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Exhibit 10.62
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of July 2,
1997, by and between Spanish Broadcasting System, Inc. (New Jersey), a New
Jersey corporation ("SBS-NJ"), Spanish Broadcasting System of California, Inc.,
a California corporation ("SBS-CA"), Spanish Broadcasting System of Florida,
Inc., a Florida corporation ("SBS-FL") (hereinafter collectively referred to as
"Seller"), Spanish Broadcasting Systems, Inc., a Delaware corporation ("Parent")
and One-on-One Sports, Inc., a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, SBS-NJ is the licensee of radio station WXLX(AM), licensed
to Newark, New Jersey ("Station WXLX"), and related licenses and authorizations
issued by the Federal Communications Commission ("FCC"); and
WHEREAS, SBS-CA is the licensee of radio station KXMG(AM), licensed
to Los Angeles, California ("Station KXMG"), and related licenses and
authorizations issued by the FCC; and
WHEREAS, SBS-FL is the licensee of radio station WCMQ(AM), licensed
to Miami Springs, Florida ("Station WCMQ"), and related licenses and
authorizations issued by the FCC; and
WHEREAS, Station WXLX, Station KXMG and Station WCMQ are hereinafter
collectively referred to as the "Stations"; and
WHEREAS, Parent directly or indirectly owns 100% of the outstanding
capital stock of SBS-NJ, SBS-CA and SBS-FL and will benefit from the
transactions contemplated hereby; and
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WHEREAS, Seller desires to sell certain properties and assets
pertaining to the Stations, and Buyer desires to purchase the same all subject
to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
Section 1. Purchase and Sale of Properties and Assets.
(a) Stations' Assets. Subject to the terms and conditions herein
contained, on the Closing Date (as defined in Section 4), Seller agrees to
convey, sell, assign, transfer and deliver to Buyer, and Buyer agrees to
purchase the following assets of Seller (collectively, the "Stations' Assets"):
(i) Governmental Permits. All licenses, permits, privileges,
approvals and other authorizations issued by the FCC or any other regulatory
agency relating to the operation of the Stations which are presently used by the
Stations (the "Governmental Permits"), which Governmental Permits are listed on
Schedule 1(a)(i).
(ii) Records, Etc. All files, logs and books, relating to the
Stations' Assets described elsewhere in this Section 1(a), including, without
limitation, all records, reports, logs and documents required by the FCC to be
maintained and the complete local public file.
(iii) Personal Property. The tangible personal property listed
on Schedule 1(a)(iii), together with all of Seller's rights, claims or causes of
action against third parties arising under warranties from manufacturers,
vendors and others relating to any such personal property.
(iv) Real Property. The real property described in Schedule
l(a)(iv), together with all buildings, fixtures and improvements thereon and
together with all easements,
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rights of way, servitudes, leases, permits, licenses, options and other real
property rights used or useful in connection therewith, free and clear of all
claims and encumbrances, except for such claims and encumbrances as are
described on Schedule 1(a)(iv).
(v) Contracts. The agreements, leases, contracts and
commitments listed on Schedule 1(a)(v), including any renewals, extensions,
amendments or modifications thereof (the "Contracts"), and all of Seller's
rights and interests thereunder. At the sole option of Buyer, Buyer may elect to
assume any additional agreements, leases and contracts made or entered into by
Seller in the ordinary course of business subsequent to the date of this
Agreement (the Contracts, together with any such additional assumed agreement,
lease or contract are hereinafter collectively referred to as the "Assumed
Contracts").
(b) Excluded Assets. It is understood that none of the following
assets are being purchased by Buyer:
(i) cash, inter-company receivables, note receivables, bank
deposits, other cash equivalents and/or investment securities;
(ii) deposits, prepayments and overpayments;
(iii) accounts receivable or barter agreements;
(iv) the call letters for the Stations, trademarks, trade
names and other intellectual property related to the Stations;
(v) telephone numbers, customer lists, books, files and
records not related to the Stations' Assets;
(vi) studio facilities and related studio equipment used by
the Stations;
(vii) insurance policies and proceeds thereof; and
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(viii)contracts not being assumed by Buyer.
(c) Liens. Seller agrees that the Stations' Assets to be conveyed on
the Closing Date pursuant to this Agreement will be conveyed with good title and
free and clear of all liens, charges, claims and encumbrances of any kind,
except for such claims and encumbrances as are described on Schedule 1(a)(iii)
and Schedule 1(a)(iv).
(d) No Assumption of Liabilities.
(i) As of the Adjustment Time (as defined in Section 3), Buyer
shall assume and undertake to pay, discharge and perform when due any
obligations or liabilities under the Assumed Contracts insofar as they relate to
the period after the Adjustment Time (but not insofar as they arise out of any
breach of the Assumed Contracts prior to the Adjustment Time), and all such
obligations and liabilities shall, subject to Section 10(a)(viii), become and be
the obligations and liabilities solely of Buyer.
(ii) Except as otherwise expressly provided in this Agreement,
Buyer will 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, of Seller or the Stations, including,
without limitation, any such liabilities or obligations arising: (1) prior to
the Closing, (2) in connection with the operation of the Stations or the
Stations' Assets or any claim asserted or action taken against Seller, the
Stations or the Stations' Assets relating to any event (whether act or omission)
prior to the Closing, (3) in connection with the Closing or the preparation or
negotiation of this Agreement, (4) in respect of any taxes payable by Seller,
(5) in connection with Seller's employment relationship with any of its
employees, (6) in connection with any actual or alleged violation or liability
arising under any Environmental Laws, including, without limitation, any
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Release or threatened Release of Contaminants (as such terms are defined in
Section 5(n)) occurring prior to or continuing as of the Closing, regardless of
whether such liabilities or obligations relate to Seller's ownership or
operation of the Stations' Assets, to any predecessor, owner, tenant, occupant
or user of the Stations' Assets, or to any other party unrelated to the
Stations' Assets, and any Environmental Claims (as defined in Section 5(n)) or
(7) out of any breach by Seller of any of its obligations under any contract to
which it is a party. Seller retains all obligations and liabilities not
expressly assumed by Buyer hereunder without any liability to Buyer.
Section 2. Purchase Price and Method of Payment.
(a) Purchase Price and Method of Payment. The purchase price for the
assets acquired hereunder shall be Forty-Four Million Dollars ($44,000,000)
("Purchase Price"), which shall be paid to Seller at Closing as follows:
Eighteen Million Dollars ($18,000,000) to SBS-NJ, Eighteen Million Dollars
($18,000,000) to SBS-CA and Eight Million Dollars ($8,000,000) to SBS-FL. Such
payment shall be made in same day funds by wire transfer to an account specified
by Seller in writing at least two (2) business days prior to Closing.
(b) Escrow Agreement. Upon the execution of this Agreement, Buyer
shall deposit with The Chase Manhattan Bank ("Escrow Agent") the sum of One
Million Five Hundred Thousand Dollars ($1,500,000) as ▇▇▇▇▇▇▇ money (together
with all interest earned thereon from time to time, the "▇▇▇▇▇▇▇ Money"), to be
held in escrow pursuant to the terms and conditions of that certain Escrow
Agreement attached hereto as Exhibit 1 ("Escrow Agreement"). If the Closing
occurs in accordance with the terms hereof (including any closing with respect
to a Partial Purchase (as defined in Section 16)), Buyer and Seller agree to
deliver at the Closing (or such closing with respect to a Partial Purchase, as
the case may be) a joint written letter of direction to the Escrow Agent
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instructing the Escrow Agent to disburse the ▇▇▇▇▇▇▇ Money to Buyer, or at
Buyer's direction. Buyer may elect, in its sole discretion, to have the ▇▇▇▇▇▇▇
Money disbursed directly to Seller in satisfaction of a portion of the Purchase
Price.
(c) Allocation of Purchase Price. Buyer and Seller agree that the
Purchase Price shall be allocated among the Stations as set forth on Schedule
2(c) and among the Stations' Assets as mutually agreed to by Buyer and Seller.
Buyer and Seller each shall file IRS Form 8594 with their respective federal
income tax return for the tax year in which the Closing occurs, containing the
information agreed upon by the parties pursuant to the immediately preceding
sentence. Buyer and Seller each shall deliver to the other a copy of the IRS
Form 8594 as filed with their respective federal income tax return within thirty
(30) days of the filing of such return.
Section 3. Adjustments and Assumptions. The income and expenses
attributable to the operation of the Stations up to 12:01 a.m. on the Closing
Date (the "Adjustment Time") shall be for the account of Seller and thereafter
shall be for the account of Buyer. Expenses such as real estate taxes, lease
payments, power and utility charges, and similar prepaid and deferred items that
relate to the Stations' Assets, shall be prorated between Seller and Buyer as of
the Adjustment Time.
