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") 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
▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ 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
theoperation 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 ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇") the
form attached hereto as Exhibit 3 (the "Non-Competition Agreement"),
pursuant to which ▇▇▇▇ 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
▇▇▇▇ 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.
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2.9. Security Agreement and Intercreditor Agreement. At the Effective Time,
and upon Buyer's funding of the Escrow Deposit and the LMA Deposit,
Sellers agree to execute and deliver to Buyer a Security Agreement in
the form attached hereto as Exhibit 4, and Buyer agrees to execute and
deliver to Sellers' lender, Foothill Capital Corporation, an
Intercreditor Agreement in the form attached hereto as Exhibit 5.
ARTICLE 3
The Sellers' Representations,
Warranties and Agreements
The Sellers represent, warrant and agree as follows, which
representations and warranties shall be deemed to have been made again at
Closing and which agreements shall remain in effect from the date hereof
until the Closing or such later time specified herein:
3.1. Corporate Existence and Powers. The Sellers, except CR New York, are
corporations organized and existing in good standing under the laws of
the State of Minnesota, with full power and authority to enter into
this Agreement and the other Transaction Documents (as defined herein)
and to enter into and complete the transactions contemplated herein and
therein without shareholder approval; CR New York is a corporation
organized and existing in good standing under the laws of the State of
New Jersey, with full power and authority to enter into this Agreement
and the other Transaction Documents (as defined herein) and to enter
into and complete the transactions contemplated herein and therein; CR
Dallas is, and will be at the time of Closing, qualified to do business
in the State of Texas; and CR Phoenix is, and will be at the time of
Closing, qualified to do business in the State of Arizona and neither
the nature of the business of the Stations, nor the character of the
properties owned, leased or otherwise held by Sellers for use in the
business of the Stations makes any qualification necessary in any other
state, country, territory or jurisdiction; all required corporate
actions have been taken by the Sellers to make and carry out this
Agreement and the other Transaction Documents and the transactions
contemplated herein and therein; this Agreement constitutes, and upon
execution and delivery, each other Transaction Document will constitute
a valid and binding obligation of Sellers enforceable in accordance
with its terms; the execution of this Agreement and the other
Transaction Documents and the completion of the transactions herein and
therein involved will not result in the violation of any law,
regulation, order, license, permit, rule, judgment or decree to which
any of the Sellers, the Acquired Assets or the Stations, is subject, or
conflict with or constitute the breach of any contract, agreement or
other commitment to which any of the Sellers is a party or by which
they are bound or as to which any of the Acquired Assets or the
Stations are subject or affected, or conflict with or violate any
provision of any of the respective Sellers' certificates of
incorporation, bylaws or other organizational documents; and, except
for receipt of the Commission's Consent (as defined herein) with
respect to the assignment of the Licenses to Buyer, no other consents
of any kind are required that have not been obtained for the Sellers to
make or carry out the terms of this Agreement and the other Transaction
Documents, except with respect to those consents identified on Schedule
B or D which are required of parties to Leases and Agreements listed on
Schedule B or D
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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 ▇▇▇▇ 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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 ("HSR"). Each
of the License Subsidiaries is the holder of the Licenses indicated on
Schedule A, all of which are valid, in full force and effect and which
have been unconditionally issued for the full license term. The
Licenses constitute all of the licenses, grants, permits, waivers and
authorizations issued by the FCC and required for and/or used in the
operation of the Stations as they are currently being operated. Each
License Subsidiary is fully qualified to hold its Licenses. All
ownership and employment reports, renewal applications, and other
reports and documents required to be filed for the Stations have been
properly and timely filed, except as noted on Schedule A. The Stations
are operating in accordance with the Licenses, and in compliance with
the Communications Act, and the rules and regulations of the
Commission, including, without limitation, those regulations governing
the Stations' equal employment opportunity practices and public files,
and any other applicable laws, ordinances, rules and regulations,
except as disclosed on Schedule A. Sellers have complied in all
material respects with all requirements of the FCC and the Federal
Aviation Administration with respect to the construction and/or
alteration of Seller's antenna structures, and "no hazard"
determinations
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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
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,
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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-SM- format as of midnight, January 30, 1998, and have
since maintained a 24-hour all-music format at the Stations without any
sales of advertising time, except with respect to WBAH-AM, which has
been programmed by Buyer.
3.6. Real Estate.
3.6.1. Owned Properties. Schedule B sets forth a list of all real
property owned by the Sellers ("Owned Real Property"). With
respect to each parcel of Owned Real Property, except as
disclosed on Schedule B, there are no leases, subleases,
licenses, concessions or other agreements, written or oral,
granting any person the right of use or occupancy of any
portion of such parcel and there are no outstanding actions or
rights of first refusal to purchase such parcel or any portion
thereof or interest therein.
3.6.2. Leased Properties. Schedule B sets forth a list of all real
property leased by the Sellers (the "Leased Real Property")
and all of the leases (the "Leases") of the Leased Real
Property. With respect to the Leased Real Property, except as
disclosed on Schedule B, (a) all obligations of the landlord
or lessor under the Leases that have accrued have been
performed, and no landlord or lessor is in default under or in
arrears in the payment of any sum or in the performance of any
obligation required of it under any Lease, and no circumstance
presently exists which, with notice or the passage of time, or
both, would give rise to a default by the landlord or lessor
under any Lease; (b) all obligations of the tenant or lessee
under the Leases that have accrued have been performed, and
Sellers are not in default under or in arrears in the payment
of any sum or in the performance of any obligation required of
it under any Lease, and no circumstance presently exists
which, with notice or the passage of time, or both, would give
rise to a default by Sellers; and (c) there are no consents
of any landlord or lessor required to transfer the Leased Real
Property to Buyer.
