Exhibit 10.67
ASSET PURCHASE AGREEMENT
RADIO STATIONS WVBO-FM/WOSH-AM/WOGB-FM
This Asset Purchase Agreement, (hereafter referred to as "Agreement") made
this day of February, 1997, by and between Value Radio Corporation, a
Wisconsin corporation (hereinafter referred to as "Seller") and Cumulus Media,
L.L.C., a Delaware limited liability company (hereinafter referred to as
"Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the holder of authorizations issued by the Federal
Communications Commission (the "FCC") for radio stations WVBO-FM, WOSH-AM and
WOGB-FM, licensed to Oshkosh,Wisconsin and Kaukauna, Wisconsin (hereinafter the
"Radio Stations"); and
WHEREAS, Buyer desires to purchase from Seller substantially all of the
assets used or useful in the operation of the Radio Stations, as more
particularly described below in this Agreement, upon the terms and conditions
set forth herein; and
WHEREAS, Seller desires to sell said Assets as part of a qualified
tax-deferred exchange under Internal Revenue Code Section 1031 in which this
Agreement, once executed by the parties hereto, shall be assigned to a qualified
intermediary designated by Seller (the "Qualified Intermediary") who will assume
and undertake the rights and obligations of Seller under this Agreement,
including the right to receive the purchase price from Buyer, and the obligation
to cause Seller to deliver the assets of the Radio Stations to Buyer; and
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller
hereby mutually covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS, PAYMENT OF THE
PURCHASE PRICE AND EXCHANGE OF DOCUMENTS
Upon the basis of the representations, warranties, covenants and agreements
and on the terms and subject to the conditions set forth herein, on the Closing
Date (as hereinafter defined):
1.1 ASSETS. Seller shall sell and Buyer shall purchase substantially all
of the tangible and intangible assets owned or leased by Seller and used or
useful in connection with the operation of the Radio Stations (excluding cash
and cash equivalent assets) including, but not limited to, the assets more
particularly described as follows (collectively, the "Assets"):
(a) All right, title and interest in, to and under all personal
property and equipment owned or leased by Seller and used or useful in
connection with the operation of the Radio Stations, including, but not
limited to, office equipment, record libraries, records, cartridge tapes,
compact discs, news archives, promotional materials, and all other
materials of a commercial nature for use in said operations, together with
any replacements thereof and additions thereto made between the date hereof
and the Closing Date. A correct and complete inventory summary of these
materials by category and quantity is set forth in the attached SCHEDULE
1.1(A). Not less than five (5) business days prior to the Closing Date,
Seller shall deliver to Buyer a listing of any changes to Schedule 1.1(a)
which, as so updated, will be correct and complete.
(b) All right, title and interest in, to and under the advertising
contracts listed on the attached SCHEDULE 1.1(B) with clients and customers
of Seller, and such additional advertising contracts as are existing as of
the Closing Date. Not less than five (5) business days prior to the
Closing Date, Seller shall deliver to Buyer a list of any changes to
Schedule 1.1(b) which are necessary to reflect the termination, expiration
or entry into contracts, arrangements and programs occurring following the
date hereof. In the ordinary course of its business, Schedule 1.1(b) is
(and as updated, will be) a correct and complete listing of all such
advertising contracts of the Radio Stations.
(c) All right, title and interest in, to and under the contracts and
agreements entered into by Seller in connection with the operation and
programming of the Radio Stations (the "Contracts"), and all contracts and
agreements entered into by Seller between the date hereof and the Closing
Date which Buyer agrees to assume at the Closing, subject to their approval
by Buyer. Where the consent to assignment of other parties of said
contracts and agreements is required, Seller agrees to use commercially
reasonable efforts to try to obtain any required consent by the Closing
Date. A complete current list of such contracts and agreements is included
in the attached SCHEDULE 1.1(C). Not less than five (5) business days prior
to the Closing Date, Seller shall deliver to Buyer a list of any changes to
Schedule 1.1(c) which are necessary to reflect the termination, expiration
or entry into contracts and agreements, occurring following the date
hereof.
(d) All right, title and interest in, to and under permits,
authorizations or licenses issued to Seller by the FCC and any other
governmental authority in connection with the operation of the Radio
Stations, (the "Licenses") together with all FCC logs, reports and records
relating thereto, and any renewals or modifications of such items between
the date hereof and the Closing Date, and together with any applications
filed by Seller and pending on the Closing Date, including, but not limited
to those listed in the attached SCHEDULE 1.1(D). Not less than five (5)
business days prior to the Closing Date, Seller shall deliver to Buyer a
listing of any changes to Schedule 1.1(d). Schedule 1.1(d) is (and as
updated, will be) a correct and complete listing of all such Licenses.
(e) All right, title and interest in, to and under all real property
and leases and
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subleases of real property (the "Real Property Leases"), easements,
licenses, right of access, rights of way and other real property interests
which are held or owned by Seller and used or useful in the operation of
the Radio Stations, between Seller and others, together with a copy of each
such lease and sublease. A complete legal description of such real estate
and a complete and accurate list of all such leases and subleases and
other real property rights is set forth in the attached SCHEDULE 1.1(E).
Where the consent of other parties to Seller's assignment of any Real
Property Leases or other real property rights to Buyer is required, Seller
will use commercially reasonable efforts to obtain any required consent by
the Closing Date.
(f) All right, title and interest in, to and under the call letters
"WVBO," "WOSH "WOGB," trademarks, trade names, service marks, franchises,
copyrights, including registrations and applications for registration of
any of them, jingles, logos, and slogans or licenses to use same, together
with any associated goodwill including all business goodwill of the Radio
Stations) and any additions thereto between the date hereof and the Closing
Date including, but not limited to, those described on the attached
SCHEDULE 1.1(F).
(g) All right, title and interest in, to and under all trade (cash)
accounts receivable for the Radio Stations (but excluding non-cash (barter)
agreements)(hereinafter the "Accounts Receivable"). A complete and current
list of Seller's accounts receivable, with aging, is attached as SCHEDULE
1.1(G). Two days prior to the Closing Date, Seller shall deliver to Buyer
an updated Schedule 1.1(g).
(h) All programs and programming materials, in whatever form, all
market studies, promotional or advertising materials used or useful in the
operation of the Radio Stations and all copyrights therefore.
(i) All causes of action, and other rights of recovery against third
parties for any loss, damage or destruction of any of the Radio Stations or
of any of the Assets or breach of duty or obligation with respect thereto.
(j) Any and all assets not specifically identified on the
aforementioned Schedules 1.1(a) through 1.1(i) but which are of the same
general category and nature as the assets listed on the respective
Schedules, owned by Seller and used or useful in the operation of the Radio
Stations, whether or not located on the premises where the principal
operations of the Radio Stations are conducted as of the date of execution
of this Agreement, as set forth in the attached SCHEDULE 1.1(J).
At Closing, the Assets shall be transferred to Buyer free and clear of all
liens, liabilities and encumbrances whatsoever, except Permitted Liens (as
hereinafter defined).
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1.2. CONDITION OF PERSONAL PROPERTY. Seller represents and warrants to
Buyer that all of the assets described in Sections 1.1(a) and 1.1(h) are in good
working condition, repair and order for the normal operations of the Radio
Stations, and are in compliance with FCC and the Federal Aviation Administration
requirements, and will be in such condition on the Closing Date.