Section 4. The Closing.
(a) FCC Consent. Consummation of the transactions contemplated
hereunder is conditioned upon the FCC having given its consent in writing to the
assignment to the License Subsidiaries (as defined in Section 21(b)) of the
licenses, permits and authorizations issued by the FCC relating to the operation
of the Stations (the "Licenses") and such consent having become the subject of a
Final Order; provided, that Buyer may waive the condition that such consent
shall have become the subject of a Final Order. A Final Order shall mean an
order of the FCC that grants
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consent to the assignment of the Licenses with no material condition adverse to
Buyer and that is no longer subject to timely review by the FCC or by any court
or, in the event that reconsideration is sought or granted by the FCC upon its
own motion or otherwise, or in the event of an appeal by any person to the FCC
or any court, upon the decision of such body becoming no longer subject to
review. The Closing shall take place on a date not later than March 16, 1998 or
such other date agreed to by the parties or expressly permitted hereby ("Outside
Closing Date").
(b) FCC Application. The parties agree to proceed, as expeditiously
as practicable, to file or cause to be filed an application requesting FCC
consent to the transactions here involved. Such application shall name the
License Subsidiaries (as defined in Section 21(b)) as the assignee of the
Licenses. The parties agree that said application shall be duly filed with the
FCC not later than ten (10) business days after the date of execution of this
Agreement, and that such application shall be prosecuted by all parties in good
faith and with due diligence. The parties hereto shall each bear their own legal
fees and any and all costs and expenses not specified herein with respect to the
sale and purchase of the assets covered by this Agreement, including, without
limitation, the preparation of the applicable sections of the FCC applications.
However, all FCC filing fees shall be paid one-half each by Seller and Buyer.
(c) Failure of FCC Consent. If the FCC consent has not been granted
by March 9, 1998, or if the application for consent to assignment of the
Licenses is designated for evidentiary hearing, Buyer or Seller, at their
respective options, may terminate this Agreement, without any liability, upon
ten (10) days' prior written notice to all parties hereto, provided, that the
party desiring to terminate is not in material default or breach at the time of
said notice.
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(d) Closing. The date of the closing of the transactions
contemplated by this Agreement (the "Closing") and the time thereof (the
"Closing Date") shall be as mutually agreed to by the parties; provided, that
absent such agreement the Closing shall take place at 10:00 a.m. on the fifth
business day after the FCC consent shall have become a Final Order, subject to
fulfillment or waiver of all applicable conditions precedent. The Closing shall
take place at the offices of Buyer's counsel in New York, New York, or at such
other place as may be mutually agreed to by the parties to this Agreement.
Section 5. Seller's Representations and Warranties.
Seller represents, warrants and agrees now and as of the Closing as
follows:
(a) Organization. Each of SBS-NJ, SBS-CA, and SBS-FL is a
corporation duly organized and validly existing and in good standing under the
laws of the States of New Jersey, California and Florida, respectively, and in
good standing in all jurisdictions in which they conduct business, except where
the failure to be so qualified would not restrict Seller's ability to consummate
the transactions contemplated hereby or have a material adverse effect on (i)
the value or condition of the Stations' Assets or (ii) the Governmental Permits
(hereinafter collectively referred to as a "Material Adverse Effect"). Seller
has the full power and authority to own the Stations' Assets and to carry on the
business of the Stations as now being conducted.
(b) Authorization of Agreement; No Breach.
(i) All corporate action necessary to be taken by or on the
part of Seller and Parent in connection with the transactions contemplated
hereby has been duly and validly taken, and the execution, delivery and
performance of this Agreement have been duly and validly authorized. Seller and
Parent each has the full power and authority to execute, deliver and perform
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this Agreement and to consummate all the transactions hereby contemplated.
Neither such execution, delivery and performance nor compliance by Seller and
Parent with the terms and provisions hereof will, after the giving of notice, or
the lapse of time, or otherwise, (1) conflict with or result in a breach of any
of the terms conditions or provisions of the charter or By-Laws of Seller or
Parent, (2) (assuming receipt of all necessary approvals from the FCC)
constitute a violation of, conflict with or result in any breach of or default
under, result in any termination or modification of, or cause any acceleration
of any obligation of the Stations under, any agreement, lease, contract or
instrument to which either Seller or Parent is a party or by which either is
bound, or by which the Stations or any of the Stations' Assets may be affected,
or any judgment, order, injunction, decree, law, regulation, rule or ruling of
any court or other governmental authority to which Seller and Parent, the
Stations or the Stations' Assets is subject, except to the extent that such
occurrence would not have a Material Adverse Effect, or (3) result in the
creation or imposition of any lien, charge or encumbrance against the Stations
or the Stations' Assets which is not released on or prior to Closing. Except for
the consent of the FCC and ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ approval, no other consent,
approval or authorization of, or filing with, any person, entity or agency of
any kind not yet obtained is required. This Agreement constitutes the valid and
binding obligation of Seller and Parent, enforceable against Seller and Parent
in accordance with its terms.
(ii) Seller is not in violation or breach of any of the terms,
conditions or provisions of (1) any License or Assumed Contract or (2) any court
order, judgment, arbitration award, or decree relating to or affecting the
Stations or the Stations' Assets to which Seller is a party or by which it is
bound, and has received no notices of such violation or breach, except as
disclosed in Schedule 5(b)(ii).
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(c) Licenses and Authorizations. Seller is, and on the Closing Date
will be, the holder of the Licenses and other Governmental Permits which are now
used in the present operation of the Stations. The Governmental Permits are all
of the governmental permits, licenses and approvals required to operate or
utilize the Stations' Assets as now conducted, and, to the best of Seller's
knowledge, in compliance with law. All of the Governmental Permits are
identified on Schedule 1(a)(i) and are in full force and effect. None of the
Governmental Permits shall be altered, modified or terminated between the date
hereof and the Closing Date. Except as listed and described on Schedule l(a)(i),
there is not pending, or to the knowledge of Seller threatened, any action by or
before the FCC or any other governmental agency to revoke, suspend, cancel,
rescind or modify any of the Governmental Permits. Seller has fulfilled and
performed in all material respects its obligations under each of such
Governmental Permits, and no event has occurred or condition or state of facts
exists which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any such Governmental Permit. Subject to
the receipt of a Final Order issuing the FCC's consent, each of the Governmental
Permits may be assigned and transferred to Buyer in accordance with this
Agreement and will continue in full force and effect thereafter. The Stations
have been constructed and are being operated in all material respects in
accordance with the Governmental Permits and in compliance in all material
respects with the Communications Act of 1934, as amended (the "Communications
Act"), the rules and regulations of the FCC thereunder, and all other laws and
regulations, federal, state and local, applicable to the Stations. All material
notices, reports, forms and other statements required to be filed by Seller with
the FCC and all other federal, state and local governmental agencies have been
filed, are complete, correct and comply in all material respects with the
requirements for such filings.
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(d) Personal Property. Schedule 1(a)(iii) contains a complete and
accurate list, as of the date hereof, of the tangible personal property to be
conveyed to Buyer at Closing. At the Closing, all of such property shall be
transferred to Buyer free and clear of all liens, charges, claims and
encumbrances of any kind, except as set forth on Schedule 1(a)(iii). All such
assets and their uses conform in all material respects to all applicable laws,
regulations, rules, ordinances, codes, licenses, franchises and permits,
including, without limitation, the Communications Act and all electrical,
building, zoning, environmental, occupational safety and health requirements of
law. The assets listed on Schedule 1(a)(iii) are in good working order and
condition (ordinary wear and tear excepted) and constitute all of the assets
required to transmit an AM broadcast signal at the assigned frequencies.
(e) Real Property. Schedule 1(a)(iv) contains a complete and
accurate list, as of the date hereof, of (i) all real property owned and leased
by Seller which is to be conveyed to Buyer at Closing and (ii) the nature of the
right, title or interest Seller has in such real property. Except as set forth
in Schedule 1(a)(iv), none of the buildings, structures or improvements located
on any real property owned or leased by Seller which relates to the operation of
the Stations, (i) encroaches on any adjoining real property, (ii) is located or
constructed in violation of any zoning ordinance or building code or (iii) is
used or occupied in violation of any use or occupancy restriction, and there is
no zoning ordinance, building code, use or occupancy restriction or condemnation
action or proceeding pending or, to the knowledge of Seller, threatened, with
respect to such real property or any such building, structure or improvement.
Such real property has available to it the utilities required for the operation
of the Stations and the Stations' Assets as presently conducted.
