Exhibit 2.34
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CUMULUS BROADCASTING, INC.,
AND
CUMULUS LICENSING CORPORATION
AND
CAROLINA BROADCASTING, INC.
AND
GEORGETOWN RADIO, INC.
October 29, 1997
1
TABLE OF CONTENTS
Page
1. Basic Transaction..................................................1
(a) Purchase and Sale of Assets.................................1
(b) Assumption of Liabilities...................................1
(c) Purchase Price..............................................1
(d) The Closing.................................................2
(e) Deliveries at the Closing...................................2
(f) Postclosing Agreement.......................................3
(g) Allocation..................................................3
2. Representations and Warranties of the Sellers......................3
(a) Organization of the Sellers.................................3
(b) Authorization of Transaction................................3
(c) Non-contravention...........................................3
(d) Title to Acquired Assets....................................4
(e) Financial Statements........................................4
(f) Events Subsequent to June 30, 1997..........................4
(g) Tax Matters.................................................6
(h) Tangible Assets.............................................7
(i) Real Property...............................................7
(j) Intellectual Property.......................................8
(k) Contracts..................................................10
(l) Commission Licenses and Compliance with
Commission Requirements...................................12
(m) Insurance..................................................13
(n) Litigation.................................................13
(o) Employees..................................................14
(p) Employee Benefits..........................................14
(q) Environment, Health, and Safety............................15
(r) Legal Compliance...........................................16
(s) Advertising Contracts......................................17
(t) Brokers' Fees..............................................17
(u) Undisclosed Commitments or Liabilities.....................17
(v) Disclosure.................................................17
3. Representations and Warranties of the Buyer.......................17
(a) Organization of the Buyers.................................17
(b) Authorization of Transaction...............................17
(c) Non-contravention..........................................17
(d) Brokers' Fees..............................................18
4. Pre-Closing Covenants.............................................18
(a) General....................................................18
(b) Assignment Applications....................................18
(c) Employment Offers..........................................19
(d) Notices and Consents.......................................19
(e) Operation of Business......................................19
(f) Advertising Obligations....................................19
(g) Operating Statements.......................................19
(h) Contracts..................................................19
(i) Operation of Stations......................................20
(j) Credit and Receivables.....................................20
(k) Preservation of Business...................................20
(l) Full Access and Consultation...............................20
(m) Notice of Developments.....................................20
(n) Exclusivity................................................21
(o) Title Insurance, Surveys and Environmental Assessments.....21
(p) Control of Stations........................................22
(q) Risk of Loss...............................................22
-ii-
EXHIBITS
Exhibit A--Form of Xxxxxxx Money Escrow Agreement
Exhibit B--Forms of Assignments
Exhibit C--Form of Assumption
Exhibit D--Form of Postclosing Agreement
Exhibit E--Allocation Schedule
Exhibit F--Form of Opinion of Counsel to the Sellers
Exhibit G--Assumed Contracts
SCHEDULES
Description of Schedule Section
----------------------- -------
Organization of the Seller 2(a)
Exceptions to Title to Acquired Assets 2(d)
Financial Statements 2(e)
Events Subsequent to June 30, 1997 2(f)
Tangible Assets 2(h)
Real Property 2(i)
Intellectual Property 2(j)
Contracts 2(k)
Commission Licenses and Compliance with Commission Requirements 2(l)
Insurance 2(m)
Litigation 2(n)
Employees 2(o)
Employee Benefits 2(p)
Environmental, Health and Safety 2(q)
Advertising Contracts 2(s)
-iii-
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of October 29, 1997, by
and between Cumulus Broadcasting, Inc., a Nevada corporation ("Broadcasting"),
Cumulus Licensing Corporation, a Nevada corporation ("Licensing"), and Carolina
Broadcasting, Inc., a Maryland corporation ("CBI") and Georgetown Radio, Inc., a
Maryland corporation ("GRI"). (CBI and GRI are referred to collectively herein
as the "Sellers.") Broadcasting and Licensing are referred to collectively
herein as the "Buyers." The Buyers and the Sellers are referred to collectively
herein as the "Parties." Capitalized terms used in this Agreement are defined in
Section 8 hereof.
Subject to the terms and conditions of this Agreement, the Buyers hereby
agree to purchase substantially all of the assets (and assume certain of the
liabilities) of the Sellers that are used or useful in the operation of radio
stations WJXY-AM and WJXY-FM, licensed to Conway, South Carolina, of which CBI
is licensee, and WXJY-FM, licensed to Georgetown, South Carolina of which GRI is
licensee (the "Stations") in return for cash.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, Licensing agrees to purchase from the Sellers, and
the Sellers agree to sell, transfer, convey, and deliver to Licensing, all of
the FCC Licenses listed in Section 2(l) of the Disclosure Schedule. In addition,
Broadcasting agrees to purchase from the Sellers, and the Sellers agree to sell,
transfer, convey, and deliver to Broadcasting, all of the Acquired Assets other
than the FCC Licenses. Both such sales shall take place at the Closing for the
consideration specified below in this Section 1.
(b) Assumption of Liabilities. On and subject to the terms and conditions
of this Agreement, Broadcasting agrees to assume and become responsible for all
of the Assumed Liabilities at the Closing. The Buyers will not assume or have
any responsibility, however, with respect to any other obligation or Liability
of the Sellers not included within the definition of Assumed Liabilities and the
Sellers agree to pay and discharge all Liabilities and obligations of the
Sellers other than the Assumed Liabilities.
(c) Purchase Price. The Buyers agree to pay to the Sellers, as
consideration for the Acquired Assets, the amount of Two Million Three Hundred
Thousand Dollars ($2,300,000) (the "Purchase Price"). The Purchase Price shall
be payable as follows:
(i) on the date of this Agreement, the Buyers will deposit with the
Escrow Agent the amount of One Hundred Fifteen Thousand Dollars
($115,000.00) (the "Xxxxxxx Money Deposit") by wire transfer or delivery
of either (A) a letter of credit drawn on NationsBank
of Texas, N.A. naming Escrow Agent as beneficiary ("Letter of Credit"), or
(B) other immediately available funds; and
(ii) on the Closing Date, the Buyers shall pay to the Sellers the
amount of Two Million One Hundred Thirty Five Thousand Dollars
($2,135,000.00), less any interest earned on the Xxxxxxx Money Deposit if
the Xxxxxxx Money Deposit is in a form other than the Letter of Credit;
and
(iii) on the Closing Date, the Buyer shall pay to the Sellers, on
behalf of all parties to the Postclosing Agreement, the amount of Fifty
Thousand Dollars ($50,000.00).
The Xxxxxxx Money Deposit referenced in this Section 1(c) shall be placed in
escrow with the Escrow Agent pursuant to an escrow agreement in the form
attached hereto as Exhibit A (the "Xxxxxxx Money Escrow Agreement"), and if in a
form other than the Letter of Credit shall be deposited by the Escrow Agent with
a federally insured financial institution in an interest bearing account.
Interest earned on the Xxxxxxx Money Deposit, if any, shall accrue to the
benefit of Buyers, and, together with the principal amount of the Xxxxxxx Money
Deposit, shall be payable to the Sellers and credited against the Purchase Price
on the Closing Date. If this Agreement is terminated without Closing of the
transaction contemplated herein, the Xxxxxxx Money Deposit and all accrued
interest, if any, shall be paid to the Buyers or the Sellers as provided in the
Xxxxxxx Money Escrow Agreement.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Stations in
Conway, South Carolina, commencing at 9:00 a.m. local time on the date set by
the Buyers not earlier than the fifth business day or later than the tenth
business day after the FCC approval of the Assignment Application becomes a
Final Order, by which date all other conditions to the obligations of the
Parties to consummate the transactions contemplated hereby will have been
satisfied or such other date as the Parties may mutually determine (the "Closing
Date").
(e) Deliveries at the Closing. At the Closing, (i) the Sellers will
deliver to the Buyers the various certificates, instruments, and documents
referred to in Section 5(a) below; (ii) the Buyers will deliver to the Sellers
the various certificates, instruments, and documents referred to in Section 5(b)
below; (iii) the Sellers will execute, acknowledge (if appropriate), and deliver
to the Buyers (A) assignments (including Lease and other Assumed Contract
assignments and Intellectual Property transfer documents), bills of sale and
warranty deeds in the forms attached hereto as Exhibits B-1 through B-2, (B)
such affidavits, transfer tax returns, memorandums of lease, and other
additional documents as may be required by the terms of the title insurance
commitments described in Section 4(o) hereof, as necessary to furnish title
insurance as required by such section or as may be necessary to convey title to
the Real Estate to the Buyers in the condition required herein or provided
public notice of existence of the Leases, and (C) such other instruments of
sale, transfer, conveyance, and assignment as the Buyers and their counsel
reasonably may request; (iv) the Buyers will execute, acknowledge (if
appropriate), and deliver to the Sellers (A) an assumption in the form attached
hereto as Exhibit C and (B) such other
-2-
instruments of assumption as the Sellers and their counsel reasonably may
request; and (v) the Buyers will deliver to the Sellers the consideration
specified in Section 1(c) above.
(f) Postclosing Agreement. On the Closing Date, the Sellers shall execute,
and shall cause shareholders Xxxxxx Xxxxx, Xxxxxx Xxxxxxxx and Xxxx Xxxxx to
execute, a Postclosing Agreement with Broadcasting including covenants not to
compete with the Buyers in the markets served by the Stations and agreements to
indemnify the Buyers in the form of Exhibit D attached hereto. A portion of the
Purchase Price equal to Fifty Thousand Dollars ($50,000.00) shall be paid to the
Sellers by the Buyers on the Closing Date as consideration for the agreements
set forth in the Postclosing Agreement.
(g) Allocation. The Parties agree to allocate the Purchase Price (and all
other capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached hereto as Exhibit E.
2. Representations and Warranties of the Sellers. The Sellers jointly and
severally represent and warrant to the Buyers that the statements contained in
this Section 2 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 2), except as set forth in the lettered and numbered
paragraphs contained in the disclosure schedule accompanying this Agreement and
initialed by the Parties (the "Disclosure Schedule") corresponding to the
lettered and numbered sections of this Section 2.
(a) Organization of the Sellers. CBI and GRI are each a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of Maryland. Neither CBI nor GRI has any subsidiaries. Each Seller
has the power and authority to own or lease its properties and to carry on all
business activities now conducted by it. All of the shareholders of CBI and GRI
are listed in Section 2(a) of the Disclosure Schedule.
