ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 15th day of October,
1999, by and between Xxx Radio, Inc. ("Seller"), and Hispanic Broadcasting
Corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is the licensee of Radio Stations KACE(FM) and KRTO(FM)
(collectively, the "Stations"), licensed to Inglewood, California and West
Covina, California, respectively, and authorized by the Federal Communications
Commission (the "Commission" or "FCC"), and the Seller owns the assets which are
used in the operation of the Station; and
WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires
to purchase from the Seller, certain of the radio station properties and assets
relating to the Station as described herein under the terms and conditions
herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 PURCHASE AND SALE OF STATION ASSETS. Subject to the conditions
set forth in this Agreement, at the Closing (as defined hereinafter), the
Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser
shall purchase from the Seller, all right, title and interest in and to the
following assets relating to the Station (the "Purchased Assets"), free and
clear of all liens, security interests, charges, encumbrances and rights of
others (other than liens and charges for which a proration adjustment is made
pursuant to Section 15.2 hereof):
(a) All licenses, construction permits or authorizations issued by
or pending before the FCC or any other governmental authority for use in the
operation of the Stations that are set forth on Schedule I attached hereto,
together with any and all renewals, extensions and modifications thereof (the
"Governmental Licenses");
(b) All real and personal property, tangible or intangible, owned
by Seller which is necessary to the operation of the Stations as currently
operated, including broadcast towers and antennas, main and back-up
transmitters and generators, STL and/or T-1 equipment, on-air control and
studio equipment, production studio equipment, engineering shop equipment
exclusive to the Stations, antennae for the Stations, feed lines,
accessories, vans and other vehicles, promotional materials, inflatables, and
tapes and record libraries, together with replacements thereof and additions
thereto made between the date hereof and the Closing, listed on Schedule II
hereto;
(c) Programming materials, market data, research and similar items
relating to the Stations' intellectual property (to the extent that Seller has
any transferable interest therein);
(d) The KACE(FM) and KRTO(FM) call letters, trademarks, tradenames,
internet domain names and web properties specifically designed and operated for
the Stations, listed on Schedule III hereto;
(e) All deposits made by the Seller to third parties in connection
with the transmitter site and the Assumed Contracts (defined below), for
which proration shall be made in accordance with Section 15.2; and
(f) Copies of the Stations' FCC logs, all materials maintained in the
Stations' FCC public file, technical data and records relating to the Purchased
Assets.
The foregoing notwithstanding, in no event shall the Purchased Assets be deemed
to include (i) the cash and cash equivalents of the Seller (except for normal
and customary deposits), (ii) any accounts receivable, notes receivable or other
receivables of the Seller (including tax refunds), (iii) the Seller's corporate
seal, minute books, charter documents, corporate stock record books and other
books and records that pertain to the organization of Seller, (iv) securities of
any kind owned by Seller, (v) insurance contracts or proceeds thereof or (vi)
claims arising out of acts occurring before the Closing Date.
1.2 ASSUMED CONTRACTS. At the Closing, the Purchaser shall assume the
specified contractual obligations of the Stations listed on Schedule IV hereto
(the "Assumed Contracts"), and the Purchaser agrees to pay and perform the
Assumed Contracts after the Closing Date. Except as specifically set forth on
such Schedule IV, Purchaser does not assume and shall in no event be liable for
any debt, obligation, responsibility or liability of the Stations or Seller,
including without limitation, employee obligations, taxes, accounts payable and
barter obligations of the Stations.
2. CONSIDERATION; CLOSING.
2.1 PURCHASE PRICE. The consideration to be received by the Seller in
exchange for the Purchased Assets shall be $75 million.
2.2 TIME OF CLOSING.
(a) A closing (the "Closing") for the sale and purchase of the
Purchased Assets shall be held at the offices of Xxxxxx & Xxxxxxx, L.L.P. at 000
X. Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx (or such other place as may be agreed upon
by the parties in writing). The Closing shall occur on such date (the "Closing
Date") that
is the 10th business day after the FCC Order (defined below) has become a Final
Order (defined below); provided that the Seller may accelerate the Closing Date
to any date after the FCC Order has been issued upon 15 business days prior
written notice of such acceleration. The Closing shall be deemed to be effective
as of 12:01 a.m. on the Closing Date.
(b) In order to consummate the transfer of the Purchased Assets,
Seller and Purchaser agree to file, within five business days after the date
hereof, an assignment of license application (the "Application") requesting
FCC consent to the assignment from the Seller to Purchaser of all
Governmental Licenses relating to the operation of the Stations. The parties
agree that the Application will be prosecuted with commercially reasonable
best efforts, in good faith and with due diligence. The parties agree to use
their commercially reasonable best efforts to file additional information or
amendments requested by the FCC orally or in writing within five business
days after such request and, in any event, to commence preparation of such
additional information or amendments immediately upon request and to complete
and file the same with the FCC as rapidly as practical. Each party will be
solely responsible for the expenses incurred by it in the preparation, filing
and prosecution of the Application (it being understood that the parties will
bear equally the FCC filing fee). As used herein, the term "FCC Order" shall
mean that the FCC staff has granted or given its consent, without any
condition materially adverse to Purchaser or Seller, to the assignment of the
Governmental Licenses; and the term "Final Order" shall mean that the FCC
Order shall have become final, that the time period for filing any protests,
requests for stay, reconsideration by the FCC, petitions for rehearing or
appeal of such order shall have expired, and that no protest, request for
stay, reconsideration by the FCC, petition for rehearing or appeal of such
order shall be pending.
