Exhibit 10.16
ASSET PURCHASE AGREEMENT
DATED MAY 20, 1998
BY AND AMONG
RADIO UNICA CORPORATION,
XXXXXXXX RADIO OF LOS ANGELES, INC.
AND
XXXXXXXX RADIO OF LOS ANGELES LICENSEE, INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I - CERTAIN DEFINITIONS............................................1
1.1 Terms Defined in this Section..................................1
1.2 Terms Defined Elsewhere in this Agreement......................4
1.3 Rules of Construction..........................................5
ARTICLE II - EXCHANGE AND TRANSFER OF ASSETS;
ASSET VALUE...............5
2.1 Agreement to Exchange and Transfer.............................5
2.2 Excluded Assets................................................6
2.3 Purchase Price.................................................6
2.3.1 Prorations.............................................6
2.3.2 Manner of Determining Adjustments......................7
2.4 Payment of Purchase Price......................................8
2.4.1 Payment of Estimated Purchase Price At Closing.........8
2.4.2 Payments to Reflect Adjustments........................8
2.4.3 Assumption of Liabilities and Obligations..............8
ARTICLE III - REPRESENTATIONS AND WARRANTIES
OF SELLER...................................................9
3.1 Organization and Authority of Seller...........................9
3.2 Authorization and Binding Obligation...........................9
3.3 Absence of Conflicting Agreements; Consents....................9
3.4 Governmental Licenses; FCC Matters............................10
3.5 Real Property.................................................10
3.6 Tangible Personal Property....................................11
3.7 Contracts.....................................................11
3.8 Intangibles...................................................12
3.9 Title to Properties...........................................12
3.10 Financial Information........................................12
3.11 Taxes........................................................12
3.12 Insurance....................................................13
3.13 Reports......................................................13
3.14 Personnel and Employee Benefits...............................13
3.14.1 Employees and Compensation...........................13
3.14.2 Pension Plans........................................14
3.14.3 Welfare Plans........................................14
3.14.4 Benefit Arrangements.................................14
3.14.5 Multiemployer Plans..................................14
3.15 Labor Relations..............................................14
3.16 Claims and Legal Actions.....................................15
3.17 Environmental Matters........................................15
3.18 Compliance with Laws.........................................16
3.19 Conduct of Business in Ordinary Course.......................17
3.20 Transactions with Affiliates.................................17
3.21 Broker.......................................................17
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF BUYER....................................................18
4.1 Organization, Standing and Authority..........................18
4.2 Authorization and Binding Obligation..........................18
4.3 Absence of Conflicting Agreements and Required Consents.......18
4.4 Brokers.......................................................18
4.5 Qualification of Buyer........................................18
4.6 Availability of Funds.........................................19
4.7 No Outside Reliance...........................................19
ARTICLE V - OPERATION OF THE STATION PRIOR
TO CLOSING..................................................19
5.1 Contracts.....................................................20
5.2 Compensation..................................................20
5.3 Encumbrances..................................................20
5.4 Dispositions..................................................20
5.5 Access to Information.........................................20
5.6 Insurance.....................................................20
5.7 Licenses......................................................20
5.8 Obligations...................................................21
5.9 No Inconsistent Action........................................21
5.10 Maintenance of Assets........................................21
5.11 Consents.....................................................21
5.12 Books and Records............................................21
5.13 Notification.................................................21
5.14 Compliance with Laws.........................................21
ARTICLE VI - SPECIAL COVENANTS AND AGREEMENTS.............................21
6.1 FCC Consent .........................21
6.2 Xxxx-Xxxxx-Xxxxxx.............................................22
6.3 Risk of Loss..................................................22
6.4 Confidentiality...............................................22
6.5 Cooperation...................................................22
6.6 Control of the Station........................................23
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6.7 Title Insurance and Surveys...................................23
6.7.1 Title Insurance on Owned Property.....................23
6.7.2 General Requirements as to Title
Insurance Policies................................23
6.7.3 Surveys...............................................23
6.7.4 Associated Fees and Costs.............................24
6.8 Allocation of Purchase Price..................................24
6.9 Access to Books and Records...................................24
6.10 Purchase of Promissory Note..................................24
6.11 Time Brokerage Agreement.....................................24
6.12 Public Announcements.........................................25
6.13 FCC Compliance..............................................25
ARTICLE VII - CONDITIONS TO OBLIGATIONS OF
BUYER AND SELLER...........................................25
7.1 Conditions to Obligations of Buyer............................25
7.1.1 Representations and Warranties........................25
7.1.2 Covenants and Conditions..............................25
7.1.3 Consents..............................................25
7.1.4 FCC Consent...........................................26
7.1.5 Governmental Authorizations...........................26
7.1.6 Title Reports and Surveys.............................26
7.1.7 Tax, Lien and Judgment Searches.......................26
7.1.8 Deliveries............................................26
7.1.9 Legal Proceedings.....................................26
7.2 Conditions to Obligations of Seller...........................26
7.2.1 Representations and Warranties........................26
7.2.2 Covenants and Conditions..............................26
7.2.3 FCC Consent...........................................26
7.2.4 Deliveries............................................27
ARTICLE VIII - CLOSING AND CLOSING DELIVERIES.............................27
8.1 Closing.......................................................27
8.1.1 Closing Date..........................................27
8.1.2 Closing Place.........................................27
8.2 Deliveries by Seller..........................................28
8.2.1 Conveyancing Documents................................28
8.2.2 Officer's Certificate.................................28
8.2.3 Secretary's Certificate........................28
8.2.4 Consents..............................................28
8.2.5 Licenses, Contracts and Business Records..............29
8.2.6 UCC Report............................................29
8.2.7 Other Documents.......................................29
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8.3 Deliveries by Buyer...........................................29
8.3.1 Closing Payment.......................................29
8.3.2 Officer's Certificate.................................29
8.3.3 Secretary's Certificate...............................29
8.3.4 Assumption Agreements.................................29
8.3.5 Other Documents.......................................30
ARTICLE IX - TERMINATION..................................................30
9.1 Termination by Seller.........................................30
9.1.1 Conditions............................................30
9.1.2 Judgments.............................................30
9.1.3 FCC Hearing Designation...............................30
9.1.4 Dropdead Date.........................................30
9.2 Termination by Buyer..........................................30
9.2.1 Conditions............................................30
9.2.2 Judgments.............................................30
9.2.3 Interruption of Service...............................30
9.2.4 FCC Hearing Designation...............................30
9.2.5 Dropdead Date.........................................30
9.3 Rights on Termination.........................................30
9.4 Specific Performance..........................................31
9.5 Liquidated Damages............................................31
9.6 Attorneys' Fees...............................................31
ARTICLE X - SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.........................................31
10.1 Survival.....................................................31
10.2 Indemnification by Seller....................................32
10.3 Indemnification by Buyer.....................................32
10.4 Procedure for Indemnification................................33
10.5 Certain Limitations..........................................34
ARTICLE XI - MISCELLANEOUS................................................34
11.1 Fees and Expenses............................................34
11.2 Notices......................................................34
11.3 Benefit and Assignment.......................................35
11.4 Further Assurances...........................................36
11.5 GOVERNING LAW................................................36
11.6 Entire Agreement.............................................36
11.7 Waiver of Compliance; Consents...............................36
11.8 Counterparts.................................................36
11.9 Severability.................................................36
11.10 Headings....................................................36
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of May 20,
1998, by and among Xxxxxxxx Radio of Los Angeles, Inc., a Maryland corporation
("Xxxxxxxx"), Xxxxxxxx Radio of Los Angeles Licensee, Inc., a Delaware
corporation ("Licensee" and together with Xxxxxxxx, "Seller"), and Radio Unica
Corporation, a Delaware corporation ("Buyer").
R E C I T A L S:
A. Seller owns that certain radio station KBLA (AM), licensed to Santa Monica,
California (the "Station").
B. Seller desires to sell, and Buyer desires to purchase, substantially all of
the assets of the Station, on the terms and conditions hereinafter set forth.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
ARTICLE I:
CERTAIN DEFINITIONS.
1.1 Terms Defined in this Section. The following terms, as used in this
Agreement, have the meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller as of the Closing Date to
payment for the sale of advertising time and other goods and services by the
Station prior to the Closing Date.
"Affiliate" means, with respect to any Person, (a) any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person, or (b) an officer or
director of an Affiliate of such Person within the meaning of clause (a) of this
definition. For purposes of clause (a) of this definition, (i) a Person shall be
deemed to control another Person if such Person (A) has sufficient power to
enable such Person to elect a majority of the board of directors of such Person,
or (B) owns a majority of the beneficial interests in income and capital of such
Person; and (ii) a Persons shall be deemed to control any partnership of which
such Person is a general partner.
"Assets" means the assets to be transferred or otherwise conveyed by Seller to
Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (a) all Contracts, (b) contracts with advertisers for
the sale of advertising time or production services for cash at rates consistent
with past practices, (c) any contracts entered into by Seller between the date
of this Agreement and the Closing Date in compliance with Section 5.1 and (d)
any other Contracts entered into by Seller between the date of this Agreement
and the Closing Date that Buyer agrees in writing to assume.
"Closing" means the consummation of the exchange and acquisition of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.1.
"Closing Date" means the date on which the Closing occurs, as determined
pursuant to Section 8.1.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Communications Act" means the Communications Act of 1934, as amended.
"Consents" means the consents, permits, or approvals of government authorities
and other third parties necessary to transfer the Assets to Buyer or otherwise
to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses and other
agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or that are binding upon Seller and that
relate to or affect the Assets or the business or operations of the Station, and
that are in effect on the date of this Agreement.
"Effective Time" means 12:01 a.m., eastern standard time, on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Escrow Deposit" means the sum of Two Million One Hundred Thousand Dollars
($2,100,000) which is being deposited by Buyer with First Union National Bank
(the "Escrow Agent") on the date hereof to secure the obligations of Buyer to
close under this Agreement, with (i) such deposit being held by the Escrow Agent
in accordance with the Escrow Agreement executed among Buyer, Seller and Escrow
Agent on the date hereof, and (ii) the Escrow Deposit, and all earnings thereon,
being paid to Buyer upon Seller's receipt of the Estimated Purchase Price (as
defined in Section 2.4.1 hereof).
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the assignment of
the FCC Licenses by Seller to Buyer as contemplated by this Agreement.
"FCC Licenses" means those licenses, permits and authorizations issued by the
FCC to Seller in connection with the business and operations of the Xxxxxxx.
