Exhibit 2.37
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
VENICE BROADCASTING CORP.
AND
VENICE MICHEL
AND
CUMULUS BROADCASTING, INC.
AND
CUMULUS LICENSING CORP.
June 26, 1997
TABLE OF CONTENTS
Page
1. Basic Transaction..................................................1
(a) Purchase and Sale of Assets................................1
(b) Assumption of Liabilities..................................1
(c) Purchase Price.............................................1
(d) The Closing................................................2
(e) Deliveries at the Closing..................................3
(f) Postclosing Agreement......................................3
(g) Allocation.................................................3
2. Representations and Warranties of the Seller.......................3
(a) Organization of the Seller.................................3
(b) Authorization of Transaction...............................3
(c) Noncontravention...........................................4
(d) Title to Acquired Assets...................................4
(e) Financial Statements.......................................4
(f) Events Subsequent to ......................................5
(g) Tax Matters................................................7
(h) Tangible Assets............................................7
(i) Real Property..............................................7
(j) Intellectual Property......................................8
(k) Contracts.................................................10
(l) Commission Licenses and Compliance with Commission
Requirements ............................................11
(m) Insurance.................................................12
(n) Litigation................................................12
(o) Employees.................................................12
(p) Employee Benefits.........................................13
(q) Environment, Health, and Safety...........................13
(r) Legal Compliance..........................................14
(s) Brokers' Fees.............................................15
(t) Advertising Contracts.....................................15
(u) Disclosure................................................15
3. Representations and Warranties of the Buyers......................15
(a) Organization of the Buyers................................15
(b) Authorization of Transaction..............................15
(c) Noncontravention..........................................15
(d) Brokers' Fees.............................................16
4. Pre-Closing Covenants.............................................16
(a) General...................................................16
(b) Assignment Applications...................................16
(c) Employment Offers.........................................17
(d) Notices and Consents......................................17
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(e) Operation of Business.....................................17
(f) Advertising Obligations...................................17
(g) Operating Statements......................................18
(h) Contracts.................................................18
(i) Operation of Station......................................18
(j) Credit and Receivables....................................18
(k) Preservation of Business..................................18
(l) Full Access...............................................18
(m) Notice of Developments....................................19
(n) Exclusivity...............................................19
(o) Title Insurance...........................................19
(p) Survey....................................................19
(q) Environmental Assessments.................................20
(r) Control of Station........................................20
(s) Risk of Loss..............................................20
5. Conditions to Obligation to Close.................................21
(a) Conditions to Obligation of the Buyers....................21
(b) Conditions to Obligation of the Seller....................22
6. Post-Closing Covenants............................................23
(a) General...................................................23
(b) Litigation Support........................................23
(c) Adjustments...............................................24
(d) Collection of Accounts Receivable.........................24
(e) Severance Obligations.....................................25
7. Remedies for Breaches of this Agreement...........................25
(a) Survival..................................................25
(b) Indemnification Provisions for the Benefit of the Buyers..25
(c) Indemnification Provisions for the Benefit of the Seller..26
(d) Specific Performance......................................26
(e) Matters Involving Third Parties...........................26
(f) Other Indemnification Provisions..........................27
8. Definitions.......................................................27
9. Termination.......................................................32
(a) Termination of Agreement..................................32
(b) Effect of Termination.....................................33
10. Miscellaneous....................................................33
(a) Survival..................................................33
(b) Press Releases and Announcements..........................33
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(c) No Third Party Beneficiaries..............................33
(d) Entire Agreement..........................................33
(e) Succession and Assignment.................................33
(f) Counterparts..............................................33
(g) Headings..................................................34
(h) Notices...................................................34
(i) Governing Law.............................................34
(j) Amendments and Waivers....................................35
(k) Severability..............................................35
(l) Expenses..................................................35
(m) Construction..............................................35
(n) Incorporation of Exhibits and Schedules...................36
(o) Submission to Jurisdiction................................36
(p) Bulk Transfer Laws........................................36
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EXHIBITS
Exhibit A--Form of Note
Exhibit B--Form of ▇▇▇▇▇▇▇ Money Escrow Agreement
Exhibit C--Forms of Assignments
Exhibit D--Form of Assumption
Exhibit E--Form of Postclosing Agreement
Exhibit F--Allocation Schedule
Exhibit G--Form of Opinion of Counsel to the Seller
SCHEDULES
Description Reference Section
Financial Statements 2(e)
Events Subsequent to January 1, 1997 2(f)
Tangible Assets 2(h)
Real Property 2(i)
Intellectual Property 2(j)
Contracts 2(k)
Commission Licenses and Compliance with Commission Requirements 2(l)
Insurance 2(m)
Litigation 2(n)
Employees 2(o)
Employee Benefits 2(p)
Advertising Contracts 2(t)]
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ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of June 26, 1997, by and
between Venice Broadcasting Corp. an Ohio corporation (the "Seller"), Venice
Michel, an individual Ohio resident and owner of all of the outstanding capital
stock of Seller ("Michel"), Cumulus Broadcasting, Inc., a Nevada corporation
(the "Operating Company"), and Cumulus Licensing Corp., a Nevada corporation
(the "Licensing Company"). The Operating Company and the Licensing Company are
collective referred to herein as the "Buyers." The Buyers, the Seller, and
Michel are sometimes collectively referred to herein as the "Parties."
Capitalized terms used in this Agreement are defined in Section 8 hereof.
This Agreement contemplates a transaction in which the Buyers will
purchase substantially all of the assets (and assume certain of the liabilities)
of the Seller that are used or useful in the operation of radio station WXKR-FM,
licensed to operate in Port Clinton, Ohio 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 Buyers agree to purchase from the
Seller, and the Seller agrees to sell, transfer, convey, and deliver
to the Buyers, all of the Acquired Assets 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, the Buyers agree to assume and become
responsible for all of the Assumed Liabilities at the Closing. The
Buyers will not assume or have any responsibility, however, with
respect to any other obligation or Liability of the Seller not
included within the definition of Assumed Liabilities.
(c) Purchase Price. The Buyers agree to pay to the Seller Five
Million Dollars ($5,000,000) (the "Purchase Price") payable as
follows:
(i) on the date of this Agreement, the Buyers will deposit with
the Escrow Agent the amount of Two Hundred Fifty Thousand
Dollars ($250,000) (the "▇▇▇▇▇▇▇ Money Deposit") by delivery
of Cash payable by wire transfer or delivery of other
immediately available funds; and
(ii) on the Closing Date, the Buyers shall pay to the Seller the
amount of Four Million Six Hundred Thousand Dollars
($4,600,000) by delivery of Cash
payable by wire transfer or delivery of other immediately
available funds; and
(iii) on the Closing Date, the Buyers shall pay to the Seller, on
behalf of all parties to the Postclosing Agreement, the amount
of One Hundred Fifty Thousand Dollars ($150,000) by delivery
of Cash payable by wire transfer or delivery of other
immediately available funds; and
(iv) on the Closing Date, the Buyers, at the Buyers' option, shall
deliver to the Seller, in lieu of the delivery of Two Million
Dollars ($2,000,000) in Cash pursuant to Section 1(c)(ii)
above, a promissory note in the form of Exhibit A in the
principal amount of Two Million Dollars ($2,000,000) (the
"Note"), payable with interest at six and one-half percent
(6.5%) per annum, One Million Dollars ($1,000,000) on the
first anniversary of the Closing Date and One Million Dollars
($1,000,000) on the second anniversary of the Closing Date.
