ASSET PURCHASE AGREEMENT
BETWEEN
HVS PARTNERS
AND
CUMULUS MEDIA, LLC
May 1, 1997
TABLE OF CONTENTS
Page
1. Basic Transaction..................................................1
(a) Purchase and Sale of Assets.................................1
(b) Assumption of Liabilities...................................1
(c) Purchase Price..............................................1
(d) The Closing.................................................2
(e) Deliveries at the Closing...................................2
(f) Postclosing Agreement.......................................2
(g) Allocation..................................................2
2. Representations and Warranties of the Seller.......................2
(a) Organization of the Seller..................................3
(b) Authorization of Transaction................................3
(c) Noncontravention............................................3
(d) Title to Acquired Assets....................................3
(e) Financial Statements........................................3
(f) Events Subsequent to January 1, 1997 .......................4
(g) Tax Matters.................................................6
(h) Tangible Assets.............................................6
(i) Real Property...............................................6
(j) Intellectual Property.......................................7
(k) Contracts...................................................9
(l) Commission Licenses and Compliance with Commission
Requirements..............................................10
(m) Insurance..................................................11
(n) Litigation.................................................11
(o) Employees..................................................12
(p) Employee Benefits..........................................12
(q) Environment, Health, and Safety............................12
(r) Legal Compliance...........................................13
(s) Advertising Agreements.....................................13
(t) Brokers' Fees..............................................14
(u) Disclosure.................................................14
3. Representations and Warranties of the Buyer.......................14
(a) Organization of the Buyer..................................14
(b) Authorization of Transaction...............................14
(c) Noncontravention...........................................14
(d) Brokers' Fees..............................................14
4. Pre-Closing Covenants.............................................15
(a) General....................................................15
-i-
(b) Assignment Applications....................................15
(c) Employment Offers..........................................15
(d) Notices and Consents.......................................15
(e) Operation of Business......................................15
(f) Advertising Obligations....................................16
(g) Operating Statements.......................................16
(h) Contracts..................................................16
(i) Operation of Stations......................................16
(j) Credit and Receivables.....................................16
(k) Preservation of Business...................................16
(l) Full Access................................................16
(m) Notice of Developments.....................................17
(n) Exclusivity................................................17
(o) Title Insurance, Surveys and Environmental Assessments.....17
(p) Control of Stations........................................17
(q) Risk of Loss...............................................18
5. Conditions to Obligation to Close.................................18
(a) Conditions to Obligation of the Buyer......................18
(b) Conditions to Obligation of the Seller.....................19
6. Post-Closing Covenants............................................20
(a) General....................................................20
(b) Litigation Support.........................................20
(c) Adjustments................................................21
(d) Collection of Accounts Receivable..........................21
(e) Severance Obligations......................................22
7. Remedies for Breaches of this Agreement...........................22
(a) Survival...................................................22
(b) Indemnification Provisions for the Benefit of the Buyer....22
(c) Indemnification Provisions for the Benefit of the Seller...23
(d) Specific Performance.......................................23
(e) Liquidated Damages.........................................23
(f) Matters Involving Third Parties............................23
(g) Other Indemnification Provisions...........................24
8. Definitions.......................................................24
9. Termination.......................................................29
(a) Termination of Agreement...................................29
(b) Effect of Termination......................................29
10. Miscellaneous....................................................29
-ii-
(a) Survival...................................................29
(b) Press Releases and Announcements...........................30
(c) No Third Party Beneficiaries...............................30
(d) Entire Agreement...........................................30
(e) Succession and Assignment..................................30
(f) Counterparts...............................................30
(g) Headings...................................................30
(h) Notices....................................................30
(i) Governing Law..............................................31
(j) Amendments and Waivers.....................................31
(k) Severability...............................................31
(l) Expenses...................................................32
(m) Construction...............................................32
(n) Incorporation of Exhibits and Schedules....................32
(o) Submission to Jurisdiction.................................32
(p) Bulk Transfer Laws.........................................33
-iii-
EXHIBITS
Exhibit A--Form of Xxxxxxx Money Escrow Agreement
Exhibit B--Forms of Assignments
Exhibit C--Form of Assumption
Exhibit D--Form of Postclosing Agreement
Exhibit E--Allocation Schedule
Exhibit F--Form of Opinion of Counsel to the Seller
Exhibit G--Form of Tower Lease
SCHEDULES
Description Section Reference
Exceptions To Seller's Good Title 2(d)
Financial Statements 2(e)
Subsequent Events 2(f)
Tangible Personal Property 2(h)
Real Property Leases 2(i)
Intellectual Property 2(j)
Material Contracts 2(k)
FCC Licenses 2(l)
Insurance 2(m)
Litigation 2(n)
Employees 2(o)
Employee Benefit Plans 2(p)
Advertising Agreements 2(s)
-iv-
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of May 1, 1997, by and
between Cumulus Media, LLC, a Wisconsin limited liability company (the "Buyer"),
and HVS Partners, Inc., a Florida general partnership (the "Seller"). The Buyer
and the Seller are referred to collectively herein as the "Parties." Capitalized
terms used in this Agreement are defined in Section 8 hereof.
This Agreement contemplates a transaction in which the Buyer will purchase
substantially all of the assets (and assume certain of the liabilities) of the
Seller that are used or useful in the operation of radio stations WWQQ-FM,
licensed to operate in Wilmington, North Carolina and WQSL-FM and WXQR-FM, each
licensed to operate in Jacksonville, North Carolina (collectively, the
"Stations") in return for cash.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the 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, the Buyer agrees to assume and become responsible for all of
the Assumed Liabilities at the Closing. The Buyer will not assume or have any
responsibility, however, with respect to any other obligation or Liability of
the Seller not included within the definition of Assumed Liabilities.
(c) Purchase Price. The Buyer agrees to pay to the Seller at the Closing
Six Million Dollars ($6,000,000) (the "Purchase Price") payable as follows:
(i) on the date of this Agreement, the Buyer will deposit with the
Escrow Agent the amount of Six Hundred Thousand Dollars ($600,000) (the
"Xxxxxxx Money Deposit") by delivery of cash payable by wire transfer or
delivery of other immediately available funds; and
(ii) on the Closing Date, the Buyer shall pay to the Seller the
amount of Five Million Three Hundred Fifty Thousand Dollars ($5,350,000),
less interest earned on the Xxxxxxx Money Deposit; and
(iii) on the Closing Date, the Buyer shall pay to the Seller, on
behalf of all parties to the Postclosing Agreement, the amount of Fifty
Thousand Dollars ($50,000).