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"XXX" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
"Intangibles" means all copyrights, trademarks, trade names, service marks,
service names, licenses, patents, permits, jingles, proprietary information,
technical information and data, machinery and equipment warranties, and other
similar intangible property rights and interests (and any goodwill associated
with any of the foregoing) applied for, issued to, or owned by Seller or under
which Seller is licensed or franchised and that are used in the business and
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, construction permits and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Seller, currently in
effect and used in connection with the conduct of the business or operations of
the Station, together with any additions thereto between the date of this
Agreement and the Closing Date.
"LMA" means a local marketing agreement or similar arrangement whereby a party
thereto acquires the right to program a television or radio station from the
licensee of such station.
"Material Contract" means those Assumed Contracts that are designated on
Schedule 3.7 as "Material Contracts."
"Permitted Liens" means (a) liens and encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord's liens arising in the
ordinary course of business, (b) liens and encumbrances arising in connection
with equipment or maintenance financing or leasing under the terms of the
Contracts set forth on the Schedules which have been made available to Buyer,
(c) liens and encumbrances arising pursuant to the terms of leases on Real
Property which are subject to any lease or sublease to a third party, (d) liens
and encumbrances for Taxes not yet due and payable or which are being contested
in good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on Seller's books in accordance with generally accepted
accounting principles and (e) liens and encumbrances that do not materially
detract from the value of any of the Assets or materially interfere with the use
thereof as currently used.
"Person" means an individual, corporation, association, partnership, joint
venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"Real Property" means all real property, and all buildings and other
improvements thereon, whether or not owned or held by Seller, used or useful in
the business or operations of the Station.
"Real Property Interests" means all interests in real property, including fee
estates, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, and rights of way, and all buildings and other improvements
thereon, owned or held by Seller that are used in the business or operations of
the Station, together with any additions thereto between the date of this
Agreement and the Closing Date.
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"TBA" means the Time Brokerage Agreement, dated as of August 1, 1997, by and
between Seller (as the ultimate assignee of Keymarket of Los Angeles, Inc.) and
Radio Korea U.S.A., Inc. ("Radio Korea").
"Tangible Personal Property" means all machinery, equipment, tools, vehicles,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts and other tangible personal property owned or held by Seller that is used
in the conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tax" means any federal, state, local, or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, capital, transfer, employment, withholding, or other tax or
governmental assessment, together with any interest, additions, or penalties
with respect thereto and any interest in respect of such additions or penalties.
"Tax Return" means any tax return, declaration of estimated tax, tax report or
other tax statement, or any other similar filing required to be submitted to any
governmental authority with respect to any Tax.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth in the sections indicated:
Term Section
---- --------
Benefit Arrangement Section 3.14.1
Buyer Preamble
Claimant Section 10.4.1
Employees Section 3.14.1
ERISA Affiliate Section 3.14.2
Estimated Purchase Price Section 2.4.1
Financial Statements Section 3.10
Indemnifying Party Section 10.4.1
Multiemployer Plan Section 3.14.1
Outside Closing Date Section 8.1.1
Pension Plan Section 3.14.1
Purchase Price Section 2.3
Seller Preamble
Station Recitals
Welfare Plan Section 3.14.1
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1.3 Rules of Construction. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender and any other number as the context requires. As used in this
Agreement, the word "including" is not limiting, and the word "or" is not
exclusive. Except as specifically otherwise provided in this Agreement in a
particular instance, a reference to a Section or Schedule is a reference to a
Section of this Agreement or a Schedule hereto, and the terms "hereof,"
"herein," and other like terms refer to this Agreement as a whole, including the
Schedules to this Agreement, and not solely to any particular part of this
Agreement. The descriptive headings in this Agreement are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
ARTICLE II
EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE.
2.1 Agreement to Exchange and Transfer. Subject to the terms and conditions
set forth in this Agreement and subject to the terms of the TBA, Seller hereby
agrees to transfer, convey, assign and deliver to Buyer on the Closing Date, and
Buyer agrees to acquire, all of Seller's right, title and interest in the
tangible and intangible assets used in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (other than Permitted Liens), including,
without limitation, the following:
(a) The Tangible Personal Property;
(b) The Real Property Interests;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the Station to
the extent they relate to the period after the Effective Time; and
5
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following:
(a) Seller's cash on hand, cash equivalents or deposits held
by Seller, all interest payable in connection therewith and any of Seller's
interest in its short-term investments, bank balances and rights in and to
Seller's bank accounts;
(b) All Accounts Receivable;
(c) All tangible personal property disposed of or consumed in
the ordinary course of business;
(d) All rights and claims of Seller to the extent they relate
to the period prior to the Effective Time, whether mature, contingent or
otherwise, against third parties relating to the Assets or the Stations whether
in tort, contract or otherwise;
(e) All rights to the name "Xxxxxxxx" and any logo or
variation thereof;
(f) Any insurance policies, promissory notes, amounts due from
employees, bonds, letters of credit, certificates of deposit, or other similar
items, and any cash surrender value in regard thereto;
(g) Any pension, profit-sharing, or employee benefit plans,
including all of Seller's interest in any Welfare Plan, Pension Plan or Benefit
Arrangement (each as defined in Section 3.14);
(h) All tax returns and supporting materials, all original
financial statements and supporting materials, all books and records that Seller
is required by law to retain, all of Seller's organizational documents and
corporate books and records, and all records of Seller relating to the sale of
the Assets; and
(i) Any interest in and to any refunds of federal, state, or
local franchise, income, or other taxes for periods prior to the Closing Date.
2.3 Purchase Price. The purchase price of the Assets (the "Purchase Price")
shall be Twenty-One Million Dollars ($21,000,000), adjusted as provided below.
2.3.1 Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of revenues and expenses.
Subject to the provisions of the TBA, all revenues and all expenses arising from
the operation of the Station, including tower rental, business and license fees,
utility charges, real and personal property taxes and assessments levied against
the Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, taxes (except for taxes arising from the transfer of
the Assets under this Agreement), employee compensation, including wages,
salaries, accrued sick leave and severance pay, but excluding earned vacation
time, and similar prepaid and deferred items, shall
6
be prorated between Buyer and Seller in accordance with the principle that
Seller shall receive all revenues and shall be responsible for all expenses,
costs and liabilities allocable to the operations of each Station for the period
prior to the Effective Time for such Station, and Buyer shall receive all
revenues and shall be responsible for all expenses, costs and obligations
allocable to the operations of the Station for the period after the Effective
Time, subject to the following:
(a) There shall be no adjustment for, and Seller shall remain
solely liable with respect to, any obligation or liability not being assumed by
Buyer in accordance with Section 2.4.3. An adjustment and proration shall be
made in favor of Buyer to the extent that Buyer assumes any liability under any
Assumed Contract to refund (or to credit against payments otherwise due) any
security deposit or similar prepayment paid to Seller by any lessee or other
third party.
(b) The Purchase Price shall be reduced to the extent the
value of any advertising time remaining to be run by the Station under its trade
or barter agreements as of the Effective Time exceeds $15,000.
(c) Seller shall be responsible for the payment of all
compensation and commissions owed to the Station's employees up to the Effective
Time.
2.3.2 Manner of Determining Adjustments. The Purchase Price,
taking into account the adjustments and prorations pursuant to Section 2.3.1,
will be determined in accordance with the following procedures:
(a) Seller shall prepare and deliver to Buyer not later than
five days before the Closing Date a preliminary settlement statement which shall
set forth Seller's good faith estimate of the adjustments to the Purchase Price
under Section 2.3.1. The preliminary settlement statement shall (A) contain all
information reasonably necessary to determine the adjustments to the Purchase
Price under Section 2.3.1, to the extent such adjustments can be determined or
estimated as of the date of the preliminary settlement statement, and such other
information as may be reasonably requested by Buyer, and (B) be certified by
Seller to be true and complete to Seller's knowledge as of the date thereof.
(b) Not later than ninety days after the Closing Date, Buyer
will deliver to Seller a statement setting forth Buyer's determination of the
Purchase Price and the calculation thereof pursuant to Section 2.3.1. Buyer's
statement (A) shall contain all information reasonably necessary to determine
the adjustments to the Purchase Price under Section 2.3.1, and such other
information as may be reasonably requested by Seller, and (B) shall be certified
by Buyer to be true and complete to Buyer's knowledge as of the date thereof. If
Seller disputes the amount of the Purchase Price determined by Buyer, it shall
deliver to Buyer within thirty days after its receipt of Buyer's statement a
statement setting forth its determination of the amount of the Purchase Price.
If Seller notifies Buyer of its acceptance of Buyer's statement, or if Seller
7
fails to deliver its statement within the thirty-day period specified in the
preceding sentence, Buyer's determination of the Purchase Price shall be
conclusive and binding on the parties as of the last day of the thirty-day
period.
(c) Buyer and Seller shall use good faith efforts to resolve
any dispute involving the determination of the Purchase Price. If the parties
are unable to resolve the dispute within fifteen days following the delivery of
Seller's statement pursuant to Section 2.3.2(b), Buyer and Seller shall jointly
designate an independent certified public accountant, who shall be knowledgeable
and experienced in the operation of radio broadcasting stations, to resolve the
dispute. If the parties are unable to agree on the designation of an independent
certified public accountant, the selection of the accountant to resolve the
dispute shall be submitted to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association. The accountant's
resolution of the dispute shall be final and binding on the parties, and a
judgment may be entered thereon in any court of competent jurisdiction. Any fees
of this accountant, and, if necessary, for arbitration to pick such accountant,
shall be split equally between the parties.
2.4 Payment of Purchase Price. The Purchase Price shall be paid as
follows:
2.4.1 Payment of Estimated Purchase Price At Closing. The sum
of Twenty-One Million Dollars ($21,000,000), adjusted by the estimated
adjustments as set forth in Seller's preliminary settlement statement pursuant
to Section 2.3.2(a), is referred to as the "Estimated Purchase Price." At the
Closing, Buyer shall pay or cause to be paid to Seller the Estimated Purchase
Price by federal wire transfer of same-day funds pursuant to wire instructions
which wire instructions shall be delivered to Buyer by Seller at least two
business days prior to the Closing Date.
2.4.2 Payments to Reflect Adjustments.
(a) If the Purchase Price as finally determined pursuant to
Section 2.3.2 exceeds the Estimated Purchase Price, Buyer shall pay to Seller,
in immediately available funds within five business days after the date on which
the Purchase Price is determined pursuant to Section 2.3.2, the difference
between the Purchase Price and the Estimated Purchase Price.
