EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 4th day of September,
2001, by and among Big City Radio-Phoenix, L.L.C. ("BCR-Phoenix"), Big City
Radio, Inc. ("BCR," and together with BCR-Phoenix, the "Seller"), HBC Phoenix,
Inc. ("HBC Phoenix") and HBC License Corporation ("HBC License" and together
with HBC Phoenix, the "Purchaser").
W I T N E S S E T H:
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WHEREAS, Seller is the licensee of the following radio stations
(collectively the "Stations"): (i) KEDJ(FM), licensed to Sun City, Arizona,
authorized by the Federal Communications Commission (the "FCC") to operate at
106.3 MHz (FCC Facility ID No. 55913); (ii) KDDJ(FM), licensed to Globe,
Arizona, authorized by the FCC to operate at 100.3 MHz (FCC Facility ID No.
22977); (iii) KBZR(FM), licensed to Arizona City, Arizona, authorized by the FCC
to operate at 106.5 MHz (FCC Facility ID No. 2740); and (iv) KSSL(FM), licensed
to Wickenburg, Arizona, authorized by the FCC to operate at 105.3 MHz (FCC
Facility ID No. 29021); and
WHEREAS, Seller owns the assets which are used in the operation of the
Stations;
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 Stations as described herein under the terms and conditions
herein set forth; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Hispanic Broadcasting Corporation ("HBC") and the Seller are entering
into a Guaranty Agreement pursuant to which HBC is guaranteeing the obligations
of the Purchaser under this Agreement.
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 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 Stations (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
and other Permitted Liens):
(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 1.1(a) attached hereto, together with any and all
renewals, extensions and modifications thereof (the "Governmental Licenses");
(b) The leasehold interest at each of the sites described on Schedule
1.1(b) hereto (the "Transmitter Sites");
(c) All broadcast towers, antennas, main and back-up transmitters and
generators, STL's and other tangible personal property located, or otherwise
intended for use, at the Transmitter Sites, together with replacements thereof
and additions thereto made between the date hereof and the Closing;
(d) The leasehold interest at each of the sites described on Schedule
1.1(d) hereto (the "Studio Sites") and the roof top rights for the auxiliary
antenna located at the Valley Commerce Center;
(e) All studio equipment, production and imaging equipment, office
equipment, furniture, vehicles and other items of tangible personal property
used, or intended for use, in the operation of the Stations, together with
replacements thereof and additions thereto made between the date hereof and the
Closing;
(f) The call letters, xxxxx frequencies, "Que Buena" tradename and
internet domain names of the Stations; and
(g) Unless as may be otherwise required by law, the books and records
related to the Purchased Assets, such as property tax records, logs, all
materials maintained in the FCC public file relating to the Stations, technical
data, political advertising records and all other records, correspondence with
and documents pertaining to governmental authorities and similar third parties
(the "Business Records").
In no event shall the Purchased Assets be deemed to include (i) the cash and
cash equivalents of the Seller or the Stations (except for any normal and
customary deposits with respect to the Purchased Assets for which a proration
adjustment is made in Seller's favor pursuant to Section 15.2), (ii) any
accounts receivable, notes receivable or other receivables of the Seller
(including tax refunds), (iii) promotional materials, tapes and record libraries
and similar items of intellectual property in respect of the Stations except as
specifically set forth above, (iv) 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, (v) securities of any kind owned by
Seller, (vi) insurance contracts or proceeds thereof, (vii) time sales
agreements or barter rights of the Stations, (viii) vehicles in excess of the
four vehicles (reasonably acceptable to Purchaser) that are included in the
Purchased Assets or (ix) claims arising out of acts occurring before the Closing
Date.
1.2 ASSUMED CONTRACTS. At the Closing, the Purchaser shall assume the
specified contractual obligation of the Stations for periods on and after the
Closing under the agreements set forth on Schedule 1.2 hereof (the "Assumed
Contracts"), and the Purchaser agrees to pay and perform the Assumed Contracts
after the Closing Date. Except as
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specifically set forth in the preceding sentence, 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, time sales agreements 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 $34 million, payable in cash at
Closing.
