201,000 and the swap termination fee of $417,000) in September 1997. This write-off, net of income tax benefit, was included in the extraordinary loss in the accompanying statement of operations for the nine months ended September 30, 1997 (see Note 4).
6. INCOME TAXES
As discussed in Note 1, prior to the Reorganization, New Inspiration and Golden Gate were S corporations for income tax purposes. Accordingly, any federal and state income tax liability on net income of the S corporations has been the liability of shareholders of the S corporations. The S corporation status of New Inspiration and Golden Gate was terminated in the Reorganization, which was effective August 13, 1997, and the income of New Inspiration and Golden Gate will thereafter be subject to federal and state income taxes. The accompanying consolidated statements of operations include an unaudited pro forma income tax adjustment, using an estimated combined effective tax rate of approximately 40%, to reflect the estimated income tax expense of the Company as if New Inspiration and Golden Gate had been subject to federal and state income taxes for the periods presented. In connection with the Reorganization, which resulted in the termination of the S corporation status of New Inspiration and Golden Gate, the Company recorded a deferred tax liability and provision of approximately $612,000 in September 1997.
The consolidated provision (benefit) for income taxes for Salem consisted of the following at December 31:
1994 1995 1996
----- ----- ------
(IN THOUSANDS)
Current:
Federal........................ $ 14 $ 45 $ 189
State.......................... (47) 314 333
----- ----- ------
(33) 359 522
Deferred:
Federal........................ (321) (775) 5,737
State.......................... 107 (51) 396
----- ----- ------
(214) (826) 6,133
Current tax benefit reflected in
net extraordinary loss.......... -- (263) --
----- ----- ------
Income tax provision (benefit)... $(247) $(204) $6,655
===== ===== ======
|
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
6. INCOME TAXES, CONTINUED
The consolidated deferred tax asset and liability consisted of the following at December 31:
1995 1996
------ -------
(IN THOUSANDS)
Deferred tax assets:
Financial statement accruals not currently deductible.... $ 359 $ 447
Net operating loss, AMT credit and other carryforwards... 910 280
State taxes.............................................. 95 102
------ -------
Total deferred tax assets.................................. 1,364 829
Valuation allowance for deferred tax assets................ (95) (95)
------ -------
Net deferred tax assets.................................... 1,269 734
Deferred tax liabilities:
Excess of net book value of property, plant and equipment
for financial reporting purposes over income tax
purposes................................................ 2,498 2,700
Excess of net book value of intangible assets for
financial reporting purposes over income tax purposes... 3,272 8,668
Other.................................................... 257 256
------ -------
Total deferred tax liabilities............................. 6,027 11,624
------ -------
Net deferred tax liabilities............................... $4,758 $10,890
====== =======
|
A reconciliation of the statutory federal income tax rate to the effective tax rate, as a percentage of income before income taxes, is as follows:
YEAR ENDED
DECEMBER 31
------------------
1994 1995 1996
---- ---- ----
Statutory federal income tax rate........................ 34 % 34 % 34 %
State income taxes, net.................................. (13) 53 3
Exclusive of income taxes of S corporations and the
Partnership............................................. (82) (177) (7)
Change in valuation allowance............................ 21 -- --
Other, net............................................... (16) 25 4
--- ---- ---
(56)% (65)% 34 %
=== ==== ===
|
The S corporations had book income before income taxes of $1,062,191, $1,791,580 and $3,814,431 in 1994, 1995 and 1996, respectively. These amounts include the S corporations' 85% ownership interest in Beltway.
In 1996 the increase in the deferred tax liabilities related to intangible assets is primarily due to gains on the disposal of assets of approximately $14.6 million that are deferred for tax purposes under (S)1031 of the Internal Revenue Code.
At December 31, 1996, the Company has net operating loss carryforwards for state income tax purposes of approximately $1,200,000 which expire in years 1997 through 2008. The Company has federal alternative minimum tax credit carryforwards of approximately $109,000. For financial reporting purposes, a valuation allowance of $95,000 has been provided in 1996 and 1995 to offset a portion of the deferred tax assets related to the state net operating loss carryforwards.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
7. COMMITMENTS AND CONTINGENCIES
Salem leases various land, offices, studios and other equipment under operating leases that expire over the next 10 years. The majority of these leases may be renewed for successive periods ranging from one to five years on terms similar to current agreements except for specified increases in lease payments. Rental expense included in operating expense under all lease agreements was $2,485,661, $3,123,049 and $3,821,254 in 1994, 1995 and 1996, respectively.
Future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 1996, are as follows:
RELATED
PARTIES OTHER TOTAL
------- ------- -------
(IN THOUSANDS)
1997........................... $1,046 $ 3,255 $ 4,301
1998........................... 1,045 3,259 4,304
1999........................... 1,045 3,208 4,253
2000........................... 1,045 2,724 3,769
2001........................... 1,045 2,149 3,194
Thereafter..................... 1,539 8,068 9,607
------ ------- -------
$6,765 $22,663 $29,428
====== ======= =======
|
The Company is involved in certain legal actions and claims arising in the normal course of business. It is the opinion of management that such litigation and claims will be resolved without material effect on the Company's consolidated financial position, operations and cash flows.
The Company has a deferred compensation agreement with one of its officers, which provides for retirement payments to the officer for a period of ten consecutive years, if he remains employed by the Company until age 60. The retirement payments are based on a formula defined in the agreement. The estimated obligation under the deferred compensation agreement is being provided for over the service period. At September 30, 1997, a liability of approximately $355,000 is included in accrued compensation in the accompanying balance sheet for the amounts earned under this agreement.
8. RELATED PARTY TRANSACTIONS
A shareholder's trust owns real estate on which certain assets of two radio stations are located. Salem, in the ordinary course of its business, entered into two separate lease agreements with this trust. Rental expense included in operating expense for 1994, 1995 and 1996 amounted to $66,501, $55,915, and $57,003, respectively.
Land and buildings occupied by various Salem radio stations are leased from the shareholders of Salem. Rental expense under these leases included in operating expense for 1994, 1995 and 1996 amounted to $574,410, $690,380 and $827,378, respectively.
At December 31, 1995, notes receivable from shareholders totaled $3,387,080. The notes bore interest at the Applicable Federal Rate and were payable upon demand. In December 1996, New Inspiration and Golden Gate distributed $5.5 million to the shareholders, of which $4.8 million was used by the shareholders to repay the notes receivable and accrued interest.
In June 1997, the Company entered into a local marketing agreement (LMA) with a corporation, Sonsinger, Inc. ("Sonsinger"), owned by two of Salem's shareholders for radio station KKOL-AM. Under the LMA, Salem programs KKOL-AM and sells all the airtime. Salem retains all of the revenue and incurs all of the expenses related to the operation of KKOL-AM and pay no fees or rent under the LMA.
SALEM COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)
9. DEFINED CONTRIBUTION PLAN
In 1993, the Company established a 401(k) defined contribution plan (the Plan), which covers all eligible employees (as defined in the Plan). Participants are allowed to make nonforfeitable contributions up to 15% of their annual salary, but may not exceed the annual maximum contribution limitations established by the Internal Revenue Service. The Company currently matches 10% of the amounts contributed by each participant but does not match participants' contributions in excess of 10% of their compensation per pay period. The Company contributed $36,000, $44,000 and $48,000 to the Plan in 1994, 1995 and 1996, respectively.
10. SUBSEQUENT EVENTS (UNAUDITED)
In October 1997, the Company assigned its contract with a tower construction company to build a broadcast tower in Houston to two of the Company's shareholders (the Principal Shareholders), subject to the Principal Shareholders obtaining financing. The Principal Shareholders will reimburse the Company for its costs and expenses, which amounted to approximately $2.9 million as of September 30, 1997. The antenna for the Company's station in Houston, KKHT-FM, will be located on the tower and the Company will pay rent to the Principal Shareholders. Proceeds from the sale will be used to reduce borrowings.
In October 1997, the Company purchased the assets of radio station WCCD-AM, Cleveland, Ohio, for $700,000 from available cash. The Company had operated WCCD-AM under an LMA since April 1997.
In November 1997, the Company sold substantially all of the assets of radio station WPZE-AM, Boston, Massachusetts, for $5 million. Proceeds from the sale are being held by a qualified intermediary under a like-kind exchange agreement to preserve the Company's ability to effect a tax-deferred exchange. If the Company does not identify replacement property it will use the proceeds to reduce borrowings.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN- FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURIS- DICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
----
Available Information and Incorporation by Reference...................... 1
Prospectus Summary........................................................ 3
Risk Factors ............................................................. 14
Use of Proceeds .......................................................... 19
The Exchange Offer........................................................ 19
Selected Consolidated Financial Information of the Company ............... 27
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 30
Business.................................................................. 36
Management................................................................ 53
Certain Transactions ..................................................... 56
Securities Ownership of Certain Beneficial Owners......................... 60
Description of Certain Indebtedness ...................................... 60
Description of the Notes ................................................. 62
Certain Federal Income Tax Considerations................................. 89
Plan of Distribution...................................................... 90
Legal Matters............................................................. 90
Experts................................................................... 90
Index to Financial Statements............................................. F-1
|
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES, WHETHER OR NOT PARTICIPATING IN THIS EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
$150,000,000
[LOGO OF SALEM COMMUNICATIONS CORPORATION]
OFFER FOR ALL OUTSTANDING
9 1/2% SERIES A SENIOR
SUBORDINATED
NOTES DUE 2007
IN EXCHANGE FOR 9 1/2%
SERIES B SENIOR SUBORDINATED NOTES
DUE 2007
PROSPECTUS
, 1998
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Salem Communications Corporation (the "Company"), is a California corporation and, therefore, is subject to the California General Corporations Code.
Subject to certain limitations, Section 317 of the California General Corporations Code provides in part that a corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that the person is or was an agent (which term includes officers and directors) of the corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful.
The California indemnification statute, as provided in Section 317 of the California General Corporations Code (noted above), is nonexclusive and allows a corporation to expand the scope of indemnification provided, whether by provisions in its bylaws or by agreement, to the extent authorized in the corporation's articles.
The Company's bylaws provides that the Company "shall, to the maximum extent permitted by California General Corporation Law, indemnify each of its agents against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the corporation." The indemnification extends to an "agent" of the Company including "any person who is or was a director, officer, employee or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation."
The indemnification provisions in the Company's bylaws may permit indemnification for liabilities arising under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
The Guarantors are organized in various jurisdictions. Indemnification of the Guarantors' directors, officers and agents provided by applicable law, by each Guarantor's articles or certificates of incorporation, bylaws, by contract or otherwise are substantially similar to that afforded the directors, officers and agents of the Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
*1.01 Placement Agreement, dated September 17, 1997, among the Company,
the Guarantors, and Furman Selz LLC, Smith Barney, Inc.,
BancBoston Securities, Inc., and BNY Capital Markets, Inc.
(collectively, the "Initial Purchasers").
*1.02 Registration Rights Agreement, dated September 17, 1997, between
the Company, the Guarantors and the Initial Purchasers.
**1.03 Form of Letter of Transmittal.
|
II-1
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
**1.04 Form of Notice of Guaranteed Delivery.
*3.01 Articles of Incorporation of the Company.
*3.02 Bylaws of the Company.
*3.03 Partnership Agreement of Beltway Media Partners.
*3.04 Articles of Incorporation of ATEP Radio, Inc.
*3.05 Bylaws of ATEP Radio, Inc.
*3.06 Articles of Incorporation of Bison Media, Inc.
*3.07 Bylaws of Bison Media, Inc.
*3.08 Articles of Incorporation of Caron Broadcasting, Inc.
*3.09 Code of By-laws of Caron Broadcasting, Inc.
*3.10 Articles of Incorporation of Common Ground Broadcasting, Inc.
*3.11 Bylaws of Common Ground Broadcasting, Inc.
*3.12 Articles of Incorporation of Golden Gate Broadcasting Company,
Inc.
*3.13 Bylaws of Golden Gate Broadcasting Company, Inc.
*3.14 Articles of Incorporation of Inland Radio, Inc.
*3.15 Bylaws of Inland Radio, Inc., a California Corporation.
*3.16 Articles of Incorporation of Inspiration Media, Inc.
*3.17 Bylaws of Inspiration Media, Inc.
*3.18 Articles of Incorporation of Inspiration Media of Texas, Inc.
*3.19 Bylaws of Inspiration Media of Texas, Inc.
*3.20 Articles of Organization of New England Continental Media Inc.
*3.21 By-laws of New England Continental Media Inc.
*3.22.01 Articles of Incorporation of New Inspiration Broadcasting
Company, Inc.
*3.22.02 Articles of Incorporation of Inspirational Media of Southern
California, Inc. (see Exhibit 3.22.03 for name change to New
Inspiration Broadcasting Company, Inc.).
*3.22.03 Certificate of Ownership of Inspirational Media of Southern
California, Inc. (evidencing merger of New Inspiration
Broadcasting Company, Inc. with and into the corporation and
revision of articles to adopt the name New Inspiration
Broadcasting Company, Inc.).
*3.23 Bylaws of Inspirational Broadcasting Company, Inc. (see Exhibit
3.22.03 for name change to New Inspiration Broadcasting
Company, Inc.).
*3.24 Articles of Incorporation of Oasis Radio, Inc.
*3.25 Bylaws of Oasis Radio, Inc.
*3.26 Articles of Incorporation of Pennsylvania Media Associates, Inc.
*3.27 Pennsylvania Media Associates, Inc. By-laws
*3.28 Articles of Incorporation of Radio 1210, Inc.
*3.29 Bylaws of Radio 1210, Inc.
*3.30 Certificate of Incorporation of Salem Communications Corporation
(a Delaware corporation).
*3.31 Salem Communications Corporation Bylaws (a Delaware
corporation).
|
II-2
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
*3.32 Certificate of Incorporation of Salem Media Corporation.
*3.33 By-laws of Salem Media Corporation.
*3.34.01 Articles of Incorporation of John Brown Schools of California,
Inc. (see Exhibit 3.34.03 for name change to Salem Media of
California, Inc.).
*3.34.02 Certificate of Amendment of Articles of Incorporation of John
Brown Schools of California, Inc. (see Exhibit 3.34.03 for name
change to Salem Media of California, Inc.).
*3.34.03 Certificate of Amendment of Articles of Incorporation of John
Brown Schools of California, Inc. (amending the name of the
corporation to be Salem Media of California, Inc.).
*3.35 By-laws of Salem Media of California, Inc.
*3.36 Articles of Incorporation of Salem Media of Colorado, Inc.
*3.37 Bylaws of Salem Media of Colorado, Inc.
*3.38 Articles of Incorporation of Salem Media of Louisiana, Inc.
*3.39 By-laws of Salem Media of Louisiana, Inc.
*3.40 Articles of Incorporation of Salem Media of Ohio, Inc.
*3.41 Code of By-laws For the Government of the Board of Directors of
Salem Media of Ohio, Inc.
*3.42 Articles of Incorporation of Salem Media of Oregon, Inc.
*3.43 Bylaws of Salem Media of Oregon, Inc.
*3.44 Articles of Incorporation of Salem Media of Pennsylvania, Inc.
*3.45 Salem Media of Pennsylvania, Inc. By-laws.
*3.46 Articles of Incorporation of Salem Media of Texas, Inc.
*3.47 Bylaws of Salem Media of Texas, Inc.
*3.48 Articles of Incorporation of Salem Music Network, Inc.
*3.49 Bylaws of Salem Music Network, Inc.
*3.50 Certificate of Incorporation of Salem Radio Network
Incorporated.
*3.51 Salem Radio Network Incorporated Bylaws.
*3.52 Articles of Incorporation of Salem Radio Representatives, Inc.
*3.53 Bylaws of Salem Radio Representatives, Inc.
*3.54 Articles of Incorporation of South Texas Broadcasting, Inc.
*3.55 Bylaws of South Texas Broadcasting, Inc.
*3.56 Articles of Incorporation of SRN News Network, Inc.
*3.57 Bylaws of SRN News Network, Inc.
*3.58 Articles of Incorporation of Vista Broadcasting, Inc.
*3.59 Bylaws of Vista Broadcasting, Inc.
*4.01 Indenture between the Company, the Guarantors and The Bank of
New York, as Trustee, dated as of September 25, 1997, relating
to the Old Notes and the Notes, including form of Note.
*4.02 Form of Note (filed as part of Exhibit 4.01).
*4.03 Form of Note Guarantee (filed as part of Exhibit 4.01).
*4.04 Registration Rights Agreement, dated September 25, 1997, between
the Company, the Guarantors and the Initial Purchasers (filed
as Exhibit 1.02).
|
II-3
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
*4.05 Letter of Transmittal (filed as Exhibit 1.03).
*4.06 Notice of Guaranteed Delivery (filed as Exhibit 1.04).
*4.07 Credit Agreement, dated as of September 25, 1997, among the
Company, the several Lenders from time to time parties thereto,
and The Bank of New York, as administrative agent for the
Lenders.
*4.08 Borrower Security Agreement, dated as of September 25, 1997, by
and between the Company and The Bank of New York, as
Administrative Agent of the Lenders.
*4.09 Subsidiary Guaranty and Security Agreement dated as of September
25, 1997, by and between the Company, the Guarantors, and The
Bank of New York, as Administrative Agent.
5.01 Opinion and Consent of Gibson, Dunn & Crutcher LLP, regarding
validity and enforceability of the Notes and Guarantees
*10.01 Employment Agreement, dated as of August 1, 1997, between the
Company and Edward G. Atsinger III.
*10.02 Employment Agreement, dated as of August 1, 1997, between the
Company and Stuart W. Epperson.
*10.03.01 Employment Contract, dated November 7, 1991, between the Company
and Eric H. Halvorson.
*10.03.02 First Amendment to Employment Contract, dated April 22, 1996,
between the Company and Eric H. Halvorson.
*10.03.03 Second Amendment to Employment Contract, dated July 8, 1997,
between the Company and Eric H. Halvorson.
*10.03.04 Deferred Compensation Agreement, dated November 7, 1991, between
the Company and Eric H. Halvorson.
*10.04.01 Employment Agreement, dated February 9, 1995, between Salem Radio
Network Incorporated and Greg R. Anderson.
*10.04.02 Letter Agreement dated December 22, 1995, by Inspiration Media of
Texas, Inc. re compensation of Greg R. Anderson under Employment
Agreement with Salem Radio Network Incorporated.
*10.04.03 First Amendment to Employment Agreement, dated August 1, 1997
between Salem Radio Network Incorporated and Greg R. Anderson.
*10.05.01 Antenna/tower lease between Caron Broadcasting, Inc. (WHLO-
AM/Akron, Ohio) and Messrs. Atsinger and Epperson expiring 2007.
*10.05.02 Antenna/tower/studio lease between Caron Broadcasting, Inc.
(WTSJ-AM/Cincinnati, Ohio) and Messrs. Atsinger and Epperson
expiring 2007.
*10.05.03 Antenna/tower lease between Caron Broadcasting, Inc. (WHK-
FM/Canton, Ohio) and Messrs. Atsinger and Epperson expiring
2007.
*10.05.04 Antenna/tower/studio lease between Common Ground Broadcasting,
Inc. (KKMS-AM/Eagan, Minnesota) and Messrs. Atsinger and
Epperson expiring in 2006.
10.05.05 Antenna/tower lease between Common Ground Broadcasting, Inc.
(WHK-AM/Cleveland, Ohio) and Messrs. Atsinger and Epperson
expiring 2008.
10.05.06 Antenna/tower lease (KFAX-FM/Hayward, California) and Salem
Broadcasting Company, a partnership consisting of Messrs.
Atsinger and Epperson, expiring in 2003.
10.05.07 Antenna/tower/studio lease between Inland Radio, Inc. (KKLA-
AM/San Bernardino, California) and Messrs. Atsinger and Epperson
expiring 2002.
|
II-4
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
10.05.08 Antenna/tower lease between Inspiration Media, Inc. (KGNW-
AM/Seattle, Washington) and Messrs. Atsinger and Epperson
expiring in 2002.
10.05.09 Antenna/tower lease between Inspiration Media, Inc. (KLFE-
AM/Seattle, Washington) and The Atsinger Family Trust and
Stuart W. Epperson Revocable Living Trust expiring in 2004.
10.05.10 Antenna/tower lease between Oasis Radio, Inc (KAVC-
FM/Rosamond, California) and The Atsinger Family Trust under
a lease expiring in 2002.
10.05.11.01 Antenna/tower/lease between Pennsylvania Media Associates,
Inc. (WZZD-AM/
WFIL-AM/Philadelphia, Pennsylvania) and Messrs. Atsinger and
Epperson, as
assigned from WEAZ-FM Radio, Inc., expiring 2004.
10.05.11.02 Antenna/tower/studio lease between Pennsylvania Media
Associates, Inc. (WZZD-AM/ WFIL-AM/Philadelphia,
Pennsylvania) and The Atsinger Family Trust and Stuart W.
Epperson Revocable Living Trust expiring 2004.
10.05.12 Antenna/tower lease between Radio 1210, Inc. (KPRZ-
AM/Olivenhain, California) and The Atsinger Family Trust
expiring in 2002.
10.05.13 Antenna/tower lease between Salem Media Corporation (WYLL-
FM/Arlington Heights, Illinois) and Messrs. Atsinger and
Epperson expiring in 2002.
10.05.14 Antenna/turner/studio leases between Salem Media Corporation
(KLTX-AM/Long Beach and Paramount, California) and Messrs.
Atsinger and Epperson expiring in 2002.
10.05.15 Antenna/tower lease between Salem Media of Colorado, Inc.
(KNUS-AM/Denver-Bolder, Colorado) and Messrs. Atsinger and
Epperson expiring 2006.
10.05.16 Antenna/tower lease between Salem Media of Ohio, Inc. (WRFD-
AM/Columbus, Ohio) and Messrs. Atsinger and Epperson expiring
2002.
10.05.17.01 Studio Lease between Salem Media of Oregon, Inc. (KPDQ-
AM/FM/Portland, Oregon) and Edward G. Atsinger III, Mona J.
Atsinger, Stuart W. Epperson, and Nancy K. Epperson expiring
2002.
10.05.17.02 Antenna/tower lease between Salem Media of Oregon, Inc. (KPDQ-
AM/FM/Raleigh Hills, Oregon and Messrs. Atsinger and Epperson
expiring 2002.
10.05.18 Antenna/tower lease between Salem Media of Pennsylvania, Inc.
(WORD-FM/WPIT-AM/ Pittsburgh, Pennsylvania) and The Atsinger
Family Trust and Stuart W. Epperson Revocable Living Trust
expiring 2003.
10.05.19 Antenna/tower lease between Salem Media of Texas, Inc. (KSLR-
AM/San Antonio, Texas) and Epperson-Atsinger 1983 Family
Trust expiring 2007.
10.05.20 Antenna/tower lease between South Texas Broadcasting, Inc.
(KENR-AM/KKHT-FM/ Houston-Galveston, Texas) and Atsinger
Family Trust and Stuart W. Epperson Revocable Living Trust
expiring 2005.
10.05.21 Antenna/tower lease between Vista Broadcasting, Inc. (KFIA-
AM/Sacramento, California) and The Atsinger Family Trust and
Stuart W. Epperson Revocable Living Trust expiring 2005.
10.06.01 Asset Purchase Agreement dated as of June 5, 1996 by and
between Radio 94 of Phoenix Limited Partnership and Salem
Media of Arizona, Inc. (KOOL-AM, Phoenix, Arizona).
10.06.02 Asset Purchase Agreement dated as of September 3, 1996 by and
between Caron Broadcasting, Inc. and Mortenson Broadcasting
Company of Canton, LLC and Mortensen Broadcasting Company of
Akron, LLC (WTOF-FM, Canton, Ohio and WHLO-AM, Akron, Ohio).
|
II-5
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
10.06.03.01 Asset Purchase Agreement dated March 28, 1996 by and between
American Radio Assistance Corporation and Common Ground
Broadcasting, Inc. (KDBX-FM, Banks, Oregon).
10.06.03.02 First Amendment to Asset Purchase Agreement dated as of July
22, 1996 by and between American Radio Systems Corporation
and Common Ground Broadcasting, Inc. (KDBX-FM, Banks,
Oregon).
10.06.04.01 Asset Purchase Agreement dated as of April 23, 1996 by and
between OmniAmerica Group and WHK License Partnership and
Inspiration Media of Ohio, Inc. (WHK-AM, Cleveland, Ohio).
10.06.04.02 First Amendment to the Asset Purchase Agreement dated as of
July 23, 1996 by and between OmniAmerica Group and WHK
License Partnership and Inspiration Media of Ohio, Inc. (WHK-
AM, Cleveland, Ohio).
10.06.04.03 Second Amendment to Asset Purchase Agreement dated as of
August 12, 1996 by and between OmniAmerica Group and WHK
License Partnership and Inspiration Media of Ohio, Inc. (WHK-
AM, Cleveland, Ohio).
10.06.05 Asset Purchase Agreement dated as of September 30, 1996 by and
between Infinity Broadcasting Corporation of Dallas and
Inspiration Media of Texas, Inc. (KEWS, Arlington, Texas;
KDFX, Dallas, Texas).
10.06.06.01 Asset Purchase Agreement dated as of December 4, 1996 by and
between Backbay Broadcasters, Inc. and New England
Continental Media, Inc. (WBNW-AM, Boston, Massachusetts).
10.06.06.02 First Amendment to the Asset Purchase Agreement dated as of
February, 1997 by and between Backbay Broadcasters, Inc. and
New England Continental Media, Inc. (WBNW-AM, Boston,
Massachusetts).
10.06.07 Asset Purchase Agreement dated June 2, 1997 by and between New
England Continental Media, Inc. and Hibernia Communications,
Inc. (WPZE-AM, Boston, Massachusetts).
10.06.08 Option to Purchase dated as of August 18, 1997 by and between
Sonsinger, Inc. and Inspiration Media, Inc. (KKOL-AM,
Seattle, Washington).
10.07.01 Tower Purchase Agreement dated August 22, 1997 by and between
the Company and Sonsinger Broadcasting Company of Houston,
L.P.
*10.07.02 Amendment to the Tower Purchase Agreement dated November 10,
1997 by and between the Company and Sonsinger Broadcasting
Company of Houston, L.P.
*10.07.03 Promissory Note dated November 11, 1997 made by Sonsinger
Broadcasting Company of Houston, L.P. payable to the Company.
10.07.04 Promissory Note dated December 24, 1997 made by the Company
payable to Edward G. Atsinger III.
10.07.05 Promissory Note dated December 24, 1997 made by the Company
payable to Stuart W. Epperson.
*10.08.01 Local Programming and Marketing Agreement dated June 13, 1997
between Sonsinger, Inc. and Inspiration Media, Inc.
*10.08.02 Local Programming and Marketing Agreement and Put/Call
Agreement dated October 23, 1997 by and between Cherokee
Broadcasting Co., Inc. and Salem Media of Georgia, Inc.
*10.09.01 Evidence of Key man life insurance policy no. 2256440M
insuring Edward G. Atsinger III in the face amount of
$5,000,000.
*10.09.02 Evidence of Key man life insurance policy no. 2257474H
insuring Edward G. Atsinger III in the face amount of
$5,000,000.
*10.09.03 Evidence of Key man life insurance policy no. 2257476B
insuring Stuart W. Epperson in the face amount of $5,000,000.
|
II-6
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
*12.01 Statement regarding Computation of Ratio of Earnings to Fixed
Charges.
*21.01 Subsidiaries of the Company.
**23.01 Consent of Ernst & Young LLP.
23.02 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.01).
*24.01 Powers of Attorney (included on Signature Pages of Registration
Statement).
25.01 Statement of Eligibility of Trustee.
*27.01 Financial Data Schedule.
|
* Previously filed.
** Marked to show changes.
(B) FINANCIAL STATEMENT SCHEDULES: SCHEDULE II--VALUATION AND QUALIFYING
ACCOUNTS
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
ITEM 22. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described under Item 20 or otherwise, each Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a Registrant of expenses incurred or paid by a director, officer or controlling person of such Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(b) Each Registrant undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
II-7
(c) Each undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(d) Each undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
II-8
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Communications Corporation
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President and Chief
* Financial Officer (Principal
------------------------------------- Financial Officer)
DIRK GASTALDO
Vice President--Accounting &
* Taxation (Principal
------------------------------------- Accounting Officer)
EILEEN E. HILL
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
/s/ Eric H. Halvorson Director
-------------------------------------
ERIC H. HALVORSON
Director
*
-------------------------------------
RICHARD A. RIDDLE
Director
*
-------------------------------------
ROLAND S. HINZ
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-9
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ATEP RADIO, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
ATEP Radio, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BISON MEDIA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Bison Media, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-11
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, CARON BROADCASTING, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Caron Broadcasting, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-12
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, COMMON GROUND BROADCASTING, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Common Ground Broadcasting, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, GOLDEN GATE BROADCASTING COMPANY, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Golden Gate Broadcasting Company, Inc.
* By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, INLAND RADIO, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Inland Radio, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-15
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, INSPIRATION MEDIA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Inspiration Media, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-16
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, INSPIRATION MEDIA OF TEXAS, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Inspiration Media of Texas, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-17
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, NEW ENGLAND CONTINENTAL MEDIA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
New England Continental Media, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-18
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, NEW INSPIRATION BROADCASTING COMPANY, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
New Inspiration Broadcasting Company, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-19
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, OASIS RADIO, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Oasis Radio, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-20
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, PENNSYLVANIA MEDIA ASSOCIATES, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Pennsylvania Media Associates, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-21
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, RADIO 1210, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Radio 1210, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-22
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM COMMUNICATIONS CORPORATION, HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Communications Corporation, a Delaware corporation
* By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-23
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA CORPORATION HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media Corporation
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-24
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF CALIFORNIA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of California, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-25
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF COLORADO, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Colorado, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-26
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF LOUISIANA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Louisiana, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-27
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF OHIO, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Ohio, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-28
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF OREGON, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Oregon, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-29
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF PENNSYLVANIA, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Pennsylvania, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-30
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MEDIA OF TEXAS, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Media of Texas, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-31
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM MUSIC NETWORK, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Music Network, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-32
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM RADIO REPRESENTATIVES, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Radio Representatives, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-33
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SOUTH TEXAS BROADCASTING, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
South Texas Broadcasting, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-34
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SRN NEWS NETWORK, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
SRN News Network, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-35
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, VISTA BROADCASTING, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Vista Broadcasting, Inc.
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-36
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SALEM RADIO NETWORK INCORPORATED HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Salem Radio Network Incorporated
*
By: _________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
President and Chief Executive
* Officer (Principal Executive
------------------------------------- Officer)
EDWARD G. ATSINGER III
Vice President (Principal
* Financial and Accounting
------------------------------------- Officer)
DIRK GASTALDO
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
/s/ Eric H. Halvorson
By:
-------------------------------------
|
ERIC H. HALVORSON
ATTORNEY-IN-FACT
II-37
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BELTWAY MEDIA PARTNERS HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN CAMARILLO, CALIFORNIA ON JANUARY 29, 1998.
Beltway Media Partners
Salem Communications Corporation,
a California corporation, a
general partner
By: *
________________________________
EDWARD G. ATSINGER III PRESIDENT
AND CHIEF EXECUTIVE OFFICER
|
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON JANUARY 29, 1998.
NAME TITLE
Salem Communications Corporation, a
California corporation, a general
partner
Director
*
-------------------------------------
EDWARD G. ATSINGER III
Director
*
-------------------------------------
STUART W. EPPERSON
/s/ Eric H. Halvorson Director
-------------------------------------
ERIC H. HALVORSON
Director
*
-------------------------------------
RICHARD A. RIDDLE
|
II-38
NAME TITLE
Director
*
-------------------------------------
|
ROLAND S. HINZ
New Inspiration Broadcasting
Company, Inc., a general partner
Golden Gate Broadcasting Company,
Inc., a general partner
STUART W. EPPERSON
Bestway Media Partners
* Vice President and Chief
------------------------------------- Financial Officer (Principal
DIRK GASTALDO Financial Officer and
Accounting Officer)
|
* Eric H. Halvorson, by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
By: /s/ Eric H. Halvorson
-------------------------------------
ERIC H. HALVORSON
ATTORNEY-IN-FACT
|
II-39
SALEM COMMUNICATIONS CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS DEDUCTIONS
--------------------- --------
BALANCE AT CHARGED TO CHARGED BAD BALANCE
BEGINNING COSTS AND TO OTHER DEBT AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS WRITE-OFFS OF PERIOD
----------- ---------- ---------- -------- ---------- ---------
(DOLLARS IN THOUSANDS)
Year Ended December 31,
1994
Allowance for doubtful
accounts............. $242 $ 484 $ -- $(195) $ 531
Year Ended December 31,
1995
Allowance for doubtful
accounts............. 531 929 -- (756) 704
Year Ended December 31,
1996
Allowance for doubtful
accounts............. 704 1,067 -- (766) 1,005
|
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ------------
*1.01 Placement Agreement, dated September 17, 1997,
among the Company, the Guarantors, and Furman
Selz LLC, Smith Barney, Inc., BancBoston
Securities, Inc., and BNY Capital Markets, Inc.
(collectively, the "Initial Purchasers").
*1.02 Registration Rights Agreement, dated September
17, 1997, between the Company, the Guarantors
and the Initial Purchasers.
**1.03 Form of Letter of Transmittal.
**1.04 Form of Notice of Guaranteed Delivery.
*3.01 Articles of Incorporation of the Company.
*3.02 Bylaws of the Company.
*3.03 Partnership Agreement of Beltway Media Partners.
*3.04 Articles of Incorporation of ATEP Radio, Inc.
*3.05 Bylaws of ATEP Radio, Inc.
*3.06 Articles of Incorporation of Bison Media, Inc.
*3.07 Bylaws of Bison Media, Inc.
*3.08 Articles of Incorporation of Caron Broadcasting,
Inc.
*3.09 Code of By-laws of Caron Broadcasting, Inc.
*3.10 Articles of Incorporation of Common Ground
Broadcasting, Inc.
*3.11 Bylaws of Common Ground Broadcasting, Inc.
*3.12 Articles of Incorporation of Golden Gate
Broadcasting Company, Inc.
*3.13 Bylaws of Golden Gate Broadcasting Company, Inc.
*3.14 Articles of Incorporation of Inland Radio, Inc.
*3.15 Bylaws of Inland Radio, Inc., a California
Corporation.
*3.16 Articles of Incorporation of Inspiration Media,
Inc.
*3.17 Bylaws of Inspiration Media, Inc.
*3.18 Articles of Incorporation of Inspiration Media of
Texas, Inc.
*3.19 Bylaws of Inspiration Media of Texas, Inc.
*3.20 Articles of Organization of New England
Continental Media Inc.
*3.21 By-laws of New England Continental Media Inc.
*3.22.01 Articles of Incorporation of New Inspiration
Broadcasting Company, Inc.
*3.22.02 Articles of Incorporation of Inspirational Media
of Southern California, Inc. (see
Exhibit 3.22.03 for name change to New
Inspiration Broadcasting Company, Inc.).
*3.22.03 Certificate of Ownership of Inspirational Media
of Southern California, Inc. (evidencing merger
of New Inspiration Broadcasting Company, Inc.
with and into the corporation and revision of
articles to adopt the name New Inspiration
Broadcasting Company, Inc.).
*3.23 Bylaws of Inspirational Broadcasting Company,
Inc. (see Exhibit 3.22.03 for name change to New
Inspiration Broadcasting Company, Inc.).
*3.24 Articles of Incorporation of Oasis Radio, Inc.
|
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ------------
*3.25 Bylaws of Oasis Radio, Inc.
*3.26 Articles of Incorporation of Pennsylvania Media
Associates, Inc.
*3.27 Pennsylvania Media Associates, Inc. By-laws
*3.28 Articles of Incorporation of Radio 1210, Inc.
*3.29 Bylaws of Radio 1210, Inc.
*3.30 Certificate of Incorporation of Salem
Communications Corporation (a Delaware
corporation).
*3.31 Salem Communications Corporation Bylaws (a
Delaware corporation).
*3.32 Certificate of Incorporation of Salem Media
Corporation.
*3.33 By-laws of Salem Media Corporation.
*3.34.01 Articles of Incorporation of John Brown Schools
of California, Inc. (see Exhibit 3.34.03 for
name change to Salem Media of California, Inc.).
*3.34.02 Certificate of Amendment of Articles of
Incorporation of John Brown Schools of
California, Inc. (see Exhibit 3.34.03 for name
change to Salem Media of California, Inc.).
*3.34.03 Certificate of Amendment of Articles of
Incorporation of John Brown Schools of
California, Inc. (amending the name of the
corporation to be Salem Media of California,
Inc.).
*3.35 By-laws of Salem Media of California, Inc.
*3.36 Articles of Incorporation of Salem Media of
Colorado, Inc.
*3.37 Bylaws of Salem Media of Colorado, Inc.
*3.38 Articles of Incorporation of Salem Media of
Louisiana, Inc.
*3.39 By-laws of Salem Media of Louisiana, Inc.
*3.40 Articles of Incorporation of Salem Media of Ohio,
Inc.
*3.41 Code of By-laws For the Government of the Board
of Directors of Salem Media of Ohio, Inc.
*3.42 Articles of Incorporation of Salem Media of
Oregon, Inc.
*3.43 Bylaws of Salem Media of Oregon, Inc.
*3.44 Articles of Incorporation of Salem Media of
Pennsylvania, Inc.
*3.45 Salem Media of Pennsylvania, Inc. By-laws.
*3.46 Articles of Incorporation of Salem Media of
Texas, Inc.
*3.47 Bylaws of Salem Media of Texas, Inc.
*3.48 Articles of Incorporation of Salem Music Network,
Inc.
*3.49 Bylaws of Salem Music Network, Inc.
*3.50 Certificate of Incorporation of Salem Radio
Network Incorporated.
*3.51 Salem Radio Network Incorporated Bylaws.
*3.52 Articles of Incorporation of Salem Radio
Representatives, Inc.
*3.53 Bylaws of Salem Radio Representatives, Inc.
*3.54 Articles of Incorporation of South Texas
Broadcasting, Inc.
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SEQUENTIALLY
EXHIBIT NUMBERED
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*3.55 Bylaws of South Texas Broadcasting, Inc.
*3.56 Articles of Incorporation of SRN News Network,
Inc.
*3.57 Bylaws of SRN News Network, Inc.
*3.58 Articles of Incorporation of Vista Broadcasting,
Inc.
*3.59 Bylaws of Vista Broadcasting, Inc.
*4.01 Indenture between the Company, the Guarantors and
The Bank of New York, as Trustee, dated as of
September 25, 1997, relating to the Old Notes and
the Notes, including form of Note.
*4.02 Form of Note (filed as part of Exhibit 4.01).
*4.03 Form of Note Guarantee (filed as part of Exhibit
4.01).
*4.04 Registration Rights Agreement, dated September 25,
1997, between the Company, the Guarantors and the
Initial Purchasers (filed as Exhibit 1.02).
*4.05 Letter of Transmittal (filed as Exhibit 1.03).
*4.06 Notice of Guaranteed Delivery (filed as Exhibit
1.04).
*4.07 Credit Agreement, dated as of September 25, 1997,
among the Company, the several Lenders from time
to time parties thereto, and The Bank of
New York, as administrative agent for the
Lenders.
*4.08 Borrower Security Agreement, dated as of September
25, 1997, by and between the Company and The Bank
of New York, as Administrative Agent of the
Lenders.
*4.09 Subsidiary Guaranty and Security Agreement dated
as of September 25, 1997, by and between the
Company, the Guarantors, and The Bank of New
York, as Administrative Agent.
5.01 Opinion and Consent of Gibson, Dunn & Crutcher
LLP, regarding validity and enforceability of the
Notes and Guarantees
*10.01 Employment Agreement, dated as of August 1, 1997,
between the Company and Edward G. Atsinger III.
*10.02 Employment Agreement, dated as of August 1, 1997,
between the Company and Stuart W. Epperson.
*10.03.01 Employment Contract, dated November 7, 1991,
between the Company and Eric H. Halvorson.
*10.03.02 First Amendment to Employment Contract, dated
April 22, 1996, between the Company and Eric H.
Halvorson.
*10.03.03 Second Amendment to Employment Contract, dated
July 8, 1997, between the Company and Eric H.
Halvorson.
*10.03.04 Deferred Compensation Agreement, dated November 7,
1991, between the Company and Eric H. Halvorson.
*10.04.01 Employment Agreement, dated February 9, 1995,
between Salem Radio Network Incorporated and Greg
R. Anderson.
*10.04.02 Letter Agreement dated December 22, 1995, by
Inspiration Media of Texas, Inc. re compensation
of Greg R. Anderson under Employment Agreement
with Salem Radio Network Incorporated.
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*10.04.03 First Amendment to Employment Agreement, dated
August 1, 1997 between Salem Radio Network
Incorporated and Greg R. Anderson.
*10.05.01 Antenna/tower lease between Caron Broadcasting,
Inc. (WHLO-AM/Akron, Ohio) and Messrs.
Atsinger and Epperson expiring 2007.
*10.05.02 Antenna/tower/studio lease between Caron
Broadcasting, Inc. (WTSJ-AM/Cincinnati, Ohio)
and Messrs. Atsinger and Epperson expiring
2007.
*10.05.03 Antenna/tower lease between Caron Broadcasting,
Inc. (WHK-FM/Canton, Ohio) and Messrs.
Atsinger and Epperson expiring 2007.
*10.05.04 Antenna/tower/studio lease between Common
Ground Broadcasting, Inc. (KKMS-AM/Eagan,
Minnesota) and Messrs. Atsinger and Epperson
expiring in 2006.
10.05.05 Antenna/tower lease between Common Ground
Broadcasting, Inc. (WHK-AM/Cleveland, Ohio)
and Messrs. Atsinger and Epperson expiring
2008.
10.05.06 Antenna/tower lease (KFAX-FM/Hayward,
California) and Salem Broadcasting Company, a
partnership consisting of Messrs. Atsinger and
Epperson, expiring in 2003.
10.05.07 Antenna/tower/studio lease between Inland
Radio, Inc. (KKLA-AM/San Bernardino,
California) and Messrs. Atsinger and Epperson
expiring 2002.
10.05.08 Antenna/tower lease between Inspiration Media,
Inc. (KGNW-AM/Seattle, Washington) and Messrs.
Atsinger and Epperson expiring in 2002.
10.05.09 Antenna/tower lease between Inspiration Media,
Inc. (KLFE-AM/Seattle, Washington) and The
Atsinger Family Trust and Stuart W. Epperson
Revocable Living Trust expiring in 2004.
10.05.10 Antenna/tower lease between Oasis Radio, Inc
(KAVC-FM/Rosamond, California) and The
Atsinger Family Trust under a lease expiring
in 2002.
10.05.11.01 Antenna/tower/lease between Pennsylvania Media
Associates, Inc. (WZZD-AM/ WFIL-
AM/Philadelphia, Pennsylvania) and Messrs.
Atsinger and Epperson, as assigned from WEAZ-
FM Radio, Inc., expiring 2004.
10.05.11.02 Antenna/tower/studio lease between Pennsylvania
Media Associates, Inc. (WZZD-AM/ WFIL-
AM/Philadelphia, Pennsylvania) and The
Atsinger Family Trust and Stuart W. Epperson
Revocable Living Trust expiring 2004.
10.05.12 Antenna/tower lease between Radio 1210, Inc.
(KPRZ-AM/Olivenhain, California) and The
Atsinger Family Trust expiring in 2002.
10.05.13 Antenna/tower lease between Salem Media
Corporation (WYLL-FM/Arlington Heights,
Illinois) and Messrs. Atsinger and Epperson
expiring in 2002.
10.05.14 Antenna/turner/studio leases between Salem
Media Corporation (KLTX-AM/Long Beach and
Paramount, California) and Messrs. Atsinger
and Epperson expiring in 2002.
10.05.15 Antenna/tower lease between Salem Media of
Colorado, Inc. (KNUS-AM/Denver-Bolder,
Colorado) and Messrs. Atsinger and Epperson
expiring 2006.
10.05.16 Antenna/tower lease between Salem Media of
Ohio, Inc. (WRFD-AM/Columbus, Ohio) and
Messrs. Atsinger and Epperson expiring 2002.
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10.05.17.01 Studio Lease between Salem Media of Oregon,
Inc. (KPDQ-AM/FM/Portland, Oregon) and Edward
G. Atsinger III, Mona J. Atsinger, Stuart W.
Epperson, and Nancy K. Epperson expiring 2002.
10.05.17.02 Antenna/tower lease between Salem Media of
Oregon, Inc. (KPDQ-AM/FM/Raleigh Hills, Oregon
and Messrs. Atsinger and Epperson expiring
2002.
10.05.18 Antenna/tower lease between Salem Media of
Pennsylvania, Inc. (WORD-FM/WPIT-AM/
Pittsburgh, Pennsylvania) and The Atsinger
Family Trust and Stuart W. Epperson Revocable
Living Trust expiring 2003.
10.05.19 Antenna/tower lease between Salem Media of
Texas, Inc. (KSLR-AM/San Antonio, Texas) and
Epperson-Atsinger 1983 Family Trust expiring
2007.
10.05.20 Antenna/tower lease between South Texas
Broadcasting, Inc. (KENR-AM/KKHT-FM/ Houston-
Galveston, Texas) and Atsinger Family Trust
and Stuart W. Epperson Revocable Living Trust
expiring 2005.
10.05.21 Antenna/tower lease between Vista Broadcasting,
Inc. (KFIA-AM/Sacramento, California) and The
Atsinger Family Trust and Stuart W. Epperson
Revocable Living Trust expiring 2005.
10.06.01 Asset Purchase Agreement dated as of June 5,
1996 by and between Radio 94 of Phoenix
Limited Partnership and Salem Media of
Arizona, Inc. (KOOL-AM, Phoenix, Arizona).
10.06.02 Asset Purchase Agreement dated as of September
3, 1996 by and between Caron Broadcasting,
Inc. and Mortenson Broadcasting Company of
Canton, LLC and Mortensen Broadcasting Company
of Akron, LLC (WTOF-FM, Canton, Ohio and WHLO-
AM, Akron, Ohio).
10.06.03.01 Asset Purchase Agreement dated March 28, 1996
by and between American Radio Assistance
Corporation and Common Ground Broadcasting,
Inc. (KDBX-FM, Banks, Oregon).
10.06.03.02 First Amendment to Asset Purchase Agreement
dated as of July 22, 1996 by and between
American Radio Systems Corporation and Common
Ground Broadcasting, Inc. (KDBX-FM, Banks,
Oregon).
10.06.04.01 Asset Purchase Agreement dated as of April 23,
1996 by and between OmniAmerica Group and WHK
License Partnership and Inspiration Media of
Ohio, Inc. (WHK-AM, Cleveland, Ohio).
10.06.04.02 First Amendment to the Asset Purchase Agreement
dated as of July 23, 1996 by and between
OmniAmerica Group and WHK License Partnership
and Inspiration Media of Ohio, Inc. (WHK-AM,
Cleveland, Ohio).
10.06.04.03 Second Amendment to Asset Purchase Agreement
dated as of August 12, 1996 by and between
OmniAmerica Group and WHK License Partnership
and Inspiration Media of Ohio, Inc. (WHK-AM,
Cleveland, Ohio).
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10.06.05 Asset Purchase Agreement dated as of September
30, 1996 by and between Infinity Broadcasting
Corporation of Dallas and Inspiration Media of
Texas, Inc. (KEWS, Arlington, Texas; KDFX,
Dallas, Texas).
10.06.06.01 Asset Purchase Agreement dated as of December 4,
1996 by and between Backbay Broadcasters, Inc.
and New England Continental Media, Inc. (WBNW-
AM, Boston, Massachusetts).
10.06.06.02 First Amendment to the Asset Purchase Agreement
dated as of February, 1997 by and between
Backbay Broadcasters, Inc. and New England
Continental Media, Inc. (WBNW-AM, Boston,
Massachusetts).
10.06.07 Asset Purchase Agreement dated June 2, 1997 by
and between New England Continental Media, Inc.
and Hibernia Communications, Inc. (WPZE-AM,
Boston, Massachusetts).
10.06.08 Option to Purchase dated as of August 18, 1997
by and between Sonsinger, Inc. and Inspiration
Media, Inc. (KKOL-AM, Seattle, Washington).
10.07.01 Tower Purchase Agreement dated August 22, 1997
by and between the Company and Sonsinger
Broadcasting Company of Houston, L.P.
*10.07.02 Amendment to the Tower Purchase Agreement dated
November 10, 1997 by and between the Company
and Sonsinger Broadcasting Company of Houston,
L.P.
*10.07.03 Promissory Note dated November 11, 1997 made by
Sonsinger Broadcasting Company of Houston, L.P.
payable to the Company.
10.07.04 Promissory Note dated December 24, 1997 made by
the Company payable to Edward G. Atsinger III.
10.07.05 Promissory Note dated December 24, 1997 made by
the Company payable to Stuart W. Epperson.
*10.08.01 Local Programming and Marketing Agreement dated
June 13, 1997 between Sonsinger, Inc. and
Inspiration Media, Inc.
*10.08.02 Local Programming and Marketing Agreement and
Put/Call Agreement dated October 23, 1997 by
and between Cherokee Broadcasting Co., Inc. and
Salem Media of Georgia, Inc.
*10.09.01 Evidence of Key man life insurance policy no.
2256440M insuring Edward G. Atsinger III in the
face amount of $5,000,000.
*10.09.02 Evidence of Key man life insurance policy no.
2257474H insuring Edward G. Atsinger III in the
face amount of $5,000,000.
*10.09.03 Evidence of Key man life insurance policy no.
2257476B insuring Stuart W. Epperson in the
face amount of $5,000,000.
*12.01 Statement regarding Computation of Ratio of
Earnings to Fixed Charges.
*21.01 Subsidiaries of the Company.
**23.01 Consent of Ernst & Young LLP.
23.02 Consent of Gibson, Dunn & Crutcher LLP (included
in Exhibit 5.01).
*24.01 Powers of Attorney (included on Signature Pages
of Registration Statement).
25.01 Statement of Eligibility of Trustee.
*27.01 Financial Data Schedule.
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* Previously filed.
** Marked to show changes.
LETTER OF TRANSMITTAL
OFFER FOR ALL OUTSTANDING
PRIVATELY PLACED 9 1/2% SERIES A SENIOR SUBORDINATED NOTES DUE 2007
IN EXCHANGE FOR
9 1/2% SERIES B SENIOR SUBORDINATED NOTES DUE 2007
OF
SALEM COMMUNICATIONS CORPORATION
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 1998, UNLESS EXTENDED
The Exchange Agent is The Bank of New York, whose mailing address, facsimile number and telephone number are as follows:
By Hand Delivery: By Facsimile: By Mail or Overnight Express:
(Insured or registered recommended):
The Bank of New York (212) 815-6339
101 Barclay Street - Floor 7E The Bank of New York
Corporate Trust Services Window By Telephone: 101 Barclay Street - Floor 7E
Ground Level New York, New York 10286
New York, New York 10286 (212) 815-[TBD] Attn: Reorganization Department
Attn: Reorganization Department
|
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be completed by holders of Old Notes either if Old Notes are to be forwarded herewith or if tenders of Old Notes are to be made by book-entry transfer to an account maintained by The Bank of New York (the "Exchange Agent") at The Depository Trust Company (the "DTC") pursuant to the procedures set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus (as defined herein).
Holders of Old Notes whose certificates (the "Certificates") for such Old Capital Securities are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus) or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus.
If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, or if Certificates are submitted for more Old Notes than are tendered or accepted for exchange, Certificates for such nonexchanged or nontendered Old Notes will be returned (or, in the case of Old Notes tendered by book-entry transfer, such Old Notes will be credited to an account maintained at DTC), without expenses to the tendering holder promptly following the Expiration Date (as defined in the Prospectus).
DELIVERY OF DOCUMENTS TO THE DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.
DESCRIPTION OF SECURITIES TENDERED
--------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED HOLDER AS IT
APPEARS ON THE PRIVATELY PLACED 9 1/2% SERIES A CERTIFICATE NUMBER(S) OF PRINCIPAL AMOUNT OF
SENIOR SUBORDINATED NOTES DUE 2007 ("OLD NOTES") OLD NOTES TRANSMITTED OLD NOTES TRANSMITTED
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
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(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[_]CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution__________________________________________
Account Number_________________________________________________________
Transaction Code Number________________________________________________
[_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)___________________________________________
Window Ticket Number (if any)__________________________________________
Date of Execution of Notice Guaranteed Delivery________________________
Name of Institution which Guaranteed Delivery__________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution__________________________________________
Account Number_________________________________________________________
Transaction Code Number________________________________________________
[_]CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND ANY NON-EXCHANGED OLD NOTES ARE TO BE RETURNED BY CREDITING DTC ACCOUNT NUMBER SET FORTH ABOVE.
Ladies and Gentlemen:
1. The undersigned hereby agrees to exchange the aggregate principal amount of privately placed 9 1/2% Series A Senior Subordinated Notes Due 2007 (the "Old Notes") for a like principal amount of 9 1/2% Series B Senior Subordinated Notes Due 2007 (the "Notes") of Salem Communications Corporation, a California corporation (the "Company"), guaranteed on a senior, subordinated basis by all of the Company's current subsidiaries (the "Guarantors") upon the terms and subject to the conditions contained in the Registration Statement on Form S-4 filed by the Company with the Securities and Exchange Commission (the "Registration Statement") and the accompanying Prospectus dated , 1998 included therein (the "Prospectus"), receipt of which is hereby acknowledged.
2. The undersigned hereby acknowledges and agrees that the Notes will bear interest from and including September 25, 1997, the date of issuance of the Old Notes. Accordingly, the undersigned will forgo accrued but unpaid interest on his, her or its Old Notes that are exchanged for Notes from and including September 25, 1997 but will receive such interest under the Notes.
3. The undersigned hereby represents and warrants that he, she or it has full authority to tender the Old Notes described above. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the exchange of the Old Notes.
4. The undersigned understands that the tender of the Old Notes pursuant to all of the procedures set forth in the Prospectus will constitute an agreement between the undersigned and the Company as to the terms and conditions set forth in the Prospectus.
5. The undersigned hereby represents and warrants that the undersigned (i) is not an affiliate of the Company or any Guarantor within the meaning of Rule 405 of the Securities Act of 1933, as amended (the "Securities Act") and (ii) is acquiring the Notes in the ordinary course of the business of the undersigned and, if the undersigned is not a broker-dealer, that the undersigned is not engaged in, and does not intend to engage in, a distribution of the Notes.
6. If the undersigned is a broker-dealer, (i) it hereby represents and warrants that it acquired the Old Notes for its own account as a result of market-making activities or other trading activities and (ii) it hereby acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act, in connection with any resale of the Notes received hereby. The acknowledgment contained in the foregoing sentence shall not be deemed an admission that the undersigned is an "underwriter" within the meaning of the Securities Act.
7. Any obligation of the undersigned hereunder shall be binding upon the successors, assigns, executors, administrators, trustees in bankruptcy and legal and personal representatives of the undersigned.
SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 1)
To be completed ONLY IF the Notes are to be issued in the name of someone other than the undersigned or are to be sent to someone other than the undersigned or to the undersigned at an address other than that provided above.
Issue to:
Name ______________________________________________________________________
(PLEASE PRINT)
Address ___________________________________________________________________
Telephone No.: _______________________________________________________
Mail to: (INCLUDE AREA CODE)
Name ______________________________________________________________________
(PLEASE PRINT)
Address ___________________________________________________________________
Telephone No.: _______________________________________________________
(INCLUDE AREA CODE)
SIGNATURE
By: _______________________________________________________________________ Name: _____________________________________________________________________ Title: ____________________________________________________________________
(Must be signed by registered holder exactly as name appears on Certificates for Old Notes or on the register of holders of Old Notes maintained by The Bank of New York, as trustee for the Old Notes (the "Trustee"), or any person(s) authorized to become the registered holder(s) of the Old Notes by endorsements and documents transmitted herewith (including such opinions of counsel, certifications and other information as may be required by the Trustee to comply with the restrictions on transfer applicable to the Old Notes). If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.) Address: __________________________________________________________________ Telephone No.: ____________________________________________________________
(INCLUDE AREA CODE)
Taxpayer Identification No.: ______________________________________________ Signature Guaranteed By: __________________________________________________
(SEE INSTRUCTION 1)
Title: ____________________________________________________________________ Name of Institution: ______________________________________________________ Address: __________________________________________________________________
Telephone No.: _______________________________________________________
(INCLUDE AREA CODE)
Date: _____________________________________________________________________
PLEASE READ THE INSTRUCTIONS BELOW, WHICH FORM A PART OF THIS LETTER OF
TRANSMITTAL.
INSTRUCTIONS
1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office in the United States which is a member of a recognized Medallion Signature Program approved by the Securities Transfer Association, Inc. (an "Eligible Institution") unless (i) the "Special Issuance and Delivery Instructions" above have not been completed or (ii) the Old Notes described above are tendered for the account of an Eligible Institution.
2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD NOTES. This Letter of Transmittal is to be completed either if (a) Certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus. Certificates, or timely confirmation of a book- entry transfer of such Old Notes into the Exchange Agent's account at the DTC, as well as this Letter of Transmittal (of facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Old Notes may be tendered in whole or in part in the principal amount of integral multiples of $1,000.
THE METHOD OF DELIVERY OF OLD NOTES AND OTHER DOCUMENTS IS AT THE ELECTION AND RISK OF THE RESPECTIVE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL (WITH RETURN RECEIPT), PROPERLY INSURED, IS SUGGESTED.
3. GUARANTEED DELIVERY PROCEDURES. Registered holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available, or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or any other required documents to the Exchange Agent on or prior to the Expiration Date, or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) substantially in the form made available by the Company; and
(c) Such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as the Certificate(s) (or a Book-Entry Confirmation (as defined in the Prospectus)) representing all tendered Old Notes in proper form for transfer and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date.
Upon request of the Exchange Agent, a Notice of Guaranteed Delivery will be sent to registered holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above.
4. SIGNATURES ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by a person other than a registered holder of any Old Notes, such Old Notes must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear on the Old Notes.
If this Letter of Transmittal or any Old Notes or bond power is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted.
5. EXCHANGE OF OLD NOTES ONLY. Only the above-described Old Notes may be exchanged for Notes pursuant to the Exchange Offer.
6. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be accepted only in the principal amount of integral multiples of $1,000.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written, telegraphic, telex or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth above or in the Prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Notes to be withdrawn, the aggregate principal amount of Old Notes to be withdrawn, and (if Certificates for Old Notes have been tendered) the name of the registered holder of the Old Notes as set forth on the Certificate for the Old Notes, if different from that of the person who tendered such Old Notes. If Certificates for the Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Certificates for the Old Notes, the tendering holder must submit the serial numbers shown on the particular Certificates for the Old Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Notes tendered for the account of an Eligible Institution. If Old Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under "The Exchange Offer--Procedures for Tendering," the notice of withdrawal must specify the name and number of the account at the DTC to be credited with the withdrawal of Old Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer--Procedures for Tendering."
7. MISCELLANEOUS. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all tenders that are not in proper form or the acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders or consents must be cured within such time as the Company shall determine. Neither the Company nor the Exchange Agent shall be under any duty to give notification of defects in such tenders or shall incur liabilities for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder thereof.
IMPORTANT TAX INFORMATION
Under current Federal income tax law, an Old Noteholder whose tendered Old Notes are accepted for payment generally is required to provide the Exchange Agent (as agent for the payer) with his or her correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If such Old Noteholder is an individual, the TIN is his or her social security number. If the Exchange Agent is not provided with the correct TIN, the Old Noteholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such Old Noteholders with respect to Notes exchanged pursuant to the Offer may be subject to backup withholding.
Certain Old Noteholders (including, among others, all corporations and certain foreign individuals) may not be subject to these backup withholding and reporting requirements. Exempt Old Noteholders should indicate their exempt status on Substitute Form W-9. In order for a foreign individual to qualify as an exempt recipient, that Old Noteholder must submit a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to his or her exempt status. Such statements can be obtained from the Exchange Agent. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Exchange Agent is required to withhold 31 percent of any such payments made to the Old Noteholder. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to an Old Noteholder with respect to Old Notes exchanged pursuant to the Offer, each Old Noteholder is required to notify the Exchange Agent of his, her or its correct TIN by completing the Substitute Form W-9 below certifying the TIN provided on such form is correct (or that such Old Noteholder is awaiting a TIN) and that (1) the Old Noteholder has not been notified by the Internal Revenue Service that he, she or it is subject to backup withholding as a result of a failure to report all interest or dividends or (2) the Internal Revenue Service has notified the Old Noteholder that he, she or it is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Old Noteholder is required to give the Exchange Agent the social security number or employer identification number of the record owner of the Old Notes. If the Old Notes are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidelines on which number to report.
PAYER'S NAME: THE BANK OF NEW YORK AS AGENT
PART 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ---------------------
CERTIFY BY SIGNING AND DATING Social Security Number
BELOW. OR
SUBSTITUTE
FORM W-9
DEPARTMENT OF
THE TREASURY ---------------------
INTERNAL Employer Identification
REVENUE SERVICE Number
|
PAYER'S REQUEST
FOR TAXPAYER (1) The number shown on this form is my correct
IDENTIFICATION Taxpayer Identification Number (or I am waiting
NUMBER (TIN) for a number to be issued to me) and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, (b) I
have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividends or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out
Item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of under-reporting interest or
dividends on your tax return. However, if after
being notified by the IRS that you were subject to
backup withholding you received another
notification from the IRS that you are no longer
subject to backup withholding, do not cross out
such Item (2).
----------------------------------------------------------
SIGNATURE: _____________ DATE: _____________ PART 3
Awaiting
TIN [_]
|
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31
PERCENT OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within sixty (60) days, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number.
________________________________________ ________________________________________
Signature Date
|
NOTICE OF GUARANTEED DELIVERY
OFFER FOR ALL OUTSTANDING
PRIVATELY PLACED 9 1/2% SERIES A SENIOR SUBORDINATED NOTES DUE 2007
IN EXCHANGE FOR
9 1/2% SERIES B SENIOR SUBORDINATED NOTES DUE 2007
OF
SALEM COMMUNICATIONS CORPORATION
Registered holders of privately placed 9 1/2% Series A Senior Subordinated Notes Due 2007 (the "Old Notes") who wish to tender their Old Notes in exchange for a like principal amount of 9 1/2% Series B Senior Subordinated Notes Due 2007 (the "Notes") and (i) whose Old Notes are not immediately available, or (ii) who cannot deliver their Old Notes and Letter of Transmittal or any other documents required by the Letter of Transmittal to The Bank of New York, as exchange agent (the "Exchange Agent") on or prior to the Expiration Date, or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis must use this Notice of Guaranteed Delivery or one substantially equivalent hereto. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission or mail to the Exchange Agent. See "THE EXCHANGE OFFER--Procedures for Tendering" in the Prospectus.
THE EXCHANGE AGENT FOR THE OFFER IS
THE BANK OF NEW YORK
By Hand Delivery By Mail or Overnight Express
(Insured or registered recommended):
THE BANK OF NEW YORK THE BANK OF NEW YORK
101 BARCLAY STREET - FLOOR 7E 101 BARCLAY STREET - FLOOR 7E
CORPORATE TRUST SERVICES WINDOW NEW YORK, NEW YORK 10286
GROUND LEVEL ATTN: REORGANIZATION DEPARTMENT
NEW YORK, NEW YORK 10286
ATTN: REORGANIZATION DEPARTMENT
By Facsimile: By Telephone:
(212) 815-6339 (212) 815-[TBD]
|
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED ON THE LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
Ladies and Gentlemen:
The undersigned hereby tenders the principal amount of Old Notes indicated below, upon the terms and subject to the conditions contained in the Registration Statement on Form S-4 filed by Salem Communications Corporation, a California corporation, and its subsidiaries identified therein as Other Registrants with the Securities and Exchange Commission (the "Registration Statement") and the accompanying Prospectus dated , 1998 included therein (the "Prospectus"), receipt of which is hereby acknowledged.
DESCRIPTION OF SECURITIES TENDERED
NAME AND ADDRESS OF
REGISTERED HOLDER AS IT CERTIFICATE NUMBER(S) PRINCIPAL AMOUNT OF
APPEARS ON THE OLD NOTES OF OLD NOTES TRANSMITTED OLD NOTES TRANSMITTED
-------------------------- -------------------------- --------------------------
__________________________ __________________________ __________________________
__________________________ __________________________ __________________________
__________________________ __________________________ __________________________
__________________________ __________________________ __________________________
__________________________ __________________________ __________________________
|
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office,
branch, agency or correspondent in the United States, which is a member of
a recognized Medallion Signature Program approved by the Securities
Transfer Association, Inc., hereby guarantees to deliver to the Exchange
Agent at one of its addresses set forth above, either the Old Notes
tendered hereby in proper form for transfer, or confirmation of the book-
entry transfer of such Old Notes to the Exchange Agent's account at The
Depository Trust Company pursuant to the procedures for book-entry
transfer set forth in the Prospectus, in either case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, and any other documents
required by the Letter of Transmittal within five New York Stock Exchange,
Inc. trading days after the date of execution of this Notice of Guaranteed
Delivery.
Name of Firm: _____________________________________________________________
Address: __________________________________________________________________
(ZIP CODE)
Area Code and Telephone Number: ___________________________________________
Name: _____________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: ____________________________________________________________________
Date: , 1998
If Old Notes will be tendered by book-entry transfer, provide the following information:
DTC Account Number:
Date:
NOTE:DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OLD
NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
[Letterhead of Gibson, Dunn & Crutcher LLP]
January 26, 1998
(714) 451-3800 C 80253-00029
Salem Communications Corporation
and the Guarantors identified herein
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Re: Salem Communications Corporation
Gentlemen and Mesdames:
We have acted as special counsel for Salem Communications Corporation, a Delaware corporation (the "Company"), and its subsidiaries (collectively, the "Guarantors") that are party to the Indenture, dated as of September 25, 1997 (the "Indenture"), with The Bank of New York, as trustee (the "Trustee"), in connection with the proposed offer by the Company (the "Exchange Offer") to exchange up to $150,000,000 aggregate principal amount of its outstanding 9 1/2% Series A Senior Subordinated Notes Due 2007 (the "Old Notes") for a like principal amount of its 9 1/2% Series B Senior Subordinated Notes Due 2007 (the "Notes"). The Old Notes were, and the Notes will be, issued pursuant to the Indenture. The Old Notes were guaranteed on a senior, subordinated basis by the Guarantors, in accordance with the terms of the Indenture. As were the Old Notes, the Notes will be guaranteed (the "Guarantees") by the Guarantors on a senior, subordinated basis, in accordance with the terms of the Indenture. The Indenture, the Notes and the Guarantees are referred to herein collectively as the "Financing Documents."
I.
In our capacity as special counsel to the Company and the Guarantors in connection with the proposed Exchange Offer, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the Registration Statement (no. 333-41733) on Form S-4, as amended to date (the "Registration Statement"), as filed by the Company and the Guarantors with the Securities and Exchange Commission (the "Commission") to register under the Securities Act of 1933, as amended (the "Securities Act"), the offering of the Notes and the
Salem Communications Corporation
and the Guarantors identified herein
January 26, 1998
Guarantees pursuant to the Exchange Offer and such other documents, corporate records, partnership records, certificates of such public officials and other instruments as we have deemed necessary or advisable to enable us to render the opinions set forth below. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to any facts material to these opinions, we have relied upon statements and representations of officers and other representations of the Company and the Guarantors and others, in each case without having independently verified the accuracy or completeness thereof. In rendering this opinion, we have assumed that the Company and each Guarantor has been duly organized under the laws of their respective state of incorporation or partnership formation.
We have assumed, without independent investigation or inquiry with respect to any such matter, that (i) the Trustee has all requisite power and authority to execute, deliver and perform its obligations under the Indenture, the execution and delivery of the Indenture and the performance of such obligations have been duly authorized by all necessary action on the Trustee's part and the Indenture has been duly delivered by it; and (ii) the Indenture is enforceable against the Trustee in accordance with the terms thereof.
Based upon the foregoing, and subject to the qualifications, exceptions, limitations and assumptions hereinafter set forth, we are of the opinion that:
1. The Notes, when executed and authenticated in accordance with the provisions of the Indenture and when issued and delivered in exchange for the Old Notes in the manner described in the Registration Statement, will be legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
2. The Guarantees, when executed, when the Notes with the Guarantees endorsed thereon have been authenticated in accordance with the provisions of the Indenture and when issued and delivered in connection with the exchange of the Old Notes in the manner described in the Registration Statement, will be legal, valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms.
Each of the opinions set forth above is subject to the following exceptions, qualifications, limitations and assumptions:
Salem Communications Corporation
and the Guarantors identified herein
January 26, 1998
(a) The execution and delivery of the Financing Documents by the Trustee and performance by the Trustee of its obligations thereunder comply with all laws and regulations that are applicable to the Trustee or the transactions contemplated by such Financing Documents because of the nature of the Trustee's business.
(b) Our opinions are subject to the effect of bankruptcy, insolvency, reorganization, moratorium, arrangement or other similar laws affecting enforcement of creditors' rights generally, including, without limitation, the effect of statutory or other laws regarding fraudulent conveyances or transfers, preferential transfers, and of laws affecting distributions by corporations to stockholders.
(c) Our opinions are subject to the application of general principles of equity, whether considered in a case or proceeding at law or in equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing.
(d) Our opinions are subject to the qualification that indemnification or contribution provisions in any of the Financing Documents may be unenforceable to the extent that such indemnification or contribution may be held to be in violation of or against public policy, including, without limitation, limitations under certain circumstances on enforceability of provisions (i) indemnifying a party against loss attributable to or liability for its own negligent acts or (ii) providing for contribution with respect to such loss or liability.
Furthermore, the opinions herein expressed are subject to the qualification that we express no opinion as to:
(a) The legality, validity, binding effect or enforceability (whether according to its terms or otherwise) of any provision of any Financing Document to the effect that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to any other right or remedy, that the election of some particular remedy does not preclude recourse to one or more other remedies or that failure to exercise or delay in exercising rights or remedies will not operate as a waiver of any such right or remedy.