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(f) Contracts. Seller has delivered to Buyer true and correct copies
of each Assumed Contract. Each Assumed Contract is legal, valid, binding and
enforceable against Seller and, to the best knowledge of Seller, each of the
other parties thereto, in accordance with its terms, and is in full force and
effect. To the best knowledge of Seller, there is no material default or event
that with notice or lapse of time, or both, would constitute a material default
by any party to any of the Assumed Contracts. Seller has not received notice
that any party to any of the Assumed Contracts intends to cancel or terminate
any of such agreements or to exercise or not exercise any options under any of
such agreements.
(g) Stations' Assets. At the time of Closing, Seller will have and
will transfer and convey to Buyer good title to all of the Stations' Assets
(and, in the case of owned real property, good and marketable title, and, in the
case of leased real property, a valid and binding leasehold interest), subject
to no mortgages, liens, charges, pledges, encumbrances, security interest or any
other rights of others or other adverse interests of any kind, except as set
forth on Schedule 1(a)(iv).
(h) No Litigation. There is no suit, action or other proceeding
pending or, so far as is known to Seller, threatened against Seller or the
Stations, except as set forth on Schedule 5(h), which (i) seeks to enjoin or
prevent the consummation of the sale of the Stations' Assets, (ii) would
restrict Seller's ability to consummate the transactions contemplated hereby or
(iii) if adversely decided against Seller, would result in any lien or
encumbrance on the Stations' Assets or have a Material Adverse Effect. There are
no outstanding and unsatisfied judgments, orders, decrees or injunctions against
Seller or the Stations.
(i) Taxes. All federal, state and local, excise, property, sales,
use, franchise or other tax returns and reports required to be filed by Seller
(including any affiliated group, which files
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a consolidated federal income tax return, or any unitary group with which Seller
files as a member or as a part thereof) by the Closing Date (the "Tax Returns")
have or will have been by such date duly and timely filed with the appropriate
governmental agencies in all jurisdictions in which Tax Returns are required to
be filed. All Tax Returns properly reflect the taxes of Seller for the periods
covered thereby. All taxes shown on all Tax Returns have been paid, and no
taxing authority has asserted any outstanding deficiency or claim relating to
any such taxes. None of the Stations' Assets (or portion thereof) is subject to
a "safe harbor lease" under former Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended, is tax exempt use property under Section 168(h) of the
Internal Revenue Code of 1986, as amended (the "Code"), consists of an interest
in a partnership for federal income tax purposes, or was financed directly or
indirectly from the proceeds of any tax exempt state or local government
obligation described in Code Section 103(a). Seller has no (and has not
previously had any) permanent establishment in any foreign country, and does not
engage (and has not previously engaged) in a trade or business within the
meaning of the Code relating to the creation of a permanent establishment in any
foreign country. Neither the Code nor any other provision of law requires Buyer
to withhold any portion of the Purchase Price. All monies or trust fund taxes
required to be withheld by Seller from employees of the Stations have been
collected or withheld, and either paid to the respective governmental agency,
set aside in an account for such purpose, or reserved against and entered upon
the books of Seller.
(j) Brokerage. Neither Seller nor Parent has taken any action which
will obligate Buyer to pay any commission or finder's fee to any broker for or
on account of the transactions contemplated by this Agreement. Seller and Parent
agree to indemnify and hold harmless Buyer against any loss, liability, damage,
cost, claim or expense incurred by reason of any brokerage,
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commission or finder's fee alleged to be payable because of any act, omission or
statement of Seller or Parent.
(k) Compliance With Laws. Seller has complied in all material
respects with, and is not in material violation of, any federal, state or local
laws, rules, regulations, ordinances, decrees or orders of any governmental
authority affecting the Stations' Assets, Seller's business or the operation of
the Stations. Without limiting the generality of the foregoing:
(i) The Stations' transmitting and studio equipment is
operating in material compliance with the terms and conditions of the Licenses.
(ii) Seller has, in the conduct of the Stations' business,
complied, in all material respects, with all applicable laws, rules and
regulations relating to the employment of labor, including those concerning
wages, hours, equal employment opportunity, collective bargaining, pension and
welfare benefit plans, and the payment of Social Security and similar taxes, and
Seller is not liable for any arrearages of wages, tax withholding obligations,
or any tax penalties due to any failure to comply with any of the foregoing.
(iii) Seller has complied in all material respects with all
applicable building, zoning, environmental protection, water use and
occupational health and safety laws, rules and regulations affecting the
Stations' Assets or the operation of the Stations.
(l) Insurance. Seller maintains the insurance policies listed on
Schedule 5(l) and all such policies are in full force and effect and Seller is
not in default of any material provision thereof Seller has not received notice
from any issuer of any such policies of its intention to cancel, terminate or
refuse to renew any policy issued by it. Seller will continue to maintain such
insurance coverage in full force and effect through the Closing Date.
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(m) Employees. Seller is not a party to and Buyer is not assuming
any employee collective bargaining agreement, employment agreement, consulting
agreement or deferred compensation agreement that is not terminable by Seller on
30 days' notice or less. Buyer is not assuming (i) any employees' pension,
profit-sharing, stock option, bonus, incentive, stock purchase, welfare, life
insurance, medical benefit plan or other employee benefit agreement that is not
terminable by Seller on thirty (30) days' notice or less or (ii) any other
contract, agreement, commitment, understanding or instrument between Seller and
any employee.
(n) Environmental. Seller has complied and is presently complying in
all material respects with all Environmental Laws (as herein defined) applicable
to the Stations or the Stations' Assets and has obtained all permits, licenses
and authorizations required under Environmental Laws (collectively, the
"Environmental Permits") for the operation and use of the Stations and the
Stations' Assets. The Environmental Permits are set forth on Schedule 5(n), and
all such Environmental Permits are in good standing and Seller is in compliance
with all terms and conditions of such Environmental Permits. None of such
Environmental Permits shall be altered, terminated or modified between the date
hereof and the Closing Date. There is no pending action by any governmental
authority to revoke, suspend, rescind or modify any such Environmental Permits,
and, except as set forth on Schedule 5(n), all such Environmental Permits shall
be transferred or assigned to Buyer at Closing without approval from any
governmental authority. Except as set forth on Schedule 5(n), there has been, to
the best knowledge of Seller after due inquiry, and there currently is no
Release or threatened Release of any Contaminant at or into the environment
from, on, in, under, to, from or at any of Seller's owned or leased properties
(the "Properties"), including, without limitation, Releases from underground
storage tanks. The Properties are not subject to any pending
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or threatened investigation, claim, notice of violation, allegation, demand,
suit, action, injunction, proceeding, penalty, fine, restriction, lien,
encumbrance, judgment, decree, order or agreement from, by or with any
governmental authority or private party concerning any Environmental Laws or any
Release of any Contaminant into the environment (collectively, the
"Environmental Claims") and, except as set forth on Schedule 5(n), there are no
conditions or occurrences at the Properties which could form the basis for an
Environmental Claim against Seller or the Properties. Seller has not received
any notice or claim to the effect that it may be liable as a result of a Release
of a Contaminant from any of the Properties into the environment, or any actual
or alleged violation at the Properties of any Environmental Laws.
"Environmental Laws" shall mean any applicable federal, state or
local statute, law, regulation, rule, standard, judgment, order, consent decree,
or other legal requirement or common law pertaining to (a) the protection of
health, safety, and environment, (b) the conservation, management, or use of
natural resources and wildlife, (c) the management, use, generation,
transportation, treatment, storage, disposal, Release, threatened Release,
abatement, removal, remediation or handling of, or exposure to, any Contaminant
or (d) pollution (including any release to air, land, surface water, and
groundwater), and includes, without limitation, the following statutes, as
presently amended, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 USC 9601 et seq., the Solid Waste Disposal Act, 42 USC
6901 et seq., the Federal Water Pollution Control Act, 33 USC 1251 et seq., the
Clean Air Act, 42 USC 7401 et seq., the Toxic Substances Control Act of 1976, 15
USC 2601 et seq., the Occupational Safety and Health Act, 29 USC 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et
seq., and any similar, implementing or successor law or amendment.
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"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing into the environment (including the abandonment or discarding of
barrels, containers, and other closed receptacles containing any hazardous
substance or pollutant or contaminant).
"Contaminant" shall mean any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant, or material which
is hazardous, carcinogenic or toxic, and includes, without limitation, (a)
asbestos, polychlorinated biphenyls and petroleum (including crude oil or any
fraction thereof) and (b) any such material classified or regulated as
"hazardous", "carcinogenic" or "toxic" pursuant to Environmental Laws.
