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EXHIBIT 2(b)
ASSET PURCHASE AGREEMENT
by and among
NEW WAVE BROADCASTING, L.P.
("Seller")
and
REGENT BROADCASTING OF EL PASO, INC.
and
REGENT LICENSEE OF EL PASO, INC.
(collectively, "Buyers")
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TABLE OF CONTENTS
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Page
ARTICLE I - PURCHASE OF ASSETS
1.1 Transfer of Assets ...................................1
1.2 Excluded Assets ......................................3
ARTICLE 2 ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Obligations ............................4
2.2 Retained Liabilities .................................4
ARTICLE 3 CONSIDERATION
3.1 Delivery of Consideration ............................5
3.2 Escrow Deposit .......................................5
3.3 Proration of Income and Expenses .....................6
3.4 Allocation of Purchase Price .........................6
3.5 Adjustment for Barter ................................7
3.6 Collection of Accounts Receivable ....................7
ARTICLE 4 CLOSING
4.1 Closing ..............................................8
ARTICLE 5 GOVERNMENTAL CONSENTS
5.1 FCC Consent ..........................................8
5.2 FCC Application ......................................9
5.3 Antitrust ............................................9
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS
6.1 Organization and Standing ............................9
6.2 Authorization and Binding Obligation .................9
6.3 Qualification As Assignee ............................9
6.4 Bankruptcy ..........................................10
6.5 Committed Sources of Financing ......................10
6.6 Absence of Conflicting Agreements or
Required Consents ...................................10
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6.7 Commissions or Finder's Fees ........................10
6.8 Litigation ..........................................10
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Organization and Standing ...........................11
7.2 Authorization and Binding Obligation ................11
7.3 Absence of Conflicting Agreements or
Required Consents ...................................11
7.4 Government Authorizations ...........................11
7.5 Compliance with FCC Regulations .....................12
7.6 Taxes .............................................13
7.7 Personal Property ...................................13
7.8 Real Property .......................................13
7.9 Contracts ...........................................14
7.10 Status of Contracts, etc. ...........................15
7.11 Environmental .......................................15
7.12 Intellectual Property ...............................15
7.13 Financial Statements ................................16
7.14 Personnel Information ...............................16
7.15 Litigation ..........................................17
7.16 Compliance With Laws ................................17
7.17 Employee Benefit Plans ..............................17
7.18 Commissions or Finder's Fees ........................17
7.19 Conduct of Business in Ordinary Course;
Adverse Changes ......................................18
7.20 Instruments of Conveyance; Good Title ...............18
7.21 Undisclosed Liabilities .............................18
7.22 Full Disclosure .....................................18
ARTICLE 8 COVENANTS OF BUYERS
8.1 Closing .............................................18
8.2 Notification ........................................19
8.3 No Inconsistent Action 19
ARTICLE 9 COVENANTS OF SELLER
9.1 Pre-Closing Covenants .................................19
9.2 Notification ..........................................21
9.3 No Inconsistent Action ................................21
9.4 Closing.................................................21
9.5 Other Items ...........................................21
9.6 Exclusivity ...........................................21
9.7 Extension of Tower Lease ..............................22
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ARTICLE 10 JOINT COVENANTS
10.1 Confidentiality .....................................22
10.2 Cooperation .........................................23
10.3 Control of Stations .................................23
10.4 Consents to Assignment ..............................23
10.5 Filings .............................................23
10.6 Bulk Sales Laws .....................................24
10.7 Employee Matters ....................................24
ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS
11.1 Representations, Warranties and
Covenants ...........................................24
11.2 Governmental Consents ...............................25
11.3 Governmental Authorizations .........................25
11.4 Adverse Proceedings .................................25
11.5 Third-Party Consents ................................25
11.6 Closing Documents ...................................25
11.7 Environmental Studies ...............................25
11.8 No Adverse Change ...................................26
11.9 Engineering Inspection ..............................26
ARTICLE 12 CONDITIONS OF CLOSING BY SELLER
12.1 Representations, Warranties and Covenants ...........27
12.2 Governmental Consents ...............................27
12.3 Adverse Proceedings .................................27
12.4 Closing Documents ...................................27
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES
13.1 Expenses ............................................28
13.2 Specific Charges ....................................28
ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Seller's Documents ..................................28
14.2 Buyers' Documents ...................................29
ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc ....................30
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15.2 Indemnification .....................................31
15.3 Procedures: Third Party and Direct
Indemnification Claims ..............................31
ARTICLE 16 TERMINATION RIGHTS
16.1 Termination .........................................32
16.2 Liability ...........................................33
16.3 Monetary Damages, Specific Performance
and Other Remedies ..................................33
16.4 Seller's Liquidated Damages .........................33
ARTICLE 17 MISCELLANEOUS PROVISIONS
17.1 Risk of Loss ........................................34
17.2 Certain Interpretive Matters and Definitions ........34
17.3 Further Assurances ..................................34
17.4 Preservation of Records .............................34
17.5 Benefit and Assignment ..............................35
17.6 Amendments ..........................................35
17.7 Headings ............................................35
17.8 Governing Law .......................................35
17.9 Notices .............................................35
17.10 Counterparts ........................................36
17.11 No Third Party Beneficiaries ........................36
17.12 Severability ........................................36
17.13 Entire Agreement ....................................36
17.14 Disclosure Exhibits and Schedules ....................36
17.15 Partnership Equity ...................................37
LIST OF SCHEDULES AND EXHIBITS
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Schedule 1.2.10 Excluded Assets
6.4 Third Party Consents
7.4 Stations Licenses, Etc.
7.7 Tangible Personal Property
7.8 Real Property
7.9 Contracts (including identification of Material
Contracts)
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Financial Statements
7.14 Personnel Information
7.15 Litigation
7.16 Compliance With Laws
7.17 Employee Benefit Plans
9.1 Leased Real Estate not Requiring Title Commitment
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Exhibit A Indemnification Escrow Agreement
B Deposit Escrow Agreement
C Assignment and Assumption Agreement
D Seller's Opinion of Counsel
E Seller's Opinion of FCC Counsel
F Non-Competition Agreement
G Buyers' Opinion of Counsel
H Form of Letter of Credit
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 13th day of September, 1999 by and among NEW WAVE BROADCASTING, L.P., a
Delaware limited partnership ("Seller") and REGENT BROADCASTING OF EL PASO,
INC., a Delaware corporation ("RBI"), and REGENT LICENSEE OF EL PASO, INC., a
Delaware corporation ("RLI") (RBI and RLI collectively referred to as "Buyers").
RECITALS
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WHEREAS, Seller owns and operates radio stations KLAQ-FM, KSII-FM, and
KROD-AM, licensed to El Paso, Texas (together the "Stations" and each
individually, a "Station"), pursuant to licenses issued by the Federal
Communications Commission ("FCC"), and
WHEREAS, Seller desires to sell, and Buyers desire to purchase, certain
assets and assume certain obligations associated with the ownership and
operation of the Stations, all on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
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1.1 TRANSFER OF ASSETS. On the terms and subject to the conditions
hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined),
Seller shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall
purchase, and RBI shall assume from Seller, all of the right, title and interest
of Seller in and to all of the assets, properties, interests and rights of
Seller of whatsoever kind and nature, real and personal, tangible and
intangible, owned or leased (to the extent of Seller's leasehold interest) by
Seller as the case may be, wherever situated, which are used or useful in the
operation of the Stations (the "Stations Assets"), including but not limited to
all of Seller's right, title and interest in and to the assets, properties,
interests and rights described in this Section 1. 1:
1.1.1 all licenses, permits and other authorizations issued to
Seller by any governmental or regulatory authority including without limitation
those issued by the FCC (the licenses, permits and authorizations issued by the
FCC are hereafter referred to as the "Stations Licenses") used or held for use
in connection with the operation of the Stations, including but not limited to
those described in SCHEDULE 7.4, along with renewals or modifications of such
items, and all applications pertaining thereto, between the date hereof and the
Closing Date;
1.1.2 all equipment, electrical devices, broadcast towers,
antennae, cables, tools, hardware, office furniture and fixtures, office
materials and supplies, inventory, motor vehicles, spare parts and all other
tangible personal property of every kind and description, and Seller's rights
therein, owned, leased (to the extent of Seller's leasehold interest) or held by
Seller and
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used or held for use in connection with the operations of the
Stations, including but not limited to those items described or listed in
SCHEDULE 7.7, together with any replacements thereof and additions thereto, made
between the date hereof and the Closing Date, and less any retirements or
dispositions thereof made between the date hereof and the Closing Date in the
ordinary course of business and consistent with past practices of Seller;
provided, however, Seller agrees that the value of all such assets retired or
disposed of and not replaced with an asset of like kind and quality shall not
exceed $25,000 in the aggregate unless Seller has obtained the prior written
approval of RBI which shall not be unreasonably withheld;
1.1.3 all contracts, agreements, leases and legally binding
contractual rights of any kind, written or oral, relating to the operation of
the Stations and which are listed in SCHEDULE 7.8 and SCHEDULE 7.9, together
with (a) all advertising contracts entered into or acquired by Seller between
the date hereof and the Closing Date in the ordinary course of business,
consistent with past practices of Seller; and (b) any other contracts,
agreements, leases and legally binding contractual rights entered into or
acquired by Seller between the date hereof and the Closing Date, which RBI
specifically agrees at Closing to assume (collectively the "Contracts");
provided, however, Buyers shall be entitled to a credit against the Purchase
Price for the amount, if any, by which the aggregate net value of the Stations'
Barter Payable as of the Closing Date exceeds the aggregate net value of the
Stations' Barter Receivable as of the Closing Date by more than $20,000.
1.1.4 all of Seller's rights in and to the call letters of the
Stations, and any variation thereof, as well as all of Seller's rights in and to
all trademarks, trade names, service marks, franchises, copyrights, including
registrations and applications for registration of any of them, computer
software, programs and programming material of whatever form or nature, jingles,
slogans, the Stations' logos and all other logos or licenses to use same and all
other intangible property rights of Seller, which are used or held for use in
connection with the operation of the Stations, including but not limited to
those listed in SCHEDULE 7.12 (collectively, the "Intellectual Property")
together with any associated goodwill and any additions thereto between the date
hereof and the Closing Date;
1.1.5 all programming materials and elements of whatever form
or nature owned by Seller, whether recorded on tape or other medium or intended
for live performance, and all copyrights owned by or licensed to Seller that are
used or useful in connection with the operation of the Stations, including all
such programs, materials, elements and copyrights acquired by Seller between the
date hereof and the Closing Date;
1.1.6 all of Seller's rights in and to all the files,
documents, records, and books of account relating to the operation of the
Stations or to the Stations Assets, including, without limitation, the Stations'
local public files, programming information and studies, blueprints, technical
information and engineering data, news and advertising studies or consulting
reports, marketing and demographic data, sales correspondence, lists of
advertisers, promotional materials, credit and sales reports and copies of
filings with the FCC and all written Contracts to be assigned hereunder, logs,
software programs and copies of books and records relating to employees,
financial, accounting and operation matters, but excluding records relating
solely to any Excluded Asset (as hereinafter defined);
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1.1.7 all of Seller's rights under manufacturers' and vendors'
warranties relating to items included in the Stations Assets and all similar
rights against third parties relating to items included in the Stations Assets;
and
1.1.8 the real property and fixtures thereon described in
Section 7.8 (including all real property owned or in the process of being
acquired by Seller).
