Exhibit 10.15
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STOCK PURCHASE AGREEMENT
by and among
ORO SPANISH BROADCASTING, INC.,
RADIO UNICA of SAN FRANCISCO, INC.
and
▇▇▇▇ DE LA ▇▇▇▇
dated as of
February 20, 1998
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TABLE OF CONTENTS
RECITALS..........................................................................................................1
ARTICLE I DEFINITIONS AND REFERENCES..............................................................................2
ARTICLE II SALE AND PURCHASE OF COMMON SHARES AND CONSIDERATION
FOR COVENANT NOT TO COMPETE.......................................................................................7
Section 2.1 Sale and Purchase of Common Shares; Entry into Covenant not to
Compete.......................................................................7
Section 2.2 Consideration.................................................................7
Section 2.3 Payment of Purchase Price.....................................................8
Section 2.4 Purchase Price Adjustment.....................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY.................................................10
Section 3.1 Organization and Standing....................................................10
Section 3.2 Authorization................................................................11
Section 3.3 Compliance with Laws.........................................................11
Section 3.4 Required Consents; No Conflicts..............................................11
Section 3.5 Financial Statements.........................................................12
Section 3.6 Absence of Certain Changes or Events. ......................................12
Section 3.7 Absence of Litigation........................................................13
Section 3.8 Ownership of the Shares......................................................13
Section 3.9 Real Property................................................................13
Section 3.10 Tangible Personal Property...................................................14
Section 3.11 Capitalization...............................................................14
Section 3.12 FCC Matters..................................................................15
Section 3.13 Intellectual Property........................................................16
Section 3.14 Reports and Records..........................................................16
Section 3.15 Contracts; Scheduled Contracts...............................................16
Section 3.16 Taxes........................................................................17
Section 3.17 Employee Benefit Plans; Labor Relations......................................18
Section 3.18 Environmental Matters........................................................19
Section 3.19 Insurance....................................................................20
Section 3.20 Powers of Attorney; Guarantees...............................................20
Section 3.21 Disclosure...................................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES BY BUYER...............................................................20
Section 4.1 Organization and Standing....................................................20
Section 4.2 Authorization................................................................21
Section 4.3 Required Consents; No Conflicts..............................................21
Section 4.4 Absence of Litigation........................................................21
Section 4.5 Qualification of Buyer.......................................................21
Section 4.6 Investment...................................................................22
Section 4.7 Disclosure...................................................................22
ARTICLE V PRE-CLOSING FILINGS AND UNDERTAKINGS...................................................................22
Section 5.2 Sharing Information..........................................................22
ARTICLE VI COVENANTS AND AGREEMENTS OF THE COMPANY AND SELLER....................................................23
Section 6.1 Conduct of Business of the Company...........................................23
Section 6.2 Affirmative Covenants........................................................25
Section 6.3 De La ▇▇▇▇ Negative Covenants................................................26
Section 6.4 Confidentiality. The Company and Seller.....................................26
Section 6.5 No Solicitation..............................................................27
Section 6.6 Use of Proceeds..............................................................27
Section 6.7 Giants Contract..............................................................27
Section 6.8 Noncompetition...............................................................27
ARTICLE VII COVENANTS AND AGREEMENTS OF BUYER....................................................................28
Section 7.1 Confidentiality..............................................................28
Section 7.2 Notice of Certain Events.....................................................28
ARTICLE VIII MUTUAL COVENANTS AND UNDERSTANDINGS OF
THE COMPANY, SELLER AND BUYER...................................................................................29
Section 8.1 Possession and Control.......................................................29
Section 8.2 Public Announcements.........................................................29
Section 8.4 Unwind Agreement.............................................................29
ARTICLE IX CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE...................................................30
Section 9.1 Representations and Covenants................................................30
Section 9.2 FCC Order....................................................................30
Section 9.3 Legal Proceedings............................................................30
Section 9.4 No Adverse Action or Decision................................................30
Section 9.5 Approvals and Consents.......................................................30
Section 9.6 Material Adverse Change......................................................31
Section 9.7 Delivery by the Company and Seller...........................................31
Section 9.8 Time Brokerage Agreement.....................................................31
Section 9.9 Bank of America Consent......................................................31
ARTICLE X CONDITIONS PRECEDENT TO DE LA ROSA'S OBLIGATION TO CLOSE...............................................31
Section 10.1 Representations and Covenants................................................31
Section 10.2 FCC Order....................................................................32
Section 10.3 Legal Proceedings............................................................32
Section 10.4 No Adverse Action or Decision................................................32
Section 10.5 Delivery by Buyer............................................................32
ARTICLE XI THE CLOSING...........................................................................................32
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Section 11.1 Closing......................................................................32
Section 11.2 Delivery by the Company and Seller...........................................32
Section 11.3 Delivery by Buyer............................................................33
ARTICLE XII SURVIVAL; INDEMNIFICATION............................................................................34
Section 12.1 Survival of Representations..................................................34
Section 12.3 Indemnification by Buyer.....................................................36
Section 12.4 Indemnification Procedure....................................................37
Section 12.5 Remedies Cumulative..........................................................37
Section 12.6 Consequential Damages........................................................38
ARTICLE XIII TERMINATION.........................................................................................38
Section 13.1 Termination..................................................................38
Section 13.2 Effect of Termination........................................................39
ARTICLE XIV REMEDIES.............................................................................................39
Section 14.1 Default by the Company or Seller.............................................39
Section 14.2 Default by Buyer.............................................................39
Section 14.3 Specific Performance.........................................................39
Section 14.4 Remedies Not Exclusive.......................................................40
ARTICLE XV GENERAL PROVISIONS....................................................................................40
Section 15.1 Further Assurances...........................................................40
Section 15.2 Brokers......................................................................40
Section 15.3 Expenses.....................................................................40
Section 15.4 Notices......................................................................41
Section 15.5 Waiver.......................................................................42
Section 15.6 Benefit and Assignment.......................................................42
Section 15.7 Entire Agreement; Amendment..................................................43
Section 15.8 Severability.................................................................43
Section 15.9 Headings.....................................................................43
Section 15.10 Governing Law................................................................43
Section 15.11 Signature in Counterparts....................................................43
Section 15.12 No Prejudice.................................................................43
Section 15.13 Specific Performance.........................................................43
Section 15.14 Obligations Under De La ▇▇▇▇ Consulting Agreement............................44
Section 15.16 Guaranty.....................................................................44
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into as of the 20th day of February, 1998 by and among ORO SPANISH BROADCASTING,
INC., a California corporation (the "Company"), ▇▇▇▇ De La ▇▇▇▇, an individual
("De La ▇▇▇▇" or Seller") and RADIO UNICA OF SAN FRANCISCO, INC., a Delaware
corporation ("Buyer").
RECITALS
WHEREAS, the Company is the licensee of radio station KIQI,
1010 kHz, San Francisco, California (the "Station");
WHEREAS, De La ▇▇▇▇ is the sole record and beneficial owner of
all of the issued and outstanding shares of common stock of the Company, par
value $1.00 per share (the "Common Shares");
WHEREAS, Seller wishes to sell, and Buyer wishes to buy, all
of the Common Shares, all in accordance with and subject to the terms and
conditions set forth below;
WHEREAS, Seller wishes to enter into a covenant which will
prevent him from engaging in certain activities for a certain period of time;
WHEREAS, Buyer and the Company are simultaneously entering
into a Time Brokerage Agreement, dated as of the date hereof (the "TBA"),
whereby the Company shall make available to Buyer substantially all of the
broadcasting time on the Station through and including the Closing Date (as
defined herein); and
WHEREAS, Buyer and De La ▇▇▇▇ are simultaneously entering into
a Consulting Agreement dated as of the date hereof (the "De La ▇▇▇▇ Consulting
Agreement"), whereby De La ▇▇▇▇ shall provide certain services to Buyer.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND REFERENCES
Unless the context otherwise specifies or requires, terms used
herein shall have the respective meanings assigned thereto as follows (such
definitions to be equally applicable to both the singular and plural forms of
the terms defined). Unless otherwise specified, all references herein to
"Articles" or "Sections" are to Articles or Sections of this Agreement.
Additional Agreements means any and all Contracts executed and
delivered by Sellers between the date hereof and the Closing Date.
Affiliate means, as to any entity, any other entity which
owns, is owned by or is under common control with such entity.
Applicable Law means any federal, state or local statute, law,
ordinance, rule, regulation, order, writ, injunction, judgment or decree
applicable to a Person or any such Person's Subsidiaries, properties or assets.
Assets shall mean the assets of the Company used or useful in
the operation of the Station or the Company's business.
Audited Statements shall have the meaning specified in Section
3.5.
Bank of America Loan shall mean the outstanding debt owed by
the Company to the Bank of America.
Bank of America Release shall mean a letter or such other
correspondence from the Bank of America indicating that the Company has fully
satisfied and been released from any and all of its obligations under the Bank
of America Loan.
Buyer Indemnitees shall have the meaning specified in Section
12.2.
Closing Date Balance Sheet means the balance sheet of the
Company as of the Common Stock Closing Date prepared on the Common Closing Date
by the Company in accordance with GAAP and reviewed by Buyer's independent
public accountants.
Closing means the closing of the purchase and sale of the
Common Shares and Seller's entry into the covenant set forth in Section 6.8.
Closing Date means the time and date on which the Closing
takes place, as established by Section 11.1.
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Code means the Internal Revenue Code of 1986, as amended.
Common Shares shall have the meaning specified in the
recitals.
Communications Act means the Communications Act of 1934, as
amended, and the rules and regulations of the FCC promulgated pursuant thereto.
Contracts means all written contracts, commitments, plans,
agreements, leases, arrangements, undertakings and licenses, including
Additional Agreements which relate to the ownership, operation, business or use
of the Station or any of the Common Shares.
De La ▇▇▇▇ Consulting Agreement shall mean the Consulting
Agreement, dated as of the date hereof, by and between De La ▇▇▇▇ and the
Company.
Encumbrances means any mortgages, pledges, liens, claims,
security interests, agreements, restrictions, defects in title, easements or
encumbrances.
Environmental Laws means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. ss.
9601 et seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C. ss. 2601 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802 et seq.;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 9601 et seq.;
the Clean Water Act ("CWA"), 33 U.S.C. ss. 1251 et seq.; the Safe Drinking Water
Act, 42 U.S.C. ss. 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. ss. 7401
et seq.; or any other applicable federal, state, or local laws, regulations,
ordinances, decrees, rules, judgments, orders or directives now or hereinafter
in effect relating to the protection of human health, safety or the environment,
or otherwise relating to Hazardous Materials generation, production, use,
storage, treatment, transportation or disposal.
ERISA mean Employee Retirement Income Security Act of 1974, as
amended.
Escrow Agent shall have the meaning specified in Section 2.3.
Escrow Agreement shall mean the Escrow Agreement, dated as of
the date hereof, by and among Buyer, De La ▇▇▇▇ and the Escrow Agent.
Escrow Deposit shall have the meaning specified in Section
2.3.
Existing Contract shall have the meaning specified in Section
3.15.
FAA means the Federal Aviation Administration.
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FCC means the Federal Communications Commission.
FCC Licenses means all licenses, permits and other
authorizations issued by the FCC to the Company for the operation of the
Station.
FCC Order means an order or orders of the FCC consenting to
the transfer of control to Buyer of the Company.
Final Order means an FCC Order 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.
Financial Statements shall have the meaning specified in
Section 3.5.
GAAP means generally accepted accounting principles as used in
the United States as in effect at the time any applicable financial statements
were prepared or any act requiring the application of GAAP was performed.
Giants Contract shall have the meaning specified in Section
6.7.
Governmental Authority 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.
Hazardous Materials means any wastes, substances, or materials
(whether solids, liquids or gases) that are defined or regulated as hazardous or
toxic under any Environmental Law, including without limitation, substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"radioactive materials," or other similar designations in any Environmental
Laws. "Hazardous Materials" includes, without limitation, polychlorinated
biphenyls (PCBs), asbestos, lead-based paints and petroleum and petroleum
products.
Indemnification Notice shall have the meaning specified in
Section 12.4.
Indemnified Party and Indemnitor shall have the respective
meanings specified in Section 12.4..
Intellectual Property shall have the meaning specified in
Section 3.13.
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IRS means the Internal Revenue Service.
Liens means all liens, mortgages, pledges, charges, claims,
restrictions, defects in title, easements or other encumbrances.