(o) Conduct of Business Since December 31, 1996. Since December 31,
1996, (i) Seller has not sustained or incurred any loss or damage with respect
to the condition of the Stations' Assets (whether or not insured against) on
account of fire, flood, accident or other calamity which has interfered with or
affected, or may interfere with or affect, the condition of the Stations' Assets
and (ii) there has been no material adverse change in or with respect to (1) the
value or condition of the Stations' Assets or (2) the Governmental Permits
(hereinafter collectively referred to as a "Material Adverse Change"), and no
state of facts exists which may reasonably be expected to give rise to any such
Material Adverse Change.
(p) No Misrepresentation or Omission. No representation or warranty
by Seller in any certificate or other document furnished or to be furnished by
Seller in connection with the transactions contemplated under this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit a material fact necessary to make the statements contained herein
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or therein not misleading or will omit to state a material fact necessary in
order to provide Buyer with accurate and complete information as to the Stations
and the Stations' Assets.
Section 6. Buyer's Representations and Warranties. Buyer represents,
warrants and agrees now and as of the date of Closing as follows:
(a) Organization. Buyer is a corporation organized, validly existing
and in good standing in the State of Delaware and, as of the Closing Date, Buyer
(or the subsidiaries of Buyer operating the respective Stations) will be
qualified to do business in the States of New York, California and Florida (as
applicable).
(b) Authorization of Agreement; No Breach. All corporate action
necessary to be taken by or on the part of Buyer in connection with the
transactions contemplated hereby has been duly and validly taken, and the
execution, delivery and performance of this Agreement have been duly and validly
authorized. Buyer has the full power and authority to execute, deliver and
perform this Agreement and to consummate all the transactions hereby
contemplated. Neither such execution, delivery and performance nor compliance by
Buyer with the terms and provisions hereof will, after the giving of notice, or
the lapse of time, or otherwise, (i) conflict with or result in a breach of any
of the terms, conditions or provisions of the Certificate of Incorporation or
By-Laws of Buyer or (ii) (assuming receipt of all necessary approvals from the
FCC) constitute a violation of; conflict with or result in any breach of or
default under, result in any termination or modification of, or cause any
acceleration of any obligation of Buyer under any agreement, lease, contract or
instrument to which Buyer is a party, or any judgment, order, injunction,
decree, law, regulation, rule or ruling of any court or other governmental
authority to which Buyer is subject. Except for the consent of the FCC and
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ approval, no other consent, approval or authorization of,
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or filing with, any person, entity or agency of any kind not yet obtained is
required. This Agreement constitutes the valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
(c) Qualification. Buyer has no knowledge of any facts which would,
under present law (including the Communications Act) and present rules,
regulations and practices of the FCC, disqualify Buyer as an assignee of the
Licenses, or as an owner and/or operator of the Stations' Assets, and Buyer will
not unreasonably take or fail to take, any action which Buyer knows or has
reason to know would cause such disqualification. Buyer is able to meet all of
the financial undertakings set forth herein.
(d) Litigation. There is no suit, action or proceeding pending or,
so far as is known to Buyer, threatened against Buyer that would affect Buyer's
ability to carry out this Agreement.
(e) Brokerage. Buyer agrees to indemnify and hold harmless Seller
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage, commission or finder's fee alleged to be payable because of
any act, omission or statement of Buyer.
(f) Financial Backing. Buyer has received and delivered copies to
Seller and Parent commitment letters from reputable financial institutions
sufficient to fund the Purchase Price and consummate the transactions
contemplated hereby.
(g) No Misrepresentation or Omission. No representation or warranty
by Buyer in any certificate or other document furnished or to be furnished by
Buyer in connection with the transactions contemplated under this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit a material fact necessary to make the statements contained herein
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or therein not misleading or will omit to state a material fact necessary in
order to provide Seller with accurate and complete information to consummate the
transactions contemplated hereby.
Section 7. Certain Covenants and Agreements.
(a) Access to Information. Upon the request of Buyer from time to
time, Seller shall afford to the officers, employees and authorized
representatives of Buyer reasonable access during normal business hours to the
Stations' Assets, and shall furnish to Buyer or its authorized representatives
such additional information concerning the Stations and the Stations' Assets as
Buyer may reasonably request. No investigation by Buyer hereunder and no facts
learned in such investigation shall in any way affect, diminish, terminate or be
deemed to modify any representations or warranties made by Seller herein or
lessen Seller's obligations under Section 10.
(b) Reasonable Efforts. Seller and Buyer will cooperate and use
their reasonable efforts to make all registrations, filings and applications, to
give all notices and to obtain any governmental or other consents, transfers,
approvals, orders, qualifications and waivers necessary or desirable for the
consummation of the transactions contemplated hereby. Each of the parties hereto
shall use its reasonable efforts to fulfill or obtain the fulfillment of the
conditions of the Closing, including, without limitation, the execution and
delivery of all agreements or other documents contemplated hereunder to be so
executed and delivered.
(c) Operation of Stations. Seller (i) shall not enter into,
terminate, waive any material right under, amend or modify any Assumed Contract,
(ii) shall not make any material additions to or sell, transfer or otherwise
dispose of, or subject to any encumbrance, any of the Stations' Assets, (iii)
shall not take any action that is likely to have a Material Adverse Effect and
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(iv) shall maintain all of the personal property listed on Schedule 1 (a)(iii)
in good working order, wear and tear excepted.
(d) Further Assurances. At any time after the Closing Date, Seller
shall promptly execute, acknowledge and deliver any further deeds, assignments,
conveyances and other assurances and documents and instruments of transfer
reasonably requested by Buyer and necessary for Seller to comply with its
representations, warranties and covenants contained herein, and will take any
action consistent with the terms of this Agreement that may reasonably be
requested by Buyer for the purpose of assigning, transferring, granting,
conveying, vesting and confirming ownership in or to Buyer, or reducing to
Buyer's possession, any or all of the Stations' Assets.
(e) Bulk Sales Waiver. Buyer and Seller hereby waive compliance with
any applicable bulk sales laws in connection with the transactions contemplated
by this Agreement; provided, that Seller shall indemnify and hold Buyer harmless
from and against any liabilities arising out of non-compliance with any such
laws.
(f) Update of Schedules. Seller shall update any Schedule provided
pursuant to any provision of this Agreement as promptly as practicable after the
occurrence of an event or fact which, if such event or fact had occurred prior
to the date hereof, would have caused a material change in the information
disclosed on such schedule. The delivery of such additional schedules by Seller
shall not relieve Seller from any breach or violation hereof based on the
schedules as of the date of the execution of this Agreement.
(g) Notification of Material Adverse Events. Seller shall promptly
notify Buyer in writing of any event following the date hereof of which Seller
is or becomes aware that will or may reasonably be expected to have a Material
Adverse Effect.
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(h) Code Section 1445 Withholding. Seller shall take all actions as
may be necessary to comply with Code Sections 897 and 1445 and any rules,
regulations and orders which may be promulgated thereunder. In the event that
Seller fails to provide to Buyer, at or prior to the Closing, either (i) an
affidavit in form acceptable to Buyer or (ii) evidence satisfactory to Buyer's
counsel that the transaction contemplated by this Agreement is exempt from any
taxes which may apply by reason of Code Section 897, Buyer shall have the right
to withhold ten percent (10%) of the Purchase Price (the "Section 1445
Withholding"), and Buyer shall hold and dispose of the Section 1445 Withholding
in accordance with the requirements of that Section. The amount of the Section
1445 Withholding shall be credited against the Purchase Price otherwise due and
payable hereunder by Buyer to Seller at the Closing and Seller shall have no
recourse against Buyer therefor. It shall be a condition to the Closing that the
Title Company shall omit from the Title Policy any and all exceptions based upon
any tax liabilities arising under Code Section 897.
(i) Exclusivity. Unless this Agreement has been terminated in
accordance with Section 15, (i) Seller shall not, and shall not permit any of
its affiliates, directors, officers, employees, agents or advisors to, initiate,
pursue or encourage (by way of furnishing information or otherwise) any
inquiries or proposals, or enter into any discussions, negotiations or
agreements (whether preliminary or definitive) with any person or entity,
contemplating or providing for any merger, acquisition, purchase or sale of all
or substantially all of the assets or any business combination or change in
control of the Stations and (ii) Seller shall deal exclusively with Buyer with
respect to the sale of the Stations and the Stations' Assets.
(j) Code Section 1031 Exchange. (i) Seller agrees to cooperate with
Buyer, as described in subsection (ii) below, to accommodate any desire of Buyer
to treat the sale and purchase
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of the Stations' Assets under this Agreement as part of a tax deferred exchange
by Buyer under Code Section 1031, provided, however, Seller and Buyer
acknowledge and agree that Seller shall have no responsibility for the tax
treatment to Buyer, it being expressly understood and agreed that the tax
treatment accorded Buyer is not and shall not be a condition to, or requirement
for, the obligations of Buyer under this Agreement.
