ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("AGREEMENT"), dated as of July 6,
1999, by and between SBT COMMUNICATIONS STATUTORY TRUST, a Connecticut
statutory trust ("SELLER"), and HBC BROADCASTING TEXAS, L.P., a Texas limited
partnership ("PURCHASER").
W I T N E S S E T H:
WHEREAS, prior to the Closing, Seller shall have, directly or
indirectly, acquired Delaware Radio, Inc., a Delaware corporation (the
"COMPANY") the owner, operator and licensee of radio station KLTY-FM (the
"STATION");
WHEREAS, either Seller (in the event that the assets of the Company
have been transferred from the Company to Seller) or the Company (in the
event that no such transfer has occurred) will be the licensee of the Station
authorized by the Federal Communications Commission (the "COMMISSION" or
"FCC") to operate the Station, and will hold title to various assets which
are used in the operation of the Station and certain of which are included in
this sale of assets;
WHEREAS, in the event that the assets of the Company have not been
transferred from the Company to the Seller, Seller shall cause the Company to
sell, convey and transfer to Purchaser the certain identified assets of the
Company, in which event, certain references to "SELLER" herein, where
appropriate, shall be references to the Company and, in connection with the
Closing, Seller shall cause the Company to deliver to Purchaser certificates
or other evidence regarding the organization, existence and authority of the
Company to consummate the transactions contemplated hereby; and
WHEREAS, Seller desires to sell and assign to Purchaser, and
Purchaser desires to purchase and assume from Seller, certain of the assets
and related liabilities used in the ownership and operation of the Station,
including, without limitation, certain contracts and leases and, subject to
the approval of the Commission, to accept assignment from Seller of the
licenses and other authorizations issued by the Commission for the operation
of the Station.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
DEFINED TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings:
"ACTION" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by any Governmental Authority or other third
party.
"ENCUMBRANCES" means liens, charges, pledges, options, mortgages,
deeds of trust, security interests, claims, restrictions (whether on voting,
sale, transfer, disposition or otherwise), easements and other encumbrances
of every type and description, whether imposed by law, agreement,
understanding or otherwise.
"GOVERNMENTAL AUTHORITY" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered into by or with any
Governmental Authority.
"LAW" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, requirement or rule of common law.
"LIABILITIES" means any and all debts, liabilities and obligations
(including, without limitation, all obligations relating to employees or
former employees of the Company), whether accrued or fixed, absolute or
contingent, matured or unmatured, or determined or determinable, including,
without limitation, those arising under any Law (including, without
limitation, any environmental law), Action or Governmental Order and those
arising under any contract agreement, arrangement, commitment or undertaking.
"PERMITTED ENCUMBRANCES" means any and all of the following liens,
charges, defects and encumbrances:
(a) Liens for taxes and assessments which are not yet due and
payable or, if due and payable, the validity of which is being contested
in good faith by appropriate legal proceedings;
(b) Rights existing under applicable laws or operating agreements or
similar contracts to assert liens against any properties of the Station
or Seller, but not including liens and other rights which have actually
been asserted, unless the Station or Seller disputes the validity of any
such lien or the amount claimed to be owed in connection therewith, or
such lien or other right is not enforceable against the interest of the
Station or Seller;
(c) Any obligations or duties affecting any property to any
municipality or public authority with respect to any franchise, grant,
license or permit and all applicable laws, rules and orders of any
Governmental Authority;
(d) Any other defect, irregularity or encumbrance which are not
substantial in character, amount or extent and do not materially detract
from the value of the property subject thereto;
(e) Any Encumbrance created by Purchaser or any of its affiliates; and
(f) Such Encumbrances or impairments to the quality of title arising
as a result of the sale to Purchaser of the Station Assets pursuant to
this Agreement.
