EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of September 11, 1996, is made between XXXXXX
BROADCASTING, INC., an Illinois corporation ("Seller"); XXXXX XXXXXX
("Shareholder"); CHILDREN'S BROADCASTING CORPORATION, a Minnesota corporation
("CBC"); and CHILDREN'S RADIO GROUP, INC., a Minnesota corporation ("Buyer");
and
W I T N E S S E T H :
THAT, WHEREAS, Seller is the Federal Communications Commission ("FCC" or
"Commission") licensee of Radio Station WAUR-AM, licensed to Sandwich, Illinois
(the "Station"); and
WHEREAS, Shareholder is the owner of a majority of the issued and
outstanding stock of Seller; and
WHEREAS, CBC is the owner of 100% of the issued and outstanding stock of
Buyer; and
WHEREAS, subject to and conditioned upon the consent of the FCC, Seller
desires to sell and transfer and Buyer desires to purchase and acquire the
Station and all of the tangible and intangible assets used or held for use in
connection with the operation of the Station;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
SALE AND TRANSFER OF ASSETS
At closing of the transaction described herein ("Closing"), Seller shall
sell, convey, assign, transfer and deliver to Buyer, free and clear of any lien,
encumbrance, mortgage or security interest of any nature whatsoever, all the
material assets of the Seller or Shareholder listed herein for use in connection
with the operation of the Station, specifically excluding cash on hand, accounts
receivable , like cash accounts and cash value of life insurance policies, items
not listed, if any, and including, the following (collectively, the "Assets"):
1.1. All licenses, permits and authorizations ("Licenses") issued by the
Commission for the operation of or used in connection with the operation
of the Station, all of which are listed on SCHEDULE A attached hereto;
1.2. All of Seller's real property interests described in SCHEDULE B attached
hereto ("Real Property");
1.3. All tangible personal property owned by Seller and used or held for use
in connection with the operation of the Station listed on SCHEDULE C
attached hereto, and any replacements therefor or improvements thereof
acquired or constructed prior to Closing ("Personal Property");
1.4. All of Seller's rights and benefits under the business agreements,
leases and contracts listed on SCHEDULE D attached hereto, including any
renewals, extensions, amendments or modifications
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thereof, all time sales agreements, and any additional agreements,
leases and contracts listed; Contracts made or entered into by Seller in
the ordinary course of business between the date of such Schedule and
the Closing approved in writing by Buyer and Seller or otherwise
permitted hereunder ("Leases and Agreements");
1.5. All other licenses, permits or authorizations issued by any government
or regulatory agency other than the FCC, which are used in connection
with the operation of the Station ("Permits");
1.6. All right, title and interest of Seller in and to the use of the call
letters WAUR for the Station ("Call Letters"), to the extent they can be
conveyed; together with all common law property rights, goodwill,
copyrights, trademarks, service marks, trade names and other similar
rights used in connection with the operation of the Station, including
all accretions thereto, including but not limited to those listed on
SCHEDULE E attached hereto ("General Intangibles"); and
1.7. Copies or originals of (relating to WAUR) programs, logs, customer
contracts, public files, vendor contracts, historical billing
information, promotional material, customer files, correspondence,
maintenance records or other business records relating to or used in
connection with the operation and financial condition of the Station (if
requested), but not including records pertaining to corporate affairs
(including tax records) and journals, provided copies are supplied to
Buyer if needed at Buyer's expense. Buyer shall have reasonable access
to all such records which might be in the possession of Seller for a
period of two (2) years following the Closing, and shall, at its own
expense, have the right to make copies thereof;
1.8. Seller and Shareholder agree that the Station Assets conveyed to Buyer
on the Closing Date pursuant to this Agreement will be conveyed free and
clear of all liens, charges, claims and encumbrances whatsoever,
excepting only those obligations from and after the Closing Date with
respect to obligations of Seller expressly agreed to be assumed by Buyer
hereunder.
ARTICLE 2
PURCHASE PRICE AND PAYMENTS
2.1. PURCHASE PRICE. As the purchase price for the Assets, Buyer agrees to
pay to Seller the sum of Three Million Nine Hundred Thousand and no/100
Dollars ($3,900,000.00).
2.2. METHOD OF PAYMENT OF PURCHASE PRICE. The purchase price shall be paid
as follows:
2.2.1. CASH PAYMENT AT CLOSING. Two Million and no/100 Dollars
($2,000,000.00) of the aggregate purchase price shall be
payable in cash at Closing.
2.2.2. PROMISSORY NOTE. One Million Four Hundred Thousand and no/100
Dollars ($1,400,000.00) of the aggregate purchase price shall
be payable pursuant to the terms of a Promissory Note in the
form attached hereto as EXHIBIT A (the "Note") to be executed
by Buyer and CBC and delivered to Seller at Closing. The Note
shall provide that the principal balance and interest thereon
at the rate of prime (as determined and adjusted quarterly by
reference to the prime rate published in the WALL STREET
JOURNAL) plus 1%, be amortized over six (6) years and payable
in equal quarterly payments over six (6) years or at such
earlier time that Buyer or CBC is sold or upon the resale of
WAUR. In the event of sale of Buyer or CBC or the resale of
WAUR, the balance due of this Promissory Note will become
payable in full in cash. The Note shall be secured by a lien
upon the Station Assets as set forth in that Security Agreement
attached hereto as EXHIBIT B. The Buyer shall have the option
of delivering shares of CBC Common Stock ("CBC Stock")
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in lieu of cash payments under the Note with the value of CBC
Stock determined by the average closing sale price of CBC Stock
on the NASDAQ National Market over the ten (10) trading days
prior to the two (2) days prior to the date of any due date of
a payment under the Note. Any CBC Stock delivered to Seller
shall carry demand registration rights as more particularly
described in Section 3 below, with any cost associated with
such registration to be paid by CBC. Notwithstanding the
foregoing, if the trading volume of CBC's stock over the thirty
(30) trading days preceding any such payment date averaged less
than 7,500 shares per day, then one-half of such Note payment
must be made in cash, and if the average trading volume is less
than 3,750 per day, then all of such Note payment shall be made
in cash. If a Suspension Notice or other impediment exists
which prevents registration of CBC Stock upon demand made at
the time of issuance of any installment of CBC Stock, Seller
shall have the right to require Buyer and CBC to make such
payment in cash within 5 business days after receipt of notice
from Seller. CBC shall have the option of making a maximum of
two payments of cash or CBC Stock in advance during any
calendar year, which prepayments shall be credited against the
next installment payment or payments due under the Note. Any
sale volume limitations imposed upon Seller in such event shall
be adjusted proportionately so that, for instance, if two
installments are being made, Seller's volume limit would be
doubled.