Losses means any action, claim, charge, suit, proceeding,
investigation, cost, damage, disbursement, expense, liability, loss, injury,
response costs, deficiency, penalty, diminution in value, settlement or
obligation of any kind or nature, including but not limited to interest,
penalties, fines, legal, accounting and other professional fees and expenses
incurred in the investigation, collection, prosecution, determination and
defense of claims, amounts paid in settlement, any incidental or consequential
damages and any punitive damages payable to third parties.
Material Adverse Effect means (i) a material adverse effect on
the assets, liabilities, business, condition (financial or other), or prospects
of the Company or (ii) an event that would prevent in any material respect or
materially delay the performance by De La ▇▇▇▇ or the Company of its obligations
under this Agreement or would materially interfere with the ability of the
parties hereto to consummate the transactions contemplated hereby.
Net Barter Liability Position shall have the meaning specified
in Section 2.4.
Note Maturity Date shall have the meaning specified in Section
2.3.
Ordinary Course of Business means, with respect to the
Company, the ordinary course of business consistent with past practices of the
Company.
Other Transaction Agreements means the De La ▇▇▇▇ Consulting
Agreement, the TBA and the Escrow Agreement.
Overage shall have the meaning specified in Section 2.4.
Per Share Value shall have the meaning specified in Section
2.3.
Person means any individual, corporation, company, partnership
(limited or general), joint venture, limited liability company, association,
trust or other entity.
Post-Closing Escrow Deposit shall have the meaning specified
in Section 2.3.
Pre-Closing Tax Periods shall have the meaning specified in
Section 12.2.
Promissory Note shall have the meaning specified in Section
2.3.
Post-Closing Tax Periods shall have the meaning specified in
Section 12.2.
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Purchase Price shall have the meaning specified in Section 2.2.
Preferred Stock.
Real Property means all real property, and all buildings and
other improvements thereon, (i) owned or leased by the Company or (ii) held by
the Company and used or useful in the business or operations of the Station;
provided, however, that, this definition shall specifically exclude all real
property located in Tehama, Calusa and ▇▇▇▇▇▇.
Real Property Interests means all interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements, thereon, (i) owned or leased by the Company or (ii) held by
the Company and used or useful in the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date; provided, however, that this definition shall specifically exclude
all interests in real property located in Tehama, Calusa and ▇▇▇▇▇▇.
Returns means any returns, declarations, reports, estimates,
schedules, information returns or other documents (including any related or
supporting information) with respect to Taxes.
Seller Indemnitees shall have the meaning specified in Section
12.3.
Shortage shall have the meaning specified in Section 2.4.
Station shall have the meaning specified in the recitals.
Stock Payment shall have the meaning specified in Section 2.3.
Survival Period shall have the meaning specified in Section
12.1.
Tangible Personal Property means all machinery, equipment,
tools, vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property (i) owned or leased
by the Company or (ii) held by the Company and used or useful in the business or
operations of the Station, including the Station transmitters, together with any
additions thereto between the date of this Agreement and the Closing Date;
provided, however, that, this definition shall specifically exclude the Mercedes
sports utility vehicle and the Mercedes automobile used by De La ▇▇▇▇.
Taxes shall mean any taxes, charges, duties, fees, imposts,
levies or other assessments, including, without limitation, all net income,
gross income, sales, use, franchise, profits, service, gross receipts, capital,
ad valorem, value added, transfer, inventory, capital stock, license,
registration, environmental, social security, unemployment, severance, stamp,
recording, occupation, withholding, payroll, employment, excise, or property
including
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personal intangible and real taxes and estimated taxes, assessments or charges
of any kind whatsoever together with interest and any penalties, fines, duties,
fees, levies, additions, to tax or additional amounts with respect thereto.
TBA means the Time Brokerage Agreement, dated as of the date
hereof, by and between the Company and Buyer.
Transaction Agreements means this Agreement and the Other
Transaction Agreements.
Transfer of Control Applications shall have the meaning
specified in Section 5.1.
Unaudited Statements shall have the meaning specified in
Section 3.5.
Unwind Agreement shall have the meaning specified in Section
8.3.
Working Capital shall mean the Company's current assets minus
its liabilities (as such terms are defined by and determined in accordance with
GAAP), as adjusted pursuant to Section 2.4.
Working Capital Statement shall have the meaning specified in
Section 2.4.
ARTICLE II
SALE AND PURCHASE OF COMMON SHARES AND CONSIDERATION FOR
COVENANT NOT TO COMPETE
Section 2.1 Sale and Purchase of Common Shares; Entry into
Covenant not to Compete. Subject to the terms and conditions hereof and in
reliance upon the representations, warranties, covenants and agreements
contained herein, at the Closing (as defined herein): (i) Seller shall sell,
assign, transfer, convey and deliver to Buyer, and Buyer agrees to purchase from
Seller, all of the Common Shares, free and clear of all Encumbrances and (ii)
Seller shall enter into the covenant set forth in Section 6.8 hereof.
Section 2.2 Consideration. If, as of the Closing Date, the
Company is free and clear of all indebtedness, the aggregate consideration for
Seller's sale of the Common Shares and Seller's agreement to enter into the
covenant set forth in Section 6.8 hereof (the "Purchase Price") shall be Twelve
Million Dollars ($12,000,000), as adjusted pursuant to Section 2.4 hereof. If,
however, the Company has outstanding debt as of the Closing Date, (i) Buyer
agrees to assume such debt and to pay any outstanding balances thereon (which
amounts are estimated on Schedule 2.3(b)) at Closing and (ii) the amount paid by
Buyer for the purchase of the Common Shares shall be adjusted from Eleven
Million Five Hundred Thousand Dollars
7
($11,500,000) to Seven Million One Hundred and Twenty Thousand Dollars
($7,120,000) (or to such other amount as shall be calculated by deducting the
aggregate amount of the Company's outstanding debt which is paid by Buyer at
Closing pursuant to Clause (i) of Section 2.3(b) from Eleven Million Five
Hundred Thousand Dollars ($11,500,000)).
Section 2.3 Payment of Purchase Price.
(a) Upon the execution of this Agreement, Buyer shall deposit
the amount of One Million Dollars ($1,000,000) into escrow (the "Escrow
Deposit"). The total Escrow Deposit shall be held by First Union National Bank
(together with any successor thereto, the "Escrow Agent") pursuant to the terms
and conditions of that certain Escrow Agreement executed on the date hereof. At
the Closing, Nine Hundred Thousand Dollars ($900,000) of the total Escrow
Deposit shall be paid by the Escrow Agent to Seller and credited to the Purchase
Price at Closing. The remaining One Hundred Thousand Dollars ($100,000) of the
total Escrow Deposit (the "Post-Closing Escrow Deposit"), together with any
interest earned on the Escrow Deposit, shall be held by the Escrow Agent for a
period of six (6) months from the Closing Date, unless dispersed on an earlier
date pursuant to Section 2.4 hereof, to cover the potential purchase price
adjustment pursuant to Section 2.4 hereof. If the Closing does not occur due to
the reason specified in Section 14.2 hereof, the total Escrow Deposit, together
with any interest earned thereon, shall be paid to Seller as liquidated damages
as specified in Section 14.2. If the Closing does not occur for any other
reason, the Escrow Deposit, together with any interest earned thereon, shall be
forthwith paid to Buyer.
(b) An aggregate amount of Five Million Dollars ($5,000,000),
shall be paid by the Buyer on the Closing Date as follows: (i) the amounts
specified on Schedule 2.3(b) shall be paid directly to the creditors of the
Company that are listed thereon (or to such other creditors for such amounts as
may be designated by Seller at least three (3) business days prior to the
Closing Date; provided, that, in no event shall such amounts total more than
Five Million Dollars ($5,000,000)) and (ii) the difference, if any, between Five
Million Dollars ($5,000,000) and the aggregate amount paid pursuant to clause
(i) of this Section 2.3(b) shall be paid by wire transfer of immediately
available funds to such bank or other financial institution as shall be
designated by Seller at least three (3) business days prior to the Closing Date.
(c) A promissory note (the "Promissory Note") in the principal
amount of Six Million Dollars ($6,000,000) from the Buyer made payable to the
Seller shall be delivered to Seller on the Closing Date. The Promissory Note
shall be substantially in the form of Exhibit A hereto. The Promissory Note
shall bear interest at the annual rate of eight (8) percent, payable monthly.
The principal amount of the Promissory Note shall be due and payable in full on
the date which is five (5) years from the Closing Date (the "Note Maturity
Date"); provided, however, that, if by notice given not later than sixty (60)
business days prior to the Note Maturity Date, Seller advises Buyer that it
wishes to receive a portion, but not more than twenty five (25) percent, of the
principal amount then outstanding under the Promissory Note in shares of the
Company's common stock (the "Stock Payment"), then Buyer and Seller shall
negotiate in good
8
faith to agree upon the terms of the Stock Payment and the per share value of
the Company's common stock as of the Note Maturity Date (the "Per Share Value").
In the event that Buyer and Seller are unable by the Note Maturity Date to agree
upon the terms of the Stock Payment and the Per Share Value of the Company's
common stock as of the Note Maturity Date, the entire principal amount then
outstanding under the Promissory Note shall be paid solely in immediately
available federal funds in accordance with the terms of the Promissory Note.
Section 2.4 Purchase Price Adjustment.
(a) Within six (6) months after the Closing Date, Buyer shall
deliver, or shall cause the Company to deliver, a statement of the Company's
Working Capital (the "Working Capital Statement"), dated as of the Closing Date.
For purposes of this Agreement, the Company's Working Capital shall be
calculated by deducting the Company's liabilities from the Company's current
assets (as such items are defined by and determined in accordance with GAAP);
provided, that, the parties agree that the Company's outstanding debt under the
Bank of America Loan shall not be included in the calculation of the Company's
Working Capital and; provided, further, that, the parties agree that, (i) if the
amount by which barter liabilities as of the Closing Date exceeds barter
receivables as of the Closing Date (the "Net Barter Liability Position") is less
than Thirty-Five Thousand Dollars ($35,000), such Net Barter Liability Position
shall not be factored into the calculation of the Company's Working Capital and
(ii) if, as of the Closing Date, the Net Barter Liability Position equals or
exceeds Thirty-Five Thousand Dollars ($35,000) such excess Net Barter Liability
Position shall be factored into the calculation of the Company's Working
Capital. The Working Capital Statement shall: (i) set forth the Working Capital
of the Company as of the Closing Date; (ii) be determined in accordance with
GAAP; and (iii) be certified by the President of the Company as having been
prepared consistent with the provisions of this Section 2.4(a). For purposes of
determining the accounts receivable balance as of the Closing Date and the
appropriate allowance for doubtful accounts as of the Closing Date, any
post-Closing adjustments made to such balances shall be in accordance with GAAP
and shall reflect that any payments received by the Company in satisfaction of
any outstanding accounts receivable balance are applied to the oldest such
outstanding balance (i.e., "first in, first out"), unless such application is,
in the Buyer's reasonable discretion, validly disputed by the account debtor. If
Seller so requests, by notice given within two (2) business days after the
delivery of the Working Capital Statement, the Company shall assign to Seller
any accounts receivable owing to the Company from or related to the operation of
the Station prior to the Closing Date which have been deemed uncollectible.
(b) The Working Capital reflected on the Working Capital
Statement shall be conclusive and binding upon the parties unless within two (2)
business days after the delivery of the Working Capital Statement to Seller,
Seller notifies Buyer of his objection thereto. In the event that Buyer and
Seller are unable to resolve any dispute concerning the Working Capital
Statement, the parties shall engage an independent, national or regional
accounting firm which is mutually agreeable to Buyer and Seller to calculate the
Company's Working Capital in accordance with Section 2.4(a) hereof. If Buyer and
Seller are unable to agree upon an
9
accounting firm to perform the calculation, Buyer and Seller shall each select
an independent, national or regional accounting firm who will then agree upon a
third independent, national or regional accounting firm to perform the
calculation. The calculation performed by the selected accounting firm will be
conclusive and binding upon the parties.
(c) In the event that the Working Capital as reflected on the
Working Capital Statement is equal to or greater than Zero Dollars ($0): (i) the
Post-Closing Escrow Deposit, together with any interest earned thereon, shall be
paid to Seller; (ii) the interest earned on the Escrow Deposit prior to Closing
shall be paid to Buyer; and (iii) Buyer shall pay the amount, if any, that the
Working Capital exceeds Zero Dollars ($0) (the "Overage") to Seller by wire
transfer of immediately available funds to such bank or other financial
institution as shall be designated by Seller at least three (3) business days
after Seller's receipt of the Working Capital Statement as an increase in the
Purchase Price.