(ii) In order to accommodate Buyer, Seller agrees that (1)
consistent with Section 1, it shall convey, sell, arrange, transfer and deliver,
as requested by Buyer in writing, to the person or persons designated by Buyer,
and (2) as requested by Buyer in writing, Sellers shall consent to Buyer's
assignment of this Agreement on or after the Closing Date; provided, however,
that neither such delivery nor consent to assignment shall in any way diminish
any right Seller shall have under this Agreement or any related document or
instrument, or create any obligation of any kind on the part of Seller, except
as expressly set forth herein.
(k) Local Marketing Agreement. The parties intend to enter into a
local marketing agreement or agreements to be effective as of September 1, 1997
at an aggregate monthly cost to Buyer of $40,799 for Station WXLX, $20,920 for
Station KXMG and $19,082 for Station WCMQ and upon such other terms and
conditions as are mutually agreed upon by the parties. The parties agree to
expeditiously and in good faith enter into negotiations regarding such
agreement(s) so as to facilitate execution thereof as soon as practicable after
the date hereof.
Section 8. Performance by Buyer. The obligations of Buyer to
consummate the sale of the Stations' Assets are subject to the conditions that
(in addition to the conditions set forth in Section 4):
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(a) Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true and correct at
the time of Closing hereunder as though made at and as of such time, and each
and all of the agreements of Seller to be performed on or prior to the Closing
hereunder pursuant to the terms of this Agreement shall have been duly
performed, and Seller shall have delivered to Buyer certificates, dated as of
the Closing Date, to such effect.
(b) Litigation, Etc. No litigation, action, suit, investigation or
proceeding of any kind shall have been instituted or threatened before any court
or governmental body, which (i) seeks to enjoin or prevent the consummation of
the sale of the Stations' Assets or (ii) might reasonably have a Material
Adverse Effect.
(c) FCC Licenses. At the Closing, the Licenses to be assigned and
transferred to Buyer shall be valid and in full force and effect for the full
license term then currently issued to the Stations, and shall contain no
material adverse modifications of the terms of any such License from the terms
in effect as of the date of this Agreement.
(d) Legal Opinion. Buyer shall have received a written opinion of
counsel for Seller, dated the Closing Date, in form and content reasonably
acceptable to counsel for Buyer to the effect that:
(i) Each of SBS-NJ, SBS-CA and SBS-FL is organized and validly
existing and in good standing under the laws of the States of New Jersey,
California and Florida, respectively.
(ii) The Agreement has been duly authorized, executed and
delivered by Seller and Parent and (assuming the due authorization, execution
and delivery by Buyer) constitutes the valid and binding obligation of Seller
and Parent, enforceable against Seller and Parent in
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accordance with its terms (subject to any applicable bankruptcy, reorganization,
insolvency or other laws, now or hereafter in effect, affecting creditors rights
generally as well as all rights in equity).
(iii) Neither the execution, delivery and performance of this
Agreement nor any instrument of sale required hereunder nor compliance by Seller
or Parent with the terms and provisions of this Agreement will (A) conflict with
or result in a breach of any of the terms, conditions or provisions of the
charter of Seller or Parent or any judgment, order or decree known to such
counsel or (B) to the knowledge of such counsel, result in any lien or
encumbrance upon any of the Stations' Assets under any agreement filed as an
exhibit to Parent's Form 10-K for the fiscal year ending September 29, 1996 or
any agreement filed as an exhibit to a filing by Parent on Form 10-Q or on Form
8-K since the date of Parent's Form 10-K for the fiscal year ending September
29, 1996.
(iv) The Licenses are in full force and effect and may be
assigned to Buyer without any further approval of the FCC.
(v) Such counsel has not been retained by Parent or Seller to
represent any of them with respect to any claim, suit, action, litigation,
arbitration or other proceeding or governmental investigation or inquiry pending
or threatened against, affecting or involving, the Stations or any of the
Stations' Assets.
Such opinion may be delivered in the form and subject to the
assumptions and qualifications specified in the Legal Opinion Accord of the
Section of Business Law of the American Bar Association.
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(e) Performance. Seller shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing hereunder.
(f) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Approval. All filings required pursuant to the
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Act will have been made, and any approvals required thereunder
will have been obtained, or the waiting period required thereby will have
expired or have been terminated, as the case may be.
(g) Other Consents. All material consents, approvals, orders,
authorizations, registrations, declarations and filings shall have been obtained
or made in form reasonably satisfactory to Buyer. No such consents shall impose
any burdensome or, in Buyer's reasonable determination, unsatisfactory
conditions or requirements on Buyer or Buyer shall have entered into new
contracts or agreements which permit the continued use or supply of the
property, products, technology or services provided for by Seller's existing
contracts or agreements on terms no less favorable to Buyer than the prior
contract or agreement of Seller as to such property, products, technology or
services.
(h) No Material Adverse Change. There shall have occurred no
Material Adverse Change since the date hereof.
(i) Schedules. All material amendments or supplements to the
Schedules made by Seller pursuant to Section 7(f) shall be acceptable to Buyer.
(j) Closing Documents. Seller shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by Seller on the
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Closing Date pursuant to Section 12, and the form and substance of all such
reports, agreements, certificates, instruments, opinions and other documents
shall be reasonably satisfactory to Buyer.
(k) Title Insurance and Surveys. Buyer shall have received, at its
expense, owner's title insurance policies and leasehold title insurance
policies, each dated the Closing Date, and surveys, each in form and substance
reasonably satisfactory to Buyer in its sole discretion.
(l) Withholding Certificate. Seller shall have executed and
delivered to Buyer a withholding certificate in the form of Exhibit 2.
(m) ▇▇▇▇▇▇▇ Money. The ▇▇▇▇▇▇▇ Money shall have been released to
Buyer, or at Buyer's direction, in accordance with Section 2(b).
(n) Allocation of Purchase Price. The allocation of Purchase Price
among the Stations' Assets shall have been agreed to by Buyer and Seller in
accordance with Section 2(c).
(o) Advertising and Trade Contracts. Seller shall have made
arrangements satisfactory to Buyer to terminate all advertising and trade
contracts of the Stations that have terms extending beyond the Closing Date.
Section 9. Seller's Performance. Seller's obligation to consummate
the sale of the Stations' Assets is subject to (in addition to the conditions
set forth in Section 4):
(a) Payments Etc. All payments hereunder which are due and payable
by Buyer on or before the Closing Date shall have been paid in accordance with
the terms of this Agreement, and Buyer shall have executed all of the documents
required of it herein.
(b) Representations and Warranties. Each of Buyer's representations
and warranties contained herein shall be true at the time of Closing, as though
made at and as of such time and Buyer shall have delivered to Seller
certificates to that effect, dated as of the Closing Date.
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(c) Performance. Buyer shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing hereunder.
(d) Litigation. No litigation, investigation or proceeding of any
kind shall have been instituted or threatened which would adversely affect the
ability of Buyer to comply in all material respects with the provisions of this
Agreement.
(e) Legal Opinion. Seller shall have received an opinion of counsel
for Buyer, dated the Closing Date, in form and content reasonably acceptable to
Seller's counsel to the effect that:
(i) Buyer (or the subsidiaries of Buyer operating the
respective Stations) is organized and validly existing and in good standing and
qualified to do business under the laws of the States of New Jersey, California
and Florida (as applicable).
(ii) The Agreement has been duly executed and delivered by
Buyer and (assuming the due authorization, execution and delivery by Seller and
Parent) constitutes the valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms (subject to any applicable
bankruptcy, reorganization, insolvency or other laws, now or hereafter in
effect, affecting creditors' rights generally as well as all rights in equity).
(iii) Neither the execution, delivery and performance of this
Agreement nor compliance by Buyer with the terms of this Agreement will conflict
with or result in a breach of any of the terms, conditions or provisions of the
Certificate of Incorporation or By-Laws of Buyer or any judgment, order or
decree known to such counsel, or any material agreement known by such counsel to
which Buyer is subject.
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Section 10. Rights of Indemnification.
