EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of October 26, 1998, is made between and among
CHILDREN'S BROADCASTING CORPORATION (referred to herein as "CBC"), CHILDREN'S
RADIO OF DALLAS, INC., a Minnesota corporation ("CR Dallas"), CHILDREN'S RADIO
OF PHOENIX, INC., a Minnesota corporation ("CR Phoenix"), and CHILDREN'S RADIO
OF NEW YORK, INC., a New Jersey corporation ("CR New York") (CR Dallas, CR
Phoenix and CR New York are sometimes collectively referred to herein as the
"Asset Subsidiaries"); KAHZ-AM, INC., a Minnesota corporation ("KAHZ-AM"),
KIDR-AM, INC., a Minnesota corporation ("KIDR-AM"), and WJDM-AM, INC.,
("WJDM-AM"), a Minnesota corporation (KAHZ-AM, KIDR-AM and WJDM-AM are sometimes
collectively referred to herein as the "License Subsidiaries"; the Asset
Subsidiaries and the License Subsidiaries are sometimes collectively referred to
herein as the "Subsidiaries"; and CBC and the Subsidiaries are sometimes
collectively referred to herein as the "Sellers"); and RADIO UNICA CORP., a
Delaware corporation (the "Buyer"); and
W I T N E S S E T H :
THAT, WHEREAS, CBC is the owner and holder of 100% of the issued
and outstanding stock of the Asset Subsidiaries; and WHEREAS, each of the Asset
Subsidiaries is the owner of all the assets of the radio station indicated below
licensed to the community listed below (collectively referred to herein as the
"Stations"), except for the Federal Communications Commission (the "FCC" or the
"Commission") licenses, permits or authorizations issued with respect to the
Stations, and are the owners and
holders of 100% of the issued and outstanding stock of the License Subsidiary
designated by the respective Station's call letters:
CR Dallas KAHZ(AM) Fort Worth, Texas
1360 kHz
CR Phoenix KIDR(AM) Phoenix, Arizona
000 xXx
XX Xxx Xxxx WJDM(AM) Elizabeth, New Jersey
1530 kHz
CR New York WBAH(AM) Elizabeth, New Jersey
1660 kHz
WHEREAS, the License Subsidiaries are the FCC licensees and/or
permittees of the Stations indicated above; and
WHEREAS, Sellers have previously entered into a purchase agreement
with Catholic Radio Network, LLC ("CRN"), dated April 17, 1998, as amended (the
"CRN Agreement") and the parties are desirous of entering into this agreement
subject to the rights of CRN and CBC to close upon the CRN Agreement; and
WHEREAS, subject to and conditioned upon the consent of the FCC, the
termination of CRN's right to acquire the Stations under the CRN Agreement or
amendment of the CRN Agreement to exclude the Stations and the other conditions
set forth herein, the Sellers desire to sell and transfer and Buyer desires to
purchase and acquire the Stations and certain of the tangible and intangible
assets of the Sellers used or held for use in connection with the operation of
the Stations, all as is more fully described below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
SALE AND TRANSFER OF ASSETS
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Buyer acknowledges that Sellers have entered into the CRN Agreement.
Buyer further acknowledges that the CRN Agreement is in full force and effect as
of the date of execution hereof, and that the First Amendment to the CRN
Agreement provides, among other things that the transaction will close on
October 16, 1998, subject to CRN's right to extend the closing date until
October 30, 1998, upon payment of a fee to Sellers no later than October 19,
1998 (the "First Extension Fee") and October 26, 1998 (the "Second Extension
Fee"). Accordingly, Buyer acknowledges that Sellers' obligations under this
Agreement are subject to Sellers' and CRN's rights and obligations under the CRN
Agreement. Sellers agree that if at the close of business on October 19, 1998,
all of the conditions to CRN's obligations to close under the CRN Agreement have
been satisfied and CRN has not paid to Sellers the First Extension Fee, Sellers
will immediately terminate the CRN Agreement. Further, Sellers agree that if at
the close of business on October 26, 1998, all of the conditions to CRN's
obligations to close under the CRN Agreement have been satisfied and CRN has not
paid to Sellers the Second Extension Fee, Sellers will immediately terminate the
CRN Agreement. Further, Sellers agree that if CRN has paid the First Extension
Fee and the Second Extension Fee, and all of the conditions to CRN's obligations
to close have been fulfilled, Sellers will grant no further extensions of the
closing date under the CRN Agreement beyond November 5, 1998, and will terminate
the CRN Agreement if all the conditions to CRN's obligations to close have been
fulfilled.
At closing of the transaction described herein ("Closing"), the
Sellers shall sell, convey, assign, transfer and deliver to Buyer, free and
clear of any lien, encumbrance, interest, reservation, restriction, mortgage or
security interest of any nature whatsoever, except for Excluded Assets (as
defined below), and except as otherwise expressly provided herein, all the
assets of the Sellers described below, including the business and goodwill, used
or held for use in connection with the operation of the Stations and including
all replacements and additions thereto between October 8, 1998, and the Closing
Date (as hereinafter defined) (collectively, the "Acquired Assets"):
1.1. All licenses, permits and authorizations ("Licenses") issued by the
Commission for the operation of or used in connection with the
operation of the Stations, all of which are listed on Schedule A
attached hereto, and all applications therefor, together with any
renewals, extensions or modifications thereof and additions thereto;
1.2. All of the Sellers' owned or leased real property interests relating
to the operation of the Stations including that described in Schedule
B attached hereto;
1.3. All tangible personal property owned by the Sellers used or held for
use in the operation of the Stations including but not limited to the
property listed on Schedule C attached hereto, and any replacements
therefor or improvements thereof acquired or constructed prior to
Closing ("Personal Property");
1.4. Subject to Section 2.6 of this Agreement, all of the Sellers' rights
and benefits under the business agreements, leases and contracts
listed on Schedule D attached hereto, including any renewals,
extensions, amendments or modifications thereof, and any additional
agreements, leases and contracts made or entered into by the Sellers
in the ordinary course
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of business between October 8, 1998 and the
Closing approved in writing by Buyer or otherwise permitted hereunder
("Leases and Agreements");
1.5. All other licenses, permits or authorizations issued by any government
or regulatory agency other than the FCC, which are used in connection
with the operation of the Stations, all of which are listed on
Schedule A ("Permits") and pending applications therefor;
1.6. All right, title and interest of the Sellers in and to the use of the
call letters for the Stations (referred to herein as the "Call
Letters"), to the extent they can be conveyed; together with all
common law property rights, goodwill, copyrights, trademarks, service
marks, trade names and other similar rights used in connection with
the operation of the Stations, including all additions thereto, listed
on Schedule E attached hereto ("General Intangibles");
1.7. All of the Subsidiaries' magnetic media, electronic data processing
files, systems and computer programs, logs, public files, records
required by the FCC, vendor contracts, supplies, maintenance records
or similar business records relating to or used in connection with the
operation of the Stations, but not including records pertaining to
corporate affairs (including tax records) and original journals,
provided copies are supplied to Buyer. The Sellers shall have
reasonable access to all such records which might be in the possession
of Buyer for a period of two (2) years following the Closing, and
shall, at its own expense, have the right to make copies thereof; and
1.8. All rights and claims of Sellers whether mature, contingent or
otherwise, against third parties relating to the Acquired Assets,
whether in tort, contract, or otherwise, under or pursuant to all
warranties, representations and guarantees made by manufacturers,
suppliers or vendors.
1.9 "Excluded Assets" means cash on hand, accounts receivable and the
office lease with Lincoln Building Associates.
ARTICLE 2
PURCHASE PRICE AND PAYMENTS
2.1. PURCHASE PRICE. As the purchase price for the Acquired Assets, Buyer
agrees to pay to the Sellers the sum of Twenty-Nine Million Two
Hundred Fifty Thousand and no/100 Dollars ($29,250,000.00), subject to
adjustment as provided herein (the "Purchase Price").
2.2. METHOD OF PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
payable as follows:
2.2.1. ESCROW DEPOSIT. Contemporaneously with the earlier
of (i) the termination of the CRN Agreement or (ii) the
termination of CRN's right to acquire the Stations by
amendment or waiver of the CRN Agreement (the "Effective
Time"), Buyer and Sellers shall enter into an escrow
agreement substantially in the form attached hereto as
Exhibit 1-A with such changes as First Union National Bank
may in its
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discretion reasonably require,, pursuant to which Buyer will
deposit into escrow the sum of Two Million Nine Hundred
Twenty-Five Thousand and no/100 Dollars ($2,925,000.00) (the
"Damages Escrow Funds"). At Closing, the Damages Escrow
Funds, including any interest thereon, shall be delivered to
Sellers and shall be a credit to Buyer against the Purchase
Price subject to the provisions governing the release and
delivery of the Damages Escrow Funds contained in Article 6
hereof.
In addition to entering into the escrow agreement in the
form attached hereto as Exhibit 1-A, at the Effective Time
Buyer and Sellers shall enter into a second escrow agreement
substantially in the form attached hereto as Exhibit 1-B
with such changes as First Union National Bank may in its
reasonable discretion require, pursuant to which Buyer will
deposit into escrow the sum of Seven Million Seventy-Five
Thousand and No/100 Dollars ($7,075,000.00) (the "Purchase
Price Escrow Funds"). At Closing, the Purchase Price Escrow
Funds, including any interest thereon, shall be delivered to
Sellers and shall be a credit to Buyer against the Purchase
Price. Further provisions governing release and delivery of
the Purchase Price Escrow Funds shall be as set forth in
Article 6 hereof.
2.2.2. At Closing, Buyer shall also receive a credit against the
Purchase Price in an amount equal to the portion of the LMA
Deposit, as defined in Section 2.4 below, which is allocable
to periods of time after the Closing, together with interest
on one-half of the LMA Deposit at the rate of 5.5% per annum
from the date hereof until Closing.