(b) If the Purchase Price as finally determined pursuant to
Section 2.3.2 is less than the Estimated Purchase Price, Seller shall pay to
Buyer, in immediately available funds within five business days after the date
on which the Purchase Price is determined pursuant to Section 2.3.2, the
difference between the Purchase Price and the Estimated Purchase Price.
2.4.3 Assumption of Liabilities and Obligations. As of the
Closing Date and subject to Buyer's right to reject the assignment of the TBA,
Buyer shall assume and undertake to pay, discharge and perform all obligations
and liabilities of Seller under the Licenses, the TBA and the other Assumed
Contracts to the extent that either (a) the obligations and liabilities relate
to the time after the Effective Time with respect to the Station or (b) the
Purchase Price was reduced pursuant to Section 2.3.1 as a result of the
proration of such obligations and liabilities. Buyer shall not assume any other
obligations or liabilities of Seller, including, without limitation, (i) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Effective Time except insofar as an adjustment therefor is made in
favor of Buyer
8
under Section 2.3.1, (ii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the Closing, (iii) any
obligations or liabilities of Seller under any management incentive, employee
pension, retirement, or other benefit plans, (iv) any obligations or liabilities
of Seller under any collective bargaining agreements, (v) any obligation to any
employee of the Station for severance benefits, vacation time, or sick leave
accrued prior to the Closing Date, (vi) any credit agreements, note purchase
agreements, indentures, capital leases, or other financing arrangements, or
(vii) any obligations or liabilities caused by, arising out of, or resulting
from any action or omission of Seller prior to the Closing, and all such
obligations and liabilities shall remain and be the obligations and liabilities
solely of Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer as follows:
3.1 Organization and Authority of Seller. Xxxxxxxx is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland. Licensee is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Xxxxxxxx and Licensee
is qualified to do business and has the requisite corporate power and authority
to own, lease and operate its properties, to carry on its business in the State
of California, and to execute, deliver and perform this Agreement and the
documents contemplated hereby according to their respective terms. Neither
Xxxxxxxx nor Licensee is a participant in any joint venture or partnership with
any other Person with respect to any part of the operations of the Station or
any of the Assets. Except as a result of the TBA, Xxxxxxxx has not entered into
any other arrangement with any other Persons providing any rights to operate the
Station.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by each of Xxxxxxxx and Licensee have been duly
authorized by all necessary corporate action on the part of each of Xxxxxxxx and
Licensee. This Agreement has been duly executed and delivered by each of
Xxxxxxxx and Licensee and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms except as the enforceability
of this Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. Subject to obtaining the
Consents listed on Schedule 3.3, the FCC Consent and filings required under HSR,
the execution, delivery and performance by each of Xxxxxxxx and Licensee of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (a) do not require the consent of any third
party; (b) will not conflict with any provision of the Articles of Incorporation
or Bylaws of either of Xxxxxxxx or Licensee; (c) will not conflict with, result
in a breach of, or constitute a default under any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality specifically applicable to either of Xxxxxxxx or
Licensee; (d) will not conflict with, constitute grounds for termination of,
result in a breach of, constitute a default under, or accelerate or permit the
acceleration of any performance required by the terms of, any material
agreement, instrument, license, or permit to which either Xxxxxxxx or Licensee
is a party or by which either Xxxxxxxx or Licensee may be bound legally; and (e)
will not create any
9
claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon any of the Assets other than Permitted Liens. Except
for the FCC Consent provided for in Section 3.4, filings required under HSR and
the other Consents described in Schedule 3.3, no consent, approval, permit, or
authorization of, or declaration to, or filing with any governmental or
regulatory authority or any other third party is required (a) to consummate this
Agreement and the transactions contemplated hereby, or (b) to permit Seller to
transfer and convey the Assets to Buyer.
3.4 Governmental Licenses; FCC Matters.
(a) Schedule 3.4 includes a true and complete list of the
Licenses. Seller has made available to Buyer true and complete copies of the
Licenses (including any amendments and other modifications thereto). The
Licenses have been validly issued, and Licensee is the authorized legal holder
thereof. The Licenses listed on Schedule 3.4 comprise all of the licenses,
permits and other authorizations required from any governmental or regulatory
authority for the lawful conduct in all material respects of the business and
operations of the Station in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any unusual or special
restriction or condition that could reasonably be expected to limit the full
operation of the Station as now operated. The Licenses are in full force and
effect, and the conduct of the business and operations of the Station is in
accordance therewith. Except as set forth on Schedule 3.4, no application,
action or proceeding is pending for the renewal or modification of any of the
Licenses and, except for actions or proceedings affecting radio broadcast
stations generally, no application, complaint, action or proceeding is pending
or, to Seller's knowledge, threatened that may result in the (i) denial of an
application for renewal by the FCC or other granting authority, (ii) the
revocation, modification, non-renewal or suspension of any of the Licenses,
(iii) the issuance of any cease-an-desist orders, or (iv) the imposition of any
administrative or judicial sanction with respect to the Station; provided, to
the extent any application, action or proceeding has been brought by a person or
entity which is not an Affiliate of Seller, the foregoing representation is
provided only to the knowledge of Seller.
(b) Except as set forth on Schedule 3.4, the Station (i) is
being operated in all material respects in accordance with the specifications of
the applicable FCC Licenses as seasonal variances allow and (ii) is being
operated in material compliance in all respects with all requirements of the
Communications Act. Sellers have complied in all material respects with all
requirements of the FCC and the FAA with respect to the Station's antenna
structures.
(c) Except as set forth on Schedule 3.4, Seller knows of no
facts, conditions or events relating to Seller or the Station that might cause
the FCC or other granting authority to have a legally valid basis to deny the
assignment of the Licenses as provided for in this Agreement or not to renew any
of the Licenses in the ordinary course.
3.5 Real Property. Schedule 3.5 contains a complete and accurate description
of all Real Property and all Real Property Interests (including street address,
legal description (where known), owner, and Seller's use thereof). The Real
Property Interests listed on Schedule 3.5 comprise all interests in real
property necessary to conduct the business and operations of the Station as now
conducted. Seller has good and marketable fee simple title to all fee estates
included in the Real Property Interests and good title to all other Real
Property Interests, in each case free and clear of all liens, mortgages,
pledges, covenants, easements, restrictions, encroachments, leases, charges, and
other claims and encumbrances, except for Permitted Liens. With
10
respect to each leasehold or subleasehold interest included in the Real Property
Interests, so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment against its
lessor or sublessor, and, to the knowledge of Seller, no third party holds any
interest in the leased premises with the right to foreclose upon Seller's
leasehold or subleasehold interest. Seller has full legal and practical access
to all of the Real Property. To Seller's knowledge, all Real Property (including
the improvements thereon) (a) is in good condition and repair consistent with
its present use, (b) is available for immediate use in the conduct of the
business and operations of the Station, and (c) complies in all material
respects with all applicable building or zoning codes and the regulations of any
governmental authority having jurisdiction, except to the extent that the
current use by Seller, while permitted, constitutes or would constitute a
"nonconforming use" under current zoning or land use regulations and except to
the extent the failure to satisfy the forgoing statements would not have a
material adverse effect on the business or operations of the Station. To
Seller's knowledge, 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.
3.6 Tangible Personal Property. Schedule 3.6 lists all material items of
Tangible Personal Property. The Tangible Personal Property listed on Schedule
3.6 comprises all material items of tangible personal property necessary to
conduct the business and operations of the Station as now conducted. Except as
described in Schedule 3.6, Seller owns and has good title to each item of
Tangible Personal Property and none of the Tangible Personal Property owned by
Seller is subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except for Permitted Liens. With
allowance for normal repairs, maintenance, wear and obsolescence, each material
item of Tangible Personal Property is in good operation condition and repair and
is available for immediate use in the business and operations of the Station,
except where such failure or lack of availability would not have a material and
adverse effect on the business or operations of the Station. All items of
transmitting and studio equipment included in the Tangible Personal Property (a)
have been maintained in a manner consistent with generally accepted standards of
good engineering practice, and (b) will permit the Station and any unit
auxiliaries thereto to operate in accordance with the material terms of the FCC
Licenses and the rules and regulations of the FCC and in all material respects
with all other applicable federal, state and local statutes, ordinances, rules
and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all Contracts
except Contracts which are not material to the business and operations of the
Stations and Contracts with advertisers for production or the sale of
advertising time on the Station for cash at rates consistent with past
practices. Seller has delivered to Buyer true and complete copies of all written
Assumed Contracts, true and complete descriptions of all oral Assumed Contracts
(including any amendments and other modifications to such Contracts). Other than
the Contracts listed on Schedule 3.7 (and contracts relating to the Station
entered into by Radio Korea), Seller requires no contract, lease, or other
agreement to enable it to carry on its business in all material respects as now
conducted. All of the Contracts are in full force and effect and are valid,
binding and enforceable in accordance with their terms except as the
enforceability may be affected by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies. Seller is not aware of any intention by any
party to any Contract (a) to terminate such Contract or amend the terms thereof,
(b) to refuse to renew the Contract upon expiration of its term, or (c) to renew
the Contract
11
upon expiration only on terms and conditions that are more onerous than those
now existing. Except for the need to obtain the Consents listed on Schedule 3.3,
the exchange and transfer of the Assets in accordance with this Agreement will
not affect the validity, enforceability, or continuation of any of the
Contracts. Seller, and, to the best of Seller's knowledge, the other parties
thereto, have complied in all material respects with all of the material
provisions of the Assumed Contracts and are not in default thereunder in any
material respect, and there has not occurred any event which (whether with or
without notice or lapse of time) would constitute such a default.
3.8 Intangibles. Schedule 3.8 is a true and complete list of all material
Intangibles (exclusive of Licenses listed in Schedule 3.4) that are required to
conduct the business and operations of the Station as now conducted, all of
which are valid and in good standing. Other than with respect to matters
generally affecting the radio broadcasting industry and not particular to
Seller, Seller has not received any notice or demand alleging that Seller is
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other Person, and there is no claim
or action pending, or to the knowledge of Seller threatened, with respect
thereto.
3.9 Title to Properties. Except as disclosed in Schedule 3.9, Seller has
good and marketable title to the Assets subject to no mortgages, pledges, liens,
security interests, encumbrances, or other charges or rights of others of any
kind or nature except Permitted Liens.