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 the Purchaser in Dallas, Texas
(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 7th day after
the date on which the FCC Order (defined below) has occurred with respect to the
FCC Licenses. 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 use their reasonable best efforts to file, within three
business days after the date hereof, an assignment of license application (the
"FCC Application") requesting FCC consent to the assignment from the Seller to
HBC License of the FCC Licenses. The parties agree that the FCC Application will
be prosecuted with reasonable best efforts, in good faith and with due
diligence. The parties agree to use their 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 FCC Application (it being understood
that the parties will bear equally the FCC filing fee).
(c) As used herein, the term "FCC Order" shall mean that the FCC staff
(including the Mass Media Bureau pursuant to delegated authority) has granted or
given its consent, without any condition materially adverse to Purchaser or
Seller, to the assignment of the FCC 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.
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
agreement with respect to the Assumed Contracts as are
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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.
2.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets in a manner as mutually agreed between the parties
based upon an appraisal prepared by Bond & Xxxxxx (whose fees shall be paid by
Purchaser). Seller and Purchaser agree to use the allocations determined
pursuant to this Section 2.4 for all tax purposes, including without limitation,
those matters subject to Section 1060 of the Internal Revenue Code of 1986, as
amended.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Purchaser, as follows:
3.1 ORGANIZATION; GOOD STANDING. BCR-Phoenix is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Delaware. BCR is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Seller 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 any
provisions of Seller's organizational documents, (ii) subject to the FCC Order
and Final Order, 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 Purchaser's ownership of the Purchased
Assets; or (iii) except as set forth on Schedule 3.3, 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.
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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 by the Seller of the transactions
contemplated hereby or thereby, other than those of the FCC.
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) Permitted Liens (ii) liens which will be released on or prior to the
Closing, or (iii) the Assumed Contracts.
3.6 TRANSMITTER AND STUDIO SITES.
(a) Except as set forth on Schedule 1.1(b), as of the Closing, Seller
will have good and indefeasible title to the main Transmitter Site for KBZR and
valid, binding and enforceable leasehold interests in and to the remaining
Transmitter Sites and Studio Sites; and in each case such title or interest
shall be free and clear of liens, claims, encumbrances, subleases or other
restrictions except for Permitted Liens.
(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 or Studio 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 Studio Sites or discontinuation of necessary sewer,
water, electrical, gas, telephone or other utilities or services, except as set
forth on Schedule 1.1(b).
(c) To Seller's knowledge, (i) 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; (ii) no portion of the
Transmitter Sites has been used by Seller as a landfill or for storage or
landfill of hazardous or toxic materials; and (iii) there are not any
underground storage tanks that have been installed by Seller at or removed by
Seller from the Transmitter Sites. 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 TANGIBLE PERSONAL PROPERTY ASSETS. Schedule 3.7 sets forth a list,
complete and accurate in all material respects, of the Purchased Assets which
consist of tangible personal property. All of such tangible personal property,
viewed as a whole and not on an
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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
present use thereof by Seller.
3.8 GOVERNMENTAL LICENSES. Schedule 1.1(a) 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, 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 by Seller, except for proceedings of a legislative or
rule-making nature intended to affect the broadcasting industry generally. The
Stations, each of 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. 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. Except as set forth on Schedule
3.8, 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.
3.9 REPORTS. Except as set forth on Schedule 3.9, 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. Except as set forth on Schedule 3.9, 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 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 with respect
to such taxes, as reflected on the filed returns or claimed to
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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). 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 that
could adversely affect the Purchased Assets. All additional taxes, if any,
assessed as a result of such examinations or audits have been paid, and 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
would reasonably be expected to have a Material Adverse Effect 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 in any
material respect with respect to the Assumed Contracts, and, as of the Closing
Date, the Stations will have paid all sums and performed in all material
respects all obligations under the Assumed Contracts which are required to be
paid or performed prior to the Closing Date.
3.13 BUSINESS RECORDS. The Seller has, and after the Closing, Purchaser
will have, the right to use the Business Records included in the Purchased
Assets, free and clear of any royalty or other payment obligations.