(a) Indemnification by Seller. It is understood and agreed that
Buyer does not assume and shall not be obligated to pay, any liabilities of
Seller under the terms of this Agreement or otherwise, and it shall not be
obligated to perform any obligations of Seller, of any kind or manner except as
specifically assumed by Buyer hereunder. The indemnification provided herein
shall not limit any liability of Seller which may arise by statute or common
law. Parent and Seller, jointly and severally, hereby agree to indemnify and
hold Buyer and its successors and assigns harmless from and against:
(i) For a period of two (2) years from the date of Closing,
any and all damage, liability, deficiency or expense (including, without
limitation, reasonable attorneys' fees) arising out of or resulting from any
misrepresentation or breach of warranty on the part of Parent or Seller under
this Agreement; provided, that if at the stated expiration of any such
indemnification obligation there shall then be pending any indemnification claim
by any person or entity, such person or entity shall continue to have the right
to such indemnification with respect to such claim notwithstanding the
expiration of such two-year period.
(ii) Any and all claims, liabilities and obligations arising
from or related to Seller's ownership or operation of the Stations or the
Stations' Assets prior to the Closing hereunder, including, without limitation,
any claims arising in connection with any failure by Seller to pay or discharge
any liability relating to the Stations that is not expressly assumed by Buyer
pursuant to the provisions of this Agreement and any liability of Seller for
slander or libel.
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(iii) Any and all damage, liability, deficiency or expense
(including, without limitation, reasonable attorneys' fees) arising out of any
breach by Seller or Parent of any covenant herein contained.
(iv) Any and all severance pay or other payment required to be
paid with respect to any employee of the Stations prior to Closing terminated by
Seller or arising by reason of the sale of the Stations or any liability or
obligation arising under (1) any employment relationship between Seller and any
employer arising by reason of the sale of Stations or otherwise or (2) any
assumed employment contract relating to the payment of compensation, bonuses or
benefits accrued to the Closing Date or as respects the deferred compensation or
phantom equity arising by reason of the sale of the Stations or otherwise.
(v) Any and all third party actions, suits, proceedings,
demands, assessments and judgments, and all fees, costs and expenses of any
kind, related or incident to any of the foregoing (including, without
limitation, any and all legal fees and expenses).
(vi) Any obligation or liability of Seller not expressly
assumed by Buyer pursuant to this Agreement.
(vii) Any obligation or liability arising from the failure to
comply with any applicable bulk sales laws.
(viii)Any and all Environmental Claims and any actual or
alleged violation or liability arising under any Environmental Laws, including,
without limitation, any injury to any person whatsoever or damage to any
property arising out of, in connection with, or in any way relating to (1) any
Release or threatened Release of Contaminants occurring prior to or continuing
as of the Closing, regardless of whether such liabilities or obligations relate
to Seller's ownership or
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operation of the Stations' Assets, to any predecessor, owner, tenant, occupant
or user of the Stations' Assets, or to any other party unrelated to the
Stations' Assets, (2) the breach of any of the warranties or covenants contained
in this Agreement or (3) any facts or circumstances that cause any of the
representations set forth in Section 5(n) to cease to be true. Seller waives any
claim for contribution or cost recovery against Buyer arising under
Environmental Laws.
(b) Indemnification by Buyer. Buyer hereby agrees to indemnify and
hold Seller and its successors and assigns harmless from and against:
(i) For a period of two (2) years from the date of the
Closing, any and all damage, liability, deficiency or expense (including,
without limitation, reasonable attorneys' fees) resulting from any
misrepresentation or breach of warranty expressly assumed by Buyer under this
Agreement; provided, that if at the stated expiration of any such
indemnification obligation there shall then be pending any indemnification claim
by any person or entity, such person or entity shall continue to have the right
to such indemnification with respect to such claim notwithstanding the
expiration of such two-year period.
(ii) Any and all claims, liabilities and obligations arising
from or related to the ownership or operation of the Stations subsequent to the
Closing hereunder.
(iii) Any and all damage, liability, deficiency or expense
(including, without limitation, reasonable attorneys' fees) arising out of any
breach by Buyer of any covenant herein contained or out of any obligation
expressly assumed by Buyer hereunder (except to the extent any such obligation
arises out of any Environmental Claim not resulting from an action by Buyer
under any Assumed Contract).
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(iv) Any and all third party actions, suits, proceedings,
demands, assessments and judgments, and all fees, costs and expenses of any
kind, related or incident to any of the foregoing (including, without
limitation, any and all legal fees and expenses).
(c) Procedure for Indemnification. If any person or entity shall
claim indemnification (the "Indemnified Party") hereunder for any claim other
than a third party claim, the Indemnified Party shall promptly give written
notice to the other party from whom indemnification is sought (the "Indemnifying
Party") of the nature and amount of the claim. If an Indemnified Party shall
claim indemnification hereunder arising from any claim or demand of a third
party, the Indemnified Party shall promptly give written notice (a "Third-Party
Notice") to the Indemnifying Party of the basis for such claim or demand,
setting forth the nature of the claim or demand in detail. Failure by the
Indemnified Party to give prompt notice hereunder shall not limit the
Indemnifying Party's obligations hereunder except to the extent that it is
actually prejudiced by the delay in notice. The Indemnifying Party shall have
the right to compromise or, if appropriate, defend at its own cost and through
counsel of its own choosing, any claim or demand set forth in a Third-Party
Notice giving rise to such claim for indemnification. In the event the
Indemnifying Party undertakes to compromise or defend any such claim or demand,
it shall promptly (and in any event, no later than fifteen (15) days after
receipt of the Third-Party Notice) notify the Indemnified Party in writing of
its intention to do so. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its counsel in the defense or compromise of such claim or
demand. After the assumption of the defense by the Indemnifying Party, the
Indemnifying Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnified Party, in connection with such defense,
other than reasonable costs of investigation, but the Indemnified Party may
participate in such defense at
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its own expense. The Indemnifying Party shall not, except with written consent
of the Indemnified Party, consent to the entry of a judgment or settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnified Party of an unconditional release of all liability
in respect of such third party claim or demand.
Section 11. Risk of Loss. The risk of any loss, damage or
destruction to any of the Stations' Assets to be transferred hereunder from fire
or other casualty or cause shall be borne by Seller at all times prior to the
Closing Date hereunder. Subject to the provisions hereof, Buyer shall have the
option in the event the loss or damage exceeds Fifty Thousand Dollars
($50,000.00) and the property cannot be substantially repaired or restored
before the Closing Date, exercisable within ten (10) days after receipt of
written notice of such circumstance from Seller to:
(a) Postpone the Closing until such time as the property has been
completely repaired, replaced or restored to Buyer's reasonable satisfaction,
unless the same cannot be reasonably effected within ninety (90) days of
notification, at which time Buyer may terminate this Agreement.
(b) Elect to consummate the Closing and accept the property in its
"then" condition, in which event Seller shall assign all rights under any
insurance claims covering the loss and pay over to Buyer (as part of the
Stations' Assets) any proceeds under any such insurance policy theretofore
received by Seller with respect thereto. Upon the assignment of such insurance
claims to Buyer, Seller shall have no further obligation to Buyer for any loss
of value to the Stations' Assets. In the event Buyer elects to postpone the
Closing Date as provided in subparagraph (ii) above, the parties hereto will
cooperate and extend the time during which this Agreement must be closed as
specified in Section 4(a).
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Section 12. Seller's Performance at Closing. At the Closing
hereunder, Seller will:
(a) Governmental Permits. Deliver to Buyer assignments of all
Licenses and other Governmental Permits to Buyer in customary form and
substance.
(b) Personal Property. Deliver to Buyer a ▇▇▇▇ of sale and all other
appropriate documents and instruments in customary form and substance assigning
good title to all personal property being sold to Buyer pursuant to this
Agreement, free and clear of any liens, charges, claims or encumbrances of any
kind, except as permitted by this Agreement.
(c) Real Property.
(i) Deliver to Buyer for the Owned Real Property a deed
("Deed") conveying good, clear and marketable fee simple title to Buyer, free
from any encumbrances, except: (1) real estate taxes for the current year that
are not due and payable on the delivery of such Deed; (2) existing easements for
public utilities of record; and (3) such other encumbrances as are permitted by
this Agreement.
(ii) Deliver to Buyer for the Leased Real Property:
(1) an assignment of lease (the "Lease Assignment") conveying
the interest of Seller therein;
(2) estoppel certificates from each landlord in the form
permitted under the applicable lease, or, if not so provided for in the lease,
in form reasonably satisfactory to Buyer; and
(3) consents to the Lease Assignment from each landlord and
such other consents to the Lease Assignment as are required by the applicable
lease.
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(d) Assignment of Agreements. Deliver to Buyer such assignments and
further instruments of transfer as Buyer may reasonably require to effectuate
the assignment to it of the Assumed Contracts pursuant to Section 1(a)(v).
(e) Adjustments and Payment. If the adjustments provided for in
Section 3 result in a net amount owing by Seller to Buyer, deliver a cashier's
check or wire transfer to Buyer for such amount at the Closing.