The Stations Assets shall be transferred to RBI (except for the
Stations' Licenses which shall be transferred to RLI) free and clear of all
debts, security interests, mortgages, trusts, claims, pledges or other liens,
liabilities, encumbrances or rights of third parties whatsoever
("Encumbrances"), except for Permitted Encumbrances, if any, as provided for in
Section 7.8.2 and except as set forth in SCHEDULE 7.7. and SCHEDULE 7.8.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
herein, it is expressly understood and agreed that the Stations Assets shall not
include the following assets along with all rights, title and interest therein
(the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Seller on hand and/or
in banks, including without limitation certificates of deposit, commercial
paper, treasury bills, marketable securities, notes or other entitlements
evidencing loan receivables, asset or money market accounts and all such similar
accounts or investments;
1.2.2 all investment securities and accounts receivable, notes
receivable, or other entitlements evidencing notes receivables for services
performed by Seller in connection with the operation of the Stations prior to
the Closing Date;
1.2.3 subject to the limitation set forth in Section 1.1.2 of
this Agreement, all tangible and intangible personal property of Seller disposed
of or consumed in the ordinary course of business consistent with the past
practices of Seller between the date of this Agreement and the Closing Date;
1.2.4 all Contracts that have terminated or expired prior to
the Closing Date in the ordinary course of business consistent with the past
practices of Seller and any contract not listed on SCHEDULE 7.8 or 7.9 unless
RBI agrees, in writing, to assume such contract;
1.2.5 Seller's partnership minute books and records, and such
other books and records as pertain to the organization, existence or
capitalization of Seller and duplicate copies of such records as are necessary
to enable Seller to file its tax returns and reports, as well as any other
records or materials relating to Seller generally and not involving or relating
to the Stations Assets or the operation or operations of the Stations;
1.2.6 contracts of insurance, and any insurance proceeds or
claims made by, Seller relating to property or equipment repaired, replaced or
restored by Seller prior to the Closing Date;
1.2.7 all pension, profit sharing or cash or deferred (Section
401 (k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Seller;
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1.2.8 any and all claims of Seller for tax refunds;
1.2.9 Seller's partnership name and the right to the name "New
Wave" or any variant of the foregoing; and
1.2.10 any right, property or asset described in SCHEDULE
1.2.10 (including without limitation any assets personally owned by the general
partner or employees of Seller and listed on said Schedule).
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
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2.1 ASSUMPTION OF OBLIGATIONS. Subject to the provisions of this Section
2.1, Section 2.2 and Section 3.3, on the Closing Date, RBI shall assume the
obligations of Seller arising or to be performed on and after the Closing Date
(except to the extent such obligations represent liabilities for activities,
events or transactions occurring, or conditions existing, on or prior to the
Closing Date) under: (a) the Contracts; (b) COBRA for employees of Seller at the
Stations who are not hired by RBI if Seller terminates its existing medical
policy within ninety (90) days after the Closing Date; and (c) all property
taxes and other governmental charges on the Stations Assets. All of the
foregoing liabilities and obligations shall be referred to herein collectively
as the "Assumed Liabilities."
2.2 RETAINED LIABILITIES. Notwithstanding anything contained in this
Agreement to the contrary, Buyers expressly do not, and shall not, assume or
agree to pay, satisfy, discharge or perform and will not be deemed by virtue of
the execution and delivery of this Agreement or any agreement, instrument or
document delivered pursuant to or in connection with this Agreement or otherwise
by reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Seller of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed to Buyer, other than as to RBI the
Assumed Liabilities. Seller will retain and pay, satisfy, discharge and perform
in accordance with the terms thereof, all liabilities and obligations of the
Seller, other than the Assumed Liabilities, including but not limited to, the
obligation to assume, perform, satisfy or pay any liability, obligation,
agreement, debt, charge, claim, judgment or expense incurred by or asserted
against Seller related to taxes, environmental matters, pension or retirement
plans or trusts, profit-sharing plans, employment contracts, employee benefits,
severance of employees, product liability or warranty, negligence, contract
breach or default, or other obligations, claims or judgments asserted against
Buyers as successor in interest to Seller. All of such liabilities, obligations
and commitments of Seller described in this Section 2.2 shall be referred to
herein collectively as the "Retained Liabilities."
ARTICLE 3
CONSIDERATION
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3.1 DELIVERY OF CONSIDERATION. In consideration for the sale of the
Stations Assets to Buyers, in addition to the assumption of certain obligations
of Seller pursuant to Section 2.1 above, Buyers shall, at the Closing (as
hereinafter defined), deliver to Seller consideration in the amount of
$23,500,000.00, subject to adjustment pursuant to the provisions of Sections 3.2
and 3.3 below (the "Purchase Price") in cash by wire transfer. Notwithstanding
the foregoing, the parties agree that at the Closing, Buyers, Seller and Star
Media Group, Inc., as Escrow Agent (the "Indemnification Escrow Agent"), shall
enter into an Indemnification Escrow Agreement in the form of EXHIBIT A hereto
(the "Indemnification Escrow Agreement") pursuant to which Seller shall deposit
with the Indemnification Escrow Agent $250,000.00, which funds shall be held in
escrow for a period of up to twenty-four (24) months following the Closing Date
and will be used to satisfy indemnification claims of Buyers pursuant to Section
15.2.1 hereof, and which funds shall otherwise be administered and released as
specifically provided for in the Indemnification Escrow Agreement. Pursuant to
the Indemnification Escrow Agreement, (a) at the end of 14 months after the
Closing Date and provided Seller then has a "Partnership Equity" (as calculated
in accordance with Section 17.15) of at least $2,000,000, as confirmed by a
certificate delivered to Buyers and the Indemnification Escrow Agreement showing
the calculation thereof, $125,000.00 of the Indemnification Escrow, together
with the earnings thereon less the amount of any then unresolved pending claims
by the Buyers shall be released from the Escrow and paid to Seller; and (b) on
the second anniversary of the Closing Date, the balance of the Indemnification
Escrow together with earnings thereon less the amount of any then unresolved
pending claims by Buyer shall be released from the Escrow and paid to the
Seller.
3.2 ESCROW DEPOSIT. (a) Within ten business days of the execution and
delivery of this Agreement, Buyers, Seller and Star Media Group, Inc., as Escrow
Agent (the "Deposit Escrow Agent"), shall enter into a Deposit Escrow Agreement
in the form of EXHIBIT B hereto (the "Deposit Escrow Agreement") pursuant to
which Buyers shall deposit the amount described below as a deposit on the amount
of the Purchase Price. Such amounts held in escrow shall be applied as set forth
herein and in the Deposit Escrow Agreement.
(b) Pursuant to the terms of the Deposit Escrow Agreement,
Buyers shall wire transfer $1,500,000.00, or alternatively, deliver an
irrevocable, stand-by letter of credit for such amount in substantially the form
attached as Exhibit H to an escrow account established pursuant to the Deposit
Escrow Agreement (the "Escrow Deposit"). At the Closing, the Escrow Deposit, if
in the form of cash, shall be applied to the Purchase Price to be paid to Seller
and the interest accrued thereon shall be paid to Buyers, or if in the form of a
letter of credit, shall be returned to Buyers. As more fully described in the
Deposit Escrow Agreement: (a) in the event this Agreement is terminated solely
because of Buyers' material breach of this Agreement and all other conditions to
Closing are at such time satisfied or waived (other than such conditions as can
reasonably be expected to be satisfied by the Closing), the Escrow Deposit shall
be paid to or delivered for draw thereon to Seller as liquidated damages as
provided in Section 16.4 hereto for Buyers' material breach of this Agreement
(the payment of such sum to Seller shall discharge any liability Buyers may have
to Seller), and the interest accrued on the Escrow Deposit, if any, shall be
paid to Seller; and (b) in the event this Agreement is terminated under any
circumstances other than those set forth in the immediately preceding clause
(a), the Escrow Deposit and any interest accrued thereon shall be paid or
returned to Buyers.
3.3 PRORATION OF INCOME AND EXPENSES.
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3.3.1 Except as otherwise provided herein, all items of income
and expense, deposits, reserves and prepaid and deferred income and expenses
relating to the Stations Assets or the Assumed Liabilities and arising from the
conduct of the business and operations of the Stations shall be prorated between
Buyers and Seller in accordance with generally accepted accounting principles as
of 11:59 p.m. local time, on the date immediately preceding the Closing Date.
Such prorations shall include, without limitation, all ad valorem, real estate,
property taxes and other governmental charges on the Stations Assets (but
excluding taxes arising by reason of the transfer of the Stations Assets as
contemplated hereby which shall be paid as set forth in Section 13.2), business
and license fees, frequency discounts, music and other license fees (including
any retroactive adjustments thereof, which retroactive adjustments shall not be
subject to the ninety-day limitation set forth in Section 3.3.2), utility
expenses, wages, salaries, vacation and sick pay and other employee benefits for
employees hired by RBI, amounts due or to become due under Contracts, any
negative barter balance in excess of $20,000, rents and similar prepaid and
deferred items.
3.3.2 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 3.3, to the extent practicable, shall
be made on the Closing Date. As to those prorations and adjustments not capable
of being ascertained on the Closing Date, an adjustment and proration shall be
made within ninety (90) calendar days after the Closing Date.
3.3.3 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 3.3.2 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by Seller and
one-half by Buyers.
3.4 ALLOCATION OF PURCHASE PRICE. Seller and Buyers have agreed to
allocate $5,000 of the Purchase Price to the Non-Competition Agreement. The
parties shall in good faith attempt to agree prior to Closing upon an allocation
of the balance of the Purchase Price among the Stations Assets. If the parties
are unable to agree, such allocation shall be based upon an appraisal prepared
by an appraiser mutually selected by Buyers and Seller, and such appraisal and
allocation shall be completed as soon after Closing as reasonably possible.
Seller and Buyers agree to use the agreed upon allocation, if any, for all tax
purposes, including without limitation, those matters subject to Section 1060 of
the Internal Revenue Code of 1986, as amended.
3.5 ADJUSTMENT FOR BARTER. As of the Closing Date, Buyers shall be
entitled to a credit against the Purchase Price for the amount, if any, by which
the aggregate net value of the Stations' Barter Payable (as defined below) as of
the Closing Date exceeds the aggregate net value of the Stations' Barter
Receivable (as defined below) as of the Closing Date by more than $20,000.00
with respect to Contracts for the sale of advertising in exchange, in whole or
in part, for merchandise or services ("Trade Agreements").
"Barter Payable" means the aggregate value of time owed pursuant to
each of the Trade Agreements. "Barter Receivable" means the aggregate value of
goods and services to be received pursuant to each of the Trade Agreements.
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3.6 COLLECTION OF ACCOUNTS RECEIVABLE. The accounts receivable of
Seller are not included among the Stations Assets. Nevertheless, at Closing,
Seller shall supply RBI with a list of Seller's accounts receivable as of the
Closing Date (the "Accounts"), and RBI shall use the same diligence it uses to
collect its own accounts in the ordinary course of business to collect the
Accounts on Seller's behalf for a period of 120 days from the Closing Date (the
"Collection Period"). This obligation, however, shall not extend to the
institution of litigation, employment of counsel, or any other extraordinary
means of collection. During the Collection Period, Seller shall not solicit any
monies from a local account debtor who, after Closing, continues to do business
with the Stations, provided that during such period Seller may act to preserve
its rights against a bankrupt debtor or commence suit or otherwise take action
against any debtor that disputes the amount of, or liability for, an Account. If
Seller receives a payment from an account debtor during the Collection Period,
it shall so notify RBI. RBI may endorse and deposit in its own name and collect
any and all checks and other instruments for the payment of money that RBI may
receive in payment of Accounts. RBI shall receive no remuneration for its
services and shall not be liable for non-collection, or failure of any such
collection, except due to its own gross negligence or intentional misconduct.
