Exhibit 2.53
ASSET PURCHASE AGREEMENT
This Agreement ("AGREEMENT") is entered into as of January 2, 1997, by and
between Cumulus Broadcasting, Inc., a Nevada corporation ("BROADCASTING"),
Cumulus Licensing Corporation, a Nevada corporation ("LICENSING"), and Westwind
Broadcasting Inc. (the "SELLER"). Broadcasting and Licensing (collectively
herein the "BUYERS"). The Buyers and the Seller are referred to collectively
herein as the ("PARTIES"). Capitalized terms used in this Agreement are defined
in SECTION 8 hereof.
Subject to the terms and conditions of this Agreement, the Buyers hereby
agree to purchase substantially all of the assets (and assume certain of the
liabilities) of the Seller that are used or useful in the operation of radio
stations XXXX-FM, licensed to Canyon, Texas, and XXXX-AM, licensed to Amarillo
(the "STATIONS") in return for cash.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. BASIC TRANSACTION.
(A) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, Licensing agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to Licensing, all of
the FCC Licenses listed in SECTION 2(L) of the Disclosure Schedule. In
addition, Broadcasting agrees to purchase from the Seller, and the Seller agrees
to sell, transfer, convey, and deliver to Broadcasting, all of the Acquired
Assets other than the FCC Licenses. Both such sales shall take place at the
Closing for the consideration specified below in this SECTION 1.
(B) ASSUMPTION OF LIABILITIES. On and subject to the terms and conditions
of this Agreement, 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 and the
Seller agrees to pay and discharge all Liabilities and obligations of the Seller
other than the Assumed Liabilities.
(C) PURCHASE PRICE. The Buyers agree to pay to the Seller, as
consideration for the Acquired Assets, the amount of Eight Hundred Twenty
Thousand Dollars ($820,000.00) (the "PURCHASE PRICE"). The Purchase Price shall
be payable as follows:
(i) on the date of this Agreement, the Buyers will deliver to the
Escrow Agent an irrevocable letter of credit issued by NationsBank of Texas,
N.A. for the benefit of the Escrow Agent in the amount of Sixty-One Thousand
Five Hundred Dollars ($61,500.00) (the "XXXXXXX MONEY DEPOSIT"); and
(ii) on the Closing Date, the Buyers shall pay to the Seller the
amount of Eight Hundred Twenty Thousand Dollars ($820,000.00), with adjustments
as specifically provided in this Agreement.
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The Xxxxxxx Money Deposit referenced in this Section 1(c) shall be held in
escrow by the Escrow Agent pursuant to an escrow agreement in the form attached
hereto as Exhibit A (the "XXXXXXX MONEY ESCROW AGREEMENT"). If this Agreement
is terminated without Closing of the transaction contemplated herein, the
Xxxxxxx Money Deposit shall be paid to the Seller or returned to the Buyers 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 XXXXXXX, XXXXX &
XXXXX, P.C., attorneys in Amarillo, Texas, commencing at 9:00 a.m. local time on
the date set by the Buyers and Seller not earlier than the fifth business day or
later than the tenth business day after the FCC approval of the Assignment
Application becomes a Final Order, by which date all other conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
will have been satisfied or such other date as the Parties may mutually
determine (the "CLOSING DATE").
(E) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will deliver
to the Buyers the various certificates, instruments, and documents referred to
in SECTION 5(A) below; (ii) the Buyers will deliver to the 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
Buyers (A) assignments (including Lease and other Assumed Contract assignments
and Intellectual Property transfer documents), bills of sale and warranty deeds
in the forms attached hereto as EXHIBITS "B-1" THROUGH "B-2", (B) such
affidavits, transfer tax returns, memorandums of lease, and other documents as
may be required by the terms of the title insurance commitments described in
SECTION 4(O) hereof, as necessary to furnish title insurance as required by such
section or as may be necessary to convey title to the Real Estate to the Buyers
in the condition required herein or provided public notice of existence of the
Leases, and (C) such other instruments of sale, transfer, conveyance, and
assignment as the Buyers and their counsel reasonably may request; (iv) the
Buyers will execute, acknowledge (if appropriate), and deliver to the 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 Buyers will deliver to the Seller the consideration specified in
SECTION L(C) above.
(F) POSTCLOSING AGREEMENT. On the Closing Date, the Seller shall execute,
and shall cause shareholder Xxxxx Xxxxx to execute, a Postclosing Agreement with
the Buyer containing a covenant not to compete with the Buyer in the markets
served by the Stations. A portion of the Purchase Price equal to Thirty
Thousand Dollars ($30,000.00) shall be paid to the Seller by the Buyers on the
Closing Date as consideration for the covenant not to compete 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".
(H) LOCAL MARKETING AGREEMENT. Concurrent with the execution of this
Agreement, the Seller and Buyer shall execute the Local Marketing Agreement (the
"LMA AGREEMENT"),which includes the terms and conditions pursuant to which the
Operating Company will purchase the airtime on the
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Stations. The accounts receivable of the Stations in existence as of the date
of this Agreement shall be collected pursuant to the terms and conditions of the
LMA Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Buyers that the statements contained in this SECTION 2 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this SECTION 2):
(A) ORGANIZATION OF THE SELLER. The Seller is a corporation 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 Seller has the power and authority to own or lease its properties and to
carry on all business activities now conducted by it. The shareholder of the
Seller is Xxxxx Xxxxx.