(d) In the event that the Working Capital as reflected on the
Working Capital Statement is less than Zero Dollars ($0), but the amount by
which the Working Capital is less than Zero Dollars ($0) (the "Shortage") is
less than or equal to One Hundred Thousand Dollars ($100,000), (i) the amount of
such Shortage, together with any interest earned thereon, shall be paid to Buyer
out of the Post-Closing Escrow Deposit as a reduction in the Purchase Price and
(ii) the remainder of the Post-Closing Escrow Deposit, if any, together with any
interest earned thereon, shall be paid to Seller.
(e) In the event that the Working Capital as reflected on the
Working Capital Statement is less than Zero Dollars ($0) and the amount of the
Shortage is greater than One Hundred Thousand Dollars ($100,000), the amount of
any such Shortage shall be offset first against the interest and then, if
necessary, against the principal payable under the Promissory Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY
Seller and the Company jointly and severally represent and warrant to Buyer as
follows:
Section 3.1 Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has all requisite power and authority to carry on
its business as now being conducted. Neither the nature of the business of the
Station, nor the character of the properties owned, leased or otherwise held by
the Company for use in the Station's business makes any qualification necessary
in any other state, country, territory or jurisdiction other than as set forth
in Schedule 3.1 and the Company is qualified to do business in all such
jurisdictions.
10
Section 3.2 Authorization. Each of De La ▇▇▇▇ (except with
respect to the TBA) and the Company has all requisite power and authority and in
the case of De La ▇▇▇▇, capacity, to execute and deliver this Agreement, the
Escrow Agreement, the TBA and the De La ▇▇▇▇ Consulting Agreement (collectively
with this Agreement, the "Transaction Agreements" and without this Agreement,
the "Other Transaction Agreements"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Other Transaction Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate proceedings on the part of the Company and
no other corporate proceedings or actions on the part of the Company, its Board
of Directors or its sole shareholder is necessary therefor. This Agreement and
each of the Other Transaction Agreements have been duly and validly executed and
delivered by each of De La ▇▇▇▇ (except as to the TBA) and the Company and this
Agreement and each of the Other Transaction Documents constitute a valid and
binding agreement and obligation of each of De La ▇▇▇▇ and the Company to the
extent it is a party thereto, enforceable against each of De La ▇▇▇▇ and the
Company to the extent either is a party thereto, in accordance with their
respective terms.
Section 3.3 Compliance with Laws. The Company has complied in
all material respects with all Applicable Laws (other than the Communications
Act which is the subject of Section 3.12) and neither the Company nor De La ▇▇▇▇
have received any notice asserting noncompliance by the Company or De La ▇▇▇▇
with any Applicable Laws other than notice of a violation or failure to comply
which would not individually or in the aggregate have a Material Adverse Effect
on the Company. The Company holds all permits, licenses, approvals, certificates
of authority, franchises and other authorizations (none of which has been
rescinded and all of which are in full force and effect) from all Governmental
Authorities necessary in order to conduct the operations of the Station in
accordance with Applicable Laws, as presently conducted. The Company is in
compliance in all material respects with its obligations under such permits,
licenses, approvals, certificates of authority and authorizations.
Section 3.4 Required Consents; No Conflicts. (a) Except as set
forth in Schedule 3.4(a) or in connection with the filings referred to in
Section 5.1, the execution, delivery and performance by Sellers of the
Transaction Agreements will not require the consent, approval, authorization or
permit of, or filing with, or notification to any Person or Governmental
Authority.
(b) Except as set forth in Schedule 3.4(b), the execution and
delivery of the Transaction Agreements and the consummation of the transactions
contemplated hereby and thereby, do not and will not (assuming for purposes of
clauses (i) and (ii) that the consents and approvals referred to in Schedule
3.4(a) or 4.3 are duly obtained) (i) conflict with or violate any Applicable
Laws with respect to the Company or De La ▇▇▇▇, (ii) conflict with or result in
any breach of or constitute a default (or an event which with notice or lapse of
time or both
11
would become a default) under, result in the acceleration of, or create in any
Person the right to accelerate, terminate, or modify, any note, bond, indenture,
mortgage, deed of trust, license, lease, contract or other instrument to which
the Company or its assets or De La ▇▇▇▇ is a party or by which the Company or De
La ▇▇▇▇ is bound or to which the Common Shares or the Station is subject or
affected, or (iii) conflict with or violate any provision of the Company's
Articles of Incorporation or By-Laws.
Section 3.5 Financial Statements. The Company has furnished to
Buyer the audited balance sheet of the Company as of August 31, 1996 and the
audited statements of income, retained earnings and cash flow for the year ended
August 31, 1996, as reported on by Miller, Kaplan, Arase & Company, independent
auditors (the "Audited Statements") and (ii) the Company-prepared balance sheet
of the Company as of August 31, 1997, the Company-prepared statements of income,
retained earnings and cash flow for the year ended August 31, 1997, and the
Company-prepared balance sheet of the Company as of December 31, 1997 (the
"Unaudited Statements"). In addition, the Company will furnish to Buyer within
30 days of the end of each calendar month the interim Company-prepared balance
sheet of the Company, and the interim Company-prepared statements of income,
retained earnings and cash flows for each month until the Closing Date, prepared
in accordance with GAAP (except for the elimination of footnote information)
regardless of whether such financial statements have been reported on by Miller,
Kaplan, Arase & Company. The Audited Statements and the Unaudited Statements
(the "Financial Statements"), including in each case the related notes, fairly
present (and in the case of the financial statements delivered after the date
hereof, will fairly present) the financial position of the Company as of the
respective dates of said balance sheets and the result of the operations of the
Company for the respective periods covered by said statements of income and
retained earnings and changes in financial position (subject, in the case of the
unaudited statements, to year-end audit adjustments), and have been prepared
(and in the case of the financial statements delivered after the date hereof,
will be prepared) in accordance with GAAP (except for the elimination of certain
footnote information in the unaudited statements) consistently applied by the
Company throughout the periods involved, except for accounting changes described
in the related notes. As of the date hereof, except (i) as disclosed on Schedule
3.5 and (ii) for liabilities or obligations which were incurred after December
31, 1997 in the Ordinary Course of Business and consistent with past practices
and which are not material, the Company does not have any liabilities or
obligations as determined in accordance with GAAP (whether absolute, accrued,
contingent or otherwise) which were not either fully reflected or disclosed in
the December 31, 1997 balance sheet and, in the reasonable judgment of the
Company, the reserves referred to in the footnotes to such balance sheet are
appropriate and reasonable. As of the Closing Date, the Company will not have
any liabilities or obligations as determined in accordance with GAAP that are
not fully reflected or disclosed on the Closing Date Balance Sheet.
Section 3.6 Absence of Certain Changes or Events. Except as
set forth and described in Schedule 3.6, since January 1, 1998, there has been
no material adverse change in the business, assets, liabilities, operations,
prospects, or conditions (financial or otherwise), of
12
the Company. Except as set forth and described in Schedule 3.6, since January 1,
1998 the Company has not (a) canceled any debts or claims other than in the
Ordinary Course of Business; (b) written down the value of any Assets except
write-downs in the Ordinary Course of Business, none of which, individually or
in the aggregate, constitutes a Material Adverse Effect; (c) entered into any
transactions relating to the business and operations of the Station other than
in the Ordinary Course of Business; (d) made capital expenditures relating to
the Station, or entered into commitments therefor, materially in excess of the
capital expenditures budgets previously delivered to Buyer; (e) made any
material change in any method of accounting or accounting practice except as may
be required under GAAP; (f) amended the articles of incorporation or (g) made
any agreement to do any of the foregoing.
Section 3.7 Absence of Litigation. Except as set forth and
described in Schedule 3.7, there is no action, suit, investigation, claim,
arbitration or litigation pending or, to the best of the Company's or De La
Rosa's knowledge, threatened against, affecting or involving the Common Shares
or De La ▇▇▇▇ with respect to his ability to consummate the transactions
contemplated by the Transaction Agreements, the Company, the Station or the
business and operations of the Station, or the transactions contemplated by this
Agreement or the Other Transaction Agreements, before or by any court,
arbitrator or Governmental Authority, and the Company is not subject to, and the
Station is not operating under or subject to any order, award, judgment, writ,
decree, determination or injunction of any court, arbitrator or Governmental
Authority.
Section 3.8 Ownership of the Shares. De La ▇▇▇▇ is the record
and beneficial owner of the Common Shares. De La ▇▇▇▇ owns the Common Shares
free and clear of all Encumbrances (except for Bank of America's security
interest in the Common Shares). Subject to the terms and conditions of this
Agreement, at the Closing De La ▇▇▇▇ will transfer and convey, and Buyer will
acquire, good and marketable title to the Common Shares, free and clear of all
Encumbrances. De La ▇▇▇▇ is not a party to any option, warrant, purchase right
or other contract or commitment that requires the sale, transfer or other
disposition of any securities of the Company (other than this Agreement). De La
▇▇▇▇ is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of securities of the Company.
Section 3.9 Real Property. Schedule 3.9 contains a true,
correct and complete description of all Real Property and all Real Property
Interests as of the date hereof. The Real Property Interests listed on Schedule
3.9 comprise all interests in real property necessary to conduct the business
and operations of the Station as now conducted. Except as described on Schedule
3.9 and except for Bank of America's security interest, the Company has good,
record and marketable fee simple title to or a valid leasehold interest in all
of the Real Property and good title to all of the Real Property Interests, in
each case free and clear of all Liens and Encumbrances, except for liens for
current Taxes not yet due and payable and minor imperfections in title which
individually and in the aggregate do not interfere with the use of the Real
Property for which it is used or diminish its value. The Company has
13
delivered to Buyer true, correct and complete copies of all deeds and all leases
of Real Property pertaining to the Real Property listed on Schedule 3.9 and will
deliver copies of all deeds and leases entered into after the date hereof, to
the extent permitted hereby. The Company enjoys peaceful and undisturbed
possession under its leases for leased Real Property. The Company has full legal
and practical access to all of the Real Property. All towers, guy anchors, and
buildings and other improvements included in the Assets are located entirely on
the Real Property listed in Schedule 3.9. All Real Property (including the
improvements thereon) (a) is in good condition and repair consistent with its
present use, (b) is available for immediate use in the conduct of the business
and operations of the Station, and (c) complies in all material respects with
all applicable building or zoning codes and the regulations of any Governmental
Authority having jurisdiction. All easements, rights-of-way and licenses
included in the Real Property have been properly recorded in the appropriate
public recording office.
Section 3.10 Tangible Personal Property. Schedule 3.10 lists
all of the Company's Tangible Personal Property as of the date hereof which are
material to the operation of the Company and the Station. The Tangible Personal
Property listed on Schedule 3.10 comprises all material items of Tangible
Personal Property necessary to conduct the business and operations of the Sation
as now conducted and in accordance with Applicable Law and on the Closing Date
the Company will own or have valid leasehold interests in all of the Tangible
Personal Property listed on Schedule 3.10 or such other Tangible Personal
Property necessary to conduct the operations of the Station as now conducted and
in accordance with Applicable Law. Except as described in Schedule 3.10 and
except for Bank of America's security interest, the Company owns and has good
title to each item of Tangible Personal Property owned by it and none of the
Tangible Personal Property owned by the Company is subject to any Liens or
Encumbrances, except for liens for current Taxes not yet due and payable. With
allowance for normal repairs, maintenance, wear, and obsolescence, each item of
Tangible Personal Property is in good operating condition and repair, and is
available for immediate use in the business and operations of the Station. All
items of transmitting and studio equipment included in the Tangible Personal
Property (a) have been maintained in a manner consistent with generally accepted
standards of good engineering practice, and (b) will permit the Station and all
auxiliary broadcast facilities related to the Station to operate in accordance
with the terms of the FCC Licenses and the rules and regulations of the FCC.
Section 3.11 Capitalization. The authorized capital stock of
the Company consists solely of 1,000,000 shares of common stock, par value $1.00
per share, of which 6,000 shares are issued and outstanding and owned by De La
▇▇▇▇. All issued and outstanding shares of capital stock of the Company have
been duly authorized, are validly issued and outstanding, are fully paid and non
assessable. No securities issued by the Company were issued in violation of any
statutory or common-law preemptive rights. Except as permitted pursuant to
Section 6.1(g), there are no dividends which have accrued or been declared but
are unpaid on the capital stock of the Company. All Taxes required to be paid in
14
connection with the issuance and any transfers of the capital stock of the
Company have been paid by the Seller. There are no outstanding: (i) securities
or instruments convertible into or exercisable for any of the capital stock or
other equity interests of the Company; (ii) options, warrants, subscriptions or
other rights to acquire capital stock or other equity interests of the Company;
or (iii) contracts commitments, agreements or understandings of any kind,
including employee benefit arrangements, relating to the issuance or repurchase
by the Company of (A) any capital stock or other equity interests of the Company
or (B) any securities, options, warrants, rights or instruments convertible into
or exercisable for capital stock or other equity interests of the Company.