(c) To the extent required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"), the parties further agree to use their best efforts
to make any necessary filings under the HSR Act. The fees associated with any
filings made pursuant to the HSR Act shall be paid equally by the Purchaser and
the Seller.
2.3 CLOSING PROCEDURE. At the Closing, the Seller shall deliver to
Purchaser such bills of sale, instruments of assignment, transfer and conveyance
and similar documents as Purchaser shall reasonably request. Against such
delivery, Purchaser shall (i) issue and deliver to Seller the purchase price in
accordance with Section 2.1 above and (ii) execute and deliver the assumption
agreements with respect to the Assumed Contracts as are contemplated by Section
1.2 hereof. Each party will cause to be prepared, executed and delivered all
other documents required to be delivered by such party pursuant to this
Agreement and all other appropriate and customary documents as another party or
its counsel may reasonably request for the purpose of consummating the
transactions contemplated by this Agreement. All actions taken at the Closing
shall be deemed to have been taken simultaneously
at the time the last of any such actions is taken or completed.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Purchaser, as follows:
3.1 ORGANIZATION; GOOD STANDING. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and has all requisite corporate power and authority to own and lease
its properties and carry on its business as currently conducted.
3.2 DUE AUTHORIZATION. Subject to the FCC Order and the Final Order,
the Seller has full power and authority to enter into and perform this Agreement
and to carry out the transactions contemplated hereby. The Seller has taken all
necessary corporate action to approve the execution and delivery of this
Agreement and the transactions contemplated hereby. This Agreement constitutes
the legal, valid and binding obligation of the Seller, enforceable against it in
accordance with its terms, except as may be limited by the availability of
equitable remedies or by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally.
3.3 EXECUTION AND DELIVERY. Neither the execution and delivery by the
Seller of this Agreement nor the consummation by it of the transactions
contemplated hereby will: (i) conflict with or result in a breach of the
Articles of Incorporation or bylaws of Seller (ii) to Seller's knowledge,
subject to the FCC Order and Final Order and the making of any required filings
under the HSR Act, violate any statute, law, rule or regulation or any order,
writ, injunction or decree of any court or governmental authority, which
violation, either individually or in the aggregate, might reasonably be expected
to have a material adverse effect on the business or operations of the Seller or
Purchaser's ownership of the Purchased Assets; or (iii) violate or conflict with
or constitute a default under (or give rise to any right of termination,
cancellation or acceleration under), or result in the creation of any lien on
any of the Purchased Assets pursuant to, any material agreement, indenture,
mortgage or other instrument to which the Seller is a party or by which it or
its assets may be bound or affected. As used throughout this Agreement, "to
Seller's knowledge" shall mean to the actual knowledge of Xxxxxx X. Xxxx,
President and Chief Executive Officer of Seller, Xxxxxxx Xxxxxxxx and Xxxx
Xxxxxx, Co-Chief Operating Officers of Seller and Xxxxxxx Xxxxxx, Chief
Financial Officer of Seller, which actual knowledge shall be based on reasonable
and due inquiry.
3.4 GOVERNMENTAL CONSENTS. No approval, authorization, consent, order
or other action of, or filing with, any governmental authority or administrative
agency is required in connection with the execution and delivery by the Seller
of this Agreement or the consummation of the transactions contemplated hereby or
thereby, other than those of the FCC or under the HSR Act.
3.5 TITLE TO PERSONAL PROPERTY ASSETS. Except for leased property,
the Seller is the sole and exclusive legal owner of all right, title and
interest in, and has good and marketable title to, all of the Purchased
Assets constituting personal property, free and clear of liens, claims and
encumbrances except (i) liens for taxes not yet payable and (ii) the Assumed
Contracts.
3.6 TRANSMITTER SITES.
(a) Seller has valid, binding and enforceable leasehold interests,
which are (except as disclosed in the Transmitter Site Leases (defined below)
relating thereto) free and clear of liens, claims, encumbrances, subleases or
other restrictions known to Seller or relating to or caused by Seller or its
operation of the Stations, in and to the transmitter sites from which the
Stations' signals are broadcast, and the buildings, structures and improvements
situated thereon (the "Transmitter Sites"). True, complete and correct copies of
the leases evidencing such interests (the "Transmitter Site Leases") have been
furnished to Purchaser. Neither Seller nor, to Seller's knowledge, any other
party is in default under the Transmitter Site Leases and no notice of
termination or default has been given.
