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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): January 14, 1999
RADIO UNICA CORP.
(Exact name of Registrant as specified in its charter)
Delaware 333-61211 65-0776004
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
8400 N.W. 52nd Street, Suite 101
Miami, Florida 33166
(Address of principal executive offices, including zip code)
(305) 463-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 14, 1999, Radio Unica Corp. (the ""Company'') acquired, through
certain of its subsidiaries substantially all of the assets of radio stations
WJDM-1530 (AM) and WBAH-1660 (AM) licensed to Elizabeth, New Jersey,
KAHZ-1360 (AM) licensed to Fort Worth, Texas and KIDR-740 (AM) licensed to
Phoenix, Arizona from certain subsidiaries of Children's Broadcasting
Corporation, a Minnesota corporation. The purchase price for the acquisition
was approximately $30 million. The Company used a portion of the proceeds
from its July 27, 1998 offering of 11 3/4% Senior Discount Notes due 2006 to
fund the acquisition.
Prior to the acquisition, the assets acquired by the Company were used by the
Sellers in the operation of their children oriented broadcasting business in
New York, Dallas and Phoenix. The Company intends to use such assets in the
operation of its radio broadcasting business in New York, Dallas and Phoenix.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT 10: Asset Purchase Agreement, dated October 27, 1998, by and among
Children's Broadcasting Corporation, a Minnesota corporation, Children's
Radio of Dallas, Inc., a Minnesota corporation, Children's Radio of Phoenix,
Inc., a Minnesota corporation, Children's Radio of New York, a New Jersey
Corporation (collectively the ""Asset Subsidiaries''), KAHZ-AM, Inc., a
Minnesota corporation, KIDR-AM, Inc., a Minnesota corporation, WJDM-AM, Inc.,
a Minnesota corporation (the ""License Subsidiaries'', and together with the
Asset Subsidiaries and CBC, the ""Sellers'') and Radio Unica Corp. (the
""Buyer'')
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.
RADIO UNICA CORP.
Date: January 26, 1999 By: /s/ Joaquin F. Blaya
---------------------------------
Joaquin F. Blaya
Chairman and Chief Executive Officer
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Exhibit 10.41
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of October 26, 1998, is made between and
among Children's Broadcasting Corporation (referred to herein as "CBC"),
Children's Radio of Dallas, Inc., a Minnesota corporation ("CR Dallas"),
Children's Radio of Phoenix, Inc., a Minnesota corporation ("CR Phoenix"),
and Children's Radio of New York, Inc., a New Jersey corporation ("CR New
York") (CR Dallas, CR Phoenix and CR New York are sometimes collectively
referred to herein as the "Asset Subsidiaries"); KAHZ-AM, Inc., a Minnesota
corporation ("KAHZ-AM"), KIDR-AM, Inc., a Minnesota corporation ("KIDR-AM"),
and WJDM-AM, Inc., ("WJDM-AM"), a Minnesota corporation (KAHZ-AM, KIDR-AM and
WJDM-AM are sometimes collectively referred to herein as the "License
Subsidiaries"; the Asset Subsidiaries and the License Subsidiaries are
sometimes collectively referred to herein as the "Subsidiaries"; and CBC and
the Subsidiaries are sometimes collectively referred to herein as the
"Sellers"); and Radio Unica Corp., a Delaware corporation (the "Buyer"); and
W I T N E S S E T H:
THAT, WHEREAS, CBC is the owner and holder of 100% of the issued and
outstanding stock of the Asset Subsidiaries; and
WHEREAS, each of the Asset Subsidiaries is the owner of all the
assets of the radio station indicated below licensed to the community listed
below (collectively referred to herein as the "Stations"), except for the
Federal Communications Commission (the "FCC" or the "Commission")
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licenses, permits or authorizations issued with respect to the Stations, and
are the owners and holders of 100% of the issued and outstanding stock of the
License Subsidiary designated by the respective Station's call letters:
CR Dallas KAHZ(AM) Fort Worth, Texas
1360 kHz
CR Phoenix KIDR(AM) Phoenix, Arizona
740 kHz
CR New York WJDM(AM) Elizabeth, New Jersey
1530 kHz
CR New York WBAH(AM) Elizabeth, New Jersey
1660 kHz
WHEREAS, the License Subsidiaries are the FCC licensees and/or
permittees of the Stations indicated above; and
WHEREAS, Sellers have previously entered into a purchase agreement
with Catholic Radio Network, LLC ("CRN"), dated April 17, 1998, as amended
(the "CRN Agreement") and the parties are desirous of entering into this
agreement subject to the rights of CRN and CBC to close upon the CRN
Agreement; and
WHEREAS, subject to and conditioned upon the consent of the FCC, the
termination of CRN's right to acquire the Stations under the CRN Agreement or
amendment of the CRN Agreement to exclude the Stations and the other
conditions set forth herein, the Sellers desire to sell and transfer and
Buyer desires to purchase and acquire the Stations and certain of the
tangible and intangible assets of the Sellers used or held for use in
connection with the operation of the Stations, all as is more fully described
below.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and conditions contained herein, the parties hereto hereby agree as follows:
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ARTICLE 1
SALE AND TRANSFER OF ASSETS
Buyer acknowledges that Sellers have entered into the CRN Agreement.
Buyer further acknowledges that the CRN Agreement is in full force and effect
as of the date of execution hereof, and that the First Amendment to the CRN
Agreement provides, among other things that the transaction will close on
October 16, 1998, subject to CRN's right to extend the closing date until
October 30, 1998, upon payment of a fee to Sellers no later than October 19,
1998 (the "First Extension Fee") and October 26, 1998 (the "Second Extension
Fee"). Accordingly, Buyer acknowledges that Sellers' obligations under this
Agreement are subject to Sellers' and CRN's rights and obligations under the
CRN Agreement. Sellers agree that if at the close of business on October 19,
1998, all of the conditions to CRN's obligations to close under the CRN
Agreement have been satisfied and CRN has not paid to Sellers the First
Extension Fee, Sellers will immediately terminate the CRN Agreement.
Further, Sellers agree that if at the close of business on October 26, 1998,
all of the conditions to CRN's obligations to close under the CRN Agreement
have been satisfied and CRN has not paid to Sellers the Second Extension Fee,
Sellers will immediately terminate the CRN Agreement. Further, Sellers agree
that if CRN has paid the First Extension Fee and the Second Extension Fee,
and all of the conditions to CRN's obligations to close have been fulfilled,
Sellers will grant no further extensions of the closing date under the CRN
Agreement beyond November 5, 1998, and will terminate the CRN Agreement if
all the conditions to CRN's obligations to close have been fulfilled.
At closing of the transaction described herein ("Closing"), the
Sellers shall sell, convey, assign, transfer and deliver to Buyer, free and
clear of any lien, encumbrance, interest, reservation, restriction, mortgage
or security interest of any nature whatsoever, except for Excluded Assets (as
defined below), and except as otherwise expressly provided herein, all the
assets of the Sellers described below, including the business and goodwill,
used or held for use in connection with the operation of the Stations and
including all replacements and additions thereto between October 8, 1998, and
the Closing Date (as hereinafter defined) (collectively, the "Acquired
Assets"):
1.1. All licenses, permits and authorizations ("Licenses") issued by the
Commission for the operation of or used in connection with the
operation of the Stations, all of which are listed on Schedule A
attached hereto, and all applications therefor, together with any
renewals, extensions or modifications thereof and additions thereto;
1.2. All of the Sellers' owned or leased real property interests relating
to the operation of the Stations including that described in Schedule
B attached hereto;
1.3. All tangible personal property owned by the Sellers used or held for
use in the operation of the Stations including but not limited to the
property listed on Schedule C attached hereto, and any replacements
therefor or improvements thereof acquired or constructed prior to
Closing ("Personal Property");
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1.4. Subject to Section 2.6 of this Agreement, all of the Sellers' rights
and benefits under the business agreements, leases and contracts
listed on Schedule D attached hereto, including any renewals,
extensions, amendments or modifications thereof, and any additional
agreements, leases and contracts made or entered into by the Sellers
in the ordinary course of business between October 8, 1998 and the
Closing approved in writing by Buyer or otherwise permitted hereunder
("Leases and Agreements");
1.5. All other licenses, permits or authorizations issued by any government
or regulatory agency other than the FCC, which are used in connection
with the operation of the Stations, all of which are listed on
Schedule A ("Permits") and pending applications therefor;
1.6. All right, title and interest of the Sellers in and to the use of the
call letters for the Stations (referred to herein as the "Call
Letters"), to the extent they can be conveyed; together with all
common law property rights, goodwill, copyrights, trademarks, service
marks, trade names and other similar rights used in connection with
the operation of the Stations, including all additions thereto, listed
on Schedule E attached hereto ("General Intangibles");
1.7. All of the Subsidiaries' magnetic media, electronic data processing
files, systems and computer programs, logs, public files, records
required by the FCC, vendor contracts, supplies, maintenance records
or similar business records relating to or used in connection with the
operation of the Stations, but not including records pertaining to
corporate affairs (including tax records) and original journals,
provided copies are supplied to Buyer. The Sellers shall have
reasonable access to all such records which might be in the possession
of Buyer for a period of two (2) years following the Closing, and
shall, at its own expense, have the right to make copies thereof; and
1.8. All rights and claims of Sellers whether mature, contingent or
otherwise, against third parties relating to the Acquired Assets,
whether in tort, contract, or otherwise, under or pursuant to all
warranties, representations and guarantees made by manufacturers,
suppliers or vendors.
1.9 "Excluded Assets" means cash on hand, accounts receivable and the
office lease with Lincoln Building Associates.
ARTICLE 2
PURCHASE PRICE AND PAYMENTS
2.1. PURCHASE PRICE. As the purchase price for the Acquired Assets, Buyer
agrees to pay to the Sellers the sum of Twenty-Nine Million Two
Hundred Fifty Thousand and no/100 Dollars ($29,250,000.00), subject to
adjustment as provided herein (the "Purchase Price").
