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Asset Purchase Agreement

 

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Title:

Asset Purchase Agreement

Entities:

Kzjl License Corp; Union Bank of California, NA; Bank of New York; O’Melveny & Myers; Skadden, Arps, Slate, Meagher & Flom LLP

Date:

2002

Size:

Preview shows 15KB of 169KB total

Price:

$61

ID:

#1908245

 

 

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
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Start of Preview


                            ASSET PURCHASE AGREEMENT


Among

EL DORADO COMMUNICATIONS, INC.

EL DORADO 108, INC.

KXTJ LICENSE, INC.

LBI HOLDINGS II, INC.

LIBERMAN BROADCASTING OF HOUSTON, INC.

and

LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.

RELATING TO THE ACQUISITION OF KQQK



Dated as of April 5, 2002

{PAGE}

TABLE OF CONTENTS

{TABLE}
{CAPTION}
Page
{S} {C}
ARTICLE I DEFINITIONS....................................................... 2

1.1 Definitions....................................................... 2

1.2 Knowledge........................................................ 7

ARTICLE II PURCHASE AND SALE OF ASSETS...................................... 7

2.1 Assets to be Conveyed............................................ 7

2.2 Excluded Assets and Liabilities.................................. 8

ARTICLE III PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT................ 9

3.1 Purchase Price................................................... 9

3.2 Liabilities Assumed.............................................. 11

3.3 Escrow Deposit................................................... 11

3.4 Buyer's Remedies................................................. 13

3.5 Allocation....................................................... 14

3.6 Prorations....................................................... 14

ARTICLE IV REPRESENTATIONS AND WARRANTIES BY SELLER......................... 14

4.1 Organization and Standing........................................ 14

4.2 Authorization.................................................... 14

4.3 KQQK FCC Licenses, Transmitters and Towers....................... 15

4.4 Purchased Assets................................................. 17

4.5 Insurance........................................................ 17

4.6 Litigation....................................................... 17

4.7 Contracts........................................................ 18

4.8 Insolvency....................................................... 18

4.9 Reports.......................................................... 18

4.10 No Defaults...................................................... 18

4.11 Disclosures...................................................... 19

4.12 Environmental Compliance......................................... 19

4.13 Intellectual Property............................................ 19

4.14 Brokers.......................................................... 20

4.15 Prepaid Expenses................................................. 20

4.16 Sale Proceeds Recipients; Recipient Agreement.................... 20
{/TABLE}

-i-

{PAGE}
TABLE OF CONTENTS
(continued)

{TABLE}
{CAPTION}
Page
{S} {C}
ARTICLE V REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS.......... 21

5.1 Status............................................................ 21

5.2 No Defaults....................................................... 21

5.3 Authorization..................................................... 21

5.4 Brokers........................................................... 21

5.5 Qualification as a Broadcast Licensee............................. 22

5.6 Litigation........................................................ 22

5.7 Approvals and Consents............................................ 22

ARTICLE VI COVENANTS OF SELLER............................................... 22

6.1 Affirmative Covenants of Seller................................... 22

6.2 Negative Covenants of Seller...................................... 25

ARTICLE VII ADDITIONAL AGREEMENTS............................................. 26

7.1 Determination of KQQK Closing Date................................ 26

7.2 Application for Commission Consent; Other Consents; Pre-Closing... 26

7.3 Mutual Right to Terminate......................................... 27

7.4 Buyer's Right to Terminate........................................ 28

7.5 Seller's Right to Terminate....................................... 28

7.6 Risk of Loss...................................................... 29

7.7 Transfer Taxes and FCC Filings; Expenses; Bulk Sales.............. 30

7.8 Invoices.......................................................... 31

7.9 Access to Microwave Facilities.................................... 31

7.10 Recipient Agreement............................................... 31

ARTICLE VIII CLOSING CONDITIONS............................................... 31

8.1 Conditions Precedent to Buyer's Obligations....................... 31

8.2 Conditions Precedent to Seller's Obligations...................... 33

ARTICLE IX ITEMS TO BE DELIVERED AT THE CLOSING.............................. 34

9.1 Seller's Performance At Closing................................... 34

9.2 Buyer's Performance at Closing.................................... 36

ARTICLE X INDEMNIFICATION................................................... 37
{/TABLE}

-ii-

{PAGE}
TABLE OF CONTENTS
(continued)

{TABLE}
{CAPTION}
Page
{S} {C}
10.1 Indemnification by Seller........................................ 37

10.2 Indemnification by LBI Holdings and Buyer........................ 38

10.3 Third-Party Claims............................................... 38

10.4 Cap and Basket................................................... 39

10.5 Holdback......................................................... 40

10.6 Survival of Representations and Warranties....................... 40

ARTICLE XI MISCELLANEOUS PROVISIONS......................................... 40

11.1 Notices.......................................................... 40

11.2 Benefit and Assignment........................................... 42

11.3 Other Documents.................................................. 42

11.4 Appendices....................................................... 42

11.5 Construction..................................................... 42

11.6 Arbitration...................................................... 42

11.7 Counterparts..................................................... 44

11.8 Headings......................................................... 44

11.9 Entire Agreement................................................. 44
{/TABLE}

-iii-

{PAGE}

SCHEDULE I Identification of Contracts to be Assumed

SCHEDULE II List of all Permits and KQQK FCC Licenses

SCHEDULE III List of Required Consents; Encumbrances; UCC Financing
Statements; UCC Termination Statements

