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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
This Agreement ("Agreement") is entered into as of September 15, 1999,
by and between CUMULUS MEDIA Inc., a Nevada corporation, or its wholly-owned
subsidiary created for the purpose of implementing this transaction, Broadcast
Software International Inc., a corporation of Nevada ("Buyer"), and Broadcast
Software INTERNATIONAL INC., an Oregon corporation ("BSI"), and XXX XXXXXX, an
individual resident of Oregon ("Xxxxxx"). BSI and Xxxxxx are referred to
collectively as the "Seller." The Buyer and the Seller are referred to
individually as the "Party" or collectively as the "Parties." Capitalized terms
used in this Agreement are defined in Section 7 hereof.
Subject to the terms and conditions of this Agreement, the Buyer hereby
agrees to purchase substantially all of the assets of the Seller in return for
cash and stock of Buyer.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. BASIC TRANSACTION.
A. PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Seller agrees to sell, transfer, convey and
deliver to Buyer all of the Acquired Assets at the Closing for the consideration
specified below in this Section 1.
B. ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, Buyer agrees to assume and become responsible for
all of the Assumed Liabilities at Closing. The Buyer will not assume or have any
responsibility, however, with respect to any other obligation or Liability of
the Seller, and the Seller agrees to pay and discharge all Liabilities and
obligations of the Seller.
C. PURCHASE PRICE. The Buyer agrees to pay to the Seller, as
consideration for the Acquired Assets, the purchase price (the "Purchase Price")
consisting of the following:
(i) Seller acknowledges that Buyer on August 20, 1999, paid the
Seller cash in the amount of Five Hundred Thousand and no/100 Dollars
($500,000), by wire transfer of immediately available U.S. funds, as a deposit
toward the Purchase Price; and
(ii) on the Closing Date, the Buyer shall issue to the Seller One
Hundred Fifty-Two Thousand, Six Hundred Thirty-Six (152,636) Class A Common
Shares of Cumulus Media Inc. (the "Shares"). The Shares shall not have been
registered and shall be characterized as "restricted securities" under the
federal securities laws, and under such laws such shares may be resold without
registration under the Securities Act of 1933, as amended (the "Securities Act")
only in certain limited circumstances. The Shares shall also be subject to the
restrictions
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specified in this Agreement. Each certificate of the Shares to be issued
pursuant to this Agreement shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO THE
STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM
AND SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY TO
THE ISSUER, SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS
EXEMPT FROM REGISTRATION OR IS OTHERWISE IN
COMPLIANCE WITH THE ACT AND SUCH LAWS. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER DESCRIBED IN THAT
CERTAIN ASSET PUCHASE AGREEMENT DATED AS OF
SEPTEMBER 15, 1999 BY AND AMONG CUMULUS MEDIA INC.,
BROADCAST SOFTWARE INTERNATIONAL, INC. AND XX. XXX
XXXXXX, A COPY OF WHICH IS AVAILABLE FOR INSPECTION
AT THE OFFICE OF THE SECRETARY OF THE COMPANY."
D. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at a mutually agreed location,
commencing at 1:00 p.m. on the date of execution of this Agreement, or such
other date as the Parties may mutually determine (the "Closing Date").
E. DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 4(a) below; (ii) the Seller will execute, acknowledge (if
appropriate), and deliver to the Buyer (A) assignments (including Lease and
other Assumed Contract assignments and Intellectual Property transfer
documents), and bills of sale in form acceptable to the Buyer, (B) such
affidavits, transfer tax returns, memorandums of lease, and such other documents
as may be necessary to provide public notice of existence of the Leases, and (C)
such other instruments of sale, transfer, conveyance, and assignment as the
Buyer and their counsel reasonably may request; (iii) the Buyer will deliver to
the Seller the various certificates, instruments, and documents referred to in
Section 4(b) below; and (iv) the Buyer will deliver to the Seller the
consideration specified in Section 1(c) above.
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F. EMPLOYMENT AGREEMENTS. On the Closing Date, the Seller shall
execute, and shall cause Xx. Xxx Xxxxxx and Xx. Xxxxx Xxxxxxx to execute
Employment Agreements including covenants not to compete with the Buyer.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Buyer 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, except as set
forth in the Seller's disclosure schedule attached to this Agreement (the
"Disclosure Schedule").
A. ORGANIZATION OF THE SELLER. BSI is a Subchapter S corporation
duly organized, validly existing, and in good standing under the laws of Oregon.
BSI does not have any Subsidiaries. BSI has the power and authority to own or
lease its properties and to carry on all business activities now conducted by
it. BSI is qualified to do business and is in good standing, where applicable,
in each jurisdiction in which the properties owned, leased or operated by it or
the nature of the business conducted by makes such qualification necessary.
True, accurate and complete copies of BSI's Articles of Incorporation and
Bylaws, as in effect on the date hereof, have been delivered to Buyer. BSI is
not in violation of any of the provisions of its Articles of Incorporation or
Bylaws. The sole shareholder of BSI is Xxxxxx.
B. AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority to execute and deliver this Agreement and all agreements and
instruments to be executed and delivered by Seller pursuant to this Agreement
(collectively, the "Ancillary Agreements") and to perform its obligations
hereunder and thereunder. Without limiting the generality of the foregoing, the
Shareholders and Board of Directors of BSI have duly authorized the execution,
delivery, and performance of this Agreement and the Ancillary Agreements by BSI.
This Agreement and the Ancillary Agreements constitute the valid and legally
binding obligation of the Seller, enforceable in accordance with their
respective terms and conditions.