Section 3.12 FCC Matters. (a) The Company holds the FCC
Licenses set forth and described on Schedule 3.12(a) and the FCC Licenses listed
on Schedule 3.12(a) constitute all of the licenses, permits and authorizations
from the FCC that are necessary or required for and/or used in the business and
operations of the Station. The FCC Licenses are valid and in full force and
effect through the dates set forth on Schedule 3.12(a). From the date hereof
until the Closing Date the Company will hold all licenses, permits and
authorizations from the FCC that are necessary or required for the business and
operations of the Station and all such licenses, permits and authorizations will
be at the time of the Closing valid and binding and effective through the dates
shown thereon. Except as set forth on Schedule 3.12(a), no application, action
or proceeding is pending for the renewal or modification of any of the FCC
Licenses, and, except for actions or proceedings affecting radio broadcast
stations generally and the proceedings set forth in Schedule 3.7 hereto, no
application, complaint, action or proceeding is pending or, to the best of the
Company's or Seller's knowledge, threatened that may result in the (i) denial of
an application for renewal, (ii) the revocation, modification, non-renewal or
suspension of any of the FCC Licenses, (iii) the issuance of a cease-and-desist
order relating to the FCC Licenses or the Station, or (iv) the imposition of any
administrative or judicial sanction with respect to the Station.
(b) The Station, its physical facilities, electrical and
mechanical systems and transmitting and studio equipment (i) are being operated
in compliance with the specifications of the FCC Licenses or at the time of the
Closing, such other licenses, permits and authorizations then in effect, and
(ii) are being operated in material compliance with all requirements of the
Communications Act. Both the Company and Seller have complied with all
requirements of the FCC and the FAA with respect to the construction and/or
alteration of the Company's antenna structures, and "no hazard" determinations
for each antenna structure have been obtained.
(c) Neither the Company nor Seller know of any facts,
conditions or events relating to the Company or the Station that might cause the
FCC to have a legally valid basis to deny the transfer of control of the FCC
Licenses as provided for in this Agreement or not to renew any of the FCC
Licenses in the ordinary course.
15
Section 3.13 Intellectual Property. Except as set forth on
Schedule 3.13 and except for the Bank of America's security interest, the
Company owns or has the right to use all intellectual property used in or
necessary for the conduct of the business and operations of the Station,
including without limitation all patents, trademarks, service marks, trade
names, copyrights, software, trade secrets, call letters, jingles, slogans and
logotypes, including any and all common law rights, applications, registrations,
extensions and renewals relating thereto (collectively, the "Intellectual
Property"), free and clear of all Encumbrances. Schedule 3.13 sets forth a
complete and accurate list of all applications, registrations or patents
included in the Intellectual Property owned by the Company. The Company has
valid and enforceable rights in all its Intellectual Property. To the best of
the Company's and Seller's knowledge, no Intellectual Property is being
infringed by any third party, the Company is not infringing any intellectual
property or other proprietary right of any third party in conducting the
business of the Station, and there is no pending or threatened opposition,
interference, re-examination, cancellation, claim of invalidity or other legal
or governmental proceeding in any jurisdiction involving any of the Intellectual
Property. The Company has the right pursuant to the rules and regulations of the
FCC to the use of the various call letters set forth on Schedule 3.12(a). The
Company pays no royalty to anyone for use of the Intellectual Property.
Section 3.14 Reports and Records. All reports, statements and
other documents relating to the Station required to be filed by the Company or
De La ▇▇▇▇ with the FCC or any other Governmental Authority in connection with,
or as a result of, the Company's operation of the Station or De La Rosa's
ownership of the Common Shares have been filed and complied with and were true,
correct and complete in all material respects when filed. All such reports,
statements and other documents shall continue to be filed on a current basis
until the Closing Date, and will be true, correct, and complete in all respects.
Section 3.15 Contracts; Scheduled Contracts. Schedule 3.15
sets forth a complete and accurate list of all Contracts to which the Company is
a party or by which it or its assets or properties are bound or subject on the
date hereof ("Existing Contracts"). Either the Company or De La ▇▇▇▇ has
provided Buyer with copies of all Existing Contracts. Each Existing Contract is
(except as otherwise set forth on Schedule 3.15 and except for the right to use
the luxury skybox at Candlestick Park which is described in the Giants Contract
(as defined in Section 6.7) which right will be assigned to De La ▇▇▇▇ prior to
Closing) and each contract which the Company may enter after the date hereof in
compliance with this Agreement will be, in full force and effect, and
constitutes or will constitute the legal, valid and binding obligation of, and
is or will be legally enforceable against the Company or De La ▇▇▇▇ or both, as
the case may be. The Company and, to the best of the Company's and Seller's
knowledge, the other parties thereto, have complied with all of the provisions
of the Existing Contracts and are not in default thereunder in any respect, and
there has not occurred any event which (whether with or without notice or lapse
of time) would constitute such a default, except for any such default as would
not have a Material Adverse Effect on the Company. At the time of the Closing,
the Company or De La ▇▇▇▇ or both, as the case may be, shall have complied with
all provisions of and shall not be in default under any contracts
16
then in effect and there shall not be in any event which whether with notice or
without notice or lapse of time) would constitute a default thereunder, except
for any such defaults as would not have a Material Adverse Effect on the
Company. To the best of the Company's and Seller's knowledge, there has not been
any threatened cancellation of any Existing Contracts or any outstanding dispute
thereunder and at the time of the Closing, there shall not be any threatened
cancellation of any contract then in effect or any outstanding dispute
thereunder except for any threatened cancellation or dispute as would not have a
Material Adverse Effect on the Company. The Company is not a party to any
agreement which materially limits the freedom of the Company to compete in any
line of business in which it currently operates or with any person.
Section 3.16 Taxes. (a) The Company has duly filed all Returns
required to be filed by it, and all such Returns are true, correct and complete;
has timely paid (or has had paid on its behalf) all Taxes and other charges
shown to be due on such Returns or claimed to be due by any taxing authority;
and has established adequate reserves for unpaid Taxes as required by GAAP with
respect to any period or portion thereof ending prior to or on the date hereof,
and such reserves will continue to be so established with respect to periods
ending prior to or on the Closing Date. The Company has no unpaid deficiency or
assessment from any taxing authority with respect to Taxes or Returns; the
Company has not given or requested any waiver extending the statute of
limitations in connection with any Taxes or Returns. Schedule 3.16(a) discloses
as of the date hereof all years for which Returns of the Company have been
audited or examined by any Governmental Authority, or the statute of limitations
has expired.
(b) There are no liens for Taxes upon the Assets, except for
statutory liens for current Taxes not yet due; and there are no facts which
would give rise to any liens for Taxes.
(c) The Company has complied (and until the Closing Date will
comply) with all applicable laws relating to the payment and withholding of
Taxes, including, without limitation, withholding from employee wages and
payment to the proper taxing authorities all amounts required to be withheld
under applicable law.
(d) The Company has not made payments, is not obligated to
make any payments, and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under section 162(m) or section 280G of the Code.
(e) Except for Del Cobre Corporation, a corporation which is
wholly-owned by Seller and which has no activity or assets and is not in the
broadcasting business, the Company has not been a member of an affiliated group
of corporations within the meaning of section 1504 of the Code (or similar state
or local filing group).
17
(f) The Company is not a party to, is not bound by and has no
obligation under, any Tax allocation or sharing agreement, or Tax
indemnification agreement or similar contract or arrangement.
(g) The Company has not agreed, and is not required, to make
any adjustments under section 481(a) of the Code by reason of a change in
accounting method or otherwise that have not been fully recognized on prior year
tax returns.
(h) No federal, state, local or foreign audits or other
administrative proceedings or court proceedings exist or have been initiated
with regard to any Taxes or Returns of the Company; the Company has not received
any notice that such an audit is pending or, to the knowledge of Sellers,
threatened with respect to any Taxes due from or with respect to the Company or
any Return filed by or with respect to such entities; and no state of facts
exists or has existed which would constitute grounds for the assessment of any
material tax liability with respect to the Company for the periods which have
not been audited by the IRS.
(i) No power of attorney has been granted by, or with respect
to, the Company with respect to any matter relating to Taxes.
(j) All transfer, documentary, stamp, registration, value
added and other similar such Taxes and fees (including any penalties, additions
and interest) incurred in connection with this Agreement shall be borne by
Sellers, and Sellers will, at Sellers' expense, file all Returns and other
documentation with respect to such Taxes and fees, and if required by law, Buyer
will join in the execution of any such Returns and other documentation.
(k) The Company files Returns (or has Returns filed on its
behalf) in the states, political subdivisions thereof and foreign countries set
forth in Schedule 3.16(k).
(l) All elections with respect to Taxes currently affecting
the Company made through the date hereof are set forth on Schedule 3.16(l).
(m) The Company is not and has not been a U.S. real property
holding corporation (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(ii) of the Code.
Section 3.17 Employee Benefit Plans; Labor Relations. (a)
Schedule 3.17(a) contains a true and complete list of each employee benefit plan
covering employees, former employees or directors of the Company, or providing
benefits to such persons in respect of services provided to the Company
(collectively, the "Company Benefit Plans"). The Company has no employee pension
benefit plans within the meaning of Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Each Company Benefit Plan
intended to provide for the deferral of income, the reduction of salary or other
compensation or to afford other income tax benefits complies with the
requirements of the
18
applicable provisions of the Internal Revenue Code or other applicable laws,
rules and regulations required to provide such income tax benefits.
(b) With respect to the Company Benefit Plans
individually and in the aggregate, no event has occurred, and, to the best
knowledge of the Company, there exists no condition or set of circumstances that
could subject the Company to any liability arising under the code or any other
applicable law, which liability, excluding liability for benefit claims and
funding obligations payable in the ordinary course, would have, or insofar as
reasonably can be foreseen, could have, a material adverse effect on the
Company.
(c) Except as set forth in Schedule 3.17(c), (i)
the consummation or announcement of any transaction contemplated by this
Agreement will not result in any (A) payment (whether of severance pay or
otherwise) becoming due from the Company to any officer or director thereof or
to the trustee under any "rabbi trust" or similar arrangement, or (B) benefit
under any Company Benefit Plan being established or becoming accelerated, vested
or payable and (ii) the Company is not a party to (A) any management,
employment, deferred compensation, severance (including any payment, right or
benefit resulting from a change in control), bonus or other contract for
personal services with any officer or director, or (B) any consulting contract
with any person who prior to entering into such contract was a director or
officer of the Company.
(d) As of the date hereof, the Company is not a
party to any collective bargaining agreement or other labor agreement with any
union or labor organization.
Section 3.18 Environmental Matters. (a) There are no pending
or, to the best of the Company's or Seller's knowledge, threatened actions,
suits, claims, legal proceedings or other proceedings based on, and neither the
Company nor Seller has received any notice of any complaint, order, directive,
citation, notice of responsibility, notice of potential responsibility, or
information request from any Governmental Authority arising out of or
attributable to: (i) the presence of Hazardous Materials at any Real Property
owned or leased by the Company; (ii) any facility operations or procedures of
the Company relating to the Station or the Assets that do not conform to
requirements of the Environmental Laws; or (iii) any violation of Environmental
Laws otherwise arising from the Company's activities relating to the Station or
the Assets involving Hazardous Materials.
(b) The Company is in compliance with all applicable
Environmental Laws, including having obtained and maintained all permits,
licenses, certificates, and approvals required under any Environmental Law. A
true and complete list of all such permits, licenses, certificates and
approvals, all of which are valid and in full force and effect, is set out in
Schedule 3.18(b).
19
(c) The operation of the Station 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 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇" (▇▇▇▇ 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.
Section 3.19 Insurance. The Company maintains insurance
relating to its assets, properties, business, operations and employees, which is
customary and reasonable for a Company of its size engaged in the operation of a
radio station in California. Schedule 3.19 contains a list of all policies of
title, property, fire, casualty, liability, life, workmen's compensation, libel
and slander, and other forms of insurance of any kind relating to the business
and operations of the Station and owned or held by the Company as of the date
hereof. All insurance policies are in full force and effect.