The Xxxxxxx Money Deposit referenced in this Section 1(c) shall be placed in
escrow with the Escrow Agent pursuant to an escrow agreement in the form
attached hereto as Exhibit A (the "Xxxxxxx Money Escrow Agreement"), and shall
be deposited by the Escrow Agent with a federally insured financial institution
in an interest bearing account. Interest earned on the Xxxxxxx Money Deposit
shall accrue to the benefit of the Buyer, and, together with the principal
amount of the Xxxxxxx Money Deposit, shall be payable to the Seller and credited
against the Purchase Price on the Closing Date. If this Agreement is terminated
without Closing of the transaction contemplated herein, the Xxxxxxx Money and
all accrued interest shall be paid to the Buyer or the Seller as provided in the
Xxxxxxx Money Escrow Agreement.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Stations in
Wilmington, North Carolina, commencing at 9:00 a.m. local time on the date set
by the Buyer not earlier than the fifth business day or later than the tenth
business day after the FCC approval of the Assignment Application becomes a
Final Order, by which date all other conditions to the obligations of the
Parties to consummate the transactions contemplated hereby will have been
satisfied or waived 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 5(a) below; (ii) the Buyer will deliver to the Seller the various
certificates, instruments, and documents referred to in Section 5(b) below;
(iii) the Seller will execute, acknowledge (if appropriate), and deliver to the
Buyer (A) assignments (including real property lease assignments and
Intellectual Property transfer documents) in the forms attached hereto as
Exhibits B-1 through B-[ ] and (B) such other instruments of sale, transfer,
conveyance, and assignment as the Buyer and its counsel reasonably may request;
(iv) the Buyer will execute, acknowledge (if appropriate), and deliver to the
Seller (A) an assumption in the form attached hereto as Exhibit C and (B) such
other instruments of assumption as the Seller and its counsel reasonably may
request; and (v) the Buyer will deliver to the Seller the consideration
specified in Section 1(c) above.
(f) Postclosing Agreement. On the Closing Date, the Seller shall execute,
and shall cause all partners of the Seller to execute, a Postclosing Agreement
with the Buyer including covenants not to compete with the Buyer in the markets
served by the Stations and to indemnify the Buyer in the form of Exhibit D
attached hereto. A portion of the Purchase Price equal to Fifty Thousand Dollars
($50,000) shall be paid to the Seller, on behalf of all parties other than the
Buyer, on the Closing Date as consideration for the agreements set forth in the
Postclosing Agreement.
(g) Allocation. The Parties agree to allocate the Purchase Price (and all
other capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached hereto as Exhibit E.
2. Representations and Warranties of the 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 (as though made then and as
-2-
though the Closing Date were substituted for the date of this Agreement
throughout this Section 2), except as set forth in the lettered and numbered
paragraphs contained in the disclosure schedule accompanying this Agreement and
initialed by the Parties (the "Disclosure Schedule") corresponding to the
lettered and numbered sections of this Section 2.
(a) Organization of the Seller. The Seller is a general partnership duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. The Seller does not have any Subsidiaries.
The partners of the Seller are GBH Radio, Inc., a Florida Corporation and TS
Radio, Inc., a Florida Corporation.
(b) Authorization of Transaction. The Seller has full power and authority
(including full partnership power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the partners of the Seller have duly authorized the
execution, delivery, and performance of this Agreement by the Seller. This
Agreement constitutes the valid and legally binding obligation of the Seller,
enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 1 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 any of the Seller is subject or any provision of the charter
or bylaws of any 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
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 any of 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). Other than with
respect to the Assignment Application described in Section 4(b), the Seller does
not need to give any notice to, make any filing with, or obtain any Licenses,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in Section 1 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 years ended December 31, 1993, December 31, 1994,
December 31, 1995 and December 31, 1996, for the Seller; and (ii) unaudited
statements of income, as of and for each month during 1995 and 1996 and the
months ended January 31 and February 28, 1997 for the Seller. The Financial
Statements have been prepared
-3-
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, are correct and complete, and are consistent with the books and
records of the Seller (which books and records are correct and complete).
(f) Events Subsequent to January 1, 1997. Since January 1, 1997, except as
set forth in Section 2(f) of the Disclosure Schedule, there has not been any
adverse change in the assets, Liabilities, business, financial condition,
operations, results of operations, or future prospects of the Seller with
respect to the operation of the Stations. Without limiting the generality of the
foregoing and with respect to the operation of the Stations since that date:
(i) the Seller has not sold, leased, transferred, or assigned any of
its material assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) the Seller has not entered into any contract, lease, sublease,
license, or sublicense (or series of related contracts, leases, subleases,
licenses, and sublicenses) outside the Ordinary Course of Business;
(iii) no party has accelerated, terminated, modified, or cancelled
any contract, lease, sublease, license, or sublicense (or series of
related contracts, leases, subleases, licenses, and sublicenses) involving
more than $5,000 to which the Seller is a party or by which it is bound;
(iv) no Security Interest has been imposed upon any of its assets,
tangible or intangible;
(v) the Seller has not made any capital expenditure (or series of
related capital expenditures) outside the Ordinary Course of Business;
(vi) the Seller has not made any capital investment in, any loan to,
or any acquisition of the securities or assets of any other person (or
series of related capital investments, loans, and acquisitions) outside
the Ordinary Course of Business;
(vii) the Seller has not created, incurred, assumed, or guaranteed
any indebtedness (including capitalized lease obligations) outside the
Ordinary Course of Business;
(viii) the Seller has not delayed or postponed (beyond its normal
practice) the payment of accounts payable and other Liabilities;
(ix) the Seller has not cancelled, compromised, waived, or released
any right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
(x) the Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
-4-
(xi) the Seller has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property or any action
adversely affecting the FCC Licenses of the Stations;
(xii) the Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside
the Ordinary Course of Business giving rise to any claim or right on its
part against the person or on the part of the person against it;
(xiii) the Seller has not entered into any employment contract,
consulting contract or severance agreement or collective bargaining
agreement, written or oral, or modified the terms of any existing such
contract or agreement;
(xiv) the Seller has not granted any increase outside the Ordinary
Course of Business in the base compensation of any of its directors,
officers, and employees;
(xv) the Seller has not adopted any (A) bonus, (B) profit-sharing,
(C) incentive compensation, (D) pension, (E) retirement, (F) medical,
hospitalization, life, or other insurance, (G) severance, or (H) other
plan, contract, or commitment for any of its directors, officers, and
employees, or modified or terminated any existing such plan, contract, or
commitment;
(xvi) the Seller has not made any other change in employment terms
for any of its directors, officers, and employees;
(xvii) the Seller has not made or pledged to make any charitable or
other capital contribution outside the Ordinary Course of Business;
(xviii) the Seller has not paid any amount to any third party with
respect to any Liability or obligation (including any costs and expenses
the Seller has incurred or may incur in connection with this Agreement or
any of the transactions contemplated hereby) which would not constitute an
Assumed Liability if in existence as of the Closing;
(xix) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving any of the Seller;
(xx) the Seller has not altered its credit and collection policies
or its accounting policies;
(xxi) the Seller has not materially altered the programming, format
or call letters of the Stations, or its promotional and marketing
activities;
(xxii) the Seller has not applied to the FCC for any modification of
the FCC Licenses or failed to take any action necessary to preserve the
FCC Licenses and has operated the Stations in compliance therewith and
with all FCC rules and regulations; or
-5-
(xxiii) the Seller has not committed to any of the foregoing.