(b) The legality, validity, binding effect or enforceability of any waiver under any Financing Document or any consent thereunder relating to the rights of the Company or Guarantor party thereto existing, or duties owing to it, as a matter of law, except to the extent that the Company or such Guarantor can waive such rights or duties or give such consent under applicable law. We express no opinion as to the effectiveness of any waiver or consent contained in any Financing Document relating to such rights or duties that is broadly or vaguely stated, does not describe the right or duty purportedly waived or to which such consent relates with reasonable specificity or relates to unknown future rights.
Salem Communications Corporation
and the Guarantors identified herein
January 26, 1998
(c) The legality, validity, binding effect or enforceability of any provision of any Financing Document to the extent that it provides for a rate of interest after failure to pay principal when due or other occurrence of a default that is in excess of the rate of interest otherwise payable, to the extent such rate is found to constitute a penalty.
(d) Any provision of any Financing Document requiring written amendments or waivers of such document insofar as it suggests that oral or other modifications, amendments or waivers could not effectively be agreed upon by the parties or that the doctrine of promissory estoppel might not apply.
(e) The effect on the enforceability of any of the Financing Documents against any Guarantor of any facts or circumstances that would constitute a defense to the obligation of a surety, unless such defense has been waived effectively by the Guarantor, to the extent that any of the Guarantor's obligations under such Financing Document constitute obligations to answer for the debt of another Person.
Our opinions expressed herein are limited to the internal laws (excluding choice of law rules) of the State of New York. The opinions expressed herein are based upon the law and circumstances as they are in effect or exist on the date hereof, and we assume no obligation to revise or supplement this letter in the event of future changes in the law or interpretations thereof with respect to circumstances or events that may occur subsequent to the date hereof. We express no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption "Legal Matters" in the Prospectus included in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder. This opinion is solely for the benefit of the Company and the Guarantors and may not be relied upon by any other person. This opinion may not be quoted, in whole or in part, or copies hereof furnished, to any other person without our prior express written consent.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP Gibson, Dunn & Crutcher LLP |
TDM/JHE/SPG/AME
Exhibit 10.05.05
ORIGINAL
This Agreement ("Agreement") is made as of the first day of February, 1997, by and between EDWARD G. ATSINGER III and STUART W. EPPERSON (collectively referred to herein as "Lessor") and Common Ground Broadcasting, Inc. ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee desires to use said Real Property in operating its radio station WHK(AM), Cleveland, Ohio; and,
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute Installations of similar kind and character for those hereinabove specified, provided such changes shall be approved in advance by Lessor, and Lessor shall not unreasonably delay or withhold its approval. In the event Lessee submits any such changes for Lessor's approval and Lessor does not respond within
thirty (30) days after Lessor's receipt thereof, then such changes shall be deemed approved by Lessor, so long as such changes otherwise comply with this Agreement, five (5) days after Lessor's receipt of notice that it has not responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1, 1997 (the "Commencement Date"), and shall expire on January 31, 1998 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in default under this Agreement, to extend the Term of this Agreement for up to two (2) successive periods of five (5) years each (the "Extended Terms"), and, except as set forth in subparagraph (c), below, on the same terms, covenants and conditions herein contained. The word "Term" as used in this Agreement shall be deemed to include the Extended Terms when and if the Agreement is extended. Each option to extend the Term shall be exercised only by Lessee's delivery to Lessor by United States mail on or before ninety (90) days prior to the commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through
the Expiration Date, or such earlier date as this Agreement is terminated as
provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Accounting, or to such other person or place as Lessor may designate from time
to time by notice to Lessee, in the following amounts and in the following
manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of $33,600 per annum, in equal monthly installments of $2,800 (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to
Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than Three Million Dollars ($3,000,000.00) for injuries to one person, Five Million Dollars ($5,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than Five Million Dollars ($5,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to
time reasonably request for the protection by insurance of their respective
interests. The policy or policies of insurance maintained by Lessee pursuant to
this Paragraph shall be of a company or companies authorized to do business in
California and a certificate thereof shall be delivered to Lessor, together with
evidence of the payment of the premiums therefor, not less than fifteen (15)
days prior to the commencement of the Term hereof or of the date when Lessee
shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen
(15) days prior to the expiration or termination date of any policy, Lessee
shall deliver a certificate of a renewal or replacement policy with proof of the
payment of the premium therefor. Any such insurance required by this Paragraph
may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be
required to indemnify Lessee for any damages, injury, loss or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in
"American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and
notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Texas.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE
Common Ground Broadcasting, Inc.
/s/ Edward G. Atsinger, III /s/ Eric H. Halvorson ----------------------------- --------------------------------- EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President /s/ Stuart W. Epperson ----------------------------- STUART W. EPPERSON Trustee |
Exhibit 10.05.06
THIS LEASE is made and entered into as of the 1st day of January, 1989, by and between SALEM BROADCASTING COMPANY, a California general partnership, hereinafter referred to as "Landlord" or "Lessor", and GOLDEN GATE BROADCASTING COMPANY, INC., a California corporation, hereinafter referred to as "Tenant" or "Lessee".
In consideration of the following covenants, agreements, conditions and representations, the parties agree as follows:
(a) The premises shall be used to operate a radio station, including, but not limited to, operation of a directional antenna system including a transmitter for use in connection with the operation of a radio station, and for such uses as are incidental or customarily related thereto. The premises shall not be used for any other purpose without Tenant first obtaining the written consent of Landlord thereto.
(b) Landlord agrees that in the event an inspection by any municipal or governmental authority results in a citation or order being issued requiring the correction of any condition existing on the leased premises at the time they were made available to Tenant, Landlord shall at its expense remedy said condition within a reasonable period of time; provided that Landlord shall have the right to dispute any such order and shall
be required to correct said condition only after it has exhausted its rights to appeal or review of said order or citation. Tenant agrees that it will comply with all laws, ordinances, orders, rules, regulations or requirements of all governmental authorities which are applicable to its use and/or occupancy of the leased premises. Notwithstanding the foregoing, either Landlord or Tenant shall have the right to contest by appropriate proceedings the validity and/or applicability of any such laws, ordinances, orders, rules, regulations and/or requirements.
4.1. During the first five (5) years of this Lease, the amount of Eleven Thousand Dollars ($11,000.00) per month.
4.2. During the first (5) year extended term of this Lease, a monthly amount equal to one (1%) of the appraised value of the leased premises as of the commencement of the extended term as determined by an appraiser mutually selected by Landlord and Tenant not later than fifteen (15) days after Tenant's delivery of the election to extend the term of the Lease under Section 2, above. The cost of the appraisal shall be paid by Tenant.
4.3 During the second five (5) year extended term of this Lease, a monthly amount equal to one (1%) of the appraised value of the leased premises as of the commencement of the extended term as determined by an appraiser mutually selected by Landlord and Tenant not later than fifteen (15) days after Tenant's delivery of the election to extend the term of the Lease under Section 2, above. The cost of the appraisal shall be paid by Tenant.
4.4 Rent shall be payable in lawful money of the United States to Landlord at 2310 Ponderosa Drive, Suite 29, Camarillo, California 93010 on the first day of each month.
description, maintained on and used by Tenant in connection with the leased premises. All of such charges, costs, and expenses shall constitute additional rent, and upon the failure of Tenant to pay any of such costs, charges or expenses, Landlord shall have the same rights and remedies as otherwise provided in this Lease for the failure of Tenant to pay rent.
Tenant shall not make, or permit to be made any structural improvements or
alterations, in, on, or to the leased premises or any part thereof without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided that the improvements shall not lessen the value of the
leased premises. Any improvements made in, on, or to the leased premises shall
be at the sole expense of Tenant and any additions to or alterations of said
premises shall become at once a part of the realty and belong to Landlord.
Tenant shall keep the premises and the property in which they are situated free
from any liens arising out of any work performed on the leased premises, by or
on behalf of Tenant, for material furnished to the leased premises, or for
obligations incurred by Tenant. In making any alteration that Tenant has a right
to make, Tenant shall not commence such improvement or alteration until three
(3) days after Landlord has received notice from Tenant stating the date of
commencement of the improvement or alteration so that Landlord can post and
record any appropriate notice of nonresponsibility. All alterations shall be
completed with due diligence.
Subject to the provisions of Paragraph 16, below, if any installation, alteration or improvement is required by law by any governmental authority, Tenant shall at Tenant's cost and expense promptly make such installation, alteration or improvement.
Provided Tenant is not in default or in breach of this Lease beyond the expiration of any applicable grace periods, Tenant may during the term of this Lease, and shall immediately upon the expiration of this Lease, remove from the leased premises all of Tenant's personal property and trade fixtures and such other property which Landlord may during the term of this Lease agree or acknowledge in writing are improvements belonging to Tenant.
Tenant may from time to time during the term of this Lease install trade fixtures of various kinds and descriptions for the purpose of carrying on, and used in connection with, any broadcasting business conducted on the leased premises, and upon any of such trade fixtures being so installed or placed on the leased premises by Tenant or any other person, the same shall remain at all times the property of Tenant or such other person and, at any time during the term of this Lease, and at the termination thereof, Tenant or such other person shall be entitled to remove any and all of such trade fixtures that shall belong to the person so removing the same, and Landlord shall have the right to require the Tenant at the expiration of the term to remove any or all of such trade fixtures; provided that all damage to the leased premises caused by such removal shall be fully repaired by Tenant at Tenant's sole expense.
Tenant's sole cost and expense, carry public liability insurance and property damage insurance in amounts reasonably required by Landlord. All such insurance shall be carried with insurance companies satisfactory to Landlord. Said insurance shall name Landlord as a co-insured or an additional insured. Tenant shall furnish, or cause to be furnished to Landlord, upon request, certificates of insurance from the insurance carrier stating that such insurance is in full force and effect, that the premiums thereon have been paid and that the insurance carrier will give Landlord at least ten (10) days prior written notice of any termination, cancellation, or modification of such insurance.
Tenant shall furnish, or cause to be furnished to Landlord, upon request, certificates of insurance from the insurance carrier stating that such insurance is in full force and effect, that the premiums have been paid and that the insurance carrier will give Landlord at least ten (10) days prior written notice of any termination, cancellation or modification of such insurance. Tenant may provide a certificate of insurance under its blanket insurance policies in satisfaction of this requirement.
If Tenant fails or refuses to procure or maintain said fire or liability insurance as required by this Lease or fails or refuses to furnish Landlord with the required proof that the insurance has been procured and is in force and paid for, Landlord shall have the right, at Landlord's option upon five (5) days written notice, to procure and maintain such insurance. The premium paid by Landlord shall be treated as additional rent due and payable immediately. Landlord shall give prompt notice of the payment of such premiums, stating the amounts paid and the insurer or insurers, and interest shall run from the date of the notice.
proceeds obtained under Paragraph 10 shall belong to Landlord, except that Tenant shall be entitled to that portion of the award, if any, attributable to the destruction of Tenant's trade fixtures and personal property which Tenant had the right to remove upon the termination of this Lease.
None of Landlord's rights herein specified in the event of a default by Tenant shall prejudice any other legal remedies available to Landlord other than those herein enumerated.
(1) Acts of maintenance or preservation or efforts to relet the property; and
(2) Appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease.
obligated to do so) relet the leased premises for the benefit of the Landlord and Tenant on such terms and conditions and at such rental as may then be reasonably available to Landlord. Such reletting shall not relieve Tenant from any of Tenant's obligations hereunder unless the Lease is terminated by Landlord by a written notice of termination served on Tenant.
(a) Tenant shall, at Tenant's sole cost and expense, comply with all of the requirements of all Municipal, State and Federal authorities now in force, or which may hereafter be in force, pertaining to the said premises, and shall faithfully observe in the use of the premises all Municipal ordinances and State and Federal statutes now in force or which may hereafter be in force. The judgment of any court of competent jurisdiction, after appeals have been taken or waived, or the admission of Tenant in any action or proceeding against Tenant, whether Landlord is a party thereto or not, that Tenant has violated any such ordinance or statute in the use of the premises shall be conclusive of that fact as between Tenant and Landlord.
(b) Subject to other provisions of this Lease, Tenant, upon prior notice to Landlord, shall be entitled to contest or have reviewed in good faith in the name of Landlord or Tenant, but at the expense of Tenant (except as otherwise provided in this Lease) by appropriate proceedings diligently conducted, the amount, validity or applicability, as the case may be, of any:
(i) Law, ordinance, order, rule, regulation or requirement of any governmental authority applicable to the leased premises or to the use thereof or any such proposed law, ordinance, order, rule, regulation or requirement;
(ii) Any tax or any proposed tax or other charge or amount levied or assessed against the leased premises by any governmental authority which under the terms of this Lease is payable by the Tenant;
(iii) Lien or encumbrance filed or asserted against the leased premises or any part thereof arising out of any claim asserted against the Tenant which might be or become a lien or encumbrance upon the leased premises or any part thereof, or
(iv) Other expense or charge, which, during the term of this Lease, shall be levied, assessed, imposed, demanded or threatened to be assessed, demanded or imposed by any governmental authority or by any insurance carrier upon or with respect to or alleged by any person to have been incurred in connection with Tenant's possession, occupation, operation, alteration, maintenance, repair or use of the leased premises or the making of any additions thereto. The period of any such permitted contest shall be excluded in computing the period during which a default shall be deemed to exist, if such default would not have occurred except by such contest.
If any mechanic's, laborer's or materialman's lien shall at any time be filed against the leased premises as a result of either Landlord's or Tenant's occupancy thereof, or which arises out of any claim asserted against the Landlord or Tenant, the party against who a claim exists giving rise to such lien shall, within thirty (30) days after notice of the filing thereof, cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction, or otherwise. If either party shall fail to cause such lien to be discharged during the period aforesaid, then, in addition to any other right or remedy, the other party may, but shall not be obligated to, discharge the same by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings. Any amount paid by Tenant and all costs and expenses incurred by Tenant in connection with any such claim shall be credited upon installments of rent payable by Tenant to Landlord hereunder. Interest at the rate of ten percent (10%) per annum from the making of any such payment or incurring of any such costs or expenses shall be added to such amount to be credited to Tenant by Landlord. Any amount paid by Landlord and in connection with any such mechanic's, laborer's and materialman's lien or arising out of a claim asserted against Tenant incurred by Landlord in connection therewith, together with interest thereon at the rate of ten percent (10%) per annum from the respective dates of Landlord's making of the payment or incurring of such costs and expenses shall constitute additional rent payable as additional rent by Tenant to Landlord on demand.
(a) If the entire leased premises are taken or acquired by condemnation this Lease shall terminate. Such termination shall take effect as of the date taking becomes effective by passage of title to the leased premises to the condemning authority pursuant to court order, or by the physical taking of possession of the leased premises by the condemning authority, whichever is earlier.
If only a portion of the leased premises is taken or acquired by or incident to condemnation and a part thereof remains which in Tenant's opinion can be used for the purpose specified in Paragraph 3 of this Lease without compromising Tenant's activity or usability of the premises, this Lease shall, except for the part actually taken, remain in full force and effect.
(b) If only a portion of the leased premises is taken by condemnation and part thereof remains which can be used for the purposes specified in Paragraph 3 of this Lease, rent payable under this Lease shall be equitably adjusted according to the amount and value of the leased premises remaining for Tenant's use.
Such adjustment in rent shall take effect on the date title to the condemned portion of the leased premises passes to the condemning authority pursuant to court order or on the date the condemning authority takes physical possession of the condemned leased property, whichever is earlier.
(c) All compensation paid for the land and improvements taken, including severance damage, if any, shall belong to Landlord except that Tenant shall be entitled to any relocation award specifically for Tenant's benefit and such portion of the award attributable to Tenant's trade fixtures and personalty, if any.
(d) Landlord, under no circumstances, shall be or become liable for or on account of any damage to, loss of, or interference with Tenant's business occasioned by any condemnation or threat thereof.
(a) Assignment of the Lease by operation of law;
(b) The appointment of a receiver to take possession of all or substantially all of the assets of Tenant and the receiver is not discharged within thirty (30) days after his appointment.
(c) A general assignment for benefit of creditors by Tenant;
(d) The filing of a voluntary petition or arrangement in bankruptcy by Tenant;
(e) The filing of an involuntary petition or arrangement in bankruptcy against Tenant and the same is not dismissed within sixty (60) days from the date of filing; and
(f) Any other action taken or suffered by Tenant because of Tenant's insolvency.
insurance policies required hereunder. This paragraph shall apply so long as the insurance required under this Lease is no invalidated by this paragraph. Landlord and Tenant shall obtain such insurance which is not invalidated whenever possible.
(a) Notice to be served upon Landlord shall be sent to Landlord addressed to:
Salem Broadcasting Company
2310 Ponderosa Drive, Suite 29
Camarillo, California 93010
(b) Notice to be served upon tenant shall be sent to Tenant addressed to:
Golden Gate Broadcasting Company, Inc. 2310 Ponderosa Drive, Suite 29 Camarillo, California 93010
All notices by mail shall be deemed served on receipt.
Either party may change his address for notice purposes by giving notice of such changes as provided above.
under this Lease shall be cumulative and in addition to any rights given to it by law. The exercise of any right or remedy shall not impair a party's right to any other remedy.
32.1 This Lease contains the entire agreement between the parties respecting the Lease of the premises and all matters covered or mentioned herein. This Lease may not be altered, changed or amended except by an instrument in writing signed by both parties hereto.
32.2 The illegality, invalidity or unenforceability of any provision of this Lease shall in no way impair or invalidate any other provision of this Lease, and such remaining provisions shall remain in full force and effect.
32.3 As used in this Lease, the masculine, feminine or neuter gender, and the singular or plural number, shall each be deemed to include the other whenever the context so indicates. If there is more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several. The paragraph headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.
32.4 All exhibits attached to this Lease are hereby incorporated by this reference and made a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as to the date and year first above written.
LANDLORD:
By: /s/ Edward G. Atsinger III ----------------------------------------- Edward G. Atsinger III General Partner |
TENANT:
GOLDEN GATE BROADCASTING COMPANY, INC.
By: /s/ Eric H. Halvorson ------------------------------------------- Eric H. Halvorson Vice President |
EXHIBIT A
Transmitter Site
DESCRIPTION:
REAL PROPERTY IN THE CITY OF HAYWARD, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTHERN LINE OF THE 67.85 ACRE PARCEL OF LAND
DESCRIBED IN THE DEED FROM JOSE T. BAPTISTA TO M. B. BETTENCOURT AND TONY A.
BETTENCOURT, DATED JANUARY 15, 1924, RECORDED JANUARY 16, 1924, IN BOOK 591 OF
OFFICIAL RECORDS OF ALAMEDA COUNTY, PAGE 355, SERIES NO. T/88764, SAID LINE
BEING ALSO THE SOUTHERN LINE OF THE PARCEL OF LAND DESIGNATED "BETTENCOURT" ON
THE "RECORD OF SURVEY, WILLIAM JOHNSON PROPERTY", ETC., FILED AUGUST 14, 1952,
IN BOOK 3 OF RECORD OF SURVEYS, PAGE 32, IN THE OFFICE OF THE COUNTY RECORDER OF
ALAMEDA COUNTY, DISTANT THEREON SOUTH 88(degrees) 31' 23" WEST 2969.87 FEET
FROM THE WESTERN LINE OF CLAWITER ROAD, OR COUNTY ROAD NO. 1649, AS THE SAME
EXISTED 50 FEET WIDE, PRIOR TO THE WIDENING THEREOF, ON APRIL 5, 1960; RUNNING
THENCE NORTH 1(degree) 00' 06" WEST 723.21 FEET TO THE SOUTHERN LINE OF THE
65.85 ACRE PARCEL OF LAND, DESCRIBED IN THE DEED FROM JOHN JOHNSON TO AUGUST
LEWIS JOHNSON, DATED DECEMBER 4, 1896, RECORDED AUGUST 13, 1897, IN BOOK 620 OF
DEEDS, PAGE 117, ALAMEDA COUNTY RECORDS; THENCE ALONG THE LAST NAMED LINE, SOUTH
88(degrees) 59' 54" WEST 675 FEET; THENCE SOUTH 1(degree) 00' 06" EAST 646.68
FEET TO SAID SOUTHERN LINE OF THE 67.85 ACRE PARCEL, 591 or 355; AND THENCE
ALONG THE LAST NAMED LINE, SOUTH 69(degrees) 12' 33" EAST 216.72 FEET TO AN
ANGLE POINT THEREON, AND NORTH 88(degrees) 31' 23" EAST 473.78 FEET TO THE POINT
OF BEGINNING.
RESERVING THEREFROM, A NON-EXCLUSIVE EASEMENT FOR ALL PUBLIC UTILITY PURPOSES, IN, UNDER, OVER, ALONG AND ACROSS THE NORTHERN 10 FEET, RIGHT ANGLE MEASUREMENT THEREOF.
ALSO RESERVING THEREFROM, A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS, OVER, ALONG AND ACROSS THE NORTHERN 60 FEET RIGHT ANGLE MEASUREMENT THEREOF.
SAID EASEMENTS TO BE APPURTENANT TO AND FOR THE BENEFIT OF THE REMAINING LANDS OF THE GRANTOR.
EXHIBIT 10.05.07
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON
AND
INLAND RADIO, INC.
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and INLAND RADIO, INC., a California corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the City of San Bernardino, in the County of San Bernardino and State of California, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee certain portions of the Real Property, more particularly described as set forth in Exhibit B, which is attached hereto and made a part hereof (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting tower and equipment (the "Installations") . Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those here in above specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors .
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics,
materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date") . If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880
Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Accounting, or to such other person or place as Lessor may designate from time
to time by notice to Lessee, in the following amounts and in the following
manner:
(i) During the first year beginning with the Commencement Date, a base rent of Thirty-Nine Thousand Six Hundred Dollars ($39,600.00) per annum, in equal monthly installments of Three Thousand Three Hundred Dollars ($3,300.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the
Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the
estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000.00), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement .
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect
thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection
with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel
selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss
or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable .
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises
relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the
foregoing representation and warranty in entering into this Agreement and in expanding monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the
terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will note exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased
Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting tower is and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be
sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(1) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective
purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the
part of Lessee:
(i) The failure of Lessee to pay rent or additional rent,
and continuation of such failure for more than ten (10) days after
Lessee's receipt of written notice thereof from Lessor; provided,
however, that Lessor shall not be required to provide such written
notice to Lessee more than twice in any twelve (12) month period
prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its
business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased
Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and
Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed
of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting tower, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio tower located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
INLAND RADIO, INC.
/s/ Edward G. Atsinger By: /S/ Edward G. Atsinger
------------------------------------- ---------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Stuart W. Epperson
--------------------------------------
STUART W. EPPERSON
|
LOTS 3 TO 11, INCLUSIVE, BLOCK "B", AND LOTS 2 To 15, INCLUSIVE, BLOCK "C", TRACT NO. 2397 IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO. STATE OF CALIFORNIA. AS PER PLAT RECORDED IN BOOK 34 OF MAPS, PAGES 27 AND 30, RECORDS OF SAID COUNTY.
TOGETHER WITH THOSE PORTIONS OF "J" STREET AND DE SIENNA DRIVE, CLOSED, ADJACENT TO SAID LOTS, AND WHICH ACCRUED TO SAID LOTS BY REASON OF THE CLOSING OF SAID STREETS BY RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, DATED JULY 15, 1940, ALSO THAT PORTION OF COLTON AVENUE IN RESOLUTION DATED MAY 4, 1976, IN BOOK 8922, PAGE 1050, OFFICIAL RECORDS, ADJOINING SAID PROPERTY AND WHAT WOULD PASS BY OPERATION OF LAW WITH A CONVEYANCE OF SAID PROPERTY.
The building commonly known as 992 Inland Center Drive, San Bernardino, CA 92408.
Sufficient space on the Real Property for the Lessee's broadcasting tower, related guy wires and ground system, and any other of its Installations.
The building commonly known as 990 Inland Center Drive, San Bernardino, CA 92408, is specifically excluded from the definition of Leased Premises.
CERTIFICATE OF UNANIMOUS CONSENT
OF
INLAND RADIO, INC.
The undersigned, being all of the members of the Board of Directors of Inland Radio, Inc., a California corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to sell the real estate owned by it and located in San Bernardino, California to Edward G. Atsinger III and Stuart W. Epperson for the amount of $394,285, such amount to be paid by the assumption of the Corporation obligations to Thomas M. Jones and Sally Lenart in that amount; and
RESOLVED that the Corporation is hereby authorized and directed to lease said real estate from Edward G. Atsinger III and Stuart W. Epperson pursuant to the terms of a lease in the form of and with the terms and conditions set forth in the Lease Agreement attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of February, 1992.
/s/ Stuart W. Epperson ---------------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III ---------------------------------- Edward G. Atsinger III |
Exhibit 10.05.08
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON
AND
INSPIRATION MEDIA, INC.
February 1, 1992
AGREEMENT made as of. this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and INSPIRATION MEDIA, INC., a Washington corporation ("Lessee") .
WHEREAS, Lessor owns certain land (the "Land") and certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in King County, State of Washington, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting towers and equipment (the "Installations").
Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the, first year beginning with the Commencement Date, a base rent of Thirty-One Thousand Two Hundred Dollars ($31,200.00) per annum, in equal monthly installments of Two Thousand Six Hundred Dollars ($2,600.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in
any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean
order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v)
does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be
paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability
arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Washington and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal
injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but
at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such
approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will note exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and
validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting towers are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(1) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for
Lessee's reorganization under the Bankruptcy Act of the United
States, or any future law of the United States having the same general
purpose, or if Lessee shall make an assignment for the benefit of its
creditors, or if Lessee's interest hereunder shall be levied upon or
attached, which levy or attachment shall not be removed within twenty
(20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of
the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises,
Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting towers, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Washington.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
INSPIRATION MEDIA, INC.
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
------------------------------- ----------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Stuart W. Epperson
-------------------------------
STUART W. EPPERSON
|
THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER; AND WEST HALF OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER; ALL IN SECTION 31, TOWNSHIP 23 NORTH, RANGE 3 EAST, W.M, IN KING COUNTY, WASHINGTON;
EXCEPT THE SOUTH 180 FEET OF THE WEST 400 FEET AND EXCEPT THE NORTH 195 FEET OF THE EAST 400 FEET; ALSO
THE NORTH 1/2 OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 6, TOWNSHIP 22 NORTH, RANGE 3 EAST, W.M, IN KING COUNTY, WASHINGTON;
EXCEPT THE WEST 30 FEET;
ALSO KNOWN AS LOT A AND PARCEL A OF LOT LINE ADJUSTMENT RECORDED UNDER AUDITOR'S FILE NO. 8502190649;
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES OVER THE EAST 30
FEET OF THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF.
SECTION 6, TOWNSHIP 22 NORTH, RANGE 3 EAST, W.M, IN KING COUNTY, WASHINGTON;
EXCEPT THAT PORTION LYING WITHIN SW 196TH ST.;
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES OVER THE WEST 30 FEET OF THE EAST HALF OF NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 6, TOWNSHIP 22 NORTH, RANGE 3 EAST, W.M, IN KING COUNTY, WASHINGTON;
EXCEPT THAT PORTION LYING WITHIN S.W. 196TH ST.
Exhibit 10.05.09
This Agreement ("Agreement") is made as of the twenty-second day of August, 1994, by and between EDWARD G. ATSINGER III and MONA J. ATSINGER, not individually but solely as Trustees of the ATSINGER FAMILY TRUST, and STUART W. EPPERSON, not individually but solely as Trustee of the STUART W. EPPERSON REVOCABLE LIVING TRUST, collectively referred to herein as "Lessor", and INSPIRATION MEDIA, INC. ("Lessee"), a Washington corporation.
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Kitsap, State of Washington, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee uses said Real Property in operating its radio station KLFE-AM, Seattle, Washington; and,
WHEREAS, the parties are desirous of making a mutually suitable and
satisfactory agreement whereby Lessor will lease to Lessee the Real Property
(constituting the "Leased Premises") on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the following covenants,
agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on August 22,
1994 (the "Commencement Date"), and shall expire on August 21, 2004 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of TWENTY-FOUR THOUSAND DOLLARS ($24,000) per annum, in equal monthly installments of TWO THOUSAND DOLLARS ($2,000) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st)
through the ninth (9th) anniversaries of the Commencement Date. During the one
(1) year period beginning with each Adjustment Date, the monthly rent payable by
Lessee shall reflect an adjustment, as herein provided, for an increase, if any,
in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities
Average [Base Year 1982/84=100] ("CPI") published by the United States
Department of Labor, Bureau of Labor Statistics, as measured in February of each
year; i.e., during the one (1) year period beginning with the Adjustment Date,
the monthly rent shall be the product obtained by multiplying the Base Rent
times a fraction, the numerator of which shall be the CPI for February of the
year in which the Adjustment Date falls and the denominator of which shall be
the CPI for February of the year in which the Commencement Date falls.
Notwithstanding the results of the foregoing calculation, the monthly amount
payable by Lessee hereunder shall not in any event be less than the monthly
rental paid during the immediately preceding one (1) year period. In the event
that the Bureau of Labor Statistics shall change the base period for the CPI,
the new index number shall be substituted for the old index numbers in making
the above computation. In the event the Bureau of Labor Statistics ceases
publishing the CPI, or materially changes the method of its computation, Lessor
and Lessee shall accept comparable statistics on the purchasing power of the
consumer dollar as published at the time of said discontinuation or change by a
responsible financial periodical of recognized authority to be then chosen by
Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment,
diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the
fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered
to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other
sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under
the terms hereof, and continuation of such failure to cure for more than thirty
(30) days after notice by Lessor, provided, however, that if the nature of
Lessee's default is such that more than thirty (30) days is required for its
cure, then Lessee shall not be deemed to be in default if Lessee has commenced
such cure within the thirty (30) day period, demonstrates to Lessor's reasonable
satisfaction that such default is curable and thereafter diligently prosecutes
such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if
this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE ATSINGER FAMILY TRUST INSPIRATION MEDIA, INC. /s/ Edward G. Atsinger, III /s/ Eric H. Halvorson ------------------------------ ------------------------------ EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President /s/ Mona J. Atsinger ------------------------------ MONA J. ATSINGER Trustee |
STUART W. EPPERSON
REVOCABLE LIVING TRUST
/s/ Stuart W. Epperson ------------------------------ STUART W. EPPERSON Trustee |
The following described real estate, situated in the county of KITSAP State of Washington:
That portion of Government Lot 5, Section 14, Township 25 North, Range 2 East, W.M., described as follows:
Beginning at the Southwest corner of Government Lot 5, said Section, the True Point of Beginning; thence East 528 Feet; thence North 660 feet; thence East 132 feet; thence North 330 feet; thence West 451 feet; thence South 104.5 feet; thence West 209 feet to Section line; thence South 885.3 feet to the Point of Beginning;
EXCEPT portion taken for road in Kitsap County SC No. 14124;
AND EXCEPT County Road No. 214;
Situate in the City of Bainbridge Island, Kitsap County, Washington.
Exhibits 10.05.10
AGREEMENT
BETWEEN
ATSINGER FAMILY TRUST
AND
OASIS RADIO, INC.
June 1, 1992
AGREEMENT made as of this first day of June, 1992, by and between EDWARD G. ATSINGER III AND MONA J. ATSINGER, not individually but solely as Trustees of the ATSINGER FAMILY TRUST ("Lessor"), and OASIS RADIO, INC., a California corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located on Fifteenth Avenue, in the City of Rosamond, County of Kern, State of California, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Land (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the
installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned
by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of
the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on June 1, 1992 (the "Commencement Date") and shall expire on May 31, 2002 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date
through the Expiration Date, or such earlier date as this Agreement is
terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA
93012, Attn: accounting, or to such other person or place as Lessor may
designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Ten Thousand Eight Hundred Dollars ($10,800) per annum, in equal monthly installments of Nine Hundred Dollars ($900.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls.
Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection
with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an
amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel
selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss
or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises
relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the
foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the
terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will not exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased
sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective
purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its
business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased
Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and
Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed
of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement (a) Lessor shall have the exclusive right to unrestricted use of the space on the radio tower located on the Land not used by the Lessee, and (b) Lessor shall have the right to unrestricted use of approximately 300 square feet of the transmitter building located on the Land, as outlined on Exhibit B attached hereto. Lessor shall have no obligation to pay rent for the use described above and may use the allowed space for any lawful purpose which does not interfere with Lessee's operations. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the allowed space.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon
the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio tower located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose
of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No
additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
ATSINGER FAMILY TRUST OASIS RADIO, INC.
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
---------------------------------- ---------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
Trustee President
/s/ Mona J. Atsinger
----------------------------------
MONA J. ATSINGER
Trustee
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EXHIBIT A
|
BLOCK 52, BEING A PORTION OF THE EAST HALF OF SECTION 21, TOWNSHIP 9 NORTH, RANGE 12 WEST, SAN BERNARDINO MERIDIAN, IN THE UNINCORPORATED AREA OF THE COUNTY OF KERN, STATE OF CALIFORNIA, ACCORDING TO THE MAP OF ROSAMOND TOWNSITE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, RECORDED AUGUST 12, 1907, IN BOOK 195 PAGES 66 AND 67 OF DEEDS.
EXHIBIT B
[LOT DRAWING APPEARS HERE]
CERTIFICATE OF UNANIMOUS CONSENT
OF
OASIS RADIO, INC.
The undersigned, being all of the members of the Board of Directors of Oasis Radio, Inc., a California corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to lease the real estate owned by the Atsinger Family Trust and located in Rosamond, California, pursuant to the terms of a lease in the form of and with the terms and conditions set forth in the Lease Agreement attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of June, 1992.
/s/ Stuart W. Epperson ---------------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III ---------------------------------- Edward G. Atsinger III |
Exhibit 10.05.11.01
This Lease Agreement (hereinafter called "this Lease"), is made and entered into the 30th day of September, 1993, by and between WEAZ-FM , Inc., a Pennsylvania corporation (hereinafter called "Landlord"), and PENNSYLVANIA MEDIA ASSOCIATES, INC., a Pennsylvania corporation (hereinafter called "Tenant").
WITNESSETH:
That Landlord is the owner of certain property located in Whitemarsh Township, Montgomery County, Pennsylvania, and more fully and particularly described in Exhibit A attached hereto, which is hereby incorporated herein (hereinafter sometimes called the "demised premises" or the "leased premises"); and
NOW THEREFORE, in consideration of the execution and delivery of this Lease, the mutual promises contained herein and the sum of One Dollar ($1.00) in hand each paid to the other, the
receipt and sufficiency of all of which is hereby acknowledged, the parties hereto do covenant and agree as follows:
(B) Tenant shall have the right to extend the term of this Lease for three (3) successive periods of five (5) years each, by giving written notice to Landlord at least one hundred eighty (180) days prior to the expiration of the then current term.
(C) Notwithstanding anything contained herein to the contrary, Tenant shall have the right to terminate this Lease at any time by: (1) giving not less than one hundred eighty (180) days prior written notice of termination to Landlord, (2) removing from the leased premises all towers, antennas, buildings, improvements, trade fixtures and equipment now on the demised premises or placed or installed in or upon the demised premises by Tenant on or before the effective of termination, and (3) quitting and surrendering the leased premises to Landlord on or before the effective date of such termination.
(D) In the event that Tenant terminates this Lease pursuant to
Section 1(C) hereof, all of Tenant's right, title and interest in and to the
property shall terminate as of the effective date of such termination,
specifically including but
(A) During the first year of the term hereof, Tenant shall pay annual rent in the amount of Fifty Thousand ($50,000) Dollars, payable in equal monthly installments.
(B) During the second year of the term hereof, Tenant shall pay annual rent in an amount equal to the sum of (i) Fifty Thousand ($50,000) Dollars, plus (ii) an amount equal to the product of (x) Fifty Thousand ($50,000) Dollars and (y) the percentage increase, if any, in the Consumer Price Index (as hereinafter defined) between October 1993 and October 1994, payable in equal monthly installments.
(C) During the third year of the term hereof, Tenant shall pay annual rent in an amount equal to the sum of (i) Fifty Five Thousand ($55,000) Dollars, plus (ii) an amount equal to the product of (x) Fifty Five Thousand ($55,000) Dollars and (y) the percentage increase, if any, in the Consumer Price Index between October 1993 and October 1995, payable in equal monthly installments.
(D) During each subsequent year during the balance of the term hereof, Tenant shall pay annual rent in an amount equal to the sum of (i) the annual rent in effect during the preceding lease year, plus (ii) an amount equal to the product of (x) the annual rent in effect during the preceding lease year and (y) the percentage increase, if any, in the Consumer Price Index between October of the preceding calendar year and October of the current calendar year, payable in equal monthly installments.
(E) In no event shall the annual rent for any lease year be less then the annual rent for the prior lease year. Thus, if there is a decrease in the Consumer Price Index during the relevant period of comparison, the annual rent for the ensuing lease year shall remain the same as the annual rent for the prior lease year.
(F) For purposes of this Section 2, the "Consumer Price Index" means the Consumer Price Index for all Urban Consumers, Philadelphia-Wilmington- Trenton area, Consumer Prices for All Items (1982-84=100), determined and released by the Bureau of Labor Statistics of the United States Department of
Labor (hereinafter called the "Index"). If the base year selected by the United States Department of Labor shall be changed, then the resultant Index shall be readjusted so as to reflect the base initially established under this Section 2. If the Consumer Price Index shall no longer be published or cannot be readjusted, then Landlord shall designate another index generally recognized as authoritative, which shall then be substituted for the Consumer Price Index for purposes of this Agreement.
(G) All monthly payments of rent are due in advance on or before the first day of each month during the term hereof.
(A) The following are hereby defined as "Events of Default":
(1) If Tenant shall default in the payment of any installment of rent, or of any other sum payable by Tenant to Landlord, on any day upon which the same is due to be paid, and if such default shall continue for five (5) days after Landlord shall have given to Tenant a written notice specifying such default; or
(2) If Tenant shall do or permit anything to be done, whether by action or inaction, contrary to any covenant or agreement on the part of Tenant herein contained, or contrary to any of the covenants, agreements, terms, or provisions of this Lease, or shall fail in the keeping or performance of any of the covenants, agreements, terms, or provisions contained in this
Lease which on the part or behalf of Tenant are to be kept or performed, and
Tenant shall fail to commence to take steps to remedy the same within thirty
(30) days after Landlord shall have given to Tenant a written notice specifying
the same, or having so commenced, shall thereafter fail to proceed diligently to
remedy the same.
(B) Upon the occurrence of any Event of Default, then regardless of and notwithstanding the fact that Landlord has or may have some other remedy under this Lease or by virtue hereof, or in law or in equity, Landlord may give to Tenant a notice (herein called the "second notice") of intention to end the term of this Lease, specifying a day not less than ten (10) days thereafter, and, upon the giving of the second notice, this Lease and the term and estate hereby granted shall expire and terminate upon the day so specified in the second notice as fully and completely and with the same force and effect as if the day so specified were the date hereinbefore fixed for the expiration of the term of this Lease, and all rights of Tenant under this Lease shall expire and terminate, but Tenant shall remain liable for damages as hereinafter provided.
(C) Upon any termination or expiration of this Lease, Tenant shall peaceably quit and surrender the demised premises to Landlord, having removed all improvements and personal property now on the demised premises and/or placed or installed in or upon the demised premises by Tenant, and Landlord may without further notice enter upon, re-enter, possess, and repossess itself
thereof peaceably through summary proceedings, ejectment, or otherwise, and may dispossess and remove Tenant and all other persons and property from the demised premises and may have, hold, and enjoy the demised premises and the right to receive all rental and other income of and from the same.
(D) It is covenanted and agreed by Tenant that, in the event of the expiration or termination of this Lease, or re-entry by Landlord under any of the provisions of this paragraph or pursuant to law, by reasons of default hereunder on the part of Tenant, Tenant will pay to Landlord, as damages, a sum equal to all of the rent which would have been payable by Tenant had this Lease not so terminated, or had Landlord not so re-entered the Premises, for the period ending such time as Tenant shall quit and surrender the demised premises to Landlord.
(E) If Tenant shall fail to make any payment required to be made under this Lease or shall default in the performance of any other covenant, agreement, term, provision, or condition herein contained, Landlord, without being under any obligation to do so and without thereby waiving such default, may make such payment and/or remedy such other default for the account and at the expense of Tenant, immediately and without notice in the case of emergency, or in any other case, provided that Tenant shall fail to make such payment or remedy such default with all reasonable dispatch within ten (10) days (for payment defaults) or thirty (30) days (for performance defaults), after Landlord shall have notified Tenant in writing of such failure or default.
(F) Tenant will also pay to Landlord, upon demand, any and all reasonable expenses incurred by Landlord as a result of Tenant's failure to make any payment required under this Lease or default in performance of any other covenant, agreement, term, provision, or condition herein contained, including reasonable counsel fees involved in collection of any sum due Landlord hereunder, or enforcement of any right against Tenant under or in connection with this Lease or pursuant to law, including (without being limited to) any such cost, expense, and disbursement involved in instituting and prosecuting summary proceedings, as well as bills for any property, material, labor, or services provided, furnished, or rendered, or caused to be, by Landlord to Tenant, with respect to the Premises.
(G) The failure of Landlord to insist upon the strict performance of any one of the covenants, agreements, terms, provisions, or conditions of this Lease or to exercise any right, remedy, or election herein contained or permitted by law shall not constitute or be construed as a waiver or relinquishment for the future of such covenant, agreement, term, provision, condition, right, remedy, or election, but the same shall continue and remain in full force and effect.
equipment for the operation of an AM radio station and may lease space on the existing towers to other communication companies.
or in part by a defective, dangerous, or unsafe condition of the demised premises, or the equipment, fixtures, or appurtenances thereon and/or thereat which are required by law or the terms hereof to be maintained in good repair.
(A) If any taking in condemnation proceedings will not render the Premises unsatisfactory for Tenant's use, Tenant will restore the Premises to proper, tenantable condition forthwith, as to the land, and shall be entitled to use all condemnation proceedings for such restoration. If any taking will render the Premises unsatisfactory for Tenant's use, this Lease shall terminate, and all condemnation proceeds shall be payable to Landlord. Nothing herein shall prevent Tenant from pursuing its own claim directly against the condemning authority for loss of business, trade fixtures, moving costs or other items of loss.
(B) For purposes of this paragraph, the term "condemnation proceedings" shall include conveyances and grants made in anticipation or in lieu of condemnation proceedings.
parent, subsidiary, affiliated, or controlled corporation of or to a surviving entity of a merger or consolidation of any of the foregoing, without the consent of Landlord, and (ii) in the event of a proposed sale of radio station WBEB(AM), Landlord shall not unreasonably withhold consent of the assignment of this Lease to the purchaser of the radio station and the release of Tenant of any further liability hereunder.
(A) During the entire term of this Lease, Tenant covenants to pay, in addition to all other sums required to be paid by Tenant under the Lease, before delinquency, all real estate taxes levied or assessed against the demised premises for each year of the Lease term, and all installments for special assessments due during the Lease term with respect to the demised premises during the Lease term.
(B) Tenant shall also pay, before delinquency, any and all taxes and assessments levied or assessed and becoming payable during the term against Tenant's personal property located upon the demised premises.
(C) As between the parties hereto, Tenant shall have the duty of making and filing all statements or reports which may be required under applicable law in connection with any tax, charge, fee, rate, imposition or assessment referred to in either subparagraphs (A) or (B) hereof.
(D) Any payments due under the provisions of subparagraph (A) shall be prorated as of the commencement and the termination or expiration date of this Lease.
(A) This Lease shall be deemed and construed to be a "net/net/net lease" and Tenant shall pay to Landlord, absolutely net throughout the term of this Lease, the rent and other sums payable hereunder, and under no circumstances or conditions, whether now existing or hereafter arising, or whether beyond the present contemplation of the parties, shall Landlord be expected
or required to make any payment of any kind whatsoever hereunder or be under any other obligations or liability with respect to the demised premises except as herein otherwise expressly set forth.
(B) If Landlord is required to employ an attorney to collect any of the monies due Landlord or to enforce the performance by Tenant of the agreement, conditions, covenants, provisions, or stipulations of this Lease, then in such an event, Landlord's costs, expenses, and reasonable counsel fees shall be paid (if Landlord prevails) by Tenant to Landlord upon demand.
(C) Except to the extent elsewhere provided in this Lease, no happening, event, occurrence, or situation during the term of this Lease, whether foreseen or unforeseen, and however extraordinary, shall relieve Tenant from its liability to pay the full rent and other charges under this Lease, or shall relieve Tenant from any of its other obligations under this Lease; and Tenant waives any rights now or hereafter conferred upon it by statute, proclamation, decree, or order, or otherwise, to quit or surrender the demised premises or this Lease, or any part thereof, or to any abatement, diminution, reduction, or suspension of rent on account of any such event, happening, occurrence, or situation.
(A) Each party shall, at any time and from time to time upon not less than twenty (20) days' prior notice from the other party, or its successors or assigns, execute, acknowledge,
and deliver to the other party a statement setting forth the commencement date,
the expiration date, and the rent, and further stating: (i) that this Lease is
unmodified and in full force and effect (or, if there has been any modification,
that the same is in full force and effect as modified and stating the
modification); (ii) the date to which the rent has been paid in advance, if any;
(iii) whether or not, to the knowledge of the party issuing the certificate, the
other party is in default in performance of any of its obligations under this
Lease and, if so, specifying each such default of which the party issuing the
certificate may have knowledge; (iv) whether the party issuing the certificate
has accepted possession of the demised premises; (v) whether the party issuing
the certificate has made any claim against the other party under this Lease and,
if so, the nature thereof and the dollar amount, if any, of such claim; (vi)
whether there exist any known offsets or defenses against enforcement of any of
the terms of this Lease upon the part of the party issuing the certificate to be
performed, and, if so, specifying the same; and (vii) such further information
with respect to this Lease or the demised premises as the other party reasonably
request.
(B) It is agreed that any such statement delivered pursuant hereto shall be binding upon the issuing party and may be relied upon by the other party by any prospective purchaser of the demised premises or any part thereof, by any mortgagee or prospective mortgagee thereof, by any lessor or prospective
lessor thereof, by any lessee or prospective lessee thereof, or by any prospective assignee or any mortgagee thereof.
(A) Landlord shall not be responsible for any damage or injury to any property, fixtures, merchandise, or decorations or to any person or persons at any time on the demised premises.
(B) Landlord shall not in any way be responsible or liable in case of any accident or injury, including death, to any of Tenant's servants, employees, agents, or to any person or persons in or about the demised premises.
(C) Tenant agrees that it will not hold Landlord in any way responsible or liable therefor and will further indemnify, defend and hold Landlord harmless from and against any and all claims, liabilities, penalties, damages, expenses, and judgments arising from injury to persons or property of any nature and also for any matter or thing growing out of the use and/or occupation of the demised premises.
term hereof shall be made at Tenant's expense, and Landlord hereby consents thereto.
charges, and encumbrances excepting those permitted by this paragraph, Landlord shall, within a reasonable time thereafter, cure such defects and clear title. The closing of the transaction shall, in all events, be held on a date within such seven (7) year period and the time of such closing is agreed to be of the essence. If the evidence of title furnished by Landlord discloses any defects in Landlord's title which cannot be cured, and the curing of which Tenant is unwilling to waive, Tenant may withdraw its exercise of this option to purchase, and its performance of the contract formed by such exercise shall be excused, and this Lease shall continue in full force and effect in accordance with its terms. At the closing, Landlord shall by special warranty deed convey to Tenant fee simple title to the Premises free and clear of all liens, charges, and encumbrances excepting those permitted by this paragraph. Upon delivery of such warranty deed, Tenant shall pay the purchase price to Landlord in cash or by certified check. All deed stamp and/or transfer taxes imposed in connection with such transfer shall be divided equally between Landlord and Tenant. Upon the closing, this Lease and all of the obligations arising from and after the closing shall terminate. Tenant shall have the right to assign this option to permitted assignees, as set forth in Section 10 hereof, and may assign its rights and obligations under this Section 18 to Edward G. Atsinger, Stuart W. Epperson, their spouses and children, or trusts created for the benefit of their spouses and children. Upon Tenant's request, the parties shall
record a summary of this option with the office for the recording of deeds in and for Montgomery County.
IN WITNESS HEREOF, the parties have caused this Lease to be duly executed, in quadruplicate, as of the day and year first above written.
LANDLORD:
WEAZ-FM Radio, Inc.,
a Pennsylvania corporation
BY: /s/ Jerry Lee
-------------------------------
Jerry Lee, President
ATTEST: [SIGNATURE APPEARS HERE]
---------------------------
|
TENANT:
PENNSYLVANIA MEDIA ASSOCIATES,
INC., a Pennsylvania corporation
BY: /s/ Eric H. Halvorson ------------------------------- Eric H. Halvorson Exec. V.P. |
STATE OF Pennsylvania :
: SS.
COUNTY OF Philadelphia :
On this 30th day of September, 1993, before me, an officer duly authorized in the County and State aforesaid to take acknowledgments, personally appeared ERIC H. HALVORSON, who is Executive Vice President of Pennsylvania Media Associates, Inc., a corporation existing under the laws of the Commonwealth of Pennsylvania, to me known to be the individual and Executive Vice President of said corporation described in and who executed the foregoing instrument, and that he acknowledged the execution thereof to be his free act and deed as such Executive Vice President thereunto duly authorized, and that the said instrument is the act and deed of said corporation.
WITNESS my hand and official seal in the above County and State.
/s/ Patrice Kelly
----------------------------------
NOTARY PUBLIC
|
My Commission Expires:
STATE OF Pennsylvania :
: SS.
COUNTY OF Philadelphia :
On this 30th day of September, 1993, before me, an officer duly authorized in the County and State aforesaid to take acknowledgments, personally appeared JERRY LEE, who is President of WEAZ-FM Radio, Inc., a corporation existing under the laws of the Commonwealth of Pennsylvania, to me known to be the individual and President of said corporation described in and who executed the foregoing instrument, and that he acknowledged the execution thereof to be his free act and deed as such President thereunto duly authorized, and that the said instrument is the act and deed of said corporation.
WITNESS my hand and official seal in the above County and State.
My Commission Expires:
EXHIBIT 10.05.11.02
This Agreement ("Agreement") is made as of the fifth day of August, 1994, by and between EDWARD G. ATSINGER III and MONA J. ATSINGER, not individually but solely as Trustees of the ATSINGER FAMILY TRUST, and STUART W. EPPERSON, not individually but solely as Trustee of the STUART W. EPPERSON REVOCABLE LIVING TRUST, collectively referred to herein as "Lessor", and PENNSYLVANIA MEDIA ASSOCIATES, INC. ("Lessee"), a Pennsylvania corporation.
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Montgomery, State of Pennsylvania, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee uses said Real Property in operating its radio station WZZD-AM, Philadelphia, Pennsylvania; and,
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated
with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute Installations
of similar kind and character for those hereinabove specified, provided such
changes shall be approved in advance by Lessor, and Lessor shall not
unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on August 5, 1994 (the "Commencement Date"), and shall expire on August 4, 2004 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the
last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in default under this Agreement, to extend the Term of this Agreement for up to two (2) successive periods of five (5) years each (the "Extended Terms"), and, except as set forth in subparagraph (c), below, on the same terms, covenants and conditions herein contained. The word "Term" as used in this Agreement shall be deemed to include the Extended Terms when and if the Agreement is extended. Each option to extend the Term shall be exercised only by Lessee's delivery to Lessor by United States mail on or before ninety (90) days prior to the commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through
the Expiration Date, or such earlier date as this Agreement is terminated as
provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Accounting, or to such other person or place as Lessor may designate from time
to time by notice to Lessee, in the following amounts and in the following
manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of FORTY EIGHT THOUSAND DOLLARS ($48,000) per annum, in equal monthly installments of FOUR THOUSAND DOLLARS ($4,000) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the
ninth (9th) anniversaries of the Commencement Date. During the one (1) year
period beginning with each Adjustment Date, the monthly rent payable by Lessee
shall reflect an adjustment, as herein provided, for an increase, if any, in the
Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average
[Base Year 1982/84=100] ("CPI") published by the United States Department of
Labor, Bureau of Labor Statistics, as measured in February of each year; i.e.,
during the one (1) year period beginning with the Adjustment Date, the monthly
rent shall be the product obtained by multiplying the Base Rent times a
fraction, the numerator of which shall be the CPI for February of the year in
which the Adjustment Date falls and the denominator of which shall be the CPI
for February of the year in which the Commencement Date falls. Notwithstanding
the results of the foregoing calculation, the monthly amount payable by Lessee
hereunder shall not in any event be less than the monthly rental paid during the
immediately preceding one (1) year period. In the event that the Bureau of Labor
Statistics shall change the base period for the CPI, the new index number shall
be substituted for the old index numbers in making the above computation. In the
event the Bureau of Labor Statistics ceases publishing the CPI, or materially
changes the method of its computation, Lessor and Lessee shall accept comparable
statistics on the purchasing power of the consumer dollar as published at the
time of said discontinuation or change by a responsible financial periodical of
recognized authority to be then chosen by Lessor subject to reasonable consent
of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all
rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after
written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv)
insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessee, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessor, (ii) any negligent or intentional act or omission of Lessor, its employees, agents, invitees or contractors, whether in,
on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessor on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessor pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessor's request or this Agreement; provided, however, that Lessor shall not be required to indemnify Lessee for any damages, injury, loss or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated
condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not
yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character
immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given hereunder shall be in writing and sent certified mail, return receipt requested, and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE
ATSINGER FAMILY TRUST PENNSYLVANIA MEDIA
ASSOCIATES, INC.
/s/ EDWARD G. ATSINGER /s/ ERIC H. HALVORSON
--------------------------- -----------------------------
EDWARD G. ATSINGER, III ERIC H. HALVORSON
Trustee Vice-President
/s/ MONA J. ATSINGER
---------------------------
MONA J. ATSINGER
Trustee
|
STUART W. EPPERSON
REVOCABLE LIVING TRUST
/s/ STUART W. EPPERSON --------------------------- STUART W. EPPERSON Trustee |
EXHIBIT 10.05.12
This Agreement ("Agreement") is made as of the 1st day of September, 1997, by and between EDWARD G. ATSINGER III, not individually but solely as Trustee of the ATSINGER FAMILY TRUST ( "Lessor"), and RADIO 1210, INC. ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee desires to use said Real Property in operating its radio
station KPRZ(AM), SAN DIEGO, CALIFORNIA; and,
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute Installations of similar kind and character for those hereinabove specified, provided such changes shall be approved in advance by Lessor, and Lessor shall not unreasonably delay or withhold its approval. In the event
Lessee submits any such changes for Lessor's approval and Lessor does not respond within thirty (30) days after Lessor's receipt thereof, then such changes shall be deemed approved by Lessor, so long as such changes otherwise comply with this Agreement, five (5) days after Lessor's receipt of notice that it has not responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on August 1, 1997 (the "Commencement Date"), and shall expire on December 31, 2002 (the "Expiration Date").
(b) {Intentionally omitted.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through
the Expiration Date, or such earlier date as this Agreement is terminated as
provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Accounting, or to such other person or place as Lessor may designate from time
to time by notice to Lessee, in the following amounts
and in the following manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of $45,596 per annum, in equal monthly installments of $3,799.67 (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first day of February following the Commencement Date and each subsequent anniversary of such date this Agreement remains in effect. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the year in which the Commencement Date falls, in the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles area [Base Year 1982-84=100] ("CPI") as measured in February and published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for February of the year such Adjustment Date falls and the denominator of which shall be the CPI for February of the year in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the amount payable by Lessee hereunder shall not in any event be less than the rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index number in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for
the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than Three Million Dollars ($3,000,000.00) for injuries to one person, Five Million Dollars ($5,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than Five Million Dollars ($5,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Ohio and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or
with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any
part of the Leased Premises, (iv) any work undertaken by or at the request of
Lessee on or about the Leased Premises, (v) any other activity undertaken by or
at the request of Lessee pursuant to or in connection with this Agreement, or
(vi) the presence of any individuals on the Leased Premises as a result of
Lessee's request or this Agreement; provided, however, that Lessee shall not be
required to indemnify Lessor for any damages, injury, loss or expense arising
out of Lessor's or its agents', employees', invitees' or contractors' negligent
acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessee, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessor, (ii) any negligent or intentional act or omission of Lessor, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessor on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessor pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessor's request or this Agreement; provided, however, that Lessor shall not be required to indemnify Lessee for any damages, injury, loss or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or
damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and
validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such
failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by
appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given hereunder shall be in writing and sent certified mail, return receipt requested, and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE ATSINGER FAMILY TRUST RADIO 1210, INC. /s/ Edward G. Atsinger III /s/ Eric H. Halvorson -------------------------------- ---------------------------- EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President |
Exhibit 10.05.13
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON AND
SALEM MEDIA CORPORATION
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and SALEM MEDIA CORPORATION, a New York corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in Cook County, Illinois, more particularly described as:
Lot 3 in Hardee's Dundee Road Resubdivision of Lot 5 (except the south 33 feet thereof) and all of Lot 6 in Freedom Small Farms, being a Subdivision of parts of the north west 1/4 of the north west 1/4 and north 1/2 of the south west 1/4 of the north west 1/4 of Section 8, Township 42 North, Range 11 east of the Third Principal Meridian, in Cook County, Illinois
(the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Land (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting tower and equipment (the "Installations"). Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics,
materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in default under this Agreement, to extend the Term of this Agreement for up to two (2) successive periods of five (5) years each (the "Extended Terms"), and, except as set forth in subparagraph (c), below, on the same terms, covenants and conditions herein contained. The word "Term" as used in this Agreement shall be deemed to include the Extended Terms when and if the Agreement is extended. Each option to extend the Term shall be exercised only by Lessee's delivery to Lessor by United States mail on or before ninety (90) days prior to the commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880
Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Thirty-Six Thousand Dollars ($36,000.00) per annum, in equal monthly installments of Three Thousand Dollars ($3,000.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average (Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the
Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the
estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000.00), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect
thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection
with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an
amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Illinois and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel
selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss
or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents-and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises
relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the
foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the
terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(c) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will note exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased
Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting tower is and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be
sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(1) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective
purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the
terms hereof, and continuation of such failure to cure for more than thirty
(30) days after notice by Lessor, provided, however, that if the nature of
Lessee's default is such that more than thirty (30) days is required for
its cure, then Lessee shall not be deemed to be in default if Lessee has
commenced such cure within the thirty (30) day period, demonstrates to
Lessor's reasonable satisfaction that such default is curable and
thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its
business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased
Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and
Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed
of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be -denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting tower, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor s assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio tower located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Illinois.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
SALEM MEDIA CORPORATION
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
---------------------------- --------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Stuart W. Epperson
----------------------------
STUART W. EPPERSON
|
CERTIFICATE OF UNANIMOUS CONSENT
OF
SALEM MEDIA CORPORATION
The undersigned, being all of the members of the Board of Directors of Salem Media Corporation, a New York corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to sell the real estate owned by it and located in Chicago, Illinois to Edward G. Atsinger II and Stuart W. Epperson for the amount of $90,000, such amount to be paid in cash.
RESOLVED that the Corporation is hereby authorized and directed to lease said real estate from Edward G. Atsinger II and Stuart W. Epperson pursuant to the terms of a lease in the form of and with the terms and conditions set forth in the Lease Agreement attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of February, 1992.
/s/ Stuart W. Epperson ---------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III ---------------------------- Edward G. Atsinger Ill |
Exhibit 10.05.14
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON
AND
SALEM MEDIA OF CALIFORNIA, INC.
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and SALEM MEDIA OF CALIFORNIA, INC., a California corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the City of Paramount, in the County of Los Angeles, State of California, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof, and certain easements more particularly described as set forth in Exhibit B, which is attached hereto and made a part hereof (the "Easements") (together comprising the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee approximately 43,745 square feet of the Real Property, more particularly described as set forth in Exhibit C, which is attached hereto and made a part hereof, and the Easements (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting towers and equipment (the "Installations"). Lessee is fully familiar with the physical condition of the Leased Premises and has received the same in good order and condition, and agrees that the Leased Premises complies in all respects with all requirements of this Agreement. Lessee shall use the Leased Premises exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which
may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date") . If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the
commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Edward G. Atsinger III, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement
Date, a base rent of One Hundred Twenty Thousand Dollars ($120,000)
per annum, in equal monthly installments of Ten Thousand Dollars
($10,000.00) (the "Base Rent") in advance on the first day of each
month; and thereafter on each and every Adjustment Date (hereinafter
defined) the monthly rent shall be computed according to subparagraph
(ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States
Department of Labor, Bureau of Labor Statistics; i.e., during the one
(1) year period beginning with the Adjustment Date, the monthly rent
shall be the product obtained by multiplying the Base Rent times a
fraction, the numerator of which shall be the CPI for the calendar
month of the Adjustment Date and the denominator of which shall be the
CPI for the month in which the Commencement Date falls.
Notwithstanding the results of the foregoing calculation, the monthly
amount payable by Lessee hereunder shall not in any event be less than
the monthly rental paid during the immediately preceding one (1) year
period. In the event that the Bureau of Labor Statistics shall change
the base period for the CPI, the new index number shall be substituted
for the old index numbers in making the above computation. In the
event the Bureau of Labor Statistics ceases publishing the CPI, or
materially changes the method of its computation, Lessor and Lessee
shall accept comparable statistics on the purchasing power of the
consumer dollar as published at the time of said discontinuation or
change by a responsible financial periodical of recognized authority
to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided
herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Leased Premises or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Leased Premises and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Leased Premises at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Leased Premises whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value
thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000.00), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, and except for taxes and assessments paid by the lessee under Section 8 of the lease agreement for the Real Property dated July 1, 1981 between John Brown Schools of California, Inc. and C. Robert Langslet & Son, Inc., Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied,
confirmed or imposed on or in respect of or be a lien upon the Leased Premises or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Leased Premises or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Leased Premises, provided that (i) Lessee
shall first make all contested payments, under protest if it desires, (ii) neither the Leased Premises nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Leased Premises or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Leased Premises arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one
person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Leased Premises; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than
fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss
or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased
Premises or otherwise, (iii) the use by Lessor of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessor on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessor pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessor's request or this Agreement; provided, however, that Lessor shall not be required to indemnify Lessee for any damages, injury, loss or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be
subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of
which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking
of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards") . Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will note exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting towers are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all
regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Leased Premises or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor,
provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said
period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security
Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Leased Premises to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Leased Premises to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Leased Premises shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting towers, or to use the Leased Premises for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Leased Premises.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
SALEM MEDIA OF CALIFORNIA, INC.
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
----------------------------- -----------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Stuart W. Epperson
-----------------------------
|
STUART W. EPPERSON
PARCEL 2, IN THE CITY OF PARAMOUNT, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON PARCEL MAP NO. 13658 FILED IN BOOK 137 PAGE 95 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
LEGAL DESCRIPTION
FOR
RADIO STATION TOWER GUY WIRES AND ANCHORS
EASEMENTS FOR GUY WIRES AND ANCHORS IN THE CITY OF PARAMOUNT, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL `A':
A 5.00 FOOT WIDE EASEMENT WITHIN PARCEL 3 OF PARCEL MAP NO. 16925, AS SHOWN ON A MAP FILED IN BOOK 187, PAGES 74 THROUGH 76, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE EASTERLY BOUNDARY OF SAID PARCEL 3, SAID POINT BEING
THE NORTHERLY TERMINUS OF THAT CERTAIN COURSE IN SAID EASTERLY BOUNDARY SHOWN AS
"N 3(degrees) 16' 51" W 122.07 FEET" ON SAID MAP; THENCE S 3(degrees) 16' 51" E
15.31 FEET ALONG SAID BOUNDARY TO THE TRUE POINT OF BEGINNING; THENCE LEAVING
SAID EASTERLY BOUNDARY AND THROUGH A PORTION OF SAID PARCEL 3 S 68(degrees) 25;
58" W 92.87 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT `A'.
PARCEL `B':
AN EASEMENT WITHIN PARCEL 3 OF PARCEL MAP NO. 16925, AS DESCRIBED IN PARCEL `A' HEREON, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT POINT `A' AS DESCRIBED IN PARCEL `A' HEREON; THENCE N 84(degrees) 34' 48" W 5.00 FEET; THENCE N 5(degrees) 25' 12" E 5.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE S 84(degrees) 34' 48" E 10.00 FEET; THENCE S 5(degrees) 25' 12" W 10.00 FEET; THENCE N 84(degrees) 34' 48" W 10.00 FEET; THENCE N 5(degrees) 25' 12" E 10.00 FEET TO THE TRUE POINT OF BEGINNING.
THE SIDELINES OF SAID PARCELS `A' AND `B' SHALL BE PROLONGED OR FORESHORTENED SO AS TO TERMINATE AT SAID DESCRIBED BOUNDARIES AND/ OR INTERSECT WITH NO OVERLAP.
CERTIFICATE OF UNANIMOUS CONSENT
OF
SALEM MEDIA OF CALIFORNIA, INC.
The undersigned, being all of the members of the Board of Directors of Salem Media of California, Inc. a California corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to sell the real estate owned by it and located at Long Beach, California to Edward G. Atsinger II and Stuart W. Epperson for the amount of $625,000, such amount to be paid in the form of cash in the amount of $588,903.94 and a Promissory Note in the amount of $36,096.06, such Promissory Note to be in the form and with the terms and conditions set forth in the Promissory Note attached hereto and incorporated herein by reference; and
RESOLVED that the Corporation is hereby authorized and directed to sell the real estate owned by it and located at Paramount California to Edward G. Atsinger II and Stuart W. Epperson for the amount of $1,150,000, such amount to be paid in cash; and
RESOLVED that the Corporation is hereby authorized and directed to lease said real estate from Edward G. Atsinger II and Stuart W. Epperson pursuant to the terms of leases in the form of and with the terms and conditions set forth in the Lease Agreements attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of February, 1992.
/s/ Stuart W. Epperson ------------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III ------------------------------- Edward G. Atsinger III |
EXHIBIT 10.05.15
This Agreement ("Agreement") is made as of the 15th day of March, 1996 by and between EDWARD G. ATSINGER III, not individually but solely as Trustee of the ATSINGER FAMILY TRUST, and STUART W. EPPERSON, not individually but solely as Trustee of the STUART W. EPPERSON REVOCABLE LIVING TRUST, collectively referred to herein as "Lessor", and Salem Media of Colorado, Inc.("Lessee"), a Colorado corporation.
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise the real property located in the State of Colorado, County of Adams, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee uses said Real Property in operating its radio station KNUS-AM, Denver, Colorado (the "Station"); and,
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute Installations
of similar kind and character for those hereinabove specified, provided such
changes shall be approved in advance by Lessor, and Lessor shall not
unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on March 15, 1996 (the "Commencement Date"), and shall expire on March 22, 2006 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in default under this Agreement, to extend the Term of this Agreement for up to two (2) successive periods of five (5) years each (the "Extended Terms"), and, except as set forth in subparagraph (c), below, on the same terms, covenants and conditions herein contained. The word "Term" as used in this Agreement shall be deemed to include the Extended Terms when and if the Agreement is extended. Each option to extend the Term shall be exercised only by Lessee's delivery to Lessor by United States mail on or before ninety (90) days prior to the commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through
the Expiration Date, or such earlier date as this Agreement is terminated as
provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Accounting, or to such other person or place as Lessor may designate from time
to time by notice to Lessee, in the following amounts and in the following
manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of EIGHTEEN THOUSAND DOLLARS ($18,000) per annum, in equal monthly installments of ONE THOUSAND FIVE HUNDRED DOLLARS ($1,500) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the
ninth (9th) anniversaries of the Commencement Date. During the one (1) year
period beginning with each Adjustment Date, the monthly rent payable by Lessee
shall reflect an adjustment, as herein provided, for an increase, if any, in the
Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average
[Base Year 1982/84=100] ("CPI") published by the United States Department of
Labor, Bureau of Labor Statistics, as measured in February of each year; i.e.,
during the one (1) year period beginning with the Adjustment Date, the monthly
rent shall be the product obtained by multiplying the Base Rent times a
fraction, the numerator of which shall be the CPI for February of the year in
which the Adjustment Date falls and the denominator of which shall be the CPI
for February of the year in which the Commencement Date falls. Notwithstanding
the results of the foregoing calculation, the monthly amount payable by Lessee
hereunder shall not in any event be less than the monthly rental paid during the
immediately preceding one (1) year period. In the event that the Bureau of Labor
Statistics shall change the base period for the CPI, the new index number shall
be substituted for the old index numbers in making the above computation. In the
event the Bureau of Labor Statistics ceases publishing the CPI, or materially
changes the method of its computation, Lessor and Lessee shall accept comparable
statistics on the purchasing power of the consumer dollar as published at the
time of said discontinuation or change by a responsible financial periodical of
recognized authority to be then chosen by Lessor subject to reasonable consent
of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement
or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any
interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies
authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessee, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessor, (ii) any negligent or intentional act or omission of Lessor, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessor on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessor pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessor's request or this Agreement; provided, however, that Lessor shall not be required to indemnify Lessee for any damages, injury, loss or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for
overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio
Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without
prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessee, shall constitute a default on the part of Lessor; provided, however, that if the nature of Lessor's default is such that more than thirty (30) days is required for its cure, then Lessor shall not be deemed to be in default if Lessor has commenced such cure within the thirty (30) day period, demonstrates to Lessee's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb
Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given hereunder shall be in writing and sent certified mail, return receipt requested, and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR LESSEE ATSINGER FAMILY TRUST SALEM MEDIA OF COLORADO, INC. /s/ Edward G. Atsinger, III /s/ Eric H. Halvorson ------------------------------- ------------------------------- EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President |
STUART W. EPPERSON
REVOCABLE LIVING TRUST
/s/ Stuart W. Epperson ------------------------------- STUART W. EPPERSON Trustee |
Exhibit 10.05.16
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON
AND
SALEM MEDIA OF OHIO, INC.
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and SALEM MEDIA OF OHIO, INC., an Ohio corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Delaware, State of Ohio, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting tower and equipment (the "Installations").
Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Thirty-Eight Thousand Four Hundred Dollars ($38,400.00) per annum, in equal monthly installments of Three Thousand Two Hundred Dollars ($3,200.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in
any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean
order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000.00), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor,
and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be
paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability
arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Ohio and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal
injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but
at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such
approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will not exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and
validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting tower is and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(1) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for
Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of
the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises,
Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting tower, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's s interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio tower located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Ohio.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
SALEM MEDIA OF OHIO, INC.
