EXHIBIT 10
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of July 16, 1997, is made between and among
CHILDREN'S BROADCASTING CORPORATION, a Minnesota corporation (referred to herein
as "CBC"); CHILDREN'S RADIO OF CHICAGO, INC., a Minnesota corporation ("CRC"),
CHILDREN'S RADIO OF DALLAS, INC., a Minnesota corporation ("CR Dallas"),
CHILDREN'S RADIO OF DETROIT, INC., a Minnesota corporation ("CR Detroit"),
CHILDREN'S RADIO OF GOLDEN VALLEY, INC., a Minnesota corporation ("CRGV"),
CHILDREN'S RADIO OF HOUSTON, INC., a Minnesota corporation ("CRH"), CHILDREN'S
RADIO OF KANSAS CITY, INC., a Minnesota corporation ("CRKC"), CHILDREN'S RADIO
OF LOS ANGELES, INC., a Minnesota corporation ("CRLA"), CHILDREN'S RADIO OF
MILWAUKEE, INC., a Minnesota corporation ("CR Milwaukee"), CHILDREN'S RADIO OF
MINNEAPOLIS, INC., a Minnesota corporation ("CR Minneapolis"), CHILDREN'S RADIO
OF NEW YORK, INC., a New Jersey corporation ("CRNY"), CHILDREN'S RADIO OF
PHILADELPHIA, INC., a Minnesota corporation ("CR Philadelphia"), and CHILDREN'S
RADIO OF PHOENIX, INC., a Minnesota corporation ("CR Phoenix"), CHILDREN'S RADIO
OF TULSA, INC., a Minnesota corporation ("CRT") (CRC, CR Dallas, CR Denver, CR
Detroit, CRGV, CRH, CRKC, CRLA, CR Milwaukee, CR Minneapolis, CRNY, CR
Philadelphia, CR Phoenix and CRT are sometimes collectively referred to herein
as the "Asset Subsidiaries"); KAHZ-AM, INC. ("KAHZ-AM"), KCNW-AM, INC.
("KCNW-AM"), KIDR-AM, INC. ("KIDR-AM"), KKYD-AM, INC. ("KKYD-AM"), KMUS-AM, INC.
("KMUS-AM"), KPLS-AM, INC. ("KTEK-AM"), KTEK-AM, INC. ("KTEK-AM"), KYCR-AM, INC.
("KYCR-AM"), WAUR-AM, INC. ("WAUR-AM"), WCAR-AM, INC. ("WCAR-AM"), WJDM-AM, INC.
("WJDM-AM"), WPWA-AM, INC. ("WPWA-AM"), WWTC-AM, INC. ("WWTC-AM"), and WZER-AM,
INC. ("WZER-AM"), all Minnesota corporations (KAHZ-AM, KCNW-AM, KIDR-AM,
KKYD-AM, KMUS-AM, KPLS-AM, KTEK-AM, KYCR-AM, WAUR-AM, WCAR-AM, WJDM-AM, WPWA-AM,
WWTC-AM and WZER-AM are sometimes collectively referred to herein as the
"License Subsidiaries"; the Asset Subsidiaries and the License Subsidiaries are
sometimes collectively referred to herein as the "Subsidiaries"; and CBC and
the Subsidiaries are sometimes collectively referred to herein as the
"Sellers"); and GLOBAL BROADCASTING COMPANY, INC., a Delaware corporation (the
"Buyer"); and
W I T N E S S E T H :
THAT, WHEREAS, CBC is the owner and holder of 100% of the issued and
outstanding stock of the Asset Subsidiaries; and
WHEREAS, each of the Asset Subsidiaries is the owner of all the assets of
the radio station indicated below licensed to the community listed below
(collectively referred to herein as the "Stations"), except for the Federal
Communications Commission (the "FCC" or the "Commission") licenses, permits or
authorizations issued with respect to the Stations, and are the owners and
holders of 100% of the issued and outstanding stock of the License Subsidiary
designated by the respective Station's call letters:
KAHZ(AM) Fort Worth, Texas
KCNW(AM) Fairway, Kansas
KIDR(AM) Phoenix, Arizona
KKYD(AM) Denver, Colorado
KMUS(AM) Muskogee, Oklahoma
KPLS(AM) Orange, California
KTEK(AM) Alvin, Texas
KYCR(AM) Golden Valley, Minnesota
WAUR(AM) Sandwich, Illinois
WCAR(AM) Livonia, Michigan
WJDM(AM) Elizabeth, New Jersey
WPWA(AM) Chester, Pennsylvania
WWTC(AM) Minneapolis, Minnesota
WZER(AM) Milwaukee, Wisconsin; and
WHEREAS, the License Subsidiaries are the FCC licensees of the Stations;
and
WHEREAS, subject to and conditioned upon the consent of the FCC, the
Sellers desire to sell and transfer and Buyer desires to purchase and acquire
the Stations and certain of the tangible and intangible assets of the Sellers
used or held for use in connection with the operation of the Stations, all as is
more fully described below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
SALE AND TRANSFER OF ASSETS
At closing of the transaction described herein ("Closing"), the Sellers
shall sell, convey, assign, transfer and deliver to Buyer, free and clear of any
lien, encumbrance, interest, reservation, restriction, mortgage or security
interest of any nature whatsoever, except as expressly provided herein, all the
material assets of the Sellers described below used or held for use in
connection with the operation of the Stations (collectively, the "Acquired
Assets"):
1.1. All licenses, permits and authorizations ("Licenses") issued by the
Commission for the operation of or used in connection with the operation
of the Stations, all of which are listed on SCHEDULE A attached hereto;
1.2. All of the Sellers' real property interests relating to the operation of
the Stations including that described in SCHEDULE B attached hereto ("Real
Property");
1.3. All tangible personal property owned by the Sellers used or held for use
in the operation of the Stations listed on SCHEDULE C attached hereto, and
any replacements therefor or improvements thereof acquired or constructed
prior to Closing ("Personal Property");
1.4. All of the Sellers' rights and benefits under the business agreements,
leases and contracts listed on SCHEDULE D attached hereto, including any
renewals, extensions, amendments or modifications thereof, and any
additional agreements, leases and contracts made or entered into by the
Sellers in the ordinary course of business between the date of such
Schedule and the Closing approved in writing by Buyer or otherwise
permitted hereunder ("Leases and Agreements");
1.5. All other licenses, permits or authorizations issued by any government or
regulatory agency other than the FCC, which are used in connection with
the operation of the Stations, all of which are listed on Schedule A
("Permits");
1.6. All right, title and interest of the Sellers in and to the use of the call
letters for the Stations (referred to herein as the "Call Letters"), to
the extent they can be conveyed; together with all common law property
rights, goodwill, copyrights, trademarks, service marks, trade names and
other similar rights used in connection with the operation of the
Stations, including all accretions thereto, listed on SCHEDULE E attached
hereto ("General Intangibles");
1.7. All of the Subsidiaries' magnetic media, electronic data processing files,
systems and computer programs, logs, public files, records required by the
FCC, vendor contracts, supplies, maintenance records or similar business
records relating to or used in connection with the operation of the
Stations, but not including records pertaining to corporate affairs
(including tax records) and original journals, provided copies are
supplied to Buyer. The Sellers shall have reasonable access to all such
records which might be in the possession of Buyer for a period of two (2)
years following the Closing, and shall, at its own expense, have the right
to make copies thereof; and
1.8. Subject to closing of the contemplated acquisition of the assets and
licenses of radio station KMUS(AM), Muskogee, Oklahoma pursuant to that
purchase agreement between CBC and Oklahoma Sports Properties, Inc., dated
December 31, 1996 (the "KMUS Purchase Agreement"), which Purchase
Agreement was subsequently assigned to CRT, which is listed on Schedule D
attached
hereto among the Agreements to be assigned to and assumed by Buyer, the
assets acquired by CRT shall be among the Acquired Assets, and the
Schedules hereto shall be revised accordingly.