C. NONCONTRAVENTION. Assuming the receipt of the consent of
Seller's landlord as more fully described in Section 2(c) of the Disclosure
Schedule, 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 Seller is subject or any
provision of the charter or bylaws of the Seller; or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice or third party consent under any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest, or other
agreement, arrangement to which the Seller is a party or by which it is bound or
to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). The Seller 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
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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 Seller has good and marketable title to all of the
Acquired Assets, free and clear of any Security Interest or restriction on
transfer.
E. FINANCIAL STATEMENTS. Included in Section 2(e) of the
Disclosure Schedule are the following financial statements (collectively the
"Financial Statements"): (i) unaudited balance sheets and statements of income,
and cash flow as of and for the fiscal year ended December 31, 1998 for the
Seller; and (ii) unaudited balance sheets and statements of income, as of and
for each month during 1998 and each month to date in 1999 for the Seller. The
Financial Statements have been prepared in conformity with the Seller's normal
accounting policies, practices and procedures applied on a consistent basis,
throughout the periods covered thereby, are correct and complete, fairly present
the financial condition of the Seller and the results of operation of Seller at
the dates and for the periods indicated, and are consistent with the books and
records of the Seller (which books and records are correct and complete). The
Financial Statements accurately state the revenues of the Seller for the period
indicated therein and include an accurate breakout of cash and trade revenues.
F. EVENTS SUBSEQUENT TO JANUARY 1, 1999. Since January 1, 1999,
except as set forth in Section 2(f) of the Disclosure Schedule, there has not
been any material adverse change in the assets, Liabilities, business, financial
condition, operations, results of operations, or future prospects of the Seller.
Without limiting the generality of the foregoing, since January 1, 1999:
(i) other than this Agreement, the 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;
(ii) the Seller has not delayed or postponed (beyond its
normal practice in the Ordinary Course of Business) the payment of
accounts payable and other Liabilities;
(iii) the Seller has not altered its credit and collection
policies or its accounting policies;
(iv) other than in the Ordinary Course of Business, the
Seller has not entered into or terminated any employment arrangement,
employment contract, consulting contract or severance agreement or
collective bargaining agreement, written or oral, or modified the terms
of any existing such contract or agreement;
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(v) other than in the Ordinary Course of Business, there
have been no changes and, to Seller's knowledge, any threatened changes
in employment terms for any of its directors, officers, and employees;
(vi) there has not been any other occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving the Seller; and
(vii) the Seller has not committed to any of the foregoing.
G. TAX MATTERS. The Seller has timely and properly filed all Tax
Returns that it was required to file with respect to the Seller's operations.
All such Tax Returns were correct and complete and properly reflect the tax
liability of the Seller. No Tax deficiencies have been proposed or assessed
against the Seller. All Taxes owed by the Seller with respect to its operations
(whether or not shown on any Tax Return) have been paid. The Seller has withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party. No claim has ever been made by any authority in any
jurisdiction where the Seller does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
H. TANGIBLE ASSETS. Section 2(h) of the Disclosure Schedule sets
forth a listing of all of the tangible personal property used in conducting the
business of the Seller. The Seller owns or leases all tangible assets necessary
for the conduct of the operation and business of the Seller's business 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. All of the tangible personal property included in the Acquired Assets
is (a) in good operating condition and repair, ordinary wear and tear excepted,
and (b) maintained in accordance with sound maintenance practices. The Acquired
Assets are sufficient for the operation of Seller's business in the ordinary
course and are suitable for the purposes for which they are being used.
I. REAL PROPERTY. Section 2(i) of the Disclosure Schedule lists
and describes briefly all real property leased to the Seller (including, without
limitation, complete legal descriptions for all of the Real Estate). The Seller
does not own and has never owned any real property. The Seller has delivered to
the Buyer correct and complete copies of the Leases. With respect to the Real
Estate:
(i) the Leases are and, following the Closing will
continue to be, legal, valid, binding, enforceable, and in full force
and effect;
(ii) 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;
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(iii) there are no disputes, oral agreements, or forbearance
programs in effect as to any Lease;
(iv) to the Seller's Knowledge, none of the properties
subject to the Leases is subject to any lease (other than Leases),
option to purchase or rights of first refusal;
(v) the Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or
its rights thereunder;
(vi) to the Seller's 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
(vii) to the Seller's Knowledge, the owner of each leased
facility has good and marketable title to the underlying parcel of real
property, free and clear of any Security Interest, easement, covenant,
or other restriction, except for Permitted Real Estate Encumbrances and
Seller's leasehold interest in each Lease has priority over any other
interest except for the fee interest therein and Permitted Real Estate
Encumbrances.
J. CONTRACTS. Section 2(j) of the Disclosure Schedule lists any
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
Seller has delivered to the Buyer a correct and complete copy of each written
arrangement listed in Section 2(j) of the Disclosure Schedule (as amended to
date). With respect to each written arrangement so listed which constitutes an
Assumed Contract: (A) 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 Seller is not a party to any verbal contract,
agreement, or other arrangement which, if reduced to written form, would be
required to be listed in Section 2(j) of the Disclosure Schedule under the terms
of this Section 2(j). Except for the Assumed Contracts, the Buyer shall not have
any Liability or obligations for or in respect of any of the contracts set forth
in Section 2(j) of the Disclosure Schedule or any other contracts or agreements
of the Seller.
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K. PRODUCT WARRANTIES. All software and other products and
services manufactured, sold, or licensed by Seller have been in conformity with
all applicable contractual commitments, all express or implied warranties, and
all specifications, documentation, performance standards, representations or
statements provided with respect thereto by or on behalf of the Seller. No
liability for any warranty claims exists for the placement of such software or
other products. All product labeling of the Seller is in conformity with all
applicable Laws. There are no pending or threatened claims by any of Seller's
customers for the correction of any so-called computer software "bug" and the
Seller does not know of any so-called "bugs" which may form the basis for any
such claim.
