Exhibit 10.74
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") are entered into as of March 5, 1998, by and
between Cumulus Broadcasting, Inc., a Nevada corporation ("Broadcasting"),
Cumulus Licensing Corporation, a Nevada corporation ("Licensing), Missouri River
Broadcasting, Inc. ("Missouri River"), a North Dakota corporation, and JKJ
Broadcasting, Inc. ("JKJ") a North Dakota corporation. Broadcasting and
Licensing are referred to collectively herein as the "Buyers;" Missouri River
and JKJ are referred to collectively herein as the "Seller." 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 9
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 the
Stations, as defined below, 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, the Sellers agree to sell, transfer, convey and
deliver to (i) Licensing, and Licensing agrees to purchase from the Sellers, all
of the FCC Licenses listed in Section 2(k) of the disclosure schedule
("Disclosure Schedule"); and (ii) Broadcasting, and Broadcasting agrees to
purchase from the Sellers, all of the Acquired Assets other than the FCC
Licenses. 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, Broadcasting agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing. The Buyers will
not assume or has 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 agree to make the escrow deposit
(the "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 a mutually agreed location,
commencing at 9:00 a.m. local time on the last day of the month in which 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 has 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(o) hereof, as necessary to obtain 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 B and (B) such other
instruments of assumption as the Sellers and their 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, the Sellers shall
execute, and shall cause each of their shareholders to execute, a Postclosing
Agreement with the Buyers including covenants not to compete with the Buyers in
the market served by the Stations for a period not to exceed three years and
agreements to indemnify the Buyers in the form of Exhibit C attached hereto. A
portion of the Purchase Price equal to Fifty Thousand Dollars ($50,000) shall be
paid to the Sellers by the Buyers on the Closing Date as consideration for the
agreements set forth in the Postclosing Agreement.
2. Representations and Warranties of the Seller.
The Sellers represent and warrant to the Buyers that the statements
contained in this Section 2 is 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 Seller. Sellers are corporations duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of their incorporation. The Sellers do not has any Subsidiaries.
The Sellers has the power and authority to own or lease their properties and to
carry on all business activities now conducted by it. The sole shareholder of
each of Sellers is ▇▇▇▇▇ ▇▇▇▇▇▇▇.
b. Authorization of Transaction. 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
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(collectively, the "Ancillary Agreements") and to perform their obligations
hereunder and thereunder. Without limiting the generality of the foregoing, the
Boards of Directors of the Sellers has duly authorized the execution, delivery,
and performance of this Agreement and the Ancillary Agreements by the Seller.
This Agreement and the Ancillary Agreements constitute the valid and legally
binding obligations of the Sellers, enforceable in accordance with their
respective terms and conditions.
c. Noncontravention. Except as set forth in the Disclosure Schedule,
neither the execution and the delivery of this Agreement nor the Ancillary
Agreements, nor the consummation of the transactions contemplated hereby and
thereby (including the assignments and assumptions referred to in Section l(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 is subject or any provision
of the charter or bylaws of the Sellers; or (ii) Materially 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 is a party or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Security Interest upon any of its assets) subject to the giving of required
notices and obtaining required consents of contracts identified in Section 2(j)
of the Disclosure Schedule. Other than with respect to the Assignment
Application described in Section 4(b), and the possible need for actions
pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, 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 has 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 is unaudited statements of income as of and for the fiscal year
December 31, 1996, for the Sellers and unaudited statements of income as of and
for each month during 1997 for the Sellers(collectively the "Financial
Statements"). The Financial Statements has been prepared in conformity with the
Seller's normal accounting policies, practices and procedures applied on a
consistent basis, throughout the periods covered thereby, and is correct and
complete, fairly present the financial condition of the Sellers and the results
of operation of at the dates and for the periods indicated (without
consideration of certain "group home office" expenses that has been identified
to Buyers and that will not be incurred subsequent bo the Closing, and subject
to adjustments consistent with Seller's past practices, is consistent with the
books and records of the
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Sellers (which books and records is correct and complete). The Financial
Statements accurately state the revenues of the Stations for the period
indicated therein and include a Materially accurate breakout of cash and trade
revenues.