(b) Seller has not received any notice of, and has no knowledge
of, any material violation of any zoning, building, health, fire, water use
or similar statute, ordinance, law, regulation or code in connection with the
Transmitter Sites. To the knowledge of Seller, no fact or condition exists
which would result in the termination or impairment of access of the Stations
to the Transmitter Sites or discontinuation of necessary sewer, water,
electrical, gas, telephone or other utilities or services.
(c) To Seller's knowledge, no hazardous or toxic material (as
hereinafter defined) exists in any structure located on, or exists on or under
the surface of, the Transmitter Sites which is, in any case, in material
violation by Seller of applicable environmental law. For purposes of this
Section, "hazardous or toxic material" shall mean waste, substance, materials,
smoke, gas or particulate matter designated as hazardous, toxic or dangerous
under any environmental law. For purposes of this Section, "environmental law"
shall include the Comprehensive Environmental Response Compensation and
Liability Act, the Clean Air Act, the Clean Water Act and any other applicable
federal, state or local environmental, health or safety law, rule or regulation
relating to or imposing liability or standards concerning or in connection with
hazardous, toxic or dangerous waste, substance, materials, smoke, gas or
particulate matter.
3.7 CONDITION OF ASSETS. All of the Purchased Assets viewed as a
whole and not on an asset by asset basis are in good condition and working
order, ordinary wear and tear excepted, and are suitable for the uses for
which intended, free from any known defects except such minor defects that do
not interfere with the continued use thereof.
3.8 GOVERNMENTAL LICENSES. Schedule I lists and accurately describes
all of the Governmental Licenses necessary for the lawful ownership and
operation of the Stations and the conduct of their businesses, except where the
failure to hold such Governmental License would not have a material adverse
effect on the Stations. The Seller has furnished to Purchaser true and accurate
copies of all of the Governmental Licenses. Each such Governmental License is in
full force and effect and is valid under applicable federal, state and local
laws; the Stations are being operated in compliance in all material respects
with the Communications Act of 1934, as amended (the "Act"), and all rules,
regulations and policies of the FCC; and to the knowledge of the Seller, no
event has occurred which (whether with or without notice, lapse of time or the
happening or occurrence of any other event) is reasonably likely to result in
the revocation or termination of any Governmental License or the imposition of
any restriction of such a nature as might adversely affect the ownership or
operation of the Stations as now conducted, except for proceedings of a
legislative or rule-making nature intended to affect the broadcasting industry
generally. The Stations, their physical facilities, electrical and mechanical
systems and transmitting and studio equipment are being operated in all material
respects in accordance with the specifications of the Governmental Licenses. To
Seller's knowledge, the Governmental Licenses are unimpaired by any act or
omission of the Seller or any of the Seller's officers, directors or employees
and the Seller has fulfilled and performed all of its obligations with respect
to the Governmental Licenses and has full power and authority thereunder. To
Seller's knowledge, no application, action or proceeding is pending for the
renewal or modification of any of the Governmental Licenses. No event has
occurred which, individually or in the aggregate, and with or without the giving
of notice or the lapse of time or both, would constitute ground for revocation
thereof and would have a materially adverse effect on the business or financial
conditions of the Stations.
3.9 REPORTS. The Seller has duly filed all reports required to be
filed by law or applicable rule, regulation, order, writ or decree of any
court, governmental commission, body or instrumentality and has made payment
of all charges and other payments, if any, shown by such reports to be due
and payable, except where the failure to so file or make payment would not
have a material adverse effect upon the operations of the Stations. All
reports required to be filed by the Seller with the FCC with respect to the
Stations have been filed, except where the failure to so file would not
materially and adversely affect the business, operations, properties, assets
or conditions (financial or otherwise) of the Stations or which challenges
the validity or propriety of any of the transactions contemplated by this
Agreement. Such reports and disclosures are complete and accurate in all
material respects.
3.10 TAXES. All tax reports and returns required to be filed by or
relating to the Purchased Assets or operations of the Stations (including sales,
use, property and employment taxes) have been filed with the appropriate
federal, state and local governmental agencies, and there have been paid all
taxes, penalties, interest,
deficiencies, assessments or other charges due as reflected on the filed returns
or claimed to be due by such federal, state or local taxing authorities (other
than taxes, deficiencies, assessments or claims which are being contested in
good faith and which in the aggregate are not material); (ii) Seller has not
received any written notice of any examinations or audits pending or unresolved
examinations or audit issues with respect to the Seller's federal, state or
local tax returns; (iii) all additional taxes, if any, assessed as a result of
such examinations or audits have been paid; and (iv) to Seller's knowledge,
there are no pending claims or proceedings relating to, or asserted for, taxes,
penalties, interest, deficiencies or assessments against the Purchased Assets.
3.11 LITIGATION. There is no order of any court, governmental
agency or authority and no action, suit, proceeding or investigation,
judicial, administrative or otherwise that is pending or, to Seller's
knowledge, threatened against or affecting the Stations which, if adversely
determined, might materially and adversely affect the business, operations,
properties, assets or conditions (financial or otherwise) of the Stations or
which challenges the validity or propriety of any of the transactions
contemplated by this Agreement.