(b) Authorization of Transaction. Each Seller has full power and authority
to execute and deliver this Agreement and all agreements and instruments to be
executed and delivered by such Party pursuant to this Agreement (collectively,
the "Ancillary Agreements") and to perform its obligations hereunder and
thereunder. Without limiting the generality of the foregoing, the Board of
Directors of each CBI and GRI have duly authorized the execution, delivery, and
performance of this Agreement and the Ancillary Agreements by each Seller. This
Agreement and the Ancillary Agreements constitute the valid and legally binding
obligation of the Sellers, enforceable in accordance with their respective terms
and conditions.
(c) Non-contravention. Neither the execution and the delivery of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in Section 1(e) above), will (i) violate any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge, or other
restriction of any government, governmental agency, or court to which the
Sellers are
-3-
subject or any provision of the charter or bylaws of either Seller; or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice or third party consent under any contract,
lease, sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, Security Interest, or
other agreement, arrangement to which either Seller is a party or by which
either Seller is bound or to which any of the assets of either Seller is subject
(or result in the imposition of any Security Interest upon any of the assets of
either Seller). Other than with respect to the Assignment Application described
in Section 4(b) the Sellers does not need to give any notice to, make any filing
with, or obtain any Licenses, consent, or approval of any court or government or
governmental agency in order for the Parties to enter into this Agreement or the
Ancillary Agreements or to consummate the transactions contemplated by this
Agreement or the Ancillary Agreements (including the assignments and assumptions
referred to in Section 1(e) above).
(d) Title to Acquired Assets. Other than the Security Interests set forth
on Section 2(d) of the Disclosure Schedule (which shall be released at or before
the Closing) the Sellers have good and marketable title to all of the Acquired
Assets, free and clear of any Security Interest or restriction on transfer.
(e) Financial Statements. Included in Section 2(e) of the Disclosure
Schedule are: (i) all of the balance sheets, financial statements and income tax
returns for the fiscal years ending December 31, 1993, December 31, 1994, and
December 31, 1995 that were prepared by predecessor licensees of the Stations
and received by the Sellers in connection with the Sellers' acquisitions of the
Stations; (ii) all of the balance sheets, financial statements and income tax
returns covering any portion of 1996 that were prepared by predecessor licensees
of the Stations and received by the Sellers in connection with the Sellers'
acquisitions of the Stations; and (iii) balance sheets and statements of income
prepared by the Sellers covering portions of 1996 and 1997 through August 31,
1997 ("Financial Statements"). The Financial Statements prepared by the Sellers
for portions of 1996 and 1997 (A) have been prepared on a cash basis,
consistently applied throughout the periods covered thereby, (B) are correct and
complete, and (C) fairly represent the financial condition of the Sellers on the
dates and the results of the operations for the periods designated therein and
are consistent with the books and records of the Sellers (which books and
records are correct and complete). To the Knowledge of the Sellers, the
Financial Statements prepared by predecessor licensees of the Stations and
received by the Sellers in connection with the Sellers' acquisitions of the
Stations are correct and complete except as may be disclosed in Section 2(e) of
the Disclosure Schedules. At the end of the fiscal year 1997, the Sellers will
prepare Financial Statements on an accrual basis and will provide such statement
to the Buyers.
(f) Events Subsequent to June 30, 1997. Since June 30, 1997, except as set
forth in Section 2(f) of the Disclosure Schedule, and with respect to the
operation of the Stations since that date:
-4-
(i) neither Seller has sold, leased, transferred, or assigned any of
its material assets, tangible or intangible;
(ii) other than this Agreement, neither Seller has not entered into
any agreement, contract, lease, sublease, license, or sublicense (or
series of related agreements, contracts, leases, subleases, licenses, and
sublicenses) outside the Ordinary Course of Business;
(iii) no party has accelerated, terminated, modified, or canceled
any agreement, contract, lease, sublease, license, or sublicense (or
series of related agreements, contracts, leases, subleases, licenses, and
sublicenses) involving more than $5,000 to which either Seller is a party
or by which either Seller or any of the assets of either Seller are bound;
(iv) no Security Interest has been imposed upon any of Sellers'
assets, tangible or intangible;
(v) neither Seller has made any capital expenditure (or series of
related capital expenditures) outside the Ordinary Course of Business;
(vi) neither Seller has made any capital investment in, any loan to,
or any acquisition of the securities or assets of any other person (or
series of related capital investments, loans, and acquisitions);
(vii) neither Seller has created, incurred, assumed, or guaranteed
any indebtedness (including capitalized lease obligations) outside the
Ordinary Course of Business;
(viii) neither Seller has delayed or postponed (beyond its normal
practice in the Ordinary Course of Business) the payment of accounts
payable and other Liabilities;
(ix) neither Seller has canceled, compromised, waived, or released
any right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
(x) neither Seller has granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) neither Seller has experienced any damage, destruction, or loss
(whether or not covered by insurance) to any of its property or any action
adversely affecting the FCC Licenses or experienced any period of more
than 48 hours when the Stations were not broadcasting at full signal
strength;
(xii) neither Seller has made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees giving
rise to any claim or right on its part against the person or on the part
of the person against it;
-5-
(xiii) neither Seller has entered into any employment contract,
consulting contract or severance agreement or collective bargaining
agreement, written or oral, or modified the terms of any existing such
contract or agreement;
(xiv) neither Seller has granted any increase (outside routine
salary and wage increases in the Ordinary Course of Business) in the rate
of compensation, commissions, bonus or other remuneration payable, or
granted any severance or termination pay to, any of its directors,
officers, and employees;
(xv) neither Seller has adopted any (A) bonus, (B) profit-sharing,
(C) incentive compensation, (D) pension, (E) retirement, (F) medical,
hospitalization, life, or other insurance, (G) severance, or (H) other
plan, contract, or commitment for any of its directors, officers, and
employees, or modified or terminated any existing such plan, contract, or
commitment;
(xvi) neither Seller has made any other change in employment terms
for any of its directors, officers, and employees;
(xvii) neither Seller has made or pledged to make any charitable or
other capital contribution;
(xviii) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving either Seller;
(xix) neither Seller has altered its credit and collection policies
or its accounting policies;
(xx) neither Seller has materially altered the programming, format
or call letters of the Stations, or its promotional and marketing
activities;
(xxi) neither Seller has applied to the FCC for any modification of
the FCC Licenses or failed to take any action necessary to preserve the
FCC Licenses, no proceeding has been issued before the FCC which could, if
adversely determined, affect the FCC Licenses each Seller and has operated
the Stations in compliance therewith and with all FCC rules and
regulations;
(xxii) there has been no other occurrence or non-occurrence the
result of which has caused or would be reasonably likely to cause
significant damage to the financial condition, operations or prospects of
the Stations or Acquired Assets including, but not limited to a drop of
more than ten percent (10%) in broadcast signal strength; and
(xxiii) neither Seller has committed to any of the foregoing.
-6-
(g) Tax Matters. The Sellers have timely and properly filed all Tax
Returns that they were required to file with respect to the Sellers' operations.
All such Tax Returns were correct and complete in all respects and properly
reflect the tax liability of the Sellers. The Sellers have not requested any
extension of time within which to file returns in respect of any Taxes with
respect to the Sellers' operations. No Tax deficiencies have been proposed or
assessed against either of the Sellers. There are no pending, or to the Sellers'
Knowledge, threatened audits, investigations, or claims for or relating to any
liability in respect of Taxes with respect to the Sellers' operations. All Taxes
owed by the Sellers with respect to their operations (whether or not shown on
any Tax Return) have been paid. The Sellers have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, creditor, independent contractor, or other third party. No
claim has ever been made by any authority in any jurisdiction where the Sellers
do not file Tax Returns that either Seller is or may be subject to taxation by
that jurisdiction. There are no Security Interests on any of the assets of the
Sellers that arose in connection with any failure (or alleged failure) to pay
any Tax.
(h) Tangible Assets. Section 2(h) of the Disclosure Schedule sets forth a
listing of all transmitter and Station equipment, vehicles and other tangible
personal property used in conducting the operation and business of the Stations.
The Sellers own or lease all tangible assets necessary for the conduct of the
operation and business of the Stations as presently conducted and as presently
proposed to be conducted and all leased assets are specifically identified as
such in Section 2(h) of the Disclosure Schedule. Except as listed in Section
2(h) of the Disclosure Schedule, each such tangible asset is free from defects
(patent and latent), has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear), and is suitable for the purposes for which it presently is used. Except
as listed in Section 2(h) of the Disclosure Schedule, no such tangible asset is
in need of replacement. Any leased personal property included within the
tangible personal property is in the condition required of such property by the
terms of the lease applicable thereto during the term of the lease and upon the
expiration thereof. All of the equipment utilized in the operation of the
Stations is in compliance with all FCC and FAA requirements and is sufficient to
satisfy the intended needs of the normal customary operations of the Stations at
all times of the year and all such equipment is in compliance with all
applicable laws.
(i) Real Property. Section 2(i) of the Disclosure Schedule lists and
describes briefly all Owned Real Estate and real property leased to the Sellers
(including, without limitation, complete legal descriptions for all of the Real
Estate). The Sellers have delivered to the Buyers correct and complete copies of
the Leases. With respect to the Real Estate:
(i) the Sellers have good and marketable title to all of the Owned
Real Estate free and clear of all liens, charges, mortgages, security
interests, easements, restrictions or other encumbrances of any nature
whatsoever except (A) real estate taxes for the year of Closing and
municipal and zoning ordinances and recorded utility easements which do
not impair the current use, occupancy or value or the marketability of
title of the property and which are disclosed in Section 2(i) of the
Disclosure Schedule (collectively, the
-7-
"Permitted Real Estate Encumbrances") and (B) mortgages and Security
Interests that are to be discharged at Closing and which are disclosed in
Section 2(i) of the Disclosure Schedule.