The ▇▇▇▇▇▇▇ Money Deposit referenced in this Section 1(c) shall be placed
in escrow with the Escrow Agent pursuant to an escrow agreement in the form
attached hereto as Exhibit B (the "▇▇▇▇▇▇▇ Money Escrow Agreement"), which
requires that such ▇▇▇▇▇▇▇ Money Deposit shall be deposited by the Escrow Agent
with a federally insured financial institution in an interest bearing account.
Interest earned on the ▇▇▇▇▇▇▇ Money Deposit shall accrue to the benefit of the
Buyers, and, together with the principal amount of the ▇▇▇▇▇▇▇ Money Deposit,
shall be payable to the Seller and credited against the Purchase Price on the
Closing Date. If this Agreement is terminated without Closing of the transaction
contemplated herein, the ▇▇▇▇▇▇▇ Money and all accrued interest shall be paid to
the Buyers or the Seller as provided in the ▇▇▇▇▇▇▇ Money Escrow Agreement.
In the event that the Note is delivered at the Closing, the payments to be
made by the Buyers to the Seller pursuant to the Note, shall be secured by a
letter of credit in favor of the Buyers issued by NationsBank National
Association in the form acceptable to the Seller in the Seller's sole
discretion. The expenses associated with the issuance and maintenance of such
letters of credit shall be paid by the Buyers.
(d) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. in Toledo, Ohio, commencing at 9:00 a.m. local
time on the date set by the Buyers not earlier than the fifth
business day or later than the tenth business day after the FCC
approval of the Assignment Application becomes a Final Order, by
which date all other conditions to the obligations of the Parties to
consummate the transactions contemplated hereby will have been
satisfied or waived or such other date as the Parties may mutually
determine (the "Closing Date"); provided, however, that the Closing
Date shall be no later than two hundred seventy (270) days from the
date of this Agreement.
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(e) Deliveries at the Closing. At the Closing, (i) the Seller 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 Seller the various certificates, instruments, and
documents referred to in Section 5(b) below; (iii) the Seller will
execute, acknowledge (if appropriate), and deliver to the Buyers (A)
assignments (including real property and Intellectual Property
transfer documents) in the forms attached hereto as Exhibit C and
(B) such other instruments of sale, transfer, conveyance, and
assignment as the Buyers and Buyers' counsel reasonably may request;
(iv) the Buyers will execute, acknowledge (if appropriate), and
deliver to the Seller (A) an assumption in the form attached hereto
as Exhibit D and (B) such other instruments of assumption as the
Seller and its counsel reasonably may request; and (v) the Buyers
will deliver to the Seller the consideration specified in Section
1(c) above.
(f) Postclosing Agreement. On the Closing Date, the Seller shall
cause Venice Michel to execute, a Postclosing Agreement with the
Buyers including covenants not to compete with the Buyers in the
markets served by the Station and to indemnify the Buyers in the
form of Exhibit E attached hereto. A portion of the Purchase Price,
equal to One Hundred Fifty Thousand Dollars ($150,000) shall be paid
by the Buyers to the Seller Stockholders, on the Closing Date as
consideration for the agreements set forth in the Postclosing
Agreement.
(g) Allocation. The Parties agree 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 the allocation schedule attached hereto as Exhibit
F.
2. Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyers that the statements contained in this Section 2 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 2),
except as set forth in the lettered and numbered paragraphs contained in the
disclosure schedule accompanying this Agreement and initialed by the Parties
(the "Disclosure Schedule") corresponding to the lettered and numbered sections
of this Section 2.
(a) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation. The Seller does not have any
Subsidiaries.
(b) Authorization of Transaction. The Seller has full power and
authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the board of
directors and stockholders of the Seller have duly authorized the
execution, delivery, and performance of this Agreement by the
Seller. This
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Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Section 1 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 Seller is subject or any provision of the charter or
bylaws of the Seller; or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice 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 Seller 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). Other
than with respect to the transfer of the FCC Licenses, the Seller
does not need to give any notice to, make any filing with, or obtain
any Licenses, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and
assumptions referred to in Section 1 above).
(d) Title to Acquired Assets. Seller 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
Schedules are the following financial statements (collectively the
"Financial Statements"): (i) unaudited balance sheets as of December
31, 1994, and unaudited statements of income for the fiscal year
ended December 31, 1995, for the Seller; (ii) unaudited balance
sheets and statements of income and cash flows, as of and for the
fiscal years ended December 31, 1996; and (iii) unaudited statements
of income, as of and for months ended January 31, February 28, March
31 and April 30 1997, for the Seller. The Financial Statements
identified in clauses (ii) and (iii) in the preceding sentence are
referred to herein as the "Most Recent Financial Statements." The
Most Recent Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods
covered thereby, are correct and complete, and are consistent with
the books and records of the Seller (which books and records are
correct and complete). Without limiting the generality of the
foregoing, all material revenues and expenses of the Seller and the
Station with respect to the Most Recent Financial Statements (A) are
properly reflected in the Most Recent Financial Statements, (B) have
arisen in the Ordinary Course of Business, (C) are valid and subject
to no counterclaims, and (D) will be or have been collected or paid
at their recorded amounts subject only to the reserve for bad debts
set forth on the face of the Most Recent Financial Statements.
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(f) Events Subsequent to January 1, 1997. Since January 1, 1997,
except as set forth in Section 2(f) of the Disclosure Schedules,
there has not been any material adverse change in the assets,
Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Seller with respect to the
operation of the Station. Without limiting the generality of the
foregoing and with respect to the operation of the Station since
that date:
(i) the Seller has not sold, leased, transferred, or assigned any
of its material assets, tangible or intangible, other than for
a fair consideration in the Ordinary Course of Business;
(ii) the Seller has not entered into any contract, lease, sublease,
license, or sublicense (or series of related contracts,
leases, subleases, licenses, and sublicenses) outside the
Ordinary Course of Business;
(iii) no party has accelerated, terminated, modified, or canceled
any contract, lease, sublease, license, or sublicense (or
series of related contracts, leases, subleases, licenses, and
sublicenses) involving more than $5,000 to which the Seller is
a party or by which it is bound;
(iv) no Security Interest has been imposed upon any of its assets,
tangible or intangible;
(v) the Seller has not made any capital expenditure (or series of
related capital expenditures) outside the Ordinary Course of
Business;
(vi) the Seller has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of any
other person (or series of related capital investments, loans,
and acquisitions) outside the Ordinary Course of Business;
(vii) the Seller has not created, incurred, assumed, or guaranteed
any indebtedness (including capitalized lease obligations)
outside the Ordinary Course of Business;
(viii) the Seller has not delayed or postponed (beyond its normal
practice) the payment of accounts payable and other
Liabilities;
(ix) the Seller has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims)
outside the Ordinary Course of Business;
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(x) the Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) the Seller has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property or
any action adversely affecting the FCC Licenses or the
Station;
(xii) the Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and
employees outside the Ordinary Course of Business giving rise
to any claim or right on its part against the person or on the
part of the person against it;
(xiii) the Seller has not entered into any 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;
(xiv) the Seller has not granted any increase outside the Ordinary
Course of Business in the base compensation of any of its
directors, officers, and employees;
(xv) the Seller has not adopted any (A) bonus, (B) profit-sharing,
(C) incentive compensation, (D) pension, (E) retirement, (F)
medical, hospitalization, life, or other insurance, (G)
severance, or (H) other plan, contract, or commitment for any
of its directors, officers, and employees, or modified or
terminated any existing such plan, contract, or commitment;
(xvi) the Seller has not made any other change in employment terms
for any of its directors, officers, and employees;
(xvii) the Seller has not made or pledged to make any charitable or
other capital contribution outside the Ordinary Course of
Business;
(xviii) the Seller has not paid any amount to any third party with
respect to any Liability or obligation (including any costs
and expenses the Seller has incurred or may incur in
connection with this Agreement or any of the transactions
contemplated hereby) which would not constitute an Assumed
Liability if in existence as of the Closing;
(xix) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary
Course of Business involving the Seller;
(xx) the Seller has not altered its credit and collection policies
or its accounting policies;
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(xxi) the Seller has not materially altered the programming, format
or call letters of the Station, or its promotional and
marketing activities;
(xxii) the Seller has not applied to the FCC for any modification of
the FCC Licenses or failed to take any action necessary to
preserve the FCC Licenses and has operated the Station in
compliance therewith and with all FCC rules and regulations;
(xxiii) there has been no material adverse change in the Cash flow of
the Station; and
(xxiv) the Seller has not committed to any of the foregoing.