ARTICLE 2
PURCHASE PRICE AND PAYMENTS
2.1. PURCHASE PRICE. As the purchase price for the Assets, Buyer agrees to pay
to the Sellers the sum of Seventy-two Million Five Hundred Thousand and
no/100 Dollars ($72,500,000.00), subject for adjustment as provided
herein.
2.2. METHOD OF PAYMENT OF PURCHASE PRICE. The purchase price shall be paid as
follows:
2.2.1. XXXXXXX MONEY ESCROW. An aggregate amount of Three Million Five
Hundred Thousand and no/100 Dollars ($3,500,000.00) (the
"Escrowed Funds") shall be paid into escrow, Five Hundred
Thousand and no/100 Dollars ($500,000.00) on July 30, 1997, and
Three Million and no/100 Dollars ($3,000,000.00) on August 13,
1997, all pursuant to the terms of that Escrow Agreement (the
"Escrow Agreement") a copy of which is attached hereto as EXHIBIT
A.
2.2.2. CASH PAYMENT AT CLOSING. The entire purchase price payable
hereunder, including the Escrowed Funds, shall be payable in cash
at Closing, subject to adjustment or allocation as provided
herein.
2.3. ADJUSTMENTS AND PRORATIONS. The operations of the Stations and the income
and expenses attributable thereto up to 12:01 A.M. on the day of the
Closing (the "Adjustment Time"), shall, except as otherwise provided in
this Agreement, be for the account of the Sellers and thereafter shall be
for the account of Buyer. Expenses such as power and utility charges,
lease rents, property taxes according to year of payment, frequency
discounts, annual license fees (if any), wages, commissions, payroll
taxes, and other fringe benefits of employees of the Sellers who enter the
employment of the Buyer, and similar deferred items shall be prorated
between the Sellers and the Buyer. Prepaid deposits shall not be prorated
but shall remain the property of the Sellers. Employees' employment with
the Sellers shall be terminated as of the Closing Date, and Buyer shall
employ employees of its choice from and after said date upon terms
acceptable to Buyer and such employees. Any prorations shall be made and
paid insofar as feasible at the Closing, with a final settlement within
ninety (90) days after the Closing.
2.4. KMUS ADJUSTMENT. If for any reason the transactions contemplated under
the KMUS Purchase Agreement do not close prior to the Closing of the
transaction contemplated hereunder, Buyer shall have the option of either:
a. accepting Sellers' rights under the KMUS Purchase Agreement without
any adjustment to the purchase price payable hereunder, or
b. amending this Agreement to exclude the KMUS Purchase Agreement and
any rights of Sellers associated therewith from the Acquired Assets
and adjusting the purchase price payable hereunder by the amount of
Four Hundred Thousand and no/100 Dollars ($400,000.00).
Buyer must notify CBC as to which option it intends to elect no later than
ten (10) days after receipt of the FCC's first grant of an approval to an
assignment of any of the Licenses or it will be deemed to have exercised
the option described at subparagraph (a) above.
2.5. PARTIAL CLOSING ADJUSTMENTS. Further adjustments to the purchase price
payable hereunder may be made pursuant to the provisions of Sections 7.3
and 8.6 below.
2.6. ASSUMED LIABILITIES. Except as expressly provided for in this Agreement
or the Leases and Agreements listed on the Schedules hereto, at the
Closing Buyer shall not assume, incur or be charged with, in connection
with the transactions herein contemplated, any liabilities or obligations
of any nature whatsoever, contingent or otherwise. Without limitation of
the foregoing, Buyer shall not assume any obligations to the Stations'
employees under any employee benefit plans or employment contracts.
2.7. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated among
the Acquired Assets by Buyer and the Sellers as set forth in the attached
SCHEDULE F. The values of the Acquired Assets with respect to each of the
Stations are set forth with an aggregate allocation value as to all
Acquired Assets associated with the operation of each of the Stations set
out thereon as the station aggregate value (the "Station Aggregate Value")
for each of the Stations. Such allocation will be used for all purposes,
including preparation and filing of IRS Form 8594 with respect to the
transactions contemplated by this Agreement.
2.8. XXXX NON-COMPETITION AGREEMENT. In addition to the purchase price payable
hereunder, Buyer agrees to enter into a Non-Competition Agreement with
Seller's Chief Executive Officer, Xxxxxxxxxxx X. Xxxx ("Xxxx"), at Closing
in the form attached hereto as EXHIBIT B (the "Non-Competition
Agreement"), and CBC agrees to cause Xxxx to enter into the
Non-Competition Agreement at Closing.