(ii) the Leases are and, following the Closing will continue to be,
legal, valid, binding, enforceable, and in full force and effect;
(iii) no party to any Lease is in breach or default (or has
repudiated any provision thereof), and no event has occurred which, with
notice or lapse of time, would constitute a breach or default thereunder
or permit termination, modification, or acceleration thereunder;
(iv) there are no disputes, oral agreements, or forbearance programs
in effect as to any Lease;
(v) none of the Owned Real Estate and to the Sellers' Knowledge,
none of the properties subject to the Leases are subject to any lease
(other than Leases), option to purchase or rights of first refusal;
(vi) except for Permitted Real Estate Encumbrances, there are no (A)
actual or, to the Sellers' Knowledge, proposed special assessments with
respect to any of the Real Estate; (B) pending or, to the Sellers'
Knowledge, threatened condemnation proceedings with respect to any of the
Real Estate; (C) pending or, to the Sellers' Knowledge, threatened
litigation or administrative actions with respect to any of the Real
Estate; (D) mechanic's or materialmens' liens with respect to the Owned
Real Estate; (E) structural or mechanical defects in any of the buildings
or improvements located in the Real Estate; (F) planned or commenced
improvements which will result in an assessment or otherwise affect the
Real Estate; (G) governmental agency or court orders requiring the repair,
alteration or correction of any existing condition with respect to the
Real Estate or any portion thereof; or (H) any pending or, to the Sellers'
Knowledge, threatened changed in any zoning laws or ordinances which may
affect any of the Real Estate or Sellers' use thereof;
(vii) all buildings and improvements on the Real Estate are in good
operating condition and repair, normal wear and tear excepted;
(viii) the Sellers have not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or
its rights thereunder;
(ix) to the Sellers' Knowledge, all facilities on the Real Estate
have received all approvals of governmental authorities (including
licenses, permits and zoning approvals) required in connection with the
operation thereof and have been operated and maintained in accordance with
applicable laws, rules, and regulations; and
-8-
(x) all facilities on the Real Estate are supplied with utilities
and other services necessary for the operation of said facilities.
(j) Intellectual Property. The Sellers own or have the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary for or currently used in the operation of the business of the
Sellers as presently conducted and as presently proposed to be conducted. Each
item of Intellectual Property owned or used by the Sellers immediately prior to
the Closing hereunder will be owned or available for use by the Buyers on
identical terms and conditions immediately subsequent to the Closing hereunder.
It is specifically acknowledged that the unregistered servicemark "Cruisin'
Country" and logos using "Cruisin' Country" as depicted in Section 2(j) of the
Disclosure Schedule, are among the Retained Assets. Sellers, however, at Closing
will execute a licensing agreement, in a form reasonably satisfactory to the
Parties, under which the Buyers shall have the right to continue using the
"Cruisin' Country" servicemark and logos in connection with the operation and
promotion of the Stations, but will not be authorized to use those items of
Intellectual Property in connection with the operation or promotion of any other
broadcast station that the Buyers own now or in the future. The Sellers have
taken all necessary or desirable action to protect each item of Intellectual
Property that each Seller owns or uses. With respect to such Intellectual
Property:
(i) The Sellers have not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and the Sellers have never received any
charge, complaint, claim, or notice alleging any such interference,
infringement, misappropriation, or violation. To the Knowledge of the
Sellers, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Sellers.
(ii) Section 2(j) of the Disclosure Schedule identifies each patent,
trademark or copyright registration which has been issued to the Sellers
with respect to any of its Intellectual Property and the call letters
(current and past) of the Stations, identifies each pending patent,
trademark or copyright application for registration which the Sellers have
made with respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which the Sellers have granted to
any third party with respect to any of the Sellers' Intellectual Property
(together with any exceptions). The Sellers have delivered to the Buyers
correct and complete copies of all such patents, trademarks or copyright
registrations, applications, licenses, agreements, and permissions (as
amended to date) and have made available to the Buyers correct and
complete copies of all other written documentation evidencing ownership
and prosecution (if applicable) of each such item. With respect to each
item of Intellectual Property that the Sellers own:
(A) the Sellers possess all right, title, and interest in and
to the item and all registrations and applications are in full force
and effect;
-9-
(B) the item is not subject to any outstanding judgment,
order, decree, stipulation, injunction, or charge;
(C) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending or, to the Knowledge of
the Sellers, is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) the Sellers have not ever agreed to indemnify any person
or entity for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iii) Section 2(j) of the Disclosure Schedule also identifies each
item of Intellectual Property that any third party owns and that the
Sellers use pursuant to license, sublicense, agreement, or permission
including, but not limited to the call letters of the Stations. The
Sellers have supplied the Buyers with correct and complete copies of all
such licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each such item of used Intellectual Property:
(A) the license, sublicense, agreement, or permission covering
the item is, and following the Closing will continue to be on
identical terms, legal, valid, binding, enforceable, and in full
force and effect;
(B) no party to the license, sublicense, agreement, or
permission is in breach or default (or has repudiated any provision
thereof), and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(C) with respect to each sublicense, the representations and
warranties set forth in subsections (A) and (B) above are true and
correct with respect to the underlying license;
(D) the underlying item of Intellectual Property is not
subject to any outstanding judgment, order, decree, stipulation,
injunction, or charge;
(E) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending, or, to the Knowledge of
the Sellers, is threatened which challenges the legality, validity,
or enforceability of the underlying item of Intellectual Property;
(F) the Sellers have not agreed to indemnify any person or
entity for or against any interference, infringement,
misappropriation, or other conflict with respect to the underlying
item of Intellectual Property; and
-10-
(G) the Sellers have not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(iv) The Sellers have no Knowledge of any new products, inventions,
procedures, or methods of processing that any competitors or other third
parties have developed which reasonably could be expected to supersede or
make obsolete any product or process of the Sellers.
(k) Contracts. Section 2(k) of the Disclosure Schedule lists the following
contracts, agreements, and other written arrangements (other than Advertising
Contracts which are listed in Section 2(s) of the Disclosure Schedule) to which
the Sellers are a party:
(i) any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties
providing for lease payments in excess of $1,000 per year;
(ii) any written arrangement (or group of related written
arrangements) for the purchase or sale of supplies, products, or other
personal property or for the furnishing or receipt of services which
either calls for performance over a period of more than one year or
involves more than the sum of $1,000;
(iii) any written arrangement concerning a partnership or joint
venture;
(iv) any written arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or guaranteed
(or may create, incur, assume, or guarantee) indebtedness (including
capitalized lease obligations) involving more than $1,000 or under which
Sellers are imposed (or may impose) a Security Interest on any of Sellers'
assets, tangible or intangible;
(v) any written arrangement concerning confidentiality or
non-competition;
(vi) any written arrangement with any of its employees in the nature
of a collective bargaining agreement, consulting agreement, compensation
agreement, employment agreement, commission agreement, or severance
agreement;
(vii) any written arrangement under which the consequences of a
default or termination could have an adverse effect on the assets,
Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Sellers or the Stations;
(viii) any written arrangement concerning a guaranty by either
Seller of the obligations of any other party; or
-11-
(ix) any other written arrangement (or group of related written
arrangements) either involving more than $5,000 or not entered into in the
Ordinary Course of Business.
The Sellers have delivered to the Buyers a correct and complete copy of each
written arrangement listed in Section 2(k) of the Disclosure Schedule (as
amended to date). With respect to each written arrangement so listed which
constitutes an Assumed Contract: (A) the written arrangement is legal, valid,
binding, enforceable, and in full force and effect; (B) the written arrangement
will continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms following the Closing (if the arrangement has not
expired according to its terms); (C) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or acceleration, under the
written arrangement; and (D) no party has repudiated any provision of the
written arrangement. The Sellers are not a party to any verbal contract,
agreement, or other arrangement which, if reduced to written form, would be
required to be listed in Section 2(k) of the Disclosure Schedule under the terms
of this Section 2(k). Except for the Assumed Contracts, the Buyers shall not
have any Liability or obligations for or in respect of any of the contracts set
forth in Section 2(k) of the Disclosure Schedule or any other contracts or
agreements of the Sellers.
(l) Commission Licenses and Compliance with Commission Requirements.
(i) All licenses, permits, authorizations, franchises, certificates
of compliance, and consents of governmental bodies, including, without
limitation, the FCC Licenses, used or useful in the operation of the
Stations as they are now being operated are (A) in full force and effect,
(B) unimpaired by any acts or omissions of the Sellers or the Sellers'
employees or agents, (C) free and clear of any restrictions which might
limit the full operation of the Stations, and (D) detailed in Section 2(1)
of the Disclosure Schedule. With respect to the licenses, permits,
authorizations, franchises, certificates of compliance and consents
referenced in the preceding sentence, Section 2(1) of the Disclosure
Schedule also sets forth, without limitation, the date of the last
renewal, the expiration date thereof, and any conditions or contingencies
related thereto. Except as set forth in Section 2(1) of the Disclosure
Schedule, no condition exists or event has occurred that permits, or after
notice or lapse of time, or both, would permit, the revocation or
termination of any such license, permit, consent, franchise, or
authorization (other than pursuant to their express expiration date) or
the imposition of any material restriction or limitation upon the
operation of the Stations as now conducted. Except as set forth in Section
2(1) of the Disclosure Schedule, the Sellers are not aware of any reason
why the FCC licenses might not be renewed in the ordinary course or
revoked.
(ii) The Stations are each in compliance with the FCC's policy on
exposure to radio frequency radiation. No renewal of any FCC License would
constitute a
-12-
major environmental action under the FCC's rules or policies. Access to
the Stations' transmission facilities is restricted in accordance with the
policies of the FCC.
(iii) Except as set forth in Section 2(1) of the Disclosure
Schedule, to the Sellers' Knowledge, the Sellers are not the subject of
any FCC or other governmental investigation or any notice of violation or
order, or any material complaint, objection, petition to deny, or
opposition issued by or filed with the FCC or any other governmental
authority in connection with the operation of or authorization for the
Stations, and there are no proceedings (other than rule making proceedings
of general applicability) before the FCC or any other governmental
authority that could adversely affect any of the FCC Licenses or the
authorizations listed in Section 2(1) of the Disclosure Schedule.
(iv) The Sellers have filed with the FCC and all other governmental
authorities having jurisdiction over the Stations all material reports,
applications, documents, instruments, and other information required to be
filed, and will continue to make such filings through the Closing Date.
(v) The Sellers are not aware of any information concerning the
Stations that could cause the FCC or any other regulatory authority not to
issue to Licensing all regulatory certificates and approvals necessary for
the consummation of the transactions contemplated hereunder or the Buyers'
operation and/or ownership of the Stations. Except as set forth in Section
(l) of the Disclosure Schedule, to the Sellers' Knowledge as of the date
of this Agreement, there are no pending FCC applications which, if
approved, would allow for the operation of a new radio station with a
signal reaching the signal area of the Stations and there are not any
plans or proposals by existing radio Stations with a signal reaching the
signal area of the Stations to alter or change their format to a format
similar to that of the Stations.