2.2.3. The balance of the Purchase Price payable hereunder shall be
paid in cash by the Buyer on the Closing Date by wire
transfer of immediately available funds to such bank or
other financial institution as shall be designated by
Sellers at least one (1) business day prior to the Closing
Date.
2.3. ADJUSTMENTS AND PRORATIONS. The operations of the Stations and
the income and expenses attributable thereto up to 12:01 A.M. on the
day of the Closing shall, except as otherwise provided in this
Agreement and in that local marketing agreement ("LMA") to be entered
into between the parties in the form attached hereto as Exhibit 2 at
the time the Effective Time, be for the account of the Sellers and
thereafter shall be for the account of Buyer. Expenses such as power
and utility charges, lease rents, property taxes according to year of
payment, frequency discounts, annual license fees (if any), wages,
commissions, payroll taxes, and other fringe benefits of employees of
the Sellers who enter the employment of the Buyer, and similar
deferred items shall be prorated between the Sellers and the Buyer.
Prepaid deposits shall also be prorated between the Sellers and the
Buyer. Employees' employment with the Sellers shall be terminated as
of the Closing Date, and Buyer shall employ employees of its choice
from and after said date upon terms acceptable to Buyer and such
employees. Any prorations shall be made and paid insofar as feasible
at the Closing, with a final settlement within ninety (90) days after
the Closing.
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2.4. LMA. Any material breach or any default under this
Agreement shall be a breach or default of the LMA by the breaching
party, and any material breach or any default under the LMA shall be a
breach or default of this Agreement by the breaching party. At the
Effective Time, the Buyer shall pay to Sellers the sum of Two Million
Five Hundred Thousand and no/100 Dollars ($2,500,000.00) as a
prepayment of payments called for under the LMA with respect to radio
station WBAH(AM), and upon approval of the HSR Filing (as defined in
Section 7.7 below), Buyer shall pay to Seller the additional sum of
Five Hundred Thousand and no/100 Dollars ($500,000.00) as a prepayment
of payments called for under the LMA with respect to radio stations
KAHZ(AM) and KIDR(AM) (as initially funded and subsequently increased,
the "LMA Deposit").
2.5. NON-COMPETITION AGREEMENT. On the Closing Date, the Buyer shall enter
into a non-competition agreement with Xxxxxxxxxxx X. Xxxx ("Xxxx") the
form attached hereto as Exhibit 3 (the "Non-Competition Agreement"),
pursuant to which Xxxx will agree not to own, operate or be employed
by a radio station broadcasting from a site within 100 miles of any
site from which any of the Stations broadcast for a period of two (2)
years, and Buyer, in consideration thereof, shall make a lump sum
payment to Xxxx in the amount of Seven Hundred Fifty Thousand and
no/100 Dollars ($750,000.00) on the Closing Date.
2.6. PARTIAL CLOSING ADJUSTMENTS. Further adjustments to the purchase
price payable hereunder may be made pursuant to the provisions of
Sections 6.1 and 7.3 below.
2.7. ASSUMED LIABILITIES. Except as expressly provided for in this
Agreement or the Leases and Agreements listed on the Schedules hereto,
at the Closing Buyer shall not assume, incur or be charged with, in
connection with the transactions herein contemplated, any liabilities
or obligations of any nature whatsoever, contingent or otherwise.
Without limitation of the foregoing, Buyer shall not assume any
obligations to the Stations' employees under any employee benefit
plans or employment contracts.
2.8. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Acquired Assets by Buyer and the Sellers as set forth in the
attached Schedule F. The values of the Acquired Assets with respect to
each of the Stations are set forth with an aggregate allocation value
as to all Acquired Assets associated with the operation of each of the
Stations set out thereon as the station aggregate value (the "Station
Aggregate Value") for each of the Stations. Such allocation will be
used for all purposes, including preparation and filing of IRS Form
8594 with respect to the transactions contemplated by this Agreement.
2.9. SECURITY AGREEMENT AND INTERCREDITOR AGREEMENT. At the Effective Time,
and upon Buyer's funding of the Escrow Deposit and the LMA Deposit,
Sellers agree to execute and deliver to Buyer a Security Agreement in
the form attached hereto as Exhibit 4, and Buyer agrees to execute and
deliver to Sellers' lender, Foothill Capital Corporation, an
Intercreditor Agreement in the form attached hereto as Exhibit 5.
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ARTICLE 3
THE SELLERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
The Sellers represent, warrant and agree as follows, which
representations and warranties shall be deemed to have been made again at
Closing and which agreements shall remain in effect from the date hereof until
the Closing or such later time specified herein:
3.1. CORPORATE EXISTENCE AND POWERS. The Sellers, except CR New York,
are corporations organized and existing in good standing under the
laws of the State of Minnesota, with full power and authority to enter
into this Agreement and the other Transaction Documents (as defined
herein) and to enter into and complete the transactions contemplated
herein and therein without shareholder approval; CR New York is a
corporation organized and existing in good standing under the laws of
the State of New Jersey, with full power and authority to enter into
this Agreement and the other Transaction Documents (as defined herein)
and to enter into and complete the transactions contemplated herein
and therein; CR Dallas is, and will be at the time of Closing,
qualified to do business in the State of Texas; and CR Phoenix is, and
will be at the time of Closing, qualified to do business in the State
of Arizona and neither the nature of the business of the Stations, nor
the character of the properties owned, leased or otherwise held by
Sellers for use in the business of the Stations makes any
qualification necessary in any other state, country, territory or
jurisdiction; all required corporate actions have been taken by the
Sellers to make and carry out this Agreement and the other Transaction
Documents and the transactions contemplated herein and therein; this
Agreement constitutes, and upon execution and delivery, each other
Transaction Document will constitute a valid and binding obligation of
Sellers enforceable in accordance with its terms; the execution of
this Agreement and the other Transaction Documents and the completion
of the transactions herein and therein involved will not result in the
violation of any law, regulation, order, license, permit, rule,
judgment or decree to which any of the Sellers, the Acquired Assets or
the Stations, is subject, or conflict with or constitute the breach of
any contract, agreement or other commitment to which any of the
Sellers is a party or by which they are bound or as to which any of
the Acquired Assets or the Stations are subject or affected, or
conflict with or violate any provision of any of the respective
Sellers' certificates of incorporation, bylaws or other organizational
documents; and, except for receipt of the Commission's Consent (as
defined herein) with respect to the assignment of the Licenses to
Buyer, no other consents of any kind are required that have not been
obtained for the Sellers to make or carry out the terms of this
Agreement and the other Transaction Documents, except with respect to
those consents identified on Schedule B or D which are required of
parties to Leases and Agreements listed on Schedule B or D or with
respect to assignment and assumption of specific contract rights and
obligations. The Sellers shall use their best efforts to obtain third
party consents with respect to any of the Leases and Agreements
designated on Schedule B or D as "material," to the extent required by
such documents. Buyer shall cooperate with the Sellers in obtaining
all such required consents. As used herein, the term "Transaction
Documents" refers collectively to this Agreement, the LMA, the
Assignment of Licenses, the Warranty Deeds, an Assignment and Xxxx of
Sale and any
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other agreements to be executed and delivered by any Seller hereunder
or as otherwise contemplated herein.
3.2. COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Sellers are not in
violation of, and have not received any notice asserting any material
noncompliance by Sellers with, any applicable statute, law, rule or
regulation, whether federal, state, local or otherwise, in connection
with the ownership of the Acquired Assets. Sellers have complied and
are in compliance in all material respects with all laws, regulations
and governmental orders applicable to Sellers' operation of the
Stations and ownership of the Acquired Assets, except as disclosed on
Schedule A. Sellers have obtained and hold all permits, licenses and
approvals (other than the Licenses), none of which has been rescinded
and all of which are in full force and effect, from all Governmental
Authorities (as defined herein) necessary in order to conduct the
operations of the Stations in accordance with applicable law, as
presently conducted and to own, use and maintain the Acquired Assets,
all of which permits, licenses and approvals are identified on
Schedule A. As used herein, "Governmental Authorities" means
any agency, board, bureau, court, commission, department,
instrumentality or administration of the United States government, any
state government or any local or other governmental body in a state of
the United States or the District of Columbia. No filing or
registration with, notification to, or authorization, consent or
approval of, any Governmental Authority is required in connection with
the execution and delivery of this Agreement and the other
Transactional Documents by any Seller or the performance by any Seller
of its obligations hereunder or thereunder except compliance with any
applicable requirements of the Communications Act of 1934 as amended,
(the "Communications Act") and the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 ("HSR"). Each of the License Subsidiaries is
the holder of the Licenses indicated on Schedule A, all of
which are valid, in full force and effect and which have been
unconditionally issued for the full license term. The Licenses
constitute all of the licenses, grants, permits, waivers and
authorizations issued by the FCC and required for and/or used in the
operation of the Stations as they are currently being operated. Each
License Subsidiary is fully qualified to hold its Licenses. All
ownership and employment reports, renewal applications, and other
reports and documents required to be filed for the Stations have been
properly and timely filed, except as noted on Schedule A. The Stations
are operating in accordance with the Licenses, and in
compliance with the Communications Act, and the rules and regulations
of the Commission, including, without limitation, those regulations
governing the Stations' equal employment opportunity practices and
public files, and any other applicable laws, ordinances, rules and
regulations, except as disclosed on Schedule A. Sellers have complied
in all material respects with all requirements of the FCC
and the Federal Aviation Administration with respect to the
construction and/or alteration of Seller's antenna structures, and "no
hazard" determinations for each antenna structure have been obtained.