ARTICLE 3
THE SELLERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
The Sellers represent, warrant and agree as follows, which
representations, warranties and agreements shall be deemed to have been made
again at Closing:
3.1. CORPORATE EXISTENCE AND POWERS. The Sellers, except for CRNY, are
corporations organized and existing in good standing under the laws of the
State of Minnesota, with full power and authority to enter into this
Agreement and to enter into and complete the transactions contemplated
herein; CRNY is a corporation organized and existing in good standing
under the laws of the State of New Jersey, with full power and authority
to enter into this Agreement and to enter into and complete the
transactions contemplated herein; CRC is, and will be at the time of
Closing, qualified to do business in the State of Illinois; CR Dallas is,
and will be at the time of Closing, qualified to do business in the State
of Texas; CR Denver is, and will be at the time of Closing, qualified to
do business in the State of Colorado; CR Detroit is, and will be at the
time of Closing, qualified to do business in the State of Michigan; CRH
is, and will be at the time of Closing, qualified to do business in the
State of Texas; CRKC is, and will be at the time of Closing, qualified to
do business in the State of Kansas; CRLA is, and will be at the time of
Closing, qualified to do business in the State of California; CR Milwaukee
is, and will be at the time of Closing, qualified to do business in the
State of Wisconsin; CRNY is, and will be at the time of Closing, qualified
to do business in the State of New York; CR Philadelphia is, and will be
at the time of Closing, qualified to do business in the State of
Pennsylvania; and CR Phoenix is, and will be at the time of Closing,
qualified to do business in the State of Arizona; CRT is, and will be at
the time of Closing, qualified to do business in the State of Oklahoma;
all required corporate actions have been taken by the Sellers to make and
carry out this Agreement, which is a valid and binding obligation of
Sellers and which is enforceable in accordance with its terms; the
execution of this Agreement and the completion of the transactions herein
involved will not result in the violation of any order, license, permit,
rule, judgment or decree to which any of the Sellers is subject or the
breach of any contract, agreement or other commitment to which any of the
Sellers is a party or by which they are bound; and, except for receipt of
the Commission's Final Approval (as defined herein) with respect to the
assignment of the Licenses to Buyer, no other consents of any kind are
required that have not been obtained for the Sellers to make or carry out
the terms of this Agreement, except with respect to those consents
required of parties to Leases and Agreements listed on Schedule B or D,
with respect to assignment and assumption of specific contract rights and
obligations and the consent of CBC's shareholders. The Sellers shall use
their best efforts to obtain third party consents with respect to any of
the Leases and Agreements designated by Buyer and the Sellers as
"material", to the extent required by such documents. Buyer shall
cooperate with the Sellers in obtaining all such required consents.
3.2. LICENSES AND PERMITS. Each of the License Subsidiaries is the holder of
the Licenses indicated on Schedule A, all of which are valid, in full
force and effect and which have been unconditionally issued for the full
license term, subject to such pending renewal applications as are
indicated on such Schedule A. The Licenses constitute all of the
licenses, grants, permits, waivers and authorizations issued by the FCC
and required for and/or used in the operation of the Stations as they are
currently being operated. Each License Subsidiary is fully qualified to
hold its Licenses. All ownership and employment reports, renewal
applications, and other reports and documents required to be filed for the
Stations have been properly and timely filed. The Stations are operating
in accordance with the Licenses, and in compliance with the Communications
Act of 1934, as amended, and the rules and regulations of the Commission,
including, without limitation, those regulations governing the Stations'
equal employment opportunity practices and public files, and any other
applicable laws, ordinances, rules and regulations. The Licenses are
unimpaired by any act or omission of Sellers or their officers, directors,
employees and agents and Sellers will not, without Buyer's prior written
consent, by an act
or omission, surrender, modify, forfeit or fail to seek renewals on
regular terms, of any License, or cause the Commission or other regulatory
authority to institute any proceeding for the cancellation or modification
of any such License, or fail to prosecute with due diligence any pending
application to the Commission or other regulatory authority. There is not
now pending, or to the best of Sellers' knowledge threatened, any action
by or before the Commission or other regulatory authority to revoke,
cancel, rescind, modify or refuse to renew in the ordinary course any of
the Licenses, or any investigation, order to show cause, notice of
violation, notice of inquiry, notice of apparent liability or of
forfeiture or complaint against the Stations or Sellers, and Sellers have
no knowledge of any basis for the commencement of any such proceeding in
the future. Should any such action or investigation be commenced, order
or notice be released, or complaint be filed, Sellers will promptly notify
Buyer and take all actions necessary to protect the Stations and the
Licenses from any material adverse impact.
3.3. ACQUIRED ASSETS. The Acquired Assets to be transferred to Buyer at
Closing represent all the assets necessary for the Stations' current and
continuing operations; until Closing, none of the Acquired Assets will be
sold, leased or otherwise disposed of unless replaced by a similar asset
of equal or greater value, and, at Closing, all of the Acquired Assets
shall be owned by and transferred by the Sellers to Buyer free and clear
of all liens, encumbrances, interests or restrictions of any kind
whatsoever excepting only those obligations, liens or encumbrances
expressly provided to be assumed by Buyer herein or the Leases and
Agreements listed on Schedule B or D. The Acquired Assets have been
maintained in good condition, subject to normal wear and tear.
3.4. CONTRACTS, LEASES, AGREEMENTS, ETC. Each of the Leases and Agreements are
in full force and effect, and there are no outstanding notices of
cancellation, acceleration or termination in connection therewith except
as noted upon Schedule B or X. Xxxxxxx are not in breach or default in
connection with any of the Leases and Agreements and, to the best of
Sellers' knowledge, there is no basis for any claim, breach or default
with respect to Sellers or any other party under any of said Leases and
Agreements. Sellers have made available to Buyer true and correct copies
of all agreements and instruments listed on Schedule D. On the Closing
Date there will be no Leases or Agreements relating to the Stations (not
including this Agreement) which will be binding on the Buyer other than
those specifically identified herein, including the Schedules attached
hereto, as assumed by Buyer, or as otherwise approved in writing by Buyer.
3.5. LITIGATION. Except as set forth on SCHEDULE G, no strike, labor dispute,
investigation, litigation, court or administrative proceeding is pending
or, to the best of Sellers' knowledge, threatened against the Sellers
relating to the Stations, their employees or any of the Acquired Assets
which may result in any change in the business, operations, assets or
financial condition of the Stations or may materially affect Buyer's use
and enjoyment of the Acquired Assets, or which would hinder or prevent the
consummation of the transaction contemplated by this Agreement, and the
Sellers know of no basis for any such possible action.
3.6. HAZARDOUS WASTE. As of now and as of the Closing Date, Sellers have not
participated in nor approved, nor has there occurred any production,
disposal or storage by Sellers on the Real Property of any hazardous waste
or toxic substance, nor, to the best of their knowledge, does such waste
or substance exist on the Real Property (above or beneath the surface),
nor is there any proceeding or inquiry, by any governmental authority
(federal or state) with respect to the presence of such waste or substance
on the Real Property to the best of the Sellers' knowledge, nor are there
any underground storage tanks on the Real Property, to the best of
Sellers' knowledge, all except as shown on SCHEDULE H attached hereto.
"Hazardous waste" shall consist of the substances defined as "hazardous
substances," "hazardous materials," or "toxic substances" in the
Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended, 42 USC Section 9601, et seq.,
or in the Hazardous Materials Transportation Act, 49 USC Section 1801, et
seq., or in the Resources Conservation and Recovery Act, 42 USC Section
6901, et seq.
3.7. INSURANCE. Until Closing, the Sellers shall keep the Acquired Assets
insured against loss or damage by fire or from other causes customarily
insured against by other radio stations similarly situated consistent with
past practices, and has provided Buyer with an abstract of such casualty
insurance coverage.