(m) Insurance. Section 2(m) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which the Sellers are a party, a named insured,
or otherwise the beneficiary of coverage:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage was
on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
-13-
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, and enforceable and in full force and effect; and (B) the policy will
continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms through the Closing Date.
(n) Litigation. Section 2(n) of the Disclosure Schedule sets forth each
instance in which either Seller: (i) is subject to any unsatisfied judgment,
order, decree, stipulation, injunction, or charge; or (ii) is a party or, to the
Knowledge of the Sellers, is threatened to be made a party to any charge,
complaint, action, suit, proceeding, hearing, or investigation of or in any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. None of the charges,
complaints, actions, suits, proceedings, hearings, and investigations set forth
in Section 2(n) of the Disclosure Schedule could result in any adverse change in
the assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Sellers or the Stations taken as a whole.
The Sellers have no reason to believe that any such charge, complaint, action,
suit, proceeding, hearing, or investigation may be brought or threatened against
the Sellers.
(o) Employees. Section 2(o) of the Disclosure Schedule sets forth a
listing of the names, positions, job descriptions, salary or wage rates and all
other forms of compensation paid for work at the Stations of each employee of
the Sellers. Section 2(o) of the Disclosure Schedule also sets forth a list of
all employee handbooks and/or manuals relating to the employees of the Sellers,
true and correct copies of which have been delivered to the Buyers. To the
Knowledge of the Sellers, except as set forth in Section 2(o) of the Disclosure
Schedule, no key employee or group of employees has any plans to terminate
employment with the Sellers. The Sellers are not a party to or bound by any
understanding (whether written or oral), agreement or contract with any union,
labor organization, employee group or other entity or individual which affects
the employment of employees of the Sellers including, but not limited to any
collective bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes. The
Sellers have no Knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of any
of the Sellers. The Sellers have not been subject to a strike, slow down or
other work stoppage during the five (5) year period immediately preceding the
date hereof and, to the Sellers' Knowledge, there are no strikes, slow downs or
work stoppages threatened against the Sellers. To the Sellers' Knowledge, it has
not committed any unfair labor practice. There is no basis for any claim by any
past or present employee of the Sellers that such employee was subject to
wrongful discharge or any employment discrimination by the Sellers or the
Sellers' management arising out of or relating to the employee's race, sex, age,
religion, national origin, ethnicity, handicap or any other protected
characteristic under applicable law. No proceedings are pending before any
court, governmental agency or instrumentality or
-14-
arbitrator relating to labor matters, and there is no pending investigation by
any governmental agency or, to the Knowledge of the Sellers, threatened claim by
any such agency or other person relating to labor or employment matters.
(p) Employee Benefits. Section 2(p) of the Disclosure Schedule lists all
Employee Benefit Plans that the Sellers maintain or to which the Sellers
contribute or are required to contribute for the benefit of any current or
former employee of the Sellers and true and correct copies of each such Employee
Benefit Plan have been delivered to the Buyers. Each Employee Benefit Plan (and
each related trust or insurance contract) complies and at all times has complied
in form and in operation in all respects with the applicable requirements of
ERISA and the Code. The Sellers do not have any commitment to create any
additional Employee Benefit Plan or modify or change any existing Employee
Benefit Plan that would affect any employee or terminated employee of the
Sellers. There are no pending or, to the Knowledge of the Sellers, threatened
claims under, by or on behalf of any of the Employee Benefit Plans, by any
employee or beneficiary covered by any such Employee Benefit Plan, or otherwise
involving any such Employee Benefit Plan (other than routine claims for
benefits), nor have there been any Reportable Events or Prohibited Transactions
with respect to any Employee Benefit Plan.
(q) Environment, Health, and Safety.
(i) With respect to the operation of the Stations and the Real
Estate, the Sellers are, and at all times in the past have been, in
compliance in all material respects with all Environmental Laws and all
laws (including rules and regulations thereunder) of federal, state, and
local governments (and all agencies thereof) concerning employee health
and safety, and no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice has ever been filed or commenced
or, to the Sellers' Knowledge, is threatened, against the Sellers alleging
any failure to comply with any such Environmental Law or laws concerning
employee health and safety.
(ii) With respect to the operation of the Stations and the Real
Estate, the Sellers have no Liability (and to Sellers' Knowledge there is
no Basis related to the past or present operations of the Sellers or the
Sellers' predecessors for any present or future charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand against the
Sellers giving rise to any Liability) under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Resource Conservation and Recovery Act of 1976, the Federal Water
Pollution Control Act of 1972, the Clean Air Act of 1970, the Safe
Drinking Water Act of 1974, the Toxic Substances Control Act of 1976, the
Refuse Act of 1899, or the Emergency Planning and Community Right-to-Know
Act of 1986 (each as amended), or any other law of any federal, state,
local, or foreign government or agency thereof (including rules,
regulations, codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety,
or pollution or protection
-15-
of the environment, including, without limitation, laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous or toxic materials or
wastes into ambient air, surface water, ground water, or lands or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or
wastes ("Environmental Laws");
(iii) The Sellers have no Liability (and to Sellers' Knowledge there
is no Basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against the Sellers
giving rise to any Liability) under the Occupational Safety and Health
Act, as amended, or any other law (or rule or regulation thereunder) of
any federal, state, local, or foreign government (or agency thereof)
concerning employee health and safety, or for any illness of or personal
injury to any employee.
(iv) The Sellers have obtained and at all times has been in
compliance in all material respects with all of the terms and conditions
of all permits, licenses, and other authorizations which are required
under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules,
and timetables which are contained in, all Environmental Laws or law of
any federal, state, or local or foreign government relating to worker
health and safety.
(v) All properties and equipment used in the business of the Sellers
are, and to the Sellers' Knowledge have been free of PCBs and, to the
Sellers' Knowledge, free of asbestos, methylene chloride,
trichloroethylene, 1, 2-trans-dichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances.
(vi) To the Sellers' Knowledge no pollutant, contaminant, or
chemical, industrial, hazardous, or toxic material or waste ever has been
buried, stored, spilled, leaked, discharged, emitted, or released on any
of the Real Estate.
(vii) To the Sellers' Knowledge, none of the Acquired Assets are
required to be upgraded, modified or replaced to be in compliance with
Environmental Laws.
(viii) Section 2(q) of the Disclosure Schedule contains a copy of
all environmental claims, reports, studies, compliance actions or the like
of the Sellers or which are available to the Sellers with respect to any
of the Real Estate or any of the Acquired Assets.
(ix) To the Sellers' Knowledge, no above ground or underground
storage tanks (other than septic tanks) have ever been located at, on or
under the Real Estate.
-16-
None of the Real Estate is contaminated by hazardous or toxic substances
or waste, as defined under Environmental Laws, originating from off-site
sources.
(r) Legal Compliance.
(i) The Sellers have complied in all material respects with all laws
(including rules and regulations thereunder) of federal, state, local and
foreign governments (and all agencies thereof, and no charge, complaint,
action, suit, proceeding, hearing, investigation, claim, demand, or notice
has been filed or commenced or, to the Sellers' Knowledge, is threatened,
against the Sellers alleging any failure to comply with any such law or
regulation, including those relating to the employment of labor, employee
civil rights, and equal employment opportunities and relating to antitrust
matters.
(ii) The Sellers have filed all reports, documents, and other
materials it was required to file (and the information contained therein
was correct and complete in all material respects) under all applicable
laws (including rules and regulations thereunder) of federal state, local
and foreign governments (and all agencies thereof). To the Sellers'
Knowledge, the Sellers have possession of all records and documents it was
required to retain under all applicable laws (including rules and
regulations thereunder).
(s) Advertising Contracts. Section 2(s) of the Disclosure Schedule lists
all arrangements for the sale of air time or advertising on the Stations
("Advertising Contracts") in excess of $1000, and the amount to be paid to the
Sellers therefor.
(t) Brokers' Fees. Other than the fee payable to The Xxxxxxx Agency, which
shall be the exclusive responsibility of Sellers, the Sellers have no Liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
(u) Undisclosed Commitments or Liabilities. There are no commitments,
liabilities or obligations relating to any of the Stations, whether accrued,
absolute, contingent or otherwise including, without limitation, guaranties by
the Sellers of the liabilities of third parties, for which specific and adequate
provisions have not been made on the Financial Statements except those incurred
in or as a result of the Ordinary Course of Business since June 30, 1997 (none
of which Ordinary Course of Business obligations have had or will have a
material adverse effect on any Stations).
(v) Disclosure. The representations and warranties contained in this
Section 2 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 2 not materially misleading.
-17-
3. Representations and Warranties of the Buyer. Buyers represent and
warrant to the Sellers that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization of the Buyers. Broadcasting and Licensing are
corporations duly organized, validly existing, and in good standing under the
laws of Nevada.
(b) Authorization of Transaction. The Buyers have full power and authority
to execute and deliver this Agreement and the Ancillary Agreements and to
perform their obligations hereunder and thereunder. This Agreement and the
Ancillary Agreements constitute the valid and legally binding obligation of the
Buyers, enforceable against the Buyers in accordance with their respective terms
and conditions.
(c) Non-contravention. Neither the execution and the delivery of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in Section 1(e) above), will (i) violate any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge, or other
restriction of any government, governmental agency, or court to which the Buyers
are subject or any provision of their articles of organization or other charter
documents, or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice or third party
consent under any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest, or other arrangement to which the Buyers are a
party or by which they are bound or to which any of their assets is subject.
Other than the Assignment Application described in Section 4(b), the Buyers do
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any court or government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement or the Ancillary Agreements (including the assignments and
assumptions referred to in Section 1(e) above).
(d) Brokers' Fees. The Buyers have no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
4. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing:
(a) General. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary, proper, or advisable to
consummate and make effective the
-18-
transactions contemplated by this Agreement (including satisfying the closing
conditions set forth in Section 5 below).