L. INTELLECTUAL PROPERTY.
(1) For purposes of this Agreement, "Intellectual Property" means
inventions, designs, models, processes, formulations, know-how and schematics,
whether or not patented and/or patentable, patents and patent applications,
trade names, trademarks, service marks and Internet domain names, and copyrights
and registrations thereof and/or registration applications therefor, mask works,
algorithms, authoring tools, computer software programs or applications (in both
source code and object code form), including, without limitation, the Software
as defined below, and web-sites that are used or currently proposed to be used
in the business of the Seller, and documentation relating thereto or explaining
the use thereof, and the goodwill related to any of the foregoing.
(2) Section 2(l)(2) of the Disclosure Schedule identifies (i) all
patents owned and patent applications made by the Seller, and the jurisdictions
in which each such patent has been issued or in which each such application has
been filed; (ii) all trade names, trademarks, service marks and Internet domain
names used by the Seller, whether or not owned by the Seller, (iii) all
registrations made and all registration applications filed by the Seller for
trade names, trademarks, service marks and Internet domain names owed by the
Seller, and the jurisdictions by which each such registration has been issued or
in which each such application has been filed, (iv) all registrations made and
registration applications filed by the Seller for copyrights owned by the
Seller, and each jurisdiction by which each such registration has been issued or
in which each such application has been filed. To the Seller's Knowledge, all of
the patents and registrations listed on Section 2(l)(2) are valid and
subsisting, and no such patent or registration has been declared invalid or, in
whole or in part, been abandoned, dedicated, disclaimed or allowed to lapse for
nonpayment of fees or taxes or for any other reason.
(3) Section 2(l)(3) of the Disclosure Schedule lists all licenses,
sublicenses and other agreements under which the Seller is authorized to use any
Intellectual Property owned by any third party and the royalty payments payable
by the Seller in connection therewith (the "Third Party Intellectual Property").
(4) Except for the rights existing under the agreements referred
to in Section 2(l)(6), below, the Seller is the sole and exclusive owners of,
with all right, title and interest in and to, free of all liens, valid claims
and encumbrances, all Intellectual Property, other than Third Party Intellectual
Property. No claims with respect to the Seller's Intellectual Property or the
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Third Party Intellectual Property (to the extent arising out of any use,
reproduction or distribution of such Third Party Intellectual Property by the
Seller) are pending or, to the Seller's Knowledge, threatened by any person, nor
does the Seller know of any valid ground for any claim (i) to the effect that
the development, marketing, licensing or use of any product or Intellectual
Property as now marketed, licensed or used by the Seller infringes upon any
Intellectual Property belonging to another person, (ii) against the use and/or
distribution of any Intellectual Property by the Seller, (iii) challenging the
ownership, validity or effectiveness of any of the Seller's Intellectual
Property, (iv) challenging the Seller's license or legally enforceable right to
use any Third Party Intellectual Property, or (v) to the effect that the Seller
is obligated to pay any compensation with respect to ownership, sale, use or
disposition of the Intellectual Property. To the Seller's Knowledge, there is no
unauthorized use, infringement or misappropriation of any of the Seller's
Intellectual Property by any third party, including any employee or former
employee of the Seller.
(5) Copies of all algorithms, tools and other software and all
source and object programs and codes and related documentation incorporated in,
used in or related to the Seller's products are located either at the Seller's
principal executive offices, or at an off-premise site under the Seller's
control as identified in Section 2(l)(5) of the Disclosure Schedule. Such
algorithms, tools, software, programs, codes and documentation are fully usable
and understandable by persons ordinarily skilled in computer programming and are
sufficient to permit the maintenance and further development of all software
products and rights currently marketed and licensed by the Seller. Without
limitation, the Seller's source code includes a full source language statement
of the programs comprising all of the software developed by the Seller,
including any support utilities which are not commercially available and which
are required to build the object code from the source code.
(6) Section 2(l)(6) of the Disclosure Schedule lists all licenses,
sublicenses and other agreements under which any person is authorized to use any
Intellectual Property owned by the Seller.
(7) Section 2(l)(7) of the Disclosure Schedule lists each person
who has authored any portion of the programs developed or marketed by the Seller
(not including Third Party Intellectual Property incorporated therein). Section
2(l)(7) of the Disclosure Schedule identifies all contracts executed by such
persons for the benefit of the Seller with respect to code authored by such
persons.
(8) The Seller has not entered into any agreement to indemnify any
other person against any charge of infringement of any Intellectual Property,
other than indemnification provisions contained in sales agreements arising in
the ordinary course of business.
(9) The Seller is not, nor will it be as a result of the execution
and delivery of this Agreement or the performance of obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to
the Intellectual Property or Third Party Intellectual Property, the breach of
which would have a material adverse effect on the Seller's business.
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(10) The Seller has taken all commercially reasonable and
customary measures and precautions necessary to protect and maintain the
confidentiality of all Intellectual Property (except such Intellectual Property
whose value would be unimpaired by public disclosure) and otherwise to maintain
and protect the full value of all proprietary assets. All use, disclosure or
appropriation of Intellectual Property not otherwise protected by patents,
patent applications or copyright ("Confidential Information") owned by the
Seller or licensed to a third party has been pursuant to the terms of a written
agreement between the Seller and such third party. All use, disclosure or
appropriation of Confidential Information not owned by the Seller has been
pursuant to the terms of a written agreement between the Seller and the owner of
such Confidential Information, or is otherwise lawful.
(11) With respect to the broadcast automation software sold by the
Seller (the "Software"):
(i) The Software performs substantially in accordance with its
functional specifications and related documentation. The Seller has
provided the Corporation with all fault logs and other logs and other
records relating to the Software and any defects or deficiencies in the
possession of the Seller.