The Licenses are unimpaired by any act or omission of Sellers or their
officers, directors, employees and agents and Sellers will not,
without Buyer's prior written consent, by an act or omission,
surrender, modify, forfeit or fail to seek renewals on regular terms,
of any License, or cause the Commission or other regulatory authority
to institute any proceeding for the cancellation or modification of
any such License, or fail to prosecute with due diligence any pending
application to the
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Commission. There is not now pending, or to the best of Sellers'
knowledge threatened, any action by or before the Commission or other
regulatory authority to revoke, cancel, rescind, modify (except as to
any applications by the Sellers shown on Schedule A) or refuse to
renew in the ordinary course any of the Licenses, or any
investigation, order to show cause, notice of violation, notice of
inquiry, notice of apparent liability or of forfeiture or complaint
against the Stations or Sellers, and Sellers have no knowledge of any
basis for the commencement of any such proceeding in the future.
Should any such action or investigation be commenced, order or notice
be released, or complaint be filed, Sellers will promptly notify Buyer
and take all actions necessary to protect the Stations and the
Licenses from any material adverse impact. All reports, statements and
other documents relating to the Stations filed by the Sellers or the
Stations with the FCC or any other Governmental Authority were true,
correct and complete in all material respects when filed.
3.3. FINANCIAL STATEMENTS. The Sellers have delivered to the Buyer
unaudited balance sheets dated December 31, 1996, and December 31,
1997 (the latter of which are referred to herein as the "1997 Balance
Sheets") and unaudited statements of operations for the twelve months
ended December 31, 1996, and December 31, 1997, for each of the
Stations, other than KIDR(AM), as to which no 1996 financial
statements have been delivered. Such balance sheets and the notes
thereto are true, complete and accurate in all material respects and
fairly present the consolidated assets, liabilities and financial
condition of the Stations as at the respective dates thereof, and such
statements of operations and the notes thereto are true, complete and
accurate in all material respects and fairly present the results of
operations for the periods indicated, all in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved.
3.4. NO UNDISCLOSED LIABILITIES. None of the Stations has any material
liabilities or obligations of any nature (absolute, accrued,
contingent or otherwise) which were not fully reflected or reserved
against in the 1997 Balance Sheets, except for liabilities and
obligations incurred in the ordinary course of business and consistent
with past practice since the date thereof (none of which liabilities
and obligations is a liability for breach of contract, tort,
infringement or violation of law); and the reserves reflected in the
1997 Balance Sheets are adequate, appropriate and reasonable.
3.5. ACQUIRED ASSETS. The Acquired Assets to be transferred to Buyer
at Closing represent all the assets necessary for the Stations'
current and continuing operations; until Closing, none of the Acquired
Assets will be sold, leased or otherwise disposed of unless replaced
by a substantially similar asset of equal or greater value, and, at
Closing, all of the Acquired Assets shall be owned by and transferred
by the Sellers to Buyer free and clear of all liens, encumbrances,
interests or restrictions of any kind whatsoever excepting only those
obligations, liens or encumbrances expressly provided to be assumed by
Buyer herein or the Leases and Agreements listed on Schedule B or D.
The Acquired Assets have been maintained in good condition, subject to
normal wear and tear. Since the date of the 1997 Balance Sheets, there
has not been any material adverse change in the Acquired Assets; the
Sellers are not aware of any circumstance that could cause a material
adverse effect in
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the Acquired Assets; the Sellers have conducted the business of the
Stations in the Ordinary Course of Business; and the Sellers have not
taken any action that would be prohibited by Section 3.16. As used
herein, the term "Ordinary Course of Business" means, with respect to
Sellers, the ordinary course of business of the Stations consistent
with the past practices of Sellers and recognizing that the Sellers
ended the 24-hour distribution of their Aahs World RadioK format as of
midnight, January 30, 1998, and have since maintained a 24-hour
all-music format at the Stations without any sales of advertising
time, except with respect to WBAH-AM, which has been programmed by
Buyer.
3.6. REAL ESTATE.
3.6.1. OWNED PROPERTIES. Schedule B sets forth a list of all real
property owned by the Sellers ("Owned Real Property"). With
respect to each parcel of Owned Real Property, except as
disclosed on Schedule B, there are no leases, subleases,
licenses, concessions or other agreements, written or oral,
granting any person the right of use or occupancy of any
portion of such parcel and there are no outstanding actions
or rights of first refusal to purchase such parcel or any
portion thereof or interest therein.
3.6.2. LEASED PROPERTIES. Schedule B sets forth a list of all
real property leased by the Sellers (the "Leased Real
Property") and all of the leases (the "Leases") of the
Leased Real Property. With respect to the Leased Real
Property, except as disclosed on Schedule B, (a) all
obligations of the landlord or lessor under the Leases that
have accrued have been performed, and no landlord or lessor
is in default under or in arrears in the payment of any sum
or in the performance of any obligation required of it under
any Lease, and no circumstance presently exists which, with
notice or the passage of time, or both, would give rise to a
default by the landlord or lessor under any Lease; (b) all
obligations of the tenant or lessee under the Leases that
have accrued have been performed, and Sellers are not in
default under or in arrears in the payment of any sum or in
the performance of any obligation required of it under any
Lease, and no circumstance presently exists which, with
notice or the passage of time, or both, would give rise to a
default by Sellers; and (c) there are no consents of any
landlord or lessor required to transfer the Leased Real
Property to Buyer.
3.6.3. TITLE AND DESCRIPTION. Sellers hold a valid and enforceable
freehold interest in the Owned Real Property and valid and
enforceable leasehold interests in the Leased Real Property
pursuant to the Leases as shown on Schedule B, subject only
to the right of reversion of the landlord or lessor under
the Leases and those rights of third parties disclosed on
Schedule B.
3.6.4. PHYSICAL CONDITION. There is no defect in the physical
condition of any improvements located on or constituting a
part of the Real Property. The Real Property, including,
without limitation, such improvements, is in good condition
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and repair and is adequate for the uses to which it is being
put, and the Real Property is not in need of maintenance or
repairs except for ordinary, routine maintenance and repairs
which are not material in nature or cost. The soil condition
of the Real Property is such that it will support all of the
improvements thereon for the foreseeable life of the
improvements without the need for unusual or new subsurface
excavations, fill, footings, caissons or other
installations.
3.6.5. UTILITIES. All water, sewer, gas, electric, telephone,
drainage and other utility equipment, facilities and
services required by law or necessary for the operation of
the Real Property as it is now improved and operated are
installed and connected pursuant to valid permits, are
sufficient to service the Real Property and are in good
operating condition except in such case as will not
materially detract from the marketability or value of the
Real Property and do not impair the operations of the lessee
thereof.
3.6.6. COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Sellers
have received no notice from any Governmental Authority of
any violation of any zoning, building, fire, water, use,
health, or other law, ordinance, code, regulation, license,
permit or authorization issued in respect of any of the Real
Property that has not been heretofore corrected, and know of
no such violation or violations that now exist that would
materially detract from the marketability or value of the
Real Property or impair the operations of the occupant
thereof in any material respect. Sellers' improvements
located on or constituting a part of the Real Property and
the construction, installation, use and operation thereof
(including, without limitation, the construction,
installation, use and operation of any signs located
thereon) are in compliance with all applicable municipal,
state, federal or other governmental laws, ordinances,
codes, regulations, licenses, permits and authorizations,
including, without limitation, applicable zoning, building,
fire, water, use, or health laws, ordinances, codes,
regulations, licenses, permits and authorizations, and there
are presently in effect all certificates of occupancy,
licenses, permits and authorizations required by law,
ordinance, code or regulation or by any governmental or
private authority having jurisdiction over the ownership or
operation of the Sellers' businesses or any of the Acquired
Assets, including the Stations and the Real Property or any
portion thereof, or the occupancy thereof or any present use
thereof, except such non-compliance as will not materially
detract from the marketability or value of the Real Property
and do not impair the operations of the occupant thereof in
any respect. All such approvals required by law, ordinance,
code, regulation or otherwise to be held by the occupant of
any of the Real Property shall be transferred to Buyer at
Closing, if and to the extent transferable. There is legally
enforceable pedestrian and vehicular access to the Real
Property.
3.6.7. REAL PROPERTY TAXES. Sellers have received no notice of any
pending or threatened special assessment or reassessment of
all or any portion of any of the Real Property.
11
3.6.8. CONDEMNATION. There is no pending or, to Sellers'
knowledge, threatened condemnation of all or any part of the
Real Property.
3.6.9. INSURABILITY. Sellers have not received any notice from any
insurance company of any material defects or inadequacies in
the Real Property or any part thereof, which would
materially, adversely affect the insurability of the same or
of any termination or threatened termination of any policy
of insurance.
3.7. CONTRACTS, LEASES, AGREEMENTS, ETC. Each of the Leases and
Agreements are in full force and effect, and there are no
outstanding notices of cancellation, acceleration or
termination in connection therewith except as noted upon
Schedule B or X. Xxxxxxx are not in breach or default in
connection with any of the Leases and Agreements and, to the
best of Sellers' knowledge, there is no basis for any claim,
breach or default with respect to Sellers or any other party
under any of said Leases and Agreements. Sellers have made
available to Buyer true and correct copies of all agreements
and instruments listed on Schedule D, and will make
available to Buyer true and correct copies of any additional
agreements, leases and contracts entered into by the Sellers
in Ordinary Course of Business, as provided in Section 1.4
hereof. On the Closing Date there will be no Leases or
Agreements relating to the Stations (not including this
Agreement and the LMA) which will be binding on the Buyer
other than those specifically identified herein, including
the Schedules attached hereto, as assumed by Buyer, or as
otherwise approved in writing by Buyer.