f. Events Subsequent to January 1, 1997. Since January 1, 1997,
except as set forth in Section 2(f) of the Disclosure Schedule, there have not
been any Material Adverse effects on the assets, Liabilities, business,
financial condition, operations, results of operations, or future prospects of
the Sellers with respect to the operation of the Stations. Without limiting the
generality of the foregoing and with respect to the operation of the Stations
since January 1, 1997, to Seller's Knowledge, except as set forth in Section
2(f) of the Disclosure Schedule:
i. Sellers has not, other than this Agreement, entered into
any Material 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. Sellers has not Materially delayed or postponed (beyond
its normal practice in the Ordinary Course of Business) the payment of accounts
payable and other Liabilities;
iii. Sellers has not Materially altered its credit and
collection policies or its accounting policies;
iv. Sellers has not entered into or terminated any Material
employment arrangement, employment contract, consulting contract or severance
agreement or collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
v. there has been no Material changes to, nor threatened
changes to, employment terms for any of Seller's employees;
vi. there has not been any other Material occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary Course of
Business involving the Seller;
vii. the Sellers has not Materially altered the programming,
format or call letters of the Stations, or their promotional and marketing
activities;
viii. the Sellers has not applied to the FCC for any
modification of the FCC Licenses or failed to take any material action necessary
to preserve the FCC Licenses and has operated the Stations in material
compliance therewith and in material compliance with all FCC rules and
regulations;
ix. the Sellers has not terminated or received notice of
termination for any Material syndicated programming; and
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x. the Sellers has not committed to any of the foregoing.
g. Tax Matters. The Sellers has timely and properly filed all Tax
Returns that it was required to file with respect to the Seller's operations.
All such Tax Returns were correct and complete and properly reflect the tax
liability of the Seller. No Tax deficiencies has been proposed or assessed
against the Seller. All Taxes owed by the Sellers with respect to its operations
(whether or not shown on any Tax Return) has been paid. The Sellers has withheld
and paid all Taxes required to has 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 the Sellers does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
h. Tangible Assets. Section 2(h) of the Disclosure Schedule sets
forth a Materially complete listing of transmitter and station equipment,
vehicles and other tangible personal property used in conducting the operation
and business of the Stations. The Sellers own or lease all tangible assets
Materially necessary for the conduct of the operation and business of the
Stations as presently conducted and as presently proposed to be conducted and
all leased assets is specifically identified as such in Section 2(h) of the
Disclosure Schedule.
i. Real Property. 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 has delivered to the Buyers correct and complete copies of
the Leases. With respect to the Real Estate, except as set forth in Section 2(i)
of the Disclosure Schedule:
i. the Sellers has good and marketable title to all of the
Owned Real Estate which, at Closing, with the exception of the Stations' studios
and the KLXX (AM) transmitter site to be retained by Seller, will be delivered
to Buyers 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 is disclosed in
Section 2(i) of the Disclosure Schedule (collectively, the "Permitted Real
Estate Encumbrances");
ii. to Seller's Knowledge, the Leases is and, following the
Closing will continue to be, legal, valid, binding, enforceable, and in full
force and effect;
iii. to Seller's Knowledge, no party to any Lease is in
Material breach or default (or has repudiated any provision thereof), and no
event has occurred which, with notice or lapse of time, would constitute a
Material breach or default thereunder or permit termination, modification, or
acceleration thereunder;
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iv. to Seller's Knowledge, there is no Material disputes or
oral agreements, or any forbearance programs in effect as to any Lease;
v. none of the Owned Real Estate and to the Seller's
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, to Seller's
Knowledge, there is no (i) actual or proposed special assessments with respect
to any of the Real Estate; (ii) pending or 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 that would
prevent their continued use in the manner in which they is presently used; or
(iv) any pending or threatened change in any zoning laws or ordinances which may
Materially adversely affect any of the Real Estate or Seller's use thereof; and
vii. the Sellers has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or its
rights thereunder;
viii. to the Seller's Knowledge, all facilities on the Real
Estate has received all Material approvals of governmental authorities
(including Material licenses, permits and zoning approvals) required in
connection with the operation thereof and has been operated and maintained in
Material accordance with applicable laws, rules, and regulations.
j. Contracts. Section 2(j) of the Disclosure Schedule lists any
written arrangement (or group of related written arrangements) either involving
more than $25,000 or not entered into in the Ordinary Course of Business. The
Sellers has 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) to Seller's Knowledge, the written arrangement is legal,
valid, binding, enforceable, and in full force and effect; (B) subject to the
giving of required notices and obtaining required consents, 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
arrangements has not expired according to their terms); (C) to Seller's
Knowledge, no party is in Material breach or default, and no event has occurred
which with notice or lapse of time would constitute a Material breach or default
or permit termination, modification, or acceleration, under the written
arrangement; and (D) to Seller's Knowledge, no party has repudiated any
provision of the written arrangement. The Sellers is 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 Sellers
shall hold Buyers harmless and indemnify Buyers from 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 Seller.
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k. Commission Licenses and Compliance with Commission Requirements.