(ii) Except as set forth on Section 2(l)(11) of the Disclosure
Schedule, the Seller has not disclosed the source code for any of the
Software or other confidential or proprietary information constituting,
embodied in or pertaining to the Software to any person or entity other
than employees or contractors of Seller who are bound by
confidentiality agreements in substantially the form disclosed to
Buyer. Except as set forth in Section 2(l)(11) of the Disclosure
Schedule, none of the Software has been placed in escrow or is subject
to other arrangements pursuant to which the source code has been or
could be delivered or disclosed to any third party.
M. INSURANCE. Section 2(m) of the Disclosure Schedule sets forth a
complete and accurate description of all Seller's insurance coverage. With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
and enforceable and in full force and effect; (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. The Seller is not: (i) subject to any unsatisfied
judgment, order, decree, stipulation, injunction, or charge; or (ii) a party or,
to the Knowledge of the Seller, is threatened to be made a party to any charge,
complaint, action, suit, proceeding, hearing, or investigation of or in any
court or quasijudicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. The Seller has no Knowledge of
any Basis for any such charge, complaint, action, suit, proceeding, hearing, or
investigation against the Seller.
O. EMPLOYEES. Section 2(o) of the Disclosure Schedule sets forth a
listing of the names, positions, job descriptions, salary or wage rates and all
other forms of compensation paid for work in the business of the Seller. To the
Knowledge of the Seller, no key employee or
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group of employees has any plans to terminate employment with the Seller. The
Seller is not a party to or bound by any collective bargaining or similar
agreement, nor has it experienced any strikes, grievances, claims of unfair
labor practices or other collective bargaining disputes. The Seller has no
Knowledge of any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to the employees of the Seller. The
Seller has no Knowledge of any Basis for any claim by past or current employees
of the Seller or applicants for employment that the Seller or its management has
discriminated based on each individuals race, sex, national origin, religion,
ethnicity, handicap or any other protected characteristic under applicable law.
P. EMPLOYEE BENEFITS. Section 2(p) of the Disclosure Schedule
lists all Employee Benefit Plans that the Seller maintains or to which the
Seller contributes or is required to contribute for the benefit of any current
or former employee of the Seller and true and correct copies of each such
Employee Benefit Plan have been delivered to the Buyer. 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 Seller does 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 Seller. There are no pending or, to the Knowledge of the Seller, threatened
claims under, by or on behalf of any of the Employee Benefit Plans, by any
employee or beneficiary covered by any such Employee Benefit Plan, or otherwise
involving any such Employee Benefit Plan (other than routine claims for
benefits), nor have there been any Reportable Events or Prohibited Transactions
with respect to any Employee Benefit Plan.
Q. ENVIRONMENT, HEALTH, AND SAFETY.
(i) The Seller is, and at all times in the past has 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 the Seller has no Liability (and to
Seller's Knowledge there is no Basis related to the past or present
operations of the Seller or its predecessors for any present or future
Liability) under any Environmental Law. The Seller has no Liability
(and to Seller's Knowledge there is no Basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against the Seller giving rise to any Liability) under
the Occupational Safety and Health Act, as amended, or any other law
(or rule or regulation thereunder) of any federal, state, local, or
foreign government (or agency thereof) concerning employee health and
safety, or for any illness of or personal injury to any employee.
(ii) The Seller has obtained and at all times has been in
compliance in all material respects with all of the terms and
conditions of all permits, licenses, and other authorizations which 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.
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(iii) To Seller's Knowledge, all properties and equipment
used in the Seller's operations and the Acquired Assets have been free
of asbestos, PCB's, methylene chloride, trichloroethylene, 1,
2-trans-dichloroethylene, dioxins, dibenzofurans, and Extremely
Hazardous Substances. To Seller's 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. To Seller's Knowledge, no above ground or
underground storage tanks have ever been located at, on or under the
Real Estate. The Seller has delivered to the Buyer a complete copy of
all environmental claims, reports, studies, compliance actions or the
like of the Seller or which are available to the Seller with respect to
any of the Real Estate or any of the Acquired Assets.
R. LEGAL COMPLIANCE. The Seller has complied in all material
respects with all laws (including rules and regulations thereunder) of federal,
state, local and foreign governments (and all agencies thereof). The Seller has
filed in a timely manner all reports, documents, and other materials it was
required to file (and the information contained therein was correct and complete
in all material respects) under all applicable laws.
S. BROKERS' FEES. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
T. CUSTOMIZATION PROJECTS. The Seller has engaged and is currently
engaged in no customization or software development projects of the Seller in
process, or pending proposals regarding customization or software development
projects for third party customers.
U. TRANSACTIONS WITH AFFILIATES. Neither Seller nor its affiliates
has had (a) any interests in any entity which has purchased, sold or furnished
to Seller any goods or services, (b) a beneficial interest in any contract,
lease commitment or understanding to which the Seller is a party or by which it
is bound or affected, (c) any interest or claim against the Seller or any of its
assets, or (d) any interest in any assets used by Seller in its business.
V. YEAR 2000 COMPLIANCE.
(1) All data processing systems, other computer systems, chips,
firmware and software owned, used, affecting or relied upon by Seller ("Computer
Systems") will be usable to, during and after the calendar year 2000, and will
operate during such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century. The
Computer Systems will manage and manipulate data involving dates, including but
not limited to single century formulas and multi-century formulas, and will not
cause an abnormally ending scenario within the application or generate incorrect
values or invalid results involving such date(s).
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(2) There is no deficiency or inadequacy in the manufacture,
design or formulation of any of Seller's products (including, without
limitation, the Software) which may hereafter give rise to any such failure or
results in an product liability claim arising out of deficiencies or
inadequacies relating to the year 2000.