(g) Tax Matters. The Seller has filed all Tax Returns that it was required
to file. All such Tax Returns were correct and complete in all respects. All
Taxes owed by the Seller (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 an
authority in a jurisdiction where the Seller does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of the Seller that arose in connection with any
failure (or alleged failure) to pay any Tax.
(h) Tangible Assets. Section 2(h) of the Disclosure Schedule sets forth a
listing of all transmitter and station equipment, vehicles and other tangible
personal property used in conducting the operation and business of the Stations.
The Seller owns or leases all tangible assets necessary for the conduct of the
operation and business of the Stations as presently conducted and as presently
proposed to be conducted. Each such tangible asset is free from defects (patent
and latent), has been maintained in accordance with normal industry practice, is
in good operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used. No such tangible asset
is in need of replacement.
(i) Real Property. The Seller owns no real property. Section 2(i) of the
Disclosure Schedule lists and describes briefly all real property leased or
subleased to the Seller. Section 2(i) of the Disclosure Schedule also identifies
the leased or subleased properties for which title insurance policies are to be
procured in accordance with Section 4(i) below. The Seller has delivered to the
Buyer correct and complete copies of the leases and subleases listed in of the
Disclosure Schedule (as amended to date). With respect to each lease and
sublease listed in Section 2(i) of the Disclosure Schedule:
(i) the lease or sublease is and, following the Closing will
continue to be, legal, valid, binding, enforceable, and in full force and
effect;
(ii) no party to the lease or sublease is in breach or default (or
has repudiated any provision thereof), and no event has occurred which,
with notice or lapse of time, would constitute a breach or default or
permit termination, modification, or acceleration thereunder;
(iii) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(iv) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (iii) above are true and
correct with respect to the underlying lease;
(v) the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold or
subleasehold;
-6-
(vi) to the Seller's Knowledge, all facilities leased or subleased
thereunder 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;
(vii) all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities; and
(viii) to the Seller's Knowledge, the owner of the facility leased
or subleased has good and marketable title to the parcel of real property,
free and clear of any Security Interest, easement, covenant, or other
restriction, except for recorded easements, covenants, and other
restrictions impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
(j) Intellectual Property. The Seller owns or has the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary for the operation of the businesses of the Seller as
presently conducted and as presently proposed to be conducted. Each item of
Intellectual Property owned or used by the Seller immediately prior to the
Closing hereunder will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing hereunder. The Seller
has taken all necessary or desirable action to protect each item of Intellectual
Property that it owns or uses.
(i) The Seller has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and the Seller has never received any
charge, complaint, claim, or notice alleging any such interference,
infringement, misappropriation, or violation. To the Knowledge of the
Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Seller.
(ii) Section 2(j) of the Disclosure Schedule identifies each patent,
trademark or copyright registration which has been issued to the Seller
with respect to any of its Intellectual Property and the call letters
(current and past) of the Stations, identifies each pending patent,
trademark or copyright application for registration which the Seller has
made with respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which the Seller has granted to
any third party with respect to any of its Intellectual Property (together
with any exceptions). The Seller has delivered to the Buyer correct and
complete copies of all such patents, trademarks or copyright
registrations, applications, licenses, agreements, and permissions (as
amended to date) and has made available to the Buyer correct and complete
copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. With respect to each item
of Intellectual Property that the Seller owns:
(A) the Seller possesses all right, title, and interest in and
to the item;
-7-
(B) the item is not subject to any outstanding judgment,
order, decree, stipulation, injunction, or charge;
(C) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending or, to the Knowledge of
the Seller, is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) the Seller has not ever agreed to indemnify any person or
entity for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iii) Section 2(j) of the Disclosure Schedule also identifies each
item of Intellectual Property that any third party owns and that the
Seller uses pursuant to license, sublicense, agreement, or permission
including, but not limited to the call letters of the Stations. The Seller
has supplied the Buyer with correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to date).
With respect to each such item of used Intellectual Property:
(A) the license, sublicense, agreement, or permission covering
the item is, and following the Closing will continue to be on
identical terms, legal, valid, binding, enforceable, and in full
force and effect;
(B) no party to the license, sublicense, agreement, or
permission is in breach or default (or has repudiated any provision
thereof), and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(C) with respect to each sublicense, the representations and
warranties set forth in subsections (A) and (B) above are true and
correct with respect to the underlying license;
(D) the underlying item of Intellectual Property is not
subject to any outstanding judgment, order, decree, stipulation,
injunction, or charge;
(E) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending, or, to the Knowledge of
the Seller, is threatened which challenges the legality, validity,
or enforceability of the underlying item of Intellectual Property;
(F) the Seller has not agreed to indemnify any person or
entity for or against any interference, infringement,
misappropriation, or other conflict with respect to the underlying
item of Intellectual Property; and
-8-
(G) the Seller has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
(iv) The Seller has no Knowledge of any new products, inventions,
procedures, or methods of processing that any competitors or other third
parties have developed which reasonably could be expected to supersede or
make obsolete any product or process of any of the Seller.
(k) Contracts. Section 2(k) of the Disclosure Schedule lists the following
contracts, agreements, and other written arrangements (other than with
advertisers for the sale of air time) to which the Seller is a party:
(i) any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties
providing for lease payments in excess of $1,000 per year;
(ii) any written arrangement (or group of related written
arrangements) for the purchase or sale of supplies, products, or other
personal property or for the furnishing or receipt of services which
either calls for performance over a period of more than one year or
involves more than the sum of $1,000;
(iii) any written arrangement concerning a partnership or joint
venture;
(iv) any written arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or guaranteed
(or may create, incur, assume, or guarantee) indebtedness (including
capitalized lease obligations) involving more than $1,000 or under which
it has imposed (or may impose) a Security Interest on any of its assets,
tangible or intangible;
(v) any written arrangement concerning confidentiality
or noncompetition;
(vi) any written arrangement with any of its employees in the nature
of a collective bargaining agreement, consulting agreement, employment
agreement, or severance agreement;
(vii) any written arrangement under which the consequences of a
default or termination could have an adverse effect on the assets,
Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Seller or the Stations;
(viii) any arrangement with any third party under which it has
created, incurred, assumed, or guaranteed an obligation to provide
advertising or air time ("Advertising Contract"); or
-9-
(ix) any other written arrangement (or group of related written
arrangements) either involving more than $5,000 or not entered into in the
Ordinary Course of Business.