3.12 CONTRACTS AND AGREEMENTS. The Stations are not in default with
respect to any of the contracts contained on Schedule IV hereto, and, as of the
Closing Date, the Stations will have paid all sums and performed all obligations
under such contracts which are required to be paid or performed prior to the
Closing Date. True and complete copies of such contracts have been delivered to
Purchaser on or prior to the date hereof.
3.13 INTANGIBLE PROPERTY. The Seller has, and after the Closing,
Purchaser will have, the right to use the intangible property included in the
Purchased Assets, free and clear of any royalty or other payment obligations.
Seller's use of such intangible property does not conflict with, violate or
infringe upon any rights of any other person or entity with respect to such
intangible property and Seller has not received any notice of any such claimed
conflict, violation or infringement.
3.14 FINANCIAL STATEMENTS AND RECORDS OF THE BUSINESS. Seller has
delivered or will deliver to Purchaser true, correct and complete copies of the
unaudited financial statements for the Stations as of the end of the most recent
calendar year end and the unaudited financial Statements of the Stations for the
three, six or nine months ended for the most recent quarter end of the current
calendar year. Since the date of such financial statements, the Stations have
not suffered any change in their results of operations, working capital, assets,
liabilities or condition (financial or otherwise) or the manner of conducting
their business other than changes in the ordinary course of business that,
individually or in the aggregate, have not had a material adverse effect on the
business of the Stations.
3.15 YEAR 2000. To Seller's knowledge, all operating system,
application and other computer software included in the Purchased Assets is
currently Year 2000 compliant, or to the extent that such software or hardware
is not currently Year
2000 compliant, Seller has in place and is implementing detailed plans to ensure
that such software and hardware will be Year 2000 compliant no later than the
Closing Date.
3.16 FINDERS AND BROKERS. No person has as a result of any
agreement entered into by the Seller any valid claim against any of the parties
hereto for a brokerage commission, finder's fee or other like payment.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite power and authority to own and lease its properties and carry
on its business as currently conducted.
4.2 DUE AUTHORIZATION. Subject to the FCC Order and Final Order,
Purchaser has full power and authority to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly executed and delivered by Purchaser and constitutes the
legal, valid and binding obligation of Purchaser, enforceable against it in
accordance with its respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally or general equitable principles.
4.3 EXECUTION AND DELIVERY. Neither the execution and delivery by
Purchaser of this Agreement nor the consummation of the transactions
contemplated hereby will: (i) conflict with or result in a breach of the
Articles of Incorporation or Bylaws of Purchaser; (ii) subject to the FCC Order
and Final Order and the making of any required filings under the HSR Act,
violate any law, statute, rule or regulation or any order, writ, injunction or
decree of any court or governmental authority; or (iii) violate or conflict with
or constitute a default under (or give rise to any right of termination,
cancellation or acceleration under) any indenture, mortgage, lease, contract or
other instrument to which Purchaser is a party or by which it is bound or
affected.
4.4 CONSENTS. No consent, approval, authorization, license, exemption
of, filing or registration with any court, governmental authority, commission,
board, bureau, agency or instrumentality, domestic or foreign, is required by
Purchaser in connection with the execution and delivery of this Agreement or the
consummation by it of any transaction contemplated hereby, other than the
consent of the FCC or under the HSR Act. No approval, authorization or consent
of any other third party is required in connection with the execution and
delivery by Purchaser of this Agreement and the consummation of the transactions
contemplated hereby, except as may have been previously obtained by Purchaser.
Purchaser warrants that it is legally qualified to become a licensee of the
Stations and is aware of no impediment to the approval by the FCC of the
assignment of the Governmental Licenses to Purchaser.
4.5 FINDERS AND BROKERS. No person has as a result of any agreement
entered into by the Purchaser any valid claim against any of the parties hereto
for a brokerage commission, finder's fee or other like payment.
4.6 PURCHASER'S QUALIFICATION. The Purchaser is in all material
respects qualified legally, financially and otherwise to be the licensee of the
Stations, and has or shall have sufficient resources to pay in full all amounts
due to the Seller under this Agreement when such amounts are due.
5. CERTAIN COVENANTS AND AGREEMENTS.
5.1 REASONABLE EFFORTS. Each of the Seller and Purchaser shall
take all commercially reasonable action necessary to consummate the
transactions contemplated by this Agreement and will use all necessary and
reasonable means at its disposal to obtain all necessary consents and
approvals of other persons and governmental authorities required to enable it
to consummate the transactions contemplated by this Agreement. Except as
otherwise provided herein, each of the Seller and Purchaser acknowledges and
agrees that it shall pay all costs, fees and expenses incurred by it in
obtaining such necessary consents and approvals. Each party shall make all
filings, applications, statements and reports to all governmental agencies or
entities which are required to be made prior to the Closing Date by or on its
behalf pursuant to any statute, rule or regulation in connection with the
transactions contemplated by this Agreement, and copies of all such filings,
applications, statements and reports shall be provided to the other. If the
FCC determines that the transactions contemplated hereby or a portion thereof
are inconsistent or violative of FCC rules or regulations, the parties agree
that they will negotiate in good faith to amend, modify or restructure the
transactions contemplated hereby so as to be consistent with FCC rules and
regulations.