(b) Assignment Applications. Within ten (10) business days after the
execution of this Agreement, the Sellers and the Buyers shall jointly file with
the FCC an application for assignment of the FCC Licenses, permits and
authorizations pertaining to the Stations from the Sellers to Licensing (the
"Assignment Application"). The costs of the FCC filing fees in connection with
the Assignment Application shall be divided equally between the Parties. Each
Party shall pay its own attorneys' fees. The Sellers and the Buyers shall
thereafter prosecute the Assignment Application with all reasonable diligence
and otherwise use the commercially reasonable efforts to obtain the grant of the
Assignment Application as expeditiously as practicable (but neither the Sellers
nor the Buyers shall have any obligation to satisfy complainants or the FCC by
taking any steps which would have material adverse effect upon the Stations or
upon any Affiliate or impose significant costs on such Party). If the FCC
imposes any condition on either Party to the Assignment Application, such Party
shall use commercially reasonable efforts to comply with such condition,
provided, that neither Party shall be required hereunder to comply with any
condition that would have a material adverse effect upon the Stations or any
Affiliate. The Sellers and the Buyers shall jointly oppose any requests for
reconsideration or judicial review of FCC approval of the Assignment Application
and shall jointly request from the FCC extension of the effective period of FCC
approval of the Assignment Application if the Closing shall not have occurred
prior to the expiration of the original effective period of the FCC Consent.
Nothing in this Section 4(b) shall be construed to limit either party's right to
terminate this Agreement pursuant to Section 9 of this Agreement.
(c) Employment Offers. Upon notice to the Sellers, and at mutually
agreeable times, the Sellers will permit the Buyers to meet with its employees
prior to the Closing Date. Not earlier than one (1) week prior to the Closing,
the Buyers may, at their option, extend offers of employment to all or any of
the Sellers' employees effective on the Closing Date. From and after the
execution of this Agreement, the Sellers shall use their best efforts to assist
Buyers in retaining those employees of the Stations that the Buyers wish to hire
in connection with the operation of the Stations by the Buyers subsequent to the
Closing, and the Sellers will not take any action to preclude or discourage any
of the Sellers' employees from accepting any offer of employment extended by the
Buyers.
(d) Notices and Consents. The Sellers will give all notices to third
parties and shall have obtained all third party consents that the Buyers
reasonably may request in connection with the matters pertaining to the Sellers
disclosed or required to be disclosed in the Disclosure Schedule (including,
without limitation, consents to assignment of the Leases and other Assumed
Contracts). Each of the Parties will take any additional action that may be
necessary, proper, or advisable in connection with any other notices to, filings
with, and authorizations, consents, and approvals of governments, governmental
agencies, and third parties that it may be required to give, make, or obtain.
-19-
(e) Operation of Business. The Sellers will not engage in any practice,
take any action, embark on any course of inaction, or enter into any transaction
outside the Ordinary Course of Business. Without limiting the generality of the
foregoing, the Sellers will not engage in any practice, take any action, embark
on any course of inaction, or enter into any transaction of the sort described
in Section 2(f) above.
(f) Advertising Obligations. The Sellers shall satisfy the Sellers' air
time obligations under the Sellers' agreements for sale of air time and
advertising on the Stations for goods or services ("Barter Agreements") such
that the outstanding aggregate balance owing under all Barter Agreements as of
the Closing Date shall not exceed Five Thousand Dollars ($5,000.00) worth of air
time without the Buyers' consent. On the Closing Date, the Sellers shall deliver
to the Buyers a schedule, certified by an officer of the Sellers, reflecting the
aggregate outstanding balances under all Barter Agreements in existence as of
the Closing Date.
(g) Operating Statements. The Sellers shall deliver to the Buyers, for the
Buyers' informational purposes only, monthly unaudited statements of operating
revenues and operating expenses of the Stations within ten (10) days after each
such statement is prepared by or for the Sellers.
(h) Contracts. The Sellers will not without the prior written consent of
the Buyers amend, change, or modify any of the contracts listed on Section 2(k)
of the Disclosure Schedule in any material respect. The Sellers will not without
prior written consent of the Buyers enter into any new contracts respecting the
Stations or their properties, except (i) contracts for the sale of time on the
Stations for cash, goods or services which are entered into in the Ordinary
Course of Business and comply with Sections 4(f) and 4(j) hereof, (ii) contracts
entered into in the Ordinary Course of Business which are cancelable on not more
than thirty-one (31) days' notice without penalty or premium, and (iii)
contracts entered into in the Ordinary Course of Business each of which does not
involve more than Five Thousand Dollars ($5,000) or all of which do not involve
more than Ten Thousand Dollars ($10,000) in the aggregate.
(i) Operation of Stations. The Sellers shall operate the Stations in
compliance with the FCC Licenses and the rules and regulations of the FCC, and
the FCC Licenses shall at all times remain in full force and effect. The Sellers
shall file with the FCC all material reports, applications, documents,
instruments and other information required to be filed in connection with the
operation of the Stations.
(j) Credit and Receivables. The Sellers will follow Sellers' usual and
customary policies with respect to extending credit for sales of air time and
advertising on the Stations and with respect to collecting accounts receivable
arising from such extension of credit.
(k) Preservation of Business. The Sellers will keep Sellers' business and
properties substantially intact, including its present operations, physical
facilities, working conditions,
-20-
relationships with lessors, licensors, advertisers, suppliers, customers, and
employees, all of the Confidential Information, call letters and trade secrets
of the Stations, and the FCC Licenses.
(l) Full Access and Consultation. The Sellers will permit representatives
of the Buyers to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Stations, to all
premises, properties, books, records, contracts, Tax records, and documents of
or pertaining to the Sellers for the purpose of permitting the Buyers to, among
other things: (a) conduct the Buyers' due diligence review, (b) review financial
statements of the Sellers, (c) verify the accuracy of representations and
warranties of the Sellers contained in this Agreement, and (d) prepare for the
consummation of the transactions contemplated by this Agreement. The Sellers
will consult with the Buyers' management with a view to informing Buyer's
management as to the operations, management and business of the Stations.
Without limiting the foregoing, Sellers acknowledge and agree that Sellers will
provide the Buyers and their representatives with such access to the properties,
books, records, documents and operations of the Sellers as contemplated herein
in a manner which will permit the Buyers to fully complete their due diligence
review within the twenty (20) day period referenced in Section 5(a)(ix) below.
(m) Notice of Developments. The Sellers will give prompt written notice to
the Buyers of any material development affecting the assets, Liabilities,
business, financial condition, operations, results of operations, or future
prospects of the Sellers or the Stations. Each Party will give prompt written
notice to the other of any material development affecting the ability of the
Parties to consummate the transactions contemplated by this Agreement. No
disclosure by any Party pursuant to this Section 4(m), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(n) Exclusivity. The Sellers will not (i) solicit, initiate, or encourage
the submission of any proposal or offer from any person relating to any (A)
liquidation, dissolution, or recapitalization, (B) merger or consolidation, (C)
acquisition or purchase of securities or assets, or (D) similar transaction or
business combination involving the Sellers; or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any person to do or seek any of the foregoing. The Sellers will
notify the Buyers immediately if any person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
(o) Title Insurance, Surveys and Environmental Assessments. The Sellers
will obtain (i) with respect to the parcel of Real Estate used as the WXJY-FM
transmitter site ("WXJY Site"), a leasehold owner's policy issued by a title
insurer reasonably satisfactory to the Buyers, in an amount equal to the fair
market value of such Real Estate (including all Seller-owned improvements
located thereon), insuring over the standard pre-printed exceptions and insuring
leasehold title to such Real Estate in the Buyers as of the Closing subject only
to
-21-
the Permitted Real Estate Encumbrances, together with such endorsements for
zoning, contiguity, public access and extended coverage as the Buyers or their
lender reasonably requests, (ii) with respect to each parcel of Owned Real
Estate, an owner's policy of title insurance by a title insurer reasonably
satisfactory to the Buyers, in an amount equal to the fair market value of such
Real Estate (including all improvements located thereon), insuring over the
standard pre-printed exceptions and insuring title to the Owned Real Estate to
be vested in the Buyers as of the Closing free and clear of all liens and
encumbrances except Permitted Real Estate Encumbrances, together with such
endorsements for zoning, contiguity, public access and extended coverage as the
Buyers or the Buyers' lender reasonably requests, and (iii) a current survey of
each parcel of the WXJY Site and Owned Real Estate certified to the Buyers and
the Buyers' lender, prepared by a licensed surveyor and conforming to current
ALTA Minimum Detail Requirements for Land Title Surveys, disclosing the location
of all improvements, easements, party walls, sidewalks, roadways, utility lines,
and other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Surveys") which shall not
disclose any survey defect or encroachment from or onto any of the WXJY Site or
Owned Real Estate which has not been cured or insured over prior to the Closing;
and (iv) with respect to the WXJY site, a current Phase I environmental site
assessment from an environmental consultant or engineer reasonably satisfactory
to the Buyers which does not indicate that the Sellers and the Real Estate are
not in compliance with any Environmental Law and which shall not disclose or
recommend any action with respect to any condition to be remediated or
investigated or any contamination on the site assessed. The Buyers and the
Sellers will each pay one-half (1/2) of the costs of these title policies,
Surveys and environmental assessments. The Sellers have delivered to the Buyers
a Phase I Environmental Site Assessment prepared by Southeastern Environmental,
Inc. and dated December 9, 1996, pertaining to both parcels of Owned Real
Estate. The Sellers have taken no action and, to Sellers' Knowledge, no
circumstance or event has arisen that would render that Phase I Environmental
Site Assessment no longer accurate.
(p) Control of Stations. The transactions contemplated by this Agreement
shall not be consummated until after the FCC has given its consent and approval
to the Assignment Application. Between the date of this Agreement and the
Closing Date, the Buyers and their employees or agents shall not directly or
indirectly control, supervise, or direct, or attempt to control, supervise, or
direct, the operation of the Stations, and such operation shall be the sole
responsibility of and in the control of the Sellers.