3.8. LITIGATION. Except as set forth on Schedule G, no strike, labor
dispute, investigation, litigation, court or administrative
proceeding is pending or, to the best of Sellers' knowledge,
threatened against the Sellers relating to the Stations,
their employees or any of the Acquired Assets which may
result in any change in the business, operations, assets or
financial condition of the Stations or may materially affect
Buyer's use and enjoyment of the Acquired Assets, or which
would hinder or prevent the consummation of the transaction
contemplated by this Agreement and the other Transaction
Documents, and the Sellers know of no basis for any such
possible action.
3.9. ENVIRONMENTAL MATTERS.
3.9.1. ENVIRONMENTAL REPRESENTATION OF SELLERS. Sellers are in
compliance in all material respects with all applicable
federal, state and local laws and regulations relating to
pollution or protection of human health or the environment
("Environmental Laws") (which compliance includes, but is
not limited to, the possession by such Sellers of any
permits and other governmental authorizations required under
applicable Environmental Laws and compliance with the terms
and conditions thereof) with respect to the Real Property
and the business of the stations. None of Sellers has
received any communication (written or oral), whether from a
Governmental Authority, citizens' group, employee or
otherwise, alleging that Sellers are not in such compliance,
and to the Sellers' knowledge, there are no past or present
actions, activities, circumstances, conditions, covenants or
incidents that may prevent or interfere with such compliance
in the
12
future. Sellers have not participated in nor approved, nor
has there occurred, to the best of their knowledge, except
as disclosed on Schedule B, any production, disposal or
storage on the Real Property of any hazardous waste or toxic
substance, nor does such waste or substance exist on the
Owned Real Property (above or beneath the surface), nor is
there any proceeding or inquiry, by any governmental
authority (federal or state) with respect to the presence of
such waste or substance on the Real Property to the best of
the Sellers' knowledge, nor are there any underground
storage tanks on the Owned Real Property, to the best of
Sellers' knowledge. There is no Environmental Claim (as
defined below) pending, or to the knowledge of Sellers,
threatened against any Seller with respect to the Owned Real
Property or the business of the Stations or, to the best of
the Sellers' knowledge, against any Person whose liability
for any Environmental Claim any Seller has or may have
retained or assumed either contractually or by operation of
law. To the best of the Sellers' knowledge, there are no
past or present actions, activities, circumstances,
conditions, events or incidents with respect to the Owned
Real Property, any Seller or the business of the Stations
that could form the bases of any Environmental Claim against
any Seller or against any Person whose liability for any
Environmental Claim any Seller has or may have retained or
assumed either contractually or by operation of law. As used
herein, "Environmental Claim" means any claim, action, cause
of action, investigation or notice (written or oral) by any
Person alleging potential liability arising out of, based on
or resulting from (a) the presence or release of any
hazardous waste at any location, whether or not owned or
operated by the Seller or (b) circumstances forming the
basis of any violation of any Environmental Law. "Hazardous
waste" shall consist of the substances defined as "hazardous
substances", "hazardous materials", or "toxic substances" in
the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 USCss.9601, et seq.,
or in the Hazardous Materials Transportation Act, 49
USCss.1801, et seq., or in the Resources Conservation and
Recovery Act, 42 USCss.6901, et seq., and all substances
defined as "hazardous waste" under the Statutes of the
States of New Jersey, Texas and Arizona or any regulations
adopted pursuant to those statutes.
3.9.2. ENVIRONMENTAL COVENANT OF SELLERS. Sellers have provided
Buyer with all information, surveys and reports in each
Seller's or each Station's possession or control concerning
the existence or possible existence of any underground
storage tanks, polychlorinated biphenyls, asbestos or
asbestos-containing materials, radon gas, radioactive
materials, liquid petroleum or liquid petroleum products, or
other hazardous wastes, and any other reports, studies or
documents in each Seller's or each Station's possession
relating to each Seller's or each Station's potential
liability under applicable Environmental Laws
("Environmental Contamination").
3.9.3. RADIO FREQUENCY RADIATION. Other than in compliance with the
Communications Act, the operation of the Stations does not
cause or result in exposure of workers or the general public
to levels of radio frequency radiation in excess of the
"Radio
13
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" (ANSI C95.1-1982), issued by the American
National Standards Institute. Renewal of the FCC Licenses
would not constitute a "major action" within the meaning of
Section 1.1301, et seq., of the FCC's rules.
3.10. INSURANCE. The Sellers shall maintain in full force and effect all of
their existing casualty, liability, and other insurance covering any
or all of the Acquired Assets through the day following the Closing
Date in amounts not less than those in effect on the date hereof, and
Sellers have set forth on Schedule H an abstract of such casualty
insurance coverage. Such coverage is for replacement value against
risks commonly insured against in the radio broadcast industry and
Sellers are not in default under any such policies. Sellers have not
received any notice from any issuer of such policies of its intention
to cancel, terminate or refuse to renew any policy issued by it to
Sellers.
3.11. ACCESS TO INFORMATION AND CONFIDENTIALITY. The Sellers shall
give Buyer and its representatives reasonable access during normal
business hours throughout the period prior to Closing to the
operations, properties, books, accounting records, contracts,
agreements, leases, commitments, programming, technical and sales
records and other records of and pertaining to the Stations; provided,
however, such access shall not disrupt the Sellers' normal operation.
The Sellers shall furnish to Buyer all information concerning the
Stations' affairs as Buyer may reasonably request. Buyer will maintain
the confidentiality of all the information and materials delivered to
it or made available for its inspection by the Sellers hereunder.
Nothing shall be deemed to be confidential information that: (a) is
known to Buyer at the time of its disclosure to Buyer; (b) becomes
publicly known or available other than through disclosure by Buyer;
(c) is received by Buyer from a third party not actually known by
Buyer to be bound by a confidentiality agreement with or obligation to
Sellers; or (d) is independently developed by Buyer as clearly
evidenced by its records. Notwithstanding the foregoing provisions of
this Section 3.11, Buyer may disclose such confidential information
(x) to the extent required or deemed advisable to comply with
applicable laws and regulations, (y) to its officers, directors,
employees, representatives, financial advisors, attorneys,
accountants, and agents with respect to the transactions contemplated
hereby (so long as such parties are informed of the confidentiality of
such information), and (z) to any Governmental Authority in connection
with the transactions contemplated hereby. In the event this Agreement
is terminated, Buyer will return to Sellers all confidential
information prepared or furnished by Sellers relating to the
transactions contemplated hereunder, whether obtained before or after
the execution of this Agreement.
3.12. CONDUCT OF THE STATIONS' BUSINESS. Until Closing, without the
written consent of Buyer, the Sellers shall not enter into any
transaction, agreement or understanding (whether or not in writing)
other than those in the Ordinary Course of Business; no employment
contract shall be entered into by the Sellers relating to the Stations
unless the same is terminable at will and without penalty; no material
increase in compensation payable or to become
14
payable, to any of the employees employed at the Stations shall be
made; no material change in personnel policies, insurance benefits or
other compensation arrangements shall be made; and the Sellers will
cause the Stations to be operated in compliance with the Licenses and
Permits and all applicable laws and regulations;
the Sellers further represent, warrant and covenant:
(a) Between the date hereof and Closing, the Sellers shall not
take any action which will prevent or impede Buyer from
obtaining at the Closing the actual and immediate occupancy
and possession of the Stations and all of the Acquired
Assets.
(b) On the Closing date, the Sellers will be the owner of the
Acquired Assets except such of the same replaced by
substantially similar property of no less than equivalent
value in the ordinary course of business, with good and
marketable title thereto, free and clear of all liens and
encumbrances, except liens for current taxes and assessments
not yet due and payable or to secure obligations to be
assumed by Buyer hereunder pursuant to the Leases and
Agreements; and that between the date of this Agreement and
the Closing, there will be no more than the ordinary normal
wear and tear and expendability of the Acquired Assets, and
that the Acquired Assets will be in good working condition.
(c) The Sellers do not know of any facts relating to them or the
Stations which would cause (i) the applications for
assignment of the Licenses to Buyer to be challenged, (ii)
the Commission to deny its consent to the assignments of the
Stations' Licenses to Buyer, or (iii) the Commission to
grant such applications for assignment subject to material
adverse conditions to Buyer.
(d) The Sellers will have duly filed all tax returns required
to be filed by each of the Sellers on or before the Closing
Date and will have paid and discharged all taxes,
assessments, excises, levies, or other similar charges of
every kind, character or description imposed by any
Governmental Authority, and any interest, penalties or
additions to tax imposed thereon or in connection therewith
(collectively, "Taxes") known to the Sellers which are due
and payable and have not been paid and that would interfere
with the Sellers' enjoyment of the Acquired Assets. There is
no action, suit, proceeding, audit, investigation or claim
pending or, to the Sellers' best knowledge, threatened in
respect of any Taxes been proposed, asserted or threatened.
(e) The Sellers shall (i) upon receiving notice or otherwise
becoming aware of any violation relating to the Licenses,
any violation by any of the Stations of any rules and
regulations of the FCC, or any material violations under any
other applicable laws and regulations, promptly notify Buyer
and, at Sellers' expense, use reasonable commercial efforts
to cure all such violations prior to the Closing Date, (ii)
promptly notify Buyer in writing if the Station ceases to
broadcast at its
15
authorized power for more than 48 consecutive hours; such
notice shall specify the reason or reasons for such
cessation and the corrective measures taken or to be taken
by Sellers, and (iii) promptly inform Buyer in writing of
any material variances from the representations and
warranties contained in this Article 3 that become known to
the Sellers or any breach of any agreement hereunder by
Sellers.