Section 3.20 Powers of Attorney; Guarantees. The Company does
not have any power of attorney outstanding, nor any obligation or liability,
either actual, accruing or contingent, as guarantor, surety, co-signer,
endorser, co-maker or indemnitor (in the case of indemnitor, other than in the
ordinary course of business) in respect of the obligation of any person,
corporation, partnership, joint venture, association, organization or other
entity.
Section 3.21 Disclosure. The representations and warranties of
the Company and Seller in this Agreement and the other information furnished by
the Company and Seller to Buyer in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated in order to make such
information not misleading. Except for facts affecting the radio industry
generally, there is no fact known to the Company or Seller which can reasonably
be expected to have a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents and warrants to the Company and Seller as
follows:
Section 4.1 Organization and Standing. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to carry on its
business as now being conducted. Buyer has all requisite power and authority to
execute and deliver this Agreement and the Other Transaction Agreements to which
it is a party and to consummate the transactions contemplated hereby and
thereby.
20
Section 4.2 Authorization. The execution, delivery and
performance of this Agreement and the Other Transaction Agreements to which it
is a party, and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all necessary corporate
proceedings on the part of Buyer and no other corporate proceedings or actions
on the part of Buyer, its Board of Directors or its shareholders is necessary
therefor. This Agreement and the Other Transaction Agreements to which it is a
party each constitute a valid and binding agreement and obligation of Buyer,
enforceable in accordance with their respective terms.
Section 4.3 Required Consents; No Conflicts.
(a) The execution, delivery and performance by Buyer of the
Transaction Agreements to which it is a party will not require Buyer to obtain
or file any consent, approval, authorization or permit of, or filing with, or
notification to any person, entity or Governmental Authority which Buyer does
not have or will not have prior to the Closing, except for any consent,
approval, authorization, permit or filing the failure of which to make or obtain
would not materially affect Buyer's ability to consummate the transactions
contemplated by the Transaction Agreements.
(b) The execution and delivery by Buyer of the Transaction
Agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
Applicable Laws applicable to Buyer, (ii) conflict with or result in any breach
of or constitute any default (or an event which with notice or the lapse of time
or both would become a default) under any note, bond, indenture, mortgage, deed
of trust, license, lease, contract or other instrument to which Buyer is a party
or by which Buyer is bound or to which any of the Buyer's assets are subject or
affected, or (iii) conflict with or violate any provision of Buyer's Certificate
of Incorporation or By-Laws, except, in each case, as would not prevent or
materially delay Buyer's ability to consummate the transactions contemplated by
this Agreement.
Section 4.4 Absence of Litigation. There is no action, suit,
investigation, claim, arbitration or litigation pending or, to the best of
Buyer's knowledge, threatened against Buyer affecting or involving Buyer's
ability to consummate the transactions contemplated by this Agreement, before or
by any court, arbitrator or Governmental Authority. As of the date hereof, Buyer
is not subject to an order, award, judgment, writ, decree, determination or
injunction of any court, arbitrator or Governmental Authority that would prevent
or materially delay its ability to consummate the Closing.
Section 4.5 Qualification of Buyer. Buyer is qualified under
the Communications Act to be the controlling entity of the FCC Licenses and
Buyer knows of no facts or circumstances that will delay a routine grant of the
Transfer of Control Applications.
21
Section 4.6 Investment. Buyer is acquiring the Common Shares
for investment for its own account, and not with a view to any distribution
thereof.
Section 4.7 Disclosure. The representations and warranties of
Buyer in this Agreement and the other information furnished by Buyer to Sellers
in connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, do not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated in order to make such information not misleading.
ARTICLE V
PRE-CLOSING FILINGS AND UNDERTAKINGS
Section 5.1 Applications for FCC Consent. As promptly as
practicable, and in no event later than five (5) business days following the
execution of this Agreement, the Company, Seller and Buyer shall jointly file
one or more applications with the FCC requesting its consent to the transfer of
control of the FCC Licenses for the Station from Seller to Buyer (the "Transfer
of Control Applications"). The Company, Seller and Buyer will diligently take,
or fully cooperate in the taking of, all necessary and proper steps, and provide
any additional information reasonably requested, and use their respective
reasonable commercial efforts to resolve and/or overcome objections that may be
asserted by the FCC or any third party, in order to obtain promptly the
requested consent and approval of the Transfer of Control Applications by the
FCC. Notwithstanding anything in this Agreement to the contrary, if the Closing
occurs before the FCC Order becomes a Final Order, this Section 5.1 shall
survive the Closing until the FCC Order becomes a Final Order. No transfer of
control of the FCC Licenses shall occur without the prior written consent of the
FCC.
Section 5.2 Sharing Information. Each party hereto shall as
promptly as possible, and in any event within two (2) business days, inform the
other of any material communications between such party and the FCC or any other
Governmental Authority regarding this Agreement, the Other Transaction
Agreements or the transactions contemplated hereby or thereby. If any party
receives a request for additional information or documentary material from any
such Governmental Authority, then such party shall 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.
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ARTICLE VI
COVENANTS AND AGREEMENTS OF THE COMPANY AND SELLER
Subject to Section 8.1 below, the Company and Seller covenant
and agree with Buyer as follows:
Section 6.1 Conduct of Business of the Company. From the date
hereof through the Closing Date, the Company, shall not, and De La ▇▇▇▇ shall
cause the Company not to, do or agree to do any of the following without the
prior written consent or approval of Buyer, which consent or approval Buyer may
grant or withhold in its sole and absolute discretion:
(1) Acquire or agree to acquire by merging or
consolidating with, or by purchasing all or a substantial equity interest in or
all or a substantial portion of the assets of, any business or any corporation,
partnership association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets other than assets acquired in
the ordinary course of business which are immaterial in nature or amount;
(2) Sell, assign, lease, or otherwise dispose
of, or agree to sell, assign, lease or otherwise dispose of, all or any part of
the Company's Assets other than Assets which are immaterial in value,
individually and in the aggregate, and not material to the Station's operations
and then only in the ordinary course of business or enter into any agreement to
do the same;
(3) Terminate, adopt, amend or enter into,
except as may be required by applicable law or regulation, any bonus, profit
sharing, severance, termination, compensation, stock option, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund, plan or arrangement for the benefit or welfare of its
employees or pay any benefit not required by any plan or arrangement existing on
the date hereof;
(4) Make any tax elections or settle or
compromise any income tax liability or, except as required by law or applicable
accounting standards, change any accounting policies or procedures;
(5) Enter into any new agreement which requires
the payment or performance by Seller of an amount in excess of $100,000 of cash
or services or which amends, modifies or extends any existing contract so as to
impose an obligation on the Company in an amount in excess of $100,000 of cash
or services;
(6) Enter into any new agreement or arrangement
of any nature with an Affiliate of De La ▇▇▇▇ or the Company or a family member
of De La ▇▇▇▇, except for an
23
agreement or arrangement with ▇▇▇▇▇▇ De La ▇▇▇▇ in an amount not to exceed
$15,000 annually;
(7) (i) Declare, set aside or pay any dividends
on or make other distributions in respect of any of its capital stock (except
that the Company may, or De La ▇▇▇▇ may cause the Company to, subject to the
provisions of Section 2.4(a), declare a dividend to De La ▇▇▇▇ immediately prior
to the Closing), (ii) Split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock or (iii) Directly or
indirectly repurchase, redeem or otherwise acquire, any shares of its capital
stock;
(8) Issue or sell, or authorize or propose the
issuance or sale of, any shares of its capital stock of any class or any
securities convertible into or exchangeable for, or any rights, warrants, calls,
subscriptions or options to acquire, any such shares, or convertible or
exchangeable securities;
(9) Amend its Articles of Incorporation or
By-laws;
(10) Incur any indebtedness, other than trade
payables and the costs associated with a power increase or upgrade, for money
borrowed or issue any debt securities; assume, guarantee, or otherwise become
liable or responsible for the obligations of any other Person; or make any loans
or capital contributions to, or investments in, any other Person;
(11) Enter into any real property lease or any
lease of personal property or extend or modify any existing lease of real or
personal property;
(12) Take any action that is intended or would
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the transactions contemplated by this Agreement set forth in Article IX not
being satisfied, or in a violation of any provision of this Agreement except, in
every case, as may be required by Applicable Law;
(13) Change its methods of accounting in effect
at December 31, 1997, except as required by changes in GAAP as concurred to by
the Company's independent auditors;
(14) Transfer or license to any person or entity
or otherwise extend, amend or modify any rights to the Company's intellectual
property;
(15) Take any action that jeopardizes the
validity or enforceability of or rights under the FCC Licenses, or take any
action under any contract that would have a Material Adverse Effect; or
24
(16) Enter into any agreement to do any of the
foregoing.
Section 6.2 Affirmative Covenants. From the date hereof until
the Closing Date, the Company will, and De La ▇▇▇▇ shall cause the Company to,
perform the following actions as such actions relate to the Company or Station:
(a) Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.1) (i) carry on the business and
activities of the Station in the Ordinary Course of Business; (ii) pay or
otherwise satisfy all obligations (cash and barter) of the Station as they come
due and payable; (iii) maintain all Assets in good working, order and condition
subject to normal wear and tear; and (iv) maintain the Company's books of
account, records, and files in substantially the same manner as heretofore
maintained;
(b) (i) Maintain the validity of the FCC Licenses, and comply
in all material respects with all requirements of the FCC Licenses and the rules
and regulations of the FCC; and (ii) deliver to Buyer, within ten (10) business
days after filing, copies of any reports, applications or responses to the FCC
related to the Station that are filed between the date of this Agreement and the
Closing Date;
(c) Operate the business in compliance with all Applicable
Laws and take all actions under the Applicable Laws necessary to effectuate the
transactions contemplated by this Agreement;
(d) (i) Give to Buyer and Buyer's authorized representatives
access during normal business hours to the Company properties, books, records,
contracts, commitments, facilities, premises, and equipment and to the Company's
directors, officers and employees, agents and representatives (including,
without limitation, the independent accountants of the Company), (ii) cause the
Company's outside accountants to cooperate with Buyer's authorized
representatives and make available to such representatives work papers relating
to the Station maintained by such accountants, and (iii) permit Buyer and
Buyer's consulting engineers and independent contractors, at Buyer's expense, to
conduct engineering and other inspections of the Station and the Assets,
provided that all access under subparagraphs (i), (ii) and (iii) shall be upon
reasonable prior notice and in a manner that will not interfere with the
Station's operations;
(e) Maintain in full force and effect all of the Company's
existing casualty, liability, and other insurance through the day following the
Closing Date in amounts not less than those in effect on the date hereof;
(f) Upon receiving notice or otherwise becoming aware of any
violation relating to the FCC Licenses, any violation by the Station of any
rules and regulations of the FCC, or any material violations under any other
applicable laws and regulations, promptly
25
notify Buyer and, at the Company's expense, use reasonable commercial efforts to
cure all such violations prior to the Closing Date;
(g) Promptly notify Buyer in writing if the Station ceases to
broadcast at its authorized power for more than 48 consecutive hours, which such
notice shall specify the reason or reasons for such cessation and the corrective
measures taken or to be taken by the Company;
(h) Promptly notify Buyer in writing of (i) any material
discharge of any Hazardous Materials or of any actions or notices described in
Section 3.18 and (ii) any material change in the information set forth in
Section 3.18;
(i) Use its best efforts to extend the daytime and nighttime
coverage contours of the Station to the east, including, without limitation, by
compensating other radio broadcast stations to reduce power or alter their
transmitter location to permit the Station to operate with increased power;
provided, that, the Company shall be obligated to pay only such compensation for
which Buyer agrees to reimburse the Company;
(j) At reasonable intervals following the date hereof, use
reasonable efforts to provide Buyer with documentation regarding any material
changes to the Schedules hereto;
(k) Use its best efforts to obtain the consents listed on
Schedule 3.4(a) hereof; and
(l) Promptly notify Buyer in writing of any default by the
Company under the terms of the Bank of America Loan. The Company further agrees
that in the event of such a default by the Company under the terms of the Bank
of America Loan, Buyer may, but shall not be required to, cure such default;
provided, that, should Buyer choose to cure such default, any payments which
Buyer is obligated to pay the Company pursuant to the TBA shall be reduced by
the amount of any costs incurred by Buyer relating to such cure.