Except as set forth in Section 2(k) of the Disclosure Statement:
i. All licenses, permits, authorizations, franchises,
certificates of compliance, and consents of governmental bodies, including,
without limitation, the FCC Licenses, used or useful in the operation of the
Stations as they is now being operated is (A) in full force and effect, and (B)
to Seller's knowledge, unimpaired by any acts or omissions of the Sellers or the
Seller's employees or agents. Copies of all FCC licenses, permits, and
authorizations is included in Section 2(k) of the Disclosure Schedule. To
Seller's Knowledge, 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 Stations as now
conducted. Except as set forth in Section 2(k) of the Disclosure Schedule, the
Sellers is not aware of any reason why the FCC licenses might not be renewed in
the ordinary course or revoked.
ii. The Sellers has been advised by its engineering staff that
the Stations is in compliance with the FCC's policy on exposure to radio
frequency radiation, and knows of no reason to dispute said information. To
Seller's Knowledge, no renewal of any FCC License would constitute a major
environmental action under the FCC's rules or policies. To Seller's Knowledge,
access to the Stations' transmission facilities is restricted in accordance with
the policies of the FCC.
iii. Except as set forth in Section 2(k) of the Disclosure
Schedule, to the Seller's Knowledge, the Sellers 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 Stations, and there is no proceedings
(other than rule making proceedings of general applicability) before the FCC or
any other governmental authority that could adversely affect any of the FCC
Licenses or the authorizations listed in Section 2(k) of the Disclosure
Schedule.
iv. To Seller's Knowledge, the Sellers has filed with the FCC
and all other governmental authorities having jurisdiction over the Stations all
Material reports, applications, documents, instruments, and other information
required to be filed, including but not limited to Antenna Structure
Registration Forms, and will continue to make such filings through the Closing
Date.
v. The Sellers is not aware of any information concerning the
Seller's ownership or operation of the Stations that could cause the FCC 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 Stations.
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l. Intellectual Property. To Seller's Knowledge, the Sellers owns or
has the right to use pursuant to license, sublicense, agreement or permission
all Intellectual Property Materially necessary for the operation of the
businesses of the Sellers as presently conducted and as presently proposed to be
conducted. Each item of Intellectual Property owned or used by the Sellers
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. To Seller's Knowledge, the Sellers has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and the Sellers has never
received any charge, complaint, or notice alleging any such interference,
infringement, misappropriation, or violation, that has not been, or will not be
by the Closing, resolved. To the Knowledge of the Seller, no third party has
Materially interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of the Seller.
m. Insurance. Section 2(m) of the Disclosure Schedule sets forth a
Materially complete and accurate description of all Seller's insurance coverage.
With respect to each such insurance policy, to Seller's Knowledge: (A) the
policy is legal, valid, binding, and enforceable and in full force and effect;
and (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. Section 2(n) of the Disclosure Schedule sets forth
each instance in which the Seller: (i) is subject to any unsatisfied judgment,
order, decree, stipulation, injunction, or charge; or (ii) is a party or, to the
Knowledge of the Seller, is threatened to be made a party to any charge,
complaint, action, suit, proceeding, hearing, or investigation of or in any
court or quasi judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. To Seller's Knowledge, 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 Materially Adverse Effect. The Sellers has no Knowledge of any Basis for
any such charge, complaint, action, suit, proceeding, hearing, or investigation
against the Seller.
o. Employees. Section 2(o) of the Disclosure Schedule sets forth a
Materially complete listing of the names, positions, job descriptions, salary or
wage rates and all other forms of compensation paid for work at the Stations of
each employee. To the Knowledge of the Seller, no key employee or group of
employees has any plans to terminate employment with the Seller. The Sellers is
not a party to or bound by any collective bargaining or similar agreement, nor
has they experienced any strikes, grievances, claims of unfair labor practices
or other collective bargaining disputes. The Sellers 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 the Seller. The Sellers has no
knowledge of any Basis for any Material claim by past or current employees of
the Sellers or applicants for employment that the Sellers or its management has
discriminated based on each individuals race, sex, national origin, religion,
ethnicity, handicap or any other protected characteristic under applicable law.
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p. Employee Benefits. Section 2(p) of the Disclosure Schedule lists
all Employee Benefit Plans that the Sellers maintains or to which the Sellers
contributes or is required to contribute for the benefit of any current or
former employee of the Sellers and true and correct copies of each such Employee
Benefit Plan has been delivered to the Buyers. Each Employee Benefit Plan (and
each related trust or insurance contract) Materially complies and at all times
has Materially complied in form and in operation in all respects with the
applicable requirements of ERISA and the Code. The Sellers does not has 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 Seller. There is no pending or, to the Knowledge of the Seller,
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 has there been any Reportable Events or Prohibited
Transactions with respect to any Employee Benefit Plan of which Sellers has
Knowledge.