Upon termination of its duties hereunder, RBI shall deliver to Seller all of its
correspondence and files concerning the collection of the Accounts and all
reports of attempts to collect the same. Except as otherwise provided herein,
amounts collected by RBI during any month during the Collection Period on
account of Seller's Accounts shall be remitted in full to Seller by the tenth
(10th) day of the following month. Buyer shall deliver to Seller an accounting
showing the amount it received during each monthly period on each account. If
both Seller and RBI are entitled to accounts receivable from the same account
debtor, all payments received during the Collection Period shall be first
applied to Seller's Accounts from such account debtor until the same are paid in
full, unless such account debtor has disputed such account receivable in writing
to the Seller, in which event RBI shall be entitled to apply the payment made by
the account debtor to RBI's account receivable. If during the Collection Period
an account debtor disputes an amount, Seller may request the reassignment of the
Account and proceed against that account debtor. At the conclusion of the
Collection Period and after remittance of all amounts collected, RBI will
thereafter have no further responsibility with respect to the collection of the
Accounts, and RBI may apply all collections received by RBI from any Account
party who continues business with RBI to obligations owing to RBI, except for
any payment received by RBI which such Account party specifies is for amounts
owed to Seller, in which event such specified amounts shall be paid over to
Seller. RBI shall not have the right to compromise, settle or adjust the amounts
of any one of the Accounts without Seller's prior written consent. Seller shall
promptly pay all sales commissions relating to all of its accounts receivable
whenever Seller receives payment thereon; provided, however, RBI may do so on
Seller's behalf for employees who are hired by RBI and pay the net commission to
Seller. Notwithstanding anything contained herein to the contrary, RBI shall
submit to Seller a detailed description of the calculation of commissions and
any dispute with respect thereto shall be settled in accordance with the
procedures set forth in Section 3.3. If RBI fails to timely pay any amounts due
hereunder, then RBI shall pay Seller interest calculated at the rate of ten
percent (10%) per annum on such past due amount.
ARTICLE 4
CLOSING
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4.1 CLOSING. Except as otherwise mutually agreed upon by Buyers and
Seller, the consummation of the transactions contemplated herein (the "Closing")
shall occur within ten (10) business days after the later to occur of (a) the
satisfaction or waiver of each condition to closing contained herein, other than
such conditions as are reasonably anticipated to be satisfied at Closing
(provided that each party hereto shall use its reasonable best efforts to cause
each condition to closing to be satisfied so that the Closing may occur at the
earliest possible date), (b) the issuance of the Final Order (as defined below);
or (c) such other date as may be mutually agreed by the parties hereto (the
"Closing Date"); provided, however, that Buyers may in their sole discretion
waive the requirement that a Final Order be issued and elect (subject to clause
(a) above) to close at any time (upon not less than ten (10) business days'
notice to Seller) after the release of a public notice of initial FCC approval
consenting to the transaction contemplated hereby (the "Initial Approval"). For
purposes of this Agreement, "Final Order" means an order or grant by the FCC
which is no longer subject to reconsideration or review by the FCC or a court of
competent jurisdiction and pursuant to which the FCC consents to the assignments
of the FCC Licenses contemplated by this Agreement, such order or grant being
without the imposition of any conditions not imposed upon the radio broadcast
industry generally adverse to Buyers or any Affiliate (as hereinafter defined)
of Buyers with respect to the assignment of the FCC Licenses to RLI or the
continued operation by Buyers of the Stations or the Stations Assets. In the
event that the parties close before the Initial Approval has become a Final
Order, the parties shall enter into a mutually acceptable Unwind Agreement. The
Closing shall be held in the offices of Strauss & Troy, The Federal Reserve
Building, 150 East Fourth Street, Cincinnati, Ohio, or at such place and in such
manner as the parties hereto may agree.
ARTICLE 5
GOVERNMENTAL CONSENTS
---------------------
5.1 FCC CONSENT. It is specifically understood and agreed by Buyers and
Seller that the Closing and the assignment of the Stations Licenses and the
transfer of the Stations Assets are expressly conditioned on and are subject to
the prior consent and approval of the FCC without the imposition of any
conditions not imposed upon the radio broadcast industry generally adverse to
Buyers or any Affiliate of Buyers (the "FCC Consent").
5.2 FCC APPLICATION. Within seven (7) business days after the execution
of this Agreement, Buyers and Seller shall file an application with the FCC for
the FCC Consent (the "FCC Application"). Buyers and Seller shall prosecute the
FCC Application with all reasonable diligence and otherwise use their best
efforts to obtain the FCC Consent as expeditiously as practicable (but neither
Buyers nor Seller shall have any obligation to satisfy complainants or the FCC
by taking any steps which would have a material adverse effect upon Buyers or
Seller or upon any of their respective Affiliates). If the FCC Consent imposes
any condition on Buyers or Seller or any of their respective Affiliates, such
party shall use its best efforts to comply with such condition; provided,
however, that neither Buyers nor Seller shall be required hereunder to comply
with any condition that would have a material adverse effect upon it or any of
its Affiliates. If reconsideration or judicial review is sought with respect to
the FCC Consent, the party affected shall vigorously oppose such efforts for
reconsideration or judicial review; provided, however, that nothing herein shall
be construed to limit either party's right to terminate this Agreement pursuant
to Article 16 hereof.
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5.3 ANTITRUST. Seller and Buyers shall cooperate in preparing and
filing any necessary notification and report forms and related material that may
be required to be filed with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and each will use its best efforts to obtain
an early termination of the applicable waiting period and will make any further
filings pursuant thereto that may be necessary, proper or advisable.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYERS
----------------------------------------
Buyers hereby make the following representations and warranties to
Seller, each of which is true and correct on the date hereof, shall survive the
Closing and shall be unaffected by any investigation heretofore or hereafter
made by Seller:
6.1 ORGANIZATION AND STANDING. Buyers are corporations duly organized
validly existing and in good standing under the laws of the State of Delaware,
and by the Closing Date will be authorized to conduct business within the State
of Texas.
6.2 AUTHORIZATION AND BINDING OBLIGATIONS. Buyers have all necessary
corporate power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and to own or lease the Stations Assets and to
carry on the business of the Stations upon the consummation of the transactions
contemplated by this Agreement. Buyers' execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary action on their part and, assuming the due
authorization, execution and delivery of this Agreement by Seller, this
Agreement will constitute the legal, valid and binding obligation of Buyers,
enforceable against them in accordance with its terms, except as limited by laws
affecting creditors' rights or equitable principles generally.
6.3 QUALIFICATION AS ASSIGNEE. To the best of Buyers' knowledge, RLI is
qualified under the Communications Act of 1934, as amended, and the rules,
regulations and policies promulgated thereunder to obtain FCC approval of the
FCC Application and serve as the licensee of the Stations, and Buyers have no
knowledge of any material reason, fact, allegation or claim not stated herein
which may impair RLI's qualifications and know of no reason why the FCC would
not approve the FCC Application. Between the date hereof and the Closing, Buyers
will take no action knowingly that would substantially delay FCC approval or
make RLI not qualified to be the licensee of the Station.
6.4 BANKRUPTCY. No insolvency proceedings of any character, including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, against Buyers or any of
their Affiliates are pending or threatened, and neither Buyers nor any of their
Affiliates have made any assignment for the benefit of creditors or taken any
action in contemplation of or which would constitute the basis for the
institution of such insolvency proceedings.
6.5 COMMITTED SOURCES OF FINANCING. Buyers have funds available from
committed sources of financing, subject to customary closing conditions,
sufficient to consummate the transaction contemplated by this Agreement.
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6.6 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 hereof with respect to governmental consents or on
SCHEDULE 6.4, the execution, delivery and performance of this Agreement by
Buyers: (a) do not conflict with the provisions of the articles of incorporation
or by-laws of Buyers; (b) do not require the consent of any third party; (c)
will not violate any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which either Buyer is a
party; and (d) will not, either alone or with the giving of notice or the
passage of time, or both, conflict with, constitute grounds for termination of
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any agreement, instrument, license or permit to which either
Buyer is now subject.
6.7 COMMISSIONS OR FINDER'S FEES. Neither Buyers nor any person or
entity acting on behalf of Buyers has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity.
6.8 LITIGATION. Buyers are not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree prohibiting the consummation of
the transactions contemplated by this Agreement, and there are no suits, legal
proceedings or investigations of any nature pending, or to the best knowledge of
Buyers, threatened against or affecting Buyers that would affect Buyers' ability
to carry out the transactions contemplated by this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyers,
each of which is true and correct on the date hereof, shall survive the Closing
and shall be unaffected by any investigation heretofore or hereafter made by
Buyers:
7.1 ORGANIZATION AND STANDING. Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller is authorized to conduct business within the State of Texas,
and has the requisite power and authority to own, lease and operate the Stations
Assets owned or leased by it and to carry on the business of the Stations as now
being conducted by it and as proposed to be conducted by it between the date
hereof and the Closing Date.
7.2 AUTHORIZATION AND BINDING OBLIGATION. Seller has the power and
authority, and has taken all necessary and proper action to enter into and
perform this Agreement and to consummate the actions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery of this Agreement by
Buyers, constitutes the legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as limited by laws
affecting the enforcement of creditors' rights or equitable principles
generally.
7.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 with respect to governmental consents and in SCHEDULE 7.9
with respect to consents required in connection with the assignment of certain
Contracts, the execution, delivery and
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performance of this Agreement by Seller: (a) do not require the consent of any
third party (including, without limitation, the consent of any governmental,
regulatory, administrative or similar authority); (b) will not conflict with,
result in a breach of, or constitute a violation of or default under, the
provisions of Seller's partnership agreement (or other organizational
documents), or any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which Seller is a party or
by which Seller or any of the Stations Assets are bound; (c) will not either
alone or with the giving of notice or the passage of time, or both, conflict
with, constitute grounds for termination of or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any Contract,
agreement, instrument, license or permit to which Seller or any of the Stations
Assets is now subject; and (d) will not result in the creation of any lien,
charge or encumbrance on any of the Stations Assets.
7.4 GOVERNMENT AUTHORIZATIONS.
7.4.1 Except as stated therein, SCHEDULE 7.4 hereto contains a
true and complete list of the Stations Licenses and other licenses, permits or
other authorizations from governmental and regulatory authorities which are
required for the lawful conduct of the business and operations of the Stations
in the manner and to the full extent they are presently conducted (including,
without limitation, auxiliary licenses associated with each Station). Seller has
delivered to Buyers true and complete copies of the Stations Licenses and the
other licenses, permits and authorizations listed in SCHEDULE 7.4, including any
and all amendments and other modifications thereto.
7.4.2 Seller is the authorized legal holder of the Stations
Licenses and other licenses, permits and authorizations listed in SCHEDULE 7.4.
Except as set forth SCHEDULE 7.4, none of the Stations Licenses and other
licenses, permits and authorizations listed in SCHEDULE 7.4 is subject to any
restrictions or conditions which would limit the full operation of the Stations.
7.4.3 Except as set forth in SCHEDULE 7.4, and except for
matters affecting the radio broadcast industry generally, there are no
applications, complaints, petitions or proceedings pending or, to the best of
Seller's knowledge, threatened as of the date hereof before the FCC or any other
governmental or regulatory authority relating to the business or operations of
the Stations. Except as set forth in SCHEDULE 7.4, the Stations Licenses and the
other licenses, permits and authorizations listed in SCHEDULE 7.4 are in good
standing, are in full force and effect and are unimpaired by any act or omission
of Seller or its partners, managers, officers, or employees. Except as set forth
in SCHEDULE 7.4, the operations of the Stations are in accordance with the
Stations Licenses and the underlying construction permits and the other
licenses, permits and authorizations listed in SCHEDULE 7.4. No proceedings are
pending or, to the best of Seller's knowledge, threatened, and to the best of
Seller's knowledge there has not been any act or omission of Seller or any of
its partners (limited or general), agents, representatives, or employees, which
may result in the revocation, modification, non-renewal or suspension of any of
the Stations Licenses or the other licenses, permits and authorizations listed
in SCHEDULE 7.4, the denial of any pending applications, the issuance of any
cease and desist order, the imposition of any administrative actions by the FCC
or any other governmental or regulatory authority with respect to the Stations
Licenses or the other licenses, permits and authorizations listed in SCHEDULE
7.4 or which may affect Buyers' ability to continue to operate the Stations as
they are currently operated.
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7.4.4 Except as set forth in SCHEDULE 7.4, each Station is
operating with the maximum power and facilities specified in the respective
Station License.
7.4.5 None of the Stations is causing objectionable
interference to the transmissions of any other broadcast station or
communications facility nor has any of the Stations received any complaints with
respect thereto, and no other broadcast station or communications facility is
causing objectionable interference to respective transmissions of any Station or
the public's reception of such transmissions.