3.14 THIRD PARTY CONSENTS. The only consents from any person or entity
which are required to be obtained by Seller in connection with the execution and
delivery by Seller of this Agreement and the consummation of the transactions
contemplated hereby are set forth on Schedule 3.14 (the "Third Party Consents"),
and Seller reasonably anticipates that it will be able to obtain the Third Party
Consents prior to the Closing.
3.15 FINDERS AND BROKERS. Except for Xxxxxxxxx Broadcast Brokerage, the
fees and expenses of which shall be borne solely by Seller, 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.
3.16 DISCLAIMER OF WARRANTIES; LIMITATIONS OF WARRANTIES. EXCEPT WITH
RESPECT TO THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH IN THIS
AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY AS
TO THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE CONDITION OR
WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT.
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4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Each of HBC Phoenix and HBC License
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
certificate of incorporation or bylaws of Purchaser; (ii) subject to the FCC
Order and Final Order, 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. 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 on
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the Closing Date sufficient funds 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 CONSUMMATION OF THE TRANSACTION.
(a) Each of the Seller and Purchaser shall take all reasonable action
necessary to consummate the transactions contemplated by this Agreement and will
use all necessary and reasonable means at its disposal to obtain (and cooperate
with the other party in obtaining) all necessary approvals of the FCC and Third
Party Consents 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.
(b) 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.
(c) Seller will use its reasonable best efforts to obtain all Third
Party Consents as promptly as practicable after the date of this Agreement. All
Third Party Consents shall be in form reasonably satisfactory to Purchaser, and
none shall provide for any increase in cost or other change in terms and
conditions after the Closing which would be adverse to Purchaser. With respect
to the assignment to Purchaser of Seller's roof top rights for the auxiliary
antenna located at Valley Commerce Center, the Third Party Consent shall be in
writing, shall expire no later than the stated expiration date in 2004 of
Seller's studio lease at Valley Commerce Center (it being acknowledged by
Purchaser that Seller shall not be required to assign any roof top rights for
subsequent periods) and shall not impose any costs for such rights on Purchaser.
(d) If any Third Party Consent has not been obtained prior to Closing
and prior to Closing an Alternative Arrangement (as defined below) has been
obtained with respect to the Assumed Contract to which such Third Party Consent
pertains (in each case, a "Deferred Contract"), then the Seller shall retain,
until such time as such Third Party Consent shall have been obtained by the
Seller, all rights to and liabilities under the Deferred Contract. Until the
assignment of the Deferred Contract, (i) the Seller shall continue to use
reasonable best efforts and the Purchaser shall cooperate with the Seller to
obtain all required consents or approvals to remove any other impediments to
such assignment, and (ii) the Seller shall cooperate with the Purchaser (and the
Purchaser shall cooperate with the Seller) in any lawful arrangement to provide
(to the extent permitted without breach of such Deferred
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Contract and as determined in the reasonable opinion of the Purchaser) that the
Purchaser shall receive the benefits of such Deferred Contract after the Closing
Date to the same extent, and without any additional cost or expense to Purchaser
and without any diminution in broadcast signal quality, as if such Deferred
Contract had been assigned to the Purchaser (such arrangement, an "Alternative
Arrangement"). To the extent that the Purchaser receives such benefits, the
Purchaser shall assume the Seller's obligations and liabilities thereunder
arising on or after the Closing Date with respect to such Alternative
Arrangement and the Purchaser shall perform any such obligations of the Seller
arising under such Alternative Arrangement. If, subsequent to the Closing, the
Seller shall obtain all required consents or approvals required to assign any
Deferred Contract, the Deferred Contract for which consent or approval to assign
has been obtained shall at that time be deemed to be conveyed, granted,
bargained, sold, transferred, setover, assigned, released, delivered and
confirmed to the Purchaser and assumed by the Purchaser, without need of further
action by the Seller or of further documentation except for notice from the
Seller to the Purchaser that such consent or approval has been obtained; and
from and after the effective date such Deferred Contract is assigned to the
Purchaser, (i) no party shall have any further liability under the Alternative
Arrangement related thereto, and (ii) the Deferred Contract shall be deemed to
be an Assumed Contract.