1.3 PURCHASE PRICE. Buyer agrees to purchase all of the Assets from
Seller and the Seller agrees to sell all of the Assets to Buyer for the Purchase
Price of Six Million Nine Hundred Fifty Thousand and 00/100 Dollars
($6,950,000.00) (the "Cash Payment") plus a dollar amount equal to the aggregate
of all "current" trade (cash) accounts receivable valued as of the Closing Date,
adjusted for bad debts (the "Accounts Receivable Payment"). For purposes of this
Agreement, "current" trade (cash) accounts receivable means those accounts
arising from advertising and billed in the ordinary course of business,
consistent with Seller's past policies, not more than 120 days prior to the
Closing Date, minus any specifically identified bad debts which Seller
identifies on SCHEDULE 1.3 at the Closing. The parties hereto shall, by the
Closing Date, complete a list of all of the assets covered by this Agreement and
allocate the Purchase Price between tangible and intangible assets on a basis as
detailed as is reasonable according to the business standards of this industry.
1.4 PAYMENT OF PURCHASE PRICE; XXXXXXX MONEY; ESCROW AGENT.
(a) On the Closing Date, Buyer shall pay to Seller, or its assignee,
in cash or by wire transfer, the sum of the Cash Payment and the Accounts
Receivable Payment, subject to the following deductions and credits on the
Closing Date:
(1) Xxxxxxx Money in the amount of Three Hundred Forty Seven
Thousand Five Hundred and 00/100 Dollars ($347,500) which Buyer shall deliver
into escrow to the Escrow Agent described in (b) below on the date set forth in
Section 1.2 of this Agreement, plus interest earned thereon.
(2) Appropriate credits for real and personal property taxes,
prorated to the Closing Date.
(b) Buyer and Seller hereby mutually agree that Broadcast Asset
Management, Inc. shall act as Escrow Agent for purposes of this
transaction, and that the relationship between the Escrow Agent and the
parties hereto shall be governed by a certain Escrow Agreement, attached
hereto as SCHEDULE 1.4 which shall be executed by the Escrow Agent and the
parties hereto, simultaneous with the execution of this Agreement. The
Xxxxxxx Money referenced in this section, after being placed in escrow,
shall be deposited by the Escrow Agent with a federally insured financial
institution in an interest bearing account as directed by the Escrow
Agreement. Interest earned on the deposit shall accrue to the benefit of
Buyer, and, together with the principal amount of the escrow deposit, shall
be payable to Seller and credited against the aforementioned Purchase Price
on the Closing Date. If this Agreement is terminated without Closing of
the transaction contemplated
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herein, the Xxxxxxx Money and all accrued interest shall be paid to Buyer
or to Seller as provided in the Escrow Agreement.
1.5 PRORATION OF INCOME AND EXPENSES.
(a) ADJUSTMENT TIME AND ITEMS. Except as otherwise provided herein,
all income and expenses arising from the conduct of the business and
operation of the Radio Stations shall be prorated between Buyer and Seller
in accordance with generally accepted accounting principles as of 11:59
p.m., Oshkosh, Wisconsin time, on the date immediately preceding the
Closing Date. Such prorations shall include, without limitation, all ad
valorem, real estate and other property taxes (but excluding taxes arising
by reason of the transfer of the Assets as contemplated hereby, which,
shall be paid as set forth in Section 11.9 of this Agreement), business and
license fees, music and other license fees (including any retroactive
adjustments thereof, which retroactive adjustments shall not be subject to
the sixty day limitation set forth in Section 1.5(b) hereof), utility
expenses, rents and similar prepaid and deferred items attributable to the
ownership and operation of the Radio Stations. Salaries, wages, sales
commissions, fringe benefit accruals, vested leave time (i.e. earned sick
leave and vacation) and termination or severance pay for employees arising
or accruing prior to the Closing Date shall not be pro-rated but shall be
the sole responsibility of Seller.
(b) DETERMINATION. The prorations contemplated by this Section, to
the extent practicable, shall be made as set forth in subsection (a),
above, and shall be implemented on the Closing Date. As to those
prorations not capable of being ascertained on the Closing Date, an
adjustment and proration as of the time stated in subsection (a) above
shall be made within sixty (60) days of 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 Wipley & Xxxxxx, Appleton, Wisconsin,
and the fees and expenses of said accountant shall be paid one-half (1/2)
by Seller and one-half (1/2) by Buyer.
1.6 ASSUMED LIABILITIES; RETAINED LIABILITIES.
(a) ASSUMED LIABILITIES. Subject to the provisions of Section
1.6(b), on the Closing Date, Buyer shall assume and undertake to pay,
satisfy or discharge the following: the liabilities, obligations and
commitments of Seller (other than any liability arising from Seller's
noncompliance with the contracts to be assigned and assumed by Buyer on or
prior to the Closing Date) arising or to be performed on or after the
Closing Date under (A) the contracts on Schedule 1.1(c), (B) the real
property and Real Property Leases on Schedule 1.1(e); (C) personal property
leases on Schedule 1.1(a); (D) the advertising contracts listed on Schedule
1.1(b); (E) the licenses set forth on Schedule 1.1(d), in each case as of
the date hereof; (F) the Accounts Receivable referred to on
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Schedule 1.1(g), above; and (G) any other contracts entered into between
the date hereof and the Closing Date which Buyer may in its sole discretion
expressly agrees in writing to assume (collectively, the "Assumed
Liabilities").
(b) RETAINED LIABILITIES. Except as set forth in Section 1.6(a)
hereof, Buyer expressly does not, and shall not, assume or be deemed to
assume, under this Agreement or otherwise by reason of the transaction
contemplated hereby, any liabilities, obligations or commitments of Seller
of any nature whatsoever (collectively, the "Retained Liabilities").
Without limiting the generality of the foregoing, it is understood and
agreed that Buyer is not agreeing to, and shall not, assume any liability
or obligation of Seller to Seller's employees (whether under any existing
written or oral agreements with Seller or otherwise, including any such
liability or obligation in respect of wages, salaries, bonuses, accrued
vacation or sick pay or any other matter) and any liability for Seller's
taxes or trade payables arising on or prior to the Closing Date.
1.7 TRANSFER OF ASSETS AND DELIVERY OF DOCUMENTS. (1) On the Closing
Date, Seller shall deliver, or cause to be delivered, to Buyer the following
documentation:
(a) XXXX OF SALE. A xxxx of sale in the form attached hereto as
SCHEDULE 1.7(1)(A) ("Xxxx of Sale"), transferring to the Buyer all of the
personal property and equipment identified on Schedules 1.1(a) and 1.1(j),
including, but not limited to, the transmitting towers and antennas with
existing hardware, guy wires and anchor points all free and clear of all
liens and encumbrances.
(b) WARRANTY DEED. A warranty deed in the form attached hereto as
SCHEDULE 1.7(1)(B) ("Warranty Deed") in recordable form and stating that
title to the owned real estate described on Schedule 1.1(e) is free and
clear of all liens and encumbrances, except for easements, restrictions,
rights-of-way of record and property taxes for the current year which are
not yet due and payable (the "Permitted Liens").
