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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 2, 1999
JONES INTERNATIONAL NETWORKS, LTD.
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(Exact name of registrant as specified in its charter)
COLORADO 333-62077 84-1470911
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(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
9697 E. MINERAL AVENUE, ENGLEWOOD, CO 80112
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(Address of principal executive office and Zip Code)
Registrant's telephone number, including area code (303) 792-3111
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Item 5. OTHER EVENTS.
On August 2, 1999, Jones International Networks, Ltd. (the
"Company"), acquired from Broadcast Electronics, Inc., a Rhode Island
corporation ("BEI"), BEI's radio programming business conducted through its
Broadcast Programming Division ("BP"), which includes, but is not limited to,
the following programs: Delilah-Registered Trademark-, Neon Nights-Registered
Trademark- with Lia Knight and BP's TotalRadio-SM- music format services for a
total purchase price, as adjusted, of approximately $20,860,000 (the "BP
Acquisition"). The purchase price was paid in cash. In connection with the BP
Acquisition, the Company borrowed $20 million from Bank of America, N.A. due
on June 30, 2000 (the "Loan"). In order to assist the Company in obtaining
favorable financing terms for the Loan, Jones International, Ltd. has
guaranteed the Loan and provided certain collateral as security for the
guaranty.
BP serves approximately one thousand radio stations in the U.S. and
abroad. The Delilah Show is heard nightly via satellite from 7 PM to Midnight
on nearly 200 Adult Contemporary radio stations across North America. Neon
Nights with Lia Knight, BP's seven to midnight Country show, reaches 60
markets. TotalRadio provides some 700 stations with a menu of services
ranging from weekly new hit music to fully voice tracked "virtual" formats in
all music categories and full-service consulting.
Upon the closing, the Company entered into employment agreements
with two key BP employees, Ms. Edith Hilliard and Mr. James LaMarca. The
Company also entered into an agreement with BEI to represent BEI in the sale
or lease of certain BEI electronic equipment to radio stations which also
take BP programming.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2.1 Agreement of Broadcast Electronics, Inc., BEI Holding
Corporation and the Company dated as of June 15,
1999.
10.1 Revolving Credit Facility dated as of July 29, 1999 between
Bank of America, N.A. and the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JONES INTERNATIONAL
NETWORKS, LTD.
Dated: August 6, 1999 By: /s/ Jay B. Lewis
----------------------
Jay B. Lewis
Group Vice President
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AGREEMENT
OF
BROADCAST ELECTRONICS, INC.,
BEI HOLDING CORPORATION
AND
JONES INTERNATIONAL NETWORKS, LTD.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Sale of Assets to Jones..............................................................1
Assumption of Certain Obligations and Liabilities....................................2
Excluded Assets and Liabilities......................................................3
Purchase Price.......................................................................4
The Purchase Price Adjustment........................................................4
Purchase Price Allocation............................................................5
Certain Taxes........................................................................5
Nonassignable Contracts..............................................................5
2. Representation, Warranties, and Covenants of BEI.....................................6
Due Organization; The Radio Programming Business; Authority..........................6
Subsidiaries or Affiliates...........................................................7
Financial Statements.................................................................7
Title to Properties; Liens; Condition of Properties..................................8
Governmental Authority; Compliance With Law..........................................9
Taxes................................................................................9
Contracts and Agreements............................................................10
Insurance and Bonds.................................................................11
Labor, Benefit, Employment Agreements, ERISA and Employees..........................11
Litigation and Disputed Items.......................................................12
Accounts Receivable.................................................................12
No Violation of Other Instruments...................................................13
Brokerage Commissions...............................................................13
Governmental Approvals..............................................................13
Transactions with Affiliates........................................................13
Books and Records...................................................................14
Intellectual Property...............................................................14
Libraries and Programs..............................................................14
Distribution........................................................................14
Correctness of Representations and Warranties.......................................14
Operations from Date of Latest Financial Statements to Date of this Agreement.......15
3. [Deliberately Omitted]..............................................................16
4. Representations, Warranties and Covenants of Jones..................................16
Due Organization; Capitalization; Articles and Bylaws; Authority....................16
Brokerage Commissions...............................................................16
No Violation of Other Instruments...................................................16
</TABLE>
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<TABLE>
<S> <C>
Governmental Approvals..............................................................17
Correctness of Representations and Warranties.......................................17
Available Funds.....................................................................17
5. Covenants and Agreements of BEI.....................................................17
Access..............................................................................17
Satisfaction of Conditions..........................................................17
Operations Prior to the Closing.....................................................18
Bulk Sales Law Compliance...........................................................20
Updated Schedules...................................................................20
Certain Financial Statement Matters.................................................20
6. Covenants and Agreements of the Shareholder and BEI.................................21
7. Covenants and Agreements of Jones...................................................21
Satisfaction of Conditions..........................................................21
Employment Offers...................................................................21
Agent Agreement.....................................................................21
401(k) Plan Matters.................................................................21
Digilease Collections...............................................................22
8. Conditions to Obligations of BEI and the Shareholder................................22
Accuracy of Representations, Warranties and Covenants...............................22
Absence of Litigation...............................................................23
Validity of Transactions............................................................23
Hart-Scott-Rodino Waiting Period....................................................23
Closing Deliveries..................................................................23
9. Conditions to Obligations of Jones..................................................23
Accuracy of Representations, Warranties and Covenants...............................23
Absence of Litigation...............................................................24
Validity of Transactions............................................................24
No Material Adverse Change, Officers'Certificate....................................24
Hart-Scott-Rodino Waiting Period....................................................24
Consents and Lien Terminations; Assets Free and Clear...............................24
Extension of Employment Agreement with Delilah......................................24
Comfort Letter......................................................................25
Closing Deliveries..................................................................25
10. The Closing.........................................................................25
11. Survival of Representations and Warranties..........................................26
</TABLE>
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<TABLE>
<S> <C>
12. Expenses............................................................................26
13. Termination.........................................................................26
14. Indemnification.....................................................................27
By BEI..............................................................................27
By the Shareholder..................................................................27
By Jones............................................................................27
Procedure...........................................................................28
Exclusive Remedy....................................................................29
15. Notices.............................................................................29
16. Miscellaneous.......................................................................30
Counterparts........................................................................30
Entire Agreement, No Waiver.........................................................30
Headings............................................................................31
Schedules and Exhibits as Part of Agreement.........................................31
Use of the Plural, etc..............................................................31
Assignment..........................................................................31
Governing Law.......................................................................31
Publicity...........................................................................31
Further Assurances..................................................................32
No Third Party Beneficiaries........................................................32
</TABLE>
EXHIBITS:
A. Purchase Price Allocation
B-1,2. Employment Agreements
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AGREEMENT
This Agreement, dated as of June 15, 1999 (the "Agreement"), is
between and among BROADCAST ELECTRONICS, INC., a Rhode Island corporation
("BEI"), its sole shareholder BEI HOLDING CORPORATION, a Delaware corporation
(the "Shareholder"), and JONES INTERNATIONAL NETWORKS, LTD., a Colorado
corporation ("Jones"). References in this Agreement to BEI shall mean BEI,
its subsidiaries and affiliates.
RECITALS
(a) BEI conducts a radio programming business through its Broadcast
Programming Division. BEI is wholly-owned by the Shareholder.
(b) Jones desires to acquire certain assets and assume certain
liabilities of BEI's Broadcast Programming Division and BEI and the
Shareholder desire to sell such assets and transfer such liabilities to
Jones, all on the terms and conditions hereinafter set forth.
Now, therefore, in consideration of the premises and the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree
as follows:
1. SALE OF ASSETS TO JONES.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined in Section 9) BEI agrees to sell and
deliver to Jones and Jones agrees to acquire from BEI all of the assets and
properties of the Broadcast Programming Division of BEI (the "Division"),
whether real, personal, tangible or intangible as the same may exist on the
date hereof, and all additions thereto on and after the date hereof through
and including the Closing Date (as defined in Section 9) but less (i) any
permitted dispositions thereof between the date of this Agreement and the
Closing Date, and (ii) the "Excluded Assets" as defined in Section l(c). Such
assets and properties to be sold and delivered are referred to hereinafter as
the "Assets," which shall include without limitation the following:
(i) All prepaid expenses and security deposits (the "Prepaid
Expenses") (except for prepaid expenses or premiums relating to
insurance policies);
(ii) Subject to Section 1(h) below, all contracts, contract
rights, talent agreements, programming agreements, radio affiliate
agreements, agreements to provide services to third parties and all
other agreements and arrangements, whether similar or dissimilar (the
"Contracts") (it being acknowledged and agreed
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that, with respect to the Contracts listed in Schedule 7(e), BEI shall
only transfer, and Jones shall only accept and assume, those rights
and obligations that relate to the providing of formatting services or
that are otherwise solely performed by the Division and shall not
accept and assume any obligations with respect to equipment furnished
by BEI);
(iii) All customer, advertiser and radio station affiliate
lists;
(iv) All furniture, fixtures, leasehold improvements,
computer hardware, computer software and websites;
(v) All interests in and to any leased real property;
(vi) All rights in and to all radio programming, all
Intellectual Property (as defined in Section 2(q)) and goodwill;
(vii) All accounts receivable (the "Accounts Receivable");
(viii) All music libraries, radio program libraries, video
libraries and production test equipment (the "Inventory");
(ix) All files, data, books and records related to or with
respect to the Division and the Assets; and
(x) All rights in and to the names "Broadcast Programming",
"Broadcast Programming Division", "Delilah" and "Delilah After Dark",
as well as the Internet names Delilah, Nashville Nights, Neon Nights
and all other Internet names listed on Schedule 1(a)(x), and any
derivations from or variations thereof.
(b) ASSUMPTION OF CERTAIN OBLIGATIONS AND LIABILITIES. On the terms
and subject to the conditions set forth in this Agreement at the Closing,
Jones shall assume and agree to pay, discharge and perform when due all of
the listed (but not any unknown or contingent) liabilities and obligations of
the Division, except those which are specifically hereinafter excluded from
assumption by the terms of this Agreement. Such assumed liabilities are
hereafter referred to as the "Assumed Liabilities". The Assumed Liabilities
shall consist of the following:
(i) CUSTOMER ADVANCES. All liabilities of the Division for any
amounts advanced to the Division by customers of the Division as of the
date hereof and arising in the ordinary course of the business of the
Division between the date hereof and the Closing ("Customer Advances").
A schedule of the Customer Advances as of March 31, 1999 is set forth
on Schedule 1b(i) hereto;
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(ii) CONTRACTS AND LEASED REAL PROPERTY. All liabilities and
obligations of the Division in respect of the Contracts, including that
Asset Purchase Agreement between Astro Communications, LLC and
Broadcast Electronics, Inc. dated December 19, 1996 regarding the
program entitled "Delilah After Dark" hosted by Delilah Rene Ortega
(the "Astro Agreement"), and the Leased Real Property and all other
contracts and agreements of BEI that relate to the Division arising in
the ordinary course of the business of the Division between the date
hereof and the Closing; and
(iii) EMPLOYEE RELATED LIABILITIES. All liabilities and
obligations of the Division existing as of the Closing for accrued but
unpaid vacation and sick leave with respect to the employees of the
Division (the "Employee Related Liabilities").
(c) EXCLUDED ASSETS AND LIABILITIES. Notwithstanding Section 1(a),
BEI will retain, and Jones will not purchase or acquire, any other assets of
BEI, or any rights with respect to, which do not constitute the Assets,
including, without limitation, the following (the "Excluded Assets"):
EXCLUDED ASSETS:
(i) All cash and cash equivalents.
(ii) Any and all contracts, plans, contributions, funds or
trusts arising out of or related to any pension plan, deferred
compensation plan, profit sharing plan, 401(k) plan, or other employee
benefit plan or arrangement.