W. UNDISCLOSED COMMITMENTS OR LIABILITIES. There are no material
commitments, liabilities or obligations relating to the business of the Seller,
whether accrued, absolute, contingent or otherwise including, without
limitation, guaranties by the Seller of the liabilities of third parties, for
which specific and adequate provisions have not been made on the Financial
Statements.
X. INVESTMENT REPRESENTATIONS.
(a) The Seller represents and warrants that it is acquiring the
Shares solely for investment, solely for its own account and not with a view to
or for the resale or distribution thereof except as permitted under the
Securities Act and except as follows: (1) BSI intends to transfer some or all of
the Shares to Xxxxxx upon the liquidation of BSI after the Closing (or to such
entities wholly controlled by, or individuals related to, Xxxxxx upon the prior
approval of the Buyer and its counsel); (2) Xxxxxx may transfer Shares to
entities wholly controlled by, or individuals related to, Xxxxxx upon the prior
approval of Buyer and its counsel; (3) BSI or Xxxxxx may transfer up to 22,896
of the Shares to Xx. Xxxxx Xxxxxxx, if Xxxxxxx makes investment representations
and warranties as Buyer and its counsel deem sufficient to qualify for an
exemption to applicable securities registration requirements governing transfer
of the shares, and if Xxxxxxx consents to the same rights of first refusal and
restrictions on transfer of the Shares contained in this Agreement, all to be
contained in a written document to be executed by Xxxxxxx in form reasonably
acceptable to Company and its counsel; provided, however, that if such Shares
are transferred to Xxxxxxx, on and after September 15, 2000 only 11,000 of the
Shares transferred to Xxxxxxx shall be subject to the Repurchase Rights, as set
forth Section 5(g) below, and any additional Shares transferred to Xxxxxxx shall
not be subject to Repurchase Rights.
(b) Seller understands that it may sell or otherwise transfer the
Shares only if such transaction is duly registered under the Securities Act,
under a registration statement or otherwise, or if Seller shall have received
the favorable opinion of counsel to Seller to the effect that such sale or other
transfer may be made in the absence of registration under the Securities Act,
and registration or qualification in every applicable state. The certificates
representing the Shares will be legended to reflect these restrictions, and stop
transfer instructions will apply. The Seller acknowledges that the Shares are
not currently registered, that there are no current plans for the Shares to be
registered, and that the Shares are not a liquid investment.
(c) The Seller has the knowledge and experience to evaluate the
Company and the risks and merits relating thereto.
(d) The Seller represents and warrants that it is an "accredited
investor" as such term is defined in Rule 501 of the Regulation D promulgated
pursuant to the Securities Act, and shall be such on the date any of the Shares
is issued to Stockholder; Seller acknowledges
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that it is able to bear the economic risk of losing its entire investment in the
shares and understands that an investment in the Company involves substantial
risks; Seller has the power and authority to enter into this Agreement; and the
execution and delivery of, and performance under this Agreement shall not
conflict with any rule, regulation, judgment or agreement applicable to Seller.
Seller has had the opportunity to discuss, and has discussed, the Company's
affairs with the Company's officers.
(e) The warranties and representations of the Seller contained in
this Section shall be true and correct on the Closing Date and shall survive the
consummation of the transaction contemplated by this Agreement
Y. 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 misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
Buyer represents and warrants to the Seller that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date except as set
forth in the Disclosure Schedule.
A. ORGANIZATION OF THE BUYER. Cumulus Media Inc. is a corporation
duly organized, validly existing, and in good standing under the laws of
Illinois, and through its subsidiary "Broadcast Software International Inc., a
corporation of Nevada," is duly qualified, validly existing, and in good
standing under the laws of Nevada, and is qualified to do business in the State
of Oregon. Cumulus Broadcasting, Inc. is a subsidiary of Cumulus Media Inc.,
which is duly organized, validly existing, and in good standing under the laws
of Illinois.
B. AUTHORIZATION OF TRANSACTION. Buyer has full power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to perform their obligations hereunder and thereunder. This Agreement and the
Ancillary Agreements constitute legally binding obligations of the Buyer,
enforceable against the Buyer in accordance with their respective terms and
conditions.
C. NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement or the Ancillary Agreements, nor the consummation of the
transactions contemplated hereby and thereby (including the assignments and
assumptions referred to in Section 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
Buyer 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 Buyer are a
party or by which they are bound or to
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which any of their assets is subject. The Buyer does 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. SECURITIES REPORTS AND FINANCIAL STATEMENTS. The Buyer has
filed with the Securities and Exchange Commission (the "SEC") all forms,
statements, reports and documents (including all exhibits, amendments and
supplements thereto) required to be filed by it prior to the date hereof under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Securities Act and the respective rules and regulations thereunder, all of
which, as amended if applicable, complied in all material respects with all
applicable requirements of the appropriate act and the rules and regulations
thereunder (collectively, the "Cumulus SEC Reports"). As of their respective
dates, the Cumulus SEC Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited combined and consolidated
financial statements for the year ended December 31, 1998 of Cumulus Media Inc.
(the "Cumulus Financial Statements") which heretofore have been provided to
Seller, have been prepared in accordance with GAAP (except as may be indicated
therein or in the notes thereto) and fairly present the financial position of
Cumulus Media Inc. as of the dates thereof and the results of their operations
and changes in financial position for the period then ended.