5.2 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, all public
announcements and other publicity relating to the transaction contemplated by
this Agreement shall be jointly planned and agreed to by the Seller and
Purchaser.
5.3 ORDINARY COURSE OF BUSINESS. During the period from the date
hereof to the Closing Date, unless the prior consent of Purchaser is first
obtained, the Seller shall use its commercially reasonable best efforts to
(i) conduct the operations of the Stations in the ordinary course of business
consistent with past and current practices and (ii) not knowingly take any
action which would cause any representation contained in Article 3 to be
untrue as of the Closing Date.
5.4 SECTION 1031 ASSET CHANGE. The Seller intends that the transfer
of the Purchased Assets contemplated by this Agreement will be part of an
exchange of assets that will qualify, pursuant to Section 1031 of the
Internal Revenue Code and regulations thereunder, as a deferred like-kind
exchange by Seller. In keeping with that intention, it is expressly
acknowledged that Seller, its assignee or transferee, may, at or prior to
Closing, assign its rights (in whole or in part) under this Agreement to a
qualified intermediary as defined in Treasury regulation section
1.103(k)-1(g)(4), or a similar entity or arrangement ("Qualified
Intermediary"), subject to all of Seller's rights and obligations herein and
shall promptly provided written notice of such assignment to Purchaser.
Purchaser shall cooperate with the reasonable requests of the Seller's
Qualified Intermediary in arranging and affecting this exchange and any
additional exchange as would qualify under Section 1031 of the Internal
Revenue Code; provided that, Seller shall reimburse to Purchaser any costs
and expenses incurred by Purchaser directly and solely as a result of
Seller's use of a Qualified Intermediary to consummate the transaction
contemplated herein. Without limiting the generality of the foregoing, if
Seller has given notice of its intention to affect an exchange using a
Qualified Intermediary, Purchaser shall promptly provide Seller with written
acknowledgment of such notice. If requested by Seller, Purchaser shall pay
the Purchase Price for the Purchased Assets to the Qualified Intermediary of
Seller (and not to Seller), and such payment shall satisfy the obligations of
Purchaser to make payment of the Purchase Price herein. Seller's assignment
to a Qualified Intermediary will not relieve Seller of any of its duties or
obligations herein. Except for the obligations of Purchaser set forth in this
Section, Purchaser shall not have any liability or obligation to Seller for
the failure of the contemplated exchange to qualify as a like kind of
exchange under Section 1031 of the Internal Revenue Code unless such failure
is the result of the material breach by Purchaser of its representations,
warranties, covenants and obligations herein.
5.5 RIGHT TO HIRE EMPLOYEES. Seller hereby grants to the Purchaser
the right, but not the obligation, after the Closing, to offer employment to
any employee of Seller involved in the operation of the Stations prior to the
Closing.
5.6 THIRD PARTY CONSENTS. By the Closing Date, the Seller will use
all commercially reasonable efforts to obtain all consents from any person or
entity which are required in connection with the execution and delivery by
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby, which consents are described on Schedule V.
6. CONDITIONS TO PURCHASER'S CLOSING.
All obligations of Purchaser under this Agreement shall be subject
to the fulfillment at or prior to the Closing of the following conditions, it
being understood that Purchaser may, in its sole discretion, waive any or all
of such conditions in whole or in part:
6.1 REPRESENTATIONS, ETC. The Seller shall have performed in all
material respects the covenants and agreements contained in this Agreement
that are to be performed by it at or prior to the Closing, and the
representations and warranties of the Seller contained in this Agreement
shall be true and correct in all material respects as of the Closing Date
with the same effect as though made at such time (except as contemplated or
permitted by this Agreement).
6.2 CONSENTS. All consents and approvals from the FCC and
governmental agencies required to consummate the transactions contemplated by
this Agreement shall have been obtained without material cost or other
materially adverse consequence to Purchaser and shall be in full force and
effect, and the FCC Order shall, at the Closing, be in full force and effect.
6.3 NO ADVERSE LITIGATION. No order or temporary, preliminary or
permanent injunction or restraining order shall have been entered and no
action, suit or other legal or administrative proceeding by any court or
governmental authority, agency or other person shall be pending or threatened
on the Closing Date which may have the effect of (i) making any of the
transactions contemplated hereby illegal or (ii) materially adversely
affecting the value of the Purchased Assets.
6.4 TRANSMITTER SITE LEASES. Seller shall have renegotiated, amended
and reexecuted the Transmitter Site Lease for KACE(FM), which lease shall be
in substantially the same form as Attachment A hereto. The Transmitter Site
Lease for KRTO(FM) shall be deemed to include that certain letter dated
October _____, 1999 from Glendale Electronics to Xxx Radio, Inc., which lease
shall be in the form attached hereto as Attachment B. The lessors of the
Transmitter Site Leases shall have consented to the assignment of such
amended Transmitter Site Leases to Purchaser without additional cost to the
Purchaser.