Other than Advertising Contracts, the Seller has delivered to the Buyer a
correct and complete copy of each written arrangement listed in Section 2(k) of
the Disclosure Schedule (as amended to date). Other than Advertising Contracts,
with respect to each written arrangement so listed: (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; (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(k) of the
Disclosure Schedule under the terms of this Section 2(k). No advertiser of the
Stations has indicated within the past year that it will stop, or decrease the
rate of, buying services from them.
(l) Commission Licenses and Compliance with Commission Requirements.
(i) All licenses, permits, authorizations, franchises, certificates
of compliance, and consents of governmental bodies, including, without
limitation, the FCC Licenses, used or useful in the operation of the
Stations as they are now being operated are (A) in full force and effect,
(B) unimpaired by any acts or omissions of the Seller or the Seller's
employees or agents, (C) free and clear of any restrictions which might
limit the full operation of the Stations, and (D) detailed in Section 2(l)
of the Disclosure Schedule. With respect to the licenses, permits,
authorizations, franchises, certificates of compliance and consents
referenced in the preceding sentence, Section 2(l) of the Disclosure
Schedule also sets forth, without limitation, the date of the last
renewal, the expiration date thereof, and any conditions or contingencies
related thereto. Except as set forth in Section 2(l) of the Disclosure
Schedule, no condition exists or event has occurred that permits, or after
notice or lapse of time, or both, would permit, the revocation or
termination of any such license, permit, consent, franchise, or
authorization (other than pursuant to their express expiration date) or
the imposition of any material restriction or limitation upon the
operation of the Stations as now conducted. Except as set forth in Section
2(l) of the Disclosure Schedule, the Seller is not aware of any reason why
the FCC licenses might not be renewed in the ordinary course or revoked.
(ii) The Stations are each in compliance with the FCC's policy on
exposure to radio frequency radiation. No renewal of any FCC License would
constitute a major environmental action under the FCC's rules or policies.
Access to the Stations' transmission facilities is restricted in
accordance with the policies of the FCC.
(iii) Except as set forth in Section 2(l) of the Disclosure
Schedule, to the best of the Seller's knowledge, the Seller is not the
subject of any FCC or other governmental investigation or any notice of
violation or order, or any material complaint, objection,
-10-
petition to deny, or opposition issued by or filed with the FCC or any
other governmental authority in connection with the operation of or
authorization for the Stations, and there are no proceedings (other than
rulemaking proceedings of general applicability) before the FCC or any
other governmental authority that could adversely affect any of the FCC
Licenses or the authorizations listed in Section 2(l) of the Disclosure
Schedule.
(iv) The Seller has filed with the FCC and all other governmental
authorities having jurisdiction over the Stations all material reports,
applications, documents, instruments, and other information required to be
filed, and will continue to make such filings through the Closing Date.
(m) Insurance. Section 2(m) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which the Seller is a party, a named insured,
or otherwise the beneficiary of coverage:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage was
on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, and enforceable and in full force and effect; (B) the policy will
continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms through the Closing Date.
(n) Litigation. Section 2(n) of the Disclosure Schedule sets forth each
instance in which the Seller: (i) is subject to any unsatisfied judgement,
order, decree, stipulation, injunction, or charge; or (ii) is 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. None of the charges, complaints,
actions, suits, proceedings, hearings, and investigations set forth in Section
2(n) of the Disclosure Schedule could result in any adverse change in the
assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Seller or the Stations taken as a whole.
The Seller has no reason to believe that any such charge,
-11-
complaint, action, suit, proceeding, hearing, or investigation may be brought or
threatened 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 at the Stations of each employee of
the Seller. To the Knowledge of the Seller, no key employee or 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 agreement, nor has it
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. To the Seller's Knowledge, it has not committed
any unfair labor practice. 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 employees of any of the Seller.
(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 for the benefit of any current or former employee of the Seller.
Each Employee Benefit Plan (and each related trust or insurance contract)
complies in form and in operation in all respects with the applicable
requirements of ERISA and the Code.
(q) Environment, Health, and Safety.
(i) The Seller has complied in all material respects with all laws
(including rules and regulations thereunder) of federal, state, and local
governments (and all agencies thereof) concerning the environment, public
health and safety, and employee health and safety, and no charge,
complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against any of them alleging
any failure to comply with any such law or regulation.
(ii) The Seller has no Liability (and to Seller's Knowledge there is
no Basis related to the past or present operations, and its respective
predecessors 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 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 (or rule or regulation thereunder) of any
federal, state, local, or foreign government (or agency thereof,
concerning release or threatened release of hazardous substances, public
health and safety, or pollution or protection of the environment, or for
damage to any site, location, or body of water (surface or subsurface) or
for illness or personal injury.
(iii) 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,
-12-
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.
(iv) The Seller has obtained and 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 federal, state, local, and foreign laws (including
rules, regulations, codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public
health and safety, worker health and safety, and pollution or protection
of the environment, including 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.
(v) All properties and equipment used in the business of the Seller
have been free of asbestos, PCB's, methylene chloride, trichloroethylene,
1, 2-trans-dichloroethylene, dioxins, dibenzofurans, and Extremely
Hazardous Substances.
(vi) 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 real property that the Seller owns
or ever has owned or that the Seller leases or ever has leased.
(r) Legal Compliance.
(i) The Seller has complied in all material respects with all laws
(including rules and regulations thereunder) of federal, state, and local
governments (and all agencies thereof, and no charge, complaint, action,
suit, proceeding, hearing, investigation, claim, demand, or notice has
been filed or commenced against the Seller alleging any failure to comply
with any such law or regulation, including those relating to the
employment of labor, employee civil rights, and equal employment
opportunities and relating to antitrust matters.
(ii) The 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 (including rules and regulations thereunder). To the
Seller's Knowledge, it has possession of all records and documents it was
required to retain under all applicable laws (including rules and
regulations thereunder).
-13-
(s) Advertising Agreements. Section 2(s) of the Disclosure Schedule lists
all arrangements for the sale of air time or advertising on the Stations, and
the amount to be paid to the Company therefor.