(iii) Minute Books of BEI.
(iv) Proceeds of any litigation.
(v) Any tax refund.
(vi) All rights of BEI in and to any insurance policies.
(vii) All furniture, equipment, computer hardware, software
and all other personal property located on the premises of the Division
and used exclusively by BEI's customer sales and service employees, all
as set forth in Schedule 1(c)(vii).
(viii) Any receivable with respect to so-called "digilease"
transactions.
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EXCLUDED LIABILITIES: Notwithstanding Section 1(b), BEI will retain,
and Jones will not assume, any other liabilities or obligations of BEI
which do not constitute the Assumed Liabilities, including, without
limitation, the following (the "Excluded Liabilities"):
(i) Except for the Employee Related Liabilities, any
liability or obligation whatsoever, whether fixed or contingent, that
arises out of, or relates in any way to, any pension plan, profit
sharing plan, 401(k) plan or other employee benefit, including any
deferred compensation, vacation or health care arrangement.
(ii) Any undisclosed or contingent liability of any kind,
nature or description.
(iii) Any tax liability or tax-related liability of any
kind, nature or description.
(iv) Any liability or responsibility to provide any
COBRA coverage or notices under Part 6 of Title I of ERISA.
(v) Any liability with respect to any litigation, whether or
not disclosed.
(vi) All accounts payable, loans payable and notes payable
(including any inter-company payable regarding so-called "digilease"
transactions).
(vii) Any liability with respect to BEI equipment provided to
radio stations in "digilease"-type transactions.
(d) PURCHASE PRICE. The purchase price payable to BEI for the Assets
shall be twenty million dollars ($20,000,000) plus or minus the "Purchase Price
Adjustment" (as hereinafter defined). The purchase price, as so adjusted, shall
be paid at the Closing in cash.
(e) THE PURCHASE PRICE ADJUSTMENT. At the Closing, the Purchase Price
shall be adjusted as follows (the "Purchase Price Adjustment").
(i) The Purchase Price shall be decreased by the amount equal
to the sum of any amounts in respect of Customer Advances, Employee
Related Liabilities and $897,000 (less any amount or amounts paid prior
to the Closing by BEI pursuant to, and according to the terms of, the
Astro Agreement) with respect to the Astro Agreement (the "Agreed Astro
Payment"), and reflected on Schedule 1(e)(i), which Schedule 1(e)(i)
shall be updated no later than five (5) days prior to
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the Closing and shall be prepared on a basis consistent with
Schedule 1(e)(i). Any amount payable after the Closing with respect
to the Astro Agreement in excess of the Agreed Astro Payment shall
be the responsibility of Jones.
(ii) The Purchase Price shall be increased by the amount equal
to the sum of any amounts in respect of Accounts Receivable, Inventory
and Prepaid Expenses, all as reflected on Schedule 1(e)(ii), which
Schedule 1(e)(ii) shall be updated no later than five (5) days prior to
the Closing and shall be prepared on a basis consistent with Schedule
1(e)(ii).
At the Closing, Jones shall pay the amount of Accounts Receivable
set forth in Schedule 1(e)(ii), less the allowance for certain specific
accounts shown on such Schedule which are not likely to be collected in the
regular course. If the entire net amount of the Accounts Receivable as set
forth on such Schedule is not collected within one-hundred fifty (150) days
after the Closing, Jones shall be entitled to collect the entire shortfall
(the "Receivables Shortfall") from BEI and BEI agrees to pay the Receivables
Shortfall within ten (10) days after notice from Jones. The foregoing
obligation of BEI to pay the Receivables Shortfall shall not be subject to,
or in any way limited by, Section 14 of this Agreement. Upon receiving
payment from BEI, Jones shall assign the uncollected accounts to BEI and
shall execute any assignment documents as are necessary to effectuate such
assignment. Any aggregate amount collected by Jones in excess of the amount
paid by Jones at Closing in respect of the acquired Accounts Receivable shall
be remitted to BEI not less than one hundred sixty (160) days after Closing.
(f) PURCHASE PRICE ALLOCATION. Exhibit A hereto sets forth the
agreed-upon allocation of the purchase price (exclusive of the Purchase Price
Adjustment) to the various Assets. The parties agree to provide an updated
Exhibit A after the Closing, in order to reflect the effect, if any, of the
Purchase Price Adjustment on such allocation. The parties also agree to
report consistently with Exhibit A for federal and applicable state income
tax purposes.
(g) CERTAIN TAXES. Any sales, use, transfer or documentary taxes
imposed in connection with the sale and delivery of the Assets under this
Agreement shall be borne and paid equally by BEI and Jones.
(h) NONASSIGNABLE CONTRACTS.
(i) NONASSIGNABILITY. To the extent that any Contract to be
assigned pursuant hereto is not capable of being assigned without the
consent, approval or
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waiver of a third person or entity, nothing in this Agreement will
constitute an assignment or require the assignment thereof except to
the extent provided in this Section 1(h).
(ii) BEI TO USE ALL COMMERCIALLY REASONABLE EFFORTS.
Notwithstanding anything contained in this Agreement to the contrary,
BEI will not be obligated to assign to Jones any of its rights and
obligations in and to any of the Contracts referred to in Section 1(a)
without first having obtained all consents, approvals and waivers
necessary for such assignment; provided, however, that BEI shall use
all commercially reasonable efforts to obtain all such consents,
approvals and waivers prior to and, if the Closing occurs, after the
Closing.
(iii) IF WAIVERS OR CONSENTS CANNOT BE OBTAINED. If the
Closing occurs, to the extent that the consents, approvals and waivers
referred to above were not obtained by BEI, BEI shall use all
commercially reasonable efforts to provide to Jones the financial and
business benefits of any Contract and enforce, at the request and
expense of Jones, for the account of Jones, any rights of BEI arising
from any such Contract (including without limitation the right to elect
to terminate such Contract in accordance with the terms thereof upon
the advice of Jones).
(iv) NO AFFECT ON CLOSING CONDITIONS. Nothing in this Section
1(h) shall alter, amend or be deemed a waiver by any party of any of
the conditions to Closing set forth in Section 9 of this Agreement.
2. REPRESENTATION, WARRANTIES, AND COVENANTS OF BEI.
BEI hereby represents, warrants and covenants to and with Jones as
follows:
(a) DUE ORGANIZATION; THE RADIO PROGRAMMING BUSINESS; AUTHORITY.
(i) BEI is a corporation duly organized, validly existing and
in good standing under the laws of Rhode Island. BEI has full corporate
power and authority to own, lease and operate the Division and conduct
the business of the Division as presently being conducted. BEI is duly
qualified to do business as a foreign corporation and is in good
standing in all jurisdictions except where the failure to be so
qualified would not have a material adverse effect on the business or
financial condition of the Division.
(ii) BEI conducts its radio programming business only through
the Division, and the Assets and the Excluded Assets constitute all of
the assets of such business and the Division. There are no radio
programming assets of any
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kind which are owned or controlled by BEI which are not part of the
Assets, except for the Excluded Assets. Upon the Closing, Jones will
acquire the entire radio programming business of the Division, except
for the Excluded Assets.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated thereby have been duly
authorized by the board of directors and the shareholder of BEI, and no
other corporate or other proceedings on the part of BEI are necessary
to authorize the Agreement and the transactions contemplated thereby.
Assuming this Agreement constitutes a valid and binding obligation of
Jones, this Agreement constitutes the valid and binding agreement of
BEI, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy and other laws affecting the
enforceability of creditors' rights generally or laws governing the
availability of specific performance or other equitable remedies.
(b) SUBSIDIARIES OR AFFILIATES. Except as set forth in Schedule 2(b)
hereto, none of the Assets or the Division are comprised of any shares of
stock or other securities in any corporation, nor is BEI, acting through the
Division a partner, venturer, participant or associate in any partnership,
venture or other business with any other person or firm.
(c) FINANCIAL STATEMENTS.
(i) Schedule 2(c)(i) contains (a) the audited balance sheet of
the Division as of December 31, 1998, together with the related audited
statements of income and cash flows for the fiscal year then ended (the
"Year-End Financial Statements") and (b) the unaudited balance sheet of
the Division as of March 31, 1999 (the "Interim Balance Sheet"),
together with the related unaudited statements of income and cash flows
for the three months then ended (the "Interim Financial Statements,"
and together with the Year-End Financial Statements, the "Financial
Statements").
(ii) The Financial Statements (A) are true, correct, complete,
and accurate in all material respects and present fairly the financial
position and results of operations of the Division, as at the dates and
for the periods indicated, in accordance with generally accepted
accounting principles consistently applied; and (B) reflect all known
claims against or affecting the Division or the Assets and all known
debts and liabilities, fixed or contingent, and of a type required to
be disclosed in financial statements under generally accepted
accounting principles ("GAAP"), as of the respective dates thereof.
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(iii) There is no material indebtedness or liability,
contingent or otherwise, arising out of, or related to the Division or
the Assets required to be disclosed under GAAP, except as disclosed or
adequately and specifically reserved for in the Interim Balance Sheet,
or as set forth on Schedule 2(c)(iii). Since the date of the Interim
Balance Sheet (A) there has been no material adverse change in the
business, assets, liabilities (actual or contingent), earnings
prospects or financial or other condition of the Division, (B) there
has been no disposition of any material amount of assets of the
Division, except in the ordinary course of business and (C) the
business of the Division has been conducted only in the ordinary course
and consistent with the manner in which such business was conducted
prior to that date.
(iv) The balance sheets included in the Financial Statements
do not include any material assets or liabilities not intended to
constitute a part of the Division, the Assets, or the Excluded Assets,
after giving effect to the transactions contemplated hereby, and
present fairly the financial condition of the Division as at their
respective dates. The statements of income and retained earnings and
statements of cash flows included in the Financial Statements do not
reflect the operations of any entity or business not intended to
constitute a part of the Division, reflect all costs that historically
have been incurred by the Division and present fairly the results of
operations and cash flows of the Division for the periods indicated.
(d) TITLE TO PROPERTIES; LIENS; CONDITION OF PROPERTIES.
(i) Other than as set forth in Schedule 2(d)(i), BEI has good
title to the Assets, free and clear of any mortgages, deeds of trust,
security interests, conditional sales agreements, liens, claims,
restrictions, preferential rights of purchase or other burdens
(collectively, "Liens"), except (a) Liens for taxes that are not yet
due and payable. (b) any Liens that are not, individually or in the
aggregate, material, and (c) any mechanic's, materialmen's, workmen's,
repairmen's, warehousemen's, carrier's lien, or other similar Lien that
has arisen or been incurred in the ordinary course of the business of
the Division since March 31, 1999 and which are not individually or in
the aggregate material (collectively, "Permitted Liens"). Other than as
set forth in Schedule 2(d)(i), with respect to the Division or the
Assets, no presently effective financing statement under the Uniform
Commercial Code is on file in any jurisdiction and BEI has not signed
any presently effective security agreement authorizing any secured
party thereunder to file any such financing statement.
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(ii) The Division presently occupies only the premises
referred to on Schedule 2(d)(ii), under the terms of those lease
agreements described on Schedule 2(d)(ii), true and complete copies of
which have been delivered to Jones.
(iii) The property and equipment of the Division is in good
operating condition and in a state of good repair sufficient for the
conduct of normal operations, subject to normal wear and tear. The
assets and properties (including leased property) of the Division are
adequate to enable the conduct of the business of the Division as now
being conducted. Other than as set forth on Schedule 2(d)(iii), BEI is
not aware of any major capital expenditure with respect to the Division
that will be required before December 31, 1999 that is not consistent
with past practice. Schedule 2(d)(iii) sets forth a list of each item
of property or equipment of the Division that has a cost of at least
$10,000 or is otherwise material to the business of the Division.