q. Environment, Health, and Safety. Except as disclosed in Section
2(q) of the Disclosure Schedule:
i. With respect to the operation of the Stations and the Real
Estate, the Sellers is, and at all times in the past has been, in compliance in
all Material respects with all then-effective 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, to Seller's Knowledge, the Sellers has no Liability (and there is no Basis
related to the past or present operations of the Sellers or its predecessors for
any present or future Material Liability) under any Environmental Law. To
Seller's Knowledge, the Sellers has no Liability (and 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 has 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 is required under, and has
Materially complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
which is contained in, all Environmental Laws or law of any federal, state, or
local or foreign government relating to worker health and safety.
iii. To Seller's Knowledge, all properties and equipment used
in the Stations and the Acquired Assets has been free of asbestos, PCB's,
methylene chloride, trichloroethylene, 1, 2-transdichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances unless the presence of such
Materials is in conformity with Environmental Laws. Sellers has no Knowledge
that any pollutant, contaminant, or chemical, industrial, hazardous, or
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toxic material or waste ever has been unlawfully buried, stored, spilled,
leaked, discharged, emitted, or released on any of the Real Estate. To Seller's
Knowledge, no above ground or underground storage tanks has ever been located
at, on or under the Real Estate. The Sellers has delivered to the Buyers a
Materially complete copy of all environmental claims, reports, studies,
compliance actions or the like of the Sellers or which is available to the
Sellers with respect to any of the Real Estate or any of the Acquired Assets.
r. Legal Compliance. Except as set forth in Section 2(r) of the
Disclosure Schedule, the Sellers has complied in all Material respects with all
laws (including rules and regulations thereunder) of federal, state, local and
foreign governments (and all agencies thereof). To Seller's Knowledge, the
Sellers has filed all reports, documents, and other materials it was required to
file (and the information contained therein was correct and complete in all
Material respects) under all applicable laws.
s. Advertising Contracts. Section 2(s) of the Disclosure Schedule
lists all arrangements for the sale of air time or advertising on the Stations
in excess of $10,000, and the amount to be paid to the Sellers therefor, which
will not be completed prior to Closing. The Sellers 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 the Sellers to cease doing
business or to reduce in any Material respect the business transacted with the
Sellers or to terminate or modify any agreements with the Sellers (whether as a
result of consummation of the transactions contemplated hereby or otherwise)
which, collectively or individually, would has a Material Adverse Effect.
t. Brokers' Fees. Other than the fee payable to Media Venture
Partners, which shall be the exclusive responsibility of Seller, the Sellers has
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. Except as set forth in
Section 2(u) of the Disclosure Schedule, there is no Material commitments,
liabilities or obligations relating to the Stations, 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
has 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. The representations and warranties contained in this
Section 2 do not contain any Materially 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 Materially not misleading.
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3. Representations and Warranties of the Buyer.
Buyers represent and warrant to the Sellers that the statements
contained in this Section 3 is 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 is
corporations duly organized, validly existing, and in good standing under the
laws of Nevada.
b. Authorization of Transaction. Buyers has 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. 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 l(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
is subject or any provision of their articles of organization or other charter
documents, or (ii) Materially 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 is a
party or by which they is bound or to which any of their assets is subject.
Other than the Assignment Application described in Section 4(b), and the
possible need for actions pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, 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. The Buyers has 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.
d. Qualifications to Acquire Stations. The Buyers is legally,
financially, technically, and otherwise qualified to acquire the Stations from
Seller. The Buyers is not aware of any information that could cause the FCC 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 Stations.
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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 Application. Within ten (10) business days after the
execution of this Agreement, the Sellers and the Buyers shall jointly file with
the FCC an appropriate application for assignment of the FCC Licenses, permits
and authorizations pertaining to the Stations from the Sellers to Licensing (the
"Assignment Application"). The costs of the FCC filing fees in connection with
the Assignment Application shall be divided equally between the Parties. Each
party shall pay their own attorneys' fees. The Sellers 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 the Sellers
nor the Buyers shall has any obligation to satisfy complainants or the FCC by
taking any steps which would has a Material Adverse Effect upon the Stations 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 has a
Material Adverse Effect upon the Stations or any Affiliate. The Sellers 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 has 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 10 of this Agreement.
c. Employment Offers. Upon notice to the Seller, and at mutually
agreeable times, the Sellers 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 the Seller's employees effective on the Closing
Date. From and after the execution of this Agreement, the Sellers shall use its
best efforts to assist Buyers in retaining those employees of the Stations which
the Buyers wish to hire in connection with the operation of the Stations by the
Buyers subsequent to the Closing, and the Sellers will not take any action to
preclude or discourage any of the Seller's employees from accepting any offer of
employment extended by the Buyers.