(f) Opinions. Deliver to Buyer the written opinions of Seller's
counsel, dated as of the Closing Date, pursuant to the provisions of this
Agreement.
(g) Officer's Certificate. Deliver to Buyer its certificate
attesting to the accuracy as of the Closing Date of all representations and
warranties and due performance of all obligations.
(h) Secretary's Certificate. Deliver to Buyer a certificate of the
Secretary of Parent and Seller certifying to (i) the By-laws of Parent and
Seller, as amended, (ii) resolutions of the Board of Directors of Parent and
Seller and its shareholders authorizing and approving the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby and (iii) incumbency and signatures of the officers of
Parent and Seller executing this Agreement and any other certificate or document
delivered in connection herewith.
(i) Charter. Deliver to Buyer the charters of Parent and Seller
certified by the States of Delaware, New Jersey, California and Florida,
respectively, as amended.
(j) Good Standing Certificates. Deliver to Buyer certificates of
good standing for (i) Parent and Seller from its respective jurisdictions of
incorporation, (ii) SBS-NJ from the State of New Jersey, (iii) SBS-CA from the
State of California and (iv) SBS-FL from the State of Florida.
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(k) Originals. Deliver to Buyer the originals, if available, of all
Assumed Contracts.
(l) Consents. Deliver to Buyer copies of all consents and approvals
required pursuant to Section 7(b), including, without limitation, estoppel
certificates and consents to assignment and collateral assignments to Buyer's
senior lender from all landlords.
(m) Other Documents. Deliver to Buyer such other documents as
counsel for Buyer may reasonably request for the purpose of consummating the
transactions described herein.
Section 13. Buyer's Performance at Closing. At the Closing, Buyer
will:
(a) Payment. Deliver to Seller by confirmed wire transfer, the
monies payable at the Closing as set forth in the appropriate provisions of
Section 2.
(b) Adjustments and Payment. If the adjustments provided for in
Section 3 result in a net amount owing to Seller by Buyer, deliver a cashier's
check or wire transfer to Seller for such amount at the Closing.
(c) Opinion. Deliver the written opinion of its counsel, dated as of
the Closing Date, pursuant to the provisions of this Agreement.
(d) Officer's Certificate. Deliver to Seller its certificate
attesting to the accuracy as of the Closing Date of all representations and
warranties and due performance of all obligations.
(e) Secretary's Certificate. Deliver to Seller a certificate of the
Secretary of Buyer certifying to (i) the By-laws of Buyer, as amended, (ii)
resolutions of the Board of Directors of Buyer authorizing and approving the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and (iii) incumbency and signatures of the
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officers of Buyer executing this Agreement and any other certificate or document
delivered in connection herewith.
(f) Certificate of Incorporation. Deliver to Seller the Certificate
of Incorporation of Buyer certified by the State of Delaware, as amended.
(g) Good Standing Certificate. Deliver to Seller a certificate of
good standing from the State of Delaware.
(h) Other Documents. Deliver to Seller such other documents as
counsel for Seller may reasonably request for the purpose of consummating the
transactions described herein.
Section 14. Default and Remedies.
(a) Breach and Opportunity to Cure. If either party believes the
other to be in default hereunder, the nondefaulting party shall provide the
defaulting party with notice specifying in reasonable detail the nature of such
default. If such default has not been cured by the earlier of: (i) the Closing
Date or (ii) within twenty (20) days after delivery of such notice, then the
party giving such notice may (1) terminate this Agreement (but no such
termination shall constitute a waiver of its rights arising out of such
default), (2) extend the Closing Date under Section 4 (but no such extension
shall constitute a waiver of such nondefaulting party's right to terminate as a
result of such default) and/or (3) exercise the remedies available to such party
pursuant to Section 14(b) or 14(c) or otherwise available by contract, at law or
in equity, subject to the right of the other party to contest such action
through appropriate proceedings.
(b) Seller's Remedies. Buyer recognizes that if, as a result of
Buyer's material breach of this Agreement, the transactions contemplated hereby
are not consummated, Seller would be entitled to compensation, the extent of
which is extremely difficult and impractical to ascertain.
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The parties, therefore, agree that if this Agreement is not consummated due to a
material breach by Buyer, provided that Seller is not in default and has
otherwise complied with its obligations under this Agreement and the conditions
to Buyer's obligations to consummate the sale of the Stations' Assets as set
forth in Section 8 shall have been satisfied (other than conditions which have
not been satisfied as a result of a material breach by Buyer of its obligations
hereunder), Seller shall be entitled to the ▇▇▇▇▇▇▇ Money. The parties agree
that this sum shall constitute liquidated damages and shall be Seller's sole and
exclusive remedy and shall be in lieu of any and all other relief to which
Seller might otherwise be entitled due to Buyer's failure to consummate, or
default under, this Agreement.
(c) Buyer's Remedies. Seller agrees that the Stations' Assets
include unique property that cannot be readily obtained on the open market and
that Buyer would be irreparably injured if this Agreement is not specifically
enforced after default. Therefore, in addition to any other remedies available
to it at law or in equity, Buyer shall have the right to specifically enforce
Seller's performance under this Agreement, and Seller agrees to waive the
defense in any such suit that Buyer has an adequate remedy at law and to
interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy.
(d) Disposition of ▇▇▇▇▇▇▇ Money. In the event that the transactions
contemplated hereunder are not consummated due to a breach by Buyer, the ▇▇▇▇▇▇▇
Money shall be paid to Seller as liquidated damages as contemplated in Section
14(b), provided that Seller is not in default and has otherwise complied with
its obligations under this Agreement and the conditions to Buyer's obligations
to consummate the sale of the Stations' Assets as set forth in Section 8 shall
have been satisfied (other than conditions which have not been satisfied as a
result of a material breach by
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Buyer of its obligations hereunder). If the transactions contemplated hereunder
are not consummated for any other reason or reasons, the ▇▇▇▇▇▇▇ Money shall be
paid to Buyer promptly upon Buyer's demand.
Section 15. Termination.
(a) Absence of Commission Consent or Court Approval. This Agreement
may be terminated at the option of Buyer or Seller upon notice to the other if
the FCC consent has not become a "Final Order" by March 9, 1998; provided,
however, that Seller may not so terminate this Agreement if, on or prior to
March 9, 1998, a preliminary order of approval has been issued by the FCC and
Buyer has waived a "Final Order" as a condition of Closing; provided, further,
that Seller may not so terminate this Agreement if the FCC fails to consent to
the assignment of the Licenses relating to Station WCMQ and Buyer elects to
proceed with the purchase of the Stations' Assets relating to Station WXLX and
Station KXMG in accordance with Section 16; and provided, further, that a party
may not terminate this Agreement if (i) such party's action or inaction has
caused a delay in any decision or determination by the FCC or (ii) the party
seeking to terminate the Agreement pursuant to this Section 15(a) has not
diligently pursued its assignment application before the FCC; and provided,
further, that if a party's breach under this Agreement has caused such a delay
in any decision or determination by the FCC, then the non-breaching party may
terminate this Agreement and exercise the remedies available to such party
pursuant to Section 14. In the event of termination pursuant to this Section,
the ▇▇▇▇▇▇▇ Money shall be returned to Buyer and the parties shall be released
and discharged from any further obligation hereunder other than in respect of
breaches occurring prior to such termination; provided, that in the event of
termination due to a breach by Buyer that has caused a delay in any such
decision or determination by the FCC, then Seller shall
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be entitled to the remedies set forth in Sections 14(b) and (d), provided,
further, that Seller is not in default and has otherwise complied with its
obligations under this Agreement and the conditions to Buyer's obligations to
consummate the sale of the Stations' Assets as set forth in Section 8 shall have
been satisfied (other than conditions which have not been satisfied as a result
of a material breach by Buyer of its obligations hereunder).
(b) Designation for Hearing. The provisions of Section 15(a)
notwithstanding, either party may terminate this Agreement upon notice to the
other, if, for any reason, the assignment application is designated for hearing
by the FCC, unless such designation for hearing is due to the willful action or
inaction of either party, in which case such party shall have no right of
termination; provided, however, that notice of termination must be given within
twenty (20) days after release of the hearing designation order. Upon
termination pursuant to this Section 15(b), the ▇▇▇▇▇▇▇ Money shall be returned
to Buyer and the parties shall be released and discharged from any further
obligation hereunder other than in respect of breaches occurring prior to such
termination; provided, that in the event of termination due to Buyer's basic
qualifications or Buyer's willful action or inaction that has caused the
assignment application to be designated for hearing by the FCC, then Seller
shall be entitled to the remedies set forth in Sections 14(b) and (d), provided,
further, that Seller is not in default and has otherwise complied with its
obligations under this Agreement and the conditions to Buyer's obligations to
consummate the sale of the Stations' Assets as set forth in Section 8 shall have
been satisfied (other than conditions which have not been satisfied as a result
of a material breach by Buyer of its obligations hereunder).