2.2. METHOD OF PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
payable as follows:
2.2.1. ESCROW DEPOSIT. Contemporaneously with the earlier of (i) the
termination of the CRN Agreement or (ii) the termination of
CRN's right to acquire the Stations by
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amendment or waiver of the CRN Agreement (the "Effective
Time"), Buyer and Sellers shall enter into an escrow agreement
substantially in the form attached hereto as Exhibit 1-A with
such changes as First Union National Bank may in its
discretion reasonably require,, pursuant to which Buyer will
deposit into escrow the sum of Two Million Nine Hundred
Twenty-Five Thousand and no/100 Dollars ($2,925,000.00) (the
"Damages Escrow Funds"). At Closing, the Damages Escrow
Funds, including any interest thereon, shall be delivered to
Sellers and shall be a credit to Buyer against the Purchase
Price subject to the provisions governing the release and
delivery of the Damages Escrow Funds contained in Article 6
hereof.
In addition to entering into the escrow agreement in the form
attached hereto as Exhibit 1-A, at the Effective Time Buyer
and Sellers shall enter into a second escrow agreement
substantially in the form attached hereto as Exhibit 1-B with
such changes as First Union National Bank may in its
reasonable discretion require, pursuant to which Buyer will
deposit into escrow the sum of Seven Million Seventy-Five
Thousand and No/100 Dollars ($7,075,000.00) (the "Purchase
Price Escrow Funds"). At Closing, the Purchase Price Escrow
Funds, including any interest thereon, shall be delivered to
Sellers and shall be a credit to Buyer against the Purchase
Price. Further provisions governing release and delivery of
the Purchase Price Escrow Funds shall be as set forth in
Article 6 hereof.
2.2.2. At Closing, Buyer shall also receive a credit against the
Purchase Price in an amount equal to the portion of the LMA
Deposit, as defined in Section 2.4 below, which is allocable
to periods of time after the Closing, together with interest
on one-half of the LMA Deposit at the rate of 5.5% per annum
from the date hereof until Closing.
2.2.3. The balance of the Purchase Price payable hereunder shall be
paid in cash by the Buyer on the Closing Date by wire transfer
of immediately available funds to such bank or other financial
institution as shall be designated by Sellers at least one (1)
business day prior to the Closing Date.
2.3. ADJUSTMENTS AND PRORATIONS. The operations of the Stations and the
income and expenses attributable thereto up to 12:01 A.M. on the day
of the Closing shall, except as otherwise provided in this Agreement
and in that local marketing agreement ("LMA") to be entered into
between the parties in the form attached hereto as Exhibit 2 at the
time the Effective Time, be for the account of the Sellers and
thereafter shall be for the account of Buyer. Expenses such as power
and utility charges, lease rents, property taxes according to year of
payment, frequency discounts, annual license fees (if any), wages,
commissions, payroll taxes, and other fringe benefits of employees of
the Sellers who enter the employment of the Buyer, and similar
deferred items shall be prorated between the Sellers and the Buyer.
Prepaid deposits shall also be prorated between the Sellers and the
Buyer. Employees' employment with the Sellers shall be terminated as
of the Closing Date, and Buyer shall employ employees of its choice
from and after said date upon terms acceptable to Buyer and
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such employees. Any prorations shall be made and paid insofar as
feasible at the Closing, with a final settlement within ninety (90)
days after the Closing.
2.4. LMA. Any material breach or any default under this Agreement shall
be a breach or default of the LMA by the breaching party, and any
material breach or any default under the LMA shall be a breach or
default of this Agreement by the breaching party. At the Effective
Time, the Buyer shall pay to Sellers the sum of Two Million Five
Hundred Thousand and no/100 Dollars ($2,500,000.00) as a prepayment
of payments called for under the LMA with respect to radio station
WBAH(AM), and upon approval of the HSR Filing (as defined in Section
7.7 below), Buyer shall pay to Seller the additional sum of Five
Hundred Thousand and no/100 Dollars ($500,000.00) as a prepayment of
payments called for under the LMA with respect to radio stations
KAHZ(AM) and KIDR(AM) (as initially funded and subsequently
increased, the "LMA Deposit").
2.5. NON-COMPETITION AGREEMENT. On the Closing Date, the Buyer shall
enter into a non-competition agreement with Christopher T. Dahl
("Dahl") the form attached hereto as Exhibit 3 (the "Non-Competition
Agreement"), pursuant to which Dahl will agree not to own, operate or
be employed by a radio station broadcasting from a site within 100
miles of any site from which any of the Stations broadcast for a
period of two (2) years, and Buyer, in consideration thereof, shall
make a lump sum payment to Dahl in the amount of Seven Hundred Fifty
Thousand and no/100 Dollars ($750,000.00) on the Closing Date.
2.6. PARTIAL CLOSING ADJUSTMENTS. Further adjustments to the purchase
price payable hereunder may be made pursuant to the provisions of
Sections 6.1 and 7.3 below.
2.7. ASSUMED LIABILITIES. Except as expressly provided for in this
Agreement or the Leases and Agreements listed on the Schedules
hereto, at the Closing Buyer shall not assume, incur or be charged
with, in connection with the transactions herein contemplated, any
liabilities or obligations of any nature whatsoever, contingent or
otherwise. Without limitation of the foregoing, Buyer shall not
assume any obligations to the Stations' employees under any employee
benefit plans or employment contracts.
2.8. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Acquired Assets by Buyer and the Sellers as set forth in
the attached Schedule F. The values of the Acquired Assets with
respect to each of the Stations are set forth with an aggregate
allocation value as to all Acquired Assets associated with the
operation of each of the Stations set out thereon as the station
aggregate value (the "Station Aggregate Value") for each of the
Stations. Such allocation will be used for all purposes, including
preparation and filing of IRS Form 8594 with respect to the
transactions contemplated by this Agreement.
2.9. SECURITY AGREEMENT AND INTERCREDITOR AGREEMENT. At the Effective
Time, and upon Buyer's funding of the Escrow Deposit and the LMA
Deposit, Sellers agree to execute and deliver to Buyer a Security
Agreement in the form attached hereto as Exhibit 4, and Buyer
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agrees to execute and deliver to Sellers' lender, Foothill Capital
Corporation, an Intercreditor Agreement in the form attached hereto
as Exhibit 5.
ARTICLE 3
THE SELLERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
The Sellers represent, warrant and agree as follows, which
representations and warranties shall be deemed to have been made again at
Closing and which agreements shall remain in effect from the date hereof until
the Closing or such later time specified herein:
3.1. CORPORATE EXISTENCE AND POWERS. The Sellers, except CR New York, are
corporations organized and existing in good standing under the laws
of the State of Minnesota, with full power and authority to enter
into this Agreement and the other Transaction Documents (as defined
herein) and to enter into and complete the transactions contemplated
herein and therein without shareholder approval; CR New York is a
corporation organized and existing in good standing under the laws of
the State of New Jersey, with full power and authority to enter into
this Agreement and the other Transaction Documents (as defined
herein) and to enter into and complete the transactions contemplated
herein and therein; CR Dallas is, and will be at the time of
Closing, qualified to do business in the State of Texas; and CR
Phoenix is, and will be at the time of Closing, qualified to do
business in the State of Arizona and neither the nature of the
business of the Stations, nor the character of the properties owned,
leased or otherwise held by Sellers for use in the business of the
Stations makes any qualification necessary in any other state,
country, territory or jurisdiction; all required corporate actions
have been taken by the Sellers to make and carry out this Agreement
and the other Transaction Documents and the transactions contemplated
herein and therein; this Agreement constitutes, and upon execution
and delivery, each other Transaction Document will constitute a valid
and binding obligation of Sellers enforceable in accordance with its
terms; the execution of this Agreement and the other Transaction
Documents and the completion of the transactions herein and therein
involved will not result in the violation of any law, regulation,
order, license, permit, rule, judgment or decree to which any of the
Sellers, the Acquired Assets or the Stations, is subject, or conflict
with or constitute the breach of any contract, agreement or other
commitment to which any of the Sellers is a party or by which they
are bound or as to which any of the Acquired Assets or the Stations
are subject or affected, or conflict with or violate any provision of
any of the respective Sellers' certificates of incorporation, bylaws
or other organizational documents; and, except for receipt of the
Commission's Consent (as defined herein) with respect to the
assignment of the Licenses to Buyer, no other consents of any kind
are required that have not been obtained for the Sellers to make or
carry out the terms of this Agreement and the
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other Transaction Documents, except with respect to those consents
identified on Schedule B or D which are required of parties to Leases
and Agreements listed on Schedule B or D or with respect to
assignment and assumption of specific contract rights and
obligations. The Sellers shall use their best efforts to obtain
third party consents with respect to any of the Leases and Agreements
designated on Schedule B or D as "material," to the extent required
by such documents. Buyer shall cooperate with the Sellers in
obtaining all such required consents. As used herein, the term
"Transaction Documents" refers collectively to this Agreement, the
LMA, the Assignment of Licenses, the Warranty Deeds, an Assignment
and Bill of Sale and any other agreements to be executed and
delivered by any Seller hereunder or as otherwise contemplated
herein.