d. Notices and Consents. The Sellers will give all notices to third
parties and shall use commercially reasonable efforts to obtain all third party
consents, that the Buyers reasonably may request. Each of the Parties will file
any notification and report forms and related
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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 their 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. The Sellers shall take commercially
reasonable steps, without Materially adversely impacting the cash financial
performance of the Stations, to satisfy its outstanding obligations under its
agreements for sale of air time and advertising on the Stations for goods or
services ("Barter Agreements") and shall only enter into new Barter Agreements
in the Ordinary Course of Business of the Stations. On the Closing Date, the
Sellers shall deliver to the Buyers a report (the "Trade Report") which lists
all Barter Agreements included in the Acquired Assets and the contract end date
for each such Barter Agreement together with an itemized statement, determined
in accordance with generally accepted accounting principles, of the aggregate
value of the barter payable and the barter receivable pursuant to each of the
Barter Agreements. To the extent that the aggregate value as reflected on the
Trade Report of the Stations' barter payable is more than Twenty Thousand
Dollars ($20,000.00) greater than the aggregate value of the barter receivable,
Buyer shall be entitled to receive as a credit against the purchase price the
amount of the excess barter imbalance.
f. Operating Statements. The Sellers shall deliver to the Buyers,
for the Buyers' informational purposes only, monthly unaudited statements of
operating revenues and operating expenses of the Stations within ten (10) days
after each such statement is prepared by or for the Seller.
g. Contracts. The Sellers 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. The Sellers will not
without prior written consent of the Buyers enter into any contract outside the
Ordinary Course of Business which involves an obligation which will survive the
Closing under which Buyer will be obligated to expend more than Five Thousand
Dollars ($5,000).
h. Operation of Stations. The Sellers will not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business which will has a Material Adverse Effect. The Sellers shall
operate the Stations Materially in compliance with the FCC Licenses and the
rules and regulations of the FCC, and the FCC Licenses shall at all times remain
in full force and effect. The Sellers 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 Stations.
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i. Credit and Receivables. The Sellers will follow its usual and
customary policies with respect to extending credit for sales of air time and
advertising on the Stations and with respect to collecting accounts receivable
arising from such extension of credit.
j. Preservation of Stations and the Acquired Assets. The Sellers
will take all commercially reasonable actions to keep its Stations and the
Acquired Assets and properties substantially intact, including their present
operations, 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 Stations, and
the FCC Licenses.
k. Access and Consultation. The Sellers will permit representatives
of the Buyers to has commercially reasonable access at all reasonable times, and
in a manner so as not to interfere with the normal business operations of the
Stations, to all premises, properties, books, records, contracts, Tax records,
and documents of or pertaining to the Seller. The Sellers will consult with the
Buyers' management with a view to informing Buyers' management as to the
operations, management and business of the Stations. Without limiting the
foregoing, Sellers acknowledges and agrees 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
thirty (30) day period referenced in Section 9(a) (vi), below.
l. Notice of Developments. The Sellers will give prompt written
notice to the Buyers of any Material development affecting business, operations
or prospects of the Stations or the Acquired Assets or the ability of the
Sellers to perform hereunder.
m. 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 Seller,
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.
n. Title Insurance. Surveys and Environmental Assessments. The
Sellers will take all commercially reasonable actions to assist Buyer in
obtaining, at Buyers' own cost (i) 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 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 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 being sold to
Buyers, an owner's
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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
preprinted 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 their
lender reasonably request, (iii) a current survey of each parcel of Real Estate
certified to the Buyers and their 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 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 is 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. Sellers
shall provide to Buyers copies of all existing title insurance policies, land
surveys, Phase I and other environmental surveys that is in the possession of
Seller.
o. Control of Stations. 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 Stations, and such operation shall be the sole
responsibility of and in the control of the Seller. The costs of obtaining title
insurance, surveys and environmental assessments shall be borne by Buyers.
p. 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 Material loss, damage, or destruction to any of the Acquired
Assets, 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 Seller's 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 Licenses. 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 Seller's notice to the Buyers and the
Buyers determine that the Seller's failure to repair or replace would has a
Material Adverse Effect on the operation of the Stations:
i. the Buyers may elect to terminate this Agreement; or
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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 Seller's 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 Seller's 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 pursuant to
this Section 4(p), the parties hereto will cooperate to extend the time during
which this Agreement must be closed as specified in the consent of the FCC.
r. Priority of Transaction. Buyers will take no action which will
prevent or unduly delay the issuance of any required regulatory clearance
relating to the transactions contemplated by this Agreement. In the event of a
conflict between the transactions proposed in this Agreement and another
subsequent transaction involving the Buyers, Buyer will defer, delay, or
terminate such other transaction if necessary to permit the grant of required
regulatory consent for the transactions contemplated herein.