3.13. COPYRIGHTS, TRADEMARKS AND SIMILAR RIGHTS. The call letters listed
on Schedule E are the call letters used by Sellers during the radio
broadcast operations of the Stations to identify each of the
respective Stations to its local audience. Sellers have full right and
authority from the FCC to use such call letters except as may be
provided in the Leases and Agreements. Sellers have not licensed or
consented to, and have no knowledge of, any other entity's or
individual's use of such call letters. There is no other name,
trademark, service xxxx, copyright, or other trade, or service right
or xxxx currently being used in the business and operations of the
Stations other than those listed in Schedule X. Xxxxxxx pay no royalty
to anyone for use of the General Intangibles and have the right to
bring action for the infringement thereof to the extent permitted by
applicable law. Sellers represent that the operations of the Stations
do not infringe on any trademark, service xxxx, copyright or other
intellectual property or similar right owned by others.
3.14. EMPLOYEES. Sellers shall be solely responsible for any and all
liabilities and obligations Sellers may have to the employees of the
Stations, including, without limitation, compensation, severance pay,
incentive bonuses, health expenses, and accrued vacation time, sick
leave and obligations under any of Sellers' employee benefit plans.
Sellers acknowledge that Buyer has no obligation hereunder to offer
employment to any employee of Sellers; however, Buyer shall have the
right to hire such of the employees of the Stations as Buyer may
select. With respect to any employee that Buyer hires, Sellers further
acknowledge that Buyer shall have no obligation for, and shall not
assume as part of the transaction contemplated by this Agreement, any
compensation, incentive bonuses, health expenses, or "accrued
vacation" or other accrued leave time of said employees as a
consequence of their being hired by Buyer. Sellers also acknowledge
that with respect to such employees as may be hired by Buyer, and
where any such compensation, incentive bonuses, health expenses, or
accrued leave time exists for said employees, Sellers will retain the
responsibility for any liability arising therefrom. The consummation
of the transactions contemplated hereby will not cause Buyer to incur
or suffer any liability relating to, or obligation to pay, severance,
termination, or other payments to any person or entity, or any
liability under any employee benefit plans of Sellers, including,
without limitation, any liability under the Internal Revenue Code of
1986, as amended, or the Employee Retirement Income Security Act of
1974, as amended. Sellers shall comply with the provisions of the
Worker Adjustment and Retraining and Notification Act and similar laws
and regulations, if applicable, and shall be solely responsible for
any and all liabilities, penalties, fines, or other sanctions that may
be assessed or otherwise due under such applicable laws and
regulations on account of the dismissal or termination of the
employees of the Stations by Sellers.
16
3.15. LABOR RELATIONS. Schedule I lists the names, dates of hire and
current annual salaries of all persons employed by the Sellers
directly and principally in connection with the operation of the
Stations. None of the Sellers is a party to or subject to any
collective bargaining agreements with respect to any of the Stations.
Sellers have no written or oral contracts of employment with any
employee of the Stations, other than (i) oral employment agreements
terminable at will without penalty, or (ii) those listed in Schedule
D. The Sellers, in the operations of the Stations, have substantially
complied with all applicable laws, rules and regulations relating to
the employment of labor, including those related to wages, hours,
collective bargaining, occupational safety, discrimination and the
payment of social security and other payroll related taxes. To the
best of Sellers' knowledge, there is no representation or organizing
effort pending or threatened against or involving or affecting the
Sellers with respect to employees employed at any of the Stations.
3.16. PRE-CLOSING COVENANTS. Between the date hereof and the Closing, the
Sellers covenant that:
3.16.1. FCC COMPLIANCE. The Sellers shall continue to operate the
Stations in conformity with the terms of the Stations'
Licenses and in conformity in all material respects with all
applicable laws, regulations, rules and ordinances,
including but not limited to the rules and regulations of
the FCC. The Sellers shall file all reports, applications
and other filings required by the FCC in a timely and
accurate manner. Sellers will maintain the Licenses in full
force and effect and take any action necessary before the
FCC to preserve such Licenses in full force and effect
without material adverse change. Sellers will not take any
action that would jeopardize the License Subsidiaries'
rightful possession of the Licenses, the potential for
assignment of the Licenses to Buyer, or the unconditional
renewal of the Licenses for full license terms. Sellers
shall continue to prosecute any pending applications before
the FCC in the ordinary course.
3.16.2. CONDUCT OF BUSINESS. The Sellers shall conduct the business
and technical operations of the Stations in the Ordinary
Course of Business and consistent with past practices, and
shall continue all practices, policies, procedures and
technical operations relating to the Stations in
substantially the same manner as heretofore.
3.16.3. MAINTENANCE OF ASSETS. The Sellers shall maintain all of
the Acquired Assets in a good condition and, with respect
to the Personal Property, shall maintain inventories of
spare parts at levels consistent with the past practices of
the Sellers and the Stations. The Sellers shall not sell,
convey, assign, transfer or encumber any of the Acquired
Assets, except for the retirement of tangible Acquired
Assets consistent with the normal and customary practices
of the Sellers and the Stations.
3.17. NO MISLEADING STATEMENTS. To Sellers' knowledge, no statement,
representation or warranty made by Sellers herein and no information
provided or to be provided by Sellers
17
to Buyer pursuant to this Agreement or the other Transaction Documents
or in connection with the negotiations covering the purchase and sale
contemplated herein contains or will contain any untrue statement of a
material fact, or omits or will omit a material fact. There are no
facts or circumstances known to Sellers and not disclosed herein or in
the Schedules hereto that, either individually or in the aggregate,
will materially adversely affect after Closing the Acquired Assets or
the condition of the Stations.
3.18. CONSENTS. The Sellers shall use commercially reasonable efforts
to obtain any third party consents required to assign to Buyer all
Leases and Agreements. If, on the Closing Date, Sellers have not
obtained any required consent for the assignment of any Lease and
Agreement (other than the material Leases and Consents referred to in
Section 8.4(d) hereof) to Buyer and the Closing occurs, then after the
Closing Date, Sellers will continue to use commercially reasonable
efforts, and the Buyer will cooperate with Sellers, to obtain any such
consent and/or to remove any other impediments to the assignment of
any such Lease and Agreement. From and after the Closing, until the
valid assignment of all such Leases and Agreements, Sellers will take
such lawful actions as are reasonably necessary to assure that Buyer
shall receive the benefits of, and shall be obligated to perform the
obligations of Sellers under, all such Leases and Agreements after the
Closing Date to the same extent as if Buyer were a party thereunder
(and Buyer agrees to cooperate with Sellers in connection with any
such actions and to enter into, at the time of the Closing, any lawful
arrangements in furtherance thereof (but at no additional cost to
Buyer other than such costs as Buyer would incur as a party to such
Leases and Agreements)).
3.19. SUPPLEMENTAL DISCLOSURE. From time to time prior to the Closing, the
Sellers will promptly supplement or amend the Schedules hereto with
respect to any matter hereafter arising which, if existing or
occurring at the date of the Agreement, would have been required to be
set forth or described in such Schedules. No supplement or amendment
of any Schedule made pursuant to this section shall be deemed to cure
any breach of any representation or warranty made in this Agreement
unless Buyer specifically agrees thereto in writing.
3.20 UNWIND AGREEMENTS. In the event that a Closing occurs hereunder prior
to the receipt of a Final Order (as defined below), and upon the
receipt of an FCC order requiring Buyer to return the Acquired Assets
(including any Licenses issued by the FCC) to Sellers as a result of
Sellers' failure to comply with the Communications Act or the rules
and regulations of the FCC, Sellers agree that upon Sellers receipt of
the Acquired Assets (including any Licenses issued by the FCC),
Sellers shall return the Purchase Price to Buyer. In such event,
Sellers and Buyer agree to cooperate to return the Acquired Assets to
Sellers, the Purchase Price to Buyer and to otherwise place the
parties in the same positions as they were in immediately prior to the
Closing and to ensure that neither party has been otherwise
economically damaged. The term "Final Order" as used herein shall mean
an FCC order or action as to which the time for filing a request for
administrative or judicial review, or for instituting administrative
review sua sponte, shall have expired without any such filing having
been made or notice of such review having been issued; or in the event
of such filing or review sua sponte, as to which such filing or review
shall have been
18
disposed of favorably to the grant and the time for seeking further
relief with respect thereto shall have expired without any request for
such further relief having been filed.
ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants as follows, which representations
and warranties shall be deemed to have been made again at Closing.
4.1. CORPORATE EXISTENCE AND POWERS. Buyer is a corporation organized
and existing in good standing under the laws of the State of Delaware
with full power and authority to enter into this Agreement and the
other Transaction Documents to which it is a party and enter into and
complete the transactions contemplated herein and therein; Buyer is,
or will be at the time of Closing, qualified to do business in the
States of New York, New Jersey, Texas and Arizona; all required
corporate action has been taken by Buyer to make and carry out this
Agreement and the other Transaction Documents to which it is a party
and the transactions contemplated herein and therein; this Agreement
constitutes, and upon execution and delivery, each other Transaction
Document will constitute, valid and binding obligation of Buyer
enforceable in accordance with its terms; the execution of the
Agreement and the other Transaction Documents to which it is a party
and, once the consent referred to in the next clause of this sentence
is obtained, the completion of the transactions herein involved will
not result in the violation of any order, license, permit, rule,
judgment or decree to which Buyer is subject or the breach of any
contract, agreement or other commitment to which Buyer is a party or
by which it is bound or conflict with or violate any provision of
Buyer's certificate of incorporation, bylaws or other organizational
documents; and except for the consent of the Commission to the
assignment of the Licenses to Buyer and the consents identified by the
Sellers on Schedule B or D, to the Buyer's knowledge, no other consent
of any kind is required that has not been obtained for Buyer to make
or carry out the terms of this Agreement.
4.2. BUYER'S QUALIFICATIONS. At Closing, Buyer will be legally and
financially qualified to become the licensee of the Commission. Buyer
does not know of any facts relating to it which would cause the
Commission to deny its consents, or which would materially hinder or
delay receipt of such consents, to the assignments of the Licenses to
Buyer.