(e) Prior to Closing, Seller shall provide written notice to third
parties which have entered into material contracts with any of the Stations
(other than the Assumed Contracts) regarding (i) the existence of this Agreement
and the transactions contemplated hereby and (ii) that Purchaser is not assuming
any obligations of the Seller or the Stations in respect of the contracts with
such third parties. Seller shall promptly provide copies of these written
notices to Purchaser.
5.2 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, all notices to
third parties and other publicity relating to the transaction contemplated by
this Agreement shall be jointly planned and agreed to by the Seller and
Purchaser; provided, however, that each party shall be entitled to issue a press
release announcing the entering of this Agreement and the transactions
contemplated hereby in accordance with its respective obligations under federal
securities laws.
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 cause the Stations to not knowingly take any action which would
cause the conditions set forth in Section 6.1 not to be satisfied as of the
Closing Date.
5.4 CONTROL OF THE STATION. Prior to the Closing, Purchaser shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations; such operations, including
complete control and supervision of all of the Stations programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
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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. 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 FCC ORDER. 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 shall be pending 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 THIRD PARTY CONSENTS. Each of the Third Party Consents shall have
been obtained without the imposition of any conditions adverse to Purchaser;
provided, that if an Alternative Arrangement has been entered into in lieu of a
Third Party Consent for an Assumed Contract as contemplated by Section 5.1(d),
no consents or approvals with respect to such Assumed Contract shall be required
under this Section 6.4.
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 FCC ORDER. The FCC Order shall, at the Closing, be in full force
and effect.
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7.3 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 shall be pending 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.
7.4 CLOSING DELIVERIES. The Seller shall have received each of the
documents or items required to be delivered to it pursuant to Section 8.2.
8. DOCUMENTS 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) The Business Records.
(d) A rescission agreement in the form of Exhibit A hereto (the
"Rescission Agreement").
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 through 7.3 hereof.
(c) An assumption agreement pursuant to which Purchaser shall assume
the Assumed Contracts.
(d) The Rescission Agreement.
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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.
From and after the Closing and 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 (collectively,
together with the costs and expenses described in clause (c) below, but
excluding any indirect, consequential, incidental, exemplary or punitive or
other special damages or lost profits regardless of the theory of recovery,
being referred to herein as "Damages") 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 Damages 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;
provided, however, that after Closing, Seller shall have no liability to
Purchaser hereunder until, and only to the extent that, Purchaser's aggregate
Damages exceed $50,000, up to a maximum aggregate amount of $17,000,000.
11. INDEMNIFICATION OF SELLER.
From and after the Closing and 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:
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(a) any and all Damages 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 Damages 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 and all Damages arising out of the Assumed Contracts in respect
of periods on and after the Closing Date; 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;
provided, however, that after Closing, Purchaser shall have no liability to
Seller hereunder until, and only to the extent that, Seller's aggregate Damages
exceed $50,000.
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
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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) Except as herein expressly provided, each of Purchaser and Seller
acknowledges and agrees that its sole and exclusive remedy after Closing with
respect to any and all claims and causes of action under or that are reasonably
related to this Agreement, and the other transactions contemplated hereby, the
Stations, the Purchased Assets and the Assumed Contracts shall be pursuant to
the indemnification provisions set forth in Sections 10 through 12 hereof.
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13. TERMINATION; RISK OF LOSS.
13.1 TERMINATION. This Agreement may be terminated by the mutual
consent of Purchaser and Seller, or, if the terminating party is not then in
material breach of its obligations hereunder, upon written notice as follows:
(a) by Purchaser if Seller is in material breach of its
obligations hereunder, such that the conditions set forth in Section 6.1 would
not be satisfied as of the Closing, and such breach has not been cured by Seller
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 Seller is diligently
attempting to cure such breach);
(b) by Seller if Purchaser is in material breach of its
obligations hereunder, such that the conditions set forth in Section 7.1 would
not be satisfied as of the Closing, and such breach has not been cured by
Purchaser 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 Purchaser is
diligently attempting to cure such breach);
(c) by either Purchaser or Seller if the FCC denies the FCC
Application in an order that has become a Final Order, or has designated the FCC
application for a hearing; or
(d) by either Purchaser or Seller if the Closing has not
occurred on or before June 30, 2002 (the "Outside Date").