SECTION 1.02. OTHER DEFINED TERMS. The following terms shall have
the meanings defined for such terms in the Sections of this Agreement set
forth below:
Term Section
---- -------
affiliates...........................................Section 9.10
Agreement............................................First Paragraph
Assignment Application...............................Section 2.04
Assumed Contracts....................................Section 2.03
Assumed Liabilities..................................Section 2.03
Closing..............................................Section 3.01
Closing Date.........................................Section 3.01
Commission...........................................Recitals
Commission Authorizations............................Section 4.01
Company..............................................Recitals
Drumcree Capital.....................................Section 3.03
Excluded Assets......................................Section 2.02
Excluded Tax Liabilities.............................Section 2.03
FCC..................................................Recitals
FCC Applications.....................................Section 3.02
FCC Order............................................Section 2.04
Final Order..........................................Section 2.04
Governmental Licenses................................Section 2.01
HBC GP...............................................Section 3.04
HSR Act..............................................Section 2.04
Lease No. 1..........................................Section 2.01
Lease No. 2..........................................Section 2.01
License..............................................Section 4.01
Losses...............................................Section 7.02
Purchase Price.......................................Section 2.05
Purchaser............................................First Paragraph
SDLP.................................................Section 2.01
Seller...............................................First Paragraph
Seller...............................................Recitals
Station..............................................Recitals
Station Assets.......................................Section 2.01
Time Brokerage Agreement.............................Section 2.01
Transmission Equipment...............................Section 2.01
Trust Agreement......................................Section 9.14
Trust Estate.........................................Section 9.14
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. PURCHASE AND SALE OF STATION ASSETS. Upon the terms
and subject to the conditions set forth in this Agreement, at the Closing,
Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser
shall purchase from Seller, all right, title and interest in and to the
following assets (the "STATION ASSETS"), free and clear of all Encumbrances,
other than Permitted Encumbrances:
(a) All licenses issued by or pending before the FCC, together with
all other authorizations pending before or issued by the FCC to Seller for
use at the Station, together with any and all renewals, extensions and
modifications thereof ("GOVERNMENTAL LICENSES");
(b) All transmitters and transmitter equipment and antennas, used or
useful in the operation of the Station, as listed on Schedule 2.01(b) hereto,
together with replacements thereof and additions thereto made between the
date hereof and the Closing (collectively, the "TRANSMISSION EQUIPMENT");
(c) All right, title and interest of Seller in and to that certain
(i) Lease Agreement, dated July 26, 1982, as amended to date, by and between
Arcetex Corporation and Latin American Broadcasting Company ("LEASE NO. 1")
and (ii) Lease Agreement, dated as of November 30, 1997, by and between
Corsicana Communications, Inc. and the Company ("LEASE NO. 2");
(d) All right, title and interest of Seller in and to the Time
Brokerage Agreement (the "TIME BROKERAGE AGREEMENT"), to be entered into
between Seller and Sunburst Dallas, LP ("SDLP"), related to the Station, in
the form attached as Exhibit A hereto; and
(e) All property tax records, FCC logs, all materials maintained in
the Station's FCC public file, technical data and records and all
correspondence with and documents pertaining to suppliers, governmental
authorities and other third parties relating to the assets
described in clauses (a) through (d) above.
SECTION 2.02. EXCLUDED ASSETS. The following property will not be
purchased by Purchaser and shall remain the property of Seller (collectively,
the "EXCLUDED ASSETS"):
(a) Corporate minute books, stock books and income tax returns of
Seller;
(b) Investments of Seller in subsidiaries, partnerships and other
entities;
(c) All tradenames, trademarks, patents, service marks, call
letters, copyrights, logos and similar intangibles owned by Seller or used in
the operation of the Station;
(d) All programming materials, programs, jingles and promotional
materials owned by, licensed to or held by Seller and used in the operation
of the Station, whether recorded on tape or any other substance or intended
for live performance and whether completed or in production;
(e) All contracts for the sale of time on the Station and all
accounts receivable in respect thereof;
(f) Employment contracts; and
(g) The cash and cash equivalents of the Station as of the
Closing Date.
SECTION 2.03. ASSUMPTION AND EXCLUSION OF LIABILITIES. (a) On the
terms and subject to the conditions of this Agreement, from and after the
Closing Date, Purchaser shall assume and shall pay, perform and discharge
when due all Liabilities relating to the contracts (the "ASSUMED CONTRACTS")
listed on Schedule 2.03 hereto, or arising out of Purchaser's ownership after
the Closing Date of the Governmental Licenses or the Transmission Equipment
(collectively, the "ASSUMED LIABILITIES").
(b) Purchaser shall not assume any Liabilities of Seller, Seller's
beneficiary or the Company in respect of any United States federal income tax
on or resulting from the transactions contemplated by this Agreement
(collectively, "EXCLUDED TAX LIABILITIES").
(c) Except as set forth in Section 2.03(a), Purchaser shall not
assume any Liabilities of Seller, Seller's beneficiary, the Company or the
Station.
SECTION 2.04. ASSIGNMENT OF GOVERNMENTAL LICENSES. (a) In
order to consummate the transfer of the Station Assets, Purchaser and Seller
will file within five business
days after the execution and delivery of this Agreement an assignment of
license application (the "ASSIGNMENT APPLICATION") requesting FCC consent to
the assignment to Purchaser of all Governmental Licenses relating to the
operation of the Station. The parties agree that the Assignment Application
will be prosecuted in good faith and with due diligence. The parties agree to
use their reasonable best efforts to file additional information or
amendments requested by the FCC orally or in writing within five business
days after such request and, in any event, to commence preparation of such
additional information or amendments promptly upon request and to complete
and file the same with the FCC as rapidly as practical. Each party will be
solely responsible for the expenses incurred by it in the preparation, filing
and prosecution of the Assignment Application (it being understood that each
of Seller and Purchaser will pay one-half of the FCC filing fee). As used
herein, the term "FCC ORDER" shall mean that the FCC has granted or given its
consent, without any condition materially adverse to Purchaser, to the
Assignment Application; the term "FINAL ORDER" shall mean that the FCC Order
shall have been final, that such FCC Order is not reversed, stayed, enjoined
or set aside, and with respect to such FCC Order, no timely request for stay,
reconsideration, review, rehearing or notice of appeal is pending, and as to
which FCC Order the time set forth in the FCC rules or the Communications Act
of 1934, as amended for filing any such request, petition or notice of appeal
or for review by the FCC staff on its own motion has expired.