3.8. ACCESS TO INFORMATION. The Sellers shall give Buyer and its
representatives reasonable access during normal business hours throughout
the period prior to Closing to the operations, properties, books,
accounting records, contracts, agreements, leases, commitments,
programming, technical and sales records and other records of and
pertaining to the Stations; provided, however, such access shall not
disrupt the Sellers' normal operation. The Sellers shall furnish to Buyer
all information concerning the Stations' affairs as Buyer may reasonably
request. Buyer will maintain the confidentiality of all the information
and materials delivered to it or made available for its inspection by the
Sellers hereunder in accordance with that Confidentiality Agreement
between CBC and Buyer, dated June 9, 1997 (the "Confidentiality
Agreement").
3.9. CONDUCT OF THE STATIONS' BUSINESS. Until Closing, without the written
consent of Buyer, the Sellers shall not enter into any transaction other
than those in the ordinary course of the business of the Stations; no
employment contract shall be entered into by the Sellers relating to the
Stations unless the same is terminable at will and without penalty; no
material increase in compensation payable or to become payable, to any of
the employees employed at the Stations shall be made; no material change
in personnel policies, insurance benefits or other compensation
arrangements shall be made; and the Sellers will cause the Stations to be
operated in compliance with the Licenses and Permits and all applicable
laws and regulations;
the Sellers further represent, warrant and covenant:
(a) Between the date hereof and Closing, the Sellers shall not take any
action which will prevent or impede Buyer from obtaining at the
Closing the actual and immediate occupancy and possession of the
Stations and all of the Acquired Assets.
(b) On the Closing date, the Sellers will be the owner of the Acquired
Assets except such of the same replaced by suitable property of no
less than equivalent value in the ordinary course of business, with
good and marketable title thereto, free and clear of all liens and
encumbrances, except liens for current taxes and assessments not yet
due and payable or to secure obligations to be assumed by Buyer
hereunder pursuant to the Leases and Agreements; and that between the
date of this Agreement and the Closing, there will be no more than
the ordinary normal wear and tear and expendability of the Acquired
Assets, and that the Acquired Assets will be in good working
condition.
(c) The Sellers do not know of any facts relating to them or the Stations
which would cause (i) the applications for assignment of the Licenses
to Buyer to be challenged, (ii) the Commission to deny its consent to
the assignments of the Stations' Licenses to Buyer, or (iii) the
Commission to grant such applications for assignment subject to
material adverse conditions to Buyer.
(d) The Sellers will have paid and discharged all taxes, assessments,
excises, and levies known to the Sellers which are due and payable
and have not been paid and that would interfere with the Sellers'
enjoyment of the Acquired Assets.
(e) The Sellers do not know of any facts which would cause any
application for renewal of any of the Licenses to be challenged at
the Commission or that would cause such renewals to be granted other
than in the ordinary course for a full license term without material
adverse condition.
3.10. COPYRIGHTS, TRADEMARKS AND SIMILAR RIGHTS. The call letters listed on
Schedule E are the call letters used by Sellers during the radio
broadcast operations of the Stations to identify each of the respective
Stations to its local audience. Sellers have full right and authority
from the FCC to use such call letters except as may be provided in the
Agreements. Sellers have not licensed or consented to, and have no
knowledge of, any other entity's or individual's use of such call
letters. There is no other name, trademark, service xxxx, copyright, or
other trade, or service right or xxxx currently being used in the
business and operations of the Stations other than those listed in
Schedule E, except those of CBC in connection with its Radio
AAHS-Registered Trademark-/Aahs World Radio-SM- children's radio format.
To the best of Sellers' knowledge, the operations of the Stations do not
infringe on any trademark, service xxxx, copyright or other intellectual
property or similar right owned by others.
3.12. EMPLOYEE BENEFITS.
3.12.1. All of the Sellers' employee plans and compensation arrangements
providing benefits to employees of the Stations as of the date
hereof are listed and described in SCHEDULE I and copies of any
such written employee plans and compensation arrangements (or
related insurance policies) and any amendments thereto have been
made available to Buyer, along with copies of any currently
available employee handbooks or similar documents describing
such employee plans and compensation arrangements. Except as
disclosed in Schedule I, there is not now in effect or scheduled
to become effective after the date hereof, any new employee plan
or compensation arrangement or any amendment to an existing
employee plan or compensation arrangement which will affect the
benefits of employees or former employees of the Stations.
3.12.2. Each of the Sellers' employee plans and compensation
arrangements has been administered, without material exception,
in compliance with its own terms and, where applicable, with
ERISA, the Internal Revenue Code of 1986, as amended, the Age
Discrimination in Employment Act and any other applicable
federal or state laws.
3.12.3. Sellers do not contribute to and are not required to contribute
to any multiemployer plan with respect to its employees at the
Stations except as disclosed on Schedule I.
3.12.4. Sellers are not aware of the existence of any governmental audit
or examination of any of Sellers' employee plans or compensation
arrangements or of any facts that would lead them to believe
that any such audit or examination is pending or threatened.
3.12.5. Sellers acknowledge that Buyer has no obligation hereunder to
offer employment to any employee of Sellers; however, Buyer
shall have the right to hire such of the employees of the
Stations as Buyer may select. With respect to any employee that
Buyer hires, Sellers further acknowledge that Buyer shall have
no obligation for, and shall not assume as part of the
transaction contemplated by this Agreement, any "accrued
vacation" or other accrued leave time of said employees as a
consequence of their being hired by Buyer. Sellers also
acknowledge that with respect to such employees as are hired by
Buyer, and where any such accrued leave time exists for said
employees, Sellers will retain the responsibility for any
liability arising therefrom.
3.13. LABOR RELATIONS. SCHEDULE J lists the names, dates of hire and current
annual salaries of all persons employed by the Sellers directly and
principally in connection with the operation of the Stations. None of
the Sellers is a party to or subject to any collective bargaining
agreements with respect to any of the Stations. Sellers have no written
or oral contracts of employment with any employee of the Stations, other
than (i) oral employment agreements terminable at will without penalty,
or (ii) those listed in Schedule D. The Sellers, in the operations of
the Stations, have substantially complied with all applicable laws, rules
and regulations relating to the employment of labor, including those
related to wages, hours, collective bargaining, occupational safety,
discrimination and the payment of social security and other payroll
related taxes. To the best of Sellers' knowledge, there is no
representation or organizing effort pending or threatened against or
involving or affecting the Sellers with respect to employees employed at
the Stations.
3.14 PRE-CLOSING COVENANTS. Between the date hereof and the Closing, the
Sellers covenant that:
3.14.1. FCC COMPLIANCE. The Sellers shall continue to operate the
Stations in conformity with the terms of the Stations' Licenses
and in conformity in all material respects with all applicable
laws, regulations, rules and ordinances, including but not
limited to the rules and regulations of the FCC. The Sellers
shall file all reports, applications and other filings required
by the FCC in a timely and accurate manner. Sellers will
maintain the Licenses in full force and effect and take any
action necessary before the FCC to preserve such Licenses in
full force and effect without material adverse change. Sellers
will not take any action that would jeopardize the License
Subsidiaries' rightful possession of the Licenses, the potential
for assignment of the Licenses to Buyer, or the unconditional
renewal of the Licenses for full license terms.