(g) Tax Matters. The Seller has filed and will file all Tax Returns
that it was required to file and may be required to file. All such
Tax Returns were correct and complete in all respects. All Taxes
owed by the Seller (whether or not shown on any Tax Return) have
been paid. The Seller has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing
to any employee, creditor, independent contractor, or other third
party. The Seller has not waived any statute of limitations with
respect to Taxes or agreed to any extension of time with respect to
a Tax assessment or deficiency. The Seller is not a party to a
pending Tax audit and is aware of no threatened Tax audit. No claim
has ever been made by an authority in a jurisdiction where the
Seller does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no Security Interests on
any of the assets of the Seller that arose in connection with any
failure (or alleged failure) to pay any Tax.
(h) Tangible Assets. Section 2(h) of the Disclosure Schedule sets
forth a listing of all transmitter and station equipment, vehicles
and other tangible personal property used in conducting the
operation and business of the Station. The Seller owns or leases all
tangible assets necessary for the conduct of the operation and
business of the Station as presently conducted and as presently
proposed to be conducted. Each such tangible asset is free from
defects (patent and latent), has been maintained in accordance with
normal industry practice, is in good operating condition and repair
(subject to normal wear and tear) and is suitable for the purpose
for which it is presently used.
(i) Real Property. The Seller owns no real property that is used or
useful in the operation of the Station. The Seller does not lease or
sublease any real property other than pursuant to the Tower Lease
and the Studio Lease. The Seller has delivered to the Buyers correct
and complete copies of the Tower Lease and the Studio Lease. With
respect to the Tower Lease:
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(i) the lease is and, following the Closing will continue to be,
legal, valid, binding, enforceable, and in full force and
effect;
(ii) no party to the lease is in breach or default (or has
repudiated any provision thereof), and no event has occurred
which, with notice or lapse of time, would constitute a breach
or default or permit termination, modification, or
acceleration thereunder;
(iii) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease;
(iv) the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold;
(v) all facilities leased thereunder have received all approvals
of governmental authorities (including licenses, permits and
zoning approvals) required in connection with the operation
thereof and have been operated and maintained in accordance
with applicable laws, rules, and regulations; and
(vi) all facilities leased thereunder are supplied with utilities
and other services necessary for the operation of said
facilities.
(j) Intellectual Property. The Seller owns or has the right to use
pursuant to license, sublicense, agreement, or permission all
Intellectual Property necessary for the operation of the businesses
of the Seller as presently conducted and as presently proposed to be
conducted. Each item of Intellectual Property owned or used by the
Seller immediately prior to the Closing hereunder will be owned or
available for use by the Buyers on identical terms and conditions
immediately subsequent to the Closing hereunder. The Seller has
taken all necessary or desirable action to protect each item of
Intellectual Property that it owns or uses.
(i) Except as described in Section 2(j) of the Disclosure
Schedule, the Seller has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and the Seller
has never received any charge, complaint, claim, or notice
alleging any such interference, infringement,
misappropriation, or violation. Except as described in Section
2(j) of the Disclosure Schedule, to the Knowledge of the
Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of the Seller.
(ii) Section 2(j) of the Disclosure Schedule identifies each
patent, trademark or copyright registration which has been
issued to the Seller with respect to any of its Intellectual
Property, identifies each pending patent, trademark or
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copyright application for registration which the Seller has
made with respect to any of its Intellectual Property, and
identifies each license, agreement, or other permission which
the Seller has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions).
The Seller has delivered to the Buyers correct and complete
copies of all such patents, trademarks or copyright
registrations, applications, licenses, agreements, and
permissions (as amended to date) and has made available to the
Buyers correct and complete copies of all other written
documentation evidencing ownership and prosecution (if
applicable) of each such item. With respect to each item of
Intellectual Property that the Seller owns:
(A) the Seller possesses all right, title, and interest in
and to the item;
(B) the item is not subject to any outstanding judgment,
order, decree, stipulation, injunction, or charge;
(C) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending or, to the
Knowledge of the Seller, is threatened which challenges
the legality, validity, enforceability, use, or
ownership of the item; and
(D) the Seller is not a party to any agreement or other
arrangement to indemnify any person or entity for or
against any interference, infringement,
misappropriation, or other conflict with respect to the
item.
(iii) Section 2(j) of the Disclosure Schedule also identifies each
item of Intellectual Property that any third party owns and
that the Seller uses pursuant to license, sublicense,
agreement, or permission including, but not limited to the
call letters of the Station. The Seller has supplied the
Buyers with correct and complete copies of all such licenses,
sublicenses, agreements, and permissions (as amended to date).
With respect to each such item of used Intellectual Property:
(A) the license, sublicense, agreement, or permission
covering the item is, and following the Closing will
continue to be on identical terms, legal, valid,
binding, enforceable, and in full force and effect;
(B) no party to the license, sublicense, agreement, or
permission is in breach or default (or has repudiated
any provision thereof), and no event has occurred which
with notice or lapse of time would constitute a breach
or default or permit termination, modification, or
acceleration thereunder;
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(C) with respect to each sublicense, the representations and
warranties set forth in subsections (A) and (B) above
are true and correct with respect to the underlying
license;
(D) the underlying item of Intellectual Property is not
subject to any outstanding judgment, order, decree,
stipulation, injunction, or charge;
(E) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending, or, to the
Knowledge of the Seller, is threatened which challenges
the legality, validity, or enforceability of the
underlying item of Intellectual Property;
(F) the Seller has not agreed to indemnify any person or
entity for or against any interference, infringement,
misappropriation, or other conflict with respect to the
underlying item of Intellectual Property; and
(G) the Seller has not granted any sublicense or similar
right with respect to the license, sublicense,
agreement, or permission.
(k) Contracts. Other than Advertising Contracts, Section 2(k) of the
Disclosure Schedule lists the contracts, agreements, and other
written arrangements to which the Seller is a party and either
involving payment in excess of One Thousand Dollars ($1,000) per
year or not entered into in the Ordinary Course of Business. The
Seller has delivered to the Buyers a correct and complete copy of
each written arrangement listed in Section 2(k) of the Disclosure
Schedule (as amended to date). With respect to each written
arrangement so listed:
(i) the written arrangement is legal, valid, binding, enforceable,
and in full force and effect;
(ii) the written arrangement will continue to be legal, valid,
binding, and enforceable and in full force and effect on
identical terms following the Closing;
(iii) no party is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or
acceleration, under the written arrangement; and
(iv) no party has repudiated any provision of the written
arrangement.