(b) Within ten days after the execution and delivery of this
Agreement, Purchaser and Seller shall make any and all necessary filings
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR ACT") with respect to the transactions contemplated by this
Agreement.
SECTION 2.05. PURCHASE PRICE. The purchase price (the "PURCHASE
PRICE") for the Station Assets shall be (i) $65,000,000 and (ii) the
assumption of the Assumed Liabilities pursuant to this Agreement.
SECTION 2.06. CONSUMMATION BY PURCHASER. Purchaser shall use
commercially reasonable efforts to further establish, prior to the Closing,
Purchaser's ability to consummate the transactions contemplated by this
Agreement.
ARTICLE III
CLOSING
SECTION 3.01. CLOSING. Subject to the terms of this Agreement,
the sale and purchase of the Station Assets and the assumption of the Assumed
Contracts contemplated by this Agreement shall take place at a closing of the
transactions contemplated hereby (the "CLOSING") to be held at the offices of
Hispanic Broadcasting Corporation, Dallas, Texas on the date which is the later
of (i) the fifth day after issuance of the FCC Order or (ii) the satisfaction of
all closing conditions set forth in this Article III or at such other place or
at such other time or
on such other date as Seller and Purchaser may mutually agree upon in writing
(the day on which the Closing takes place being the "CLOSING DATE").
SECTION 3.02. CONDITIONS TO THE CLOSING. The obligations of Seller
and Purchaser hereunder shall be subject to the satisfaction or written
waiver at or prior to the Closing Date of the following conditions:
(a) The waiting period (and any extension thereof), if any,
applicable to the transactions contemplated by this Agreement under the
HSR Act, shall have been terminated or shall have expired, and no
restrictive order or other requirements pursuant to the HSR Act shall
have been placed on the Parties.
(b) The FCC shall have approved the Assignment Application (and such
other applications as may be required by applicable law, rule or
regulation to permit the transfer to the Seller of the assets of the
Company, as contemplated by the recitals of this Agreement) to be filed
with respect to the transactions contemplated by this Agreement (the
"FCC APPLICATIONS").
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of
the sale of the Station Assets shall be in effect, nor shall any
proceeding by or with any Governmental Authority or third party seeking
any of the foregoing be pending (excluding, in each case, any such
matter initiated by Seller, Purchaser or any of their affiliates). There
shall not be any Action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the sale of the
Station Assets, which makes the consummation of the sale of the Assets
illegal (excluding, in each case, any such matter initiated by Seller,
Purchaser or any of their affiliates).
(d) Purchaser and Seller shall have entered into an Unwind
Agreement, substantially in the form attached hereto as EXHIBIT 3.02(e).
(e) The delivery by (i) Seller to Purchaser of the items set forth
in Section 3.03 and (ii) Purchaser to Seller of the items set forth in
Section 3.04.
(f) Seller shall have consummated its acquisition of the company at
least two days prior to the Closing Date.
SECTION 3.03. CLOSING DELIVERIES BY SELLER. At the Closing, Seller
shall execute, acknowledge (where appropriate) and deliver, or cause to be
executed, acknowledged (where appropriate) and delivered, to Purchaser the
following:
(a) Such instruments, in form and substance satisfactory to
Purchaser, as may be requested by Purchaser to transfer the Station
Assets to Purchaser or evidence such transfer on the public records.
(b) A certificate, executed by Seller, dated as of the Closing Date,
certifying that (i) the representations and warranties of Seller in this
Agreement are true and correct in all material respects as of the
Closing (or, in the case of representations and warranties which address
matters only as of a particular date, as of such particular date), with
the same effect as though made as of such date, (ii) that each covenant
or agreement of Seller in this Agreement to be complied with at or prior
to Closing shall have been complied with in all material respects and
(iii) no Action (excluding any such matter initiated by Purchaser or any
of its Affiliates) is pending or, to Seller's knowledge, threatened
before and no injunction issued by any Governmental Authority seeking to
enjoin or restrain or prohibit, delay, or restrain the performance of or
to obtain damages or other relief in connection with this Agreement, or
the consummation of the transactions contemplated thereby or hereby.
(c) A certificate, executed by an officer of Drumcree Capital, Inc.
("DRUMCREE CAPITAL"), dated as of the Closing Date, certifying the
incumbency and signature of the officers of Drumcree Capital and that
attached to such certificate is a true and complete copy of (i) the
Articles of Association of Drumcree Capital, (ii) the By-laws of
Drumcree Capital and (iii) evidence reasonably satisfactory to Purchaser
of the necessary trust action of Seller authorizing the execution and
delivery of this Agreement and the closing documents to which it is a
party and the consummation of the transactions contemplated hereunder.
(d) A written opinion, dated as of the Closing Date, of counsel for
Seller, in form and substance reasonably satisfactory to Purchaser.