/s/ EDWARD G. ATSINGER III By: /s/ EDWARD G. ATSINGER III
--------------------------------- -------------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ STUART W. EPPERSON
---------------------------------
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STUART W. EPPERSON
EXHIBIT A
Situate in the State of Ohio, County of Delaware, and being a part of Lot No. 5 in the Subdivision of Quarter Township 3, Range 18, United States Military Lands and being part of the tract of land known as Parcel No. 1 conveyed to Peoples Broadcasting Corporation as the same is shown of record in Deed Book 220, Page 14, Recorder's Office, Delaware County, Ohio and being more particularly described as follows:
Beginning for reference at the intersection of the centerline of Powell Road with the original centerline of U.S. Route No. 23 and the southwesterly corner of the aforementioned Lot No. 5 and the northwesterly corner of Lot No. 6, said point also being the southwesterly corner of the aforementioned Parcel No. 1 said point being located N 89(degrees) 37' 45" W a distance of 1.57 feet from a point in the curved centerline of existing U.S. Route No. 23 at Sta. 75+53.54 (Del-23-1.22);
Thence with the centerline of Powell Road and the southerly line of the aforementioned Lot No. 5 and the southerly line of the aforementioned Parcel No. 1 S 89(degrees) 37' 45" E a distance of 2057.09 feet to a railroad spike at the point of true beginning of the tract of land herein described;
Thence N 00(degrees)" 22' 15" E a distance of 250.49 feet to an iron pin in a curve, passing an iron pin on line in the northerly right-of-way line of Powell Road at a distance of 20.00 feet;
Thence with a curve to the right having a radius of 600 feet, a central angle of 190(degrees) 44' 08" and a length of 1997.38 feet, the chord to which bears N 44(degrees) 27' 29" E a distance of 1194.74 feet to an iron pin;
Thence N 88" 12' 36" E a distance of 227.83 feet to an iron pin in the westerly line of the Penn Central Railroad;
Thence with the westerly right-of-way line of the Penn Central Railroad S 1(degree) 47' 24" E a distance of 1075.00 feet to an iron pin at an angle point in said right-of-way line;
Thence continuing with the right-of-way line of the Penn Central Railroad S 84(degrees)" 06' 15" W a distance of 210.70 feet to an iron pin in the northerly right-of-way line of Powell Road;
Thence S 0(degrees)" 22' 15" W a distance of 20.00 feet to a railroad spike in the centerline of Powell Road and the southerly line of the aforementioned Lot No. 5 and the southerly line of the aforementioned Parcel No. 1;
Thence with the centerline of Powell Road, the southerly line of the aforementioned Lot No. 5 and the southerly line of the aforementioned Parcel No. 1 N 89(degrees)" 37' 45" W a distance of 890.00 feet to the point of true beginning containing 33.698 acres more or less of which 0.408 acres more or less
lies within the right-of-way line of Powell Road.
EXHIBIT 10.05.17.01
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND MONA J. ATSINGER
AND STUART W. EPPERSON AND NANCY K. EPPERSON
AND
SALEM MEDIA OF OREGON, INC.
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND MONA J. ATSINGER AND STUART W. EPPERSON AND NANCY K. EPPERSON ("Lessor"), and SALEM MEDIA OF OREGON, INC., an Oregon corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and a building thereon (the "Building"), which Land and Building together comprise certain real property described as Lot 1 and 2, Paradise Park Addition, in the City of Portland, County of Multnomah and State of Oregon (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting equipment (the "Installations"). Lessee is fully familiar with the physical condition of the Leased Premises
and has received the same in good order and condition, and agrees that the Leased Premises complies in all respects with all requirements of this Agreement. Lessee shall use the Leased Premises exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four
(24) hours per day, seven (7) days per week, for the purpose of installing,
maintaining and repairing its Installations, provided that the contractors
performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number
which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1, 1992 (the "Commencement Date") and shall expire on January 31, 2002 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Edward G. Atsinger III, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Fifty-Two Thousand Eight Hundred Dollars ($52,800.00) per annum, in equal monthly installments of Four Thousand Four Hundred Dollars ($4,400.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in
any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Leased Premises or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Leased Premises and the adjoining streets and ways in good and clean
order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Leased Premises at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Leased Premises whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Building or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Building, or reduce the fair market value thereof below its value immediately before such alteration or addition, or impair its usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v)
does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Leased Premises or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Leased Premises or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be
paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Leased Premises, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Leased Premises nor any part thereof or interest therein nor
any such rents or other sums would be in any danger of being sold, forfeited,
lost or interfered with, and (iii) Lessee shall have furnished such security, if
any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Leased Premises or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Building against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Building and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from
claims of workers in respect of and during the period of any work on or about
the Real Property; and (iv) insurance against such other hazards and in such
amounts as is customarily carried by owners and operators of similar properties,
and as Lessor may reasonably require for its protection. Lessee shall comply
with such other requirements as Lessor, or any mortgagee, may from time to time
reasonably request for the protection by insurance of their respective
interests. The policy or policies of insurance maintained by Lessee pursuant to
this Paragraph shall be of a company or companies authorized to do business in
Oregon and a certificate thereof shall be delivered to Lessor, together with
evidence of the payment of the premiums therefor, not less than fifteen (15)
days prior to the commencement of the Term hereof or of the date when Lessee
shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen
(15) days prior to the expiration or termination date of any policy, Lessee
shall deliver a certificate of a renewal or replacement policy with proof of the
payment of the premium therefor. Any such insurance required by this Paragraph
may, at Lessee' s option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or
resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee' s request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor' s expense. Lessee shall not enter into any settlement
of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee' s or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to
which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will not exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and
validly authorized by all, necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) In case of any material damage to or destruction of the Leased Premises or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Building or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Building as nearly as possible to its value, condition and character immediately prior to such damage or destruction.
(j) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may
be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(k) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee' s interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end,
unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceedings and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction
that such default is curable and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements
placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the
interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Leased Premises to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Leased Premises to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Leased Premises shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or
exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of the Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves that other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and the Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, as 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Oregon.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.
LESSOR: LESSEE:
SALEM MEDIA OF OREGON, INC.
By:
----------------------------- ---------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
-----------------------------
|
MONA J. ATSINGER
/s/ Stuart W. Epperson ----------------------------- STUART W. EPPERSON /s/ Nancy K. Epperson ----------------------------- NANCY K. EPPERSON |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.
LESSOR: LESSEE:
SALEM MEDIA OF OREGON, INC.
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
----------------------------- ---------------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Mona J. Atsinger
-----------------------------
MONA J. ATSINGER
/s/ Stuart W. Epperson
-----------------------------
STUART W. EPPERSON
/s/ Nancy K. Epperson
-----------------------------
|
NANCY K. EPPERSON
CERTIFICATE OF UNANIMOUS CONSENT
OF
SALEM MEDIA OF OREGON, INC.
The undersigned, being all of the members of the Board of Directors of Salem Media of Oregon, Inc. an Oregon corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to lease the real estate owned by Edward G. Atsinger III and Mona J. Atsinger and Stuart W. Epperson and Nancy K. Epperson and located in Portland, Oregon, pursuant to the terms of a lease in the form of and with the terms and conditions set forth in the Lease Agreement attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of February, 1992.
/s/ Stuart W. Epperson --------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III --------------------------- Edward G. Atsinger III |
EXHIBIT 10.05.17.02
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III AND STUART W. EPPERSON
AND
SALEM MEDIA OF OREGON, INC.
February 1, 1992
AGREEMENT made as of this first day of February, 1992, by and between EDWARD G. ATSINGER III AND STUART W. EPPERSON ("Lessor"), and SALEM MEDIA OF OREGON, INC., an Oregon corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Washington, State of Oregon, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Land (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting towers and equipment (the "Installations").
Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four
(24) hours per day, seven (7) days per week, for the purpose of installing,
maintaining and repairing its Installations, provided that the contractors
performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on February 1,
1992 (the "Commencement Date") and shall expire on January 31, 2002 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Twelve Thousand Dollars ($12,000.00) per annum, in equal monthly installments of One Thousand Dollars ($1,000.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in any event be less than the monthly rental paid during the
immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or
appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000.00), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor,
and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be
paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability
arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Oregon and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal
injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but
at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such
approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will not exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and
validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting towers are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(1) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for
Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of
the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises,
Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting towers, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio tower located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of Oregon.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
SALEM MEDIA OF OREGON, INC.
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
----------------------------- --------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
President
/s/ Stuart W. Epperson
-----------------------------
|
STUART W. EPPERSON
EXHIBIT "A"
All that real property situated in the County of Washington, State of Oregon, to wit:
Beginning at the Southwest corner of the Southeast quarter of Section 13, Township 1 South, Range 1 West of the Willamette Meridian, and running thence North 1(degree) 21' East 557.2 feet to a pipe set on the South boundary of the tract conveyed to S.B. and Vivian Lawrence by deed recorded at page 360 of Book 115, Records of Deed for said County; thence with said South boundary,North 85(degrees) 20' East 940 feet to an iron pipe; thence South 1(degree) 21' West 654.2 feet to the South boundary of said Section and thence North 88(degrees) 42' West 935.2 feet to the place of beginning.
CERTIFICATE OF UNANIMOUS CONSENT
OF
SALEM MEDIA OF OREGON, INC.
The undersigned, being all of the members of the Board of Directors of Salem Media of Oregon, Inc., an Oregon corporation ("Corporation"), do hereby consent to and adopt the following resolutions:
RESOLVED that the Corporation is hereby authorized and directed to sell the real estate owned by it and located in Washington County, Oregon to Edward G. Atsinger III and Stuart W. Epperson for the amount of $77,000, such amount to be paid in cash.
RESOLVED that the Corporation is hereby authorized and directed to lease said real estate from Edward G. Atsinger III and Stuart W. Epperson pursuant to the terms of a lease in the form of and with the terms and conditions set forth in the Lease Agreement attached hereto and incorporated herein by reference; and
RESOLVED that the officers of the Corporation are hereby directed to take any and all actions they deem necessary, advisable, convenient or proper to carry out the intent of these resolutions.
IN WITNESS WHEREOF the undersigned have executed this certificate of unanimous consent as of the 1st day of February, 1992.
/s/ Stuart W. Epperson ----------------------------------- Stuart W. Epperson /s/ Edward G. Atsinger III ----------------------------------- Edward G. Atsinger III |
Exhibit 10.05.18
AGREEMENT
BETWEEN
EDWARD G. ATSINGER III, not individually but solely as Trustee of the Atsinger Family Trust, AND STUART W. EPPERSON, not individually but solely as Trustee of the Stuart W. Epperson Revocable Living Trust
AND
SALEM MEDIA OF PENNSYLVANIA, INC.
January 27, 1993
AGREEMENT made as of this twenty-seventh day of January, 1993, by and between EDWARD G. ATSINGER III, not individually but solely as Trustee of the Atsinger Family Trust, AND STUART W. EPPERSON, not individually but solely as Trustee of the Stuart W. Epperson Revocable Living Trust ("Lessor"), and SALEM MEDIA OF PENNSYLVANIA, INC., a Pennsylvania corporation ("Lessee").
WHEREAS, Lessor owns certain land (the "Land") and certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the Township of Reserve, County of Allegheny and Commonwealth of Pennsylvania, more particularly described as set forth in Exhibit A, which is attached hereto and made a part hereof (the "Real Property"); and
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its broadcasting towers and equipment (the "Installations"). Lessee is fully familiar with the physical condition of the Real Property and has received the same in good order and condition, and agrees that the Real Property complies in all respects with all requirements of this Agreement. Lessee shall use the Real Property exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics,
materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on January 27, 1993 (the "Commencement Date") and shall expire on January 31, 2003 (the "Expiration Date"). If the Term has been extended as provided in subparagraph (b), below, the Expiration Date shall be the last day of the Term as so extended.
(b) Lessee shall have the option, if Lessee is not at the time in default under this Agreement, to extend the Term of this Agreement for up to two (2) successive periods of five (5) years each (the "Extended Terms"), and, except as set forth in subparagraph (c), below, on the same terms, covenants and conditions herein contained. The word "Term" as used in this Agreement shall be deemed to include the Extended Terms when and if the Agreement is extended. Each option to extend the Term shall be exercised only by Lessee's delivery to Lessor by United States mail on or before ninety (90) days prior to the commencement of the renewal term of written notice of Lessee's election to extend as provided herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880
Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date, a base rent of Twenty-Four Thousand Dollars ($24,000) per annum, in equal monthly installments of Two Thousand Dollars ($2,000.00) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st) through the nineteenth (19th) anniversaries of the Commencement Date. During the one (1) year period beginning with each Adjustment Date, the monthly rent payable by Lessee shall reflect an adjustment, as herein provided, for the change, if any, from the month in which the Commencement Date falls, in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average [Base Year 1982/84=100] ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics; i.e., during the one (1) year period beginning with the Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for the calendar month of the
Adjustment Date and the denominator of which shall be the CPI for the month in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the monthly amount payable by Lessee hereunder shall not in any event be less than the monthly rental paid during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be then chosen by Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the
estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect
thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written notice to Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any tax, lien or other imposition on the Real Property, provided that (i) Lessee shall first make all contested payments, under protest if it desires, (ii) neither the Real Property nor any part thereof or interest therein nor any such rents or other sums would be in any danger of being sold, forfeited, lost or interfered with, and (iii) Lessee shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection
with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an
amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in Pennsylvania and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessor, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessee, (ii) any negligent or intentional act or omission of Lessee, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessee on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessee pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessee's request or this Agreement; provided, however, that Lessee shall not be required to indemnify Lessor for any damages, injury, loss or expense arising out of Lessor s or its agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel
selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and against all claims, actions, losses, damages, liabilities and expenses (including reasonable attorneys' fees) incurred by or asserted against Lessee, whether during or after the Term of this Agreement, including by reason of personal injury, loss of life, or damage to property, caused by or resulting from in whole or any material part, (i) any breach of this Agreement by Lessor, (ii) any negligent or intentional act or omission of Lessor, its employees, agents, invitees or contractors, whether in, on, about or with respect to the Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased Premises, (iv) any work undertaken by or at the request of Lessor on or about the Leased Premises, (v) any other activity undertaken by or at the request of Lessor pursuant to or in connection with this Agreement, or (vi) the presence of any individuals on the Leased Premises as a result of Lessor's request or this Agreement; provided, however, that Lessor shall not be required to indemnify Lessee for any damages, injury, loss
or expense arising out of Lessee's or its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld) , against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises
relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the
foregoing representation and warranty in entering into this Agreement and in expending monies in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the
terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards"). Lessor represents and warrants its equipment and property at the Leased Premises and the operation thereof do not and will not exceed Acceptable Radio Frequency Radiation Standards.
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased
Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that its broadcasting towers are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be
sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective
purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its
business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased
Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and
Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any Mortgages and Security Agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such Mortgages and Security Agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed
of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement
of rent, provided entrance to the Real Property shall not be denied Lessee.
At all times during the Term of this Agreement Lessor shall have the exclusive right to place and operate, or to permit another tenant to place and operate, broadcasting equipment on the Leased Premises and on the Lessee's broadcasting towers, or to use the Real Property for any other lawful purpose, provided, such actions do not interfere with Lessee's operations. Lessor shall have no obligation to pay rent for the uses described above. Lessor shall hold Lessee harmless from and defend Lessee against any and all claims or liability arising out of or in any way connected to Lessor's use or occupancy of the Real Property.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as
part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the Commonwealth of Pennsylvania.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, .the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
SALEM MEDIA CORPORATION
/s/ Edward G. Atsinger III By: /s/ Edward G. Atsinger III
--------------------------- -----------------------------
EDWARD G. ATSINGER III EDWARD G. ATSINGER III
Trustee President
Atsinger Family Trust
/s/ Stuart W. Epperson
---------------------------
STUART W. EPPERSON
TRUSTEE
Stuart W. Epperson
Revocable Living Trust
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Exhibit "A"
ALL that certain lot or piece of ground situate in the Township of Reserve, County of Allegheny and Commonwealth of Pennsylvania, bounded and described as follows, to-wit:
BEGINNING at the point formed by the intersection of the Southerly line of land now or formerly of William H. Schneider and the Westerly line of Mount Troy Road (33 feet wide), formerly known as Troy Hill Road; thence along said Westerly line of Mount Troy Road, South 27 degrees 19' East, a distance of 247.90 feet to an iron pin; thence by a line in said Mount Troy Road, South 41 degrees 38' East, a distance of 161.00 feet to a point; thence by a line in said Mount Troy Road, South 52 East, a distance of 21.10 feet to an existing nail; thence along the Northwesterly line of land now or formerly of Ridgelawn Cemetery Company, South 57 degrees 18' West, a distance of 1032.695 feet to an iron pin; thence along the Easterly line of Lots Nos. 52, 53, 54, 55, 56, 57, 58, 59, 60 and 61 in the Feldman Plan of Lots (recorded in Plan Book Volume 24, pages 102 and 103), land now or formerly of Alice Melensky, and land now or formerly of Thelma M. Filmore, North 0 degrees 41' 36" West, a distance of 924.829 feet to an iron pin; and thence along the Southerly line of Lots Nos. 20 and 21 in the Sherling Manor Plan (recorded in Plan Book Volume 42, page 29) and the aforesaid land now or formerly of William H. Schneider, South 88 degrees 49' East, a distance of 643.00 feet to a nail at the place of beginning.
EXHIBIT 10.05.19
This Assignment and Assumption is made and entered into this 5th day of August, 1994 by and among COMMUNICOM CO. OF AMERICA, L.P., a Colorado limited partnership ("Assignor") and SALEM MEDIA OF TEXAS, a Texas corporation ("Assignee").
WHEREAS, under the Purchase Agreement dated as of March 30, 1994 (the "Agreement"), between Assignor and Assignee, Assignor is obligated to assign to Assignee all of its right, title and interest in and to certain contracts and obligations, and Assignee is obligated to assume such contracts and obligations.
NOW THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Assignor hereby assigns, sells, transfers, sets over and delivers, as of August 6, 1994, unto Assignee all of Assignor's right, title and interest in and to the agreements set forth on Schedule I attached hereto and incorporated herein by reference, and Assignee hereby accepts such assignment.
2. Assignee, as of August 6, 1994, hereby assumes and agrees to perform, without duplication, the liabilities and obligations arising under the agreements assigned to Assignee under Paragraph I above to the extent such liabilities and obligations arise on and after August 6, 1994. Except as specifically set forth herein, Assignee shall not assume or in any manner be liable for any duties, responsibilities, obligations or liabilities of Assignor of any kind or nature whether express or implied, known or unknown, contingent or absolute.
3. All representations and warranties under the Agreement and relating to the agreements and obligations assigned and assumed hereunder shall survive, for the time specified in the Agreement, the execution and delivery of this Assignment and Assumption.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Assignment and Assumption as of the date first above written.
COMMUNICOM CO. OF AMERICA, L.P.
By: CCA, INC., General Partner
By: /s/ Richard L. Kylberg
---------------------------------
Richard L. Kylberg
President
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SALEM MEDIA OF TEXAS, INC.
By /s/ Eric H. Halvorson
---------------------------------
Eric H. Halvorson
Vice President
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SCHEDULE 1
l. Agreement between Brad Burkhart Christian Media, Inc. and Seller dated January 12, 1993.
2. Service Agreement between CellularOne and Seller dated September 30, 1993.
3. Agreement between Metro Traffic Control, Inc. and Seller dated November 9, 1993.
4. License Agreement between Nordic Software, Inc. and Seller dated March 14, 1994.
5. Agreement between USA Radio Network and Seller dated May 1, 1993.
6. All cash and barter contracts for sale of advertising and programming.
7. Lease between E. Atsinger III and S. Epperson and Seller dated March 1, 1983.
[Tower Lease]
ASSIGNMENT OF LEASE AND
ASSUMPTION OF OBLIGATIONS
THIS ASSIGNMENT dated January 7, 1988 is between SALEM MEDIA OF TEXAS, INC., a Texas corporation, with an address of 2310 Ponderosa Drive, Suite 29, Camarillo, CA 93010 ("Assignor") and AMERICAN COMMUNICOM CORP. OF TEXAS, a Colorado corporation, with an address of Plaza 6000 Office Park, 6000 East Evans Avenue, Building One, Suite 400, Denver, Colorado 80222 ("Assignee").
For good and valuable consideration and pursuant to Section 11(a) of the Asset Purchase Agreement dated October 16, 1987 among Assignor, Assignee and the individuals named therein, Assignor hereby conveys, grants, transfers and assigns to Assignee, its successors and assigns, all of the right, title and interest of such Assignor in, to and under the Lease dated March 1, 1983 between Edward G. Atsinger III and Stuart W. Epperson, co-trustees, as landlord, and Assignor, as tenant, as amended to date, and attached hereto as Exhibit A and incorporated herein by this reference (the "Lease").
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever; and Assignor, for itself, its successors and assigns, covenants and agrees with Buyer, its successors and assigns, that Assignor will for three years from the date hereof, WARRANT AND DEFEND the same against all persons whomsoever.
Assignee, for itself, its successors and assigns, hereby accepts this Assignment, and agrees to assume as of the date hereof all of the tenant's obligations under the Lease accruing from and after the date hereof, and agrees to indemnify, defend and hold harmless Assignor, its successors and assigns, from and against any damage, liability, loss, expense or deficiency which such Assignor may pay or suffer by reason of any claims or liabilities arising out of the obligations assumed by Assignee pursuant to this Assignment.
Assignor, for itself, its successors and assigns hereby represents and warrants to Assignee, its successors and assigns, that: (i) Assignor is the lawful owner of and has good, valid and marketable title as lessee to the leasehold interest created by the Lease and to the interest above assigned in, to and under the Lease; (ii) Assignor's right, title and interest in, to and under the Lease is free and clear from all liens, encumbrances or adverse claims of any nature; (iii) the Lease is in full force and effect and
Assignor is not in default thereunder and no event has occurred that with notice or the passage of time would constitute a default thereunder; (iv) Assignor has good right, full power and lawful authority to assign and transfer all of its right, title and interest in, to and under the Lease; (v) the Lease constitutes the legal, valid and binding obligations of the parties thereto, enforceable against such parties in accordance with their respective terms; (vi) there is no liability or obligation of Assignor as tenant with respect to the Lease which, pursuant to the terms thereof, is required to be paid or otherwise performed, or is required to have been paid or otherwise performed, as of the date hereof, which has not been paid or otherwise performed in full; (vii) Assignor has obtained each consent, approval and authorization and filed each document required to be obtained by Assignor from or filed by Assignor with any person or entity with respect to such assignment and transfer; and (viii) immediately after the assignment and transfer hereunder, Assignee will have good, valid and marketable title to the leasehold interest created by the Lease and Assignee's right, title and interest in, to and under the Lease will be free and clear of all liens, encumbrances or adverse claims of any nature.
Assignor hereby assigns and transfers to Assignee, its successors and assigns, to the extent held by Assignor, all warranties of others relating to the Lease conveyed, transferred and assigned hereunder.
EXECUTED by the parties on the day and year first above written.
ASSIGNOR:
SALEM MEDIA OF TEXAS, INC., a
Texas corporation
By: /s/ [SIGNATURE APPEAR HERE]
---------------------------
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ASSIGNEE:
AMERICAN COMMUNICOM CORP. OF
TEXAS, a Colorado corporation
By: /s/ John F. Mueller, Jr.
--------------------------------
John F. Mueller, Jr., Vice
President
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THE STATE OF TEXAS )
) ss.
COUNTY OF BEXAR )
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Before me Robert N. Lepine on this day personally appeared Edward G. Atsinger III, the President of SALEM MEDIA OF TEXAS, INC., known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purpose and consideration therein expressed.
[Seal] Given under my hand and seal of office this 7th day of January A.D.,
1988.
/s/ Robert N. Lepine
-------------------------------
Notary Public
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My commission expires 9-30-90 .
------------------------------
THE STATE OF TEXAS )
) ss.
COUNTY OF BEXAR )
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Before me Robert N. Lepine on this day personally appeared John F. Mueller, Jr., the Vice President of AMERICAN COMMUNICOM CORP. OF TEXAS, known to me to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purpose and consideration therein expressed.
[Seal] Given under my hand and seal of office this 7th day of January A.D.,
1988.
[SEAL APPEARS HERE]
/s/ Robert N. Lepine
-------------------------------
Notary Public
My commission expires 9/30/90
---------------------------------
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EXHIBIT the to Assignment of Lease and Assumption of Obligations
[attach copy of lease, the amendment dated October 1, 1987 and the new amendment dated of even date with closing]
Exhibit A
THIS LEASE is made and entered into as of the 1st day of March, 1983, by and between EDWARD G. ATSINGER III and STUART W. EPPERSON, not individually but solely as co-Trustees of the Epperson-Atsinger 1983 Family Trust, hereinafter referred to as "Landlord", and SALEM MEDIA OF TEXAS, INC., a Texas corporation, hereinafter referred to as "Tenant", with reference to the following recitals of facts:
A. Landlord purchased the property on February 22, 1983.
B. The parties desire to enter into this Lease which shall contain all of the rights and obligations of the parties to each other with respect to the subject property.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties agree as follows:
the property and sell such portions, as long as Landlord's other leasing activities do not interfere with the operation of Tenant's radio station, transmission equipment and the directional array ground system.
Landlord agrees to indemnify Tenant for any damage or injury caused by other tenants to the radio station, transmitting equipment and directional array ground system and to promptly correct the same upon demand.
4.1 During the period March 1, 1983 through February 28, 1988, the amount of One Thousand Seven Hundred Fifty Dollars ($1,750.00) per month (the "Base Rent").
4.2 During the period March 1, 1988 through February 28, 1993, a monthly amount equal to the greater of (i) Two Thousand Twelve and 50/100 Dollars ($2,012.50) or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure (as hereinafter defined) for February, 1988, and the denominator of which
shall be the cost of living index figure for February, 1983 (the "Base Index").
4.3 During the period March 1, 1993, through February 28, 1998, a monthly amount equal to the greater of (i) Two Thousand Two Hundred Seventy-five Dollars ($2,275.00) or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure for February, 1993, and the denominator of which shall be the Base Index.
4.4 During the period March 1, 1998, through February 28, 2003, a monthly amount equal to the greater of (i) Two Thousand Five Hundred Thirty-seven and 50/100 Dollars ($2,537.50), or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure for February, 1998, and the denominator of which shall be the Base Index.
4.5 During the period March 1, 2003, through February 28, 2007, a monthly amount equal to the greater of (i) Two Thousand Eight Hundred Dollars ($2,800.00) or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure for February, 2003, and the denominator of which shall be the Base Index.
4.6 For purposes of this Lease, the "cost of living index figure" shall be the index number in the column for "all items" in the table entitled "Consumer Price Index-U.S. Cities Average," published by the Bureau of Labor Statistics of the United Stated Department of Labor in the "Monthly Labor Review." In the event that the Bureau of Labor Statistics shall change the base period (1967 equals 100), the new index number shall be substituted for the old index numbers in making the above computation. In the event the Bureau of Labor Statistics ceases
publishing the Consumer Price Index, or materially changes the method of its computation, Landlord and Tenant shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation of change by a responsible financial periodical of recognized authority to be then chosen by Landlord subject to reasonable consent of Tenant.
4.7 Rent shall be payable in lawful money of the United States to Landlord at 2310 Ponderosa Drive, Suite 29, Camarillo, California 93010, on the first day of each month.
characterized by law as a fixture, but does not include Tenant's personal property.
Tenant shall not make, or permit to be made any structural improvements or alterations, in, on, or to the leased premises or any part thereof without the prior written consent of Landlord. Any improvements made in, on, or to the leased premises shall be at the sole expense of Tenant and any additions to or alterations of said premises shall become at once a part of the realty and belong to Landlord. Tenant shall keep the premises and the property in which they are situated free from any liens arising out of any work performed on the leased premises, by or on behalf of Tenant, for material furnished to the leased premises, or for obligations incurred by Tenant. In making any alteration that Tenant has a right to make, Tenant shall not commence such improvement or alteration until three (3) days after Landlord has received notice from Tenant stating the date of commencement of the improvement or alteration so that Landlord can post and record any appropriate notice of nonresponsibility. All alterations shall be completed with due diligence.
If any installation, alteration or improvement is required by law by any governmental authority, Tenant shall at Tenant's cost and expense promptly make such installation, alteration or improvement.
Provided Tenant is not in default or in breach of this Lease beyond the expiration of any applicable grace periods, Tenant may during the term of this Lease, and shall immediately upon the expiration of this Lease, remove from the leased premises all of Tenant's personal property and trade fixtures and such other property which Landlord may during the term of this Lease agree or acknowledge in writing are improvements belonging to Tenant.
satisfaction of this requirement. Said insurance shall name Landlord as a co-insured or an additional insured. Tenant shall furnish, or cause to be furnished to Landlord, upon request, certificates of insurance from the insurance carrier stating that such insurance is in full force and effect, that the premiums thereon have been paid and that the insurance carrier will give Landlord at least ten (10) days prior written notice of any termination, cancellation, or modification of such insurance.
Tenant shall furnish, or cause to be furnished to Landlord, upon request, certificates of insurance from the insurance carrier stating that such insurance is in full force and effect, that the premiums have been paid and that the insurance carrier will give Landlord at least ten (10) days prior written notice of any termination, cancellation or modification of such insurance. Tenant may provide a certificate of insurance under its blanket insurance policies in satisfaction of this requirement.
If Tenant fails or refused to procure or maintain said fire or liability insurance as required by this Lease or fails or refuses to furnish Landlord with the required proof that the insurance has been procured and is in force and paid for, Landlord shall have the right, at Landlord's option upon five (5) days written notice, to procure and
maintain such insurance. The premium paid by Landlord shall be treated as additional rent due and payable immediately. Landlord shall give prompt notice of the payment of such premiums, stating the amounts paid and the insurer or insurers, and interest shall run from the date of the notice.
A consent to one assignment, subletting, occupation, or use by another person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation, or use by another person. Any assignment or subletting without such consent of Landlord shall be void, and shall, at the option of Landlord, terminate this Lease. This Lease shall not, nor shall any interest of Tenant therein, be assignable by operation of law, without the written consent of Landlord. Tenant may, without Landlord's consent, have the right to assign this Lease to a corporation with which it may merge or consolidate or to a purchaser of substantially all of Tenant's assets, if the assignee executes an agreement assuming Tenant's obligations hereunder.
Landlord, except for Landlord's, its employees', contractors', invitees', agents and servants' gross negligence or willful misconduct.
other than the payment of money, and such default, if curable, is not cured within fifteen (15) days after service upon Tenant of a written notice thereof from Landlord, or if not curable within fifteen (15) days, Tenant fails to commence a cure within fifteen (15) days after service upon Tenant of a written notice thereof from Landlord and thereafter diligently pursues such cure to completion, Landlord may terminate Tenant's right of possession to the leased premises and may recover from Tenant all of the damages to which Landlord is entitled under the laws of the State of Texas.
None of Landlord's rights herein specified in the event of a default by Tenant shall prejudice any other legal remedies available to Landlord other than those herein enumerated.
(1) Acts of maintenance or preservation or efforts to relet the property; and
(2) Appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease.
of the Landlord and Tenant on such terms and conditions and at such rental as may then be reasonably available to Landlord. Such reletting shall not relieve Tenant from any of Tenant's obligations hereunder unless the Lease is terminated by Landlord by a written notice of termination served on Tenant.
If only a portion of the leased premises is taken or acquired by or incident to condemnation and a part thereof remains which in Landlord's opinion can be used for the purpose specified in Paragraph 3 of this Lease without compromising Tenant's activity or usability of the premises, this Lease shall, except for the part actually taken, remain in full force and effect.
Such adjustment in rent shall take effect on the date title to the condemned portion of the leased premises passes to the condemning authority pursuant to court order or on the date the condemning authority takes physical possession of the condemned leased property, whichever is earlier.
(a) Assignment of the Lease by operation of law;
(b) The appointment of a receiver to take possession of all or substantially all of the assets of Tenant and the receiver is not discharged within thirty (30) days after his appointment;
(c) A general assignment for benefit of creditors by Tenant;
(d) The filing of a voluntary petition or arrangement in bankruptcy by Tenant;
(e) The filing of an involuntary petition or arrangement in bankruptcy against Tenant and the same is not dismissed within sixty (60) days from the date of filing; and
(f) Any other action taken or suffered by Tenant because of Tenant's insolvency.
allowed space for any lawful purpose which does not interfere with Tenant's operations. Landlord shall hold Tenant harmless from and defend Tenant against any and all claims or liability arising out of or in any way connected to Landlord's use or occupancy of the allowed space.
(a) Notice to be served upon Landlord shall be sent to Landlord addressed to:
Edward G. Atsinger III
Stuart W. Epperson
2310 Ponderosa Drive, Suite 29
Camarillo, CA 93010
(b) Notice to be served upon Tenant shall be sent to Tenant addressed to:
5430 Fredericksburg Road
Suite 504
San Antonio, TX 78229
All notices by mail shall be deemed served 48 hours after deposit in the United States mail.
Either party may change his address for notice purposes by giving notice of such change as provided above.
The execution by Landlord and the recording in the office of the County Recorder's office in which the property is located of a declaration that this Lease and leasehold estate are subject, subordinate, and inferior to the lien of a first and/or second deed of trust placed or to be placed by Landlord upon or against the leased premises or any part thereof, shall, of and by itself, in favor of the trustee and beneficiary of said deed or deeds of trust, make this Lease subject, subordinate and inferior thereto. Tenant shall, with all reasonable diligence, after written request made to it by Landlord or the title company issuing a policy of title insurance insuring the effect of the lien of said deed or deeds of trust, execute and deliver to said title company an agreement or subordination, in accordance with the foregoing.
In the event any proceedings are brought for the foreclosure of, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord or its successors or assigns covering the demised premises, the Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease.
Landlord execute, acknowledge and deliver to Landlord a statement (an "Estoppel
Certificate") in writing (i) certifying that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force and effect) and
the dates to which the rent and other charges are paid in advance, if any, and
(ii) acknowledging that there are not, if such be the case, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder and that
Tenant has no right of offset, counterclaim or deduction alleged by Tenant. Any
such Estoppel Certificate may be relied upon by any prospective purchaser or
lender upon the security of the property of which the premises are a part.
33.1 This Lease contains the entire agreement between the parties respecting the Lease of the premises and all matters covered or mentioned herein. This Lease may not be altered, changed or amended except by an instrument in writing signed by both parties hereto.
33.2 The illegality, invalidity or unenforceability of any provision of this Lease shall in no way impair or invalidate any other provision of this Lease, and such remaining provisions shall remain in full force and effect.
33.3 As used in this Lease, the masculine, feminine or neuter gender, and the singular or plural number, shall each be deemed to include the other whenever the context so indicates. If there is more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several. The paragraph headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.
33.4 All exhibits attached to this Lease are hereby incorporated by this reference and made a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date and year first above written.
LANDLORD:
THE EPPERSON-ATSINGER 1983
FAMILY TRUST
/s/ Edward G. Atsinger III ----------------------------------------- Edward G. Atsinger III, Co-Trustee /s/ Stuart W. Epperson ----------------------------------------- Stuart W. Epperson, Co-Trustee |
TENANT:
SALEM MEDIA OF TEXAS, INC., a Texas Corporation
/s/ Edward G. Atsinger III ----------------------------------------- President |
Ret. to:
HOLME ROBERTS & OWEN
ATTORNEYS AT LAW
1700 BROADWAY
DENVER, COLORADO 80290
A 35.473 acre tract of land, being all of the remaining portion of that certain 38.17 acre tract of land described in deed from Howard W. Davis, and wife, Maidell Davis, to Hermitage Properties, Inc., dated February 17, 1969, recorded in Volume 6109 at Page 681 of the Deed Records of Bexar County, Texas, being out of the M.D. Oliver Survey No. 55, Abstract 559, County Block 5127, Bexar County, Texas, said 35.473 acre tract being more particularly described as follows:
BEGINNING at a point on the present Northeast right-of-way line of U.S. Highway No. 87 (Gonzales Road), an iron pin set at the intersection of a cutback right-of-way line to F.M. Highway No. 1516, the Southeast corner of the herein described tract;
THENCE Northwesterly along the present Northeast right-of-way line of U.S.
Highway No. 87 (Gonzales Road), as follows:
N. 68(degrees) 36' 42" W. - 178.35 feet to an iron pin set for angle point;
N. 70(degrees) 38' 30" W. - 205.47 feet to an iron pin set for angle point;
N. 72(degrees) 26' 37" W. - 219.94 feet to an iron pin set for angle point;
and
N. 75(degrees) 21' 00" W. - 547.05 feet to its intersection with the existing
fence on the Northwest line of the said 38.17 acre tract, an iron pin found set,
the Southwest corner of the herein described tract;
THENCE N. 15(degrees) 13' 24" E. - 464.55 feet, N. 14(degrees) 50' 47" E. - 300.00 feet, N. 15(degrees) 08' 45" E. - 209.22 feet and N. 14(degrees) 45' 32" E. - 316.00 feet all along the existing fence on the Northwest line of the said 38.17 acre tract, to its Northwest corner, the Northwest corner of the herein described tract;
THENCE S. 75(degrees) 23' 14" E. - 1178.74 feet along the existing fence on the Northeast line of the said 38.17 acre tract to its Northeast corner, an iron pin found set on the Northwest right-of-way line of F.M. Highway No. 1516, the Northeast corner of the herein described tract;
THENCE S. 14(degrees) 10' 00" W. - 1295.51 feet along the Northwest right-of-way line of F.M. Highway No. 1516, to its intersection with a cutback right-of-way line to U.S. Highway No. 87 (Gonzales Road), an iron pin set;
THENCE S. 62(degrees) 52' 48" W. - 66.05 feet along said cutback right-of-way line, to the POINT OF BEGINNING.
easement; thence S. 62(degrees) 36' 00" East (ILLEGIBLE) west line of F. M. Highway 1516, the east corner of this easement; thence S. 14(degrees) 10' 00" West 20.55 feet along the west line of F. M. Highway 1516 to the place of beginning and containing 0.175 acre according to a survey on the ground November 2, 1982 for KISS Broadcasting, Inc. by Baker Surveying, Inc.
AMENDMENT TO LEASE
This Amendment to Lease is made and entered into as of the 1st day of October, 1987, by and between Edward G. Atsinger III and Stuart W. Epperson, not individually but solely as co-trustees of the Epperson-Atsinger 1983 Family Trust, hereinafter referred to as "Landlord", and Salem Media of Texas, Inc., a Texas corporation, hereinafter referred to as "Tenant", with reference to the following recitals of facts:
A. The parties entered into a Lease Agreement as of March 1, 1983 (the "Lease Agreement").
B. The parties desire to make certain amendments to the Lease Agreement.
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties agree as follows:
4.6 During the period March 1, 2007, through February 28, 2012 (if Tenant elects to extend the term of this Lease), a monthly amount equal to the greater of (i) Three Thousand Sixty-two and 50/100 Dollars ($3,062.50) or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure for February, 2007, and the denominator of which shall be the Base Index.
4.7 During the period March 1, 2012, through February 28, 2017 (if Tenant elects to extend the term of this Lease), a monthly amount equal to the greater of (i) Three Thousand Three Hundred Twenty-five Dollars ($3,325.00) or (ii) the Base Rent multiplied by a fraction, the numerator of which shall be the cost of living index figure for February, 2012, and the denominator of which shall be the Base Index.
(a) Tenant shall have the right to assign this Sublease to a firm or corporation controlled by its shareholders without the prior consent of the Landlord; provided, however, that Tenant shall remain liable for the performance of all the covenants and conditions herein contained in the event of any uncured default on the part of the assignee. For purposes of this subsection (a), the shareholders of Tenant shall be deemed in control of a firm or a corporation if their ownership interests, when combined, constitute more than fifty percent (50) of the voting rights of the firm or corporation.
(b) Tenant shall have the right to assign this Sublease to the assignee of all of the FCC authorizations (the "license") for KSLR-AM, after approval by the FCC of the assignment or transfer of said license. Tenant shall provide Landlord at least sixty (60) days' written notice of its intent to assign its rights hereunder and shall provide Landlord with written confirmation of the assignment. Upon assignment of this Lease to the successor licensee, Tenant shall have no further liability under this Lease except for any uncured defaults which arose prior to the assignment.
(c) Except as provided in subsections (a) and (b), above, Tenant shall not have the right to assign this Lease, or any part hereof, to any third person(s), firm(s) or corporation(s) without the prior written consent of Landlord, which consent shall not be unreasonably withheld.
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day, month and year first-above written.
LANDLORD:
THE EPPERSON-ATSINGER 1983
FAMILY TRUST
/s/ Stuart W. Epperson ------------------------------------ Stuart W. Epperson, Co-Trustee /s/ Edward G. Atsinger III ------------------------------------ Edward G. Atsinger III, Co-Trustee |
TENANT:
SALEM MEDIA OF TEXAS, INC., a Texas
corporation
By: /s/ Edward G. Atsinger --------------------------------- President |
SECOND AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE is made and entered into as of the 7th day of January, 1987, by and between Edward G. Atsinger III and Stuart W. Epperson, not individually but solely as co-trustees of the Epperson-Atsinger 1983 Family Trust, hereinafter referred to as "Landlord," and Salem Media of Texas, Inc., a Texas corporation, hereinafter referred to as "Tenant," with reference to the following recitals of facts:
A. The parties entered into a Lease Agreement as of March 1, 1983, as amended by Amendment to Lease as of October 1, 1987 (the "Lease Agreement").
B. The parties desire to make certain amendments to the Lease Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
thereof, such party has acknowledged by written notice to Tenant that this Lease and Tenant's rights hereunder shall continue undisturbed while Tenant is not in default hereunder; except that such party shall not be (i) liable for any act or omission of any prior Landlord or (ii) subject to any offsets or defenses which Tenant might have against any prior Landlord or (iii) bound by any amounts which Tenant might have paid as rent to any Landlord for a period ending beyond the end of the month following the month in which such party acquired title to the leased premises or any part thereof."
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day, month and year first above written.
LANDLORD:
THE EPPERSON-ATSINGER 1983
FAMILY TRUST
/s/ Stuart W. Epperson ---------------------------------- Stuart W. Epperson, Co-Trustee /s/ Edward G. Atsinger III ---------------------------------- Edward G. Atsinger III, Co-Trustee |
TENANT:
SALEM MEDIA OF TEXAS, INC., a
Texas corporation
By: /s/ Edward G. Atsinger III ----------------------------- President |
[Seal] Given under my hand and seal of office this 5th day of January A.D.,
1988. ---
Linda R. Lynch
------------------------------------
Notary Public
My commission expires April 20,1988 .
---------------------------------
[NOTARY SEAL APPEARS HERE]
|
THE STATE OF TEXAS )
) ss.
COUNTY OF BEXAR )
|
Before me Robert N. Lepine on this day personally appeared, Edward G. Atsinger III, co-trustee of the Epperson-Atsinger 1983 Family Trust, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purpose and consideration therein expressed.
[Seal] Given under my hand and seal of office this 7 day of January A.D., 1988.
/s/ Robert N. Lepine
-------------------------------
Notary Public
|
My commission expires 9-30-90 .
-----------------------------------------
THE STATE OF TEXAS )
) ss.
COUNTY OF BEXAR )
|
Before me Robert N. Lepine on this day personally appeared Edward G. Atsinger III, the President of Salem Media of Texas, Inc., known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purpose and consideration therein expressed.
[Seal] Given under my hand and seal of office this 7 day of January A.D., 1988.
/s/ Robert N. Lepine
-------------------------------
Notary Public
|
EXHIBIT 10.05.20
This Agreement ("Agreement") is made as of the fourth day of March, 1995, by and between EDWARD G. ATSINGER III and MONA J. ATSINGER, not individually but solely as Trustees of the ATSINGER FAMILY TRUST, and STUART W. EPPERSON, not individually but solely as Trustee of the STUART W. EPPERSON REVOCABLE LIVING TRUST, collectively referred to herein as "Lessor", and SOUTH TEXAS BROADCASTING, INC. ("Lessee"), a Texas corporation.
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Harris, State of Texas, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee uses said Real Property in operating its radio station KENR-AM, Houston, Texas; and,
WHEREAS, the parties are desirous of making a mutually suitable and
satisfactory agreement whereby Lessor will lease to Lessee the Real Property
(constituting the "Leased Premises") on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the following covenants,
agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on March 4,
1995 (the "Commencement Date"), and shall expire on March 3, 2005 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of THIRTY THOUSAND DOLLARS ($30,000) per annum, in equal monthly installments of TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500) (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date (hereinafter defined) the monthly rent shall be computed according to subparagraph (ii) below.
(ii) The term "Adjustment Date" shall mean the first (1st)
through the ninth (9th) anniversaries of the Commencement Date. During the one
(1) year period beginning with each Adjustment Date, the monthly rent payable by
Lessee shall reflect an adjustment, as herein provided, for an increase, if any,
in the Consumer Price Index for All Urban Consumers, All Items, U.S. Cities
Average [Base Year 1982/84=100] ("CPI") published by the United States
Department of Labor, Bureau of Labor Statistics, as measured in February of each
year; i.e., during the one (1) year period beginning with the Adjustment Date,
the monthly rent shall be the product obtained by multiplying the Base Rent
times a fraction, the numerator of which shall be the CPI for February of the
year in which the Adjustment Date falls and the denominator of which shall be
the CPI for February of the year in which the Commencement Date falls.
Notwithstanding the results of the foregoing calculation, the monthly amount
payable by Lessee hereunder shall not in any event be less than the monthly
rental paid during the immediately preceding one (1) year period. In the event
that the Bureau of Labor Statistics shall change the base period for the CPI,
the new index number shall be substituted for the old index numbers in making
the above computation. In the event the Bureau of Labor Statistics ceases
publishing the CPI, or materially changes the method of its computation, Lessor
and Lessee shall accept comparable statistics on the purchasing power of the
consumer dollar as published at the time of said discontinuation or change by a
responsible financial periodical of recognized authority to be then chosen by
Lessor subject to reasonable consent of Lessee.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment,
diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the
fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered
to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other
sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under
the terms hereof, and continuation of such failure to cure for more than thirty
(30) days after notice by Lessor, provided, however, that if the nature of
Lessee's default is such that more than thirty (30) days is required for its
cure, then Lessee shall not be deemed to be in default if Lessee has commenced
such cure within the thirty (30) day period, demonstrates to Lessor's reasonable
satisfaction that such default is curable and thereafter diligently prosecutes
such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if
this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement nor sublet any portion of the Leased Premises without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment or sublease, Lessee shall remain primarily liable under this Agreement.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE ATSINGER FAMILY TRUST SOUTH TEXAS BROADCASTING, INC. /s/ EDWARD G. ATSINGER, III /s/ ERIC H. HALVORSON ----------------------------------- -------------------------------------- EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President /s/ MONA J. ATSINGER ___________________________________ MONA J. ATSINGER Trustee |
STUART W. EPPERSON
REVOCABLE LIVING TRUST
/s/ STUART W. EPPERSON ----------------------------------- STUART W. EPPERSON Trustee |
49.09 acres consisting of Tract #1(1.04 acres), Tract #2 (9.41 acres) and Tract #3 (38.64 acres) out of the H. Simmons Survey, A-745 and the E. Richey Survey, A-1424, Harris County, Texas.
The surface only of 1.04 acres of land, more or less, lying and being situated partly in the E. Richey Survey, Abstract 1424 and partly in the H. Simmons Survey, Abstract 745, Harris County, Texas, and being a portion of that tract designated as private road, in a partition of the Mrs. Mary Tautenhahn 121.68 acre tract out of the said E. Richey Survey and the said H. Simmons Survey; said 1.04 acres of land, more or less, being more particularly described by metes and bounds as follows:
BEGINNING at a 1" iron pipe from which a 12" Sweet Gum X bears N 87(degrees) 45' W 35.5 feet and a 5" Pine X bears N 27(degrees) 15' E 30.0 feet and which 1" pipe marks the northwesterly, corner of C. C. McLean Survey and the northeasterly corner of the said Richey Survey, as fenced and generally recognized;
THENCE S 33(degrees) 11' 28" E along a fence and the westerly boundary of the said McLean Survey and the easterly boundary of the said Richey Survey 697.69 feet to a 3/4" iron pipe from which a 8" Post Oak X bears N 62(degrees) 40' W 23.3 feet and a 12" Post Oak X bears S 2(degrees) 00' W 58.2 feet;
THENCE S 56(degrees) 55' 32" W 60.00 feet, to a 3/4" iron pipe marking the southeasterly corner of Share 3 of the aforementioned Mrs. Mary Tautenhahn partition;
THENCE N 33(degrees) 11' 28" W parallel to and 60.0 feet at right angles from the easterly line of the said Richey Survey and the westerly line of the said McLean Survey, at 697.69 feet cross the northerly boundary of the said Richey Survey and the southerly boundary of the said Simmons Survey, in all 757.69 feet to a 3/4" iron pipe which marks the northeasterly corner of the said Share 3 and an angle point in the southerly line of Share 2 of the said partition;
THENCE N 56(degrees) 55' 32" E parallel to and 60.0 feet at right angles from the southerly boundary of the said H. Simmons Survey and the northerly boundary of the said McLean Survey and the northerly boundary of the McLean Survey 60.00 feet to a point;
THENCE S 33(degrees) 11' 28" E 60.00 feet to the point or place of beginning and containing as aforesaid 1.04 acres of land, more or less.
The surface only of 9.41 acres of land, more or less, lying and being situated in the H. Simmons Survey, Abstract 745, Harris County, Texas, and being a portion of that tract of land designated as Share 2 of a partition of the Mrs. Mary Tautenhahn 121.68 acre tract out of the E. Richey Survey, Abstract 1424, and the H. Simmons Survey, Abstract 745, Harris County, Texas; said 9.41 acres of land, more or less, being more particularly described by metes and bounds as follows:
BEGINNING at a 3/4" iron pipe from which a 4" Pine X bears N 2(degrees) 45' E 38.0 feet and a 14" Post Oak X bears N 74(degrees) 05' W 35.6 feet, said pipe being located in the westerly line of the said H. Simmons Survey and the easterly line of the John Schnell Survey as fenced and generally recognized and being N 33(degrees) 17' 29" w 505.26 feet from the southwesterly corner of the said Simmons Survey and marking the northwesterly corner of Share 3 of the aforementioned partition and the southwesterly corner of Share 2 of the said partition;
THENCE N 56(degrees) 55' 32" E 1778.59 feet to a 5/8" iron rod for corner from which a 24" Post Oak X bears N 89(degrees) 00' W 60.2 feet and a 24" Pin Oak X bears 5 29(degrees) 00' W 50.5 feet;
THENCE S 33(degrees) 11' 28" E 445.26 feet to a point, same being located N 33(degrees) 11' 28" W 60.00 feet from the northwesterly corner of the C. C. McLean Survey and the northeasterly corner of the E. Richey Survey as fenced and generally recognized;
THENCE S 57(degrees) 01' 28" W parallel to and 60.0 feet at right angles from the southerly line of the said Simmons Survey and the northerly line of the E. Richey Survey 60.00 feet to a 3/4" iron pipe for corner, same being the northeasterly corner of the aforementioned Share 3;
THENCE S 71(degrees) 26' 32" W along the dividing line between the said Share 2 and Share 3 a distance of 1776.23 feet to the point of beginning and containing 9.41 acres of land, more or less;
The surface only of 38.64 acres of land, more or less, lying and being situated partly in the E. Richey Survey, Abstract 1424 and partly in the H. Simmons Survey, Abstract 745, Harris County, Texas, and being all of that tract of land designated as Share 3 of a partition of the Mrs. Mary Tautenhahn 121.68 acre tract out of the said E. Richey Survey and the said H. Simmons Survey; said 38.64 acres of land, more or less, being more particularly described by metes and bounds as follows:
BEGINNING at a 3/4" iron pipe from which a 10" Pine X bears N 56(degrees) 00' E 41.00 feet and a 16" Post Oak X bears N 18(degrees) 00' E 47.00 feet, said pipe being in. the westerly boundary of the said E. Richey Survey and the easterly boundary of the said John Schnell Survey, Abstract 742, and being located N 33 (degrees) 17'. 28" W 736.8 feet from the southeasterly corner of the said Schnell Survey which is also a re-entrant corner of the said Richey Survey as fenced and generally recognized;
THENCE N 33(degrees) 17' 28" W along a fence marking the westerly line of the said Richey Survey and the easterly line of the said Schnell Survey at 697.69 feet pass the northwesterly corner of the said Richey Survey and the southwesterly corner of the said H. Simmons Survey, and continuing along the westerly line of the said Simmons Survey a total distance of 1202.95 feet to a 3/4" iron pipe for corner from which a 4" Pipe X bears N 2(degrees) 45' E 38.0 feet and a 14" Post Oak X bears N 74(degrees) 05' W 35.6 feet, said pipe also marking the southwesterly corner of Share 2 of the aforementioned partition;
THENCE N 71(degrees) 26' 32" E along the dividing line between Shares 2 and 3 a distance of 1776.23 feet to a 3/4" iron pipe for corner, said pipe being located N 33(degrees) 11' 28" W 60.0 feet from a point in the southerly line of the said Simmons Survey which is S 57(degrees) 01' 28" W 60.0 feet from the northeasterly corner of the said Richey Survey;
THENCE S 33(degrees) 11' 28" E at 60.0 feet cross the southerly line of the said Simmons Survey and the northerly line of the said Richey Survey and continuing parallel to and 60.0 feet at right angles from the easterly line of the said Richey Survey and the westerly line of the C. C. McLean Survey, Abstract 1415, a distance of 757.69 feet to a 3/4" iron pipe for corner;
THENCE S 56(degrees) 55' 32" w along the southerly line of the said Share 3 a distance of 1716.50 feet to the point or place of beginning and containing as aforesaid 38.64 acres of land, more or less.
EASEMENTS AND RESTRICTIONS OF RECORD:
(a) Thirty (30) foot pipe line easement granted to Houston Pipe Line Company as reflected by instrument recorded in Volume 5249, page 521, Deed Records of Harris County, Texas.
(b) Pipe line easement granted to Houston Pipe Line Company as reflected by instrument recorded in Volume 2408, page 577, Deed Records of Harris County, Texas.
(c) Terms, conditions, and stipulations contained in Oil and Gas Lease from J. G. Ehrhardt, et al, to H. M. Harrell, recorded in Volume 334, page 104, Contract Records of Harris County, Texas, as amended by instrument recorded in Volume 338, page 686, Contract Records of Harris County, Texas, and as further supplemented or amended by Pooling Agreement recorded in Volume 399, page 263, Contract Records of Harris County, Texas.
(d) All prior reservations of minerals in and under the above described property.
(e) Lease dated September 15, 1983, as filed for record under Harris County Clerk's File No. J-679462, between Lake Huron Broadcasting Corporation, as Lessor, and the United States of America, as Lessee.
EASEMENTS AND RESTRICTIONS OF RECORD:
(a) Thirty (30) foot pipe line easement granted to Houston Pipe Line Company as reflected by instrument recorded in Volume 5249, page 521, Deed Records of Harris County, Texas.
(b) Pipe line easement granted to Houston Pipe Line Company as reflected by instrument recorded in Volume 2408, page 577, Deed Records of Harris County, Texas.
(c) Terms, conditions, and stipulations contained in Oil and Gas Lease from J. G. Ehrhardt, et al, to H. M. Harrell, recorded in Volume 334, page 104, Contract Records of Harris County, Texas, as amended by instrument recorded in Volume 338, page 686, Contract Records of Harris County, Texas, and as further supplemented or amended by Pooling Agreement recorded in Volume 399, page 263, Contract Records of Harris County, Texas.
(d) All prior reservations of minerals in and under the above described property.
(e) Lease dated September 15, 1983, as filed for record under Harris County Clerk's File No. J-679462, between Lake Huron Broadcasting Corporation, as
Lessor, and the United States of America, as Lessee.
Exhibit 10.05.21
This Agreement ("Agreement") is made as of October 1, 1996, by and between the ATSINGER FAMILY TRUST the STUART W. EPPERSON REVOCABLE LIVING TRUST, collectively referred to herein as "Lessor", and VISTA BROADCASTING, INC. ("Lessee"), a California corporation.
WHEREAS, Lessor owns certain land (the "Land") and Lessee owns certain improvements thereon (the "Improvements"), which Land and Improvements together comprise certain real property located in the County of Placer, State of California, more particularly described as set forth in Exhibit "A", which is attached hereto and made a part hereof (the "Real Property"); and,
WHEREAS, Lessee uses said Real Property in operating its radio station KFIA-AM, Carmichael, California; and,
WHEREAS, the parties are desirous of making a mutually suitable and satisfactory agreement whereby Lessor will lease to Lessee the Real Property (constituting the "Leased Premises") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the following covenants, agreements, conditions and representations, the parties hereto agree as follows:
(a) Lessor, in consideration of the rents to be paid and covenants herein contained, hereby leases to Lessee the Leased Premises.
(b) Lessee may use the Leased Premises for the operation of its radio station, and, in connection therewith, for the installation, repair, maintenance, operation, housing and removal of its Improvements and other related broadcasting equipment (together comprising the "Installations"). Lessee is fully familiar with the physical condition of the Land and has received the same in good order and condition, and agrees that the Land complies in all respects with all requirements of this Agreement. Lessee shall use the Land exclusively for purposes associated with the operation of a radio station. Notwithstanding the foregoing, Lessor retains all rights to lease and sub-lease space in, on or about the Leased Premises and the Installations.
(c) Lessee shall have the right from time to time to substitute
Installations of similar kind and character for those hereinabove specified,
provided such changes shall be approved in advance by Lessor, and Lessor shall
not unreasonably delay or withhold its approval. In the event Lessee submits any
such changes for Lessor's approval and Lessor does not respond within thirty
(30) days after Lessor's receipt thereof, then such changes shall be deemed
approved by Lessor, so long as such changes otherwise comply with this
Agreement, five (5) days after Lessor's receipt of notice that it has not
responded.
(d) Lessee shall have access to the Leased Premises twenty-four (24) hours per day, seven (7) days per week, for the purpose of installing, maintaining and repairing its Installations, provided that the contractors performing such work are reasonably acceptable to Lessor.
(e) Lessor shall not be responsible for repairs or maintenance to the Installations, except for repairs occasioned by the negligence of Lessor, its agents, employees or contractors.
(f) During the Term (as hereinafter defined), Lessor and Lessee shall each provide the other with a telephone number which, if called will ring at a location that is staffed by their respective agents twenty-four (24) hours each and every day, seven (7) days each and every week; and Lessor and Lessee shall notify each other promptly in the event of any change in such telephone number.
(g) Lessee shall not use or permit the Leased Premises to be used by any dangerous, toxic, noxious or offensive trade or business, or for any unlawful purpose.
(h) Lessee shall not directly or indirectly create or permit to be created or to remain, and will discharge any mortgage, lien, security interest, encumbrance or charge on, pledge of or conditional sale or other title retention agreement with respect to the Real Property or any part thereof or Lessee's interest therein other than (i) this Agreement, (ii) any lien, including a mortgage on the leasehold interest of Lessee, which may be approved by the Lessor in writing, which approval shall not be unreasonably withheld, (iii) liens for impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for non-payment, or being contested as permitted by Paragraph 3(d), below, and (iv) liens of mechanics, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums which under the terms of the related contracts are not at the time due, provided that adequate provision for the payment thereof shall have been made.
(a) The term of this Lease (the "Term") shall commence on October 1,
1996 (the "Commencement Date"), and shall expire on September 30, 2006 (the
"Expiration Date"). If the Term has been extended as provided in subparagraph
(b), below, the Expiration Date shall be the last day of the Term as so
extended.
(b) Lessee shall have the option, if Lessee is not at the time in
default under this Agreement, to extend the Term of this Agreement for up to two
(2) successive periods of five (5) years each (the "Extended Terms"), and,
except as set forth in subparagraph (c), below, on the same terms, covenants and
conditions herein contained. The word "Term" as used in this Agreement shall be
deemed to include the Extended Terms when and if the Agreement is extended. Each
option to extend the Term shall be exercised only by Lessee's delivery to Lessor
by United States mail on or before ninety (90) days prior to the commencement of
the renewal term of written notice of Lessee's election to extend as provided
herein.
(c) Lessee agrees to pay rent to Lessor from the Commencement Date through the Expiration Date, or such earlier date as this Agreement is terminated as provided herein, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn: Accounting, or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
(i) During the first year beginning with the Commencement Date Lessee shall pay a base rent of $78,960 per annum, in equal monthly installments of $6,580 (the "Base Rent") in advance on the first day of each month; and thereafter on each and every Adjustment Date, as hereinafter defined, the monthly rent shall be computed according to subparagraph (ii) below.
(d) Rent and all other sums payable to Lessor hereunder shall be paid without notice, demand, counterclaim, set-off, deduction or defense and without abatement, suspension, deferment, diminution or reduction. Except as expressly provided herein, Lessee waives all
rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Agreement or the Real Property or any part thereof, or to any abatement, suspension, deferment, diminution or reduction of rent or any other sum payable by Lessee hereunder.
(a) Lessee, at its sole expense, shall keep the Real Property and the adjoining streets and ways in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals shall be equal in quality and class to the original work. Lessee waives any right created by any law now or hereafter in force to make repairs to the Real Property at Lessor's expense. Lessee, at its sole expense, shall do or cause others to do every act necessary or appropriate for the preservation and safety of the Real Property whether or not the Lessor shall be required by any legal requirement to take such action or be liable for failure to do so.
(b) If not at the time in default under this Agreement, Lessee, at its sole expense, may make reasonable alterations of and additions to the Improvements or any part thereof, provided that any alteration or addition (i) shall not change the general character of the Improvements, or reduce the fair market value thereof below their value immediately before such alteration or addition, or impair their usefulness, (ii) is effected with due diligence, in a good and workmanlike manner and in compliance with all legal requirements and insurance requirements, (iii) is promptly and fully paid for by Lessee, (iv) is made, in case the estimated cost of such alteration or addition exceeds Ten Thousand Dollars ($10,000), under the supervision of an architect or engineer satisfactory to Lessor and in accordance with plans, specifications and cost estimates approved by Lessor, and (v) does not interfere with Lessor's rights of use under this Agreement.
(c) Subject to subparagraph (d), below, relating to contests, Lessee shall pay all taxes, assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term hereof), ground rents, water, sewer or similar rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges in each case, whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereof), which at any time during or in respect of the Term hereof may be assessed, levied, confirmed or imposed on or in respect of or be a lien upon the Real Property or any part thereof or any rent therefrom or any estate, right or interest therein, or any occupancy, use or possession of or activity conducted on the Real Property or any part thereof, other than any income or excess profits tax imposed upon the Lessor's general income or revenues, but excluding any income or excess profits or franchise taxes of Lessor determined on the basis of general income or revenue or any interest or penalties in respect thereof. Lessee shall furnish to Lessor for inspection within thirty (30) days after written request, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payment. If by law any such amount may be paid in installments, Lessee
shall be obligated to pay only those installments as they become due from time to time before any interest, penalty, fine or cost may be added thereto; and any such amount relating to the fiscal period of the taxing authority, part of which is included within the Term and a part of which extends beyond the Term shall, if Lessee shall not be in default under this Agreement, be apportioned between Lessee and Lessor as of the expiration of the Term of this Agreement.
(d) Lessee, at its sole expense, may contest, after prior written
notice to Lessor, by appropriate legal proceedings conducted in good faith and
with due diligence, the amount or validity or application, in whole or in part,
of any tax, lien or other imposition on the Real Property, provided that (i)
Lessee shall first make all contested payments, under protest if it desires,
(ii) neither the Real Property nor any part thereof or interest therein nor any
such rents or other sums would be in any danger of being sold, forfeited, lost
or interfered with, and (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings or reasonably requested by Lessor.
(e) Lessee shall pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and protective services at any time rendered to or in connection with the Real Property or any part thereof, will comply with all contracts relating to any such services, and will do all other things required for the maintenance and continuance of all such services.
(a) Lessee shall, at its sole cost and expense, during the Term hereof, obtain or provide and keep in full force for the benefit of Lessor, as an additional named insured (i) general public liability insurance, insuring Lessor against any and all liability or claims or liability arising out of, occasioned by or resulting from any accident or other occurrence in or about the Real Property arising out of any act or omission of Lessee or any officer, employee, agent or contractor of Lessee, for injuries to any person or persons, with limits of not less than One Million Dollars ($1,000,000.00) for injuries to one person, One Million Dollars ($1,000,000.00) for injuries to more than one person, in any one accident or occurrence, and for loss or damage to the property of any person or persons, for not less than One Million Dollars ($1,000,000.00); (ii) insurance with respect to the Improvements against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles, smoke and other risks from time to time included under "extended coverage" policies, in an amount equal to at least One Hundred Percent (100%) of the full replacement value of the Improvements and, in any event, in an amount sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial loss under the applicable policies, which shall be written on a replacement cost basis; (iii) appropriate workers' compensation or other insurance against liability arising from claims of workers in respect of and during the period of any work on or about the Real Property; and (iv) insurance against such other hazards and in such amounts as is customarily carried by owners and operators of similar properties, and as Lessor may reasonably require for its protection. Lessee shall comply with such other requirements as Lessor, or any mortgagee, may from time to time reasonably request for the protection by insurance of their respective interests. The policy
or policies of insurance maintained by Lessee pursuant to this Paragraph shall be of a company or companies authorized to do business in California and a certificate thereof shall be delivered to Lessor, together with evidence of the payment of the premiums therefor, not less than fifteen (15) days prior to the commencement of the Term hereof or of the date when Lessee shall enter upon the Leased Premises, whichever occurs sooner. At least fifteen (15) days prior to the expiration or termination date of any policy, Lessee shall deliver a certificate of a renewal or replacement policy with proof of the payment of the premium therefor. Any such insurance required by this Paragraph may, at Lessee's option, be provided through a blanket policy or policies.
(b) Lessee shall indemnify Lessor and hold Lessor harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessor,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessee,
(ii) any negligent or intentional act or omission of Lessee, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessee of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessee on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessee pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessee's request or this
Agreement; provided, however, that Lessee shall not be required to indemnify
Lessor for any damages, injury, loss or expense arising out of Lessor's or its
agents', employees', invitees' or contractors' negligent acts or omissions.
(c) If Lessor so elects by notice to Lessee, Lessee shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessee and approved by Lessor (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessor may assume, or require that such defense be assumed, by Lessor and counsel selected by Lessor, at the cost and expense of Lessee if Lessor is for any reason dissatisfied with the defense by Lessee, or believes that its interests would be better served thereby. In any case where Lessee is defending any such claim, Lessor may participate in the defense thereof by counsel selected by it, but at Lessor's expense. Lessee shall not enter into any settlement of any claim without the consent of Lessor, which consent shall not be unreasonably withheld.
(d) Lessor shall indemnify Lessee and hold Lessee harmless from and
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable attorneys' fees) incurred by or asserted against Lessee,
whether during or after the Term of this Agreement, including by reason of
personal injury, loss of life, or damage to property, caused by or resulting
from in whole or any material part, (i) any breach of this Agreement by Lessor,
(ii) any negligent or intentional act or omission of Lessor, its employees,
agents, invitees or contractors, whether in, on, about or with respect to the
Leased Premises or otherwise, (iii) the use by Lessor of any part of the Leased
Premises, (iv) any work undertaken by or at the request of Lessor on or about
the Leased Premises, (v) any other activity undertaken by or at the request of
Lessor pursuant to or in connection with this Agreement, or (vi) the presence of
any individuals on the Leased Premises as a result of Lessor's request or this
Agreement; provided, however, that Lessor shall not be required to indemnify
Lessee for any damages, injury, loss or expense arising out of Lessee's or
its agents', employees', invitees' or contractors' negligent acts or omissions.
(e) If Lessee so elects by notice to Lessor, Lessor shall have the obligation of defending, at its sole cost and expense, by counsel selected by Lessor and approved by Lessee (such approval not to be unreasonably withheld), against any claim to which the foregoing indemnity may apply. Lessee may assume, or require that such defense be assumed, by Lessee and counsel selected by Lessee, at the cost and, expense of Lessor if Lessee is for any reason dissatisfied with the defense by Lessor, or believes that its interests would be better served thereby. In any case where Lessor is defending any such claim, Lessee may participate in the defense thereof by counsel selected by it, but at Lessee's expense. Lessor shall not enter into any settlement of any claim without the consent of Lessee, which consent shall not be unreasonably withheld.
(f) Nothing in this Agreement shall be construed so as to authorize or permit any insurer of Lessor or Lessee to be subrogated to any right of Lessor or Lessee against the other. Each of Lessor and Lessee hereby releases the other to the extent of its insurance coverage for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty shall be brought about by the fault or negligence of the other party or persons for whose acts said party is liable.
(a) Lessor represents and warrants that:
(i) The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(ii) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to the Leased Premises, and as of the date of this Agreement, no notice of any kind relating thereto (which would adversely affect the transactions contemplated by this Agreement) has been issued by public authorities having jurisdiction over the Leased Premises.
(iii) No person or party other than Lessor has a right to use the Leased Premises for any purpose which would affect Lessee's right to use the Leased Premises as contemplated hereunder.
(iv) Lessor has not received written notice of pending or contemplated condemnation proceedings affecting the Leased Premises or any part thereof.
(v) To the best of Lessor's knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Leased Premises or any portion thereof and Lessor has not received notice written or otherwise of any litigation affecting or concerning the Leased Premises relating to or arising out of its ownership, management, use or operation. Lessor shall give to Lessee prompt notice of institution of any such proceeding or litigation.
(vi) To the best of Lessor's knowledge, there are presently no proceedings for overdue real estate taxes assessed against the Leased Premises for any fiscal period.
(vii) Lessor shall promptly advise Lessee in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or to the maintenance, operation or use thereof.
(viii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessor (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(ix) Subject to liens and encumbrances of record, Lessor owns good and marketable title in fee simple to the Real Property on which the Leased Premises are located, and Lessor acknowledges that Lessee is relying upon the foregoing representation and warranty in entering into this Agreement and in expending moneys in connection herewith. Lessor shall not encumber or permit any encumbrances, liens or restrictions on Lessee's Installations, except with the prior written approval of Lessee.