3.6.3. Title and Description. Sellers hold a valid and enforceable
freehold interest in the Owned Real Property and valid and
enforceable leasehold interests in the Leased Real Property
pursuant to the Leases as shown on Schedule B, subject only to
the
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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 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
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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 ▇. ▇▇▇▇▇▇▇ are not in breach or
default in connection with any of the Leases and Agreements and, to the
best of Sellers' knowledge, there is no basis for any claim, breach or
default with respect to Sellers or any other party under any of said
Leases and Agreements. Sellers have made available to Buyer true and
correct copies of all agreements and instruments listed on Schedule D,
and will make available to Buyer true and correct copies of any
additional agreements, leases and contracts entered into by the Sellers
in Ordinary Course of Business, as provided in Section 1.4 hereof. On
the Closing Date there will be no Leases or Agreements relating to the
Stations (not including this Agreement and the LMA) which will be
binding on the Buyer other than those specifically identified herein,
including the Schedules attached hereto, as assumed by Buyer, or as
otherwise approved in writing by Buyer.
3.8. Litigation. Except as set forth on Schedule G, no strike, labor
dispute, investigation, litigation, court or administrative proceeding
is pending or, to the best of Sellers' knowledge, threatened against
the Sellers relating to the Stations, their employees or any of the
Acquired Assets which may result in any change in the business,
operations, assets or financial condition of the Stations or may
materially affect Buyer's use and enjoyment of the Acquired Assets, or
which would hinder or prevent the consummation of the transaction
contemplated by this Agreement and the other Transaction Documents, and
the Sellers know of no basis for any such possible action.
3.9. Environmental Matters.
3.9.1. Environmental Representation of Sellers. Sellers are in
compliance in all material respects with all applicable
federal, state and local laws and regulations relating to
pollution or protection of human health or the environment
("Environmental Laws") (which compliance includes, but is not
limited to, the possession by such Sellers of any permits and
other governmental authorizations required under
12
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 Section 9601, et seq., or in the
Hazardous Materials Transportation Act, 49 USC Section 1801, et
seq., or in the Resources Conservation and Recovery Act, 42 USC
Section 6901, et seq., and all substances defined as "hazardous
waste" under the Statutes of the States of New Jersey, Texas and
Arizona or any regulations adopted pursuant to those statutes.
3.9.2. Environmental Covenant of Sellers. Sellers have
provided Buyer with all information, surveys and reports in
each Seller's or each Station's possession or control
concerning the existence or possible existence of any
underground storage tanks, polychlorinated biphenyls, asbestos
or asbestos-containing materials, radon gas, radioactive
materials, liquid petroleum or liquid petroleum products, or
other
13
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 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
14
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 action, suit, proceeding, audit, investigation or
claim pending or, to the Sellers' best
15
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 ▇▇▇▇, copyright, or other trade, or service
right or ▇▇▇▇ currently being used in the business and operations
of the Stations other than those listed in Schedule ▇. ▇▇▇▇▇▇▇ 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 ▇▇▇▇, copyright or other intellectual property or similar
right owned by others.
3.14. Employees. Sellers shall be solely responsible for any and
all liabilities and obligations Sellers may have to the employees
of the Stations, including, without limitation, compensation,
severance pay, incentive bonuses, health expenses, and accrued
vacation time, sick leave and obligations under any of Sellers'
employee benefit plans. Sellers acknowledge that Buyer has no
obligation hereunder to offer employment to any employee of
Sellers; however, Buyer shall have the right to hire such of the
employees of the Stations as Buyer may select. With respect to any
employee that Buyer hires, Sellers further acknowledge that Buyer
shall have no obligation for, and shall not assume as part of the
transaction contemplated by this Agreement, any compensation,
incentive bonuses, health expenses, or "accrued vacation" or other
accrued leave time of said employees as a consequence of their
being hired by Buyer. Sellers also acknowledge that with respect
to such employees as may be hired by Buyer, and where any such
compensation, incentive bonuses, health expenses, or accrued leave
time exists for said employees, Sellers will retain the
responsibility for any liability arising therefrom. The
consummation of the transactions contemplated hereby will not cause
Buyer to incur or suffer any liability relating to, or obligation
to pay, severance, termination, or other payments to any person or
entity, or any liability under any employee
16
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
17
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
18
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.
19
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
20
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
21
and the indemnifying party and the indemnified party and their respective
counsel or other representatives shall cooperate in good faith with
respect to such Claim.
(d) The indemnifying party hereby agrees to pay the amount of any
established Claim within fifteen (15) days after the establishment
thereof. The amount of established Claims shall be paid in cash. Any
amounts for such Claims not paid when due under this Article shall bear
interest at a rate equal to 15% per annum until paid.
5.6. Sellers covenant that, upon the initiation by CBC of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, or similar proceeding relating to it under any
jurisdiction (a "Liquidation Announcement"), Sellers 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);
22
(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
23
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.
24
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
25
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 ▇▇▇▇ 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;
26
(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 ▇▇▇▇.
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;
27
(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.
28
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,
29
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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: Children's Broadcasting Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: Radio Unica Corp.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile Number (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number (▇▇▇) ▇▇▇-▇▇▇▇
and to: Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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.
30
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 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, 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 ▇▇▇ ▇▇▇▇▇▇▇ 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
31
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]
32
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: COO Its: Chairman & CEO
Children's Radio of Dallas, Inc. KAHZ-AM, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------------
Its: COO Its: COO
Children's Radio of Phoenix, Inc. KIDR-AM, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------------
Its: COO Its: COO
Children's Radio of New York, Inc. WJDM-AM, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------------
Its: COO Its: COO