(e) A letter to Purchaser from counsel to Seller's beneficiary
relating to Seller's acquisition of the Company and the transactions
contemplated by this Agreement, in form and substance reasonably
satisfactory to Purchaser.
SECTION 3.04. CLOSING DELIVERIES BY PURCHASER. At the Closing,
Purchaser shall execute, acknowledge (where appropriate) and deliver, or
cause to be executed, acknowledged (where appropriate) and delivered, to
Seller the following:
(a) Such assumption agreements and similar instruments, in form and
substance satisfactory to Seller, relating to the assumption of the
Assumed Contracts and the transfer of the Station Assets, as may be
requested by Seller.
(b) The Purchase Price, delivered to Seller by wire transfer of
immediately
available funds.
(c) A certificate, executed by the duly authorized officer of HBC
GP Texas, Inc. ("HBC GP"), the general partner of Purchaser, dated as of
the Closing Date, certifying that (i) the representations and warranties
of Purchaser in this Agreement are true and correct in all material
respects as of the Closing, with the same effect as though made as of
such date (or, in the case of representations and warranties which
address matters only as of a particular date, as of such particular
date), (ii) that each covenant or agreement of Purchaser in this
Agreement to be complied with at or prior to Closing shall have been
complied with in all material respects and (iii) no Action (excluding
any such matter initiated by Seller or any of its Affiliates) is pending
or, to Purchaser's knowledge, threatened before any court or
governmental agency seeking to enjoin or restrain or prohibit, delay, or
restrain the performance of or to obtain damages or other relief in
connection with this Agreement, or the consummation of the transactions
contemplated thereby or hereby.
(d) A certificate, executed by the duly authorized Secretary or
Assistant Secretary of HBC GP on behalf of Purchaser, dated as of the
Closing Date, certifying the incumbency and signatures of the officers
of HBC GP on behalf of Purchaser and that attached to such certificate
is a true and complete copy of (i) the organizational documents of HBC
GP and Purchaser and (ii) evidence of all necessary partnership action
of Purchaser authorizing the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder and the
closing documents to which it is a party.
(e) A written opinion, dated as of the Closing Date, of counsel to
Purchaser, in a form acceptable to Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 4.01. Seller hereby represents and warrants to Purchaser as
follows:
(a) ORGANIZATION; GOOD STANDING. Seller is a statutory trust duly
formed under the laws of Connecticut and has all requisite trust power and
authority to own and lease its properties and assets and to carry on its
business as currently conducted.
(b) DUE AUTHORIZATION; EXECUTION AND DELIVERY. Subject to the
issuance of the Final Order, any required compliance with the HSR Act, Seller
has full power and authority to enter into and perform this Agreement and to
carry out the transactions contemplated hereby.
Prior to the Closing, Seller will have taken all requisite action to approve
the execution and delivery of this Agreement and the transactions
contemplated hereby. This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except as may be limited by the availability of equitable remedies or by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally (whether such rights are considered at
law or in equity). Neither the execution and delivery by Seller of this
Agreement nor the consummation by it of the transactions contemplated hereby
will conflict with or result in a breach of the trust agreement of Seller.
(c) GOVERNMENTAL CONSENTS. No approval, authorization, consent,
order or other action of, or filing with, any governmental authority or
administrative agency is required in connection with the execution and
delivery by Seller of this Agreement or the consummation of the transactions
contemplated hereby, other than those of the FCC or those under the HSR Act,
other than (i) filings with other Governmental Authorities to occur in the
ordinary course following the consummation of the transaction contemplated by
this Agreement, (ii) filings, with or approvals of Governmental Authorities
which may be necessary due to the status of Purchaser or any affiliate of
Purchaser and (iii) such consents, approvals, orders or authorizations which,
if not obtained, and such declarations, filings, or registrations which, if
not made, would not, individually or in the aggregate, have a material and
adverse effect on the Station Assets.
(d) TITLE TO ASSETS. As of the Closing Date, Seller will have good
and defensible title or, with respect to Station Assets which it leases,
valid leasehold rights, to all of the material Station Assets, free and clear
of all Encumbrances other than Permitted Encumbrances.
(e) CONDITION OF ASSETS. As of the Closing Date, the Station Assets
shall be (i) in the case of tangible properties, in reasonably good operating
condition and repair (ordinary wear and tear excepted) and have been
maintained in substantial accordance with industry practice and (ii) adequate
for normal operation of the Station.
(f) GOVERNMENTAL LICENSES.
(i) Schedule 4.01(f) includes a true and complete list of all of
the Governmental Licenses, including the FM broadcast station license
(the "LICENSE"), which, together with all applications for such
authorizations pending as of the date hereof, are herein referred to as
the "COMMISSION AUTHORIZATIONS". Schedule 4.01(f) accurately identifies
each of the Commission Authorizations (including each of the
applications therefor) as to the licensee, city of license, and call
sign (or, with respect to applications therefor, the file number
assigned by the Commission to such application). Seller has delivered to
Purchaser copies of each of the Commission Authorizations (including any
and all amendments and other modifications thereto and all applications
for additional such licenses). The Commission Authorizations identified
on Schedule
4.01(f) comprise all of the licenses, permits and other authorizations
required from the Commission for the normal and lawful broadcast
operations of the Station in the manner now conducted.