3.2. COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Sellers are not in
violation of, and have not received any notice asserting any material
noncompliance by Sellers with, any applicable statute, law, rule or
regulation, whether federal, state, local or otherwise, in connection
with the ownership of the Acquired Assets. Sellers have complied and
are in compliance in all material respects with all laws, regulations
and governmental orders applicable to Sellers' operation of the
Stations and ownership of the Acquired Assets, except as disclosed on
Schedule A. Sellers have obtained and hold all permits, licenses and
approvals (other than the Licenses), none of which has been rescinded
and all of which are in full force and effect, from all Governmental
Authorities (as defined herein) necessary in order to conduct the
operations of the Stations in accordance with applicable law, as
presently conducted and to own, use and maintain the Acquired Assets,
all of which permits, licenses and approvals are identified on
Schedule A. As used herein, "Governmental Authorities" means any
agency, board, bureau, court, commission, department, instrumentality
or administration of the United States government, any state
government or any local or other governmental body in a state of the
United States or the District of Columbia. No filing or registration
with, notification to, or authorization, consent or approval of, any
Governmental Authority is required in connection with the execution
and delivery of this Agreement and the other Transactional Documents
by any Seller or the performance by any Seller of its obligations
hereunder or thereunder except compliance with any applicable
requirements of the Communications Act of 1934 as amended, (the
"Communications Act") and the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 ("HSR"). Each of the License Subsidiaries
is the holder of the Licenses indicated on Schedule A, all of which
are valid, in full force and effect and which have been
unconditionally issued for the full license term. The Licenses
constitute all of the licenses, grants, permits, waivers and
authorizations issued by the FCC and required for and/or used in the
operation of the Stations as they are currently being operated. Each
License Subsidiary is fully qualified to hold its Licenses. All
ownership and employment reports, renewal applications, and other
reports and documents required to be filed for the Stations have been
properly and timely filed, except as noted on Schedule A. The
Stations are operating in accordance with the Licenses, and in
compliance with the Communications Act, and the rules and regulations
of the Commission, including, without limitation, those regulations
governing the Stations' equal employment opportunity practices and
public files, and any other applicable laws, ordinances, rules and
regulations, except as disclosed on Schedule A. Sellers have
complied in all material respects with all
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requirements of the FCC and the Federal Aviation Administration with
respect to the construction and/or alteration of Seller's antenna
structures, and "no hazard" determinations for each antenna structure
have been obtained. The Licenses are unimpaired by any act or
omission of Sellers or their officers, directors, employees and
agents and Sellers will not, without Buyer's prior written consent,
by an act or omission, surrender, modify, forfeit or fail to seek
renewals on regular terms, of any License, or cause the Commission or
other regulatory authority to institute any proceeding for the
cancellation or modification of any such License, or fail to
prosecute with due diligence any pending application to the
Commission. There is not now pending, or to the best of Sellers'
knowledge threatened, any action by or before the Commission or other
regulatory authority to revoke, cancel, rescind, modify (except as to
any applications by the Sellers shown on Schedule A) or refuse to
renew in the ordinary course any of the Licenses, or any
investigation, order to show cause, notice of violation, notice of
inquiry, notice of apparent liability or of forfeiture or complaint
against the Stations or Sellers, and Sellers have no knowledge of any
basis for the commencement of any such proceeding in the future.
Should any such action or investigation be commenced, order or notice
be released, or complaint be filed, Sellers will promptly notify
Buyer and take all actions necessary to protect the Stations and the
Licenses from any material adverse impact. All reports, statements
and other documents relating to the Stations filed by the Sellers or
the Stations with the FCC or any other Governmental Authority were
true, correct and complete in all material respects when filed.
3.3. FINANCIAL STATEMENTS. The Sellers have delivered to the Buyer
unaudited balance sheets dated December 31, 1996, and December 31,
1997 (the latter of which are referred to herein as the "1997 Balance
Sheets") and unaudited statements of operations for the twelve months
ended December 31, 1996, and December 31, 1997, for each of the
Stations, other than KIDR(AM), as to which no 1996 financial
statements have been delivered. Such balance sheets and the notes
thereto are true, complete and accurate in all material respects and
fairly present the consolidated assets, liabilities and financial
condition of the Stations as at the respective dates thereof, and
such statements of operations and the notes thereto are true,
complete and accurate in all material respects and fairly present the
results of operations for the periods indicated, all in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved.
3.4. NO UNDISCLOSED LIABILITIES. None of the Stations has any material
liabilities or obligations of any nature (absolute, accrued,
contingent or otherwise) which were not fully reflected or reserved
against in the 1997 Balance Sheets, except for liabilities and
obligations incurred in the ordinary course of business and
consistent with past practice since the date thereof (none of which
liabilities and obligations is a liability for breach of contract,
tort, infringement or violation of law); and the reserves reflected
in the 1997 Balance Sheets are adequate, appropriate and reasonable.
3.5. ACQUIRED ASSETS. The Acquired Assets to be transferred to Buyer at
Closing represent all the assets necessary for the Stations' current
and continuing operations; until Closing, none of the Acquired Assets
will be sold, leased or otherwise disposed of unless replaced by a
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substantially similar asset of equal or greater value, and, at
Closing, all of the Acquired Assets shall be owned by and transferred
by the Sellers to Buyer free and clear of all liens, encumbrances,
interests or restrictions of any kind whatsoever excepting only those
obligations, liens or encumbrances expressly provided to be assumed
by Buyer herein or the Leases and Agreements listed on Schedule B or
D. The Acquired Assets have been maintained in good condition,
subject to normal wear and tear. Since the date of the 1997 Balance
Sheets, there has not been any material adverse change in the
Acquired Assets; the Sellers are not aware of any circumstance that
could cause a material adverse effect in the Acquired Assets; the
Sellers have conducted the business of the Stations in the Ordinary
Course of Business; and the Sellers have not taken any action that
would be prohibited by Section 3.16. As used herein, the term
"Ordinary Course of Business" means, with respect to Sellers, the
ordinary course of business of the Stations consistent with the past
practices of Sellers and recognizing that the Sellers ended the
24-hour distribution of their Aahs World Radio_ format as of
midnight, January 30, 1998, and have since maintained a 24-hour
all-music format at the Stations without any sales of advertising
time, except with respect to WBAH-AM, which has been programmed by
Buyer.
3.6. REAL ESTATE.
3.6.1. OWNED PROPERTIES. Schedule B sets forth a list of all real
property owned by the Sellers ("Owned Real Property"). With
respect to each parcel of Owned Real Property, except as
disclosed on Schedule B, there are no leases, subleases,
licenses, concessions or other agreements, written or oral,
granting any person the right of use or occupancy of any
portion of such parcel and there are no outstanding actions
or rights of first refusal to purchase such parcel or any
portion thereof or interest therein.
3.6.2. LEASED PROPERTIES. Schedule B sets forth a list of all real
property leased by the Sellers (the "Leased Real Property")
and all of the leases (the "Leases") of the Leased Real
Property. With respect to the Leased Real Property, except
as disclosed on Schedule B, (a) all obligations of the
landlord or lessor under the Leases that have accrued have
been performed, and no landlord or lessor is in default under
or in arrears in the payment of any sum or in the performance
of any obligation required of it under any Lease, and no
circumstance presently exists which, with notice or the
passage of time, or both, would give rise to a default by the
landlord or lessor under any Lease; (b) all obligations of
the tenant or lessee under the Leases that have accrued have
been performed, and Sellers are not in default under or in
arrears in the payment of any sum or in the performance of
any obligation required of it under any Lease, and no
circumstance presently exists which, with notice or the
passage of time, or both, would give rise to a default by
Sellers; and (c) there are no consents of any landlord or
lessor required to transfer the Leased Real Property to Buyer.
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3.6.3. TITLE AND DESCRIPTION. Sellers hold a valid and enforceable
freehold interest in the Owned Real Property and valid and
enforceable leasehold interests in the Leased Real Property
pursuant to the Leases as shown on Schedule B, subject only
to the right of reversion of the landlord or lessor under the
Leases and those rights of third parties disclosed on
Schedule B.
3.6.4. PHYSICAL CONDITION. There is no defect in the physical
condition of any improvements located on or constituting a
part of the Real Property. The Real Property, including,
without limitation, such improvements, is in good condition
and repair and is adequate for the uses to which it is being
put, and the Real Property is not in need of maintenance or
repairs except for ordinary, routine maintenance and repairs
which are not material in nature or cost. The soil condition
of the Real Property is such that it will support all of the
improvements thereon for the foreseeable life of the
improvements without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations.
3.6.5. UTILITIES. All water, sewer, gas, electric, telephone,
drainage and other utility equipment, facilities and services
required by law or necessary for the operation of the Real
Property as it is now improved and operated are installed and
connected pursuant to valid permits, are sufficient to
service the Real Property and are in good operating condition
except in such case as will not materially detract from the
marketability or value of the Real Property and do not impair
the operations of the lessee thereof.
3.6.6. COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Sellers have
received no notice from any Governmental Authority of any
violation of any zoning, building, fire, water, use, health,
or other law, ordinance, code, regulation, license, permit or
authorization issued in respect of any of the Real Property
that has not been heretofore corrected, and know of no such
violation or violations that now exist that would materially
detract from the marketability or value of the Real Property
or impair the operations of the occupant thereof in any
material respect. Sellers' improvements located on or
constituting a part of the Real Property and the
construction, installation, use and operation thereof
(including, without limitation, the construction,
installation, use and operation of any signs located thereon)
are in compliance with all applicable municipal, state,
federal or other governmental laws, ordinances, codes,
regulations, licenses, permits and authorizations, including,
without limitation, applicable zoning, building, fire, water,
use, or health laws, ordinances, codes, regulations,
licenses, permits and authorizations, and there are presently
in effect all certificates of occupancy, licenses, permits
and authorizations required by law, ordinance, code or
regulation or by any governmental or private authority having
jurisdiction over the ownership or operation of the Sellers'
businesses or any of the Acquired Assets, including the
Stations and the Real Property or any portion thereof, or the
occupancy thereof or any present use thereof, except such
non-compliance as will not materially detract from the
marketability
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or value of the Real Property and do not impair the
operations of the occupant thereof in any respect. All such
approvals required by law, ordinance, code, regulation or
otherwise to be held by the occupant of any of the Real
Property shall be transferred to Buyer at Closing, if and to
the extent transferable. There is legally enforceable
pedestrian and vehicular access to the Real Property.
3.6.7. REAL PROPERTY TAXES. Sellers have received no notice of any
pending or threatened special assessment or reassessment of
all or any portion of any of the Real Property.
3.6.8. CONDEMNATION. There is no pending or, to Sellers' knowledge,
threatened condemnation of all or any part of the Real
Property.
3.6.9. INSURABILITY. Sellers have not received any notice from any
insurance company of any material defects or inadequacies in
the Real Property or any part thereof, which would
materially, adversely affect the insurability of the same or
of any termination or threatened termination of any policy of
insurance.