2.2.3. NON-COMPETITION AGREEMENT. Five Hundred Thousand and no/100
Dollars ($500,000.00) of the aggregate purchase price shall be
payable pursuant to the terms of a Non-Competition Agreement
(the "Non-Competition Agreement") in the form attached hereto
as EXHIBIT C to be executed by Shareholder and Buyer and
delivered at Closing. The Non-Competition Agreement shall have
a term of ten (10) years, shall cover the Eight County Chicago
Metropolitan Area, and shall provide that Shareholder shall not
directly or indirectly engage in the production or broadcast of
a children's radio format or programming within the proscribed
area during such 10-year term except in the event of default by
CBC and Buyer. Equal quarterly payments shall be made by Buyer
during the term of the Non-Competition Agreement.
2.3. ESCROW PROVISIONS. To secure Buyer's obligation to close hereunder, the
parties agree to enter into an Escrow Agreement in the form attached
hereto as EXHIBIT D (the "Escrow Agreement") contemporaneously with the
execution of this Agreement. Pursuant to the terms of the Escrow
Agreement, Buyer shall deliver to the Escrow Agent a certificate
representing shares of CBC Stock having a Market Value (as that term is
defined in the Escrow Agreement) of Three Hundred Fifty Thousand and
no/100 Dollars ($350,000.00) to secure performance of CBC's and Buyer's
obligations hereunder.
2.4. ADJUSTMENTS AND PRORATIONS. The operations of the Station and the
expenses and income attributable thereto up to 12:01 A.M. on the day of
the Closing (the "Adjustment Time"), shall, except as otherwise provided
in this Agreement, be for the account of Seller and thereafter shall be
for the account of Buyer. Expenses such as power and utility charges,
lease rents, property taxes according to year of accrual, frequency
discounts, annual license fees (if any), wages, commissions, payroll
taxes, and other fringe benefits of employees of the Seller who enter
the employment of the Buyer, and similar deferred items shall be
prorated between the Seller and the Buyer. With specific reference to
vacation pay or vacation time, it is understood that Seller will be
responsible for paying employees any accrued vacation pay and that Buyer
will not assume the obligation to provide any accrued vacation time to
employees. Prepaid deposits shall not be prorated but shall remain the
property of Seller. Employees' employment with Seller shall be
terminated as of the Closing Date, and Buyer shall employ employees of
its choice from and after said date upon terms acceptable to Buyer and
such employees. All prorations shall be made and paid insofar as
feasible at the Closing, with a final settlement within ninety (90) days
after the Closing.
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2.5. ASSUMED LIABILITIES. Except as expressly provided for in this
Agreement, at the Closing Buyer shall not assume, incur or be charged
with, in connection with the transactions herein contemplated, any
liabilities or obligations of any nature whatsoever, contingent or
otherwise. Without limitation of the foregoing, Buyer shall not assume
any obligations to Seller's or the Station's employees under any
employee benefit plans or employment contracts.
2.6. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets by Buyer and Seller as set forth in the attached
SCHEDULE F. Such allocation will be used for all purposes, including
preparation and filing of IRS Form 8594 with respect to the transactions
contemplated by this Agreement.
ARTICLE 3
FEDERAL SECURITIES LAWS MATTERS
3.1. DEFINITIONS. As used in this Article 3, the following terms shall have
the following meanings:
"ACT" means the Securities Act of 1933, as amended.
"ADVICE" has the meaning set forth in Section 3.3.
"AFFILIATE" means, with respect to any specified person, any other
person who, directly or indirectly, controls, is controlled by, or is
under common control with such specified person.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and
regulations of the Commission promulgated thereunder.
"HOLDER" means (i) Seller and (ii) each person (other than CBC and its
Affiliates) to whom Seller transfers the Shares as provided in Section
3.6 hereof, if the person to whom the Shares are transferred acquires
the Shares as Registrable Securities.
"PROSPECTUS" means the Prospectus included in any Registration Statement
(including without limitation, a Prospectus that discloses information
previously omitted from a Prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any Prospectus
supplement, and by all other amendments and supplements to the
Prospectus, including post-effective amendments, and in each case
including all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the Shares; PROVIDED, HOWEVER, that any
Shares shall cease to be Registrable Securities when (i) a Registration
Statement covering such Registrable Securities has been declared
effective and such Registrable Securities have been disposed of pursuant
to such effective Registration Statement, or (ii) such Registrable
Securities become eligible for sale pursuant to Rule 144(k) (or any
similar provision then in force) under the Act, or (iii) such Securities
cease to be outstanding.
"REGISTRATION STATEMENT" means any registration statement of CBC that
covers any of the Registrable Securities pursuant to the provisions of
this Agreement and all amendments and supplements to any such
registration statement, including post-effective amendments, in each
case including the Prospectus, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in
such registration statement.
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"SHARES" means the shares of CBC Common Stock issued to the Seller
pursuant to this Agreement so long as they are owned beneficially and of
record by a Holder.
"SUSPENSION NOTICE" has the meaning set forth in Section 3.3.