(c) Legal Actions. If, prior to the Closing Date, any action, suit,
or proceeding shall have been instituted by or before any court or other
governmental authority (other than the
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FCC) to enjoin, restrain, or prohibit the consummation of the transactions
contemplated hereby, the Closing may be adjourned at the option of either party
(with prior consent of the FCC if necessary, which consent both parties will use
their reasonable best efforts to obtain), for a period of up to ninety (90)
days, and if, at the end of such period, the action, suit, or proceeding shall
not have been favorably resolved, either party may, by written notice to the
other, terminate this Agreement, provided, however, that if such action, suit,
or proceeding shall have been solicited or encouraged by, or instituted as a
result of any act or omission of, Seller or Buyer, then such party shall not
have any right of adjournment or termination pursuant to this Section.
(d) Failure to Close. This Agreement may be terminated by any party
not then in default hereunder if for any reason the Closing has not occurred on
or prior to the Outside Closing Date.
(e) Mutual Consent or No FCC Filing. In addition, this Agreement may
be terminated at any time on or prior to the Closing Date: (i) by the mutual
written consent of Seller and Buyer; or (ii) by any non-defaulting party hereto
if within ten (10) business days after the date hereof, an application for FCC
consent to the assignment of the Licenses to Buyer and the consummation of the
transactions contemplated by this Agreement has not been filed with the FCC
(provided that the non-defaulting party shall have used all reasonable efforts
to cooperate in the preparation of such application).
(f) Effect of Termination. A termination pursuant to this Section 15
shall not relieve any party of any liability it may otherwise have for a breach
of this Agreement prior to such termination.
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Section 16. Failure to Obtain FCC Consent to the Assignment of the
Licenses Relating to Station WCMQ. Notwithstanding anything contained herein to
the contrary, if at anytime the conditions to closing set forth in Section 4
have been satisfied with respect to the Licenses relating to Station WXLX and
Station KXMG but not with respect to the Licenses relating to Station WCMQ,
Buyer shall proceed with the purchase, and Seller shall proceed with the sale (a
"Partial Purchase"), of the Stations' Assets relating to Station WXLX and
Station KXMG and reduce the purchase price payable hereunder by Eight Million
Dollars ($8,000,000). In such event, (a) the closing conditions and closing
obligations applicable for such Partial Purchase shall be deemed modified to
exclude those solely applicable to Station WCMQ or the Stations' Assets with
respect thereto, (b) upon the closing of the Partial Purchase, the ▇▇▇▇▇▇▇ Money
shall be released in full to Buyer, or at Buyer's direction, in accordance with
Section 2(b) and (c) the parties shall remain obligated to consummate the sale
of the Stations' Assets with respect to Station WCMQ at a price of Eight Million
Dollars ($8,000,000) upon, but only upon, the satisfaction of the closing
conditions otherwise applicable thereto, subject to the earlier termination of
such obligations in accordance with Section 15.
Section 17. Sales and Transfer Taxes and Fees. All sales, transfer
and other similar taxes incident to this transaction shall be paid by Buyer.
Section 18. Survival of Representations and Warranties. The several
representations and warranties of the parties contained herein shall survive the
Closing for a period of two (2) years.
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Section 19. Public Announcements.
(a) Prior to the Closing Date, no party shall, without the approval
of the other party hereto, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that such party shall be so obligated by law, in which case such party
shall give advance notice to the other party and the parties shall use their
best efforts to cause a mutually agreeable release or announcement to be issued.
Nothing in this Agreement shall be construed to limit Seller's normal duty to
broadcast all announcements required by the FCC.
(b) Notwithstanding the foregoing, the parties acknowledge that the
rules and regulations of the FCC require that public notice of the transactions
contemplated by this Agreement be made after the application for the FCC's
consent has been filed with the FCC. The form and substance of such public
notice, to the extent not dictated by the Communications Act or the rules and
regulations of the FCC, shall be mutually agreed upon by Seller and Buyer.
Section 20. Non-Competition Agreement.
(a) For a period of three (3) years from and after the Closing Date,
(i) neither Parent nor Seller nor any affiliate of either of them shall,
directly or indirectly, or as the agent of another person or entity, own,
manage, lease, license or operate, within a geographical area in which any of
the Stations now transmits (the "Territory"), a radio station utilizing an
English or Spanish sports talk format and (ii) neither Buyer nor any affiliate
of Buyer shall, directly or indirectly, or as the agent of another person or
entity, own, manage, lease, license or operate, within the Territory, a radio
station utilizing a Spanish music format. This provision shall not be assignable
by either party except to an affiliate which is or agrees to be bound by such
provision.
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(b) The necessity of protection against the competition of Seller
and Buyer against the other and the nature and scope of such protection has been
carefully considered by the parties hereto. The parties hereto agree and
acknowledge that the duration, scope and geographic areas applicable to the
covenant not-to-compete described in this Section 20 are fair, reasonable and
necessary and that adequate compensation has been received by Seller and Buyer
for such obligations. If, however, for any reason any court determines that the
restrictions in this Section 20 are not reasonable or that consideration is
inadequate, such restrictions shall be interpreted, modified or rewritten to
include as much of the duration, scope and geographic area identified in this
Section as will render such restrictions valid and enforceable.
(c) In the event of a breach or threatened breach of this Section
20, the non breaching party shall be entitled, without the posting of a bond, to
an injunction restraining such breach. Nothing herein contained shall be
construed as prohibiting any party from pursuing any other remedy available to
it for such breach or threatened breach.
Section 21. Miscellaneous.
(a) Schedules and Exhibits. All schedules and exhibits attached to
this Agreement (and all other documents referred to therein) shall be deemed
part of this Agreement and incorporated herein, where applicable, as if fully
set forth herein.
(b) No Assignment, Successors, Assigns, Etc. This Agreement shall
not be assigned or conveyed by any party hereto to any other person or entity
without the prior written consent of the other parties hereto, except that Buyer
may assign this Agreement and the rights and obligations hereunder to any of its
affiliates which will not release Buyer from any one or more of the obligations
and undertakings provided for herein. In addition, Buyer or its assigns shall
have the
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right to assign its interests herein to its senior lender. The parties
acknowledge and agree that, upon the Closing, Buyer may assign its rights
hereunder to acquire the Licenses to one or more direct or indirect wholly-owned
subsidiaries (which may be in the form of either limited liability companies or
corporations) of Buyer (the "License Subsidiaries") and may assign its rights
hereunder to acquire the other Stations' Assets to one or more direct or
indirect wholly-owned subsidiaries (which may be in the form of either limited
liability companies or corporations) of Buyer, in which case, at Closing, such
assets shall be transferred by Seller to the applicable assignee.
(c) Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
(e) Notices. Any notice or other communications shall be in writing
and shall be considered to have been duly given when personally delivered or
deposited into first class certified mail, postage prepaid, return receipt
requested:
(i) If to Seller to:
Spanish Broadcasting System, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., President
cc: ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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(ii) If to Buyer to:
One-on-One Sports Radio Network, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
cc: Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
cc: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.L.C.
11th Floor
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(f) Integration. Except as herein expressly provided, this Agreement
embodies the entire agreement and understanding among Seller and Buyer, and
supersedes all prior agreements and understandings, whether oral or in writing,
with respect to the purchase and sale of the Stations' Assets.
(g) Amendment. This Agreement shall not be amended or modified in
any manner except by written document executed by the party or parties against
whom enforcement of such amendment or modification may be sought.
(h) Joint and Several. All covenants, representations, obligations
and liabilities of "Seller" hereunder shall be joint and several covenants,
representations, obligations and liabilities of SBS-NJ, SBS-CA and SBS-FL.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed through their duly authorized officers on the day and year first
above written.
SPANISH BROADCASTING SYSTEM, INC.
(NEW JERSEY)
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM
OF CALIFORNIA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM
OF FLORIDA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
ONE-ON-ONE SPORTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
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SCHEDULES AND EXHIBITS
CONTRACT DOCUMENT
REFERENCE
1(a)(i) Governmental Permits
1(a)(iii) Personal Property
1(a)(iv) Real Property
1(a)(v) Contracts
2(c) Allocation of Purchase Price
5(b)(ii) Violations and Breaches
5(h) Litigation
5(l) Insurance
5(n) Environmental Permits
EXHIBIT 1 Escrow Agreement
EXHIBIT 2 Withholding Certificate