(iv) A true and correct copy of all the Contracts has been
delivered to Jones. BEI is not a party to any other agreements
involving network programming or agreements with radio stations.
Schedule 2(d)(iv) lists all obligations with respect to the Division,
fixed or contingent, to make payments of over $25,000 per annum under
any of the Contracts.
(e) GOVERNMENTAL AUTHORITY; COMPLIANCE WITH LAW. With respect to the
Division, BEI possesses all material permits, licenses and/or franchises from
governmental agencies having jurisdiction over it that are required for it to
operate and to continue to operate the Division. All of such permits,
licenses and franchises are in full force and effect and shall remain so as
of the Closing. Except with respect to incidents of non-compliance which have
been corrected, BEI has not received any notice from any governmental
authority alleging any non-compliance with, or failure to secure any such
permit or license or alleging any non-compliance with law which would
materially adversely affect the business of the Division and BEI has complied
in all material respects with all statutes, regulations, rules and other
orders of all governmental departments or agencies, whether U.S. or foreign,
including, without limitation, those statutes, regulations, rules and orders
dealing with environmental matters and/or hazardous materials), the failure
to comply with which would have a material adverse effect on the Division or
the Assets. Schedule 2(e) contains a list of all material permits, licenses
and/or franchises held by BEI with respect to the Division.
(f) TAXES. There are no outstanding claimed deficiencies or
assessments for Taxes, except as indicated on Schedule 2(f), which in any way
affect any of the material Assets or the Division, and no such claimed
deficiencies or assessments are pending or threatened which in any way affect
the Assets or the Division. There are no agreements,
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consents or waivers extending the time for the assessment of any Tax or Tax
deficiency against BEI which in any way affect the Assets or the Division.
The Latest Financial Statements include adequate reserves with respect to
Taxes accrued but not yet payable which in any way affect the Assets or the
Division. None of the Assets are subject to Tax liens (except for any
Permitted Liens) which in any way affect the Assets or the Division. The
Assets do not include any interest in, and are not subject to any arrangement
which is treated as, a partnership for federal or applicable state or foreign
tax purposes. As used in this Agreement, the term "Taxes" shall mean with
respect to the Division and/or the Assets, all federal, state, county, local,
foreign and other taxes and governmental assessments, including without
limitation income taxes, estimated taxes, withholding taxes, transfer taxes,
excise taxes, sales taxes, real and personal property taxes, ad valorem
taxes, payroll-related taxes, employment taxes, franchise taxes and import
duties, together with any related liabilities for penalties, fines or
additions to tax.
(g) CONTRACTS AND AGREEMENTS.
(i) Schedule 2(g)(i) lists and completely identifies with
respect to the Division and the Assets, every material contract or
agreement, written or oral, (including but not limited to, joint
ventures and partnerships) to which BEI is a party or is subject or by
which BEI or any of its properties is bound, and any other documents to
which BEI is as of the date of this Agreement a party (the "Material
Contracts"), excepting those which (A) are described on, and
cross-referenced to, another Schedule hereto, or (B) were made in the
ordinary course of business and can be canceled upon 30 days' notice or
less without incurring any penalty or liability for such cancellation
and are not material, or (C) did not individually exceed $10,000 in any
one instance or $50,000 in the aggregate in required purchases, sales
or services, or (D) are programming or equipment agreements with radio
station affiliates. A true and complete copy of each Material Contract
has been delivered to Jones. In addition, every programming or similar
agreement with a radio station affiliate, whether or not material, will
be delivered to Jones at or prior to the Closing.
(ii) All of the Material Contracts listed on or made a part of
Schedule 2(g)(i) are valid and binding obligations of the parties
thereto in accordance with their respective terms and there are no
material liabilities arising from any default by BEI heretofore in any
of such agreements or contracts except as set forth on Schedule 2(g)(i)
or Schedule 2(g)(i)-(a). Except as set forth on Schedule 2(g)(i) or
Schedule 2(g)(i)-(a), BEI is not aware of any material default by any
party to any of the agreements listed on Schedule 2(g)(i) or Schedule
2(g)(i)-(a) or in any other schedule attached hereto or of any material
default by any party to any agreements
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or contracts required to be listed on Schedule 2(g)(i) or of any
assertion by any other person of any material default under any of
such agreements or contracts.
(iii) Except as set forth on Schedule 2(g)(iii), all of the
Material Contracts and affiliate agreements with radio stations
constituting part of the Division or the Assets are freely transferable
to Jones pursuant to this Agreement without the need to obtain any
consent of the parties thereto. Schedule 2(g)(iii)(a) sets forth the
consents with respect to any Material Contract or any affiliate
agreement, with a radio station which will be obtained prior to
Closing, without any adverse change in the terms thereof.
(h) INSURANCE AND BONDS. BEI currently has in full force and effect
with respect to the Division, the respective insurance policies and bonds,
listed on, and in the amounts set forth on, Schedule 2(h). Such insurance
policies and bonds are adequate for the business and properties of the Division
and shall be in full force and effect as of the Closing. True and complete
copies of all such policies and bonds have been delivered to Jones.
(i) LABOR, BENEFIT, EMPLOYMENT AGREEMENTS, ERISA AND EMPLOYEES.
(i) Except as listed on Schedule 2(i)(i) hereto, with respect
to the Division (and the employees thereof), there are no collective
bargaining agreements, nor are there any pension plans or other
employment, profit sharing, 401(k), deferred compensation, bonus, stock
option, stock purchase, retainer, consultant, retirement, welfare,
group medical, disability or health insurance or incentive plans or
contracts or life insurance or other "fringe benefits" for employees. A
true and complete copy of each such agreement, plan and policy has been
delivered to Jones. Except as provided on Schedule 2(i)(i), BEI has no
fixed or contingent liability or obligation to any person now or
formerly employed at the Division, including, without limitation, under
any pension or thrift plan, individual or supplemental pension or
accrued compensation arrangement, contribution to hospitalization or
other health or life insurance program, incentive plan, bonus
arrangement and vacation, sick leave, disability and termination
arrangement or policy, including workers compensation policy. Except
for post-Closing obligations under the agreements between BEI and Ms.
Delilah Rene Ortega, and between BEI and Sheila Kay Griffith (a/k/a Lia
Knight) Jones shall not assume or hereby or otherwise become obligated
to pay any debt, obligation or liability arising from BEI's employee
benefit plans, or any other employment arrangement, whether for a group
of employees or a single employee. It is understood and agreed that any
obligation whether past, present or future under any such plan or
arrangement shall not be the responsibility of Jones.
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(ii) With respect to persons employed by or at the Division,
there are no employment agreements, written or oral, now in effect,
except as indicated on Schedule 2(i)(ii), true and complete copies of
each of which have been delivered to Jones. Schedule 2(i)(ii) contains
a true and complete list of all persons employed at or in connection
with the operation of the Division and a description of all
compensation arrangements (including bonus arrangements) applicable to
such employees. BEI has no knowledge that any employee identified on
such Schedule currently plans to terminate employment, whether by
reason of the transactions contemplated by this Agreement or otherwise.
(iii) BEI has, with respect to the operation of the Division,
complied in all material respects with all laws relating to the
employment of labor, including, without limitation, those laws relating
to safety, health, wages, hours, unemployment insurance, workers'
compensation, and equal employment opportunity.
(j) LITIGATION AND DISPUTED ITEMS.
(i) Except as set forth in Schedule 2(j)(i), with respect to
the Division and/or the Assets, no action or proceeding against BEI is
pending, or, to the knowledge of BEI, contemplated or threatened before
any court or governmental body or authority, that has an amount in
issue in excess of $10,000 or that in any manner could materially
adversely affect the business, property or prospects of the Division or
the consummation of the transactions contemplated by this Agreement,
nor is BEI subject to any existing judgment, order or decree materially
affecting the operation of the Division or the Assets, or which would
prevent, hamper or make illegal the transactions contemplated by this
Agreement. It is understood and agreed that Jones shall assume no
responsibility or obligation whatsoever for any litigation and related
claims against BEI, nor shall Jones have any responsibility or
obligation for any costs or expenses related to any such litigation or
claims. Any litigation, whether or not disclosed to Jones, in which BEI
is a party shall not become the responsibility or obligation of Jones
and the litigation shall remain with and be the sole responsibility of
BEI.
(ii) With respect to the Division and/or the Assets, BEI is
not engaged in any material legal action to recover claims for moneys
due or damages sustained or to enforce any right except as set forth on
Schedule 2(j)(ii).
(k) ACCOUNTS RECEIVABLE. The accounts receivable of the Division as
set forth on the Interim Balance Sheet or arising since the date thereof are
valid and genuine, have
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arisen solely out of bona fide sales and deliveries of goods, performance of
services and other business transactions, and are collectible in a manner
consistent with the past practice of the Division.
(l) NO VIOLATION OF OTHER INSTRUMENTS. Neither the execution and
delivery of this Agreement nor the performance of the transactions
contemplated hereby will (i) constitute a breach of BEI's certificate of
incorporation or bylaws, or of the material terms of any evidence of
indebtedness or agreement to which it is a party or by which it is bound;
(ii) cause a material default under any mortgage or deed of trust or other
lien, charge or encumbrance with respect to the Division or the Assets; (iii)
conflict with, or permit any party to declare a material default under or
cancel or modify any contract with respect to the Division or the Assets;
(iv) accelerate or constitute an event entitling the holder of any of
indebtedness with respect to the Division or the Assets to accelerate the
maturity of any of such indebtedness; or (v) conflict with or result in a
material breach of any judgment, order, writ, injunction or decree of any
court, commission, bureau or agency with respect to the Division or the
Assets.
(m) BROKERAGE COMMISSIONS. No person has acted on BEI's behalf as
agent, finder or broker in negotiating or bringing about this Agreement and
BEI has not agreed to pay to any person any fee or commission in connection
with this Agreement or the transactions contemplated thereby.
(n) GOVERNMENTAL APPROVALS. No authorization, consent, approval,
license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is or will be necessary for the
execution and delivery by BEI of this Agreement and the consummation of the
transactions contemplated thereby, except for the expiration of the
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, as amended, and the rules and regulations thereunder (the "HSR
Act").
(o) TRANSACTIONS WITH AFFILIATES. With respect to the Division
and/or any of the Assets, and except as set forth in Schedule 2(o), there are
no material agreements or arrangements of any kind between BEI and any
officer of director or employee of BEI or any holder of any class of capital
stock of BEI or any member of any such officer's, director's, employee's or
stockholder's immediate family or any corporation or other entity controlled
by any such officer, director, employee or stockholder or any corporation or
other entity controlled by any such officer, director, employee, or
stockholder or a member of any such officer's, director's, employee's or
stockholder's immediate family. A true and complete copy of each document
listed in Schedule 2(o)
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has been delivered to Jones. Any such agreement or transaction shall not be
assumed by Jones without its express written consent, specifically referring
to the agreement or transaction in question.
(p) BOOKS AND RECORDS. With respect to the Division and the Assets,
the books of account, ledgers, order books, records and documents of BEI
accurately and completely reflect all material information relating to the
business of the Division and the nature, acquisition, maintenance, location
and collection of each if its assets.
(q) INTELLECTUAL PROPERTY. With respect to the Division, BEI has
good title in and to all copyrights, trademarks, trade names, service marks,
licenses, permits, jingles, privileges, and other similar intangible property
rights and interests applied for, issued to or owned by it, or under which it
is licensed or franchised, which are used or useful in the present conduct of
the Division ("Intellectual Property"). The Intellectual Property
specifically includes all websites and Internet names owned or used with
respect to the Division, and all the names and marks used on or with respect
to all radio programs of the Division. Schedule 2(q) is a list of all such
Intellectual Property rights. BEI has no knowledge of any threatened or
pending proceeding or litigation affecting or with respect to any
Intellectual Property. BEI has received no notice alleging infringement of
the rights of any third party to Intellectual Property or unlawful use of
such property. BEI has the right to use the Intellectual Property in the
conduct of the business and operations of the Division as now conducted and
has not granted any licenses or other rights and has no obligation to grant
licenses or other rights with respect thereto to any party.