7.4.6 Seller has no reason to believe that the Stations
Licenses and the other licenses, permits, or authorizations listed in SCHEDULE
7.4 will not be renewed in their ordinary course.
7.4.7 Subject only to insignificant omissions, all reports,
forms, and statements required to be filed by Seller with the FCC with respect
to the Stations since the grant of the last renewal of the Stations Licenses
have been filed and are substantially complete and accurate.
7.4.8 The operation of the Stations and all of the Stations
Assets are in compliance in all respects with ANSI Radiation Standards
C95.1-1992.
7.5 COMPLIANCE WITH FCC REGULATIONS. Except as specified in SCHEDULE 7.4,
the operation of the Stations and all of the Stations Assets are in compliance
in all respects with: (a) all applicable engineering standards required to be
met under applicable FCC rules, including, but not limited to, all applicable
painting and lighting requirements of the FCC and the Federal Aviation
Administration to the extent required to be met under applicable FCC rules and
regulations, and (b) all other applicable federal, state and local rules,
regulations, requirements and policies (except where the failure to comply is
immaterial and will be of no meaningful or monetary consequence to Buyers or to
the operation of any of the Stations by Buyers after the Closing Date),
including, but not limited to, equal employment opportunity policies of the FCC,
and to the best of Seller's knowledge, there are no filed claims to the
contrary.
7.6 TAXES. Seller has filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and other tax returns
required by law to be filed by it, and has paid in full all taxes, estimated
taxes, interest, assessments, and penalties due and payable by it. All returns
and forms which have been filed have been true and correct in all material
respects and no tax or other payment in an amount other than as shown on such
returns and forms is required to be paid by Seller and has not been paid by
Seller. There are no present disputes as to taxes of any nature payable by
Seller which in any event could adversely affect any of the Stations Assets or
the operation of the Stations by Buyers. Seller has not been advised that any of
its tax returns, federal, state, local or foreign, have been or are being
audited. Seller does not and will not in the future have any liability, fixed or
contingent, for any unpaid federal, state or local taxes or other governmental
or regulatory charges whatsoever (including without limitation withholding and
payroll taxes) which could result in a lien on the Stations Assets after
conveyance thereof to Buyers or in any other form of transferee liability to
Buyers.
7.7 PERSONAL PROPERTY. Without material omission, SCHEDULE 7.7 hereto
contains a list of all items of tangible personal property owned by Seller and
used or held for use in the conduct
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of the business and operations of the Stations other than the Excluded Assets.
SCHEDULE 7.7 also separately lists any material tangible personal property
leased by Seller pursuant to leases included within the Contracts. Except as
disclosed in SCHEDULE 7.7, Seller has, and following the Closing, RBI will have,
good and marketable title to all of the items of tangible personal property
which are included in the Stations Assets (other than those subject to lease)
and none of such Stations Assets is, or at the Closing will be, subject to any
security interest, mortgage, pledge, lease, license, lien, encumbrance, title
defect or other charge, except for liens for taxes not yet due and payable, and
except for the Assumed Liabilities. The properties listed in SCHEDULE 7.7, along
with those properties subject to lease and included among the Contracts,
constitute all material tangible personal property necessary to operate the
Stations as the same are now being operated. Except as set forth in SCHEDULE
7.7, all items of tangible personal property included in the Stations Assets are
in good and technically sound operating condition and repair (ordinary wear and
tear excepted), are free from all material defect and damage, and have been
properly maintained in a manner consistent with generally accepted standards of
good engineering practice.
7.8 REAL PROPERTY.
7.8.1 SCHEDULE 7.8 hereto contains a complete and accurate
list and description of all real property (including without limitation, real
property relating to the towers, transmitters, studio sites and offices of the
Stations) used or contemplated for use by Seller in connection with the
operations of the Stations, identifying thereon the real property that is owned
by Seller (the "Owned Real Estate") or leased by Seller (the "Leased Real
Estate") (collectively, the "Real Estate").
7.8.2 Seller has, and by the Closing Date will have, good and
marketable title in fee simple to all of the Owned Real Estate, free and clear
of all liens, mortgages, security interests, charges and encumbrances, except
for (i) liens for taxes and other governmental charges which are not yet due and
payable, and (ii) restrictions and easements of record common for properties of
such nature which do not, and are unlikely to, detract from the existing or
future use of the property affected or affect the marketability of the same
("Permitted Encumbrances") and except for such liens described in SCHEDULE 7.8.
7.8.3 Seller enjoys quiet possession of all Owned and Leased
Real Estate. There are no present disputes or claims with respect to offsets or
defenses by any party against the other under any of the Contracts relating to
the Leased Real Estate. Except as stated in SCHEDULES 7.8 AND 7.9, Seller has
delivered to Buyers true and complete copies of all Contracts relating to the
Real Estate. Except as set forth in SCHEDULE 7.9 hereto, the assignment of the
Contracts relating to the Leased Real Estate to RBI will not permit the other
party to accelerate the rent, cause the terms thereof to be renegotiated or
constitute a default thereunder, and will not require the consent of any such
party to the assignment thereof to RBI.
7.8.4 Seller has full legal and practical access to all of the
Owned and Leased Real Estate. The Owned Real Estate includes all the real
property, easements, rights of way, and other real property interests necessary
to conduct the business and operations of the Stations as they are now
conducted. Except as described in SCHEDULE 7.8, none of the buildings,
structures, improvements or fixtures constructed on any Owned Real Estate in
connection with the operation of the Stations, including, but not limited to,
all towers, guy wires and guy anchors and ground
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radials, encroach upon adjoining real property, and all such buildings,
structures, improvements and fixtures are constructed and are operated and used
in conformance with all "set back" lines, easements, covenants, restrictions and
all applicable building, fire, zoning, health and safety laws and codes. No
utility lines serving the Owned Real Estate pass over the lands of a third party
except where appropriate easements have been obtained. Except as described in
SCHEDULE 7.8, all buildings, structures, towers, antennae, improvements and
fixtures situated on the Real Estate and owned by Seller are in good and
technically sound operating condition, ordinary wear and tear excepted, have no
latent structural, mechanical or other defects of material significance, and
each has adequate rights of ingress and egress, utility service for water and
sewer, telephone, electric and/or gas, and sanitary service for the conduct of
the business and operations of the Stations as presently conducted. There is no
pending or, to the best knowledge of Seller, threatened condemnation or other
legal proceeding or action of any kind relating to the Real Estate.
7.9 CONTRACTS. SCHEDULE 7.9 lists all Contracts to which Seller is a
party, or which are binding on Seller, as of the date of this Agreement, other
than time sales for cash entered into in the ordinary course of business. Those
Contracts listed on SCHEDULE 7.9, if any, requiring the consent of a third party
to assignment are identified by an asterisk in the left margin of SCHEDULE 7.9.
Those Contracts, if any, that Seller and Buyers have agreed are material to the
operation of the Stations Assets and the valid assignment of which and receipt
by Buyers of consents thereto (along with appropriate estoppel certificates for
the leases related to the Leased Real Estate) is a condition to the consummation
of the transactions contemplated hereby (the "Material Contracts") are
identified by an "M" in the left margin of SCHEDULE 7.9.
7.10 STATUS OF CONTRACTS, ETC. Seller has delivered to Buyers true and
complete copies of all written Contracts and true and complete memoranda of all
oral Contracts, including any and all amendments and other modifications
thereto. All of the Contracts are in full force and effect and are valid,
binding and enforceable in accordance with their respective terms, except as
limited by laws affecting creditors' rights or equitable principles generally.
Seller has complied in all respects with all Contracts and is not in default
beyond any applicable grace periods under any thereof and, to the best of
Seller's knowledge, no other contracting party is in default under any thereof.
All advertising time committed under Trade Agreements is preemptible for cash
sales and none is subject to any fixed position.
7.11 ENVIRONMENTAL. Except as set forth in SCHEDULE 7.11, to the best
of Seller's knowledge Seller has complied with all federal, state and local
environmental laws, rules and regulations as in effect on the date hereof
applicable to each of the Stations and its operations, including but not limited
to the FCC's guidelines regarding RF radiation. Except as set forth on SCHEDULE
7.11, to the best of Seller's knowledge, the technical equipment included in the
Stations Assets does not contain any PCBs. No hazardous or toxic waste,
substance, material or pollutant (as those or similar terms are defined under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. ss.ss. 9601 ET seq., Toxic Substances Control Act.
15 U. S. C. ss. ss. 2601 ET seq., the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.sS. 6901 et seq. or any other applicable federal, state and
local environmental law, statute, ordinance, order, judgment rule or regulation
relating to the environment or the protection of human health ("Environmental
Laws")), including but not limited to, any asbestos or asbestos-related
products, oils, or petroleum-derived compounds, CFCs, PCBs, or underground
storage tanks (collectively Hazardous Materials"), have been released, emitted
or discharged by Seller, or to the best of Seller's knowledge, by any other
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person or entity, in violation of applicable laws or regulations, or to the best
of Seller's knowledge are currently located in quantities in violation of
applicable laws and regulations in, on, under or about the real property on
which the Stations Assets are situated, including without limitation the
transmitter sites, or contained in the tangible personal property included in
the Stations Assets. To the best of Seller's knowledge, the Stations Assets and
Seller's use thereof are not in violation of any Environmental Laws or any
occupational, safety and health or other such law now in effect. With respect to
Buyers, Seller shall be as of the Closing Date and thereafter solely responsible
for all environmental liabilities, of whatsoever kind and nature, arising out of
or attributable to the operation or ownership of the Stations Assets prior to
the Closing Date.
7.12 INTELLECTUAL PROPERTY. SCHEDULE 7.12 hereto is a true and complete
list of all material Intellectual Property applied for, registered or issued to,
or owned by Seller or under which Seller is a licensee and which is used in the
conduct of Seller's business and operations with regard to the Stations. Except
as set forth on SCHEDULE 7.12, to the best of Seller's knowledge: (a) Seller's
right, title and interest in the Intellectual Property as owner or licensee, as
applicable, is free and clear of all liens, claims, encumbrances, rights, or
equities whatsoever of any third party and, to the extent any of the
Intellectual Property are licensed to Seller, such interest is valid and
uncontested by the licensor thereof or any third party; (b) all computer
software located at the Stations' facilities or used in the Stations' business
or operations is properly licensed to Seller, and all of Seller's uses of such
computer software are authorized under such licenses; (c) all of Seller's right,
title and interest in and to the Intellectual Property and computer software
shall be assignable to RBI at Closing, and upon such assignment, RBI shall
receive complete and exclusive right, title, and interest in and to all tangible
and intangible property rights existing in the Intellectual Property; and (d)
there are no infringements or unlawful use of such Intellectual Property by
Seller in connection with Seller's business or operations. All material hardware
and software products used by Seller in the operation of the Stations will be
able to accurately process date data (including, but not limited to calculating,
comparing and sequencing) from, into and between the twentieth century (through
the year 1999), the year 2000 and the twenty-first century, including leap year
calculations when used in accordance with the product documentation accompanying
such hardware and software products.
7.13 FINANCIAL STATEMENTS. Seller has delivered complete copies of the
income statements of the Stations and consolidated balance sheets of Seller as
of and for the three (3) months ended December 31, 1997 and fiscal year ended
December 31, 1998 (the "Financial Statements"). In addition, Seller will deliver
monthly income statements for the Stations for each month ended after January 1,
1999 and prior to the Closing Date (collectively, the "Additional Financial
Statements"). The Financial Statements and Additional Financial Statements are
true, correct and complete and have been, and in the case of the Additional
Financial Statements will be, prepared in accordance with generally accepted
accounting principals consistently applied and maintained throughout the periods
indicated, except as disclosed on SCHEDULE 7.13. The Financial Statements and
Additional Financial Statements present and will present fairly the results of
operations of the Stations for the periods indicated. The financial information
within the Additional Financial Statements does not include and will not include
financial information unrelated to the operations of the Stations. None of the
Financial Statements or Additional Financial Statements understates nor will it
understate the true costs and expenses of conducting the business and operations
of the Stations, fails to disclose any material liability, or inflates or will
it inflate the revenues of the Stations for any reason.
