ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of January __, 1998, by
and between Cumulus Broadcasting, Inc., a Nevada corporation ("Broadcasting"),
Cumulus Licensing Corporation, a Nevada corporation ("Licensing), ▇▇▇▇▇▇▇
Communications, Inc., a Michigan corporation ("▇▇▇▇▇▇▇"), and ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇") (solely with respect to the sale of land identified in Schedule 2(i)
of the Disclosure Schedule). Broadcasting and Licensing are referred to
collectively herein as the "Buyers." ▇▇▇▇▇▇▇ and ▇▇▇▇▇ are referred to
collectively herein as the "Sellers." The Buyers and the Sellers are referred to
individually as the "Party" or collectively as the "Parties." Capitalized terms
used in this Agreement are defined in Section 8 hereof.
Subject to the terms and conditions of this Agreement, the Buyers hereby
agree to purchase substantially all of the assets (and assume certain of the
liabilities) of the Sellers that are used or useful in the operation of radio
station WTWR-FM, licensed to Monroe, Michigan (the "Station") in return for
cash.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. Basic Transaction.
a. Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement (i) ▇▇▇▇▇▇▇ agrees to sell, transfer, convey and
deliver to Licensing, and Licensing agrees to purchase from the Sellers, the FCC
License listed in Section 2(k) of the disclosure schedule ("Disclosure
Schedule"), which schedule shall be provided to Buyers by Sellers within thirty
(30) days of this Agreement; and (ii) Sellers agree to sell, transfer, convey
and deliver to Broadcasting, and Broadcasting agrees to purchase from the
Sellers, all of the Acquired Assets other than the FCC License. Both such sales
shall take place at the Closing for the consideration specified below in this
Section 1.
b. Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, and subject to the prior approval of the Federal
Communications Commission ("FCC"), Broadcasting agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing. The Buyers will
not assume or have any responsibility, however, with respect to any other
obligation or Liability of the Sellers not included within the definition of
Assumed Liabilities and assumed by Broadcasting, and the Sellers agree to pay
and discharge all Liabilities and obligations of the Sellers other than the
Assumed Liabilities.
c. Purchase Price. The Buyers agree to pay to the Sellers, as
consideration for the Acquired Assets, the Purchase Price (the "Purchase Price")
described in Schedule A to this Agreement, and agrees to make the escrow deposit
("Escrow Deposit") in the form and manner described in Schedule A and more
particularly in the ▇▇▇▇▇▇▇ money escrow agreement ("▇▇▇▇▇▇▇ Money Escrow
Agreement") attached hereto as Exhibit A.
d. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Station in
Monroe, Michigan, commencing at 9:00 a.m. local time promptly after the FCC
approval of the Assignment Application becomes a Final Order, by which date all
other conditions to the obligations of the Parties to consummate the
transactions contemplated hereby will have been satisfied, or such other date as
the Parties may mutually determine (the "Closing Date").
e. Deliveries at the Closing. At the Closing, (i) the Sellers will
deliver to the Buyers the various certificates, instruments, and documents
referred to in Section 5(a) below; (ii) the Buyers will deliver to the Sellers
the various certificates, instruments, and documents referred to in Section 5(b)
below; (iii) the Sellers will execute, acknowledge (if appropriate), and deliver
to the Buyers (A) assignments (including Lease and other Assumed Contract
assignments and Intellectual Property transfer documents), bills of sale and
warranty deeds in form acceptable to the Buyers, (B) such affidavits, transfer
tax returns, memorandums of lease, and other additional documents as may be
required by the terms of the title insurance commitments described in Section
4(m) hereof, as necessary to furnish title insurance as required by such section
or as may be necessary to convey title to the Real Estate to the Buyers in the
condition required herein or provide public notice of existence of the Leases,
and (C) such other instruments of sale, transfer, conveyance, and assignment as
the Buyers and their counsel reasonably may request; (iv) the Buyers will
execute, acknowledge (if appropriate), and deliver to the Sellers (A) an
assumption in the form attached hereto as Exhibit C and (B) such other
instruments of assumption as the Sellers and its counsel reasonably may request;
and (v) the Buyers will deliver to the Sellers the consideration specified in
Section 1(c) above.
f. Postclosing Agreement. On the Closing Date, ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇
shall execute a Postclosing Agreement with the Buyers including covenants not to
compete with the Buyers in the markets served by the Station and agreements to
indemnify the Buyers in the form of Exhibit D attached hereto. A portion of the
Purchase Price equal to Fifty Thousand Dollars ($50,000) shall be paid to ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇ by the Buyers on the Closing Date as consideration for the
agreements set forth in the Postclosing Agreement.
2. Representations and Warranties of the Sellers.
The Sellers represent and warrant to the Buyers that the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date, except as set
forth in the Disclosure Schedule.
a. Organization of the Sellers. ▇▇▇▇▇▇▇ is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. ▇▇▇▇▇▇▇ does not have any Subsidiaries.
▇▇▇▇▇▇▇ has the power and authority to own or lease its properties and to carry
on all business activities now conducted by it. The shareholders of ▇▇▇▇▇▇▇ are
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as conservator for ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇▇▇ owns
the assets identified in Section 2(i) of the Disclosure Schedule to be conveyed
to Buyers.
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b. Authorization of Transaction. To Sellers' Knowledge, the Sellers
have full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and all agreements and instruments to be
executed and delivered by Sellers pursuant to this Agreement (collectively, the
"Ancillary Agreements") and to perform their obligations hereunder and
thereunder. Without limiting the generality of the foregoing, the Board of
Directors of ▇▇▇▇▇▇▇ has duly authorized the execution, delivery, and
performance of this Agreement and the Ancillary Agreements by the Sellers. This
Agreement and the Ancillary Agreements constitute the valid and legally binding
obligation of the Sellers, enforceable in accordance with their respective terms
and conditions.
c. Noncontravention. To Sellers' Knowledge, neither the execution
and the delivery of this Agreement or the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby and thereby (including the
assignments and assumptions referred to in Section 1(e) above), will (i) violate
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court to
which the Sellers are subject or any provision of the charter or bylaws of the
Sellers; or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice or third party
consent under any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest, or other agreement, arrangement to which the
Sellers are a party or by which it is bound or to which any of their assets is
subject (or result in the imposition of any Security Interest upon any of its
assets). Other than with respect to the Assignment Application described in
Section 4(b) the Sellers do not need to give any notice to, make any filing
with, or obtain any Licenses, consent, or approval of any court or government or
governmental agency in order for the Parties to enter into this agreement or the
Ancillary Agreements or to consummate the transactions contemplated by this
Agreement or the Ancillary Agreements (including the assignments and assumptions
referred to in Section 1(e) above).
d. Title to Acquired Assets. Other than the Security Interests set
forth on Section 2(d) of the Disclosure Schedule (which shall be released at or
before the Closing) the Sellers have good and marketable title to all of the
Acquired Assets, free and clear of any Security Interest or restriction on
transfer.
e. Financial Statements. Included in Section 2(e) of the Disclosure
Schedule are the following financial statements (collectively the "Financial
Statements"): unaudited balance sheets and statements of income, and cash flow
as of and for the fiscal years ended December 31, 1994, December 31, 1995, and
December 31, 1996 for ▇▇▇▇▇▇▇. To Sellers' Knowledge, the Financial Statements
have been prepared in conformity with the ▇▇▇▇▇▇▇'▇ normal accounting policies,
practices and procedures applied on a consistent basis, throughout the periods
covered thereby, are correct and complete, fairly present the financial
condition of ▇▇▇▇▇▇▇ and the results of operation of ▇▇▇▇▇▇▇ at the dates and
for the periods indicated, and are consistent with the books and records of
▇▇▇▇▇▇▇ (which books and records are correct and complete). The Financial
Statements accurately state the revenues of the Station for the period indicated
therein and include an accurate breakout of cash and trade revenues.
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f. Events Subsequent to January 1, 1997. Since January 1, 1997, to
Sellers' Knowledge, except as set forth in Section 2(f) of the Disclosure
Schedule, there has not been any material adverse change in the assets,
Liabilities, business, financial condition, operations, results of operations,
or future prospects of ▇▇▇▇▇▇▇ with respect to the operation of the Station.