3.10 Financial Information. Seller has furnished Buyer with true and complete
copies of unaudited financial statements of Seller containing a balance sheet
and statement of income as at and for the fiscal year ended December 31, 1997,
and an unaudited balance sheet and statement of income as at and for the three
months ended March 31, 1998 (collectively, the "Financial Statements"). The
Financial Statements have been prepared from the books and records of Seller,
have been prepared in a manner consistent with the audited consolidated
financial statements of Seller's ultimate corporate parent, Xxxxxxxx Broadcast
Group, Inc., accurately reflect the books, records and accounts of Seller, and
present fairly the financial condition of Seller as at their respective dates
and the results of operations for the periods then ended. None of the Financial
Statements understates the true costs and expenses of conducting the business or
operations of the Station as currently conducted by Seller or otherwise
inaccurately reflects the operations of the Station. The audited consolidated
financial statements of Xxxxxxxx Broadcast Group, Inc. have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis.
3.11 Taxes. Seller has filed or caused to be filed all Tax Returns that are
required to be filed with respect to the ownership and operation of the Station,
and, except as disclosed on Schedule 3.10, it has paid or caused to be paid all
Taxes shown on those returns or on any tax assessment received by it to the
extent that such Taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no legal, administrative, or tax
proceedings pursuant to which Seller is or could be made liable for any Taxes,
penalties, interest, or other
12
charges, the liability for which could extend to Buyer as transferee of the
business of the Station, and no event has occurred that could impose on Buyer
any transferee liability for any Taxes, penalties, or interest due or to become
due from Seller.
3.12 Insurance. Schedule 3.12 is a true and complete list of all insurance
policies of Seller. All policies of insurance listed in Schedule 3.12 are in
full force and effect. During the past three years, no insurance policy of
Seller or the Station has been canceled by the insurer and no application of
Seller for insurance has been rejected by any insurer.
3.13 Reports. All material returns, reports and statements that the Station is
currently required to file with the FCC, the Federal Aviation Administration or
any other governmental authority have been filed, and all reporting requirements
(including maintenance of a public inspection file) of the FCC, the Federal
Aviation Administration and all other governmental authorities have been
complied with in all material respects. All of such returns, reports and
statements, as filed, satisfy all applicable legal requirements.
3.14 Personnel and Employee Benefits.
3.14.1 Employees and Compensation. Schedule 3.14 contains a
true and complete list of all employees of Seller (collectively, the
"Employees") and a description of all compensation arrangements affecting them.
Schedule 3.14 also contains a true and complete list of all employee benefit
plans or arrangements applicable to the Employees, including any:
(a) "Employee welfare benefit plan," as defined in Section
3(1) of ERISA, that is maintained or administered by Seller or to which Seller
contributes or is required to contribute and that covers any Employee or under
which Seller has any liability (a "Welfare Plan");
(b) "Multiemployer pension plan," as defined in Section 3(37)
of ERISA, that is maintained or administered by Seller or to which Seller
contributes or is required to contribute and which covers any Employee or under
that Seller has any liability (a "Multiemployer Plan");
(c) "Employee pension benefit plan," as defined in Section
3(2) of ERISA (other than a Multiemployer Plan), to which Seller contributes or
is required to contribute (a "Pension Plan");
(d) Employee plan that is maintained in connection with any
trust described in Section 501(c)(9) of the Internal Revenue Code of 1986, as
amended; and
(e) Employment, severance, or other similar contract,
arrangement, or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, or retirement benefits or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases, or other
forms of incentive compensation or post-retirement insurance,
13
compensation, or benefits that (A) is not a Welfare Plan, Pension Plan, or
Multiemployer Plan, (B) is entered into, maintained, contributed to, or required
to be contributed to by Seller or under which Seller has any liability, and (C)
covers any Employee (collectively, "Benefit Arrangements").
3.14.2 Pension Plans. Except as disclosed on Schedule 3.14,
Seller does not sponsor, maintain, or contribute to any Pension Plan. Each
Pension Plan disclosed on Schedule 3.14 complies currently and has been
maintained in compliance with its terms and, both as to form and in operation,
with the requirements prescribed by any statutes, order, rules and regulations
that are applicable to such plans, including ERISA and the Code. Neither the
Seller nor any trade or business under common control within the meaning of
Sections 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate") has any
material liability to, or with respect to, any Pension Plan subject to the
minimum funding requirements of Section 302 of ERISA or Section 412 of the Code.
Neither Seller nor any ERISA Affiliate knows or has reason to know that any
Pension Plan is subject to any governmental audit or examination, and neither
Seller nor any ERISA Affiliate is subject to any action, suit, or claim with
respect to any Pension Plan. Neither Seller nor any ERISA Affiliate has engaged
in any transaction that could subject Seller to any material liability under
Section 4069 of ERISA. The transactions contemplated by this Agreement will not
subject Seller to any liability under Section 4069 of ERISA.
3.14.3 Welfare Plans. Each Welfare Plan complies currently and
has been maintained in material compliance with its terms and, both as to form
and in operation, in all material respects with the requirements prescribed by
any and all statutes, orders, rules and regulations that are applicable to such
plans, including ERISA and the Code. Seller does not sponsor, maintain, or
contribute to any Welfare Plan that provides health or death benefits to former
employees of the Station other than as required by Section 4980B of the Code.
3.14.4 Benefit Arrangements. Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by all statutes, orders, rules and regulations that are applicable to
such Benefit Arrangement. Seller has no written contract prohibiting the
termination of any Employee.
3.14.5 Multiemployer Plans. Seller has not at any time been
a participant in any Multiemployer Plan.
3.15 Labor Relations. Except as set forth in Schedule 3.15, Seller is not a
party to or subject to any collective bargaining agreement or written or oral
employment agreement with any Employee. Seller has complied in all material
respects with all laws, rules and regulations relating to the employment of
labor, including those related to wages, hours, collective bargaining,
occupational safety, discrimination, and the payment of social security and
other payroll related taxes, and it has not received any notice alleging that it
has failed to comply with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the knowledge of
Seller, threatened, between it and any Employee (singly or collectively). No
labor union or other collective bargaining unit represents or claims to
represent any of the employees of
14
Seller. To the knowledge of Seller, there is no union campaign being conducted
to solicit cards from any Employees to authorize a union to represent any of the
employees of Seller or to request a National Labor Relations Board certification
election with respect to any Employees.
3.16 Claims and Legal Actions. Except for any FCC rulemaking proceedings
generally affecting the radio broadcasting industry and not particular to
Seller, there is no claim, legal action, counterclaim, suit, arbitration, or
other legal, administrative, or tax proceeding, nor any order, decree, or
judgment, in progress or pending, or to the knowledge of Seller threatened,
against or relating to Seller, the Assets, or the business or operations of the
Station, nor does Seller know of any basis for the same. In particular, but
without limiting the generality of the foregoing, there are no applications,
complaints, or proceedings pending or, to the knowledge of Seller, threatened
(a) before the FCC relating to the business or operations of the Station other
than rule making proceedings that affect the radio industry generally, (b)
before any federal or state agency relating to Seller involving charges of
illegal discrimination under any federal or state employment laws or
regulations, or (c) before any federal, state, or local agency relating to
Seller involving zoning issues under any federal, state, or local zoning law,
rule, or regulation.
3.17 Environmental Matters.
3.17.1 Seller has complied in all material respects with all
material laws, rules and regulations of all federal, state and local governments
(and all agencies thereof) concerning the environment, public health and safety,
and employee health and safety, and no charge, complaint, action, suit,
proceeding, hearing, claim, demand, or notice has been filed or, to Seller's
knowledge, commenced against Seller alleging any failure to comply with any such
law, rule, or regulation.
3.17.2 To Seller's knowledge, Seller has no liability (and
there is no reasonable basis related to Seller's past or present operations,
properties, or facilities for any present or future charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand against Seller giving
rise to any such liability) under the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Federal Water Pollution Control Act, the Clean Air Act, the Safe Drinking Water
Act, the Toxic Substances Control Act, the Refuse Act, or the Emergency Planning
and Community Right-to-Know Act (each as amended) or any other law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
3.17.3 To Seller's knowledge, Seller has no liability (and
Seller has not handled or disposed of any substance, arranged for the disposal
of any substance, or owned or operated any property or facility in any manner
that could reasonably be expected to form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
3.17.4 Seller has no liability (and there is no reasonable
basis for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Seller giving rise to any such
liability) under the Occupational Safety and Health Act, as amended, or under
any other law, rule, or regulation of any federal, state, or local government
(or agency thereof) concerning employee health and safety.
15
3.17.5 To Seller's knowledge, Seller has no liability (and
Seller has not exposed any employee to any substance or condition that could
reasonably be expected to form the basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the common law or pursuant to statute) against Seller giving rise to any
such liability) for any illness or personal injury to any employee.
3.17.6 Seller has obtained and been in material compliance
with all of the terms and conditions of all material permits, licenses and other
authorizations that are required under, and to Seller's knowledge, has complied
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables that are contained in, all
federal, state and local laws, rules and regulations (including all codes,
plans, judgments, orders, decrees, stipulations, injunctions and charges
thereunder) relating to public health and safety, worker health and safety, and
pollution or protection of the environment, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
3.17.7 To Seller's knowledge, all properties and equipment of
Seller are and have been free of asbestos and asbestos-related products, PCB's,
methylene chloride, trichloroethylene, 1, 2-trans- dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances (as defined in Section 302 of
the Emergency Planning and Community Right-to-Know Act).
3.17.8 To Seller's knowledge, no pollutant, contaminant, or
chemical, industrial, hazardous, or toxic material or waste has ever been
manufactured, buried, stored, spilled, leaked, discharged, emitted, or released
on any Real Property.
3.17.9 Other than in compliance with the Communications Act,
the operation of the Station does not cause or result in exposure to workers or
the general public to levels of radio frequency radiation in excess of the
"Radio Frequency Protection Guides" recommended in "American National Standard
Safety Levels with Respect to Human Exposure to Radio Frequency Electromagnetic
Fields 300 kHz to 100 gHz" (ANSI C95.1-1982), issued by the American National
Standards Institute. Renewal of the Licenses would not constitute a "major
action" within the meaning of Section 1.1301, et seq., of the FCC's rules.
3.18 Compliance with Laws. Seller is not in material violation of, and has
not received any notice asserting any material noncompliance by Seller with any
applicable material statute, law, rule or regulation, whether federal, state,
local or otherwise, in connection with the ownership of the Assets. Seller has
complied and is in compliance, in all material respects, with all material laws,
regulations and governmental orders applicable to Seller's operation of the
Station and ownership of the Assets. Seller has obtained and
16
holds all material permits, licenses and approvals (none of which has been
rescinded and all of which are in full force and effect) from all governmental
authorities necessary in order to conduct the operations of the Station in
accordance with applicable law, as presently conducted and to own, use and
maintain the Assets.