(q) Risk of Loss. The risk of loss, damage, or destruction to any of the
Acquired Assets shall remain with the Sellers until the Closing. In the event of
any such loss, damage, or destruction, the Sellers will promptly notify the
Buyers of all particulars thereof, stating the cause thereof (if known) and the
extent to which the cost of restoration, replacement and repair of the Acquired
Assets lost, damaged or destroyed will be reimbursed under any insurance policy
with respect thereto. The Sellers will, at Sellers' expense, repair or replace
such Acquired Assets to their former condition as soon as possible after loss,
damage or destruction thereof and shall use the Sellers' best efforts to restore
as promptly as possible
-22-
transmissions as authorized in the FCC Licenses. The Closing Date shall be
extended (with FCC consent, if necessary) for up to sixty (60) days to permit
such repair or replacement. If repair or replacement cannot be accomplished
within sixty (60) days of the date of the Sellers' notice to the Buyers, and the
Buyers determine that the Sellers' failure to repair or replace, alone or in the
aggregate with any other then existing factors, would have a material adverse
effect on the operation of the Stations:
(i) the Buyers may elect to terminate this Agreement; or
(ii) the Buyers may postpone the Closing Date until such time as the
property has been repaired, replaced or restored in a manner and to an
extent reasonably satisfactory to the Buyers, unless the same cannot be
reasonably effected within ninety (90) days of the date of the Sellers'
notice to the Buyers, in which case either Party may terminate this
Agreement; or
(iii) the Buyers may choose to accept the Acquired Asset in their
"then" condition, together with the Sellers' assignment to the Buyers of
all rights under any insurance claims covering the loss, damage or
destruction and payment over to the Buyers of any proceeds under any such
insurance policies, previously received by the Sellers with respect
thereto plus an amount equal to the amount of any deductible or
self-insurance maintained by the Sellers on such Acquired Assets.
In the event the Closing Date is postponed pursuant to this Section 4(q),
the parties hereto will cooperate to extend the time during which this Agreement
must be closed as specified in the consent of the FCC.
5. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyers. The obligation of the Buyers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 2 above
shall be true and correct in all respects at and as of the Closing Date as
though made on and as of the Closing Date;
(ii) the Sellers shall have performed and complied with all of the
Sellers' covenants hereunder in all respects through the Closing;
(iii) the Sellers shall have procured all of the third party
consents specified in Section 4(d) above, including but not limited to
those relating to transmitter and studio leases, and all of the title
insurance commitments (and endorsements), Surveys and environmental site
assessments described in Section 4(o) above;
-23-
(iv) no action, suit, investigation, inquiry or other proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or impose damages or penalties
upon any of the parties if such transactions are consummated, (B) cause
any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely the right of the Buyers to
own, operate, or control the Acquired Assets (and no such judgment, order,
decree, stipulation, injunction, or charge shall be in effect);
(v) the Sellers shall have delivered to the Buyers a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified above in Sections 5(a)(i)
through (iv) is satisfied in all respects and the statements contained in
such certificate shall be deemed a warranty of the Sellers which shall
survive the Closing;
(vi) each of the Assignment Applications shall have been approved by
a Final Order of the FCC and the Buyers shall have received all
governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vii) the relevant parties shall have entered into the Postclosing
Agreement;
(viii) the Buyers shall have received from counsel to the Sellers an
opinion with respect to the matters set forth in Exhibit F attached
hereto, addressed to the Buyers and the Buyers' lender and dated as of the
Closing Date;
(ix) The Buyers shall, within twenty (20) days after the date
hereof, be satisfied as to the results of their examination and due
diligence review referred to in Section 4(l) hereof. If, within twenty
(20) days after the date hereof, Buyers do not deliver to sellers a
written notice terminating this Agreement in regard to the contingency
described in this Section 5(a)(ix), then the contingency set forth in this
Section 5(a)(ix) shall be deemed waived by Buyers; and
(x) all actions to be taken by the Sellers in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyers.
In the event that any of the foregoing conditions to Closing shall not have been
satisfied, as of the Closing Date, the Buyers shall provide written notice to
the Sellers of the specific condition(s) that have not been satisfied and the
Closing shall be postponed until they are
-24-
satisfied, provided, however, that if the conditions so specified are not
satisfied within ten (10) days after Buyers' notice is received, Buyers may
elect to (A) terminate this Agreement without liability to the Sellers, or (B)
consummate the transactions contemplated herein despite such failure. If the
Buyers elect to consummate the transactions described herein, not withstanding
breach of any provision of this Agreement by the Sellers (including, without
limitation, any breach arising as a result of the failure of the Sellers to
execute and/or deliver any item described in this Section 5(a)), the Buyers may
seek appropriate remedies for any and all damages, costs and expenses incurred
by the Buyers by reason of such breach including, without limitation,
indemnification pursuant to Section 7(b), below.
(b) Conditions to Obligation of the Sellers. The obligation of the Sellers
to consummate the transactions to be performed by the Sellers in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3 above
shall be true and correct in all respects at and as of the Closing Date as
though made on and as of the Closing Date;
(ii) the Buyers shall have performed and complied with all of their
covenants hereunder in all respects through the Closing;
(iii) no action, suit, investigation, inquiry or other proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or impose damages or penalties
upon any of the Parties if such transactions are consummated, or (B) cause
any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
(iv) the Buyers shall have delivered to the Sellers a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified above in Section
5(b)(i)-(iii) is satisfied in all respects and the statements contained in
such certificate shall be deemed a warranty of the Buyers which shall
survive the Closing;
(v) each of the Assignment Applications shall have been approved by
a Final Order of the FCC and the Buyers shall have received all
governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vi) the relevant parties shall have entered into the Postclosing
Agreement; and
-25-
(vii) all actions to be taken by the Buyers in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Sellers.
In the event that any of the foregoing conditions to the Closing shall not have
been satisfied, as of the Closing Date the Sellers shall provide written notice
to the Buyers of the specific condition(s) that have not been satisfied and the
Closing shall be postponed until they are satisfied, provided, however, that if
the conditions so specified are not satisfied within ten (10) days after
Sellers' notice is received, the Sellers may elect to (A) terminate this
Agreement without liability to the Buyers, or (B) consummate the transactions
contemplated herein despite such failure. If the Sellers elect to consummate the
transactions described herein, not withstanding a breach of any provision of
this Agreement by the Buyers (including, without limitation, any breach arising
as a result of the failure of the Buyers to execute and/or deliver any item
described in this Section 5(a)), the Sellers may seek appropriate remedies for
any and all damages, costs and expenses incurred by the Sellers by reason of
such breach including, without limitation, indemnification pursuant to Section
7(c), below.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 7 below).
(b) Litigation Support. In the event and for so long as any Party actively
is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Stations, each of the other Parties will reasonably cooperate with
the contesting or defending Party and its counsel in the contest or defense,
make available his or its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 7 below); provided, however, that such access and
cooperation does not unreasonably disrupt the normal operations of the
cooperating Party.
-26-
(c) Adjustments. Operation of the Stations and the income and expenses
attributable thereto up through the close of business on the day before the
Closing Date shall be for the account of the Sellers and thereafter for the
account of the Buyers. Such items as employee salaries, vacation, sick day and
personal time accruals, and fringe benefits, power and utilities charges,
insurance, real and personal property taxes, prepaid expenses, deposits, music
license fees, and rents and payments pertaining to the Assumed Contracts
(including any contracts for the sale of time for Cash, trade or barter so
assigned) shall be prorated between the Sellers and the Buyers as of the Closing
Date in accordance with the foregoing principle. In addition, all commissions
payable with respect to the accounts receivable of the Sellers (whether due
before or after the Closing) shall be solely for the account and responsibility
of the Sellers. Contractual arrangements that do not reflect an equal rate of
compensation to a Stations over the term of the agreement shall be equitably
adjusted as of the Closing Date. The prorations and adjustments hereunder shall
be made and paid insofar as feasible on the Closing Date, with a final
settlement sixty (60) days after the Closing Date. In the event of any disputes
between the Parties as to such adjustments, the amounts not in dispute shall
nonetheless be paid at such time and such disputes shall be determined by an
independent accounting firm mutually acceptable to both parties and the fees and
expenses of such accounting firm shall be paid one-half (1/2) by the Sellers and
one-half (1/2) by the Buyer.
(d) Collection of Accounts Receivable. At the Closing, the Sellers will
turn over to the Buyers, for collection only, the accounts receivable of the
Stations owing to the Sellers as of the close of business on the Closing Date. A
schedule of such accounts receivable will be delivered by the Sellers to the
Buyers on the Closing Date or as soon thereafter as possible. The Buyers agree
to use commercially reasonable efforts in the ordinary course of business (but
without responsibility to institute legal or collection proceedings) to collect
such accounts receivable during the 120-day period following the Closing Date,
and will remit all payments received on such accounts during each calendar month
during this 120-day period on the one hundred twentieth (120th) day together
with an accounting of all payments received within such period. The Buyers shall
have the sole right to collect such accounts receivable during such one hundred
twenty (120) day period. In the event the Buyers receive moneys during the
120-day period following the Closing Date from an advertiser who, after the
Closing Date, is advertising over any of the Stations, and that advertiser was
included among the accounts receivable as of the Closing Date, the Buyers shall
apply said moneys to the oldest outstanding balance due on the particular
account, except in the case of a "disputed" account receivable. For purposes of
this Section 6(d), a "disputed" account receivable means one which the account
debtor refuses to pay because he asserts that the money is not owed or the
amount is incorrect. In the case of such a disputed account, the Buyers shall
immediately return the account to the Sellers prior to expiration of the 120-day
period following the Closing Date. If the Buyers return a disputed account to
the Sellers, the Buyers shall have no further responsibility for its collection
and may accept payment from the account debtor for advertising carried on any of
the Stations after the Closing Date. At the end of the 120-day period following
the Closing Date, the Buyers will turn back to the Sellers all of the accounts
receivable of the Stations as of the
-27-
Closing Date owing to the Sellers which have not yet been collected, and the
Buyers will thereafter have no further responsibility with respect to the
collection of such receivables. During the 120-day period following the Closing
Date, the Buyers shall afford the Sellers reasonable access to the accounts
receivable "aging list." The Sellers acknowledge and agree that the Buyers are
acting as the Sellers' collection agent hereunder for the sole benefit of the
Sellers and that Buyers have accepted such responsibility for the accommodation
of the Sellers. The Buyers shall not have any duty to inquire as to the form,
manner of execution or validity of any item, document, instrument or notice
deposited, received or delivered in connection with such collection efforts, nor
shall the Buyers have any duty to inquire as to the identity, authority or
rights of the persons who executed the same. The Sellers shall indemnify Buyers
and hold them harmless from and against any judgments, expenses (including
attorney's fees) costs or liabilities which the Buyers may incur or sustain as a
result of or by reason of such collection efforts.