The written arrangement listed in Section 2(k) of the Disclosure Schedule
are all of the written arrangements necessary for the conduct of the
operation and business of
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the Station as presently conducted and proposed to be conducted and,
except for the Studio Lease, are included within the definition of
Acquired Assets. The Seller 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(k) of the Disclosure Schedule under
the terms of this Section 2(k).
(l) Commission Licenses and Compliance with Commission
Requirements.
(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 Station as they are now
being operated (A) are in full force and effect, (B) are
unimpaired by any acts or omissions of the Seller or the
Seller's employees or agents, (C) are free and clear of any
restrictions which might limit the full operation of the
Station, and (D) are detailed in Section 2(l) of the
Disclosure Schedules. With respect to the licenses, permits,
authorizations, franchises, certificates of compliance and
consents referenced in the preceding sentence, Section 2(l) of
the Disclosure Schedules also sets forth, without limitation,
the date of the last renewal, the expiration date thereof, and
any conditions or contingencies related thereto. Except as set
forth in Section 2(l) of the Disclosure Schedules, no
condition exists or event has occurred that permits, or after
notice or lapse of time, or both, would permit, the revocation
or termination of any such license, permit, consent,
franchise, or authorization (other than pursuant to their
express expiration date) or the imposition of any material
restriction or limitation upon the operation of the Station as
now conducted. Except as set forth in Section 2(l) of the
Disclosure Schedules, the Seller is not aware of any reason
why the FCC licenses might not be renewed in the ordinary
course or revoked.
(ii) The Station is in compliance with the FCC's policy on exposure
to radio frequency radiation. No renewal of any FCC License
would constitute a major environmental action under the FCC's
rules or policies. Access to the Station's transmission
facilities is restricted in accordance with the policies of
the FCC.
(iii) Except as set forth in Section 2(l) of the Disclosure
Schedules, to the best of the Seller's Knowledge, the Seller
is not the subject of any FCC or other governmental
investigation or any notice of violation or order, or any
material complaint, objection, petition to deny, or opposition
issued by or filed with the FCC or any other governmental
authority in connection with the operation of or authorization
for the Station, and there are no proceedings (other than
rulemaking proceedings of general applicability) before the
FCC or any other governmental authority that could adversely
affect any of the
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FCC Licenses or the authorizations listed in Section 2(l) of
the Disclosures Schedules.
(iv) Seller has filed with the FCC and all other governmental
authorities having jurisdiction over the Station all material
reports, applications, documents, instruments, and other
information required to be filed, and will continue to make
such filings through the Closing Date.
(m) Insurance. Section 2(m) of the Disclosure Schedule sets forth
the following information with respect to each insurance policy
(including policies providing property, casualty, liability, and
workers' compensation coverage and bond and surety arrangements) to
which the Seller is a party or was a party during the past 3 years,
a named insured, or otherwise the beneficiary of coverage:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and the
name of each covered insured; and
(iii) the policy number and the period of coverage.
Section 2(m) of the Disclosure Schedule describes any self-insurance
arrangements affecting the Seller. Notwithstanding the Seller's intention to
terminate such insurance policies upon Closing, with respect to each such
insurance policy prior to such termination, to the knowledge of Seller: (A) the
policy is legal, valid, binding, and enforceable and in full force and effect;
(B) neither the Seller nor any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default or permit termination, modification, or
acceleration, under the policy; and (C) no party to the policy has repudiated
any provision thereof.
(n) Litigation. Section 2(n) of the Disclosure Schedule sets forth
each instance in which the Seller: (i) is subject to any unsatisfied
judgement, 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 quasijudicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator. None of the charges,
complaints, actions, suits, proceedings, hearings, and
investigations set forth in Section 2(n) of the Disclosure Schedule
could result in any adverse change in the assets, Liabilities,
business, financial condition, operations, results of operations, or
future prospects of the Seller or the Station taken as a whole. The
Seller has no reason to believe that any such charge, complaint,
action, suit, proceeding, hearing, or investigation may be brought
or threatened against the Seller.
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(o) Employees. Section 2(o) of the Disclosure Schedule sets forth a
listing of the names, positions, job descriptions, salary or wage
rates and all other forms of compensation paid for work at the
Station of each employee of Seller. To the Knowledge of the Seller,
no key employee or group of employees has any plans to terminate
employment with the Seller. The Seller is not a party to or bound by
any collective bargaining agreement, nor has it experienced any
strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. The Seller has not committed any
unfair labor practice. The Seller has no Knowledge of any
organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of the Seller.
(p) Employee Benefits. Section 2(p) of the Disclosure Schedule lists
all Employee Benefit Plans and other executive compensation plans
that the Seller maintains or to which the Seller contributes for the
benefit of any current or former employee of the Seller. Each
Employee Benefit Plan (and each related trust or insurance contract)
complies in form and in operation in all respects with the
applicable requirements of ERISA and the Code. The Seller does not
contribute to, ever has contributed to, or ever has been required to
contribute to any Multiemployer Plan. The Seller has not incurred
and has no reason to expect that it will incur any Liability to the
PBGC (other than PBGC premium payments) or otherwise under Title IV
of ERISA (including any withdrawal liability) or under the Code with
respect to any Employee Pension Benefit Plan that the Seller
maintains or ever has maintained or to which it contributes, ever
has contributed, or ever has been required to contribute. The Seller
does not maintain and has not maintained, contributed or been
required to contribute to any Employee Welfare Benefit Plan
providing health, accident, or life insurance benefits to former
employees, their spouses, or their dependents (other than in
accordance with Code Sec. 4980B).
(q) Environment, Health, and Safety.
(i) The Seller has complied with all laws (including rules and
regulations thereunder) of federal, state, and local
governments (and all agencies thereof) concerning the
environment, public health and safety, and employee health and
safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been
filed or commenced against any of them alleging any failure to
comply with any such law or regulation.
(ii) The Seller has no Liability (and there is no Basis related to
the past or present operations, and its respective
predecessors for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or
demand against the Seller giving rise to any Liability) under
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
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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 (or rule or regulation thereunder) of any federal,
state, local, or foreign government (or agency thereof),
concerning release or threatened release of hazardous
substances, public health and safety, or pollution or
protection of the environment, or for damage to any site,
location, or body of water (surface or subsurface) or for
illness or personal injury.
(iii) The Seller 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 Seller
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.
(iv) The Seller has obtained and has been in compliance with all of
the terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied with
all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, local,
and foreign laws (including rules, regulations, codes, plans,
judgments, orders, decrees, stipulations, injunctions, and
charges thereunder) relating to public health and safety,
worker health and safety, and pollution or protection of the
environment, including 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.
(v) To the Knowledge of the Seller, no pollutant, contaminant, or
chemical, industrial, hazardous, or toxic material or waste
has been buried, stored, spilled, leaked, discharged, emitted,
or released on any real property that the Seller leases or
ever has leased with respect to the Station.
(r) Legal Compliance.
(i) The Seller has complied with all laws (including rules and
regulations thereunder) of federal, state, and local
governments (and all agencies thereof, and no charge,
complaint, action, suit, proceeding, hearing, investigation,
claim, demand, or notice has been filed or commenced against
the Seller
-14-
alleging any failure to comply with any such law or
regulation, including those relating to the employment of
labor, employee civil rights, and equal employment
opportunities and relating to antitrust matters.
(ii) The Seller has filed in a timely manner all reports,
documents, and other materials it was required to file (and
the information contained therein was correct and complete in
all respects) under all applicable laws (including rules and
regulations thereunder). The Seller has possession of all
records and documents it was required to retain under all
applicable laws (including rules and regulations thereunder).