Without limiting the generality of the foregoing and with respect to the
operation of the Station since January 1, 1997:
i. other than this Agreement, ▇▇▇▇▇▇▇ has not entered into any
agreement, contract, lease, sublease, license, or sublicense (or series of
related agreements, contracts, leases, subleases, licenses, and
sublicenses) outside the Ordinary Course of Business;
ii. ▇▇▇▇▇▇▇ has not delayed or postponed (beyond its normal
practice in the Ordinary Course of Business) the payment of accounts
payable and other Liabilities;
iii. ▇▇▇▇▇▇▇ has not altered its credit and collection
policies or its accounting policies;
iv. there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving ▇▇▇▇▇▇▇;
v. Except as described in the Disclosure Schedule, ▇▇▇▇▇▇▇ has
not materially altered the programming, format or call letters of the
Station, or its promotional and marketing activities;
vi. ▇▇▇▇▇▇▇ has not applied to the FCC for any modification of
the FCC License or failed to take any action necessary to preserve the FCC
License and has operated the Station in compliance therewith and with all
FCC rules and regulations;
vii. Except as described in Section 2(f) of the Disclosure
Schedule, ▇▇▇▇▇▇▇ has not terminated or received notice of termination for
any syndicated programming; and
▇. ▇▇▇▇▇▇▇ has not committed to any of the foregoing.
g. Tax Matters. To Sellers' Knowledge, ▇▇▇▇▇▇▇ has timely and
properly filed all Tax Returns that it was required to file with respect to its
operations. All such Tax Returns were correct and complete and properly reflect
the tax liability of ▇▇▇▇▇▇▇. No Tax deficiencies have been proposed or assessed
against ▇▇▇▇▇▇▇. All Taxes owed by ▇▇▇▇▇▇▇ with respect to its operations
(whether or not shown on any Tax Return) have been paid. ▇▇▇▇▇▇▇ has withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party. No claim has ever been made by any authority in any
jurisdiction where ▇▇▇▇▇▇▇ does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
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h. Tangible Assets. To Sellers' Knowledge, Section 2(h) of the
Disclosure Schedule sets forth a listing of all transmitter and station
equipment, vehicles and other tangible personal property used in conducting the
operation and business of the Station. ▇▇▇▇▇▇▇ owns or leases all tangible
assets necessary for the conduct of the operation and business of the Station as
presently conducted and as presently proposed to be conducted and all leased
assets are specifically identified as such in Section 2(h) of the Disclosure
Schedule.
i. Real Property. To Sellers' Knowledge, Section 2(i) of the
Disclosure Schedule lists and describes briefly all Owned Real Estate and real
property leased to the Sellers (including, without limitation, complete legal
descriptions for all of the Real Estate). The Sellers have delivered to the
Buyers correct and complete copies of the Leases. With respect to the Real
Estate:
i. the Sellers have good and marketable title to all of the
Owned Real Estate free and clear of all liens, charges, mortgages,
security interests, easements, restrictions or other encumbrances of any
nature whatsoever except real estate taxes for the year of Closing and
municipal and zoning ordinances and recorded utility easements which do
not impair the current use, occupancy or value or the marketability of
title of the property and which are disclosed in Section 2(i) of the
Disclosure Schedule (collectively, the "Permitted Real Estate
Encumbrances");
ii. the Leases are and, following the Closing will continue to
be, legal, valid, binding, enforceable, and in full force and effect;
iii. no party to any Lease is in breach or default (or has
repudiated any provision thereof), and no event has occurred which, with
notice or lapse of time, would constitute a breach or default thereunder
or permit termination, modification, or acceleration thereunder;
iv. there are no disputes, oral agreements, or forbearance
programs in effect as to any Lease;
v. none of the Owned Real Estate and to the Sellers'
Knowledge, none of the properties subject to the Leases is subject to any
lease (other than Leases), option to purchase or rights of first refusal;
vi. except for Permitted Real Estate Encumbrances, there are
no (i) actual or, to the Sellers' Knowledge, proposed special assessments
with respect to any of the Real Estate; (ii) pending or, to the Sellers'
Knowledge, threatened condemnation proceedings with respect to any of the
Real Estate; (iii) structural or mechanical defects in any of the
buildings or improvements located on the Real Estate; (iv) any pending or,
to the Sellers' Knowledge, threatened changed in any zoning laws or
ordinances which may materially adversely affect any of the Real Estate or
Sellers' use thereof;
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vii. the Sellers have not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or
its rights thereunder;
viii. to the Sellers' Knowledge, all facilities on the Real
Estate have received all approvals of governmental authorities (including
licenses, permits and zoning approvals) required in connection with the
operation thereof and have been operated and maintained in accordance with
applicable laws, rules, and regulations; and
ix. to the Sellers' Knowledge, the owner of each leased
facility has good and marketable title to the underlying parcel of real
property, free and clear of any Security Interest, easement, covenant, or
other restriction, except for Permitted Real Estate Encumbrances and
Sellers' leasehold interest in each Lease has priority over any other
interest except for the fee interest therein and Permitted Real Estate
Encumbrances.
j. Contracts. To Sellers' Knowledge, Section 2(j) of the Disclosure
Schedule lists any written arrangement (or group of related written
arrangements) either involving more than $5,000 or not entered into in the
Ordinary Course of Business. The Sellers have delivered to the Buyers a correct
and complete copy of each written arrangement listed in Section 2(j) of the
Disclosure Schedule (as amended to date). With respect to each written
arrangement so listed which constitutes an Assumed Contract: (A) the written
arrangement is legal, valid, binding, enforceable, and in full force and effect;
(B) the written arrangement will continue to be legal, valid, binding, and
enforceable and in full force and effect on identical terms following the
Closing (if the arrangement has not expired according to its terms); (C) no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default or permit termination,
modification, or acceleration, under the written arrangement; and (D) no party
has repudiated any provision of the written arrangement. The Sellers are not a
party to any verbal contract, agreement, or other arrangement which, if reduced
to written form, would be required to be listed in Section 2(j) of the
Disclosure Schedule under the terms of this Section 2(j). Except for the Assumed
Contracts, the Buyers shall not have any Liability or obligations for or in
respect of any of the contracts set forth in Section 2(j) of the Disclosure
Schedule or any other contracts or agreements of the Sellers.
k. Commission Licenses and Compliance with Commission Requirements.
To Sellers' Knowledge:
i. All licenses, permits, authorizations, franchises,
certificates of compliance, and consents of governmental bodies,
including, without limitation, the FCC License, used or useful in the
operation of the Station as they are now being operated are (A) in full
force and effect, (B) unimpaired by any acts or omissions of ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇'▇ employees or agents, (C) free and clear of any restrictions
which might limit the full operation of the Station, and (D) detailed in
Section 2(k) of the Disclosure Schedule. With respect to the licenses,
permits, authorizations, franchises, certificates of compliance and
consents referenced in the preceding sentence, Section 2(k) of the
Disclosure Schedule also sets forth, without limitation, the date of the
last renewal, the expiration date thereof, and any
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conditions or contingencies related thereto. Except as set forth in
Section 2(k) of the Disclosure Schedule, no condition exists or event has
occurred that permits, or after notice or lapse of time, or both, would
permit, the revocation or termination of any such license, permit,
consent, franchise, or authorization (other than pursuant to their express
expiration date) or the imposition of any material restriction or
limitation upon the operation of the Station as now conducted. Except as
set forth in Section 2(k) of the Disclosure Schedule, the Sellers are not
aware of any reason why the FCC License might not be renewed in the
ordinary course or revoked.
ii. The Station is in compliance with the FCC's policy on
exposure to radio frequency radiation. Access to the Station's
transmission facilities is restricted in accordance with the current
policies of the FCC.
iii. Except as set forth in Section 2(k) of the Disclosure
Schedule, to ▇▇▇▇▇▇▇'▇ Knowledge, ▇▇▇▇▇▇▇ is not the subject of any FCC or
other governmental investigation or any notice of violation or order, or
any material complaint, objection, petition to deny, or opposition issued
by or filed with the FCC or any other governmental authority in connection
with the operation of or authorization for the Station, and there are no
proceedings (other than rule making proceedings of general applicability)
before the FCC or any other governmental authority that could adversely
affect the FCC License or the authorizations listed in Section 2(k) of the
Disclosure Schedule.
iv. ▇▇▇▇▇▇▇ has filed with the FCC and all other governmental
authorities having jurisdiction over the Station all material reports,
applications, documents, instruments, and other information required to be
filed, and will continue to make such filings through the Closing Date.