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 has performed and complied with all of
its covenants hereunder in all respects through the Closing;
iii. the Sellers shall has procured all of the third party
consents specified in Section 4(d) above (or taken such action to Buyers'
satisfaction as will provide the full benefits of such contracts, agreements or
arrangements to Buyer) and all of the title insurance commitments (and
endorsements), Surveys and environmental site assessments described in Section
4(o) above;
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,
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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 is consummated, (B) cause
any of the transactions contemplated by this Agreement to be rescinded following
consummation, or (C) adversely affect 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 has 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 Assignment Application shall has been approved by a
Final Order of the FCC, all applicable waiting periods (and any extensions
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall has expired or been terminated,
and the Buyers shall has received all governmental approvals required to
transfer all other authorizations, consents, and approvals of governments and
governmental agencies set forth in the Disclosure Schedule;
vii. the relevant parties shall has entered into the
Postclosing Agreement;
viii. the Buyers shall has received from counsel to the
Sellers an opinion with respect to the matters set forth in Exhibit E attached
hereto, addressed to the Buyers and their lender and dated as of the Closing
Date;
ix. the Parties shall has 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 an
allocation schedule to be delivered at closing; and
x. The Parties shall has entered into a lease with terms
reasonably acceptable to each party, providing for the lease to Buyers, for a
period of twelve months from the Closing Date, of the Stations studios and the
KLXX (AM) transmitter site. The lease shall be without rent, except that during
the term of the lease Buyers will pay directly or reimburse Sellers within five
(5) days for all out-of-pocket costs relating to its occupation of the leased
premises, including but not limited to power and utility costs, real estate and
other taxes, maintenance and other costs.
xi. 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.
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b. Conditions to Obligation of the Seller. 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 has 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 is 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 has delivered to the Sellers one or more
certificate(s) (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 has been approved by a
Final Order of the FCC and the Buyers shall has received all governmental
approvals required to transfer all other authorizations, consents, and approvals
of governments and governmental agencies set forth in the Disclosure Schedule;
and
vi. the relevant parties shall has entered into the
Postclosing Agreement;
vii. the Parties shall has 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 an
allocation schedule to be delivered at closing; and
viii. The Parties shall has entered into a lease with terms
reasonably acceptable to each party, providing for the lease to Buyers, for a
period of twelve months from the Closing Date, of the Stations studios and the
KLXX (AM) transmitter site. The lease shall be without rent, except that during
the term of the lease Buyers will pay directly or reimburse Sellers
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within five (5) days for all out-of-pocket costs relating to its occupation of
the leased premises, including but not limited to power and utility costs, real
estate and other taxes, maintenance and other costs.
ix. 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
Seller.
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 Stations, each of the other Parties will reasonably cooperate with
the contesting or defending Party and their counsel in the contest or defense,
make available his or their personnel, and provide such testimony and access to
their 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 Stations 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 so assigned) shall be
prorated between the Sellers and the Buyers as of the Closing Date in accordance
with the foregoing principle. Outstanding barter balances shall be adjusted as
provided in Section 4(e) of this Agreement. In addition, all commissions payable
with respect to the accounts receivable of the Sellers (whether due before or
after Closing) shall be
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solely for the account and responsibility of the Seller. Contractual
arrangements that do not reflect an equal rate of compensation to a Stations
over the term of the agreement shall be equitably adjusted 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 Buyer.
d. Collection of Accounts Receivable. At the Closing, the Sellers
will turn over to the Buyers, for collection only, the accounts receivable of
the Stations 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 120-day period
following the Closing Date, and will remit all payments received on such
accounts during this 120-day period on the one hundred twentieth (120th) day
together with an accounting of all payments received within such period. The
Buyers shall has the sole right to collect such accounts receivable during such
one hundred twenty (120) day period. In the event the Buyers receive monies
during the 120-day period following the Closing Date from an advertiser who,
after the Closing Date, is advertising on the Stations, 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. Buyers shall not knowingly encourage any account debtor to
dispute any amounts outstanding on the Closing Date. In the case of such a
disputed account, the Buyers shall immediately return the account to the Sellers
prior to expiration of the 120-day period following the Closing Date. If the
Buyers return a disputed account to the Seller, the Buyers shall has no further
responsibility for their collection and may accept payment from the account
debtor for advertising carried on the Stations after the Closing Date. At the
end of the 120-day period following the Closing Date, the Buyers will turn back
to the Sellers all of the accounts receivable of the Stations as of the Closing
Date owing to the Sellers which has not yet been collected (including all
records and documents of the Stations relating to such uncollected accounts),
and the Buyers will thereafter has no further responsibility with respect to the
collection of such receivables. During the 120-day period following the Closing
Date, the Buyers shall afford the Sellers reasonable access to the accounts
receivable "aging list." The Sellers acknowledges and agrees that the Buyers is
acting as collection agent hereunder for the sole benefit of the Sellers and
that Buyers has accepted such responsibility for the accommodation of the
Seller. The Buyers shall not has 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 has any duty to inquire as to the identity, authority or rights of the
persons who executed the same. The Sellers shall indemnify
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Buyers and hold them harmless from and against any judgments, expenses
(including attorney's fees) costs or liabilities which the Buyers may incur or
sustain as a result of or by reason of such collection efforts taken in good
faith. To the extent that Sellers (i) satisfy accounts payable related to the
Stations with cash payments following the Closing Date and (2) provide Buyers
with documentation of such accounts payable and cash payments, Buyers shall
reimburse Sellers for such expenses no later than the tenth (10th) day of the
month following that in which Sellers makes such cash payments in satisfaction
of accounts payable, and such amounts shall be deducted from the amounts due
Sellers as a result of the collection of accounts receivable owing to the
Sellers as of the close of business on the day before the Closing Date
e. Consents. In the event any of the Assumed Contracts is 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 arrangement to provide that the Buyers shall
receive the Seller's 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 has been responsible therefore if such consent or assignment had
been obtained.