E. BROKERS' FEES. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
4. CONDITIONS TO OBLIGATION TO CLOSE.
A. CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of Buyer
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 material respects at
and as of the Closing Date as though made on and as of the Closing
Date;
(ii) no action, suit, investigation, inquiry or other
proceeding shall be pending or threatened before any court or
quasijudicial or administrative agency of any federal, state, local, or
foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction, or charge would (A) prevent consummation of
any of the transactions contemplated by this Agreement or 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
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adversely the right of the Buyer to own, operate, or control the
Acquired Assets (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
(iii) the Seller shall have delivered to the Buyer a
certificate (without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified above in
Sections 4(a)(i) through (ii) is satisfied in all respects;
(iv) Xx. Xxx Xxxxxx shall have entered into the Employment
Agreement with Buyer;
(v) Xx. Xxxxx Xxxxxxxx shall have entered into the
Employment Agreement with Buyer;
(vi) the Buyer shall have received from counsel to the
Seller an opinion with respect to the matters set forth in Exhibit A
attached hereto, addressed to the Buyer and its lender and dated as of
the Closing Date;
(vii) the Parties shall have agreed to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for
all purposes (including financial accounting and tax purposes) in
accordance with an allocation schedule to be delivered at Closing; and
(viii) all actions to be taken by the Seller 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 Buyer.
B. CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all respects at and as of
the Closing Date as though made on and as of the Closing Date;
(ii) 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);
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(iii) the Buyer shall have delivered to the Seller a
certificate (without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified above in
Section 4(b)(i)-(ii) is satisfied in all respects;
(iv) Xx. Xxx Xxxxxx shall have entered into the Employment
Agreement with Buyer; and
(v) all actions to be taken by the Buyer in connection
with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
5. 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 6 below).
B. TAX-FREE TREATMENT; LIQUIDATION OF BSI. The Parties shall use
commercially reasonable efforts to cause the transaction contemplated by this
Agreement to be treated as a tax-free reorganization for federal, state and
foreign income tax purposes. To effectuate this intent, in part, Seller
covenants that it will liquidate and wind up the affairs of BSI promptly after
the Closing. In conjunction with the liquidation, Seller will notify the state
corporation office of its intent no longer to use the name Broadcast Software
International, Inc., so that such corporate name will be free for Buyer's use as
soon as possible following the Closing.
C. LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Seller, 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.
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D. ADJUSTMENTS. Operation of the business of the Seller and the
income and expenses attributable thereto up through the close of business on the
day before the Closing Date shall be for the account of the Seller and
thereafter for the account of the Buyer. 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 Seller and the Buyer as of
the Closing Date in accordance with the foregoing principle. In addition, all
commissions payable with respect to the accounts receivable of the Seller
(whether due before or after Closing) shall be solely for the account and
responsibility of the Seller. Contractual arrangements that do not reflect an
equal rate of compensation 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 Seller and
one-half (1/2) by the Buyer.
E. 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 Buyer elect to consummate the transactions contemplated
herein despite such failure or inability to obtain such consent, the Seller
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 Seller will cooperate with Buyer in any
lawful and economically feasible arrangement to provide that the Buyer shall
receive the Seller's interest in the benefits under any such Assumed Contract,
including performance by the Seller as agent, if economically feasible;
provided, however, that the Buyer shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the extent that
Buyer would have been responsible therefor if such consent or assignment had
been obtained.
F. ACCESS FOR AUDITS. Seller acknowledges the Buyer is a
subsidiary of a publicly traded company and as such may have responsibilities
under SEC rules and regulations to obtain audits of the Seller for the period
prior to the date of this Agreement. Seller agrees to use best efforts, before
or after Closing to prepare such audits at Buyer' request and at Buyer' expense,
and to provide such access to its historical records as may be reasonably
necessary for Buyer to comply with their financial reporting obligations.
G. RESTRICTIONS ON TRANSFER OF SHARES; RIGHT OF FIRST REFUSAL.
Seller hereby agrees that it shall not sell, transfer, pledge or otherwise
convey the Shares except in compliance with the procedures in this Section 5(g).
Seller grants Buyer a right of first refusal to purchase the Shares, as follows:
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(a) The Buyer's right of first refusal (the "Repurchase Rights")
as described in this Section 5(g) shall apply to a certain
number of the Shares held by Seller according to the following
schedule:
September 15, 1999 to September 14, 2000: 152,636 shares
September 15, 2000 to September 14, 2001: 122,109 shares
September 15, 2001 to September 14, 2002: 91,519 shares
September 15, 2002 to September 14, 2003: 61,054 shares
September 15, 2003 to September 14, 2004: 30,527 shares
On and after September 15, 2004, Seller shall have no
Repurchase Rights with respect to any of the Shares.
(b) In the event Seller receives a written offer from a third
party to purchase some or all of the Shares (the "Offer"),
within fifteen (15) days of the receipt of the offer, Seller
shall provide written notice to Buyer enclosing a copy of the
Offer. Buyer shall have the opportunity to purchase from
Seller the portion of the Shares subject to Repurchase Rights,
on the same terms and conditions as proposed in the Offer.
Within thirty (30) days of the receipt of notice of the Offer,
Buyer will notify Seller whether it wishes to exercise its
Repurchase Rights with respect to some or all of the Shares
subject to the Repurchase Rights.
(c) In the event Buyer elects to exercise the Repurchase Rights,
Buyer and Seller shall agree on a mutually convenient closing
date and shall execute such further agreements and documents
as may be necessary to effectuate the purchase of the shares
by Buyer. In the event the Buyer elects not to exercise the
Repurchase Rights with respect to all of the Shares, Buyer
shall provide written notice to Seller of this decision.
Seller may sell the Shares as to which Buyer has declined to
exercise Repurchase Rights within thirty (30) days of the
receipt of such notice from Buyer. If the sale is not
completed within thirty (30) days of such notice, the transfer
of such Shares shall again be subject to the restrictions in
this Section 5(g).
(d) The certificates representing the Shares will be legended to
reflect the restrictions in this Section 5(g), and stop
transfer instructions will apply.