3.2. RESALE REGISTRATION.
3.2.1. FILING, EFFECTIVENESS. If any Holder shall make a demand of
CBC in writing at any time after the Closing Date of the
transactions contemplated by this Agreement that it desires CBC
to register all or any portion of his Registrable Securities,
CBC shall use reasonable efforts to prepare and file a
registration statement on Form S-3 (the "Registration
Statement") under the Act covering the resale by such Holder of
its Registrable Securities pursuant to Rule 415 under the
Securities Act from time to time in transactions not involving
any underwritten public offering and use reasonable efforts (i)
to cause such Registration Statement to be declared effective
by the Commission for such Registrable Securities as soon as
practicable thereafter and (ii) to keep the Resale Registration
Statement continuously effective until the earliest of (x) the
date on which such Holder no longer holds any Registrable
Securities registered under the Resale Registration Statement
or (y) the third anniversary of the issuance of the Registrable
Securities, or such lesser time as may be permitted under Rule
144(k) under the Act (or any successor rule thereto) to enable
Holder to sell the Registrable Securities without restriction
under the Act. CBC shall not be required to cause a
Registration Statement requested pursuant to this Section 3.2
to become effective prior to 90 days following the effective
date of a registration statement for a publicly underwritten
offering of CBC Common Stock initiated by CBC if any managing
underwriter named in such registration statement for the
publicly underwritten offering has advised CBC in writing that
the registration or sale of additional securities by
stockholders of CBC within such 90-day period would have a
material adverse effect on the likelihood of success of such
underwritten offering; PROVIDED, HOWEVER, that CBC shall use
its best efforts to achieve such effectiveness promptly
following such 90-day period if the request pursuant to this
Section 3.2 has been made prior to the expiration of such
90-day period. CBC may postpone the filing of any Registration
Statement required hereunder for a reasonable period of time,
not to exceed 60 days, if CBC has been advised by outside legal
counsel that such filing would require the disclosure of a
material transaction or other matter and CBC determines
reasonably and in good faith that such disclosure would have a
material adverse effect on CBC; PROVIDED, HOWEVER, that CBC
shall (A) use reasonable efforts to disclose such material
transaction or other matter as soon as in its good faith
judgment it is prudent to do so and (B) may so postpone such
filing only if all other persons who are named as selling
securityholders under then effective registration statements
filed by CBC with the Commission and all directors of CBC are
advised of the fact that a material transaction or other matter
is not being disclosed during the length of such postponement
and of the consequences of such nondisclosure under the Act and
the Exchange Act. The disclosure to any Holder of any material
transaction, or of the existence thereof, pursuant to the
preceding sentence shall be held in confidence by Seller or
Holder until CBC or a third party not under the control of
Seller or Holder has made a public disclosure thereof.
3.2.2. EFFECTIVE REGISTRATION. A registration will not be deemed to
have been effected unless the Registration Statement has been
declared effective by the Commission; PROVIDED, HOWEVER, that
if after it has been declared effective, the offering of
Registrable Securities pursuant to a Registration Statement is
interfered with by any stop order, injunction or other order or
requirement of the Commission or any other governmental agency
or court, such Registration Statement will be deemed not to
have become effective during the period of
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such interference until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume.
3.3. REGISTRATION PROCEDURES. In connection with the obligations of CBC to
effect or cause the registration of any Registrable Securities pursuant
to the terms and conditions of this Agreement, CBC shall use reasonable
efforts to effect the registration and sale of such Registrable
Securities in accordance with the intended method of distribution
thereof, and in connection therewith:
(a) CBC shall prepare and file with the Commission a Registration
Statement on Form S-3 or other similar form under the
Securities Act which permits secondary sales of securities in a
"shelf registration," and use reasonable efforts to cause such
Registration Statement to become effective and remain effective
in accordance with the provisions of this Agreement;
(b) CBC shall promptly prepare and file with the Commission such
amendments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration
Statement effective and shall timely file with the Commission
all required filings under the Exchange Act as are necessary to
keep the Registration Statement effective for as long as such
registration is required to remain effective pursuant to the
terms hereof; shall cause the Prospectus to be supplemented by
any required Prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act; and
shall comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all
Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended
methods of disposition by Holder set forth in such Registration
Statement or supplement to the Prospectus;
(c) CBC shall promptly furnish to Holder such number of copies of
the Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, as Holder may reasonably
request in order to facilitate the public sale or other
disposition of the Registrable Securities being sold by Holder;
(d) CBC shall promptly notify Holder, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been
filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective,
(ii) of any request by the Commission or any state securities
authority for amendments and supplements to a Registration
Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement, (iv) of the issuance
by any state securities commission or other regulatory
authority of any order suspending the qualification or
exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws, and (v)
of the happening of any event which makes any statement made in
a Registration Statement or related Prospectus untrue or which
requires the making of any changes in such Registration
Statement or Prospectus so that they will not contain any
untrue statement of a material fact or omit to state any
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. As soon as
practicable following expiration of the Suspension Period (as
defined below), CBC shall prepare and file with the Commission
and furnish a supplement or amendment to such Prospectus so
that, as thereafter deliverable to the purchasers of such
Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the
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statements therein, in light of the circumstances under which
they were made, not misleading.
Upon receipt of any notice (a "Suspension Notice") by Holder from CBC of
the happening of any event of the kind described in Section 3.3(d),
Holder shall forthwith discontinue disposition of the Registrable
Securities pursuant to the Resale Registration Statement covering such
Registrable Securities until such Seller's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3.3(d) or
until Holder is advised in writing (the "Advice") by CBC that the use of
the Prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by CBC, will, or will request any
broker-dealer acting as Holder's agent to, deliver to CBC (at CBC
expense) all copies, other than permanent file copies then in Seller's
or broker-dealer's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice;
PROVIDED, HOWEVER, that in no event shall the period from the date on
which Seller receives a Suspension Notice to the date on which Seller
receives either the Advice or copies of the supplemented or amended
Prospectus contemplated by Section 3.3(d) (the "Suspension Period")
exceed 60 days.
3.4. REGISTRATION EXPENSES. CBC shall bear all expenses incurred in
connection with the registration of the Registrable Shares pursuant to
Section 3.2 of this Agreement. Such expenses shall include, without
limitation, all printing, legal and accounting expenses incurred by CBC
and all registration and filing fees imposed by the Commission, any
state securities commission or the NASDAQ Stock Market. Each Holder
shall be responsible for any brokerage fees or commissions and taxes of
any kind (including, without limitation, transfer taxes) with respect to
any disposition, sale or transfer of Registrable Securities and for any
legal, accounting and other expenses incurred by such Holder.
3.5. INDEMNIFICATION AND CONTRIBUTION.
3.5.1. INDEMNIFICATION BY CBC. CBC agrees to indemnify and hold
harmless, to the full extent permitted by law, each Holder from
and against all losses, claims, damages, liabilities and
expenses (including without limitation reasonable legal fees
and expenses incurred by Holder (collectively, the "Damages")
to which Holder may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect
thereat) arise out of or are based upon any untrue statement of
material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, or caused by any
omission to state therein a material fact necessary to make the
statements therein in light of the circumstances under which
they were made not misleading, or caused by any untrue
statement of a material fact contained in any Prospectus (as
amended or supplemented if CBC shall have furnished any
amendments or supplements thereto), or caused by any omission
to state therein a material fact necessary to make the
statements therein in light of the circumstances under which
they were made not misleading, except insofar as such Damages
arise out of or are based upon any such untrue statement or
omission based upon information relating to Seller furnished in
writing to CBC by Seller specifically for use therein;
PROVIDED, HOWEVER, that CBC shall not be liable to Holder under
this Section 3.5.1 to the extent that any such Damages were
caused by the fact that Holder sold Securities to a person as
to whom it shall be established that there was not sent or
given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented if, but
only if, (i) CBC has previously furnished copies of such
amended or supplemented Prospectus to Holder and (ii) such
Damages were caused by any untrue statement or omission
contained in the Prospectus so delivered which was corrected in
such amended or supplemented Prospectus.