(ii) No action or proceeding is pending or threatened before the
Commission or other Governmental Entity for the cancellation or material
adverse modification of the Commission Authorizations other than the
License. The Station's Public File which is required by the Commission
to be maintained by the Company is current and contains all information
required to be included therein. Seller is current with all reports,
filings and other matters that it is required to file with the
Commission and is not delinquent in the payment of any fees and charges
due to the Commission. The material required by 47 C.F.R. Section 73.3526
to be kept in the public inspection file of the Station is in such file.
(iii) As of the Closing Date, Seller shall be the authorized legal
holder of the License. The License is in full force and effect and no
action or proceeding is pending or threatened before the Commission for
the cancellation of the License. The Station, its physical facilities,
electrical and mechanical systems and transmitting and studio equipment
are being operated in material compliance with the terms of each
Governmental License and are in substantial and material compliance with
the rules and regulations of the Commission.
(g) LITIGATION. There are no Governmental Orders and no Actions
pending or, to Seller's knowledge, threatened against or affecting the
Station Assets which, if adversely determined, might materially and adversely
affect the Station Assets (taken as a whole) or which challenges the validity
or propriety of any of the transactions contemplated by this Agreement.
(h) BROKERS. No broker, finder, financial advisor or investment
banker is entitled to any brokerage, finder's or other fee, commission or
expense reimbursement in connection with the transactions contemplated by
this Agreement as a result of any agreement or action of Seller.
SECTION 4.02. DISCLAIMER OF WARRANTIES; LIMITATION ON WARRANTIES.
(a) EXCEPT WITH RESPECT TO THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY
SET FORTH IN THIS AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED,
WHETHER OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
OR QUALITY AS TO THE STATION ASSETS, OR ANY PART THEREOF, OR AS TO THE
CONDITION OR WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN,
WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT THE STATION ASSETS ARE TO
BE CONVEYED HEREUNDER "AS IS" AND PURCHASER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY
PRECEDING SENTENCE AND EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, THE SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR
OTHERWISE, RELATING TO (i) ANY INFRINGEMENT BY SELLER OR ANY OF ITS
AFFILIATES OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY OR (ii) THE
ACCURACY, COMPLETENESS OR MATERIALITY OF ANY ESTIMATES, PROJECTIONS AND
EVALUATIONS.
(b) Seller makes no representation or warranty that any
date-sensitive data included among the Station Assets is in proper format and
accurate for all dates in the twentieth and twenty-first centuries, or that
any systems included in the Station Assets accurately process all
date-sensitive data, including for the twentieth and twenty-first centuries
and any leap-year sensitive data, or will operate properly after December 31,
1999 and, notwithstanding anything to the contrary set forth herein, if any
representation or warranty of Seller contained herein is rendered untrue or
incorrect (other than Sellers representations regarding title to the Station
Assets), or Seller is rendered unable to perform any covenant or agreement
contained herein as a result of the Closing occurring in the year 2000, then
such representations and warranties shall nevertheless be deemed to be true
and correct for all purposes and such covenants and conditions shall be
deemed to have been performed and Purchaser waives any such breach of such
representations or warranties or such nonperformance of such covenants and
agreements by Seller. Furthermore, Purchaser will not be excused from
performance of any of its obligations hereunder on the grounds that the
advent of the year 2000 makes it impractical or impossible to perform such
obligations. Purchaser assumes all risk of loss or damage to the Station
Assets or the Purchaser to the extent that such loss or damage is caused by
the advent of the year 2000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 5.01. Purchaser hereby represents and warrants to Seller as
follows:
(a) ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the state
of Delaware and has all requisite corporate power and authority to own and
lease its properties and carry on its business as currently conducted.
(b) DUE AUTHORIZATION; EXECUTION AND DELIVERY. Subject to the
issuance of the Final Order and any required compliance with the HSR Act,
Purchaser has full power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary partnership action on the part of
Purchaser. This Agreement has been duly executed and delivered by Purchaser
and constitutes the legal, valid
and binding obligation of Purchaser, enforceable against it in accordance
with its respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally or general equitable principles. Neither the execution and
delivery by Purchaser of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) conflict with or result in a
breach of the organizational documents of Purchaser; (ii) subject to the
issuance of the Final Order, violate any law, statute, rule or regulation or
any order, writ, injunction or decree of any court or governmental authority;
or (iii) violate or conflict with or constitute a default under (or give rise
to any right of termination, cancellation or acceleration under) any
indenture, mortgage, lease, contract or other instrument to which Purchaser
or any of its affiliates is a party or by which it or any of its affiliates
is bound or affected.