(t) Brokers' Fees. Except for fees due to The Xxxxxxx Agency, 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.
(u) Disclosure. The representations and warranties contained in this
Section 2 do not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information contained in this
Section 2 not misleading.
3. Representations and Warranties of the Buyer. The 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 (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization of the Buyer. The Buyer is a limited liability company
duly organized, validly existing, and in good standing under the laws of
Wisconsin.
(b) Authorization of Transaction. The Buyer has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 1 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 is subject or any provision of its articles of
organization 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 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 is a party or by which it is
bound or to which any of its assets is subject. Other than the Assignment
Application described in Section 4(b), the Buyer does not need to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 1 above).
-14-
(d) Brokers' Fees. Except for fees due to The Xxxxxxx Agency, 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. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfying the closing conditions set forth in Section 5 below).
(b) Assignment Applications. Within ten (10) business days after the
execution of this Agreement, the Seller and the Buyer shall jointly file with
the FCC an application for assignment of the FCC Licenses, permits and
authorizations pertaining to the Stations from the Seller to the Buyer (the
"Assignment Application"). The costs of the FCC filing fees in connection with
the Assignment Application shall be divided equally between the Parties. Each
party shall pay their own attorneys' fees. The Seller and the Buyer shall
thereafter prosecute the Assignment Application with all reasonable diligence
and otherwise use the commercially reasonable efforts to obtain the grant of the
Assignment Application as expeditiously as practicable (but neither the Seller
nor the Buyer shall have any obligation to satisfy complainants or the FCC by
taking any steps which would have material adverse effect upon the Stations or
upon any affiliated entity. If the FCC imposes any condition on either party to
the Assignment Application, such party shall use commercially reasonable efforts
to comply with such condition, provided, that neither party shall be required
hereunder to comply with any condition that would have a material adverse effect
upon the Stations or any Affiliate. The Seller and the Buyer shall jointly
oppose any requests for reconsideration or judicial review of FCC approval of
the Assignment Application and shall jointly request from the FCC extension of
the effective period of FCC approval of the Assignment Application if the
Closing shall not have occurred prior to the expiration of the original
effective period of the FCC Consent. Nothing in this Section 4(b) shall be
construed to limit either party's right to terminate this Agreement pursuant to
Section 9 of this Agreement.
(c) Employment Offers. Upon notice to the Seller, and at mutually
agreeable times, the Seller will permit the Buyer to meet with its employees
prior to the Closing Date. Not earlier than one (1) week prior to the Closing,
the Buyer may, at its option, extend offers of employment to all or any of the
Seller's employees effective on the Closing Date. From and after the execution
of this Agreement, the Seller will not take any action to preclude or discourage
any of the Seller's employees from accepting any offer of employment extended by
the Buyer.
(d) Notices and Consents. The Seller will give any notices to third
parties, and the Seller will use its commercially reasonable efforts to obtain
any third party consents, that the Buyer reasonably may request in connection
with the matters pertaining to the Seller disclosed or required to be disclosed
in the Disclosure Schedule. Each of the Parties will take any additional action
that may be necessary, proper, or advisable in connection with any other notices
to, filings with, and
-15-
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make, or obtain.
(e) Operation of Business. The Seller will not engage in any practice,
take any action, embark on any course of inaction, or enter into any transaction
outside the Ordinary Course of Business. Without limiting the generality of the
foregoing, the Seller will not engage in any practice, take any action, embark
on any course of inaction, or enter into any transaction of the sort described
in Section 2(e) above.
(f) Advertising Obligations. The Seller shall satisfy its air time
obligations under its agreements for sale of air time and advertising on the
Stations for goods or services ("Barter Agreements") such that the outstanding
aggregate balance owing under all Barter Agreements as of the Closing Date shall
not exceed Five Thousand Dollars ($5,000.00) worth of air time without the
Buyer's consent. On the Closing Date, the Seller shall deliver to the Buyer a
schedule, certified by an officer of the Seller, reflecting the aggregate
outstanding balances under all Barter Agreements in existence as of the Closing
Date.
(g) Operating Statements. The Seller shall deliver to the Buyer, for the
Buyer's informational purposes only, monthly unaudited statements of operating
revenues and operating expenses of the Stations within ten (10) days after each
such statement is prepared by or for the Seller.
(h) Contracts. The Seller will not without the prior written consent of
the Buyer amend, change, or modify any of the contracts listed on Section 2(1)
of the Disclosure Schedule in any material respect. The Seller will not without
prior written consent of the Buyer enter into any new contracts respecting the
Stations or their properties, except (i) contracts for the sale of time on the
Stations for cash, goods or services which comply with the representations and
warranties pertaining to such contracts set forth in Section 2(1) above, (ii)
contracts entered into in the Ordinary Course of Business which are cancelable
on not more than thirty-one (31) days' notice without penalty or premium, and
(iii) contracts entered into in the Ordinary Course of Business each of which
does not involve more than Five Thousand Dollars ($5,000) or all of which do not
involve more than Ten Thousand Dollars ($10,000) in the aggregate.
(i) Operation of Stations. The Seller shall operate the Stations in
compliance with the FCC Licenses and the rules and regulations of the FCC, and
the FCC Licenses shall at all times remain in full force and effect. The Seller
shall file with the FCC all material reports, applications, documents,
instruments and other information required to be filed in connection with the
operation of the Stations;
(j) Credit and Receivables. The Seller will follow its usual and customary
policies with respect to extending credit for sales of air time and advertising
on the Stations and with respect to collecting accounts receivable arising from
such extension of credit.
-16-
(k) Preservation of Business. The Seller will keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions, relationships with lessors, licensers,
advertisers, suppliers, customers, and employees, all of the confidential
information, call letters and trade secrets of the Stations, and the FCC
Licenses.
(l) Full Access and Consultation. The Seller will permit representatives
of the Buyer to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Stations, to all
premises, properties, books, records, contracts, Tax records, and documents of
or pertaining to the Seller. The Seller will consult with the Buyer's management
with a view to informing Buyer's management as to the operations, management and
business of the Stations.