3.7. CONTRACTS, LEASES, AGREEMENTS, ETC. Each of the Leases and
Agreements are in full force and effect, and there are no outstanding
notices of cancellation, acceleration or termination in connection
therewith except as noted upon Schedule B or D. Sellers are not in
breach or default in connection with any of the Leases and Agreements
and, to the best of Sellers' knowledge, there is no basis for any
claim, breach or default with respect to Sellers or any other party
under any of said Leases and Agreements. Sellers have made available
to Buyer true and correct copies of all agreements and instruments
listed on Schedule D, and will make available to Buyer true and
correct copies of any additional agreements, leases and contracts
entered into by the Sellers in Ordinary Course of Business, as
provided in Section 1.4 hereof. On the Closing Date there will be no
Leases or Agreements relating to the Stations (not including this
Agreement and the LMA) which will be binding on the Buyer other than
those specifically identified herein, including the Schedules
attached hereto, as assumed by Buyer, or as otherwise approved in
writing by Buyer.
3.8. LITIGATION. Except as set forth on Schedule G, no strike, labor
dispute, investigation, litigation, court or administrative
proceeding is pending or, to the best of Sellers' knowledge,
threatened against the Sellers relating to the Stations, their
employees or any of the Acquired Assets which may result in any
change in the business, operations, assets or financial condition of
the Stations or may materially affect Buyer's use and enjoyment of
the Acquired Assets, or which would hinder or prevent the
consummation of the transaction contemplated by this Agreement and
the other Transaction Documents, and the Sellers know of no basis for
any such possible action.
3.9. ENVIRONMENTAL MATTERS.
3.9.1. Environmental Representation of Sellers. Sellers are in
compliance in all material respects with all applicable
federal, state and local laws and regulations relating to
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pollution or protection of human health or the environment
("Environmental Laws") (which compliance includes, but is not
limited to, the possession by such Sellers of any permits and
other governmental authorizations required under applicable
Environmental Laws and compliance with the terms and
conditions thereof) with respect to the Real Property and
the business of the stations. None of Sellers has received
any communication (written or oral), whether from a
Governmental Authority, citizens' group, employee or
otherwise, alleging that Sellers are not in such compliance,
and to the Sellers' knowledge, there are no past or present
actions, activities, circumstances, conditions, covenants or
incidents that may prevent or interfere with such compliance
in the future. Sellers have not participated in nor
approved, nor has there occurred, to the best of their
knowledge, except as disclosed on Schedule B, any production,
disposal or storage on the Real Property of any hazardous
waste or toxic substance, nor does such waste or substance
exist on the Owned Real Property (above or beneath the
surface), nor is there any proceeding or inquiry, by any
governmental authority (federal or state) with respect to the
presence of such waste or substance on the Real Property to
the best of the Sellers' knowledge, nor are there any
underground storage tanks on the Owned Real Property, to the
best of Sellers' knowledge. There is no Environmental Claim
(as defined below) pending, or to the knowledge of Sellers,
threatened against any Seller with respect to the Owned Real
Property or the business of the Stations or, to the best of
the Sellers' knowledge, against any Person whose liability
for any Environmental Claim any Seller has or may have
retained or assumed either contractually or by operation of
law. To the best of the Sellers' knowledge, there are no
past or present actions, activities, circumstances,
conditions, events or incidents with respect to the Owned
Real Property, any Seller or the business of the Stations
that could form the bases of any Environmental Claim against
any Seller or against any Person whose liability for any
Environmental Claim any Seller has or may have retained or
assumed either contractually or by operation of law. As used
herein, "Environmental Claim" means any claim, action, cause
of action, investigation or notice (written or oral) by any
Person alleging potential liability arising out of, based on
or resulting from (a) the presence or release of any
hazardous waste at any location, whether or not owned or
operated by the Seller or (b) circumstances forming the basis
of any violation of any Environmental Law. "Hazardous waste"
shall consist of the substances defined as "hazardous
substances", "hazardous materials", or "toxic substances" in
the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 USC 9601, et seq., or
in the Hazardous Materials Transportation Act, 49 USC 1801,
et seq., or in the Resources Conservation and Recovery Act,
42 USC 6901, et seq., and all substances defined as
"hazardous waste" under the Statutes of the States of New
Jersey, Texas and Arizona or any regulations adopted pursuant
to those statutes.
3.9.2. ENVIRONMENTAL COVENANT OF SELLERS. Sellers have provided
Buyer with all information, surveys and reports in each
Seller's or each Station's possession or
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control concerning the existence or possible existence of any
underground storage tanks, polychlorinated biphenyls,
asbestos or asbestos-containing materials, radon gas,
radioactive materials, liquid petroleum or liquid petroleum
products, or other hazardous wastes, and any other reports,
studies or documents in each Seller's or each Station's
possession relating to each Seller's or each Station's
potential liability under applicable Environmental Laws
("Environmental Contamination").
3.9.3. RADIO FREQUENCY RADIATION. Other than in compliance with the
Communications Act, the operation of the Stations does not
cause or result in exposure of workers or the general public
to levels of radio frequency radiation in excess of the
"Radio Frequency Protection Guides" recommended in "American
National Standard Safety Levels with Respect to Human
Exposure to Radio Frequency Electromagnetic Fields 300 kHz to
100 gHz" (ANSI C95.1-1982), issued by the American National
Standards Institute. Renewal of the FCC Licenses would not
constitute a "major action" within the meaning of Section
1.1301, et seq., of the FCC's rules.
3.10. INSURANCE. The Sellers shall maintain in full force and effect all
of their existing casualty, liability, and other insurance covering
any or all of the Acquired Assets through the day following the
Closing Date in amounts not less than those in effect on the date
hereof, and Sellers have set forth on Schedule H an abstract of such
casualty insurance coverage. Such coverage is for replacement value
against risks commonly insured against in the radio broadcast
industry and Sellers are not in default under any such policies.
Sellers have not received any notice from any issuer of such policies
of its intention to cancel, terminate or refuse to renew any policy
issued by it to Sellers.
3.11. ACCESS TO INFORMATION AND CONFIDENTIALITY. The Sellers shall give
Buyer and its representatives reasonable access during normal
business hours throughout the period prior to Closing to the
operations, properties, books, accounting records, contracts,
agreements, leases, commitments, programming, technical and sales
records and other records of and pertaining to the Stations;
provided, however, such access shall not disrupt the Sellers' normal
operation. The Sellers shall furnish to Buyer all information
concerning the Stations' affairs as Buyer may reasonably request.
Buyer will maintain the confidentiality of all the information and
materials delivered to it or made available for its inspection by the
Sellers hereunder. Nothing shall be deemed to be confidential
information that: (a) is known to Buyer at the time of its disclosure
to Buyer; (b) becomes publicly known or available other than through
disclosure by Buyer; (c) is received by Buyer from a third party not
actually known by Buyer to be bound by a confidentiality agreement
with or obligation to Sellers; or (d) is independently developed by
Buyer as clearly evidenced by its records. Notwithstanding the
foregoing provisions of this Section 3.11, Buyer may disclose such
confidential information (x) to the extent required or deemed
advisable to comply with applicable laws and regulations, (y) to its
officers, directors, employees, representatives, financial advisors,
attorneys, accountants, and agents with respect to the transactions
contemplated hereby (so long as such parties are informed of the
confidentiality of such
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information), and (z) to any Governmental Authority in connection
with the transactions contemplated hereby. In the event this
Agreement is terminated, Buyer will return to Sellers all
confidential information prepared or furnished by Sellers relating to
the transactions contemplated hereunder, whether obtained before or
after the execution of this Agreement.
3.12. CONDUCT OF THE STATIONS' BUSINESS. Until Closing, without the
written consent of Buyer, the Sellers shall not enter into any
transaction, agreement or understanding (whether or not in writing)
other than those in the Ordinary Course of Business; no employment
contract shall be entered into by the Sellers relating to the
Stations unless the same is terminable at will and without penalty;
no material increase in compensation payable or to become payable, to
any of the employees employed at the Stations shall be made; no
material change in personnel policies, insurance benefits or other
compensation arrangements shall be made; and the Sellers will cause
the Stations to be operated in compliance with the Licenses and
Permits and all applicable laws and regulations;
the Sellers further represent, warrant and covenant:
(a) Between the date hereof and Closing, the Sellers shall not take
any action which will prevent or impede Buyer from obtaining at
the Closing the actual and immediate occupancy and possession
of the Stations and all of the Acquired Assets.
(b) On the Closing date, the Sellers will be the owner of the
Acquired Assets except such of the same replaced by
substantially similar property of no less than equivalent value
in the ordinary course of business, with good and marketable
title thereto, free and clear of all liens and encumbrances,
except liens for current taxes and assessments not yet due and
payable or to secure obligations to be assumed by Buyer
hereunder pursuant to the Leases and Agreements; and that
between the date of this Agreement and the Closing, there will
be no more than the ordinary normal wear and tear and
expendability of the Acquired Assets, and that the Acquired
Assets will be in good working condition.
(c) The Sellers do not know of any facts relating to them or the
Stations which would cause (i) the applications for assignment
of the Licenses to Buyer to be challenged, (ii) the Commission
to deny its consent to the assignments of the Stations'
Licenses to Buyer, or (iii) the Commission to grant such
applications for assignment subject to material adverse
conditions to Buyer.
(d) The Sellers will have duly filed all tax returns required to be
filed by each of the Sellers on or before the Closing Date and
will have paid and discharged all taxes, assessments, excises,
levies, or other similar charges of every kind, character or
description imposed by any Governmental Authority, and any
interest, penalties or additions to tax imposed thereon or in
connection therewith (collectively, "Taxes") known to the
Sellers which are due and payable and have not been paid and
that would interfere with the Sellers' enjoyment of the
Acquired Assets. There is no
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action, suit, proceeding, audit, investigation or claim pending
or, to the Sellers' best knowledge, threatened in respect of
any Taxes been proposed, asserted or threatened.