(c) GOVERNMENTAL CONSENTS. No consent, approval, authorization,
license, exemption of, filing or registration with any court, governmental
authority or administrative agency is required by Purchaser in connection
with the execution and delivery of this Agreement or the consummation by it
of any transaction contemplated hereby, other than the consent of the FCC or
under the HSR Act. Purchaser warrants that it is legally qualified to become
a licensee of the Station and is aware of no material impediment to the
approval by the FCC or any other Governmental Authority of the assignment of
the Governmental Licenses.
(d) LITIGATION. There is no order of any court, governmental agency
or authority and no action, suit, proceeding or investigation, judicial,
administrative or otherwise that is pending or, to Purchaser's knowledge,
threatened against or affecting Purchaser which challenges the validity or
propriety of any of the transactions contemplated by this Agreement.
(e) BROKERS. No broker, finder, financial advisor or investment
banker is entitled to any brokerage, finder's or other fee, commission or
expense reimbursement in connection with the transactions contemplated by
this Agreement as a result of any agreement or action of Purchaser.
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. BEST EFFORTS. Seller and Purchaser shall take all
reasonable action necessary to consummate the transactions contemplated by
this Agreement and will use all necessary and reasonable means at its
disposal to obtain all necessary consents and approvals of other persons and
governmental authorities required to enable it to consummate the transactions
contemplated by this Agreement, including the consent of the FCC and any
necessary filings and consents under the HSR Act. Except as otherwise
provided herein, each of Seller and Purchaser acknowledges and agrees that it
shall pay all costs, fees and expenses incurred by it in obtaining
such necessary consents and approvals (it being understood that Seller and
Purchaser shall each pay one-half of all filing fees in connection with
filings under the HSR Act or with the FCC). Each party shall promptly make
all filings, applications, statements and reports to all governmental
agencies or entities which are required to be made prior to the Closing Date
by or on its behalf pursuant to any statute, rule or regulation in connection
with the transactions contemplated by this Agreement, and copies of all such
filings, applications, statements and reports shall be provided to the other.
If the FCC determines that the transactions contemplated hereby or a portion
thereof are inconsistent or violative of FCC rules or regulations, the
parties agree that they will, to the extent practicable, negotiate in good
faith to amend, modify or restructure the transactions contemplated hereby so
as to be consistent with FCC rules and regulations.
SECTION 6.02. PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, all
notices to third parties and other publicity relating to the transactions
contemplated by this Agreement shall be jointly planned by Seller and
Purchaser.
SECTION 6.03. TRUST DURATION. In connection with the Time Brokerage
Agreement and the License Agreement to be entered into between Seller and
SDLP with respect to certain assets of the Company and Seller's obligations
thereunder, Seller shall (a) for at least five years following the Closing
maintain itself as a validly existing statutory trust under the laws of
Connecticut and (b) retain and not distribute to its beneficiary any of the
periodic payments received by Seller pursuant to such License Agreement until
such time as Seller has received $1,000,000 in periodic payments under such
License Agreement. Thereafter, Seller shall retain and not distribute to its
beneficiary at least $1,000,000 in such periodic payments for the balance of
the five year period following the Closing. Seller may, however, without
limitation, distribute the entire initial payment received under such License
Agreement. During such five-year period, Seller shall retain its ownership of
the assets licensed by it to SDLP pursuant to such License Agreement.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. SURVIVAL. All representations, warranties, covenants
and agreements made by any party to this Agreement or pursuant hereto shall
be deemed to be material and to have been relied upon by the parties hereto
and shall survive the Closing for twelve months after the Closing Date;
provided, however, that (i) Seller's obligations in Section 6.03 hereof shall
survive for five years after the Closing and (ii) Seller's indemnification
obligations set forth in Section 7.02(c) shall survive for 30 days after the
applicable statute of limitations relating to the Excluded Tax Liabilities.
SECTION 7.02. INDEMNIFICATION BY SELLER. Subject to the
limitations set forth in Sections 7.01 and 7.04, Seller shall indemnify and
hold harmless Purchaser from, against, for and in respect of:
(a) any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances
(collectively, "LOSSES") suffered, sustained, incurred or required to be paid
by Purchaser and arising from the breach of any written representation,
warranty, agreement or covenant of Seller contained in this Agreement;
(b) any and all Liabilities of Seller or its beneficiaries other
than the Assumed Liabilities arising from and after the Closing Date;
(c) the Excluded Tax Liabilities; and
(d) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by Purchaser in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 7.02.
SECTION 7.03. INDEMNIFICATION BY PURCHASER. Subject to the
limitations set forth in Sections 7.01 and 7.04, Purchaser shall indemnify
and hold Seller harmless from, against, for and in respect of:
(a) any and all Losses suffered, sustained, incurred or required to
be paid by Seller and arising from the breach of any written representation,
warranty, agreement or covenant of Purchaser contained in this Agreement;
(b) any and all Assumed Liabilities arising from and after the
Closing Date; and
(c) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by Seller in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 7.03.