(e) In the event that BSI or Xxxxxx transfers Shares to Xxxxxxx as
described in Section 2(x)(a) above, the number of Shares held
by Xxxxxx which shall be subject to the Repurchase Rights
under Section 5(g)(a), and the schedule for the removal of
such restrictions for BSI or Xxxxxx shall be adjusted on a pro
rata basis. A maximum of 11,000 of the Shares held by Xxxxxxx
shall by subject to Repurchase Rights, with 2,200 of such
11,000 Shares becoming free of such Repurchase Rights on each
anniversary of the Closing Date. If more than 11,000 Shares
are transferred to Xxxxxxx, none of the excess shares over
11,000 shall be subject to the Repurchase Rights.
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(f) Notwithstanding this Section 5(g), the restrictions on
transfer of Shares and the Repurchase Rights are subject to
termination on the terms and conditions set forth in those
certain employment agreements between Buyer and Xxx Xxxxxx and
Buyer and Xxxxx Xxxxxxx.
6. REMEDIES FOR BREACHES OF THIS AGREEMENT.
A. SURVIVAL. All of the representations and warranties of the
Seller contained in Section 2 of this Agreement (other than the representations
and warranties of the Seller contained in Sections 2(a), 2(b), 2(c), and 2(d)
hereof or relating to the Seller's title to the Acquired Assets) shall survive
the Closing and continue in full force and effect for a period until 90 days
after the applicable statute of limitations has expired with respect to any
claim by the Buyer based on a claim or action by a third party and for a period
of three (3) years following Closing with respect to any claim by the Buyer not
based on a claim or action by a third party. All of the other representations
and warranties of Seller (including the representations and warranties of Seller
contained in Sections 2(a), 2(b), 2(c), and 2(d) hereof or relating to the
Seller's title to the Acquired Assets) and all representations and warranties of
the Buyer shall survive the Closing and continue in full force and effect
forever thereafter.
B. INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE BUYER. The
Seller agrees to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer 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 Seller's
representations or warranties, and covenants contained in this
Agreement or in any Ancillary Agreement executed and/or delivered by
the Seller (so long as the Buyer make a written claim for
indemnification within the applicable survival period);
(ii) any breach or nonfulfillment of any agreement or
covenant of the Seller contained herein or in any Ancillary Agreement;
(iii) any Liability of the Seller; and/or
(iv) any Liability of the Buyer arising by operation of law
(including under any bulk transfer law of any jurisdiction or under any
common law doctrine of defacto merger or successor liability) which is
not an Assumed Liability.
C. INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE SELLER. The
Buyer agrees to indemnify the Seller from and against the entirety of any
Adverse Consequences the Seller may suffer resulting from, arising out of,
relating to, in the nature of, or caused by (i) any misrepresentation or breach
of any of the Buyer' representations or warranties contained in this Agreement
or in any Ancillary Agreement executed and/or delivered by the Buyer (so long as
the Seller makes a written claim for indemnification within the applicable
survival period) or (ii)
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any breach or nonfulfillment of any agreement or covenant of the Buyer contained
herein or in any Ancillary Agreement.
D. 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 6, then the Indemnified Party shall
notify the Indemnifying Party thereof promptly; provided, however, that no delay
on the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is damaged as a
result of such failure. In the event any Indemnifying Party notifies the
Indemnified Party within 15 days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense thereof, (i) the
Indemnifying Party will defend the Indemnified Party against the matter with
counsel of 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 Liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld unreasonably). In the event
the Indemnifying Party does not notify the Indemnified Party within 15 days
after the Indemnified Party has given notice of the matter that the Indemnifying
Party is assuming the defense thereof, however, and/or in the event the
Indemnifying Party shall fail to defend such claim actively and in good faith,
then the Indemnified Party may defend against, or enter into any settlement with
respect to, the matter in any manner it reasonably may deem appropriate.
E. LIMITATION OF LIABILITY. Notwithstanding anything in this
Agreement to the contrary, after the Closing neither party shall indemnify or
otherwise be liable to the other party from and after the Closing Date except to
the extent that the Adverse Consequences suffered by the Indemnified Party, in
the aggregate from all indemnifiable events shall exceed Ten Thousand Dollars
($10,000) and indemnification shall be made by the indemnifying party only to
the extent of such excess over Ten Thousand Dollars ($10,000); provided however
that the foregoing limitation shall not be applicable to: (i) the obligations of
the Buyer to pay and discharge any Liability of the Seller to third parties from
and after the Closing Date assumed by the Buyer under the terms of this
Agreement; (ii) the obligation of the Seller to pay and discharge any Liability
to third parties, or (iii) the Seller's obligation to deliver clear title to the
Acquired Assets.
7. DEFINITIONS.
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"ACQUIRED ASSETS" means all right, title, and interest in and to all of
the assets of the Seller, other than Retained Assets that are used or useful in
the operation of the business of the Seller, wherever located, including but not
limited to all of its (a) software owned or developed by Seller, including
source code and object code version; (b) all documents, files and records; (c)
all customer lists and goodwill; (d) all customer or operating manuals, training
materials, references guides, and sales materials; (e) all contract and license
rights; (f) all slogans, trade names and service marks; (g) copyrights; (h) real
property, leaseholds and other interests of any kind therein, improvements,
fixtures, and fittings thereon, and easements, rights-of-way, and other
appurtenances thereto; (i) tangible personal property (such as fixed assets,
computers, data processing equipment, electrical devices, monitoring equipment,
test equipment, furniture, furnishings, other supplies, and vehicles) and all
assignable warranties with respect thereto; (j) 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;
(k) rights under orders and agreements now existing or entered into in the
Ordinary Course of Business; (l) Assumed Contracts, indentures, Security
Interests, guaranties, other similar arrangements, and rights thereunder; (m)
claims, deposits, prepayments, refunds, causes of action, chooses in action,
rights of recovery (including rights under policies of insurance), rights of set
off, and rights of recoupment; (n) Licenses and similar rights obtained from
governments and governmental agencies; (o) goodwill of the Seller; (p) Ten
Thousand and no/100 Dollars ($10,000); and (q) all accounts receivable.