3.19 Conduct of Business in Ordinary Course. Since March 31, 1998, Seller
has conducted its business and operations only in the ordinary course and has
not:
3.19.1 suffered any material adverse change in the business,
assets, properties, financial condition, results of operations, or business
prospects of the Station, including any damage, destruction, or loss affecting
any assets used or useful in the conduct of the business of the Station;
3.19.2 made any material increase in compensation payable or
to become payable to any of its employees, or any bonus payment made or promised
to any of its employees, or any material change in personnel policies, employee
benefits, or other compensation arrangements affecting its employees;
3.19.3 made any sale, assignment, lease, or other transfer of
assets other than in the normal and usual course of business with suitable
replacements being obtained therefor;
3.19.4 canceled any debts owed to or claims held by Seller,
except in the normal and usual course of business;
3.19.5 made any changes in Seller's accounting practices;
3.19.6 suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable; or
3.19.7 transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right.
3.20 Transactions with Affiliates. Except as disclosed in the Financial
Statements, Seller has not been involved in any business arrangement or
relationship with any Affiliate of Seller, and no Affiliate of Seller owns any
property or right, tangible or intangible, that is used in the business of the
Station.
3.21 Broker. Neither Seller nor any Person acting on its behalf has incurred
any liability for any finders' or brokers' fees or commissions in connection
with the transactions contemplated by this Agreement.
17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and by the Closing Date will be duly qualified to do business as a
foreign corporation where such qualification is necessary. Buyer has the
requisite corporate power and authority to execute, deliver and perform this
Agreement and the documents contemplated hereby according to their respective
terms and to own the Assets.
4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by Buyer have been duly authorized by all
necessary action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Subject to the
receipt of the Consents or as otherwise set forth in this Section 4.3, the
execution, delivery and performance by Buyer of this Agreement and the documents
contemplated hereby (with or without the giving of notice, the lapse of time, or
both): (a) do not require the consent of any third party; (b) will not conflict
with the Articles of Incorporation or Bylaws of Buyer; (c) will not conflict
with, result in a breach of, or constitute a default under, any applicable law,
judgment, order, ordinance, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; and (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any material agreement, instrument, license or permit
to which Buyer is a party or by which Buyer may be bound.
4.4 Brokers. Neither Buyer nor any person or entity acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement other than fees
due to the Xxx Xxxxxxx Company and to Xxxxxxx Xxxxxxxx, Inc., which fees shall
be the sole responsibility of Buyer.
4.5 Qualification of Buyer.
4.5.1 Except as disclosed in Schedule 4.5.1, Buyer is, and
pending Closing will remain legally, financially and otherwise qualified under
the Communications Act and all rules, regulations and policies of the FCC to
acquire and operate the Station. Except as disclosed in Schedule 4.5.1, there
are no facts or proceedings which would reasonably be expected to disqualify
Buyer under the Communications Act or otherwise from acquiring or operating the
Station or would cause the FCC not to approve the assignment of the FCC License
to Buyer. Except as disclosed in Schedule 4.5.1, Buyer has no knowledge of any
fact or circumstance relating to Buyer or any of Buyer's affiliates that would
reasonably be expected to (a) cause
18
the filing of any objection to the assignment of the FCC License to Buyer, or
(b) lead to a delay in the processing by the FCC of the application for such
assignment. Except as disclosed in Schedule 4.5.1, no waiver of any FCC rule or
policy is necessary to be obtained for the grant of the applications for the
assignment of the FCC License to Buyer, nor will processing pursuant to any
exception or rule of general applicability be requested or required in
connection with the consummation of the transactions herein.
4.5.2 As of the date hereof and through the Closing Date,
except as set forth on Schedule 4.5.1, neither Buyer nor any Affiliate of Buyer
(a) owns, controls or operates any television or radio station located in the
DMA in which the Station is located, (b) has any direct or indirect interest,
including, without limitation, any equity, debt, security or any other financial
interest, whether or not "attributable" (as defined in the rules and regulations
of the FCC), or management interest, in (i) any television or radio station
located in the DMA in which the Station is located, or (ii) any applicant
seeking to construct or acquire, by assignment of license or transfer of
control, any such television or radio station (an "Applicant"); or (c) is a
party to any LMA with a television or radio station located in the DMA in which
the Station is located, or with any Applicant. Buyer acknowledges and agrees
that the representations set forth in this Section 4.5.2 shall take into account
and include (a) the consummation of any proposed or pending acquisition (as of
the date hereof and through the Closing Date of television or radio stations
(including the acquisition of the Station) by Buyer or any Affiliate of Buyer or
any Applicant, and (b) any LMA or proposed or pending LMA (as of the date hereof
and through the Closing Date) to which Buyer or any Affiliate of Buyer is or may
become a party.
4.6 Availability of Funds. Buyer will have available on the Closing Date
sufficient funds to enable it to consummate the transactions contemplated
hereby.
4.7 No Outside Reliance. Buyer has not relied and is not relying on any
statement, representation or warranty not made in this Agreement, any Schedule
hereto or any certificate to be delivered to Buyer at the Closing pursuant to
this Agreement. Buyer is not relying on any projections or other predictions
contained or referred to in materials (other than the Schedules) that have been
or may hereafter be provided to Buyer or any of its Affiliates, agents or
representatives, and Seller makes no representations or warranties with respect
to any such projections or other predictions.
ARTICLE V
OPERATION OF THE STATION PRIOR TO CLOSING.
Subject to the terms of the TBA, Seller covenants and agrees that between the
date hereof and the Closing Date, Seller will conduct its business in the
ordinary course in accordance with its past practices (except where such conduct
would conflict with the following covenants or with other obligations of Seller
under this Agreement), and, except as contemplated by this Agreement or with the
prior written consent of Buyer, Seller will act in accordance with the
following:
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5.1 Contracts. Seller will not renew, extend, amend or terminate, or waive
any material right under, any Material Contract, or enter into any contract or
commitment or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract, regardless whether such Contract is
a Material Contract) that will be assumed by or be otherwise binding on Buyer
after Closing, except for (a) cash time sales agreements and production
agreements made in the ordinary course of business consistent with Seller's past
practices, (b) the renewal or extension of any existing Contract on its existing
terms in the ordinary course of business, and (c) other contracts entered into
in the ordinary course of business consistent with Seller's past practices that
do not involve consideration, in the aggregate, in excess of $25,000 measured at
Closing. Prior to the Closing Date, Seller shall deliver to Buyer a list of all
Contracts entered into between the date of this Agreement and the Closing Date
and shall make available to Buyer true and complete copies of all such
Contracts. Seller will not do or omit to do any act (or permit such act or
omission) which will result in a material breach of any Contract.
5.2 Compensation. Seller shall not increase the compensation, bonuses, or
other benefits payable or to be payable to any person employed in connection
with the conduct of the business or operations of the Station, except in
accordance with past practices.
5.3 Encumbrances. Seller will not create, assume, or permit to exist any
mortgage, pledge, lien, or other charge or encumbrance affecting any of the
Assets, except for (a) liens that will be removed prior to the Closing Date, and
(b) Permitted Liens.
5.4 Dispositions. Seller will not sell, assign, lease, or otherwise transfer
or dispose of any of the Assets except in the ordinary course of business
provided that either (i) such Assets are replaced with assets of equivalent kind
and value or (ii) the sale proceeds in respect of such Assets are held for the
benefit of Buyer.
5.5 Access to Information. Seller will give to Buyer and its investors,
lenders, counsel, accountants, engineers and other authorized representatives
reasonable access to the Station and all books, records and documents of Seller
which pertain solely to the Station, and will furnish or cause to be furnished
to Buyer and its authorized representatives all information relating to the
Station that they reasonably request (including any financial reports and
operations reports produced with respect to the Station).
5.6 Insurance. Seller shall maintain in full force and effect policies of
insurance of the same type, character and coverage as the policies currently
carried with respect to the business, operations and assets of Seller.
5.7 Licenses. Seller shall not cause or permit, by any act or failure to
act, any of the Licenses required to be listed on Schedule 3.4 to expire or to
be revoked, suspended or modified, or take any action that could reasonably be
expected to cause the FCC or any other governmental authority to institute
proceedings for the suspension, revocation or material adverse modification of
any of the Licenses. Seller shall prosecute with due diligence any applications
to any governmental authority necessary for the operation of the Station.
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5.8 Obligations. Seller shall pay all its obligations as they become due,
consistent with past practices, so that all such obligations shall be current as
of the Closing Date.
5.9 No Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement in any material respect
or that could reasonably be expected to hinder or delay the consummation of the
transactions contemplated by this Agreement. Neither Seller nor any of its
respective representatives or agents shall, directly or indirectly, solicit,
initiate, or participate in any way in discussions or negotiations with, or
provide any confidential information to, any Person (other than Buyer or any
affiliate or associate of Buyer and their respective representatives and agents)
concerning any possible disposition of the Station, the sale of any material
assets of the Station, or any similar transaction.
5.10 Maintenance of Assets. Seller shall maintain all of the Assets in good
condition (ordinary wear and tear excepted), consistent with their overall
condition on the date of this Agreement, and use, operate and maintain all of
the Assets in a reasonable manner. Seller shall maintain inventories of spare
parts and expendable supplies at levels consistent with past practices. If any
insured or indemnified loss, damage, impairment, confiscation, or condemnation
of or to any of the Assets occurs, Seller shall repair, replace, or restore the
Assets to their prior condition as represented in this Agreement as soon
thereafter as possible, and Seller shall use the proceeds of any claim under any
property damage insurance policy or other recovery solely to repair, replace, or
restore any of the Assets that are lost, damaged, impaired, or destroyed.
5.11 Consents. Seller shall use reasonable efforts to obtain all Consents
without any adverse change in the terms or conditions of any Assumed Contract or
License.
5.12 Books and Records. Seller shall maintain its books and records in
accordance with past practices.
5.13 Notification. Seller shall promptly notify Buyer in writing of any
unusual or material developments with respect to the business or operations of
the Station of which Seller becomes aware and of any material change in any of
the information contained in the representations and warranties contained in
Article III of this Agreement.
5.14 Compliance with Laws. Seller shall comply in all material respects with
all laws, rules and regulations.
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS.