(b) Each party shall comply in all material respects with all local, state and federal laws, statutes, ordinances, rules, regulations, orders and decrees that it knows to be applicable in connection with its activities and operations at the Leased Premises, and Lessor shall require the same representation and warranty from all additional users of the facilities at the Leased Premises.
(c) The parties agree that, during the Term of this Agreement neither party shall intentionally do anything at the Leased Premises which will interfere with or adversely affect the operations of the other party.
(d) In the event that during the Term of this Agreement there shall be an actual condemnation or foreclosure and taking of all of the Leased Premises, or a portion thereof such that it renders the premises unsuitable for broadcasting, this Agreement may be terminated by written notice from either party to the other and thereafter each of the parties shall be relieved of any future liability to the other under this Agreement, except as to obligations accrued and not yet discharged at the date of termination. Following any condemnation or foreclosing order, Lessee may continue to use the property for operations under the terms of this Agreement until Lessee finds and begins to utilize new facilities or until prevented by the condemning or foreclosing authority from utilizing the Leased Premises, whichever occurs first.
(e) Lessee represents and warrants that its Installations to be located on or about the Leased Premises, together with the existence of the equipment of Lessor, and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in
"American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(f) Lessee covenants that it will not at any time during the Term of this Agreement, transmit, store, handle or dump toxic or hazardous wastes anywhere at or around the Leased Premises.
(g) Lessee shall promptly advise Lessor in writing of any written notice received from any governmental authority to comply with the terms, provisions and requirements of any local, state and federal laws, ordinances, directives, orders, regulations, and requirements which apply to any portion of the Leased Premises or to any adjacent street or other public area or the maintenance, operation or use thereof.
(h) Lessee represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee (none of which actions have been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(i) Lessee warrants unto Lessor that the Improvements (including the radio tower(s) located on the Real Property) are and will remain in material compliance at all times during the Term and any Extension Term with all federal, state, county, municipal, local, administrative and other governmental laws, statutes, ordinances, codes, rules, regulations and orders pertaining thereto, including, without limitation, to the extent applicable, all zoning laws and building codes and all regulations of the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC").
(j) In case of any material damage to or destruction of the Real Property or any part thereof, Lessee shall promptly give written notice thereof to Lessor and any mortgagee, generally describing the nature and extent of such damage or destruction. In case of any damage to or destruction of the Improvements or any parts thereof, Lessee, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, at its sole expense, shall promptly commence and complete the restoration, replacement or rebuilding of the Improvements as nearly as possible to their value, condition and character immediately prior to such damage or destruction.
(k) Lessee will execute, acknowledge and deliver to the Lessor, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) no notice has been received by Lessee of any default which has not been cured, except as to defaults specified in said certificate. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Real Property or any part thereof.
(l) Lessor will execute, acknowledge and deliver to the Lessee or any mortgagee, promptly upon request, a certificate certifying that (i) this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the Agreement is in full force and effect, as modified, and stating the modifications), (ii) the dates, if any, to which rent and other sums payable hereunder have been paid, and (iii) whether or not, to the knowledge of Lessor, there are then existing any defaults under this Agreement (and if so, specifying the same). Any such certificate may be relied upon by any prospective purchaser transferee or mortgagee of Lessee's interest under this Agreement.
(a) Any of the following events shall constitute a default on the part of Lessee:
(i) The failure of Lessee to pay rent or additional rent, and continuation of such failure for more than ten (10) days after Lessee's receipt of written notice thereof from Lessor; provided, however, that Lessor shall not be required to provide such written notice to Lessee more than twice in any twelve (12) month period prior to declaring such failure to pay an event of default; or
(ii) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion; or
(iii) Lessee is finally and without further right of appeal or review, adjudicated a bankrupt or insolvent, or has a receiver appointed for all or substantially all of its business or assets on the ground of its insolvency, or has a trustee appointed for it after a petition has been filed for Lessee's reorganization under the Bankruptcy Act of the United States, or any future law of the United States having the same general purpose, or if Lessee shall make an assignment for the benefit of its creditors, or if Lessee's interest hereunder shall be levied upon or attached, which levy or attachment shall not be removed within twenty (20) days from the date thereof.
(b) If an event of default on the part of Lessee shall occur at any time, Lessor, at its election, may give Lessee a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessee has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, but Lessee shall remain liable for the payment of rent during the full period which would otherwise constitute the balance of the Term of this Agreement; and without prejudice to any other right or remedy which it may have hereunder or by law, and
notwithstanding any waiver of any prior breach of condition or event of default hereunder, Lessor may re-enter the Leased Premises either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Premises by appropriate suit, action or proceeding and remove its effects and hold the Leased Premises as if this Agreement had not been made.
(c) The failure of Lessor to cure any default under the terms hereof,
and continuation of such failure to cure for more than thirty (30) days after
notice by Lessee, shall constitute a default on the part of Lessor; provided,
however, that if the nature of Lessor's default is such that more than thirty
(30) days is required for its cure, then Lessor shall not be deemed to be in
default if Lessor has commenced such cure within the thirty (30) day period,
demonstrates to Lessee's reasonable satisfaction that such default is curable
and thereafter diligently prosecutes such cure to completion.
(d) If an event of default on the part of Lessor shall occur at any time, Lessee, at its election, may give Lessor a notice of termination specifying a day not less than thirty (30) days thereafter on which the Term of this Agreement shall end, unless such default shall be cured within said period, or, if the default is such that more than thirty (30) days is required for its cure, unless Lessor has commenced such cure within said period. If such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Premises to Lessor, and Lessee shall not be liable for payment of rent for any period after such expiration.
Lessee shall not assign this Agreement without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Notwithstanding any assignment, Lessee shall remain primarily liable under this Agreement. Under no circumstances shall Lessee enter into any agreement to lease or sublease any space in, on or about the Leased Premises or the Installations, which rights are specifically reserved to Lessor.
This Agreement shall not be a lien against the Leased Premises in respect to any mortgages and security agreements placed or hereafter to be placed by Lessor upon the Leased Premises. The recording of such mortgages and security agreements shall have preference and precedence and be superior and prior in lien to this Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in the Leased Premises an agreement that the mortgagee or lender shall not disturb
Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering the Leased Premises, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
Lessor shall not be liable for any damages or injury which may be sustained by Lessee or any other person by reason of the failure, breakage, leakage or obstruction of the water, sewer, plumbing, roof, drains, leaders, electrical, air conditioning or any other equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct of Lessee, its agents, employees, contractors, invitees, assignees or successors; or attributable to any interference with or the interruption of or failure of any services, beyond the control of Lessor, to be supplied by Lessor.
(a) Lessor agrees that it shall not enforce any unreasonable rules or regulations which would unduly prejudice the conduct of Lessee's business, or which would prevent full and free access to the Leased Premises by Lessee, as herein provided.
(b) Lessor reserves and shall at all times have the right to re-enter the Real Property to inspect the same, to supply any service to be provided by Lessor to Lessee hereunder, and to show the Real Property to prospective purchasers, mortgagees, or lessees, to post notices of non-responsibility, without abatement of rent, provided entrance to the Real Property shall not be denied Lessee.
Notwithstanding any of the provisions of this Lease, Lessor (a) may assign, in whole or in part, Lessor's interest in this Lease and (b) may sell all or part of the Real Property. In the event of any sale or exchange of the Leased Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Leased Premises occurring after the consummation of such sale or exchange and assignment, but only upon the condition that, as part of such sale or exchange, Lessor will cause the grantee to agree in writing to assume to carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of Lessor's assignment of its interest in and to this Lease.
The parties acknowledge and agree that this Agreement has not been brought about as a result of the services of any real estate broker, firm or corporation, and each indemnifies and saves the other harmless from any and all claims from any person(s) claiming to have rendered real estate services in connection with this Agreement.
Upon the expiration of the Term hereof, Lessee shall surrender the Leased Premises, and, at Lessor's option, all interest of the Lessee in and to the Improvements (including the radio towers located on the Land), to Lessor in good order and condition, reasonable wear and tear excepted. Any equipment, fixtures, goods or other property of Lessee not removed within ten (10) days after any quitting, vacating or abandonment of the Leased Premises, or upon Lessee's eviction therefrom, shall be considered abandoned, and Lessor shall have the right, without notice to Lessee, to sell or otherwise dispose of same without having to account to Lessee for any part of the proceeds of such sale.
All notices, demands, and requests required or permitted to be given
hereunder shall be in writing and sent certified mail, return receipt requested,
and if to Lessor, at 4880 Santa Rosa Road, Suite 300, Camarillo, CA 93012, Attn:
Edward G. Atsinger III, and if Lessee, at 4880 Santa Rosa Road, Suite 300,
Camarillo, CA 93012, Attn: Accounting. Either party hereto may change the place
for notice to it by sending like written notice to the other party hereto.
The provisions of this Agreement shall apply to, bind and inure to the benefit of Lessor and Lessee, their respective successors, legal representatives or assigns. The terms of this Agreement and any disputes arising therefrom, shall be governed by the laws of the State of California.
This Agreement contains the entire understanding and agreement between the parties. No representative, agent or employee of Lessor has been authorized to make any representations or promises with reference to the within agreement or to vary, alter or modify the terms hereof. No additions, changes or modifications shall be binding unless reduced to writing and signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE ATSINGER FAMILY TRUST VISTA BROADCASTING, INC. /s/ Edward G. Atsinger /s/ Eric H. Halvorson ------------------------------- ------------------------------------ EDWARD G. ATSINGER, III ERIC H. HALVORSON Trustee Vice-President /s/ Mona J. Atsinger ------------------------------- MONA J. ATSINGER Trustee (By Edward G. Atsinger III, Attorney in Fact) |
STUART W. EPPERSON
REVOCABLE LIVING TRUST
/s/ Stuart W. Epperson ------------------------------- STUART W. EPPERSON Trustee |
EXHIBIT 10.06.01
This ASSET PURCHASE AGREEMENT (this "Agreement"), made as of the 5TH day of June, 1996, is by and between Radio 94 of Phoenix Limited Partnership, a Maryland limited partnership ("Seller"), and Salem Media of Arizona, Inc., an Arizona corporation ("Buyer").
Seller is the licensee of and operates radio broadcast station KOOL(AM), Phoenix, Arizona (the "Station"), pursuant to licenses issued by the Federal Communications Commission (the "FCC").
Seller and Buyer have agreed, subject to the prior approval of the FCC, that Seller will sell and Buyer will acquire certain of the assets associated solely with the operation of the Station on the terms and subject to the conditions set forth in this Agreement.
Therefore, the parties agree as follows:
1.1. CLOSING. Subject to Section 17.1 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 designated by Seller within five (5) business days after the last of the conditions specified in Sections 11.2 and 12.2 hereof has been fulfilled (or waived by the party entitled to waive such condition). The Closing shall be held at 10:00 a.m. in the offices of Leventhal, Senter & Lerman, 2000 K Street, N.W., Washington, D.C., or at such place as the parties may otherwise agree.
1.2. STATION ASSETS. At the Closing, Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase from Seller, certain assets held by Seller and used solely in the operation of the Station (but excluding the assets specified in Section 1.3), as follows:
(d) all of Seller's rights under and interest in any contracts entered into or acquired by Seller between the date hereof and the Closing Date that Seller offers to assign to Buyer and which are accepted in writing by Buyer (the "Contracts"); and
(e) true and complete copies of all of the files, logs, ledgers, reports of engineers and other consultants or independent contractors, pertaining to the Station Assets.
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 debts, liens, or encumbrances of any kind or nature except as to any obligation or liability of Seller that Buyer may expressly agree in writing to assume and except for Permitted Liens.
1.3. EXCLUDED ASSETS. The Station Assets shall not include the following:
(a) Seller's books and records as pertain to the corporate organization, existence or capitalization of Seller, and duplicate copies of such records as are necessary to enable Seller to file tax returns and reports. Seller's files, records, books of account, computer programs and software relating to the operation of the Station except as set forth in Section 1.2(e) hereof, including, without limitation, payable records, receivable records, invoices, statements, traffic material, programming information and studies, news and advertising studies and consultants' reports, ratings reports, marketing and demographic data, sales correspondence, lists of advertisers, promotional materials, credit and sales reports, budgets, financial reports and projections, sales, operating and business plans; and
(b) all cash, cash equivalents, accounts receivable (which shall be collected by Seller) and any assets of any kind or description used in connection
with the Station that are also used or held for use in connection with Radio Station KOOL-FM, Phoenix, Arizona and the call letters "KOOL"; and
(c) all insurance policies, except for any rights that may be assigned pursuant to Article 20 hereof; and
(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 and all employment contracts
or any rights or obligations relating thereto.
(e) all commitments, contracts and agreements not specifically assigned to and assumed by Buyer pursuant to Section 1.2(d), above.
2.1. PURCHASE PRICE. The total consideration to be paid by Buyer for the Station Assets (the "Purchase Price ") shall be Six Million Five Hundred Thousand Dollars ($6,500,000), as adjusted pursuant to Section 5.2.
2.2. PAYMENT OF PURCHASE PRICE. The Purchase Price will be payable as follows:
(a) Upon the execution of this Agreement, Buyer shall deposit the amount of Four Hundred Thousand Dollars ($400,000) (the "Escrow Deposit") with Escrow Agent to be held pursuant to the terms and conditions of the Escrow Agreement, as set forth on Exhibit A. At the Closing, the Escrow Deposit shall be paid by Escrow Agent to Seller. If Closing does not occur, the Escrow Deposit shall either be delivered to Seller or returned to Buyer in accordance with this Agreement. All interest earned on the Escrow Deposit shall be paid by Escrow Agent to Buyer.
(b) Six Million One Hundred Thousand Dollars ($6,100,000) shall be paid on the Closing Date by wire transfer of immediately available federal funds to a bank or other financial institution designated by Seller at least two (2) days prior to the Closing Date.
2.3. ALLOCATION. Buyer shall prepare an initial draft of IRS Form 8594. Buyer shall forward such form to Seller for its approval, which shall not be unreasonably withheld, and Buyer and Seller shall each file the IRS Form 8594 finally agreed upon by the parties with their respective federal income tax return for the tax year in which the Closing occurs.
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.
4.1. FCC APPLICATION. The assignment of the Station Licenses as contemplated by this Agreement is subject to the prior consent and approval of the FCC. No later than five (5) business days after the date of this Agreement, Buyer and Seller shall file the FCC Application. Seller and Buyer shall thereafter prosecute the FCC Application with all reasonable diligence and otherwise use their best efforts to obtain the grant of the FCC Application as expeditiously as practicable and shall diligently oppose any objections to, appeals from or petitions to reconsider such approval of the FCC, to the end that the FCC Consent and a Final Order with respect thereto may be obtained as soon as practicable; provided, however, that neither Seller nor Buyer shall have any obligation to satisfy any complainant or the FCC by taking any steps which would have a material adverse effect upon Seller or Buyer or upon any affiliated entity, but neither the expense nor inconvenience to a party of defending against a complainant or an inquiry by the FCC shall be considered a material adverse effect on such party. If the FCC Application has been designated for hearing by the FCC, either Buyer or Seller may elect to terminate this Agreement pursuant to Article 17 hereof. Buyer and Seller covenant that neither of them shall knowingly take any action that such party knows or has reason to know would materially and adversely affect or materially delay issuance of the FCC Consent or materially and adversely affect or materially delay the FCC Consent becoming a Final Order, unless such action is requested by the FCC or its staff or is required by the FCC's rules or policies. Should Buyer or Seller become aware of any facts which could reasonably be expected to materially and adversely affect or materially delay the FCC Consent from becoming a Final
Order, or which would result in the imposition of a Material Adverse Condition, such party shall promptly notify the other party thereof in writing and both parties shall cooperate to take all steps necessary or desirable to resolve the matter expeditiously and to obtain the FCC Consent and the Final Order without the imposition of a Material Adverse Condition so long as such steps would not have a material adverse effect upon Seller or Buyer or any affiliated entity.
4.2. OTHER GOVERNMENTAL CONSENTS. Promptly following the execution 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.
5.1. PRORATION OF EXPENSES. All expenses arising from the conduct
of the operation of the Station shall be prorated between Buyer and Seller as of
the Effective Time in accordance with GAAP. 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
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, utility expenses, 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
14.2. 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. All income derived from
the sale of advertising time on the Station prior to the Closing shall be for
the benefit of and shall be collected by Seller.
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 at Closing. To the extent that all prorations and adjustments are not resolved at Closing, Seller shall deliver to Buyer a schedule of such additional 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 twenty (20) 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 twenty (20) 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 five thousand dollars ($5,000), the dispute shall be submitted within ten (10) days to the Phoenix, Arizona office of Deloitte & Touche (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. The cost and expenses of the Referee shall be proportionately allocated between Buyer and Seller based on the percentage of the disputed amount allocated by the Referee to Buyer and Seller, respectively, but each party shall bear its own legal and other expenses, if any. If the amount in dispute is equal to or less than five thousand dollars ($5,000), 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 ten (10) days after the last to occur of (i) Buyer's acceptance of the Proration Schedule or 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 of 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 five thousand dollars ($5,000); 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 five thousand dollars ($5,000). 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 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 Nothing in this Article 5 shall in any way limit Buyer or Seller from seeking any remedy from the other party for breach of any provision of this Agreement or indemnification pursuant to Article 16.
Buyer represents and warrants to Seller as follows:
6.1. ORGANIZATION AND STANDING. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Arizona.
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.
6.3. FCC QUALIFICATIONS. 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 assignee of the Station Licenses, and Buyer is able to certify on FCC Form 314 to its financial qualifications.
6.5. ABSENCE OF LITIGATION. There is no claim, litigation, proceeding or investigation pending or, to the best of Buyer's knowledge, threatened against Buyer which seeks to enjoin or prohibit, or which otherwise questions the validity of, any action taken or to be taken in connection with this Agreement.
6.6. FINANCIAL QUALIFICATION. Buyer is financially qualified to meet all terms, conditions and undertakings contemplated by this Agreement.
Seller represents and warrants to Buyer as follows:
7.1. ORGANIZATION AND STANDING. Seller is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Maryland, and 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.
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.
7.4. FCC AUTHORIZATIONS.
authorized power, in material compliance with the terms and conditions of the Station Licenses applicable to it and in material compliance with all rules and regulations of the FCC. Seller has no reason to believe that the FCC will not renew the Station Licenses in the ordinary course.
(c) To the knowledge of Seller, 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.
(d) Seller has complied in all material respects with all requirements to file reports, applications and other documents with the FCC with respect to the Station, and all such reports, applications and documents are complete and correct in all material respects. The "Public Inspection File" of the Station is complete and in substantial and material compliance with Section 73.3526 of the Rules and Regulations.
7.5. CONDITION OF LEASED REAL PROPERTY.
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 such Real Property or improvements thereon, or of the need for any material repair, remedy, construction, alteration or installation with respect to the Real
Property or improvements thereon, or any change in the means or methods of conducting operations thereon.
7.7. CONTRACTS. The Contracts, if any, will constitute valid and binding obligations of Seller and, to Seller's knowledge, of all other parties thereto, will be in full force and effect as of the Closing Date. Seller will not be in default under any of the Contracts and to Seller's knowledge, the other parties to such Contracts will not be in default thereunder. Should there be any Contracts, Seller will have all requisite power and authority to assign its rights under the Contracts to Buyer in accordance with this Agreement, and such assignment will not affect the validity, enforceability or continuity of any such Contracts.
7.9. COMPLIANCE WITH LAWS. To Seller's knowledge, 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 violate any such laws, regulations or orders in any material respect. Seller has not received any notice asserting any noncompliance with any applicable statute, role or regulation, in connection with the operation of the Station.
7.10. ENVIRONMENTAL MATTERS; OSHA. Except to the extent disclosed in
the Phase I Environmental Site Assessment Update, Pinnacle Peak AM Tower Site,
3701 East Pinnacle Peak Road, Phoenix, AZ, prepared for Compass Radio Group,
Inc. by Dames & Moore, dated September 1, 1995, a copy of which has been
provided to Buyer, to Seller's actual knowledge, during the period of Seller's
ownership of the Station: (a) No Hazardous Materials (i) are or have been used,
treated, stored, disposed of, released, spilled, generated, manufactured,
transported or otherwise handled on the Real Property, (ii) have been spilled,
released or disposed of on property adjacent to the Real Property, or (iii) have
otherwise come to be located on or under the Real Property; (b) the Real
Property and all operations on the Real Property are in material compliance with
all Environmental Laws; (c) Seller has obtained all environmental, health and
safety permits necessary for the operation of the Station, and all such permits
are in full force and effect, and Seller is in compliance with the terms and
conditions of all such permits; (d) there are no underground storage tanks,
whether in use or closed, on or under the Real Property, and no PCB is present
on the Real Property or used in the Personal Property; and (e) Seller is in
material compliance with OSHA Laws. Seller has not received any notice, and is
not aware, of any administrative or judicial investigations, proceedings or
actions with respect to violations, alleged or proven, of Environmental Laws by
Seller or any tenants of Seller. The term "actual knowledge," as used in this
Section 7.10, shall mean the knowledge and awareness of Seller's principals,
after inquiry of the Station's general manager and chief engineer.
7.11 FILING OF TAX RETURNS. Seller has filed all Federal, State and local tax returns which are required to be filed, and has paid all taxes and all assessments to the extent that such taxes and assessments have become due.
7.12 ABSENCE OF INSOLVENCY. No insolvency proceeding of any character including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting the Seller or any of the Station Assets, are pending or, to the best knowledge of Seller, threatened, and Seller has made no assignment for the benefit of creditors, nor taken any action with a view to, or which would constitute the basis for the institution of, any such insolvency proceedings.
7.13 INSURANCE. There is now in full force and effect with reputable insurance companies fire and extended coverage insurance with respect to all material tangible Station Assets and public liability insurance, all in commercially reasonable amounts.
8.1. NOTIFICATION. Buyer shall notify Seller of any material litigation, arbitration or administrative proceeding pending or, to its knowledge, threatened against Buyer which challenges the transactions contemplated hereby, including any challenges to the FCC Application, and shall use reasonable efforts to remove any such impediment to the transactions contemplated by this Agreement.
8.2. NO INCONSISTENT ACTION. Buyer shall not take any action materially inconsistent with its obligations under this Agreement or that would hinder or delay the consummation of the transactions contemplated by this Agreement.
8.5. REQUEST FOR CALL SIGN CHANGE. Prior to Closing, Buyer shall file an application with the FCC requesting a change to the call sign of the Station to be effective upon the consummation of the transactions contemplated hereby.
9.1. INTERIM OPERATION. Between the date of this Agreement and the Closing Date, except as expressly permitted by this Agreement or with the prior written consent of Buyer:
(a) Seller shall conduct the technical operation of the Station solely in the ordinary and normal course of operation consistent with past practice, including continuation of the current broadcast hours of the Station and the carriage of programming during such hours, except that Seller shall be permitted to take steps which encourage the Station's listeners to listen to the Station's programming on Station KOOL-FM;
(b) Seller shall not sell, assign, lease or otherwise transfer or dispose of any of the Station Assets, except where no longer used or useful in the operation of the Station;
(c) 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 Station Assets, except for those in existence on the date of this Agreement, all of which will be removed on or prior to the Closing Date unless they are to be assumed by Buyer in accordance with Section 3.1 of this Agreement;
(d) Seller shall operate the Station in material compliance with the FCC's rules and regulations and the Station Licenses and with all other applicable laws, regulations, rules and orders;
(e) Seller shall comply in all material respects with the Leases;
(f) Seller shall promptly notify Buyer of any material default by, or claim of default against, any party under any of the Leases which are material, individually or in the aggregate, to the operation of the Station, and any event or condition which, with notice or lapse of time or both, would constitute an event of default under such Leases; and
(g) Seller shall maintain insurance policies on the Station and the Station Assets.
9.2. NOTIFICATION. Seller shall notify Buyer of any litigation, arbitration or administrative proceeding pending or, to its knowledge, threatened against Seller which
challenges the transactions contemplated hereby, including any challenges to the FCC Application, and shall use its reasonable efforts to take such steps as may be necessary to remove any such impediment to the transactions contemplated by this Agreement.
9.4. CLOSING COVENANT. On the Closing Date, Seller shall transfer, convey, assign and deliver to Buyer the Station Assets as provided in Article 1 of this Agreement.
9.5. PAYMENT OF INDEBTEDNESS; FINANCING STATEMENTS. Seller shall secure the release of all liens or encumbrances on the Station Assets that secure the payment of any indebtedness and shall deliver to Buyer at the Closing releases or terminations under the Uniform Commercial Code and any other applicable federal, state or local statutes or regulations of any financing or similar statements filed against any Station Assets in (a) the jurisdictions in which the Station Assets are and have been located since such Station Assets were acquired by Seller, and (b) any other location specified or required by applicable federal, state or local statutes or regulations.
9.6. NO INCONSISTENT ACTION. Seller shall not take any action which is materially inconsistent with its obligations under this Agreement or that would hinder or delay the consummation of the transactions contemplated by this Agreement.
9.7. ACCESS PRIOR TO THE CLOSING DATE. Prior to the Closing, Buyer and its representatives may make reasonable investigation of the Station Assets and Seller shall give to Buyer and it engineers, and other representatives reasonable access during normal business hours throughout the period prior to the Closing to Seller's personnel that may provide information relating to the Station Assets; provided that (i) Buyer shall give Seller reasonable advance notice of each date on which Buyer or any such other person or entity desires such access, (ii) each person shall, if requested by Seller, be accompanied by an officer or other representative of Seller; (iii) the investigations at the offices of Seller shall be reasonable in number and frequency, and (iv) all investigations shall be conducted in such a manner as not to physically damage any property or constitute a disruption of the operation of the Station or Seller. Seller shall furnish to Buyer during such period all documents and copies of documents and information concerning the Station Assets as Buyer may reasonably request.
9.8. FCC REPORTS. Seller shall continue to file, on a current basis until the Closing Date, all reports and documents required to be filed with the FCC with respect to the Station Assets.
10.1. CONDITIONS. If any event should occur between the date hereof and the Closing, either within or without the control of any party hereto, which would prevent fulfillment of the conditions upon the obligations of any party to consummate the transactions contemplated by this Agreement, the parties shall use their reasonable efforts to cure the event as expeditiously as possible.
10.2. BEST EFFORTS. Between the date of this Agreement and the Closing, each party shall use its best efforts to cause the fulfillment at the earliest practicable date of all of the conditions to the obligations of the other party to consummate the sale and purchase under this Agreement.
10.3. CONTROL OF STATION. Between the date of this Agreement and the Closing, Buyer shall not, directly or indirectly, control, supervise or direct the operations of the Station. Such operations shall be the sole responsibility of Seller and, subject to the provisions of Article 9, shall be in its complete discretion.
The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:
11.1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) All representations and warranties of Seller made in this Agreement shall be true and complete in all material respects on and as of the Closing Date as if made on and as of that date.
(b) All of the terms, covenants and conditions to be complied with and performed by Seller on or prior to Closing Date shall have been complied with or performed.
11.2. GOVERNMENTAL CONSENTS. The conditions specified in Article 4 of this Agreement shall have been satisfied, and the FCC Consent shall have become a Final Order without any Material Adverse Condition.
11.4. THIRD-PARTY CONSENTS. Seller shall have obtained and shall have delivered to Buyer all third-party consents that may be required for assignment of the Leases and Contracts, without any condition adverse to Buyer, or shall have made arrangements for Buyer to receive the benefits of such Leases and Contracts.
11.5. ADVERSE PROCEEDINGS. No suit, action, claim or governmental proceeding shall be pending against, and no order, decree or judgment of any court, agency or other governmental authority shall have been rendered against, any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms.
11.6. DELIVERIES. Seller shall have made or stand willing to make all the deliveries required under Section 13.1.
11.7. OPINION OF SELLER'S FCC COUNSEL. Buyer shall have received from Seller's FCC counsel an opinion, dated the Closing Date, in the form of Exhibit D hereto.
The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:
12.1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) All representations and warranties made by Buyer in this Agreement shall be true and complete in all material respects on and as of the Closing Date as if made on and as of that date.
(b) All the terms, covenants and conditions to be complied with and performed by Buyer under this Agreement on or prior to the Closing Date shall have been complied with or performed in all material respects.
12.2. GOVERNMENTAL CONSENTS. The conditions specified in Article 4 of this Agreement shall have been satisfied, and the FCC Consent shall have become a Final Order.
12.3. ADVERSE PROCEEDINGS. No suit, action, claim or governmental proceeding shall be pending against, and no order, decree or judgment of any court, agency or other governmental authority shall have been rendered against any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms.
12.4. DELIVERIES. Buyer shall have made or stand willing to make all the deliveries required under Section 13.2.
13.1. DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, Seller shall deliver to Buyer the following:
(a) a certificate signed by an officer of Seller's general partner, dated the Closing Date, in form and substance reasonably satisfactory to Buyer, certifying to the fulfillment of the conditions set forth in Sections 11.1 through 11.5 hereof;
(b) instruments of conveyance and transfer, in form and substance reasonably satisfactory to counsel to Buyer, effecting the sale, transfer, assignment and conveyance of the Station Assets to Buyer, including, but not limited to, the following:
(i) assignment of the Station Licenses;
(ii) bill of sale for all Personal Property;
(iii) assignment of the Leases and Contracts; and
(c) resolutions of the boards of directors and shareholders of Seller's
general partner, authorizing the execution, delivery and performance of this Agreement, certified by the secretary of the Seller's general partner; and
(d) executed releases, in suitable form for filing and otherwise in form and substance reasonably satisfactory to Buyer, of any security interests granted in the Station Assets as security for payment of loans and other obligations and of any other Liens; and
(e) such other documents as may reasonably be requested by Buyer's counsel.
13.2. DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, Buyer shall deliver to Seller the following:
(a) a certificate signed by an officer of Buyer, dated the Closing Date, in form and substance reasonably satisfactory to Seller, certifying to the fulfillment of the conditions specified in Sections 12.1 through 12.3 hereof;
(b) immediately available wire-transferred federal funds as provided in Section 2.1;
(c) instruments, in form and substance reasonably satisfactory to Seller and its counsel, pursuant to which Buyer assumes obligations, liabilities and commitments as provided in Article 3;
(e) a copy of the application filed with the FCC requesting a change to the call sign of the Station to be effective upon the consummation of the transactions contemplated hereby and the FCC's grant thereof; and,
(f) such other documents as may reasonably be requested by Seller's counsel.
14.1. GOVERNMENTAL FILING OR GRANT FEES. Any filing or grant fees imposed by any governmental authority, the consent of which is required for the transactions contemplated hereby, including all filing fees incurred pursuant to Article 4, shall be borne equally by Buyer and Seller.
14.2. TRANSFER TAXES. Any taxes arising by reason of the transfer of the Station Assets as contemplated hereby shall be borne by Buyer.
14.3. EXPENSES. Each party hereto shall be solely responsible for and shall pay all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.
15.1. BUYER'S REPRESENTATION AND AGREEMENT TO INDEMNIFY. Buyer represents and warrants to Seller that neither it nor any person or entity acting on its behalf has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, nor has it or any person or entity acting on its behalf taken any action on which a claim for any such payment could be based. Buyer further agrees to indemnify and hold Seller harmless from and against any and all claims, losses, liabilities and expenses (including reasonable attorneys' fees) arising out of a claim by any person or entity based on any such arrangement or agreement made or alleged to have been made by Buyer.
15.2. SELLER'S REPRESENTATION AND AGREEMENT TO INDEMNIFY. Seller represents and warrants to Buyer that, except for its agreement with Kalil & Co., Inc., neither it nor any person or entity acting on its behalf has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, nor have they or any person or entity acting on its behalf taken any action on which a claim for any such payment could be based. Seller further agrees that it shall be solely responsible for the payment of any fee due to Kalil & Co., Inc. Seller further agrees to indemnify and hold Buyer harmless from and against any and all claims, losses, liabilities and expenses (including reasonable attorneys' fees) arising out of a claim by any person or entity based on any such arrangement or agreement made or alleged to have been made by Seller.
16.1. INDEMNIFICATION BY SELLER. Notwithstanding the Closing, Seller hereby agrees to indemnify, defend and hold Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, direct or indirect, liabilities, or damages resulting from any untrue representation, breach of warranty, or nonfulfillment of any covenant or obligation by
Seller contained herein or in any certificate, document or instrument delivered to Buyer hereunder;
(b) Any and all obligations of Seller arising prior to the Effective Time and which are not assumed by Buyer pursuant to the terms of this Agreement;
(c) Any and all losses, liabilities or damages resulting from the operation or ownership of the Station prior to the Effective Time, including but not limited to any and all liabilities arising under the Station Licenses or the Leases or the Contracts which relate to events occurring prior to the Effective Time;
(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, subject to the notice and opportunity to remedy requirements of Section 16.3 hereof; and
(f) Interest at the Prime Rate on any reimbursable expense or loss incurred by Buyer from the date of payment, in the case of a reimbursable expense, and from the date of incurrence, in the case of any other losses, until the date of reimbursement by Seller.
16.2. INDEMNIFICATION BY BUYER. Notwithstanding the Closing, Buyer hereby agrees to indemnify and hold the Seller harmless against and with respect to, and shall reimburse the Seller for:
(a) Any and all losses, direct or indirect, liabilities, or damages resulting from any untrue representation, breach of warranty, or nonfulfillment of any covenant or obligation by Buyer contained herein or in any certificate, document or instrument delivered to Seller hereunder;
(b) Any and all obligations of Seller arising after the Effective Time and which are assumed by Buyer pursuant to the terms of this Agreement;
(c) Any and all losses, liabilities or damages resulting from the operation or ownership of the Station by Buyer on and after the Effective Time, including but not limited to any and all liabilities arising under the Station Licenses, the Leases or the Contracts assigned to Buyer which relate to events occurring after the Effective Time;
(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, subject to the notice and opportunity to remedy requirements of Section 16.3 hereof; and
(e) Interest at the Prime Rate on any reimbursable expense or loss incurred by Seller from the date of payment, in the case of a reimbursable expense, and from the date of incurrence, in the case of any other losses, until the date of reimbursement by Buyer.
16.3. PROCEDURE FOR INDEMNIFICATION. The procedure for indemnification shall be as follows:
(a) The party seeking indemnification under this Article 16 (the "Claimant") shall give notice to the party from whom indemnification is sought (the "Indemnitor") of any claim, whether solely between the parties or brought by a third party, specifying (i) the factual basis for the claim, and (ii) the amount of the claim. If the claim relates to an action, suit or proceeding filed by a third party against Claimant, notice shall be given by Claimant within fifteen (15) business days after written notice of the action, suit or proceeding was given to Claimant. In all other circumstances, notice shall be given by Claimant within thirty (30) business days after Claimant becomes, or should have become, aware of the facts giving rise to the claim. Notwithstanding the foregoing, Claimant's failure to give Indemnitor timely notice shall not preclude Claimant from seeking indemnification from Indemnitor except to the extent that Claimant's failure has materially prejudiced Indemnitor's ability to defend the claim or litigation.
(b) With respect to claims between the parties, following receipt of notice from the Claimant of a claim, the Indemnitor shall have thirty (30) business days to make any investigation of the claim that the Indemnitor deems necessary or desirable. For the purposes of this investigation, the Claimant agrees to make available to the Indemnitor and/or its authorized representatives the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnitor cannot agree as to the validity and amount of the claim within the 30-day period (or any mutually agreed upon extension thereof), the Claimant may pay, compromise, or defend such a claim without prejudice to any rights it may have hereunder.
(c) With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnitor shall have the right at its own expense to participate in or assume control of the defense of the claim with counsel of Indemnitor's choice, provided, that once the defense thereof is assumed by the Indemnitor, the Indemnitor shall keep the Claimant advised of all developments in the defense thereof, and any related litigation, and the Claimant shall cooperate fully with the Indemnitor, subject to reimbursement for actual
out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnitor. If the Indemnitor elects to assume control of the defense of any third-party claim, the Claimant shall have the right to participate in the defense of the claim as its own expense. If the Indemnitor does not elect to assume control or otherwise participate in the defense of any third party claim, Claimant may, but shall have no obligation to, defend or settle such claim or litigation in such manner as it deems appropriate, and in any event Indemnitor shall be bound by the results obtained by the Claimant with respect to the claim (by default or otherwise) and shall promptly reimburse Claimant for the amount of all expenses (including the amount of any judgment rendered), legal or otherwise, incurred in connection with such claim or litigation. The Indemnitor shall be subrogated to all rights of the Claimant against any third party with respect to any claim for which indemnity was paid.
16.4. LIMITATIONS.
(a) Neither Seller nor Buyer shall have any obligation to the other party for any matter described in Section 16.1 or Section 16.2, as the case may be, except upon compliance by the other party with the provisions of this Article 16, particularly Section 16.3. Neither party shall be required to indemnify the other party under this Article 16 for any breach of any representation or warranty contained in this Agreement unless written notice of a claim under this Article 16 was received by the party within the pertinent survival period specified in Article 18 of this Agreement.
(c) The provision of Section 16.4(b) hereof shall not be applicable to any indemnification of Buyer pursuant to Section 21.10 hereof.
17.1. TERMINATION.
(a) This Agreement may be terminated by either Buyer or Seller, if the party seeking to terminate is not in material default or breach of this Agreement, upon written notice to the other upon the occurrence of any of the following:
(i) if, on or prior to the Closing Date, the other party defaults in any material respect in the observance or in the due and timely performance of any of its covenants or agreements contained herein, or any representation or warranty hereunder is inaccurate in any material respect and such inaccuracy is materially adverse to the party giving notice, and such default or inaccuracy, if curable, has not been cured within ten (10) days from receipt of written notice of default from the non-defaulting party;
(ii) if the FCC denies the FCC Application or any part thereof or designates any part of it for a trial-type hearing, provided that the party which is the subject of the hearing (or whose alleged actions or omissions resulted in the designation for hearing) may not elect to terminate under this subsection (a)(ii);
(iii) if there shall be in effect any judgment, final decree or order that would prevent or make unlawful the Closing; or
(iv) if the Closing has not occurred within nine (9) months of the date of the FCC Application is accepted for filing.
(b) This Agreement may be terminated by Buyer, upon written notice to Seller,
(i) if Buyer elects to terminate pursuant to Article 20 hereof; or
(ii) if the broadcast transmission of any of the Station from its main broadcasting antenna at full authorized power is interrupted or impaired for a period of more than forty-eight (48) consecutive hours or for an aggregate of seventy-two (72) hours in any seven (7) day period.
17.2. LIABILITY; RETURN OF ESCROW DEPOSIT. The termination of this Agreement under Section 17.1 hereof shall not relieve any party of any liability for breach of this Agreement
prior to the date of termination, but if neither party is in breach or default of its representations, warranties, covenants or agreements hereunder, neither party shall have any further liability hereunder. If either Buyer or Seller shall terminate this Agreement pursuant to Section 17.1 hereof and Buyer shall not be in material breach of its representations, warranties, covenants or other agreements hereunder, the parties shall instruct the Escrow Agent to remit the Escrow Deposit, together with all interest earned thereon, to Buyer.
17.3. TERMINATION NOTICE. Each notice given by a party pursuant to
Section 17.1 to terminate this Agreement shall specify the Subsection (and
clause or clauses thereof) of Section 17.1 pursuant to which such notice is
given.
The representations, warranties, covenants, indemnities and agreements contained in this Agreement or in any certificate, document or instrument delivered pursuant to this Agreement are and will be deemed and construed to be continuing representations, warranties, covenants, indemnities and agreements and shall survive the Closing for a period of nine (9) months after the Closing Date. No claim may be brought under this Agreement or any other certificate, document or instrument delivered pursuant to this Agreement unless written notice describing in reasonable detail the nature and basis of such claim is given on or prior to the last day of the applicable survival period. In the event such a notice is given, the right to indemnification with respect thereto shall survive the applicable survival period until such claim is finally resolved and any obligations thereto are fully satisfied. Any investigation by or on behalf of any party hereto shall not constitute a waiver as to enforcement of any representation, warranty, covenant or agreement contained herein.
19.1. DEFAULT BY SELLER. Seller recognizes that, in the event Seller defaults in the performance of its obligations under this Agreement, monetary damages alone will not be adequate. Buyer shall therefore be entitled in such event, in lieu of bringing suit at law or equity for money or other damages (including return of the Escrow Deposit and the interest earned thereon as well as costs and expenses incurred by Buyer in the preparation and negotiation of this Agreement and in contemplation of the Closing hereunder) or for indemnification under Article 16 hereof, to obtain specific performance of the terms of this Agreement. In any action to enforce the provisions of this Agreement, Seller shall waive the defense that there is an adequate remedy at law or equity and agree that Buyer shall have the right to obtain specific performance
of the terms of this Agreement without being required to prove actual damages, post bond or furnish other security. In addition, Buyer shall be entitled to obtain from Seller court costs and reasonable attorneys' fees incurred by it in enforcing its rights hereunder, plus interest at the Prime Rate on the amount of any judgment obtained against Seller from the date of default until the date of payment of the judgment. As a condition to seeking specific performance, Buyer shall not be required to have tendered the Purchase Price specified in Section 2.1 of this Agreement, but shall be ready, willing and able to do so.
19.2. DEFAULT BY BUYER. If the transactions contemplated by this Agreement are not consummated as a result of Buyer's wrongful failure to close hereunder, and Seller is not also in material breach hereunder, Seller shall be entitled to payment of Five Hundred Thousand Dollars ($500,000) as liquidated damages in full settlement of any damages of any nature or kind that Seller may suffer or allege to suffer as the result thereof. It is understood and agreed that the amount of liquidated damages represents Buyer's and Seller's reasonable estimate of actual damages and does not constitute a penalty. Recovery of liquidated damages under this Section 19.2 shall be the sole and exclusive remedy of Seller against Buyer for breach of or failure to consummate this Agreement and shall be applicable regardless of the actual amount of damages sustained. In addition, Seller shall be entitled to obtain from Buyer court costs and reasonable attorneys' fees incurred by it in enforcing its rights hereunder, plus interest at the Prime Rate on the amount of any judgment obtained against Buyer from the date of default until the date of payment of the judgment. As a condition to obtaining liquidated damages, Seller shall not be required to have tendered the Station Assets but shall be required to demonstrate that it is willing and able to do so and to perform its other closing obligations in all material respects.
unable or fails to restore or replace any lost or damaged Station Asset prior to the Closing Date and the cost of such restoration or replacement would be $75,000 or less the Purchase Price shall be reduced in an amount equal to the reasonable cost to restore or replace said Station Asset or a reasonable reserve shall be placed in escrow pending cure or repair. If the delay in the Closing Date under this Article 20 would cause the Closing to fall at any time after the period permitted by the FCC Consent, Seller and Buyer shall file an appropriate request with the FCC for an extension of time within which to complete the Closing.
21.1. PUBLICITY. Except as required by applicable law or with the other party's express written consent, no party to this Agreement nor any affiliate of any party shall issue any press release or similar public statement regarding the Transactions contemplated by this Agreement.
21.2. BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Neither Buyer nor Seller may assign this Agreement without the prior written consent of the other parties hereto except that Buyer may assign its rights (but not its obligations) under this Agreement to an Affiliate of Buyer.
21.3. ENTIRE AGREEMENT. This Agreement and the exhibits and schedules hereto embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. No amendment, waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought.
21.4. HEADINGS. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement.
21.5. COMPUTATION OF TIME. If after making computations of time provided for in this Agreement, a time for action or notice falls on Saturday, Sunday or a Federal holiday, then such time shall be extended to the next business day.
21.6. GOVERNING LAW. The construction and performance of this Agreement shall be governed by the laws of the State of Arizona without regard to its principles of conflict of law.
21.7. NOTICES. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, addressed to the following addresses, or to such other address as any party may request in writing.
If to Seller:
Radio 94 of Phoenix Limited Partnership
920 Dain Plaza
60 South Sixth Street
Minneapolis, MN 55402
Attn: L. Steven Goldstein
With a copy to:
Leventhal, Senter & Lerman
2000 K Street, N.W.
Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lerman, Esq.
If to Buyer:
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Esq.
Any such notice, demand or request shall be deemed to have been duly delivered and received (i) on the date of personal delivery, or (ii) on the date of receipt, if mailed by registered or certified mail, postage prepaid and return receipt requested, or (iii) on the date of a signed receipt, if sent by an overnight delivery service, but only if sent in the same manner to all persons entitled to receive notice or a copy.
21.8. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.
21.9. FURTHER ASSURANCES. Seller shall at any time and from time to time after the Closing execute and deliver to Buyer such further conveyances, assignments and other written assurances as Buyer may reasonably request in order to vest and confirm in Buyer (or its assignees) the title and rights to and in all of the Station Assets to be and intended to be transferred, assigned and conveyed hereunder.
21.10. BULK SALES. Buyer hereby waives compliance by Seller with the provisions of the Bulk Sales Act and similar laws of any state or jurisdiction, if applicable. Seller shall, in accordance with Article 16, indemnify and hold Buyer harmless from and against any and all claims made against Buyer by reason of such non-compliance.
21.11. SEVERABILITY. Any provision of this Agreement which is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof, and any such unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto hereby waive any provision of law now or hereafter in effect which renders any provision hereof unenforceable in any respect.
21.12. COOPERATION IN ARRANGING EXCHANGE(S). Buyer may elect to exchange the Station Assets for other property of a like-kind in a simultaneous tax-deferred exchange which would qualify as a tax-deferred like-kind exchange under Section 1031 of the Internal Revenue Code (the "Like-kind Exchange"). If Buyer elects to so exchange the Station Assets, Buyer may at any time prior to the Closing assign its rights under this Agreement to one or more "qualified intermediaries," as defined in Treasury Regulation (S) 1.103 l(k) - 1 (g)(4), subject to all of Seller's rights under this Agreement. Seller agrees to reasonably cooperate with Buyer and such intermediary(ies) in arranging and effecting the Like-kind Exchange and shall execute such additional documents as may be reasonably necessary in order to effect the Like-kind Exchange, provided that Seller shall have no obligations under this Section 21.12 unless (a) Buyer gives notice to Seller of its decision to proceed with a Like-kind Exchange not later than ten (10) business days prior to the Closing Date, (b) Buyer agrees to indemnify and reimburse Seller for any and all costs and expenses (including reasonable fees and expenses of counsel) incurred by Seller in cooperating with Buyer; (c) such Like-kind Exchange will not, in Seller's judgment, materially adversely affect Seller, (d) such Like-kind Exchange will not result in any delay of the Closing, and (e) such Like-kind Exchange will not expose Seller to any additional liability or obligation.
Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).
"Affiliate" shall mean any person or entity that is controlling, controlled by or under common control with the named person or entity.
"Agreement" shall mean this Asset Purchase Agreement, including the exhibits and schedules hereto .
"Buyer" shall have the meaning set forth in the preamble to this
Agreement. "Buyer's Proration Amount" shall have the meaning set forth in
Section 5.3.
"Business Day," whether or not capitalized, shall mean every day of the week excluding Saturdays, Sundays and Federal holidays.
"Claimant" shall have the meaning set forth in Section 16.3(a).
"Closing" shall have the meaning set forth in Section 1.1.
"Closing Date" shall mean the date on which the Closing is completed.
"Contracts" shall have the meaning set forth in Section 1.2(d).
"Effective Time" shall mean 12:01 a.m., Washington, D.C. time, on the Closing Date.
"Environmental Laws" shall mean the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Clean Air Act and the Toxic Substance Control Act, each as amended, and any other applicable federal, state and local laws, statutes, rules or regulations concerning the treating, producing, handling, storing, releasing, spilling, leaking, pumping, pouting, emitting or dumping of Hazardous Materials.
"Escrow Agent" shall mean Kalil & Co., Inc.
"FCC" shall mean the Federal Communications Commission.
"FCC Application" shall mean the application or applications that Seller and Buyer must file with the FCC requesting its consent to the assignment of the Station Licenses.
"FCC Consent" shall mean the action by the FCC granting the FCC Application.
"Final Order" shall mean action by the FCC (i) which has not been vacated, reversed, stayed, set aside, annulled or suspended, (ii) with respect to which no timely appeal, request for stay or petition for rehearing, reconsideration or review by any party or by the FCC on its own motion, is pending, and (iii) as to which the time for filing any such appeal, request, petition, or similar document or for the reconsideration or review by the FCC on its own motion under the Communications Act of 1934, as amended, and the rules and regulations of the Commission, has expired.
"GAAP" shall mean generally accepted accounting principles, consistently applied.
"Hazardous Materials" shall mean toxic materials, hazardous wastes, hazardous substances, pollutants or contaminants, asbestos or asbestos-related products, PCB's, petroleum, crude oil or any fraction or distillate thereof (as such terms are defined in any applicable federal, state or local laws, ordinances, rules and regulations, and including any other terms which are or may be used in any applicable environmental laws to define prohibited or regulated substances).
"Indemnitor" shall have the meaning set forth in Section 16.3(a).
"Leases" shall have the meaning set forth in Section 1.2(b).
"Liens" shall mean any mortgage, deed of trust, pledge, hypothecation, security interest, encumbrance, lien, lease or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, affecting any assets or property, including any written or oral agreement to give or grant any of the foregoing, any conditional sale or other title retention agreement, and the filing of or agreement to give any financing statement with respect to any assets or property under the Uniform Commercial Code or comparable law of any jurisdiction.
"Material Adverse Condition" shall mean a condition which would materially restrict, limit, or otherwise materially adversely affect or materially impair the right of Buyer to the ownership or operation of the Station Assets; provided, however, that any condition which
requires that the Station be operated in accordance with a condition similar to those contained in the Station Licenses shall not be deemed a Material Adverse Condition.
"Notice of Disagreement" shall have the meaning set forth in Section 5.3.
"OSHA Laws" shall mean the Occupational Safety and Health Act of 1970, as amended, and all other federal, state or local laws or ordinances, including orders, rules, and regulations thereunder, regulating or otherwise affecting health and safety of the workplace.
"Permitted Liens" shall mean any statutory lien which secures a payment not yet due that arises, and is customarily discharged, in the ordinary course of Seller's business; any easement, right-of-way or similar imperfection in the Seller's title to its assets or properties that, individually and in the aggregate, are not material in character or amount and do not and are not reasonably expected to materially impair the value or materially interfere with the use of any asset or property of the Seller material to the operation of its business as it has been and is now conducted.
"Personal Property" shall have the meaning set forth in Section 7.6.
"Preliminary Proration Schedule" shall have the meaning set forth in
Section 5.3.
"Proration Schedule" shall have the meaning set forth in Section 5.3.
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Real Property" shall have the meaning set forth in Section 7.5.
"Referee" shall have the meaning set forth in Section 5.2.
"Seller" shall have the meaning set forth in the preamble to this Agreement.
"Station" shall mean radio broadcast Station KOOL(AM), Phoenix, Arizona;
"Station Assets" shall have the meaning set forth in Section 1.2.
"Station Licenses" shall mean the licenses, permits and other authorizations, including any temporary waiver or special temporary authorization, issued by the FCC to Seller in connection with the operation of the Station and are used solely in the operation of the Station.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
RADIO 94 OF PHOENIX LIMITED PARTNERSHIP
By: Colfax Communications, Inc., Its General Partner
By: /s/ Joseph O. Bunting, III
-------------------------------------------------
Name: Joseph O. Bunting, III
-----------------------------------------------
Title: Vice President
----------------------------------------------
|
SALEM MEDIA OF ARIZONA, INC.
By: /s/ Eric H. Halvorson ------------------------------------------------- Name: Eric H. Halvorson Title: Executive Vice President |
ESCROW AGREEMENT
This ESCROW AGREEMENT is made as of the __ day of June, 1996, by and among Radio 94 of Phoenix Limited Partnership, a Maryland limited partnership ("Seller"), Salem Media of Arizona, Inc., an Arizona corporation ("Buyer"), and Kalil & Co., Inc., an Arizona corporation ("Escrow Agent").
Seller and Buyer have entered into an Asset Purchase Agreement (the "Purchase Agreement"), made as of the ___ day of ___________,1996, which provides for the sale and acquisition of certain of the assets associated solely with the operation of radio broadcast station KOOL(AM), Phoenix, Arizona (the "Station").
Pursuant to the Purchase Agreement, Buyer has delivered the sum of Four Hundred Thousand Dollars ($400,000) ("Escrow Deposit") to Escrow Agent, who has agreed to act as escrow agent with respect to the Escrow Deposit and all interest earned thereon pursuant to the terms of this Escrow Agreement.
NOW, THEREFORE, the parties agree as follows:
directing Escrow Agent of the manner in which to dispose of the Escrow Deposit and any interest earned thereon.
(a) Upon receipt by Escrow Agent of a joint notice from Buyer and Seller stating that the Closing under the Purchase Agreement has occurred, Escrow Agent shall immediately pay the Escrow Deposit in immediately available funds without deduction, set-off, or counterclaim to Seller and shall pay all interest earned thereon not previously distributed in immediately available funds without deduction, set-off or counterclaim to Buyer.
(b) Upon receipt by Escrow Agent of a notice from Seller stating that Seller is entitled to the Escrow Deposit and following the failure of Buyer to make a timely protest (in accordance with Paragraph 4 hereof) after receipt of notice from Escrow Agent pursuant to Paragraph 4 hereof, Escrow Agent shall pay the Escrow Deposit in immediately available funds without deduction, set-off or counterclaim to Seller, free and clear of any and all claims thereto
by Buyer. If Seller provides any notice hereunder, Seller shall concurrently provide a copy of such notice to Buyer.
(c) Upon receipt by Escrow Agent of a notice from Buyer stating that Buyer is entitled to the Escrow Deposit and following the failure of Seller to make a timely protest (in accordance with Paragraph 4 hereto) after receipt of notice from Escrow Agent pursuant to Paragraph 4 hereof, Escrow Agent shall pay the Escrow Deposit and all interest earned thereon not previously distributed in immediately available funds without deduction, set-off or counterclaim to Buyer, free and clear of any claim thereto by Seller. If Buyer provides any notice hereunder, Buyer shall concurrently provide a copy of such notice to Seller.
the Escrow Agent shall hold the Escrow Deposit until the disagreement is resolved as provided in Paragraph 5(f) below.
(a) The duties and obligations of Escrow Agent shall be determined solely by the express provisions of this Escrow Agreement and no implied duties or obligations shall be read into this Escrow Agreement against Escrow Agent. Escrow Agent shall be under no obligation to refer to the Purchase Agreement or any other documents between or among the parties related in any way to this Escrow Agreement, except as specifically provided herein.
(b) Escrow Agent shall not be liable to anyone for any damages, losses or expenses for any act done or step taken or omitted by Escrow Agent in good faith, provided, however, that Escrow Agent shall be liable for damages, losses and expenses arising out of its willful default, gross negligence or bad faith under this Escrow Agreement.
(c) Escrow Agent shall be entitled to rely upon, and shall be protected in acting in reasonable reliance upon, any writing furnished to Escrow Agent by any party in accordance with the terms hereof, which Escrow Agent believes in good faith to be genuine and valid and to have been signed by the proper party.
(d) Escrow Agent may obtain advice of its counsel with respect to any questions relating to its duties or responsibilities hereunder and shall not be liable for any action taken or omitted in good faith on such advice of such counsel.
(e) Without limiting the foregoing, Escrow Agent shall not in any event be liable, and Seller and Buyer shall jointly and severally indemnify and hold harmless Escrow Agent, in connection with Escrow Agent's investment or reinvestment of the Escrow Deposit in good faith, including without limitation any delays (not resulting from its gross negligence or willful default) in the investment or reinvestment of the Escrow Deposit, or any loss of income incident to any such delays.
(f) If any disagreement between the parties to this Escrow Agreement occurs which results in adverse claims and demands being made in connection with or against the Escrow Deposit, or any interest earned thereon, Escrow Agent shall refuse to comply with the claims or demands of any party until such disagreement is finally resolved by mutual agreement of the parties or by a court of competent jurisdiction (including expiration of all available appeal remedies), and, in so doing, Escrow Agent shall not be or become liable to any party. Alternatively, in the event of any dispute or disagreement between Buyer and Seller sufficient in the sole discretion of Escrow Agent to justify its doing so, Escrow Agent shall be entitled to tender into the registry or custody of any court of competent jurisdiction the Escrow Deposit and to initiate such legal proceedings as it deems appropriate, including without limitation, an interpleader action, for determination of the respective rights, titles and interests of Seller and Buyer therein. Upon such tender, Escrow Agent shall be entitled to receive from Seller and Buyer its reasonable attorney fees and expenses and shall be forthwith released and discharged from all further duties, liabilities and obligations under this Escrow Agreement.
(g) Buyer and Seller jointly and severally agree to indemnify Escrow Agent against all legal fees, costs and other expenses reasonably incurred by Escrow Agent in connection with or as a result of any disagreement among or between the parties hereto or the performance by Escrow Agent of its duties hereunder, including, without limitation, any litigation arising from this Escrow Agreement or involving the subject matter hereof; except, as provided in Paragraph 5(b) hereof. Except as otherwise provided in this Escrow Agreement, Buyer and Seller shall each pay one-half of the reasonable expenses incurred by Escrow Agent under this Escrow Agreement.
(h) Any action claimed to be required to be taken by Escrow Agent hereunder and not otherwise specifically set forth herein shall require the agreement of Buyer, Seller, and Escrow Agent.
(i) Except as stated herein, Escrow Agent does not have any interest in the Escrow Deposit held hereunder, but is serving as escrow holder only.
within sixty (60) days of the Resignation Notice, Escrow Agent shall be permitted to select a reputable replacement escrow agent.
recognized express courier service, charges prepaid, to the following addresses (or such other addresses as the parties may specify from time to time):
To Seller:
Radio 94 of Phoenix Limited Partnership
920 Dain Plaza
60 South 6th Street
Minneapolis, MN 55402
Attention: L. Steven Goldstein
With a copy (which shall not constitute notice) to:
Leventhal, Senter & Lerman 2000 K Street, N.W.
Suite 600
Washington, D.C. 20006
Attention: Steven A. Lerman, Esq.
To Buyer:
Salem Communications Corporation
4880 Santa Rosa Road,
Suite 300 Camarillo, CA 93012
Attention: Jonathan L. Block, Esq.
To Escrow Agent:
Kalil & Co., Inc.
3444 N. Country Club, Suite 200
Tucson, AZ 85716
Attention: Mr. Frank Kalil
and shall be deemed to have been duly delivered and received (i) on the date of personal delivery, if delivered by hand or (ii) on the date of receipt if transmitted by telecopy or mailed by registered or certified mail, postage prepaid and return receipt requested; or (iii) on the date
of a signed receipt, if sent by an overnight delivery service, but only if sent in the same manner to all persons entitled to receive notice or a copy.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the date first above written.
RADIO 94 OF PHOENIX LIMITED
PARTNERSHIP
By: Colfax Communications, Inc.
Its General Partner
SALEM MEDIA OF ARIZONA, INC.
Name: Eric H. Halvorson
Title: Executive Vice President
KALIL & CO., INC.
This RIGHT OF FIRST REFUSAL AGREEMENT (this "Agreement"), made as of the __ day of ___ 1996, is by and between Radio 94 of Phoenix Limited Partnership, a Maryland limited partnership ("Radio 94"), and Salem Media of Arizona, Inc., an Arizona corporation, _______ corporation ("Salem").
Radio 94 is the licensee of and operates radio broadcast station KOOL(AM), Phoenix, Arizona (the "Station"), pursuant to licenses issued by the Federal Communications Commission (the "FCC").
Radio 94 and Salem have entered into an Asset Purchase Agreement, made as of the __ day of ___ 1996 (the "Purchase Agreement"), pursuant to which Radio 94 and Salem have agreed that Radio 94 will sell and Salem will acquire certain of the assets associated solely with the operation of the Station on the terms and subject to the conditions set forth in the Purchase Agreement.
As a condition of the Purchase Agreement, Salem has agreed to grant Radio 94 a right of first refusal to acquire the Station.
Therefore, the parties agree as follows:
purchase the Station, or if Radio 94 fails to notify Salem within this period that it wishes to purchase the Station, Salem or its shareholders shall be permitted for a period of the following forty-five (45) days to enter into a definitive contract to sell the Station on substantially the same terms and conditions of, and to the party submitting, the Offer disclosed to Radio 94. If the terms and conditions of the offer as initially disclosed to Radio 94 are proposed to be changed in a material manner within such forty-five (45) day period, the revised terms and conditions shall be disclosed in writing to Radio 94, which shall have ten (10) business days following receipt of the changes to elect to exercise its right to purchase the Station on such revised terms and conditions in the manner set forth in this paragraph. If Salem or its shareholders do not enter into a definitive contract with the offeror to sell the Station on the terms initially disclosed to Radio 94 within the permitted forty-five (45) day period, or within ten (10) days following Radio 94's decision not to purchase the Station on the revised terms and conditions or its failure to notify Salem within the applicable period, then Radio 94's right of first refusal shall be reinstated. A sale is any transaction which involves an assignment of the broadcast license requiring prior FCC approval by the filing of an FCC application on current FCC Form 314 or the equivalent thereof, as defined under the FCC Rules. A transfer of control is any transaction requiring prior FCC approval by the filing of an FCC application on current FCC Form 315 or the equivalent thereof, as defined under the FCC Rules; provided however that control of the Station shall not be deemed to have been transferred in the event that the stock of SCC becomes publicly traded and Edward G. Atsinger III and Smart W. Epperson collectively maintain not less than a 25% voting interest in SCC.
If to Radio 94:
Radio 94 of Phoenix Limited Partnership
920 Dain Plaza
60 South Sixth Street
Minneapolis, MN 55402
Attn: L. Steven Goldstein
With a copy to:
Leventhal, Senter & Lerman
2000 K Street, N.W.
Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lerman, Esq.
If to Salem:
Salem Media of Arizona, Inc.
c/o Salem Communications Corporation 4880 Santa Rosa Road, Suite 300 Camarillo, California 93012 Attention: Jonathan L. Block, Esq.
Any such notice shall be deemed to have been duly delivered and received (i) on
the date of personal delivery, or (ii) on the date of receipt, if mailed by
registered or certified mail, postage prepaid and return receipt requested, or
(iii) on the date of a signed receipt, if sent by an overnight delivery service,
but only if sent in the same manner to all persons entitled to receive notice or
a copy.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
RADIO 94 OF PHOENIX LIMITED
PARTNERSHIP
By: Colfax Communications, Inc.,
Its General Partner
SALEM MEDIA OF ARIZONA, INC.
Name: Eric H. Halvorson
Title: Executive Vice President
This Covenant Not to Compete (the "Agreement") is made as of the ___ day of ______, 1996, by and between Salem Communications Corporation ("SCC"), Salem Media of Arizona, Inc. ("Buyer") and Radio 94 of Phoenix Limited Partnership, a Maryland limited partnership ("Seller").
Seller has been the licensee of radio station KOOL(AM), Phoenix, Arizona (the "Station").
SCC is the parent corporation of Buyer.
Concurrently with the execution of this Agreement, Buyer acquired certain of the assets of the Station pursuant to an Asset Purchase Agreement made as of the __ day of ____, 1996, between Buyer and Seller (the "Asset Purchase Agreement").
Pursuant to Section 8.4 of the Asset Purchase Agreement, and as a material inducement to Seller to enter into the Asset Purchase Agreement and consummate the transactions contemplated therein, Buyer and SCC have agreed to enter into this Agreement on the terms and conditions set forth herein.
Therefore, in consideration of the covenants and agreements contained herein and in the Asset Purchase Agreement, the parties agree as follows:
Notwithstanding anything herein to the contrary, nothing in this Agreement shall prohibit or prevent SCC or Buyer from broadcasting in a Religious, Religious Talk (defined as a format in which more than 50% of the broadcast day is devoted to talk programming emphasizing religious and cultural issues) or Contemporary Christian Music format or any format derived from those formats.
3.1 The covenant set forth in Paragraph 2 above is reasonably necessary for the protection of the interests of Seller, is reasonable as to duration, scope and geographic area and is not unreasonably restrictive upon the rights of Buyer or SCC;
3.2 Buyer and SCC specifically recognize and acknowledge that the covenant set forth in Paragraph 2 above, and the rights and privileges granted to Seller are of a special, unique, unusual and extraordinary character which gives them a peculiar value, the loss of which cannot adequately be compensated for by means of an award of damages to Seller in an action at law, and that the breach by Buyer or SCC of this Agreement will cause Seller irreparable and continuing injury and damage, which will substantially outweigh any conceivable injury which Buyer or SCC might incur as a result of being restrained from engaging in conduct that materially breaches this Agreement. Accordingly, Seller shall be entitled, as a matter of right, without further notice in addition to any other rights and remedies Seller may have, to obtain injunctive and other equitable relief to prevent the violation of any of the provisions of this Agreement by Buyer or SCC. Buyer and SCC agree that Seller shall not be required to file any bond in connection with any such request for injunctive or other equitable relief;
3.3 The amount of payment by Buyer for the Station Assets (as defined in the Asset Purchase Agreement) or the lack of an express dollar valuation for the covenants contained in this Agreement shall not define, limit or evidence the amount of damages, if any, to which Seller may be entitled as a result of the breach by Buyer or SCC of any of the provisions of this Agreement; and
3.4 Notwithstanding Paragraph 3.1 above, should any court determine that any of the covenants in Paragraph 2 above are unreasonable as to duration, scope and/or geographic areas, such covenants shall be reformed to the minimum extent required to be enforceable and, as so reformed, shall remain in full force and effect as provided herein with respect to such duration, scope and territory as a court of competent jurisdiction determines to be reasonable under applicable law.
If to Radio 94:
Radio 94 of Phoenix Limited Partnership
920 Dain Plaza
60 South Sixth Street
Minneapolis, MN 55402
Attn: L. Steven Goldstein
With a copy to:
Leventhal, Senter & Lerman
2000 K Street, N.W.
Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lerman, Esq.
If to Buyer or SCC:
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Esq.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date hereof.
SALEM COMMUNICATIONS CORPORATION
Name: Eric H. Halvorson
Title: Executive Vice President
SALEM MEDIA OF ARIZONA, INC.
Name: Eric H. Halvorson
Title: Executive Vice President
RADIO 94 OF PHOENIX LIMITED PARTNERSHIP
By: Colfax Communications, Inc., its General Partner
___________,1996
Salem Media of Arizona, Inc.
c/o Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Ladies and Gentlemen:
We have acted as counsel to Radio 94 of Phoenix Limited Partnership, a Maryland limited partnership ("Seller"), in connection with the negotiation, preparation, execution and delivery of that certain Asset Purchase Agreement by and between you and Seller dated as of _______ __, 1996 (the "Agreement"). We are furnishing this opinion to you pursuant to Section 11.7 of the Agreement. Capitalized terms used but not defined in this letter shall have the meaning assigned to them in the Agreement.
In connection with this opinion, we have assumed the genuineness of signatures on documents, the conformity to the originals of all copies examined by or submitted to us as photocopies or conformed copies, and the authenticity of the originals of such latter documents.
As to questions of fact in connection with this opinion, we have relied upon an examination of our own files and records and examination of the public records of the Federal Communications Commission (the "FCC') available as of _______ __, 1996. We have also relied upon representations made by Seller to the FCC as we have deemed necessary. As used herein, the term "to our knowledge" shall mean to the actual knowledge of attorneys in our firm who have substantial responsibility for Sellers legal matters handled by our firm without further investigation other than as described in this paragraph. You should be aware that records of the FCC that are public as a matter of
Salem Media of Arizona, Inc.
______ __,1996
law may not be publicly available as a matter of fact. Furthermore, there may be records of matters pending at the FCC that are not available for inspection by the public as a matter of law.
This opinion is limited to matters arising under the Communications Act of 1934, as amended (the "Act"), and the rules and regulations of the FCC.
Based on the foregoing and subject to the foregoing and to the further limitations set forth hereinafter, we are of the opinion that:
1. Seller holds the FCC Licenses listed on Annex A hereto. To our
knowledge, such FCC Licenses are in full force and effect, and
none of the FCC Licenses is subject to any condition other than
(i) conditions generally applicable to stations of this type by
virtue of the Act and the FCC's rules or (ii) conditions
contained on the form by which the Commission evidences the grant
of such licenses or routinely added to such forms. We have no
knowledge, but for purposes of this sentence we have not reviewed
the files of the FCC, of any other license issued by the FCC to
Seller with respect to the Station.
2. The FCC Consent has been granted and has become a Final Order.
3. To our knowledge:
(a) there is no unsatisfied adverse FCC order, decree or ruling outstanding against Seller relating to the Station;
(b) there is no proceeding, complaint or investigation against Seller relating to the Station pending or threatened before the FCC (including any pending judicial review of such an action by the FCC) except for proceedings affecting the broadcast radio industry generally to which Seller is not a specific party; and
Salem Media of Arizona, Inc.
_____ __,1996
(c) Annex A includes all applications of Seller on behalf of the Station or with respect to the FCC Licenses now pending before the FCC.
This opinion is delivered solely to you and is solely for your benefit in connection with the above transaction. This opinion may not be quoted or relied upon for any purpose by any person other than the addressee hereof.
Very truly yours,
LEVENTHAL, SENTER & LERMAN
(All licenses expire 10/1/97)
KOOL(AM) Main Station License Emergency Broadcast System Authorization WLD-961 Aural STL License WLE-696 Aural STL License KA-35291 Remote Pickup Mobile |
1. Ground Lease dated January 11, 1991 by and between Johnaquille J. Hegel and Adams Radio of Phoenix, Inc., as assigned to Compass Radio of Phoenix, Inc., as assigned to Par Broadcasting, Inc., as assigned to Radio 94 of Phoenix Limited Partnership (AM Tower Site - Pinnacle Peak).
2. Ground Lease dated October 4, 1995 by and between Johnaquille J. Hegel and Compass Radio of Phoenix, Inc., as assigned to Par Broadcasting, Inc., as assigned to Radio 94 of Phoenix Limited Partnership (AM Tower Site - Pinnacle Peak).
3. Lease Agreement dated September 12, 1988 by and between Shamrock Broadcasting, Inc. and Adams Radio of Phoenix, Inc., as assigned to Compass Radio of Phoenix, Inc., as assigned to Par Broadcasting, Inc., as assigned to Radio 94 of Phoenix Limited Partnership (AM STL Tower - Shaw Butte).
4. Agreement of Sublease dated March 29, 1996 by and between Compass Radio of Phoenix, as assigned to Par Broadcasting, Inc., as assigned to Radio 94 of Phoenix Limited Partnership, and CRC Broadcasting Co. (Sublease for AM Tower Site).