SECTION 7.04. INDEMNIFICATION PROCEDURES. The obligations and
liabilities of each indemnifying party hereunder with respect to claims
resulting from the assertion of liability by the other party or indemnified
third parties shall be subject to the following terms and conditions:
(a) The indemnified party shall give prompt written notice (which
in no event shall exceed 30 days from the date on which the indemnified party
first became aware of such claim or assertion) to the indemnifying party of
any claim which might give rise to a claim by the
indemnified party against the indemnifying party based on the indemnity
agreements contained in Sections 7.02 or 7.03 hereof, stating the nature and
basis of said claims and the amounts thereof, to the extent known. The
failure to so notify or any delay in so notifying the indemnifying party will
not relieve the indemnifying party of its obligations under Sections 7.02 or
7.03, except solely to the extent that such failure actually and materially
prejudices the indemnifying party.
(b) If any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
liability under the indemnity agreements contained in Section 7.02 or 7.03
hereof, the action, suit or proceeding shall, upon the written acknowledgment
by the indemnifying party that it is obligated to indemnify under such
indemnity agreement, be defended (including all proceedings on appeal or for
review which counsel for the indemnified party shall deem appropriate) by the
indemnifying party. The indemnified party shall have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall
be at the indemnified party's own expense unless (i) the employment of such
counsel and the payment of such fees and expenses both shall have been
specifically authorized in writing by the indemnifying party in connection
with the defense of such action, suit or proceeding, or (ii) counsel to such
indemnified party shall have reasonably concluded and specifically notified
the indemnifying party that there may be specific defenses available to it
which are different from or additional to those available to the indemnifying
party or that such action, suit or proceeding involves or could have an
effect upon matters beyond the scope of the indemnity agreements contained in
Sections 7.02 or 7.03 hereof, in any of which events the indemnifying party,
to the extent made necessary by such defenses, shall not have the right to
direct the defense of such action, suit or proceeding on behalf of the
indemnified party. In the latter such case only that portion of such fees and
expenses of the indemnified party's separate counsel reasonably related to
matters covered by the indemnity agreements contained in Section 7.02 or 7.03
hereof shall be borne by the indemnifying party. The indemnified party shall
be kept fully informed of such action, suit or proceeding at all stages
thereof whether or not it is represented by separate counsel.
(c) The indemnified party shall make available to the indemnifying
party and its attorneys and accountants all books and records of the
indemnified party relating to such proceedings or litigation and the parties
hereto agree to render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and adequate defense of
any such action, suit or proceeding.
(d) The indemnified party shall not make any settlement of any
claims without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed.
ARTICLE VIII
TERMINATION
SECTION 8.01. TERMINATION. This Agreement may be terminated by the
mutual consent of Purchaser and Seller, or by either Purchaser or Seller, if
the terminating party is not then in material breach of its obligations
hereunder, upon written notice to the other upon the occurrence of any of the
following:
(a) By the terminating party, if the other party is in material
breach of its obligations hereunder, and such breach has not been cured by
the other party within 30 days of written notice of such breach (or such
longer period of time if the breach cannot be reasonably cured within 30 days
and the breaching party is diligently attempting to cure such breach);
(b) If the FCC designates the FCC Application contemplated by
Section 2.04 hereof for hearing at any time; or
(c) If the Closing has not occurred on or before November 10, 1999,
unless, in either clause (b) or (c) above, the breach of the representations,
warranties, covenants or agreements of the party seeking to terminate this
Agreement is a cause of the Commission's denial of such FCC Application or
the failure of the commission to grant such FCC Application by November 10,
1999.
SECTION 8.02. LIQUIDATED DAMAGES. In the event of the termination
of this Agreement resulting from a default by Purchaser under this Agreement,
Purchaser shall pay to Seller $3,250,000 as liquidated damages, and not as a
penalty, and as part of the consideration given to Seller for entering into
this Agreement. The parties agree that it would be impracticable and
extremely difficult to ascertain the actual damages suffered by Seller as a
result of Purchaser's failure to complete the transaction contemplated by
this Agreement, and that under the circumstances existing as of the date of
this Agreement, the liquidated damages provided for in this section represent
a reasonable estimate of the damages which Seller will incur as a result of
such failure.
SECTION 8.03. SPECIFIC PERFORMANCE. It is understood and agreed
that money damages would not be sufficient remedy for Seller's failure to
transfer, assign, convey, sell or deliver the Station Assets to Purchaser,
that Purchaser would be irreparably harmed by such a breach and that
Purchaser shall be entitled to specific performance and injunctive relief as
remedies for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for breach of this Agreement by Seller, but shall be in
addition to all other remedies available at law or in equity to Purchaser.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01. EXPENSES. Except as otherwise expressly provided
herein, each party shall pay the fees and expenses incurred by it in
connection with the transactions contemplated by this Agreement, it being
understood that each of Seller and Purchaser shall pay one half of the filing
fees required by the FCC or under the HSR Act. Purchaser shall be responsible
for all recordation costs and all applicable transfer, stamp, documentary and
similar taxes and all governmental filing fees incurred in connection with
this Agreement with this. If any action is brought for breach of this
Agreement or to enforce any provision of this Agreement, the prevailing party
shall be entitled to recover court costs, arbitration expenses and reasonable
attorneys' fees.