Section 6.3 De La ▇▇▇▇ Negative Covenants. (a) De La ▇▇▇▇
shall not enter into any option, warrant, purchase agreement or other agreement
that requires the sale of the Common Shares or pledge or otherwise encumber the
Common Shares.
(b) De La ▇▇▇▇ shall not enter into any voting trust, proxy or
other agreement with respect to the voting securities of the Company.
Section 6.4 Confidentiality. The Company and Seller shall
maintain strict confidentiality with respect to all documents and information
furnished to the Company and Seller by or on behalf of Buyer. Nothing shall be
deemed to be confidential information that: (a) is known to the Company and
Seller at the time of its disclosure to the Company and Seller; (b) becomes
publicly known or available other than through disclosure by the Company
26
and Seller; (c) is received by the Company and Seller from a third party not
actually known by the Company and Seller to be bound by a confidentiality
agreement with or obligation to Buyer; or (d) is independently developed by the
Company or Seller as clearly evidenced by its records. Notwithstanding the
foregoing provisions of this Section 6.4, the Company and De La ▇▇▇▇, as the
case may be, may disclose such confidential information (x) to the extent
required or deemed advisable to comply with applicable laws and regulations, (y)
to the Company's officers, directors, employees, and representatives, and to
Sellers' 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, the Company or Seller shall return to Buyer all
confidential information prepared or furnished by Buyer relating to the
transactions contemplated hereunder, whether obtained before or after the
execution of this Agreement.
Section 6.5 No Solicitation. Neither De La ▇▇▇▇, nor the
Company, nor any of the Company's officers, directors or Affiliates shall,
directly or indirectly, solicit, elicit, encourage, induce or initiate any
proposals or offers from, or have discussions or negotiations with, or provide
any information to, any Person (other than Buyer) concerning or in connection
with any merger, purchase or sale of substantial assets, purchase or sale of
shares of the Company, issuance of equity securities of the Company,
recapitalization or any other similar transaction involving the Company (other
than in connection with a transaction involving Purchaser). The Company or De La
▇▇▇▇, as the case may be, shall promptly notify Purchaser of any proposal,
inquiry or offer relating to any of the foregoing matters received after the
date of this Agreement.
Section 6.6 Use of Proceeds. Seller shall use the proceeds
from the sale of the Common Shares to settle all of the Company's remaining
obligations under the Bank of America Loan. The Company and Seller shall use
their best efforts to obtain the consent of Bank of America to the transactions
contemplated by this Agreement.
Section 6.7 Giants Contract. The Company and Seller will use
their respective best efforts to ensure that the Giants broadcast contract
through radio station KNBR (the "Giants Contract") (i) remains in full force and
effect throughout the entire 1998 baseball season and (ii) permits the Company
to tape-delay broadcast any Giants baseball games which would otherwise conflict
with the broadcast of any World Cup soccer game.
Section 6.8 Noncompetition.
(a) Buyer, the Company and Seller agree that after the
Closing, the Company shall be entitled to the goodwill and going concern value
of the business of the Company and to protect and preserve the same to the
maximum extent permitted by law. The Seller acknowledges that his management and
other contributions to the business of the Company and the operation of the
Station have been uniquely valuable and involve proprietary and other
27
information that would be competitively unfair to make available to any
competitor of the Company. For these and other reasons and as an inducement to
the Buyer to enter into this Agreement and the Other Transaction Agreements to
which it is a party, Seller agrees that until the Note Maturity Date, Seller
will not, directly or indirectly, for his own benefit or as agent for another,
own, manage, operate or participate in the ownership, management or operation of
any radio station licensed to San Francisco, California or San Jose, California.
(b) If this Section 6.8 is more restrictive than permitted by
the laws of the jurisdiction in which Buyer seeks enforcement hereof, this
Section 6.8 shall be limited to the extent required to permit enforcement under
such laws.
(c) Buyer and Seller agree that Five Hundred Thousand Dollars
($500,000) of the Purchase Price is allocable to Seller's agreement to enter
into the covenant set forth in this Section 6.8.
ARTICLE VII
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with the Company and Seller as
follows:
Section 7.1 Confidentiality. Buyer shall maintain strict
confidentiality with respect to all documents and information furnished to Buyer
by or on behalf of the Company or Seller. 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
the Company or Seller; or (d) is independently developed by Buyer as clearly
evidenced by its records. Notwithstanding the foregoing provisions of this
Section 7.1, 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.
Section 7.2 Notice of Certain Events. Buyer agrees that (i)
it shall promptly notify the Company and Seller of any fact or circumstance of
which Buyer becomes aware that would reasonably be expected to cause it not to
meet any qualification to be the controlling entity of the FCC Licenses or that
it believes may delay a routine grant of the Transfer of Control Applications;
(ii) it shall use reasonable commercial efforts to remedy any such fact or
circumstance, and (iii) it shall not take any action that Buyer knows, or has
reason to believe, would result in the occurrence of any such fact or
circumstance.
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ARTICLE VIII
MUTUAL COVENANTS AND UNDERSTANDINGS
OF THE COMPANY, SELLER AND BUYER
Section 8.1 Possession and Control. Notwithstanding any other
provision of this Agreement or any Other Transaction Agreements, between the
date hereof and the Closing Date, Buyer shall not directly or indirectly
control, supervise or direct, or attempt to control, supervise or direct, the
business and operations of the Station, and such operation, including complete
control and supervision of all programming, finances and employment shall be the
sole responsibility of the Company; provided, however, that Buyer shall be
entitled (i) to provide programming to the Station pursuant to the TBA, and (ii)
to inspect the Assets as provided in Section 6.2(d). On and after the Closing
Date, other than as set forth in the De La ▇▇▇▇ Consulting Agreement, De La ▇▇▇▇
shall have no control over, or right to intervene, supervise, direct or
participate in, the business and operations of the Station.
Section 8.2 Public Announcements. The Company, De La ▇▇▇▇ and
Buyer shall consult with each other before making any public statements with
respect to this Agreement or the transactions contemplated herein and shall not
issue any such press release or make any such public statement without the prior
written consent of the other parties, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that, a party may, without prior
consultation with or the written consent of the other parties, issue such press
release or make such public statement as may be required by law or any listing
agreement with a national securities exchange to which the Company or Buyer (or
any Affiliate of the Company or Buyer) is a party if it has used all reasonable
efforts to consult with the other parties and to obtain such parties' consent
but has been unable to do so in a timely manner.
Section 8.3 Closing Date Balance Sheet. The parties shall work
together to prepare or to have prepared the Closing Date Balance Sheet at and as
of the Closing Date.
Section 8.4 Unwind Agreement. Pursuant to Section 9.2 hereof,
the parties agree to close the transactions contemplated by this Agreement prior
to the FCC Order becoming a Final Order and to enter into an unwind agreement,
at Closing, in substantially the form attached as Exhibit C hereto (the "Unwind
Agreement").
29
ARTICLE IX
CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Common Shares and to
proceed with the Closing are subject to the satisfaction (or waiver in writing
by Buyer) at or prior to the Closing of each of the following conditions:
Section 9.1 Representations and Covenants. Each of the
representations and warranties of the Company and Seller made in this Agreement
shall be true and correct in all material respects (except that representations
and warranties qualified by materiality or Material Adverse Effect shall be true
and correct in all respects) as of the date of this Agreement and (except to the
extent such representations and warranties refer to an earlier date) as of the
Closing Date as though made on and as of the Closing Date, and the Company or De
La ▇▇▇▇, as the case may be, shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by the Company or De La ▇▇▇▇ prior to the Closing.
Section 9.2 FCC Order. The FCC Order shall have been granted
and shall be in full force and effect (but without having waited for the FCC
Consent to become a Final Order).
Section 9.3 Legal Proceedings. No preliminary or permanent
injunction or any outstanding judgement, order, award, decree or ruling,
including in connection with any action or proceeding brought by a third party
(not subsequently dismissed, settled or otherwise terminated) or by any
Governmental Authority which prohibits or invalidates the transactions
contemplated by this Agreement, or which prohibits the sale of the Common Shares
to Buyer or prevents, limits, restricts or impairs the ownership, use or
operation of the Station by Buyer, other than an action or proceeding instituted
by Buyer, shall have been issued and remain in effect.
Section 9.4 No Adverse Action or Decision. There shall be no
action, suit, investigation or proceeding pending by any public official or
Governmental Authority, or, to the best knowledge of the Company or De La ▇▇▇▇,
threatened by any public official or Governmental Authority, against or
affecting the Company, its properties or rights, or any of its officers or
directors, before any court, arbitrator or administrative or governmental body
which (i) seeks to restrain, enjoin, prevent the consummation of the
transactions contemplated by this Agreement, or (ii) challenges the validity or
legality of the transactions contemplated by this Agreement or seeks to recover
damages or to obtain other relief in connection with any such transactions.
Section 9.5 Approvals and Consents. The Company and Seller
shall have duly received all authorizations, consents, approvals, licenses,
franchises, permits and
30
certificates by or of, and shall have made all filings and effected all
registrations and qualifications with, all Governmental Authorities necessary
for the sale of the Common Shares being sold at the Closing.
Section 9.6 Material Adverse Change. There shall not have
been a change (or any condition, event or development involving a prospective
change) in the business, properties, assets, liabilities, capitalization,
shareholders' equity, condition (financial or otherwise), operations, licenses
or franchises, results of operations or prospects of the Company which is or may
be materially adverse to the Company (unless such a change was caused by Buyer
during the term of the TBA).
Section 9.7 Delivery by the Company and Seller. The Company
and Seller shall have delivered to Buyer all of items required to be delivered
by the Company and Seller to Buyer pursuant to Section 11.1;
Section 9.8 Time Brokerage Agreement. The TBA and all
agreements contemplated therein shall have become effective in accordance with
the terms and conditions thereof and, from and after the date the TBA and such
agreements are to first become effective through and including the Closing Date,
the TBA and such agreements shall have not been terminated due to the Company's
breach thereof.
Section 9.9 Bank of America Consent. Buyer shall have
received a copy of the written consent of Bank of America to the sale of the
Common Shares to Buyer and the Company shall not then be in default under the
Bank America Loan.
ARTICLE X
CONDITIONS PRECEDENT TO
DE LA ROSA'S OBLIGATION TO CLOSE
The obligations of De La ▇▇▇▇ to sell the Common Shares and to
proceed with the Closing are subject to the satisfaction (or waiver in writing
by De La ▇▇▇▇) at or prior to the Closing of each of the following conditions:
Section 10.1 Representations and Covenants. Each of the
representations and warranties of Buyer made in this Agreement shall be true and
correct in all material respects (except that representations and warranties
qualified by materiality or Material Adverse Effect shall be true and correct in
all respects) as of the date of this Agreement and (except to the extent such
representations and warranties refer to an earlier date) as of the Closing Date
as though made on and as of the Closing Date, and Buyer shall have performed and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by Buyer prior to the Closing.
31
Section 10.2 FCC Order. The FCC Order shall have been
issued.
Section 10.3 Legal Proceedings. No preliminary or permanent
injunction or any outstanding judgement, order, award, decree or ruling,
including in connection with any action or proceeding brought by a third party
(not subsequently dismissed, settled, or otherwise terminated) or by any
Governmental Authority which prohibits or invalidates the transactions
contemplated by this Agreement or which prohibits the sale of Common Shares to
Buyer other than an action or proceeding instituted by the Company or De La
▇▇▇▇, shall have been issued and remain in effect.
Section 10.4 No Adverse Action or Decision. There shall be no
action, suit, investigation or proceeding pending by any public official or
Governmental Authority, or to the best knowledge of Buyer, threatened by any
public official or Governmental Authority, against or affecting the Buyer, any
of its properties or rights or any of its officers or directors, before any
court, arbitrator or administrative or governmental body which (i) seeks to
restrain, enjoin, prevent the consummation of the transactions contemplated by
this Agreement, or (ii) challenges the validity or legality of the transactions
contemplated by this Agreement or seeks to recover damages or to obtain other
relief in connection with any such transactions.
Section 10.5 Delivery by Buyer. Buyer shall have delivered to
Seller (i) the Purchase Price and (ii) all of the items required to be delivered
by Buyer to the Company and Seller pursuant to Section 11.2.
ARTICLE XI
THE CLOSING
Section 11.1 Closing. Unless otherwise agreed upon in
writing by Buyer and Seller, the Closing Date shall be on the fifteenth
(15th) business day following the grant of the FCC Consent. The Closing shall
be held at such time of day and place or places as the parties may agree.