(c) ASSIGNMENT AND ASSUMPTION AGREEMENT. A written Assignment and
Assumption Agreement in the form attached hereto as SCHEDULE 1.7(1)(C)
("Assignment and Assumption Agreement"), assigning to the Buyer the
liabilities, obligations and commitments of Seller arising or to be
performed on or after the Closing Date under (A) the contracts on Schedule
1.1(c), (B) the real property and Real Property Leases on Schedule 1.1(e);
(C) personal property leases on Schedule 1.1(a); (D) the advertising
contracts listed on Schedule 1.1(b); (E) the licenses set forth on Schedule
1.1(d), in each case as of the date hereof; (F) the Accounts Receivable
referred to on Schedule 1.1(g), above; and (G) any other contracts entered
into between the date hereof and the Closing Date which Buyer may, in its
sole discretion, expressly agree in writing to assume. Seller shall also
deliver any consents obtained from the parties to those contracts and
agreements being assigned hereunder which by their terms require such
consents for assignment to Buyer.
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(d) UNEMPLOYMENT ACCOUNT. At Buyer's option, the appropriate form,
properly executed, transferring to Buyer Seller's unemployment compensation
account and experience rate for purposes of determining Buyer's
unemployment compensation contributions.
(e) CERTIFICATE OF SECRETARY. A certificate, dated as of the Closing
Date, by the Secretary of Seller certifying the resolutions of the Board of
Directors and shareholders of the Seller approving the execution and
delivery of this Agreement and each of the other documents authorizing the
consummation of the transactions contemplated hereby and thereby, together
with copies of Seller's articles of incorporation, bylaws and listing of
Seller's officers and directors.
(f) CERTIFICATE OF OFFICER. A certificate, dated as of the Closing
Date, by an officer of Seller to the effect that the representations and
warranties of Seller contained in this Agreement are true and complete in
all material respects on and as of the Closing Date as if made on and as of
that date, that, to Seller's knowledge, there is no litigation claim or
proceeding pending against Seller with respect to the transactions
described in this Agreement, and that Seller has complied with or performed
in all material respects all terms, covenants and conditions to be complied
with or performed by it on or prior to the Closing Date.
(g) EVIDENCE OF DISCHARGE OF LIENS. Evidence of discharge of all
liens on the Assets or the Radio Stations, except Permitted Liens.
(h) OPINION OF SELLER'S COUNSEL. An opinion of Seller's counsel in
the form of SCHEDULE 1.7(1)(H) attached hereto.
(i) RECORDS. To the extent available, originals or copies of all
program, operations, transmissions, or maintenance logs and all other
records required to be maintained by the FCC with respect to the Radio
Stations, including the public file for the Radio Stations, left at the
Radio Stations and thereby delivered to Buyer.
(j) ALLOCATION OF PURCHASE PRICE. Documents reflecting the parties'
agreement with respect to the allocation of the Purchase Price.
(k) COVENANT NOT TO COMPETE. A covenant not to compete in the form
of the attached SCHEDULE 1.10.
(l) OTHER DOCUMENTS. Such other documents, instruments and
agreements as Buyer shall request and as shall be reasonably necessary to
consummate the transactions contemplated by this Agreement, each in form
and substance reasonably satisfactory to counsel for Buyer.
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(2) On the Closing Date, Buyer shall deliver or cause to be delivered to
Seller the following documentation:
(a) PURCHASE PRICE. The Purchase Price.
(b) ASSIGNMENT AND ASSUMPTION AGREEMENT. The Assignment and
Assumption Agreement.
(c) CERTIFICATE OF MANAGER OR MEMBER. A certificate, dated as of the
Closing Date, by a manager, or if none exists, by a member, certifying as
to the resolutions of Buyer approving the execution and delivery of this
Agreement and each of the other documents authorizing the consummation of
the transactions contemplated hereby and thereby, together with a copy of
Buyer's articles of organization, operating agreement and a listing of
Buyer's members or managers.
(d) CERTIFICATE OF MEMBER A certificate, dated the Closing Date, by
a member of Buyer to the effect that the representations and warranties of
Buyer contained in this Agreement are true and complete in all material
respects on and as of the Closing Date as if made on and as of that date,
that to Buyer's knowledge, there is no litigation. claim or proceeding
pending against Buyer with respect to the transactions described herein,
and that Buyer has complied with or performed in all material respects all
terms, covenants and conditions to be complied with or performed by it on
or prior to the Closing Date.
(e) ALLOCATION OF PURCHASE PRICE. A document executed by both
parties hereto (see Section 1.7(1)(j)) reflecting their agreement with
respect to the allocation of the Purchase Price.
(f) OPINION OF BUYER'S COUNSEL. An opinion of Buyer's counsel in the
form of SCHEDULE 1.7(2)(F) attached hereto.
(g) COVENANT NOT TO COMPETE. The aforementioned Covenant Not to
Compete.
(h) OTHER DOCUMENTS. Such other documents, instruments and
agreements as Seller shall request and as shall be reasonably necessary to
consummate the transactions contemplated by this Agreement, each in form
and substance reasonably satisfactory to counsel for Seller.
1.8 CLOSING. The Closing, subject to the conditions set forth herein,
shall take place at the law offices of Xxxxxxx & Xxxxx, 000 X. Xxxxxxxxxx Xxx.,
Xxxxx 0000, Xxxxxxx, XX 00000-0000, or at such other place as the parties may
mutually agree. For purposes of this Agreement, the "Closing" shall mean and
describe the meeting between the parties hereto, subsequent to the satisfaction
of all terms and conditions set forth herein, to fully consummate the
transaction
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described herein. The "Closing Date" shall mean a date fixed by Seller which is
not less than five (5) business days or more than ten (10) business days after
the date on which the FCC Consent (as defined in Section 7.1 hereof) shall have
become a Final Order provided however that Seller and Buyer may, by mutual
agreement, elect to waive finality; in which event, the Closing shall occur on
the tenth business day after the date such notice is given, or at such earlier
date that the Seller or Buyer (whichever gives such notice) specifies. For
purposes of this Agreement, the term "Final Order" means action by the FCC
consenting to the assignment of a license issued by the FCC which is not
reversed, stayed, enjoined, set aside, annulled or suspended, and with respect
to which action no timely request for stay, petition for rehearing or appeal is
pending, and as to which the time for filing any such request, petition or
appeal or reconsideration by the FCC on its own motion has expired.
1.9. COVENANT OF NON-INTERFERENCE. Between the date of this Agreement and
the Closing Date, management and control of the Radio Stations shall be the sole
responsibility of, and in the complete discretion of Seller, subject to Section
4.1 of this Agreement. It is further understood and agreed that, effective as
of the Closing Date, and thereafter, Seller shall have no control over, nor
right to intervene in, nor participate in, the operation of the Radio Stations,
nor to supervise any programs on the Radio Stations.
1.10 COVENANT NOT TO COMPETE. On the Closing Date, Seller shall execute,
and shall cause Mid-West Management, Inc., Xxxxxxx X. Xxxxxx, Xxxxxx Xxxxxx,
Xxxxxxx X. Record and Xxxxxxx Xxxxxxx, and any other person mutually agreed upon
by the parties hereto, to execute a covenant not to compete with Buyer in the
market served by the Radio Stations in the form of SCHEDULE 1.10 attached
hereto.