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3.5.2. INDEMNIFICATION BY THE SELLER. Holder agrees to indemnify and
hold harmless CBC, its stockholders, directors, officers and
each person, if any, who controls CBC within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from
CBC to Holder, but only with reference to information relating
to Holder furnished in writing to CBC by Holder specifically
for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that Holder shall not be obligated
to provide such indemnity to the extent that such Damages
result from the failure of CBC to promptly amend or take action
to correct or supplement any such Registration Statement or
Prospectus on the basis of corrected or supplemental
information provided by Seller to CBC expressly for such
purpose. In no event shall the liability of Holder hereunder
be greater in amount than the amount of the proceeds received
by Holder upon the sale of the Registrable Securities giving
rise to such indemnification obligation.
3.5.3. CONTRIBUTION. To the extent that the indemnification provided
for in paragraph 3.5.1 or 3.5.2 of this Section 3.5 is
unavailable to an indemnified party or insufficient in respect
of any Damages, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such Damages in such
proportion as is appropriate to reflect the relative fault of
CBC on the one hand and Holder on the other hand in connection
with the statements or omissions that resulted in such Damages,
as well as any other relevant equitable considerations. The
relative fault of CBC on the one hand and of Holder on the
other hand shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the
omission to state a material fact relates to information
supplied by CBC or by Holder and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
If indemnification is available under paragraph 3.5.1 or 3.5.2
of this Section 3.5, the indemnifying parties shall indemnity
each indemnified party to the full extent provided in such
paragraphs without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 3.5.3. CBC and
Holder agree that it would not be just or equitable if
contribution pursuant to this Section 3.5.3 were determined by
pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred
to herein.
3.6 TRANSFER OF REGISTRATION RIGHTS. The registration rights of Seller and
any Holder under this Article 3 may be transferred to any transferee of
Registrable Securities that acquires at least 10,000 shares of
Registrable Securities (appropriately adjusted for stock splits, stock
dividends and the like).
3.7 REPRESENTATIONS AND WARRANTIES. As a material inducement to CBC to
enter into this Agreement and to consummate the transactions
contemplated hereby, Seller makes to CBC the following representations
and warranties:
(a) Seller is acquiring the shares of CBC Common Stock to be issued
to such Seller hereunder for Seller's own account for
investment only and not with a view to, or with any intention
of, a distribution or resale thereof, in whole or in part, in
violation of the Securities Act or any rule or regulation
thereunder, as amended from time to time.
(b) Seller is not directly or indirectly controlled by, or acting
on behalf of any person which is, an "investment company"
within the meaning of the Investment Company Act of 1940 (the
"1940 Act"), as amended, required to register as such under the
1940 Act.
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(c) Seller (i) acknowledges receipt of the disclosure information
described on SCHEDULE G attached hereto and made a part hereof
by reference; (ii) has carefully reviewed such disclosure
information provided by CBC; (iii) has requested and received
such other information, as he has deemed relevant, regarding
CBC for purposes of evaluating his acquisition of CBC Common
Stock to be issued hereunder; (iv) is aware of the risks
associated with an investment in CBC Common Stock; and (v) has
not received any form of general solicitation or advertising in
connection with his decision to acquire CBC Common Stock
hereunder. Seller has not relied in any way on any information
with respect to the CBC Common Stock or CBC generally other
than the representations of CBC contained herein or the
disclosure materials described on Schedule G furnished by CBC
in connection herewith.
(d) Seller acknowledges and understands that (i) the CBC Common
Stock to be issued to Seller hereunder has not been registered
under the Securities Act or any state securities laws; (ii) the
CBC Common Stock to be issued to Seller hereunder will be
subject to transfer restrictions under the Securities Act and
applicable state securities laws and may not be transferred
unless (x) subsequently registered under the Securities Act and
applicable state securities laws or (y) there is delivered to
CBC an opinion of counsel satisfactory to CBC that such
registration is not required; and (iii) CBC will place a
restrictive legend on the certificate(s) representing the CBC
Common Stock to be issued to Seller hereunder, containing the
following language:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") AND WITHOUT
REGISTRATION UNDER APPLICABLE STATE SECURITIES
LAWS, IN RELIANCE UPON EXEMPTIONS CONTAINED IN THE
ACT AND SUCH LAWS. NO TRANSFER OF THESE SHARES OR
ANY INTEREST THEREIN MAY BE MADE EXCEPT PURSUANT
TO EFFECTIVE REGISTRATION STATEMENTS UNDER SAID
LAWS UNLESS THIS CORPORATION HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
TRANSFER OR DISPOSITION DOES NOT REQUIRE
REGISTRATION UNDER SAID LAWS AND, FOR ANY SALES
UNDER RULE 144 OF THE ACT, SUCH EVIDENCE AS IT
SHALL REQUEST FOR COMPLIANCE WITH THAT RULE.
(e) Seller (i) is able to bear the economic risks of the
acquisition of shares of CBC Common Stock hereunder and has
adequate means of providing for current needs and possible
contingencies; (ii) either alone or with his advisors has had
the opportunity to ask questions and receive answers concerning
CBC and the terms and conditions of the acquisition of CBC
Common Stock, as well as the opportunity to obtain any
additional information necessary to verify the accuracy of
information furnished in connection therewith which CBC
possesses or can acquire without unreasonable effort or
expense; and (iii) together with his advisors, if any, has such
knowledge and experience in financial and business matters that
Seller is capable of evaluating the merits and risks of this
acquisition of CBC Common Stock in exchange for the Shares, and
of making an informed investment decision, and has relied
solely upon the advice of his own counsel, accountant and other
advisors, with regard to the legal, investment, tax and other
considerations regarding such acquisition.