6.5 CLOSING DELIVERIES. Purchaser shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.1
hereof.
7. CONDITIONS TO SELLER'S CLOSING.
All obligations of the Seller under this Agreement shall be subject
to the fulfillment at or prior to the Closing of the following conditions, it
being understood that the Seller may, in its sole discretion, waive any or
all of such conditions in whole or in part:
7.1 REPRESENTATIONS, ETC. Purchaser shall have performed in all
material respects the covenants and agreements contained in this Agreement
that are to be performed by Purchaser as of the Closing, and the
representations and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects as of the Closing Date with the
same effect as though made at such time (except as contemplated or permitted
by this Agreement).
7.2 NO ADVERSE LITIGATION. No order or temporary, preliminary or
permanent injunction or restraining order shall have been entered and no
action, suit or other legal or administrative proceeding by any court or
governmental authority, agency or other person shall be pending or threatened
on the Closing Date which may have the effect of (i) making any of the
transactions contemplated hereby illegal or (ii) materially adversely
affecting the value of the Purchased Assets.
7.3 CLOSING DELIVERIES. The Seller shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.2.
7.4 CONSENTS. All consents and approvals from the FCC and
governmental agencies required to consummate the transactions contemplated by
this Agreement shall have been obtained without material cost or other
materially adverse consequence to Seller and shall be in full force and
effect, and the FCC Order shall, at the Closing, be in full force and effect.
8. DOCUMENTS AND ITEMS TO BE DELIVERED AT CLOSING.
8.1 TO PURCHASER. At the Closing, there shall be delivered to
Purchaser:
(a) The bills of sale, agreements of assignment and similar
instruments of transfer to the Purchased Assets contemplated by Section 2.3
hereof.
(b) A certificate, signed by an executive officer of Seller, as to
the fulfillment of the conditions set forth in Sections 6.1 through 6.3
hereof.
(c) If the Closing occurs prior to the Final Order, an Unwind
Agreement in the form of Exhibit A hereto (the "Unwind Agreement").
(d) An adjustment for increases in the license fees equal to the
product of (a) the difference between: (i) the monthly amount owed by
Purchaser under the amended Transmitter Site Lease for KACE(FM) from and
after the Closing Date through the expiration of the term of such Lease and
(ii) $700 multiplied by (b) the number of months that Purchaser will pay the
license fee after the Closing Date under such amended Transmitter Site Lease.
The adjustment amount shall: (i) be adjusted to reflect its present value
calculated by using an interest rate of seven percent (7%), (ii) be paid in
cash at the Closing, and (iii) not exceed $50,000.
8.2 TO SELLER. At the Closing, there shall be delivered to the
Seller:
(a) The purchase price contemplated by Section 2.1 hereof, in the
form of wire transfer or cashier's or certified check as the Seller may
direct.
(b) A certificate, signed by an executive officer of Purchaser, as
to the fulfillment of the conditions set forth in Sections 7.1 and 7.2 hereof.
(c) An assumption agreement pursuant to which Purchaser shall assume
the Assumed Contracts.
(d) If the Closing occurs prior to the Final Order, the Unwind
Agreement.
9. SURVIVAL.
All representations, warranties, covenants and agreements made by
any party to this Agreement or pursuant hereto shall be deemed to be material
and to have been relied upon by the parties hereto and shall survive the
Closing; provided, however, that notice of any claim against the Purchaser or
Seller, whether made under the indemnification provisions hereof or
otherwise, based on a breach of a representation, warranty, covenant or
agreement must be given within one year from the Closing Date. The
representations and warranties hereunder shall not be affected or diminished
by any investigation at any time by or on behalf of the party for whose
benefit such representations and warranties were made. No representation or
warranty contained herein shall be deemed to be made at any time after the
date of this Agreement.
10. INDEMNIFICATION OF PURCHASER.
Subject to the limitations set forth in Sections 9 and 12, the
Seller shall indemnify and hold Purchaser harmless from, against, for and in
respect of:
(a) any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances suffered,
sustained, incurred or required to be paid by Purchaser because of the breach
of any written representation, warranty, agreement or covenant of the Seller
contained in this Agreement;
(b) any and all liabilities, obligations, claims and demands arising
out of the ownership and operation of the Stations at all times prior to the
Closing Date (other than the contractual liabilities specifically assumed as
set forth in Section 1.2 hereto); and
(c) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by Purchaser in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of
the matters indemnified against in this Section 10.