1.11 EMPLOYER AND EMPLOYEE BENEFITS. Attached hereto as SCHEDULE 1.11 is a
correct and complete listing of all employees of Seller, working at the, or in
connection with Radio Stations, setting forth their respective positions, job
descriptions, salaries or wages, and all other forms of compensation paid to
them for their work at the Radio Stations. Upon notice to Seller, and at
mutually agreeable times, Seller will permit Buyer to meet with its employees
prior to the Closing Date. Buyer may, at its option, extend offers of
employment to all or any of Seller's employees effect on the Closing Date.
Seller will not take any action to preclude or discourage any of Seller's
employees from accepting any offer of employment extended by Buyer. At Seller's
option, the general manager of the Radio Stations may participate in any meeting
between Buyer and any employee of the Radio Stations.
1.12 FINANCING. During the forty-five (45) day period following the date
of this Agreement, Buyer will use commercially reasonable and good faith efforts
to conclude equity financing for the purchase of the Radio Stations
contemplated hereby, on terms acceptable to Buyer in its sole discretion. In
the event that Buyer obtains such equity financing during such forty-five day
period, Buyer will immediately deposit the Xxxxxxx Money with the Escrow Agent.
In the event Buyer is unable to obtain such equity financing during said time
period, either Buyer or Seller may, at their option by notice to the other,
terminate this Agreement without further
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obligation or penalty.
1.13 DUE DILIGENCE. Buyer may test and inspect all of the Assets, Seller's
financial records and other books and records relating to the Radio Stations
within forty-five (45) days of the date of execution of this Agreement to
determine (1) if the Assets are in the condition called for by this Agreement;
and (2) that Seller's financial records reflect the income generating capacity
of the Radio Stations upon which the Purchase Price is based. Such inspection
and testing shall be conducted so as not to interfere unreasonably with or
disrupt the operation of the Radio Stations. In the event that, in Buyer's
reasonable judgment, following Buyer's inspection and testing of the Assets, the
condition of any of the Assets does not comply with the terms this Agreement,
Buyer shall immediately provide written notice to Seller of such failure, (which
shall include a copy of the written inspection report). Thereafter, the parties
hereto will cooperate with each other to reach an agreement on the method of
compliance with the terms of this Agreement. In the event the parties hereto
cannot agree on the method or the payment of the costs to restore any such Asset
to the condition required by this Agreement, either Buyer or Seller may, upon
written notice to the other, terminate this Agreement. If, after inspection of
Seller's financial records, Buyer concludes, in its good faith judgment, that a
material discrepancy exists in the value of the Radio Stations as compared to
the purchase price for the Radio Stations as set forth by the parties hereto in
their Letter of Intent dated January 2, 1997, Buyer shall immediately provide
written notice to Seller of its findings. Thereafter, the parties may cooperate
to reach an agreement on whether an appropriate adjustment to the Purchase Price
is warranted, and if so, the amount of the adjustment; or either party may
terminate this Agreement without any liability upon written notice to the other
party.
1.14 CONDUCT OF BUSINESS PRIOR TO CLOSING. Between the date hereof and the
Closing Date, Seller will conduct the business of the Radio Stations only in the
ordinary course, consistent with its past practices, including but not limited
to the following:
(a) the personal property used and useful in the operation of the
Radio Stations will be maintained in normal operating condition and repair;
(b) no material personal property or real property used and useful in
the operation of the Radio Stations will be sold, transferred or
terminated, and no additional material personal property or real property
will be acquired, except for acquisition made in the normal and ordinary
course of business;
(c) no new lien or encumbrance against the Assets will be created;
(d) material Contracts and advertising agreements will not be
modified or terminated, and those material contracts and advertising
contracts identified in a written notice by Buyer will not be renewed and
material contracts and advertising agreements that will remain in effect
after the Closing Date will not be entered into, in each case, without
Buyer's consent;
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(e) Seller will take all commercially reasonable actions to preserve
and maintain the Licenses and the intellectual property listed on Schedule
1.1(f) and will operate the Radio Stations in compliance with all provisions of
the FCC licenses, Communications Act and the rules and regulations of the FCC;
(f) Seller will not alter its credit and collection policies or it
accounting policies;
(g) Seller will not alter the benefits available to its employees,
but may renew employment contracts in the normal and ordinary course of
business upon notice to Buyer;
(h) the programming of the Radio Stations will not be materially
altered from the current format; and
(i) Seller will use commercially reasonable efforts to preserve
relationships with employees, advertisers, vendors, and others currently
dealing with the Radio Stations.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
In addition to representations, warranties, and covenants made elsewhere in
this Agreement, Seller represents, warrants and covenants to Buyer that both as
of the date hereof and as of the Closing Date, each of the following statements
are, and shall be, correct and complete:
2.1 ORGANIZATION AND STANDING OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Wisconsin and has all requisite power and authority to: (i) own, lease, operate
and sell the Assets; and (ii) carry on the business of the Radio Stations as now
being conducted and as proposed to be conducted by Seller between the date
hereof and the Closing Date.
2.2 AUTHORIZATION AND BINDING OBLIGATION. Seller has the power and
authority to enter into and perform this Agreement and the transactions
contemplated hereby, and Seller's execution, delivery and performance of this
Agreement, and the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on its part. This Agreement has
been duly executed and delivered by Seller and this Agreement constitutes, and
the agreements to be executed in connection herewith will, subject to approval
by the FCC, constitute the valid and binding obligation of Seller enforceable in
accordance with their terms.
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2.3 OWNERSHIP OF ASSETS. Seller now owns and on the Closing Date will own
the Assets and has and will have, subject to FCC approval, full power and
authority to sell, transfer and assign such Assets (including the assets of the
former Valley Radio Results Partnership) to Buyer in the manner provided herein,
free and clear of any and all liens except for Permitted Liens. There are no
assets used or useful in the operation of the Radio Stations other than the
Assets, except for cash on hand and cash equivalent assets.
2.4 COMMISSION LICENSES AND COMPLIANCE WITH FCC REQUIREMENTS.
(a) 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 Radio
Stations as they are now being operated are detailed in Schedule 1.1(d) and
are in full force and effect, are unimpaired by any acts or omissions of
Seller or Seller's employees or agents, and are free and clear of any
restrictions which might limit the full operation of the Radio Stations.
Except as set forth in Schedule 1.1(d), 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 Radio Stations as now conducted.
Except as set forth in Schedule 1.1(d), Seller is not aware of any reason
why the FCC licenses might not be renewed in the ordinary course or
revoked.
(b) Each of the Radio Stations is in material 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 Radio Stations' transmission facilities
is restricted in accordance with the policies of the FCC.
(c) Except as set forth in Schedule 1.1(d), to the best of Seller's
knowledge, 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 issue by or filed
with the FCC or any other governmental authority in connection with the
operation of or authorization for the Radio Stations, 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 FCC Licenses or the authorizations listed in Schedule
1.1(d).
(d) Seller has filed with the FCC and all other governmental
authorities having jurisdiction over the Radio Stations all material
reports, applications, documents, instruments, and other information,
required to be filed, and will continue to make such filings through the
Closing Date.
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2.5 INSURANCE. There is presently in force adequate fire, theft and
general casualty insurance in respect to the Assets together with general
liability insurance covering the business and operation of the Radio Stations.