(e) The Sellers shall (i) upon receiving notice or otherwise
becoming aware of any violation relating to the Licenses, any
violation by any of the Stations of any rules and regulations
of the FCC, or any material violations under any other
applicable laws and regulations, promptly notify Buyer and, at
Sellers' expense, use reasonable commercial efforts to cure all
such violations prior to the Closing Date, (ii) promptly notify
Buyer in writing if the Station ceases to broadcast at its
authorized power for more than 48 consecutive hours; such
notice shall specify the reason or reasons for such cessation
and the corrective measures taken or to be taken by Sellers,
and (iii) promptly inform Buyer in writing of any material
variances from the representations and warranties contained in
this Article 3 that become known to the Sellers or any breach
of any agreement hereunder by Sellers.
3.13. COPYRIGHTS, TRADEMARKS AND SIMILAR RIGHTS. The call letters listed on
Schedule E are the call letters used by Sellers during the radio
broadcast operations of the Stations to identify each of the
respective Stations to its local audience. Sellers have full right
and authority from the FCC to use such call letters except as may be
provided in the Leases and Agreements. Sellers have not licensed or
consented to, and have no knowledge of, any other entity's or
individual's use of such call letters. There is no other name,
trademark, service mark, copyright, or other trade, or service right
or mark currently being used in the business and operations of the
Stations other than those listed in Schedule E. Sellers pay no
royalty to anyone for use of the General Intangibles and have the
right to bring action for the infringement thereof to the extent
permitted by applicable law. Sellers represent that the operations of
the Stations do not infringe on any trademark, service mark, copyright
or other intellectual property or similar right owned by others.
3.14. EMPLOYEES. Sellers shall be solely responsible for any and all
liabilities and obligations Sellers may have to the employees of the
Stations, including, without limitation, compensation, severance pay,
incentive bonuses, health expenses, and accrued vacation time, sick
leave and obligations under any of Sellers' employee benefit plans.
Sellers acknowledge that Buyer has no obligation hereunder to offer
employment to any employee of Sellers; however, Buyer shall have the
right to hire such of the employees of the Stations as Buyer may
select. With respect to any employee that Buyer hires, Sellers
further acknowledge that Buyer shall have no obligation for, and shall
not assume as part of the transaction contemplated by this Agreement,
any compensation, incentive bonuses, health expenses, or "accrued
vacation" or other accrued leave time of said employees as a
consequence of their being hired by Buyer. Sellers also acknowledge
that with respect to such employees as may be hired by Buyer, and
where any such compensation, incentive bonuses, health expenses, or
accrued leave time exists for said employees, Sellers will retain the
responsibility for any liability arising therefrom. The consummation
of the transactions contemplated hereby will not cause Buyer to incur
or suffer any liability relating to, or obligation to pay, severance,
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termination, or other payments to any person or entity, or any
liability under any employee benefit plans of Sellers, including,
without limitation, any liability under the Internal Revenue Code of
1986, as amended, or the Employee Retirement Income Security Act of
1974, as amended. Sellers shall comply with the provisions of the
Worker Adjustment and Retraining and Notification Act and similar laws
and regulations, if applicable, and shall be solely responsible for
any and all liabilities, penalties, fines, or other sanctions that may
be assessed or otherwise due under such applicable laws and
regulations on account of the dismissal or termination of the
employees of the Stations by Sellers.
3.15. LABOR RELATIONS. Schedule I lists the names, dates of hire and
current annual salaries of all persons employed by the Sellers
directly and principally in connection with the operation of the
Stations. None of the Sellers is a party to or subject to any
collective bargaining agreements with respect to any of the Stations.
Sellers have no written or oral contracts of employment with any
employee of the Stations, other than (i) oral employment agreements
terminable at will without penalty, or (ii) those listed in Schedule
D. The Sellers, in the operations of the Stations, have substantially
complied with all applicable laws, rules and regulations relating to
the employment of labor, including those related to wages, hours,
collective bargaining, occupational safety, discrimination and the
payment of social security and other payroll related taxes. To the
best of Sellers' knowledge, there is no representation or organizing
effort pending or threatened against or involving or affecting the
Sellers with respect to employees employed at any of the Stations.
3.16. PRE-CLOSING COVENANTS. Between the date hereof and the Closing, the
Sellers covenant that:
3.16.1. FCC COMPLIANCE. The Sellers shall continue to operate the
Stations in conformity with the terms of the Stations'
Licenses and in conformity in all material respects with all
applicable laws, regulations, rules and ordinances, including
but not limited to the rules and regulations of the FCC. The
Sellers shall file all reports, applications and other filings
required by the FCC in a timely and accurate manner. Sellers
will maintain the Licenses in full force and effect and take
any action necessary before the FCC to preserve such Licenses
in full force and effect without material adverse change.
Sellers will not take any action that would jeopardize the
License Subsidiaries' rightful possession of the Licenses, the
potential for assignment of the Licenses to Buyer, or the
unconditional renewal of the Licenses for full license terms.
Sellers shall continue to prosecute any pending applications
before the FCC in the ordinary course.
3.16.2. CONDUCT OF BUSINESS. The Sellers shall conduct the business
and technical operations of the Stations in the Ordinary
Course of Business and consistent with past practices, and
shall continue all practices, policies, procedures and
technical operations relating to the Stations in substantially
the same manner as heretofore.
3.16.3. MAINTENANCE OF ASSETS. The Sellers shall maintain all of the
Acquired Assets in a good condition and, with respect to the
Personal Property, shall maintain
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inventories of spare parts at levels consistent with the past
practices of the Sellers and the Stations. The Sellers shall
not sell, convey, assign, transfer or encumber any of the
Acquired Assets, except for the retirement of tangible
Acquired Assets consistent with the normal and customary
practices of the Sellers and the Stations.
3.17. NO MISLEADING STATEMENTS. To Sellers' knowledge, no statement,
representation or warranty made by Sellers herein and no information
provided or to be provided by Sellers to Buyer pursuant to this
Agreement or the other Transaction Documents or in connection with
the negotiations covering the purchase and sale contemplated herein
contains or will contain any untrue statement of a material fact, or
omits or will omit a material fact. There are no facts or
circumstances known to Sellers and not disclosed herein or in the
Schedules hereto that, either individually or in the aggregate, will
materially adversely affect after Closing the Acquired Assets or the
condition of the Stations.
3.18. CONSENTS. The Sellers shall use commercially reasonable efforts to
obtain any third party consents required to assign to Buyer all
Leases and Agreements. If, on the Closing Date, Sellers have not
obtained any required consent for the assignment of any Lease and
Agreement (other than the material Leases and Consents referred to in
Section 8.4(d) hereof) to Buyer and the Closing occurs, then after
the Closing Date, Sellers will continue to use commercially
reasonable efforts, and the Buyer will cooperate with Sellers, to
obtain any such consent and/or to remove any other impediments to the
assignment of any such Lease and Agreement. From and after the
Closing, until the valid assignment of all such Leases and
Agreements, Sellers will take such lawful actions as are reasonably
necessary to assure that Buyer shall receive the benefits of, and
shall be obligated to perform the obligations of Sellers under, all
such Leases and Agreements after the Closing Date to the same extent
as if Buyer were a party thereunder (and Buyer agrees to cooperate
with Sellers in connection with any such actions and to enter into,
at the time of the Closing, any lawful arrangements in furtherance
thereof (but at no additional cost to Buyer other than such costs as
Buyer would incur as a party to such Leases and Agreements)).
3.19. SUPPLEMENTAL DISCLOSURE. From time to time prior to the Closing, the
Sellers will promptly supplement or amend the Schedules hereto with
respect to any matter hereafter arising which, if existing or
occurring at the date of the Agreement, would have been required to
be set forth or described in such Schedules. No supplement or
amendment of any Schedule made pursuant to this section shall be
deemed to cure any breach of any representation or warranty made in
this Agreement unless Buyer specifically agrees thereto in writing.
3.20 UNWIND AGREEMENTS. In the event that a Closing occurs hereunder
prior to the receipt of a Final Order (as defined below), and upon
the receipt of an FCC order requiring Buyer to return the Acquired
Assets (including any Licenses issued by the FCC) to Sellers as a
result of Sellers' failure to comply with the Communications Act or
the rules and regulations of the FCC, Sellers agree that upon Sellers
receipt of the Acquired Assets (including any Licenses issued by the
FCC), Sellers shall return the Purchase Price to Buyer. In such
event, Sellers and Buyer agree to cooperate to return the Acquired
Assets to Sellers, the Purchase
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Price to Buyer and to otherwise place the parties in the same
positions as they were in immediately prior to the Closing and to
ensure that neither party has been otherwise economically damaged.
The term "Final Order" as used herein shall mean an FCC order or
action as to which the time for filing a request for administrative
or judicial review, or for instituting administrative review sua
sponte, shall have expired without any such filing having been made
or notice of such review having been issued; or in the event of such
filing or review sua sponte, as to which such filing or review shall
have been disposed of favorably to the grant and the time for seeking
further relief with respect thereto shall have expired without any
request for such further relief having been filed.
ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants as follows, which representations
and warranties shall be deemed to have been made again at Closing.
4.1. Corporate Existence and Powers. Buyer is a corporation organized and
existing in good standing under the laws of the State of Delaware
with full power and authority to enter into this Agreement and the
other Transaction Documents to which it is a party and enter into and
complete the transactions contemplated herein and therein; Buyer is,
or will be at the time of Closing, qualified to do business in the
States of New York, New Jersey, Texas and Arizona; all required
corporate action has been taken by Buyer to make and carry out this
Agreement and the other Transaction Documents to which it is a party
and the transactions contemplated herein and therein; this Agreement
constitutes, and upon execution and delivery, each other Transaction
Document will constitute, valid and binding obligation of Buyer
enforceable in accordance with its terms; the execution of the
Agreement and the other Transaction Documents to which it is a party
and, once the consent referred to in the next clause of this sentence
is obtained, the completion of the transactions herein involved will
not result in the violation of any order, license, permit, rule,
judgment or decree to which Buyer is subject or the breach of any
contract, agreement or other commitment to which Buyer is a party or
by which it is bound or conflict with or violate any provision of
Buyer's certificate of incorporation, bylaws or other organizational
documents; and except for the consent of the Commission to the
assignment of the Licenses to Buyer and the consents identified by
the Sellers on Schedule B or D, to the Buyer's knowledge, no other
consent of any kind is required that has not been obtained for Buyer
to make or carry out the terms of this Agreement.