▇. ▇▇▇▇▇▇▇ is not aware of any information concerning the
Station that could cause the FCC or any other regulatory authority not to
issue to the Buyers all regulatory certificates and approvals necessary
for the consummation of the transactions contemplated hereunder or the
Buyer's operation and/or ownership of the Station.
l. Intellectual Property. To Sellers' Knowledge, ▇▇▇▇▇▇▇ owns or has
the right to use pursuant to license, sublicense, agreement or permission all
Intellectual Property necessary for the operation of the businesses of ▇▇▇▇▇▇▇
as presently conducted and as presently proposed to be conducted. Each item of
Intellectual Property owned or used by ▇▇▇▇▇▇▇ immediately prior to the Closing
hereunder is set forth on Section 2(l) of the Disclosure Schedule and each item
listed will be owned or available for use the by the Buyers on identical terms
and conditions immediately subsequent to the Closing hereunder. ▇▇▇▇▇▇▇ has not
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties, and ▇▇▇▇▇▇▇ has
never received any charge, complaint, or notice alleging any such interference,
infringement, misappropriation, or violation. To the Knowledge of ▇▇▇▇▇▇▇, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of ▇▇▇▇▇▇▇.
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m. Insurance. To Sellers' Knowledge, Section 2(m) of the Disclosure
Schedule sets forth a complete and accurate description of all ▇▇▇▇▇▇▇'▇
insurance coverage. With respect to each such insurance policy: (A) the policy
is legal, valid, binding, and enforceable and in full force and effect; (B) the
policy will continue to be legal, valid, binding, and enforceable and in full
force and effect on identical terms through the Closing Date.
n. Litigation. To Sellers' Knowledge, Section 2(n) of the Disclosure
Schedule sets forth each instance in which the Sellers: (i) are subject to any
unsatisfied judgment, order, decree, stipulation, injunction, or charge; or (ii)
is a party or, to the Knowledge of the Sellers, is threatened to be made a party
to any charge, complaint, action, suit, proceeding, hearing, or investigation of
or in any court or quasijudicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator. None of the charges,
complaints, actions, suits, proceedings, hearings, and investigations set forth
in Section 2(n) of the Disclosure Schedule could result in any adverse change in
the assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Sellers or the Station taken as a whole.
The Sellers have no Knowledge of any Basis for any such charge, complaint,
action, suit, proceeding, hearing, or investigation against the Sellers.
o. Employees. To Sellers' Knowledge, Section 2(o) of the Disclosure
Schedule sets forth a listing of the names, positions, job descriptions, salary
or wage rates and all other forms of compensation paid for work at the Station
of each employee. To the Knowledge of ▇▇▇▇▇▇▇, no key employee or group of
employees has any plans to terminate employment with ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ is not a
party to or bound by any collective bargaining or similar agreement, nor has it
experienced any strikes, grievances, claims of unfair labor practices or other
collective bargaining disputes. ▇▇▇▇▇▇▇ has no Knowledge of any organizational
effort presently being made or threatened by or on behalf of any labor union
with respect to the employees of ▇▇▇▇▇▇▇.
p. Employee Benefits. Section 2(p) of the Disclosure Schedule lists
all Employee Benefit Plans that ▇▇▇▇▇▇▇ maintains or to which ▇▇▇▇▇▇▇
contributes or is required to contribute for the benefit of any current or
former employee of ▇▇▇▇▇▇▇ and true and correct copies of each such Employee
Benefit Plan have been delivered to the Buyers. To Sellers' Knowledge, each
Employee Benefit Plan (and each related trust or insurance contract) complies
and at all times has complied in form and in operation in all respects with the
applicable requirements of ERISA and the Code. ▇▇▇▇▇▇▇ does not have any
commitment to create any additional Employee Benefit Plan or modify or change
any existing Employee Benefit Plan that would affect any employee or terminated
employee of the Sellers. There are no pending or, to the Knowledge of ▇▇▇▇▇▇▇,
threatened claims under, by or on behalf of any of the Employee Benefit Plans,
by any employee or beneficiary covered by any such Employee Benefit Plan, or
otherwise involving any such Employee Benefit Plan (other than routine claims
for benefits), nor have there been any Reportable Events or Prohibited
Transactions with respect to any Employee Benefit Plan.
q. Environment, Health, and Safety.
To Sellers' Knowledge:
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i. With respect to the operation of the Station and the Real
Estate, the Sellers are, and at all times in the past have been, in
compliance in all material respects with all Environmental Laws and all
laws (including rules and regulations thereunder) of federal, state, and
local governments (and all agencies thereof) concerning employee health
and safety, and the Sellers have no Liability (and to Sellers' Knowledge
there is no Basis related to the past or present operations of the Sellers
or their predecessors for any present or future Liability) under any
Environmental Law. The Sellers have no Liability (and to Sellers'
Knowledge there is no Basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand against
the Sellers giving rise to any Liability) under the Occupational Safety
and Health Act, as amended, or any other law (or rule or regulation
thereunder) of any federal, state, local, or foreign government (or agency
thereof) concerning employee health and safety, or for any illness of or
personal injury to any employee.
ii. The Sellers have obtained and at all times has been in
compliance in all material respects with all of the terms and conditions
of all permits, licenses, and other authorizations which are required
under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules,
and timetables which are contained in, all Environmental Laws or law of
any federal, state, or local or foreign government relating to worker
health and safety.
iii. All properties and equipment used in the Station and the
Acquired Assets have been free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1, 2-trans-dichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances. No pollutant, contaminant, or
chemical, industrial, hazardous, or toxic material or waste ever has been
buried, stored, spilled, leaked, discharged, emitted, or released on any
of the Real Estate. No above ground or underground storage tanks have ever
been located at, on or under the Real Estate. The Sellers have delivered
to the Buyers a complete copy of all environmental claims, reports,
studies, compliance actions or the like of the Sellers or which are
available to the Sellers with respect to any of the Real Estate or any of
the Acquired Assets.
r. Legal Compliance. To Sellers' Knowledge, the Sellers have
complied in all material respects with all laws (including rules and regulations
thereunder) of federal, state, local and foreign governments (and all agencies
thereof. The Sellers have filed in a timely manner all reports, documents, and
other materials they were required to file (and the information contained
therein was correct and complete in all material respects) under all applicable
laws.
s. Advertising Contracts. To Sellers' Knowledge, Section 2(s) of the
Disclosure Schedule lists all arrangements for the sale of air time or
advertising on the Station in excess of $1000, and the amount to be paid to
▇▇▇▇▇▇▇ therefor. ▇▇▇▇▇▇▇ has no reason to believe and has not received a notice
or indication of the intention of any of the advertisers or third parties to
material contracts of ▇▇▇▇▇▇▇ to cease doing business or to reduce in any
material respect the business transacted with ▇▇▇▇▇▇▇ or to terminate or modify
any agreements with ▇▇▇▇▇▇▇ (whether as a result of consummation of the
transactions contemplated hereby or otherwise).
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t. Brokers' Fees. To Sellers' Knowledge, the Sellers have no
Liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
u. Undisclosed Commitments or Liabilities. To Sellers' Knowledge,
there are no material commitments, liabilities or obligations relating to the
Station, whether accrued, absolute, contingent or otherwise including, without
limitation, guaranties by the Sellers of the liabilities of third parties, for
which specific and adequate provisions have not been made on the Financial
Statements except those incurred in or as a result of the Ordinary Course of
Business since January 1, 1997.
v. Disclosure. To Sellers' Knowledge, the representations and
warranties contained in this Section 2 do not contain any untrue statement of a
fact or omit to state any fact necessary in order to make the statements and
information contained in this Section 2 not misleading.