(s) Brokers' Fees. The Seller 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.
(t) Advertising Contracts. Other than to employees of the Seller or
the Station or as disclosed in Section 2(t) of the Disclosure
Schedule, no commission or other form of renumeration is paid by the
Seller with respect to Advertising Contracts and any renumeration so
listed shall be paid by Seller at or prior to Closing. To Michel's
Knowledge, no party to a material Advertising Contract has indicated
to the Seller within the past year that it will stop or
substantially decrease the rate of advertising.
(u) Disclosure. The representations and warranties contained in this
Section 2 do not contain any untrue statement of a fact or omit to
state any fact necessary in order to make the statements and
information contained in this Section 2 not misleading.
3. Representations and Warranties of the Buyers. The Buyers represent and
warrant to the Seller that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization of the Buyers. The Operating Company is a
corporation duly organized, validly existing, and in good standing
under the laws of the state of Nevada. The Licensing Company is a
corporation duly organized, validly existing, and in good standing
under the laws of the state of Nevada.
(b) Authorization of Transaction. The Buyers have full power and
authority to execute and deliver this Agreement and to perform the
Buyers' obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of each the Buyers, enforceable in
accordance with its terms and conditions.
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(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Section 1 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 either of the Buyers are subject or any provision of either of
the Buyers' articles of organization or (ii) conflict with, result
in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice 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
either of the Buyers are a party or by which either of the Buyers
are bound or to which any of the Buyers' assets are subject. The
Buyers do not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 1 above).
(d) Brokers' Fees. The Buyers have no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which the
Seller could become liable or obligated.
4. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper,
or advisable to consummate and make effective the transactions
contemplated by this Agreement (including satisfying the closing
conditions set forth in Section 5 below).
(b) Assignment Applications. Within ten (10) business days after the
execution of this Agreement, the Seller and the Licensing Company
shall jointly file with the FCC an application for assignment of the
FCC Licenses, permits and authorizations pertaining to the Station
from the Seller to the Licensing Company (the "Assignment
Application"). The costs of the FCC filing fees in connection with
the Assignment Application shall be divided equally between the
Seller and the Licensing Company. The Seller and the Licensing
Company shall each pay its own attorneys' fees. The Seller and the
Licensing Company shall thereafter prosecute the Assignment
Application with all reasonable diligence and otherwise use the
commercially reasonable efforts to obtain the grant of the
Assignment Application as expeditiously as practicable (but neither
the Seller nor the Licensing Company shall have any obligation to
satisfy complainants or the FCC by taking any steps which would have
material adverse effect upon the Station or upon any Affiliate). If
the FCC imposes
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any condition on either party to the Assignment Application, such
party shall use commercially reasonable efforts to comply with such
condition, provided, that neither party shall be required hereunder
to comply with any condition that would have a material adverse
effect upon the Station or any Affiliate. The Seller and the
Licensing Company shall jointly oppose any requests for
reconsideration or judicial review of FCC approval of the Assignment
Application and shall jointly request from the FCC extension of the
effective period of FCC approval of the Assignment Application if
the Closing shall not have occurred prior to the expiration of the
original effective period of the FCC Consent. Nothing in this
Section 4(b) shall be construed to limit either the Seller's or the
Buyer's right to terminate this Agreement pursuant to Section 9 of
this Agreement.
(c) Employment Offers. Upon notice to the Seller, and at mutually
agreeable times, the Seller will permit the Buyers to meet with its
employees prior to the Closing Date. The Buyers may, at the Buyers'
option and upon the Buyers' terms and conditions, extend offers of
employment to all or any of the Seller's employees effective on the
Closing Date. The Seller 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 Seller will give any notices to third
parties, and the Seller will use its commercially reasonable efforts
to obtain any third party consents, that the Buyers reasonably may
request in connection with the matters pertaining to the Seller
disclosed or required to be disclosed in the Disclosure Schedule.
Each of the Parties will file any notification and report forms and
related material that it may be required to file with the Federal
Trade Commission and the Antitrust Division of the United States
Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, will use its
best efforts to obtain an early termination of the applicable
waiting period, and will make any further filings pursuant thereto
that may be necessary, proper, or advisable. Each of the Parties
will take any additional action that may be necessary, proper, or
advisable in connection with any other notices to, filings with, and
authorizations, consents, and approvals of governments, governmental
agencies, and third parties that it may be required to give, make,
or obtain.
(e) Operation of Business. The Seller will not engage in any
practice, take any action, embark on any course of inaction, or
enter into any transaction outside the Ordinary Course of Business.
Without limiting the generality of the foregoing, the Seller will
not engage in any practice, take any action, embark on any course of
inaction, or enter into any transaction of the sort described in
Section 2(f) above.
(f) Advertising Obligations. The Seller shall satisfy its air time
obligations for goods or services under its Advertising Contracts
such that the outstanding aggregate balance owing under all such
Advertising Contracts as of the Closing Date shall not
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exceed Five Thousand Dollars ($5,000.00) worth of air time. On the
Closing Date, the Seller shall deliver to the Operating Company a
schedule, certified by an officer of the Seller, reflecting all such
Advertising Contracts and the daily value thereof and outstanding
balances thereunder in existence as of the Closing Date.
(g) Operating Statements. The Seller shall deliver to the Buyers,
for the Buyers' informational purposes only, monthly unaudited
statements of operating revenues and operating expenses of the
Station within ten (10) days after each such statement is prepared
by or for the Seller.
(h) Contracts. The Seller will not without the prior written consent
of the Operating Company amend, change, or modify any of the
contracts listed on Section 2(k) of the Disclosure Schedule in any
material respect. The Seller will not without prior written consent
of the Operating Company enter into any new contracts respecting the
Station or their properties, except (i) contracts for the sale of
time on the Station for cash, goods or services which comply with
the representations and warranties pertaining to such contracts set
forth in Section 2(k) above, (ii) contracts entered into in the
Ordinary Course of Business which are cancelable on not more than
thirty-one (31) days' notice without penalty or premium, and (iii)
contracts entered into in the Ordinary Course of Business each of
which does not involve more than One Thousand Dollars ($1,000) or
all of which do not involve more than Five Thousand Dollars ($5,000)
in the aggregate.
(i) Operation of Station. The Seller shall operate the Station 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 Seller shall file with the FCC all material
reports, applications, documents, instruments and other information
required to be filed in connection with the operation of the
Station.
(j) Credit and Receivables. The Seller will follow its usual and
customary policies with respect to extending credit for sales of air
time and advertising on the Station and with respect to collecting
accounts receivable arising from such extension of credit.
(k) Preservation of Business. The Seller will keep its business and
properties substantially intact, including its present operations,
physical facilities, working conditions, relationships with lessors,
licensers, advertisers, suppliers, customers, and employees, all of
the confidential information, call letters and trade secrets of the
Station, and the FCC Licenses. The Seller will continue to make
expenditures for advertising, programming, sales, technical and
administrative support at a level consistent with the past practices
of the Seller.
(l) Full Access and Consultation. The Seller will permit
representatives of the Buyers to have full access at all reasonable
times, and in a manner so as not to
-18-
interfere with the normal business operations of the Station, to all
premises, properties, assets, books, records, contracts (except
Advertising Contracts), Tax records, and documents of or pertaining
to the Acquired Assets or the Seller. The Seller will consult with
the Buyers' management with a view to informing Buyers' management
as to the operations, management and business of the Station.