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ARTICLE 4
SELLER'S AND SHAREHOLDER'S REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
Seller and Shareholder represent, warrant and agree as follows, which
representations, warranties and agreements shall be deemed to have been made
again at Closing:
4.1. CORPORATE EXISTENCE AND POWERS. Seller is a corporation organized and
existing in good standing under the laws of the State of Illinois with
full power and authority to enter into this Agreement and to enter into
and complete the transactions contemplated herein; all required
corporate action has been or will be taken by Closing by Seller and
Shareholder to make and carry out this Agreement; the execution of this
Agreement and the completion of the transactions herein involved will
not result in the violation of any order, licenses, permit, rule,
judgment or decree to which Seller is subject or the breach of any
contract, agreement or other commitment to which Seller is a party or by
which it is bound; and no other consent of any kind is required that has
not been obtained for Seller to make or carry out the terms of this
Agreement, except with respect to those consents required of parties to
Leases and Agreements listed on Schedule B or D, with respect to
assignment and assumption of specific contract rights and obligations.
Seller shall use its best efforts to obtain third party consents with
respect to any leases, contracts or agreements designated herein by
Buyer and Seller as "material", to the extent required by such
documents, and, to the extent Seller is unable to obtain any such
consents, Seller shall provide Buyer with alternate benefits essentially
similar to those which would have been provided under such contract at
the cost that Buyer would have paid by assumption of such contract.
Buyer shall cooperate with Seller in obtaining all such required
consents.
4.2. LICENSES. Seller is the holder of the licenses, permits and
authorizations listed on Schedule A, all of which are valid, and in full
force and effect, and to the best of their knowledge and belief, all
ownership and employment reports, renewal applications, financial
reports, and other reports and documents required to be filed for the
Station have been properly and timely filed, and Seller will not
knowingly, without Buyer's prior written consent, by an act or omission,
surrender, modify (except to seek extensions of existing
authorizations), forfeit or fail to seek renewal on regular terms, of
the broadcast license or authorization of the Commission, or cause the
Commission to institute any proceeding for the cancellation or
modification of any such license or authorization.
The parties expressly acknowledge that FCC has issued a construction
permit to Seller authorizing an increase in the Station's effective
radiated operating power. The construction permit (FCC File No. BP-
940302DD, as extended by File No. BMP-951204DA), as shown on Schedule A
hereto, expires August 29, 1996. Seller is in the process of diligently
implementing the authorized construction and improvements, but makes no
representations that construction will be completed by the Closing Date
or that the FCC will authorize additional time within which to complete
construction.Failure to complete such construction or any act which
jeopardizes the construction permit with the FCC will be considered a
breach of this Agreement.
4.3. ASSETS. The Assets to be transferred to Buyer at Closing represent all
the assets necessary for the Station's current operations; until
Closing, none of the Assets will be sold, leased or otherwise disposed
of unless replaced by a similar Asset of equal or greater value, and, at
Closing, all of the Assets shall be owned by and transferred by Seller
to Buyer free and clear of all liens, encumbrances, interests or
restrictions of any kind whatsoever excepting only those obligations,
liens or encumbrances expressly assumed by Buyer hereunder and listed on
Schedule B or D.
4.4. CONTRACTS, LEASES, AGREEMENTS, ETC. On the Closing Date there will be
no Leases or Agreements relating to the Station (not including this
Agreement) which will be binding on the Buyer other than
10
those specifically identified herein, including Schedule D attached
hereto, or as otherwise approved in writing by Buyer.
4.5. LITIGATION. To Seller's and Shareholder's knowledge, no strike, labor
dispute, investigation, litigation, court or administrative proceeding
is pending or threatened against Seller or Shareholder relating to the
Station, its employees or any of the Assets to be conveyed hereunder
which may result in any change in the business, operations, assets or
financial condition of Seller or may materially affect Buyer's use and
enjoyment of the Assets, or which would hinder or prevent the
consummation of the transaction contemplated by this Agreement, and
Seller knows of no basis for any such possible action.
4.6. INSURANCE. Until Closing, Seller shall keep the Assets insured to full
insurable value against loss or damage by fire or from other causes
customarily insured against by other radio stations similarly situated,
and has provided Buyer with an abstract of such casualty insurance
coverage which Buyer has read and agrees is adequate.
4.7. ACCESS TO INFORMATION. Seller shall give Buyer and its representatives
reasonable access during normal business hours throughout the period
prior to Closing to the operations, properties, books, accounting
records, contracts, agreements, leases, commitments, programming,
technical and sales records and other records of and pertaining to the
Station; provided, however, such access shall not disrupt Seller's
normal operation. Seller shall furnish to Buyer all information
concerning the Station's operations as Buyer may reasonably request.
Buyer will maintain the confidentiality of all the information and
materials delivered to it or made available for its inspection by Seller
hereunder, except where such information or materials are required to be
filed with the FCC in connection with the assignment application or are
disclosed to partners of Buyer or lenders thereto as reasonably required
to secure financing to consummate the transaction contemplated herein.If
for any reason the transaction contemplated herein is not consummated,
Buyer will return to Seller all such materials in its possession and
keep all of the foregoing information confidential. Buyer and CBC shall
reimburse Seller for cost incurred to Seller to comply with 4.7.
4.8. CONDUCT OF THE STATION'S BUSINESS. Until Closing, without the written
consent of Buyer, Seller shall not enter into any transaction other than
those in the ordinary course of the business of the Station; and Seller
will cause the Station to be operated in compliance with its licenses,
permits and all applicable laws and regulations;
Seller further represents, warrants and covenants:
(a) Between the date hereof and Closing, Seller shall not take any
action which will prevent or impede Buyer from obtaining at the
Closing the actual and immediate occupancy and possession of
the Station and all of the Assets purchased hereunder,
including its books and records of Station.
(b) On the Closing date, Seller will be the owner of the radio
broadcast equipment and other assets purchased hereunder except
such of the same replaced by suitable property of no less than
equivalent value in the ordinary course of business, with good
and marketable title thereto, free and clear of all liens and
encumbrances, except liens for current taxes and assessments
not yet due and payable, and at Closing the Assets will be in
condition sufficient to continue the operation of the Station
in compliance with its FCC licenses.
(c) Neither Seller nor Shareholder knows of any facts relating to
it or the Station which would cause the Commission to deny its
consent to the assignment of the Station authorization to
Buyer.
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(d) Seller will have paid and discharged all taxes, assessments,
excises, and levies known to Seller or Shareholder which have
not been paid and that would interfere with Seller's assets,
facilities, license or other items conveyed hereunder.
4.9. FINANCIAL INFORMATION. Any financial information relating to the
Station that Seller has provided or will provide to Buyer are true and
correct to the best of Seller's knowledge in all material respects.