6.1 FCC Consent.
6.1.1 The exchange and transfer of the Assets as contemplated
by this Agreement is subject to the prior consent and approval of the FCC
without any conditions which are materially adverse to Buyer.
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6.1.2 Seller and Buyer shall prepare and within ten days after
the date of this Agreement shall file with the FCC an appropriate application
for FCC Consent. The parties shall thereafter prosecute the application with all
reasonable diligence and otherwise use their respective best efforts to obtain a
grant of the application as expeditiously as practicable. Buyer and Seller shall
oppose any petitions to deny or other objections filed with respect to the
application for the FCC Consent and any requests for reconsideration or judicial
review of the FCC Consent.
6.1.3 If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party shall
have terminated this Agreement under Article IX, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension of
the effective period of the FCC Consent shall limit the exercise either party of
its right to terminate the Agreement under Article IX.
6.2 Xxxx-Xxxxx-Xxxxxx. Within ten days following the execution of this
Agreement, Seller and Buyer shall complete any filing that may be required
pursuant to HSR (each an "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.
6.3 Risk of Loss.
(a) The risk of loss or damage by fire or other casualty or
cause to the Assets until the Closing Date shall be upon Seller. In the event of
such loss or damage prior to the Closing Date, Seller shall use reasonable
commercial efforts to restore, replace or repair the damaged Assets in
accordance with Seller's past practices at Seller's sole cost and expense.
Except as provided in clause (b) of this Section 6.3, in the event such loss or
damage shall not be restored, replaced or repaired as of the Closing Date, Buyer
and Seller shall proceed with the Closing and Buyer shall receive at Closing a
reduction of the Purchase Price in an amount which, net of any insurance
proceeds paid by Seller to Buyer, or the value of any rights to receive
insurance proceeds which are assigned by Seller to Buyer, is sufficient to pay
for such restoration, replacement or repair.
(b) In the event that any loss or damage results in the
regular broadcast transmission of the Station (including its effective radiated
power) to be diminished in any material respect on what would otherwise be the
Closing Date, Buyer may, at its sole option, defer the Closing Date until the
Station's broadcast transmission has been resumed.
6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law, each
party will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Cooperation. Buyer and Seller shall cooperate fully with each other and
their respective counsel and accountants in connection with any actions required
to be taken as part of their respective obligations under
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this Agreement, and Buyer and Seller shall execute such other documents as may
be necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, and except as otherwise expressly
provided in this Agreement, neither Seller nor Buyer shall have any obligation
(a) to expend funds (other than their own reasonable legal fees or incidental
expenses) to obtain any of the Consents or (b) to agree to any adverse change in
any License or Assumed Contract in order to obtain a Consent required with
respect thereto.
6.6 Control of the Station. Prior to Closing except as otherwise required by
Section 6.11, Buyer shall not, directly or indirectly, control, supervise or
direct, or attempt to control, supervise or direct, the operations of the
Station; subject to the TBA, those operations, including complete control and
supervision of all of each Station's programs, employees and policies, shall be
the sole responsibility of Seller.
6.7 Title Insurance and Surveys.
6.7.1 Title Insurance on Owned Property. With respect to each
fee estate included in the Real Property Interests, Seller will obtain and
deliver to Buyer (i) as soon as practicable after the date of this Agreement, a
title commitment disclosing the condition of title to such fee estate and all
easements, rights of way, and restrictions of record with respect thereto, as of
a date not earlier than the date of this Agreement, accompanied by copies of all
instruments evidencing the scope and extent of all such easements, rights of
way, and restrictions of record, and (ii) at or prior to Closing, an ALTA
Owner's Policy of Title Insurance on a form customarily used in the State of
California, issued by a title insurer reasonably satisfactory to Buyer, in an
amount equal to the fair market value of the property and any improvements
thereon (as reasonably determined by Buyer), insuring title to such property to
be in the name of Buyer as of the Closing, subject only to Permitted Liens.
6.7.2 General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall, except to the extent that title insurers in the State of
California are not lawfully permitted to issue such policies, (i) insure title
to the property described in the policy and all recorded easements benefiting
such property, (ii) contain an "extended coverage endorsement" or similar
modification insuring over or otherwise eliminating the general exceptions
customarily contained in title policies, (iii) contain an endorsement insuring
that the property described in the policy is the same real estate shown in the
survey delivered with respect to such property, (iv) contain a "contiguity"
endorsement with respect to any property consisting of more than one record
parcel, and (v) not be subject to any survey exception or any defect or
encroachment disclosed by a survey delivered with respect to the property.
6.7.3 Surveys. With respect to each Real Property Interest as
to which a title insurance policy is to be procured pursuant to this Agreement,
Seller will obtain and deliver to Buyer as soon as practicable after the date of
this Agreement a current survey of the relevant parcel, prepared and certified
to Buyer and to the title insurer of such Real Property Interest by a licensed
surveyor and conforming to current ALTA Minimum Detail Requirements for Land
Title Surveys, disclosing the location of all improvements, easements, party
walls, sidewalks, roadways, utility lines and other matters customarily shown on
such surveys, and showing access affirmatively to public streets and roads.
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6.7.4 Associated Fees and Costs. Buyer shall be responsible
for the costs associated with obtaining the title commitments, title insurance
policies and surveys described above.
6.8 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets as agreed to by the Seller and the Buyer within 60 days of the
date hereof for purposes of Section 1060 of the Internal Revenue Code of 1986,
as amended, and Temporary Treasury Regulation Section 1.1060-1T. Buyer and
Seller agree to file with their respective federal income tax returns an initial
asset acquisition statement and any supplemental statements on Internal Revenue
Service Form 8594 required by Temporary Treasury Regulation Section 1.1060-1T,
all in accordance with and accurately reflecting the agreed upon allocation of
Purchase Price as described above.
6.9 Access to Books and Records. Seller shall provide Buyer access and the
right to copy for a period of five years from the Closing Date any books and
records relating to the Assets but not included in the Assets. Buyer shall
provide Seller access and the right to copy for a period of five years after the
Closing Date any books and records relating to the Assets that are included in
the Assets.
6.10 Purchase of Promissory Note. Contemporaneously with the Closing, Buyer
shall purchase from Keymarket of Los Angeles, Inc. that certain Promissory Note,
dated February 1, 1995, of Radio Korea, in the original principal amount of
$175,000, for a purchase price not in excess of $200,000, payable in immediately
available funds, equal to the then outstanding principal amount plus accrued and
unpaid interest as of the Closing Date.
6.11 Time Brokerage Agreement. At the option of Seller, exercisable by
providing written notice to Buyer at any time simultaneously with or after the
execution of the Agreement, Buyer and Seller will enter into a time brokerage
agreement, pursuant to which Buyer will obtain the right to broadcast on the
Station all of the programming thereon other than during a mutually agreeable
two hour period and to provide all services (and retain all revenues) relating
to the sale of advertising time on the Station. Subject to the rights retained
by the Seller as required by applicable law, including the rules and regulations
of the FCC, and a prohibition against moving the Station's main studio location
or making other than certain agreed to format changes, Buyer will exercise
complete discretion in the operation of the Station. In consideration of the
rights obtained by Buyer under the new TBA, Buyer will provide Seller with a
monthly fee of $150,000, together with monthly reimbursement of verifiable,
reasonable operating expenses of the Stations incurred by Seller. Subject to
applicable governmental requirements, the time brokerage agreement shall contain
certain other customary terms and conditions and shall include a term beginning
on a date specified by Seller, but not earlier than 10 business days after
Seller's notice to Buyer pursuant to this Section 6.11 and ending upon the
earlier of (i) the date of the closing of the transactions contemplated by this
Agreement; or (ii) the termination of this Agreement; provided, at Seller's
option following termination of this Agreement as a result of Buyer's breach,
the term of the time brokerage agreement shall not end until up to one year (as
designated by Seller) after termination of this Agreement; provided further, if
Buyer materially breaches the time brokerage agreement following termination of
this Agreement, Buyer shall pay to Seller, as liquidated damages, the sum of the
number of months which would have remained under the TBA had the TBA not been
terminated multiplied by $150,000.
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6.12 Public Announcements. The parties hereto shall consult with each other
before making any public statements with respect to this Agreement or the
transactions contemplated herein and shall not issue any press release or make
any 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 law or any listing agreement with a national securities exchange to
which Seller or Buyer (or any affiliate of Seller or Buyer) is a party 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.
6.13 FCC Compliance. Seller agrees to use commercially reasonable efforts to
correct, prior to Closing, the failure of the Station's antenna monitor and base
current ratios to be within the tolerances required by the rules and regulations
of the FCC, as referenced in Schedule 3.4 hereto. To the extent such failures
are not corrected prior to Closing, Seller shall reimburse Buyer, promptly
following receipt of a written invoice, for all out-of-pocket expenses not in
excess of $50,000 (reduced by any expenses incurred by Seller prior to Closing),
incurred by Buyer to correct such failure.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER.
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing hereunder are subject at Buyer's option to the fulfillment prior to or
at the Closing Date of each of the following conditions:
7.1.1 Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete
(without regard to materiality qualifiers contained therein) at and as of the
Closing Date as though made at and as of that time, except where the failure to
be true and complete will not have a material adverse effect on the Assets or
the business of the Station.
7.1.2 Covenants and Conditions. Seller shall have performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date, except where the failure to have performed or complied will not have a
material adverse effect on the Assets or the business of the Station.
7.1.3 Consents. All Consents shall have been obtained and
delivered to Buyer (other than any Consent required under any Contract listed on
Schedule 3.7 that is not a Material Contract), without any materially adverse
change in the terms or conditions of any Contract or any License.
25
7.1.4 FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof and Seller shall have complied with any
conditions imposed on it by the FCC Consent.
7.1.5 Governmental Authorizations. Seller shall be the holder
of all FCC Licenses and there shall not have been any modification, revocation,
or non-renewal of any License that could have an adverse effect on the Station
or the conduct of its business and operations. No proceeding shall be pending
the effect of which is reasonably likely to be to revoke, cancel, fail to renew,
suspend, or modify adversely any FCC License.
7.1.6 Title Reports and Surveys. Buyer shall have received
reasonably satisfactory title insurance commitments and surveys, as provided for
in Section 6.7.
7.1.7 Tax, Lien and Judgment Searches. Buyer shall have
received reasonably satisfactory searches for tax, lien and judgment filings in
the Secretary of State's records of California, and in the appropriate records
of the applicable counties, such searches having been made no earlier than ten
days prior to the Closing Date.