Seller will maintain such insurance in force until the Closing Date. Such
policies are valid and enforceable, and provide adequate insurance coverage for
the Assets and operations of the Radio Stations. A list of such policies
showing the names of the insurers, the property or liability insured and the
amounts of coverage is attached hereto as SCHEDULE 2.5.
2.6 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) The Seller has good and marketable title to all of the properties
and Assets described in this Agreement, and has not sold or otherwise
disposed of any such properties or Assets referred to in Section 1.1
(except for Assets acquired or disposed of in the normal and ordinary
course of business) and the same will be true and correct as of the Closing
Date. Buyer, at its option and expense, prior to the Closing Date, may
conduct a Uniform Commercial Code name search under the name of Seller,
with the Wisconsin Secretary of State and the Winnebago County Register of
Deeds. If the written reports from such searches indicate the presence of
liens on any of Seller's property, all such liens shall be removed,
satisfied or otherwise released by Seller on or prior to the Closing Date.
(b) With respect to the leases of real and personal property listed
in Schedule 1.1(d): (i) the lease is in full force and effect; (ii) all
accrued and payable rents have been paid; (iii) Seller has been in
peaceable possession since the beginning of the original term of such lease
and is not in default hereunder, and no waiver, indulgence, postponement of
Seller's obligations have been granted by the lessor; (iv) no event of
default, and no event that with the giving of notice, the lapse of time, or
the happening of any further event would become a default, under any such
lease has occurred; (v) Seller has not violated any material term or
condition under any such lease in any respect; and (vi) each material
covenant to be performed by Seller under such lease has been fully
performed.
(c) With respect to the Radio Stations' transmitter sites (the
"Sites"), (i) there are no encroachments on any portion of the Sites
owned, lease, or used by Seller by any buildings, structures, or
improvements located on adjoining real estate; (ii) none of the buildings,
structures or improvements (including any guy wires or anchors) owned,
leased or used by Seller on the Sites encroach upon adjoining real estate
and all such buildings, structures and improvements conform to all
"setback" lines, easements, and other restrictions or rights of record
established by applicable building, zoning or safety ordinances; (iii) the
radio transmission facilities owned, leased or used by Seller at the Sites
conform in all material respects to all regulations, codes, ordinances, and
statutes of all applicable governmental authorities, including, without
limitation all environmental protection and sanitary laws and regulations,
occupational safety and health regulations and electrical codes. All
towers and other structures owned, lease or used by Seller at the Sites are
painted and lighted in material compliance with the rules and requirements
of the
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FCC, the Federal Aviation Administration, and all applicable requirements
of state and local law.
2.7 ABSENCE OF CONFLICTS. Neither Seller's entry into this Agreement, nor
its sale of the Assets and the transfer of the Radio Stations as contemplated by
this Agreement will (a) violate any law, regulation, judgment, order or
restriction applicable, the Assets or the Radio Stations; (b) violate the
provisions of Seller's articles of incorporation and by-laws; (c) conflict with
or cause a breach or termination of or give rise to any lien under any
agreement, lease, license or instrument of indebtedness. Other than violations,
conflicts or breaches which will not have a material adverse effect on the
Stations or the Assets. Other than the filings with and approvals by the FCC
contemplated hereby, Seller does not need to give notice to or obtain the
consent of any governmental agency or unit to conclude the transactions
contemplated hereby.
2.8 LITIGATION. There is no litigation, action, suit, investigation or
proceeding pending or, to Seller's knowledge, threatened against or affecting
Seller or the Radio Stations, or involving any of the Assets, at law or in
equity, or before any federal, state, municipal, local, or other government or
authority, and there has been no assertion and, to Seller's knowledge, no
grounds to assert any claim against Seller which or before any administrative
agency or arbitrator (including, without limitation, any proceeding which seeks
the forfeiture of, or opposes the renewal of any of the Licenses) (a) could
reasonably be expected to have an adverse affect on the financial condition,
Assets, or operations of the Radio Stations or (b) seeks to enjoin or prohibit,
or other questions the validity of, any action to be taken pursuant to or in
connection with this Agreement.
2.9 ABSENCE OF ADVERSE AGREEMENTS. Seller is not a party to any agreement
or instrument or subject to any judgment, order or decree, or rule or regulation
of any court or governmental agency or authority which adversely affects or, to
the best Seller's knowledge, in the future may materially and adversely affect
the financial condition, operation, or assets of the Radio Stations.
2.10 CONTRACTS. Schedules 1.1(b), 1.1(c) and 1.1(e) attached hereto
contains a list of all of the agreements, leases and other contracts to which
the Radio Stations and Seller are a party or by which, as of the date hereof,
the Radio Stations and Seller may be bound or obligated in any way or which are
required to operate the Radio Stations in the manner in which it is currently
operated. All of such agreements, leases and other contracts are valid, binding
and enforceable by Seller in accordance with their respective terms. The
aforedescribed agreements, contracts and leases shall not be rendered
unenforceable by their assignment and transfer to Buyer. Seller is not in
material breach or default thereof, there is no claim of breach or default, and
Seller has no knowledge of any act or omission which has occurred or which has
been threatened which could result in a breach or default thereof. Seller has
delivered complete and accurate copies of all such agreements, contracts, and
leases to Buyer as they are currently in effect.
2.11 INTELLECTUAL PROPERTY. Schedule 1.1(f) attached hereto contains a
list of all intellectual property applied for, issued to or owned by the Seller
or under which Seller is a
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licensee and used in the conduct of the business and operation of the Radio
Stations. Such intellectual property is all of the intellectual property used
in connection with the operation of the Radio Stations in the manner conducted
by Seller.
2.12 INSOLVENCY. No insolvency proceedings of any character, including but
not limited to bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller or any of
the Assets is pending or, to the best knowledge of Seller, threatened, and
Seller has made no assignment for the benefit of creditors, nor taken any
actions with a view to, or which would constitute the basis for, the institution
of any insolvency proceedings.
2.13 COMMISSION OR FINDER'S FEE. To the extent that Seller employs a
broker, any commission, finder's fee or similar payment in connection with this
Agreement or any matter related hereto shall be paid by, and the sole obligation
of, Seller.
2.14 ENVIRONMENTAL. To the best of Seller's knowledge, 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 Seller alleging any failure to comply
with any such law or regulation. Seller has not unlawfully generated, stored,
released or disposed of any hazardous waste or hazardous substance including
Polychlorinated Byphenyls ("PCBs") in connection with the operation of the Radio
Stations. To the best of Seller's knowledge, no hazardous waste has been
generated, stored or disposed of by any other person on the real estate occupied
by Seller, the Radio Stations or their transmitters. As used herein, the term
"hazardous waste" shall mean as defined in federal and state environmental
statutes. The technical equipment included in the Assets does not contain any
PCBs. To the best of Seller's knowledge, there is no asbestos insulation or
other asbestos-containing materials at the Radio Stations. At its option,
Buyer may conduct an Environmental Audit of the real property referenced in
this Agreement. One-half of the cost of any such audit shall be born by Seller
and one-half by Buyer.
2.15 WARRANTIES TRUE AND CORRECT. No warranty or representation by Seller
contained in this Agreement or in any certificate or other instrument to be
furnished pursuant hereto contains or will contain any untrue statement of fact
or omits or will omit to state any fact required to make the statement therein
contained not misleading. Seller shall provide Buyer prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article II hereof.