(r) LIBRARIES AND PROGRAMS. BEI has good title to all the Inventory
and radio programs of the Division, and BEI owns or has right to no other
such libraries and programs. Schedule 2(r) sets forth the name of each such
item of Inventory and program, and indicates, if applicable, the rights of
any third parties with respect to any such item of Inventory or program, or
any revenue therefrom.
(s) DISTRIBUTION. Schedule 2(s) sets forth each agreement between
BEI and a distributor of any goods, services or programming (within or
outside of the United States) with respect to the Division, true and correct
copies of which agreements have been delivered to Jones.
(t) CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. To the knowledge
of BEI, no representation or warranty made by BEI in this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary to make such representation or warranty not misleading. For
purposes of the foregoing sentence, the "knowledge of BEI" means the
knowledge of the following persons Ms. E. Hilliard, Mr. J. LaMarca, Ms. B.
Keck, Mr. C. Apple, Mr. T. Harrison and Mr. R. Carroll, after their
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due inquiry. All of the facts recited with respect to BEI in any of the
Schedules attached hereto shall be deemed to be representations as to fact
and shall be as if recited in this Agreement. All the representations and
warranties herein contained shall survive any investigation made by or on
behalf of Jones.
(u) OPERATIONS FROM DATE OF LATEST FINANCIAL STATEMENTS TO DATE OF
THIS AGREEMENT. Since the date of the Latest Financial Statements, BEI has
not, with respect to the Division or the Assets:
(i) Other than in the ordinary course of the business of the
Division, incurred any indebtedness for borrowed money or assumed,
guaranteed, endorsed or otherwise as an accommodation, became
responsible for obligations of any other individual, corporation or
other entity or organization in any one instance in excess of $10,000
or $50,000 in the aggregate;
(ii) Other than in the ordinary course of business, sold,
leased, transferred, released, abandoned or otherwise disposed of, or
entered into any contract or license for the sale, lease or other
disposition of or granted any preferential right to purchase, lease or
otherwise acquire, any of its properties, rights or other assets or any
interest therein or canceled, released or assigned, any indebtedness
owed to it or any claim, license or permit held by it or released,
abandoned or terminated any lease, contract, agreement, instrument or
right relating to title to or ownership of any its properties, rights
or other assets or any interest therein;
(iii) Other than in the ordinary course of business,
mortgaged, pledged, hypothecated, subjected to lien or other
encumbrance, or granted any security interest in any of properties,
rights or other assets or any interest therein;
(iv) Other than in the ordinary course of business, purchased,
leased or otherwise acquired, or entered into any contract for the
purchase, lease or other acquisition of, machinery, equipment,
material, products, supplies, or other personal property or rights or
services at a cost of more than $10,000 in any one instance or more
than $50,000 in the aggregate;
(v) Other than in the ordinary course of business, purchased,
leased or otherwise acquired, or entered into any contract for the
purchase, lease or other acquisition of, any interest in real property;
(vi) Made any investment, either by purchase of stock or other
securities, the purchase of partnership interest, contributions to
capital, transfer, merger,
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consolidation or otherwise, or by the purchase of any business or any
other individual or entities.
(vii) Entered into or engaged in any transaction with any of
the persons set forth in Schedule 2(i)(ii).
3. [DELIBERATELY OMITTED]
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF JONES.
Jones hereby represents, warrants and covenants to and with BEI as
follows:
(a) DUE ORGANIZATION; CAPITALIZATION; ARTICLES AND BYLAWS; AUTHORITY.
(i) Jones is a duly organized, validly existing corporation,
in good standing under the laws of Colorado. Jones has full power and
authority to own, lease and operate its properties and conduct its
business as presently being conducted. Jones is duly qualified to do
business as a foreign entity and is in good standing in all
jurisdictions wherein the failure to be so qualified would have a
material adverse effect on its business or financial condition.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated thereby have been duly
authorized by the board of directors of Jones, and no other proceedings
are necessary to authorize this Agreement and the transactions
contemplated thereby. Assuming the Agreement constitutes a valid and
binding agreement of BEI and the Shareholder, this Agreement
constitutes the valid and binding agreement of Jones, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy and other laws affecting the enforceability of creditors'
rights generally or laws governing the availability of specific
performance or other equitable remedies.
(b) BROKERAGE COMMISSIONS. No person has acted on behalf of Jones in
negotiating or bringing about the Agreement and Jones has not agreed to pay
to any person any fee or commission in the nature of a finder's, broker's or
originator's fee or commission in connection with this Agreement or the
transactions contemplated thereby which in any way shall be the
responsibility of BEI or the Shareholder.
(c) NO VIOLATION OF OTHER INSTRUMENTS. Neither the execution and
delivery of this Agreement nor the performance of the transactions
contemplated thereby will (i) constitute a breach of the articles of
incorporation or bylaws of Jones, or of the terms of
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any evidence of indebtedness or agreement to which Jones is a party or by
which Jones is bound (ii) conflict with or result in the breach of any
judgment, order, writ, injunction or decree of any court, commission, bureau
or agency to which Jones is a party or by which Jones is bound.
(d) GOVERNMENTAL APPROVALS. No authorization, consent, approval,
license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is or will be necessary for the
execution and delivery by Jones of this Agreement and the consummation of the
transactions contemplated thereby, except for the expiration of the waiting
periods under the HRS Act.
(e) CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. No representation
or warranty made by Jones in this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary to make such
representation or warranty not misleading. All representations and warranties
of Jones herein contained shall survive any investigation made by or on
behalf of BEI.
(f) AVAILABLE FUNDS. Jones has available to it, and at the Closing
will have available to it, all funds necessary to pay the cash portion of the
consideration for the Assets and to satisfy its other obligations under this
Agreement.
5. COVENANTS AND AGREEMENTS OF BEI.
BEI covenants and agrees that, from and after the date of this
Agreement and until (i) the termination of this Agreement or (ii) the
Closing, whichever shall first occur:
(a) ACCESS. Upon reasonable advance notice, it will permit Jones and
its authorized representatives to have full access to its premises and books
and records of BEI during reasonable business hours and will make available
to Jones such financial and operating data and other information with respect
to the business and properties of the Division as Jones reasonably shall
request, including all working papers pertaining to examinations made by its
auditors and accountants.
(b) SATISFACTION OF CONDITIONS. BEI will use all commercially
reasonable efforts to cause the satisfaction of the conditions precedent
contained in this Agreement to bring about the transactions contemplated by
this Agreement as soon as practicable.
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(c) OPERATIONS PRIOR TO THE CLOSING.
Prior to the Closing, except in accordance with prior
approval of Jones (which shall not be unreasonably withheld):
(i) BEI will carry on the business of the Division in the same
manner as was conducted immediately prior to the date of this Agreement
and will not make any purchase or sale or enter into any transaction or
execute any agreement or incur any obligation or liability or introduce
any method of management or operation in respect of any such business,
except in the ordinary course of business as heretofore conducted (and
in every case, only in accordance with and subject to the other
restrictions of this Agreement).
(ii) BEI will, with respect to the Division, use its best
efforts to maintain and preserve intact the business organizations and
relationships with employees, radio stations, on-air talent, suppliers
and customers and others having business relations with the Division.
(iii) Except as specifically contemplated hereby, BEI will
not, with respect to the Division:
(A) Other than in the ordinary course of business,
enter into (i) any contract which commits it for a fixed term
(unless such term is terminable by it without penalty on not
more than 30 days' notice), or (ii) any agreement with any
labor union or other employee bargaining agent or unit;
(B) Other than in the ordinary course of business,
prepay any Assumed Liabilities;
(C) Other than in the ordinary course of business,
incur any indebtedness for borrowed money or assume,
guarantee, endorse or otherwise as an accommodation become
responsible for obligations of any other individual,
corporation or other entity or organization (except for
endorsement for collection or deposit of negotiable
instruments received in the ordinary and usual course of
business);
(D) Other than in the ordinary course of business,
sell, lease, transfer, release, abandon or otherwise dispose
of, or enter into any contract or license for the sale, lease
or other disposition of or grant any preferential right to
purchase, lease or otherwise acquire, any of the Assets or any
18
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interest therein or cancel, release or assign any indebtedness
owed to it or any claim, license or permit held by it or
release, abandon or terminate any lease, contract, agreement,
instrument or right relating to title to or ownership of any
of the Assets or any interest therein;
(E) Other than in the ordinary course of business,
mortgage, pledge, hypothecate, subject to lien or other
encumbrance, or grant any security interest in any of the
Assets or any interest therein;
(F) Other than in the ordinary course of business,
purchase, lease or otherwise, acquire, or enter into any
contract for the purchase, lease or other acquisition of,
machinery, equipment, material, products, supplies, other
personal property or rights or services;
(G) Other than in the ordinary course of business,
purchase, lease or otherwise acquire, or enter into any
contract for the purchase, lease or other acquisition of, any
interest in real property;
(H) Make any investment either by the purchase of
stock or other securities, the purchase of partnership
interests, contributions to capital, transfer, merger,
consolidation or otherwise, or by the purchase of any property
or business of, any other individual or entity;
(I) Other than in the ordinary course of business,
increase in any manner the compensation of any of its
officers, managers, employees or consultants; enter into or
adopt, or make or commit itself or make any contribution to,
any pension plan, retirement plan, bonus plan, profit sharing
plan, stock purchase plan, insurance plan or other employee
benefit plan or agreement; enter into or commit itself to any
employment agreement, management agreement or consulting
agreement with or for the benefit of any person;
(J) Other than in the ordinary course of business,
agree to any changes to the compensation arrangements outlined
on Schedule 2(i)(ii) hereto;
(K) Make any loans or advances (except in the case of
normal business travel and expense advances) to any
individual, entity or organization;
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(L) Take or permit any action within its control that
would prevent performance of this Agreement;
(M) Sell the Division or the Assets, or to conduct
any discussions or negotiations with respect thereto;
(N) Enter into any transaction, including, without
limitation, any loans or extensions of credit, with any
officer or director of BEI, or any member of their respective
immediate families or any corporation or other entity directly
or indirectly controlled by one or more of such officers or
directors or members of their immediate families.
(d) BULK SALES LAW COMPLIANCE. Jones hereby waives compliance by BEI
with the provisions of the Bulk Sales Law of any state (if applicable), and
BEI warrants and agrees to pay and discharge when due all claims of creditors
which could be asserted against it by reason of such noncompliance to the
extent that such liabilities are not specifically assumed under this
Agreement. BEI hereby indemnifies and agrees to hold Jones harmless from,
against and in respect of (and shall on demand reimburse Jones for) any loss,
liability, cost or expense, including, without limitation, attorneys' fees,
suffered or incurred by Jones by reason of the failure of BEI to pay or
discharge such claims.
(e) UPDATED SCHEDULES. Not less than five days prior to Closing, BEI
will deliver to Jones revised copies of the Schedules, which shall have been
updated to show any changes occurring between the date of this Agreement and
the date of such delivery and any corrections to the Schedules in the form
originally attached to this Agreement; provided, however, that for purposes
of the representations, warranties and covenants in this Agreement of BEI,
including the indemnification provisions set forth in Section 13 of this
Agreement, all references to the Schedules will mean the version of the
Schedules attached to this Agreement on the date of signing, and provided
further, that, if the effect of any such updates to Schedules is to disclose
any one or more additional Assets or additional liabilities, Jones, at or
before the Closing, will have the right (to be exercised by written notice)
to cause any one or more of such items to be designated as and deemed to
constitute Excluded Assets or Excluded Liabilities for all purposes of this
Agreement.