(m) Notice of Developments. The Seller will give prompt written notice to
the Buyer of any material development affecting the assets, Liabilities,
business, financial condition, operations, results of operations, or future
prospects of the Seller. Each Party will give prompt written notice to the other
of any material development affecting the ability of the Parties to consummate
the transactions contemplated by this Agreement. No disclosure by any Party
pursuant to this Section 4(m), however, shall be deemed to amend or supplement
the Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
(n) Exclusivity. The Seller will not (i) solicit, initiate, or encourage
the submission of any proposal or offer from any person relating to any (A)
liquidation, dissolution, or recapitalization, (B) merger or consolidation, (C)
acquisition or purchase of securities or assets, or (D) similar transaction or
business combination involving any of the Seller; or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any person to do or seek any of the foregoing. The Seller will notify
the Buyer immediately if any person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(o) Title Insurance, Surveys and Environmental Assessments. The Seller
will obtain with respect to each parcel of real estate that the Seller leases,
(i) a leasehold owner's policy issued by a title insurer reasonably satisfactory
to the Buyer, in an amount equal to the fair market value of such real property
(including all improvements located thereon), insuring leasehold title to such
real property in the Buyer as of the Closing subject only to the title
exceptions which do not impair the current use, occupancy or value or the
marketability of title of the property and are disclosed in Section 2(i) of the
Disclosure Schedule, together with such endorsements for zoning, contiguity,
public access and extended coverage as the Buyer reasonably requests; (ii) a
current survey of the real property certified to the Buyer, prepared by a
licensed surveyor and conforming to current ALTA Minimum Detail Requirements for
Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters shown
customarily on such surveys, and showing access affirmatively to public streets
and roads (the "Survey") which shall not disclose any survey defect or
encroachment from or onto the real property which has not been cured or insured
over prior to the Closing; and (iii) a current Phase I environmental site
assessment from an environmental consultant or engineer reasonably satisfactory
-17-
to the Buyer which shall not disclose or recommend any action with respect to
any condition to be remediated or investigated or any contamination on the site
assessed. The Buyer and the Seller will each pay one-half (1/2) of the costs of
these title policies, surveys and environmental assessments.
(p) Control of Stations. The transactions contemplated by this Agreement
shall not be consummated until after the FCC has given its consent and approval
to the Assignment Application. Between the date of this Agreement and the
Closing Date, the Buyer and its employees or agents shall not directly or
indirectly control, supervise, or direct, or attempt to control, supervise, or
direct, the operation of the Stations, and such operation shall be the sole
responsibility of and in the control of the Seller.
(q) Risk of Loss. The risk of loss, damage, or destruction to any of the
Acquired Assets shall remain with the Seller until the Closing. In the event of
any such loss, damage, or destruction the Seller will promptly notify the Buyer
of all particulars thereof, stating the cause thereof (if known) and the extent
to which the cost of restoration, replacement and repair of the Acquired Assets
lost, damaged or destroyed will be reimbursed under any insurance policy with
respect thereto. The Seller will repair or replace such Acquired Assets as soon
as possible after loss, damage or destruction thereof and shall use its best
efforts to restore as promptly as possible transmissions as authorized in the
FCC Licenses. The Closing Date shall be extended (with FCC consent, if
necessary) for up to sixty (60) days to permit such repair or replacement. If
repair or replacement cannot be accomplished within sixty (60) days of the date
of the Seller's notice to the Buyer, and the Buyer determines that the Seller's
failure to repair or replace, alone or in the aggregate, would have a material
adverse effect on the operation of the Stations:
(a) the Buyer may elect to terminate this Agreement; or
(b) the Buyer may postpone the Closing Date until such time as
the property has been repaired, replaced or restored in a manner and to an
extent reasonably satisfactory to the Buyer, unless the same cannot be
reasonably effected within ninety (90) days of the date of the Seller's notice
to the Buyer, in which case either party may terminate this Agreement; or
(c) the Buyer may choose to accept the Acquired Asset in their
"then" condition, together with the Seller's assignment to the Buyer of all
rights under any insurance claims covering the loss, damage or destruction and
payment over to the Buyer any proceeds under any such insurance policies,
previously received by the Seller with respect thereto.
In the event the Closing Date is postponed pursuant to this Section 4(m),
the parties hereto will cooperate to extend the time during which this Agreement
must be closed as specified in the consent of the FCC.
5. Conditions to Obligation to Close.
-18-
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer 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 2 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) the Seller shall have procured all of the third party consents
specified in Section 4(c) above, including but not limited to those
relating to transmitter and studio leases, all of the title insurance
commitments (and endorsements), Surveys and environmental site assessments
described in Section 4(o) above;
(iv) no action, suit, or 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,
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, or (C) affect 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);
(v) 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 Section 5(a)(i)-(iv)
is satisfied in all respects;
(vi) each of the Assignment Applications shall have been approved by
a Final Order of the FCC and the Buyer shall have received all
governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vii) the relevant parties shall have entered into the Postclosing
Agreement;
(viii) the relevant parties shall have entered into the Tower Lease
Agreement;
(ix) the Buyer shall have received from counsel to the Seller an
opinion with respect to the matters set forth in Exhibit F attached
hereto, addressed to the Buyer and dated as of the Closing Date; and
(x) 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
-19-
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 5(a) if it executes
a writing so stating at or prior to the Closing.
(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 material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or 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
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such judgment, order, decree,
stipulation, injunction, or charge shall be in effect);
(iv) the 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
5(b)(i)-(iii) is satisfied in all respects;
(v) each of the Assignment Applications shall have been approved by
a Final Order of the FCC and the Buyer shall have received all
governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vi) the relevant parties shall have entered into the Postclosing
Agreement; and
(vii) the relevant parties shall have entered into the Tower Lease
Agreement;
(viii) 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.
The Seller may waive any condition specified in this Section 5(b) if it executes
a writing so stating at or prior to the Closing.
-20-
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 7 below).
(b) Litigation Support. In the event and for so long as any Party actively
is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Seller, each of the other Parties will 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).
(c) Adjustments. Operation of the Stations and the income and expenses
attributable thereto up through the close of business on the day before the
Closing Date shall be for the account of the 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, prepared expenses, deposits, music
license fees, and rents and payments pertaining to the leases and contracts
being assigned hereunder (inducing 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. Contractual
arrangements that do not reflect an equal rate of compensation to the station
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 the accounting firm 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.