2.16 COMPLIANCE WITH BULK SALES LAWS; SALES TAX. Seller will comply with
all bulk sales laws to the extent they may be applicable to this transaction.
Seller does not hold a Wisconsin sales tax permit.
2.17 FINANCIAL STATEMENTS. The financial statements of Seller provided to
Buyer have
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been prepared in accordance GAAP applied on a consistent basis throughout the
periods covered thereby, are correct and complete in all material respects and
are consistent with the books and records of Seller (which books and records
are correct and complete in all material respects).
2.18 TAX MATTERS. Seller has filed all tax returns that it was required to
file. Except for 1997 real and personal property taxes (which are payable in
1998), all taxes owed by Seller have been paid (including payroll withholding
taxes). To the best knowledge of Seller, there are no security interests on any
of the Assets that arose in connection with any failure (or alleged failure) to
pay an tax.
2.19 EMPLOYEE BENEFITS. To Seller's knowledge, each employee benefit plan
(and each related insurance contract) complies in form and operation in all
material respects with the applicable requirements of ERISA and the Internal
Revenue Code. SCHEDULE 2.19 lists all employee benefit plans that Seller
maintains or to which Seller contributes for the benefit of any current employee
of Seller.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
Buyer hereby represents, warrants and covenants to Seller that both as of
the date hereof and as of the Closing Date, each of the following statements
are, and shall be, correct and complete :
3.1 BUYER'S ORGANIZATION. Buyer is a limited liability company duly
organized, validly existing and in good standing under and by virtue of the laws
of the State of Delaware and has all requisite power and authority to (i) own,
lease, and operate its properties and carry on its business, and (ii) enter into
this Agreement and perform the transactions contemplated hereby.
3.2 APPROVALS. The execution and delivery of this Agreement by Buyer and
the performance of its obligations hereunder has been duly authorized by
appropriate resolutions of Buyer and this Agreement constitutes, subject to
approval by the FCC, a valid and binding obligation of Buyer in accordance
with its terms.
3.3 CAPABILITY. There are no facts which, under the Communications Act of
1934, as amended, or the existing rules and regulations of the FCC, would
disqualify Buyer as an assignee of the FCC licenses. Subject to Section 1.12,
hereof, Buyer knows of no facts or information, financial or otherwise, which
would or will prevent Buyer from completing this transaction in accordance with
the terms of this Agreement.
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3.4 WARRANTIES TRUE AND CORRECT. No warranty or representation by Buyer
contained in this Agreement or in any certificate or other instrument to be
furnished pursuant hereto contains or will contain any untrue statement of fact
or omits or will omit to state any material fact required to make the statement
therein contained not misleading.
ARTICLE IV
EXAMINATION BY BUYER PRIOR TO CLOSING
Buyer and Seller hereby agree as follows:
4.1 EXAMINATION BY BUYER. From the date of this Agreement until the
Closing Date, Seller will accord to Buyer, its officers, counsel, accountants,
engineers and other representatives full access to its properties, contracts,
commitments and FCC, financial and other related records, at all reasonable
times during business hours, and such representatives will be furnished true and
complete copies of the same as such representatives may reasonably request;
provided, however, that such review shall be conducted so as to not interfere
unreasonably with or disrupt the business and broadcast operations of Seller.
Upon at least 24 hours notice to Seller, Seller shall cause the employees of the
Radio Stations to furnish and discuss with Buyer and its representatives the
information described in this Section 4.1.
4.2 CONFIDENTIALITY. Buyer agrees that it and its representatives will
use commercially reasonable efforts to maintain the confidence of and not
utilize in any manner (other than to analyze the transactions contemplated by
this Agreement) all data and information so obtained from Seller, and if this
transaction is not consummated, Buyer and its officers, agents and
representatives will return to Seller all such data in its possession, including
all copies made thereof.
4.3 EXCLUSIVITY. From the date Buyer deposits the Xxxxxxx Money with the
Escrow Agent (the "Deposit Date"), Seller will not solicit, initiate, encourage,
participate, facilitate or provide any information with respect to any proposal
or offer of any person or entity other than Buyer relating to any merger,
consolidation, recapitalization, acquisition of the Radio Stations, the Assets,
the FCC Licenses, or its capital stock or any similar transaction. From the
date of this Agreement, Seller will promptly notify Buyer of any such offer or
contract with respect to any such transaction. From the date of this Agreement
until the Deposit Date, Buyer may solicit, encourage, participate, facilitate or
provide any information with respect to any proposed offer of any person or
entity other than Buyer relating to any merger, consolidation, recapitalization,
acquisition of the Radio Stations, the Assets, the FCC licenses, or its capital
stock or any similar transaction. If Seller is prepared to accept any other
offer of any person or entity other than Buyer, Seller will notify Buyer and,
unless Buyer tenders the Xxxxxxx Money to the Escrow Agent within two (2)
business days, Seller may accept the other offer.
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4.4 REAL ESTATE. Seller will, by the Closing Date, obtain, at Seller's
expense, policies of title insurance on all owned real estate included in the
Assets, in the amount of the fully assessed value of all such owned real estate,
with such endorsements as Buyer may reasonably request, except that Buyer shall
bear the additional cost and expense of obtaining the endorsements it desires to
have included in the title insurance policies. Seller shall obtain, at Buyer's
expense surveys of the real estate owned by the Seller.
ARTICLE V
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS HEREUNDER
The obligations of Buyer under this Agreement are subject at the Closing
Date to the conditions listed in this Article. Buyer may waive any one or more
of the following conditions, by written notice delivered at or prior to the
Closing Date, other than that of the FCC Consent:
5.1 FCC APPROVAL. The FCC shall have issued the FCC Consent (as defined
in Section 7.1 hereof) without any condition that would have a material adverse
effect upon Buyer, and such FCC Consent shall have become a Final Order (as
defined in Section 1.8 hereof).
5.2 SELLER REPRESENTATIONS AND WARRANTIES AND COVENANTS. Seller's
representations and warranties contained in this Agreement and in any document
delivered pursuant hereto shall be true and correct in all material respects as
of the Closing Date as if made on and as of that date. Seller shall have
performed and complied in all material respects with all agreements, covenants
and conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing Date.
5.3 GOVERNMENTAL AUTHORIZATIONS. Seller shall be the holder of the
Licenses and there shall not have been any modification of any of such Licenses
which has, or will have, a material adverse effect on the Radio Stations or the
conduct of its business and operation. No proceedings shall be pending which
seeks or the effect of which reasonably could be to revoke, cancel, fail to
renew, suspend, modify or impose any material condition upon any Licenses or any
material licenses, permits or authorizations of the Radio Stations.
5.4 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the Assets, business, prospects, condition (financial or otherwise) or
results of Seller, the Assets or the Radio Stations.
5.5 NO ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms.
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5.6 CLOSING DELIVERIES. Seller shall have delivered to Buyer those items
required to be delivered at or prior to the Closing Date under the terms of this
Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject at the Closing
Date to the conditions set forth in this Agreement. Seller may waive any one
or more of the following conditions, by written notice delivered at or prior to
the Closing Date, other than those in Section 6.1.
6.1 FCC APPROVAL. The FCC shall have issued the FCC Consent for the Radio
Stations without any condition that would have a material adverse effect upon
Seller.