(f) CERTAIN FINANCIAL STATEMENT MATTERS. BEI agrees to provide to
Jones, as soon as completed, but in any event no later than the 30th day of
each month, copies of BEI's internal, unaudited monthly balance sheet,
statement of operations and for the prior month, beginning with the month of
April, 1999, and through the Closing. BEI also agrees both before and after
the Closing to provide such information and assistance to Jones as Jones may
reasonably request in order to cause the Financial Statements to be in
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compliance with Regulation S-X of the Securities and Exchange Commission,
should such compliance be questioned, either before or after the Closing.
6. COVENANTS AND AGREEMENTS OF THE SHAREHOLDER AND BEI
Prior to 11:59 P.M., Denver time on the Closing Date, (the "Exclusivity
Period"), BEI and/or the Shareholder shall not, directly or indirectly,
through any employee, legal or financial advisor or other agent or otherwise,
solicit, initiate or encourage submission of, proposals or offers from any
person relating to any acquisition or purchase of all or a portion of the
Assets, or any equity interest in, the Division, or any business combination
with BEI or in any shares of BEI held by the Shareholder, the effect of which
would be to transfer control of the Division to a third party, or participate
in any negotiations regarding, or furnish to any other person any information
with respect to, or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person to do or seek any of the foregoing. BEI and/or the Shareholder shall
immediately cease and cause to be terminated any existing discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. BEI and/or the Shareholder shall promptly notify Jones if any such
proposal or offer, or any inquiry or contact with any person with respect
thereto, is made.
7. COVENANTS AND AGREEMENTS OF JONES.
(a) SATISFACTION OF CONDITIONS. Jones will use all commercially
reasonable efforts to cause the satisfaction of the conditions precedent
contained in this Agreement and to bring about the transactions contemplated
by this Agreement as soon as practicable.
(b) EMPLOYMENT OFFERS. Upon and subject to the Closing, Jones will
make offers of employment to the full-time employees of the Division who meet
the employment standards of Jones (the "Division Employees"), on the same
cash salary basis as now exists for such persons, but with the benefits
package available to other Jones employees.
(c) AGENT AGREEMENT. Jones agrees that, at the Closing, Jones will
enter into an agent agreement with BEI in form and substance reasonably
satisfactory to BEI and Jones (the "Agent Agreement") regarding the manner in
which Jones will act as agent for the sale of equipment manufactured by BEI
after the Closing, and the compensation of Jones for such services.
(d) 401(K) PLAN MATTERS. To the extent of the accrual recorded as of
the Closing, BEI will, as soon as practicable after the Closing, contribute
to the 401(k) Plan
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maintained by BEI for its employees (the "BEI 401(k) Plan") the PRORATA
portion of any matching contributions that otherwise would have been payable
to the BEI 401(k) Plan with respect to the Division Employees for such
period. At the Closing, BEI will 100% vest all Division Employees under the
BEI 401(k) Plan. Jones will not assume the BEI 401(k) Plan or accept a direct
transfer from the trust associated with the BEI 401(k) Plan into any Jones
401(k) plan, although Jones will accept individual rollovers by the Division
Employees into a 401(k) plan designated by Jones, subject to the
administrator's approval, which will not be unreasonably withheld. Jones
will, as soon as practicable after the Closing, offer all of the Division
Employees a 401(k) plan designated by Jones and will credit each Division
Employee with his or her service with the Division for purposes of
determining eligibility and vesting under such 401(k) plan, subject to any
entry date requirements.
(e) DIGILEASE COLLECTIONS. On or before the 15th day of each month
following the Closing, Jones shall pay to BEI, by check mailed to the
attention of Becky Keck, an amount equal to the sum of all amounts collected
by Jones from customers of the Division during the immediately preceding
month in respect of equipment lease payments and maintenance fees under the
so-called "digilease" transactions set forth on Schedule 7(e).
8. CONDITIONS TO OBLIGATIONS OF BEI AND THE SHAREHOLDER.
The obligations of BEI and the Shareholder to consummate the Closing
under this Agreement are subject to the satisfaction on or prior to the
Closing of all of the following conditions precedent, compliance with which
or the occurrence of which may be waived in whole or in part by BEI and the
Shareholder in writing.
(a) ACCURACY OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties of Jones contained in
this Agreement shall be true and correct in all material respects on
and as of the Closing Date, with the same effect as though the same had
been made on and as of the Closing Date.
(ii) Jones shall have performed and satisfied all agreements,
covenants, and conditions required by the Agreements to be performed or
satisfied by it on or prior to the Closing Date.
(iii) There shall have been delivered to BEI and the
Shareholder on the Closing Date a certificate dated as of the Closing
Date from officers of Jones certifying that Jones has complied with
their obligations under this Section.
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(b) ABSENCE OF LITIGATION. On the Closing Date, there shall not be
pending or threatened litigation in any court or any proceeding by any
governmental commission, board or agency, with a view to seeking or in which
it is sought to restrain or prohibit consummation of this Agreement or in
which it is sought to obtain rescission or damages in connection with this
Agreement, and, to the knowledge of any of the parties hereto, no
investigation by any governmental agency shall be pending or threatened which
might eventuate in any such suit, action or other proceeding.
(c) VALIDITY OF TRANSACTIONS. The form and substance of certificates
and other documents to be delivered to BEI and the Shareholder hereunder
shall be reasonably satisfactory in all respects to BEI and the Shareholder.
(d) HART-SCOTT-RODINO WAITING PERIOD. All applicable waiting periods
(and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
(e) CLOSING DELIVERIES. Jones shall have delivered all of the
documents to BEI contemplated under Section 10.
9. CONDITIONS TO OBLIGATIONS OF JONES.
The obligations of Jones to consummate the Closing under this
Agreement are subject to the satisfaction on or prior to the Closing of all
of the following conditions precedent, compliance with which or the
occurrence of which may be waived in whole or in part by Jones in writing:
(a) ACCURACY OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties of BEI contained in
this Agreement to the extent qualified by materiality or material
adverse effect, shall be true and correct on and as of the Closing
Date, and to the extent not qualified by materiality or material
adverse effect, shall be true and correct in all material respects, in
each INSTANCE, with the same effect as though the same had been made on
and as of the Closing Date, and the Schedules provided by BEI attached
hereto shall likewise be true and correct in every material respect on
and as of the Closing Date.
(ii) BEI and the Shareholder shall have performed and
satisfied all agreements, covenants and conditions required by this
Agreement to be performed or satisfied by them on or prior to the
Closing Date.
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(iii) There shall have been delivered to Jones on the Closing
Date (A) a certificate of the President and the Chief Financial Officer
of BEI dated as of the Closing Date certifying that BEI has complied
with this Section and (B) a certificate of the President and of the
Shareholder dated the Closing Date certifying that the Shareholder has
complied with its obligations under this Section.
(b) ABSENCE OF LITIGATION. On the Closing Date, there shall not be
pending or threatened litigation in any court or any proceeding by any
governmental commission, board or agency, with a view to seeking or in which
it is sought to restrain or prohibit consummation of this Agreement or in
which it is sought to obtain rescission or damages in connection with this
Agreement, and, to the knowledge of any of the parties hereto, no
investigation by any governmental agency shall be pending or threatened which
might eventuate in any such suit, action or other proceeding.
(c) VALIDITY OF TRANSACTIONS. The form and substance of certificates
and other documents to be delivered to Jones hereunder shall be reasonably
satisfactory in all respects to Jones.
(d) NO MATERIAL ADVERSE CHANGE, OFFICERS' CERTIFICATE. During the
period from the date of the Latest Financial Statements to the Closing Date,
there shall not have been any material adverse change in the financial
condition, properties or results of operations of the Division, and there
shall not have occurred any material destruction, loss or damage to the
Assets, whether or not insured. Jones shall have received a certificate dated
the Closing Date, signed by the President and Chief Financial Officer of BEI,
certifying to the foregoing effect.
(e) HART-SCOTT-RODINO WAITING PERIOD. All applicable waiting periods
(and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
(f) CONSENTS AND LIEN TERMINATIONS; ASSETS FREE AND CLEAR. All
required consents of third parties with respect to the assignment or transfer
of the Material Contracts and the affiliate agreements with radio stations,
as shown on Schedule 2(g) (iii) (a) (and any consents of governmental bodies)
to be obtained by BEI shall have been obtained. In the case of assigned
agreements, such consents shall have been obtained without any adverse change
to the terms of such agreements. The Assets shall be free and clear of any
and all liens, claims, encumbrances and security interests and all necessary
lien terminations shall have been delivered by BEI to Jones.
(g) EXTENSION OF EMPLOYMENT AGREEMENT WITH DELILAH. The Employment
Agreement between Delilah Rene Ortega and BEI shall have been extended to
June 30,
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2004, on terms satisfactory to Jones in its sole discretion. In addition,
satisfactory confirmation shall have been received by Jones that life
insurance and disability insurance on Ms. Ortega in an amount of no less than
$10,000,000 shall be available on normal rates and terms.
(h) COMFORT LETTER. Jones shall have received satisfactory written
assurance from the audit firm which audited the Year-End Financial Statements
that the Year-End Financial Statements were prepared in compliance with
Regulation S-X of the United States Securities and Exchange Commission.
(i) CLOSING DELIVERIES. BEI and the Shareholder shall have
delivered all of the documents to Jones contemplated under Sections 8 and 9.
10. THE CLOSING.
The Closing hereunder shall be held at 9:00 a.m. on the first business
day which is five (5) days after the receipt of the consents required by Section
7(e) of this Agreement, but not later than August 9, 1999 (unless the parties
agree to an extension of such date) at the offices of Jones, 9697 East Mineral
Avenue, Englewood, Colorado 80112, or at such other time, date and place as the
parties shall agree (the date of such Closing being herein called the "Closing
Date"). At the Closing, the parties shall deliver the following:
(a) BEI shall deliver such suitable transfer documents as Jones may
require pursuant to which the Assets are conveyed to Jones.
(b) Jones shall deliver (i) one or more documents whereby it agrees to
assume the Assumed Liabilities, (ii) the purchase price for the Assets by wire
transfer in immediately available funds to an account designated in writing by
BEI.
(c) The parties thereto shall deliver (i) the Employment Agreements
between Jones and Ms. Hilliard and Mr. LaMarca, respectively, in the form set
forth as Exhibits B-1 and B-2 hereto.
(d) The various closing certificates and documents contemplated by
Sections 8 and 9 of this Agreement.
(e) The Agent Agreement between BEI and Jones.
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11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations, warranties and covenants in the Agreements or
in any closing certificate delivered pursuant to the provisions of this
Agreement shall be continuing and shall survive the Closing for a period of
one (1) year, except for any warranties and covenants set forth in Sections
2(f) and except for those involving environmental matters, all of which shall
survive until the end of the applicable statute of limitation. Any claim with
respect to any of such matters which is not asserted by notice given as
herein provided relating thereto within the applicable foregoing period
following the Closing may not be pursued and is hereby irrevocably waived
after such time.
12. EXPENSES.
Costs and expenses relating to the transactions contemplated by this
Agreement shall be borne and paid by the respective parties incurring same.
13. TERMINATION.
This Agreement may be terminated and the transactions contemplated
by this Agreement may be abandoned at any time prior to the Closing:
(a) By the mutual written consent of BEI, the Shareholder and Jones;
(b) By BEI and the Shareholder in the event that any condition to
their obligations set forth in Section 8 has not been fulfilled at or prior
to the Closing; or
(c)By Jones in the event that any condition to its obligations set
forth in Section 9 has not been fulfilled at or prior to the Closing.