(m) Notice of Developments. The Seller will give prompt written
notice to the Buyers of any material development affecting the
assets, Liabilities, business, financial condition, operations,
results of operations, or future prospects of the Seller. Each Party
will give prompt written notice to the other of any material
development affecting the ability of the Parties to consummate the
transactions contemplated by this Agreement. No disclosure by any
party pursuant to this Section 4(m), however, shall be deemed to
amend or supplement the Disclosure Schedule or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant.
(n) Exclusivity. The Seller will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person
relating to any (A) liquidation, dissolution, or recapitalization,
(B) merger or consolidation, (C) acquisition or purchase of
securities or assets, or (D) similar transaction or business
combination involving the Seller or the Station; 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 Seller will notify the Buyers
immediately if any person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(o) Title Insurance. The Seller will obtain with respect to the
parcel of real estate that the Seller leases pursuant to the Tower
Lease, a leasehold owner's policy issued by a title insurer
reasonably satisfactory to the Operating Company, in an amount equal
to the fair market value of such real property (including all
improvements located thereon), insuring title to such real property
in the Operating Company as of the Closing subject only to the title
exceptions which do not impair the current use, occupancy or value
or the marketability of title of the property, together with such
endorsements for zoning, contiguity, public access and extended
coverage as the Operating Company reasonably requests. The Seller
shall pay the cost and expense associated with any such title
insurance procured pursuant to this Section 4(o).
(p) Survey. With respect to the parcel of real property that the
Seller leases pursuant to the Tower Lease, the Seller will provide
to the Operating Company in preparation for the Closing a current
survey of the real property certified to the Operating Company,
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
-19-
other masters shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Survey"). The Survey
shall not disclose any survey defect or encroachment from or onto
such real property which has not been cured or insured over prior to
the Closing. The Operating Company shall pay the cost and expense
associated with any Survey initiated pursuant to this Section 4(p).
(q) Environmental Assessments. The Operating Company may, at its own
expense, obtain with respect to the parcel of real estate that the
Seller leases pursuant to the Tower Lease, a current Phase I
environmental site assessment from an environmental consultant or
engineer 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.
(r) Control of Station. The transactions contemplated by this
Agreement shall not be consummated until after the FCC has given its
consent and approval to the Assignment Application. Between the date
of this Agreement and the Closing Date, the Operating Company and
its employees or agents shall not directly or indirectly control,
supervise, or direct, or attempt to control, supervise, or direct,
the operation of the Station, and such operation shall be the sole
responsibility of and in the control of the Seller.
(s) Risk of Loss. The risk of loss, damage, or destruction to any of
the Acquired Assets shall remain with the Seller until the Closing.
In the event of any such loss, damage, or destruction the Seller
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 Seller will repair or replace such
Acquired Assets 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, alone or in the aggregate, would have a material adverse
effect on the operation of the Station:
(i) the Buyers may elect to terminate this Agreement; or
(ii) the Buyers may postpone the Closing Date until such time as
the property has been repaired, replaced or restored in a
manner and to an extent reasonably satisfactory to the Buyers,
unless the same cannot be reasonably effected within ninety
(90) days of the date of the Seller's notice to Buyers, in
which case either party may terminate this Agreement; or
-20-
(iii) the Buyers may choose to accept the Acquired Asset in their
"then" condition, together with the Seller's assignment to
Buyers all rights under any insurance claims covering the
loss, damage or destruction and payment over to Buyers any
proceeds under any such insurance policies, previously
received by the Seller with respect thereto.
In the event the Closing Date is postponed pursuant to this Section 4(s),
the Parties hereto will cooperate to extend the time during which this Agreement
must be closed as specified in the consent of the FCC.
5. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyers. The obligation of the
Buyers to consummate the transactions to be performed by the Buyers
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 material respects at
and as of the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the
Closing;
(iii) the Seller shall have procured all of the third party consents
specified in Section 4(d) above, including but not limited to
those relating to the Tower Lease, the title insurance
commitment and endorsement specified in Section 4(o) above,
and the Survey specified in section 4(p) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasijudicial or administrative agency of
any federal, state, local, or foreign jurisdiction wherein an
unfavorable judgment, order, decree, stipulation, injunction,
or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of
the transactions contemplated by this Agreement to be
rescinded following consummation, or (C) affect adversely the
right of the Buyers to own, operate, or control the Acquired
Assets (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
(v) the Seller shall have delivered to the Buyers a certificate
(without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified
above in Section 5(a)(i)-(iv) is satisfied in all respects;
(vi) the Assignment Application shall have been approved by a Final
Order of the FCC, all applicable waiting periods (and any
extensions thereof) under the
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▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or otherwise been
terminated and the Seller and the Buyers shall have 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 have entered into the Postclosing
Agreement;
(viii) the Seller shall have delivered to the Buyers, pursuant to
Section 4(f), a list of the Advertising Contracts and the
daily value any outstanding balance of such Advertising
Contracts as of the Closing Date;
(ix) the Buyers shall have received from counsel to the Seller an
opinion with respect to the matters set forth in Exhibit G
attached hereto, addressed to the Buyers and dated as of the
Closing Date; and
(x) all actions 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.
The Buyers may waive any condition specified in this Section 5(a) if the Buyers
execute a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller 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 material respects at
and as of the Closing Date;
(ii) the Buyers shall have performed and complied with all of the
Buyers' covenants hereunder in all material respects through
the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasijudicial or administrative agency of
any federal, state, local, or foreign jurisdiction wherein an
unfavorable judgment, order, decree, stipulation, injunction,
or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such judgment, order,
decree, stipulation, injunction, or charge shall be in
effect);
(iv) the Buyers shall have delivered to the Seller a certificate
(without qualification as to knowledge or materiality or
otherwise) to the effect that
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each of the conditions specified above in Section
5(b)(i)-(iii) is satisfied in all respects;
(v) each of the Assignment Applications shall have been approved
by a Final Order of the FCC, all applicable waiting periods
(and any extension thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
shall have expired or otherwise been terminated and the Seller
and the Buyers shall have received all governmental approvals
required to transfer all other authorizations, consents, and
approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vi) the relevant Parties shall have entered into the Postclosing
Agreement; and
(vii) all actions to be taken by the Buyers in connection with
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.
The Seller may waive any condition specified in this Section 5(b) if it executes
a writing so stating at or prior to the Closing.
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 Seller, the other Party will cooperate with the
contesting or defending Party and its counsel in the contest or
defense, make available his or its personnel, and provide such
testimony and access to its books and records as shall be necessary
in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting
or defending Party is entitled to indemnification therefor under
Section 7 below).
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(c) Adjustments. Operation of the Station and the income and
expenses attributable thereto up through the close of business on
the day before the Closing Date shall be for the account of the
Seller and thereafter for the account of the Operating Company. 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, prepared expenses,
deposits, music license fees, and rents and payments pertaining to
the leases and contracts being assigned hereunder (inducing any
contracts for the sale of time for cash, trade or barter so
assigned) shall be prorated between the Seller and the Operating
Company as of the Closing Date in accordance with the foregoing
principle. Contractual arrangements that do not reflect an equal
rate of compensation to the Station 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 the
accounting firm of Ernst & Young and the fees and expenses of such
accounting firm shall be paid one-half (1/2) by the Seller and
one-half (1/2) by the Operating Company.