4.10 PRE-CLOSING COVENANTS. Between the date hereof and the Closing, Seller
and Shareholder covenant that :
4.10.1 FCC COMPLIANCE. Seller shall make all reasonable efforts to
the best of Seller's knowledge and belief to continue to
operate the Station in substantial conformity with the terms of
the Station's license and in conformity in all material
respects with all applicable laws, regulations, rules and
ordinances, including but not limited to the rules and
regulations of the FCC. Seller shall file all reports,
applications and other filings required by the FCC in a timely
and accurate manner.
4.10.2 CONDUCT OF BUSINESS. Seller shall operate the Station and
conduct its business diligently and in the usual and ordinary
course and consistent with past practices, and shall continue
all practices, policies, procedures and operations relating to
the Station in substantially the same manner as heretofore,
including maintenance of the Assets; however, Seller may adjust
staff to conduct day to day operations.
4.10.3 MAINTENANCE OF ASSETS. Seller shall maintain all of the Assets
as is in a good condition and shall maintain inventories of
spare parts at current levels consistent with the past
practices of Seller and the Station. Seller shall not sell,
convey, assign, transfer or encumber any of the Assets herein
listed, except for the retirement of tangible Assets consistent
with the normal and customary practices of Seller and the
Station.
ARTICLE 5
CBC'S AND BUYER'S REPRESENTATIONS AND WARRANTIES
CBC and the Buyer represent and warrant as follows, which
representations and warranties shall be deemed to have been made again at
Closing.
5.1. CORPORATE EXISTENCE AND POWERS. CBC and Buyer are corporations
organized and existing in good standing under the laws of the State of
Minnesota with full power and authority to enter into this Agreement and
enter into and complete the transactions contemplated herein; Buyer is,
or will be at the time of Closing, qualified to do business in the State
of Illinois; all required corporate action has been taken by Buyer and
CBC to make and carry out this Agreement; the execution of the Agreement
and, once the consent referred to in the next clause of this sentence is
obtained, the completion of the transactions herein involved will not
result in the violation of any order, license, permit, rule, judgment or
decree to which CBC or the Buyer is subject or the breach of any
contract, agreement or other commitment to which CBC or the Buyer is a
party or by which it is bound; and except for the consent of the
Commission, no other consent of any kind is required that has not been
obtained for Seller to make or carry out the terms of this Agreement.
5.2. BUYER'S QUALIFICATIONS. Buyer or its assignee are legally and
financially qualified to become the licensee of the Commission and to
consummate this Agreement. Buyer does not know of any facts
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relating to it which would cause the Commission to deny its consent, or
which would materially hinder or delay receipt of such consent, to the
Licenses for the Station to Buyer.
5.3. SECURITIES AND EXCHANGE ACT OF 1934. CBC shall be in compliance with
applicable requirements of the Securities and Exchange Act of 1934.
5.4. CBC STOCK. At Closing, all CBC Stock to be issued hereunder will be
validly issued, duly authorized, fully paid and non-assessable.
5.5. LITIGATION. To Buyer's and CBC's knowledge, no strike, labor dispute,
investigation, litigation, court or administrative proceeding is pending
or threatened against Buyer or CBC relating to its operations, its
employees or any of the responsibilities which may result in any change
in the business, operations, assets or financial condition of Buyer or
may materially hinder or prevent the consummation of the transaction
contemplated by this Agreement, and Buyer knows of no basis for any such
possible action.
5.6. ENCUMBRANCES. Neither Buyer nor CBC shall encumber any equipment,
licenses, transmitter lease, or other assets listed herein. Buyer's
right to encumber assets is not restricted if the encumbrance is
subordinate to the security agreement(s) herein provided to Seller.
5.7. FCC CONSTRUCTION PERMIT. The parties expressly acknowledge that FCC has
issued a construction permit to Seller authorizing an increase in the
Station's effective radiated operating power. The construction permit
(FCC File No. BP-940302DD, as extended by File No. BMP-951204DA), as
shown on Schedule A hereto, expires August 29, 1996. Seller is in the
process of diligently implementing the authorized construction and
improvements, but makes no representations that construction will be
completed by the Closing Date or that the FCC will authorize additional
time within which to complete construction. Therefore, Buyer agrees to
accept assignment of the Licenses subject to the extant status of the
construction permit and associated construction at Closing. If
construction is not complete at the time of Closing, Buyer agrees
further that it will immediately continue construction of the authorized
facilities after the assignment is consummated and complete construction
of the upgrade of the facility. Failure to complete such construction
or any act which jeopardizes the construction permit with the FCC will
be considered a breach of this Agreement.
ARTICLE 6
BREACH OF AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
6.1. BREACH OF SELLER'S OR SHAREHOLDER'S AGREEMENTS, REPRESENTATIONS AND
WARRANTIES. Seller and Shareholder shall indemnify and hold harmless
CBC and Buyer from and against any loss, damage, liability, claim,
demand, judgment or expense, including claims of third parties arising
out of ownership of the Assets or the operation of the Station by Seller
prior to Closing, and including without being limited to, reasonable
counsel fees and reasonable accounting fees, arising out of or sustained
by CBC or Buyer by reason of any material breach of any warranty,
representation, covenant or agreement of Seller or Shareholder contained
herein or in the Schedules attached hereto; provided, however, that such
indemnification shall be required only if written notice, with respect
to any matter for which indemnification is claimed, is given. Upon
receipt of such written notice, Seller shall have the right, if it
involves a liability to a third party, to defend or compromise such
matter at Seller's sole cost and expense, and Buyer shall cooperate
fully in such defense.
6.2. BREACH OF CBC'S OR BUYER'S AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
CBC and Buyer shall indemnify and hold harmless Seller from and against
any loss, damage, liability, claim, demand,
13
judgment or expense, including claims of third parties arising out of
ownership of the Assets or operation of the Station by Buyer after
Closing, and including without being limited to, reasonable counsel fees
and reasonable accounting fees, arising out of or sustained by Seller by
reason of any material breach of any warranty, representation, covenant
or agreement of CBC or Buyer contained herein; provided, however, that
such indemnification shall be required only if written notice, with
respect to any matter for which indemnification is claimed, is given.
Upon receipt of such written notice, CBC and Buyer shall have the right,
if it involves a liability to a third party, to defend or compromise
such matter at CBC or Buyer's sole cost and expense, and Seller shall
cooperate fully in such defense.