Section 11.2 Delivery by the Company and Seller. At the
Common Stock Closing, the Company or De La ▇▇▇▇, as the case may be, shall
deliver to Buyer as a condition to Buyer's obligation to purchase and pay for
the Common Shares the following:
(a) A copy of the articles of incorporation and by-laws of the
Company, certified by the corporate secretary of the Company as being true,
correct and complete as of the Closing Date.
32
(b) A certificate as to the good standing of the Company in
California, dated as of a date not earlier than ten (10) days prior to the
Closing Date.
(c) A certificate signed by Seller to the effect that as of
the Closing Date, (i) the representations and warranties of Seller set forth in
Article III are true and correct in all material respects and (ii) the
obligations of Seller to be performed hereunder on or prior to the Closing Date
have been performed in all material respects.
(d) A certificate signed by an executive officer of the
Company to the effect that as of the Closing Date, (i) the representations and
warranties of the Company set forth in Article III are true and correct in all
material respects and (ii) the obligations of the Company to be performed
hereunder on or prior to the Closing Date have been performed in all material
respects.
(e) Stock certificates representing the Common Shares duly
executed in blank or accompanied by stock powers duly executed in blank, in
proper form for transfer, with all appropriate stock transfer tax stamps
affixed.
(f) The opinions of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, Leader & ▇▇▇▇▇▇▇▇
L.L.P., communications counsel to the Company, and Sanders, Barnet, ▇▇▇▇▇▇▇,
Simons & Mosk, corporate counsel to the Company, in each case in form and
substance reasonably satisfactory to Buyer.
(g) A copy of the Escrow Agreement executed by De La ▇▇▇▇.
(h) A fully executed copy of the De La ▇▇▇▇ Consulting
Agreement.
(i) A receipt evidencing payment by Buyer of the Purchase
Price.
(j) Resignations of all members of the Board of Directors of
the Company (other than the director appointed by Buyer) effective as of the
Closing Date.
(k) The Closing Date Balance Sheet.
(l) The Bank of America Release.
(m) A copy of the Unwind Agreement executed by De La ▇▇▇▇.
(n) Such other documents to be delivered by Seller hereunder
as are reasonably necessary for Buyer to effectuate and document the
transactions contemplated hereby.
Section 11.3 Delivery by Buyer. At the Closing, Buyer
shall deliver to De La ▇▇▇▇ as a condition to De La Rosa's obligation to sell
the Common Shares the following:
33
(a) Five Million Dollars ($5,000,000) in immediately available
funds, as set forth in Section 2.3(b).
(b) The Promissory Note.
(c) The Security Agreement (as defined in the Promissory
Notes).
(d) The Pledge Agreement (as defined in the Promissory Note).
(e) A certificate signed by an executive officer of Buyer to
the effect that as of the Common Stock Closing Date, (i) the representations and
warranties of Buyer set forth in Article IV are true and correct in all material
respect, and (ii) the obligations of Buyer to be performed hereunder on or prior
to the Closing Date have been performed in all material respects.
(f) A copy of the Escrow Agreement executed by Buyer.
(g) A copy of the Unwind Agreement executed by Buyer.
(h) The opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel to Buyer, in form and substance reasonably satisfactory to Seller.
(i) A receipt evidencing receipt by Buyer of the Common
Shares.
(j) Such other documents to be delivered by Buyer hereunder as
are reasonably necessary for Seller to effectuate the transactions contemplated
herein.
ARTICLE XII
SURVIVAL; INDEMNIFICATION
Section 12.1 Survival of Representations. Except as
otherwise set forth herein, all representations and warranties, covenants and
agreements of the Company, Seller and Buyer contained in or made pursuant to
this Agreement or in any certificate furnished pursuant hereto shall survive
the Closing Date and shall remain in full force and effect for a period of
eighteen (18) months after the Closing Date (the "Survival Period"), except
that the representations and warranties set forth in Sections 3.16 shall
survive for the applicable statute of limitations period plus six months and
Sections 3.8 and 3.18 shall survive without limitation. All representations
and warranties, covenants, and agreements shall also survive and be
unaffected by (and shall not be deemed waived by) any investigation, audit,
appraisal, or inspection at any time made by or on behalf of any party
hereto. Notwithstanding anything
34
herein to the contrary, any representation, warranty, covenant or agreement
which is the subject of a claim which is asserted in writing prior to the
expiration of the applicable period set forth above shall survive with respect
to such claim or dispute until the final resolution thereof. This Section 12.1
shall not limit any covenant or agreement of the parties which contemplate
performance after the Closing, including, without limitation, the covenant set
forth in Section 6.8.
Section 12.2 Indemnification by the Company and Seller. (a)
Subject to the other provisions of this Article XII, prior to the Closing, the
Company and Seller shall be jointly and severally obligated, and from and after
the Closing, Seller shall be obligated, to indemnify, defend and hold harmless
Buyer and its respective successors, assigns and Affiliates and the directors,
officers, agents and employees of any of them (collectively, the "Buyer
Indemnitees," which term shall include the Company after the Closing) from and
against any and all Losses imposed on, incurred or suffered by or asserted
against any Buyer Indemnitee, directly or indirectly, to the extent resulting
from, arising out of or incurred with respect to any breach of any
representation, warranty, covenant or agreement of the Company or Seller
contained in this Agreement and any actual or threatened action or proceeding in
connection therewith; provided, that, neither the Company nor Seller shall have
any obligation pursuant to this Section 12.2(a) for any such Losses which are
caused by Buyer during the term of the TBA.
(b) (1) Prior to the Closing, the Company and Seller shall be
jointly and severally responsible for paying, and shall be jointly and severally
obligated, and from and after the Closing, Seller shall be obligated, to
indemnify and hold the Buyer Indemnitees harmless from and against any Losses in
respect of (A) any Taxes of the Company for any taxable periods ending on or
before the Closing Date ("Pre-Closing Tax Periods"), and for the portion of any
Straddle Period treated as ending on and including the Common Stock Closing Date
pursuant to this paragraph, including without limitation, any Taxes arising from
the transactions contem plated by this Agreement, and (B) any liability arising
from breach of Sellers' representations and warranties contained in Section 3.16
or Sellers' covenants contained in this Section 12.2(b).
For purposes of this Agreement, "Straddle Period" means any
taxable period which includes but does not end on the Closing Date. For purposes
of this Agreement, in the case of any Straddle Period, Taxes of the Company for
the portion of any Straddle Period ending on and including the Closing Date
shall be computed as if such taxable period ended as of the close of business on
the Closing Date.
(2) The Company shall duly prepare, or cause to be
prepared, and file, or cause to be filed, on a timely basis all Returns with
respect to the Company for all Pre- Closing Tax Periods. The Company shall allow
Buyer an opportunity to review and comment upon such Returns. The Company shall
take no position on such Returns that relate to the Company that would have a
Material Adverse Effect. Buyer shall duly prepare, or cause to be prepared, and
file, or cause to be filed, all Returns with respect to the Company for any
35
taxable periods beginning after the Closing Date ("Post-Closing Tax Periods")
and any Strad dle Periods.
(3) Except as otherwise provided in this Agreement,
the Company, Seller and Buyer shall jointly control and participate in all
audits and other proceedings relat ing to Taxes of the Company for any Straddle
Period and for any Pre-Closing Tax Period. Neither the Company nor Seller shall
settle any such audit or proceeding without the prior written consent of the
Buyer. With respect to audits and other proceedings for Taxes relating to
Post-Closing Tax Periods, Buyer shall control all proceedings and may make all
decisions taken in connection therewith at Buyer's sole discretion and, without
limiting the foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any taxing
authority with respect thereto, and may, in its sole discretion, either pay the
Tax claimed and ▇▇▇ for a refund where applicable law permits such refund suits
or contest the Tax liability in any permissible manner.
(4) Each of the Company, Seller and Buyer shall
provide the other parties with such information and records and make such of its
officers, directors, employees and agents available as may reasonably be
requested by such other party in connection with the preparation of any Return
or any audit or other proceeding that relates to the Company.
(c) The Buyer shall be entitled to recover for any Losses
including, without limitation, Losses incurred by any Buyer Indemnitee and
indemnifiable under Section 12.1(a) or (b), by drawing upon the Escrow Account
(as defined in the Escrow Agreement) established in accordance with the Escrow
Agreement. In the event that the funds in the Escrow Account are insufficient to
compensate the Buyer or any such Buyer Indemnitee, the Company and Seller shall
be jointly and severally liable and after the Closing Date, Seller shall be
liable, for any uncompensated Losses, which may, at the election of Buyer, be
offset in whole or in part, first, against the interest payable under the
Promissory Note and then, if necessary, against the principal amount then
outstanding under the Promissory Note. The amount of any Loss shall be
calculated exclusive of any insurance proceeds received by the Buyer Indemnitee
with respect thereto.
Section 12.3 Indemnification by Buyer. Subject to the other
provisions of this Article XII, Buyer shall indemnify, defend and hold harmless
the Company, Seller and their respective successors, assigns and Affiliates and
the directors, officers, agents and employees of any of them (collectively, the
"Seller Indemnitees") from and against any and all Losses imposed on, incurred
or suffered by or asserted against any Seller Indemnitee, directly or
indirectly, to the extent resulting from arising out of or incurred with respect
to any breach of any representation, warranty, covenant or agreement of Buyer
contained in this Agreement and any actual or threatened action or proceeding in
connection therewith. The amount of any Loss shall be calculated exclusive of
any insurance proceeds received by Seller Indemnitee with respect thereto.
36
Section 12.4 Indemnification Procedure. (a) For purposes of
this Article XII, the term "Indemnified Party" shall refer to a Buyer Indemnitee
or a Seller Indemnitee, as the case may be, and the term "Indemnitor" shall
refer to Seller, the Company or Buyer, as the case may be. The Indemnified Party
shall give written notice (the "Indemnification Notice") to the Indemnitor
within ten (10) days after discovery by the Indemnified Party of any matters
giving rise to a claim for indemnification or reimbursement under this
Agreement; provided however, the failure to deliver such notice shall not
prejudice the Indemnified Party's right to indemnification hereunder except to
the extent that the Indemnitee is actually prejudiced thereby. Notwithstanding
the preceding sentence, any such Indemnification Notice must be given before the
end of the Survival Period.
(b) In the event that the Indemnitor advises the
Indemnified Party that the Indemnitor will contest a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any Indemnification
Notice to notify, in writing, the Indemnified Party of its election to defend,
settle or compromise, at its sole cost and expense, any action or claim (or
discontinues its defense at any time after it commences such defense), then the
Indemnified Party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the Indemnitor elects
in writing to assume and does so assume the defense of any such claim or action,
the Indemnified Party's costs and expenses arising out of the defense,
settlement or compromise of any such action or claim shall be Losses subject to
indemnification hereunder.
(c) The Indemnified Party shall cooperate fully
with the Indemnitor in connection with any negotiation or defense of any such
action or claim by and shall furnish to the Indemnitor all information
reasonably available to the Indemnified Party which relates to such action or
claim. The Indemnitor shall keep the Indemnified Party fully appraised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. If the Indemnitor elects to defend any such action or claim,
then the Indemnified Party shall be entitled to participate in such defense with
counsel of its choice at its sole cost and expense. If the Indemnitor does not
assume the defense, the Indemnified Party shall keep the Indemnitor appraised at
all times as to the status of the defense; provided, however, that the failure
to keep the Indemnitor so informed shall not affect the obligations of the
Indemnitor hereunder. Payment of indemnification amounts hereunder shall be made
to the person or entity specified by the Indemnified Party. Anything in this
Article XII to the contrary notwithstanding, the Indemnitor shall not, without
the Indemnified Party's prior written consent (which consent shall not be
unreasonably withheld), settle or compromise any claim or consent to entry of
any judgment in respect thereof which imposes any future obligation on the
Indemnified Party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the Indemnified Party, a release
from all liability in respect of such claim.
Section 12.5 Remedies Cumulative. Any Indemnified Party
shall be entitled to such indemnification from time to time and shall be
entitled to rely upon one or more
37
provisions of this Agreement without waiving their right to rely upon any other
provisions at the same time or any other time.
Section 12.6 Consequential Damages. For purposes of this
Article XII, the term Loss shall include incidental and consequential damages.