(d) Collection of Accounts Receivable. At the Closing, the Seller
will turn over to the Operating Company, for collection only, the
accounts receivable of the Station owing to the Seller as of the
close of business on the Closing Date. A schedule of such accounts
receivable will be delivered by the Seller to the Operating Company
on the Closing Date or as soon thereafter as possible. The Operating
Company agrees 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 to Seller at the end of such
120-day period. In the event the Operating Company receives moneys
during the 120-day period following the Closing Date from an
advertiser who, after the Closing Date, is advertising over any of
the Station, and that advertiser was included among the accounts
receivable as of the Closing Date, the Operating Company shall apply
said moneys to the oldest outstanding balance due on the particular
account, except in the case of a "disputed" account receivable. For
purposes of this Section 6(d), a "disputed" account receivable means
one which the account debtor refuses to pay because he asserts that
the money is not owed or the amount is incorrect. In the case of
such a disputed account, the Operating Company shall immediately
return the account to the Seller prior to expiration of the 120-day
period following the Closing Date. If the Operating Company returns
a disputed account to the Seller, the Operating Company shall have
no further responsibility for its collection and may accept payment
from the account debtor for advertising carried on any of the
Station after the Closing Date. At the end of the 120-day period
following the Closing Date, the Operating Company will turn back to
the Seller all of the accounts receivable of the Station as of the
Closing Date owing to the Seller which have not yet been
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collected, and the Operating Company will thereafter have no further
responsibility with respect to the collection of such receivables.
During the 120-day period following the Closing Date, the Operating
Company shall afford the Seller reasonable access to the accounts
receivable "aging list."
(e) Severance Obligations. In the event an offer of employment is
extended by the Buyers to and accepted by an employee of the Seller
pursuant to Section 4(c) and such subsequent employment by the
Buyers is terminated within sixty (60) days from the Closing Date,
the Seller shall be exclusively responsible for, and shall pay to
such accepting employee, all severance benefits that may be due and
owing such employee by reason of his or her employment with either
the Seller or the Buyers based on Seller's severance policies as in
effect on the Closing Date.
7. Remedies for Breaches of this Agreement.
(a) Survival. All of the representations and warranties of the
Seller contained in Section 2 of this Agreement (other than the
representations and warranties of the Seller contained in Sections
2(a), 2(b) and 2(c) hereof or relating to the Seller's title to the
Acquired Assets) shall survive the Closing (even if the Buyers knew
or had reason to know of any misrepresentation or breach of warranty
at the time of Closing) and continue in full force and effect for a
period of three (3) years thereafter. All of the other
representations, warranties, and covenants of the Buyers and the
Seller contained in this Agreement (including the representations
and warranties of the Seller contained in Sections 2(a), 2(b) and
2(c) hereof or relating to the Seller's title to the Acquired
Assets) and in this Agreement shall survive the Closing (even if the
damaged party knew or had reason to know of any misrepresentation or
breach of warranty or covenant at the time of Closing) and continue
in full force and effect forever thereafter.
(b) Indemnification Provisions for the Benefit of the Buyers.
Michel and the Seller jointly and severally agree to indemnify the
Buyers from and against the entirety of any Adverse Consequences the Buyers may
suffer resulting from, arising out of, relating to, in the nature of, or caused
by:
(i) any breach of the Seller's representations, warranties, and
covenants contained in this Agreement (so long as the
particular representation, warranty, or covenant survives the
Closing and the Buyers make a written claim for
indemnification within the applicable survival period);
(ii) any Liability of the Seller which is not an Assumed Liability;
or
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(iii) 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. The
Buyers agree to indemnify the Seller from and against the entirety
of any Adverse Consequences the Seller may suffer resulting from,
arising out of, relating to, in the nature of, or caused by (i) the
breach of any of the Buyers' representations, warranties, and
covenants contained in this Agreement (so long as the particular
representation, warranty, or covenant survives the Closing and the
Seller makes a written claim for indemnification within the
applicable survival period) or (ii) any Assumed Liability.
(d) Specific Performance. Each of the Parties acknowledge and agree
that (i) the Station to be acquired pursuant to this Agreement is
unique; (ii) the Buyers would be damaged irreparably in the event
any provision of this Agreement is not performed in accordance with
specific term or otherwise is breached; and (iii) money damages
would not be an adequate remedy for a breach of any provision of
this Agreement. Accordingly, each of the Parties agrees that the
Buyers shall be entitled to an injunction or injunctions to prevent
such breach and to enforce specifically this Agreement and the terms
and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in
Section 10(o) below), in addition to any other remedy to which it
may be entitled, at law or in equity.
(e) 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. In the event any Indemnifying Party notifies the
Indemnified Party within fifteen (15) days after the Indemnified
Party has given notice of the matter that the Indemnifying Party is
assuming the defense thereof, (i) the Indemnifying Party will defend
the Indemnified Party against the matter with counsel of its choice
reasonably satisfactory to the Indemnified Party, (ii) the
Indemnified Party may retain separate co-counsel at its sole cost
and expense (except that the Indemnifying Party will be responsible
for the fees and expenses of the separate co-counsel to the extent
the Indemnified Party concludes reasonably 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
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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
fifteen (15) days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense
thereof, however, the Indemnified Party may defend against, or enter
into any settlement with respect to, the matter in any manner it
reasonably may deem appropriate.
(f) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any
statutory or common law remedy any party may have for breach of
representation, warranty, or covenant.
8. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of
the assets of the Seller, (other than Retained Assets) that are used or useful
in the operation of the Station, including but not limited to all of its (i)
interests of any kind in real property, improvements, fixtures, and fittings
thereon (such as towers and antennae), and easements, rights-of-way, and other
appurtenants thereto under the Tower Lease; (ii) tangible personal property
(such as computers, electrical devices, monitoring equipment, test equipment,
switching, terminal and studio equipment, transmitters, transformers, receivers,
broadcast facilities, inventories of compact disks, records, tapes and other
supplies, vehicles, and all assignable warranties with respect thereto; (iii)
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; (iv) rights under orders and agreements
(including those barter agreements identified on the Disclosure Schedules) now
existing or entered into in the Ordinary Course of Business for the sale of
advertising time on the Station; (v) contracts, indentures, Security Interests,
guaranties, other similar arrangements, and rights thereunder; (vi) call letters
of the Station, jingles, logos, slogans, and business goodwill of the Station;
(vii) Licenses and similar rights obtained from governments and governmental
agencies; and (viii) FCC logs and records and all other books, records, ledgers,
logs, files, documents, correspondence, lists, plats, architectural plans,
drawings, and specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written materials.
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including all attorneys' fees and court costs.
"Advertising Contracts" means any arrangement with any third party under
which the Seller has created, incurred, assumed or guaranteed an obligation to
provide advertising or air time on the Station.
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"Affiliate" means with reference to any person or entity, another person
or entity controlled by, under the control of or under common control with that
person or entity.
"Assignment Application" has the meaning set forth in Section 4(b) above.
"Assumed Liabilities" means obligations of the Seller under the licenses,
sublicenses, leases, subleases, contracts, and other arrangements referred to in
the definition of Acquired Assets either: (a) to furnish services, and other
non-Cash benefits to another party after the Closing; or (b) 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
Liability.
"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 2 and Section 3
above.
"▇▇▇▇▇▇▇ Money Deposit" has the meaning set forth in Section 1(c) above.
"▇▇▇▇▇▇▇ Money Escrow Agreement" has the meaning set forth in Section 1(c)
above.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer 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).
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"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means Fifth Third Bank of Northwest Ohio N.A.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 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.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Final Order" means an action by the FCC as to which: (a) no request for
stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"Financial Statements" has the meaning set forth in Section 2(e) above.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Indemnified Party" has the meaning set forth in Section 7(f) above.