(d) By Jones or by BEI and the Shareholder in the event the Closing
has not occurred by August 9, 1999; or
(e) By either party if a court of competent jurisdiction or any
governmental body shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use
their best efforts to lift), in each case permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable.
The right to terminate this Agreement shall be exercised by written
notice from the terminating party to the other party or parties, which notice
shall specify in reasonable
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<PAGE>
detail the basis upon which the Agreement is being terminated. The
termination of this Agreement will in no way limit any obligation or
liability of any party based on or arising from a breach or default by such
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement at or before the date of termination.
14. INDEMNIFICATION.
(a) BY BEI. BEI will indemnify, defend and hold harmless Jones and
its officers, directors, shareholders, owners, employees, agents, successors
and assigns from and against all losses, damages, liabilities, deficiencies
or obligations ("Losses") resulting from or arising out of (i) any breach of
any representation or warranty made by BEI in this Agreement, (ii) any breach
of any covenant, agreement or obligation of BEI contained in this Agreement,
(iii) any act or omission of BEI with respect to, or any event or
circumstance related to, the ownership or operation of the Assets or the
conduct of the business of the Division, which act, omission, event or
circumstance occurred or existed prior to or at the Closing Date, without
regard to whether a claim with respect to such matter is first asserted
before or after the Closing Date, including any matters disclosed in the
Schedules hereto, (iv) any liability or obligation of the Division which was
not expressly assumed under this Agreement by Jones, and (v) all claims,
actions, suits, proceedings, demands, judgments, assessments, fines,
interest, penalties, costs and expenses (including settlement costs and
reasonable legal, accounting, experts' and other fees, costs and expenses)
incident or relating to or resulting from any of the foregoing; Jones shall
not be entitled to recover any amount for indemnification claims under
Section 14(a)(i) unless and until the amount which Jones is entitled to
recover in respect of such claims exceeds, in the aggregate, $200,000 (the
"Deductible"), after which (subject to the following sentence) BEI shall only
be liable for Losses that, in the aggregate, exceed the Deductible. The
maximum amount recoverable by Jones shall in the aggregate not exceed five
million dollars ($5,000,000).
(b) BY THE SHAREHOLDER. The Shareholder will indemnify, defend and
hold harmless Jones and its officers, directors, shareholders, owners,
employees, agents, successors and assigns from and against all Losses
resulting from or arising out of i) any breach of any covenant, agreement or
obligations of the Shareholder contained in this Agreement, and (ii) all
claims, actions, suits, proceedings, demands, judgments, assessments, fines,
interest, penalties, costs and expenses (including settlement costs and
reasonable legal, accounting, experts' and other fees, costs and expenses)
incident or relating to or resulting from any of the foregoing.
(c) BY JONES. Jones will indemnify, defend and hold harmless BEI,
the Shareholder and their officers, directors, shareholders, employees,
agents, successors and
27
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assigns from and against all Losses resulting from or arising out of (i) any
breach of any representation or warranty made by Jones in this Agreement,
(ii) any breach of any covenant, agreement or obligation of Jones contained
in this Agreement, (iii) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts' and
other fees, costs and expenses) incident or relating to or resulting from any
of the foregoing, and (iv) any Assumed Liabilities and the conduct of the
business of the Division or any portion thereof, or the use or ownership of
the Assets after the Closing. Any recovery from Jones for indemnification
shall be limited as follows: Jones shall not be liable for any amount for
indemnification claims under Section 14(c)(i) unless and until the amount in
respect of such claims exceeds, in the aggregate, $200,000 (the "Jones
Deductible"), after which (subject to the following sentence) Jones shall
only be liable for Losses that, in the aggregate, exceed the Jones
Deductible. The maximum amount recoverable from Jones shall in the aggregate
not exceed five million dollars ($5,000,000).
(d) PROCEDURE.
(i) In the event that any party shall incur or suffer any
losses in respect of which indemnification may be sought by such party
pursuant to the provisions of this Section, the party seeking to be
indemnified hereunder (the "Indemnitee") shall assert a claim for
indemnification by written notice (a "Notice") to the party from whom
indemnification is sought (the "Indemnitor") stating the nature and
basis of claim, and if such claim is with respect to a third-party
claim, accompanied by a copy of the written notice of the third-party
claimant. In the case of losses arising by reason of any third-party
claim, the Notice shall be given within thirty (30) days of the filing
or other written assertion of any such claim against the Indemnitee.
The Indemnitor shall have the option, and shall notify the Indemnitee
in writing within thirty (30) days after the date of the Notice of its
election either (A) to participate (at its own expense) in the defense
of such claim (in which case the defense of such claim shall be
controlled by the Indemnitee) or (B) to take charge of and control the
defense of such claim (at its own expense). If the Indemnitor fails to
notify the Indemnitee of its election within the applicable response
period (as determined in the immediately preceding sentence), then the
Indemnitor shall be deemed to have elected not to assume the defense of
such claim, in which case the Indemnitee may assume the defense of such
claim (provided that the Indemnitee shall not settle such claim without
the prior written consent of the Indemnitor, which consent shall not be
unreasonably withheld). The Indemnitor's failure to respond shall not
relieve the Indemnitor of its indemnification obligations under this
Section. If the Indemnitor elects to assume the defense of any claim in
accordance with this paragraph, then the Indemnitee
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<PAGE>
shall be entitled to participate (at its own expense) in such
defense. If the Indemnitor elects not to assume the defense of any
claim, the Indemnitor may nonetheless participate (at its own expense)
in the defense thereof.
(ii) The Indemnitee shall provide to the Indemnitor on request
all information and documentation reasonably necessary to support and
verify any losses which the Indemnitee believes gives rise to a claim
for indemnification hereunder and shall give the Indemnitor reasonable
access to all books, records and personnel in the possession or under
the control of the Indemnitee which would have a bearing on such claim.
(e) EXCLUSIVE REMEDY. The indemnification provisions set forth in
this Section 14 shall constitute the sole and exclusive remedy of the parties
with respect to claims of breaches of the representations, warranties and
covenants contained in this Agreement, except for a breach of Section 6 of
this Agreement and the right of Jones under Section 2(e) with respect to the
Receivables Shortfall.
15. NOTICES.
All notices, requests, demands, and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (i) mailed, registered or certified mail,
return receipt requested, postage prepaid, (ii) delivered by hand, (iii) sent
by facsimile transmission, or (iv) delivered by courier, to the following
addresses, or at such other address as a party may designate by notice given
in accordance with this Section:
If to Jones to: Jones International Networks, Ltd.
9697 E. Mineral Avenue
Englewood, CO 80112
Attn: Jay B. Lewis
Phone: (303) 792-3111
Fax: (303) 784-799-4675
With copy to: General Counsel
9697 E. Mineral Avenue
Englewood, CO 80112
Phone: (303) 792-3111
Fax: (303) 799-1644
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<PAGE>
If to BEI to: Broadcast Electronics, Inc.
4100 North 24th Street
Quincy, Illinois 62305-3606
Phone: (217) 224-9600
Fax: (217) 224-1849
With a copy to: Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Scott Cohen
Phone: (214) 746-7738
Fax: (214) 746-7777
If to the Shareholder: BEI Holding Corporation
1900 Preston Road
Suite 267-LB75
Plano, Texas 75093
Attn: Robert J. Carroll
Phone: (972) 407-1506
Fax: (972) 407-1539
Notices delivered personally or by courier shall be effective upon
delivery to the intended recipient. Notices transmitted by facsimile
transmission shall be effective when confirmation of transmission is
received. Notices delivered by registered or certified mail shall be
effective on the delivery date set forth on the receipt of registered or
certified mail, or three days after deposit in the mail, whichever is earlier.
16. MISCELLANEOUS.
(a) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement.
(b) ENTIRE AGREEMENT, NO WAIVER. This Agreement and the documents
and instruments referred to therein constitute the entire agreements between
the parties hereto pertaining to the subject matter thereof and supersede all
prior and contemporaneous agreements and understandings of the parties, and
there are no warranties, representations or other agreements among the
parties in connection with the subject matter thereof except as specifically
set forth therein. No supplement, modification or waiver or termination of
this Agreement shall be binding unless executed in writing by the party
30
<PAGE>
against whom it is asserted and delivered by that party to each of the other
parties. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions thereof (whether or not
similar), nor shall such waiver constitute a continuing waiver.
(c) HEADINGS. The title or headings of the various sections and
paragraphs hereof are intended solely for convenience of reference and are
not intended and shall not be deemed for any purpose whatsoever to modify or
explain or place any construction upon any of the provisions of this
Agreement.
(d) SCHEDULES AND EXHIBITS AS PART OF AGREEMENT. The Schedules and
Exhibit A to this Agreement constitute a part of this Agreement. Such
Schedules are referred to herein individually as a "Schedule" and
collectively as "Schedules." All statements contained in any Schedule or
certificate or other instrument delivered by or on behalf of the parties
hereto, or in connection with the transactions contemplated hereby, are an
integral part of this Agreement and shall be deemed representations and
warranties hereunder.
(e) USE OF THE PLURAL, ETC. Throughout this Agreement, wherever the
context so requires the singular shall include the plural, and the masculine
gender shall include the feminine and neuter genders, and vice versa.
(f) ASSIGNMENT. No party may assign this Agreement or any interest
herein without the prior written consent of the other parties, except that
Jones may assign this Agreement to any entity controlling, controlled by or
under common control with it, which assignment shall not relieve Jones of its
obligations under this Agreement. Subject to the foregoing, all of the terms
and provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective transferees, successors,
and assigns.
(g) GOVERNING LAW. The parties agree that this Agreement has been
executed and delivered in the State of Colorado and shall be construed,
enforced and governed by the laws thereof, without giving effect to the
principles of conflicts of law of such State.
(h) PUBLICITY. Any communications and notices to third parties and
all other publicity concerning the transactions contemplated by this
Agreement shall be planned and coordinated between Jones and BEI. None of the
parties hereto shall disseminate or make public or cause to be disseminated
or made public any information regarding the transactions contemplated
hereunder without the prior written approval of Jones and BEI, which approval
shall not be unreasonably withheld, subject however to the disclosure
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obligations of any party and its affiliates under applicable securities laws
or as otherwise required pursuant to court order, subpoena or other process
of law.
(i) FURTHER ASSURANCES. From time to time after the Closing, BEI
shall, if reasonably requested by Jones, make, execute and deliver to Jones
such additional assignments, bills of sale, deeds and other instruments of
transfer, as may be necessary or proper to transfer all of BEI's right,
title, and interest in and to the Assets.
(j) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights, claims or remedies upon anyone not a party to this Agreement or
the permitted successors and assigns of such a party, except under the
indemnification provisions of this Agreement.
[The remainder of this page has been left blank intentionally]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized and have caused
their respective corporate seals to be hereunto affixed and attested by the
signatures of their respective Secretaries or Assistant Secretaries, and to
be delivered, and this Agreement has been signed and delivered by the
Shareholders all effective as of the date first above written.
ATTEST: BROADCAST ELECTRONICS, INC.
/s/ Elizabeth K. Keck By: /s/ Robert J. Carroll
- ----------------------------- ---------------------------
Secretary Vice President
ATTEST: BEI HOLDING CORPORATION
/s/ Elizabeth K. Keck By: /s/ Robert J. Carroll
- ----------------------------- ---------------------------
Secretary President
ATTEST: JONES INTERNATIONAL
NETWORKS, LTD.
/s/ Lorri Ellis By: /s/ Jay B. Lewis
- ----------------------------- ---------------------------
Assistant Secretary Group Vice President
<PAGE>
July 29, 1999
Jones International Networks, Ltd.