7. Remedies for Breaches of this Agreement.
a. Survival. All of the representations and warranties of the
Sellers contained in Section 2 of this Agreement (other than the representations
and warranties of the Sellers contained in Sections 2(a), 2(b), 2(c), and 2(d)
hereof or relating to the Seller's title to the Acquired Assets) shall survive
the Closing and continue in full force and effect for a period until 90 days
after the applicable statute of limitations has expired with respect to any
claim by the Buyers based on a claim or action by a third party and for a period
of three (3) years following Closing with respect to any claim by the Buyers not
based on a claim or action by a third party. All of the other representations
and warranties (including the representations and warranties Sellers contained
in Sections 2(a), 2(b), 2(c),. and 2(d) hereof or relating to the Seller's title
to the Acquired Assets) and all covenants of the Buyers and the Sellers
contained in this Agreement shall survive the Closing and continue in full force
and effect forever thereafter.
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 agrees 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:
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i. any misrepresentation or breach of any of the Seller's
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.
c. Indemnification Provisions for the Benefit of the Seller. 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 the Buyers would be damaged irreparably in the event any of the provisions
of this Agreement is not performed in accordance with their specific terms or
otherwise is breached. Accordingly, each of the Parties agrees that the Buyers
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 11(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 Buyers 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 is 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
-22-
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 has not occurred. The Sellers shall proceed against the ▇▇▇▇▇▇▇ Money
Deposit as full satisfaction of liquidated damages owed by the Buyers and as
their sole remedy for a failure of the transactions contemplated hereby to occur
as a result of a Material breach of the terms of this Agreement by the Buyers.
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 indemnification 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 their choice reasonably satisfactory to the Indemnified Party, (ii)
the Indemnified Party may retain separate co-counsel at their 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 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 Ten Thousand Dollars
($10,000) and indemnification shall be made by the indemnifying party only to
the extent of such excess over Ten Thousand Dollars ($10,000); 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
-23-
Liability to third parties not assumed by the Buyer under the terms of this
Agreement, or (iii) the Seller's obligation to deliver clear title to the
Acquired Assets.
8. Option. Seller hereby grants Buyer an option to purchase the Stations
studios and KLXX(AM) transmitter site for the amount of FIVE HUNDRED THOUSAND
DOLLARS ($500,000) (the "Option"). Buyer shall notify Seller in writing of its
exercise of the Option within six (6) months of the Closing Date and shall close
on the Option within twelve (12) months of the Closing Date. Buyer's failure to
notify Seller of its exercise or close pursuant to this paragraph shall
terminate Buyer's Option.
9. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of
the assets of the Seller, other than Retained Assets that is used or useful in
the operation of the Stations, 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 Stations to be broadcast after the Closing;
(e) Assumed Contracts, indentures, Security Interests, guaranties, other similar
arrangements, and rights thereunder; (f) call letters of the Stations, jingles,
logos, slogans, and business goodwill of the Stations; (g) claims, deposits,
prepayments, refunds, causes of action, chooses in action, rights of recovery
(including rights under policies of 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 Stations.
"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.
-24-
"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" shall 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 the Sellers 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.
"Confidential Information" means any information concerning the businesses
and affairs of the Seller.
"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).
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined
-25-
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 Media Venture Partners.
"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.
"FCC Licenses" 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 Stations.
"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
-26-
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 actual knowledge after reasonable investigation. It is
understood and agreed that prior to the execution of this Agreement, Sellers has
not informed any employees of Sellers or the Stations as to the negotiations
between Sellers and Buyers or the contemplated sale of the Stations, and
therefore the warranties and representations set forth herein reflect
information known to ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇. Promptly after
this Agreement has been executed, Sellers will inquire of the Stations' general
managers regarding the accuracy of the representations and warranties set forth
herein, and shall supplement the schedules hereto within ten days from the date
of execution of this Agreement reflecting information obtained through such
inquiry, if any.