"Indemnifying Party" has the meaning set forth in Section 7(f) 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
-29-
information), (g) other proprietary rights, and (h) copies and tangible
embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"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 Seller with respect to
the operations of the Station and all applications therefor, together with any
renewals, extension or modifications thereof and additions thereto.
"Licensing Company" has the meaning set forth in the preface above.
"Most Recent Financial Statements" has the meaning set forth in Section
2(e) above.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37)
"Operating Company" has the meaning set forth in the preface above.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Post-Closing Agreement" means the Post-Closing Agreement with Seller
Stockholders entered into concurrently herewith and attached hereto as Exhibit
E.
"Process Agent" has the meaning set forth in Section 10(o) below.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"Purchase Price" has the meaning set forth in Section 1(c) above.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Retained Assets" means (a) 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 Seller
as a
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corporation; (b) any of the rights of the Seller under this Agreement (or under
any side agreement between the Seller on the one hand and the Buyers on the
other hand entered into on or after the date of this Agreement); (c) accounts,
notes and other receivables; (d) Seller's Cash; (e) all rights as lessor or
otherwise under the Studio Lease; and (f) a single personal computer.
"Retained Liabilities" means any other obligations or liabilities of
Seller, including but not limited to: (a) any Liability relating to the
ownership or operation of the Station prior to the Closing; (b) any Liability of
the Seller for income, transfer, sales, use, and other Taxes arising in
connection with the consummation contemplated hereby; (c) any Liability of the
Seller for costs and expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated hereby; (d) all obligations as
lessor or otherwise under the Studio Lease; or (e) any Liability or obligation
of the Seller under this Agreement (or under any side agreement between the
Seller on the one hand and the Buyers on the other hand entered into on or after
the date of this Agreement).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation; and (c) other
liens arising in the Ordinary Course of Business and not incurred in connection
with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Station" means the radio broadcast station having the call letters
WXKR-FM licensed by the FCC to operate in Port Clinton, Ohio.
"Studio Lease" means that Lease Agreement (as amended) entered into as of
April 30, 1990, by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and Venice
Broadcasting Incorporated, pursuant to which Venice Broadcasting Incorporated
does lease Unit Nos. 609 and 611 in the building located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
"Subsidiary" means any corporation with respect to which another specified
corporation has the power to vote or direct the voting of sufficient securities
to elect a majority of the directors.
"Survey" has the meaning set forth in Section 4(p) 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.
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"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.
"Tower Lease" means that Property Lease (as amended) entered into as of
December 11, 1991, by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ and the
Seller pursuant to which the Seller does lease approximately six (6) acres in
the Township of ▇▇▇▇▇▇, County of Ottawa, State of Ohio on which the Seller has
erected and maintains a radio station tower and requisite building and
equipment.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyers and the Seller 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 Seller at any time prior to the Closing in the
event the Seller is in breach, and the Seller may terminate
this Agreement by giving written notice to the Buyers at any
time prior to the Closing in the event the Buyers are in
breach, of any material representation, warranty, or covenant
contained in this Agreement in any material respect in each
case if such breach remains uncured for ten (10) days after
notice of breach is received from the other party;
(iii) the Buyers may terminate this Agreement by giving written
notice to the Seller on or before the 30th day following the
date of this Agreement if the Buyers are not satisfied in the
Buyers' sole discretion with the results of its continuing
business, legal, engineering and accounting due diligence
regarding the Seller;
(iv) the Buyers may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if the
Closing shall not have occurred on or before the 270th day
following the date of this Agreement by reason of the failure
of any condition precedent under Section 5(a) hereof (unless
the failure results primarily from the Buyers breaching any
representation, warranty, or covenant contained in this
Agreement);
(v) the Seller may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing if the
Closing shall not have occurred on or before the 270th day
following the date of this Agreement by reason of the failure
of any condition precedent under Section 5(b) hereof (unless
the
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failure results primarily from the Seller itself breaching any
representation, warranty, or covenant contained in this
Agreement); or
(vi) the Buyers or the Seller 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 9(a) above, all obligations of the Parties
hereunder shall terminate without any Liability of any Party to any
other Party (except for any Liability of any Party then in breach).
10. Miscellaneous.
(a) Survival. All of the representations, warranties, and covenants
of the Parties contained in this Agreement shall survive the Closing
hereunder as and to the extent provided in the Post-Closing
Agreement.
(b) 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).
(c) 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.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, that may
have related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign
either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the
other Party, provided that the Buyers may assign all of the Buyers'
right, title and interest in, to and under this Agreement to one or
more Affiliates or Midwest Broadcasting, who shall then, subject to
the terms and conditions of this Agreement, have the right to
receive the Acquired Assets, assume the Assumed Liabilities, and to
pay to the Seller the Purchase Price therefor.
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(f) 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.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Seller: Venice Michel
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to the Buyers: Cumulus Media, LLC
c/o Quaestus Management Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Copy to: Cumulus Media, LLC
c/o Century Broadcasting
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the individual
for whom it is intended. Any Party may change the address to which notices,
requests,
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demands, claims, and other communications hereunder are to be delivered by
giving the other Party notice in the manner herein set forth.
(i) 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 Ohio.
(j) 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.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid
or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
(l) Expenses. The Buyers and the Seller, will each bear their own
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby, other than as set forth in Section 4(b) with regard to the
Assignment Applications. The Seller will pay all income taxes,
transfer or sales taxes and other recording or similar fees
necessary to vest title to each of the Acquired Assets in the
Buyers.
(m) 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 have independent
significance. If any Party has breached any
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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.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Toledo, Ohio,
in any action or proceeding arising out of or relating to this
Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees
not to bring any action or proceeding arising out of or relating to
this Agreement in any other court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto.
Seller appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and Buyers appoint CT Corporation (each the
"Process Agent") as their respective agent to receive on behalf of
each service of copies of the summons and complaint and any other
process that might be served in the action or proceeding. Any Party
may make service on the other Party by sending or delivering a copy
of the process (i) to the Party to be served at the address and in
the manner provided for the giving of notices in Section 10(h) above
or (ii) to the Party to be served in care of the Process Agent at
the address and in the manner provided for the giving of notices in
Section 10(h) above. Nothing in this Section 10(p), 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.
(p) Bulk Transfer Laws. The Seller has, or will as of the Closing
Date, comply with the provisions of any bulk transfer laws of Ohio
or any other jurisdiction applicable to the transactions
contemplated by this Agreement.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
CUMULUS BROADCASTING, INC.
By:
--------------------------------
Title:
-----------------------------
"Operating Company"
CUMULUS LICENSING CORP.
By:
-----------------------------------
(printed)
-----------------------------------
Title:
-----------------------------------
"Licensing Company"
VENICE BROADCASTING CORP.
By:
-----------------------------------
(printed)
-----------------------------------
Title:
-----------------------------------
"Seller"
VENICE MICHEL
-----------------------------------
"Michel"
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LIST OF OMITTED SCHEDULES AND/OR EXHIBITS:
Ex. A -- Form of Note
Ex. B -- Form of ▇▇▇▇▇▇▇ Money Escrow Agreement
Ex. C -- Form of Assignments
Ex. D -- Form of Assumption
Ex. E -- Form of Post Closing Agreement
Ex. F -- Allocation Schedule
Ex. G -- Form of Opinion of Counsel to the Seller
The preceding schedules and/or exhibits have been omitted from this exhibit.
The Company agrees to provide copies of such schedules and/or exhibits to the
Commission upon request.
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