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7.14 PERSONNEL INFORMATION.
7.14.1 SCHEDULE 7.14 contains a true and complete list of all
persons employed at the Stations as of the date of this Agreement, including
date of hire, a description of material compensation arrangements (other than
employee benefit plans set forth in SCHEDULE 7.17) and a list of other material
terms of any and all agreements affecting such persons and their employment by
Seller. Seller has received no notice that, and Seller is not aware of, any
individual employee who shall or is likely to terminate his or her employment
relationship with the Stations upon the execution of this Agreement or after the
Closing.
7.14.2 Except as set forth in SCHEDULE 7.14, Seller, with
respect to the Stations, is not a party to any contract or agreement with any
labor organization, nor has Seller agreed to recognize any union or other
collective bargaining unit, nor has any union or other collective bargaining
unit been certified as representing any employees of Seller at the Stations.
Seller has no knowledge of any organization effort currently being made or
threatened by or on behalf of any labor union with respect to employees of
Seller at the Stations.
7.14.3 Except as disclosed in SCHEDULE 7.14, Seller, with
respect to the Stations, has complied in all material respects with all laws
relating to the employment of labor, including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and payment and withholding
of taxes.
7.15 LITIGATION. Except as set forth in SCHEDULE 7.15, Seller is not
subject to any judgment, award, order, writ, injunction, arbitration decision or
decree relating to the conduct of the business or the operation of the Stations
or any of the Stations Assets, and there is no litigation, administrative
action, arbitration, proceeding or investigation pending or, to the best
knowledge of Seller, threatened against Seller with respect to, related to or in
connection with the operation of the Stations in any federal, state or local
court, or before any administrative agency or arbitrator (including, without
limitation, any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the Stations Licenses), or before any other tribunal duly authorized
to resolve disputes where the outcome or effect thereof could reasonably have a
material adverse effect upon the value, operations or market share of any of the
Stations or a meaningful or monetary consequence to Buyers or the operation of
any of the Stations by Buyers after the Closing Date. In particular, but without
limiting the generality of the foregoing, to the best knowledge of Seller, there
are no applications, complaints or proceedings pending or threatened before the
FCC or any other governmental organization with respect to the business or
operations of the Stations.
7.16 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 7.16: (i)
Seller is not in violation of, nor has Seller received any notice asserting any
non-compliance by it in connection with the operation of the Stations or use or
ownership of any of the Stations Assets with, any applicable statute, rule or
regulation, whether federal, state or local; (ii) Seller is not in default with
respect to any judgment, order, injunction or decree of any court administrative
agency or other governmental authority or any other tribunal duly authorized to
resolve disputes which relates to the transactions contemplated hereby; and
(iii) Seller is in compliance with all laws, regulations and governmental orders
applicable to the conduct of the business and operations of
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the Stations, and its present use of the Stations Assets does not violate any of
such laws, regulations or orders, except with respect to subparts (i) and (iii)
for violations or noncompliance which are immaterial and will be of no
meaningful or monetary consequence to Buyers or to the operation of any of the
Stations by Buyers after the Closing Date.
7.17 EMPLOYEE BENEFIT PLANS. SCHEDULE 7.17 contains a true and complete
list as of the date of this Agreement of all employee benefit plans applicable
to the employees of Seller employed at the Stations, and a brief description
thereof. Seller does not maintain any other employee benefit plan as the term is
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended, applicable to the employees of Seller employed at the Stations.
7.18 COMMISSIONS OR FINDER'S FEES. Neither Seller nor any person or
entity acting on behalf of Seller has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity, with the exception of Star Media Group, Inc.,
whose fees shall be paid entirely by Seller.
7.19 CONDUCT OF BUSINESS IN ORDINARY COURSE; ADVERSE CHANGES. Since
December 31, 1998: (a) Seller has conducted the business of the Stations only in
the ordinary course consistent with Seller's past practices; (b) there has not
been any material adverse change in the business, assets, properties, prospects
or condition (financial or otherwise) of the Stations, or any damage,
destruction, or loss affecting any of the Stations Assets; and (c) Seller has
not created, assumed, or suffered any mortgage, pledge, lien or encumbrance on
any of the Stations Assets.
7.20 INSTRUMENTS OF CONVEYANCE: GOOD TITLE. The instruments to be
executed by Seller and delivered to Buyers at the Closing, conveying the
Stations Assets to Buyers, will transfer good and marketable title to the Assets
free and clear of all liabilities (absolute or contingent), security interests,
mortgages, pledges, liens, obligations and encumbrances, except for Permitted
Encumbrances and except as set forth in SCHEDULE 7.7 and SCHEDULE 7.8 hereto and
those obligations referred to in the first sentence of Section 2.1 hereof.
7.21 UNDISCLOSED LIABILITIES. Excepting only for the Assumed
Liabilities, no liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, relating to Seller, the Stations or the
Stations Assets exists which could, after the Closing result in any form of
transferee liability against Buyers or subject the Stations Assets to any lien,
encumbrance, claim, charge, security interest or imposition whatsoever or
otherwise affect the full, free and unencumbered use of the Stations Assets by
Buyers.
7.22 FULL DISCLOSURE. No representation or warranty made by Seller
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or shall omit to state any
material fact required to make any statement contained herein or therein not
misleading. To the best of Seller's knowledge, there is no impending or
contemplated event or occurrence that would cause any of the foregoing
representations not to be true and complete on the date of such event or
occurrence as if made on that date.
Whenever in this Article 7 a warranty or representation is qualified by
a word or phrase referring to the best of Seller's knowledge (or similar terms),
it shall mean to the actual
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knowledge of Mr. Jon Ferrari and Seller's chief financial officer and engineer,
after having made due inquiry of the employees, representatives and agents of
Seller who would be expected to have knowledge of the matter, and with respect
to the condition of any Stations Assets, records or other object, after having
inspected it.
ARTICLE 8
COVENANTS OF BUYERS
-------------------
8.1 CLOSING. Subject to Article 11 hereof, on the Closing Date, Buyers
shall purchase the Stations Assets from Seller as provided in Article I hereof
and RBI shall assume the Assumed Liabilities of Seller as provided in Article 2
hereof.
8.2 NOTIFICATION. Buyers will provide Seller prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 6. Buyers shall also notify Seller of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against Buyers which challenges the transactions contemplated hereby.
8.3 NO INCONSISTENT ACTION. Buyers shall not take any action which is
materially inconsistent with its obligations under this Agreement or take any
action which would cause any representation or warranty of Buyers contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
ARTICLE 9
COVENANTS OF SELLER
-------------------
9.1 PRE-CLOSING COVENANTS. Seller covenants and agrees with respect to
the Stations that, between the date hereof and the Closing Date or the earlier
termination of this Agreement in accordance with its terms, except as expressly
permitted by this Agreement or with the prior written consent of Buyers, Seller
shall act in accordance with the following:
9.1.1 Seller shall use its reasonable best efforts to conduct
the business and operations of the Stations in the ordinary and prudent course
of business consistent with past practice and with the intent of preserving the
ongoing operations and assets of the Stations, including but not limited to
maintaining the independent identity of the Stations, retaining the current
format and programming (including the content thereof) of the Stations,
continuing at historical levels and frequencies spending for promotions,
advertising, and survey testing, and using its reasonable best efforts to retain
at the Stations the services of all active employees, consultants and agents of
the Stations.
9.1.2 Seller shall use its reasonable best efforts to: (i)
preserve the operation of the Stations intact; (ii) preserve the business of the
Stations' advertisers, customers, suppliers and others having business relations
with the Stations; and (iii) continue to conduct financial operations of the
Stations, including without limitation, their credit and collection and pricing
policies and practices, all in the ordinary course of business consistent with
past practices.
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9.1.3 Seller shall operate the Stations in all respects in
accordance with FCC rules and regulations and the Stations Licenses and with all
other laws, regulations, rules and orders, and shall not cause or permit by any
act, or failure to act, any of the Stations Licenses or other licenses, permits
or authorizations listed in SCHEDULE 7.4 to expire, be surrendered, adversely
modified, or otherwise terminated, or the FCC to institute any proceedings for
the suspension, revocation or adverse modification of any of the Stations
Licenses, or fail to prosecute with due diligence any pending applications to
the FCC.
9.1.4 Should any fact relating to Seller which would cause the
FCC to deny its consent to the transactions contemplated by this Agreement come
to Seller's attention, Seller will promptly notify Buyers thereof and, subject
to Section 5.2, will use its reasonable best efforts to take such steps as may
be necessary to remove any such impediment to the FCC's consent to the
transactions contemplated by this Agreement.
9.1.5 Except for actions in the ordinary course of business
consistent with past practices, Seller shall not: (a) sell broadcast time on a
prepaid basis (other than in the course of existing credit practices); (b)
except as required by the applicable law or written agreements currently in
effect, grant or agree to grant any general increases in the rates of salaries
or compensation payable to employees of the Stations (provided that no such
increases in fixed compensation to any employee shall in the aggregate exceed 5%
of such employee's compensation as set forth on SCHEDULE 7.14 hereto), (c)
except as required by written agreements currently in effect, grant or agree to
grant any specific bonus (other than a bonus for remaining as an employee until
the Closing Date) or increase in compensation to any executive management
employee of the Stations (provided that no such increases to any employee shall
in the aggregate exceed 5 % of such employee's fixed compensation as set forth
on SCHEDULE 7.14 hereto); (d) provide for any new pension, retirement or other
employment benefits for employees of the Stations or any increases in any
existing benefits, (e) modify, change or terminate any Contract; (f) change the
advertising rates in effect as of the date hereof, or (g) enter into any Trade
Agreements.
9.1.6 Seller shall give or cause the Stations to give Buyers
and Buyers' counsel, accountants, engineers and other representatives, at
Buyers' reasonable request and upon reasonable notice, full and reasonable
access to all of Seller's personnel, properties, books, Contracts, reports and
records (including, without limitation, financial information and tax returns
relating to the Stations, and environmental audits in existence with respect to
the Stations Assets), real estate, buildings and equipment relating to the
Stations and to the Stations' employees; to furnish Buyers with financial
statement consents, certifications, information and copies of all documents and
agreements relating to the Stations and the operation thereof (including but not
limited to financial and operating data and other information concerning the
financial condition, results of operations and business of the Stations) that
Buyers may reasonably request. The rights of Buyers under this Section 9.1.6
shall not be exercised in such a manner as to interfere unreasonably with the
business of the Stations.
9.1.7 Seller shall use its reasonable best efforts to obtain
any third party consents necessary for the assignment of any Contract (which
shall not require any payment to any such third party except for such amounts
contemplated by the Contract to be assigned, and any amount then owing by Seller
to such third party).
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9.1.8 Seller shall provide to Buyers within forty-five (45)
days after the date of this Agreement (a) title insurance commitments, issued by
a title insurance company reasonably satisfactory to Buyers, agreeing to issue
to Buyers and its senior lender, on the most current standard ALTA form,
leasehold, owners and lenders policies of title insurance with respect to all
Owned Real Estate and to all Leased Real Estate which is used as a tower/antenna
site (except as otherwise specifically agreed in SCHEDULE 9.1), together with a
copy of each document to which reference is made in such commitments, insuring
title in full accordance with the representations and warranties set forth
herein and subject only to such conditions and exceptions, and with such
endorsements, as Buyers or their senior lenders may approve or require, and (b)
up-to-date surveys of all Owned Real Estate and to all Leased Real Estate which
is used as a tower/antenna site, each prepared in accordance with ALTA/ASCM
standards and each detailing the legal description, the perimeter boundaries,
all improvements thereon, all easements and encroachments affecting each parcel,
and such other matters as may be reasonably requested by Buyers or the title
insurance company, each containing a surveyor certificate of recent date
reasonably acceptable to Buyer an the title insurance company, and each prepared
by a registered land surveyor. The cost of the title commitments shall be paid
by Seller; the cost of the insurance policy premiums and surveys shall be paid
by Buyers.