7.1.8 Deliveries. Seller shall have made all the deliveries to
Buyer described in Section 8.2.
7.1.9 Legal Proceedings. No governmental authority shall have
enacted, enforced, issued or entered any law, rule, regulation or order,
including in connection with any action or proceeding brought by a third party
(not subsequently dismissed, settled or otherwise terminated), which prohibits
or invalidates the transactions contemplated by this Agreement or prevents,
limits, restricts or impairs the ownership, use or operation of the Assets or
the Station by Buyer, other than an action or proceeding instituted by Buyer or
other than any limitation, restriction or impairing which does not have a
material adverse effect on the Assets or the business of the Station.
7.2 Conditions to Obligations of Seller. All obligations of Seller at the
Closing hereunder are subject at Seller's option to the fulfillment prior to or
at the Closing Date of each of the following conditions:
7.2.1 Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
7.2.2 Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
7.2.3 FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
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7.2.4 Deliveries. Buyer shall have made all the deliveries
described in Section 8.3.
7.2.5 Legal Proceedings. No governmental authority shall have
enacted, enforced, issued or entered any law, rule, regulation or order,
including in connection with any action or proceeding brought by a third party
(not subsequently dismissed, settled or otherwise terminated), which prohibits
or invalidates the transactions contemplated by this Agreement.
ARTICLE VIII
CLOSING AND CLOSING DELIVERIES.
8.1 Closing.
8.1.1 Closing Date.
(a) Except as provided below in this Section or as otherwise
agreed to by Buyer and Seller, the Closing shall take place at 10:00 a.m. on a
date, to be set by Buyer on at least ten business days' written notice to
Seller, which shall be not earlier than the first business day after the FCC
Consent is granted and not later than the tenth business day after the FCC
Consent is granted.
(b) If any event occurs that prevents signal transmission by
the Station in the normal and usual manner and Seller cannot restore the normal
and usual transmission before the date on which the Closing would otherwise
occur pursuant to this Section 8.1.1, and this Agreement has not been terminated
under Article IX, the Closing shall be postponed until a date within the
effective period of the FCC Consent (as it may be extended pursuant to Buyer's
and Seller's reasonable efforts) to allow Seller to restore the normal and usual
transmission. If the Closing is postponed pursuant to this paragraph, the date
of the Closing shall be mutually agreed to by Seller and Buyer, but no later
than the tenth business day after the restoration of the normal and usual
transmission of the Station's signal.
(c) If there is in effect on the date on which the Closing
would otherwise occur pursuant to this Section 8.1.1 any judgment, decree or
order that would prevent or make unlawful the Closing on that date, the Closing
shall be postponed until a date within the effective period of the FCC Consent
(as it may be extended pursuant to Buyer's and Seller's reasonable efforts), to
be agreed upon by Buyer and Seller, when such judgment, decree, or order no
longer prevents or makes unlawful the Closing. If the Closing is postponed
pursuant to this paragraph, the date of the Closing shall be mutually agreed to
by Seller and Buyer, but no later than the tenth business day following the date
when the Closing is no longer prevented or unlawful.
8.1.2 Closing Place. The Closing shall be held at the offices
of Xxxxxxxx Communications, Inc., 0000 X. 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, or any other place that is agreed upon by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall deliver
to Buyer the following, in form and substance reasonably satisfactory to Buyer
and its counsel:
8.2.1 Conveyancing Documents. Duly executed warranty deeds,
bills of sale, motor vehicle titles, assignments, and other transfer documents
that are sufficient to vest good and marketable title
27
to the Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims and obligations except for Permitted Liens;
8.2.2 Officer's Certificate.
(a) A certificate, dated as of the Closing Date, executed on
behalf of Seller by an officer of Seller, certifying: (i) that the
representations and warranties of Seller contained in this Agreement are true
and complete (without regard to materiality qualifiers contained herein) as of
the Closing Date as though made on and as of that date, and (ii) that Seller has
performed and complied with all of its obligations, covenants and agreements in
this Agreement to be performed and complied with on or prior to the Closing
Date, except, in either case, where such failure does not have a material
adverse effect on the Assets or the business of the Station;
(b) A certificate, dated as of the Closing Date, executed on
behalf of Xxxxxxxx Communications, Inc. ("Parent") by an officer of Parent,
certifying that the representations and warranties of Parent contained in this
Agreement are true and complete (without regard to materiality qualifiers
contained herein) as of the Closing Date as though made on and as of that date,
except where such failure does not have a material adverse effect on the Assets
or the business of the Station.
8.2.3 Secretary's Certificate.
(a) A certificate, dated as of the Closing Date, executed by
Seller's Secretary: (i) certifying that the resolutions, as attached to such
certificate, were duly adopted by Seller's Board of Directors and shareholders
(if required), authorizing and approving the execution of this Agreement and the
consummation of the transaction contemplated hereby and that such resolutions
remain in full force and effect; and (ii) providing, as attachments thereto, the
Articles of Incorporation of Seller and a Certificate of Good Standing for
Seller certified by an appropriate California state official certified by such
state official as of a date not more than ten days before the Closing Date and
by Seller's Secretary as of the Closing Date, and a copy of Seller's Bylaws as
in effect on the date thereof, certified by Seller's Secretary as of the Closing
Date;
(b) A certificate, dated as of the Closing Date, executed by
Parent's Secretary certifying that the resolutions, as attached to such
certificate, were duly adopted by Parent's Board of Directors authorizing and
approving the execution of this Agreement and the consummation of the
transaction contemplated hereby and that such resolutions remain in full force
and effect.
8.2.4 Consents. Manually executed copies of instrument
evidencing receipt of all of the Consents which have been obtained prior to the
Closing; and
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8.2.5 Licenses, Contracts and Business Records. Originals or,
if not available, copies of all Licenses, including any modifications and
amendments thereto, and all applications, reports, technical information, and
engineering studies relating to the Station and all files required by the FCC to
be maintained by Seller, all Contracts, and other operational data or other
information maintained by Seller in the ordinary course, all blueprints,
schematics, working drawings, plans, projections, statistics and engineering
records relating to the Station, and all other business files and records in the
possession of Seller or any of its Affiliates relating to the Station.
8.2.6 UCC Report. A report dated not more than ten (10) days
prior to the Closing Date of the appropriate filing officers in the applicable
jurisdictions evidencing no judgments, financing statements, tax liens,
mechanics', materialmen's or other statutory liens, except for Permitted Liens,
on file with respect to the Assets, and, if such report evidences that
judgments, financing statements, tax liens, mechanics', materialmen's or other
statutory liens are on file with respect to any of the 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.
8.2.7 Other Documents. Such other documents to be delivered by
Seller hereunder as are reasonably necessary for Buyer to effectuate and
document the transactions contemplated hereby.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall deliver to
Seller the following, in form and substance reasonably satisfactory to Seller
and its counsel:
8.3.1 Closing Payment. The payment described in Section
2.4.1;
8.3.2 Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying (i)
that the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though made
on and as of that date, and (ii) that Buyer has in all material respects
performed and complied with all of its obligations, covenants and agreements in
this Agreement to be performed and complied with on or prior to the Closing
Date;
8.3.3 Secretary's Certificate. A certificate, dated as of the
Closing Date, executed by Buyer's Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by Buyer's Board
of Directors, authorizing and approving the execution of this Agreement and the
consummation of the transaction contemplated hereby and that such resolutions
remain in full force and effect; and (ii) providing, as attachments thereto,
Buyer's Certificate of Incorporation and a Certificate of Good Standing
certified by an appropriate Delaware state official and by Buyer's Secretary as
of the Closing Date, and a copy of Buyer's Bylaws as in effect on the date
thereof, certified by Buyer's Secretary as of the Closing Date; and
8.3.4 Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations under the Licenses and Assumed Contracts to the extent provided in
Section 2.4.3;
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8.3.5 Other Documents. Such other documents to be delivered by
Buyer hereunder as are reasonably necessary for Seller to effectuate and
document the transactions contemplated hereby.
ARTICLE IX
TERMINATION.
9.1 Termination by Seller. This Agreement may be terminated by Seller and
the exchange and transfer of the Station abandoned, if Seller is not then in
material default, upon written notice to Buyer, upon the occurrence of any of
the following:
9.1.1 Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement has not been satisfied or waived in writing by Seller;
9.1.2 Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing; or
9.1.3 Dropdead Date. If the Closing shall not have occurred
on or prior to the first anniversary of the date hereof.
9.2 Termination by Buyer. This Agreement may be terminated by Buyer and the
exchange and transfer of the Station abandoned, if Buyer is not then in material
default, upon written notice to Seller, upon the occurrence of any of the
following:
9.2.1 Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement has not been satisfied or waived in writing by Buyer;
9.2.2 Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing;
9.2.3 Interruption of Service. If any event occurs that (i)
takes the Station off-the-air for a period of thirty days or more, or (ii)
prevents a signal transmission by the Station in the normal and usual manner for
a period of thirty or more days after the date of this Agreement;
9.2.4 Dropdead Date. If the Closing shall not have occurred
on or prior to the first anniversary of the date hereof.
9.3 Rights on Termination. If this Agreement is terminated by Buyer due to
Seller's material breach of any provision of this Agreement, Buyer shall have
all rights and remedies available at law or equity, including the remedy of
specific performance described in Section 9.4 below, but shall in a suit for
damages be limited to actual damages and shall not be entitled to consequential,
incidental or similar damages. If this Agreement is terminated by Seller due to
Buyer's material breach of any provision of this Agreement, Seller shall be
30
entitled to receive as liquidated damages the Escrow Deposit, together with all
interest or other proceeds from the investment thereof, less any compensation
due the Escrow Agent. If this Agreement is terminated other than by Seller due
to Buyer's material breach, Buyer shall be entitled to the immediate return of
the Escrow Deposit, together with all interest or other proceeds from the
investment thereof, less any compensation due the Escrow Agent.
9.4 Specific Performance. The parties recognize that if Seller breaches this
Agreement and refuses to perform under the provisions of this Agreement,
monetary damages alone would not be adequate to compensate Buyer for its injury.
Buyer shall therefore be entitled, in addition to any other remedies (subject to
the limitations of Section 9.3) that may be available, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer to
enforce this Agreement, Seller shall waive the defense that there is an adequate
remedy at law.