(e) Severance Obligations. In the event an offer of employment is extended
by the Buyers to and accepted by an employee of the Sellers pursuant to Section
4(c) and such subsequent employment by the Buyers is terminated within sixty
(60) days from the Closing Date, the Sellers shall be responsible for, and shall
pay to such accepting employee, all severance benefits (if any, pursuant to the
Sellers' practices as in effect on the Closing Date) that may be due and owing
such employee by reason of his or her employment with either the Sellers or the
Buyers
(f) Consents. In the event any of the Assumed Contracts are not assignable
or any consent to such assignment is not obtained on or prior to the Closing
Date, and the Buyers elect to consummate the transactions contemplated herein
despite such failure or inability to obtain such consent, the Sellers shall
continue to use commercially reasonable efforts to obtain any such assignment or
consent after the Closing Date. Until such time as such assignment or approval
has been obtained, the Sellers will cooperate with Buyers in any lawful and
economically feasible arrangement to provide that the Buyers shall receive the
Sellers' interest in the benefits under any such Assumed Contract, including
performance by the Sellers as agent, if economically feasible; provided,
however, that the Buyers shall undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefit to the extent that Buyers would
have been responsible therefor if such consent or assignment had been obtained.
7. Remedies for Breaches of this Agreement.
(a) Survival. All of the representations and warranties of the Sellers
contained in Section 2 of this Agreement (other than the representations and
warranties of the Sellers contained in Sections 2(a), 2(b), 2(c), 2(d), 2(g),
[2(r)] and 2(t) hereof or relating to the Sellers' title to the Acquired Assets)
shall survive the Closing and continue in full force and effect for a period
until ninety (90) days after the applicable statute of limitations has expired
with respect to any claim by the Buyers based on a claim or action by a third
party and for a period of eighteen (18) months following Closing with respect to
any claim by the Buyers
-28-
not based on a claim or action by a third party. All of the other
representations and warranties (including the representations and warranties of
the Sellers contained in Sections 2(a), 2(b), 2(c), 2(d), 2(g), [2(r)] and 2(t)
hereof or relating to the Sellers' title to the Acquired Assets) and all
covenants of the Buyers and the Sellers contained in this Agreement shall
survive the Closing and continue in full force and effect forever thereafter.
(b) Indemnification Provisions for the Benefit of the Buyers.
Except as described below in Section 7(e) with respect to a breach of a
warranty or covenant prior to the Closing Date, the Sellers agree to indemnify
the Buyers from and against the entirety of any Adverse Consequences the Buyers
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by:
(i) any misrepresentation or breach of any of the Sellers'
representations or warranties, and covenants contained in this Agreement
or in any Ancillary Agreement executed and/or delivered by the Sellers (so
long as the Buyers make a written claim for indemnification within the
applicable survival period);
(ii) any breach or nonfulfillment of any agreement or covenant of
the Sellers contained herein or in any Ancillary Agreement;
(iii) any Liability of the Sellers which is not an Assumed
Liability; and/or
(iv) any Liability of the Buyers arising by operation of law
(including under any bulk transfer law of any jurisdiction or under any
common law doctrine of defacto merger or successor liability) which is not
an Assumed Liability.
(c) Indemnification Provisions for the Benefit of the Sellers. Except as
described below in Section 7(e) with respect to a breach of a warranty or
covenant prior to the Closing Date, Broadcasting agrees to indemnify the Sellers
from and against the entirety of any Adverse Consequences the Sellers may suffer
resulting from, arising out of, relating to, in the nature of, or caused by (i)
any misrepresentation or breach of any of the Buyers' representations or
warranties contained in this Agreement or in any Ancillary Agreement executed
and/or delivered by the Buyers (so long as the Sellers make a written claim for
indemnification within the applicable survival period) or (ii) any breach or
nonfulfillment of any agreement or covenant of the Buyers contained herein or in
any Ancillary Agreement, or (iii) any Assumed Liability.
(d) Specific Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action
-29-
instituted in federal court in South Carolina, in addition to any other remedy
to which it may be entitled, at law or in equity. Each of the Parties
acknowledges and agrees that not withstanding the provision in Section 7(e) with
respect to the remedy of liquidated damages upon a breach of a warranty or
covenant of this Agreement prior to the Closing, money damages would not be an
adequate remedy for a breach of any provision of this Agreement.
(e) Liquidated Damages. The Buyers and the Sellers acknowledge that in the
event that the transactions contemplated by this Agreement are not closed
because of a default by either Party, the Adverse Consequences as a result of
such default may be difficult, if not impossible, to ascertain. Accordingly, in
lieu of indemnification pursuant to Section 7(b) or 7(c), the non-defaulting
Party shall be entitled to receive from the defaulting Party for such default
the sum of Two Hundred Thirty Thousand Dollars ($230,000.00) as liquidated
damages without the need for proof of damages, subject only to successfully
proving in a court of competent jurisdiction that the other Party has materially
breached this Agreement and that the transactions contemplated thereby have not
occurred; provided however, that the Buyers shall retain the option to receive,
pursuant to Section 7(d), and in lieu of receiving the liquidated damages
provided in this Section 7(e), the remedy of specific performance with respect
to a breach of this Agreement prior to the Closing. The Buyers and the Sellers
agree to pay said sum of liquidated damages within ten (10) days of the date
that the non-defaulting party obtains such a judgment, and agree that in the
event this Agreement is terminated by the Sellers prior to the Closing Date as a
result of a breach or default by the Buyers under this Agreement, the Sellers
shall proceed against the Xxxxxxx Money as partial satisfaction of liquidated
damages owed by Buyers.
(f) Matters Involving Third Parties. If any third party shall notify any
Party (the "Indemnified Party") with respect to any matter which may give rise
to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Section 7, then the Indemnified Party shall notify the
Indemnifying Party thereof promptly; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any liability or obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is damaged as a result
of such failure. In the event any Indemnifying Party notifies the Indemnified
Party within fifteen (15) days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense thereof, (i) the
Indemnifying Party will defend the Indemnified Party against the matter with
counsel of its choice reasonably satisfactory to the Indemnified Party, (ii) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
(except that the Indemnifying Party will be responsible for the fees and
expenses of the separate co-counsel to the extent the Indemnified Party
reasonably concludes that the counsel the Indemnifying Party has selected has a
conflict of interest), (iii) the Indemnified Party will not consent to the entry
of any judgment or enter into any settlement with respect to the matter without
the written consent of the Indemnifying Party (not to be withheld unreasonably),
and (iv) the Indemnifying Party will not consent to the entry of any judgment
with respect to the matter, or enter into any settlement which does not include
a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all
-30-
Liability with respect thereto, without the written consent of the Indemnified
Party (not to be withheld unreasonably). In the event the Indemnifying Party
does not notify the Indemnified Party within fifteen (15) days after the
Indemnified Party has given notice of the matter that the Indemnifying Party is
assuming the defense thereof, however, and/or in the event the Indemnifying
Party shall fail to defend such claim actively and in good faith, then the
Indemnified Party may defend against, or enter into any settlement with respect
to, the matter in any manner it reasonably may deem appropriate.
8. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of
the assets of the Sellers, other than Retained Assets, that are used or useful
in the operation of the Stations, wherever located, including but not limited to
all of its (a) Real Property, leaseholds and other interests of any kind
therein, improvements, fixtures, and fittings thereon (such as towers and
antennae), and easements, rights-of-way, and other appurtenances thereto; (b)
tangible personal property (such as fixed assets, computers, data processing
equipment, electrical devices, monitoring equipment, test equipment, switching,
terminal and studio equipment, transmitters, transformers, receivers, broadcast
facilities, furniture, furnishings, inventories of compact disks, records, tapes
and other supplies), vehicles, and all assignable warranties with respect
thereto; (c) Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions; (d) rights under orders and
agreements (including those Barter Agreements and Advertising Contracts
identified on the Disclosure Schedule) now existing or entered into in the
Ordinary Course of Business for the sale of advertising time on the Stations;
(e) Assumed Contracts, indentures, Security Interests, guaranties, other similar
arrangements, and rights thereunder; (f) call letters of the Stations, jingles,
logos, slogans, and business goodwill of the Stations; (g) claims, deposits,
prepayments, refunds, causes of action, choses in action, rights of recovery
(including rights under policies of insurance), rights of set off, and rights of
recoupment; (h) Licenses and similar rights obtained from governments and
governmental agencies; (i) FCC logs and records and all other books, records,
ledgers, logs, files, documents, correspondence, advertiser lists, all other
lists, plats, architectural plans, drawings and specifications, creative
materials, advertising and promotional materials, program production materials,
studies, reports, and other printed or written materials; and (j) goodwill of
the Stations.
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including all attorneys' fees and court costs.
"Advertising Contracts" has the meaning set forth in Section 2(s), above.
-31-
"Affiliate" means with reference to any person or entity, another person
or entity controlled by, under the control of or under common control with that
person or entity.
"Assignment Application" has the meaning set forth in Section 4(b) above.
"Assumed Contracts" means the Leases, the Barter Agreements, the
Advertising Contracts and those contracts listed on Exhibit G attached hereto.
"Assumed Liabilities" means obligations of the Sellers that accrue after
the Closing Date under the Assumed Contracts either: (a) to furnish services,
and other non-Cash benefits to another party after the Closing; or (b) to pay
for goods, services, and other non-Cash benefits that another party will furnish
to it after the Closing. The Assumed Liabilities shall not include any Retained
Liabilities.
"Barter Agreements" has the meaning set forth in Section 2(f) above.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Buyers" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents determined in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 1(d) above.
"Closing Date" has the meaning set forth in Section 1(d) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the businesses
and affairs of the Sellers.
"Disclosure Schedule" has the meaning set forth in Section 2 above.
"Xxxxxxx Money Deposit" has the meaning set forth in Section 1(c) above.
"Xxxxxxx Money Escrow Agreement" has the meaning set forth in Section 1(c)
above.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee
-32-
Pension Benefit Plan (including any Multi-employer Plan), or (d) Employee
Welfare Benefit Plan or material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Environmental Laws" has the meaning set forth in Section 2(q), above.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means The Xxxxxxx Agency, Inc.
"Extremely Hazardous Substance" has the meaning set forth in Section 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FCC" means the Federal Communications Commission of the United States.
"FCC Licenses" means the licenses, permits and other authorizations,
including any temporary waiver or special temporary authorization, issued by the
FCC to the Sellers in connection with the conduct of the business and operation
of the Stations.
"Final Order" means an action by the FCC as to which: (a) no request for
stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"Financial Statements" has the meaning set forth in Section 2(e) above.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Indemnified Party" has the meaning set forth in Section 7(d) above.