9.2 NOTIFICATION. Seller will provide Buyers prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 7 or any Schedule. Seller agrees to notify Buyers of
any litigation, arbitration or administrative proceeding pending or, to the best
of their knowledge, threatened, which challenges the transactions contemplated
hereby. Seller shall promptly notify Buyers if any of the normal broadcast
transmissions of any Station are interrupted, interfered with or in any way
impaired, and shall provide Buyers with prompt written notice of the problem and
the measures being taken to correct such problem. If such Station is not
restored so that operation is resumed to full licensed power and antenna height
within five (5) days of such event, or if more than five (5) such events occur
within any thirty (30) day period, or if any of the Stations shall be off the
air for more than ninety-six (96) consecutive hours, then Buyers shall have the
right to terminate this Agreement.
9.3 NO INCONSISTENT ACTION. Seller shall not take any action which is
materially inconsistent with its obligations under this Agreement nor take any
action which would cause any representation or warranty of Seller contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
9.4 CLOSING. Subject to Article 12 hereof, on the Closing Date, Seller
shall transfer, convey, assign and deliver to Buyers the Stations Assets and the
Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this
Agreement.
9.5 OTHER ITEMS. Until the Closing Date or the earlier termination of
this Agreement in accordance with the terms hereof, Seller shall not: (a) waive
or release any right relating to the business or operations of the Stations,
except for adjustments or settlements made in the ordinary course of business
consistent with their past practices; (b) transfer or grant any rights under any
of the Stations Licenses; (c) enter into any commitment for capital expenditures
for which Buyers would become liable after the Closing Date; (d) introduce any
material changes in the broadcast hours or in the format of the Stations or any
other material change in the Stations'
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programming policies; (e) change the call letters of any Station; and (f) enter
into any transaction or make or enter into any contract or commitment with
respect to any of the Stations or the Stations Assets which by reason of its
size or otherwise is not in the ordinary course of business consistent with past
practices.
9.6 EXCLUSIVITY. Seller agrees that, commencing on the date hereof
through the Closing or earlier termination of this Agreement, Buyers shall have
the exclusive right to consummate the transactions contemplated herein, and
during such exclusive period, Seller agrees that neither Seller, nor any
shareholders, director, officer, employee or other representative of Seller: (a)
will initiate, solicit or encourage, directly or indirectly, any inquiries, or
the making or implementation of any proposal or offer with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of,
all or any portion of the Stations Assets (any such inquiry, proposal or offer
being hereinafter referred to as an "Acquisition Proposal" and any such
transaction being hereinafter referred to as an "Acquisition"); (b) will engage
in any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; or (c) will continue any existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal or Acquisition and will take the necessary steps to inform
the individuals or entities referred to above of the obligations undertaken by
them in this Section 9.6. Notwithstanding the foregoing, in the event that
Buyers default in any material respect in the observance or in the due and
timely performance of any of its covenants or agreements herein contained and
such default shall not be cured within ten (10) business days of notice of
default served by Seller, Seller's obligations under this Section 9.6 shall be
null and void.
9.7 EXTENSION OF TOWER LEASE. Seller shall use its reasonable best
efforts to obtain an amendment to the Lease Agreement, dated May 11, 1993,
between Seller (as successor to the original lessee) and the City of El Paso for
the lease of a portion of Tract 18, Section 31, Block 80, TSP 1, El Paso, El
Paso County, Texas for the KROD-AM tower site to provide for at least one
additional option to the lessee to extend the Lease Agreement for one additional
three (3) year period at the rent payable during the last year of the current
term, with an annual adjustment during such renewal term to relate to the CPI-U
as provided in the Lease Agreement.
ARTICLE 10
JOINT COVENANTS
---------------
Buyers and Seller each covenant and agree that between the date hereof
and the Closing Date, they shall act in accordance with the following:
10.1 CONFIDENTIALITY. Subject to the requirements of applicable law,
Buyers and Seller shall each keep confidential all information obtained by it
with respect to the other parties hereto in connection with this Agreement and
the negotiations preceding this Agreement, and will use such information solely
in connection with the transactions contemplated by this Agreement, and if the
transactions contemplated hereby are not consummated for any reason, each shall
return to each other party hereto, without retaining a copy thereof, any
schedules, documents or other written information obtained from such other party
in connection with this Agreement and the
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transactions contemplated hereby. Notwithstanding the foregoing, no party shall
be required to keep confidential or return any information which: (a) is known
or available through other lawful sources, not bound by a confidentiality
agreement with the disclosing party; (b) is or becomes publicly known through no
fault of the receiving party or its agents; (c) is required to be disclosed
pursuant to an order or request of a judicial or governmental authority
(provided the disclosing party is given reasonable prior notice of the order or
request and the purpose of the disclosure); or (d) is developed by the receiving
party independently of the disclosure by the disclosing party. Notwithstanding
anything to the contrary herein, either party may in accordance with its legal
obligations, including but not limited to filings permitted or required by the
Securities Act of 1933 and the Securities and Exchange Act of 1934, make such
press releases and other public statements and announcements as it deems
necessary and appropriate in connection with this Agreement and the transactions
contemplated hereby; provided, however, that prior to making any such unilateral
press release or announcement, such party shall first communicate the same in
writing to the other.
10.2 COOPERATION. Subject to express limitations contained elsewhere
herein, Buyers and Seller agree to cooperate fully with one another in taking
any reasonable actions (including without limitation, reasonable actions to
obtain the required consent of any governmental instrumentality or any third
party) necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the satisfaction of any condition to
closing set forth herein.
10.3 CONTROL OF STATIONS. Buyers shall not, directly or indirectly,
control, supervise or direct the operations of the Stations prior to the
Closing. Such operations, including complete control and supervision of all
Station programs, employees and policies, shall be the sole responsibility of
Seller.
10.4 CONSENTS TO ASSIGNMENT. To the extent that any Contract identified
in the Schedules is not capable of being sold, assigned, transferred, delivered
or subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, offer, delivery or sublease thereof. Subject to the provisions
of Section 11.5, in those cases where consents, assignments, releases and/or
waivers have not been obtained at or prior to the Closing relating to the
assignment to RBI of the Contracts, this Agreement and any assignment executed
pursuant hereto, to the extent permitted by law, shall constitute an equitable
assignment by Seller to RBI of all of Seller's rights, benefits, title and
interest in and to the Contracts, and where necessary or appropriate, RBI shall
be deemed to be Seller's agent for the purpose of completing, fulfilling and
discharging all of Seller's rights and liabilities arising after the Closing
Date under such Contracts. Seller shall use its reasonable best efforts to
provide RBI with the financial and business benefits of such Contracts
(including, without limitation, permitting RBI to enforce any rights of Seller
arising under such Contracts), and RBI shall, to the extent RBI is provided with
the benefits of such Contracts, assume, perform and in due course pay and
discharge all debts, obligations and liabilities of Seller under such Contracts
to the extent that RBI was to assume those obligations pursuant to the terms
hereof.
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10.5 FILINGS. In addition to the covenants of the parties set forth in
Article 5 hereto, as promptly as practicable after the execution of this
Agreement, Buyers and Seller shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, consents,
orders and approvals of any governmental authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any governmental authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, any reports
or notifications that may be required to be filed with the FCC, and each shall
furnish to one another all such information in its possession as may be
necessary for the completion of the reports or notifications to be filed by the
other.
10.6 BULK SALES LAWS. Buyers hereby waive compliance by Seller with the
provisions of the "bulk sales" or similar laws of any state. Seller agrees to
indemnify Buyers and hold them harmless from any and all loss, cost, damage and
expense (including but not limited to, reasonable attorney's fees) sustained by
Buyers as a result of any failure of Seller to comply with any "bulk sales" or
similar laws.
10.7 EMPLOYEE MATTERS. Seller shall be responsible for the payment of
all compensation and accrued employee benefits payable to all employees up to
the Closing Date. Seller acknowledges and agrees that it, and not Buyers, is and
shall be solely responsible for any and all severance, insurance, supplemental
pension, deferred compensation, retirement and any other benefits, and related
costs, premiums and claims, due, to become due, committed or otherwise promised
to any person who, as of the Closing Date, is a retiree, former employee, or
current employee of Seller, relating to the period up to the Closing Date.
Buyers, as purchaser of the Stations Assets, shall assume no employee benefit
plans, programs or practices, whether or not set forth in writing, maintained by
Seller at any time except for obligations under COBRA that are Assumed
Liabilities.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYERS
-------------------------------
The obligations of Buyers hereunder are, at their option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
11.1.1 All representations and warranties of Seller made in this
Agreement or in any Exhibit, Schedule or document delivered pursuant hereto,
shall be true and complete in all material respects as of the date hereof and on
and as of the Closing Date as if made on and as of that date, except for changes
expressly permitted or contemplated by the terms of this Agreement.
11.1.2 All of the terms, covenants and conditions to be
complied with and performed by Seller on or prior to the Closing Date shall have
been complied with or performed in all material respects.
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11.1.3 Buyers shall have received a certificate, dated as of
the Closing Date, from Seller, executed by Seller's general partner to the
effect that: (a) the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date except for changes expressly
permitted or contemplated by the terms of this Agreement; and (b) Seller has
complied with or performed in all material respects all terms, covenants and
conditions to be complied with or performed by it on or prior to the Closing
Date.
11.2 GOVERNMENTAL CONSENTS. The FCC Consent shall have been
obtained and shall have become a Final Order.
11.3 GOVERNMENTAL AUTHORIZATIONS. Seller shall be the holder of the
Stations Licenses and all other licenses, permits and other authorizations
listed in SCHEDULE 7.4, and there shall not have been any modification of any of
such licenses, permits and other authorizations which has a material adverse
effect on any of the Stations or the operations thereof. No application shall be
pending for the renewal of any of the Stations Licenses. No proceeding shall be
pending which seeks, or the effect of which reasonably could be, to revoke,
cancel, fail to renew, suspend or adversely modify any of the Stations Licenses
or any other licenses, permits or other authorizations listed in SCHEDULE 7.4.
11.4 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no order, decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; (d) seeks material damages on account of
the consummation of any transaction contemplated hereby; or (e) is a petition of
bankruptcy by or against Seller, an assignment by Seller for the benefit of its
creditors, or other similar proceeding.
11.5 THIRD-PARTY CONSENTS. All Material Contracts shall be in full
force and effect on the Closing Date, and Seller shall have obtained and shall
have delivered to RBI all appropriate third-party consents in form and substance
acceptable to RBI (including estoppel certificates for the leases related to the
Leased Real Estate) in connection with the assignment of the Material Contracts
to RBI.
11.6 CLOSING DOCUMENTS. Seller shall have delivered or caused to be
delivered to Buyers, on the Closing Date, all bills of sale, general warranty
deeds, endorsements, assignments and other instruments of conveyance reasonably
satisfactory in form and substance to Buyers, effecting the sale, transfer,
assignment and conveyance of the Stations Assets to Buyers, including, without
limitation, each of the documents required to be delivered by it pursuant to
Article 14.
11.7 ENVIRONMENTAL STUDIES. Buyers shall have obtained within thirty
(30) days following the date of this Agreement Phase I environmental assessment
reports (the "Environmental Audits") on the Real Estate confirming the
representations and warranties of Seller on environmental matters; provided,
however, if Buyers elect not to obtain such Environmental Audits, Buyers shall
be deemed to have waived the condition of Closing
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contained in this Section 11.7. Buyers shall provide Seller with a copy of such
Environmental Audits within fifteen (15) business days of receipt by Buyers and
at the same time shall give Seller notice of any matter disclosed by the
Environmental Audits that requires remediation under any Environmental Law.