9.5 Liquidated Damages. If this Agreement is terminated by Seller pursuant
to Section 9.1 hereof due to a material breach by Buyer of any provision of this
Agreement, then the amount of the Escrow Deposit, together with all interest or
other proceeds from the investment thereof, less any compensation due the Escrow
Agent, shall be paid to Seller as liquidated damages, it being agreed that such
amount shall constitute full payment for any and all damages suffered by Seller
by reason of Buyer's failure to consummate the transaction contemplated by this
Agreement to occur at the Closing. Buyer and Seller agree in advance that actual
damages would be difficult to ascertain and that the amount then comprising the
Escrow Deposit is a fair and equitable amount to reimburse Seller for damages
sustained due to Buyer's failure to consummate this Agreement at the Closing for
the above-stated reason.
9.6 Attorneys' Fees. In the event of a default by either party that results
in a lawsuit or other proceeding for any remedy available under this Agreement,
the prevailing party shall be entitled to reimbursement from the other party of
its reasonable legal fees and expenses (whether incurred in arbitration, at
trial, or on appeal).
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.
10.1 Survival. Without prejudice to representations and warranties in other
agreements delivered hereunder, all representations and warranties of Buyer and
Seller herein and all covenants of Buyer and Seller herein with respect to
periods prior to Closing shall be deemed continuing representations, warranties
and covenants, and shall survive the Closing for a period of one (1) year. Any
investigations by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty, or covenant contained in this
Agreement. No notice or information delivered by either party shall affect the
other party's right to rely on any representation, warranty, or covenant made by
such party or relieve such party of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
31
10.2 Indemnification by Seller. After the Closing, and regardless of any
investigation made at any time by or on behalf of Buyer or any information Buyer
may have, but subject to Section 10.5, Seller hereby agrees to indemnify and
hold Buyer harmless against and with respect to, and shall reimburse Buyer for:
10.2.1 Any and all losses, liabilities, or damages (other than
consequential, incidental or similar damages) resulting from any untrue
representation, breach of warranty, or nonfulfillment of any covenant by Seller
contained in this Agreement or in any certificate, document, or instrument
delivered to Buyer under this Agreement;
10.2.2 Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement;
10.2.3 Any loss, liability, obligation, or damages (other than
consequential, incidental or similar damages) resulting from the failure of the
parties to comply with the provisions of any bulk sales law applicable to the
transfer of the Assets;
10.2.4 Any and all losses, liabilities, or damages (other than
consequential, incidental or similar damages) resulting from the operation or
ownership of the Station prior to the Closing, including any liabilities arising
under the Licenses or the Assumed Contracts that relate to events occurring
prior to the Closing Date; and
10.2.5 Any and all out-of-pocket costs and expenses, including
reasonable legal fees and expenses, incident to any action, suit, proceeding,
claim, demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Subject to Section 10.5, notwithstanding the
Closing, Buyer hereby agrees to indemnify and hold Seller harmless against and
with respect to, and shall reimburse Seller for:
10.3.1 Any and all losses, liabilities, or damages (other than
consequential, incidental or similar damages) resulting from any untrue
representation, breach of warranty, or nonfulfillment of any covenant by Buyer
contained in this Agreement or in any certificate, document, or instrument
delivered to Seller under this Agreement;
10.3.2 Any and all obligations of Seller expressly assumed by
Buyer pursuant to this Agreement;
10.3.3 Any and all losses, liabilities, or damages (other than
consequential, incidental or similar damages) resulting from the operation or
ownership of the Station on or after the Closing Date; and
10.3.4 Any and all out-of-pocket costs and expenses, including
reasonable legal fees and expenses, incident to any action, suit, proceeding,
claim, demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
32
10.4 Procedure for Indemnification. The procedure for indemnification shall
be as follows:
10.4.1 The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within ten
business days after written notice of such action, suit, or proceeding was given
to Claimant; provided, any delay in providing any notice required by this
Section 10.4.1 shall relieve the Indemnifying Party from liability only if, and
to the extent, such delay materially and adversely impacts the rights of the
Indemnifying Party.
10.4.2 With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed upon
extension thereof) to the validity and amount of such claim, the Indemnifying
Party shall immediately pay to the Claimant the full amount of the claim. If the
Claimant and the Indemnifying Party do not agree within the thirty-day period
(or any mutually agreed upon extension thereof), the Claimant may seek
appropriate remedy at law or equity.
10.4.3 With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in or
assume control of the defense of such claim, and the Claimant shall cooperate
fully with the Indemnifying Party, subject to reimbursement for actual
out-of-pocket expenses incurred by the Claimant as the result of a request by
the Indemnifying Party, provided, however, that Indemnifier may not assume
control of the defense unless it affirms in writing its obligation to indemnify
Claimant for any damages incurred by Claimant with respect to such third-party
claim. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any
third-party claim, it shall be bound by the results obtained in good faith by
the Claimant with respect to such claim.
10.4.4 If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
10.4.5 The indemnifications rights provided in Section 10.2
and Section 10.3 shall extend to the members, partners, shareholders, officers,
directors, employees, representatives and affiliated entities of any Claimant
although for the purpose of the procedures set forth in this Section 10.4, any
indemnification claims by such parties shall be made by and through the
Claimant.
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10.5 Certain Limitations. Notwithstanding anything in this Agreement to the
contrary, neither party shall indemnify or otherwise be liable to the other
party with respect to any claim for any breach of a representation or warranty,
or for the breach of any covenant contained in this Agreement, (a) unless notice
of the claim is given within one (1) year after the Closing Date, and (b) except
to the extent actual damages for all such claims by such party exceed $35,000
(provided the threshold set forth in clause (b) of this Section 10.5 shall not
apply to indemnification claims relating to any failure by Seller to comply with
its covenant set forth in Section 6.14 hereof).
ARTICLE XI
MISCELLANEOUS.
11.1 Fees and Expenses.
11.1.1 Seller shall pay any filing fees, transfer taxes,
document stamps, or other charges levied by any governmental entity on account
of the transfer of the Assets from Seller to Buyer.
11.1.2 Buyer and Seller shall each pay one-half of any fees
charged (i) by the FCC in connection with obtaining the FCC Consent, and (ii) in
connection with the HSR Filing.
11.1.3 Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution and performance of this Agreement, including all fees and
expenses of counsel, accountants, agents and representatives. Buyer shall be
responsible for all fees or commissions payable to the Xxx Xxxxxxx Company and
to Xxxxxxx Xxxxxxxx, Inc.
11.2 Notices. All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be (i) in writing, (ii) sent
by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (iii) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (iv) addressed
as follows:
34
To Seller:
----------
Xxxxxxxx Radio of Los Angeles, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telecopy:(000) 000-0000
Telephone:(000) 000-0000
with a copy Xxxxxxxx Communications, Inc.
(which shall 0000 X. 00xx Xxxxxx
not constitute Xxxxxxxxx, XX 00000
notice) to: Attn: General Counsel
Telecopy:(000) 000-0000
Telephone:(000) 000-0000
To Seller:
----------
Radio Unica Corp.
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy:(000) 000-0000
Telephone:(000) 000-0000
with a copy to: Xxxx Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Telecopy:(000) 000-0000
Telephone:(000) 000-0000
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
11.3 Benefit and Assignment.
(a) Except as hereinafter specifically provided in this
Section 11.3, no party hereto shall assign this Agreement, in whole or in part,
whether by operation of law or otherwise, without the prior written consent of
Seller (if the assignor is Buyer) or Buyer (if the assignor is Seller) and any
purported assignment contrary to the terms hereof shall be null, void and of no
force and effect. Buyer shall have the right to assign this Agreement to any
entity or entities controlling, controlled by, or under common control with
Buyer so long as any such assignment will not delay the Closing beyond the date
on which any Closing would otherwise occur in accordance with this Agreement;
provided, however, that no such assignment by Buyer
35
shall release Buyer from its obligations hereunder. Any assignment in accordance
with the terms hereof shall become effective upon delivery of written notice in
accordance with Section 11.2.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the parties hereto is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
11.4 Further Assurances. The parties shall take any actions and execute any
other documents that may be necessary or desirable to the implementation and
consummation of this Agreement.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF MARYLAND (WITHOUT REGARD TO THE
CHOICE OF LAW PROVISIONS THEREOF).
11.6 Entire Agreement. This Agreement, the Schedules hereto, and all
documents, certificates and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter of this Agreement.
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and that is signed by each of the
parties hereto.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent breach or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
11.9 Severability. If any part of any provision of this Agreement or any
other contract, agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said contract, agreement,
document or writing.
11.10 Headings. The headings of the sections and subsections contained in
this Agreement are inserted for convenience only and do not form a part or
affect the meaning, construction or scope thereof.
36
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer and Seller as of the date first written above.
XXXXXXXX RADIO OF RADIO UNICA CORPORATION
LOS ANGELES, INC.
By:/s/ Xxxxx X. Xxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------- --------------------------------
Name: Xxxxx Xxx Name: Xxxxxx X. Xxxxxx
Title: Secretary/Treasurer Title: Chief Financial Officer
XXXXXXXX RADIO OF
LOS ANGELES LICENSEE, INC.
By:/s/ Xxxxx X. Xxx
----------------------------
Name: Xxxxx Xxx
Title: Secretary/Treasurer
As a material inducement for Buyer to enter into this Asset
Purchase Agreement and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxxxx Communications, Inc., a
Delaware corporation ("Parent") and the direct or indirect parent of Seller,
hereby joins in and agrees to be bound by the provisions of the Asset Purchase
Agreement as they relate to Seller. In addition, Parent acknowledges and agrees
that (i) any claim of Buyer arising under the Asset Purchase Agreement or under
any other documents called for thereunder (the "Other Documents") may be
asserted against Parent and (ii) Parent shall be jointly and severally liable
under the Asset Purchase Agreement and the Other Documents for any default in
the performance of the obligations of Seller under such documents or for the
breach by Seller of any representation, warranty, covenant or agreement
contained in such documents to the extent of Seller's liability.
Parent represents and warrants to Buyer as follows: (a) Parent
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware; (b) Parent has all requisite power and authority
to execute and deliver this Asset Purchase Agreement and to consummate the
transactions contemplated hereby; (c) the execution, delivery and performance of
this Asset Purchase Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate proceedings on the part of Parent and no other corporate proceedings
or actions on the part of Parent, its board of directors or its shareholders is
necessary therefor; and (d) this Asset Purchase Agreement constitutes a valid
and binding agreement and obligation of Parent, enforceable in accordance with
its terms.
Xxxxxxxx Communications, Inc.
By: /s/ Xxxxx X. Xxx
-------------------------
Name: Xxxxx X. Xxx
Title: Secretary
37