3. Representations and Warranties of the Buyer.
Buyers represent and warrants to the Sellers that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date except as set
forth in the Disclosure Schedule.
a. Organization of the Buyers. Broadcasting and Licensing are
corporations duly organized, validly existing, and in good standing under the
laws of the jurisdiction of Nevada. Buyers have the power and authority to own
or lease their properties and to carry on all business activities now conducted
by them. The sole shareholder of Licensing is Broadcasting; the sole shareholder
of Broadcasting is Cumulus Holdings, Inc.
b. Authorization of Transaction. Buyers have full power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to perform their obligations hereunder and thereunder. This Agreement and the
Ancillary Agreements constitute legally binding obligations of the Buyers,
enforceable against the Buyers in accordance with their respective terms and
conditions.
c. Noncontravention. To Buyers' Knowledge, neither the execution and
the delivery of this Agreement or the Ancillary Agreements, nor the consummation
of the transactions contemplated hereby and thereby (including the assignments
and assumptions referred to in Section 1(e) above), will (i) violate any
statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court to
which the Buyers are subject or any provision of their articles of organization
or other charter documents, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice or
third party consent under any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest, or other arrangement to which the
Buyers are a party or by which they are bound or to which any of their
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assets is subject. Other than the Assignment Application described in Section
4(b), the Buyers do not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any court or government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement or the Ancillary Agreements (including the
assignments and assumptions referred to in Section 1(e) above).
d. Brokers' Fees. To Buyers' Knowledge, the Buyers have no Liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which the
Sellers could become liable or obligated.
4. Pre-Closing Covenants.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
a. General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfying the closing conditions set forth in Section 5 below).
b. Assignment Applications. Within ten (10) business days after the
execution of this Agreement, ▇▇▇▇▇▇▇ and the Buyers shall jointly file with the
FCC an application for assignment of the FCC License, permits and authorizations
pertaining to the Station from ▇▇▇▇▇▇▇ to Licensing (the "Assignment
Application"). The costs of the FCC filing and attorney's fees in connection
with the Assignment Application shall be borne by the Buyers. ▇▇▇▇▇▇▇ and the
Buyers shall thereafter prosecute the Assignment Application with all reasonable
diligence and otherwise use commercially reasonable efforts to obtain the grant
of the Assignment Application as expeditiously as practicable (but neither
▇▇▇▇▇▇▇ nor the Buyers shall have any obligation to satisfy complainants or the
FCC by taking any steps which would have a material adverse effect upon the
Station or impose significant costs on such party). If the FCC imposes any
condition on either party to the Assignment Application, such party shall use
commercially reasonable efforts to comply with such condition, provided, that
neither party shall be required hereunder to comply with any condition that
would have a material adverse effect upon the Station or any Affiliate. ▇▇▇▇▇▇▇
and the Buyers shall jointly oppose any requests for reconsideration or judicial
review of FCC approval of the Assignment Application and shall jointly request
from the FCC extension of the effective period of FCC approval of the Assignment
Application if the Closing shall not have occurred prior to the expiration of
the original effective period of the FCC Consent. Nothing in this Section 4(b)
shall be construed to limit either party's right to terminate this Agreement
pursuant to Section 9 of this Agreement.
c. Employment Offers. Upon notice to ▇▇▇▇▇▇▇, and at mutually
agreeable times, ▇▇▇▇▇▇▇ will permit the Buyers to meet with its employees prior
to the Closing Date. The Buyers may, at their option, extend offers of
employment to all or any of ▇▇▇▇▇▇▇'▇ employees effective on the Closing Date.
From and after the execution of this Agreement, ▇▇▇▇▇▇▇ shall use its best
efforts to assist Buyers in retaining those employees of the Station which the
Buyers wish to
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hire in connection with the operation of the Station by the Buyers subsequent to
the Closing, and ▇▇▇▇▇▇▇ will not take any action to preclude or discourage any
of ▇▇▇▇▇▇▇'▇ employees from accepting any offer of employment extended by the
Buyers. In addition, in the event this Agreement is terminated for any reason
other than default by the Sellers, neither the Buyers nor any of their
respective Affiliates will employ or offer to employ any employee of the Sellers
for a period of three (3) years after the termination of this Agreement, except
with the Sellers' prior written consent.
d. Notices and Consents. The Sellers will give all notices to third
parties and shall have obtained all third party consents, that the Buyers
reasonably may request. Each of the Parties will file any notification and
report forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, 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.
Each of the Parties will take any additional action that may be necessary,
proper, or advisable in connection with any other notices to, filings with, and
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make, or obtain.
e. Advertising Obligations. ▇▇▇▇▇▇▇ shall satisfy its air time
obligations under its agreements for sale of air time and advertising on the
Station for goods or services ("Barter Agreements") such that the outstanding
aggregate balance owing under all Barter Agreements as of the Closing Date shall
not exceed Five Thousand Dollars ($5,000.00) worth of air time without the
Buyers' consent. On the Closing Date, ▇▇▇▇▇▇▇ shall deliver to the Buyers a
schedule, certified by an officer of ▇▇▇▇▇▇▇, reflecting the aggregate
outstanding balances under all Barter Agreements in existence as of the Closing
Date.
f. Contracts. ▇▇▇▇▇▇▇ will not without the prior written consent of
the Buyers amend, change, or modify any of the contracts listed on Section 2(k)
of the Disclosure Schedule in any material respect. ▇▇▇▇▇▇▇ will not without
prior written consent of the Buyers enter into any contract outside the Ordinary
Course of Business which involves more than Five Thousand Dollars ($5,000).
g. Operation of Station. ▇▇▇▇▇▇▇ will not engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business. ▇▇▇▇▇▇▇ shall operate the Station in compliance with the FCC License
and the rules and regulations of the FCC, and the FCC License shall at all times
remain in full force and effect. ▇▇▇▇▇▇▇ shall file with the FCC all material
reports, applications, documents, instruments and other information required to
be filed in connection with the operation of the Station.
h. Credit and Receivables. ▇▇▇▇▇▇▇ will follow its usual and
customary policies with respect to extending credit for sales of air time and
advertising on the Station and with respect to collecting accounts receivable
arising from such extension of credit.
i. Preservation of Station and the Acquired Assets. ▇▇▇▇▇▇▇ will
keep its Station and the Acquired Assets and properties substantially intact,
including its present operations,
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physical facilities, working conditions, relationships with lessors, licensors,
advertisers, suppliers, customers, and employees, all of the Confidential
Information, call letters and trade secrets of the Station, and the FCC License.
j. Full Access and Consultation. Sellers will permit representatives
of the Buyers to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Station, to all
premises, properties, books, records, contracts, Tax records, and documents of
or pertaining to the Sellers. The Sellers will consult with the Buyers'
management with a view to informing Buyers' management as to the operations,
management and business of the Station. Without limiting the foregoing, Sellers
acknowledge and agree that they will provide the Buyers and their
representatives with such access to the properties, books, records, documents
and operations of the Sellers as contemplated herein in a manner which will
permit the Buyers to fully complete their due diligence review within the sixty
(60) day period referenced in Section 5(a)(vi), below.
k. Notice of Developments. The Sellers will give prompt written
notice to the Buyers of any material development affecting business, operations
or prospects of the Station or the Acquired Assets or the ability of the Sellers
to perform hereunder.
l. Exclusivity. The Sellers will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
any (A) merger or consolidation, (B) acquisition or purchase of securities or
assets, or (C) similar transaction or business combination involving the
Sellers, or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any person to do or seek any of the
foregoing. The Sellers will notify the Buyers immediately if any person makes
any proposal, offer, inquiry, or contact with respect to any of the foregoing.
m. Title Insurance, Surveys and Environmental Assessments. The
Buyers will obtain with respect to each parcel of Real Estate subject to the
Leases, a leasehold owner's policy issued by a title insurer reasonably
satisfactory to the Sellers, in an amount equal to the fair market value of such
Real Estate (including all improvements located thereon), insuring over the
standard pre-printed exceptions and insuring leasehold title to such Real Estate
in the Buyers as of the Closing subject only to the Permitted Real Estate
Encumbrances, together with such endorsements for zoning, contiguity, public
access and extended coverage as the Buyers or their lender reasonably request,
(ii) with respect to each parcel of Owned Real Estate, an owner's policy of
title insurance by a title insurer reasonably satisfactory to the Buyers, in an
amount equal to the fair market value of such Real Estate (including all
improvements located thereon), insuring over the standard pre-printed exceptions
and insuring title to the Owned Real Estate to be vested in the Buyers as of the
Closing free and clear of all liens and encumbrances except Permitted Real
Estate Encumbrances, together with such endorsements for zoning, contiguity,
public access and extended coverage as the Buyers or its lender reasonably
request, (iii) a current survey of each parcel of Real Estate certified to the
Buyers and its lender, prepared by a licensed surveyor and conforming to current
ALTA Minimum Detail Requirements for Land Title Surveys, disclosing the location
of all improvements, easements, party walls, sidewalks, roadways, utility lines,
and other matters shown
-13-
customarily on such surveys, and showing access affirmatively to public streets
and roads (the "Surveys') which shall not disclose any survey defect or
encroachment from or onto any of the Real Estate which has not been cured or
insured over prior to the Closing; and (iv) with respect to each parcel of Real
Estate, a current Phase I environmental site assessment from an environmental
consultant or engineer reasonably satisfactory to the Sellers which does not
indicate that the Sellers and the Real Estate are not in compliance with any
Environmental Law and which shall not disclose or recommend any action with
respect to any condition to be remediated or investigated or any contamination
on the site assessed. The Buyers will pay the costs of these Surveys and
environmental assessments, and the Buyers and Sellers will each pay one-half the
cost of obtaining title insurance, and the cost of revenue stamps for recording
the deed.