Seller shall be required to complete such remediation within a period of
forty-five (45) days from the date of the Buyers' notice; provided, however,
that if Seller reasonably determines the cost of such required remediation
(including post-remediation and reporting) would exceed One Hundred Thousand
Dollars ($100,000.00) or that Seller will be unable to complete the remediation
within such 45-day period, Seller shall give notice to Buyers within fifteen
(15) business days after such determination. Within fifteen (15) days after
receipt of such notice from Seller, Buyers shall give Seller notice of Buyers'
election of one of the following: (a) to accept the Real Estate as is with
respect to such environmental matters, together with a reduction of the Purchase
Price by One Hundred Thousand Dollars ($100,000.00) and to relieve Seller from
any responsibility for indemnification under Section 15.2.1 for claims relating
to Environmental Laws; or (b) to terminate this Agreement. If Buyers fail to
elect option (a) or (b) above, then Buyers shall be deemed to have elected
option (a). Nothing in this Section 11.7 shall be deemed to extend the Closing
Date.
11.8 NO ADVERSE CHANGE. No material adverse change in operations,
condition or status of the Stations or the Stations Assets shall have occurred
since the date of this Agreement or be reasonably likely to occur. The term
"material adverse change" means an event, condition, circumstance, act, omission
or effect which, individually or in the aggregate with other similar events,
conditions, circumstances, acts, omission or effects, is, in the opinion of a
reasonably prudent buyer, likely to have such an adverse effect on the
transactions contemplated hereby or operations, condition or status of the
Stations taken as a whole that it would be of such significance that such buyer
would consider it a factor in its purchase decision; provided, however, that the
following shall not constitute a material adverse change, changes in (i)
Seller's cash flow for the Stations, (ii) the economy, (iii) the radio industry
generally or locally, (iv) the Stations' Arbitron ratings, or (v) changes in
revenues for the Stations, provided Seller's revenues for the Stations in the
trailing twelve (12) month period ending as close to the Closing Date as
possible to reasonably allow for a calculation by the Closing Date exceed such
revenues for the corresponding period of the prior twelve (12) month period.
11.9 ENGINEERING INSPECTION. It is agreed that within thirty (30) days
prior to the Closing Date, Buyers' engineer may reinspect the tangible personal
property to insure that its equipment complies with all warranties and
conditions set forth herein. Seller agrees to extend full cooperation to said
engineer, including such access to the equipment and to logs pertaining thereto
at such time or times as said engineer shall reasonably request. Buyers shall
furnish Seller with a copy of the report of any inspection prior to the Closing
Date. If Buyers' engineer reports that the equipment fails to comply with said
warranties, Buyers may either: (a) elect to consummate the purchase of the
Stations Assets, in which case Seller shall bear the cost of equipment repair in
an amount not to exceed $90,000 and such amount shall be deducted from the
Purchase Price; or (b) elect to consummate the purchase of the Stations Assets
exclusively of the equipment which fails to materially comply with said
warranties, in which case the Purchase Price shall be reduced by the fair market
value of such equipment excluded.
ARTICLE 12
CONDITIONS OF CLOSING BY SELLER
-------------------------------
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The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
12.1.1 All representations and warranties of Buyers made in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, shall be true and complete in all material respects as of the date
hereof and on and as of the Closing Date as if made on and as of that date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
12.1.2 All the terms, covenants and conditions to be complied
with and performed by Buyers on or prior to the Closing Date shall have been
complied with or performed in all material respects.
12.1.3 Seller shall have received a certificate, dated as of
the Closing Date, executed by the President of Buyers, to the effect that: (a)
the representations and warranties of Buyers contained in this Agreement are
true and complete in all material respects on and as of the Closing Date as if
made on and as of that date except for changes expressly permitted or
contemplated by the terms of this Agreement; and (b) Buyers have complied with
or performed in all material respects all terms, covenants and conditions to be
complied with or performed by it on or prior to the Closing Date.
12.2 GOVERNMENTAL CONSENTS. The FCC Initial Approval shall have been
obtained.
12.3 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no other decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; or (d) seeks material damages on account of
the consummation of any transaction contemplated hereby.
12.4 CLOSING DOCUMENTS. Buyers shall have delivered or caused to be
delivered to Seller, on the Closing Date, the Purchase Price and each of the
documents required to be delivered by them pursuant to Article 14.
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ARTICLE 13
TRANSFER TAXES: FEES AND EXPENSES
---------------------------------
13.1 EXPENSES. Except as set forth in Section 13.2 hereof or otherwise
expressly set forth in this Agreement, each party hereto shall be solely
responsible for all costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement including, but not limited to, the costs and expenses incurred
pursuant to Article 5 hereof and the fees and disbursements of counsel and other
advisors.
13.2 SPECIFIC CHARGES. All costs of transferring the Stations Assets in
accordance with this Agreement, including recordation, transfer and documentary
taxes and fees, and any excise, sales or use taxes, shall be paid equally by
Seller and Buyers. Each party shall pay any filing or grant fees imposed upon it
by any governmental authority the consent of which or the filing with which is
required for the consummation of the transactions contemplated hereby, except
that any filing fees with the FCC shall be shared equally by the parties, and
any fees payable pursuant to the Hart-Scott-Rodino Act, if applicable, shall be
paid by Buyers. Any fees or commission due Star Media Group, Inc. as a result of
this transaction shall be paid by Seller.
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 SELLER' DOCUMENTS. At the Closing, Seller shall deliver or cause
to be delivered to Buyers the following:
14.1.1 Certified resolutions of all requisite corporate or
other action of Seller approving the execution and delivery of this Agreement
and authorizing the consummation of the transactions contemplated hereby;
14.1.2 A certificate of Seller, dated the Closing Date, in the
form described in Section 11.1.3;
14.1.3 Governmental certificates showing that Seller: (a) is
duly organized and in good standing in the State of Delaware; and (b) has filed
all returns, paid all taxes due thereon and is currently subject to no
assessment and is in good standing in the State of Texas, each certified as of a
date not more than thirty (30) days before the Closing Date;
14.1.4 Such certificates, bills of sale, general warranty
deeds, assignments, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents to
conveyance, assignment or transfer required to be delivered hereunder), and lien
releases, all in form satisfactory to Buyers and Buyers' counsel, as shall be
effective to vest in Buyers good and marketable title in and to the Stations
Assets in accordance with the terms of this Agreement, free, clear and
unencumbered except for Permitted Encumbrances, if any, as set forth on SCHEDULE
7.7 and SCHEDULE 7.8.
14.1.5 An Assignment and Assumption Agreement in the form of
EXHIBIT C effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
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14.1.6 The Indemnification Escrow Agreement;
14.1.7 At the time and place of Closing, originals and all
copies of all program, operations, transmission or maintenance logs and all
other records required by the FCC to be maintained with respect to the Stations,
including the public files of the Stations, shall be left at the Stations and
thereby delivered to Buyers;
14.1.8 A written opinion of Seller's corporate counsel, on
which Buyers' lenders shall be entitled to rely, substantially in the same form
as attached as EXHIBIT D, dated as of the Closing Date;
14.1.9 A written opinion of Seller's FCC counsel, on which
Buyers' lenders shall be entitled to rely, in a form reasonably acceptable to
Buyers covering the matters listed on EXHIBIT E, dated as of the Closing Date;
14.1.10 A Non-Competition Agreement in the form of EXHIBIT F
(the "Non-Competition Agreement") executed by Seller, Jon Ferrari, Charles Cohn,
and Kirk Warshaw; and
14.1.11 Such additional information, materials, agreements,
documents and instruments as Buyers and their counsel may reasonably request in
order to consummate the Closing.
14.2 BUYERS' DOCUMENTS. At the Closing, Buyers shall deliver or cause
to be delivered to Seller the following:
14.2.1 Certified resolutions of the Board of Directors of
Buyers approving the execution and delivery of this Agreement and authorizing
the consummation of the transactions contemplated hereby;
14.2.2 A certificate of Buyers, dated the Closing Date, in the
form described in Section 12.1.3;
14.2.3 The Assignment and Assumption Agreement;
14.2.4 The Indemnification Escrow Agreement;
14.2.5 A written opinion of Buyers' counsel in substantially
the same form as attached as EXHIBIT G, dated as of the Closing Date;
14.2.6 The Purchase Price in accordance with Section 3. 1
hereof;
14.2.7 The Non-Competition Agreement; and
14.2.8 Such additional information, materials, agreements,
documents and instruments as Seller and its counsel may reasonably request in
order to consummate the Closing.
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ARTICLE 15
SURVIVAL, INDEMNIFICATION, ETC.
-------------------------------
15.1 SURVIVAL OF REPRESENTATIONS, ETC. It is the express intention and
agreement of the parties to this Agreement that all covenants and agreements
(individually, "Covenant/Agreement" and collectively, "Covenants/Agreements")
and all representations and warranties (individually, "Warranty" and
collectively, "Warranties") made by Buyers and Seller in this Agreement shall
survive the Closing (regardless of any knowledge, investigation, audit or
inspection at any time made by or on behalf of Buyers or Seller) as follows:
15.1.1 The Covenants/Agreements shall survive the Closing for
a period from the Closing Date equal to the statute of limitations for written
contracts in Texas; provided, however, where any claim or action brought
relating to any Covenant/Agreement is actually for a breach of Warranty, such
claim shall be brought within the earlier to expire of (a) the applicable
statute of limitations or (b) the applicable survival period with respect to
such Warranty.
15.1.2 The Warranties in Section 7.6 or otherwise relating to
the federal, state, local or foreign tax obligations of Seller shall survive the
Closing for the period of the applicable statute of limitations plus any
extensions or waivers granted or imposed with respect thereto.
15.1.3 The Warranties in Sections 6.2, 6.7, 7.2, the third
sentence of 7.7, 7.8.2, 7.13, 7.18 and 7.20 shall survive for a period of two
(2) years from the Closing Date.
15.1.4 All other Warranties shall survive for a period of one
(1) year from the Closing Date.
15.1.5 The right of any party to recover Damages (as defined
in Section 15.2.1) pursuant to Section 15.2 shall not be affected by the
expiration of any Warranties as set forth herein, provided that notice of the
existence of any Damages (but not necessarily the fixed amount of any such
Damages) has been given by the indemnified party to the indemnifying party prior
to such expiration.
15.1.6 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyers or Seller may bring any
action for actual fraud (a "Fraud Action"), regardless of whether such actual
fraud also included a breach of any Agreement or Warranty; provided, however,
that any Fraud Action must be brought within the period of the applicable
statute of limitations plus any extensions or waivers granted or imposed with
respect thereto.
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15.2 INDEMNIFICATION.
15.2.1 Seller shall defend, indemnify and hold harmless Buyers
from and against any and all losses, costs, damages, liabilities and expenses,
including reasonable attorneys' fees and expenses ("Damages") incurred by Buyers
arising out of or related to: (a) any breach of the Warranties given or made by
Seller in this Agreement; (b) any breach of the Agreements made by Seller in the
Agreement; (c) the Retained Liabilities; (d) any failure of the parties to
comply with any "bulk sales" laws applicable to the transactions contemplated
hereby; and (e) the conduct of the business and operations of the Stations or
any portion thereof or the use or ownership of any of the Stations Assets prior
to the Closing Date.
15.2.2 RBI shall defend, indemnify and hold harmless Seller
from and against any and all Damages incurred by Seller arising out of or
related to: (a) any breach of the Agreements and Warranties given or made by
Buyers in this Agreement; (b) the Assumed Liabilities; and (c) the conduct of
the business and operations of the Stations or any portion thereof or the use or
ownership of any of the Stations Assets on or after the Closing Date.
15.3 PROCEDURES: THIRD PARTY AND DIRECT INDEMNIFICATION CLAIMS. The
indemnified party agrees to give written notice within a reasonable time to the
indemnifying party of any demand, suit, claim or assertion of liability by third
parties or other circumstances that could give rise to an indemnification
obligation hereunder against the indemnifying party (hereinafter collectively
"Claims," and individually a "Claim"), it being understood that the failure to
give such notice shall not affect the indemnified party's right to
indemnification and the indemnifying party's obligation to indemnify as set
forth in this Agreement, unless the indemnifying party's ability to contest,
defend or settle with respect to such Claim is thereby demonstrably and
materially prejudiced. The parties also agree that any claim for Damages arising
directly between the parties relating to this Agreement may be brought at any
time within the applicable survival period specified in Section 15.1, and that
the only notice required with respect thereto shall be as specified in Section
15.1.5.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to Section 15.2 resulting from any Claim
shall be subject to the following additional terms and conditions:
15.3.1 The indemnifying party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
or opposition to such Claim.