"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.
"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.
"ASSUMED CONTRACTS" means the Leases, and those contracts identified on
Section 2(j) of the Disclosure Schedule as those to be assumed by Buyer.
"ASSUMED LIABILITIES" means (a) obligations of the Seller which accrue
after the Closing Date under the Assumed Contracts either: (i) to furnish
services, and other non-Cash benefits to another party after the Closing; or
(ii) to pay for goods, services, and other non-Cash benefits that another party
will furnish to it after the Closing, and (b) Seller's accounts payable which
are listed in Section 8 of the Disclosure Schedule. The Assumed Liabilities
shall not include any Retained Liabilities.
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"BUYER" has the meaning set forth in the preface above.
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"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.
"COMPUTER SYSTEMS" has the meaning set forth in Section 2(v) above.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Seller.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 2 above.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multi-employer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(1).
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Federal Water Pollution Control Act of 1972, the Clean Air Act
of 1970, the Safe Drinking Water Act of 1974, the Toxic Substances Control Act
of 1976, the Refuse Act of 1899, or the Emergency Planning and Community
Right-to-Know Act of 1986 (each as amended), or any other law of any federal,
state, local, or foreign government or agency thereof (including rules,
regulations, codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety, or
pollution or protection of the environment, including, without limitation, laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or chemical, industrial, hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or lands or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"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.
"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 6(d) above.
"INDEMNIFYING PARTY" has the meaning set forth in Section 6(d) above.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 2(l)
above.
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LEASES" means those real estate leases to which Seller is a party, as
described in Section 2(i) of the Disclosure Schedule.
"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 governmental licenses, franchises, approvals,
certificates, authorizations and rights of the Seller with respect to the
operations of the business 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).
"PARTY" has the meaning set forth in the preface above.
"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 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.
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"RETAINED ASSETS" means (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of the Seller
as a corporation; and (ii) any of the rights of the Seller under this Agreement
(or under any side agreement between the Seller on the one hand and the Buyer on
the other hand entered into on or after the date of this Agreement).
"RETAINED LIABILITIES" means any obligations or Liabilities of the
Seller, including but not limited to: (i) any Liability relating to the
ownership or operation of the business prior to the Closing; (ii) any Liability
of the Seller for income, transfer, sales, use, and other Taxes arising in
connection with the consummation contemplated hereby; (iii) any Liability of the
Seller for costs and expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated hereby; or (iv) any Liability or
obligation of the Seller under this Agreement (or under any side agreement
between the Seller on the one hand and the Buyer on the other hand entered into
on or after the date of this Agreement).
"SECURITY INTEREST" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; and (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation.
"SELLER" has the meaning set forth in the preface above.
"SUBSIDIARY," with respect to any person, means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which ) 50% or more of (i) the outstanding capital stock or other equity
interest having voting power to elect a majority of the Board of Directors of
such corporation or persons having a similar role as to an entity that is not a
corporation, (ii) the interest in the profits of such partnership or joint
venture, or (iii) the beneficial 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.
"SHARES" has the meaning set forth in Section 1(c) above.
"SOFTWARE" has the meaning set forth in Section 2(l) above.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
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"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"THIRD PARTY INTELLECTUAL PROPERTY" has the meaning set forth in
Section 2(l)(3) above.
8. TERMINATION.
A. TERMINATION OF AGREEMENT. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing in the
event the Seller is in breach 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 Seller from
the Buyer; and
(iii) the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing in the
event the Buyer 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 Buyer from the
Seller.
B. EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 8(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).
9. MISCELLANEOUS.
A. 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.
B. 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.
C. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and enure 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 Buyer may
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assign all of their right, title and interest in, to and under this Agreement to
one or more Affiliates, who shall then, subject to the terms and conditions of
this Agreement, have the right to receive the Acquired Assets, assume the
Assumed Liabilities, and to pay to the Seller the Purchase Price therefor or to
any successor to the Buyer in the event of any sale, merger or consolidation of
the Buyer, and (ii) Buyer may assign their indemnification claims and their
rights under the warranties and representations of the Seller to the financial
institution(s) providing financing to the Buyer in connection with this
transaction.
D. 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.
E. 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.
F. NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be considered to be given
and received in all respects when hand delivered, when delivered via prepaid
express or courier delivery service, when sent by facsimile transmission
actually received by the receiving equipment or three (3) days after deposited
in the United States mail, certified mail, postage prepaid, return receipt
requested, in each case addressed to the intended recipient as set forth below:
If to the Seller:
Xx. Xxx Xxxxxx
Broadcast Software International Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx X
Xxxxxx, Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Copy to:
Xxxxxx Xxxxxxxx, Esquire
Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxxx Xxxxx & Xxxxx LLP
000 Xxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
(which copy shall not constitute notice to Seller)
If to the Buyer:
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Cumulus Broadcast Software International, Inc.
c/o Cumulus Broadcasting, Inc.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to:
Cumulus Broadcasting, Inc.
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.
G. 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 Oregon.
H. 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
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
I. 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.
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J. EXPENSES. The Buyer and the Seller will each bear their own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Seller and the
Buyer 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 Buyer.
K. 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.
L. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the
date first above written.
CUMULUS MEDIA INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------
Xxxxxxx Xxxxxxx
Title: Executive Chairman
BROADCAST SOFTWARE INTERNATIONAL INC.
By: /s/ Xxx Xxxxxx
------------------------------
Xxx Xxxxxx (printed)
------------------------------
Title: President
---------------------------
XX. XXX XXXXXX
/s/ Xxx Xxxxxx
---------------------------------
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