6.3. SPECIFIC PERFORMANCE AND LIQUIDATED DAMAGES. The Seller acknowledges
that the Assets and property to be transferred and assigned under this
Agreement are unique and not readily bought on the open market and, for
that reason, among others, CBC and Buyer would be irreparably harmed by
any breach or failure of the Seller to consummate this Agreement, and
monetary damages therefor will be highly difficult, if not wholly
impossible, to ascertain. It is therefore agreed that this Agreement
shall be enforceable in a court of equity by a decree of specific
performance by Buyer or CBC, and an injunction may be issued restraining
any transfer or assignment of the Assets contrary to the provisions of
this Agreement pending the determination of such controversy. The
Seller, for itself and its successors and assigns, hereby waives the
claim or defense that an adequate remedy at law exists. In the event of
the failure of the contemplated transaction to close as a result of
Buyer's or CBC's material breach of their obligations hereunder, and
assuming that neither Seller nor Shareholder are in material breach of
any of their obligations hereunder, then the parties agree that the
Escrow Note and payment of the amount called for to be paid thereunder
shall act as liquidated damages to Seller and Shareholder, and in no
event shall Seller or Shareholder have the right to claim damages in
excess of the Escrow Note as a result of the transaction's failure to
close.
ARTICLE 7
RISK OF LOSS
7.1. BUYER'S OPTIONS. The risk of loss or damage to any of the Assets to be
sold hereunder by fire or other casualty loss shall be upon Seller at
all times prior to Closing. In the event that any loss or damage
occurs, the proceeds of any insurance policy covering such loss may be
used by Seller to repair, replace or restore any such loss prior to the
Closing, Seller shall notify the Buyer of same in writing immediately,
stating with particularity the reasonable estimates of the loss or
damage incurred, the cause of damage, if known, and the extent to which
restoration, replacement and repair of the Assets lost or destroyed is
believed reimbursable under any insurance policy with respect thereto.
In the event that Seller decides not to provide the additional funds or
if Seller does not restore the facilities so that transmission can be
resumed in the usual manner within sixty (60) days, however, if Seller
has commenced to restore the facility and is making due diligent effort
to restore said facility and due to circumstances beyond his control
restoration can not be completed in sixty (60) days, then additional
time shall be allowed Seller to complete restoration of the facility; if
Seller fails to act as stated above, Buyer may either (i) terminate this
Agreement, or (ii) consummate the Closing and accept the property in its
"then" condition, in which event Seller shall assign to Buyer all
proceeds of insurance relative to the property to be conveyed.
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ARTICLE 8
APPLICATION FOR COMMISSION APPROVAL
8.1. FILING AND PROSECUTION OF APPLICATION. Buyer and Seller shall join in
an application to be filed with the Commission requesting its written
consent to the assignment of the License of the Station from Seller to
Buyer. Each party shall prepare its own portion of the application.
Buyer and Seller shall take all steps necessary to the expeditious
prosecution of such application to a favorable conclusion, using their
best efforts throughout. The parties agree that the application will be
filed by September 15, 1996 at such time as their respective FCC counsel
agree would result in a Closing Date as soon as practicable, not prior
to January 1, 1997, subsequent to renewal of the Station's FCC licenses
and authorizations.
8.2. EXPENSES. Each party shall bear its own legal, accounting and other
expenses in connection with the consummation of the contemplated
transaction. Any fees incurred in connection with the preparation of
audited financial statements of Seller will be incurred at Buyer's
direction and deemed to be Buyer's expense for the purpose of this
Section 8.2 and will be prepared by Seller and Seller's CPA firm. The
parties shall cooperate with the preparation of the Commission
application and in connection with the prosecution of such application.
The filing fee shall be shared equally by the parties.
8.3. DESIGNATION FOR HEARING. If, for any reason, any application for
assignment of the License is designated for hearing by the Commission
prior to grant thereof, either party shall have the right by written
notice within thirty (30) days of such designation for hearing, to
terminate this Agreement if the allegations raised relate to the other
party. Should Closing occur and upon reconsideration should the FCC
designate the assignment for hearing, Buyer may elect to rescind this
Agreement, and if Buyer so elects, Buyer and Seller agree to cooperate
in filing an application to reassign the License to Seller, if
necessary, in order to comply with any FCC order and to take all
necessary actions to reverse this transaction as if Closing had not
occurred.
8.4. TIME FOR COMMISSION CONSENT. If the Commission has not given its
written consent to the assignment of the License set forth herein within
nine (9) months from the date of acceptance for filing of the
application for such assignment, either party, if not then in default,
may terminate this Agreement by giving written notice to the other.
Upon such termination, neither party shall have any right or liability
hereunder and all escrowed funds shall be returned to Buyer promptly.
8.5. CONTROL OF STATION. Until Closing, Buyer shall not directly or
indirectly, control, supervise, direct or attempt to control, supervise
or direct the operation of the Station, but such operation shall be the
sole responsibility of Seller, subject to and consistent with all rules,
regulations and policies of the FCC.
ARTICLE 9
CLOSING
Subject to the terms and conditions herein stated, the parties agree as
follows:
9.1. CLOSING DATE. The Closing of this Agreement shall be held at such time
and date as shall be mutually agreed by Seller and Buyer; provided,
however, that in any event Buyer must close no later than ten (10) days
after final Commission approval of the assignment of the License ("Final
Approval"). (The date scheduled, or required to be scheduled for
Closing hereunder is referred to herein as the "Closing Date.") Final
Approval shall be the approval of the FCC to the assignment of the
Station Licenses which is no longer subject to rehearing,
reconsideration or review by the
15
Commission or to review by any court under the Communications Act of
1934, as amended. Closing shall take place at the offices of Seller's
attorney in Yorkville, Illinois or, at the parties' option, another
mutually agreeable location.
9.2. SELLER'S AND SHAREHOLDER'S OBLIGATIONS AT CLOSING. At Closing, Seller
and Shareholder shall deliver to Buyer the following:
(a) An Assignment of the Licenses described in Schedule A; an
Assignment of Leases for the real property interests described
in Schedule B conveying all of Seller's or Shareholder's
interest in such real property and an Assignment and Xxxx of
Sale, Estoppel Certificate or similar instruments, including
third party consents to all "material" leases, contracts and
agreements, transferring to Buyer all other Assets to be
transferred hereunder, free and clear of all liens,
encumbrances and restrictions of any kind whatsoever.
(b) The business records described in Section 1.8 as requested;
(c) An opinion of Seller's counsel, addressed to Buyer, confirming
the correctness of Seller's representations made in Section 4.1
with respect to corporate organization and authority;
(d) The Non-Competition Agreement;
(e) A letter of instruction to the Escrow Agent authorizing release
of the Escrow Note to Buyer; and
(f) Such other documents and instruments as might reasonably be
requested by Buyer to consummate the transaction contemplated
hereunder consistent with the intent expressed herein.