SECTION 9.02. PRORATIONS. Payments under the Time Brokerage
Agreement and other Assumed Contracts, property taxes on the Station Assets
and similar items customarily prorated in an asset sale shall be prorated
effective as of the opening of business on the Closing Date. All prorations
shall be made and paid insofar as feasible on the Closing Date.
SECTION 9.03 AMENDMENT. This Agreement may be amended at any time
but only by an instrument in writing signed by the parties hereto.
SECTION 9.04 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if mailed by
certified mail, return receipt requested, or delivered by nationally
recognized "next-day" delivery service, to the parties at the addresses set
forth below (or at such other address for a party as shall be specified by
like notice), or sent by facsimile to the number set forth below (or such
other number for a party as shall be specified by proper notice hereunder):
If to Purchaser:
Hispanic Broadcasting Corporation
0000 Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: XxXxxxx X. Xxxxxxxx, Xx., President & CEO
Telecopy No.: (000) 000-0000
If to Seller:
SBT Communications Statutory Trust
c/o Drumcree Capital, Inc., Trustee
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: W. Xxxxxxxx Xxxxxxx, President
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice) to:
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxxx Xxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxxxxx, Xxxxxx & Xxxxxx, P.L.L.C.
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
SECTION 9.05. ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs and permitted assigns. This Agreement may not be assigned by either
party without the prior written consent of the other; provided, that the
parties hereto acknowledge and agree that Seller may dissolve and/or
liquidate the Company prior to the Closing or may cause the Company to
fulfill the obligations of Seller hereunder and, further, that Purchaser may
assign its rights and obligations hereunder to one or more subsidiaries of
Hispanic Broadcasting Corporation and such subsidiary or subsidiaries shall
be deemed the "Purchaser" pursuant hereto; provided, however, if such
assignment occurs, Hispanic Broadcasting Corporation will continue to have
ultimate responsibility for all obligations, representations and duties
contained herein and shall guarantee the obligations of such assignee
hereunder.
SECTION 9.06. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 9.07. HEADINGS. The headings of the Sections of this
Agreement are
inserted for convenience only and shall not constitute a part hereof.
SECTION 9.08. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein contain the entire understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties, conveyances or undertakings other than those expressly
set forth herein. This Agreement supersedes any prior agreements and
understandings between the parties with respect to the subject matter.
SECTION 9.09. WAIVER. No attempted waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement, will be
effective unless evidenced by an instrument in writing by the party against
whom the enforcement of any such waiver or consent is sought.
SECTION 9.10. CERTAIN DEFINITIONS. As used in this Agreement,
"AFFILIATES" of a party shall mean persons or entities that directly, or
indirectly through one or more intermediaries, control or are controlled by,
or are under common control with, such party.
SECTION 9.11. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
SECTION 9.12. INTENDED BENEFICIARIES. The rights and obligations
contained in this Agreement are hereby declared by the parties hereto to have
been provided expressly for the exclusive benefit of such entities as set
forth herein and shall not benefit, and do not benefit, any unrelated third
parties.
SECTION 9.13. MUTUAL CONTRIBUTION. The parties to this Agreement
and their counsel have mutually contributed to its drafting. Consequently, no
provision of this Agreement shall be construed against any party on the
ground that such party drafted the provision or caused it to be drafted or
the provision contains a covenant of such party.
SECTION 9.14. NO RECOURSE. It is expressly understood and agreed
that this Agreement is executed and delivered on behalf of Seller by Drumcree
Capital, not in its individual capacity but solely as Trustee under the Trust
Agreement (SBT Communications Statutory Trust) dated as of May 1, 1999
between Drumcree Capital and the Beneficiary named therein (the "TRUST
AGREEMENT"), in the exercise of the powers and authority conferred and vested
in it as the trustee thereunder, and that each of the representations,
warranties, undertakings and agreements herein made on the part of Seller is
made solely as a representation, warranty, undertaking or agreement of Seller
and not as a personal representation, warranty, undertaking or agreement of
Drumcree Capital and is made solely for the purpose of binding the trust
estate created by the Trust Agreement (the "TRUST ESTATE") and all persons
having any claim by reason of any such representation, warranty, undertaking
or agreement shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 9.15. BULK SALES. Each of Seller and Purchaser hereby
waives compliance by the other with the requirements of any and all laws
relating to bulk sales and transfers in connection with the transactions
contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed as of the date first above written by their
respective officers thereunto duly authorized.
HBC BROADCASTING TEXAS, L.P., a Texas
limited partnership
By: HBC GP TEXAS, INC., a Delaware
corporation, its general partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
SBT COMMUNICATIONS STATUTORY
TRUST, a Connecticut Statutory trust
By: DRUMCREE CAPITAL, INC., not in its
individual capacity, but solely as
trustee
By: /s/ W. Xxxxxxxx Xxxxxxx
-------------------------------
W. Xxxxxxxx Xxxxxxx
President