4.2. BUYER'S QUALIFICATIONS. At Closing, Buyer will be legally and
financially qualified to become the licensee of the Commission.
Buyer does not know of any facts relating to it which would cause the
Commission to deny its consents, or which would materially hinder or
delay receipt of such consents, to the assignments of the Licenses to
Buyer.
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ARTICLE 5
BREACH OF AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
5.1. BREACH OF THE SELLERS' AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
The Sellers shall jointly and severally indemnify and hold harmless
Buyer and every affiliate of Buyer and any of its or their directors,
members, stockholders, officers, partners, employees, agents,
consultants, representatives, transferees and assignees from and
against any loss, damage, liability, claim, demand, judgment or
expense, including claims of third parties arising out of ownership
of the Acquired Assets or the operation of the Stations by the
Sellers prior to Closing, and including without being limited to,
reasonable counsel fees and reasonable accounting fees, sustained by
Buyer by reason of, or arising out of or relating to, (i) any
material breach of any warranty, representation, covenant or
agreement of the Sellers contained herein or in any other
Transactional Document or in the Schedules attached hereto, (ii) any
error contained in any statement, report, certificate or other
instrument delivered to Buyer by Sellers pursuant to this Agreement,
(iii) any failure by Sellers to pay or discharge any liability
relating to the Stations that is not expressly assumed by Buyer
hereunder, (iv) any facts or circumstances described in Schedule G,
or (v) the failure to comply with any applicable bulk sales or tax
notice statutes; provided, however, that such indemnification shall
be required only if written notice, with respect to any matter for
which indemnification is claimed, is given.
5.2. BREACH OF BUYER'S AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Buyer
shall indemnify and hold harmless the Sellers and every affiliate of
Sellers and any of their directors, members, stockholders, officers,
partners, employees, agents, consultants, representatives,
transferees and assignees from and against any loss, damage,
liability, claim, demand, judgment or expense, including claims of
third parties arising out of ownership of the Acquired Assets or
operation of the Stations by Buyer after Closing, and including
without being limited to, reasonable counsel fees and reasonable
accounting fees, sustained by the Sellers by reason of, or arising
out of or relating to, any material breach of any warranty,
representation, covenant or agreement of Buyer contained herein or
any other Transaction Document; provided, however, that such
indemnification shall be required only if written notice, with
respect to any matter for which indemnification is claimed, is given.
5.3. THRESHOLD. Neither Buyer nor Seller shall be liable to the other for
indemnification until the aggregate of all indemnification claims of
the party seeking indemnification exceeds $25,000.00, but after such
threshold is exceeded, the applicable party shall be entitled to
indemnification for all claims.
5.4. SPECIFIC PERFORMANCE. Sellers acknowledge that the Acquired Assets
to be transferred and assigned under this Agreement are unique and
not readily bought or sold on the open market and, for that reason,
among others, Buyer would be irreparably harmed by any breach or
failure of the other party to consummate this Agreement, and monetary
damages therefor will be highly difficult, if not wholly impossible,
to ascertain. It is therefore agreed that this
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Agreement shall be enforceable by Buyer in a court of equity by a
decree of specific performance, and an injunction may be issued
restraining any transfer or assignment of the Acquired Assets
contrary to the provisions of this Agreement pending the
determination of such controversy. Sellers, for themselves and their
successors and assigns, hereby waive the claim or defense that an
adequate remedy at law exists. In the event of a suit by Buyer to
obtain specific performance, and if Buyer shall prevail in such
action, Buyer shall be entitled to reimbursement by Sellers of all
reasonable attorneys' fees and other out-of-pocket expenses incurred
by Buyer with respect thereto.
5.5. PROCEDURES: THIRD PARTY CLAIMS. The indemnified party agrees to give
written notice within a reasonable time to the indemnifying party of
any claim or other assertion of liability by third parties which
could give rise to a claim for indemnification hereunder (hereinafter
collectively "Claims," and individually a "Claim"), it being
understood that the failure to give such notice shall not affect the
indemnified party's obligation to indemnify as set forth in this
Agreement, unless, and then only to the extent, the indemnifying
party's ability to contest, defend or settle with respect to such
Claim is thereby demonstrably and materially prejudiced. The
obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to this Article 5 resulting
from any Claim, shall be subject to the following additional terms
and conditions:
(a) Provided the indemnifying party acknowledges in writing
its obligation to indemnify the indemnified party with respect to the
Claim and further satisfies the indemnified party as to its financial
ability to satisfy such indemnification obligation, the indemnifying
party shall have the right to undertake, by counsel or other
representatives of its own choosing, the defense or opposition to
such Claim.
(b) In the event that the indemnifying party shall either
(i) elect not to undertake, or shall fail to satisfy any requirements
to undertake, such defense or opposition, or (ii) fail to properly
elect within thirty (30) days after notice of any such Claim from the
indemnified party or thereafter fail to defend or oppose such Claim,
then, in either such event, the indemnified party shall have the
right to undertake the defense, opposition, compromise or settlement
of such Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of the
indemnifying party.
(c) Anything in this Section 5.5 to the contrary
notwithstanding, (i) the indemnifying party shall not, without the
indemnified party's written consent, settle or compromise any Claim
or consent to entry of any judgment which includes any admission of
liability or does not include as a term thereof the giving by the
claimant or the plaintiff to the indemnified party of an
unconditional release from all liability in respect of such Claim,
and (ii) in the event that the indemnifying party undertakes defense
of or opposition to any Claim, the indemnified party, by counsel or
other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party
and its counsel or other representatives concerning such Claim and
the indemnifying party
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and the indemnified party and their respective counsel or other
representatives shall cooperate in good faith with respect to such
Claim.
(d) The indemnifying party hereby agrees to pay the amount
of any established Claim within fifteen (15) days after the
establishment thereof. The amount of established Claims shall be
paid in cash. Any amounts for such Claims not paid when due under
this Article shall bear interest at a rate equal to 15% per annum
until paid.
5.6. Sellers covenant that, upon the initiation by CBC of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, or similar proceeding relating to it under
any jurisdiction (a "Liquidation Announcement"), Sellers shall enter
into an escrow agreement with Buyer and a mutually agreeable esrow
agent (the "Indemnity Escrow Agreement"). Sellers further covenant
that, in the event an Indemnity Escrow Agreement is executed by the
parties, the balance of the escrow fund contemplated by the Indemnity
Escrow Agreement shall be One Million and no/100 Dollars
($1,000,000.00) during the first twelve months following the
execution of this Agreement and Five Hundred Thousand and no/100
Dollars ($500,000.00) during the second twelve months following the
execution of this Agreement regardless of the date on which a
Liquidation Announcement is made and that such balance shall be
applied to payment of any indemnification obligations owed by Sellers
to Buyer under this Article V.
ARTICLE 6
RISK OF LOSS; TERMINATION
6.1. BUYER'S OPTIONS. The risk of any loss, damage or destruction to any
of the Acquired Assets to be transferred to the Buyer hereunder from
fire or other casualty or loss shall be borne by the Sellers at all
times prior to the Closing. Upon the occurrence of any material loss
or damage to any of the Acquired Assets to be transferred hereunder
as a result of fire, casualty, or other causes prior to the Closing,
the Sellers shall notify the Buyer of same in writing immediately,
stating with particularity the reasonable estimates of the loss or
damage incurred, the cause of damage, if known, and the extent to
which restoration, replacement and repair of the Acquired Assets lost
or destroyed is believed reimbursable under any insurance policy with
respect thereto. Provided the Sellers, at their sole expense, have
not repaired, restored or replaced the damaged Acquired Assets to
Buyer's reasonable satisfaction by the Closing, and if the Buyer is
not then in default of this Agreement, Buyer shall have the option
(but not the obligation) exercisable at the Closing to:
(i) terminate this Agreement in which case none of the parties
shall have any further liability to the other parties and all
Escrow Funds shall be returned to Buyer, except that the
Sellers shall have a reasonable period of time, not to exceed
one hundred (100) days, to effect repairs of the damaged
Acquired Assets before Buyer may exercise its option under
this subparagraph 6.1 (i);
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(ii) postpone the Closing for up to one hundred eighty (180) days
as necessary to allow the property to be completely repaired,
replaced or restored, at the Sellers' sole expense, in which
event the Sellers shall use their best efforts to complete
such repairs; or
(iii) elect to consummate the Closing and accept the property in
its "then" condition, in which event the Sellers shall assign
to Buyer all rights under any insurance claim covering the
loss and pay over to the Buyer the proceeds under any such
insurance policy previously received by the Sellers with
respect thereto and provided that Buyer's election to proceed
with the Closing under this Section 6.1(iii) shall not
relieve Sellers of any of the indemnification obligations
under Article 5 hereof with respect to damaged Acquired
Assets or in any other respect.