9.3. CBC'S AND BUYER'S OBLIGATIONS AT CLOSING. At Closing, CBC or Buyer
shall deliver to Seller the following:
(a) A cashier's or certified check in the amount of Two Million and
no/100 Dollars ($2,000,000.00);
(b) The Note for One Million Four Hundred Thousand and no/100
Dollars ($1,400,000.00), together with a UCC-1 Financing
Statement granting Seller a lien upon the Station Assets
described in Schedules B, C, D and E, and a security agreement,
together with a security agreement granting an interest in the
proceeds from the sale of the license listed in Schedule A, to
secure such Note;
(c) Estoppel Certificate;
(d) The Non-Competition Agreement;
(e) An opinion of Buyer's and CBC's counsel, addressed to Seller,
confirming the correctness of Buyer's and CBC's representations
made in Section 5.1 with respect to corporate organization and
authority; and
(f) Such other documents and instruments as might reasonably be
requested by Seller to consummate the transaction contemplated
hereunder consistent with the intent expressed herein.
16
9.4. CONDITIONS TO OBLIGATIONS OF BUYER AND CBC. The obligations of Buyer
and CBC to consummate the transactions herein contemplated at Closing
are subject to and conditioned on:
(a) The written consent of the Commission to the assignment to
Buyer of the License of the Station that does not impose any
condition that is materially adverse to Buyer or CBC;
(b) The satisfaction at or before Closing of all agreements,
obligations and covenants of Seller hereunder required to be
performed or complied with by them on or before Closing;
(c) Certificate of Seller and Shareholder confirming the material
accuracy of the representations and warranties made by Seller
and Shareholder;
(d) Written third party consents to all material leases, contracts
and agreements where required by the terms of the lease,
contract or agreement;
(e) Either a determination that the contemplated transaction does
not constitute the sale of a business under applicable SEC
regulations or delivery of audited financial statements of
Seller for the three (3) tax years prior to Closing. It is
understood that Seller's financial statements are not audited,
that Seller's and/or Buyer's accountants will be paid by Buyer
for services in connection with preparing such audits, and that
the contingency referred to in this subparagraph relates to the
auditability of such records of Seller.
9.5. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate the transaction herein contemplated at Closing are subject to
and conditioned on:
(a) The written consent of the Commission to the assignment to
Buyer of the License of the Station without any conditions that
are materially adverse to Seller;
(b) The satisfaction at or before Closing of all agreements,
obligations and covenants of Buyer and CBC hereunder required
to be performed or complied with by it at or before the
Closing; and
(c) The material accuracy of the representations and warranties
made by Buyer and CBC.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1. EXECUTION OF DOCUMENTS. The parties agree to execute all applications,
documents and instruments which may be necessary for the consummation of
the transaction contemplated hereunder, or which might be from time to
time reasonably requested by any party hereto in connection therewith,
whether before or after the date of Closing.
10.2. NOTICES. All notices, requests, elections, demands and other
communications given pursuant to this Agreement shall be in writing and
shall be duly given when delivered personally or when deposited in the
mails, certified or registered mail, postage prepaid, return receipt
requested, and shall be addressed as follows:
If to Seller or Shareholder:
Mr. Xxxxx Xxxxxx
Xxxxxx Broadcasting, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
17
with copy to: Xxxx Xxxxxx, Esq.
Xxxxxx & Xxxxxx Law Offices
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
and Xxxxxx X. Xxxxxxxxxx, Esq.
Ingemunson Law Offices
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to Buyer or CBC:
Xx. Xxxxxxxxxxx X. Xxxx
Children's Broadcasting Corporation
Fourth Floor
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
with copy to: Xxxxx X. Xxxxx, Esq.
Children's Broadcasting Corporation
Fourth Floor
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
10.4. EXHIBITS AND SCHEDULES. All Exhibits and Schedules referred to herein
are incorporated into this Agreement by reference for all purposes and
shall be deemed part of this Agreement.
10.5. ENTIRE AGREEMENT. This Agreement together with all Exhibits and
Schedules referred to herein contain all of the terms and conditions
agreed upon by the parties hereto with respect to the transaction
contemplated hereunder and shall only be modified in writing by all
parties hereto.
10.6. ASSIGNABILITY. Neither party may assign their rights or obligations
under this Agreement without the prior written consent of the other
party, which consent will not be unreasonably denied or delayed, except
that either party may make an assignment to an entity under essentially
common control as the assigning entity.
10.7. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the xxxxxxxxxxxxxxx, xxxxx, xxxxxxx, successors, and assigns
of the parties hereto.
10.8. HEADINGS. The headings contained in this Agreement are for reference
only and shall not effect in any way the meaning or interpretation of
this Agreement.
10.9. COUNTERPARTS. This Agreement and any other instrument to be signed by
the parties hereto may be executed by the parties, together or
separately, in two or more identical counterparts, each of which shall
be deemed an original, but all of which together shall constitute but
one and the same instrument.
10.10. GOVERNING LAW. This Agreement has been entered into in the State of
Illinois and shall be governed in accordance with the laws of the State
of Illinois.
10.11. BROKER COMMISSION. Seller and Buyer each represent to the other that it
has engaged no broker in connection with the contemplated transaction
and agrees to indemnify and hold the other party
18
harmless against any claims made by a broker through it in connection
with the transactions contemplated hereunder.
10.12. Parties expressly agree that all representations and warranties
hereunder survive the Closing of this Agreement for a period of two (2)
years.
IN WITNESS WHEREOF, the parties hereto, by their properly authorized
representatives, have caused this Agreement to be executed as of the day and
date first above written.
SELLER: CBC:
XXXXXX BROADCASTING, INC. CHILDREN'S BROADCASTING
CORPORATION
BY: /s/ XXXXX XXXXXX BY: /s/ XXXXX X. XXXXXXXXXX
------------------------- -----------------------------
XXXXX XXXXXX XXXXX X. XXXXXXXXXX
ITS: PRESIDENT ITS: CHIEF OPERATING OFFICER
BUYER:
CHILDREN'S RADIO GROUP, INC.
BY: /s/XXXXX X. XXXXXXXXXX
-----------------------------
XXXXX X. XXXXXXXXXX
ITS: CHIEF OPERATING OFFICER
19