[see list attached hereto]
SCHEDULE 1.2(c) PERSONAL PROPERTY
TRANSMISSION EQUIPMENT ---------------------- Transmitter, Harris SX-5B Solid State AM 1 Exciter, Harris STX-1 AM stereo 1 Harris 4 tower directional phasor, antenna tuning units, TX lines 1 and conduit Audio processing system CRLAM Stereo (main) 1 CRL AM stereo Matrix processor SMP-900 1 CRL AM stereo Matrix processor SMP-950 1 CRL SGC-800 Stereo 4 Band AGC 1 Broadcast Electronics BE AS-10AM stereo modulation monitor 1 Moseley MRC-1620 transmitter remote control unit 1 Potomac Instruments tower lights monitor 1 STL Receiver. Moseley PCL-505C 2 Transfer switch. Moseley STL Receiver 1 Modem, Hayes 2400 Baud 1 Antenna Monitor, Potomac Instruments AM-9 4 Tower 1 Stereo Demod/AM stereo audio, Belar FMS-1 1 Tower / Antenna --------------- Towers, Utility model 380-256-ft Guyed w/ground systems 4 Furniture, Fixtures & Equipment ------------------------------- Desk 1 Chair, Desk 1 Shelving unit, 8x6 metal storage 1 Bench, homemade wood test 1 Test Equipment -------------- Operating inpedence bridge, Delta OIB-1 1 Potomac Instrument FIM-41 AM Field Strength Meter 1 Multimeter, Simpson 260 1 BUILDINGS --------- 32x32 cinder block 1/asphalt shingles and wood truss roof 1,024 Improvements to Buildings & Land -------------------------------- 6-ft high chain link fencing W 1-ft barb wire 930 Perimeter fence around entire AM tower site 1 |
SCHEDULE 1.2(C) PERSONAL PROPERTY
MICROWAVE & ELECTRONICS ----------------------- Antenna, Anixter/Mark P48GRN 4-ft Grid Dish-Horizontal 1 STL TX, Moseley PCL-505C 1 Antenna, 6-ft STL 950MHZ Grid Dish-Horizontal 1 Spare Parts Kit, Harris SX-5B 1 Spare Parts, 1-Lot 1 Air Conditioning Units, Carrier 5-Ton (Model 40QB060310) 2 |
The Tangible Personal Property shall include the following assets and the assets on the list attached hereto:
Audio Console Pacific Recorders BMX-14
CD Players, Denon DN-950FA
386SX-16 PC, Automatic Transmitter Control System (connected to
Moseley 1620)
APC BackUPS 250, for Moseley 1620 and PCController
Audio DA's, Videoquip 210
Reel to Reel Recorder Otari 5050B
Monitoramp, Crown D-75 Stereo
Otari, Remote Control Head for 5050B
Microphone Electrovoice EV-RE-20
Loudspeakers JFL 4311 Monitor
Cassette Deck, Tascam 112
None
[to be completed by Buyer]
Consent under Loan Agreement dated as of December 27, 1995, as amended by the First Amendment to Loan Agreement dated as of April 2, 1996, by and among Classical Acquisition Limited Partnership, Radio 100 of Maryland Limited Partnership, Radio 100 Limited Partnership, Radio 570 Limited Partnership, and Radio 94 of phoenix Limited Partnership, as the Borrowers, Society National Bank, as Managing Agent, the First National Bank of Boston, as Co-Managing Agent, and the Financial Institutions listed therein.
None
EXHIBIT 10.06.02
AGREEMENT (the "Agreement") dated as of September 3, 1996 by and among CARON BROADCASTING, INC., an Ohio corporation ("Buyer"), and MORTENSON BROADCASTING COMPANY OF CANTON, LLC, a Kentucky limited liability company ("MBC- Canton"), and MORTENSON BROADCASTING COMPANY OF AKRON, LLC, Kentucky limited liability company ("MBC-Akron") (MBC-CANTON and MBC-AKRON are hereinafter sometimes referred to collectively as "Sellers").
1. MBC-Canton and MBC-Akron own and operate radio stations WTOF-FM, Canton, Ohio and WHLO-AM, Akron, Ohio, respectively (the "Stations"), and hold the licenses and authorizations issued by the FCC for the operation of the Stations.
2. Buyer desires to acquire substantially all the assets of the Stations, and Sellers are willing to convey such assets to Buyer.
3. The acquisition of the Stations is subject to prior approval of the FCC.
NOW THEREFORE, in consideration of the mutual covenants contained herein, Sellers and Buyer hereby agree as follows:
(a) Any and all cash, cash equivalents, cash deposits to secure contract obligations, all inter-company receivables from any affiliate of Sellers and all other accounts receivable (other than non-cash receivables under Trade Agreements), bank deposits and securities held by Sellers in respect of the Stations at the Closing Date.
(b) Any and all claims of Sellers with respect to transactions prior to the Closing including, without limitation, claims for tax refunds and refunds of fees paid to the FCC.
(c) All prepaid expenses.
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all employment contracts.
(f) All contracts that are terminated in accordance with the terms and provisions of this Agreement or have expired prior to the Closing Date in the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed between the date hereof and the Closing Date in accordance with the terms and provisions of this Agreement.
(h) Sellers' corporate records except to the extent such records pertain to or are used in the operation of the Stations, in which case Seller shall deliver accurate copies thereof to Buyer.
(a) At the Closing, Buyer shall assume and agree to perform, without duplication of Sellers' performance, the following liabilities and obligations of Sellers (the "Assumed Obligations"):
(i) The obligation under any Trade Agreements to provide advertising on the Stations on and after the Closing Date.
(iii) Liabilities and obligations arising under the Station Agreements assumed by and transferred to Buyer in accordance with this Agreement, but only to the extent such liabilities and obligations relate to any period of time after the Closing Date.
(b) Except for the Assumed Obligations and except as expressly provided in the LMA, Buyer shall not assume or in any manner be liable for any duties, responsibilities, obligations or liabilities of Sellers of any kind or nature, whether express or implied, known or unknown, contingent or absolute, including, without limitation, any liabilities to or in connection with Seller's employees whether arising in connection with the transaction contemplated hereunder or otherwise.
(a) Concurrently with the execution of this Agreement, Buyer has deposited with the Escrow Agent under the Escrow Agreement, in immediately available funds, the sum of One Hundred Thousand Dollars ($100,000) (which amount is hereinafter referred to as the "Earnest Money"). The Escrow Agent shall hold the Earnest Money under the terms of the Escrow Agreement in trust for the benefit of the parties hereto. Interest and other earnings on the Earnest Money shall be distributed by the Escrow Agent to Buyer from time to time upon the request of Buyer.
(a) The Purchase Price shall be paid by Buyer as follows:
Sellers and shall, pursuant to the Escrow Agreement, be disbursed to Sellers by cashier's check or wire transfer of immediately available funds.
(ii) The amount of the Purchase Price, less the amount of the Earnest Money disbursed to Seller, shall be paid to Seller at Closing by wire transfer of immediately available funds.
ARTICLE III
Sellers hereby jointly and severally represent and warrant to Buyer as follows:
(a) do not violate in any material respect, with or without the giving of notice or the passage of time or both (or result in the creation of any Lien other than a Permitted Lien on any of the Sale Assets under), any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Sellers;
(a) Sellers have or at closing will have good and valid title to all of the items of Tangible Personal Property free and clear of all Liens except Permitted Liens, and including the right to transfer same.
(b) The Tangible Personal Property has been maintained in accordance with industry practices and is in good operating condition subject to ordinary wear and tear.
(c) The Tangible Personal Property complies with applicable rules and regulations of the FCC and the terms of the FCC Licenses.
(d) Sellers have no knowledge of any defect in the condition or operation of any item of the Tangible Personal Property which is reasonably likely to have a material adverse effect on the operation of the Stations.
(d) No portion of the Real Property or improvements thereon is the subject of any condemnation or eminent domain proceeding presently instituted or, to Sellers' actual knowledge, pending, and Sellers have not received notice from any condemning authority that such proceedings are threatened.
such contracts are cancelable on thirty (30) days or less notice), and (D) contracts which are cancelable by Sellers or its assignee without breach or penalty on not more than sixty (60) days notice. Complete and correct copies of all such agreements, contracts, arrangement, or commitments that are in writing (other than as set forth in (A), (B), (C) and (D) of the preceding sentence), including all amendments, modifications and supplements thereto, have been delivered to Buyer.
(c) Except as set forth in the Schedules, and with respect to all Station Agreements being assumed by Buyer, (i) all Station Agreements are legal, valid and enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors/ rights generally, and subject, as to enforceability, to general principles of equity regardless of whether enforcement is sought in any proceeding at law or in equity; (ii) neither Sellers nor, to the knowledge of Sellers, any other party thereto, is in material breach of or in material default under any Station Agreements; (iii) to the knowledge of Sellers, there has not occurred any event which, after the giving of notice or the lapse of time or both, would constitute a material default under, or result in the material breach of, any Station Agreements which are, individually or in the aggregate, material to the operation of the Stations; and (iv) Sellers hold the right to enforce and receive the benefits under all of the Station Agreements, free and clear of all Liens (other than Permitted Liens) but subject to the terms and provision of each such agreement.
(a) To Sellers' knowledge, Sellers own, free and clear of conflicting claims or restrictions, all right and interest in, and right and authority to use in the operation of the Stations as presently conducted, all of the Intellectual Property, if any, which is material to the operation of the Stations; and
(b) There are no outstanding or, to the knowledge of Sellers, threatened judicial or adversary proceedings with respect to any of the Intellectual Property.
(a) Audited financial statements for the Stations as of December 31, 1995;
(b) Unaudited monthly Income Statements for the Stations for the months of July through December, 1995 and January through June, 1996.
(i) There is no labor strike, dispute, slow-down or stoppage pending or, to the knowledge of Sellers, threatened against the Stations;
(ii) There are neither pending nor, to the actual knowledge of Sellers threatened, any suits, actions, administrative proceedings, union organizing activities, arbitrations, grievances or other proceedings between Sellers and any employees of the Stations or any union representing such employees; and there are no existing labor or employment or other controversies or grievances involving employees of the Stations which have had or are reasonably likely to have a material adverse effect on the operation of the Stations;
(iii) With respect to the Stations, (A) Sellers are in compliance in all material respects with all laws, rules and regulations relating to the employment of
labor and all employment contractual obligations, including those relating to wages, hours, collective bargaining, affirmative action, discrimination, sexual harassment, wrongful discharge and the withholding and payment of taxes and contributions; (B) Sellers have withheld all amounts required by law or agreement to be withheld from the wages or salaries of their employees; and (C) Sellers are not liable to any present or former employees or any governmental authority for damages, arrears of wages or any tax or penalty for failure to comply with the foregoing;
(iv) Buyer's consummation of the transactions contemplated by this Agreement in accordance with the terms hereof shall not, as a result of or in connection with the transactions contemplated hereby, impose upon Buyer the obligation to pay any severance or termination pay under any agreement, plan or arrangement binding upon Sellers.
(a) Sellers have obtained all environmental, health and safety permits necessary or required for either the operation of the Stations or the ownership of the Real Property, and all such permits are in full force and effect and Sellers are in compliance with all terms and conditions of such permits.
(b) There is no proceeding pending or, to Sellers' actual knowledge, threatened which may result in the reversal, rescission, termination, modification or suspension of any environmental or health or safety permits necessary for the operation of the Stations or the ownership of the Real Property.
(c) With respect to the Stations and the ownership of the Real Property, Sellers are in compliance in all material respects with the provisions of Environmental Laws.
(d) During Sellers' occupancy of the Real Property, Sellers have not, and to Sellers' actual knowledge, no other person or entity has caused or permitted materials to be generated, released, stored, treated, recycled, disposed of on, under or at such parcels, which materials, if known to be present, would require clean up, removal or other remedial or responsive action under Environmental Laws (other than normal office, cleaning and maintenance supplies in reasonable quantities used and /or stored appropriately in the buildings or improvements on the Real Property). Sellers have, to their actual knowledge, not caused the migration of any materials from the Real Property onto or under any property adjacent to the Real Property which materials, if known to be present, would require cleanup, removal or other remedial or responsive action under Environmental Laws. To Sellers' actual knowledge, there are no underground storage tanks and no polychlorinated biphenyls or friable asbestos on such property.
(e) Sellers are not subject to any judgment, decree, order or citation with respect to the Stations or the Real Property related to or arising out of Environmental Laws, and Sellers have not received notice that they have been named or listed as a potentially responsible party by any person or governmental body or agency in any matter arising under Environmental Laws.
(f) Sellers have not discharged or disposed of any petroleum product or solid waste on the Real Property, or on the property adjacent to the Real Property owned by third parties, which may form the basis for any present or future claim based upon the Environmental Laws in existence on the date hereof or as of the Closing, or any demand or action seeking clean-up of any site, location, body of water, surface or subsurface, under any Environmental Laws or otherwise, or which may subject the owner of the Real Property to claims by third parties (except to the extent third party liability can be established) for damages.
(g) No portion of the Real Property has ever been used by Sellers (or, to Sellers' actual knowledge, by any previous occupant of the Real Property) in material violation of Environmental Laws, as a landfill, dump site or used for any other use which involves the disposal or storage of solid waste on-site in any manner which may materially affect the value of the Real Property.
(h) No pesticides, herbicides, fertilizers or other materials have been used on, applied to or disposed of by Sellers on the Real Property in material violation of any Environmental Laws (other than normal office, cleaning and maintenance supplies in reasonable quantities used and/or stored appropriately in the buildings or improvements on the Real Property).
(i) With respect to the Stations or the Real Property, Sellers have disposed of all waste in full compliance with all Environmental Laws and there is no existing condition that may form the basis of any present or future claim, demand or action seeking clean up of any facility, site, location or body of water, surface or subsurface, for
which the Buyer could be liable or responsible solely as a result of the disposal of Sellers' waste at such site.
(j) Sellers are in material compliance with all OSHA Laws.
ARTICLE IV
Buyer represents and warrants to Sellers as follows:
constitute the valid and legally binding agreement of Buyer, enforceable against Buyer in accordance with their terms, except as may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally, and except as may be limited by general principles of equity (regardless of whether such enforceability is sought in a proceeding in equity or at law).
(a) Do not (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any claim, lien, charge or encumbrance on any of the assets or properties of Buyer under) any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Buyer in any manner which would have a material adverse effect on the assets, business, operation or financial condition or results of operations of Buyer;
(b) Do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under, the articles of incorporation or bylaws of Buyer or any lease, agreement, commitment or other instrument which Buyer is a party to or bound by or by which any of its assets or properties may be bound.
(a) Buyer has no knowledge after due inquiry of any facts concerning Buyer or any other person with an attributable interest in Buyer (as such term is defined under the Rules and Regulations) which, under present law (including the Act) and the Rules and Regulations, would (i) disqualify Buyer from being the holder of the FCC Licenses, the owner of the Sale Assets or the operator of the Stations upon consummation of the transactions contemplated by this Agreement, or (ii) raise a substantial and material question of fact (within the meaning of Section 309(e) of the Act) respecting Buyer's qualifications.
ARTICLE V
(a) Subject to the LMA, operate the Stations in the ordinary course consistent in all material respects with past practice;
(b) Use reasonable commercial efforts to maintain insurance upon all of the tangible Sale Assets in such amounts and of such kind comparable to that in effect on the date hereof with respect to such Sale Assets and with respect to the operation of the Stations, with insurers of substantially the same or better financial condition;
(c) Subject to the LMA, operate the Stations and otherwise conduct their business in accordance with the terms or conditions of their FCC Licenses, the Rules and Regulations, the Act and all other rules and regulations, statutes, ordinances and orders of all governmental authorities having jurisdiction over any aspect of the operation of the Stations, except where the failure to so operate the Stations would not have a material adverse effect on the Sale Assets or the operation of the Stations or on the ability of Sellers to consummate the transactions contemplated hereby;
(d) Maintain the books and records of the Stations in Seller's customary manner on a basis consistent with prior years;
(e) Comply in all material respects with all Station Agreements now or hereafter existing which are material, individually or in the aggregate, to the operation or financial condition of the Stations;
(f) Promptly notify Buyer of any material default by, or claim of default against, any party under any Station Agreements which are material, individually or in the aggregate, to the operation or financial condition of the Stations, and any event or condition which, with notice or lapse of time or both, would constitute an event of default under such Station Agreements;
(g) Not mortgage, pledge or subject to any Lien (except in the ordinary course of business) any of the Sale Assets;
(h) Not sell, lease or otherwise dispose of, nor agree to sell, lease or otherwise dispose of, any of the Sale Assets, except for dispositions in the ordinary course of business;
(i) Not acquire or lease any goods or services or enter into, amend or terminate any license, lease of real or personal property or any other Station Agreement, other than in the ordinary course of business;
(j) Subject to the LMA, not introduce any material change with respect to the operation of the Stations including, without limitation, any material changes in the broadcast hours of the Stations or any other material change in the Stations' programming policies, except such changes as in the sole discretion of Seller, exercised in good faith after consultation with Buyer, are required by the public interest;
(k) Not voluntarily agree to enter into any collective bargaining agreement applicable to any employees of the Stations or otherwise recognize any union as the bargaining representative of any such employees; and not enter into any collective bargaining agreement applicable to any employees of the Stations which provides that it shall be binding upon any "successor" employer of such employees; or
(l) Not enter into any new Trade Agreements other than in the ordinary course of business.
(m) Notify Buyer of any material litigation pending or threatened against Stations or Sellers or any material damage to or destruction of any assets included or to be included in the Sale Assets;
(a) All tax returns, estimates, and reports required to be filed by Sellers prior to the Closing Date or relating to periods prior to the Closing Date will be timely filed with the appropriate governmental agencies unless valid extensions therefor shall have been obtained.
(b) All taxes pertaining to ownership of the Sale Assets or operation of the Stations prior to the Closing Date will be timely paid; provided that Sellers shall not be required to pay any such tax so long as the validity thereof shall be contested in good faith by appropriate proceedings and Sellers shall have set aside adequate reserves with respect to any such tax.
engineers and other representatives reasonable access during normal business hours throughout the period prior to the Closing to personnel and all of the assets, books, records and files of or pertaining to the Stations, provided that Buyer shall give Sellers reasonable advance notice of each date on which Buyer or any such other person or entity desires such access. Sellers shall furnish to Buyer during such period all documents and copies of documents and information concerning the business and affairs of Sellers and the Stations as Buyer may reasonably request.
(a) using such information, data and materials in connection with any action or proceeding brought or any claim asserted by Buyer or Sellers in respect of any breach by the other of any representation, warranty or covenant made in or pursuant to this Agreement; or
(b) supplying or filing such information, data or materials to or with the FCC or any other valid governmental or court authority to the extent reasonably necessary to obtain any consent, waiver, amendment, modification, approval, authorization, permit or license which may be necessary to effectuate this Agreement, and to consummate the transaction contemplated herein.
In the event that either party determines in good faith that a press release or other public announcement is desirable under any circumstances, the parties shall consult with each other to determine the appropriate timing, form and content of such release or announcement and thereafter may make such release or announcement.
accrued as of September 30, 1996. All payments received from account debtors shall be applied on a "first in, first out" basis, except to the extent an account is disputed by the account debtor as properly due, in which case Sellers and Buyer shall reasonably agree on an appropriate allocation of the payment. The full amount of such payments collected in each semi-monthly period shall be remitted and delivered to Seller on the fifteenth (15/th/) and last business days of the months of October, November and December, 1996. Immediately following such ninety (90) day period, Buyer shall furnish Sellers with all files concerning any uncollected accounts receivable, and Buyer shall have no further responsibilities hereunder except to remit promptly to Sellers any amounts subsequently received by it on account of such receivables.
Buyer's obligation to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, unless waived by Buyer in writing:
(a) The representations and warranties of Sellers contained in this Agreement or in any other Document shall be complete and correct in all material respects on the date hereof and at the Closing Date with same effect as though made at such time except for changes that are not materially adverse to the Stations or the Sale Assets taken as a whole, and except as follows:
(a) The FCC Order shall have been issued by the FCC and shall have become a Final Action without any Material Adverse Condition.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and
requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Sellers.
(c) All other authorizations, consents, approvals and clearances of federal, state or local governmental agencies required to permit the consummation by Buyer of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have a material adverse effect on the operations of the Stations.
(b) To counsel's knowledge, no condition has been imposed by the FCC as part of any FCC License which is not set forth on the face thereof as issued by the FCC or contained in the Rules and Regulations applicable generally to stations of the type, nature, class or location of the Stations.
(c) No proceedings are pending or, to counsel's knowledge, are threatened which may result in the revocation, modification, non-renewal of, suspension of, or the imposition of a Material Adverse Condition upon, any of the FCC Licenses, the denial of any pending applications, the issuance of any cease and desist order or the imposition of any fines, forfeitures or other administrative actions by the FCC with respect to the Stations or their operation, other than proceedings affecting the radio broadcasting industry in general.
In rendering such opinion, counsel shall be entitled to rely upon Sellers' representations and warranties in this Agreement and to limit its inquiry to its files and such FCC files and records as are available to it as of 10:00 o'clock A.M. Eastern time the business day immediately preceding the Closing Date. Counsel may state that, as to any factual matters embodied in, or forming a basis for any legal opinion expressed in, such opinion, counsel's knowledge is based solely on such inquiry.
(a) Between the date hereof and the Closing Date, neither of the Stations shall have for a period of more than ten (10) days in the aggregate (i) ceased broadcasting on its authorized frequency, (ii) lost substantially all of its normal broadcasting capability or (iii) been broadcasting at a power level of 50% or less of its FCC authorized level. Sellers shall promptly notify Buyer of the occurrence of any one or more of the foregoing events or conditions, and the non-fulfillment of the condition precedent set forth in this Subsection caused by the occurrence of the events specified in Sellers' notice shall be deemed waived by Buyer unless, within fifteen (15) days after Buyer's receipt of Sellers' written notice, Buyer notifies Sellers in writing to the contrary.
(b) In addition, during the five (5) days immediately preceding
the Closing Date, each of the Stations shall have been operating continuously
with substantially all of its normal broadcasting capability except for
cessation or reductions for insignificant periods of time resulting from
occurrences (such as lightning strikes) over which Sellers have no control.
Sellers shall have the right to delay Closing for a period not to exceed thirty
(30) days if Sellers reasonably determine that any action to restore the
Stations to substantially all of their normal broadcasting capability can be
completed during such delay period.
(c) Notwithstanding the foregoing, the loss or damage to Sellers' transmission facilities shall not be a condition precedent to Buyer's obligation to close if such loss or damage arose by reason of the act or omission of Buyer in its capacity as the programmer of the Stations under the LMA.
any Environmental Law at the Real Property which is not removed or cured by Sellers prior to Closing.
ARTICLE VII
The obligation of Sellers to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the closing Date, of each of the following conditions, unless waived by Sellers in writing:
(a) The representations and warranties of Buyer contained in this Agreement shall be complete and correct in all material respects on the date hereof and at the Closing Date with the same effect as though made at such time except for changes that are not materially adverse to Sellers.
(a) The FCC Order shall have been issued by the FCC and shall have become effective under the rules of the FCC.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and clearances of all Federal, state and local governmental agencies required to permit the consummation by Sellers of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have any material adverse effect on Sellers.
ARTICLE VIII
(a) Certified resolutions of Sellers' members approving the execution and delivery of this Agreement and each of the other documents and authorizing the consummation of the transactions contemplated hereby and thereby.
(c) A bill of sale and other instruments of transfer and conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and otherwise in form and substance reasonably satisfactory to Buyer, of any security interests granted in the Sale Assets as security for payment of loans and other obligations and of any other Liens (other than Permitted Liens).
(e) Warranty deeds and any other required instruments of transfer and conveyance transferring to Buyer the Real Property.
(g) An instrument or instruments assigning to Buyer all right, title and interest of Sellers in and to all Station Agreements being assumed by Buyer.
(h) An instrument or instruments assigning to Buyer all right, title and interest of Sellers in the FCC Licenses, all pending applications relating to the Stations before the FCC, and any remaining Sale Assets not otherwise conveyed.
(j) Such additional information and materials as Buyer shall have reasonably requested, including without limitation, evidence that all consents and approvals required as a condition to Buyer's obligation to close hereunder have been obtained.
(a) Certified resolutions of Buyer's Board of Directors approving the execution and delivery of this Agreement and each of the other Documents and authorizing the consummation of the transaction contemplated hereby and thereby.
(c) The agreement of Buyer assuming the obligations under any Station Agreements being assumed by Buyer.
(e) Such additional information and materials as Sellers shall have reasonably requested.
(i) Any breach or non-performance by Sellers of any of their representations, warranties, covenants or agreements set forth in this Agreement or any other Documents; or
(ii) The ownership or operation by Sellers of the Stations or the Sale Assets on or prior to the Closing Date, except as relates to operation of the Stations by Buyer under the LMA;
(iii) All other liabilities and obligations of Sellers other than the Assumed Obligations; and
(iv) Noncompliance by Sellers with the provisions of the Bulk Sales Act, if applicable, in connection with the transaction contemplated hereby.
(i) Any breach or non-performance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Document; or
(ii) The ownership or operation of the Stations after the Closing Date; or
(iii) All other liabilities or obligations of Buyer.
(a) the giving of written notice from Sellers to Buyer, or from Buyer to Sellers, if:
(i) Sellers give such termination notice and are not at such time in material default hereunder, or Buyer gives such termination notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained herein of Buyer (if such termination notice is given by Sellers), or of Sellers (if such termination notice is given by Buyer), are inaccurate in any respect and materially adverse to the party giving such termination notice unless the inaccuracy has been induced by or is the result of actions or omissions of the party giving such termination notice; or
(B) Any material obligation to be performed by Buyer (if such termination notice is given by Sellers) or by Sellers (if such termination notice is given by Buyer) is not timely performed in any material respect unless the lack of timely performance has been induced by or is the result of actions or omissions of the party giving such termination notice; or
and any such inaccuracy, failure to perform or non-satisfaction of a condition neither has been cured nor satisfied within twenty (20) days after written notice thereof from the party giving such termination notice nor waived in writing by the party giving such termination notice.
(b) Written notice from Sellers to Buyer, or from Buyer to Sellers, at any time after July 2, 1997 provided that termination shall not occur upon the giving of such termination notice by Sellers if Sellers are at such time in material default hereunder or upon the giving of such termination notice by Buyer if Buyer is at such time in material default hereunder.
(c) Written notice from Sellers to Buyer, or from Buyer to Seller, at any time following a determination by the FCC that the application for consent to assignment of the FCC Licenses has been designated for hearing; provided that the party which is the subject of the hearing (or whose alleged actions or omissions resulted in the designation for hearing) may not elect to terminate under this subsection (c).
PROOF OF LOSS, THE INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
(e) In any dispute between Buyer and Sellers as to which party is entitled to all or a portion of the Earnest Money, the prevailing party shall receive, in addition to that portion of the Earnest Money to which it is entitled, an amount equal to interest on that portion at the rate of 10% per annum, calculated from the date the prevailing party's demand for all or a portion of the Earnest Money is received by the Escrow Agent.
Upon the occurrence of any casualty loss, damage or destruction material to the operation of either of the Stations prior to the Closing, Sellers shall promptly give Buyer written notice setting forth in detail the extent of such loss, damage or destruction and the cause thereof if known. Sellers shall use their reasonable efforts to promptly commence and thereafter to diligently proceed to repair or replace any such lost, damaged or destroyed property. In the event that such repair or replacement is not fully completed prior to the Closing Date, Buyer may elect to postpone the Closing until Sellers' repairs have been fully completed or to consummate the transactions contemplated hereby on the
Closing Date, in which event Sellers shall assign to Buyer the portion of the
insurance proceeds (less all reasonable costs and expenses, including without
limitation attorney's fees, expenses and court costs incurred by Sellers to
collect such amounts), if any, not previously expended by Sellers to repair or
replace the damaged or destroyed property (such assignment of proceeds to take
place regardless of whether the parties close on the scheduled or deferred
Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged
condition. In the event the loss, damage or destruction causes or will cause
either Station to be off the air for more than seven (7) consecutive days or
fifteen (15) total days, whether or not consecutive, then Buyer may elect either
(i) to consummate the transactions contemplated hereby on the Closing Date, in
which event Sellers shall assign to Buyer the portion of the insurance proceeds
(less all reasonable costs and expenses, including without limitation attorney's
fees, expenses and court costs, incurred by Sellers to collect such amounts), if
any, not previously expended by Sellers to repair or replace the damaged or
destroyed property, and Buyer shall accept the damaged Sale Assets in their
damaged condition, or (ii) to terminate this Agreement.
Between the date of this Agreement and the Closing Date and subject only to the provisions of the LMA, Buyer shall not control, manage or supervise the operation of the Stations or the conduct of their business, all of which shall remain the sole responsibility and under the control of Sellers, subject to Sellers' compliance with this Agreement.
(b) All title insurance premiums and costs shall be paid by Buyer.
(c) All state or local sales or use, stamp or transfer, grant and other similar taxes payable in connection with consummation of the transactions contemplated hereby shall be paid by the party primarily liable under applicable law to pay such tax.
(d) Except as otherwise expressly provided in this Agreement, each of the parties shall bear its own expenses, including the fees of any attorneys and accountants engaged by such party, in connection with this Agreement and the consummation of the transactions contemplated herein.
(a) if to Seller, to:
Mortenson
Broadcasting Company
3191 Nicholasville Road
Suite 600
Lexington, KY 40503-3318
Facsimile No.: (606) 245-1600
Attention: Jack M. Mortenson
President
Copy to:
William Rigsby, Esq.
201 West Short St., Suite 820
Lexington, KY 40507
Facsimile No.: (606) 233-4642
(b) if to Buyer, to:
Salem Communications Corporation 4880 Santa Rosa Road, Suite 300 Camarillo, CA 93012 Facsimile No.: (805) 482-7290 Attention: Eric H. Halvorson Executive Vice President Chief Operating Officer
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third business day following the date mailed, and
(ii) if personally delivered or otherwise sent as provided above, on the date
received.
extra expense results to Sellers, and (iii) Buyer remains liable for indemnification of Sellers in respect of all Assumed Obligations in respect of the Real Property.
(a) The parties acknowledge that each may desire to effectuate a tax-deferred exchange pursuant to Section 1031 of the Internal Revenue Code (the "Code"), which may include a non-simultaneous exchange, with respect to the sale and acquisition of the Sale Assets. The parties agree to cooperate with the other in connection therewith, provided each party participating in such an exchange agrees to hold the other free and harmless of, and indemnify the other from, any liabilities, claims, costs, damages, expenses and fees (including attorneys' fees) which may arise out of said party's participation in a tax- deferred exchange, including without limitation any claims by the Internal Revenue Service.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written.
CARON BROADCASTING, INC.
By: /s/ Eric H. Halvorson
---------------------
Eric H. Halvorson
Executive Vice President
|
MORTENSON BROADCASTING COMPANY
OF CANTON, LLC
By: /s/ Jack M. Mortenson
---------------------
Jack M. Mortenson
President
|
MORTENSON BROADCASTING COMPANY
OF AKRON, LLC
By: /s/ Jack M. Mortenson
---------------------
Jack M. Mortenson
President
|
SCHEDULE 3.3 Conflicts
SCHEDULE 3.4 List of required consents of any court,
public agency, authority or any person to
the consummation of the transactions
contemplated by Asset Purchase
Agreement.
SCHEDULE 3.6 List of Tangible Personal Property.
SCHEDULE 3.7 Description of Real Property
SCHEDULE 3.8 List of FCC Licenses.
SCHEDULE 3.9 List of Trade Agreements and other Station
Agreements.
SCHEDULE 3.10 List of Intellectual Property
SCHEDULE 3.11 Financial Statements
SCHEDULE 3.13 Employee Information
|
CONFLICTS
Sellers have outstanding loan obligations to First National Bank of Ohio. All loans and related liens will be repaid and released at Closing.
CONSENTS
The acquisition of the Stations is subject to prior approval of the FCC.
The consent of S&S Realty Investments is required to assign the studio lease for property located at 2780 S. Arlington Road, Akron, Ohio.
TANGIBLE PERSONAL PROPERTY
See attached
EXHIBIT 10.06.03.01
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated March 28, 1996, by and between American Radio Systems Corporation, a Delaware corporation ("Buyer"), and Common Ground Broadcasting, Inc., an Oregon corporation ("Seller").
PREMISES:
A. Seller is the licensee of and operates radio station KDBX(FM), Banks, Oregon (the "Station") and pursuant to licenses issued by the Federal Communications Commission (the "FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially all of Seller's assets used or useful in the operation of the Station and the broadcast business made possible thereby for the price and on the terms and conditions hereafter set forth.
AGREEMENTS:
In consideration of the above premises and the covenants and agreements contained herein, Buyer and Seller agree as follows:
Section 1
DEFINED TERMS
The following terms shall have the following meanings in this Agreement:
1.1 "Accounts Receivable" means the rights of Seller to payment for services rendered (including sale of time or talent on the Station for cash) by Seller prior to the Closing Date as reflected on the billing records of Seller relating to the Station.
1.2 "Assets" means the tangible and intangible assets owned by Seller in connection with the conduct of the business or operations of the Station, which assets are being sold, transferred, or otherwise conveyed to Buyer hereunder, and which are specified in detail in Section 2.1.
1.3 "Back Bay" shall mean Back Bay Broadcasters, Inc., a Delaware corporation, and shall include its successors and assigns.
1.4 "Back Bay Agreement" shall mean the Agreement, dated March 15, 1994, by and between American and Back Bay, as from time to time amended.
1.5 "Assumed Contracts" means (i) all agreements listed in Schedule 3.6, and (ii) any agreements entered into by Seller in the ordinary course of business between the date hereof and the Closing Date which Buyer agrees in writing to assume.
1.6 "Closing" means the consummation of the transaction contemplated by this Agreement in accordance with the provisions of Section 8.
1.7 "Closing Date" means the date of the Closing specified in Section 8.1.
1.8 "Consents" means all of the consents, permits or approvals of government authorities and other third parties necessary to transfer the Assets to Buyer or otherwise to consummate the transaction contemplated hereby, including without limitation the consents of the parties to those agreements designated in Schedule 3.6 with an asterisk.
1.9 "Escrow Deposit" shall mean the sum of Five Hundred Thousand Dollars ($500,000) held by Media Venture Partners as Escrow Agent pursuant to an Escrow Agreement of even date, by and among Buyer, Seller, and Escrow Agent in the form of Schedule 1.9 hereto.
1.10 "Excluded Assets" shall mean those assets described or set forth in
Section 2.2 herein and on Schedule 2.2 hereto.
1.11 "FCC Consent" means action by the FCC granting its consent to the assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
1.12 "FCC Licenses" means all of the licenses, permits and other authorizations issued by the FCC to Seller in connection with the conduct of the business or operations of the Station.
1.13 "Final Order" means a written action, order or public notice issued by the FCC, setting forth the FCC Consent and (a) which has not been reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with respect to which (i) no requests have been filed for administrative or judicial review, reconsideration, appeal or stay, and the time for filing any such requests and for the FCC to review the action on its own motion has expired, or (ii) in the event of review, reconsideration or appeal that does not result in the FCC consent being reversed, stayed, enjoined, set aside, annulled or suspended, the time for further review, reconsideration or appeal has expired.
1.14 "Licenses" means all of the licenses, permits and other authorizations, including the FCC Licenses, issued by the FCC, the Federal Aviation Administration ("FAA"), and any other federal, state or local governmental authorities to Seller in connection with the conduct of the business or operations of the Station.
1.15 "Personal Property" means all of the machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, spare parts, and other tangible personal property which are owned by Seller and which are set forth on Schedule 3.5, plus such additions thereto and deletions therefrom arising in the ordinary course of business between the date hereof and the Closing Date.
1.16 "Purchase Price" means the purchase price specified in Section 2.3.
SECTION 2
SALE AND PURCHASE OF ASSETS
(a) The Personal Property;
(b) The Licenses;
(c) The Assumed Contracts;
(d) All trademarks, trade names, service marks and all other information and similar intangible assets relating to the Station, including those listed in Schedule 3.8 hereto;
(e) All of the Seller's proprietary information, which relate to the Station, including without limitation, technical information and data, machinery and equipment warranties, maps, computer discs and tapes, plans, diagrams, blueprints, and schematics, including filings with the FCC which relate to the Station, if any;
(f) All choses in action and rights under warranties of Seller relating to the Station or the Assets, if any;
(g) All books and records relating exclusively 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, subject to the right of Seller to
have such books and records made available to Seller for a reasonable period, not to exceed three (3) years; and
(h) All intangible assets of Seller relating to the Station not specifically described above.
(a) Seller's cash on hand as of the Closing Date and all other cash in any of Seller's bank or savings accounts; any and all insurance policies, letters of credit, or other similar items and any cash surrender value in regard thereto; and any stocks, bonds, certificates of deposit and similar investments.
(b) Seller's Accounts Receivable
(c) Any agreements other than the Assumed Contracts;
(d) All books and records of Seller, subject to the right of Buyer to have access and to copy for a period of three (3) years from the Closing Date, and Seller's corporate records and other books and records related to internal corporate matters and financial relationships with Seller's lenders;
(e) Any and all claims of Seller with respect to transactions prior to the Closing Date, including without limitation any claims, rights and interest in and to any refunds of federal, state or local franchise, income or other taxes or fees of any nature whatsoever;
(f) Any pension, profit-sharing or employee benefit plans, and any employment or collective bargaining agreement.
Notwithstanding the foregoing, there shall be no adjustment for, and Seller shall remain solely liable with respect to, any Contracts not included in the Assumed Contracts, or any other obligation or liability not being assumed by Buyer in accordance with Section 2.5.
A. Any adjustments or prorations will, insofar as feasible, be determined and paid on the Closing Date, with final settlement and payment being made in accordance with the procedures set forth in Section 2.4B.
B. Within sixty (60) days after the Closing Date, Buyer shall deliver to Seller a certificate (the "Closing Certificate"), signed by a senior officer of Buyer after due inquiry by such officer but without any personal liability to such officer, providing a compilation of the adjustments and prorations to be made pursuant to this Section 2.4, including any adjustments and prorations made at Closing, together with a copy of any working papers relating to such Closing Certificate and such other supporting evidence as
Seller may reasonably request. If Seller shall conclude that the Closing
Certificate does not accurately reflect the adjustments and prorations to be
made pursuant to this Section 2.4, Seller shall, within thirty (30) days after
its receipt of the Closing Certificate, provide to Buyer its written statement
of any discrepancies believed to exist. Joseph L. Winn on behalf of Buyer, and
Dirk Gastaldo on behalf of Seller, or their respective designees, shall attempt
jointly to resolve the discrepancies within fifteen (15) days after receipt of
Seller's discrepancy statement, which resolution, if achieved, shall be binding
upon all parties to this Agreement and not subject to dispute or review. If such
representatives cannot resolve the discrepancy to their mutual satisfaction
within such fifteen (15) day period, Buyer and Seller shall, within the
following ten (10) days, jointly designate a nationally known independent public
accounting firm to be retained to review the Closing Certificate together with
Seller's discrepancy statement and any other relevant documents. The cost of
retaining such independent public accounting firm shall be borne equally by
Buyer and Seller. Such firm shall report its conclusions as to adjustments
pursuant to this Section 2.4, which report shall be conclusive on all parties to
this Agreement and not subject to dispute or review. If, after adjustment as
appropriate with respect to the amount of the aforesaid adjustments paid or
credited at the Closing, Buyer is determined to owe an amount to Seller, Buyer
shall pay such amount to Seller, and if Seller is determined to owe an amount to
Buyer, Seller shall pay such amount thereof to Buyer, in each case within ten
(10) days of such determination.
Buyer receives a proration adjustment hereunder. All other obligations and liabilities of Seller, including (i) any obligations under any agreement not included in the Assumed Contracts, (ii) any obligations under the Assumed Contracts relating to the time 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 Date, and (iv) any liabilities or obligations to Seller's employee (including obligations for accrued vacation or sick pay and severance pay), shall remain and be the obligations and liabilities solely of Seller.
SECTION 3
Seller represents and warrants to Buyer as follows:
delivered by Seller and constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms except as the enforceability hereof may be affected by bankruptcy, insolvency, or similar laws affecting creditors' rights generally, or by court-applied equitable remedies.
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 and continuation of any of the Assumed Contracts.
of Seller on the Assets or the Station has been cancelled by the insurer and no application of Seller for insurance has been rejected by any insurer.
on its books reserves (segregated to the extent required by sound accounting practice) deemed by it to be adequate with respect thereto. No events have occurred which could impose on Buyer any transferee liability for any taxes, penalties or interest due or to become due from Seller.
(a) During Seller's period of ownership there has been no production, storage, treatment, recycling, disposal, use, generation, discharge, release or other handling or disposition of any kind by Seller or any such predecessor (collectively, "Handling") of any
toxic or hazardous wastes, substances, products, pollutants or materials of any kind, including, without limitation, petroleum and petroleum products and asbestos, or any other wastes, substances, products, pollutants or material regulated under any Environmental Laws (as defined below) (collectively, "Hazardous Materials") at, in, on, from or under the Station's transmission site (the "Site") or any structure or improvement on the Site which in any event is in material violation of Environmental Law. The operations of Seller at the Site, are and have been conducted, as the case may be, in material compliance with all applicable Environmental Laws. There are no pending or threatened actions, suits, claims, demands, legal proceedings, administrative proceedings, requests for information, or other notices, proceedings or requests (collectively, "Claims") against or upon Seller based on or relating to any Pre- Closing Environmental Matters (as defined below), and Seller has no knowledge that any such Claims will be asserted. Environmental Laws means any and all Federal, state or local laws, statutes, rules, regulations, plans, ordinances, codes, licenses or other restrictions relating to health, safety or the environment, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Air Act the Safe Drinking Water Act, the Toxic Substances Control Act and the Occupational Health and Safety Act. Pre-Closing Environmental Matters means (i) the Handling of any Hazardous Materials on, at, in, from or under the Site prior to the Closing Date, including without limitation, the effects of any Handling of Hazardous Materials within or outside the boundaries of the Site, the presence of any Hazardous Materials in, on or under the Site or any improvements or structures thereon regardless of how such Hazardous Materials came to
rest there, (ii) the failure of Seller to be in compliance with any Environmental Law or (iii) any other act, omission, event or condition which could give rise to liability or potential liability under any Environmental Law with respect to the Site or the present or prior business of Seller.
(b) Buyer shall be entitled to order and have undertaken on its behalf prior to closing a Phase I Environmental Assessment of the at the Site, and shall be granted all cooperation and access by Seller reasonably necessary to complete such Assessment. If the report of such Assessment, which shall be completed and furnished to Seller no later than forty (40) days following the date hereof, demonstrates or recommends remediation in order to cause the Site to comply with Environmental Laws, Seller shall immediately undertake to arrange, at its own expense, such remediation prior to Closing. Notwithstanding the foregoing, in the event such remediation costs or is estimated to cost in excess of Fifty Thousand Dollars ($50,000), Seller shall not be obligated to expend such excess, but in such event Buyer may thereafter, at its option, (i) accept the condition of the Site at Closing as so remediated, or (ii) terminate its obligations to purchase the Station under this Agreement.
(a) Suffered any material adverse change in the business assets or properties, or condition of the Station, including without limitation any damage, destruction or loss affecting the Assets;
(b) Made any sale, assignment, lease or other transfer of any of Seller's properties other than in the normal and usual course of business with suitable replacements being obtained therefor.
SECTION 4
Buyer represents and warrants to Seller as follows:
SECTION 5
SECTION 6
A. Within ten (10) days after the execution of this Agreement, Buyer and Seller shall file with the FCC an appropriate application for FCC Consent. The parties shall prosecute said application with all reasonable diligence and otherwise use their best efforts to obtain the grant of such application as expeditiously as practicable. If the FCC Consent imposes any condition on any party hereto, such party shall use its best efforts to comply with such condition unless compliance would be unduly burdensome or would have a material adverse effect upon it. If reconsideration or judicial review is sought with respect to the FCC Consent, Buyer and Seller shall oppose such efforts to obtain reconsideration or judicial review (but nothing herein shall be construed to limit any party's right to terminate this Agreement pursuant to Section 9 of this Agreement).
B. The transfer of the Assets hereunder is expressly conditioned upon (i) the grant of the FCC Consent without any materially adverse conditions on Buyer, (ii) compliance by the parties hereto with the condition (if any) imposed in the FCC Consent, and (iii) the FCC Consent, through the passage of time or otherwise, becoming a Final Order, provided, though, that the condition that the FCC Consent shall have become a Final Order may be waived by Buyer, in its sole discretion.
party all documents, work papers and other written material obtained by it in connection with the transaction contemplated hereby.
A. The risk of loss, damage or impairment, confiscation or condemnation of any of the Assets from any cause whatsoever shall be borne by Seller at all times prior to the completion of the Closing.
B. If any damage or destruction of the Assets or any other event occurs which prevents signal transmission by the Station in the normal and usual manner and Seller cannot restore or replace the Assets so that the conditions are cured and normal and usual transmission is resumed before the Closing Date, the Closing Date shall be postponed, for a period of up to one hundred and twenty (120) days, to permit the repair or replacement of the damage or loss.
C. In the event of any damage or destruction of the Assets described above, if such Assets have not been restored or replaced and the Station's normal and usual transmission resumed within the one hundred and twenty (120) day period specified above, Buyer may terminate this Agreement forthwith without any further obligation hereunder by written notice to Seller. Alternatively, Buyer may, at its option, proceed to
close this Agreement and complete the restoration and replacement of such damaged Assets after the Closing Date, in which event Seller shall deliver to Buyer all insurance proceeds received in connection with such damage or destruction of the Assets to the extent not already expended by Seller arising in connection with such restoration and replacement.
D. Notwithstanding any of the foregoing, Buyer may terminate this Agreement forthwith without any further obligation hereunder by written notice to Seller if any event occurs which prevents signal transmission by the Station in a manner generally equivalent to its current operations for a consecutive period of five (5) or a cumulative period of fourteen (14) days after the date hereof.
Notice prior to January 1, 1998, all rights of Seller to purchase the WBNW Business shall cease and terminate and by of no further force and effect.
The Election Notice shall constitute a representation that Seller is ready, willing and able, and has the financial resources, to purchase the WBNW Business for $6,000,000 and that it will negotiate in good faith with respect to and execute and deliver a purchase and sale agreement on terms and conditions customary with respect to similar transactions with Buyer (or, at Buyer's discretion, with Back Bay) to purchase the WBNW Business. Buyer agrees that it will cooperate in all reasonable respects with Seller in order to enable it to exercise the WBNW Purchase Right, including without limitation (a) advising Seller promptly of buyer's receipt of any Asset Transfer Notice pursuant to the provisions of Section 4.13 of the Back Bay Agreement, and (b) exercising any and all of its rights under the Back Bay Agreement, including without limitation the exercise by Buyer of the Right of First Refusal and the Purchase Right.
Seller acknowledges and agrees that (a) Buyer's rights with respect to the Purchase Rights and the Right of First Refusal apply or may apply, as the case may be, to all of the business and assets of Back Bay and, therefore, Buyer may be required to acquire businesses and assets other than the WBNW Business in order to enable Seller to exercise its WBNW Purchase Rights, and (b) the purchase price to be paid by Buyer pursuant to the exercise of (i) the Purchase Rights will be based on a formula set forth in the Back Bay Agreement and (ii) the Right of First Refusal will be based on a third party offer. Accordingly, Buyer and Seller acknowledge and agree that the amount required to be paid by Buyer for the WBNW Business may be more or less than $6,000,000 and that Buyer will, therefore, be required to pay any excess of the purchase price over $6,000,000, and will be entitled to any excess of $6,000,000 over such purchase price.
Buyer agrees that, in the event Seller purchases the WBNW Business pursuant to the exercise of the WBNW Purchase Right, from and after the consummation of such transaction, Buyer will assume, at no expense to Seller, fifty percent (50%) of the base
rental fees payable under the WBNW tower site lease between Back Bay and Fellsway Plaza Trust, dated December 14, 1987, as amended to the date hereof (the "WBNW Tower Lease"), or any extension or renewal therefore. Seller agrees that Buyer shall have the fight to manage, sublease and develop the tower site covered by the WBNW Tower Lease so long as such activities do not disrupt or interfere with, in either case in any material manner, with the operations of the WBNW Business.
Buyer acknowledges its right of specific performance with respect to the purchase of the WBNW Business pursuant to Section 11.13 of the Back Bay Agreement and agrees to use its best efforts to enforce, and to assist Seller in enforcing, such fights to purchase the WBNW Business. Buyer further agrees not to take any action, and to use its best efforts not to allow any action to take place, which would impair or abrogate its fight to purchase the WBNW Business pursuant to the Back Bay Agreement.
The parties recognize that the WBNW Business is of a special, unique and extraordinary character. Accordingly, if Seller is unable to acquire the WBNW Business by reason of Buyer failing to have complied with its agreements under this Section 6.10, Seller shall be entitled to bring an action against Buyer for damages or, in lieu of, and in substitution for any damages, to obtain specific performance of the terms of this Section 6.10. In the event of any action to enforce the provisions of this Section 6.10, Seller hereby waives the defense that there is an adequate remedy at law.
The provisions of this Section 6.10 shall survive the termination of this Agreement if this Agreement is terminated by reason of the fault or default of Buyer. If this Agreement is terminated for any reason other than the fault or default of Buyer, the provisions of this Section 6.10 shall be of no force and effect.
the sale of the assets of the Station; however, such an exchange shall not be a condition or obligation of Seller under this Agreement.
Buyer agrees to cooperate with Seller in connection therewith, provided:
(a) There is no additional cost or expense to Buyer, Seller shall reimburse Buyer for the actual amount of reasonable attorneys' fees and other expenses incurred by Buyer in the review of any documentation presented to Buyer for its approval or execution in connection with a particular exchange transaction; and
(b) The Closing is not delayed beyond the Closing Date. Seller will agree to hold Buyer free and harmless of, and indemnify Buyer from, any liabilities, claims, costs, damages, expenses and fees (including attorney's fees) which may arise out of the property or properties forming a part of such tax deferred exchange, including without limitation any claims by the Internal Revenue Service.
SECTION 7
SECTION 8
and the consummation of the transaction contemplated hereby and that such resolutions remain in full force and effect.
SECTION 9
(a) If on the Closing Date (i) any of the conditions precedent to the obligations of the terminating party set forth in Section 7 of this Agreement shall not have been materially satisfied, and (ii) satisfaction of such condition shall not have been waived by the terminating party;
(b) If the application for FCC Consent shall be set for hearing by the FCC for any reason; or
(c) If the Closing shall not have occurred on or before October 31, 1996.
Upon termination: (i) if neither party hereto is in breach of any material provision of this Agreement, the parties hereto shall not have any further liability to each other; (ii) if Seller shall be in breach of any material provision of this Agreement, Buyer shall have only the rights and remedies provided in Sections 9.3 or 9.4 or (iii) if Buyer shall be in breach of any material provision of this Agreement, Seller shall be entitled only to liquidated damages as provided in Section 9.2 hereof, and its continued rights pursuant to Section 6.10 hereof. If, upon termination, Buyer shall not be in breach of any material provision of this Agreement, the Escrow Deposit, plus all interest or other proceeds from the investment thereof, less any compensation due the Escrow Agent, shall be paid to Buyer.
SECTION 10
Buyer assumes the obligations under any Assumed Contract, each of which agreements shall be governed by its own terms to the extent longer periods of performance are therein provided.
(a) Any and all losses, liabilities or damages resulting from any untrue representation, breach of warranty or nonfulfillment of any covenants by Seller contained herein or in any certificate, delivered to Buyer hereunder.
(b) Any and all obligations of Seller not assumed by Buyer pursuant to the terms hereof;
(c) Any and all losses, liabilities or damages resulting from Seller's operation or ownership of the Station prior to the Closing Date, including any and all liabilities arising under the Licenses or the Assumed Contracts which relate to events occurring prior to the Closing Date; and
(d) Any and all actions, suits, proceedings, claims, demands, assessments, judgments, and reasonable costs and expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof;
provided, however, that if Closing occurs, Seller shall not be obligated to indemnify Buyer (i) for any amounts in excess of the Purchase Price in the aggregate, or (ii) until the aggregate amount of such claims, liabilities, damages, losses, costs and expenses exceeds Twenty Thousand Dollars ($20,000), in which case Buyer shall then be entitled to indemnification of the entire amount in excess of Twenty Thousand Dollars ($20,000).
(a) Any and all losses, liabilities or damages resulting from any untrue representation, breach of warranty or nonfulfillment of any covenants by Buyer contained herein or in any certificate delivered to Seller hereunder;
(b) Any and all losses, liabilities or damages resulting from Buyer's operation or ownership of the Station on or after the Closing Date, including any
and all liabilities or obligations arising under the Licenses or the Assumed Contracts which relate to events occurring after the Closing Date or otherwise assumed by Buyer under this Agreement; and
(c) Any and all actions, suits, proceedings, claims, demands, assessments, judgments, and reasonable 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;
provided, however, that if Closing occurs, Buyer shall not be obligated to indemnify Seller until the aggregate amount of such claims, liabilities, damages, losses, costs and expenses exceeds Twenty Thousand Dollars ($20,000), in which case Buyer shall then be entitled to indemnification of the entire amount in excess of Twenty Thousand Dollars ($20,000).
A. The party claiming the indemnification (the "Claimant") shall promptly give notice to the party from whom indemnification is claimed (the "Indemnifying Party") of any claim, whether between the parties or brought by a third party, specifying (i) the factual basis for such claim, and (ii) the amount of 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 (5) days after written notice of such action, suit or proceeding was given to Claimant.
B. Following receipt of notice from the Claimant of a claim, the Indemnifying Party shall have thirty (30) 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 representative(s) 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 said thirty (30) day period (or any mutually agreed upon extension thereof) to the validity
and amount of such claim, or if the Indemnifying Party does not respond to such notice, 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 said period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy.
C. With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnifying Party shall have the fight 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 reasonable 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.
D. If a claim, whether between the parties or by a third party, requires immediate action, the parties will make all reasonable efforts to reach a decision with respect thereto as expeditiously as possible.
E. If the Indemnifying Party does not elect to assume control or otherwise participate in the defense of any third party claim, it shall be bound by the results obtained in good faith by the Claimant with respect to such claim.
F. The indemnification rights provided in Sections 10.2 and 10.3 shall extend to the shareholders, directors, officers, partners employees and representatives of the 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.
SECTION 11
If to Seller: Common Ground Broadcasting, Inc.
c/o Salem Communications
4880 Santa Rosa Road, Suite 300
Camarillo, CA 93012
Attn: Eric H. Halvorson, Executive Vice President
Fax: (805) 482-8570
If to Buyer: American Radio Systems
116 Huntington Avenue
Boston, MA 02116
Attention: Steven B. Dodge, President
Fax: (617) 375-7575
with a copy
(which shall not
constitute notice) to: Michael B. Milsore, Vice President & General Counsel
American Radio Systems, Inc.
116 Huntington Avenue
Boston, MA 02116
Fax: (617) 375-7575
|
or to such other or additional persons and addresses as the parties may from time to time designate in a writing delivered in accordance with this Section 11.1.
IN WITNESS WHEREOF, this Agreement has been executed by Buyer and Seller as of the date first above written.
SELLER: COMMON GROUND BROADCASTING, INC.
By: /s/ Eric H. Halvorson
------------------------------
Eric H. Halvorson
Executive Vice President
BUYER: AMERICAN RADIO SYSTEMS CORPORATION
By: /s/ Steven B. Dodge
-----------------------------
Title: President and CEO
39
|
SCHEDULES TO ASSET PURCHASE AGREEMENT
1.9 Escrow Agreement
3.4 Licenses
3.5 Personal property
3.6 Assumed Contracts
3.7 Consents required
3.8 Trademarks; trade names; copyrights
3.9 Insurance policies
8.2(f) Opinion of Seller's General and FCC Counsels
8.3(e) Opinion of Buyer's General Counsel
40
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Exhibit 1.9
MEDIA VENTURE PARTNERS
ESCROW AGREEMENT
|
AGREEMENT, effective as of the ___ day of ______, 19__, by and among:
BUYER: ____________________________________________
SELLER: ___________________________________________
ESCROW AGENT: Media Venture Partners, Ltd.
Address: 1650 Tysons Boulevard
Suite 790
McLean, VA 22102
WITNESSETH:
WHEREAS, Buyer and Seller have entered into an Agreement of Purchase and Sale with respect to __________, said Agreement dated the __ day of ______ ,19__, being by reference incorporated herein and made a part hereof (the "Agreement"), and
WHEREAS. the parties wish to provide for an orderly disposition of the funds deposited into escrow pursuant to said Agreement;
NOW, THEREFORE, in consideration of the premises, promises and mutual covenants herein, the parties hereby agree as follows:
1. DEPOSIT OF ESCROW FUNDS. Upon the execution of this Escrow Agreement, buyer is delivering or causing to be delivered to the Escrow Agent, the sum of _____ Dollars in cash __, check __, or other _____ (check appropriate box, and if other, describe).
MEDIA VENTURE PARTNERS
2. INVESTMENT OF ESCROW FUND. The Escrow Agent shall, upon request of Buyer, invest and reinvest the escrow funds in direct obligations of the United States government, in federally insured savings accounts or in bank certificates of deposits, as Buyer shall instruct; provided, that the Escrow Agent shall not be required to invest in or hold any instrument in bearer form. The Escrow Agent shall hold said escrow funds together with all interest accumulated thereon and proceeds therefrom and dispose of the same as hereinafter provided.
3. DISPOSITION OF ESCROW FUNDS. The Escrow Agent shall distribute and dispose of the escrow funds as follows:
(a) In the event the purchase and sale closes in the manner contemplated in the Agreement, the escrow funds shall be paid over to the Seller at closing in accord with said Agreement. In such event, all interest earned and accumulated thereon and proceeds therefrom shall be paid over to Buyer at closing.
(b) In the event the purchase and sale does not close as contemplated in the Agreement due to the material breach by or default of the Buyer under the terms of the Agreement, then the escrow funds shall be paid over to Seller together with all interest earned and accumulated thereon and the proceeds therefrom.
(c) In the event the purchase and sale does not close as contemplated in the Agreement due to material breach by or default of the Seller under the terms of the Agreement, then the escrow funds shall be paid over to Buyer together with all interest earned and accumulated thereon and the proceeds therefrom.
(d) In all other events, if the Agreement is terminated or if the transactions or closing contemplated thereby are not consummated, the escrow funds shall be returned to the Buyer together with all interest earned.
(e) If any provision of this Paragraph with respect to the disposition of the escrow fund is in conflict with any provision or the Agreement with respect to such disposition, then such provision in the Agreement shall prevail.
4. CONTROVERSIES WITH RESPECT TO ESCROW. The Escrow Agent shall discharge his duties to dispose of the escrow fund in accord with the provisions of paragraph 3 above upon the joint written instructions of the Seller and Buyer or their duty designated representatives. If the Escrow Agent shall not have received such joint written instructions and a controversy shall exist between Buyer and Seller as to the correct disposition of the escrow funds, the Escrow Agent shall continue to hold the escrow funds and the income earned or accrued thereon until:
(a) The receipt by the Escrow Agent of the joint written instructions of the Seller and Buyer as to the disposition of the escrow funds; or
MEDIA VENTURE PARTNERS
(b) The receipt by the Escrow Agent of a final order entered by a court of competent jurisdiction determining the disposition of the escrow funds and the income earned or accrued thereon; or
(c) The Escrow Agent shall have, at its option, filed an action or bill in interpleader, or similar action for such purpose, in a court of competent jurisdiction and paid the escrow funds and all income earned or accrued thereon into said court, in which event, the Escrow Agent's duties, responsibilities and liabilities with respect to the escrow fund, proceeds therefrom and this Agreement shall terminate.
5. CONCERNING THE ESCROW AGENT. The following shall control the fees, resignation, discharge, liabilities and indemnification of the Escrow Agent:
(a) The Escrow Agent shall charge no fees for its service hereunder, but shall be reimbursed for all reasonable expenses, disbursements and advancements incurred or made by the Escrow Agent in performance of his duties hereunder, one-half (1/2) of any such expenses, disbursements and advances to be paid by Buyer and one-half (1/2) by the Seller, other than expenses for investments authorized hereunder which shall be borne by Buyer.
(b) The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving written notice of such resignation to the parties hereto, specifying the date when such resignation shall take effect. Upon such notice, a successor escrow agent shall be appointed with the unanimous consent of the parties hereto, and the service of such successor escrow agent shall be effective as of the date of resignation specified in such notice, which date shall not be less than thirty (30) days after the giving of such notice. If the parties hereto are unable to agree upon a successor escrow agent within thirty (30) days after such notice, the Escrow Agent shall be authorized to appoint its successor. The Escrow Agent shall continue to serve until its successor accepts the escrow by written notice to the parties hereto and the Escrow Agent deposits the escrow fund with such successor escrow agent.
(c) The Escrow Agent undertakes to perform such duties as are specifically set forth herein and may conclusively rely, and shall be protected in acting or refraining from acting, on any written notice, instrument or signature believed by it to be genuine and to have been signed or presented by the proper party or parties duly authorized to do so. The Escrow Agent shall have no responsibility for the contents of any writing contemplated herein and may rely without any liability upon the contents thereof.
MEDIA VENTURE PARTNERS
(d) The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized hereby or within the rights and powers conferred upon it hereunder, nor for action taken or omitted by it in good faith, or in accordance with advice of counsel and it shall not be liable for any mistake of fact or error of judgment or for any acts or omissions of any kind unless caused by its own misconduct or gross negligence.
(e) Each of the Buyer and Seller agrees to indemnify the Escrow Agent and hold it harmless against any and all liabilities incurred by it hereunder as a consequence of such party's action, and the Buyer and Seller agree jointly to indemnify the Escrow Agent and hold it harmless against any and all liabilities incurred by it hereunder which are not a consequence of any party's actions, except in the case of liabilities incurred by the Escrow Agent resulting from its own misconduct or gross negligence.
(f) The Escrow Agent acts hereunder as a depository only, and is not responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of any cash or security deposited with it.
(g) Buyer and Seller agree each to pay one half of the escrow agent's out- of-pocket costs within fifteen (15) days of presentment, including reasonable attorneys fees which the escrow agent may expend of incur in any dispute or action.
Should Buyer or Seller fail to reimburse escrow agent for such out-of- pocket costs and/or attorneys fees, the escrow agent, at its option, may choose to deduct said expenses from any escrow funds disbursed from the escrow account.
6. MISCELLANEOUS.
(a) This Escrow Agreement shall be construed by and governed in accordance with the laws of the District of Columbia, applicable to agreements executed and wholly to be performed therein.
(b) This Escrow Agreement shall be binding upon and shall inure to the benefit of the parties, their successors and assigns.
(c) This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.
(d) All notices, requests, demands and other communication hereunder shall be in writing, shall be given simultaneously to all parties hereunder and shall be deemed to have been duly given if delivered or mailed (certified mail, postage pre-paid, return receipt requested) as follows:
MEDIA VENTURE PARTNERS
If to Escrow Agent: Media Venture Partners, Ltd.
1650 Tysons Boulevard
Suite 790
McLean, VA 22102
or to such other addresses as any party may have furnished to the other in writing, in accord herewith.
7. TERMINATION. This Escrow Agreement shall automatically terminate upon the distribution of the escrow fund in accord with the terms hereof.
IN WITNESS WHEREOF, the parties have caused their hands, or those of their duly authorized officers, and seals to be affixed as of the date first above written.
SELLER:
ESCROW AGENT: MEDIA VENTURE PARTNERS, LTD.
EXHIBIT 3.5 Personal Property
Location QTY Item Manufacturer Model ==================================================================================================== Transmitter 700 feet 1 5/8 inch Celfex Coax Cable Wave ----------------------------------------------------------------------------------------------------- Transmitter 1 1 5/8" Coax Switch Dielectric 1896 ----------------------------------------------------------------------------------------------------- Transmitter 2 1 5/8" through line sections Bird ----------------------------------------------------------------------------------------------------- Transmitter 1 1 kW slug Bird ----------------------------------------------------------------------------------------------------- Transmitter 1 10 kW slug Bird ----------------------------------------------------------------------------------------------------- Transmitter 1 3 1/8" 2-bay FM ant.(107.5) ERI ----------------------------------------------------------------------------------------------------- Transmitter 1 480 to 208 Step down 45kva transformer Westinghouse DT3 ----------------------------------------------------------------------------------------------------- Transmitter 1 5' Equipment Rack ----------------------------------------------------------------------------------------------------- Transmitter 1 6' Equipment Rack ----------------------------------------------------------------------------------------------------- Transmitter 1 A/C Breakpanels/disconnect (installed) ----------------------------------------------------------------------------------------------------- Transmitter 2 A/C units (3 tons) Lennox CD19-31-3P- ----------------------------------------------------------------------------------------------------- Transmitter 1 AC emergency power generator Kohler 40R03P ----------------------------------------------------------------------------------------------------- Transmitter 1 AM noise monitor RDL ACM2 ----------------------------------------------------------------------------------------------------- Transmitter 1 Bandpass Filter Shively Labs 2516-3A ----------------------------------------------------------------------------------------------------- Transmitter 1 Best Fortress UPS L117.7KVA ----------------------------------------------------------------------------------------------------- Transmitter 1 Cat Link Single composite QEI 400 ----------------------------------------------------------------------------------------------------- Transmitter 1 Dummy Load Altronic Rsrch 6715E3 ----------------------------------------------------------------------------------------------------- Transmitter 1 FM Antenna Shively Labs 6015-21-3R ----------------------------------------------------------------------------------------------------- Transmitter 1 FM Transmitter QEI FMQ-10,000 ----------------------------------------------------------------------------------------------------- Transmitter 1 FM Exciter QEI 675B ----------------------------------------------------------------------------------------------------- Transmitter 1 FM Mod Monitor TFT 844A ----------------------------------------------------------------------------------------------------- Transmitter 2 Interface panels Burk IP-8 ----------------------------------------------------------------------------------------------------- Transmitter 1 misc. 1 5/8" elbows and coax hardline Cable Wave ----------------------------------------------------------------------------------------------------- Transmitter 1 Modem (for Burke RC) Hayes Accura 144 ----------------------------------------------------------------------------------------------------- Transmitter 1 Nitrogen Regulator ----------------------------------------------------------------------------------------------------- Transmitter 1 Optimod FM Orban 8200/U35 ----------------------------------------------------------------------------------------------------- Transmitter 1 Remote Control - Xmtr unit only Burk ARC-16 ----------------------------------------------------------------------------------------------------- Transmitter 1 sample ports ----------------------------------------------------------------------------------------------------- Transmitter 2 T1-ISO Digital Link DL551A ----------------------------------------------------------------------------------------------------- Transmitter 1 Transformer Panel Zenith 43R-1000C |
1. Agreement dated March 26, 1996 by and between Combined Communications, Inc., Common Ground Broadcasting, Inc. and Salem Communications Corporation.
2. Agreement dated July 1, 1995 by and between First Media Television, L.P., a Delaware limited partnership, and Salem Communications Corporation, a California corporation. (Assignment of this agreement requires the consent of the landlord.)
See Attached.
[LETTERHEAD OF FEDERAL COMMUNICATIONS COMMISSION]
FM BROADCAST STATION LICENSE
Official Mailing Address: AUTHORIZING OFFICIAL:
------------------------------- --------------------
COMMON GROUND BROADCASTING INC Robert D. Greenberg
57400 SOUTH MORSE ROAD Supervisory Engineer
WARREN, OR 97053 Audio Services Division
------------------------------- Mass Media Bureau
GRANT DATE: NOV 28, 1995
Call Sign: KDBX This license expires 3:00 a.m.
local time, February 01, 1998
License File No.: BLH-950801KC
This license covers Permit No.: BPH-940930IE
|
Subject to the provisions of the Communications Act of 1934, subsequent acts and treaties, and all regulations heretofore or hereafter made by this Commission, and further subject to the conditions set forth in this license, the licensee is hereby authorized to use and operate the radio transmitting apparatus herein described.
This license is issued on the licensee's representation that the statements contained in licensee's application are true and that the undertakings therein contained so far as they are consistent herewith, will be carried out in good faith. The licensee shall, during the term of this license, render such broadcasting service as will serve the public interest, convenience, or necessity to the full extent of the privileges herein conferred.
This license shall not vest in the licensee any right to operate the station nor
any right in the use of the frequency designated in the license beyond the term
hereof, nor in any other manner than authorized herein. Neither the license nor
the right granted hereunder shall be assigned or otherwise transferred in
violation of the Communications Act of 1934. This license is subject to the
right of use or control by the Government of the United States conferred by
Section 606 of the Communications Act of 1934.
Name of Licensee:
COMMON GROUND BROADCASTING, INC.
Callsign: KDBX License No.: BLH - 950801KC
Station Location:
OR BANKS
Frequency (MHZ): 107.5
Channel: 298
|
Class: C2
Hours of Operation: Unlimited
Main Studio Address:
OR-448 SOUTH 1ST STREET, HILLSBORO
Transmitter location (address or description): OR-262 NORTHWEST MILLER ROAD,
PORTLAND
Remote Control Point Address:
OR - 448 SOUTH 1ST STREET, HILLSBORO
OR - 5110 SOUTHEAST STARK STREET, PORTLAND
Transmitter: Type Accepted. See Sections 73.1660, 73.1665 and 73.1670 of the Commission's Rules.
Transmitter output power: 9.2 kW
Antenna type: (directional or non-directional): Non-Directional
Description: SHIVELY 6015-2-3R, TWO SECTIONS
Antenna Coordinates: North Latitude: 45 31 22 West Longitude: 122 45 7
Horizontally Vertically
Polarized Polarized
Antenna Antenna
Effective radiated power in the
Horizontal Plane (kW) .......... : 6.3 6.3
Height of radiation center above
ground (Meters) ................ : 198 198
Height of radiation center above
mean sea level (Meters)......... : 493 493
Height of radiation center above
average terrain (Meters)........ : 406 406
|
Overall height of antenna structure above ground (including obstruction lighting if any): 330 Meters
Obstruction marking and lighting specifications for antenna structure:
It is to be expressly understood that the issuance of these specifications
Callsign: KDBX License No.:BLH - 950801KC
is in no way to be considered as precluding additional or modified marking or lighting as may hereafter be required under the provisions of Section 303(q) of the Communications Act of 1934, as amended.