SCHEDULE IV Identification of Items of Tangible Personal Property Described
in Section 2.1.1

SCHEDULE V Allocation of the Purchase Price

SCHEDULE VI Insurance Coverage on the Purchased Assets

SCHEDULE VII Identification of Intellectual Property

SCHEDULE VIII Schedule of Prepaid Expenses

SCHEDULE IX Sale Proceeds Recipients

SCHEDULE X Information to be Periodically Provided to Buyer


EXHIBIT A Seller Escrow Payment Certificate (FM Only)

EXHIBIT B-1 Opinion of Sellers' Counsel

EXHIBIT B-2 Opinion of Sellers' Texas Counsel

EXHIBIT C Opinion of Sellers' FCC Counsel

EXHIBIT D Opinion of LBI Entities' Counsel

EXHIBIT E Lessor Estoppel Certificates

EXHIBIT F FM Local Marketing Agreement

EXHIBIT G Holdback Escrow Agreement

EXHIBIT H Forms of Required Consents

EXHIBIT I Recipient Agreement

EXHIBIT J Confidentiality

{PAGE}


FM ASSET PURCHASE AGREEMENT

THIS FM ASSET PURCHASE AGREEMENT is dated as of April 5, 2002, and
made and entered into by and among El Dorado Communications, Inc., a California
corporation ("EDC"), El Dorado 108, Inc., a Texas corporation ("EDC Sub") and
KXTJ License, Inc., a Delaware corporation ("EDC License Sub"), on the one hand,
and LBI Holdings II, Inc., a California corporation ("LBI Holdings"), Liberman
Broadcasting of Houston, Inc., a California corporation ("LBI"), and Liberman
Broadcasting of Houston License Corp., a California corporation ("LBI Sub"), on
the other. EDC, EDC Sub and EDC License Sub are referred to collectively as
"Seller," and LBI and LBI Sub are referred to collectively as "Buyer."

W I T N E S S E T H:

WHEREAS, Seller owns certain assets used or held for use in
connection with the operation of radio station KQQK, 107.9 FM, Beaumont, Texas
("Station KQQK") and Seller owns, or has the rights to own and as of the KEYH
Closing Date will own, certain assets used or held for use in connection with
the operation of radio station KEYH, 850 AM, Houston, Texas ("Station KEYH")
(each a "Station" and, collectively, the "Stations") and Seller desires to sell
and assign to Buyer the Stations, the businesses of the Stations and their
related assets, and the licenses, permits and other authorizations issued by the
Federal Communications Commission (the "FCC" or "Commission") for or in
connection with the operation of Station KQQK (the "KQQK FCC Licenses") and for
or in connection with the operation of Station KEYH (the "KEYH FCC Licenses";
the KQQK FCC Licenses and the KEYH FCC Licenses are collectively referred to
herein as the "FCC Licenses"); and

WHEREAS, Seller has a right to purchase Station KEYH from Artlite
Broadcasting Company, a Texas corporation ("Artlite") pursuant to the Extension
of LMA and Purchase Rights Agreement effective as of January 31, 1997 by and
between EDC and Artlite (the "KEYH Extension Agreement"), the Agreement to
Purchase Radio Assets and Enter Into Local Marketing Agreement dated July 23,
1995 by and between EDC and Artlite (the "KEYH Purchase Agreement"), the
Agreement Regarding Deposit by and among Artlite, EDC and David Best (the "KEYH
Deposit Agreement") and Agreement to Extend Due Date for Deposit dated August 5,
1996 by and among Artlite, EDC and David Best (the "KEYH Deposit Extension
Agreement") and currently has the right to operate Station KEYH under the Time
Brokerage (Local Marketing) Agreement dated as of August 1, 1995 by and between
EDC and Artlite, as extended until January 31, 2004 pursuant to the KEYH
Extension Agreement (the "KEYH Local Marketing Agreement"); and

WHEREAS, Seller has exercised such right to purchase Station KEYH
from Artlite pursuant to Section 7.1 of the AM Asset Purchase Agreement so as to
be able to sell and assign to Buyer Station KEYH and Seller shall prior to the
KEYH Closing Date use its efforts as set forth in the AM Asset Purchase
Agreement to preserve and cause Artlite to preserve the business of the Station
KEYH; and

WHEREAS, LBI Sub desires to acquire the FCC Licenses and LBI
desires to acquire from Seller all the other assets relating to the Stations and
businesses related thereto; and

{PAGE}

WHEREAS, the FCC Licenses may not be assigned to LBI Sub without
the prior written consent of the Commission; and

WHEREAS, Buyer, Seller and LBI Holdings are concurrently entering
into the AM Asset Purchase Agreement of even date herewith (as amended,
supplemented or otherwise modified from time to time, the "AM Asset Purchase
Agreement"); and

WHEREAS, Buyer and Seller wish to consummate the transactions
contemplated hereby and the transactions contemplated by the AM Asset Purchase
Agreement concurrently for an aggregate purchase price (prior to adjustments) of

 

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