13.2 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
(other than items that are obsolete and not necessary for the continued
operations of the Stations) 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. If necessary and provided that Seller is diligently pursuing such
restoration, repair or replacement, the Closing Date and Outside Date shall be
extended to give the Seller sufficient time to accomplish such restoration,
repair or replacement.
14. SPECIFIC PERFORMANCE
The parties acknowledge that the Purchased Assets and the transactions
contemplated hereby are unique, that a failure by Seller or Purchaser to
complete such transactions will cause irreparable injury to the other, and that
actual damages for any such failure may be difficult to ascertain and may be
inadequate. Consequently, Seller and Purchaser agree that each shall be
entitled, in the event of a default by the other, to specific performance of any
of the provisions of this Agreement in addition to any other legal or equitable
remedies to which the non-defaulting party may otherwise be entitled. In the
event
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any action is brought, the prevailing party shall be entitled to recover court
costs, arbitration expenses and reasonable attorneys' fees.
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.
The Purchaser and Seller shall bear equally the transfer taxes, recording fees
and similar costs imposed in connection with the transfer of the real property
assets included in the Purchased Assets.
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 or utility services 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.
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
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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: President
Fax: (000) 000-0000
If to the Seller:
Big City Radio, Inc.
c/o Metromedia Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (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 and
obligations to any of its direct or indirect wholly-owned subsidiaries, without
the requirement of consent of the Seller, so long as Hispanic Broadcasting
Corporation remains obligated for Purchaser's obligations hereunder, including
payment of the purchase price in accordance with Section 2.1, and so long as
such assignment does not delay the consummation of the transactions contemplated
by this Agreement. 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
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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 Arizona. Venue with respect to any
dispute or controversy shall be proper only in Phoenix, Arizona.
15.11 CERTAIN DEFINITIONS. Unless otherwise stated in this Agreement,
the following terms when used herein shall have the meanings assigned to them
below (such meanings to be equally applicable to both the singular and plural
forms of the terms defined).
"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.
"FCC LICENSES" shall mean the licenses, construction permits
or authorizations issued by or pending before the FCC that are described in the
FCC Application.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE EFFECT" shall
mean a material adverse effect on the Purchased Assets taken as a whole, but
shall specifically exclude any material adverse effect caused by (a) factors
affecting the radio industry generally or the market in which the Stations
operate, (b) general, national, regional or local economic or financial
conditions, (c) new governmental or legislative laws, rules or regulations, (d)
the failure to achieve any financial or operational targets, projections or
milestones set forth in any Seller business plan or budget, or (e) liquidity or
cash flow deficiencies affecting Seller's business, properties, assets,
liabilities, financial condition, results of operations, properties or
prospects.
"PERMITTED LIENS" means (a) liens for taxes not yet due and
payable; (b) landlord's liens and liens for property taxes not delinquent; (c)
statutory liens that were created in the ordinary course of business and which
are not delinquent; (d) restrictions or rights granted to governmental
authorities under applicable law to the extent not arising pursuant to any
defaults thereunder; (e) zoning, building, or similar restrictions relating to
or affecting property which do not arise in connection with a violation of
applicable law; (f) non-monetary liens on the Transmitter and Studio Sites that
do not materially affect the current use and enjoyment thereof in the operation
of the Stations or the value of such Transmitter and Studio Sites; (g) customary
utility and similar easements affecting property; and (h) liens and charges for
which a proration adjustment is made pursuant to Section 15.2 of this Agreement.
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.
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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.
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IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the date first above written.
HBC Phoenix, Inc.
By:
---------------------------------
HBC License Corporation
By:
---------------------------------
Big City Radio, Inc.
By:
---------------------------------
Big City Radio-Phoenix, L.L.C.
By:
---------------------------------
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