n. Control of Station. The transactions contemplated by this
Agreement shall not be consummated until after the FCC has given its consent and
approval to the Assignment Application. Between the date of this Agreement and
the Closing Date, the Buyers and their employees or agents shall not directly or
indirectly control, supervise, or direct, or attempt to control, supervise, or
direct, the operation of the Station, and such operation shall be the sole
responsibility of and in the control of ▇▇▇▇▇▇▇.
o. Risk of Loss. The risk of loss, damage, or destruction to any of
the Acquired Assets shall remain with the Sellers until the Closing. In the
event of any such loss, damage, or destruction the Sellers will promptly notify
the Buyers of all particulars thereof, stating the cause thereof (if known) and
the extent to which the cost of restoration, replacement and repair of the
Acquired Assets lost, damaged or destroyed will be reimbursed under any
insurance policy with respect thereto. The Sellers will, at Sellers' expense,
repair or replace such Acquired Assets to their former condition as soon as
possible after loss, damage or destruction thereof and shall use its best
efforts to restore as promptly as possible transmissions as authorized in the
FCC License. The Closing Date shall be extended (with FCC consent, if necessary)
for up to sixty (60) days to permit such repair or replacement. If repair or
replacement cannot be accomplished within sixty (60) days of the date of the
Sellers' notice to the Buyers and the Buyers determine that the Sellers' failure
to repair or replace would have a material adverse effect on the operation of
the Station:
i. the Buyers may elect to terminate this Agreement; or
ii. the Buyers may postpone the Closing Date until such time
as the property has been repaired, replaced or restored in a manner and to
an extent reasonably satisfactory to the Buyers, unless the same cannot be
reasonably effected within ninety (90) days of the date of the Sellers'
notice to the Buyers, in which case either party may terminate this
Agreement; or
iii. the Buyers may choose to accept the Acquired Asset in
their "then" condition, together with the Sellers' assignment to the
Buyers of all rights under any insurance claims covering the loss, damage
or destruction and payment over to the Buyers of any proceeds under any
such insurance policies, previously received by the Sellers with respect
thereto plus an amount equal to the amount of any deductible or
self-insurance maintained by Sellers on such Acquired Assets. In the event
the Closing Date is postponed
-14-
pursuant to this Section 4(o), the parties hereto will cooperate to extend
the time during which this Agreement must be closed as specified in the
consent of the FCC.
5. Conditions to Obligation to Close.
a. Conditions to Obligation of the Buyers. The obligation of Buyers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
i. the representations and warranties set forth in Section 2
above shall be true and correct in all respects at and as of the Closing
Date as though made on and as of the Closing Date;
ii. the Sellers shall have performed and complied with all of
its covenants hereunder in all respects through the Closing;
iii. all of the third party consents specified in Section 4(d)
above and all of the title insurance commitments (and endorsements),
Surveys and environmental site assessments described in Section 4(o) above
shall have been procured by Buyers;
iv. no action, suit, investigation, inquiry or other
proceeding shall be pending or threatened before any court or
quasijudicial or administrative agency of any federal, state, local, or
foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction, or charge would (A) prevent consummation of any
of the transactions contemplated by this Agreement or impose damages or
penalties upon any of the parties if such transactions are consummated,
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, or (C) affect adversely the right of the
Buyers to own, operate, or control the Acquired Assets (and no such
judgment, order, decree, stipulation, injunction, or charge shall be in
effect);
v. the Sellers shall have delivered to the Buyers a
certificate (without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified above in
Sections 5(a)(i) through (iv) is satisfied in all respects;
vi. the Buyers shall, within sixty (60) days of the date
hereof, be satisfied with their examination and due diligence review
referred to in Section 4(j) above. If, within sixty (60) days after the
date hereof, Buyers do not deliver a written notice terminating this
Agreement in regard to the contingency described in this Section 5(a)(vi),
then the contingency set forth in this Section 5(a)(vi) shall be deemed
waived by Buyers;
vii. the Assignment Application shall have been approved by a
Final Order of the FCC, all applicable waiting periods (and any extensions
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or been
terminated, and the Buyers shall have received all
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governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
viii. the relevant parties shall have entered into the
Postclosing Agreement;
ix. the Parties shall have agreed to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for
all purposes (including financial accounting and tax purposes) in
accordance with a formula which allocates approximately ninety percent
(90%) of the Purchase Price to intangible assets, including the broadcast
license, and the remainder to the tangible assets associated with the
Station; and
x. all actions to be taken by the Sellers in connection with
the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyers.
b. Conditions to Obligation of the Sellers. The obligation of the
Sellers to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
i. the representations and warranties set forth in Section 3
above shall be true and correct in all respects at and as of the Closing
Date as though made on and as of the Closing Date;
ii. the Buyers shall have performed and complied with all of
their covenants hereunder in all respects through the Closing;
iii. no action, suit, investigation, inquiry or other
proceeding shall be pending or threatened before any court or quasi
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or impose damages or penalties
upon any of the Parties if such transactions are consummated, or (B) cause
any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
iv. the Buyers shall have delivered to the Sellers a
certificate (without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified above in
Section 5(b)(i)-(iii) is satisfied in all respects and the statements
contained in such certificate shall be deemed a warranty of the Buyers
which shall survive the Closing;
v. the Assignment Application shall have been approved by a
Final Order of the FCC and the Buyers shall have received all governmental
approvals required to
-16-
transfer all other authorizations, consents, and approvals of governments
and governmental agencies set forth in the Disclosure Schedule;
vi. the relevant parties shall have entered into the
Postclosing Agreement; and
vii. all actions to be taken by the Buyers in connection with
the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Sellers.
6. Post-Closing Covenants.
The Parties agree as follows with respect to the period following
the Closing:
a. General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, all the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 7 below).
b. Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Station, each of the other Parties will reasonably cooperate with
the contesting or defending Party and its counsel in the contest or defense,
make available his or its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 7 below); provided, however, that such access and
cooperation does not unreasonably disrupt the normal operations of the
cooperating party.
c. Adjustments. Operation of the Station and the income and expenses
attributable thereto up through the close of business on the day before the
Closing Date shall be for the account of the Sellers and thereafter for the
account of the Buyers. Such items as employee salaries, vacation, sick day and
personal time accruals, and fringe benefits, power and utilities charges,
insurance, real and personal property taxes, prepaid expenses, deposits, music
license fees, and rents and payments pertaining to the Assumed Contracts
(including any contracts for the sale of time for cash, trade or barter so
assigned) shall be prorated between the Sellers and the Buyers as of the Closing
Date in accordance with the foregoing principle. In addition, all commissions
payable with respect to the accounts receivable of the Sellers (whether due
before or after Closing) shall be solely for the account and responsibility of
the Sellers. Contractual arrangements that do not reflect an equal rate of
compensation to a Station over the term of the agreement shall be equitably
adjusted
-17-
as of the Closing Date. The prorations and adjustments hereunder shall be made
and paid insofar as feasible on the Closing Date, with a final settlement sixty
(60) days after the Closing Date. In the event of any disputes between the
Parties as to such adjustments, the amounts not in dispute shall nonetheless be
paid at such time and such disputes shall be determined by an independent
accounting firm mutually acceptable to both parties and the fees and expenses of
such accounting firm shall be paid one-half (1/2) by the Sellers and one-half
(1/2) by the Buyers.
d. Collection of Accounts Receivable. At the Closing, the Sellers
will turn over to the Buyers, for collection only, the accounts receivable of
the Station owing to the Sellers as of the close of business on the day before
the Closing Date. A schedule of such accounts receivable will be delivered by
the Sellers to the Buyers on the Closing Date or as soon thereafter as possible.