6.2 BUYER REPRESENTATION AND WARRANTIES. Buyer's representations
contained in this Agreement shall be true and correct as of the Closing Date in
all material respects. Buyer shall have performed and complied in all material
respects with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
6.3 CLOSING DELIVERIES. Buyer shall have delivered to Seller all items
required to be delivered at or prior to the Closing Date under the terms of this
Agreement.
ARTICLE VII
FCC CONSENT
7.1. FCC CONSENT. It is specifically understood and agreed by Buyer and
Seller that the Closing and the assignment of the FCC licenses, permits and
other authorizations pertaining to the Radio Stations are expressly conditioned
on and are subject to the prior consent and approval of the FCC or its Staff
acting pursuant to delegated authority (the "FCC Consent").
7.2. ASSIGNMENT APPLICATIONS. Within ten (10) business days after Buyer's
deposit of the Xxxxxxx Money with the Escrow Agent, Seller and Buyer shall
jointly file with the FCC an application for assignment of the FCC licenses,
permits and authorizations pertaining to the Radio Stations (the "Assignment
Application") from Seller to Buyer. The cost of the FCC filing fees in
connection with the Assignment Application shall be divided equally between the
parties. Each party shall pay their own attorneys' fees. Seller and Buyer
shall thereafter prosecute the Assignment Application with all reasonable
diligence and otherwise use commercially reasonable efforts to obtain the grant
of the Assignment Application as expeditiously as practicable (but
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neither Seller nor Buyer shall have any obligation to satisfy complainants or
the FCC by taking any steps which would have a material adverse effect upon it
or upon any affiliated entity). If the FCC Consent imposes any condition on
either party to the Assignment Application, such parties shall use commercially
reasonable efforts to comply with such condition; provided, however, that
neither party shall be required hereunder to comply with any condition that
would have a material adverse effect upon the Radio Stations, it or any
affiliated entity. Seller and Buyer shall jointly oppose any requests for
reconsideration or judicial review of the FCC Consent and shall jointly request
from the FCC any extension of the effective period of the FCC Consent if the
Closing shall not have occurred prior to the expiration of the original
effective period of the FCC Consent. Nothing in this Section 7.2 shall be
construed to limit either party's right to terminate this Agreement pursuant to
Article VIII hereof.
ARTICLE VIII
TERMINATION
8.1 GROUNDS FOR TERMINATION.
This Agreement may be terminated by either Buyer or Seller, provided that
the party seeking to terminate is not in breach of any of its material
obligations under this Agreement, upon the occurrence of any of the following:
(a) If, on or prior to the Closing Date, the other party breaches any
of its material obligations contained herein, and such breach is not cured
by the earlier of the Closing Date or twenty (20) business days after
receipt of the notice of breach from the non-breaching party; or
(b) If any Assignment Application is designated for hearing; or
(c) If any Assignment Application is denied by Final Order; or
(d) If there shall be in effect any judgment, or final decree order
that would prevent or make unlawful the consummation of this Agreement; or
(e) If the Closing has not occurred within two hundred seventy (270)
days after the Assignment Applications are tendered for filing; or
(f) If either party hereto terminates this Agreement pursuant to
Section 1.13 or Section 1.12, above.
8.2 LIABILITY. The termination of this Agreement under Section 8.1 shall
not relieve any party of any liability for breach of this Agreement prior to the
date of termination.
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ARTICLE IX
DEFAULT
9.1 DEFAULT BY SELLER. In the event this Agreement is not closed because
of default on the part of the Seller, Buyer shall be entitled to pursue any and
all available legal or equitable remedies for any actual and consequential
damages and reasonable attorney's fees sustained as a consequence of such
default including, without limitation, the remedy of specific performance.
9.2 DEFAULT BY BUYER. In the event this Agreement is not closed because
of default on the part of the Buyer, Seller shall be entitled to pursue any and
all available legal or equitable remedies for any actual and consequential
damages and reasonable attorney's fees sustained as a consequence of such
default, including, without limitation, the remedy of specific performance.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY SELLER. Seller hereby covenants and agrees to
hold harmless, defend, and indemnify Buyer, its successors and assigns, from and
against any claims, actions, suits, proceedings, assessment judgments, costs,
losses, damages, liabilities, liens, encumbrances, charges, fines, penalties and
expenses (including without limitation reasonable attorneys' fees)
(collectively, "Damages") asserted against, resulting from, imposed upon or
incurred by Buyer directly or indirectly relating to or arising out of: or as a
consequence of: (i) the business and operation of the Radio Stations prior to
and on the Closing Date, (ii) any inaccuracy of any representation or warranty
herein or in any certificate, document or instrument delivered hereunder on the
part of the Seller; (iii) any failure by Seller to perform and comply with any
of its covenants, conditions or agreements set forth in this Agreement; (iv) any
l failure to comply with any "bulk sales" laws applicable to the transactions
contemplated hereby; (v) a claim by any person or entity based on any
arrangement or agreement to pay a commission, finder's fee or similar payment in
connection with this Agreement made or alleged to have been made by Seller; and
(vi) the Retained Liabilities.
10.2 INDEMNIFICATION BY BUYER. Buyer hereby covenants and agrees to
hold harmless, defend and indemnify Seller, its successors and assigns, from
and against any Damages asserted against, resulting from, imposed upon or
incurred by Seller directly or indirectly relating to or arising out of: (i) the
business and operation of the Radio Stations after the Closing Date; (ii) any
inaccuracy of any representation or warranty herein or in any certificate,
document or instrument delivered hereunder on the part of the Buyer; (iii) the
Assumed Liabilities; (iv) any failure by Buyer to perform any of its covenants,
conditions or agreements set forth in this Agreement; and
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(v) a claim by any person or entity based on any arrangement or agreement to pay
a commission, finder's fee or similar payment in connection with this Agreement
made or alleged to have been made by Buyer.
10.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein shall survive the Closing for a period of two (2)
years (five (5) years for Section 2.18) following the Closing Date and, in each
case, without regard for Buyer's or Seller's actual knowledge of a breach
thereof. Notwithstanding anything to the contrary contained herein, the
indemnification obligations contained in Sections 10.1 and 10.2 arising in
connection with the Retained Liabilities and Assumed Liabilities, as well as the
representations and warranties set forth in the aforementioned Xxxx of Sale and
Warranty Deed, shall survive forever.
10.4 PROCEDURES.
(a) NOTICE. Promptly after the receipt by either party (the
"Indemnified Party") of notice of any claim or the commencement of any
action or proceeding which may entitle such party to indemnification under
this Section, such party shall give the other party (the "Indemnifying
Party") written notice of such claim or the commencement of such action or
proceeding and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting from such claim. The failure to
give the Indemnifying Party timely notice under this Section 10.4 shall not
preclude the Indemnified Party from seeking indemnification from the
Indemnifying Party unless, and to the extent that, such failure has
materially prejudiced the Indemnifying Party's ability to defend the claim
or litigation.