15.3.2 In the event that the indemnifying party shall elect
not to undertake such defense or opposition, or within (10) days after notice of
any such Claim from the indemnified party shall fail to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
15.3.3 Anything contained in this Section 15.3 to the contrary
notwithstanding: (a) the indemnified party shall have the right, at its own cost
and expense, to participate in the
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defense, opposition, compromise or settlement of the Claim; (b) the indemnifying
party shall not, without the indemnified party's written consent, settle or
compromise any Claim or consent to entry of any judgment which does not include
as an unconditional term thereof the giving by the claimant or the plaintiff to
the indemnified party of a release from all liability in respect of such Claim,
and (c) in the event that the indemnifying party undertakes defense of or
opposition to any Claim the indemnified party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to consult with the indemnifying party and its counsel or other
representatives concerning such Claim and the indemnifying party and the
indemnified party, and their respective counsel or other representatives, shall
cooperate in good faith with respect to such Claim.
15.3.4 No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
15.3.5 Notwithstanding the provisions in Section 15.2, (a)
neither Seller nor RBI shall have the obligation to defend, indemnify and hold
harmless under Section 15.2.1(a) and 15.2.2(a) until the aggregate Damages on
account thereof exceed $35,000, and then for the full amount of all Damages, and
(b) Seller's liability under Section 15.2.1(a) shall not exceed $4,700,000
except with respect to Claims relating to taxes, title, and the Stations
Licenses for which Seller's maximum liability shall be the Purchase Price.
ARTICLE 16
TERMINATION RIGHTS
------------------
16.1 TERMINATION. This Agreement may be terminated at any time prior to
Closing as follows:
16.1.1 Upon the mutual written consent of Buyers and Seller,
this Agreement may be terminated on such terms and conditions as so agreed; or
16.1.2 By written notice of Buyers to Seller if Seller
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Buyers; or
16.1.3 By written notice of Seller to Buyers if either Buyer
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Seller; or
16.1.4 By written notice of Buyers to Seller or by Seller to
Buyers if the FCC denies the FCC Application; or
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16.1.5 By written notice of Buyers to Seller, or by Seller to
Buyers, if any court of competent jurisdiction shall have issued an order,
decree or ruling (which then remains in effect) or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, or by Buyers, if any court, legislative body or governmental or
regulatory authority has taken, or is reasonably expected to take, action that
would make the consummation of the transactions contemplated hereby inadvisable
or undesirable as determined by Buyers in their sole discretion reasonably
exercised; or
16.1.6 By written notice of Buyers to Seller, or by Seller to
Buyers, if the Closing shall not have been consummated on or before July 31,
2000; or
16.1.7 By written notice of Buyers to Seller under the
conditions set forth in Section 9.2 hereof; or
16.1.8 By written notice of Seller to Buyers under the
conditions set forth in Section 11.9 hereof.
Notwithstanding the foregoing, no party hereto may effect a termination
hereof if such party is in material default or breach of this Agreement.
16.2 LIABILITY. Except as set forth in Section 16.4 below, the
termination of this Agreement under Section 16.1 shall not relieve any party of
any liability for breach of this Agreement prior to the date of termination.
16.3 MONETARY DAMAGES, SPECIFIC PERFORMANCE AND OTHER REMEDIES. The
parties recognize that if Seller refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate Buyers for
their injury. Buyers shall therefore be entitled to obtain specific performance
of the terms of this Agreement in addition to any other remedies, including but
not limited to monetary damages, that may be available to them. If any action is
brought by Buyers to enforce this Agreement, Seller shall waive the defense that
there is an adequate remedy at law. In the event of a default by Seller, which
results in the filing of a lawsuit for damages, specific performance, or other
remedy, the prevailing party shall be entitled to reimbursement by the
non-prevailing party of reasonable legal fees and expenses incurred by the
prevailing party.
16.4 SELLER'S LIQUIDATED DAMAGES. As more fully described in the
Deposit Escrow Agreement, in the event this Agreement is terminated solely
because of Buyers' material breach of this Agreement, and all other conditions
to Closing are at such time satisfied or waived (other than such conditions as
can reasonably be satisfied by Closing), then the Escrow Deposit shall be
delivered to Seller, and the proceeds thereof shall constitute liquidated
damages. It is understood and agreed that such liquidated damages amount
represents Buyers' and Seller's reasonable estimate of actual damages and does
not constitute a penalty. Recovery of liquidated damages shall be the sole and
exclusive remedy of Seller against Buyers for failing to consummate this
Agreement as a result of Buyers' material breach hereof, and shall be applicable
regardless of the actual amount of damages sustained and all other remedies are
deemed waived by Seller.
ARTICLE 17
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MISCELLANEOUS PROVISIONS
------------------------
17.1 RISK OF LOSS. The risk of loss or damage to any of the Stations
Assets prior to the Closing Date shall be upon Seller. Seller shall repair,
replace and restore any such damaged or lost Stations Asset to its prior
condition as soon as possible and in no event later than forty-five (45) days
following the loss or damage; provided, however, that in the event any such loss
or damage of the Stations Assets exists on the Closing Date, then
notwithstanding any other provision hereto, Buyers at their option may extend
the Closing Date for a period of up to sixty (60) days until such time as Seller
shall have repaired, replaced and restored any such damaged or lost Stations
Asset to its prior condition or deduct from the Purchase Price that amount which
Buyers and Seller reasonably determine to be sufficient to cover any such loss
or damage and close the transaction on the Closing Date.
17.2 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. Unless the context
otherwise requires: (a) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof, (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to "$" or dollar amounts will be to lawful currency of the United
States of America.
17.3 FURTHER ASSURANCES. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyers, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order more effectively to
consummate the transactions contemplated hereby to vest in Buyers good and
marketable title to the Stations Assets being transferred hereunder in
accordance with the terms hereof, and RBI shall from time to time, at the
request of and without further cost or expense to Seller, execute and deliver
such other instruments and take such other actions as may reasonably be
requested in order more effectively to relieve Seller of any obligations being
assumed by RBI hereunder.
17.4 PRESERVATION OF RECORDS. Subject to Section 10.1 hereof, RBI
hereby agrees that it will preserve and make available to Seller and its
attorneys and accountants (including the right to inspect and copy at Seller's
cost), during normal business hours and upon reasonable advance notice, for
three (3) years after the Closing Date, such of the books, records, files,
correspondence, memoranda and other documents referred to in this Agreement as
Seller may reasonably require for the preparation of tax reports and returns,
the preparation of financial statements, or the preparation of a response to any
claim by a third party against Seller.
17.5 BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Seller may not voluntarily or involuntarily assign its
interest under this Agreement without the prior written consent of Buyers.
Buyers shall have the right to assign and/or delegate all or any portion of
their rights and obligations under this Agreement, including without limitation,
assignments as collateral, provided that no such assignment and/or delegation
shall relieve Buyers of their obligations hereunder in the event that its
assignee fails to perform the obligations delegated. All
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covenants, agreements, statements, representations, warranties and indemnities
in this Agreement by and on behalf of any of the parties hereto shall bind and
inure to the benefit of their respective successors and permitted assigns of the
parties hereto. In the event Buyers find it necessary or are required to provide
to a third party a collateral assignment of the Buyers' interest in this
Agreement and/or any related documents, Seller shall cooperate with the Buyers
and any third party requesting such assignment including but not limited to
signing a consent and acknowledgment of such assignment.
17.6 AMENDMENTS. No amendment, waiver of compliance with any provision
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
17.7 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.8 GOVERNING LAW. The construction and performance of this Agreement
shall be governed by the laws of the State of Texas, without giving effect to
the choice of law provisions thereof.
17.9 NOTICES. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been duly delivered and received on the
date of personal delivery, on the third day after deposit in the U.S. mail if
mailed by registered or certified mail, postage prepaid and return receipt
requested, on the day after delivery to a nationally recognized overnight
courier service if sent by an overnight delivery service for next morning
delivery or when dispatched by facsimile transmission (with the facsimile
transmission confirmation being deemed conclusive evidence of such dispatch) and
shall be addressed to the following addresses, or to such other address as any
party may request, in the case of Seller, by notifying Buyers, and in the case
of Buyers, by notifying Seller:
To Seller: New Wave Broadcasting, L.P.
79 Chestnut Ridge Road
Saddle River, New Jersey 07458
Fax: (201) 818-4376
Attn: Mr. Jon Ferrari
Copy to: Barton P. Blumberg, P.C.
205 Lexington Avenue
New York, New York 10016
Fax: (212) 779-7424
Attn: Barton P. Blumberg, Esq.
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To Buyers: Regent Broadcasting of El Paso, Inc.
c/o Regent Communications, Inc.
50 East RiverCenter Blvd.
Suite 180
Covington, KY 41011
Fax: (606) 292-0352
Attn: Mr. Terry S. Jacobs
Copy to: STRAUSS & TROY
The Federal Reserve Building
150 East Fourth Street
Cincinnati, OH 45202
Fax: (513) 241-8259
Attn: Alan C. Rosser, Esq.
17.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile, each of which will be deemed an original and all
of which together will constitute one and the same instrument.
17.11 NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns any
rights or remedies under or by reason of this Agreement.
17.12 SEVERABILITY. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.13 ENTIRE AGREEMENT. This Agreement and the schedules and exhibits
hereto embody the entire agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and understandings relating
to the matters provided for herein.
17.14 DISCLOSURE EXHIBITS AND SCHEDULES. Notwithstanding anything to
the contrary contained in this Agreement or in any of the Exhibits and
Schedules, any information disclosed in one Exhibit or Schedule, as the case may
be, shall be deemed to be disclosed in all Exhibits and Schedules. Certain
information set forth in the Exhibits and Schedules, as the case may be, is
included solely for informational purposes and may not be required to be
disclosed pursuant to this Agreement. The disclosure of any information shall
not be deemed to constitute an acknowledgement that such information is required
to be disclosed in connection with the representations and warranties made by
Sellers in this Agreement or is material, nor shall such information be deemed
to establish a standard of materiality. Except as expressly set forth in this
Agreement, there are no representations or warranties, express or implied, being
made by Seller.
17.15 PARTNERSHIP EQUITY. For purposes of a partial release of the
Indemnification Escrow pursuant to Section 3.1 hereof and Section 3(b) of the
Indemnification Escrow Agreement, the term "Partnership Equity" shall mean and
be calculated as the fair market value,
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as of the first anniversary of the Closing Date, of the radio stations then
wholly-owned by Seller (as agreed to by Seller and Buyers, or if they are unable
to agree, then by an appraisal conducted by an appraiser mutually-acceptable to
Seller and Buyers, whose fees shall be borne equally by Seller on the one hand
and Buyers on the other hand), PLUS accounts receivable (less appropriate
allowance for doubtful accounts), cash and cash equivalents, and LESS all
liabilities (as determined under generally-accepted accounting principles
consistently applied).
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT BROADCASTING OF
EL PASO, INC.
By: /s/ Terry S. Jacobs
------------------------------
Name: Terry S. Jacobs
------------------------------
Title: Chairman and Ceo
------------------------------
REGENT LICENSEE OF EL PASO, INC.
By: /s/ Terry S. Jacobs
------------------------------
Name: Terry S. Jacobs
------------------------------
Title: Chairman and Ceo
------------------------------
NEW WAVE BROADCASTING, L.P.
By: NEW WAVE BROADCASTING, INC.,
its General Partner
By: /s/ Jon Ferrari
------------------------------
Name: Jon Ferrari
------------------------------
Title: CEO
------------------------------