ARTICLE 5
BREACH OF AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
5.1. BREACH OF THE SELLERS' AGREEMENTS, REPRESENTATIONS AND
WARRANTIES. The Sellers shall jointly and severally indemnify and hold
harmless Buyer and every affiliate of Buyer and any of its or their
directors, members, stockholders, officers, partners, employees,
agents, consultants, representatives, transferees and assignees from
and against any loss, damage, liability, claim, demand, judgment or
expense, including claims of third parties arising out
19
of ownership of the Acquired Assets or the operation of the Stations
by the Sellers prior to Closing, and including without being limited
to, reasonable counsel fees and reasonable accounting fees, sustained
by Buyer by reason of, or arising out of or relating to, (i) any
material breach of any warranty, representation, covenant or agreement
of the Sellers contained herein or in any other Transactional Document
or in the Schedules attached hereto, (ii) any error contained in any
statement, report, certificate or other instrument delivered to Buyer
by Sellers pursuant to this Agreement, (iii) any failure by Sellers to
pay or discharge any liability relating to the Stations that is not
expressly assumed by Buyer hereunder, (iv) any facts or circumstances
described in Schedule G, or (v) the failure to comply with any
applicable bulk sales or tax notice statutes; provided, however, that
such indemnification shall be required only if written notice, with
respect to any matter for which indemnification is claimed, is given.
5.2. BREACH OF BUYER'S AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
Buyer shall indemnify and hold harmless the Sellers and every
affiliate of Sellers and any of their directors, members,
stockholders, officers, partners, employees, agents, consultants,
representatives, transferees and assignees from and against any loss,
damage, liability, claim, demand, judgment or expense, including
claims of third parties arising out of ownership of the Acquired
Assets or operation of the Stations by Buyer after Closing, and
including without being limited to, reasonable counsel fees and
reasonable accounting fees, sustained by the Sellers by reason of, or
arising out of or relating to, any material breach of any warranty,
representation, covenant or agreement of Buyer contained herein or any
other Transaction Document; provided, however, that such
indemnification shall be required only if written notice, with respect
to any matter for which indemnification is claimed, is given.
5.3. THRESHOLD. Neither Buyer nor Seller shall be liable to the other for
indemnification until the aggregate of all indemnification claims of
the party seeking indemnification exceeds $25,000.00, but after such
threshold is exceeded, the applicable party shall be entitled to
indemnification for all claims.
5.4. SPECIFIC PERFORMANCE. Sellers acknowledge that the Acquired
Assets to be transferred and assigned under this Agreement are unique
and not readily bought or sold on the open market and, for that
reason, among others, Buyer would be irreparably harmed by any breach
or failure of the other party to consummate this Agreement, and
monetary damages therefor will be highly difficult, if not wholly
impossible, to ascertain. It is therefore agreed that this Agreement
shall be enforceable by Buyer in a court of equity by a decree of
specific performance, and an injunction may be issued restraining any
transfer or assignment of the Acquired Assets contrary to the
provisions of this Agreement pending the determination of such
controversy. Sellers, for themselves and their successors and assigns,
hereby waive the claim or defense that an adequate remedy at law
exists. In the event of a suit by Buyer to obtain specific
performance, and if Buyer shall prevail in such action, Buyer shall be
entitled to reimbursement by Sellers of all reasonable attorneys' fees
and other out-of-pocket expenses incurred by Buyer with respect
thereto.
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5.5. PROCEDURES: THIRD PARTY CLAIMS. The indemnified party agrees to give
written notice within a reasonable time to the indemnifying party of
any claim or other assertion of liability by third parties which could
give rise to a claim for indemnification hereunder (hereinafter
collectively "Claims," and individually a "Claim"), it being
understood that the failure to give such notice shall not affect the
indemnified party's obligation to indemnify as set forth in this
Agreement, unless, and then only to the extent, the indemnifying
party's ability to contest, defend or settle with respect to such
Claim is thereby demonstrably and materially prejudiced. The
obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to this Article 5 resulting from
any Claim, shall be subject to the following additional terms and
conditions:
(a) Provided the indemnifying party acknowledges in writing
its obligation to indemnify the indemnified party with respect to the
Claim and further satisfies the indemnified party as to its financial
ability to satisfy such indemnification obligation, the indemnifying
party shall have the right to undertake, by counsel or other
representatives of its own choosing, the defense or opposition to such
Claim.
(b) In the event that the indemnifying party shall either
(i) elect not to undertake, or shall fail to satisfy any requirements
to undertake, such defense or opposition, or (ii) fail to properly
elect within thirty (30) days after notice of any such Claim from the
indemnified party or thereafter fail to defend or oppose such Claim,
then, in either such event, the indemnified party shall have the right
to undertake the defense, opposition, compromise or settlement of such
Claim, by counsel or other representatives of its own choosing, on
behalf of and for the account and risk of the indemnifying party.
(c) Anything in this Section 5.5 to the contrary
notwithstanding, (i) the indemnifying party shall not, without the
indemnified party's written consent, settle or compromise any Claim or
consent to entry of any judgment which includes any admission of
liability or does not include as a term thereof the giving by the
claimant or the plaintiff to the indemnified party of an unconditional
release from all liability in respect of such Claim, and (ii) in the
event that the indemnifying party undertakes defense of or opposition
to any Claim, the indemnified party, by counsel or other
representative of its own choosing and at its sole cost and expense,
shall have the right to consult with the indemnifying party and its
counsel or other representatives concerning such Claim and the
indemnifying party and the indemnified party and their respective
counsel or other representatives shall cooperate in good faith with
respect to such Claim.
(d) The indemnifying party hereby agrees to pay the amount
of any established Claim within fifteen (15) days after the
establishment thereof. The amount of established Claims shall be paid
in cash. Any amounts for such Claims not paid when due under this
Article shall bear interest at a rate equal to 15% per annum until
paid.
5.6. Sellers covenant that, upon the initiation by CBC of any
bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, dissolution, liquidation, or similar proceeding relating to it
under any jurisdiction (a "Liquidation Announcement"), Sellers
21
shall enter into an escrow agreement with Buyer and a mutually
agreeable esrow agent (the "Indemnity Escrow Agreement"). Sellers
further covenant that, in the event an Indemnity Escrow Agreement is
executed by the parties, the balance of the escrow fund contemplated
by the Indemnity Escrow Agreement shall be One Million and no/100
Dollars ($1,000,000.00) during the first twelve months following the
execution of this Agreement and Five Hundred Thousand and no/100
Dollars ($500,000.00) during the second twelve months following the
execution of this Agreement regardless of the date on which a
Liquidation Announcement is made and that such balance shall be
applied to payment of any indemnification obligations owed by Sellers
to Buyer under this Article V.
ARTICLE 6
RISK OF LOSS; TERMINATION
6.1. BUYER'S OPTIONS. The risk of any loss, damage or destruction
to any of the Acquired Assets to be transferred to the Buyer hereunder
from fire or other casualty or loss shall be borne by the Sellers at
all times prior to the Closing. Upon the occurrence of any material
loss or damage to any of the Acquired Assets to be transferred
hereunder as a result of fire, casualty, or other causes prior to the
Closing, the Sellers shall notify the Buyer of same in writing
immediately, stating with particularity the reasonable estimates of
the loss or damage incurred, the cause of damage, if known, and the
extent to which restoration, replacement and repair of the Acquired
Assets lost or destroyed is believed reimbursable under any insurance
policy with respect thereto. Provided the Sellers, at their sole
expense, have not repaired, restored or replaced the damaged Acquired
Assets to Buyer's reasonable satisfaction by the Closing, and if the
Buyer is not then in default of this Agreement, Buyer shall have the
option (but not the obligation) exercisable at the Closing to:
(i) terminate this Agreement in which case none of the parties
shall have any further liability to the other parties and
all Escrow Funds shall be returned to Buyer, except that
the Sellers shall have a reasonable period of time, not to
exceed one hundred (100) days, to effect repairs of the
damaged Acquired Assets before Buyer may exercise its
option under this subparagraph 6.1 (i);
(ii) postpone the Closing for up to one hundred eighty (180)
days as necessary to allow the property to be completely
repaired, replaced or restored, at the Sellers' sole
expense, in which event the Sellers shall use their best
efforts to complete such repairs; or
(iii) elect to consummate the Closing and accept the property in
its "then" condition, in which event the Sellers shall
assign to Buyer all rights under any insurance claim
covering the loss and pay over to the Buyer the proceeds
under any such insurance policy previously received by the
Sellers with respect thereto and provided that Buyer's
election to proceed with the Closing under this Section
6.1(iii) shall not relieve Sellers of any of the
indemnification obligations under Article 5 hereof with
respect to damaged Acquired Assets or in any other respect.