(d) Collection of Accounts Receivable. At the Closing, the Seller will
turn over to the Buyer, for collection only, the accounts receivable of the
Stations owing to the Seller as of the close of business on the Closing Date. A
schedule of such accounts receivable will be delivered by the Seller to the
Buyer on the Closing Date or as soon thereafter as possible. The Buyer agrees to
use commercially reasonable efforts in the ordinary course of business (but
without responsibility to institute legal or collection proceedings) to collect
such accounts receivable during the 120-day period following the Closing Date,
and will remit all payments received on such accounts during each calendar month
during this 120-day period to the Seller within fifteen (15) business days after
the end of that calendar month. The Buyer shall provide the Seller with a
monthly accounting of all payments received on such accounts within fifteen (15)
business days after
-21-
the end of each calendar month during the 120-day collection period. In the
event the Buyer receives monies during the 120-day period following the Closing
Date from an advertiser who, after the Closing Date, is advertising over any of
the Stations, and that advertiser was included among the accounts receivable as
of the Closing Date, the Buyer shall apply said monies to the oldest outstanding
balance due on the particular account, except in the case of a "disputed"
account receivable. For purposes of this Section 6(d), a "disputed" account
receivable means one which the account debtor refuses to pay because he asserts
that the money is not owed or the amount is incorrect. In the case of such a
disputed account, the Buyer shall immediately return the account to the Seller
prior to expiration of the 120-day period following the Closing Date. If the
Buyer returns a disputed account to the Seller, the Buyer shall have no further
responsibility for its collection and may accept payment from the account debtor
for advertising carried on any of the Stations after the Closing Date. At the
end of the 120-day period following the Closing Date, the Buyer will turn back
to the Seller all of the accounts receivable of the Stations as of the Closing
Date owing to the Seller which have not yet been collected, and the Buyer will
thereafter have no further responsibility with respect to the collection of such
receivables. During the 120-day period following the Closing Date, the Buyer
shall afford the Seller reasonable access to the accounts receivable "aging
list."
(e) Severance Obligations. In the event an offer of employment is extended
by the Buyer to and accepted by an employee of the Seller pursuant to Section
4(c) and such subsequent employment by the Buyer is terminated within sixty (60)
days from the Closing Date, the Seller shall be responsible for, and shall pay
to such accepting employee, all severance benefits, if any, pursuant to the
Seller's practices as in effect on the Closing Date) that may be due and owing
such employee by reason of his or her employment with either the Seller or the
Buyer.
7. 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), 2(g), 2(r) and
2(t) hereof or relating to the Seller's title to the Acquired Assets) shall
survive the Closing (even if the Buyer knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of three (3) years thereafter. All of the
other representations, warranties, and covenants of the Buyer and the Seller
contained in this Agreement (including the representations and warranties of the
Seller contained in Sections 2(a), 2(b), 2(c), 2(g), 2(r) and 2(t) hereof or
relating to the Seller's title to the Acquired Assets) and in this Agreement
shall survive the Closing (even if the damaged Party knew or had reason to know
of any misrepresentation or breach of warranty or covenant at the time of
Closing) and continue in full force and effect forever thereafter.
(b) Indemnification Provisions for the Benefit of the Buyer.
Except as described below in Section 7(e) with respect to a breach
of a covenant prior to the Closing Date, the Seller agrees to indemnify the
Buyer from and against the entirety of any
-22-
Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by:
(i) any breach of any of the Seller's representations, warranties,
and covenants contained in this Agreement (so long as the particular
representation, warranty, or covenant survives the Closing and the Buyer
makes a written claim for indemnification within the applicable survival
period);
(ii) any Liability of the Seller which is not an Assumed Liability;
or
(iii) 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. Except as
described below in Section 7(e) with respect to a breach of a covenant prior to
the Closing Date, 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) the breach of
any of the Buyer's representations, warranties, and covenants contained in this
Agreement (so long as the particular representation, warranty, or covenant
survives the Closing and the Seller makes a written claim for indemnification
within the applicable survival period) or (ii) any Assumed Liability.
(d) Specific Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the Parties and the
matter (subject to the provisions set forth in Section 10(p) below), in addition
to any other remedy to which it may be entitled, at law or in equity. Each of
the Parties acknowledges and agrees that not withstanding the provision in
Section 7(e) with respect to the remedy of liquidated damages upon a breach of a
covenant of this Agreement prior to the Closing, money damages would not be an
adequate remedy for a breach of any provision of this Agreement.
(e) Liquidated Damages. The Buyer and the Seller acknowledge that in the
event that the transactions contemplated by this Agreement are not closed
because of a default by either Party, the Adverse Consequences as a result of
such default may be difficult, if not impossible, to ascertain. Accordingly, in
lieu of indemnification pursuant to Section 5(b) or 7(c), the non-defaulting
Party shall be entitled to receive from the defaulting Party for such default
the sum of Six Hundred Thousand Dollars ($600,000) as liquidated damages without
the need for proof of damages, subject only to successfully proving in a court
of competent jurisdiction that the other Party has materially breached this
Agreement and that the transactions contemplated thereby have not occurred;
provided
-23-
however, that the Buyer shall retain the option to receive, pursuant to Section
7(d), and in lieu of receiving the liquidated damages provided in this Section
7(e), the remedy of specific performance with respect to a breach of this
Agreement prior to the Closing. The Buyer and the Seller agree to pay said sum
of liquidated damages within ten (10) days of the date that the non-defaulting
party obtains such a judgment.
(f) Matters Involving Third Parties. If any third party shall notify any
Party (the "Indemnified Party") with respect to any matter which may give rise
to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Section 7, then the Indemnified Party shall notify the
Indemnifying Party thereof promptly; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any liability or obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is damaged. 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 concludes reasonably 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, the Indemnified Party may defend against, or enter
into any settlement with respect to, the matter in any manner it reasonably may
deem appropriate.
(g) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory or common
law remedy any Party may have for breach of representation, warranty, or
covenant.
8. Definitions.
"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 Stations, including but not limited to all of its (a) real
property, leaseholds and other interests of any kind therein, improvements,
fixtures, and fittings thereon (such as towers and antennae), and easements,
rights-of-way, and other appurtenants thereto); (b) tangible personal property
(such as computers, electrical devices, monitoring equipment, test equipment,
switching, terminal and studio equipment, transmitters, transformers, receivers,
broadcast facilities, inventories of compact disks, records, tapes
-24-
and other supplies, vehicles, and all assignable warranties with respect
thereto; (c) Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions; (d) rights under orders and
agreements (including those barter agreements identified on the Disclosure
Schedule) now existing or entered into in the Ordinary Course of Business for
the sale of advertising time on the Stations; (e) contracts, indentures,
Security Interests, guaranties, other similar arrangements, and rights
thereunder; (f) call letters of the Stations, jingles, logos, slogans, and
business goodwill of the Stations; (g) claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery (including rights under
policies of insurance), rights of set off, and rights of recoupment (including
any such item relating to the payment of Taxes); (h) Licenses and similar rights
obtained from governments and governmental agencies; and (i) FCC logs and
records and all other books, records, ledgers, logs, files, documents,
correspondence, lists, plats, architectural plans, drawings, and specifications,
creative materials, advertising and promotional materials, studies, reports, and
other printed or written materials.
"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.
"Assignment Application" has the meaning set forth in Section 4(b) above.