11. INDEMNIFICATION OF SELLER.
Subject to the limitations set forth in Sections 9 and 12, Purchaser
shall indemnify and hold the Seller harmless from, against, for and in
respect of:
(a) any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances suffered,
sustained, incurred or required to be paid by the Seller because of the
breach of any written representation, warranty, agreement or covenant of
Purchaser contained in this Agreement;
(b) any and all liabilities, obligations, claims and demands arising
out of the ownership and operation of the Stations on and after the Closing
Date, except to the extent the same arises from a breach of any written
representation, warranty, agreement or covenant of the Seller contained in
this Agreement or any document, certificate or agreement executed in
connection with this Agreement;
(c) any of the Assumed Contracts specifically assumed as set forth
in Section 1.2; and
(d) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by the Seller
in connection with any action, suit, proceeding, demand, assessment or
judgment incident to any of the matters indemnified against in this Section
11.
12. GENERAL RULES REGARDING INDEMNIFICATION.
The obligations and liabilities of each indemnifying party hereunder
with respect to claims resulting from the assertion of liability by the other
party or indemnified third parties shall be subject to the following terms
and conditions:
(a) The indemnified party shall give prompt written notice (which in
no event shall exceed 30 days from the date on which the indemnified party
first became aware of such claim or assertion) to the indemnifying party of
any claim which might give rise to a claim by the indemnified party against
the indemnifying party based on the indemnity agreements contained in Section
10 or 11 hereof, stating the nature and basis of said claims and the amounts
thereof, to the extent known;
(b) If any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
liability under the indemnity agreements contained in Section 10 or 11
hereof, the action, suit or proceeding shall, upon the written acknowledgment
by the indemnifying party that it is obligated to indemnify under such
indemnity agreement, be defended (including
all proceedings on appeal or for review which counsel for the indemnified
party shall deem appropriate) by the indemnifying party. The indemnified
party shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the indemnified party's own
expense unless (A) the employment of such counsel and the payment of such
fees and expenses both shall have been specifically authorized in writing by
the indemnifying party in connection with the defense of such action, suit or
proceeding, or (B) counsel to such indemnified party shall have reasonably
concluded and specifically notified the indemnifying party that there may be
specific defenses available to it which are different from or additional to
those available to the indemnifying party or that such action, suit or
proceeding involves or could have an effect upon matters beyond the scope of
the indemnity agreements contained in Sections 10 and 11 hereof, in any of
which events the indemnifying party, to the extent made necessary by such
defenses, shall not have the right to direct the defense of such action, suit
or proceeding on behalf of the indemnified party. In the latter such case
only that portion of such fees and expenses of the indemnified party's
separate counsel reasonably related to matters covered by the indemnity
agreements contained in Section 10 or 11 hereof shall be borne by the
indemnifying party. The indemnified party shall be kept fully informed of
such action, suit or proceeding at all stages thereof whether or not it is
represented by separate counsel.
(c) The indemnified party shall make available to the indemnifying
party and its attorneys and accountants all books and records of the
indemnified party relating to such proceedings or litigation and the parties
hereto agree to render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and adequate defense of
any such action, suit or proceeding.
(d) The indemnified party shall not make any settlement of any
claims without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed.
(e) If any claims are made by third parties against an indemnified
party for which an indemnifying party would be liable, and it appears likely
that such claims might also be covered by the indemnified party's insurance
policies, the indemnified party shall make a timely claim under such policies
and to the extent that such party obtains any recovery from such insurance,
such recovery shall be offset against any sums due from an indemnifying party
(or shall be repaid by the indemnified party to the extent that an
indemnifying party has already paid any such amounts). The parties
acknowledge, however, that if an indemnified party is self-insured as to any
matters, either directly or through an insurer which assesses retroactive
premiums based on loss experience, then to the extent that the indemnified
party bears the economic burden of any claims through self-insurance or
retroactive premiums or insurance ratings, the indemnifying party's
obligation shall only be reduced by any insurance recovery in excess of the
amount paid or to be paid by the indemnified party in insurance premiums.
(f) No claim or indemnification shall be made unless and until the
indemnified party has first incurred, in the aggregate, damages, losses and
expenses for which it would be entitled to be indemnified hereunder of at
least $25,000.
(g) Except as herein expressly provided, the remedies provided in
Sections 10 through 12 hereof shall be cumulative and shall not preclude
assertion by any party of any other rights or the seeking of any other rights
or remedies against any other party hereto.
13. TERMINATION. This Agreement may be terminated by the mutual consent of
Purchaser and Seller, or by either Purchaser or Seller, if the terminating
party is not then in material breach of its obligations hereunder, upon
written notice to the other upon the occurrence of any of the following:
(a) By the terminating party, if the other party is in material
breach of its obligations hereunder, and such breach has not been cured by
the other party within 30 days of written notice of such breach (or such
longer period of time if the breach cannot be reasonably cured within 30 days
and the breaching party is diligently attempting to cure such breach);
(b) If the FCC designates the FCC Application contemplated by
Section 2.2(b) hereof for hearing at any time; or
(c) If the Closing has not occurred on or before June 30, 2000.