22
6.2. TERMINATION BY EITHER PARTY. This Agreement may be terminated prior to
Closing as follows:
(a) by mutual agreement of Buyer and Sellers at any time;
(b) by Buyer, if not otherwise in material default or
breach of this Agreement, by written notice to Sellers if any of the
conditions specified in Section 8.4 is not satisfied in all material
respects at the time for Commission consent as provided in Section 7.4
hereof or if satisfaction of any such condition is or becomes
impossible, provided that in the event of a breach by any Seller of
any covenant or agreement contained herein, Buyer shall first give
Sellers written notice thereof, and if Sellers shall have undertaken
to cure such breach within fifteen (15) days, they shall have a total
of thirty (30) days to cure such breach, or if Buyer terminates the
LMA upon an Event of Default (as defined therein) by Seller or in
accordance with Section 6.1;
(c) by Sellers, if not otherwise in material default or
breach of this Agreement, by written notice to Buyer if any of the
conditions specified in Section 8.5 is not satisfied in all material
respects at the time for Commission consent as provided in Section 7.4
hereof or if satisfaction of any such condition is or becomes
impossible, provided that in the event of a breach by Buyer of any
covenant or agreement contained herein, Sellers shall first give Buyer
written notice thereof, and if Buyer shall have undertaken to cure
such breach within fifteen (15) days, it shall have a total of thirty
(30) days to cure such breach, or if Seller terminates the LMA upon an
Event of Default (as defined therein) by Buyer; or
6.3. EFFECT OF TERMINATION. In the event this Agreement is terminated
as provided in Section 6.2, this Agreement shall be deemed null, void
and of no further force or effect, and the parties hereto shall be
released from all future obligations hereunder with respect to the
Stations; provided that the obligations of Buyer and Sellers in
Sections 2.2.1, 3.9.5, 5.1, 5.2, 5.3, 5.5, 6.3, 7.2, 9.3, and 9.10
shall survive such termination, and provided further that the
termination of this Agreement shall not relieve any party for
liability for any material breach of this Agreement, and provided
further that, if this Agreement is terminated pursuant to Section
6.2(c) due to material breach or default by the Buyer of this
Agreement, and the Sellers are not then in material breach or default
of this Agreement, the Sellers shall be paid the Damages Escrow Funds
in accordance with and subject to the terms of Section 1.2 of the
escrow agreement attached as Exhibit 1-B hereto and this Section
6.2(c), together with any interest earned thereon, as liquidated
damages, it being agreed that such payment shall constitute full
payment for any and all damages suffered by Sellers by reason thereof
and that Sellers shall have no rights to or claims for damages from
Buyer. Sellers acknowledge and expressly agree that their right to
receive the Damages Escrow Funds as liquidated damages shall be
Sellers' sole and exclusive remedy (for damages or otherwise) under
this Agreement in the event that it is terminated pursuant to Section
6.2(c) hereof, or in the event that the Closing does not occur due to
a material breach or default by the Buyer of this Agreement (occurring
when the Sellers are not in material breach or default of this
Agreement) except that Sellers shall be entitled to recover
23
its costs and legal fees incurred in any successful effort to collect
the Damages Escrow Funds. Notwithstanding any other provision of this
Agreement, Sellers and Buyer acknowledge and expressly agree that (i)
until the satisfaction of all the conditions to Buyer's obligations to
close under this Agreement and actual occurrence of the Closing.
Sellers shall neither have nor be deemed to have any legal or
equitable right, title or interest in the Purchase Price Escrow Funds
or right to delivery thereof, (ii) Buyer shall retain all legal and
equitable rights, title and interest in and to the Purchase Price
Escrow Funds as the exclusive property of Buyer pending actual
occurrence of the Closing and (iii) in any event, if this Agreement is
earlier terminated for any reason, the Buyer shall be entitled to
immediate return and delivery of the Purchase Price Escrow Funds free
and clear of all claims of Sellers. Sellers and Buyer further
acknowledge and agree that (i) Sellers shall neither have nor be
deemed to have any legal or equitable right, title or interest in or
to the Damages Escrow Funds or right to delivery thereof until either
(x) a court of competent jurisdiction determines and finds by final
order (that is not subject to appeal, review or rehearing, and as to
which no appeal or petition for review or rehearing was filed or, if
filed, remains pending) that the Closing did not occur as the proximate
result of a material breach or default by Buyer of this Agreement
(occurring when Sellers were not in material breach or default of the
Agreement) or (y) all -- the conditions to Buyer's obligations to close
under this Agreement are satisfied and the Closing actually occurs;
(ii) Buyer shall retain all legal and equitable rights, title and
interests in and to the Damages Escrow Funds as the exclusive property
of Buyer unless Sellers' rights to delivery of the Damages Escrow Funds
mature in accordance with the preceding "(i)" of this sentence; and
(iii) in the event that this Agreement is earlier terminated (except
pursuant to Section 6.2(c) due to a material breach or default by the
Buyer of this Agreement, and the Sellers are not then in material
breach or default of this Agreement), Buyer shall be entitled to
immediate return and delivery of the Damages Escrow Funds free and
clear of all claims of Sellers.
ARTICLE 7
APPLICATION FOR COMMISSION AND HSR APPROVAL
7.1. FILING AND PROSECUTION OF FCC APPLICATION. Buyer and the Sellers
shall, not later than five (5) days after the Effective Time, join in
applications to be filed with the Commission requesting its written
consents to the assignments of the Licenses of the Stations from the
License Subsidiaries to Buyer (or such other entity under common
control with Buyer as Buyer may designate). The parties shall prepare
their own portions of the applications. Buyer and the Sellers shall
take all steps necessary to the expeditious prosecution of such
applications to a favorable conclusion, using their reasonable best
efforts throughout.
7.2. EXPENSES. The parties shall bear their own legal, accounting and other
expenses in connection with the consummation of the contemplated
transaction. The parties shall cooperate with the preparation of the
Commission applications and in connection with the prosecution of such
applications. The filing fees shall be shared equally between the
Sellers on the one hand and the Buyer on the other.
24
7.3. DESIGNATION FOR HEARING. If, for any reason, any application for an
assignment of any of the Licenses is designated for hearing by the
Commission prior to grant thereof, the Buyer shall have the right by
written notice within thirty (30) days of such designation for
hearing, to exclude from the Acquired Assets those assets associated
with the operation of the Station affected, and the Purchase Price
payable hereunder shall be reduced by an amount equal to the Station
Aggregate Value of the affected Station.
7.4. TIME FOR COMMISSION CONSENT. Subject to the provisions of Section 7.3
above, if the Commission has not given its written consents to the
assignments of the Licenses set forth herein within five (5) months
from the date of acceptance for filing of the applications for such
assignments, any of the parties, if not then in default, may terminate
this Agreement by giving written notice to the other parties. Upon
such termination, if not otherwise in material breach or default of
this Agreement, none of the parties shall have any right or liability
hereunder and all Escrow Funds shall be returned to Buyer promptly.
7.5. CONTROL OF STATIONS. Until Closing, Buyer shall not directly or
indirectly, control, supervise, direct or attempt to control,
supervise or direct the operations of the Stations, but such
operations shall be the sole responsibility of the Sellers, subject to
and consistent with all rules, regulations and policies of the FCC. On
and after the Closing Date, the Sellers shall not directly or
indirectly, control, supervise, direct or attempt to control,
supervise or direct the operations of the Stations.
7.6. SHARING INFORMATION. Each party hereto shall as promptly as possible,
and in any event within five (5) business days, inform the other of
any material communications between such party and the FCC or any
other Governmental Authority regarding this Agreement or the
transactions contemplated hereby. If any party receives a request for
additional information or documentary material from any such
Governmental Authority, then such party shall endeavor in good faith
to make, or cause to be made, as promptly as practicable and after
consultation with the other party, an appropriate response to such
request.
7.7 HSR APPLICATION. Within five (5) days of the Effective Time, the
parties shall complete any filing that may be required pursuant to HSR
(the "HSR Filing"). Sellers and Buyer shall diligently take, or fully
cooperate in the taking of, all necessary and proper steps, and
provide any additional information reasonably requested in order to
comply with the requirements of HSR. Buyer and Sellers shall each pay
half of any necessary HSR filing fees, and each party shall be
responsible for its own counsel fees.
ARTICLE 8
CLOSING
Subject to the terms and conditions herein stated, the parties agree
as follows:
8.1. CLOSING DATE. The Closing of the transactions contemplated under this
Agreement shall be held at such time and date as shall be mutually
agreed by the Sellers and Buyer; provided, however, that in any event
Buyer must close no later than five business (5) days
25
after the Commission grants its consent to the assignments of the
Licenses and all other conditions to Closing shall have been satisfied
in all material respects on or before the Closing Date. (The date
scheduled, or required to be scheduled for Closing hereunder is
referred to herein as the "Closing Date.") Unless otherwise agreed by
the parties in writing, the Closing shall take place at Buyer's
counsel's offices in Washington, D.C.
8.2. THE SELLERS' OBLIGATIONS AT CLOSING. At Closing, the Sellers shall
deliver to Buyer the following:
(a) An Assignment of the Licenses described in Schedule A,
Warranty Deeds as to the Owned Real Property and described
on Schedule B and an Assignment and Xxxx of Sale, or
similar instruments, including third party consents to all
"material" Leases and Agreements, transferring to Buyer all
other Acquired Assets to be transferred hereunder, free and
clear of all liens, encumbrances and restrictions of any
kind whatsoever, except as expressly provided for in this
Agreement or in the Leases and Agreements;
(b) The business records described in Section 1.7;
(c) An opinion of the Sellers' counsel, addressed to Buyer,
confirming the correctness of the Sellers' representations
made in Sections 3.1 and 3.2;
(d) A certificate of CBC's CEO verifying that the Sellers'
representations, warranties and covenants as provided
herein remain materially true and correct up to and through
the Closing Date;
(e) Certificates of Sellers' Secretary certifying as to
Sellers' Articles of Incorporation, By-Laws, and Board of
Directors approvals (all of which shall be attached
thereto);
(f) UCC reports dated not more than thirty (30) days
prior to the Closing Date of the appropriate filing
officers in the jurisdictions specified in Schedule J
evidencing no judgments, financing statements, or liens on
file with respect to the Acquired Assets, and, if such
report evidences that judgments, financing statements, or
liens are on file with respect to any of the Acquired
Assets, a termination statement or other appropriate
document signed by the secured party or lienholder
evidencing the release or termination of such financing
statement or such lien or a pay-off letter from such
secured party or lienholder indicating that such party or
lienholder will provide such release or termination
statement upon receipt of payment from the proceeds of the
sale contemplated herein;
(g) Good and valid ALTA title insurance commitments dated
as of the Closing Date insuring the Sellers' title as fee
owner in each parcel of Owned Real Property; in each
instance, the title shall be insured by means of the
preferred policy used in the location where such real
estate exists, and each such policy, as to the insurer,
26
the insured, the dollar limit and amount of coverage and
the exceptions and conditions thereof shall be, in all
respects, in form and substance reasonably satisfactory to
the Buyer;
(h) Internal Revenue Service Form 8594 completed by the Sellers
in connection with the acquisition of the Acquired Assets
by the Buyer;
(i) A check or checks, or other evidence of payment acceptable
to Buyer, with respect to the expenses payable by Sellers,
if any, on the Closing Date in accordance with the
Agreement;
(j) Such other documents and instruments as might reasonably be
requested by Buyer to consummate the transaction
contemplated hereunder consistent with the intent expressed
herein; and
(k) Escrow instructions releasing the Damages Escrow Funds to
Buyer.