"Assumed Liabilities" means (a) obligations of the Seller under the
licenses, sublicenses, leases, subleases, contracts, and other arrangements
referred to in the definition of Acquired Assets 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. The Assumed Liabilities shall not include
any Retained Liability.
"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.
"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.
-25-
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the businesses
and affairs of the Seller.
"Disclosure Schedule" has the meaning set forth in Section 2 above.
"Xxxxxxx Money Deposit" has the meaning set forth in Section 1(c) above.
"Xxxxxxx Money Escrow Agreement" has the meaning set forth in Section 1(c)
above.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer 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).
"ERISA" means the Employee Retirement as amended.
"Escrow Agent" means The Xxxxxxx Agency.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FCC" means the Federal Communication Commission of the United States.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Final Order" means an action by the FCC as to which: (a) no request for
stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"Financial Statements" has the meaning set forth in Section 2(e) above.
-00-
"XXXX" xxxxx Xxxxxx Xxxxxx generally accepted accounting principles as in
effect from time to time.
"Indemnified Party" has the meaning set forth in Section 7(d) above.
"Indemnifying Party" has the meaning set forth in Section 7(d) above.
"Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, call letters, logos, trade names, and corporate names and registrations
and applications for registration thereof, (c) all programs, programming
materials, copyrights and registrations and applications for registration
thereof, (d) mask works and registrations and applications for registration
thereof, (e) computer software, data, and documentation, (f) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, market and other research information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial, marketing, and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information), (g) other
proprietary rights, and (b) copies and tangible embodiments thereof (in whatever
form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"Licenses" means all FCC and other governmental licenses, franchises,
approvals, certificates, authorizations and rights of the Seller with respect to
the operations of the Stations and all applications therefor, together with any
renewals, extension or modifications thereof and additions thereto.
"Multiemployer 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.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Post-Closing Agreement" means the Post-Closing Agreement with Seller
Stockholders entered into concurrently herewith and attached hereto as Exhibit
D.
"Post-Closing Escrow" has the meaning set forth in Section 1(c) above.
-27-
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"Purchase Price" has the meaning set forth in Section 1(c) above.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Retained Assets" means (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of the Seller
as a corporation; (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); (iii) accounts,
notes and other receivables; (iv) the real property located at Topsail, North
Carolina including any transmission tower located thereon or improvement
thereto; and (v) Cash.
"Retained Liabilities" means any other obligations or liabilities of the
Seller, including but not limited to: (i) any Liability relating to the
ownership or operation of the Stations 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).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation; and (c) other
liens arising in the Ordinary Course of Business and not incurred in connection
with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Stations" means the radio broadcast stations having the call letters
WWQQ-FM, licensed by the FCC to operate in Wilmington, North Carolina; and
WQSL-FM and WXQR-FM, each licensed by the FCC to operate in Jacksonville, North
Carolina.
"Subsidiary" means any corporation with respect to which another specified
corporation has the power to vote or direct the voting of sufficient securities
to elect a majority of the directors.
-28-
"Survey" has the meaning set forth in Section 4(j) 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.
"Tower Lease Agreement" means that Tower Lease pertaining to the Topsail,
North Carolina broadcast tower and real estate the form of which is attached
hereto at Exhibit G.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the 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 material representation, warranty, or covenant contained
in this Agreement in any material respect if such breach remains uncured
for twenty (20) days after notice of breach is received from the Buyer;
(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 is in breach of any material representation, warranty, or covenant
contained in this Agreement in any material respect if such breach remains
uncured for twenty (20) days after notice of breach is received from the
Seller;
(iv) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing if the Closing shall not
have occurred on or before the 270th day following the date of this
Agreement by reason of the failure of any condition precedent under
Section 5(a) hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in
this Agreement);
(v) the Seller may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing if the Closing shall not
have occurred on or before the 270th
-29-
day following the date of this Agreement by reason of the failure of any
condition precedent under Section 5(b) hereof (unless the failure results
primarily from the Seller itself breaching any representation, warranty,
or covenant contained in this Agreement);or
(vi) the Buyer or the Seller may terminate this Agreement if any
Assignment Application is denied by Final Order.
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 7(a) above, all obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability
of any Party then in breach).
10. Miscellaneous.
(a) Survival. All of the representations, warranties, and covenants of the
Parties contained in this Agreement shall survive the Closing hereunder as and
to the extent provided in the Post-Closing Agreement with Seller Stockholders.
(b) Press Releases and Announcements. No Party shall issue any press
release or announcement relating to the subject matter of this Agreement prior
to the Closing without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Party prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, that may have related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party, provided that the Buyer may assign all of its right, title
and interest in, to and under this Agreement to one or more affiliated entities,
who shall then, subject to the terms and conditions of this Agreement, have the
right to receive the Acquired Assets, assume the Assumed Liabilities, and to pay
to the Seller the Purchase Price therefor.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
-30-
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Seller: HVS Partners
3113 Xxxxx Xxxxx Road
Apt. 206
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx
Copy to:
If to the Buyer: Cumulus Media, LLC
c/o Quaestus Management Corporation
000 X. Xxxxxxxx Xxx., Xxx. 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Copy to: Cumulus Media, LLC
c/o Century Broadcasting
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
(Neither of which copies shall constitute notice to Buyer)
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, 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 individual
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.
-31-
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
North Carolina.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
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.
(k) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(l) Expenses. The Buyer and the Seller, will each bear own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby, other than as set forth in
Section 4(b) with regard to the Assignment Applications. The Seller will pay all
income taxes. 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.
(m) Construction. The language used in this Agreement will be deemed to be
the language chosen by the Parties to express their mutual intent, and no rule
of strict construction shall be applied against any Party. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Disclosure Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant.
-32-
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Wilmington, North
Carolina, in any action or proceeding arising out of or relating to this
Agreement, agrees that all claims in respect of the action or proceeding may be
heard and determined in any such court, and agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on the other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 10(h) above. Nothing in this Section 10(p),
however, shall affect the right of any Party to serve legal process in any other
manner permitted by law. Each Party agrees that a final judgment in any action
or proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
(p) Bulk Transfer Laws. The Seller has, or will as of the Closing Date,
comply with the provisions of any bulk transfer laws of North Carolina or any
other jurisdiction applicable to the transactions contemplated by this
Agreement.
* * * * *
-33-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
CUMULUS MEDIA, LLC
By:
-----------------------------------
(printed)
-----------------------------------
Title:
-----------------------------------
HVS PARTNERS
By: GBH Radio, Inc., General Partner
By:
-----------------------------------
Xxxxxx Xxxxxxxx, President
-34-