14. RISK OF LOSS. The Seller shall bear the risk of all damage to, loss of or
destruction of any of the Purchased Assets between the date of this Agreement
and the Closing Date. If any material portion of the Purchased Assets shall
suffer any material damage or destruction prior to the Closing Date, the
Seller shall promptly notify the Purchaser in writing of such damage or
destruction, shall promptly take all necessary steps to restore, repair or
replace such assets at its sole expense, and shall advise the Purchaser in
writing of the estimated cost to complete such restoration, repair or
replacement and all amounts actually paid as of the date of the estimate. The
Purchaser or Seller may extend the Closing Date for a period not exceeding 45
days to accomplish such restoration, repair or replacement, but is not
required to do so. If such restoration, repair or replacement is not
accomplished prior to the Closing Date, as the same may be extended as
provided herein, the Purchaser may, at its option:
(a) terminate this Agreement upon written notice to Seller; or
(b) receive all insurance proceeds paid or payable to Seller, close
this Agreement and thereafter complete such restoration, repair or
replacement at its sole expense; provided, however, Seller shall have no
further liabilities with respect to such damage or destruction after payment
to Purchaser of such insurance
proceeds.
15. MISCELLANEOUS PROVISIONS.
15.1 EXPENSES. Except as otherwise expressly provided herein, each
party shall pay the fees and expenses incurred by it in connection with the
transactions contemplated by this Agreement. If any action is brought for
breach of this Agreement or to enforce any provision of this Agreement, the
prevailing party shall be entitled to recover court costs and reasonable
attorneys' fees.
15.2 PRORATIONS. All items of income and expense arising from the
operation of the Stations with respect to the Purchased Assets and the
Assumed Contracts on or before the close of business on the Closing Date
shall be for the account of the Seller and thereafter shall be for the
account of the Purchaser. Proration of the items described below between the
Seller and the Purchaser shall be effective as of 11:59 p.m., local time, on
such date and shall occur as follows with respect to those rights,
liabilities and obligations of the Seller transferred to and assumed by the
Purchaser hereunder.
(a) Liability for state and local taxes assessed on the Purchased
Assets payable with respect to the tax year in which the Closing Date falls
and the annual FCC regulatory fee for the Stations payable with respect to
the year in which the Closing Date falls shall each be prorated as between
the Seller and the Purchaser on the basis of the number of days of the tax
year elapsed to and including such date.
(b) Prepaid items, deposits, credits and accruals such as water,
electricity, telephone, other utility and service charges, lease expenses,
license fees (if any) and payments under any contracts to be assumed by the
Purchaser shall be prorated between the Seller and the Purchaser on the basis
of the period of time to which such liabilities, prepaid items and accruals
apply.
All prorations shall be made and paid insofar as feasible on the Closing
Date; any prorations not made on such date shall be made as soon as
practicable (not to exceed 90 days) thereafter. The Seller and the Purchaser
agree to assume, pay and perform all costs, liabilities and expenses
allocated to each of them pursuant to this Section 15.2.
15.3 AMENDMENT. This Agreement may be amended at any time but only
by an instrument in writing signed by the parties hereto (it being understood
that email does not constitute a signed writing).
15.4 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if mailed by certified mail, return
receipt requested, or by nationally recognized "next-day" delivery service,
to the parties at the addresses set forth below (or at such other address for
a party as shall be
specified by like notice), or sent by facsimile to the number set forth below
(or such other number for a party as shall be specified by proper notice
hereunder):
If to the Purchaser:
0000 Xxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President and
Chief Financial Officer
Fax: (000) 000-0000
If to the Seller:
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Chief Financial Officer
Fax: (000) 000-0000
15.5 ASSIGNMENT. This Agreement may not be assigned by either party
without the prior consent of the other party, which shall not be unreasonably
withheld; provided, however, that Purchaser may assign its rights to one or
more subsidiaries This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs and
permitted assigns.
15.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.7 HEADINGS. The headings of the Sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
15.8 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein contain the entire understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties, conveyances or undertakings other than those expressly set forth
herein. This Agreement supersedes any prior agreements and understandings
between the parties with respect to the subject matter.
15.9 WAIVER. No attempted waiver of compliance with any provision or
condition hereof, or consent pursuant to this Agreement, will be effective
unless evidenced by an instrument in writing by the party against whom the
enforcement of any such waiver or consent is sought.
15.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. Venue with
respect to any dispute or controversy shall be proper only in Wilmington,
Delaware.
15.11 CERTAIN DEFINITIONS. As used in this Agreement, "affiliates" of a
party shall mean persons or entities that directly, or indirectly through one or
more intermediaries, control or are controlled by, or are under common control
with, such party.
15.12 INTENDED BENEFICIARIES. The rights and obligations contained in
this Agreement are hereby declared by the parties hereto to have been provided
expressly for the exclusive benefit of such entities as set forth herein and
shall not benefit, and do not benefit, any unrelated third parties.
15.13 MUTUAL CONTRIBUTION. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
[signatures on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PURCHASER:
Hispanic Broadcasting Corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
SELLER:
Xxx Radio, Inc.
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
----------------------------
Title: President/CEO
----------------------------