"Indemnifying Party" has the meaning set forth in Section 7(d) above.
"Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, call letters, logos, trade names, and corporate names and registrations
and applications for
-33-
registration thereof, (c) all programs, programming materials, copyrights and
registrations and applications for registration thereof, (d) mask works and
registrations and applications for registration thereof, (e) computer software,
data, and documentation, (f) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, market and other
research information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial, marketing, and business data,
pricing and cost information, business and marketing plans, and customer and
supplier lists and information), (g) other proprietary rights, and (b) copies
and tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Leases" means those real estate leases to which Sellers are a party
governing Sellers' studios and FM tower sites as described in Section 2(i) of
the Disclosure Schedule.
"Letter of Credit" has the meaning set forth in Section 1(c) above.
"Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"Licenses" means all FCC and other governmental licenses, franchises,
approvals, certificates, authorizations and rights of the Sellers with respect
to the operations of the Stations and all applications therefor, together with
any renewals, extension or modifications thereof and additions thereto.
"Multi-employer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Owned Real Estate" means the real property owned by the Sellers as
described in Section 2(i) of the Disclosure Schedule and all buildings,
fixtures, and improvements located thereon.
"Party" has the meaning set forth in the preface above.
"Permitted Real Estate Encumbrances" shall have the meaning set forth in
Section 2(i) above.
"Post-Closing Agreement" means the Post-Closing Agreement with Sellers'
owners in the form attached hereto as Exhibit D.
-34-
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Purchase Price" has the meaning set forth in Section 1(c) above.
"Real Estate" means the Owned Real Estate and the real estate, building,
fixtures and improvements which are the subject of the Leases.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Retained Assets" means (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of each
Seller as a corporation; (ii) any of the rights of the Sellers under this
Agreement (or under any side agreement between the Sellers on the one hand and
the Buyers on the other hand entered into on or after the date of this
Agreement); (iii) accounts, notes and other receivables of the Sellers; (iv)
Cash; and (v) the servicemark "Cruisin' Country" and logo using that servicemark
depicted in Section 2(j) of the Disclosure Schedule.
"Retained Liabilities" means any other obligations or Liabilities of the
Sellers, including but not limited to: (a) any Liability relating to the
ownership or operation of the Stations prior to the Closing; (b) any Liability
of the Sellers for income, transfer, sales, use, and other Taxes arising in
connection with the consummation contemplated hereby; (c) any Liability of the
Sellers for costs and expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated hereby (except as set forth in
Section 4(i) relating to Surveys, title commitments and environmental audits and
Section 4(b) with regard to the Assignment Application); or (d) any Liability or
obligation of the Sellers under this Agreement (or under any side agreement
between the Sellers on the one hand and the Buyers on the other hand entered
into on or after the date of this Agreement).
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; and (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation.
"Sellers" has the meaning set forth in the preface above.
"Stations" means the radio broadcast Stations having the call letters
WJXY-AM and WJXY-FM, licensed by the FCC to operate in Conway, South Carolina,
and WXJY-FM, licensed by the FCC to operate in Georgetown, South Carolina.
-35-
"Subsidiary," with respect to any person, means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which) 50% or more of (a) the outstanding capital stock or other equity
interest having voting power to elect a majority of the Board of Directors of
such corporation or persons having a similar role as to an entity that is not a
corporation, (b) the interest in the profits of such partnership or joint
venture, or (c) the beneficial interest of such trust or estate are at such time
directly or indirectly owned by such person or one or more of such person's
Subsidiaries.
"Surveys" has the meaning set forth in Section 4(o) above.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyers and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyers may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing in the event the
Sellers are in breach of any representation, warranty, or covenant
contained in this Agreement; provided, however, that if such breach is
capable of being cured, such breach also remains uncured for twenty (20)
days after notice of breach is received by the Sellers from the Buyers;
(iii) the Sellers may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing in the event the
Buyers are in breach of any representation, warranty, or covenant
contained in this Agreement; provided, however that if such breach is
capable being cured, such breach remains uncured for twenty (20) days
after notice of breach is received by the Buyers from the Sellers;
-36-
(iv) the Buyers may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing if the Closing
shall not have occurred on or before the 270th day following the date of
this Agreement by reason of the failure of any condition precedent under
Section 5(a) hereof (unless the failure results primarily from the Buyers
breaching any representation, warranty, or covenant contained in this
Agreement);
(v) the Sellers may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing if the Closing shall
not have occurred on or before the 270th day following the date of this
Agreement by reason of the failure of any condition precedent under
Section 5(b) hereof (unless the failure results primarily from the
Sellers' breaching any representation, warranty, or covenant contained in
this Agreement); or
(vi) the Buyers or the Sellers may terminate this Agreement if any
Assignment Application is denied by Final Order.
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 9(a) above, all obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability
of any Party then in breach).
10. Miscellaneous.
(a) Survival. All of the representations, warranties, and covenants of the
Parties contained in this Agreement shall survive the Closing hereunder as and
to the extent provided in Section 7(a) hereof and the Post-Closing Agreement
with respect to Sellers' owners.
(b) Press Releases and Announcements. No Party shall issue any press
release or announcement relating to the subject matter of this Agreement prior
to the Closing without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Party prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, that may have related in any way to the subject matter hereof.
-37-
(e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party, provided that (i) the Buyers may assign all of its right,
title and interest in, to and under this Agreement to one or more Affiliates,
who shall then, subject to the terms and conditions of this Agreement, have the
right to receive the Acquired Assets, assume the Assumed Liabilities, and to pay
to the Sellers the Purchase Price therefor or to any successor to the Buyers in
the event of any sale, merger or consolidation of the Buyers, and (ii) Buyers
may assign their indemnification claims and their rights under the warranties
and representations of the Sellers to the financial institution(s) providing
financing to the Buyers in connection with this transaction.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be considered to be given
and received in all respects when hand delivered, when delivered via prepaid
express or courier delivery service, when sent by facsimile transmission
actually received by the receiving equipment or three (3) days after deposited
in the United States mail, certified mail, postage prepaid, return receipt
requested, in each case addressed to the intended recipient as set forth below:
If to the Sellers:
Notices Provision
Xxxxxx Xxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
and
Xxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
-38-
Copy to:
Xxxxxxx X. XxXxxxxxx, Esq.
Reddy, Xxxxxx & XxXxxxxxx
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
(which copy shall not constitute notice to Sellers)
If to the Buyers:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
c/o QUAESTUS Management Corp.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given unless and until it actually is received by
the party for whom it is intended. Any party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
South Carolina.
-39-
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyers and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(l) Expenses. The Buyers and the Sellers, will each bear their own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby, other than as set forth
in Section 4(b) with regard to the Assignment Applications and as set forth in
Section 4(o) with respect to Surveys, title commitments and environmental
audits. The Sellers will pay all income taxes. The Sellers and the Buyers will
each pay one-half (1/2) of any transfer or sales taxes and other recording or
similar fees necessary to vest title to each of the Acquired Assets in the
Buyers.
(m) Construction. The language used in this Agreement will be deemed to be
the language chosen by the Parties to express their mutual intent, and no rule
of strict construction shall be applied against any Party. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Disclosure Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant.
-40-
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any federal court sitting in South Carolina in any action or
proceeding arising out of or relating to this Agreement, agrees that all claims
in respect of the action or proceeding may be heard and determined in any such
court, and agrees not to bring any action or proceeding arising out of or
relating to this Agreement in any other court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect thereto. Any Party may make service on the other
Party by sending or delivering a copy of the process to the Party to be served
at the address and in the manner provided for the giving of notices in Section
10(h) above. Nothing in this Section 10(o), however, shall affect the right of
any Party to serve legal process in any other manner permitted by law. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law.
(p) Time of Essence. With respect to the obligations of the Parties to
diligently prosecute the Assignment Application and, upon fulfillment of all
necessary conditions, to Close the transaction contemplated herein, time is of
the essence.
* * * * * *
-41-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
CAROLINA BROADCASTING, INC.
By:
--------------------------------
Xxxx Xxxxx
Its: President
By:
--------------------------------
Xxxxxx Xxxxxxxx
Its: Secretary
GEORGETOWN RADIO, INC.
By:
--------------------------------
Xxxx Xxxxx
Its: President
By:
--------------------------------
Xxxxxx Xxxxxxxx
Its: Secretary
CUMULUS BROADCASTING, INC.
By:
--------------------------------
Xxxxxxx Xxxxxxx
Its: Chairman
CUMULUS LICENSING CORPORATION
By:
--------------------------------
Xxxxxxx Xxxxxxx
Its: Chairman
-42-
Amendment No. 1 to Asset Purchase Agreement, by and between Sellers and
Cumulus, dated as of March 13, 1998
Time Brokerage Agreement, by and between Georgetown and Broadcasting, dated
as of March 13, 1998
Escrow Agreement between Sellers and Cumulus and Xxxx Xxxxxxx d/b/a The
Xxxxxxx Agency, dated as of October 29, 1998
General Assignment from Sellers to Broadcasting with respect to WJXY-AM and
WJXY-FM, dated as of March 16, 1998
General Assignment from Seller to Licensing with respect to WJXY-AM and
WJXY-FM, dated as of March 16, 1998
Instrument of Assumption from Broadcasting to Sellers with respect to WJXY-AM
WJXY-FM, dated as of March 16, 1998
General Assignment for Sellers to Broadcasting with respect to WXJY-FM
General Assignment for Sellers to Licensing with respect to WXJY-FM
Instrument of Assumption from Broadcasting to Seller with respect to WXJY-FM
Post-Closing Agreement, by and among Cumulus and each of the Shareholders of
Sellers
Consent to the Assignment Application by the Federal Communications Commission
Closing Compliance Certificate of Sellers dated as of March 16, 1998
Closing Compliance Certificate of Cumulus dated as of March 16, 1998
Consent to Assignment of Lease Agreement, by and among Xxxxxxx Xxxx, Sellers
and Broadcasting
Consent to Assignment of Lease Agreement, by and among X.X. Xxxxxxx,
Georgetown and Broadcasting
Escrow Release Letter
Closing Statement
Opinion of Reddy Xxxxxx & XxXxxxxxx
Opinion of The Xxxxxxxx Law Firm, P.A.
The preceding schedules and/or exhibits have been omitted from this exhibit.
The Company agrees to provide copies of such schedules and/or exhibits to the
Commission upon request.
43