PARAGRAPH 01.0, FCC FORM 715 (OCTOBER 1985): Antenna structures shall be painted throughout their height with alternate bands of aviation surface orange and white, terminating with aviation surface orange bands-at both top and bottom. The width of the bands shall be equal and approximately one-seventh the height of the structure, provided however, that the bands shall not be more than 100 feet nor less than 1 and 1/2 feet in width. All towers shall be cleaned and repainted as often as necessary to maintain good visibility.
PARAGRAPH 03.0, FCC FORM 715 (APRIL 1985): There shall be installed at the top of the structure one 300 m/m electric code beacon equipped with two 620- or 700-watt lamps (PS-40, Code Beacon type), both lamps to burn simultaneously, and equipped with aviation red color filters. Where a rod or other construction of not more than 20 feet in height and incapable of supporting this beacon is mounted on top of the structure and it is determined that this additional construction does not permit unobstructed visibility of the code beacon from aircraft at any normal angle of approach, there shall be installed two such beacons positioned so as to insure unobstructed visibility of at least one of the beacons from aircraft at any normal angle of approach. The beacons shall be equipped with a flashing mechanism producing not more than 40 flashes per minute nor less than 12 flashes per minute with a period of darkness equal to approximately one-half of the luminous period.
PARAGRAPH 08.0, FCC FORM 715 (APRIL 1985): On levels at approximately three-fourths, one-half and one-fourth of the over-all height of the tower one similar flashing 300 m/m electric code beacon shall be installed in such position within the tower proper that the structural members will not impair the visibility of the beacon from aircraft at any normal angle of approach. In the event these beacons cannot be installed in a manner to insure unobstructed visibility of the beacon from aircraft at any normal angle of approach, there shall be installed two such beacons at each level. Each beacon shall be mounted on the outside of diagonally opposite corners or opposite sides of the tower at the prescribed height.
PARAGRAPH 17.0, FCC FORM 715 (APRIL 1985): On levels at approximately seven-eighths, five-eighths, three-eighths and one-eight of the over-all height of the tower, at least one 116- or 125-watt lamp (A21/TS) enclosed in an aviation red obstruction light globe shall be installed on each outside corner of the structure.
PARAGRAPH 21.0, FCC FORM 715 (APRIL 1985): All lighting shall burn continuously or shall be controlled by a light sensitive device adjusted so that the lights will be turned on at a north sky light intensity level of about 35 foot candles and turned off at a north sky light intensity level of about 58 foot candles.
Callsign: KDBX License No.: BLH - 950801KC
Special operating conditions or restrictions:
1. The permittee/licensee in coordination with other users of the site must reduce power or cease operation as necessary to protect persons having access to the site, tower or antenna from radio- frequency radiation in excess of FCC guidelines.
*** END OF AUTHORIZATION ***
Exhibit 3.9
Insurance Policies
================================================================================
Producer THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS
Sullivan & Curtis UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
3310 Two Union Square DOES NOT AMMEND, EXTEND OR ALTER THE COVERAGE
Seattle, WA 98101 AFFORDED BY THE POLICIES BELOW.
(206) 521-3800 ==============================================
---------------------------------- COMPANIES AFFORDING COVERAGES
Insured Company
Letter A National Surety Corporation
Common Ground Broadcasting, Inc. ---------------------------------------------
(KDBX-FM) Company
448 S. First Ave., #100 Letter B TIG Insurance Company
Hillsboro OR 97123 ---------------------------------------------
Company
Letter C CIGNA Insurance Company
---------------------------------------------
Company
Letter D National Casualty Company
---------------------------------------------
Company
Letter E Cert. #07 (KDBX-FM)
===============================================================================
|
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFF DATE POLICY EXP DATE LIMITS
LTR mm/dd/yy mm/dd/yy
-------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY General Aggregate $ 2,000,000
A [X] Commercial General liab. MXX80637062 12/31/95 12/31/96 Prod-Comp/Ops Agg $ 2,000,000
[_] claim made [X] Occur Pers & Adv Injury $ 1,000,000
[_] Owner's & Contractors Each Occurrence $ 1,000,000
Protective Fire Damage $ 50,000
[_] (Any one fire)
[_] Medical Payments $ 5,000
(Any one person)
-------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY Combined $ 1,000,000
A [X] Any Auto MXX80637062 12/31/95 12/31/96 Single Limit
[_] All Owned Autos -------------------------------
[_] Scheduled Autos Bodily Injury $
[X] Hired Autos (Per Person)
[X] Non-Owned Autos -------------------------------
[_] Garage Liability Bodily Injury $
[_] (Per Accident)
--------------------------------
Property Damage $
=========================================================================================================================
EXCESS LIABILITY Ea Occurrence $10,000,000
B [X] Umbrella Form XKB2784050 12/31/95 12/31/96 Aggregate $10,000,000
[_] Other Than Umbrella Form
------------------------------------------------------------------------------------------------------------------------
WORKER'S COMPENSATION [X] Statutory
C AND C29205917 12/01/95 12/01/96 Each Accident $ 1,000,000
EMPLOYER'S LIABILITY Disease-Pol Limit $ 1,000,000
Disease-Each Empl $ 1,000,000
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A OTHER PROPERTY- MXX80637062 12/31/95 12/31/96 Blkt. Pars. Prop. and Equip.
Special Form incl Towers & Antennas/EDP/BI.
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Description of Operations/Locations/Vehicles/Special Items
Broadcaster and Film & Program Producer Errors and Omissions Coverage, Policy no, LS004536, Company Letter D,
12/31/95-12/31/96, $1,000,000 Limit each occurrence.
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001 Should any of the above described policies be cancelled before the
expiration date thereof, the issuing company will endeavor to mail
For Informational Purposes Only 10 days written notice to the certificate holder named to the left,
but failure to mail such notice shall impose no obligation or
liability of any kind upon the company, it's agent's or
representatives.
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Authorized Representative
/s/ Steven s. Stafford
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Opinion of Seller's Counsel
__________ 1995
American Radio Systems, Inc.
116 Huntington Avenue
Boston, MA 02116
The Bank of New York, as Agent
One Wall Street
New York, NY 10286
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase Agreement (the "Agreement") dated as of _______________ by and between American Radio Systems, Inc., a Massachusetts corporation ("Buyer") and ____________, a _____________ corporation ("Seller"). Capitalized terms used herein, unless otherwise defined herein, shall have the meanings ascribed to them in the Agreement.
I have reviewed the Agreement and other pertinent information and records and files necessary to render this opinion. In arriving at the opinions expressed herein, I have examined and relied upon original or copies, identified to my satisfaction, of all corporate records and other instruments, documents, certificates of public officials, officers and representations of the Seller, and other persons or entities and have made such investigations as I have considered necessary or appropriate. In making such examinations, I have assumed but not independently verified the genuineness and authenticity of all documents, and the conformity to original documents of all certified or photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have not been independently established, I have relied upon certificates of the officers, directors and representatives of the Seller and certificates of public officials, and I have assumed the accuracy and correctness of all statements of fact contained therein, including the accuracy and correctness of the factual representations and warranties of the Seller set forth in the Agreement and the documents and instruments delivered to you in connection therewith.
1. Seller is a corporation, duly organized, validly existing and in good standing under the laws of the State of ___________, and is duly qualified to conduct business in the State of ____________.
2. Seller has full corporate power and authority to enter into the Agreement and all documents required to be executed or delivered by Seller pursuant to the
Agreement (the "Related Documents"), and to consummate the transactions contemplated thereby. The Agreement and the Related Documents have been duly authorized, executed and delivered by Seller and constitute the legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms, except as such enforceability may be limited by (a) applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the rights of creditors generally, or (b) general principles of equity, whether considered in a proceeding in equity or at law.
3. The execution and delivery of the Agreement and the Related Documents, and the consummation of the transactions contemplated thereby, will not (a) result in a breach of or constitute a default under, the Articles of Incorporation or Bylaws of Seller, (b) result in a breach of or constitute a default under any agreement, trust or instrument to which Seller is a party or by which Seller or its respective properties or assets are bound, or (c) constitute a breach, violation or default under any judgment, order, writ, injunction or decree of any court or governmental agency or other authority applicable to Seller.
4. Except as disclosed in the Agreement, there are no governmental consents, permits, approvals or authorizations required to be obtained by Seller in order to consummate the transactions contemplated by the Agreement.
5. To the best of our knowledge and except as set forth in the schedules to the Agreement, there is no litigation, proceeding or investigation of any nature pending or threatened, or any judgment, award, order or decree outstanding, against the Seller or the Assets, which if adversely determined might have a material adverse effect on the Station or the Assets (taken as a whole) or prevent the consummation of the transactions contemplated by the Agreement.
The opinions expressed herein are rendered only to you and are solely for your benefit and that of other lenders who are participants in the Amended and Restated Credit Agreement dated September 12, 1994, as amended, by and among Seller, the Bank of New York as Agent, and the lenders named therein, their assigns, and by any future participants thereof and their assigns and may not be relied upon by you or by such other lenders for any purpose other than in connection with the transactions contemplated by the Agreement; or relied upon by any other person for any purpose; or, except as required by applicable law or requested by any governmental authority, furnished to or quoted to any person without our prior written consent.
Very truly yours,
American Radio Systems Corporation
116 Huntington Avenue
Boston, MA 02116
The Bank of New York, as Agent
One Wall Street
New York, NY 10286
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase Agreement (the "Agreement") dated as of, _____________, by and between American Radio Systems Corporation, a Delaware corporation ("Buyer") and _________________ ("Seller"). Capitalized terms used herein, unless otherwise defined herein, shall have the meanings ascribed to them in the Agreement.
We have reviewed the Agreement and other pertinent information and records and files necessary to render this opinion. In arriving at the opinions expressed herein, I have examined and relied upon original or copies, identified to my satisfaction, of all records, instruments, documents, and certificates of the Seller and of public officials, officers and representatives of the Seller, as I have considered necessary or appropriate, and I have made such other investigations as I have considered necessary or appropriate. In making such examinations, I have assumed but not independently verified the genuineness and authenticity of all documents, and the conformity to original documents of all certified or photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have not been independently established, we have relied upon certificates of the officers and representatives of the Seller and certificates of public officials, and we have assumed the accuracy and correctness of all statements of fact contained therein, including the accuracy and correctness of the factual representations and warranties of the Seller set forth in the Agreement and the documents and instruments delivered to you in connection therewith. This opinion is limited to the Communications Act of 1934, as amended (the "Act") and the Rules and Regulations of the FCC.
1. Seller validly holds the Licenses listed on Schedule 3.4 of the Agreement and the Licenses are in full force and effect. The Licenses include all licenses, permits and authorizations which are necessary under FCC rules for Seller to operate the Station in the manner in which we understand the station is currently being operated.
________________1996
Regent Broadcasting of Dayton, Inc.
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase Agreement (the "Agreement") dated as of ________________ by and between American Radio Systems Corporation, a Delaware corporation ("Buyer") and _________ , a ________________ corporation ("Seller"). Capitalized terms used herein, unless otherwise defined herein, shall have the meanings ascribed to them in the Agreement.
We have reviewed the Agreement and other pertinent information and records and files necessary to render this opinion. In arriving at the opinions expressed herein, we have examined and relied upon original or copies, identified to my satisfaction, of all corporate records and other instruments, documents, certificates of public officials, officers and representations of the Buyer, and other persons or entities and have made such investigations as we have considered necessary or appropriate. In making such examinations, we have assumed but not independently verified the genuineness and authenticity of all documents, and the conformity to original documents of all certified or photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have not been independently established, we have relied upon certificates of the officers, directors and representatives of the Buyer and certificates of public officials, and we have assumed the accuracy and correctness of all statements of fact contained therein, including the accuracy and correctness of the factual representations and warranties of the Buyer set forth in the Agreement and the documents and instruments delivered to you in connection therewith.
1. Buyer is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and is qualified to conduct business in the State of
2. Buyer has full corporate power and authority to enter into the Agreement
and all documents required to be executed or delivered by Seller pursuant to the
EXHIBIT 10.06.03.02
FIRST AMENDMENT TO THE ASSET PURCHASE AGREEMENT
This amendment ("Amendment") is dated this 22nd day of July 1996, by and between AMERICAN RADIO SYSTEMS CORPORATION, a Delaware corporation ("Buyer") and COMMON GROUND BROADCASTING, INC., an Oregon Corporation ("Seller").
WHEREAS, on March 28, 1996, Buyer and Seller entered into a Asset Purchase Agreement ("Agreement") relating to the sale of certain assets relating to radio station KDBX-FM, Banks, Oregon; and
WHEREAS, the Schedules of the Agreement contained clerical errors; and
WHEREAS, in connection with the sale contemplated by the Agreement, Seller elects to participate in a tax deferred exchange ("Exchange") pursuant to Internal Revenue Code (S)1031; and
WHEREAS, pursuant to the Internal Revenue Service regulations regarding the Exchange, the Agreement shall be assigned to a qualified intermediary as defined in IRC (S)1031; and
WHEREAS Buyer and Seller agree that certain portions of the Agreement shall not be assigned to the qualified intermediary;
NOWTHEREFORE the parties agree as follows:
1. Unless defined herein all capitalized terms used in this Amendment shall have the meaning given such term in the Agreement.
2. The Agreement shall be amended as follows:
3. The effectiveness of this Amendment shall be expressly subject to and conditioned upon the execution by Buyer and delivery by Buyer to Seller of the Back Bay Agreement as set forth on Exhibit "C" hereto.
4. Except as expressly stated herein all terms and conditions of the Agreement shall remain in full force and affect.
5. This Amendment may be executed in any number of counterparts and all such counterparts shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this amendment as of the date first stated above.
"SELLER"
COMMON GROUND BROADCASTING, INC.
By: /s/ Edward G. Atsinger
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Edward G. Atsinger III
President, CEO
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"BUYER"
AMERICAN RADIO SYSTEMS CORPORATION
See attached.
None.
BACK BAY AGREEMENT
This Agreement ("Agreement") is entered into on this __ of July, 1996 by and between American Radio Systems Corporation, a Delaware corporation ("American") and Common Ground Broadcasting, Inc., an Oregon corporation ("CGB").
WHEREAS American has heretofore delivered to CGB a true, correct and complete copy of the agreement ("Back Bay Agreement") dated March 15, 1994, by and between American and Back Bay Broadcasters, Inc., a Delaware corporation ("Back Bay") as in effect on the date hereof.
WHEREAS, pursuant to the Back Bay Agreement, American has the freely assignable right (a) at any time after August 31, 1998 to purchase (the "Purchase Right") all of the business and assets of Back Bay, including without limitation the WBNW Business (as defined in the Back Bay Agreement), and (b) of first refusal (the "Right of First Refusal") in the event Back Bay desires to sell, transfer or otherwise dispose of all or any material portion of the business and assets of Back Bay, including without limitation the WBNW Business.
NOW THEREFORE, the parties, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:
1. CGB shall have the right (the "WBNW Purchase Right"), but not the obligation, to purchase the WBNW Business for $6,000,000 by written notice (the "Election Notice") given to and received by American at any time prior to January 1, 1998. Anything herein to the contrary notwithstanding, if American has not received the Election Notice prior to January 1, 1998, all rights of CGB to purchase the WBNW Business shall cease and terminate and by of no further force and effect.
2. The Election Notice shall constitute a representation that CGB is ready, willing and able, and has the financial resources, to purchase the WBNW Business for $6,000,000 and that it will negotiate in good faith with respect to and execute and deliver a purchase and sale agreement on terms and conditions customary with respect to similar transactions with American (or, at American's discretion, with Back Bay) to purchase the WBNW Business. American agrees that it will cooperate in all reasonable respects with CGB in order to enable it to exercise the WBNW Purchase Right, including without limitation (a) advising CGB promptly of American's receipt of any Asset Transfer Notice pursuant to the provisions of Section 4.13 of the Back Bay Agreement, and (b) exercising any and all of its rights under the Back Bay Agreement, including without limitation the exercise by American of the Right of First Refusal and the Purchase Right.
3. CGB acknowledges and agrees that (a) American's rights with respect to the Purchase Rights and the Right of First Refusal apply or may apply, as the case may be, to all of the business and assets of Back Bay and, therefore, American may be required to acquire
businesses and assets other than the WBNW Business in order to enable CGB to exercise its WBNW Purchase Rights, and (b) the purchase price to be paid by American pursuant to the exercise of (i) the Purchase Rights will be based on a formula set forth in the Back Bay Agreement and (ii) the Right of First Refusal will be based on a third party offer. Accordingly, American and CGB acknowledge and agree that the amount required to be paid by American for the WBNW Business may be more or less than $6,000,000 and that American will, therefore, be required to pay any excess of the purchase price over $6,000,000, and will be entitled to any excess of $6,000,000 over such purchase price.
4. American agrees that, in the event CGB purchases the WBNW Business pursuant to the exercise of the WBNW Purchase Right, from and after the consummation of such transaction, American will assume, at no expense to CGB, fifty percent (50%) of the base rental fees payable under the WBNW tower site lease between Back Bay and Fellsway Plaza Trust, dated December 14, 1987, as amended to the date hereof (the "WBNW Tower Lease"), or any extension or renewal therefore. CGB agrees that American shall have the right to manage, sublease and develop the tower site covered by the WBNW Tower Lease so long as such activities do not disrupt or interfere with, in either case in any material manner, with the operations of the WBNW Business.
5. American acknowledges its right of specific performance with respect to the purchase of the WBNW Business pursuant to Section 11.13 of the Back Bay Agreement and agrees to use its best efforts to enforce, and to assist CGB in enforcing, such rights to purchase the WBNW Business. American further agrees not to take any action, and to use its best efforts not to allow any action to take place, which would impair or abrogate its right to purchase the WBNW Business pursuant to the Back Bay Agreement.
6. The parties recognize that the WBNW Business is of a special, unique and extraordinary character. Accordingly, if CGB is unable to acquire the WBNW Business by reason of American failing to have complied with its covenants under this Agreement, CGB shall be entitled to bring an action against American for damages or, in lieu of, and in substitution for any damages, to obtain specific performance of the terms of this Agreement. In the event of any action to enforce the provisions of this Agreement, CGB hereby waives the defense that there is an adequate remedy at law.
IN WITNESS WHEREOF, the parties hereto have executed this amendment as of the date first stated above.
"SELLER" "BUYER" COMMON GROUND BROADCASTING, INC. AMERICAN RADIO SYSTEMS CORPORATION By: By: ----------------------------- ------------------------------- Edward G. Atsinger III Steven Dodge President, CEO President, CEO |
Exhibit 10.06.04.01
This AGREEMENT (the "Agreement") is dated as of April 23, 1996 by and between OMNIAMERICA GROUP ("Omni Group") and WHK LICENSE PARTNERSHIP ("WHK LP") (Omni Group and WHK LP shall collectively be referred to herein as "Seller") and INSPIRATION MEDIA OF OHIO, INC. ("Buyer").
1. Seller owns and operates radio station WHK(AM) licensed to Cleveland, Ohio (the "Station"), and holds the licenses and authorizations issued by the FCC for the operation of the Station.
2. Buyer desires to acquire substantially all the assets of the Station, and Seller is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to prior approval of the FCC.
NOW THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer hereby agree as follows:
Buyer. The Buyer's Threshold Limitation shall be (a) Twenty Five Thousand Dollars ($25,000) for all claims, liabilities, damages, losses, costs and expenses; and (b) Ten Thousand Dollars ($10,000) for any individual claim, liability, damage, loss, cost or expense.
and regulations thereunder, regulating or otherwise affecting health and safety of the workplace.
(b) Any and all claims of Seller with respect to transactions prior to the Closing including, without limitation, claims for tax refunds and refunds of fees paid to the FCC.
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all employment contracts.
(f) All contracts that are terminated in accordance with the terms and provisions of this Agreement or have expired prior to the Closing Date in the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed between the date hereof and the Closing Date in accordance with the terms and provisions of this Agreement.
(h) Seller's corporate records except to the extent such records pertain to or are used in the operation of the Station, in which case Seller shall deliver accurate copies thereof to Buyer.
(j) Any assets used in the operation of WMMS-FM (Cleveland, Ohio) and WMJI-FM (Cleveland, Ohio) and any assets used in the operation of the corporate offices of Seller.
(a) At the Closing, Buyer shall assume and agree to perform the following liabilities and obligations of Seller (the "Assumed Obligations"):
(ii) Liabilities and obligations arising under the Station Agreements, if any, assumed by and transferred to Buyer in accordance with this Agreement, but only to the extent such liabilities and obligations relate to any period of time after the Closing Date.
(iii) Liabilities and obligations as the landlord under the tower space lease for the WMMS-FM antenna substantially in the form of Exhibit "B".
(b) Except for the Assumed Obligations, Buyer shall not assume or in any manner be liable for any duties, responsibilities, obligations or liabilities of Seller of any kind or nature, whether express or implied, known or unknown, contingent or absolute, including, without limitation, any liabilities to or in connection with Seller's employees whether arising in connection with the transaction contemplated hereunder or otherwise.
(a) Concurrently with the execution of this Agreement, Buyer has deposited with Escrow Agent under the Escrow Agreement, in immediately available funds, the Earnest Money. The Escrow Agent shall hold the Earnest Money under the terms of the Escrow Agreement in trust for the benefit of the parties hereto. Interest and other earnings on the Earnest Money shall be distributed by the Escrow Agent to Buyer from time to time upon the request of Buyer.
(a) The Purchase Price shall be paid by Buyer as follows:
become the property of Seller and shall, pursuant to the Escrow Agreement, be disbursed to Seller by cashier's check or wire transfer of immediately available funds.
(ii) The Purchase Price, less the amount of the Earnest Money disbursed to Seller, shall be paid to Seller, at the option of Seller, either:
(A) At Closing by wire transfer of immediately available funds; or
(B) At Closing by delivery of Buyer's promissory note payable to Seller with a payment date of January 15, 1997, and a letter of credit securing payment of the promissory note, in each case in form and substance reasonably satisfactory to the parties, in which case Seller shall reimburse Buyer for all costs associated with procuring the letter of credit.
in the form required by Treasury Regulation (S) 1.1060-1T.
2.7 ADJUSTMENT OF PURCHASE PRICE.
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(a) All operating income and operating expenses of the Station shall be adjusted and allocated between Seller and Buyer, and an adjustment in the Purchase Price shall be made as provided in this Section, to the extent necessary to reflect the principle that all such income and expenses attributable to the operation of the Station on or before the Closing Date shall be for the account of Seller, and all income and expenses attributable to the operation of the Station after the closing Date shall be for the account of Buyer.
(c) For purposes of making the adjustments pursuant to this Section, Buyer shall prepare and deliver the Adjustment List to Seller within thirty (30) days following the Closing Date, or such earlier or later date as shall be mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the Adjustment Amount. If the Adjustment Amount is a credit to the account of Buyer, unless disputed, Seller shall pay such amount to Buyer, and if the Adjustment Amount is a charge to the account of Buyer, Buyer shall pay such amount to Seller. In the event Seller disagrees with the Adjustment Amount determined by Buyer or with any other matter arising out of this subsection, and
Buyer and Seller cannot within sixty (60) days resolve the disagreement themselves, the parties will refer the disagreement to a firm of independent certified public accountants, mutually acceptable to Seller and Buyer, whose decision shall be final and whose fees and expenses shall be allocated between and paid by Seller and Buyer, respectively, to the extent that such party does not prevail on the disputed matters decided by the accountants.
ARTICLE III
Seller hereby represents and warrants to Buyer as follows:
(a) do not in any material respect (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any Lien other than a Permitted Lien on any of the Sale Assets under), any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Seller;
(b) do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration, where such conflict, breach, termination, default or right would have a material adverse effect on the Sale Assets or the operation of the Station, under charter documents of Seller or pursuant to any lease, agreement, commitment or other instrument which Seller is a party to, or bound by, or by which any of the Sale Assets may be bound, or result in the creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
(a) Seller has good, marketable and valid title to all of the items of Tangible Personal Property free and clear of all Liens except Permitted Liens, and including the right to transfer same.
(b) The Tangible Personal Property is in working order.
(d) To Seller's actual knowledge no portion of the Real Property or improvements thereon is the subject of any condemnation or eminent domain proceeding presently instituted or, to Seller's actual knowledge, pending, and Seller has not received notice from any condemning authority that such proceedings are threatened.
(b) Except as set forth in the Schedules, and with respect to all material Station Agreements being assumed by Buyer, (i) all Station Agreements are legal, valid and enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity regardless of whether enforcement is sought in any proceeding at law or in equity; (ii) neither Seller nor, to the knowledge of Seller, any other party thereto, is in material breach of or in material default under any material Station Agreements; (iii) to the knowledge of Seller, there has not occurred any event which, after the giving of notice or the lapse of time or both, would constitute a material default under, or result in the material breach of, any Station Agreements which are, individually or in the aggregate, material to the operation of the Station; and (iv) Seller holds the right to enforce and receive the benefits under all of the material Station Agreements, free and clear of all Liens (other than Permitted Liens) but subject to the terms and provision of each such agreement.
Seller which would, individually or in the aggregate if adversely determined, have an adverse effect on the Sale Assets or the operation of the Station, or which would give any third party the right to enjoin the transactions contemplated by this Agreement. To the actual knowledge of Seller, there is no basis for any such claim, investigation, action, suit or proceeding which would, individually or in the aggregate if adversely determined, have an adverse effect on the Sale Assets or operation of the Station. There are no existing or, to the actual knowledge of Seller, pending orders, judgments or decrees of any court or governmental agency affecting Seller, the Station or any of the Sale Assets. Notwithstanding the disclosure of Litigation of Seller to Buyer pursuant to this Section, Buyer shall not assume any liability, damages, cost or expense of Seller relating to or arising out of any Litigation.
(a) Seller is not a party to any collective bargaining agreement, and there is no collective bargaining agreement that determines the terms and conditions of employment of any employees of Seller.
(i) There is no labor strike, dispute, slow-down or stoppage pending or, to the knowledge of Seller, threatened against the Station;
(ii) There are neither pending nor, to the actual knowledge of Seller threatened, any suits, actions, administrative proceedings, union organizing activities, arbitrations, grievances or other proceedings between Seller and any employees of the Station or any union representing such employees; and there are no existing labor or employment or other controversies or grievances involving employees of the Station which have had or are reasonably likely to have a material adverse effect on the operation of the Station;
(iii) With respect to the Station, (A) Seller is in compliance in all material respects with all laws, rules and regulations relating to the employment of labor and all employment contractual obligations, including those relating to wages, hours, collective bargaining, affirmative action, discrimination, sexual harassment, wrongful discharge and the withholding and payment of taxes and contributions; (B) Seller has withheld all amounts required by law or agreement to be withheld from the wages or salaries of its employees; and (C) Seller is not liable to any present or former employees or any governmental authority for damages, arrears of wages or any tax or penalty for failure to comply with the foregoing;
(iv) Buyer's consummation of the transactions contemplated by this Agreement in accordance with the terms hereof shall not, as a result of or in connection with the transactions contemplated hereby, impose upon Buyer the obligation to pay any severance or termination pay under any agreement, plan or arrangement binding upon Seller.
(a) Seller has obtained all environmental, health and safety permits, the failure of which to obtain would have a material adverse effect on either the operation of the Station or the ownership of the Real Property and all such permits are in full force and effect and Seller is in material compliance with all terms and conditions of such permits.
(b) To Seller's actual knowledge on the date hereof, there is no proceeding pending or threatened which may result in the reversal, rescission, termination, modification or suspension of any environmental or health or safety permits necessary for the operation of the Station or the ownership of the Real Property.
(d) During Seller's occupancy of the Real Property, Seller has not, and to Seller's actual knowledge on the date hereof, no other person or entity has caused or permitted materials to be generated, released, stored, treated, recycled, disposed of on, under or at such parcels, which materials, if known to be present, would require clean up, removal or other remedial or responsive action under Environmental Laws (other than normal office, cleaning and maintenance supplies in reasonable quantities used and /or stored appropriately in the buildings or improvements on the Real Property). Seller has not caused the migration of any materials from the Real Property onto or under any property adjacent to the Real Property which materials, if known to be present, would require cleanup, removal or other remedial or responsive action under Environmental Laws. To Seller's actual knowledge on the date hereof, except as disclosed on the 1994 Assessment, there are no underground storage tanks and no polychlorinated biphenyls ("PCB") or friable asbestos on such property.
(e) To Seller's actual knowledge Seller is not subject to any judgment, decree, order or citation with respect to the Station or the Real Property related to or arising out of Environmental Laws, and Seller has not received notice that it has been named or listed as a potentially responsible party by any person or governmental body or agency in any matter arising under Environmental Laws.
(f) Seller has not discharged or disposed of any petroleum product or solid waste on the Real Property or on the property adjacent to the Real Property owned by third parties, which may form the basis for any present or future claim based upon the Environmental Laws or any demand or action seeking clean-up of any site, location, body of water, surface or subsurface, under any Environmental Laws or otherwise, or which may subject the owner of the Real Property to claims by third parties (except to the extent third party liability can be established) for damages.
(g) Except as otherwise disclosed on the 1994 Assessment no portion of the Real Property has ever been used by Seller, nor, to the actual knowledge of Seller as of the date hereof, any previous occupant of the Real Property, in material violation of Environmental Laws or as a landfill, dump site or any other use which involves the disposal or storage of Hazardous Materials on-site or in any manner which may adversely affect the value of the Real Property.
(h) No pesticides, herbicides, fertilizers or other materials have been used on, applied to or disposed of by Seller on the Real Property in material violation of any Environmental Laws (other than normal office, cleaning and maintenance supplies in reasonable quantities used and/or stored appropriately in the buildings or improvements on the Real Property.
(i) With respect to the Station or the Real Property, Seller has disposed of all waste in material compliance with all Environmental Laws and, to the actual knowledge of Seller on the date hereof, there is no existing condition that may form the basis of any present or future material claim, demand or action seeking clean up of any facility, site, location or body of water, surface or subsurface, for which the Buyer could be liable or responsible solely as a result of the disposal of waste at such site by a prior owner of the Real Property.
(j) Seller is in material compliance with all OSHA Laws.
knowledge of Seller, threatened, and Seller has made no assignment for the benefit of creditors, nor taken any action with a view to, or which would constitute the basis for the institution of, any such insolvency proceedings.
ARTICLE IV
Buyer represents and warrants to Seller as follows:
(a) Do not in any material respect (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any claim, lien, charge or encumbrance on any of the assets or properties of Buyer under) any provision of law, rule
or regulation or any order, judgment, injunction, decree or ruling applicable to Buyer in any manner which would have a material adverse effect on the assets, business, operation or financial condition or results of operations of Buyer;
(b) Do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under, the articles of incorporation or bylaws of Buyer or any lease, agreement, commitment, or other instrument which Buyer is a party to, bound by, or by which any of its assets or properties may be bound.
(a) Buyer has no knowledge after due inquiry of any facts concerning Buyer or any other person with an attributable interest in Buyer (as such term is defined under the Rules and Regulations) which, under present law (including the Act) and the Rules and Regulations, would (i) disqualify Buyer from being the holder of the FCC Licenses, the owner of the Sale Assets or the operator of the Station upon consummation of the transactions contemplated by this Agreement, or (ii) raise a substantial and material question of fact (within the meaning of Section 309(e) of the Act) respecting Buyer's qualifications.
ARTICLE V
Seller covenants and agrees with Buyer that between the date hereof and the Closing Date, unless the Buyer otherwise agrees in writing (which agreement shall not be unreasonably withheld), Seller shall:
(a) Use reasonable efforts to operate the Station in substantially the same manner in which it is currently being operated:
(b) Use reasonable commercial efforts to maintain insurance upon all of the tangible Sale Assets in such amounts and of such kind comparable to that in effect on the date hereof with respect to such Sale Assets and with respect to the operation of the Station, with insurers of substantially the same or better financial condition;
(c) Operate the Station and otherwise conduct its business in accordance with the terms or conditions of its FCC Licenses, the Rules and Regulations, the Act and use reasonable efforts to conduct its business in accordance with all other rules and regulations, statutes, ordinances and orders of all governmental authorities having jurisdiction over any aspect of the operation of the Station, except where the failure to so operate the Station would not have a material adverse effect on the Sale Assets or the operation of the Station or on the ability of Seller to consummate the transactions contemplated hereby;
(d) Maintain the books and records of the Station in Seller's customary manner on a basis consistent with prior years;
(e) Comply in all material respects with all Station Agreements now or hereafter existing which are material, individually or in the aggregate, to the operation of the Station;
(f) Promptly notify Buyer of any material default by, or claim of default against, any party under any Station Agreements which are material, individually or in the aggregate, to the operation of the Station, and any event or condition which, with notice or lapse of time or both, would constitute a material default under such Station Agreements;
(g) Not mortgage, pledge or subject to any Lien (except in the ordinary course of business) any of the Sale Assets;
(h) Not sell, lease or otherwise dispose of, nor agree to sell, lease or otherwise dispose of, any of the Sale Assets, except for dispositions in the ordinary course of business;
(i) Not acquire or lease any goods or services or enter into, amend or terminate any license, lease of real or personal property or any other Station Agreement, other than in the ordinary course of business;
(j) Not introduce any material change with respect to the operation of the Station including, without limitation, any material changes in the broadcast hours of the Station or any other material change in the Station's programming policies, except such changes as in the sole discretion of Seller, exercised in good faith after consultation with Buyer, are required by the public interest;
(k) Notify Buyer of any material litigation pending or threatened against Station or Seller or any material damage to or destruction of any assets included or to be included in the Sale Assets;
(a) All tax returns, estimates, and reports required to be filed by Seller prior to the Closing Date or relating to periods prior to the Closing Date will be timely
filed with the appropriate governmental agencies unless valid extensions therefor shall have been obtained.
(b) All taxes pertaining to ownership of the Sale Assets or operation of the Station prior to the Closing Date will be timely paid; provided that Seller shall not be required to pay any such tax so long as the validity thereof shall be contested in good faith by appropriate proceedings and Seller shall have set aside adequate reserves with respect to any such tax.
(i) using such information, data and materials in connection with any action or proceeding brought or any claim asserted by Buyer or Seller in respect of any breach by the other of any representation, warranty or covenant made in or pursuant to this Agreement; or
(ii) supplying or filing such information, data or materials to or with the FCC or any other valid governmental or court authority to the extent reasonably necessary to obtain any consent, waiver, amendment, modification, approval, authorization, permit or license which may be necessary to effectuate this Agreement, and to consummate the transaction contemplated herein.
In the event that either party determines in good faith that a press release or other public announcement is desirable under any circumstances, the parties shall consult with each other to determine the appropriate timing, form and content of such release or announcement and thereafter may make such release or announcement.
Buyer's obligation to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, unless waived by Buyer in writing:
(a) The representations and warranties of Seller contained in this Agreement or in any other Document shall be complete and correct in all material respects on the date hereof and at the Closing Date with same effect as though made at such time except for changes that are not materially adverse to the Station or the Sale Assets taken as a whole, and except as follows:
time or (B) the estimated cost of completion and/or certification exceeds the amount escrowed pursuant to this Section.
(a) The FCC Order shall have been issued by the FCC and shall have become a Final Action without any Material Adverse Condition.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Seller.
(c) All other material authorizations, consents, approvals and clearances of federal, state or local governmental agencies required to permit the consummation by Buyer of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have a material adverse effect on the operations of the Station.
(b) To counsel's knowledge, no condition has been imposed by the FCC as part of any FCC License which is not set forth on the face thereof as issued by the FCC or contained in the Rules and Regulations applicable generally to stations of the type, nature, class or location of the Station.
(c) No proceedings are pending or, to counsel's knowledge, are threatened which may result in the revocation, modification, non-renewal of, suspension of, or the imposition of a Material Adverse Condition upon, any of the FCC Licenses, the denial of any pending applications, the issuance of any cease and desist order or the imposition of any fines, forfeitures or other administrative actions by the FCC with respect to the
Station or its operation, other than proceedings affecting the radio broadcasting industry in general.
In rendering such opinion, counsel shall be entitled to rely upon Seller's representations and warranties in this Agreement and to limit its inquiry to its files and such FCC files and records as are available to it as of 10:00 o'clock A.M. Eastern time the business day immediately preceding the Closing Date. Counsel may state that, as to any factual matters embodied in, or forming a basis for any legal opinion expressed in, such opinion, counsel's knowledge is based solely on such inquiry.
(a) Between the date hereof and the Closing Date, the Station shall not have for a period of more than ten (10) days in the aggregate (i) ceased broadcasting on its authorized frequency, (ii) lost substantially all of its normal broadcasting capability or (iii) been broadcasting at a power level of 50% or less of its FCC authorized level. Seller shall promptly notify Buyer of the occurrence of any one or more of the foregoing events or conditions, and the non-fulfillment of the condition precedent set forth in this Subsection caused by the occurrence of the events specified in Seller's notice shall be deemed waived by Buyer unless, within fifteen (15) days after Buyer's receipt of Seller's written notice, Buyer notifies Seller in writing to the contrary.
(b) In addition, during the five (5) days immediately preceding the Closing Date, the Station shall have been operating continuously with substantially all of its normal broadcasting capability except for cessation or reductions for insignificant periods of time resulting from occurrences (such as lightning strikes) over which Seller has no control. Seller or Buyer shall have the right to delay Closing for a period not to exceed thirty (30) days if Seller or Buyer reasonably determines that any action to restore the Station substantially all of its normal broadcasting capability can be completed during such delay period.
ARTICLE VII
The obligation of Seller to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the closing Date, of each of the following conditions, unless waived by Seller in writing:
(a) The representations and warranties of Buyer contained in this Agreement shall be complete and correct in all material respects on the date hereof and at the Closing Date with the same effect as though made at such time except for changes that are not materially adverse to Seller.
(a) The FCC Order shall have been issued by the FCC and shall have become effective under the rules of the FCC.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other material authorizations, consents, approvals and clearances of all Federal, state and local governmental agencies required to permit the consummation by Seller of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have any material adverse effect on Seller.
notice. No governmental authority having jurisdiction shall have commenced any such proceeding.
ARTICLE VIII
(a) Certified resolutions of the Board of Directors of the Managing General Partner of WHK LP and the Omni Group approving the execution and delivery of this Agreement and each of the other documents and authorizing the consummation of the transactions contemplated hereby and thereby.
(c) A bill of sale and other instruments of transfer and conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and otherwise in form and substance reasonably satisfactory to Buyer, of any security interests granted in the Sale Assets as security for payment of loans and other obligations and of any other Liens (other than Permitted Liens).
(e) Limited warranty deeds and any other required instruments of transfer and conveyance transferring to Buyer the Real Property.
(g) An instrument or instruments assigning to Buyer all right, title and interest of Seller in and to all Station Agreements being assumed by Buyer.
(h) An instrument assigning to Buyer all right, title and interest of Seller in the FCC Licenses, all pending applications relating to the station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(j) Such additional information and materials as Buyer shall have reasonably requested, including without limitation, evidence that all material consents and approvals required as a condition to Buyer's obligation to close hereunder have been obtained.
(a) Certified resolutions of the Board of Directors of Buyer and Salem Communications Corporation approving the execution and delivery of this Agreement and each of the other Documents and authorizing the consummation of the transaction contemplated hereby and thereby.
(c) The agreement of Buyer assuming the obligations under any Station Agreements being assumed by Buyer.
(e) Such additional information and materials as Seller shall have reasonably requested.
(i) Any breach or non-performance by Seller of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Documents; or
(ii) The ownership or operation by Seller of the Station or the Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of the Bulk Sales Act, if applicable, in connection with the transaction contemplated hereby.
(i) Any breach or non-performance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Document; or
(ii) The ownership or operation of the Station after the Closing Date; or
(iii) The Assumed Obligations and all other liabilities or obligations of Buyer.
{THIS SPACE INTENTIONALLY LEFT BLANK.}
ARTICLE X
(a) the giving of written notice from Seller to Buyer, or from Buyer to Seller, if:
(i) Seller gives such termination notice and is not at such time in material default hereunder, or Buyer gives such termination notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained herein of Buyer (if such termination notice is given by Seller), or of Seller (if such termination notice is given by Buyer), are inaccurate in any respect and materially adverse to the party giving such termination notice unless the inaccuracy has been induced by or is the result of actions or omissions of the party giving such termination notice or unless the accuracy of such representation or warranty is not a condition to closing; or
(B) Any material obligation to be performed by Buyer (if such termination notice is given by Seller) or by Seller (if such termination notice is given by Buyer) is not timely performed in any material respect unless the lack of timely performance has been induced by or is the result of actions or omissions of the party giving such termination notice; or
(iii) any such inaccuracy, failure to perform or non-
satisfaction of a condition neither has been cured nor satisfied within twenty
(20) days after written notice thereof from the party giving such termination
notice nor waived in writing by the party giving such termination notice.
(b) Written notice from Seller to Buyer, or from Buyer to Seller, at any time after March 31, 1997 provided that termination shall not occur upon the giving of
such termination notice by Seller if Seller is at such time in material default hereunder or upon the giving of such termination notice by Buyer if Buyer is at such time in material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to Seller, at any time following a determination by the FCC that the application for consent to assignment of the FCC Licenses has been designated for hearing if Seller or Buyer reasonably determine that approval to the assignment can not be obtained prior to March 31, 1997, even with diligent efforts; provided, however, only the party whose qualifications are not in issue may terminate this Agreement under this provision and only if such party has given the other sixty (60) days' prior written notice and the requirement for such hearing has not been set aside within that period.
(e) In any dispute between Buyer and Seller as to which party is entitled to all or a portion of the Earnest Money, the prevailing party shall receive, in addition to that portion of the Earnest Money to which it is entitled, an amount equal to interest on that portion at the rate of 10% per annum, calculated from the date the prevailing party's demand for all or a portion of the Earnest Money is received by the Escrow Agent.
Upon the occurrence of any casualty loss, damage or destruction material to the operation of the Station prior to the Closing, Seller shall promptly give Buyer written
notice setting forth in detail the extent of such loss, damage or destruction and the cause thereof if known. Seller shall use its reasonable efforts to promptly commence and thereafter to diligently proceed to repair or replace any such lost, damaged or destroyed property. In the event that such repair or replacement is not fully completed prior to the Closing Date, Buyer may elect to postpone the Closing until Seller's repairs have been fully completed or to consummate the transactions contemplated hereby on the Closing Date, in which event Seller shall assign to Buyer the portion of the insurance proceeds (less all reasonable costs and expenses, including without limitation attorney's fees, expenses and court costs incurred by Seller to collect such amounts), if any, not previously expended by Seller to repair or replace the damaged or destroyed property (such assignment of proceeds to take place regardless of whether the parties close on the scheduled or deferred Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged condition. In the event the loss, damage or destruction causes or will cause the Station to be off the air for more than seven (7) consecutive days or fifteen (15) total days, whether or not consecutive, then Buyer may elect either (i) to consummate the transactions contemplated hereby on the Closing Date, in which event Seller shall assign to Buyer the portion of the insurance proceeds (less all reasonable costs and expenses, including without limitation attorney's fees, expenses and court costs, incurred by Seller to collect such amounts), if any, not previously expended by Seller to repair or replace the damaged or destroyed property, and Buyer shall accept the damaged Sale Assets in their damaged condition, or (ii) to terminate this Agreement.
ARTICLE XII
Between the date of this Agreement and the Closing Date, Buyer shall not control, manage or supervise the operation of the Station or conduct of its business, all of which shall remain the sole responsibility and under the control of Seller, subject to Seller's compliance with this Agreement.
ARTICLE XIII
of Buyer. At the request and expense of Seller, Buyer shall deliver copies of any such books and records to Seller .
(b) All state or local sales or use, stamp or transfer, grant and other similar taxes payable in connection with consummation of the transactions contemplated hereby shall be shared equally between Buyer and Seller.
(c) Except as otherwise expressly provided in this Agreement, each of the parties shall bear its own expenses, including the fees of any attorneys and accountants engaged by such party, in connection with this Agreement and the consummation of the transactions contemplated herein.
THIS SPACE INTENTIONALLY LEFT BLANK.
(a) if to Seller, to:
OmniAmerica Communications, Inc. 11111 Santa Monica Blvd., Suite 220 Los Angeles, California 90025 Attn: Carl Hirsch, CEO
Copy to:
Howard Mandel, Esq.
Thompson, Hine & Flory
3900 Society Center
127 Public Square
Cleveland, Ohio 44114
(b) if to Buyer, to:
Salem Communications Corporation 4880 Santa Rosa Road, Suite 300 Camarillo, California 93012 Facsimile No.: (805) 482-7290 Attention: Jonathan L. Block, Esq.
Corporate Counsel
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third business day following the date mailed, and
(ii) if personally delivered or otherwise sent as provided above, on the date
received.
which consent shall not be unreasonably withheld; provided, however, that Buyer
may, at its own expense, without Seller's prior written consent, assign its
rights and obligations to acquire the Real Property to Edward G. Atsinger III
and Stuart W. Epperson, or trusts or limited partnerships created for their
benefit and/or the benefit of their spouses and their issue, so long as (i) no
delay results in the Closing Date (ii) no extra expense results to Seller, and
(iii) Buyer remains liable for indemnification of Seller in respect of all
Assumed Obligations in respect of the Real Property.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written.
"SELLER" "BUYER "
OMNIAMERICA GROUP INSPIRATION MEDIA OF OHIO, INC.
By: /s/ Carl Hirsch By: /s/ Eric H. Halvorson
---------------------------- ----------------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
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WHK LICENSE PARTNERSHIP
By: /s/ Carl Hirsch
----------------------------
Carl Hirsch
Chief Executive Officer
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GUARANTY
Salem Communications Corporation ("Guarantor") hereby absolutely and unconditionally guarantees the following (the "Guaranteed Obligations"):
(a) the punctual and full payment when due of all the obligations of Buyer in connection with the Documents; it being the intention of Guarantor that this guaranty be an absolute and unconditional guarantee of payment; and
(b) the performance and observance by Buyer of all its obligations and covenants under the Documents.
Guarantor further agrees that the guaranty will not be discharged or affected by the fact that the Guaranteed Obligations or any of them shall be invalid or unenforceable for any reason. The guaranty shall be liberally construed in favor of Seller. Guarantor hereby waives any right to require payment of the Guaranteed Obligations by Buyer, or to require Seller to proceed against any collateral or escrow for the Guaranteed Obligations, or to require any action or proceeding against Buyer on the Guaranteed Obligations, or otherwise to require Seller to exhaust any and all remedies against Buyer or any other person before proceeding against Guarantor on the guaranty.
SALEM COMMUNICATIONS CORPORATION
By: /s/ Eric H. Halvorson
-------------------------
Eric H. Halvorson
Executive Vice President
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EXHIBIT 10.06.04.02
FIRST AMENDMENT
TO THE
ASSET PURCHASE AGREEMENT
WHK-AM - CLEVELAND, OHIO
This amendment ("Amendment") is dated as of this 23rd day of July, 1996 by and
between OmniAmerica Group ("Omni Group") and WHK License Partnership ("WHK LP")
(Omni Group and WHK LP shall be collectively be referred to herein as "Seller")
and Inspiration Media of Ohio, Inc. ("Buyer").
WHEREAS, pursuant to an Asset Purchase Agreement ("WHK Agreement") dated April 23, 1996, by and between Seller and Buyer, Buyer obtained the right to purchase and acquire certain assets relating to radio station WHK-AM ("WHK"), Cleveland, Ohio;
WHEREAS Buyer is a wholly owned subsidiary of Salem Communications Corporation ("Salem");
WHEREAS Common Ground Broadcasting, Inc., an Oregon corporation and wholly owned subsidiary of Salem, is selling certain assets relating to radio station KDBX-FM ("KDBX"), Banks, Oregon;
WHEREAS Salem elects to exchange ("the Exchange") the assets of WHK, for purpose of a tax-deferred exchange pursuant to IRC (S) 1031, with the assets of KDBX; and,
WHEREAS, in order to effectuate the Exchange, it is necessary that the purchaser named in the WHK Agreement be changed from "Inspiration Media of Ohio, Inc." to "Common Ground Broadcasting, Inc."
NOW THEREFORE, Seller and Buyer agree as follows:
1. Any and all references to "Inspiration Media of Ohio, Inc." in the WHK Agreement shall be replaced by "Common Ground Broadcasting, Inc."
2. Except as expressly provided herein, the terms and conditions of the Agreement shall remain in full force and effect and unamended. In the event of a conflict between this Amendment and the terms of the Agreement, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written.
"SELLER" "BUYER"
OMNIAMERICA COMMUNICATIONS, INC. INSPIRATION MEDIA OF OHIO, INC.
By: By: /s/ Eric H. Halvorson
------------------------ ------------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
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WHK LICENSE PARTNERSHIP
EXHIBIT 10.06.04.03
SECOND AMENDMENT TO
ASSET PURCHASE AGREEMENT
This Second Amendment to Asset Purchase Agreement (the "Amendment") is executed as of August 12, 1996, by and between OmniAmerica Group ("Omni"), WHK License Partnership ("WHK LP") (Omni and WHK LP shall collectively be referred to herein as "Seller"), and Inspiration Media of Ohio, Inc. ("Buyer").
WHEREAS, Seller and Buyer have executed an Asset Purchase Agreement, dated April 23, 1996 (the "Agreement"), pertaining to the acquisition by Buyer of substantially all of the assets of WHK-AM (Cleveland) (the "Station"); and
WHEREAS, Buyer and Seller desire to amend certain provisions of the Agreement;
NOW, THEREFORE, for good and valuable consideration, including the furtherance of the transactions contemplated by the Agreement, the parties agree as follows:
the LMA or (b) Buyer's repairs, modifications, or maintenance to the Station's broadcast facilities.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be duly executed and delivered as of date first above written.
"SELLER" "BUYER"
OMNIAMERICA GROUP COMMON GROUND
BROADCASTING, INC.
By: By: /s/ Eric H. Halvorson
------------------------ -----------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
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WHK LICENSE PARTNERSHIP SALEM COMMUNICATIONS
CORPORATION
By: By: /s/ Eric H. Halvorson
----------------------- -----------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
|
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be duly executed and delivered as of date first above written.
"SELLER" "BUYER"
OMNIAMERICA GROUP COMMON GROUND
BROADCASTING, INC.
By: /s/ Carl Hirsch By: /s/ Eric H. Halvorson
---------------------------- ----------------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
WHK LICENSE PARTNERSHIP SALEM COMMUNICATIONS
CORPORATION
By: /s/ Carl Hirsch By: /s/ Eric H. Halvorson
---------------------------- ----------------------------
Carl Hirsch Eric H. Halvorson
Chief Executive Officer Executive Vice President
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EXHIBIT 10.06.05
EXECUTION COPY
ASSET PURCHASE AGREEMENT by and between
INFINITY BROADCASTING CORPORATION OF DALLAS
AND
INSPIRATION MEDIA OF TEXAS, INC.
Dated as of September 30, 1996
TABLE OF CONTENTS
PAGE
ARTICLE 1 ASSETS TO BE CONVEYED............................................ 1
1.1. Closing.......................................................... 1
1.2. Transfer of KEWS Assets.......................................... 1
1.3. Excluded Assets.................................................. 2
ARTICLE 2 PURCHASE PRICE................................................... 2
2.1. Purchase Price................................................... 2
2.2. Payment of Cash Purchase Price................................... 3
2.3. Transfer of the KDFX Assets...................................... 3
2.4. Allocation....................................................... 4
ARTICLE 3 ASSUMPTION OF OBLIGATIONS; PRORATIONS ........................... 4
3.1. Assumption of Obligations........................................ 4
3.2. Limitation....................................................... 4
3.3. Proration of Expenses............................................ 5
3.4. Payment of Proration Items....................................... 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES COMMON TO BOTH
INFINITY AND SALEM.............................................. 6
4.1. Organization and Standing........................................ 6
4.2. Authorization and Binding Obligation............................. 6
4.3. Absence of Conflicting Agreements or Required Consents........... 6
4.5 Taxes............................................................ 7
4.6 Insolvency Proceedings........................................... 7
4.7. Broker's Fees.................................................... 7
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INFINITY....................... 7
5.1. FCC Authorizations and Qualifications............................ 7
5.2. Title to and Condition of Personal Property...................... 8
5.3. Assumed Contracts; Real Estate Leases............................ 8
5.4. Compliance With Laws............................................. 9
5.5. Insurance........................................................ 10
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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SALEM ......................... 10
6.1. FCC Authorizations and Qualifications............................ 10
6.2. Title to and Condition of Personal Property...................... 10
6.3. Assumed Contracts; Real Estate Leases............................ 11
6.4. Compliance With Laws............................................. 11
6.5. Insurance........................................................ 12
ARTICLE 7 GOVERNMENTAL CONSENTS ........................................... 12
7.1. FCC Application.................................................. 12
7.2 Compliance with HSRA............................................. 13
7.3 Other Governmental Consents...................................... 13
ARTICLE 8 COVENANTS........................................................ 14
8.1. Conduct of Business.............................................. 14
8.2. Notification..................................................... 14
8.3. Access........................................................... 14
8.4. Third-Party Consents............................................. 15
8.5. Pre-Closing Efforts.............................................. 15
8.6. Risk of Loss..................................................... 15
8.7. Confidentiality.................................................. 16
8.7. Further Assurances............................................... 16
8.8 Covenant Not to Compete.......................................... 16
8.9 KDFX Transmitter Site Lease...................................... 16
ARTICLE 9 CONDITIONS PRECEDENT............................................. 16
9.1. To Salem's Obligations........................................... 16
9.2 To Infinity's Obligations........................................ 17
ARTICLE 10 DOCUMENTS TO BE DELIVERED AT THE CLOSING......................... 18
10.1. Documents to be Delivered by Infinity............................ 18
10.2. Documents to be Delivered by Salem............................... 18
ARTICLE 11 INDEMNIFICATION, SURVIVAL........................................ 19
11.1. Infinity's Indemnities........................................... 19
11.2. Salem's Indemnities.............................................. 20
11.3. Procedure for Indemnification.................................... 20
11.4. Limitations...................................................... 21
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11.5. Survival of Representations, Warranties and Covenants............ 22
11.6. Sole Remedy...................................................... 22
ARTICLE 12 TERMINATION RIGHTS............................................... 22
12.1. Termination...................................................... 22
12.2. Effect of Termination............................................ 23
ARTICLE 13 REMEDIES LIPON DEFAULT; SPECIFIC PERFORMANCE..................... 23
13.1. Default by Infinity; Specific Performance........................ 23
13.2. Default by Salem; Liquidated Damages............................. 23
ARTICLE 14 OTHER PROVISIONS................................................. 24
14.1. Transfer Taxes and Expenses...................................... 24
14.2. Benefit and Assignment........................................... 24
14.3. Entire Agreement; Schedules; Amendment; Waiver................... 24
14.4. Headings......................................................... 24
14.5. Computation of Time.............................................. 25
14.6. Governing Law; Waiver of Jury Trial.............................. 25
14.7. Attorneys' Fees.................................................. 25
14.8. Severability..................................................... 25
14.9. Notices.......................................................... 25
14.10. Counterparts..................................................... 26
ARTICLE 15 DEFINITIONS...................................................... 26
15.1. Defined Terms.................................................... 26
15.2. Miscellaneous Terms.............................................. 30
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EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Form of Covenant Not to Compete
Exhibit C Form of Amended KDFX Transmitter Site Lease
SCHEDULES
Schedule 1.2(a) KEWS FCC Licenses
Schedule 1.2(c) KEWS Main Studio Equipment
Schedule 1.2(d) KEWS Assumed Contracts
Schedule 2.3(a)(i) KDFX FCC Licenses
Schedule 2.3(a)(iii) KDFX Main Studio Equipment
Schedule 2.3(a)(iv) KDFX Assumed Contracts
Schedule 4.3(a) Infinity's Required Consents
Schedule 4.3(b) Salem's Required Consents
Schedule 5.1 Infinity's FCC Qualifications Exceptions
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), made as of the 30th day of September 1996, is between Infinity Broadcasting Corporation of Dallas, a Delaware corporation ("Infinity"), and Inspiration Media of Texas, Inc., a Texas corporation ("Salem").
Infinity is the licensee of station KEWS-FM, 94.9 mHz, Arlington, Texas ("KEWS"). Salem is the licensee of station KDFX(AM), 1190 kHz, Dallas, Texas ("KDFX").
Salem has expressed an interest in acquiring certain assets used in the operation of KEWS, including the KEWS FCC Licenses (as defined below). Infinity has expressed an interest in acquiring certain assets used in the operation of KDFX, including the KDFX FCC Licenses (as defined below). Infinity has agreed to sell the KEWS Assets (as defined below) to Salem in return for the payment of $32,000,000 and the assignment of the KDFX Assets (as defined below). Definitions of capitalized terms in this Agreement are set forth in SECTION 15.1.
The assignment of KEWS FCC Licenses to Salem and the assignment of the KDFX FCC Licenses to Infinity require the prior consent of the Federal Communications Commission ("FCC").
Therefore, the parties agree as follows:
1.1. CLOSING. Subject to SECTION 12.1 (Termination Rights), the closing (the "Closing") of the sale and purchase of the KEWS Assets and the KDFX Assets shall take place in the offices of Leventhal, Senter & Lerman, 2000 K Street, N.W., Washington, D.C., at 10:00 a.m., local time, on the fifth (5th) business day following the satisfaction or waiver of the conditions set forth in SECTIONS 9.1(b) and 9.2(b) (FCC Consent), but in no event prior to December 2, 1996, or at such other place, time or date as Salem and Infinity may agree in writing.
1.2. TRANSFER OF KEWS ASSETS. At the Closing, Infinity shall sell, assign, transfer and convey to Salem, and Salem shall purchase from Infinity, the following assets (the "KEWS Assets"):
(b) all of Infinity's right, title and interest in the equipment, spare parts and other tangible personal property located at the KEWS transmitter site and used or held for use exclusively in the operation of KEWS (the "KEWS Transmitter Site Equipment");
(e) KEWS's public inspection file, filings with the FCC related to KEWS, executed copies of all written KEWS Assumed Contracts, and such technical information, engineering data, rights under manufacturers' warranties as exist at Closing and relate exclusively to the KEWS Personal Property being conveyed hereunder.
The KEWS Assets shall be delivered without any representation or warranty by Infinity except as expressly set forth in this Agreement, and Salem acknowledges that it has not relied on or been induced to enter into this Agreement by any representation or warranty other than those expressly set forth in ARTICLES 4 AND 5 hereof. The KEWS Assets shall be conveyed to Salem free and clear of all Liens, except as otherwise expressly provided in this Agreement.
1.3. EXCLUDED ASSETS. Except as set forth in SECTION 1.2, the KEWS Assets shall not include any properties, assets, privileges, rights, interests and claims, real and personal, tangible and intangible, of every type and description, wherever located, of Infinity or any of its affiliates, including all right, title and interest in the call sign "KEWS," which Salem agrees Infinity may use on any other station the Dallas/Ft. Worth market, including station KDFX after it has been acquired by Infinity.
2.1. PURCHASE PRICE.
(a) The aggregate purchase price to be paid by Salem for the KEWS Assets (the "Purchase Price") shall be (i) $32,100,000 (the "Cash Purchase Price") plus (ii) the assignment of the KDFX Assets as provided in SECTION 2.3 below.
(b) The parties stipulate that the Purchase Price is not based in any way upon the ratings or financial performance of either KEWS or KDFX. Neither station is being sold as a going concern, and the assets being conveyed do not include any goodwill or intellectual property. Therefore, neither Infinity nor Salem makes any representation or warranty as to ratings or cash flow, and neither Salem's nor Infinity's obligations under this Agreement are conditioned in any way on the financial performance between the date of this Agreement and the Closing of the station to be acquired.
2.2. PAYMENT OF CASH PURCHASE PRICE. Salem shall pay the Cash Purchase Price as follows:
(a) Simultaneous with the execution of this Agreement, Salem shall deposit $1,600,000 with the Escrow Agent to be held and distributed pursuant to the Escrow Agreement.
(b) At the Closing, Salem shall pay $30,500,000 by wire transfer prior to 3:00 p.m., local Washington, D.C. time, of immediately available federal funds to an account at a bank or financial institution pursuant to wire instructions that Infinity shall deliver to Salem at least one (1) business day prior to the Closing Date.
2.3. TRANSFER OF THE KDFX ASSETS.
(a) At the Closing, Salem shall sell, assign, transfer and convey to Infinity, and Infinity shall acquire from Salem, the following assets (the "KDFX Assets"):
(ii) all of Salem's right, title and interest in the equipment, spare parts and other tangible personal property located at the KDFX transmitter site and used or held for use exclusively in the operation of KDFX (the "KDFX Transmitter Site Equipment");
(v) KDFX's public inspection file, filings with the FCC related to KDFX, executed copies of all written KDFX Assumed Contracts, and such technical information, engineering data, rights under manufacturers' warranties as exist at Closing and relate exclusively to the KDFX Personal Property being conveyed hereunder.
The KDFX Assets shall be delivered without any representation or warranty by Salem except as expressly set forth in this Agreement, and Infinity acknowledges that it has not relied on or been induced to enter into this Agreement by any representation or warranty other than those expressly set forth in ARTICLES 4 AND 6 hereof. The KDFX Assets shall be conveyed to Infinity free and clear of all Liens, except as otherwise expressly provided in this Agreement.
(b) Except as set forth in this SECTION 2.3, the KDFX Assets shall not include any properties, assets, privileges, rights, interests and claims, real and personal, tangible and intangible, of every type and description, wherever located, of Salem or any of its affiliates, including all right, title and interest in the call sign "KDFX," which Infinity agrees Salem may use on any other station the Dallas/Ft. Worth market, including station KEWS after it has been acquired by Salem.
2.4. ALLOCATION. If Salem and Infinity are unable to agree between the date
hereof and the Closing on an allocation of the Purchase Price for income tax
purposes, Infinity shall arrange for an appraisal of the KDFX Assets and the
KEWS Assets. Any such appraisal shall be completed within one hundred eighty
(180) days after the Closing, and based upon such appraisal, if prepared,
Infinity shall prepare an initial draft of IRS Form 8594. Infinity shall forward
such form to Salem for its approval. If the parties reach an agreement on the
contents of IRS Form 8594, Salem and Infinity shall each file the IRS Form 8594
finally agreed upon by the parties with their respective federal income tax
return for the tax year in which the Closing occurs.
3.1. ASSUMPTION OF OBLIGATIONS.
(a) At the Closing, Salem shall assume and undertake to pay, satisfy or discharge (i) all liabilities, obligations and commitments of Infinity under the KEWS Assumed Contracts, arising or accruing after 12:01 a.m., local Dallas time, on the Closing Date (the "Effective Time"), and (ii) all liabilities, obligations and commitments arising from or relating to the ownership of the KEWS Assets after the Effective Time.
(b) At the Closing, Infinity shall assume and undertake to pay, satisfy or discharge (i) all liabilities, obligations and commitments of Salem under the KDFX Assumed Contracts, arising or accruing after the Effective Time, subject to the requirement of SECTION 8.9 of this Agreement, and (ii) all liabilities, obligations and commitments arising from or relating to the ownership of the KDFX Assets after the Effective Time.
3.2. LIMITATION. Except as set forth in Section 3.1, Infinity and Salem expressly do 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 the other of any nature whatsoever.
3.3. PRORATION OF EXPENSES. All expenses arising from the operation of the KEWS Assets and the KDFX Assets shall be prorated between Infinity and Salem as of the Effective Time in accordance with GAAP. Such prorations shall be based upon the principle that (a) Infinity shall be responsible for all liabilities and obligations accruing in connection with the ownership of the KEWS Assets until the Effective Time, and Salem shall (subject to SECTION 3.2 above) be responsible for such liabilities and obligations accruing thereafter and (b) Salem shall be responsible for all liabilities and obligations accruing in connection with the ownership of the KDFX Assets until the Effective Time, and Infinity shall (subject to SECTION 3.2 above) be responsible for such liabilities and obligations accruing thereafter. Such prorations shall include, without limitation, all ad valorem and other property taxes (but excluding taxes arising by reason of the transfers of the KEWS Assets and the KDFX Assets as contemplated hereby, which shall be paid as set forth in SECTION 14.1 of this Agreement), deposits, utility expenses, liabilities and obligations under the KEWS Assumed Contracts and the KDFX Assumed Contracts, rents and similar prepaid and deferred items and all other expenses attributable to the ownership and operation of the KEWS Assets and the KDFX Assets. Any real estate taxes shall be apportioned on the basis of the number of days that each party owned such real property during the relevant tax year.
3.4. PAYMENT OF PRORATION ITEMS. Three (3) business days prior to the
Closing, Infinity shall deliver to Salem a preliminary list of all items to be
prorated pursuant to SECTION 3.3 and, to the extent feasible, such prorations
shall be made at the Closing. In the event Infinity and Salem do not reach a
final agreement on such prorations at the Closing, Salem shall deliver to
Infinity a schedule of its proposed prorations (which shall set forth in
reasonable detail the basis for those determinations) (the "Proration Schedule")
no later than forty-five (45) days after the Closing Date. The Proration
Schedule shall be conclusive and binding upon Infinity unless Infinity provides
Salem with written notice of objection (the "Notice of Disagreement") within
thirty (30) days after Infinity's receipt of the Proration Schedule, which
notice shall state the prorations of expenses proposed by Infinity (the
"Infinity's Proration Amount"). Salem shall have twenty (20) days from receipt
of a Notice of Disagreement to accept or reject Infinity's Proration Amount. If
Salem rejects Infinity's Proration Amount, the dispute shall be submitted within
ten (10) days to the Dallas office of Arthur Andersen (the "Referee") for
resolution of the dispute, such resolution to be made within thirty (30) days
after submission to the Referee and to be final, conclusive and binding on
Infinity and Salem. Salem and Infinity agree to share equally the cost and
expenses of the Referee, but each party shall bear its own legal and other
expenses, if any. Payment by Salem or Infinity, as the case may be, for the
proration amounts determined pursuant to this SECTION 3.4 shall be due fifteen
(15) days after the last to occur of (a) Infinity's acceptance of the Proration
Schedule or failure to give Salem a timely Notice of Disagreement; (b) Salem's
acceptance of Infinity's Proration Amount or failure to reject Infinity's
Proration Amount
within twenty (20) days of receipt of a Notice of Disagreement; and (c) notice to Infinity and Salem of the resolution of the disputed amount by the Referee.
Infinity represents and warrants to Salem, and Salem represents and warrants to Infinity, as follows (the party making the representations and warranties being referred to as the "Representing Party"):
4.1. ORGANIZATION AND STANDING. The Representing Party (a) is a corporation duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (b) if necessary, is qualified to do business as a foreign corporation and is in good standing in the State of Texas and (c) has all necessary corporate power and authority to own, lease and operate the assets it is conveying hereunder and to carry on its business as now conducted.
4.2. AUTHORIZATION AND BINDING OBLIGATION. The Representing Party has the full right and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions provided for herein. All required corporate action with respect to the Representing Party has been taken to approve this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Representing Party and constitutes its valid and binding obligation, enforceable against the Representing Party in accordance with its terms.
4.4. NO LITIGATION. There are (a) no unsatisfied judgments, awards, orders, writs, injunctions, arbitration decisions or decrees outstanding, and (b) no claims, actions, suits, investigations or proceedings pending or, to the best of the Representing Party's knowledge, threatened against or affecting the Representing Party's assets to be conveyed hereunder, in
any court or before any governmental authority or arbitrator that (if adversely determined, in the case of pending or threatened matters) would impair in any material respect the ability of the Representing Party to perform its obligations hereunder or would impair or hinder in any material respect the ability or right of the Acquiring Party to operate the station to be conveyed to it by the Representing Party after the Closing in the manner heretofore operated by the Representing Party.
4.5 TAXES. There are no tax audits or other governmental proceedings pending or, to the best of the Representing Party's knowledge, threatened that could result in a Lien on the assets being conveyed by the Representing Party hereunder or the imposition of any tax liability on the Acquiring Party and, to the best of the Representing Party's knowledge, no event has occurred that could impose on the applicable Acquiring Party any liability for any taxes, penalties or interest due or to become due from the Representing Party.
4.6 INSOLVENCY PROCEEDINGS. Neither the Representing Party nor any of the Representing Party's assets to be conveyed hereunder are the subject of any pending insolvency proceedings of any character. The Representing Party has neither made an assignment for the benefit of creditors nor taken any action with a view to the institution of any such insolvency proceedings.
4.7. BROKER'S FEES. Except for the brokerage fee payable to Gary Stevens & Co., neither the Representing Party nor any person or entity acting on its behalf has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, and no person or entity is entitled to any such payment from the Representing Party in connection with the transactions contemplated by this Agreement. The parties agree that Infinity shall pay $100,000 and Salem shall pay the balance of any brokerage fee payable to Gary Stevens & Co.
Infinity represents and warrants to Salem as follows:
5.1. FCC AUTHORIZATIONS AND QUALIFICATIONS.
5.2. TITLE TO AND CONDITION OF PERSONAL PROPERTY. At the Closing, Infinity will have good title to the KEWS Personal Property free and clear of all Liens. At the Closing, the KEWS Personal Property will be in good operating condition and repair (ordinary wear and tear excepted), will be performing satisfactory and will be in material compliance with the rules and regulations of the FCC and all other applicable federal, state and local statues, ordinances, rules and regulations.
5.3. ASSUMED CONTRACTS; REAL ESTATE LEASES.
improvements are located entirely on the KEWS Real Property. Infinity has no knowledge of any pending, threatened or contemplated action to take by eminent domain or otherwise to condemn any part of the KEWS Real Property.
5.4. COMPLIANCE WITH LAWS. Infinity has complied in all material respects with, and is not in violation of any federal, state or local laws, regulations or orders relating to the operation of KEWS. Without limiting the generality of the foregoing:
(a) The KEWS transmitting and other equipment to be conveyed hereunder is operating in accordance with the terms and conditions of the KEWS FCC Licenses and all underlying construction permits, and the rules, regulations and policies of the FCC, including, without limitation all regulations concerning equipment authorization and human exposure to radio frequency radiation.
(b) All ownership reports, employment reports and other documents required to be filed by Infinity with the FCC have been so filed. Such items as are required to be placed in KEWS's local public inspection files have been placed in such files. All proofs of performance and measurements that are required to be made by Infinity with respect to KEWS's transmission facilities have been completed and filed at KEWS. All information contained in the foregoing documents is true, complete and accurate in all material respects.