3.14.2. CONDUCT OF BUSINESS. The Sellers shall conduct the technical
operations of the Stations in the usual and ordinary course and
consistent with past practices, and shall continue all
practices, policies, procedures and technical operations
relating to the Stations in substantially the same manner as
heretofore.
3.14.3. MAINTENANCE OF ASSETS. The Sellers shall maintain all of the
Acquired Assets in a good condition and, with respect to the
Personal Property, shall maintain inventories of spare parts at
levels consistent with the past practices of the Sellers and the
Stations. The Sellers shall not sell, convey, assign, transfer
or encumber any of the Acquired Assets, except for the
retirement of tangible Acquired Assets consistent with the
normal and customary practices of the Sellers and the Stations.
3.14.4. NO SOLICITATION.
(a) CBC will immediately cease any existing discussions or
negotiations with any third parties conducted prior to the date
hereof with respect to any Acquisition Proposal (as defined
below). CBC shall not, directly or indirectly, through any
officer, director, employee, representative or agent, or any of
the Subsidiaries, or otherwise (i) solicit, initiate, continue
or encourage any inquiries, proposals or offers that constitute,
or could reasonably be expected to lead to, a proposal or offer
for a merger, consolidation, business combination, sale of
substantial assets, sale of shares of capital stock (including,
without limitation, by way of a tender offer), liquidation,
reorganization or transactions involving CBC or any of the
Subsidiaries, other than the transactions contemplated by this
Agreement (any of the foregoing inquiries or proposals are being
referred to in this Agreement as an "Acquisition Proposal"),
(ii) solicit, initiate, continue or engage in negotiations or
discussions concerning, or provide any information or data to
any person or entity relating to, or otherwise
cooperate in any way with, or assist or participate in, or
facilitate or encourage any Acquisition Proposal, or (iii) agree
to, approve or recommend any Acquisition Proposal; PROVIDED,
that nothing contained in this Section shall prevent CBC from,
prior to the Closing, furnishing non-public information to, or
entering into discussions or negotiations with, any person or
entity in connection with any unsolicited Acquisition Proposal
by such person or entity (including a new and unsolicited
Acquisition Proposal received by CBC after the execution of this
Agreement from a person or entity whose initial contact with CBC
may have been solicited by CBC prior to the execution of this
Agreement), and CBC may recommend such an unsolicited bona fide
written Acquisition Proposal to the shareholders of CBC, if and
only to the extent that (i) the Board of Directors of CBC
determines in good faith (after consultation with and based upon
the advice of its financial advisor and considering the effect
of such Acquisition Proposal upon the employees, customers and
the community) that such Acquisition Proposal would, if
consummated, result in a transaction more favorable to the
shareholders of CBC than this Agreement and that the person or
entity making such Acquisition Proposal has the financial means,
or the ability to obtain the necessary financing, to conclude
such transaction (any such more favorable Acquisition Proposal
is being referred to in this Agreement as a "Superior
Proposal"), (ii) the Board of Directors of CBC determines in
good faith (after consultation with and based upon the advice of
its outside legal counsel) that the failure to take such action
would be inconsistent with the fiduciary duties of such Board of
Directors to its shareholders under applicable law, and (iii)
prior to furnishing such non-public information to, or entering
into discussions or negotiations with, such person or entity,
the Board of Directors receives from such person or entity an
executed confidentiality agreement with confidentiality
provisions not materially less favorable to the Company than
those contained in the Confidentiality Agreement. If (i) this
Agreement is terminated after the occurrence of a triggering
Event (as defined below), and (ii) Sellers within six (6) months
after such termination either (A) consummates any Alternative
Transaction (as defined below) or (B) become parties to any
agreement relating to an Alternative Transaction that is
thereafter consummated, then CBC shall pay Buyer a
non-refundable fee of Three Million Five Hundred Thousand and
no/100 Dollars ($3,500,000.00) (the "Fee") which amount shall be
payable by wire transfer of same day funds on the date such
Alternative Transaction is consummated.
(b) CBC shall reimburse the Buyer in connection with any legal or
other fees incurred by the Buyer in connection with the
collection of the Fee from CBC.
(c) As used herein, a "Triggering Event" shall mean any of the
following:
(i) the Board of Directors of CBC shall have withdrawn or
modified its recommendation of this Agreement or shall
have resolved or publicly announced its intention to do
so; or
(ii) an Alternative Transaction shall have taken place or
the Board of Directors of CBC shall have recommended
such an Alternative Transaction to shareholders, or
shall have resolved or publicly announced its intention
to recommend or engage in an Alternative Transaction;
or
(iii) a material breach by CBC of this Agreement shall have
occurred, and at the time of such breach or any
termination based thereon an Alternative
Transaction shall have been publicly announced and not
absolutely and unconditionally withdrawn and abandoned;
or
(iv) CBC shall have negotiated with, furnished information
to, entered into any agreement with, or consummated or
recommended any transaction with, any person other than
Buyer or its affiliates, based on a determination
regarding a "Superior Proposal" made as described
herein; or
(v) CBC shall materially breach or fail to perform its
obligations under this Section 3.14.4.
(d) As used herein, an "Alternative Transaction" shall mean (a) any
transaction or series of transactions by which any person or
group (other than Buyer) acquires or would acquire shares (or
securities exercisable or convertible into shares) representing
20% or more of the outstanding shares of CBC, pursuant to a
tender offer, exchange offer or otherwise, (b) a merger,
consolidation, share exchange, sale or substantial assets or
other business combination involving CBC, (c) any other
transaction or series of transactions whereby any person
acquires or would acquire control of the board of directors,
business or assets of CBC, or (d) any agreement with respect to
any of the foregoing, which in the case of any transaction or
agreement described in clauses (a) through (d) above, involves a
greater value (considering the amounts payable to shareholders
and all payments under employment, consulting and other
arrangements in connection therewith) than the value of this
Agreement.
3.14.5. KMUS CLOSING. Sellers shall apply reasonable and diligent
efforts in good faith to conclude the transaction contemplated
under the KMUS Purchase Agreement prior to Closing.
3.15. NO MISLEADING STATEMENTS. To Sellers' knowledge, no statement,
representation or warranty made by Sellers herein and no information
provided or to be provided by Sellers to Buyer pursuant to this Agreement
or in connection with the negotiations covering the purchase and sale
contemplated herein contains or will contain any untrue statement of a
material fact, or omits or will omit a material fact. There are no facts
or circumstances known to Sellers and not disclosed herein or in the
Schedules hereto that, either individually or in the aggregate, will
materially adversely affect after Closing the Acquired Assets or the
condition of the Stations.
ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants as follows, which representations and
warranties shall be deemed to have been made again at Closing.
4.1. CORPORATE EXISTENCE AND POWERS. Buyer is a corporation organized and
existing in good standing under the laws of the State of Delaware with
full power and authority to enter into this Agreement and enter into and
complete the transactions contemplated herein; Buyer is, or will be at
the time of Closing, qualified to do business in the States of Arizona,
California, Colorado, Illinois, Kansas, Michigan, Minnesota, New Jersey,
Oklahoma, Pennsylvania, Texas and Wisconsin; all required corporate
action has been taken by Buyer to make and carry out this Agreement; the
execution of the Agreement and, once the consent referred to in the next
clause of this sentence is obtained, the completion of the transactions
herein involved will not result in the violation of any order, license,
permit, rule, judgment or decree to which Buyer is subject or the breach
of any contract, agreement or other commitment to which Buyer is a party
or by which it is bound; and except for the consent
of the Commission to the assignment of the Licenses to Buyer, no other
consent of any kind is required that has not been obtained for Buyer to
make or carry out the terms of this Agreement.
4.2. BUYER'S QUALIFICATIONS. At Closing, Buyer will be legally and
financially qualified to become the licensee of the Commission. Buyer
does not know of any facts relating to it which would cause the
Commission to deny its consents, or which would materially hinder or
delay receipt of such consents, to the assignments of the Licenses to
Buyer.
ARTICLE 5
BREACH OF AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
5.1. BREACH OF THE SELLERS' AGREEMENTS, REPRESENTATIONS AND WARRANTIES. The
Sellers shall indemnify and hold harmless Buyer and every affiliate of
Buyer and any of its or their directors, members, stockholders, officers,
partners, employees, agents, consultants, representatives, transferees
and assignees from and against any loss, damage, liability, claim,
demand, judgment or expense, including claims of third parties arising
out of ownership of the Acquired Assets or the operations of the Stations
by the Sellers prior to Closing, and including without being limited to,
reasonable counsel fees and reasonable accounting fees, arising out of or
sustained by Buyer by reason of any material breach of any warranty,
representation, covenant or agreement of the Sellers contained herein or
in the Schedules attached hereto; provided, however, that such
indemnification shall be required only if written notice, with respect to
any matter for which indemnification is claimed, is given. Upon receipt
of such written notice, the Sellers shall have the right, if it involves
a liability to a third party, to defend or compromise such matter at the
Sellers' sole cost and expense, and Buyer shall cooperate fully in such
defense.
5.2. BREACH OF BUYER'S AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Buyer
shall indemnify and hold harmless the Sellers and every affiliate of
Sellers and any of their directors, members, stockholders, officers,
partners, employees, agents, consultants, representatives, transferees
and assignees from and against any loss, damage, liability, claim,
demand, judgment or expense, including claims of third parties arising
out of ownership of the Acquired Assets or operations of the Stations by
Buyer after Closing, and including without being limited to, reasonable
counsel fees and reasonable accounting fees, arising out of or sustained
by the Sellers by reason of any material breach of any warranty,
representation, covenant or agreement of Buyer contained herein;
provided, however, that such indemnification shall be required only if
written notice, with respect to any matter for which indemnification is
claimed, is given. Upon receipt of such written notice, Buyer shall have
the right, if it involves a liability to a third party, to defend or
compromise such matter at Buyer's sole cost and expense, and the Sellers
shall cooperate fully in such defense.
5.3. SPECIFIC PERFORMANCE. The Sellers acknowledge that the Acquired Assets
are unique and not readily bought or sold on the open market and, for
that reason, among others, Buyer would be irreparably harmed by any
breach or failure of the Sellers to consummate this Agreement, and
monetary damages therefor will be highly difficult, if not wholly
impossible, to ascertain. It is therefore agreed that this Agreement
shall be enforceable in a court of equity by a decree of specific
performance subject to the provisions of Section 3.14.4 above and Section
8.5 below, and an injunction may be issued restraining any transfer or
assignment of the Acquired Assets contrary to the provisions of this
Agreement pending the determination of such controversy. The Sellers,
for themselves and their successors and assigns, hereby waive the claim
or defense that an adequate remedy at law exists.
ARTICLE 6
RISK OF LOSS
6.1. BUYER'S OPTIONS. The risk of any loss, damage or destruction to any of
the Acquired Assets to be transferred to the Buyer hereunder from fire or
other casualty or loss shall be borne by the Sellers at all times prior
to the Closing. Upon the occurrence of any material loss or damage to
any of the Acquired Assets to be transferred hereunder as a result of
fire, casualty, or other causes prior to the Closing, the Sellers shall
notify the Buyer of same in writing immediately, stating with
particularity the reasonable estimates of the loss or damage incurred,
the cause of damage, if known, and the extent to which restoration,
replacement and repair of the Acquired Assets lost or destroyed is
believed reimbursable under any insurance policy with respect thereto.
Provided the Sellers, at their sole expense, have not repaired, restored
or replaced the damaged Acquired Assets to Buyer's reasonable
satisfaction by the Closing, Buyer shall have the option (but not the
obligation) exercisable at the Closing to:
(i) terminate this Agreement in which case none of the parties shall
have any further liability to the other parties and all Escrowed
Funds shall be returned to Buyer, except that the Sellers shall
have a reasonable period of time, not to exceed one hundred
twenty (120) days, to effect repairs of the damaged Acquired
Assets before Buyer may exercise its option under this
subparagraph 6.1 (i);
(ii) postpone the Closing for up to one hundred twenty (120) days to
allow the Acquired Assets to be completely repaired, replaced or
restored, at the Sellers' sole expense, in which event the
Sellers shall use their best efforts to complete such repairs;
or
(iii) elect to consummate the Closing and accept the property in its
"then" condition, in which event the Sellers shall assign to
Buyer all rights under any insurance claim covering the loss and
pay over to the Buyer the proceeds under any such insurance
policy heretofore received by the Sellers with respect thereto.
ARTICLE 7
APPLICATION FOR COMMISSION APPROVAL
7.1. FILING AND PROSECUTION OF APPLICATION. Buyer and the Sellers shall, as
soon as practicable after the date of this Agreement and in any event not
later than August 15, 1997, join in applications to be filed with the
Commission requesting its written consents to the assignments of the
Licenses of the Stations from the License Subsidiaries to Buyer. The
parties shall prepare their own portions of the applications. Buyer and
the Sellers shall take all steps necessary to the expeditious prosecution
of such applications to a favorable conclusion, using their best efforts
throughout.