9697 E. Mineral Avenue
Englewood CO 80124
Attn: Jay B. Lewis
Re: REVOLVING CREDIT FACILITY
Ladies/Gentlemen:
Bank of America, N.A. ("LENDER") is pleased to make available to Jones
International Networks, Ltd., a Colorado corporation, ("BORROWER") a
revolving credit facility on the terms and subject to the conditions set
forth below. Terms not defined herein have the meanings assigned to them in
EXHIBIT A hereto.
1. THE FACILITY.
(a) Subject to the terms and conditions set forth herein, Lender
agrees to make available to Borrower until the Maturity Date a
revolving line of credit providing for loans ("LOANS") in an
aggregate principal amount not exceeding at any time $20,000,000
(the "COMMITMENT"). Within the foregoing limit, Borrower may
borrow, repay and reborrow Loans until the Maturity Date.
(b) Borrower may, upon 5 Business Days' notice, reduce or cancel the
undrawn portion of the Commitment, PROVIDED, that the amount of
such reduction is not less than $1,000,000 or a whole multiple
thereof.
(c) Borrower promises to pay all Loans then outstanding on the
Maturity Date.
(d) Borrower may prepay Loans in full or in part at any time.
Borrower will give Lender irrevocable written notice of
Borrower's intention to make the prepayment, specifying the date
and amount of the prepayment. The notice must be received by
Lender at least 5 Business Days in advance of the prepayment.
Each prepayment, whether voluntary, by reason of acceleration or
otherwise, will be accompanied by the amount of accrued interest
on the amount prepaid and the prepayment fee described below.
<PAGE>
2. INTEREST RATES AND COMMITMENT FEE.
(a) REFERENCE RATE. Unless Borrower elects the Fixed Rate as
described below, the interest rate shall be Lender's Reference
Rate MINUS 2% per annum. The Reference Rate is the rate of
interest publicly announced from time to time by Lender as its
Reference Rate. The Reference Rate is set by Lender based on
various factors, including Lender's costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans. Lender may price loans to
its customers at, above, or below the Reference Rate. Any change
in the Reference Rate shall take effect at the opening of
business on the day specified in the public announcement of a
change in Lender's Reference Rate.
(b) FIXED RATE. Instead of the interest rate based on Lender's
Reference Rate, Borrower may elect the Fixed Rate PLUS 50 basis
points per annum. Any principal amount bearing interest at an
optional rate under this Agreement is referred to as a "PORTION."
(i) The "FIXED RATE" means the fixed interest rate Lender
and Borrower agree will apply during the applicable
interest period. The interest period during which the
Fixed Rate will be in effect will be between 7 days and
180 days, and each Fixed Rate Portion will be for an
amount not less than $1,000,000.
(ii) Interest shall be payable quarterly in arrears on the
last day of each calendar quarter and on the date of
any prepayment of a Fixed Rate Portion. At the end of
any interest period, the interest rate will revert to
the rate based on the Reference Rate, unless Borrower
has designated another Fixed Rate Portion. No Fixed
Rate Portion may be converted to a different interest
rate during the applicable interest period. Upon the
occurrence of an Event of Default, Lender may terminate
the availability of the Fixed Rate for interest periods
commencing after an Event of Default occurs.
(iii) In addition to the amount of accrued interest on the
amount prepaid, each prepayment of a Fixed Rate Portion
will be accompanied by a prepayment fee equal to the
amount (if any) by which (x)the additional interest
which would have been payable during the interest
period on the amount prepaid had it not been prepaid,
exceeds (y) the interest which would have been
recoverable by Lender by placing the amount prepaid on
deposit in the domestic certificate of deposit market,
the eurodollar deposit market, or other appropriate
money market selected by Lender for a period starting
on the date on which it was prepaid and ending on the
last day of the interest period for such Portion (or
the scheduled payment date for the amount prepaid, if
earlier).
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<PAGE>
(c) DEFAULT INTEREST. After the date any principal amount of any Loan
is due and payable (whether on the Maturity Date, upon
acceleration or otherwise), or after any other monetary
obligation hereunder shall have become due and payable, Borrower
shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per
annum equal to the Reference Rate plus 2%. Such interest shall be
payable on demand.
(d) COMMITMENT FEE. Borrower promises to pay a commitment fee of 3/8%
per annum on the actual daily unused portion of the Commitment,
payable in arrears on the last Business Day of each calendar
quarter and on the Maturity Date.
(e) CALCULATION. Interest on Loans when bearing interest at the
Reference Rate shall be calculated on the basis of a year of 365
or 366 days and actual days elapsed. All other interest and fees
hereunder shall be calculated on the basis of a year of 360 days
and actual days elapsed.
3. DISBURSEMENTS AND PAYMENTS.
(a) Each request for a Loan will be made in writing in a manner
acceptable to Lender, or by another means acceptable to Lender.
Lender shall make Loan proceeds available to Borrower by wire
transfer to US Bank, ABA No. 102000021 for credit to Jones
International Networks Ltd. Account No. 103655127605 or such
other accounts from time to time designated by Borrower in
writing to Lender.
(b) Borrower shall make all payments required hereunder on the date
due in same day funds in United States Dollars at the office and
account of Lender designated by Lender from time to time in
writing. If a due date does not fall on a Business Day, Borrower
will make any payment due hereunder on the first Business Day
following the due date.
(c) Each disbursement by Lender and each payment by Borrower will be
(i) made in immediately available funds, or such other type of
funds selected by Lender and (ii) evidenced by records kept by
Lender. In addition, Lender may, at its discretion, require
Borrower to sign one or more promissory notes.
(d) Lender may honor telephone or telefax instructions for Loans or
repayments or for the designation of optional interest rates
given by any one of the individuals authorized to sign loan
agreements on behalf of Borrower, or any other individual
designated by any one of such authorized signers. Lender will
provide written confirmation to Borrower of transactions made
based on telephone or telefax instructions. Borrower agrees to
notify Lender promptly of any discrepancy between the
confirmation and the telephone or telefax instructions. Borrower
indemnifies and excuses Lender (including its officers,
employees, and agents) from all liability, loss, and costs in
connection with any act resulting from telephone or telefax
instructions Lender reasonably believes
3
<PAGE>
are made by any individual authorized by Borrower to give such
instructions. This indemnity and excuse will survive this
Agreement's termination.
(e) All payments by Borrower to Lender hereunder shall be made to
Lender in full without set-off or counterclaim and free and clear
of and exempt from, and without deduction or withholding for or
on account of, any present or future taxes, levies, imposts,
duties or charges of whatsoever nature imposed by any government
or any political subdivision or taxing authority thereof.
Borrower shall reimburse Lender for any taxes imposed on or
withheld from such payments (other than taxes imposed on Lender's
income, and franchise taxes imposed on Lender, by the
jurisdiction under the laws of which Lender is organized or any
political subdivision thereof).
4. (a) CONDITIONS PRECEDENT TO INITIAL LOAN. As a condition
precedent to the initial Loan hereunder, Lender must receive
the following from Borrower in form satisfactory to Lender:
(i) the enclosed duplicate of this Agreement duly
executed and delivered on behalf of Borrower;
(ii) the Guaranty duly executed and delivered by Guarantor;
(iii) the Security Agreement duly executed and delivered by
Guarantor, together with delivery of cash collateral
thereunder in an amount not less than $21,500,000;
(iv) a certified borrowing resolution or other evidence of
Borrower's authority to borrow; together with a
certificate of incumbency;
(v) a certified resolution or other evidence of
Guarantor's authority to enter into the Guaranty;
together with a certificate of incumbency; and
(vi) such other documents as Lender may reasonably
request.
(b) CONDITIONS TO EACH BORROWING. As a condition precedent to each
borrowing (including the initial borrowing) of any Loan and
the designation of a Fixed Rate Portion:
(i) the request shall comply with Paragraph 3;
(ii) each representation and warranty set forth in
PARAGRAPH 5 below shall be true and correct in all
material respects as if made on the date of such
borrowing or designation; and
(iii) no Default or Event of Default shall have occurred
and be continuing on the date of such borrowing or
designation.
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Each notice of borrowing or designation shall be deemed a
representation and warranty by Borrower that the conditions
referred to in clauses (ii) and (iii) above have been met.
5. REENTATIONS AND WARRANTIES. Borrower represents and warrants that:
(a) EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS. It
is a corporation duly organized or formed, validly existing
and in good standing under the laws of the state of its
organization or formation, has the power and authority and the
legal right to own and operate its properties, to lease the
properties it operates and to conduct its business, is duly
qualified and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
qualification, and is in compliance with all laws except to
the extent that noncompliance does not have a Material Adverse
Effect.
(b) POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The execution,
delivery and performance of this Agreement and the other Loan
Documents by Borrower are within its powers and have been duly
authorized by all necessary action, and this Agreement is and the
other Loan Documents, when executed, will be legal, valid and
binding obligations of Borrower and Guarantor, enforceable in
accordance with their respective terms. The execution, delivery
and performance of this Agreement and the other Loan Documents are
not in contravention of law or of the terms of Borrower's or
Guarantor's organic documents and will not result in the breach of
or constitute a default under, or result in the creation of a lien
under any indenture, agreement or undertaking to which Borrower is
a party or by which it or its property may be bound or affected.
(c) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT. The audited
consolidated balance sheet and statements of earnings and cash
flow of Borrower and its Subsidiaries as of December 31, 1998
present fairly the consolidated financial condition of
Borrower and its Subsidiaries as of such date in accordance
with generally accepted accounting principles applied on a
consistent basis, and since such date, there has been no event
or circumstance that has a Material Adverse Effect.
(d) NO MATERIAL LITIGATION. No litigation or governmental
proceeding is pending or, to the best knowledge of Borrower,
threatened by or against Borrower which, if adversely
determined, has a Material Adverse Effect.
(e) NO DEFAULT. No Default or Event of Default has occurred and is
continuing.
(f) USE OF PROCEEDS. The proceeds of the Loans will be used solely
for general corporate purposes, and not in contravention of
Regulation U of the Board of Governors of the Federal Reserve
Bank or any other requirement of law.
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(g) ERISA. Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code, and other
Federal or state law, including all requirements under the
Code or ERISA for filing reports, and benefits have been paid
in accordance with the provisions of such Plan except where
the failure to be in compliance in all material respects does
not have a Material Adverse Effect.
(h) ENVIRONMENTAL MATTERS. All facilities owned or leased by
Borrower or its Subsidiaries have been and continue to be in
material compliance with all material environmental laws and
regulations.
(i) YEAR 2000. Borrower has (i) initiated a review and assessment of
all areas within its and each of its Subsidiaries' business and
operations (including those affected by customers and vendors)
that could be adversely affected by the "Year 2000 Problem" (that
is, the risk that computer applications and devices containing
imbedded computer chips used by Borrower or any of its
Subsidiaries (or their respective customers and vendors) may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented
that plan in accordance with that timetable. Based on the
foregoing, Borrower believes that all computer applications and
devices containing imbedded computer chips (including those of its
and its Subsidiaries' customers and vendors) that are material to
its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 compliant"), except to the
extent that a failure to do so does not have a Material Adverse
Effect.
(j) FULL DISCLOSURE. No written statement made by Borrower to
Lender in connection with this Agreement, or in connection
with any Loan, contains any untrue statement of a material
fact or omits a material fact necessary to make the statement
made not misleading.
6. COVENANTS. So long as principal of and interest on any Loan or any
other amount payable hereunder or under any other Loan Document remains
unpaid or unsatisfied and the Commitment has not been terminated:
(a) INFORMATION. Borrower shall deliver to Lender:
(i) as soon as available and in any event within 90 days
after the end of each fiscal year of Borrower a
consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income and
cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the
previous fiscal year, all prepared in accordance with
generally accepted
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accounting principles applied on a consistent basis and
certified by independent public accountants of nationally
recognized standing;
(ii) promptly upon Borrower's obtaining knowledge of any
Default or Event of Default, a certificate of the
chief financial officer of Borrower setting forth the
details thereof and any action that Borrower is
taking or proposes to take with respect thereto;
(iii) promptly of any discovery or determination that any
computer application (including those of its
suppliers and vendors) that is material to Borrower's
or any of its Subsidiaries' businesses and operations
will not be Year 2000 compliant on a timely basis,
except to the extent that such failure does not have
a Material Adverse Effect; and
(iv) from time to time such additional information
regarding the financial condition or business of
Borrower and its Subsidiaries as Lender may
reasonably request.