(c) To the best of Infinity's knowledge, (a) no Hazardous Substance
(i) is or has been used, treated, stored, disposed of, released, spilled,
generated, manufactured, transported or otherwise handled on KEWS Real
Property, (ii) has been spilled, released or disposed of on property
adjacent to the KEWS Real Property, or (iii) has otherwise come to be
located on or under the KEWS Real Property, (b) the KEWS Real Property and
all operations on the KEWS Real Property are in compliance with all
Environmental Laws, and (c) Infinity has obtained all environmental, health
and safety permits necessary for the operation of KEWS, and all such
permits are in full force and effect, and Infinity is in compliance with
the terms and conditions of all such permits. No outstanding liens have
been placed on the KEWS Real Property under any Environmental Laws.
Infinity has not received any notice, and is not aware, of any
administrative or judicial investigations, proceedings or actions with
respect to violations, alleged or proven, of Environmental Laws by Infinity
or any tenants of Infinity, or otherwise involving the KEWS Real Property
or the operations conducted on the KEWS Real Property. The KEWS Real
Property and all operations conducted on the KEWS Real Property are in
compliance with all federal and state statutes and regulations relating to
Asbestos, and to the best of Infinity's knowledge, no Asbestos-Containing
Material is present in any of the improvements on the KEWS Real Property or
is otherwise located on the KEWS Real Property. To the best of Infinity's
knowledge, there are no underground storage tanks, whether in use or
closed, on or under the KEWS Real Property, and no PCB is
present on the KEWS Real Property. No PCB is used in the KEWS Personal Property.
5.5. INSURANCE. The KEWS Assets are, and will be until the Closing Date, in the reasonable judgment of Infinity, adequately insured.
Salem represents and warrants to Infinity as follows:
6.1. FCC AUTHORIZATIONS AND QUALIFICATIONS.
(c) To the best of its knowledge, Salem is legally, financially and otherwise qualified under the Act to be the assignee of the KEWS FCC Licenses. Salem has no reason to believe that the FCC Applications might be challenged or might not be granted by the FCC in the ordinary course.
6.2. TITLE TO AND CONDITION OF PERSONAL PROPERTY. At the Closing, Salem will have good title to the KDFX Personal Property free and clear of all Liens. At the Closing, the KDFX Personal Property will be in good operating condition and repair (ordinary wear and tear excepted), will be performing satisfactory and will be in material compliance with the rules and regulations of the FCC and all other applicable federal, state and local statues, ordinances, rules and regulations.
6.3. ASSUMED CONTRACTS; REAL ESTATE LEASES.
6.4. COMPLIANCE WITH LAWS. Salem has complied in all material respects with, and is not in violation of any federal, state or local laws, regulations or orders relating to the operation of KDFX. Without limiting the generality of the foregoing:
(a) The KDFX transmitting and other equipment to be conveyed hereunder is operating in accordance with the terms and conditions of the KDFX FCC Licenses and all underlying construction permits, and the rules, regulations and policies of the FCC, including, without limitation all regulations concerning equipment authorization and human exposure to radio frequency radiation.
(b) All ownership reports, employment reports and other documents required to be filed by Salem with the FCC have been so filed. Such items as are required to be placed in KDFX's local public inspection files have been placed in such files. All proofs of performance and measurements that are required to be made by Salem with respect to KDFX's transmission facilities have been completed and filed at KDFX. All information contained in the foregoing documents is true, complete and accurate in all material respects.
(c) To the best of Salem's knowledge, (a) no Hazardous Substance (i) is or has been used, treated, stored, disposed of, released, spilled, generated, manufactured, transported or otherwise handled on KDFX Real Property, (ii) has been spilled, released or disposed of on property adjacent to the KDFX Real Property, or (iii) has otherwise come to be located on or under the KDFX Real Property, (b) the KDFX Real Property and all operations on the KDFX Real Property are in compliance with all Environmental Laws, and (c) Salem has obtained all environmental, health and safety permits necessary for the operation of KDFX, and all such permits are in full force and effect, and Salem is in compliance with the terms and conditions of all such permits. No outstanding liens have been placed on the KDFX Real Property under any Environmental Laws. Salem has not received any notice, and is not aware, of any administrative or judicial investigations, proceedings or actions with respect to violations, alleged or proven, of Environmental Laws by Salem or any tenants of Salem, or otherwise involving the KDFX Real Property or the operations conducted on the KDFX Real Property. The KDFX Real Property and all operations conducted on the KDFX Real Property are in compliance with all federal and state statutes and regulations relating to Asbestos, and to the best of Salem's knowledge, no Asbestos-Containing Material is present in any of the improvements on the KDFX Real Property or is otherwise located on the KDFX Real Property. To the best of Salem's knowledge, there are no underground storage tanks, whether in use or closed, on or under the KDFX Real Property, and no PCB is present on the KDFX Real Property. No PCB is used in the KDFX Personal Property.
6.5. INSURANCE. The KDFX Assets are, and will be until the Closing Date, in the reasonable judgment of Salem, adequately insured.
7.1. FCC Application.
(a) The assignments of the KEWS FCC Licenses and the KDFX FCC Licenses as contemplated by this Agreement are subject to the prior consent and approval of the FCC. Between the date of this Agreement and the Closing, Salem shall not directly or indirectly, control the operation of KEWS, and Infinity shall not directly or indirectly, control the operation of KDFX.
(b) No later than five (5) business days after the date of this Agreement, Salem and Infinity shall each prepare and jointly file complete and grantable applications requesting the FCC's consent to the assignment of the KEWS FCC Licenses to Salem and the assignment of KDFX FCC Licenses to Infinity pursuant to this Agreement (the "FCC
Applications"). Infinity and Salem shall thereafter prosecute the FCC Applications in good faith and with all reasonable diligence and otherwise use their best efforts to obtain the grant of the FCC Applications as expeditiously as practicable; provided, however, that neither Infinity nor Salem shall have any obligation to satisfy any complainant or the FCC by taking any steps which would have a material adverse effect upon Infinity or Salem or upon any affiliated entity, but neither the expense nor inconvenience to a party of defending against a complainant or an inquiry by the FCC shall be considered a material adverse effect on such party. If the FCC Consent to either of the FCC Applications imposes any condition on any party hereto, such party shall use its best efforts to comply with such condition; provided, however, that no party shall be required to comply with any condition that would have a material adverse effect upon it or any affiliated entity. If reconsideration or judicial review is sought with respect to one of the FCC Consents, the party or parties affected shall vigorously 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 12 (Termination Rights).
(c) All FCC filing or grant fees shall be borne equally by Salem and Infinity. Each party shall otherwise bear its own costs and expenses (including the fees and disbursements of its counsel) in connection with the preparation of the portion of the FCC Applications to be prepared by it and in connection with the processing and defense of such applications.
7.2 COMPLIANCE WITH HSRA. Each party shall make or cause to be made in a timely fashion, and in any event within ten (10) business days following the date of this Agreement, all filings which are required in connection with the transactions contemplated hereby under the HSRA, and shall furnish to the other party all information that the other reasonably requests in connection with such filings. The transfer of the KEWS Assets hereunder is conditioned upon the expiration of the applicable waiting period under the HSRA without the institution or threat of any action with respect to the consummation of the transactions contemplated hereunder. Salem and Infinity shall split the cost of any HSRA filing fees. Each party shall otherwise bear its own costs and expenses (including the fees and disbursements of its counsel) in connection with the preparation of any HSRA filing to be prepared by it and in connection with the prosecution and defense of that filing.
7.3 OTHER GOVERNMENTAL CONSENTS. Promptly following the execution 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. Each party shall bear its own costs and expenses in connection with the preparation of any filings, documents or requests to be prepared by it in order to obtain such
governmental consents, approvals or waivers and in connection with any prosecution or defense by it of such filings, documents or requests.
ARTICLE 8
8.1. CONDUCT OF BUSINESS. Between the date of this Agreement and the Closing, Infinity, with respect to KEWS, and Salem, with respect to KDFX, shall, except as expressly permitted by this Agreement or with the prior written consent of the other:
(a) comply in all material respects with all laws and contractual obligations applicable to such station or to the conduct of the business of such station;
(b) perform all material obligations relating to the business of such station;
(c) refrain from selling, assigning, leasing or otherwise transferring or disposing of any of the KEWS Assets or the KDFX Assets, as the case may be, except for assets consumed or disposed of in the ordinary course of business;
(d) maintain the KEWS Assets or the KDFX Assets, as the case may be, in customary repair, maintenance and condition, replace all items of equipment at time intervals consistent with prior practice, and repair or replace (subject to SECTION 8.6 (Risk of Loss)) any asset that may be damaged or destroyed with items of equal or greater value and utility unless Infinity or Salem, as the case may be, determines in good faith that such a repair or replacement is not necessary or useful for the continued operation of such station; and
(e) not modify the KEWS Assumed Contracts or the KDFX Assumed Contracts, as amended through the date of this Agreement.
8.2. NOTIFICATION. Between the date of this Agreement and the Closing, Infinity and Salem shall each promptly notify the other of (a) any pending or, to its knowledge, threatened litigation, arbitration or administrative proceeding that seeks to revoke, cancel, rescind, modify or fail to renew in the ordinary course any of the KEWS FCC Licenses or the KDFX FCC Licenses, as the case may be, or that challenges the transactions contemplated hereby, including any challenges to the FCC Applications; (b) the issuance of any order to show cause, notice of violation, notice of apparent liability or notice of forfeiture with respect to KEWS or KDFX; or (c) the submission, to such party's knowledge, of any material complaint against or with respect to KEWS or KDFX.
8.3. ACCESS. Between the date hereof and the Closing, Infinity and Salem shall each give, upon prior reasonable notice, the other or it representatives (including consultants
and advisors) reasonable access to the KEWS Assets or the KDFX Assets as applicable. It is expressly understood that, pursuant to this SECTION 8.3, the Acquiring Party, at its sole expense, shall be entitled to make such engineering and other inspections of the KEWS Assets or the KDFX Assets, as applicable, as it may desire, so long as such inspection does not unreasonably interfere with the operation of such station in the conveying party's reasonable judgment.
8.4. THIRD-PARTY CONSENTS. Between the date of this Agreement and the Closing, each party shall use reasonable efforts to obtain the consent of any third party necessary for the assignment of any of the KEWS Assumed Contracts or KDFX Assumed Contracts; provided, that neither party shall be obligated to pay any money to obtain such consent. In the event a consent or waiver required with respect to the assignment of any of the KEWS Assumed Contracts or the KDFX Assumed Contracts has not been obtained on or before the Closing, Infinity or Salem, as the case may be, shall use reasonable efforts to provide the other with the benefits of any such assumed contract (including, without limitation, permitting such other party to enforce any rights of Infinity or Salem under such assumed contract), and Salem or Infinity shall, to the extent Salem or Infinity, as the case may be, is provided with the benefits of such assumed contract, perform all obligations of the other party thereunder.
8.5. PRE-CLOSING EFFORTS. Between the date of this Agreement and the Closing, each party shall use its reasonable efforts to cause the fulfillment at the earliest practicable date of all of the conditions to the obligations of the other party to consummate the sale and purchase under this Agreement. Neither party shall take any action which is materially inconsistent with its obligations under this Agreement or that would materially hinder or delay the consummation of the transactions contemplated by this Agreement. In particular, neither party shall take any action that would result in its disqualification to hold the KEWS FCC Licenses or the KDFX FCC Licenses, as the case may be, or in any way delay grant of the FCC Applications or consummation of the transactions contemplated by this Agreement. Should either party become aware of any such fact or circumstance, such party shall promptly inform the other.
8.6. RISK OF LOSS. The risk of any loss, damage, impairment, confiscation, or condemnation of any of the KEWS Assets from any cause whatsoever shall be borne by Infinity at all times prior to the Closing. The risk of any loss, damage, impairment, confiscation, or condemnation of any of the KDFX Assets from any cause whatsoever shall be borne by Salem at all times prior to the Closing. If there is any loss, damage, impairment, confiscation, or condemnation of or to any of such assets, Infinity or Salem, as the case may be, shall repair, replace, or restore such assets (the "Damaged Assets") to their prior condition as represented in this Agreement as soon thereafter as possible; provided, however, that no party shall have any obligation to repair or replace any immaterial or obsolete asset no longer necessary or useful for the continued operation of the station consistent with past practice. If Infinity or Salem, as the case may be (the "Repairing Party"), is unable to repair
or replace the Damaged Assets by the date on which the Closing would otherwise occur under this Agreement, then the Repairing Party shall reimburse all reasonable costs incurred by the Acquiring Party in repairing or replacing the Damaged Assets after the Closing.
8.7. CONFIDENTIALITY.
(a) Salem and Infinity shall each keep confidential all information obtained by it with respect to the other in connection with this Agreement, except where such information is known or available through other lawful sources or where its disclosure is required in accordance with applicable law. If the transactions contemplated hereby are not consummated for any reason, Salem and Infinity shall return to the other, without retaining a copy thereof, any schedules, documents or other written information, including all financial information, obtained from the other in connection with this Agreement and the transactions contemplated hereby.
(b) Except as required by the FCC in connection with the filing of the FCC application, without the prior consent of both Salem and Infinity, there shall be no public announcement relating to this Agreement or the transactions proposed herein.
8.7. FURTHER ASSURANCES. Infinity and Salem shall cooperate and take such actions, and execute such other documents, at the Closing or subsequently, as may be reasonably requested by the other in order to carry out the provisions and purposes of this Agreement.
8.8 COVENANT NOT TO COMPETE. At the Closing, Salem shall execute and deliver, and cause its parent to execute and deliver, the Covenant Not to Compete.
9.1. TO SALEM'S OBLIGATIONS. The obligations of Salem hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties made by Infinity in this Agreement shall be true and complete in all material respects on and as of the Closing Date (except to the extent they expressly relate to an earlier time, in which case they shall have been true and correct only as of such earlier time) as if made on and as of that date, except to the extent changes are permitted under SECTION 8.1 of this Agreement.
(ii) All of the terms, covenants and conditions to be complied with and performed by Infinity under this Agreement on or prior to Closing Date shall have been complied with or performed in all material respects.
(b) FCC CONSENT. The FCC Consents to the Applications shall have been obtained, without the imposition of any condition materially adverse to Salem, and such FCC Consents shall have become Final Orders; provided, that Salem agrees to waive the requirement of Final Orders if its senior lenders consent to such waiver.
(c) NO INJUNCTION. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated by this Agreement in accordance with its terms.
(d) DELIVERIES. Infinity shall have made or stand willing to make all deliveries required under SECTION 10.1.
9.2 TO INFINITY'S OBLIGATIONS. The obligations of Infinity hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties made by Salem in this Agreement shall be true and complete in all material respects on and as of the Closing Date (except to the extent they expressly relate to an earlier time, in which case they shall have been true and correct only as of such earlier time) as if made on and as of that date.
(ii) All of the terms, covenants and conditions to be complied with and performed by Salem under this Agreement on or prior to the Closing Date shall have been complied with or performed in all material respects.
(b) FCC CONSENT. The FCC Consents to the FCC Applications shall have been obtained, without the imposition of any condition materially adverse to Infinity, and such FCC Consents shall have become Final Orders; provided, that Infinity agrees
to waive the requirement of Final Orders if Salem's senior lenders consent to Salem's waiving of the requirement.
(c) NO INJUNCTION. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated by this Agreement in accordance with its terms.
(d) DELIVERIES. Salem shall have made or stand willing to make all the deliveries required under SECTION 10.2 and shall have paid or stand willing to pay the Cash Purchase Price as provided in SECTION 2.2.
10.1. DOCUMENTS TO BE DELIVERED BY INFINITY. At the Closing, Infinity shall deliver to Salem the following:
(a) a copy of the resolution of the board of directors of Infinity, certified by an authorized officer of Infinity, authorizing the execution, delivery and performance of this Agreement;
(b) instruments of conveyance and transfer, in form and substance reasonably satisfactory to counsel to Salem, effecting the sale, transfer, assignment and conveyance of the KEWS Assets to Salem, including, but not limited to, the following:
(i) an assignment of the KEWS FCC Licenses;
(ii) bills of sale for all KEWS Personal Property;
(iii) assignments of the Assumed Contracts, together with all third party consents as provided in SECTION 8.4;
(c) instruments, in form and substance reasonably satisfactory to Salem and its counsel, pursuant to which Infinity assumes the obligations, liabilities and commitments of Salem as provided in ARTICLE 3; and
(d) such other documents as may reasonably be requested by Salem's counsel.
10.2. DOCUMENTS TO BE DELIVERED BY SALEM. At the Closing, Salem shall deliver to Infinity the following:
(a) a copy of the resolution of the board of directors of Salem, certified by an authorized officer of Salem, authorizing the execution, delivery and performance of this Agreement;
(b) instruments of conveyance and transfer, in form and substance reasonably satisfactory to counsel to Infinity, effecting the sale, transfer, assignment and conveyance of the KDFX Assets to Infinity, including, but not limited to, the following:
(i) an assignment of the KDFX FCC Licenses;
(ii) bills of sale for all KDFX Personal Property;
(iii) assignments of the Assumed Contracts, together with all third party consents as provided in SECTION 8.4;
(c) instruments, in form and substance reasonably satisfactory to Infinity and its counsel, pursuant to which Salem assumes the obligations, liabilities and commitments of infinity as provided in ARTICLE 3;
(d) the Covenant Not to Compete duly executed by Salem and its parent;
(e) immediately available wire transferred federal funds as provided in SECTION 2.2;
(f) the Amended KDFX Transmitter Site Lease executed by the landlord thereunder and dated the Closing Date; and
(g) such other documents as may reasonably be requested by Infinity's counsel.
11.1. INFINITY'S INDEMNITIES. From and after the Closing, Infinity shall indemnify, defend, and hold harmless Salem and its affiliates and their respective directors, officers, employees, and representatives, and the successors and assigns of any of them, from and against, and reimburse them for, all claims, damages, costs and expenses, including, without limitation, interest, penalties, court costs and reasonable attorneys' fees and expenses, resulting from:
(a) any liabilities or obligations of Infinity or its affiliates not assumed by Salem under this Agreement;
(b) any untrue representation, breach of warranty, or nonfulfillment of any covenant by Infinity contained in this Agreement or in any certificate document or instrument delivered to Salem under this Agreement;
(c) Infinity's operation or ownership of KEWS prior to the Effective Time;
(d) Infinity's operation or ownership of KDFX after the Effective Time; or
(e) any failure to comply with any "bulk sales" laws applicable to the sale of KEWS hereunder.
11.2. SALEM'S INDEMNITIES. From and after the Closing, Salem shall indemnify, defend and hold harmless Infinity and its affiliates and their respective directors, officers, employees, and representatives, and the successors and assigns of any of them, from and against, and reimburse them for, all claims, damages, costs and expenses, including, without limitation, interest, penalties, court costs and reasonable attorneys' fees and expenses, resulting from:
(a) any liabilities or obligations of Salem or its affiliates not assumed by Infinity under this Agreement;
(b) any untrue representation, breach of warranty, or nonfulfillment of any covenant by Salem contained in this Agreement or in any certificate document or instrument delivered to Infinity under this Agreement;
(c) Salem's operation or ownership of KDFX prior to the Effective Time;
(d) Salem's operation or ownership of KEWS after the Effective Time; or
(e) any failure to comply with any "bulk sales" laws applicable to the sale of KDFX hereunder.
11.3. PROCEDURE FOR INDEMNIFICATION. The procedure for indemnification shall be as follows:
(a) The party seeking indemnification under this ARTICLE 11 (the
"Claimant") shall give notice to the party from whom indemnification is
sought (the "Indemnitor") of any claim, whether solely between the parties
or brought by a third party, reasonably specifying (i) the factual basis
for the claim, and (ii) the amount of the claim if then known. If the claim
relates to an action, suit or proceeding filed by a third party against
Claimant, notice shall be given by Claimant within fifteen (15) days after
written notice of the action, suit or proceeding was given to Claimant. In
all other circumstances, notice shall be given by Claimant within thirty
(30) days after
Claimant becomes, or should have become, aware of the facts giving rise to the claim. Notwithstanding the foregoing, Claimant's failure to give Indemnitor timely notice shall not preclude Claimant from seeking indemnification from Indemnitor if Claimant's failure has not materially prejudiced Indemnitor's ability to defend the claim or litigation.
(b) With respect to claims between the parties, following receipt of notice from the Claimant of a claim, the Indemnitor shall have thirty (30) days to make any investigation of the claim that the Indemnitor deems necessary or desirable. For the purposes of this investigation, the Claimant agrees to make available to the Indemnitor and/or its authorized representatives the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnitor cannot agree as to the validity and amount of the claim within the 30-day period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy.
(c) With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnitor shall have the right at its own expense to participate in or assume control of the defense of the claim with counsel reasonably acceptable to Claimant, and the Claimant shall cooperate fully with the Indemnitor, subject to reimbursement for reasonable expenses incurred by the Claimant as the result of a request by the Indemnitor. If the Indemnitor elects to assume control of the defense of any third-party claim, the Claimant shall have the right to participate in the defense of the claim at its own expense. If the Indemnitor does not elect to assume control or otherwise participate in the defense of any third party claim, Claimant may, but shall have no obligation to, defend or settle such claim or litigation in such a manner as it deems appropriate, and in any event Indemnitor shall be bound by the results obtained by the Claimant with respect to the claim (by default or otherwise) and shall promptly reimburse Claimant for the amount of all expenses (including the amount of any judgment rendered), legal or otherwise, incurred in connection with such claim or litigation. The Indemnitor shall be subrogated to all rights of the Claimant against any third party with respect to any claim for which indemnity was paid.
11.4. LIMITATIONS.
(a) Neither Infinity nor Salem shall have any obligation to the other party for any matter described in SECTION 11.1 or SECTION 11.2, as the case may be, except upon compliance by the other party with the provisions of this ARTICLE 11, particularly SECTION 11.3.
(b) Neither party shall be required to indemnify the other party under
this ARTICLE 11 unless (i) written notice of a claim under this ARTICLE 11
was received by the party within the pertinent survival period specified in
SECTION 11.5 and (ii) unless and until the aggregate amount of claims
against the party to which the other party (as a Claimant) is entitled to
be
indemnified under this Agreement exceeds $50,000, and then only for the excess over $50,000. The foregoing "deductible" shall not apply to (i) any proration of expenses under SECTION 3.3, (ii) either party's obligation to indemnify by reason of such party's non-compliance with the provisions of any bulk sales laws applicable to this transaction, or (iii) any obligation to indemnify against third-party claims. Neither party shall have any liability to the other party under any circumstances for special, consequential, punitive or exemplary damages.
11.5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations, warranties, covenants, indemnities and agreements contained in this Agreement or in any certificate, document or instrument delivered pursuant to this Agreement are and will be deemed and construed to be continuing covenants, indemnities and agreements and shall survive the Closing for a period of six (6) months after the Closing Date (the "Survival Period"). No claim may be brought under this Agreement unless written notice describing in reasonable detail the nature and basis of such claim is given on or prior to the last day of the Survival Period. In any event such notice is given, the tight to indemnification with respect thereto shall survive the Survival Period until such claim is finally resolved and any obligations thereto are fully satisfied. Any investigation by or on behalf of any party hereto shall not constitute a waiver as to enforcement of any representation, warranty, covenant or agreement contained herein.
11.6. SOLE REMEDY. After the Closing, the right to indemnification under this ARTICLE 11 shall be the exclusive remedy of any party in connection with any breach or default by another party under this Agreement.
12.1. TERMINATION.
(a) This Agreement may be terminated by either Salem or Infinity, if the party seeking to terminate is not in material default or breach of this Agreement, upon written notice to the other upon the occurrence of any of the following:
(i) if, subject to the opportunity to cure period set forth in
Section 12.1(c) below, the other party is in material breach of this
Agreement;
(ii) if there shall be in effect any order or decree from the Department of Justice or any judgment, final decree or order that would prevent or make unlawful the Closing or if the FCC shall have released a hearing designation order requiring a formal hearing on either of the FCC Applications; or
(iii) if the Closing has not occurred by June 30, 1997 (the "Upset Date").
(b) This Agreement may be terminated by mutual written consent of Salem and Infinity
(c) If either party believes the other to be in breach or default of
this Agreement, the non-defaulting party shall, prior to exercising its right to
terminate under SECTION 12.1(a)(i), provide the defaulting party with notice
specifying in reasonable detail the nature of such breach or default. Except for
a failure to pay the Cash Purchase Price, the defaulting party shall have ten
(10) days from receipt of such notice to cure such default; provided, that if
the breach or default is due to no fault of the defaulting party and is
incapable of cure within such 1O-day period, the cure period shall be extended
as long as the defaulting party is diligently and in good faith attempting to
effectuate a cure. Nothing in this SECTION 12.1(c) shall be interpreted to
extend the Upset Date.
12.2. EFFECT OF TERMINATION.
In the event of termination of this Agreement pursuant to SECTION 12.1, this Agreement (other than SECTION 8.7 (Confidentiality), which shall remain in full force and effect) shall forthwith become null and void, and no party hereto (nor any of their respective affiliates, directors, officers or employees) shall have any liability or further obligation, except as provided in this ARTICLE 12 and in ARTICLE 13; provided, that nothing in this SECTION 12.2 shall relieve any party from liability for any breach of this Agreement.
13.1. DEFAULT BY INFINITY; SPECIFIC PERFORMANCE. Infinity recognizes that, in the event Infinity defaults in the performance of its obligations under this Agreement, monetary damages alone will not be adequate. In such event, Salem shall be entitled to obtain specific performance of the terms of this Agreement without being required to post bond or furnish other security. In addition, Salem shall be entitled to obtain from Infinity court costs and reasonable attorneys' fees and expenses incurred by it in enforcing its rights hereunder. As a condition to seeking specific performance, Salem shall not be required to have tendered the Purchase Price specified in ARTICLE 2 of this Agreement, but shall be ready, willing and able to do so.
understood and agreed that the amount of liquidated damages represents Salem's and Infinity's reasonable estimate of actual damages and does not constitute a penalty. In the event that Infinity is entitled to liquidated damages, the Escrow Deposit shall be paid over to Infinity in partial satisfaction of Salem's liability for liquidated damages. In the event of a termination of this Agreement pursuant to SECTION 12.1 for any other reason, the Escrow Deposit, together with any interest and earnings thereon, shall be paid to Salem.
14.1. TRANSFER TAXES AND EXPENSES. All recordation, transfer, documentary, excise, sales or use taxes or fees imposed on this transaction shall be shared equally by Salem and Infinity. Except as otherwise provided in this Agreement, each party shall be solely responsible for and shall pay all other costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.
14.2. BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Neither Salem nor Infinity may assign its rights under this Agreement without the prior written consent of the other party hereto.
14.3. ENTIRE AGREEMENT; SCHEDULES; AMENDMENT; WAIVER. This Agreement, and the exhibits and schedules hereto and thereto, embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. Any matter that is disclosed in a Schedule hereto in such a way as to make its relevance to the information called for by another Schedule readily apparent shall be deemed to have been included in such other Schedule, notwithstanding the omission of an appropriate cross-reference. No amendment, waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. No failure or delay on the part of Salem or Infinity in exercising any right or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
14.4. HEADINGS. The headings set forth in this Agreement are for convenience only and shall not control or affect the meaning or construction of the provisions of this Agreement.
14.5. COMPUTATION OF TIME. If after making computations of time provided for in this Agreement, a time for action or notice falls on Saturday, Sunday or a Federal holiday, then such time shall be extended to the next business day.
14.6. GOVERNING LAW; WAIVER OF JURY TRIAL. The construction and performance of this Agreement shall be governed by the law of the State of New York without regard to its principles of conflicts of law. SALEM AND INFINITY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE. Salem and Infinity hereby acknowledge that they have each been represented by counsel in the negotiation, execution and delivery of this Agreement and that their lawyers have fully explained the meaning of the Agreement, including in particular the jury-trial waiver. Any question of doubtful interpretation shall not be resolved by any rule providing for interpretation against the party who causes the uncertainty to exist or against the drafter of this Agreement.
14.7. ATTORNEYS' FEES. In the event of any dispute between the parties to this Agreement, Infinity or Salem, as the case may be, shall reimburse the prevailing party for its reasonable attorneys' fees and other costs incurred in enforcing its rights or exercising its remedies under this Agreement. Such right of reimbursement shall be in addition to any other right or remedy that the prevailing party may have under this Agreement.
14.8. SEVERABILITY. If any term or provision of this Agreement, or the application thereof to any person or circumstance shall, to any extent be held invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
14.9. NOTICES. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, addressed to the following addresses, or to such other address as any party may request.
If to Infinity:
c/o Infinity Broadcasting Corporation
600 Madison Avenue, 4th Floor
New York, NY 10022
Attention: Mr. Mel Karmazin
Telephone: 212-750-6400
Facsimile: 212-888-2959
With a copy (which shall not constitute notice) to:
Leventhal, Senter & Lerman
2000 K Street, N.W., Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lermart, Esq. Telephone: 202-429-8970 Facsimile: 202-293-7783 |
If to Salem:
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Esq.
Telephone: 805-987-0400
Facsimile: 805-482-8570
Any such notice, demand or request shall be deemed to have been duly delivered and received (a) on the date of personal delivery, or (b) on the date of transmission, if sent by facsimile (but only if a hard copy is also sent by overnight courier), or (c) on the date of receipt, if mailed by registered or certified mail, postage prepaid and return receipt requested, or (d) on the date of a signed receipt, if sent by an overnight delivery service, but only if sent in the same manner to all persons entitled to receive notice or a copy.
14.10. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.
15.1. DEFINED TERMS. Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).
"Acquiring Party" shall mean either Infinity or Salem, as required by the context in which such term is used, in its capacity as the party acquiring a station hereunder.
"Act" shall have the meaning set forth in SECTION 5.1(c).
"Agreement" shall mean this Asset Purchase Agreement.
"Amended KDFX Transmitter Site Lease" shall have the meaning set forth in
SECTION 8.9.
"Asbestos" shall mean any and all varieties of materials included in the definition of "asbestos" under any federal or state law or regulation relating to the protection of human health or the environment.
"Asbestos-Containing Material" shall mean any material containing more than one (1) percent Asbestos by weight.
"Cash Purchase Price" shall have the meaning set forth in SECTION 1.2.
"Claimant" shall have the meaning set forth in SECTION 11.3.
"Closing" shall have the meaning set forth in SECTION 1.1.
"Closing Date" shall mean the date on which the Closing is completed.
"Damaged Assets" shall have the meaning set forth in SECTION 8.6.
"Effective Time" shall have the meaning set forth in SECTION 3.1.
"Environmental Laws" shall mean all applicable local, state and federal statutes and regulations relating to the protection of human health or the environment including the FCC's regulations concerning radio frequency radiation.
"Escrow Agent" shall mean Gary Stevens & Co.
"Escrow Deposit" shall mean the amount held by the Escrow Agent pursuant to the Escrow Agreement, including all earnings and interest thereon.
"FCC" shall have the meaning set forth in the preamble to this Agreement.
"FCC Applications" shall have the meaning set forth in SECTION 7.1.
"FCC Consent" shall mean the action by the FCC granting the applicable FCC Application.
"Final Order" shall mean action by the FCC, with respect to an FCC
Application, (i) which has not been vacated, reversed, stayed, or suspended;
(ii) with respect to which no timely appeal, request for stay or petition for
rehearing, reconsideration or review by any party or by the FCC on its own
motion, is pending; and (iii) as to which the time for filing any such appeal
request, petition, or similar document or for the reconsideration or review by
the FCC on its own motion under the Communications Act of 1934, as amended, and
the rules and regulations of the FCC, has expired.
"GAAP" shall mean generally accepted accounting principles, consistently applied.
"HSRA" shall mean the Hart-Scott-Rodino Antitrust Improvements Act 1976, as amended, and the regulations adopted thereunder.
"Indemnitor" shall have the meaning set forth in SECTION 11.3.
"Infinity" shall have the meaning set forth in the preamble to this Agreement.
"Infinity's Proration Amount" shall have the meaning set forth in SECTION 3.4.
"KDFX" shall have the meaning set forth in the preamble to this Agreement.
"KDFX Assets" shall have the meaning set forth in SECTION 2.3(a).
"KDFX Assumed Contracts" shall have the meaning set forth in SECTION 2.3(a)(iv).
"KDFX FCC Licenses" shall have the meaning set forth in SECTION 2.3(a)(i).
"KDFX Main Studio Equipment" shall have the meaning set forth in SECTION 2.3(a)(iii).
"KDFX Personal Property" shall have the meaning set forth in SECTION
2.3(a)(iii). "KDFX Real Property" shall have the meaning set forth in SECTION
6.3(b).
"KDFX Transmitter Site Equipment shall have the meaning set forth in
SECTION 2.3(a)(ii).
"KEWS" shall have the meaning set forth in the preamble to this Agreement.
"KEWS Assets" shall mean the assets to be transferred to Salem hereunder, as more fully specified in SECTION 1.2.
"KEWS Assumed Contracts" shall have the meaning set forth in SECTION 1.2.
"KEWS FCC Licenses" shall have the meaning set forth in SECTION 1.2.
"KEWS Main Studio Equipment" shall have the meaning set forth in SECTION 1.2.
"KEWS Personal Property" shall have the meaning set forth in SECTION 1.2.
"KEWS Real Property" shall have the meaning set forth in SECTION 5.3(C).
"KEWS Transmitter Site Equipment" shall have the meaning set forth in
SECTION 1.2.
"Liens" shall mean mortgages, deeds of trust, liens, security interests,
pledges, collateral assignments, conditional sales agreements, leases,
encumbrances, claims, or other defects of title, but shall not include (i) liens
for current taxes not yet due and payable, (ii) other liens imposed by law (such
as materialman's, mechanic's, carrier's, worker's and repairman's liens) arising
in the ordinary course of business (provided that such liens do not interfere in
any material respect with the use of the Station Assets as currently used),
(iii) valid leases or subleases to third parties with respect to property not
used in the operation of the Station, and (iv) defects in title or other matters
that are not material to the owner or lessee, as the case may be.
"Notice of Disagreement" shall have the meaning set forth in SECTION 3.4.
"PCB" shall mean polychlorinated biphenyl.
"Proration Schedule" shall have the meaning set forth in SECTION 3.4.
"Purchase Price" shall have the meaning set forth in SECTION 2.1.
"Referee" shall have the meaning set forth in SECTION 3.4.
"Repairing Party" shall have the meaning set forth in SECTION 8.6.
"Representing Party" shall have the meaning set forth in ARTICLE 4.
"Salem" shall have the meaning set forth in the preamble to this Agreement.
"Survival Period" shall have the meaning set forth in SECTION 11.5.
"To Infinity's knowledge," or words of similar import, shall mean to the actual knowledge of the president or chief financial officer of Infinity.
"To Salem's knowledge," or words of similar import, shall mean to the actual knowledge of the president or chief financial officer of Salem.
"Upset Date" shall have the meaning set forth in SECTION 12.1.
15.2. MISCELLANEOUS TERMS. The term "or" is disjunctive; the term "and" is conjunctive. The term "shall" is mandatory; the term "may" is permissive. Masculine terms apply to females; feminine terms apply to males. The term "includes" or "including" is by way of example and not limitation.
[Signatures immediately following this page.]
3O
IN WITNESS WHEREOF. the parties hereto have caused this Asset Purchase Agreement to be duly executed as of the date first written above.
INFINITY BROADCASTING
CORPORATION OF DALLAS
By: /s/ Farid Suleman
-----------------------------
Name: Farid Suleman
Title: VP Finance/CFO
|
INSPIRATION MEDIA OF TEXAS, INC.
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement to be duly executed as of the date first written above.
INFINITY BROADCASTING
CORPORATION OF DALLAS
INSPIRATION MEDIA OF TEXAS, INC.
By: /s/ Eric H. Halvorson ---------------------------- Eric H. Halvorson Executive Vice President |
EXHIBIT 10.06.06.01
This AGREEMENT (the "Agreement") is dated as of December 4, 1996 by and
between BACK BAY BROADCASTERS, INC. ("Seller"), and NEW ENGLAND CONTINENTAL
MEDIA, INC. ("Buyer").
1. Seller owns and operates radio station WBNW(AM) licensed to Boston, Massachusetts (the "Station"), and holds the licenses and authorizations issued by the FCC for the operation of the Station.
2. Buyer desires to acquire substantially all the assets of the Station, and Seller is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to prior approval of the FCC.
NOW THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer hereby agree as follows:
Buyer. The Buyer's Threshold Limitation shall be (a) Ten Thousand Dollars
($10,000) for any individual claim, liability, damage, loss, cost or expense and
(b) Twenty Five Thousand Dollars ($25,000) for all claims, liabilities, damages,
losses, costs and expenses.
the present FCC licenses issued for operation of the Station shall not be deemed a Material Adverse Condition.
(b) Any and all claims of Seller with respect to transactions prior to the Closing including, without limitation, claims for tax refunds and refunds of fees paid to the FCC.
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all employment contracts.
(f) All contracts that are terminated in accordance with the terms and provisions of this Agreement or have expired prior to the Closing Date in the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed between the date hereof and the Closing Date in accordance with the terms and provisions of this Agreement.
(h) Seller's corporate records except to the extent such records pertain to or are used in the operation of the Station, in which case Seller shall deliver accurate copies thereof to Buyer.
(j) Any asset of Seller not comprising the Sale Assets.
(k) All of Seller's right, title and interest in and to the call letters of the Station, "WBNW".
(a) At the Closing, Buyer shall assume and agree to perform, without duplication of Seller's performance, the following liabilities and obligations of Seller (the "Assumed Obligations"):
(ii) Liabilities and obligations arising under the Station Agreements, if any, assumed by and transferred to Buyer in accordance with this Agreement, but only to the extent such liabilities and obligations relate to any period of time after the Closing Date.
(b) Except for the Assumed Obligations and except as expressly provided in the LMA, Buyer shall not assume or in any manner be liable for any duties, responsibilities, obligations or liabilities of Seller of any kind or nature, whether express or implied, known or unknown, contingent or absolute, including, without limitation, any liabilities to or in connection with Seller's employees whether arising in connection with the transaction contemplated hereunder or otherwise.
(a) Concurrently with the execution of this Agreement, Buyer has deposited with Escrow Agent under the Escrow Agreement, in immediately available funds, the Earnest Money. The Escrow Agent shall hold the Earnest Money under the terms of the Escrow Agreement in trust for the benefit of the parties hereto. Interest and other earnings on the Earnest Money shall be distributed by the Escrow Agent to Buyer from time to time upon the request of Buyer.
(a) The Purchase Price shall be paid by Buyer as follows:
property of Seller and shall, pursuant to the Escrow Agreement, be disbursed to Seller by wire transfer of immediately available federal funds.
(ii) The Purchase Price, less the amount of the Earnest Money disbursed to Seller, shall be paid to Seller at Closing by wire transfer of immediately available federal funds.
required by Treasury Regulation (S) 1.1060-1T.
2.7 ADJUSTMENT OF PURCHASE PRICE.
-----------------------------
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(a) Except as otherwise provided in the LMA, all operating income and operating expenses of the Station shall be adjusted and allocated between Seller and Buyer, and an adjustment in the Purchase Price shall be made as provided in this Section, to the extent necessary to reflect the principle that all such income and expenses attributable to the operation of the Station on or before the Closing Date shall be for the account of Seller, and all income and expenses attributable to the operation of the Station after the Closing Date shall be for the account of Buyer.
(c) For purposes of making the adjustments pursuant to this Section, Buyer shall prepare and deliver the Adjustment List to Seller within thirty (30) days following the Closing Date, or such earlier or later date as shall be mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the Adjustment Amount. If the Adjustment Amount is a credit to the account of Buyer, Seller shall pay such amount to Buyer, and if the Adjustment Amount is a charge to the account of Buyer, Buyer shall pay such amount to Seller. In the event Seller disagrees with the Adjustment Amount determined by Buyer or with any other matter arising out of this subsection, and Buyer and Seller cannot within sixty (60) days resolve the disagreement themselves, the parties will refer the disagreement to a firm of independent certified public accountants, mutually acceptable to Seller and Buyer, whose decision shall be final and whose fees and expenses shall be allocated between and paid by Seller and Buyer, respectively, to the
extent that such party does not prevail on the disputed matters decided by the accountants.
Seller hereby represents and warrants to Buyer as follows:
(a) Do not in any material respect (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any Lien other than a Permitted Lien on any of the Sale Assets under), any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Seller;
(b) Do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under the Articles of Organization or Bylaws
of Seller or pursuant to any lease, agreement, commitment or other instrument which Seller is a party to, or bound by, or by which any of the Sale Assets may be bound, or result in the creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
(a) Seller has good, marketable and valid title to all of the items of Tangible Personal Property free and clear of all Liens except Permitted Liens, and including the right to transfer same.
(b) The Tangible Personal Property has been maintained in accordance with industry practices and is in good operating condition subject to ordinary wear and tear.
(c) The Tangible Personal Property complies with applicable rules and regulations of the FCC and the terms of the FCC Licenses.
(d) Seller has no knowledge of any defect in the condition or operation of any item of the Tangible Personal Property which is reasonably likely to have a material adverse effect on the operation of the Station.
(b) Except as set forth in the Schedules, (i) all Station Agreements are legal, valid and enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity regardless of whether enforcement is sought in any proceeding at law or in equity; (ii) neither Seller nor, to the knowledge of Seller, any other party thereto, is in material breach of or in material default under any Station Agreements; (iii) to the knowledge of Seller, there has not occurred any event which, after the giving of notice or the lapse of time or both, would constitute a material default under, or result in the material breach of, any Station Agreements which are, individually or in the aggregate, material to the operation of the Station; and (iv) Seller holds the right to enforce and receive the benefits under all of the Station Agreements, free and clear of all Liens (other than Permitted Liens) but subject to the terms and provision of each such agreement.
(b) There is no labor strike, dispute, slow-down or stoppage pending or, to the actual knowledge of Seller, threatened against the Station;
(c) There are neither pending nor, to the actual knowledge of Seller threatened, any suits, actions, administrative proceedings, union organizing activities, arbitrations, grievances or other proceedings between Seller and any employees of the Station or any union representing such employees; and there are no existing labor or employment or other controversies or grievances involving employees of the Station
which have had or are reasonably likely to have a material adverse effect on the operation of the Station;
(d) With respect to the Station, (i) Seller is in compliance in all material respects with all laws, rules and regulations relating to the employment of labor and all employment contractual obligations, including those relating to wages, hours, collective bargaining, affirmative action, discrimination, sexual harassment, wrongful discharge and the withholding and payment of taxes and contributions; (ii) Seller has withheld all amounts required by law or agreement to be withheld from the wages or salaries of its employees; and (iii) Seller is not liable to any present or former employees or any governmental authority for damages, arrears of wages or any tax or penalty for failure to comply with the foregoing;
(e) Buyer's consummation of the transactions contemplated by this Agreement in accordance with the terms hereof shall not, as a result of or in connection with the transactions contemplated hereby, impose upon Buyer the obligation to pay any severance or termination pay under any agreement, plan or arrangement binding upon Seller.
(a) Seller has obtained all environmental, health and safety permits necessary or required for either the operation of the Station and all such permits are in full force and effect and Seller is in compliance with all terms and material conditions of such permits.
(b) There is no proceeding pending or, to Seller's actual knowledge, threatened which may result in the reversal, rescission, termination, modification or suspension of any environmental or health or safety permits necessary for the operation of the Station.
(c) With respect to the Station, Seller is in compliance in all material respects with the provisions of Environmental Laws.
(d) During Seller's occupancy of any real property associated with the Station ("the Real Property"), Seller has not, and to Seller's actual knowledge, no other person or entity has caused or permitted materials to be generated, released, stored, treated, recycled, disposed of on, under or at such parcels, which materials, if known to be present, would require clean up, removal or other remedial or responsive action under Environmental Laws. Seller has not caused the migration of any materials from the Real Property onto or under any property adjacent to the Real Property which materials, if known to be present, would require cleanup, removal or other remedial or responsive action under Environmental Laws. To Seller's actual knowledge there are no underground storage tanks and no polychlorinated biphenyls ("PCB") or friable asbestos on such property.
(e) Seller is not subject to any judgment, decree, order or citation with respect to the Station or the Real Property related to or arising out of Environmental Laws, and Seller has not received notice that it has been named or listed as a potentially responsible party by any person or governmental body or agency in any matter arising under Environmental Laws.
(f) Seller has not discharged or disposed of any petroleum product or solid waste on the Real Property, or on the property adjacent to the Real Property, which may form the basis for any present or future claim based upon the Environmental Laws in existence on the date hereof or as of the Closing, or any demand or action seeking clean-up of any site, location, body of water, surface or subsurface, under any Environmental Laws or otherwise, or which may subject the owner of the Real Property to claims by third parties (except to the extent third party liability can be established) for damages.
(g) No portion of the Real Property has ever been used by Seller in material violation of Environmental Laws or used by Seller as a landfill, dump site or any other use which involves the disposal or storage of Hazardous Materials on-site or in any manner which may adversely affect the value of the Real Property.
(h) No pesticides, herbicides, fertilizers or other materials have been used on, applied to or disposed of by Seller on the Real Property in material violation of any Environmental Laws.
(i) With respect to the Station or the Real Property, Seller has disposed of all waste in full compliance with all Environmental Laws and to Seller's actual knowledge, there is no existing condition that may form the basis of any present or future claim, demand or action seeking clean up of any facility, site, location or body of water, surface or subsurface.
(j) To Seller's actual knowledge, Seller is in material compliance with all OSHA Laws.
Buyer represents and warrants to Seller as follows:
properties and carry on its business as it is now being conducted and as the same will be conducted following the Closing.
(a) Do not in any material respect (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any claim, lien, charge or encumbrance on any of the assets or properties of Buyer under) any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Buyer;
(b) Do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under, the Articles of Organization or Bylaws of Buyer or any lease, agreement, commitment, or other instrument which Buyer is a party to, bound by, or by which any of its assets or properties may be bound.
material adverse effect on the assets, business, operation or financial condition or results of operations of Buyer.
(a) Buyer has no knowledge after due inquiry of any facts concerning Buyer or any other person with an attributable interest in Buyer (as such term is defined under the Rules and Regulations) which, under present law (including the Act) and the Rules and Regulations, would (i) disqualify Buyer from being the holder of the FCC Licenses, the owner of the Sale Assets or the operator of the Station upon consummation of the transactions contemplated by this Agreement, or (ii) raise a substantial and material question of fact (within the meaning of Section 309(e) of the Act) respecting Buyer's qualifications.
(a) Subject to the LMA, use reasonable efforts to operate the Station in substantially the same manner in which it is currently being operated:
(b) Use reasonable commercial efforts to maintain insurance upon all of the tangible Sale Assets in such amounts and of such kind comparable to that in effect on
the date hereof with respect to such Sale Assets and with respect to the operation of the Station, with insurers of substantially the same or better financial condition;
(c) Subject to the LMA, operate the Station and otherwise conduct its business in accordance with the terms or conditions of its FCC Licenses, the Rules and Regulations, the Act and all other rules and regulations, statutes, ordinances and orders of all governmental authorities having jurisdiction over any aspect of the operation of the Station, except where the failure to so operate the Station would not have a material adverse effect on the Sale Assets or the operation of the Station or on the ability of Seller to consummate the transactions contemplated hereby;
(d) Maintain the books and records of the Station in Seller's customary manner on a basis consistent with prior years;
(e) Comply in all material respects with all Station Agreements now or hereafter existing which are material, individually or in the aggregate, to the operation of the Station; provided, however, that Seller shall not be required to continue or resume the broadcast of Bloomberg Financial News once the existing arraignment for such service is terminated;
(f) Promptly notify Buyer of any material default by, or claim of default against, any party under any Station Agreements which are material, individually or in the aggregate, to the operation of the Station, and any event or condition which, with notice or lapse of time or both, would constitute an event of default under such Station Agreements;
(g) Not mortgage, pledge or subject to any Lien (except in the ordinary course of business) any of the Sale Assets;
(h) Not sell, lease or otherwise dispose of, nor agree to sell, lease or otherwise dispose of, any of the Sale Assets, except for dispositions in the ordinary course of business;
(i) Not acquire or lease any goods or services or enter into, amend or terminate any license, lease of real or personal property or any other Station Agreement, other than in the ordinary course of business;
(j) Subject to the LMA, not introduce any material change with respect to the operation of the Station including, without limitation, any material changes in the broadcast hours of the Station or any other material change in the Station's programming policies, except such changes as in the sole discretion of Seller, exercised in good faith after consultation with Buyer, are required by the public interest;
(k) Notify Buyer of any material litigation pending or threatened against Station or Seller or any material damage to or destruction of any assets included or to be included in the Sale Assets;
(a) All tax returns, estimates, and reports required to be filed by Seller prior to the Closing Date or relating to periods prior to the Closing Date will be timely filed with the appropriate governmental agencies unless valid extensions therefor shall have been obtained.
(b) All taxes pertaining to ownership of the Sale Assets or operation of the Station prior to the Closing Date will be timely paid; provided that Seller shall not be required to pay any such tax so long as the validity thereof shall be contested in good faith by appropriate proceedings and Seller shall have set aside adequate reserves with respect to any such tax.
5.5 ACCESS PRIOR TO THE CLOSING DATE. Prior to the Closing, Buyer and
its representatives may make such reasonable investigation of the Sale Assets as
it may desire; and Seller shall give to Buyer, its engineers, counsel,
accountants and other representatives reasonable access during normal business
hours throughout the period prior to the Closing to personnel and all of the
assets, books, records and files of or pertaining to the Station, provided that
(i) Buyer shall give Seller reasonable advance notice of each date on which
Buyer or any such other person or entity desires such access, (ii) each person
(other than an officer of Buyer) shall, if requested by Seller, be accompanied
by an officer or their representative of Buyer approved by Seller, which
approval shall not be unreasonably withheld, (iii) the investigations at the
offices of Seller shall be reasonable in number and frequency, and (iv) all
investigations shall be conducted in such a manner as not to physically damage
any property or constitute a disruption of the operation of the Station or
Seller. Seller shall furnish to Buyer during such period all documents and
copies of documents and information concerning the business and affairs of
Seller and the Station as Buyer may reasonably request.
confidentiality provisions by its respective representatives. Notwithstanding the foregoing, nothing contained herein shall prohibit Buyer or Seller from:
(i) using such information, data and materials in connection with any action or proceeding brought or any claim asserted by Buyer or Seller in respect of any breach by the other of any representation, warranty or covenant made in or pursuant to this Agreement; or
(ii) supplying or filing such information, data or materials to or with the FCC or any other valid governmental or court authority to the extent reasonably necessary to obtain any consent, waiver, amendment, modification, approval, authorization, permit or license which may be necessary to effectuate this Agreement, and to consummate the transaction contemplated herein.
In the event that either party determines in good faith that a press release or other public announcement is desirable under any circumstances, the parties shall consult with each other to agree upon the appropriate timing, form and content of such release or announcement prior to making such release or announcement.
5.10 Intentionally Omitted
Buyer's obligation to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, unless waived by Buyer in writing:
(a) The representations and warranties of Seller contained in this Agreement or in any other Document shall be complete and correct in all material respects on the date hereof and at the Closing Date with same effect as though made at such time except for changes that are not materially adverse to the Station or the Sale Assets taken as a whole.
(a) The FCC Order shall have been issued by the FCC and shall have become a Final Action without any Material Adverse Condition.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Seller.
(c) All other authorizations, consents, approvals and clearances of federal, state or local governmental agencies required to permit the consummation by Buyer of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that
individually or in the aggregate would have a material adverse effect on the operations of the station.
(b) To counsel's knowledge, no condition has been imposed by the FCC as part of any FCC License which is not set forth on the face thereof as issued by the FCC or contained in the Rules and Regulations applicable generally to stations of the type, nature, class or location of the Station.
(c) No proceedings are pending or, to counsel's knowledge, are threatened which may result in the revocation, modification, non-renewal of, suspension of, or the imposition of a Material Adverse Condition upon, any of the FCC Licenses, the denial of any pending applications, the issuance of any cease and desist order or the imposition of any fines, forfeitures or other administrative actions by the FCC with respect to the Station or its operation, other than proceedings affecting the radio broadcasting industry in general.
In rendering such opinion, counsel shall be entitled to rely upon Seller's representations and warranties in this Agreement and to limit its inquiry to its files and such FCC files and records as are available to it as of 10:00 o'clock A.M. Eastern time the business day immediately preceding the Closing Date. Counsel may state that, as to any factual matters embodied in, or forming a basis for any legal opinion expressed in, such opinion, counsel's knowledge is based solely on such inquiry.
(a) Between the date hereof and the Closing Date, the Station shall not have for a period of more than ten (10) days in the aggregate (i) ceased broadcasting on its authorized frequency, (ii) lost substantially all of its normal broadcasting capability or (iii) been broadcasting at a power level of 50% or less of its FCC authorized level. Seller shall promptly notify Buyer of the occurrence of any one or more of the foregoing events or conditions, and the non-fulfillment of the condition precedent set forth in this Subsection caused by the occurrence of the events specified in Seller's notice shall be deemed waived by Buyer unless, within fifteen (15) days after Buyer's receipt of Seller's written notice, Buyer notifies Seller in writing to the contrary.
(b) In addition, during the five (5) days immediately preceding the Closing Date, the Station shall have been operating continuously with substantially all of its normal broadcasting capability except for cessation or reductions for insignificant periods of time resulting from occurrences (such as lightning strikes) over which Seller has no control. Seller shall have the right to delay Closing for a period not to exceed thirty (30) days if Seller reasonably determines that any action to restore the Station substantially all of its normal broadcasting capability can be completed during such delay period.
6.9 Intentionally Omitted
The obligation of Seller to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the closing Date, of each of the following conditions, unless waived by Seller in writing:
(a) The representations and warranties of Buyer contained in this Agreement shall be complete and correct in all material respects on the date hereof and at the Closing Date with the same effect as though made at such time except for changes that are not materially adverse to Seller.
(a) The FCC Order shall have been issued by the FCC and shall have become effective under the rules of the FCC.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and clearances of all federal, state and local governmental agencies required to permit the consummation by Seller of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have any material adverse effect on Seller.
(a) Certified resolutions of Seller's Board of Directors (and shareholders, if required by applicable law) approving the execution and delivery of this Agreement and each of the other Documents and authorizing the consummation of the transactions contemplated hereby and thereby.
(c) A bill of sale and other instruments of transfer and conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and otherwise in form and substance reasonably satisfactory to Buyer, of any security interests granted in the Sale Assets as security for payment of loans and other obligations and of any other Liens (other than Permitted Liens).
(e) An instrument or instruments assigning to Buyer all right, title and interest of Seller in and to all Station Agreements being assumed by Buyer.
(f) An instrument assigning to Buyer all right, title and interest of Seller in the FCC Licenses, all pending applications relating to the station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(h) Such additional information and materials as Buyer shall have reasonably requested, including without limitation, evidence that all consents and approvals required as a condition to Buyer's obligation to close hereunder have been obtained.
(a) Certified resolutions of Buyer's Board of Directors (ad Buyer's shareholders if required by law) approving the execution and delivery of this Agreement and each of the other Documents and authorizing the consummation of the transaction contemplated hereby and thereby.
(c) The agreement of Buyer assuming the obligations under any Station Agreements being assumed by Buyer.
(e) Such additional information and materials as Seller shall have reasonably requested.
(i) Any breach or non-performance by Seller of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Documents; or
(ii) The ownership or operation by Seller of the Station or the Sale Assets on or prior to the Closing Date, except as relates to operation of the Station by Buyer under the LMA;
(iii) All other liabilities and obligations of Seller other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of the Bulk Sales Act, if applicable, in connection with the transaction contemplated hereby.
(i) Any breach or non-performance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Document; or
(ii) The ownership or operation of the Station after the Closing Date; or
(iii) All other liabilities or obligations of Buyer including, without limitation, the Assumed Obligations.
(a) the giving of written notice from Seller to Buyer, or from Buyer to Seller, if:
(i) Seller gives such termination notice and is not at such time in material default hereunder, or Buyer gives such termination notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained herein of Buyer (if such termination notice is given by Seller), or of Seller (if such termination notice is given by Buyer), are inaccurate in any respect and materially adverse to the party giving such termination notice unless the inaccuracy has been induced by or is the result of actions or omissions of the party giving such termination notice; or
(B) Any material obligation to be performed by Buyer (if such termination notice is given by Seller) or by Seller (if such termination notice is given by Buyer) is not timely performed in any material respect unless the lack of timely performance has been induced by or is the result of actions or omissions of the party giving such termination notice; or
and any such inaccuracy, failure to perform or non-satisfaction of a condition neither has been cured nor satisfied within twenty (20) days after written notice thereof from the party giving such termination notice nor waived in writing by the party giving such termination notice.
(b) Written notice from Seller to Buyer, or from Buyer to Seller, at any time after June 30, 1997 provided that termination shall not occur upon the giving of such termination notice by Seller if Seller is at such time in material default hereunder or upon the giving of such termination notice by Buyer if Buyer is at such time in material default hereunder.
(C) Written notice from Seller to Buyer, or from Buyer to Seller, at any time following a determination by the FCC that the application for consent to assignment of the FCC Licenses has been designated for hearing; provided that the party which is the subject of the hearing (or whose alleged actions or omissions resulted in the designation for heating) may not elect to terminate under this subsection (c).
penalty, the Earnest Money ("Liquidated Damages Amount"). SELLER'S RECEIPT OF THE EARNEST MONEY SHALL CONSTITUTE PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL BE SELLER'S SOLE REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH HEREUNDER IF CLOSING DOES NOT OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE THAT THE LIQUIDATED DAMAGES AMOUNT IS REASONABLE IN LIGHT OF THE ANTICIPATED HARM WHICH WILL BE CAUSED BY BUYER'S BREACH OF THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS, THE INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
(e) In any dispute between Buyer and Seller as to which party is entitled to all or a portion of the Earnest Money, the prevailing party shall receive, in addition to that portion of the Earnest Money to which it is entitled, an amount equal to interest on that portion at the rate of 10% per annum, calculated from the date the prevailing party's demand for all or a portion of the Earnest Money is received by the Escrow Agent.
Upon the occurrence of any casualty loss, damage or destruction material to the operation of the Station prior to the Closing, Seller shall promptly give Buyer written notice setting forth in detail the extent of such loss, damage or destruction and the cause
thereof if known. Seller shall use its reasonable efforts to promptly commence and thereafter to diligently proceed to repair or replace any such lost, damaged or destroyed property; provided, however, that if Seller shall have complied with Section 5.1 (b) hereof, Seller shall have no obligation to incur any costs or expenses for such repair or replacement not covered by insurance available therefore. In the event that the repair or replacement of any such lost, damaged or destroyed property is not fully completed prior to the Closing Date, Buyer may elect to: (a) terminate this Agreement; (b) postpone the Closing until Seller's repairs have been fully completed; or (c) consummate the transactions contemplated hereby on the Closing Date, in which event Seller shall assign to Buyer the portion of the insurance proceeds (less all reasonable costs and expenses, including without limitation attorney's fees, expenses and court costs incurred by Seller to collect such amounts), if any, not previously expended by Seller to repair or replace the damaged or destroyed property (such assignment of proceeds to take place regardless of whether the parties close on the scheduled or deferred Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged condition. In the event the loss, damage or destruction causes or will cause the Station to be off the air for more than seven (7) consecutive days or fifteen (15) total days, whether or not consecutive, then Buyer may elect either (i) to consummate the transactions contemplated hereby on the Closing Date, in which event Seller shall assign to Buyer the portion of the insurance proceeds (less all reasonable costs and expenses, including without limitation attorney's fees, expenses and court costs, incurred by Seller to collect such amounts), if any, not previously expended by Seller to repair or replace the damaged or destroyed property, and Buyer shall accept the damaged Sale Assets in their damaged condition, or (ii) to terminate this Agreement.
Except as otherwise provided in the LMA, between the date of this Agreement and the Closing Date, Buyer shall not control, manage or supervise the operation of the Station or conduct of its business, all of which shall remain the sole responsibility and under the control of Seller, subject to Seller's compliance with this Agreement.
(b) All state or local sales or use, stamp or transfer, grant and other similar taxes payable in connection with consummation of the transactions contemplated hereby shall be paid by the party primarily liable under applicable law to pay such tax.
(c) Except as otherwise expressly provided in this Agreement, each of the parties shall bear its own expenses, including the fees of any attorneys and accountants engaged by such party, in connection with this Agreement and the consummation of the transactions contemplated herein.
(a) if to Seller, to:
Mr. Peter Ottmar
Mercury Print and Mail
P.O. Box 6447
Providence, RI 02940
Facsimile No.: (401) 728-1865
with a copies to:
Thomas E. Neely, Esq.
Hale & Dorr
60 State Street
Boston, MA 02109
Facsimile No.: (617) 526-5000
and
Peter Tannenwald, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Ave., NW, Suite 200
Washington D.C. 20036-5101
Facsimile No.: (202) 728-0354
(b) if to Buyer, to:
Salem Communications Corporation 4880 Santa Rosa Road, Suite 300 Camarillo, California 93012 Facsimile No.: (805) 482-7290 Attention: Jonathan L. Block, Esq.
Corporate Counsel
or such other address with respect to any party hereto as such party may from time to time notify (as provided above) to the other party hereto. Any such notice, demand or communication shall be deemed to have been given (i) if so mailed, as of the close of the third (3rd) business day following the date mailed, and (ii) if personally delivered or otherwise sent as provided above, on the date received.
entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede any prior negotiations, agreements, understandings or arrangements between the parties with respect to the subject matter hereof. The execution of this Agreement shall in no way terminate or modify the rights of Buyer to otherwise acquire the Station in the future (by reason of its rights as successor to an option held by American Radio Systems) unless this Agreement is terminated as the result of Buyer's failure to act in good faith to pursue and effect the consummation of the Station pursuant to the terms set forth herein.
signed by the party against whom the enforcement of such amendment, waiver, discharge or termination is sought. Any waiver shall be effective only in accordance with its express terms and conditions.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written.
"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By /s/ Peter Ottman By /s/ Eric H. Halvorson
------------------------ ------------------------
Peter Ottman Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
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SCHEDULE 3.4
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NAME DESCRIPTION
--------------------------------- ---------------------------------
The Flatley Company Office Lease
Fellsway Plaza Trust Tower Land Lease
Federal Communications Commission FCC Licenses
Bloomberg Communications, Inc. Programming
SMI Multi Media Group Programming - Don McDonald
Westwood One Programming - Bruce Williams
FirstCom Production Library
Tokai Financial Services Telephone equipment
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Notwithstanding the disclosure of the required consents herein, except as specifically provided in this Agreement, the failure to obtain such consents shall not be a condition precedent to the obligations of the parties hereto, or either of them, to complete the transactions contemplated by this Agreement.
SEE ATTACHED.
1. License for Station WBNW(AM), Boston, MA, FCC File No. BR-901203UW, renewing authority to operate facilities specified in FCC File No. BZ-861022AM, expiring October 1, 1998. Assignment of license to Back Bay Broadcasters, Inc. authorized under FCC File No. BAL-940405EA, granted June 1, 1994. Transfer of control to James H. Ottmar and Peter H. Ottmar (50% each authorized under FCC File No. BTC-941130EA, granted December 21, 1994. Frequency 590 KHz.
2. Studio transmitter link used by WBNW, call sign WLO-559, frequency 946.5 MHz, expiring October 1, 1998.
3. Remote pickup license used by WBNW, call sign KVY914, frequency 450.95 MHz.
4. Remote control point under File No. BRC-951006AB, granted 3/7/96.
5. Microwave license, call sign WNEF-633, used for security camera at transmitter site, expires 10/14/98.
Capital Engineering (Maintenance) - through March 31, 1997.
Harvard University (Football) - through 1997 season.
Metro Traffic Control (Traffic Reports) - through January 24, 1997. Seller to give notice of termination at least 90 days prior to January 24, 1997.
Tower Site Lease - through remainder of 20 year term. (Consent Required)
Studios/Offices - through remainder of 20 year term. (Consent Required)
University of Massachusetts (Men's Basketball) - through 1996/1997 regular season
AFTRA - Collective Bargaining Agreement
Bloomberg Financial News
Capitol Engineering
FirstCom
The Media Audit
New England Weather Bureau
Tokai Financial Services
Richard Shafer
Tofias Fleishman Shapiro & Co.
SMI Multi Media Group
Westwood One
Joan Venocchi
Steve Bailey
John Hannah
Josh Hyatt
Maryhelen Gillespie
CBSI (Traffic/Accounting Software)
1. Back Bay Broadcasters, Inc. v. Michele E. Merolla, et al, Attleboro District Court. This is a claim by Back Bay against Merolla for failure to honor a sales contract, to which Merolla has filed a counterclaim alleging breach of contract to sell Merolla real estate. Merolla asked damages in excess of $57,000.
2. BBB adv. Associated Press - Boston Municipal Court. The Associated Press has sued BBB alleging breach of contract and asking for damages of $75,900 plus costs and interests.
3. BBB v. Merolla Chiropractic, Attleboro District Court. This is a companion case to the case referred to at item #1 above, and Merolla Chiropractic has failed to pay approximately $5,500 owed to Back Bay.
1. AFTRA - WBNW 1995-97 Collective Bargaining Agreement between Back Bay Broadcasters, Inc. and American Federation of Television and Radio Artists. (2/1/95-1/31/97).
2. Agreement dated February 8, 1994 with Local Union No. 1228 of the International Brotherhood of Electrical Workers (AFL-CIO).
Buyer and Seller acknowledge that Gary Stevens & Co., Inc. and Media Services Group, Inc. acted as the brokers with respect to this transaction. All fees due Gary Stevens & Co., Inc. arising out of this transaction shall be paid in full by Buyer. All fees due Media Services Group, Inc. shall be paid in full by Seller.
THIS ESCROW AGREEMENT (the "Agreement") is made as of this __ day of
December, 1996 by and among BACK BAY BROADCASTERS, INC. ("Seller"), NEW ENGLAND
CONTINENTAL MEDIA, INC. ("Buyer"), and MEDIA SERVICES GROUP, INC. ("Escrow
Agent").
WITNESSETH
WHEREAS, concurrently with the execution of this Agreement, Seller and Buyer are entering into an Asset Purchase Agreement (the "Purchase Agreement"), pursuant to which Seller has agreed to sell to Buyer, subject to the terms and conditions of the Purchase Agreement, substantially all the assets used in the operation of radio station WBNW-AM, Boston, Massachusetts; and
WHEREAS, the Purchase Agreement provides, upon the terms and conditions set forth therein, for Buyer to deposit into escrow the amount of Three Hundred Thousand Dollars ($300,000) (the "Escrow Deposit"), and
WHEREAS, the Escrow Deposit shall be held by the Escrow Agent subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and in the Purchase Agreement, the parties hereto agree as follows:
1. The Escrow Agent is hereby appointed and shall have all the rights, powers, duties and obligations hereinafter provided, and the Escrow Agent accepts such appointment.
2. Concurrently with the execution and delivery of this Agreement, Buyer has deposited with the Escrow Agent, in escrow, the Escrow Deposit. The Escrow Deposit shall be held and disbursed by Escrow Agent as hereinafter set forth.
3. The Escrow Agent agrees to accept Buyer's deposit of the Escrow Deposit. The Escrow Agent agrees to invest and reinvest the Escrow Deposit in accordance with the following provisions:
(a) The Escrow Agent shall invest and reinvest the Escrow Deposit in one or more of the following investments as selected from time to time by the Escrow Agent in its discretion (the "Obligations"):
EXHIBIT A
(i) Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, or
(ii) money market funds or certificates of deposit issued by any bank, trust company or national banking association, provided the capital stock, surplus, and undivided profits of such institution are not less that Fifty Million Dollars ($50,000,000), or
(iii) Money market funds authorized to invest solely in direct obligations of the United States of America.
(b) The Obligations shall have a maturity of thirty (30) days or less during the sixty (60) days immediately after deposit of the Escrow Deposit, and thereafter shall be available on demand without penalty unless Escrow Agent is otherwise directed in writing by both Seller and Buyer.
(c) Notwithstanding anything else in this Agreement to the contrary, interest and other earnings on the Escrow Deposit shall be distributed by the Escrow Agent to Buyer from time to time upon the request of Buyer.
6. Either Buyer or Seller, on its own, may request the Escrow Agent to release the Escrow Deposit to it by sending a written request to the Escrow Agent, with a copy to the other party, which request shall state the basis upon which the Buyer or Seller is requesting the release of the Escrow Deposit. The Escrow Agent shall deliver the Escrow Deposit to the requesting party if the other party hereto has not objected in writing to such written request with seven (7) business days after the date of receipt of the request by the Escrow Agent.
7. If a controversy arises between the parties hereto with respect to the release of the Escrow Deposit, the Escrow Agent shall not be required to resolve such controversy or take any action, but shall await final resolution of the controversy by joint written instructions from the parties hereto or pursuant to a nonappealable order from a court of competent jurisdiction. In any dispute between the Buyer and Seller as to which party is entitled to all or a portion of the Escrow Deposit, the prevailing party shall receive from
the losing party, in addition to that portion of the Escrow Deposit to which it is entitled, an amount equal to interest on that portion of the Escrow Deposit to which it is entitled at the rate of ten percent (10%) per annum, calculated from the date the prevailing party's demand for all or a portion of the Escrow Deposit is received by the Escrow Agent.
8. The Escrow Agent's duties are only such as are specifically provided herein, and the Escrow Agent shall incur no liability whatsoever to Buyer or Seller except for gross negligence or willful misconduct. The Escrow Agent shall have no responsibility hereunder other than to follow the instructions herein contained. The Escrow Agent may consult with counsel and shall be fully protected in any action taken reasonably and in good faith in accordance with any written instructions given to it hereunder and believed by it reasonably and in good faith to have been executed by the proper parties.
9. As between Seller and Buyer on the one hand and Escrow Agent on the other, Seller and Buyer shall be jointly and severally liable to indemnify Escrow Agent for all reasonable costs, charges, damages and expenses, including but not limited to reasonable attorneys' fees (the "Indemnifiable Costs") incurred by Escrow Agent arising out of or in connection with the performance of its obligations under this Agreement, provided that Indemnifiable Costs shall not include any costs, charges, damages or expenses, including attorneys' fees, arising out of or in connection with Escrow Agent's gross negligence or willful misconduct. Solely as between Seller and Buyer in connection with any controversy or litigation regarding the Escrow Deposit, (i) the one of them who as a claimant fails to obtain a majority of the relief sought, or who as a defendant or respondent fails to obtain denial by a judgment not subject to further appeal of a majority of the relief sought by the other, shall be responsible for payment of all of the Escrow Agent's Indemnifiable Costs relating to the controversy or litigation in question; and (ii) in any other event, Seller and Buyer shall each be responsible for payment of one-half of Escrow Agent's Indemnifiable Costs.