7.2. EXPENSES. The parties shall bear their own legal, accounting and other
expenses in connection with the consummation of the contemplated
transaction. The parties shall cooperate with the preparation of the
Commission applications and in connection with the prosecution of such
applications. The filing fees shall be shared equally between the
Sellers on the one hand and the Buyer on the other.
7.3. DESIGNATION FOR HEARING. If, for any reason, any application for an
assignment of any of the Licenses is designated for hearing by the
Commission prior to grant thereof, either of the parties shall have the
right by written notice within thirty (30) days of such designation for
hearing, to exclude from the Acquired Assets those assets associated with
the operation of the Station affected if the allegations raised relate to
the other party, and the purchase price payable hereunder shall be
reduced by an amount equal to the Station Aggregate Value of the affected
Station.
7.4. TIME FOR COMMISSION CONSENT. Subject to the provisions of Section 7.3
above and Section 8.6 below, if the Commission has not given its written
consents to the assignments of the Licenses set forth herein within nine
(9) months from the date of acceptance for filing of the applications for
such assignments, any of the parties, if not then in default, may
terminate this Agreement by giving written notice to the other parties.
Upon such termination, none of the parties shall have any right or
liability hereunder and all Escrowed Funds shall be returned to Buyer
promptly.
7.5. CONTROL OF STATIONS. Until Closing, Buyer shall not directly or
indirectly, control, supervise, direct or attempt to control, supervise
or direct the operations of the Stations, but such operations shall be
the sole responsibility of the Sellers, subject to and consistent with
all rules, regulations and policies of the FCC.
ARTICLE 8
CLOSING
Subject to the terms and conditions herein stated, the parties agree as
follows:
8.1. CLOSING DATE. Except as provided in Section 7.3 above and Section 8.6
below, the Closing of this Agreement shall be held at such time and date
as shall be mutually agreed by the Sellers and Buyer; provided, however,
that in any event Buyer must close no later than five (5) days after
final Commission approval of the assignments of the Licenses and the
final FCC grant of renewal of the Stations' Licenses for full terms
without material adverse condition have become final, the finality of
each of the assignments and renewal applications subject to waiver by
Buyer ("Final Approval") and all other conditions to Closing shall have
been satisfied on or before the Closing Date. (The date scheduled, or
required to be scheduled for Closing hereunder is referred to herein as
the "Closing Date.") Final Approval shall be the approval of the FCC to
the renewal and assignment of the Licenses which are no longer subject to
rehearing, reconsideration or review by the Commission or to review by
any court under the Communications Act of 1934, as amended, and which
action is not reversed, stayed, enjoined or set aside, and with respect
to which no timely request or petition for stay, reconsideration, review
or rehearing or a notice of appeal is pending and the time for such
filing has expired. Closing shall take place at the offices of CBC in
Minnesota.
8.2. THE SELLERS' OBLIGATIONS AT CLOSING. At Closing, the Sellers shall
deliver to Buyer the following:
(a) An Assignment of the Licenses described in Schedule A, Warranty
Deeds as to the Real Property described on Schedule B and an
Assignment and Xxxx of Sale, or similar instruments, including third
party consents to all "material" Leases and Agreements, transferring
to Buyer all other Acquired Assets to be transferred hereunder, free
and clear of all liens, encumbrances and restrictions of any kind
whatsoever, except as expressly provided for in this Agreement or in
the Leases and Agreements;
(b) The business records described in Section 1.7;
(c) The Non-Competition Agreement executed by Xxxx;
(d) An opinion of the Sellers' counsel, addressed to Buyer, confirming
the correctness of the Sellers' representations made in Sections 3.1
and 3.2;
(e) A certificate of CBC's CEO verifying that the Sellers'
representations, warranties and covenants as provided herein remain
materially true and correct up to and through the Closing Date;
(f) Certificates of Sellers' Secretary certifying as to Sellers'
Articles of Incorporation, By-Laws, and Board of Directors approvals
(all of which shall be attached thereto);
(g) Such other documents and instruments as might reasonably be
requested by Buyer to consummate the transaction contemplated
hereunder consistent with the intent expressed herein; and
(h) Escrow instructions releasing Escrowed Funds to Buyer.
8.3. BUYER'S OBLIGATIONS AT CLOSING. At Closing, Buyer shall deliver to CBC
the following:
(a) A cashier's or certified check in the amount of Seventy-two Million
Five Hundred Thousand and no/100 Dollars ($72,500,00.00) (subject to
adjustment as provided herein);
(b) An Agreement to assume the obligations of Sellers under the Leases
and Agreements with respect to periods of time from and after
Closing;
(c) The Non-Competition Agreement;
(d) An opinion of Buyer's counsel, addressed to the Sellers, confirming
the correctness of Buyer's representations made in Section 4.1; and
(e) Such other documents and instruments as might reasonably be
requested by Sellers to consummate the transaction contemplated
hereunder consistent with the intent expressed herein.
8.4. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transaction herein contemplated at Closing are subject to
and conditioned upon:
(a) The written consents of the Commission evidencing its Final
Approvals to the assignments of the Licenses to Buyer subject to the
provisions of Section 7.3 above and Section 8.6 below, provided that
any such approval is without any condition that is materially
adverse to Buyer;
(b) The satisfaction at or before Closing in all material respects of
all agreements, obligations and conditions of the Sellers hereunder
required to be performed or complied with by them on or before
Closing;
(c) The material accuracy of the representations and warranties made by
the Sellers;
(d) Written third party consents to all material Leases and Agreements
where required by the terms of the Lease or Agreement or
substitution by Sellers of equivalent rights without materially
adverse impact upon Buyer's enjoyment of the Acquired Assets; and
(e) Between the date hereof and the Closing Date, there shall not have
been any material adverse change in the Acquired Assets. Events
relating to the Sellers' current effort to obtain permits and
approvals in Riverside County, California for construction of towers
on optioned property shall not be deemed to be material, and Buyer's
obligations hereunder are not subject to the success or failure of
such efforts.
8.5. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the Sellers
to consummate the transaction herein contemplated at Closing are subject
to and conditioned upon:
(a) The approval by CBC's shareholders of this Agreement and the
transaction contemplated hereunder at a meeting to called by CBC and
held for that purpose with no more than 20% of CBC's shareholders
exercising statutory dissenter's rights;
(b) Subject to the provisions of Section 7.3 above and Section 8.6
below, the written consents of the Commission evidencing its Final
Approvals to the assignments of the Licenses to Buyer, provided that
any such approval is without any conditions that are materially
adverse to the Sellers;
(c) The satisfaction at or before Closing of all agreements, obligations
and conditions of Buyer hereunder required to be performed or
complied with by it at or before the Closing;
(d) The receipt by Sellers from their investment banker of an opinion
confirming the fairness of the consideration payable hereunder to
Sellers by Buyer; and
(e) The material accuracy of the representations and warranties made by
Buyer.