The Buyers agree to use commercially reasonable efforts in the ordinary course
of business (but without responsibility to institute legal or collection
proceedings) to collect such accounts receivable during the 180-day period
following the Closing Date, and will remit all payments received on such
accounts on a monthly basis during this 180-day period together with an
accounting of all payments received within such period. The Buyers shall have
the sole right to collect such accounts receivable during such one hundred
eighty (180) day period. In the event the Buyers receive monies during the
180-day period following the Closing Date from an advertiser who, after the
Closing Date, is advertising on the Station, and that advertiser was included
among the accounts receivable as of the Closing Date, the Buyers shall apply
said monies to the oldest outstanding balance due on the particular account,
except in the case of a "disputed" account receivable. For purposes of this
Section 6(d), a "disputed" account receivable means one which the account debtor
refuses to pay because he asserts that the money is not owed or the amount is
incorrect. In the case of such a disputed account, the Buyers shall immediately
return the account to the Sellers prior to expiration of the 180-day period
following the Closing Date. If the Buyers return a disputed account to the
Sellers, the Buyers shall have no further responsibility for its collection and
may accept payment from the account debtor for advertising carried on the
Station after the Closing Date. At the end of the 180-day period following the
Closing Date, the Buyers will turn back to the Sellers all of the accounts
receivable of the Station as of the Closing Date owing to the Sellers which have
not yet been collected, and the Buyers will thereafter have no further
responsibility with respect to the collection of such receivables. During the
180-day period following the Closing Date, the Buyers shall afford the Sellers
reasonable access to the accounts receivable "aging list." The Sellers
acknowledge and agrees that the Buyers are acting as collection agent hereunder
for the sole benefit of the Sellers and that Buyers have accepted such
responsibility for the accommodation of the Sellers. The Buyers shall not have
any duty to inquire as to the form, manner of execution or validity of any item,
document, instrument or notice deposited, received or delivered in connection
with such collection efforts, nor shall the Buyers have any duty to inquire as
to the identity, authority or rights of the persons who executed the same.
e. Consents. In the event any of the Assumed Contracts are not
assignable or any consent to such assignment is not obtained on or prior to the
Closing Date, and the Buyers elect to consummate the transactions contemplated
herein despite such failure or inability to obtain such consent, the Sellers
shall continue to use commercially reasonable efforts to obtain any such
assignment or consent after the Closing Date. Until such time as such assignment
or approval has been obtained, the Sellers will cooperate with Buyers in any
lawful and economically feasible
-18-
arrangement to provide that the Buyers shall receive the Sellers' interest in
the benefits under any such Assumed Contract, including performance by the
Sellers as agent, if economically feasible; provided, however, that the Buyers
shall undertake to pay or satisfy the corresponding liabilities for the
enjoyment of such benefit to the extent that Buyers would have been responsible
therefor if such consent or assignment had been obtained.
g. Nonsolicitation. If this Agreement is terminated for any reason
other than default by Sellers, neither Buyers nor their respective Affiliates
will take any action that primarily is designed or intended to have the effect
of discouraging any lessor, licensor, customer, supplier, or other business
associate of the Sellers from maintaining the same business relationships with
the Sellers after the Closing as it maintained with the Sellers prior to the
Closing. Except with the Sellers' prior written consent, neither the Buyers nor
any of their respective Affiliates will employ or offer to employ any employee
of the Sellers for a period of three (3) years after the termination of this
Agreement.
7. Remedies for Breaches of this Agreement.
a. Survival. The representations and warranties of the Sellers
contained in Sections 2(a), 2(b), 2(c), and 2(d) hereof or relating to the
Sellers' title to the Acquired Assets, and the representations and warranties of
the Buyers contained in Sections 3(a), 3(b), 3(c), and 3(d) hereof shall survive
the Closing and continue in full force and effect for a period of two (2) years
following Closing. All of the other representations and warranties and all
covenants of the Buyers and the Sellers other than the post-closing covenants in
Section 6 above shall terminate at Closing.
b. Indemnification Provisions for the Benefit of the Buyers. Except
as described below in Section 7(e) with respect to a breach of a warranty or
covenant prior to the Closing Date, the Sellers agree to indemnify the Buyers
from and against the entirety of any Adverse Consequences the Buyers may suffer
resulting from, arising out of, relating to, in the nature of, or caused by:
i. any misrepresentation or breach of any of the Sellers'
representations or warranties, and covenants contained in this Agreement
or in any Ancillary Agreement executed and/or delivered by the Sellers (so
long as the Buyers make a written claim for indemnification within the
applicable survival period);
ii. any breach or nonfulfillment of any agreement or covenant
of the Sellers contained herein or in any Ancillary Agreement;
iii. any Liability of the Sellers which is not an Assumed
Liability; and/or
iv. any Liability of the Buyers arising by operation of law
(including under any bulk transfer law of any jurisdiction or under any
common law doctrine of defacto merger or successor liability) which is not
an Assumed Liability.
-19-
c. Indemnification Provisions for the Benefit of the Sellers. Except
as described below in Section 7(e) with respect to a breach of a warranty or
covenant prior to the Closing Date, the Buyers agree to indemnify the Sellers
from and against the entirety of any Adverse Consequences the Sellers may suffer
resulting from, arising out of, relating to, in the nature of, or caused by (i)
any misrepresentation or breach of any of the Buyers' representations or
warranties contained in this Agreement or in any Ancillary Agreement executed
and/or delivered by the Buyers (so long as the Sellers makes a written claim for
indemnification within the applicable survival period) or (ii) any breach or
nonfulfillment of any agreement or covenant of the Buyers contained herein or in
any Ancillary Agreement, or (iii) any Assumed Liability.
d. Specific Performance. Each of the Parties acknowledges and agrees
that each Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the Parties and the
matter (subject to the provisions set forth in Section 10(o) below), in addition
to any other remedy to which it may be entitled, at law or in equity. Each of
the Parties acknowledges and agrees that not withstanding the provision in
Section 7(e) with respect to the remedy of liquidated damages upon a breach of a
warranty or covenant of this Agreement prior to the Closing, money damages would
not be an adequate remedy for the other Party for a breach of any provision of
this Agreement.
e. Liquidated Damages. The Buyers and the Sellers acknowledge that
in the event that the transactions contemplated by this Agreement are not closed
because of a default by the Buyers, the Adverse Consequences to the Sellers as a
result of such default may be difficult, if not impossible, to ascertain.
Accordingly, in lieu of indemnification pursuant to Section 7(c), the Sellers
shall be entitled to receive from the defaulting Party for such default the
▇▇▇▇▇▇▇ Money Deposit as liquidated damages without the need for proof of
damages, subject only to successfully proving in a court of competent
jurisdiction that the Buyer materially breached this Agreement and that the
transactions contemplated thereby have not occurred.
f. Matters Involving Third Parties. If any third party shall notify
any Party (the "Indemnified Party") with respect to any matter which may give
rise to a claim for indemnifica tion against any other Party (the "Indemnifying
Party",) under this Section 7, then the Indemnified Party shall notify the
Indemnifying Party thereof promptly; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any liability or obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is damaged as a result
of such failure. In the event any Indemnifying Party notifies the Indemnified
Party within 15 days after the Indemnified Party has given notice of the matter
that the Indemnifying Party is assuming the defense thereof, (i) the
Indemnifying Party will defend the Indemnified Party against the matter with
counsel of its choice reasonably satisfactory to the Indemnified Party, (ii) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
(except that the Indemnifying Party will be responsible for the fees and
expenses of the separate co-counsel to the extent the Indemnified Party
reasonably concludes that
-20-
the counsel the Indemnifying Party has selected has a conflict of interest),
(iii) the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the matter without the written consent
of the Indemnifying Party (not to be withheld unreasonably), and (iv) the
Indemnifying Party will not consent to the entry of any judgment with respect to
the matter, or enter into any settlement which does not include a provision
whereby the plaintiff or claimant in the matter releases the Indemnified Party
from all Liability with respect thereto, without the written consent of the
Indemnified Party (not to be withheld unreasonably). In the event the
Indemnifying Party does not notify the Indemnified Party within 15 days after
the Indemnified Party has given notice of the matter that the Indemnifying Party
is assuming the defense thereof, however, and/or in the event the Indemnifying
Party shall fail to defend such claim actively and in good faith, then the
Indemnified Party may defend against, or enter into any settlement with respect
to, the matter in any manner it reasonably may deem appropriate.