"Leases" means those real estate leases to which Sellers is a party, as
described in Section 2(i) of the Disclosure Schedule.
-27-
"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 Stations and all applications therefor, together with
any renewals, extension or modifications thereof and additions thereto.
"Material" or "Materially" means having or likely to has a Material
Adverse Effect.
"Material Adverse Effect" means any effect that (i) is material and
adverse to the business, assets, liabilities, results of operations or financial
condition of the Stations, or (ii) materially impairs the ability of the Sellers
or the Buyers to consummate the transactions contemplated hereby; provided,
however, that Material Adverse Effect shall not be deemed to include the impact
of (a) actions contemplated by this Agreement, and (b) changes in laws and
regulations or interpretations thereof that is generally applicable to the
broadcasting industry."
"Multi-employer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Option" has the meaning set forth in Section 8 above.
"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 the Sellers as
described in Section 2(i) of the Disclosure Schedule and all buildings,
fixtures, and improvements located thereon, which is directly used and useful in
the operation of the Stations, provided, however, that the Station's studio
building and the KLXX (AM) tower site is specifically excluded from the assets
being assigned to Buyers hereunder.
"Party" has the meaning set forth in the preface above.
"Permitted Real Estate Encumbrances" shall has the meaning set forth in
Section 2(i),
"Post-Closing Agreement" means the Post-Closing Agreement with Seller's
owner in the form attached hereto as Exhibit C.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Purchase Price " has the meaning set forth in Section l(c) above.
-28-
"Real Estate" means the Owned Real Estate and the real estate, building,
fixtures and improvements which is 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 the
Sellers as a corporation, including, without limitation, the general ledger and
tax records of Sellers and the Stations (although Sellers will provide access to
such records available to Buyers upon request at commercially reasonable times);
(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 Seller; and (iv) Cash.
"Retained Liabilities" means any other obligations or Liabilities of the
Seller, including but not limited to: (i) any Liability relating to the
ownership or operation of the Stations prior to the Closing; (ii) any Liability
of the Sellers for income, transfer, 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.
"Seller" has the meaning set forth in the preface above.
"Stations" means the following radio broadcast stations: KBYZ-FM, KACL-FM,
KKCT-FM and KLXX (AM), Bismarck, North Dakota.
"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
-29-
interest of such trust or estate is 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, personal property, 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.
10. 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
is 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 is 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 Seller;
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
has 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);
-30-
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
has 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 or the Sellers may terminate this Agreement if
any Assignment Application is denied by Final Order.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 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).
11. 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 has 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 their 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, has 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.
-31-
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 is
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 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 Seller:
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Broadcast Group
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Leader & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(which copy shall not constitute notice to Seller)
If to the Buyers:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
c/o QUAESTUS Management Corp.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
-32-
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn..: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 has 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 is 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 North Dakota.
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 Seller. 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 has 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 Application. The Sellers
will pay all income taxes. The Sellers and the Buyers will
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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.
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 exception with reasonable particularity and
describes the relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall has 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 is 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 Minneapolis, Minnesota in
any action or proceeding arising out of or relating to this Agreement, agree
that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agree 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 has executed this Agreement on as
of the date first above written.
CUMULUS BROADCASTING, INC.
By:
(printed)
Title:
CUMULUS LICENSING CORPORATION
By:
(printed)
Title:
MISSOURI RIVER BROADCASTING, INC.
By:
(printed)
Title:
JKJ BROADCASTING, INC.
By:
(printed)
Title:
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SCHEDULE A
Purchase Price. The Buyers agree to pay to the Seller, as consideration
for the Acquired Assets, the amount of Seven Million and no/100 Dollars
($7,000,000.00), payable as follows:
(i) on the date of this Agreement, the Buyers will deposit
with the Escrow Agent the amount of Three Hundred Fifty Thousand and no/100
Dollars ($350,000.00) (the "▇▇▇▇▇▇▇ Money Deposit') in the form of an
irrevocable letter of credit from ▇▇▇▇▇▇ Commercial Paper Inc.; and
(ii) on the Closing Date, the Buyers shall pay to the Sellers
the amount of Seven Million and no/100 Dollars ($7,000,000.00), with adjustments
as provided specifically in this Agreement.
The ▇▇▇▇▇▇▇ Money Deposit referenced in this Schedule A 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's, and shall
be disbursed to Sellers or returned to Buyer as provided in the ▇▇▇▇▇▇▇ Money
Escrow Agreement.
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