10. Escrow Agent agrees to serve without compensation for the services to be rendered hereunder.
11. The obligations of Seller and Buyer to indemnify Escrow Agent under
12. The Escrow Agent may resign at any time by giving written notice thereof to the other parties hereto, but such resignation shall not become effective until a successor escrow agent shall have been appointed by the Escrow Agent and approved by Seller and Buyer and shall have accepted such appointment in writing. If an instrument of acceptance by a successor escrow agent shall not have been delivered to the Escrow Agent within thirty (30) days after the giving of such notice of resignation, the resigning Escrow Agent may at the expense of both Buyer and Seller petition any court of competent jurisdiction for the appointment of a successor escrow agent.
13. In the event of any litigation between Seller and Buyer involving a disputed claim to the Escrow Deposit, the one of them who is the prevailing party shall be entitled to receive from the other reasonable attorneys' fees and other reasonable costs and expenses reasonably incurred by the prevailing party in connection with such litigation regardless of whether such litigation is prosecuted to judgment. As used herein, "prevailing party" shall mean in the case of a claimant, one who is successful in obtaining a majority of the relief sought, and in the case of a defendant or respondent, one who is successful in obtaining denial by a judgment not subject to further appeal of a majority of the relief sought by the claimant.
14. If a controversy arises between the parties hereto with respect to the release of the Escrow Deposit, any of the Seller, Buyer or Escrow Agent shall, at its option, file an action or bill in interpleader, or similar action for such purpose, in a court of competent jurisdiction and the Escrow Agent shall promptly pay the Escrow Deposit into said court, in which event the Escrow Agent's duties, responsibilities and liabilities under this Agreement shall terminate.
15. This Agreement shall be construed in accordance with the laws of the Commonwealth of Massachusetts. This Agreement may be executed in several counterparts, each one of which shall constitute an original, and all collectively shall constitute but one instrument.
16. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sufficiently given if delivered by overnight delivery service or sent by registered or certified mail, first class postage prepaid, or by telegram, facsimile machine or similar written means of communication, addressed as follows:
(a) if to the Escrow Agent, to:
Media Services Group, Inc.
170 Westminster Street
Suite 701
Providence, RI 02903
Facsimile No.: (401) 454-3131
(b) if to Seller, to:
Mr. Peter Ottmar
Mercury Print and Mail
P.O. Box 6447
Providence, RI 02940
Facsimile No.: (401) 724-1865
with a copies to:
Thomas E. Neely, Esq.
Hale & Dorr
60 State Street
Boston, MA 02109
Facsimile No.: (617) 526-5000
and
Peter Tannenwald, Esq.
Irwin, Campbell & Tannenwald
1730 Rhode Island Ave., NW, Suite 200
Washington D.C. 20036-3101
Facsimile No.: (202) 728-0354
(b) if to Buyer, to:
Salem Communications Corporation 4880 Santa Rosa Road, Suite 300 Camarillo, California 93012 Facsimile No.: (805) 482-7290 Attention: Jonathan L. Block, Esq.
Corporate Counsel
or any such other address with respect to any party hereto as such party may from time to time notify (as provided above) to the other parties hereto. Any such notice, demand or communication shall be deemed to have been given (i) if so mailed, as of the close of the third business day following the date so mailed, and (ii) if personally delivered or sent by overnight mail or otherwise sent as provided above, on the date received.
17. This Agreement shall terminate upon valid delivery of the Escrow Deposit to Seller and/or Buyer or to a successor escrow agent which executes an Escrow Agreement substantially similar to this Agreement.
18. Buyer's Federal Taxpayer Identification Number is 77-0121400.
IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as of the date first written.
"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By: By:
--------------------------- --------------------------------
Peter Ottmar Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
"ESCROW AGENT"
MEDIA SERVICES GROUP, INC.
By:
--------------------------------
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"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By: By:
------------------------------- -------------------------------
Peter Ottmar Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
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This Certificate is presented pursuant to Section 4 of the Escrow Agreement,
dated December 4, 1996 by and among BACK BAY BROADCASTERS, INC. ("Seller"), NEW
ENGLAND CONTINENTAL MEDIA, INC. ("Buyer") and MEDIA SERVICES GROUP, INC.
("Escrow Agent"). All capitalized terms used and not otherwise defined shall
have their respective meanings provided in the Escrow Agreement.
Pursuant to Section 4 of the Escrow Agreement, Seller and Buyer DO HEREBY CERTIFY that Seller is entitled to delivery of the Escrow Deposit.
Accordingly, the Escrow Agent is hereby directed to deliver the Escrow Deposit to Seller within one (1) business day of the receipt of this Certificate.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of the date indicated.
Dated:__________, 1997.
"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By: By:
---------------------------------- ---------------------------
Peter Ottmar Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
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This Certificate is presented pursuant to Section 5 of the Escrow
Agreement, dated December 4, 1996 by and among BACK BAY BROADCASTERS, INC.
("Seller"), NEW ENGLAND CONTINENTAL MEDIA, INC. ("Buyer") and MEDIA
SERVICES GROUP, INC. ("Escrow Agent"). All capitalized terms used and not
otherwise defined shall have their respective meanings provided in the
Escrow Agreement.
Pursuant to Section 5 of the Escrow Agreement, Seller and Buyer DO HEREBY CERTIFY that Buyer is entitled to delivery of the Escrow Deposit.
Accordingly, the Escrow Agent is hereby directed to deliver the Escrow Deposit to Buyer within one (1) business day of the receipt of this Certificate.
Dated:___________, 1997.
"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By: By:
---------------------------------- ----------------------
Peter Ottmar Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
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EXHIBIT 10.06.06.02
FIRST AMENDMENT
TO THE
ASSET PURCHASE AGREEMENT
This amendment ("Amendment") is dated as of this ___ day of February, 1997 by
and between BACK BAY BROADCASTERS, INC. ("Seller"), and NEW ENGLAND CONTINENTAL
MEDIA, INC. ("Buyer").
WHEREAS, pursuant to an agreement ("Purchase Agreement") dated December 4, 1996, by and between Seller and Buyer, Buyer obtained the right to purchase and acquire certain assets relating to radio station WBNW(AM), Boston Massachusetts;
WHEREAS, Buyer has entered into an agreement ("Termination Agreement") with the Landlord to terminate the Lease as of February 21, 1997, provided the Closing occurs before said date; and,
WHEREAS, the parties have agreed to and desire to amend the Purchase Agreement as set forth herein so that the Closing may occur on February 21, 1997,
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:
(i) Any breach or non-performance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Document; or
(ii) The ownership or operation of the Station after the Closing Date;
(v) All other liabilities or obligations of Buyer including, without limitation, the Assumed Obligations.
7. Except as expressly provided herein, the terms and conditions of the Purchase Agreement shall remain in full force and effect and unamended. In the event of a conflict between this Amendment and the terms of the Purchase Agreement, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.
"SELLER" "BUYER"
BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC.
By: /s/ Peter Othmar By:
------------------------ --------------------------------
Peter Othmar Eric H. Halvorson
Chairman/Chief Executive Officer Executive Vice President
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(v) All other liabilities or obligations of Buyer including, without limitation, the Assumed Obligations.
7. Except as expressly provided herein, the terms and conditions of the Purchase Agreement shall remain in full force and effect and unamended. In the event of a conflict between this Amendment and the terms of the Purchase Agreement, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.
"SELLER" "BUYER" BACK BAY BROADCASTERS, INC. NEW ENGLAND CONTINENTAL MEDIA, INC. By: By: /s/ ERIC H. HALVORSON -------------------------------- -------------------------------- Peter Ottmar Eric H. Halvorson Chairman/Chief Executive Officer Executive Vice President |
EXHIBIT 10.06.07
WPZE(AM), BOSTON, MASSACHUSETTS
AGREEMENT (the "Agreement") dated as of June 2nd, 1997 by and between NEW ENGLAND CONTINENTAL MEDIA, INC. ("Seller"), and HIBERNIA COMMUNICATIONS, INC. ("Buyer").
1. WHEREAS, Seller owns and operates radio station WPZE(AM) 1260 kHz, Boston, Massachusetts (the "Station"), and holds the licenses and authorizations issued by the FCC for the operation of the Station.
2. AND WHEREAS Buyer desires to acquire substantially all the assets of the Station, and Seller is willing to convey such assets to Buyer.
3. AND WHEREAS the acquisition of the Station is subject to prior approval of the FCC.
NOW THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer hereby agree as follows:
modifications of those agreements which are made in the ordinary course of Seller's operation of the Station and in accordance with the terms and provisions of this Agreement.
(b) Any and all claims of Seller with respect to transactions prior to the Closing including, without limitation, claims for tax refunds and refunds of fees paid to the FCC.
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all employment contracts.
(f) All contracts that are terminated in accordance with the terms and provisions of this Agreement or have expired prior to the Closing Date in the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed between the date hereof and the Closing Date in the ordinary course of business and in accordance with the terms and provisions of this Agreement.
(h) Seller's corporate records except to the extent such records pertain to or are used in the operation of the Station, in which case Seller shall deliver accurate copies thereof to Buyer.
(i) All contracts for the sale of broadcast time on the Station for cash or non-cash consideration.
(a) At the Closing, Buyer shall assume and agree to perform, without duplication of Seller's performance, the following liabilities and obligations of Seller (the "Assumed Obligations"):
(ii) Liabilities and obligations arising under the Station Agreements assumed by and transferred to Buyer in accordance with this Agreement, but only to the extent such liabilities and obligations relate to any period of time after the Closing Date.
(b) Except for the Assumed Obligations, Buyer shall not assume or in any manner be liable for any duties, responsibilities, obligations or liabilities of Seller of any kind or nature, whether express or implied, known or unknown, contingent or absolute, including, without limitation, any liabilities to or in connection with Seller's employees whether arising in connection with the transaction contemplated hereunder or otherwise.
(a) Concurrently with the execution of this Agreement, Buyer has deposited with Escrow Agent under the Escrow Agreement, in immediately available funds, the sum of Two Hundred Fifty Thousand Dollars ($250,000), which amount is hereinafter referred to as the "Earnest Money". The Escrow Agent shall hold the Earnest Money under the terms of the Escrow Agreement in trust for the benefit of the parties hereto. Interest and other earnings on the Earnest Money shall be distributed by the Escrow Agent to Buyer from time to time upon the request of Buyer.
(a) The Purchase Price shall be paid by Buyer as follows:
(ii) At the Closing, Purchase Price, less the amount of the Earnest Money disbursed to Seller, shall be paid to Seller by wire transfer of immediately available funds.
Treasury Regulation (S) 1.1060-1T.
2.7 ADJUSTMENT OF PURCHASE PRICE.
----------------------------
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(a) All operating income and operating expenses of the Station shall be adjusted and allocated between Seller and Buyer, and an adjustment in the Purchase Price shall be made as provided in this Section, to the extent necessary to reflect the principle that all such income and expenses attributable to the operation of the Station on or before the Closing Date shall be for the account of Seller, and all income and expenses attributable to the operation of the Station after the Closing Date shall be for the account of Buyer.
(c) For purposes of making the adjustments pursuant to this Section, Buyer shall prepare and deliver the Adjustment List to Seller within thirty (30) days following the Closing Date, or such earlier or later date as shall be mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the Adjustment Amount. If the
Adjustment Amount is a credit to the account of Buyer, Seller shall pay such amount to Buyer, and if the Adjustment Amount is a charge to the account of Buyer, Buyer shall pay such amount to Seller. In the event Seller disagrees with the Adjustment Amount determined by Buyer or with any other matter arising out of this subsection, and Buyer and Seller cannot within sixty (60) days resolve the disagreement themselves, the parties will refer the disagreement to an independent certified public accounting firm mutually agreeable to Buyer and Seller, whose decision shall be final and whose fees and expenses shall be allocated between and paid by Seller and Buyer, respectively, to the extent that such party does not prevail on the disputed matters decided by the accountants.
ARTICLE III
Seller hereby represents and warrants to Buyer as follows:
(a) do not in any material respect, (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any Lien other than a
Permitted Lien on any of the Sale Assets under) any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Seller;
(b) do not in any material respect, (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under the articles of incorporation or bylaws of Seller or pursuant to any lease, agreement, commitment or other instrument which Seller is a party to or bound by or by which any of the Sale Assets may be bound, or result in the creation or any Lien other than a Permitted Lien upon any of the Sale Assets.
(a) Seller has good, marketable and valid title to all of the items of Tangible Personal Property free and clear of all Liens except Permitted Liens, and including the right to transfer same.
(b) The Tangible Personal Property complies with applicable rules and regulations of the FCC and the terms of the FCC Licenses.
(c) The items of Tangible Personal Property are in good operating condition and repair and Seller has no knowledge of any defect in the condition or operation of any item of the Tangible Personal Property which is reasonably likely to have a material adverse effect on the operation of the Station.
(b) Except as set forth in the Schedules, (i) all Station Agreements are legal, valid and enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' fights generally, and subject, as to enforceability, to general principles of equity regardless of whether enforcement is sought in any proceeding at law or in equity; (ii) neither Seller nor, to the knowledge of Seller, any other party thereto, is in material
breach of or in material default under any Station Agreements; (iii) to the
knowledge of Seller, there has not occurred any event which, after the giving of
notice or the lapse of time or both, would constitute a material default under,
or result in the material breach of, any Station Agreements which are,
individually or in the aggregate, material to the operation of the Station; and
(iv) Seller holds the right to enforce and receive the benefits under all of the
Station Agreements, free and clear of all Liens (other than Permitted Liens) but
subject to the terms and provision of each such agreement.
ARTICLE IV
Buyer represents and warrants to Seller as follows:
constitute the valid and legally binding agreement of Buyer, enforceable against Buyer in accordance with their terms, except as may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally, and except as may be limited by general principles of equity (regardless of whether such enforceability is sought in a proceeding in equity or at law).
(a) Do not in any material respect (with or without the giving of notice or the passage of time or both) violate (or result in the creation of any claim, lien, charge or encumbrance on any of the assets or properties of Buyer under) any provision of law, rule or regulation or any order, judgment, injunction, decree or ruling applicable to Buyer in any manner which would have a material adverse effect on the assets, business, operation or financial condition or results of operations of Buyer;
(b) Do not (with or without the giving of notice or the passage of time or both) conflict with or result in a breach or termination of, or constitute a default or give rise to a right of termination or acceleration under, the articles of incorporation or bylaws of Buyer or any lease, agreement, commitment or other instrument which Buyer is a party to or bound by or by which any of its assets or properties may be bound.
(a) Buyer has no knowledge after due inquiry of any facts concerning Buyer or any other person with an attributable interest in Buyer (as such term is defined under the Rules and Regulations) which, under present law (including the Act) and the Rules and Regulations, would (i) disqualify Buyer from being the holder of the FCC Licenses, the owner of the Sale Assets or the operator of the Station upon consummation of the transactions contemplated by this Agreement, or (ii) raise a substantial and material question of fact (within the meaning of Section 309(e) of the Act) respecting Buyer's qualifications.
(a) Use reasonable efforts to operate the Station in substantially the manner in which it is currently being operated:
(b) Use reasonable commercial efforts to maintain insurance upon all of the tangible Sale Assets in such amounts and of such kind comparable to that in effect on the date hereof with respect to such Sale Assets and with respect to the operation of the Station, with insurers of substantially the same or better financial condition;
(c) Operate the Station and otherwise conduct its business in accordance with the terms or conditions of its FCC Licenses, the Rules and Regulations, the Act and all other rules and regulations, statutes, ordinances and orders of all governmental authorities having jurisdiction over any aspect of the operation of the Station, except where the failure to so operate the Station would not have a material adverse effect on the Sale Assets or the operation of the Station or on the ability of Seller to consummate the transactions contemplated hereby;
(d) Comply in all material respects with all Station Agreements now or hereafter existing which are material, individually or in the aggregate, to the operation of the Station;
(e) Promptly notify Buyer of any material default by, or claim of default against, any party under any Station Agreements which are material, individually or in the aggregate, to the operation of the Station, and any event or condition which, with notice or lapse of time or both, would constitute an event of default under such Station Agreements;
(f) Not mortgage, pledge or subject to any Lien (except in the ordinary course of business) any of the Sale Assets;
(g) Not sell, lease or otherwise dispose of, nor agree to sell, lease or otherwise dispose of, any of the Sale Assets, except for dispositions in the ordinary course of business unless said assets are replaced with assets of equivalent condition and functionality;
(h) Not acquire or lease any goods or services or enter into, amend or terminate any license, lease of real or personal property or any other Station Agreement, other than in the ordinary course of business;
(i) Notify Buyer of any material litigation pending or threatened against the Station or Seller or any material damage to or destruction of any assets included or to be included in the Sale Assets.
(a) All information, data and materials furnished or to be furnished to either party with respect to the other party in connection with this transaction or pursuant to this Agreement are confidential. Each party agrees that prior to Closing (i) it shall not disclose or otherwise make available, at any time, any such information, data or material to any person who does not have a confidential relationship with such party; (ii) it shall protect such information, data and material with a high degree of care to prevent the disclosure thereof; and (iii) if, for any reason, this transaction is not consummated, all information, data or material concerning the other party obtained by such party, and all copies thereof, will be returned to the other party. After Closing, neither party will disclose or otherwise make available to any person any of such information, data or material concerning the other party, except as may be necessary or appropriate in connection with the operation of the Station by Buyer. Each party shall use its reasonable efforts to prevent the violation of any of the foregoing confidentiality provisions by its respective representatives.
(b) Nothing in this Section shall prohibit Buyer or Seller from: (i) using such information, data and materials in connection with any action or proceeding brought or any claim asserted by Buyer or Seller in respect of any breach by the other of any representation, warranty or covenant made in or pursuant to this Agreement; (ii) supplying or filing such information, data or materials to or with the FCC or any other valid governmental or court authority to the extent reasonably necessary to obtain any consent, waiver, amendment, modification, approval, authorization, permit or license which may be necessary to effectuate this Agreement, and to consummate the transaction
contemplated herein; or (iii) in the case of Buyer, supplying such information, data or materials as may be reasonably requested by a prospective lender or investor; provided that said prospective lender or investor shall agree, in advance of its receipt of said information, data or materials, to treat the information, data and materials confidentially and will not disclose it, or any portion of it, to anyone.
(c) In the event that either party determines in good faith that a press release or other public announcement is desirable under any circumstances, the parties shall consult with each other to determine the appropriate timing, form and content of such release or announcement and thereafter may make such release or announcement.
Buyer's obligation to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, unless waived by Buyer in writing:
(a) The representations and warranties of Seller contained in this Agreement or in any other Document shall be complete and correct in all material respects on the date hereof and at the Closing Date with same effect as though made at such time except for changes that are not materially adverse to the Station or the Sale Assets taken as a whole; provided, however, that the accuracy of Seller's representations
or warranties shall not be a condition precedent to Buyer's obligation to close if the representation or warranty are made untrue by the acts, errors, or omissions of Buyer in its capacity as programmer under the LMA agreement.
(a) The FCC Order shall have been issued by the FCC without any Material Adverse Condition affecting Buyer and shall have become a Final Action without any Material Adverse Condition affecting Buyer.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Seller.
(c) All other authorizations, consents, approvals and clearances of federal, state or local governmental agencies required to permit the consummation by Buyer of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have a material adverse effect on the operations of the Station.
unless such governmental authority shall have withdrawn such notice. No governmental authority having jurisdiction shall have commenced any such proceeding.
ARTICLE VII
The obligation of Seller to close the transaction contemplated by this Agreement is subject to the satisfaction, on or prior to the closing Date, of each of the following conditions, unless waived by Seller in writing:
(a) The representations and warranties of Buyer contained in this Agreement shall be complete and correct in all material respects on the date hereof and at the Closing Date with the same effect as though made at such time except for changes that are not materially adverse to Seller.
(b) Buyer shall have delivered to Seller on the Closing Date a certificate that (i) the condition specified in Section 7.1(a) is satisfied as of the Closing Date, and (ii) except as set forth in such certificate (none of which exceptions shall be materially
(a) The FCC Order shall have been issued by the FCC and shall have become effective without a material adverse condition affecting Seller.
(b) Conditions which the FCC Order or any order, ruling or decree of any judicial or administrative body relating thereto or in connection therewith specifies and requires to be satisfied prior to transfer of the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and clearances of all Federal, state and local governmental agencies required to permit the consummation by Seller of the transactions contemplated by this Agreement shall have been obtained; all statutory and regulatory requirements for such consummation shall have been fulfilled; and no such authorizations, consents, approvals or clearances shall contain any conditions that individually or in the aggregate would have any material adverse effect on Seller.
ARTICLE VIII
(a) Certified resolutions of Seller's Board of Directors approving the execution and delivery of this Agreement and each of the other documents and authorizing the consummation of the transactions contemplated hereby and thereby.
(c) A bill of sale and other instruments of transfer and conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and otherwise in form and substance reasonably satisfactory to Buyer, of any security interests granted in the Sale Assets as security for payment of loans and other obligations and of any other Liens (other than Permitted Liens).
(e) An instrument or instruments assigning to Buyer all fight, title and interest of Seller in and to all Station Agreements being assumed by Buyer.
(f) An instrument assigning to Buyer all right, title and interest of Seller in the FCC Licenses, all pending applications relating to the Station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(g) A receipt acknowledging payment by the Buyer of the Purchase Price.
(h) A certificate of Seller's good standing in the Commonwealth of Massachusetts.
(i) Such additional information and materials as Buyer shall have reasonably requested, including without limitation, evidence that all consents and
approvals required as a condition to Buyer's obligation to close hereunder have been obtained.
(a) Certified resolutions of Buyer's Board of Directors approving the execution and delivery of this Agreement and each of the other Documents and authorizing the consummation of the transaction contemplated hereby and thereby.
(c) All documents necessary for the release of the Earnest Money to Seller;
(e) An instrument executed by Buyer whereby Buyer shall assume all obligations of Seller under the Station Agreements.
(f) A certificate of Buyer's good standing in Massachusetts.
(g) Such additional information and materials as Seller shall have reasonably requested.
indemnification and to be held harmless that such party (or its successors or assigns) would otherwise have by statute, common law or otherwise.
(i) Any breach or non-performance by Seller of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Documents; or
(ii) The ownership or operation by Seller of the Station or the Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of the Bulk Sales Act, if applicable, in connection with the transaction contemplated hereby.
(i) Any breach or non-performance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Document; or
(ii) The ownership or operation of the Station or the sale of the Station after the Closing Date.
(a) the giving of written notice from Seller to Buyer, or from Buyer to Seller, if:
(i) Seller gives such termination notice and is not at such time in material default hereunder, or Buyer gives such termination notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties contained herein of Buyer (if such termination notice is given by Seller), or of Seller (if such termination notice is given by Buyer), are inaccurate in any material respect and materially adverse to the party giving such termination notice unless the inaccuracy has been induced by or is the result of actions or omissions of the party giving such termination notice, and such inaccuracy has not been corrected or remedied within twenty (20) days after written notice thereof from the party giving such termination notice nor waived in writing by the party giving such termination notice; or
(B) Any material obligation to be performed by Buyer (if such termination notice is given by Seller) or by Seller (if such termination notice is given by Buyer) is not timely performed in any material respect unless the lack of timely performance has been induced by or is the result of actions or omissions of the party giving such termination notice, and such material obligation has not been satisfied within twenty (20) days after written notice thereof from the party giving such termination notice nor waived in writing by the party giving such termination notice; or
(b) Written notice from Seller to Buyer, or from Buyer to Seller, at any time after one year from the date of execution of this Agreement, provided that termination shall not occur upon the giving of such termination notice by Seller if Seller is at such time in material default hereunder or upon the giving of such termination notice by Buyer if Buyer is at such time in material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to Seller, at any time following a determination by the FCC that the application for consent to assignment of the FCC Licenses has been designated for hearing; provided that the party which is the subject of the hearing (or whose alleged actions or omissions resulted in the designation for hearing) may not elect to terminate under this subsection (c).
(e) The default of Buyer under the LMA.
(f) The default of Seller under the LMA.
(e) In any dispute between Buyer and Seller as to which party is entitled to all or a portion of the Earnest Money, the prevailing party shall receive, in addition to that portion of the Earnest Money to which it is entitled, an amount equal to interest on that portion at the rate of 10% per annum, calculated from the date the prevailing party's demand for all or a portion of the Earnest Money is received by the Escrow Agent.
The risk of any loss, damage or destruction to the Sale Assets from fire or other cause shall be borne by Seller at all times prior to the Closing Date hereunder. Upon the occurrence of any casualty loss, damage or destruction material to the operation of the Station prior to the Closing, Seller shall promptly give Buyer written notice setting forth in detail the extent of such loss, damage or destruction and the cause thereof if known. Seller shall use its reasonable efforts to promptly commence and thereafter to diligently proceed to repair or replace any such lost, damaged or destroyed property. In the event that such repair or replacement is not fully completed prior to the Closing Date, Buyer may elect to postpone the Closing until Seller's repairs have been fully completed or to consummate the transactions contemplated hereby on the Closing Date, in which event Seller shall assign to Buyer the portion of the insurance proceeds (less all reasonable costs and expenses, including without limitation attorney's fees, expenses and court costs incurred by Seller to collect such amounts), if any, not previously expended by Seller to repair or replace the damaged or destroyed property (such assignment of proceeds to take place regardless of whether the parties close on the scheduled or deferred Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged condition.
Except as otherwise provided in the LMA, between the date of this Agreement and the Closing Date, Buyer shall not control, manage or supervise the operation of the Station or conduct of its business, all of which shall remain the sole responsibility and under the control of Seller, subject to Seller's compliance with this Agreement.
(b) All state or local sales or use, stamp or transfer, grant and other similar taxes payable in connection with consummation of the transactions contemplated hereby shall be shared equally between Seller and Buyer.
(c) Except as otherwise expressly provided in this Agreement, each of the parties shall bear its own expenses, including the fees of any attorneys and accountants engaged by such party, in connection with this Agreement and the consummation of the transactions contemplated herein.
remedies it may have pursuant to this Agreement, to enforcement of this Agreement (subject to obtaining any required approval of the FCC) by decree of specific performance or injunctive relief requiring Seller to fulfill its obligations under this Agreement. In any action by Buyer to equitably enforce the provisions of this Agreement, Seller shall waive the defense that there is an adequate remedy at law or equity and agrees that Buyer shall have the right to obtain specific performance of the terms of this Agreement without being required to prove actual damages, post bond or furnish other security.
(a) if to Buyer, to:
Hibernia Communications, Inc. 42 West Lancaster Drive, Suite 200 Ardmore, Pennsylvania 19003 Facsimile No.: (610) 658-2929
With a copy to:
Kenneth E. Satten, Esq.
Wilkinson, Barker, Knauer & Quinn
1735 New York Avenue, N.W.
Washington, D.C. 20006
Facsimile No.: (202) 783-5851
(b) if to Seller, to:
New England Continental Media, Inc.
c/o Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, CA 93012
Facsimile No.: (805) 482-7290
Attention: Jonathan L. Block, Esq.
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third business day following the date mailed, and
(ii) if personally delivered or otherwise sent as provided above, on the date
received.
unenforceability without invalidating the remaining provisions hereof, and any such unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto hereby waive any provision of law now or hereafter in effect which renders any provision hereof unenforceable in any respect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written.
NEW ENGLAND CONTINENTAL MEDIA, INC.
By: /s/ Eric H. Halvorson
--------------------------------
Eric H. Halvorson
Vice President
|
HIBERNIA COMMUNICATIONS, INC.
By: /s/ Michael Craven
--------------------------------
Name: Michael Craven
------------------------
Title: President
------------------------
|
See attached.
Serafin Bros. has acted as the exclusive broker in this transaction and shall be paid by Seller pursuant to a separate agreement between Seller and Serafin Bros.
QUANTITY DESCRIPTION
-------- -----------
1 Coax Cable
3 Antenna, ATUs
1 Ground System
1 Antenna Phasor
3 AM Self-Support Towers
1 Catwalk System
1 Power Generator
1 Aux Transmitter*
1 Electric Transformer
1 Main XMTR
1 Belar Monitor
1 XMTR Wiring
1 RF Meter
1 Panel
1 ADC Propatch
1 CRL Processor w/NRSC Chassis
1 Antenna Monitor
Existing Satellite Dish
|
* Buyer and Seller acknowledge that the auxiliary transmitter may contain PCB containing capacitors. Seller shall remove and dispose of said capacitors at its sole expense; provided Seller shall not be obligated to replace said capacitors.
QUANTITY DESCRIPTION -------- ----------- 1 McCurdy SS8760 13 Channel Audio Console with Power Supply 1 Tascam 112 Cassette Tape Recorder 4 ITC Delta Audio Cartridge Player Machine 2 ITC Delta Record Cart Machine 2 RANE HC-6 Headphone Amplifier Console 1 Ramko RC 1/48 IPB Remote Control 1 UREI 535 Dual Graphic Equalizer 1 Gentner IC - 20 Station Control Unit 1 Technics SL 1200MKII Turntable 1 Audio Metrics TP - 84 Preamplifier 2 JBL 4408 Studio Monitor Speakers 1 Crown 75 Monitor Amplifier 1 Electro Voice 635 Microphone 1 Gentnet Telemix X Phone Director 4 Lake Audio Patch Panels 1 Gentner SPH - 5 Telephone Hybrid 1 Crown D - 75 Monitor Amplifier 2 Fostex 630 1B Personal Monitor 1 Tascam 122MKII Cassette Recorder |
QUANTITY DESCRIPTION
-------- -----------
1 Technics RS - TR333 Double Cassette Deck
1 Technics SL - PG440 Compact Disc Player
2 JBL 4410 Studio Monitors
1 Technics SL 1200MKII Turntable
1 Stanton 310 Turntable Pre Amplifier
4 Rarnko DA - 2080 Distribution Amplifiers with Mounting Rack
4 Rarnko RS - 1616LC Primus Routing Units
1 Ramko RC 1/48 IPB Remote Control
1 Ramko Primus RCR - 1 Receiver Interface
1 Gentner SPH - 3 Telephone System
1 Technics RS - T22 Dual Cassette Deck
4 Otari MX - 5050 Stereo Reel-to-Reel Recorders
with Floor Stand
2 Ramko DA - 2080 with Power Supply
1 Tascam 112 Cassette Tape Recorder
1 Arrakis 10000 20 Channel Audio Console with Power Supply
1 Electro Voice 635A Microphone
2 Microphone Booms
|
* Seller shall provide Buyer a credit of $5,000 which Buyer may use to purchase or install studio equipment; said credit being given on the understanding that Seller shall not be obligated to provide any equipment to Buyer except as stated in this schedule.
See attached.
FCC Form 352 UNITED STATES OF AMERICA File No.: BZ-910201AC
May 1988 FEDERAL COMMUNICATIONS COMMISSION
AM BROADCAST STATION LICENSE Call Sign: W E Z E
-------------------------------------------------------------------------------
LICENSEE:
New England Continental Media, Inc.
-------------------------------------------------------------------------------
1. Community of License........: Boston, MA
2. Transmitter location........: Corner of Vershire Street
and Harriet Avenue
Quincy, MA
|
North latitude..............: 42 . 16' 30" West longitude..............: 71 . 02' 31"
3. Transmitter(s): Type Accepted. (See Sections 73,1660, 73,1665 and 73,1670 of the Commission's rules)
4. Main Studio location: (See Section 73,1125) 500 Victory Road Quincy, MA
5. Remote control location:
500 Victory Road
Quincy, MA
6. Antenna and ground system: Attached
7. Obstruction marking and lighting specifications - FCC Form 715, paragraphs:
1, 3, 21 & 21.
8. Frequency .................: l260 kHZ
---------------
9. Nominal power (kW) ........: 5.0 Day 5.0 Night
--------------- ---------------
|
Antenna input power (kW) :
5.0 Day [XX] Non-directional antenna: current 10.0 amperes; resistance 50.0 --------------- [ ] Directional antenna : --------------- --------------- ohms. 5.0 Night [ ] Non-directional antenna: current 10.4 amperes; resistance 50.0 --------------- [XX] Directional antenna : --------------- --------------- ohms. |
10. Hours of operation: Specified in BZ-800530AP
11. Conditions ..............: - - -
/1/ This license consists of FEDERAL JNW:yl
this page and pages 2 & 3 COMMUNICATIONS [FCC LOGO] JUN 25, 1991
COMMISSION
Dated: JUN 19, 1991
|
FEDERAL COMMUNICATIONS COMMISSION
LICENSE RENEWAL AUTHORIZATION WASHINGTON, DC. 20554
----------------------------- -------------------
OFFICIAL BUSINESS
PENALTY FOR PRIVATE USE $300
THIS IS TO NOTIFY YOU THAT YOUR
APPLICATION FOR RENEWAL OF LICENSE
WAS GRANTED ON 03-20-91 FOR A TERM POSTAGE AND FEES PAID
EXPIRING ON 04-01-98. FEDERAL COMMUNICATION
COMMISSION
FCC 615
FREQUENCY: 1260KHZ
THIS IS YOUR LICENSE RENEWAL
AUTHORIZATION FOR STATION WEZE
LOCATION: BOSTON, MA
THIS ALSO IS THE RENEWAL CERTIFICATE NEW ENGLAND CONTINENTAL MEDIA, INC.
FOR YOUR CURRENTLY AUTHORIZED WEZE AM STATION
AUXILIARY SERVICES. C/O 2310 PONDEROSA DRIVE
CAMARILLO, CA 93010
THIS CARD MUST BE POSTED WITH THE
STATION'S LICENSE CERTIFICATE AND ANY
SUBSEQUENT MODIFICATIONS.
|
Tower Lease Agreement - Attached to this Schedule.
This agreement is entered into on this __ day of ___________ , 199_, by and
between the ATSINGER FAMILY TRUST and the EPPERSON FAMILY LIMITED PARTNERSHIP
(collectively "Lessor") and HIBERNIA COMMUNICATIONS, INC. ("Lessee").
WHEREAS Lessor owns the real property and improvements comprising Lessor's Property, as hereafter defined, for the use and enjoyment of Lessor, and such other and future tenants and sub-tenant's of Lessor's Property; and
WHEREAS Lessee desires to lease space on Lessor's Property to install, maintain and operate the facilities and equipment required for the operation of Lessee's radio station WPZE(AM), Boston, Massachusetts ("the Station") thereon; and,
NOW THEREFORE, for valuable consideration as set forth herein, the parties agree as follows:
The terms listed below when spelled with initial capital letters have the following meanings in this agreement:
Lease Agreement - Hibernia
Lease Agreement - Hibernia
governmental regulations and requirements of law pertaining to Lessee's activities in or around Lessor's Property; to pay all fees, charges, costs and expenses in accordance with this Agreement promptly when due; to keep the Facilities properly maintained and to comply in all respects with each of the obligations, duties, rules, conditions, and requirements applicable to Lessee under this Agreement
Lease Agreement - Hibernia
(a) This Lease is required to be terminated by a final ruling or regulation, not subject to appeal, of the Federal Communications Commission ("FCC"); or
(b) A final determination, not subject to appeal, of any local, state or federal governmental body that the placement and/or operation of Lessee's Facilities is in violation of any laws, rules or regulations of any local state or federal agencies including, without limitation, any land use provisions and/or any zoning and/or planning codes and such violation is not corrected within ninety (90) days; or
(c) A final determination, not subject to appeal, that the Facilities fail to meet the requirements imposed by law or the rules and regulations of local, state and federal agencies.
4880 Santa Rosa Road, Suite 300 Camarillo, California 93012 Attention: Accounting
or to such other person or place as Lessor may designate from time to time by notice to Lessee, in the following amounts and in the following manner:
Lease Agreement - Hibernia
Adjustment Date, the monthly rent shall be the product obtained by multiplying the Base Rent times a fraction, the numerator of which shall be the CPI for February of the year such Adjustment Date falls and the denominator of which shall be the CPI for February of the year in which the Commencement Date falls. Notwithstanding the results of the foregoing calculation, the annual base rent payable by Lessee hereunder shall not in any event be less than 103% of the annual base rent payable during the immediately preceding one (1) year period. In the event that the Bureau of Labor Statistics shall change the base period for the CPI, the new index number shall be substituted for the old index number in making the above computation. In the event the Bureau of Labor Statistics ceases publishing the CPI, or materially changes the method of its computation, Lessor and Lessee shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation or change by a responsible financial periodical of recognized authority to be chosen by Lessor subject to reasonable consent of Lessee.
(a) Lessee's allocable share shall be a percentage ("Lessee's Percentage"), as reasonably determined by Lessor from time to time based upon Lessor's determination of the benefit derived by Lessee from the Operating Expenses, which percentage shall, together with the percentage of Operating Expenses paid by other tenants of the Real Property, shall equal not less than one hundred percent (100%) of the Operating Expenses; it being the intention of the parties hereto that Lessor shall have no operational or ownership cost associated with Lessor's Property or this Agreement.
(b) For purposes of this Agreement, the term "Operating Expenses" shall mean the amount of all of Lessor's direct costs and expenses reasonably paid or incurred in operating and maintaining Lessor's Property in accordance with generally accepted accounting principles, consistently applied, including by way of illustration and not limitation, all general real estate taxes and all special assessments levied against Lessor's Property; costs and expenses of contesting the validity or amount of real estate taxes; insurance premiums; water, sewer, electrical and other utility charges other than the separately billed electrical and other charges paid by Lessee as provided in this Agreement; service and other charges incurred in the operation and maintenance of the plumbing systems, the electrical systems and the heating, ventilation and air-conditioning systems (if any); cleaning and other janitorial services; tools and supplies; repair costs; landscape and maintenance costs; security services; license, permit and inspection fees; wages and related employee benefits payable for the maintenance and operation of Lessor's Property; amortization of capital improvements or replacements for Lessor's Property including those that benefit the health and safety of the tenants of Lessor's Property, produce a reduction in operating costs or are required under any applicable
Lease Agreement - Hibernia
governmental law, ordinance, resolution, order or regulation, together with interest at the Interest Rate on the unamortized balance thereof; maintenance and repair costs, dues, fees and assessments incurred under any documents of record or owners association agreement, as amended from time to time, if any (the "Covenants"); and in general all other costs and expenses which would, under generally accepted accounting principles, be regarded as operating and maintenance costs and expenses, including those which would normally be amortized over a period not to exceed five (5) years. The foregoing list of Operating Expenses is for definitional purposes only and shall not impose any obligations upon Lessor to incur such expenses or provide such services.
(c) Lessee shall pay as additional rent with each monthly installment of base rent an amount equal to one-twelfth (1/12) of Lessor's reasonable estimate of the amount of Operating Expenses for the year multiplied by Lessee's Percentage. An adjustment will be made at the end of each calendar year based upon the actual Operating Expenses of Lessor, with Lessee receiving a credit against the payment of Rent for any excess Operating Expense paid by Lessee in the previous year. If the actual Operating Expenses of Lessor exceed the Operating Expenses paid by Lessee, then Lessee shall pay the difference within ten (10) business days from the receipt by Lessee of Lessor's statement indicating a balance due.
(d) Lessee shall also be obligated to pay all sums due from Lessee to Lessor pursuant to any term or provision of this Lease requiring Lessee to reimburse Lessor for any costs and/or expenses incurred by Lessor, and all expenses, including but not limited to, court costs, reasonable attorneys' fees, bond expenses and recording charges, incurred by Lessor in collecting any Rent due under this lease and all monies expended by Lessor releasing any liens filed against the Real Property arising from the construction contemplated hereby.
Lease Agreement - Hibernia
without obligation for interest, as security, for the performance of Lessee's obligations and covenants under this Lease. It is expressly understood and agreed that such deposit is not an advance rental deposit or a measure of Lessor's damages in case of Lessee's default. If Lessee shall be in default of this Lease or fails to surrender the Leased Space and Lessor's Property in the condition required by this Lease, Lessor shall have the right (but not the obligations), without prejudice to any other remedy which Lessor may have on account thereof, to apply all or any portion of the Security Deposit to cure such default or to remedy the condition of the Lessor's Property. If Lessor so applies the Security Deposit or any portion thereof before the Expiration Date or earlier termination of this Lease, Lessee shall deposit with Lessor, upon demand, the amount necessary to restore the Security Deposit to 150% of its original amount. If Lessor shall sell or transfer its interest in Lessor's Property, Lessor shall have the fight to assign this agreement and transfer the Security Deposit to such purchaser or transferee, in which event Lessee shall look solely to the new owner for the return of the Security Deposit, and Lessor thereupon shall be released from all liability to Lessee for the return of the Security Deposit. Although the Security Deposit shall be deemed the property of Lessor, any remaining balance of the Security Deposit shall be returned to Lessee no later than thirty (30) days after the Expiration Date or earlier termination of this Lease that all of Lessee's obligations under this Lease have been fulfilled.
Lessor, in consideration of the rents to be paid and the covenants contained herein, hereby leases to Lessee the Leased Space for the limited purpose of installing, maintaining, operating, or repairing the Facilities in accordance with this Agreement; and to pass through portions of the Lessor's Property designated by Lessor for ingress to and egress from the Leased Space. Notwithstanding the foregoing, Lessor shall have the exclusive right to lease Lessor's Property, other than the Leased Space, to any other tenant for any use; provided said tenant's uses of Lessor's Property shall not unreasonably interfere with Lessee's use of the Leased Space. Lessor agrees that it will not lease or license other persons or entities to use Lessor's Property if the use by any such person or entity will cause interference with Lessee's then-in-use frequency or signal or with Lessee's Facilities.
Lease Agreement - Hibernia
furnished by Lessee and may include the requirement of Lessee to provide at Lessee' s expense the purchase and installation of such equipment or the taking of the action for protecting Lessor's Property, or the property of any adjacent or neighboring property
Lease Agreement - Hibernia
Lease Agreement - Hibernia
of Lessee shall be a technician qualified to perform said duties and have been trained in compliance with current OSHA, FCC, and ANSI standards regarding radio frequency radiation.
Lessee and Lessee's Employees will at all times exercise the highest degree of care to prevent damages to the Lessor's Property and to the Leased Space and to all other real and personal property of Lessor and Lessee. Lessee and Lessee's Employees will perform any work and use the Facilities in a manner that will protect all other structures, equipment, utilities, and/or work areas of any kind against damage or interruption of service. Lessor reserves the right, and Lessee hereby grants Lessor the right, to take any reasonable action needed to cease or prevent any harm to the personnel, property and/or services of Lessor.
Lease Agreement - Hibernia
Lease Agreement - Hibernia
(a) Lessor owns Lessor's Property in fee simple. The execution and performance of this Agreement shall not constitute a breach or violation under any Agreement to which Lessor is a party.
(b) To the best of Lessor's knowledge, there are no violations of any federal, state, county or municipal law, ordinance, order, regulations or requirement with respect to Lessor's Property and the Leased Space.
(c) There is no action, suit or proceeding pending or, to Lessor's knowledge, threatened against or affecting Lessor's Property or the Leased Space or any portion thereof and Lessor has not received notice, written or otherwise, of any litigation affecting or concerning Lessor's Property or the Leased Space relating to or arising out of its ownership, management, use or operation.
(d) The execution, delivery and performance of this Agreement, and the consummation of the transaction contemplated hereby, have been duly authorized by all necessary action on the part of Lessor. This Agreement constitutes a valid and binding agreement and obligation of Lessor, enforceable in accordance with its terms.
(e) Lessor's Property, the existing use of Lessor's Property and the Leased Space conform in all material respects with applicable zoning ordinances and other governmental regulations.
Lease Agreement - Hibernia
(a) The Facilities and the operation thereof do not and will not result in exposure of workers or the general public to levels of radio frequency radiation in excess of the "Radio Frequency Protection Guides" recommended in "American National Standard Safety Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300 KHz to 100 GHz," issued by the American National Standards Institute ("Acceptable Radio Frequency Radiation Standards").
(b) The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary actions on the part of Lessee. This Agreement constitutes a valid and binding agreement and obligation of Lessee, enforceable in accordance with its terms.
(c) Lessee will conduct its activities on Lessor's Property in material compliance with all applicable laws, including, without limitation, all OSHA, FCC, and FAA rules and regulations, environmental laws, and any rule or law applicable to the construction or operation of Lessee's Facilities.
(a) The failure of Lessee to pay rent or additional rent, and
continuation of such failure for more than ten (10) days after Lessee's receipt
of written notice thereof from Lessor; provided however that Lessor shall not be
required to provide such written notice to Lessee more than twice in any twelve
(12) month period prior to declaring such failure to pay an event of default; or
(b) The failure of Lessee to cure any other default under the terms hereof, and continuation of such failure to cure for more than thirty (30) days after notice by Lessor, provided, however, that if the nature of Lessee's default is such that more than thirty (30) days is required for its cure, then Lessee shall not be deemed to be in default if Lessee has commenced such cure within the thirty (30) day period, demonstrates to Lessor's reasonable satisfaction that such default is curable and thereafter diligently prosecutes such cure to completion.
Lease Agreement - Hibernia
such notice is given, the Agreement shall expire on the day so specified as fully and completely as if that day were the day herein originally fixed for such expiration, and Lessee shall then quit and surrender the Leased Space to Lessor. If the Agreement is terminated pursuant to this Section, Lessee shall remain liable to Lessor for the payment of rent for the remainder of the lease term and without prejudice to any other right or remedy which Lessor may have hereunder or by law. Notwithstanding any waiver of any prior breach or event of default hereunder, Lessor may, after the termination of this Lease as a result of a default by Lessee, re-enter the Leased Space either by reasonable force or otherwise, or dispossess Lessee, any legal representative of Lessee or other occupant of the Leased Space by appropriate suit, action or proceeding and remove its effects and hold the Leased Space as if this Agreement had not been made.
Lease Agreement - Hibernia
Employees, Lessee or any officer, agent or contractor of Lessee, for injuries to
any person or persons, with limits of not less than Three Million Dollars
($3,000,000.00) for injuries to one person, Five Million Dollars ($5,000,000.00)
for injuries to more than one person, in any one accident or occurrence, and for
loss or damage to the property of any person or persons, for not less than Five
Million Dollars ($5,000,000.00); (ii) insurance with respect to any improvements
against loss or damage by fire, lightning, windstorm, hail, explosion, riot,
riot attending a strike, civil commotion, aircraft, vehicles, smoke and other
risks from time to time included under "extended coverage" policies, in an
amount equal to at least One Hundred Percent (100%) of the full replacement
value of the improvements and the Facilities and, in any event, in an amount
sufficient to prevent Lessor or Lessee from becoming a co-insurer of any partial
loss under the applicable policies, which shall be written on a replacement cost
basis; (iii) appropriate workers' compensation or other insurance against
liability arising from claims of workers in respect of and during the period of
any work on or about Lessor's Property; and (iv) insurance against such other
hazards and in such amounts as is customarily carried by owners and operators of
similar properties, and as Lessor may reasonably require for its protection.
Lessee shall comply with such other requirements as Lessor, or any mortgagee,
may from time to time reasonably request for the protection by insurance of
their respective interests. The policy or policies of insurance maintained by
Lessee pursuant to this Paragraph shall be of a company or companies authorized
to do business in Massachusetts and a certificate thereof shall be delivered to
Lessor, together with evidence of the payment of the premiums therefor, not less
than fifteen (15) days prior to the commencement of the Term hereof or of the
date when Lessee shall enter upon the Leased Premises, whichever occurs sooner.
At least thirty (30) days prior to the expiration or termination date of any
policy, Lessee shall deliver a certificate of a renewal or replacement policy
with proof of the payment of the premium therefor. Any such insurance required
by this Paragraph may, at Lessee's option, be provided through a blanket policy
or policies.
Lease Agreement - Hibernia
Lease Agreement - Hibernia
after the term of this Agreement, including by reason of personal injury, loss
of life, or damage to property, caused by or resulting from in whole or any
material part, (i) any breach of this Agreement by Lessor, (ii) Lessor's breach
of any warranty contained in this Agreement, (iii) any negligent or intentional
act or omission of Lessor, its employees, agents, invitees or contractors,
whether in, on, about or with respect to the Leased Space or Lessor's Property,
(iv) the existence or discovery of any hazardous substance on Lessor's Property
or the Leased Space (or liability for violation of any federal, state or local
environmental law or regulation) arising from Lessor's use, or the use by any
current, future or previous tenant of Lessor's Property or the Leased Space
(other than Lessee); (v) any work undertaken by or at the request of Lessor on
or about the Leased Space; provided, however, that Lessor shall not be required
to indemnify Lessee for any damages, injury, loss or expense arising out of
Lessee's or its agents', employees', invitees' or contractors' negligent acts or
omissions.
Lease Agreement - Hibernia
(a) Lessee shall be responsible for any violation by Lessee or Lessee's Employees of any safety or health standard under this Agreement. If any material furnished or any work performed by Lessee or Lessee's Employees gives rise to a safety or health violation, Lessee will immediately remedy such condition and will indemnify, defend, and hold Lessor (or any of Lessor's employees, agents, officers, representatives, affiliates, parent, subsidiaries and their affiliated companies, and their employees, agents, officers and representatives) harmless from any penalty, fine, or liability in connection with such a violation.
(b) Lessor shall be responsible for any violation by Lessor or Lessor's employees of any safety or health standard relating to Lessor's Property. If any material furnished or any work performed by Lessor or Lessor's employees gives rise to a safety or health violation relating to the Lessor's Property, Lessor will immediately remedy such condition and will indemnity, defend and hold Lessee (or any of Lessee's Employees, agents, officers, representatives, affiliates, parent, subsidiaries and their affiliated companies, and their employees, agents, officers and representatives) or liability in connection with such a violation.
Lease Agreement - Hibernia
Lease Agreement - Hibernia
If to Lessor:
Jonathan L. Block, Esq.
c/o Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, CA 93012
If to Lessee:
Hibernia Communications, Inc.
42 West Lancaster Drive, Suite 200
Ardmore, Pennsylvania 19003
Either party hereto may change the place for notice to it by sending like written notice to the other party hereto.
Lease Agreement - Hibernia
Agreement, irrespective of the date of recording, and Lessee agrees to execute any instruments, without cost, which may be deemed necessary or desirable to further effect the subordination of this Agreement. Lessor shall make a reasonable effort to obtain from any mortgagees or lenders holding an interest in the nature of a mortgage in Lessor's Property an agreement that the mortgagee or lender shall not disturb Lessee's quiet possession in the event of foreclosure. If any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor encumbering Lessor's Property, Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LESSOR: LESSEE:
ATSINGER FAMILY TRUST HIBERNIA COMMUNICATIONS, INC.
By: By:
------------------------------- --------------------------
Edward G. Atsinger III, Trustee Michael R. Craven
By:
-------------------------------
Mona J. Atsinger, Trustee
|
By Edward G. Atsinger III, Attorney-in-fact for Mona J. Atsinger
Lease Agreement - Hibernia
Salem Communications Corporation, a California corporation, hereby guarantees all obligations and liabilities of Lessor under this Agreement.
SALEM COMMUNICATION CORPORATION
Lease Agreement - Hibernia
AM Towers.
Lease Agreement - Hibernia
Legal and Street Address.
[MAP OF WOLLASTON GOLF CLUB GROUNDS]
Serafin Bros. has acted as the exclusive broker in this transaction and shall be
paid by Seller pursuant to a separate agreement between Seller and Serafin Bros.
EXHIBIT 10.06.08
THIS OPTION AGREEMENT ("Option Agreement") is made and entered into as of August 18, 1997, by and between SONSINGER, INC. (collectively refered to herein as "Optionor"), and INSPIRATION MEDIA, INC. ("Optionee").
WHEREAS Optionor is the licensee of radio station KKOL(AM) Seattle, Washington (the "Station");
WHEREAS Optionor and Optionee have on entered into a Local Programming and Marketing Agreement (the "LMA") by which Optionee provides certain programming to the Station;
WHEREAS Optionee desires to acquire from Optionor and Optionor is willing to grant to Optionee, upon the terms and conditions hereinafter set forth, the exclusive option to purchase certain assets of the Station (the "Assets"), subject to the approval of the Federal Communications Commission ("FCC"), at a future date.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, Optionor and Optionee agree as follows:
or, if then unavailable, a recognized national media brokerage company reasonably selected by Optionee and Optionor.
(a) Except for any Liens, as defined in the Asset Purchase Agreement, created by the recording of this Option Agreement or the Promissory Note, Optionor has and at Closing, as provided in the Asset Purchase Agreement, will have good, marketable and indefensible title to and full power of disposition over the Assets, and the full right to sell and transfer to Optionee all of the Assets without the requirement of obtaining the consent or approval of any other person, entity, agency or authority except the FCC.
(b) Except for any Liens created by the recording of this Option Agreement or the Promissory Note, the Assets are and at Closing, as set forth in the Asset Purchase Agreement, will be free of all Liens, claims, debts or other encumbrances.
If to the Optionee, TO:
c/o Salem Communications Corporation
4880 Santa Rosa Road, Suite 300 Camarillo, CA 93012 Attn: Eric H. Halvorson
If to the Optionor, to:
c/o Salem Communications Corporation
4880 Santa Rosa Road,
Suite 300 Camarillo, CA 93012
Attn: Jonathan L. Block
IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of the date first above written.
OPTIONOR: OPTIONEE: SONSINGER, INC. INSPIRATION MEDIA, INC. By: /s/ Edward G. Atsinger III By: /s/ Eric H. Halvorson --------------------------- -------------------------- Edward G. Atsinger III Eric H. Halvorson President Vice President |
EXHIBIT 10.07.01
TOWER PURCHASE AGREEMENT
This Agreement ("Agreement") is made this 22/nd/ day of August, 1997 by and between SALEM COMMUNICATIONS CORPORATION ("Seller"), and SONSINGER BROADCASTING COMPANY OF HOUSTON, LP. ("Buyer").
1. Seller is currently constructing a tower ("Tower") on certain real property ("Real Property") located in the State of Texas and the Counties of Liberty and Montgomery and in conjunction therewith has entered into certain contracts and expended certain amounts; and
2. Seller desires to sell and Buyer desires to acquire the Tower and assume the contracts and other obligations of Seller relating thereto on the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer hereby agree as follows:
Assets or used or useful in the construction of the Tower. Seller shall have the right to retain a copy of all books, records and other items provided by Seller to Buyer.
Seller hereby represents and warrants to Buyer as follows:
Seller covenants and agrees with Buyer that between the date hereof and the Closing Date, unless the Buyer otherwise agrees in writing (which agreement shall not be unreasonably withheld), Seller shall:
(a) Use reasonable efforts to continue the construction of the Tower;
(b) Use reasonable commercial efforts to maintain insurance upon all of the tangible Sale Assets in such amounts and of such kind comparable to that in effect on the date hereof with respect to such Sale Assets, with insurers of substantially the same or better financial condition;
(c) Conduct its business in all material respects in accordance with any rules and regulations, statutes, ordinances and orders of all governmental authorities having jurisdiction over any aspect of the operation of the Sale Assets, except where the failure to so would not have a material adverse effect on the Sale Assets or on the ability of Seller to consummate the transactions contemplated hereby;
(d) Comply in all material respects with all Construction Agreements now or hereafter existing which are material, individually or in the aggregate, to the operation of the Sale Assets;
(e) Not sell, lease or otherwise dispose of, nor agree to sell, lease or otherwise dispose of, any of the Sale Assets, except for dispositions in the ordinary course of business;
(f) Not acquire or lease any goods or services or enter into, amend or terminate any license, lease of real or personal property or any other Station Agreement, other than in the ordinary course of business;
(g) Not introduce any material change with respect to the architectural or engineering plans for the construction of the Tower; provided, Seller shall be entitled to make such changes, at the discretion of Seller exercised in good faith after consultation with Buyer, as do not materially and adversely affect the Sale Assets;
(a) A Bill of Sale conveying the Tangible Personal Property;
(b) An instrument or instruments assigning to Buyer all right, title and interest of Seller in and to the Construction Agreements;
(c) Such additional information and materials as Buyer shall have reasonably requested.
(a) The Purchase Price;
(b) An instrument or instruments signed by Buyer assuming the Assumed Obligations.
(c) Such additional information and materials as Seller shall have reasonably requested.
(i) Any breach or nonperformance by Seller of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other document; or
(ii) The ownership or operation of the Sale Assets by Seller prior to the Closing; or
(iii) All other liabilities and obligations of Seller other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of the Bulk Sales Act, if applicable, in connection with the transactions contemplated by this Agreement.
(i) Any breach or nonperformance by Buyer of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other document; or
(ii) The ownership by Buyer of the assets to be conveyed and assigned hereunder from and after the Closing; or
(iii) Any other liabilities and obligations of Buyer, including liabilities and obligations arising after the Closing under the Assumed Obligations.
(a) if to Seller, to:
Eric H. Halvorson
Vice President
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Facsimile No.: (805) 482-8570
(b) if to Buyer, to:
Jonathan L. Block, Esq.
Corporate Counsel
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Facsimile No.: (805) 384-4505
or such other address with respect to any party hereto as such party may from time to time notify (as provided above) to the other party hereto. Any such notice, demand or communication shall be deemed to have been given (i) if so mailed, as of the close of the third business day following the date so mailed, and (ii) if personally delivered or otherwise sent as provided above, on the date received.
without invalidating the remaining provisions hereof, and any such unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable law, the parties hereto hereby waive any provision of law now or hereafter in effect which renders any provision hereof unenforceable in any respect.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed as of the date first written above.
SONSINGER BROADCASTING COMPANY OF SALEM COMMUNICATIONS CORPORATION HOUSTON, LP. By: Sonsinger Management, Inc., Its General Partner By: /s/ Jonathan L. Block By: /s/ Eric H. Halvorson ---------------------- ---------------------- Jonathan L. Block Eric H. Halvorson Secretary Executive Vice President |
TANGIBLE PERSONAL PROPERTY
See attached.
EXPENDITURES
See attached.
CONSTRUCTION AGREEMENTS
See attached.
EXHIBIT 10.07.04
PRINCIPAL AMOUNT: REVOLVING Loan Date: December 24, 1997 Interest Rate: Credit Agreement Base Rate Maturity Date: December 31, 2002 less 1%
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, SALEM COMMUNICATIONS CORPORATION
("Maker") and EDWARD G. ATSINGER III ("Payee") agree as follows:
1. Maker promises to pay to Payee at 4880 Santa Rosa Road, Suite 300, Camarillo, California, or at such other place as Payee shall direct, Two Million Five Hundred Thousand Dollars ($2,500,000) or such amount as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.
(a) The rate of interest ("Interest Rate") on this Promissory Note ("Note") shall be the rate payable by the Maker pursuant to the Credit Agreement ("Credit Agreement") dated as of September 25, 1997 by and among Maker, the Bank of New York, as Administrative Agent, and Bank of America NT&SA, as Documentation Agent, less one percent (1%). Under no circumstances will the interest rate on this Note be greater than the maximum amount of interest allowed by applicable law.
(b) This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Maker. Payee may, but need not, require that all oral requests be confirmed in writing. Payee shall have no obligation to advance funds under this Note if: (i) Maker is in default under the terms of this Note; (ii) Maker ceases to do business or becomes insolvent; (iii) Payee, in good faith, deems itself insecure under this Note or any other agreement between Payee and Maker.
(c) Subject to the terms and conditions of the Credit Agreement, Maker will pay this loan upon demand, or, if no demand is made, in one payment of all outstanding principal plus accrued unpaid interest on December 31, 2002. In addition, Maker will pay regular monthly payments of accrued unpaid interest beginning the first day of each month following the execution hereof. The inclusion of specific default provisions or rights of Payee shall not preclude Payee's right to declare payment of all principal and interest under this Note due upon Payee's demand.
2. The unpaid principal amount of this Note, together with all interest accrued thereon shall, at the option of Payee, become immediately due and payable in case any one of the following events occur (an "Event of Default"):
2.1. Maker shall commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, composition, arrangement, readjustment of debt, dissolution, liquidation of relief or debtors.
2.2. Maker shall commence any case, proceeding or other action seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets; or (ii) Maker shall make a general assignment for the benefit of its creditors; or (iii) there shall be commenced against Maker any case, proceeding or other action of a nature referred to in clause (i), above, which (A) results in an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unhanded for a period of sixty (60) days; or (iv) there shall be commenced against Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order or any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (b) Maker shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii) or (iv) above; or (vi) Maker shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vii) Maker shall conceal, remove, or permit to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or make or suffer a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law, or shall make any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid, or shall suffer or permit, while insolvent, any creditor to obtain a lien upon any of its property through legal proceedings which is not vacated within sixty (60) days from the date thereof.
3. No delay or omission on the part of Payee in exercising any right or option herein given to it shall impair such right or option or be considered as a waiver thereof or acquiescence in any default hereunder.
4. Maker waives presentment, demand, notice of dishonor and protest and consents to any and all extensions and renewals hereof without notice.
5. This instrument shall be construed in accordance with the laws of the State of California.
6. This instrument may be prepaid in whole or in part at any time without penalty.
7. Maker, its directors, officers, employees, members, and agents will have no personal liability for any deficiency under this instrument.
8. In the event a suit or action is filed to enforce this Note or with respect to this Note, the prevailing party shall be reimbursed by the other party for all costs and expenses incurred in connection with the suit or action, including without limitation reasonable attorneys' fees at the trial level and on appeal.
IN WITNESS WHEREOF, the parties have executed this instrument as of this 24th day of December, 1997.
PAYEE:
EDWARD G. ATSINGER III SALEM COMMUNICATIONS CORPORATION
/s/ EDWARD G. ATSINGER III /s/ DIRK GASTALDO
---------------------------------- -------------------------------
Edward G. Atsinger III Dirk Gastaldo
Vice President
|
EXHIBIT 10.07.05
Principal Amount: Revolving Loan Date: December 24, 1997 Interest Rate: Credit Agreement Base Rate Maturity Date: December 31, 2002 less 1%
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, SALEM COMMUNICATIONS CORPORATION
("Maker") and STUART W. EPPERSON ("Payee") agree as follows:
1. Maker promises to pay to Payee at 4880 Santa Rosa Road, Suite 300, Camarillo, California, or at such other place as Payee shall direct, Two Million Five Hundred Thousand Dollars ($2,500,000) or such amount as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.
(a) The rate of interest ("Interest Rate") on this Promissory Note ("Note") shall be the rate payable by the Maker pursuant to the Credit Agreement ("Credit Agreement") dated as of September 25, 1997 by and among Maker, the Bank of New York, as Administrative Agent, and Bank of America NT&SA, as Documentation Agent, less one percent (1%). Under no circumstances will the interest rate on this Note be greater than the maximum amount of interest allowed by applicable law.
(b) This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Maker. Payee may, but need not, require that all oral requests be confirmed in writing. Payee shall have no obligation to advance funds under this Note if: (i) Maker is in default under the terms of this Note; (ii) Maker ceases to do business or becomes insolvent; (iii) Payee, in good faith, deems itself insecure under this Note or any other agreement between Payee and Maker.
(c) Subject to the terms and conditions of the Credit Agreement, Maker will pay this loan upon demand, or, if no demand is made, in one payment of all outstanding principal plus accrued unpaid interest on December 31, 2002. In addition, Maker will pay regular monthly payments of accrued unpaid interest beginning the first day of each month following the execution hereof. The inclusion of specific default provisions or rights of Payee shall not preclude Payee's right to declare payment of all principal and interest under this Note due upon Payee's demand.
2. The unpaid principal amount of this Note, together with all interest accrued thereon shall, at the option of Payee, become immediately due and payable in case any one of the following events occur (an "Event of Default"):
2.1. Maker shall commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, composition, arrangement, readjustment of debt, dissolution, liquidation of relief or debtors.
2.2. Maker shall commence any case, proceeding or other action seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets; or (ii) Maker shall make a general assignment for the benefit of its creditors; or (iii) there shall be commenced against Maker any case, proceeding or other action of a nature referred to in clause (i), above, which (A) results in an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unhanded for a period of sixty (60) days; or (iv) there shall be commenced against Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order or any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (b) Maker shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii) or (iv) above; or (vi) Maker shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vii) Maker shall conceal, remove, or permit to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or make or suffer a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law, or shall make any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid, or shall suffer or permit, while insolvent, any creditor to obtain a lien upon any of its property through legal proceedings which is not vacated within sixty (60) days from the date thereof.
3. No delay or omission on the part of Payee in exercising any right or option herein given to it shall impair such right or option or be considered as a waiver thereof or acquiescence in any default hereunder.
4. Maker waives presentment, demand, notice of dishonor and protest and consents to any and all extensions and renewals hereof without notice.
5. This instrument shall be construed in accordance with the laws of the State of California.
6. This instrument may be prepaid in whole or in part at any time without penalty.
7. Maker, its directors, officers, employees, members, and agents will have no personal liability for any deficiency under this instrument.
8. In the event a suit or action is filed to enforce this Note or with respect to this Note, the prevailing party shall be reimbursed by the other party for all costs and expenses incurred in connection with the suit or action, including without limitation reasonable attorneys' fees at the trial level and on appeal.
IN WITNESS WHEREOF, the parties have executed this instrument as of this 24th day of December, 1997.
PAYEE: MAKER:
STUART W. EPPERSON SALEM COMMUNICATIONS CORPORATION
/s/ STUART W. EPPERSON /s/ DIRK GASTALDO
-------------------------- -------------------------
Stuart W. Epperson Dirk Gastaldo
Vice President
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EXHIBIT 23.01
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the reference to our firm under the caption "Selected Consolidated Financial Information of the Company" and to the use of our report dated May 9, 1997 (except Note 1, as to which the date is August 13, 1997) in the Amendment No. 1 to the Registration Statement (Form S-4) and related Prospectus of Salem Communications Corporation for the registration of $150,000,000 9 1/2% Series B Senior Subordinated Notes Due 2007.
Our audit also included the financial statement schedule of Salem Communications Corporation listed in Item 21(b). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Woodland Hills, California
January 28, 1998
|
EXHIBIT 25.01
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
|
SALEM COMMUNICATIONS CORPORATION
(Exact name of obligor as specified in its charter)
California 77-0121400 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) |
ATEP Radio, Inc. California 77-0132973 Beltway Media Partners Virginia 77-0293196 Bison Media, Inc. Colorado 77-0434654 Caron Broadcasting, Inc. Ohio 77-0439370 Common Ground Broadcasting, Inc. Oregon 93-1079989 Golden Gate Broadcasting Company, Inc. California 94-3082936 Inland Radio, Inc. California 77-0114987 Inspiration Media, Inc. Washington 77-0132974 |
Inspiration Media of
Texas, Inc. Texas 75-2615876
New England Continental
Media, Inc. Massachusetts 04-2625658
New Inspiration Broadcasting
Company, Inc. California 95-3356921
Oasis Radio, Inc. California 77-0061780
Pennsylvania Media
Associates, Inc. Pennsylvania 94-3134636
Radio 1210, Inc. California 77-0052616
Salem Communications
Corporation Delaware 77-0363592
Salem Media Corporation New York 95-3482072
Salem Media of
California, Inc. California 95-1581210
Salem Media of Colorado, Inc. Colorado 84-1239646
Salem Media of
Louisiana, Inc. Louisiana 77-0114983
Salem Media of Ohio, Inc. Ohio 95-3690954
Salem Media of Oregon, Inc. Oregon 77-0114986
Salem Media of
Pennsylvania, Inc. Pennsylvania 77-0237182
Salem Media of Texas, Inc. Texas 77-0379125
Salem Music Network, Inc. Texas 77-0434655
Salem Radio Network
Incorporated Delaware 77-0305542
Salem Radio
Representatives, Inc. Texas 77-0281576
South Texas Broadcasting, Inc. Texas 77-0388924
SRN News Network, Inc. Texas 77-0426090
Vista Broadcasting, Inc. California 77-0389639
4880 Santa Rosa Road
Suite 300
Camarillo, California 93012
(Address of principal executive offices) (Zip code)
______________________
|
9 1/2% Series B Senior Subordinated Notes due 2007
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
-----------------------------------------------------------------------------------
Name Address
-----------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 5th day of December, 1997.
THE BANK OF NEW YORK
By: /s/ THOMAS E. TABOR
----------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
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EXHIBIT 25.01
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin...................... $ 7,769,502
Interest-bearing balances............... 1,472,524
Securities:
Held-to-maturity securities............ 1,080,234
Available-for-sale securities.......... 3,046,199
Federal funds sold and Securities
purchased under agreements to
resell................................. 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ..............35,352,045
LESS: Allowance for loan and
lease losses ......625,042
LESS: Allocated transfer risk
reserve.................429
Loans and leases, net of unearned
income, allowance, and reserve....... 34,726,574
Assets held in trading accounts.......... 1,611,096
Premises and fixed assets (including
capitalized leases).................... 676,729
Other real estate owned.................. 22,460
Investments in unconsolidated sub-
sidiaries and associated com-
panies.............................. 209,959
Customers' liability to this bank on
acceptances outstanding................ 1,357,731
Intangible assets........................ 720,883
Other assets............................. 1,627,267
-----------
Total assets............................. $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices.................... $26,875,596
Noninterest-bearing .........11,213,657
Interest-bearing ............15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 16,334,270
Noninterest-bearing ......... 596,369
Interest-bearing ......... 15,737,901
Federal funds purchased and Se-
curities sold under agreements to
repurchase............................. 1,583,157
Demand notes issued to the U.S.
Treasury............................... 303,000
Trading liabilities...................... 1,306,173
Other borrowed money:
With remaining maturity of one
year or less.......................... 2,383,570
With remaining maturity of more
than one year through three
years................................. 0
With remaining maturity of more
than three years...................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding.................. 1,377,244
Subordinated notes and debentures........ 1,018,940
Other liabilities........................ 1,732,792
-----------
Total liabilities........................ 52,937,421
-----------
EQUITY CAPITAL
Common stock............................. 1,135,284
Surplus.................................. 731,319
Undivided profits and capital
reserves............................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale se-
curities............................. 1,948
Cumulative foreign currency transla-
tion adjustments....................... (12,272)
-----------
Total equity capital..................... 4,577,537
-----------
Total liabilities and equity
capital ........................... $57,514,958
===========
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I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct.
Thomas A. Renyl
J. Carter Bacot Directors
Alan R. Griffith