6.2. TERMINATION BY EITHER PARTY. This Agreement may be terminated prior
to Closing as follows:
(a) by mutual agreement of Buyer and Sellers at any time;
(b) by Buyer, if not otherwise in material default or breach
of this Agreement, by written notice to Sellers if any of the
conditions specified in Section 8.4 is not satisfied in all material
respects at the time for Commission consent as provided in Section
7.4 hereof or if satisfaction of any such condition is or becomes
impossible, provided that in the event of a breach by any Seller of
any covenant or agreement contained herein, Buyer shall first give
Sellers written notice thereof, and if Sellers shall have undertaken
to cure such breach within fifteen (15) days, they shall have a total
of thirty (30) days to cure such breach, or if Buyer terminates the
LMA upon an Event of Default (as defined therein) by Seller or in
accordance with Section 6.1;
(c) by Sellers, if not otherwise in material default or
breach of this Agreement, by written notice to Buyer if any of the
conditions specified in Section 8.5 is not satisfied in all material
respects at the time for Commission consent as provided in Section
7.4 hereof or if satisfaction of any such condition is or becomes
impossible, provided that in the event of a breach by Buyer of any
covenant or agreement contained herein, Sellers shall first give
Buyer written notice thereof, and if Buyer shall have undertaken to
cure such breach within fifteen (15) days, it shall have a total of
thirty (30) days to cure such breach, or if Seller terminates the LMA
upon an Event of Default (as defined therein) by Buyer; or
6.3. EFFECT OF TERMINATION. In the event this Agreement is terminated as
provided in Section 6.2, this Agreement shall be deemed null, void
and of no further force or effect, and the parties hereto shall be
released from all future obligations hereunder with respect to the
Stations; provided that the obligations of Buyer and Sellers in
Sections 2.2.1, 3.9.5, 5.1, 5.2, 5.3, 5.5, 6.3, 7.2, 9.3, and 9.10
shall survive such termination, and provided further that the
termination of this Agreement shall not relieve any party for
liability for any material breach of this Agreement, and provided
further that, if this Agreement is terminated pursuant to
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Section 6.2(c) due to material breach or default by the Buyer of this
Agreement, and the Sellers are not then in material breach or default
of this Agreement, the Sellers shall be paid the Damages Escrow Funds
in accordance with and subject to the terms of Section 1.2 of the
escrow agreement attached as Exhibit 1-B hereto and this Section
6.2(c), together with any interest earned thereon, as liquidated
damages, it being agreed that such payment shall constitute full
payment for any and all damages suffered by Sellers by reason thereof
and that Sellers shall have no rights to or claims for damages from
Buyer. Sellers acknowledge and expressly agree that their right to
receive the Damages Escrow Funds as liquidated damages shall be
Sellers' sole and exclusive remedy (for damages or otherwise) under
this Agreement in the event that it is terminated pursuant to Section
6.2(c) hereof, or in the event that the Closing does not occur due to
a material breach or default by the Buyer of this Agreement
(occurring when the Sellers are not in material breach or default of
this Agreement) except that Sellers shall be entitled to recover its
costs and legal fees incurred in any successful effort to collect the
Damages Escrow Funds. Notwithstanding any other provision of this
Agreement, Sellers and Buyer acknowledge and expressly agree that (i)
until the satisfaction of all the conditions to Buyer's obligations
to close under this Agreement and actual occurrence of the Closing.
Sellers shall neither have nor be deemed to have any legal or
equitable right, title or interest in the Purchase Price Escrow Funds
or right to delivery thereof, (ii) Buyer shall retain all legal and
equitable rights, title and interest in and to the Purchase Price
Escrow Funds as the exclusive property of Buyer pending actual
occurrence of the Closing and (iii) in any event, if this Agreement
is earlier terminated for any reason, the Buyer shall be entitled to
immediate return and delivery of the Purchase Price Escrow Funds free
and clear of all claims of Sellers. Sellers and Buyer further
acknowledge and agree that (i) Sellers shall neither have nor be
deemed to have any legal or equitable right, title or interest in or
to the Damages Escrow Funds or right to delivery thereof until either
(x) a court of competent jurisdiction determines and finds by final
order (that is not subject to appeal, review or rehearing, and as to
which no appeal or petition for review or rehearing was filed or, if
filed, remains pending) that the Closing did not occur as the
proximate result of a material breach or default by Buyer of this
Agreement (occurring when Sellers were not in material breach or
default of the Agreement) or (y) all the conditions to Buyer's
obligations to close under this Agreement are satisfied and the
Closing actually occurs; (ii) Buyer shall retain all legal and
equitable rights, title and interests in and to the Damages Escrow
Funds as the exclusive property of Buyer unless Sellers' rights to
delivery of the Damages Escrow Funds mature in accordance with the
preceding "(i)" of this sentence; and (iii) in the event that this
Agreement is earlier terminated (except pursuant to Section 6.2(c)
due to a material breach or default by the Buyer of this Agreement,
and the Sellers are not then in material breach or default of this
Agreement), Buyer shall be entitled to immediate return and delivery
of the Damages Escrow Funds free and clear of all claims of Sellers.
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ARTICLE 7
APPLICATION FOR COMMISSION AND HSR APPROVAL
7.1. FILING AND PROSECUTION OF FCC APPLICATION. Buyer and the Sellers
shall, not later than five (5) days after the Effective Time, join in
applications to be filed with the Commission requesting its written
consents to the assignments of the Licenses of the Stations from the
License Subsidiaries to Buyer (or such other entity under common
control with Buyer as Buyer may designate). The parties shall
prepare their own portions of the applications. Buyer and the
Sellers shall take all steps necessary to the expeditious prosecution
of such applications to a favorable conclusion, using their
reasonable best efforts throughout.
7.2. EXPENSES. The parties shall bear their own legal, accounting and
other expenses in connection with the consummation of the
contemplated transaction. The parties shall cooperate with the
preparation of the Commission applications and in connection with the
prosecution of such applications. The filing fees shall be shared
equally between the Sellers on the one hand and the Buyer on the
other.
7.3. DESIGNATION FOR HEARING. If, for any reason, any application for an
assignment of any of the Licenses is designated for hearing by the
Commission prior to grant thereof, the Buyer shall have the right by
written notice within thirty (30) days of such designation for
hearing, to exclude from the Acquired Assets those assets associated
with the operation of the Station affected, and the Purchase Price
payable hereunder shall be reduced by an amount equal to the Station
Aggregate Value of the affected Station.
7.4. TIME FOR COMMISSION CONSENT. Subject to the provisions of Section
7.3 above, if the Commission has not given its written consents to
the assignments of the Licenses set forth herein within five (5)
months from the date of acceptance for filing of the applications for
such assignments, any of the parties, if not then in default, may
terminate this Agreement by giving written notice to the other
parties. Upon such termination, if not otherwise in material breach
or default of this Agreement, none of the parties shall have any
right or liability hereunder and all Escrow Funds shall be returned
to Buyer promptly.
7.5. CONTROL OF STATIONS. Until Closing, Buyer shall not directly or
indirectly, control, supervise, direct or attempt to control,
supervise or direct the operations of the Stations, but such
operations shall be the sole responsibility of the Sellers, subject
to and consistent with all rules, regulations and policies of the
FCC. On and after the Closing Date, the Sellers shall not directly
or indirectly, control, supervise, direct or attempt to control,
supervise or direct the operations of the Stations.
7.6. SHARING INFORMATION. Each party hereto shall as promptly as
possible, and in any event within five (5) business days, inform the
other of any material communications between such party and the FCC
or any other Governmental Authority regarding this Agreement or the
transactions contemplated hereby. If any party receives a request
for additional information or documentary material from any such
Governmental Authority, then such party shall
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endeavor in good faith to make, or cause to be made, as promptly as
practicable and after consultation with the other party, an
appropriate response to such request.
7.7 HSR APPLICATION. Within five (5) days of the Effective Time, the
parties shall complete any filing that may be required pursuant to
HSR (the "HSR Filing"). Sellers and Buyer shall diligently take, or
fully cooperate in the taking of, all necessary and proper steps, and
provide any additional information reasonably requested in order to
comply with the requirements of HSR. Buyer and Sellers shall each
pay half of any necessary HSR filing fees, and each party shall be
responsible for its own counsel fees.
ARTICLE 8
CLOSING
Subject to the terms and conditions herein stated, the parties agree
as follows:
8.1. CLOSING DATE. The Closing of the transactions contemplated under
this Agreement shall be held at such time and date as shall be
mutually agreed by the Sellers and Buyer; provided, however, that in
any event Buyer must close no later than five business (5) days after
the Commission grants its consent to the assignments of the Licenses
and all other conditions to Closing shall have been satisfied in all
material respects on or before the Closing Date. (The date
scheduled, or required to be scheduled for Closing hereunder is
referred to herein as the "Closing Date.") Unless otherwise agreed
by the parties in writing, the Closing shall take place at Buyer's
counsel's offices in Washington, D.C.
8.2. THE SELLERS' OBLIGATIONS AT CLOSING. At Closing, the Sellers shall
deliver to Buyer the following:
(a) An Assignment of the Licenses described in Schedule A, Warranty
Deeds as to the Owned Real Property and described on Schedule B
and an Assignment and Bill of Sale, or similar instruments,
including third party consents to all "material" Leases and
Agreements, transferring to Buyer all other Acquired Assets to be
transferred hereunder, free and clear of all liens, encumbrances
and restrictions of any kind whatsoever, except as expressly
provided for in this Agreement or in the Leases and Agreements;
(b) The business records described in Section 1.7;
(c) An opinion of the Sellers' counsel, addressed to Buyer,
confirming the correctness of the Sellers' representations made
in Sections 3.1 and 3.2;
(d) A certificate of CBC's CEO verifying that the Sellers'
representations, warranties and covenants as provided herein
remain materially true and correct up to and through the Closing
Date;
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(e) Certificates of Sellers' Secretary certifying as to Sellers'
Articles of Incorporation, By-Laws, and Board of Directors
approvals (all of which shall be attached thereto);
(f) UCC reports dated not more than thirty (30) days prior to the
Closing Date of the appropriate filing officers in the
jurisdictions specified in Schedule J evidencing no judgments,
financing statements, or liens on file with respect to the
Acquired Assets, and, if such report evidences that judgments,
financing statements, or liens are on file with respect to any of
the Acquired Assets, a termination statement or other appropriate
document signed by the secured party or lienholder evidencing the
release or termination of such financing statement or such lien
or a pay-off letter from such secured party or lienholder
indicating that such party or lienholder will provide such
release or termination statement upon receipt of payment from the
proceeds of the sale contemplated herein;
(g) Good and valid ALTA title insurance commitments dated as of the
Closing Date insuring the Sellers' title as fee owner in each
parcel of Owned Real Property; in each instance, the title shall
be insured by means of the preferred policy used in the location
where such real estate exists, and each such policy, as to the
insurer, the insured, the dollar limit and amount of coverage and
the exceptions and conditions thereof shall be, in all respects,
in form and substance reasonably satisfactory to the Buyer;
(h) Internal Revenue Service Form 8594 completed by the Sellers in
connection with the acquisition of the Acquired Assets by the
Buyer;
(i) A check or checks, or other evidence of payment acceptable to
Buyer, with respect to the expenses payable by Sellers, if any,
on the Closing Date in accordance with the Agreement;
(j) Such other documents and instruments as might reasonably be
requested by Buyer to consummate the transaction contemplated
hereunder consistent with the intent expressed herein; and
(k) Escrow instructions releasing the Damages Escrow Funds to Buyer.