g. Limitation of Liability. Notwithstanding anything in this
Agreement to the contrary, after the Closing neither party shall indemnify or
otherwise be liable to the other party from and after the Closing Date except to
the extent that the Adverse Consequences suffered by the Identified Party, in
the aggregate from all indemnifiable events shall exceed Twenty-Five Thousand
Dollars ($25,000) and indemnification shall be made by the indemnifying party
only to the extent of such excess over Twenty-Five Thousand Dollars ($25,000);
provided however that the foregoing limitation shall not be applicable to: (i)
the obligations of the Buyer to pay and discharge any Liability of the Sellers
to third parties from and after the Closing Date assumed by the Buyer under the
terms of this Agreement; (ii) the obligation of the Sellers to pay and discharge
any Liability to third parties not assumed by the Buyer under the terms of this
Agreement, or (iii) the Sellers' obligation to deliver clear title to the
Acquired Assets.
8. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of
the assets of ▇▇▇▇▇▇▇, and all right, title and interest in and to all real
estate listed in Section 2(i) of the Disclosure Schedule and to be conveyed by
▇▇▇▇▇, other than Retained Assets that are used or useful in the operation of
the Station, wherever located, including but not limited to all of its (a)
leaseholds and other interests of any kind therein, improvements, fixtures, and
fittings thereon (such as towers and antennae), and easements, rights-of-way,
and other appurtenances thereto); (b) tangible personal property (such as fixed
assets, computers, data processing equipment, electrical devices, monitoring
equipment, test equipment, switching, terminal and studio equipment,
transmitters, transformers, receivers, broadcast facilities, furniture,
furnishings, inventories of compact disks, records, tapes and other supplies,
vehicles) and all assignable warranties with respect thereto; (c) Intellectual
Property, goodwill associated therewith, licenses and sublicenses granted and
obtained with respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests therein under the
laws of all jurisdictions; (d) rights under orders and agreements (including
those Barter Agreements and Advertising Contracts identified on the Disclosure
Schedule) now existing or entered into in the Ordinary Course of Business for
the sale of advertising time on the Station; (e) Assumed Contracts, indentures,
Security Interests, guaranties, other similar arrangements, and rights
thereunder; (f) call letters of the Station, jingles, logos, slogans, and
business goodwill of the Station; (g) claims, causes of action, chooses in
action, rights of recovery (including rights under policies of
-21-
insurance), rights of set off, and rights of recoupment; (h) Licenses and
similar rights obtained from governments and governmental agencies; and (i) FCC
logs and records and all other books, records, ledgers, logs, files, documents,
correspondence, advertiser lists, all other lists, plats, architectural plans,
drawings, and specifications, creative materials, advertising and promotional
materials, program production materials, studies, reports, and other printed or
written materials; and (j) goodwill of the Station.
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including all attorneys' fees and court costs.
"Advertising Contracts" has the meaning set forth in Section 2(s), above.
"Affiliate" means with reference to any person or entity, another person
or entity controlled by, under the control of or under common control with that
person or entity.
"Assignment Application" has the meaning set forth in Section 4(b) above.
"Assumed Contracts" means the Leases, the Barter Agreements, the
Advertising Contracts and those contracts identified on Section 2(k) of the
Disclosure Schedule as those to be assumed by Broadcasting.
"Assumed Liabilities" means (a) obligations of ▇▇▇▇▇▇▇ which accrue after
the Closing Date under the Assumed Contract either: (i) to furnish services, and
other non-Cash benefits to another party after the Closing; or (ii) to pay for
goods, services, and other non-Cash benefits that another party will furnish to
it after the Closing. The Assumed Liabilities shall not include any Retained
Liabilities.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Buyers" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents determined in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 1(d) above.
"Closing Date" has the meaning set forth in Section 1(d) above.
"Code" means the Internal Revenue Code of 1986, as amended.
-22-
"Confidential Information" means any information concerning the businesses
and affairs of the Sellers.
"Disclosure Schedule" has the meaning set forth in Section 1 above.
"▇▇▇▇▇▇▇ Money Deposit" has the meaning set forth in Section 1(c) above.
"▇▇▇▇▇▇▇ Money Escrow Agreement" has the meaning set forth in Section 1(c)
above.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multi-employer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Federal Water Pollution Control Act of 1972, the Clean Air Act
of 1970, the Safe Drinking Water Act of 1974, the Toxic Substances Control Act
of 1976, the Refuse Act of 1899, or the Emergency Planning and Community
Right-to-Know Act of 1986 (each as amended), or any other law of any federal,
state, local, or foreign government or agency thereof (including rules,
regulations, codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety, or
pollution or protection of the environment, including, without limitation, laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or chemical, industrial, hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or lands or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title Company, Inc., Bloomfield
Hills, Michigan.
"Extremely Hazardous Substance" has the meaning set forth in Section 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FCC" means the Federal Communications Commission of the United States.
-23-
"FCC License" means the licenses, permits and other authorizations,
including any temporary waiver or special temporary authorization, issued by the
FCC to the Sellers in connection with the conduct of the business and operation
of the Station.
"Final Order" means an action by the FCC as to which: (a) no request for
stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"Financial Statements" has the meaning set forth in Section 2(e) above.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" has the meaning set forth in Section 7(d) above.
"Indemnifying Party" has the meaning set forth in Section 7(d) above.
"Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, call letters, logos, trade names, and corporate names and registrations
and applications for registration thereof, (c) all programs, programming
materials, copyrights and registrations and applications for registration
thereof, (d) mask works and registrations and applications for registration
thereof, (e) computer software, data, and documentation, (f) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, market and other research information, drawings,
specifications, designs, plans proposals, technical data, copyrightable works,
financial, marketing, and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information), (g) other
proprietary rights, and (h) copies and tangible embodiments thereof (in whatever
form or medium).
"Knowledge" means to the best of Sellers' actual knowledge.
"Leases" means those real estate leases to which Sellers are a party
governing Sellers' studios and FM tower sites, as described in Section 2(i) of
the Disclosure Schedule.
-24-
"Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"Licenses" means all FCC and other governmental licenses, franchises,
approvals, certificates, authorizations and rights of the Sellers with respect
to the operations of the Station and all applications therefor, together with
any renewals, extension or modifications thereof and additions thereto.
"Multi-employer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Owned Real Estate" means the real property owned by ▇▇▇▇▇ as described in
Section 2(i) of the Disclosure Schedule and all buildings, fixtures, and
improvements located thereon.
"Party" has the meaning set forth in the preface above.
"Permitted Real Estate Encumbrances" shall have the meaning set forth in
Section 2(i), above.
"Post-Closing Agreement" means the Post-Closing Agreement with Sellers'
owners in the form attached hereto as Exhibit D.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Purchase Price " has the meaning set forth in Schedule A below.
"Real Estate" means the Owned Real Estate and the real estate, building,
fixtures and improvements which are the subject of the Leases.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Retained Assets" means (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of ▇▇▇▇▇▇▇ as
a corporation; (ii) any of the rights of the Sellers under this Agreement (or
under any side agreement between the Sellers on the one hand and the Buyers on
the other hand entered into on or after the date of this Agreement); (iii)
accounts, notes and other receivables of the Sellers; (iv) deposits,
prepayments, and refunds; and (v) Cash.
-25-
"Retained Liabilities" means any other obligations or Liabilities of the
Sellers, including but not limited to: (i) any Liability relating to the
ownership or operation of the Station prior to the Closing; (ii) any Liability
of the Sellers for income, transfer (excluding recording charges and transfer
taxes), sales, use, and other Taxes arising in connection with the consummation
contemplated hereby; (iii) any Liability of the Sellers for costs and expenses
incurred in connection with this Agreement or the consummation of the
transactions contemplated hereby (except as set forth in Section 4(i) relating
to Surveys, title commitments and environmental audits and Section 4(b) with
regard to the Assignment Application); or (iv) any Liability or obligation of
the Sellers under this Agreement (or under any side agreement between the
Sellers on the one hand and the Buyers on the other hand entered into on or
after the date of this Agreement).