(b) OTHER AFFIRMATIVE COVENANTS. Borrower shall, and shall cause each
of its Subsidiaries to:
(i) preserve and maintain all of its rights, privileges, and
franchises necessary or desirable in the normal conduct of
its business;
(ii) comply with the requirements of all applicable laws,
rules, regulations, and orders of governmental
authorities;
(iii) pay and discharge when due all taxes, assessments,
and governmental charges or levies imposed on it or
on its income or profits or any of its property,
except for any such tax, assessment, charge, or levy
the payment of which is being contested in good faith
and by proper proceedings and against which adequate
reserves are being maintained;
(iv) maintain all of its properties owned or used in its
business in good working order and condition ordinary
wear and tear excepted;
(v) permit representatives of Lender, during normal
business hours, to examine, copy, and make extracts
from its books and records, to inspect its
properties, and to discuss its business and affairs
with its officers, directors, and accountants; and
(vi) maintain insurance in such amounts, with such
deductibles, and against such risks as is customary
for similarly situated businesses.
(c) Negative Covenants. Borrower shall not, nor shall it permit any of
its Subsidiaries to merge or consolidate with or into any Person
or liquidate, wind-
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up or dissolve itself, or permit or suffer any liquidation or
dissolution, or sell all or substantially all of its assets,
except, that so long as no Default or Event of Default exists or
would result therefrom:
(i) any Subsidiary of Borrower may merge with (1) Borrower
provided that Borrower shall be the continuing or surviving
corporation, (2) with any one or more Subsidiaries of
Borrower, and (3) with any joint ventures, partnerships and
other Persons, so long as such joint ventures, partnerships
and other Persons will, as a result of making such merger
and all other contemporaneous related transactions, become a
Subsidiary of Borrower; PROVIDED that when any wholly-owned
Subsidiary of Borrower is merging into another Subsidiary of
Borrower, the wholly-owned Subsidiary of Borrower shall be
the continuing or surviving Person; and
(ii) any Subsidiary of Borrower may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to
Borrower or any of its Subsidiaries; PROVIDED that when any
wholly-owned Subsidiary of Borrower is selling all or
substantially all of its assets to another Subsidiary of
Borrower, the Subsidiary acquiring such assets shall be a
wholly-owned Subsidiary of Borrower.
7. EVENTS OF DEFAULT. The following are "EVENTS OF DEFAULT:"
(a) Borrower fails to pay any principal of any Loan as and on the
date when due; or
(b) Borrower fails to pay any interest on any Loan, or any commitment
fees due hereunder, or any portion thereof, within three days
after the date when due; or Borrower fails to pay any other fees
or amount payable to Lender under any Loan Document, or any
portion thereof, within five days after the date due; or
(c) Any default occurs in the observance or performance of any
agreement contained in PARAGRAPH 6(a) or 6(c) hereof; or
(d) Borrower or Guarantor fails to perform or observe any other
covenant or agreement (not specified above) contained in any Loan
Document on its part to be performed or observed and such failure
continues for 30 days; or
(e) Any representation or warranty in any Loan Document or in any
certificate, agreement, instrument or other document made or
delivered by Borrower or Guarantor pursuant to or in connection
with any Loan Document proves to have been incorrect when made or
deemed made; or
(f) Borrower or Guarantor (i) fails to make any payment in respect of
any indebtedness (other than indebtedness hereunder) or guaranty
obligation having an aggregate principal amount (including
undrawn committed or available amounts and including amounts
owing to all creditors under any combined or
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syndicated credit arrangement) in excess of the Threshold Amount
when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise), or (ii) defaults in the
observance or performance of any other agreement or condition
relating to any such indebtedness or guaranty obligation or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur, the effect of
which default or other event is to cause, or to permit the holder
or holders of such indebtedness or beneficiary or beneficiaries of
such guaranty obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such indebtedness to be
demanded or become due (automatically or otherwise) prior to its
stated maturity, or such guaranty obligation to become payable or
cash collateral in respect thereof to be demanded, or (iii) is
unable or admits in writing its inability to pay its debts as
they mature; or
(g) Any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement of Lender or
satisfaction in full of all the indebtedness hereunder, ceases to
be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid or
unenforceable in any respect; or Borrower or Guarantor denies
that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan
Document; or
(h) A final judgment against Borrower or Guarantor is entered for the
payment of money in excess of the Threshold Amount and such
judgment remains unsatisfied without procurement of a stay of
execution within 30 calendar days after the date of entry of
judgment; or
(i) Guarantor, Borrower or any of their Subsidiaries institutes or
consents to the institution of any proceeding under Debtor Relief
Laws, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without
the application or consent of Guarantor, Borrower or such
Subsidiary and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under Debtor Relief Laws
relating to Guarantor, Borrower or any Subsidiary or to all or
any part of Guarantor, Borrower's or such Subsidiary's property
is instituted without the consent of Guarantor, Borrower or such
Subsidiary and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding;
or
(j) A Change of Control occurs; or
(k) Any event occurs which has a Material Adverse Effect.
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<PAGE>
Upon the occurrence of an Event of Default, Lender may declare the
Commitment to be terminated, whereupon the Commitment shall be
terminated, and/or declare all sums outstanding hereunder and
under the other Loan Documents, including all interest thereon,
to be immediately due and payable, whereupon the same shall
become and be immediately due and payable, without notice of
default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind
or character, all of which are hereby expressly waived; PROVIDED,
HOWEVER, that upon the occurrence of any event specified in
PARAGRAPH 7(i) above, the Commitment shall automatically
terminate, and all sums outstanding hereunder and under each
other Loan Document, including all interest thereon, shall become
and be immediately due and payable, without notice of default,
presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind
or character, all of which are hereby expressly waived.
8. MISCELLANEOUS.
(a) All financial computations required under this Agreement shall be
made, and all financial information required under this Agreement
shall be prepared, in accordance with generally accepted
accounting principles consistently applied.
(b) All references herein and in the other Loan Documents to any time
of day shall mean the local (standard or daylight, as in effect)
time of California.
(c) Borrower shall reimburse or compensate Lender, upon demand, for
all costs incurred, losses suffered or payments made by Lender
which are applied or reasonably allocated by Lender to the
transactions contemplated herein (all as determined by Lender in
its reasonable discretion) by reason of any and all future
reserve, deposit, capital adequacy or similar requirements
against (or against any class of or change in or in the amount
of) assets, liabilities or commitments of, or extensions of
credit by, Lender; and compliance by Lender with any directive,
or requirements from any regulatory authority, whether or not
having the force of law.
(d) No amendment or waiver of any provision of this Agreement or of
any other Loan Document and no consent by Lender to any departure
therefrom by Borrower shall be effective unless such amendment,
waiver or consent shall be in writing and signed by a duly
authorized officer of Lender, and any such amendment, waiver or
consent shall then be effective only for the period and on the
conditions and for the specific instance specified in such
writing. No failure or delay by Lender in exercising any right,
power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
rights, power or privilege.
(e) Except as otherwise expressly provided herein, notices and other
communications to each party provided for herein shall be in
writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy or
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electronic mail to the address provided from time to time by such
party. Any such notice or other communication sent by overnight
courier service, mail or telecopy shall be effective on the
earlier of actual receipt and (i) if sent by overnight courier
service, the scheduled delivery date, (ii) if sent by mail, the
fourth Business Day after deposit in the U.S. mail first class
postage prepaid, and (iii) if sent by telecopy, when transmission
in legible form is complete. All notices and other communications
sent by the other means listed in the first sentence of this
paragraph shall be effective upon receipt. Notwithstanding
anything to the contrary contained herein, all notices (by
whatever means) to Lender pursuant to PARAGRAPH 3 hereof shall be
effective only upon receipt.
(f) This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns, except that Borrower may
not assign its rights and obligations hereunder. Lender may at any
time (i) assign all or any part of its rights and obligations
hereunder to any other Person with the consent of Borrower, such
consent not to be unreasonably withheld, PROVIDED that no such
consent shall be required if the assignment is to an affiliate of
Lender or if a Default or Event of Default exists, and (ii) grant
to any other Person participating interests in all or part of its
rights and obligations hereunder without notice to Borrower.
Borrower agrees to execute any documents reasonably requested by
Lender in connection with any such assignment. All information
provided by or on behalf of Borrower to Lender or its affiliates
may be furnished by Lender to its affiliates and to any actual or
proposed assignee or participant.
(g) Borrower shall pay Lender, on demand, all reasonable out-of-pocket
expenses and legal fees (including the allocated costs for
in-house legal services) incurred by Lender in connection with the
enforcement of this Agreement or any instruments or agreements
executed in connection herewith.
(h) Borrower agrees to indemnify, save and hold harmless Lender, its
affiliates, and their respective directors, officers, agents,
attorneys and employees (collectively the "INDEMNITEES") from and
against: (i) any and all claims, demands, actions or causes of
action that are asserted against any Indemnitee by any Person
relating directly or indirectly to a claim, demand, action or
cause of action that such Person asserts or may assert against
Borrower or any of its affiliates, officers or directors; (ii) any
and all claims, demands, actions or causes of action arising out
of or relating to, the Loan Documents, any predecessor loan
documents, the Commitment, the use or contemplated use of the
proceeds of any Loan, or the relationship of Borrower and Lender
under this Agreement; (iii) any administrative or investigative
proceeding by any governmental authority arising out of or related
to a claim, demand, action or cause of action described in clause
(i) or (ii) above; and (iv) any and all liabilities, losses, costs
or expenses (including legal fees, which shall include the
allocated costs for in-house legal services) that any Indemnitee
suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding,
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<PAGE>
or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or
proceeding, in all cases, whether or not an Indemnitee is a party
to such claim, demand, action, cause of action or proceeding,
including those liabilities caused by an Indemnitee's own
negligence; PROVIDED that no Indemnitee shall be entitled to
indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another
Indemnitee.
(i) If any provision of this Agreement or any other Loan Document
shall be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect the remaining
provisions hereof or thereof. This Agreement supersedes all prior
agreements and oral negotiations with respect to the subject
matter hereof.
(j) This Agreement may be executed in one or more counterparts, and
each counterpart, when so executed, shall be deemed an original
but all such counterparts shall constitute but one and the same
instrument.
(k) This Agreement and the other Loan Documents are governed by, and
shall be construed in accordance with, the laws of the State of
California and the applicable laws of the United States of
America. Borrower hereby submits to the nonexclusive jurisdiction
of the United States District Court and each state court in the
City of Los Angeles for the purposes of all legal proceedings
arising out of or relating to any of the Loan Documents or the
transactions contemplated thereby. Borrower irrevocably consents
to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to Borrower at
its address set forth beneath its signature hereto. Borrower
irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought
in an inconvenient forum.
(l) BORROWER AND LENDER EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(m) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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Please indicate your acceptance of the Commitment on the foregoing terms and
conditions by returning an executed copy of this Agreement to the undersigned
not later than July 31, 1999.
BANK OF AMERICA, N.A.
By: /s/ Larry DaSilva
Name: Larry DaSilva
Title: Vice President
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST WRITTEN ABOVE:
JONES INTERNATIONAL NETWORKS, LTD.
By: /s/ Jay B. Lewis
Name: Jay B. Lewis
Title: Group Vice President
Date: July 29, 1999
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