(b) ASSUMPTION OF DEFENSE. If the Indemnifying Party assumes the
defense of any such claim or litigation resulting therefrom with counsel
reasonably acceptable to the Indemnified Party, the obligations of the
Indemnifying Party as to such claim shall be limited to taking all steps
necessary in the defense or settlement of such claim or litigation
resulting therefrom and to holding the Indemnified Party harmless from and
against any losses, damages and liabilities caused by or arising out of any
settlement approved by the Indemnifying Party or any judgment in connection
with such claim or litigation resulting therefrom; provided, however, the
Indemnified Party may participate, at its expense, in the defense of such
claim or litigation provided that the Indemnifying Party shall direct and
control the defense of such claim or litigation. The Indemnified Party
shall cooperate and make available all books and records reasonably
necessary and useful in connection with the defense. The Indemnifying
Party shall not, in the defense of such claim or any litigation resulting
therefrom, consent to entry of any judgment, except with the written
consent of the Indemnified Party, or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
the Indemnified Party of a release from all liability in respect of such
claim or litigation.
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(c) NON-ASSUMPTION OF DEFENSE. If the Indemnifying Party shall not
assume the defense of any such claim or litigation resulting therefrom, the
Indemnified Party may, but shall have no obligation to, defend against such
claim or litigation in such manner as it may deem appropriate, and the
Indemnified Party may compromise or settle such claim or litigation without
the Indemnifying Party's consent. The Indemnifying Party shall promptly
reimburse the Indemnified Party for the amount of all expenses, legal or
otherwise and including the amounts of judgments entered or settlements
agreed to, incurred by the Indemnified Party in connection with the defense
against or settlement of such claim or litigation. If no settlement of the
claim or litigation is made, the Indemnifying Party shall promptly
reimburse the Indemnified Party for the amount of any judgment rendered
with respect to such claim or in such litigation and for all expenses,
legal or otherwise, incurred by the Indemnified Party in the defense
against such claim or litigation.
ARTICLE XI
MISCELLANEOUS
11.1 ENTIRE AGREEMENT; BINDING EFFECT. This Agreement, and the Schedules
attached hereto constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes any and all prior
agreements, arrangements and understandings relating to the matters provided for
herein. No party shall be in any manner responsible as to any warranties,
representations, or guarantees except as specifically set forth herein. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successors and assigns
of the parties hereto.
11.2 APPLICABLE LAW. This Agreement is made pursuant to and shall be
construed under the laws of the State of Wisconsin, subject, however, to all
applicable rules and regulations of the FCC.
11.3 NOTICES, ETC. All notices, requests, demand and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or five (5) days after being deposited in the United States
mail, certified mail, postage prepaid, return receipt requested, or twenty-four
(24) hours after delivery to a reputable courier service which guarantees
overnight delivery, addressed as follows:
(a) IF SELLER, TO:
Xxxxxx X. Xxxxxx
Value Radio Corp., Inc.
c/o Mid-West Management
0000 Xxx Xxxx
Xxxxxxx XX 00000
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With copy to:
Xxxxx X. XxXxxx, Esq.
Xxxxxxx & Xxxxx
000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
(b) IF TO BUYER, TO:
Xxxxxxxx X. Xxxxx
Cumulus Media, L.L.C.
c/o Quaestus Management Corp.
000 X. Xxxxxxxx Xxx. Xxxxx 000
Xxxxxxxxx, XX 00000
With copy to:
Xxxxxxx Xxxxxx
Cumulus Media LLC
c/o Century Broadcasting
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx XX 00000
Xxxxx Xxxxxxx
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
11.4 COUNTERPARTS. This Agreement may be signed in counterpart originals,
which collectively, when each of the parties hereto have signed a counterpart,
shall have the same legal effect as if all signatures had appeared on the same
physical document.
11.5 SEVERABILITY. The parties agree that if any provision of this
Agreement shall under any circumstances be deemed invalid or inoperative, this
Agreement shall be construed with the invalid or inoperative provision deleted,
and the rights and obligations of the parties shall be construed and enforced
accordingly; provided, however, that if the deletion of any provision materially
alters the burdens or benefits of either party, the parties agree to negotiate
in good faith such modifications to this Agreement as are appropriate to insure
the burdens and benefits of each party are reasonably comparable to those
originally contemplated and expected.
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11.6 WAIVER. No waiver by either party hereto of a breach of any of the
terms and conditions of this Agreement by the other party shall be construed as
a waiver by such party of any subsequent breach.
11.7 EXPENSES. Except as otherwise set forth in Sections 7.2, 1.5(b), 4.4
and 2.14 herein, the parties hereto shall pay their own expenses, including,
without limitation, brokers', accountants' and attorneys' fees incurred in
connection with the negotiation and consummation of the transactions
contemplated by this Agreement.
11.8 RISK OF LOSS. The risk of loss or damage by fire or other casualty
or cause to those physical properties which are the subject of this Agreement
shall, until the Closing Date, be upon Seller. In the event of any material
damage, deterioration (normal wear and tear excepted) destruction, or loss
materially adversely affecting any item of tangible property included in the
Assets, the parties shall have the following options:
(i) If the loss is covered by insurance, Buyer may choose
between taking the insurance payment in lieu of the lost property or
require Seller to use the insurance proceeds to restore the lost
assets to the condition they were in prior to the casualty, normal
wear and tear excepted.
(ii) If there are either no or inadequate insurance proceeds to
cover the loss, Buyer shall be entitled, at its option, to (i) receive
from Seller the dollar amount required to restore such assets to the
condition such assets were in prior to the damage or destruction or
(ii) credit Buyer's cost of repair or restoration of such assets
against the Purchase Price or (iii) terminate this Agreement without
any liability.
11.9 FURTHER ASSURANCES. After the Closing, each party shall from time to
time, at the request of and without further cost or expense to the other,
execute and deliver such other instruments and take such other actions as may
reasonably be requested in order to more effectively consummate the transactions
contemplated hereby.
11.10 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
11.11 AMENDMENTS AND WAIVERS. No amendment, waiver of compliance with
any provision or condition hereof or consent pursuant to this Agreement shall be
effective unless evidenced by an instrument in writing signed by the parties
hereto.
11.12 ASSIGNMENT. Except as set forth in this section, neither Buyer
nor Seller may assign this Agreement without the written consent of both Buyer
and Seller. Such consent shall not be unreasonably withheld. Seller may assign
all of its right, title and interest in, to and under this Agreement to the
aforementioned Qualified Intermediary, who shall than, subject to the terms and
conditions of this Agreement, have the right to receive the Purchase Price from
Buyer, and cause Seller to transfer, convey and assign to Buyer, the Assets.
Buyer may assign all of its right,
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title and interest in, to and under the Agreement to one or more affiliated
entities, who shall then, subject to the terms and conditions of this Agreement,
have the right to receive the Assets and to pay to Seller in full the Purchase
Price therefore.
11.13 PRESS RELEASES AND ANNOUNCEMENTS. Neither Buyer nor Seller shall
issue any press release or announcement relating to the subject matter of this
Agreement prior to the Closing Date 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).
11.14 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than Buyer and Seller and their
respective successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement or a counterpart thereof as of the date first above written.
[SIGNATURES TO FOLLOW]
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VALUE RADIO CORP., Seller
By:
--------------------------------
Xxxxxx X. Xxxxxx, Treasurer
CUMULUS MEDIA, L.L.C.,, Buyer
By:
--------------------------------
Xxxxxxx Xxxxxxx, Manager
For the limited purpose of guaranteeing Seller's obligations under Article
X of this Agreement, Midwest Management, Inc., a Wisconsin corporation, joins in
this Agreement.
MID-WEST MANAGEMENT, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxx, President
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