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; and (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation.
"Sellers" has the meaning set forth in the preface above.
"Station" means the radio broadcast station having the call letters
WTWR-FM, licensed by the FCC to operate in Monroe, Michigan.
"Subsidiary," with respect to any person, means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which ) 50% or more of (i) the outstanding capital stock or other equity
interest having voting power to elect a majority of the Board of Directors of
such corporation or persons having a similar role as to an entity that is not a
corporation, (ii) the interest in the profits of such partnership or joint
venture, or (iii) the beneficial interest of such trust or estate are at such
time directly or indirectly owned by such person or one or more of such person's
Subsidiaries.
"Surveys" has the meaning set forth in Section 4(o) above.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property and personal property (on a
due date basis as applicable), sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
-26-
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
i. the Buyers and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
ii. the Buyers may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing in the event the
Sellers are in breach of any representation, warranty, or covenant
contained in this Agreement; provided, however, that if such breach is
capable of being cured, such breach also remains uncured for twenty (20)
days after notice of breach is received by the Sellers from the Buyers;
iii. the Sellers may terminate this Agreement by giving
written notice to the Buyers at any time prior to the Closing in the event
the Buyers are in breach of any representation, warranty, or covenant
contained in this Agreement; provided, however that if such breach is
capable being cured, such breach remains uncured for twenty (20) days
after notice of breach is received by the Buyers from the Sellers;
iv. the Buyers may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing if the Closing
shall not have occurred on or before the 270th day following the date of
this Agreement by reason of the failure of any condition precedent under
Section 5(a) hereof (unless the failure results primarily from the Buyers
themselves breaching any representation, warranty, or covenant contained
in this Agreement);
v. the Sellers may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing if the Closing shall
not have occurred on or before the 270th day following the date of this
Agreement by reason of the failure of any condition precedent under
Section 5(b) hereof (unless the failure results primarily from the Sellers
themselves breaching any representation, warranty, or covenant contained
in this Agreement);
vi. the Buyers shall, within sixty (60) days after the date
hereof, be satisfied in their sole discretion as to the results of their
examination and due diligence review referred to in Section 4(l) hereof.
If, within sixty (60) days after the date hereof, Buyers do not deliver to
Sellers a written notice terminating this Agreement in regard to the
contingency in this Section 5(a)(vi), then the contingency set forth in
this Section 5(a)(vi) shall be deemed waived by Buyers; or
vii. the Buyers or the Sellers may terminate this Agreement if
any Assignment Application is denied by Final Order.
-27-
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9(a) above, all obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (except for any
Liability of any Party then in breach and except that Buyer will pay up to
$10,000 to Sellers as reimbursement for actual attorneys' fees if the Agreement
is terminated for any reason other than default by Sellers).
10. Miscellaneous.
a. Press Releases and Announcements. No Party shall issue any press
release or announcement relating to the subject matter of this Agreement prior
to the Closing without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Party prior to making the disclosure).
b. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
c. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, that may have related in any way to the
subject matter hereof.
d. Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party, provided that (i) the Buyers may assign all of
their right, title and interest in, to and under this Agreement to one or more
Affiliates, who shall then, subject to the terms and conditions of this
Agreement, have the right to receive the Acquired Assets, assume the Assumed
Liabilities, and to pay to the Sellers the Purchase Price therefor or to any
successor to the Buyers in the event of any sale, merger or consolidation of the
Buyers, and (ii) Buyers may assign their indemnification claims and their rights
under the warranties and representations of the Sellers to the financial
institution(s) providing financing to the Buyers in connection with this
transaction.
e. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
f. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
g. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be considered to be given
and received in all respects when hand delivered, when delivered via prepaid
express or courier delivery service, when sent by
-28-
facsimile transmission actually received by the receiving equipment or three (3)
days after deposited in the United States mail, certified mail, postage prepaid,
return receipt requested, in each case addressed to the intended recipient as
set forth below:
If to the Sellers:
▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as conservator for ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Communications, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Suite 204
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(which copy shall not constitute notice to Sellers)
If to the Buyers:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
c/o QUAESTUS Management Corp.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-29-
Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given unless and until it actually is received by
the party for whom it is intended. Any party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
h. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts) of the State
of Michigan.
i. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyers and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
j. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
k. Expenses. The Buyers and the Sellers, will each bear their own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby, other than as set
forth in Section 4(b) with regard to the Assignment Applications and as set
forth in Section 4(n) with respect to Surveys, title commitments and
environmental audits. The Sellers will pay all income taxes of Sellers. The
Sellers and the Buyers will each pay one-half (1/2) of any transfer or sales
taxes and other recording or similar fees necessary to vest title to each of the
Acquired Assets in the Buyers. In the event this Agreement is terminated for any
reason other than default by Sellers, the Buyers will reimburse Sellers for up
to Ten Thousand Dollars ($10,000) of actual legal expenses incurred by Sellers.
l. Construction. The language used in this Agreement will be deemed
to be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against any Party. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Nothing in the Disclosure Schedule shall be deemed adequate
to disclose an exception to a representation or warranty made herein unless the
Disclosure Schedule identifies the
-30-
exception with reasonable particularity and describes the relevant facts in
reasonable detail. The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any Party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
m. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
n. Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Ann Arbor, Michigan in any
action or proceeding arising out of or relating to this Agreement, agrees that
all claims in respect of the action or proceeding may be heard and determined in
any such court, and agrees not to bring any action or proceeding arising out of
or relating to this Agreement in any other court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect thereto. Any Party may make service on the other
Party by sending or delivering a copy of the process to the Party to be served
at the address and in the manner provided for the giving of notices in Section
10(g) above. Nothing in this Section 10(n), however, shall affect the right of
any Party to serve legal process in any other manner permitted by law. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
CUMULUS BROADCASTING, INC.
By:
----------------------------
(printed)
-------------------------------
Title:
-------------------------
CUMULUS LICENSING CORPORATION
By:
----------------------------
(printed)
-------------------------------
Title:
-------------------------
▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By:
----------------------------
(printed)
-------------------------------
Title:
-------------------------
▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
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SCHEDULE A
Purchase Price. The Buyers agree to pay to ▇▇▇▇▇▇▇, as consideration for
the Acquired Assets, the amount of Two Million Eight Hundred Thousand Dollars
($2,800,000.00), payable as follows:
(i) on the date of this Agreement, the Buyers will deposit with the
Escrow Agent the amount of One Hundred Forty Thousand Dollars ($140,000.00)
(collectively with the escrow amount described below, the "▇▇▇▇▇▇▇ Money
Deposit") in cash; and
(ii) on the Closing Date, the Buyers shall pay to ▇▇▇▇▇▇▇ the amount
of Two Million Six Hundred Ten Thousand Dollars ($2,610,000.00) in cash; and
(iii) on the Closing Date, the Buyer shall pay to ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇,
on behalf of all parties to the Postclosing Agreement, the amount of Fifty
Thousand Dollars ($50,000) in cash.
In addition, the Buyers agree to pay to ▇▇▇▇▇, as consideration for the
real estate to be transferred to Broadcasting by ▇▇▇▇▇, the amount of Five
Hundred Thousand Dollars ($500,000.00), payable as follows:
(i) on the date of this Agreement, the Buyers will deposit with the
Escrow Agent the amount of Twenty-Five Thousand Dollars ($25,000.00) in cash;
and
(ii) on the Closing Date, the Buyers shall pay ▇▇▇▇▇ the amount of
Four Hundred Seventy-Five Thousand Dollars ($475,000.00) in cash.
These amounts shall be referred to collectively as the "Purchase Price." The
▇▇▇▇▇▇▇ Money Deposit referenced in this Section l(c) shall be placed in escrow
with the Escrow Agent pursuant to an escrow agreement in the form attached
hereto as Exhibit A (the "▇▇▇▇▇▇▇ Money Escrow Agreement") and shall be
disbursed to Sellers or returned to Buyers as provided in the ▇▇▇▇▇▇▇ Money
Escrow Agreement.
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