ARTICLE XIII
TERMINATION
Section 13.1 Termination. This Agreement may be terminated
at any time prior to the Closing by:
(a) the mutual consent, in writing, of De La ▇▇▇▇ and Buyer;
(b) Buyer, by written notice of termination delivered to De La
▇▇▇▇ if either (i) the Company or De La ▇▇▇▇ is in material default of its
respective obligations hereunder (and such default was not caused by any action
of Buyer during the term of the TBA) and has failed to cure such default to
Buyer's reasonable satisfaction within thirty (30) days following written notice
of such default sent by Buyer to the Company or De La ▇▇▇▇, as appropriate,
provided that Buyer is not in default hereof or (ii) the Company or De La ▇▇▇▇
fail to notify Buyer if the Station ceases to broadcast at its authorized power
for more than 48 consecutive hours as required by Section 6.2(g) hereof or, even
if such notification is given, the Company or De La ▇▇▇▇ fail to give a
commercially reasonable explanation for such cessation or the lack of corrective
measures;
(c) De La ▇▇▇▇, by written notice of termination delivered to
Buyer, if Buyer is in material default of its obligations hereunder and has
failed to cure such default to De La Rosa's reasonable satisfaction within
thirty (30) days following written notice of such default sent by De La ▇▇▇▇ to
Buyer, provided that neither De La ▇▇▇▇ nor the Company is in default hereof;
(d) By Buyer or De La ▇▇▇▇, upon written notice of termination
delivered to De La ▇▇▇▇ or Buyer, as the case may be, in the event the Closing
has failed to occur within six (6) months following the date of this Agreement
(as such date may be extended by mutual agreement of Buyer and De La ▇▇▇▇);
(e) By either Buyer or De La ▇▇▇▇ if a court of competent
jurisdiction shall have issued an order, decree or ruling permanently
restraining, enjoining or otherwise prohibiting the sale of the Common Shares to
Buyer, and such order, decree, ruling or other action shall have become final
and non-appealable; or
38
(f) Automatically, without the need for further action on the
part of any party hereto, upon the first date on which the denial of the FCC
Order becomes a Final Order.
Section 13.2 Effect of Termination. In the event this
Agreement is terminated as provided in this Article XIII, Buyer and De La ▇▇▇▇
shall be released from all future obligations hereunder with respect to the sale
and purchase of the Common Shares; provided, however, that the obligations of
the parties as in Sections 6.4, 7.1, 15.2 and 15.3 shall survive such
termination. If this Agreement is subject to termination as provided in Sections
13.1(b) or 13.1(c), the rights of the parties shall be governed by Article XIV.
ARTICLE XIV
REMEDIES
Section 14.1 Default by the Company or Seller. If this
Agreement is terminable by Buyer pursuant to Section 13.1(b) and Buyer is not in
material default or material breach of this Agreement, Buyer shall be entitled:
(i) to require Seller to consummate and specifically perform
the sale in accordance with Section 14.3, if necessary through injunction or
other court order or process; or
(ii) by written notice to Seller, to terminate this
Agreement; and
(iii) to pursue any and all remedies against the Company
and Seller available at law or in equity.
Section 14.2 Default by Buyer. If this Agreement is
terminated pursuant to Section 13.1(c) and neither the Company nor Seller is
in material default or material breach of this Agreement, the Company and
Seller shall be paid an aggregate of Five Hundred Thousand Dollars ($500,000)
from the Escrow Deposit, 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 the Company or Seller by reason
thereof and that neither the Company nor Seller shall have rights to or
claims for damages from Buyer or its Affiliates other than as set forth in
this Agreement. The remaining Five Hundred Thousand Dollars ($500,000) of the
Escrow Deposit, together with any interest earned thereon, shall be forthwith
paid to Buyer.
Section 14.3 Specific Performance. The Company and Seller
each acknowledge that the Common Shares are unique and that Buyer has no
adequate remedy at law if the Company and Seller shall fail to perform any of
their obligations hereunder, and Seller therefore confirms and agrees that
Buyer's right to specific performance is essential to protect the rights and
interests of Buyer. Accordingly, Seller hereby agrees that if this Agreement
is terminable by Buyer pursuant to Section 13.1(b) and Buyer is not in
material
39
default or material breach of this Agreement, Buyer shall have the right to have
all obligations, undertakings, agreements and other provisions of this Agreement
specifically performed by Seller and that Buyer shall have the right to obtain
an order or decree of such specific performance in any of the courts of the
United States or of any state or other political subdivision thereof.
Section 14.4 Remedies Not Exclusive.
The remedies provided in this Article 14 shall be cumulative
and not exclusive.
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
commercially reasonable efforts to take or cause to be taken all such further
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement including vesting the good title
to the Common Shares in Buyer after the Closing or in order to fully effectuate
the purposes, terms and conditions of this Agreement (including, without
limitation, executing, delivering and filing or causing to be executed,
delivered and filed such further documents and instruments and obtaining such
consents, as may be necessary or reasonably requested in connection with the
consummation of the transactions contemplated hereby). In case at any time after
the Closing Date any further action is necessary to carry out the purposes of
this Agreement, including, without limitation, the securing of consents of third
parties, each party hereto shall use its best efforts to take all such necessary
action.
Section 15.2 Brokers. Seller represents to Buyer that Seller
has not engaged, or incurred any liability (for any brokerage fees, finders'
fees, commissions or otherwise) to, any broker, finder or agent in connection
with the transactions contemplated by this Agreement or the Other Transaction
Agreements; Buyer represents to Seller that Buyer has not engaged, or incurred
any unpaid liability (for any brokerage fees, finders' fees, commissions or
otherwise) to, any broker, finder or agent in connection with the transactions
contemplated by this Agreement or the Other Transaction Agreements, to which it
is a party; Seller agrees to indemnify Buyer, and Buyer agrees to indemnify
Seller, against any claims asserted against the other parties for any such fees
or commissions by any person purporting to act or to have acted for or on behalf
of the indemnifying party.
Section 15.3 Expenses. Each party hereto shall pay its own
expenses incurred in connection with this Agreement and in the preparation for
and consummation of the
40
transactions provided for herein, and De La ▇▇▇▇ shall pay any applicable stock
transfer taxes applicable to the sale of the Common Shares.
Section 15.4 Notices. All notices, demands, requests, or
other communications which may be or are required to be given or made by any
party to any other party pursuant to this Agreement shall be in writing and
shall be hand delivered or delivered by overnight air courier and addressed
as follows:
(i) If to Buyer:
Radio Unica of San Francisco, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a required copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(ii) If to the Company:
Oro Spanish Broadcasting, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a required copy (which shall not constitute notice) to:
Sanders, Barnet, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Mosk
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(iii) If to De La ▇▇▇▇:
▇▇▇▇ De La ▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
41
with a required copy (which shall not constitute notice) to:
Sanders, Barnet, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Mosk
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, delivery, request, or communication which
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes at such time as it is delivered to
the addressee (with the delivery receipt or the affidavit of messenger being
deemed conclusive but not exclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
Section 15.5 Waiver. No delay or failure on the part of any
party hereto in exercising any right, power or privilege under this Agreement or
under any other instrument or document given in connection with or pursuant to
this Agreement shall impair any such right, power or privilege or be construed
as a waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
Section 15.6 Benefit and Assignment. (a) Except as
hereinafter specifically provided in this Section 15.6, no party hereto shall
assign this Agreement, in whole or in part, whether by operation of law or
otherwise, without the prior written consent of Seller (if the assignor is
Buyer) or Buyer (if the assignor is the Company or De La ▇▇▇▇); and any
purported assignment contrary to the terms hereof shall be null, void and of
no force and effect. Buyer shall have the right to assign this Agreement to
any entity or entities controlling, controlled by, or under common control
with Buyer so long as any such assignment will not delay the Closing beyond
the date on which the Closing is required to occur in accordance with this
Agreement. Any assignment in accordance with the terms hereof shall become
effective upon delivery of written notice in accordance with Section 15.5.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereunder. No person or entity other than the parties hereto and their
respective successors and permitted assigns is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the parties
hereto.
42
Section 15.7 Entire Agreement; Amendment. This Agreement,
including the Schedules hereto, and the other instruments and documents referred
to herein or delivered pursuant hereto contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior oral
or written agreements, commitments or understandings with respect to such
matters (including, without limitation, the Confidentiality and Escrow
Agreement, entered into in November, 1997, by and between Radio Unica Corp., the
Company and Sanders, Barnet, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Mosk). No amendment, modification
or discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the parties hereto.
Section 15.8 Severability. If any part of any provision of
this Agreement or any other contract, agreement, document or writing given
pursuant to or in connection with this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity or unenforceability only, without in any way affecting the
remaining parts of such provisions or the remaining provisions of said contract,
agreement, document or writing.
Section 15.9 Headings. The headings of the sections and
subsections contained in this Agreement are inserted for convenience only and do
not form a part or affect the meaning, construction or scope thereof.
Section 15.10 Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed under and in accordance with the laws of the
State of Delaware, without giving effect to the principles of conflicts of law
thereof.
Section 15.11 Signature in Counterparts. This Agreement may
be executed in separate counterparts, none of which need contain the
signatures of all parties, each of which shall be deemed to be an original,
and all of which taken together constitute one and the same instrument.
Section 15.12 No Prejudice. This Agreement has been
prepared by the parties hereto and the terms thereof shall not be construed
in favor of or against any party on account of its participation in such
preparation.
Section 15.13 Specific Performance. Each of the parties
hereto acknowledges and agrees that the other parties hereto would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. Accordingly, each of the parties hereto agrees that they each shall
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having subject matter
43
jurisdiction, in addition to any other remedy to which any of the parties may be
entitled, at law or in equity.
Section 15.14 Obligations Under De La ▇▇▇▇ Consulting
Agreement. The parties recognize that the De La ▇▇▇▇ Consulting Agreement is an
integral part of the transactions contemplated by this Agreement. Consequently,
Buyer and De La ▇▇▇▇ each agree to perform their respective obligations under
the De La ▇▇▇▇ Consulting Agreement.
Section 15.15 Arbitration. Any controversy, dispute, or claim
of whatever nature arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement, including any claim
based on contract, tort, or statute, shall be resolved at the request of any
party to this Agreement, by final and binding arbitration administered by and in
accordance with the then existing Rules of Practice and Procedure of Judicial
Arbitration & Mediation Services, Inc., and judgment upon any award rendered by
the arbitrator(s) may be entered by any State or Federal Court having
jurisdiction thereof. The arbitration shall take place in San Francisco,
California. The prevailing party shall be awarded all of its legal fees,
disbursements and costs of arbitration.
Section 15.16 Guaranty. Radio Unica Corp., a Delaware
corporation, hereby guarantees the complete and timely performance of Buyer's
obligations set forth in this Agreement. If any default shall be made by Buyer
in such performance, Radio Unica Corp. will itself perform, or cause to be
performed, such obligation upon receipt of notice from Seller specifying in
summary form the default. Radio Unica Corp. hereby waives presentment, protests,
demand, action or delinquency in respect of the obligations of Buyer under this
Agreement. Radio Unica Corp. waives all notices of non-performance, notices of
protest, notices of dishonor and notices of acceptance of this guaranty. This
guaranty shall be deemed a continuing guaranty and the above consents and
waivers of Radio Unica Corp. shall remain in full force and effect until the
satisfaction in full of Buyer's obligations under this Agreement.
44
IN WITNESS WHEREOF, each of the parties hereto has executed
this Stock Purchase Agreement, or has caused this Stock Purchase Agreement to be
duly executed and delivered in its name on its behalf, all as of the day and
year first above written.
COMPANY
ORO SPANISH BROADCASTING, INC.
By: /s/ ▇▇▇▇ De La ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ De La ▇▇▇▇
Title: President and General Manager
DE LA ▇▇▇▇
/s/ ▇▇▇▇ De La Ros
----------------------------------------
▇▇▇▇ De La ▇▇▇▇
BUYER
RADIO UNICA OF SAN FRANCISCO, INC.
By:
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
WITH REGARD TO SECTION 15.16 ONLY:
RADIO UNICA CORP.
By:
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
IN WITNESS WHEREOF, each of the parties hereto has executed
this Stock Purchase Agreement, or has caused this Stock Purchase Agreement to be
duly executed and delivered in its name on its behalf, all as of the day and
year first above written.
COMPANY
ORO SPANISH BROADCASTING, INC.
By:
-------------------------------------
Name: ▇▇▇▇ De La ▇▇▇▇
Title: President and General Manager
DE LA ▇▇▇▇
-----------------------------------------
▇▇▇▇ De La ▇▇▇▇
BUYER
RADIO UNICA OF SAN FRANCISCO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
WITH REGARD TO SECTION 15.15 ONLY:
RADIO UNICA CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