(l) The Non-Competition Agreement executed by Dahl.
8.3. BUYER'S OBLIGATIONS AT CLOSING. At Closing, Buyer shall deliver to CBC
the following:
(a) The Purchase Price in the manner set forth in Section 2.2;
(b) An Agreement to assume the obligations of Sellers under the
Leases and Agreements with respect to periods of time from and
after Closing;
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(c) An opinion of Buyer's counsel, addressed to the Sellers,
confirming the correctness of certain of the Buyer's
representations made in Section 4.1;
(d) Internal Revenue Service Form 8594 completed by the Buyer in
connection with the acquisition of the Acquired Assets from the
Sellers;
(e) A check or checks, or other evidence of payment acceptable to
Sellers, with respect to the expenses payable by Buyer, if any,
on the Closing Date in accordance with the Agreement; and
(f) Such other documents and instruments as might reasonably be
requested by Sellers to consummate the transactions contemplated
hereunder consistent with the intent expressed herein.
8.4. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transaction herein contemplated at Closing are subject
to and conditioned upon:
(a) The written consents of the Commission to the assignments of the
Licenses to Buyer subject to the provisions of Section 7.3 above,
provided that any such approvals are without any condition that
is materially adverse to Buyer;
(b) The satisfaction at or before Closing in all material respects of
all agreements, obligations and conditions of the Sellers
hereunder required to be performed or complied with by them on or
before Closing;
(c) The material accuracy of the representations and warranties made
by the Sellers;
(d) Written third party consents to all material Leases and
Agreements where required by the terms of the Lease or Agreement
or substitution by Sellers of substantially equivalent rights
without materially adverse impact upon Buyer's enjoyment of the
Acquired Assets;
(e) There shall not be in effect any judgment, order, injunction or
decree of any court of competent jurisdiction enjoining the
consummation of the transactions contemplated hereby;
(f) The LMA shall have become effective in accordance with the terms
and conditions thereof and, from and after the date the LMA first
becomes effective through and including the Closing Date, the LMA
shall have not been terminated due to the Sellers' breach
thereof; and
(g) Receipt of approval to the HSR Filing.
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8.5. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers to consummate the transaction herein contemplated at Closing
are subject to and conditioned upon:
(a) Subject to the provisions of Section 7.3 above, the written
consents of the Commission evidencing its Final Approvals to the
assignments of the Licenses to Buyer, provided that any such
approval is without any conditions that are materially adverse to
the Sellers;
(b) The satisfaction at or before Closing in all material respects of
all agreements, obligations and conditions of Buyer hereunder
required to be performed or complied with by it at or before the
Closing;
(c) The material accuracy of the representations and warranties made
by Buyer;
(d) There shall not be in effect any judgment, order, injunction or
decree of any court of competent jurisdiction enjoining the
consummation of the transactions contemplated hereby;
(e) The LMA shall have become effective in accordance with the terms
and conditions thereof and, from and after the date the LMA first
becomes effective through and including the Closing Date, the LMA
shall have not been terminated due to the Buyer's breach thereof;
(f) The termination of the CRN Agreement; and.
(g) Receipt of approval to the HSR Filing.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants of Sellers contained in
this Agreement shall survive for a period of twenty-four (24) months
after the Closing Date.
9.2. EXECUTION OF DOCUMENTS. The parties agree to execute all
applications, documents and instruments which may be necessary for
the consummation of the transactions contemplated hereunder, or which
might be from time to time reasonably requested by any party hereto
in connection therewith, whether before or after the date of Closing.
9.3. NOTICES. All notices, requests, elections, demands and other
communications given pursuant to this Agreement shall be in writing
and shall be duly given when delivered personally or by facsimile
transmission (upon receipt of confirmation) or when deposited in the
mail,
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certified or registered mail, postage prepaid, return receipt
requested, and shall be addressed as follows:
If to the Sellers
(or any of them): Children's Broadcasting Corporation
724 First Street North, Fourth Floor
Minneapolis, Minnesota 55401
Attention: Mr. Christopher T. Dahl
Facsimile Number: (612) 338-4318
with copy to: Children's Broadcasting Corporation
724 First Street North, Fourth Floor
Minneapolis, Minnesota 55401
Attention: Lance W. Riley, Esq.
Facsimile Number: (612) 330-9558
If to Buyer: Radio Unica Corp.
8400 N.W. 52nd Street, Suite 101
Miami, Florida 33166
Attention: Mr. Joaquin F. Blaya
Facsimile Number (305) 463-5001
with copy to: Mr. Andrew Goldman
4 Miller Circle
Armonk, NY 10504
Facsimile Number (914) 273-0885
and to: Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
Attention: John C. Quale, Esq.
Facsimile Number: (202) 371-7475
9.4. EXHIBITS AND SCHEDULES. All Exhibits and Schedules referred to
herein are incorporated into this Agreement by reference for all
purposes and shall be deemed part of this Agreement.
9.5. ENTIRE AGREEMENT. This Agreement together with all Exhibits and
Schedules referred to herein, and the LMA contain all of the terms
and conditions agreed upon by the parties hereto with respect to the
transactions contemplated hereunder. No modification or amendment to
any provision in this Agreement shall be effective unless made in
writing and signed by the parties hereto.
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9.6. ASSIGNABILITY. None of the parties may assign their rights or
obligations under this Agreement without the prior written consent of
the other parties, except that the Buyer may make an assignment to an
entity under essentially common control as the assigning entity.
9.7. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the representatives, heirs, estates, successors, and
assigns of the parties hereto.
9.8. HEADING. The headings contained in this Agreement are for reference
only and shall not effect in any way the meaning or interpretation of
this Agreement.
9.9. COUNTERPARTS. This Agreement and any other instrument to be signed
by the parties hereto may be executed by the parties, together or
separately, in two or more identical counterparts, each of which
shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
9.10. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. Any
dispute arising under or related to this Agreement shall be resolved
by binding arbitration in Wilmington, Delaware in accordance with the
then existing Rules of Practice and Procedure of Judicial Arbitration
& Mediation Services, Inc., and any judgment upon any award rendered
by the arbitrator(s) may be entered by any State or Federal court
having jurisdiction thereof. The prevailing party shall be awarded
all of its legal fees, disbursements and costs of arbitration.
9.11. BROKER COMMISSION. The Sellers and Buyer each represent to the other
that they have not engaged a broker in connection with the
contemplated transaction, except that CBC has engaged Star Media
Group, Inc., and Buyer has engaged Ted Hepburn Company and each party
agrees to pay the respective commissions owed under such engagements
and agrees to indemnify and hold the other party or parties harmless
against any claims made by a broker through it or them in connection
with the transactions contemplated hereunder.
9.12. SALES TAX. Any sales tax, including bulk sales taxes (if
applicable), due upon consummation of this transaction will be
computed at Closing and paid by the Seller and any claims or
proceedings arising therefrom shall be the sole responsibility of
Sellers. Sellers agree to indemnify and hold Buyer harmless against
any such claims in connection with the transactions contemplated
hereunder.
9.13. PUBLIC ANNOUNCEMENTS. Sellers and Buyer shall consult with each
other before making any public statements with respect to this
Agreement, the other Transaction Documents or the transactions
contemplated herein or therein and shall not issue any such press
release or make any such public statement without the prior written
consent of the other party, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that a party may, without
the prior consultation with or written consent of the other party,
issue such press release or make such public statement as may be
required by applicable law if it has
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used all reasonable efforts to consult with the other party and to
obtain such party's consent but has been unable to do so in a timely
manner.
9.14. MAIL. Sellers hereby authorize and empower Buyer from and after the
Closing Date (a) to receive and open mail addressed to the Stations
and (b) to deal with the contents thereof in any manner Buyer sees
fit, provided such mail and the contents thereof relate to the
Stations or the Acquired Assets. Sellers agree to deliver to Buyer
any mail, checks or other documents received by them pertaining to
the Stations or the Acquired Assets. Buyer agrees to deliver to
Sellers any mail which it receives to which it is not entitled by
reason of this Agreement or otherwise and to which Sellers is
entitled.
9.15. CLAUSES SEVERABLE. The provisions of this Agreement are severable.
If any provision of this Agreement or the application thereof to any
person or circumstance is held invalid, the provision or its
application shall be modified to the extent possible to reflect the
expressed intent of the parties but in any event, invalidity shall
not affect other provisions or applications of this Agreement which
can be given effect without the invalid provision or application.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto, by their properly authorized
representatives, have caused this Agreement to be executed as of the day and
date first above written.
CHILDREN'S BROADCASTING CORPORATION RADIO UNICA CORP.
By: /s/ James G. Gilbertson By: /s/ Joaquin F. Blaya
----------------------------- -------------------------------
Its: COO Its: Chairman & CEO
----------------------------- -------------------------------
CHILDREN'S RADIO OF DALLAS, INC. KAHZ-AM, INC.
By: /s/ James G. Gilbertson By: /s/ James G. Gilbertson
----------------------------- -------------------------------
Its: COO Its: COO
----------------------------- -------------------------------
CHILDREN'S RADIO OF PHOENIX, INC. KIDR-AM, Inc.
By: /s/ James G. Gilbertson By: /s/ James G. Gilbertson
----------------------------- -------------------------------
Its: COO Its: COO
----------------------------- -------------------------------
CHILDREN'S RADIO OF NEW YORK, INC. WJDM-AM, INC.
By: /s/ James G. Gilbertson By: /s/ James G. Gilbertson
----------------------------- -------------------------------
Its: COO Its: COO
----------------------------- -------------------------------