8.6. PARTIALLY DEFERRED CLOSING. The parties recognize that due to the FCC
license renewal schedule the application for renewal of Licenses held by
KPLS-AM will not be filed until August 1, 1997, and that FCC approvals of
the assignments of the other Licenses may occur and become Final Orders
prior to approval of the assignment of Station KPLS(AM)'s License or its
renewal. The parties agree that in such event, Closing shall occur with
respect to all of the Acquired Assets except those held by CRLA and
KPLS-AM within five (5) days of Final Approvals of assignments of the
other Licenses. A portion of the purchase price payable hereunder equal
to the Aggregate Station Value allocated to the Acquired Assets
associated with the operation of Station KPLS(AM) shall be paid into
escrow to be disbursed in accordance with an escrow agreement in the form
attached hereto as EXHIBIT C (the "Closing Escrow Agreement").
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants of Sellers contained in this
Agreement shall survive for a period of twenty-four (24) months after the
Closing Date.
9.2. EXECUTION OF DOCUMENTS. The parties agree to execute all applications,
documents and instruments which may be necessary for the consummation of
the transaction contemplated hereunder, or which might be from time to
time reasonably requested by any party hereto in connection therewith,
whether before or after the date of Closing.
9.3. NOTICES. All notices, requests, elections, demands and other
communications given pursuant to this Agreement shall be in writing and
shall be duly given when delivered personally or when deposited in the
mail, certified or registered mail, postage prepaid, return receipt
requested, and shall be addressed as follows:
If to the Sellers
(or any of them): Children's Broadcasting Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxxxxxxx X. Xxxx
with copy to: Children's Broadcasting Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to Buyer: Global Broadcasting Company, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
with copy to: Xxxxxx X. XxXxxxx, Xx., Esq.
Duncan, Weinberg, Xxxxxx & Pembroke, P.C.
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
9.4. EXHIBITS AND SCHEDULES. All Exhibits and Schedules referred to herein
are incorporated into this Agreement by reference for all purposes and
shall be deemed part of this Agreement.
9.5. ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
together with all Exhibits and Schedules referred to herein contain all
of the terms and conditions agreed upon by the parties hereto with
respect to the transaction contemplated hereunder.
9.6. ASSIGNABILITY. None of the parties may assign their rights or
obligations under this Agreement without the prior written consent of the
other parties, except that any party may make an assignment to an entity
under essentially common control as the assigning entity.
9.7. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the xxxxxxxxxxxxxxx, xxxxx, xxxxxxx, successors, and assigns
of the parties hereto.
9.8. HEADING. The headings contained in this Agreement are for reference only
and shall not effect in any way the meaning or interpretation of this
Agreement.
9.9. COUNTERPARTS. This Agreement and any other instrument to be signed by
the parties hereto may be executed by the parties, together or
separately, in two or more identical counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one
and the same instrument.
9.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. The parties hereto
hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Minnesota and of the United
States of America located in the State of Minnesota for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby (and they agree not to commence any
action, suit or proceeding relating thereto except in such courts) and
further agree that service of any process, summons, notice or document by
U.S. registered mail to the addresses set forth above shall be effective
service of process for any action, suit or proceeding arising out of this
Agreement, in the courts of the State of Minnesota or the United States
of America located in the State of Minnesota, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
9.11. BROKER COMMISSION. The Sellers and Buyer each represent to the other
that they have not engaged a broker in connection with the contemplated
transaction, except that CBC has engaged Star Media Group, Inc. with
respect to that portion of the transaction associated with the operations
of Stations WJDM(AM) and WAUR(AM), and Buyer has engaged Star Media
Group, Inc. with respect to the entire contemplated transaction, and each
party agrees to pay the respective commissions owed under such agreements
and agree to indemnify and hold the other party or parties harmless
against any claims made by a broker through it or them in connection with
the transactions contemplated hereunder.
9.12. SALES TAX. Any sales tax, including bulk sales taxes (if applicable),
due upon consummation of this transaction will be computed at Closing and
paid by the Sellers and any claims or proceedings arising therefrom shall
be the sole responsibility of Sellers. Sellers agree to indemnify and
hold Buyer harmless against any such claims in connection with the
transactions contemplated hereunder.
IN WITNESS WHEREOF, the parties hereto, by their properly authorized
representatives, have caused this Agreement to be executed as of the day and
date first above written.
CHILDREN'S BROADCASTING CORPORATION GLOBAL BROADCASTING COMPANY, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxx Xxxxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: CEO and Chairman
------------------------------ ----------------------------
CHILDREN'S RADIO OF CHICAGO, INC. WAUR-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF DALLAS, INC. KAHZ-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF DENVER, INC. KKYD-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF DETROIT, INC. WCAR-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF GOLDEN VALLEY, INC. KYCR-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF HOUSTON, INC. KTEK-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF KANSAS CITY, INC. KCNW-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF LOS ANGELES, INC. KPLS-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF MILWAUKEE, INC. WZER-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF MINNEAPOLIS, INC. WWTC-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF NEW YORK, INC. WJDM-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF PHILADELPHIA, INC. WPWA-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
------------------------------ ----------------------------
ITS:President and CEO ITS: President and CEO
------------------------------ ----------------------------
CHILDREN'S RADIO OF PHOENIX, INC. KIDR-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
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ITS:President and CEO ITS: President and CEO
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CHILDREN'S RADIO OF TULSA, INC. KMUS-AM, INC.
BY: /s/Xxxxxxxxxxx X. Xxxx BY: /s/Xxxxxxxxxxx X. Xxxx
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ITS:President and CEO ITS: President and CEO
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EXHIBIT A
ESCROW AGREEMENT
SEE SECTION 2.2.1
EXHIBIT B
NON-COMPETITION AGREEMENT
SEE SECTION 2.8
EXHIBIT C
CLOSING ESCROW AGREEMENT
SEE SECTION 8.6
SCHEDULE A
LICENSES, PERMITS AND AUTHORIZATIONS
SEE SECTION 1.1
SCHEDULE B
REAL PROPERTY
SEE SECTION 1.2
SCHEDULE C
PERSONAL PROPERTY
SEE SECTION 1.3
SCHEDULE D
LEASES AND AGREEMENTS
SEE SECTION 1.4
SCHEDULE E
GENERAL INTANGIBLES
SEE SECTION 1.6
SCHEDULE F
ALLOCATION OF PURCHASE PRICE
SEE SECTION 2.5
SCHEDULE G
LITIGATION
SEE SECTION 3.5
SCHEDULE H
HAZARDOUS WASTE
SEE SECTION 3.6
SCHEDULE I
SELLERS EMPLOYEE PLANS AND
COMPENSATION ARRANGEMENTS
SEE SECTION 3.12.1
SCHEDULE J
PERSONS EMPLOYED IN CONNECTION WITH
THE OPERATION OF THE STATION
SEE SECTION 3.13