(l) The Non-Competition Agreement executed by Xxxx.
8.3. BUYER'S OBLIGATIONS AT CLOSING. At Closing, Buyer shall deliver to
CBC the following:
(a) The Purchase Price in the manner set forth in Section 2.2;
(b) An Agreement to assume the obligations of Sellers under the
Leases and Agreements with respect to periods of time from
and after Closing;
(c) An opinion of Buyer's counsel, addressed to the Sellers,
confirming the correctness of certain of the Buyer's
representations made in Section 4.1;
(d) Internal Revenue Service Form 8594 completed by the Buyer
in connection with the acquisition of the Acquired Assets
from the Sellers;
(e) A check or checks, or other evidence of payment acceptable
to Sellers, with respect to the expenses payable by Buyer,
if any, on the Closing Date in accordance with the
Agreement; and
(f) Such other documents and instruments as might reasonably be
requested by Sellers to consummate the transactions
contemplated hereunder consistent with the intent expressed
herein.
8.4. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transaction herein contemplated at Closing are subject
to and conditioned upon:
(a) The written consents of the Commission to the assignments
of the Licenses to Buyer subject to the provisions of
Section 7.3 above, provided that any such approvals are
without any condition that is materially adverse to Buyer;
27
(b) The satisfaction at or before Closing in all material
respects of all agreements, obligations and conditions of
the Sellers hereunder required to be performed or complied
with by them on or before Closing;
(c) The material accuracy of the representations and warranties
made by the Sellers;
(d) Written third party consents to all material Leases and
Agreements where required by the terms of the Lease or
Agreement or substitution by Sellers of substantially
equivalent rights without materially adverse impact upon
Buyer's enjoyment of the Acquired Assets;
(e) There shall not be in effect any judgment, order,
injunction or decree of any court of competent jurisdiction
enjoining the consummation of the transactions contemplated
hereby;
(f) The LMA shall have become effective in accordance with the
terms and conditions thereof and, from and after the date
the LMA first becomes effective through and including the
Closing Date, the LMA shall have not been terminated due to
the Sellers' breach thereof; and
(g) Receipt of approval to the HSR Filing.
8.5. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers to consummate the transaction herein contemplated at Closing
are subject to and conditioned upon:
(a) Subject to the provisions of Section 7.3 above, the written
consents of the Commission evidencing its Final Approvals
to the assignments of the Licenses to Buyer, provided that
any such approval is without any conditions that are
materially adverse to the Sellers;
(b) The satisfaction at or before Closing in all material
respects of all agreements, obligations and conditions of
Buyer hereunder required to be performed or complied with
by it at or before the Closing;
(c) The material accuracy of the representations and warranties
made by Buyer;
(d) There shall not be in effect any judgment, order,
injunction or decree of any court of competent jurisdiction
enjoining the consummation of the transactions contemplated
hereby;
(e) The LMA shall have become effective in accordance with the
terms and conditions thereof and, from and after the date
the LMA first becomes effective through and including the
Closing Date, the LMA shall have not been terminated due to
the Buyer's breach thereof;
28
(f) The termination of the CRN Agreement; and.
(g) Receipt of approval to the HSR Filing.
29
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants of Sellers contained in this
Agreement shall survive for a period of twenty-four (24) months after
the Closing Date.
9.2. EXECUTION OF DOCUMENTS. The parties agree to execute all applications,
documents and instruments which may be necessary for the consummation
of the transactions contemplated hereunder, or which might be from
time to time reasonably requested by any party hereto in connection
therewith, whether before or after the date of Closing.
9.3. NOTICES. All notices, requests, elections, demands and other
communications given pursuant to this Agreement shall be in writing
and shall be duly given when delivered personally or by facsimile
transmission (upon receipt of confirmation) or when deposited in the
mail, certified or registered mail, postage prepaid, return receipt
requested, and shall be addressed as follows:
If to the Sellers
(or any of them): Children's Broadcasting Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxxxxxxx X. Xxxx
Facsimile Number: (000) 000-0000
with copy to: Children's Broadcasting Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile Number: (000) 000-0000
If to Buyer: Radio Unica Corp.
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Facsimile Number (000) 000-0000
30
with copy to: Mr. Xxxxxx Xxxxxxx
0 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile Number (000) 000-0000
and to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile Number: (000) 000-0000
9.4. EXHIBITS AND SCHEDULES. All Exhibits and Schedules referred to herein
are incorporated into this Agreement by reference for all purposes and
shall be deemed part of this Agreement.
9.5. ENTIRE AGREEMENT. This Agreement together with all Exhibits and
Schedules referred to herein, and the LMA contain all of the terms and
conditions agreed upon by the parties hereto with respect to the
transactions contemplated hereunder. No modification or amendment to
any provision in this Agreement shall be effective unless made in
writing and signed by the parties hereto.
9.6. ASSIGNABILITY. None of the parties may assign their rights or
obligations under this Agreement without the prior written consent of
the other parties, except that the Buyer may make an assignment to an
entity under essentially common control as the assigning entity.
9.7. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the xxxxxxxxxxxxxxx, xxxxx, xxxxxxx, successors, and
assigns of the parties hereto.
9.8. HEADING. The headings contained in this Agreement are for
reference only and shall not effect in any way the meaning or
interpretation of this Agreement.
9.9. COUNTERPARTS. This Agreement and any other instrument to be signed by
the parties hereto may be executed by the parties, together or
separately, in two or more identical counterparts, each of which shall
be deemed an original, but all of which together shall constitute but
one and the same instrument.
9.10. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. Any
dispute arising under or related to this Agreement shall be resolved
by binding arbitration in Wilmington, Delaware in accordance with the
then existing Rules of Practice and Procedure of Judicial Arbitration
& Mediation Services, Inc., and any judgment upon any award rendered
by the arbitrator(s) may be entered by any State or Federal court
having jurisdiction thereof. The prevailing party shall be awarded all
of its legal fees, disbursements and costs of arbitration.
31
9.11. BROKER COMMISSION. The Sellers and Buyer each represent to the other
that they have not engaged a broker in connection with the
contemplated transaction, except that CBC has engaged Star Media
Group, Inc., and Buyer has engaged Xxx Xxxxxxx Company and each party
agrees to pay the respective commissions owed under such engagements
and agrees to indemnify and hold the other party or parties harmless
against any claims made by a broker through it or them in connection
with the transactions contemplated hereunder.
9.12. SALES TAX. Any sales tax, including bulk sales taxes (if applicable),
due upon consummation of this transaction will be computed at Closing
and paid by the Seller and any claims or proceedings arising therefrom
shall be the sole responsibility of Sellers. Sellers agree to
indemnify and hold Buyer harmless against any such claims in
connection with the transactions contemplated hereunder.
9.13. PUBLIC ANNOUNCEMENTS. Sellers and Buyer shall consult with each
other before making any public statements with respect to this
Agreement, the other Transaction Documents or the transactions
contemplated herein or therein and shall not issue any such press
release or make any such public statement without the prior written
consent of the other party, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that a party may, without
the prior consultation with or written consent of the other party,
issue such press release or make such public statement as may be
required by applicable law if it has used all reasonable efforts to
consult with the other party and to obtain such party's consent but
has been unable to do so in a timely manner.
9.14. MAIL. Sellers hereby authorize and empower Buyer from and after the
Closing Date (a) to receive and open mail addressed to the Stations
and (b) to deal with the contents thereof in any manner Buyer sees
fit, provided such mail and the contents thereof relate to the
Stations or the Acquired Assets. Sellers agree to deliver to Buyer any
mail, checks or other documents received by them pertaining to the
Stations or the Acquired Assets. Buyer agrees to deliver to Sellers
any mail which it receives to which it is not entitled by reason of
this Agreement or otherwise and to which Sellers is entitled.
9.15. CLAUSES SEVERABLE. The provisions of this Agreement are severable. If
any provision of this Agreement or the application thereof to any
person or circumstance is held invalid, the provision or its
application shall be modified to the extent possible to reflect the
expressed intent of the parties but in any event, invalidity shall not
affect other provisions or applications of this Agreement which can be
given effect without the invalid provision or application.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto, by their properly authorized
representatives, have caused this Agreement to be executed as of the day and
date first above written.
CHILDREN'S BROADCASTING
CORPORATION RADIO UNICA CORP.
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: /s/ Xxxxxxx X. Xxxxx
----------------------------- ---------------------------
ITS: COO ITS: President
----------------------------- ---------------------------
CHILDREN'S RADIO OF DALLAS, INC. KAHZ-AM, INC.
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------- ---------------------------
ITS: COO ITS: COO
----------------------------- ---------------------------
CHILDREN'S RADIO OF PHOENIX, INC. KIDR-AM, INC.
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------- ---------------------------
ITS: COO ITS: COO
----------------------------- ---------------------------
CHILDREN'S RADIO OF NEW YORK, INC. WJDM-AM, INC.
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------- ---------------------------
ITS: COO ITS: COO
----------------------------- ---------------------------
33