(B) AUTHORIZATION OF TRANSACTION. The Seller has full power and authority
(including full
partnership power and authority) to execute and deliver this Agreement and all
agreements and instruments to be executed and delivered by such Party pursuant
to this Agreement (collectively, the "ANCILLARY AGREEMENTS") and to perform its
obligations hereunder and thereunder. Without limiting the generality of the
foregoing, the Board of Directors of the Seller has duly authorized the
execution, delivery, and performance of this Agreement and the Ancillary
Agreements by the Seller. This Agreement and the Ancillary Agreements
constitute the valid and legally binding obligation of the Seller, enforceable
in accordance with their respective terms and conditions.
(C) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement or Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in SECTION 1(E) above), to the knowledge and belief of Seller,will
in any material way, (i) violate any statute, regulation, rule, judgment, order,
decree, stipulation, injunction, charge, or other of any government,
governmental agency, or court to which the Seller is subject or any provision of
the charter or bylaws of the Seller; or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice or third party consent under any contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement or mortgage for borrowed
money, instrument of indebtedness, Security Interest, or other agreement,
arrangement to which the Seller is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets). Other than with respect to the Assignment
Application described in SECTION 4(O) to the knowledge of Seller, the Seller
does not need to give any notice to, make any filing with, or obtain any
Licenses, consent, or approval of any court or government or govenunental agency
in order for the Parties to enter into this agreement or the Ancillary
Agreements or to consummate the transactions contemplated by this Agreement or
the Ancillary Agreements (including the assignments and assumptions referred to
in SECTION 1(E) above).
(D) TITLE TO ACQUIRED ASSETS. Other than the Security Interests set forth
on SECTION 2(D) of the Disclosure Schedule (which shall be released at or before
the Closing) the Seller has good and
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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
fiow 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
balance sheets and statements of income, as of and for each month during 1996
and each month ending October 31 in 1997 for the Seller. The Financial
Statements are correct and complete, fairly represent the financial condition
of the Seller on such dates and the results of operations for the periods
designated therein, and are consistent with the books and records of the Seller
(F) EVENTS SUBSEQUENT TO SEPTEMBER 1, 1997. Since September 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. 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;
(ii) other than this Agreement, the Seller has not entered into any
agreement, contract, lease, sublease, license, or sublicense (or series of
related agreements, contracts, leases, subleases, licenses, and sublicenses)
outside the Ordinary Course of Business;
(iii) no party has accelerated, terminated, modified, or canceled
any agreement, contract lease, sublease, license, or sublicense (or series of
related agreements, contracts, leases, subleases, licenses, and sublicenses)
involving more than $5,000 to which the Seller is a party or by which it or any
of its assets are bound;
(iv) no Security Interest has been imposed upon any of Seller's
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);
(vii) the Seller has not created, incurred, assumed, or guaranteed
any indebtedness (including capitalized lease obligations) outside the Ordinary
Course of Business;
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(viii) the Seller has not delayed or postponed (beyond its normal
practice in the Ordinary
Course of Business) the payment of accounts payable and other Liabilities;
(ix) the Seller has not canceled, 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;
(xi) the Seller has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to any of its property or any action
adversely affecting the FCC Licenses;
(xii) the Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees giving rise to
any claim or right on its part against the person
or on the part of the person against it;
(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 routine
salary and wage increases in the Ordinary Course of Business) in the rate of
compensation, commissions, bonus or other remuneration payable, or granted any
severance or termination pay to, any of its directors, officers, and employees;
(xv) 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, 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;
(xviii) there has not been any other occurrence, event, incident,
action, failure to act, or
transaction outside the Ordinary Course of Business involving the Seller;
(xix) the Seller has not altered its credit and collection policies
or its accounting policies;
(xx) the Seller has not materially altered the programming, format
or call letters of the
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Stations, or its promotional and marketing activities;
(xxi) 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 compliance therewith and with all FCC rules and
regulations; or
(xxii) the Seller has not committed to any of the foregoing.
(G) TAX MATTERS. The Seller has timely and properly filed all Tax Returns
that they were required to file with respect to the Seller's operations. All
such Tax Returns were correct and complete in all respects and properly reflect
the tax liability of the Seller. The Seller has not requested any extension of
time within which to file returns in respect of any Taxes with respect to the
Seller's operations. No Tax deficiencies have been proposed or assessed against
the Seller. There are no pending, or to the Seller's knowledge, threatened
audits, investigations, or claims for or relating to any liability in respect of
Taxes with respect to the Seller's operations. All Taxes due and owed by the
Seller with respect to its operations (whether or not shown on any Tax Return)
have been paid. The Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party. No claim has ever been
made by any authority in any jurisdiction where the Seller does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. 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 as are specifically identified as
such in SECTION 2(H) of the Disclosure Schedule. Any leased personal property
included within the tangible personal property is in the condition required of
such property by the terms of the lease applicable thereto during the term of
the lease and upon the expiration thereof. All of the equipment utilized in the
operation of the Stations to the best knowledge and belief of Seller, is in
compliance with all FCC and FAA requirements.
(i) INSPECTION. Buyer by execution hereof acknowledges and
represents Buyer has conducted Buyer's own inspection of the tangible assets and
accepts same "AS IS."
(ii) NO WARRANTIES. SELLER HEREBY MAKES NO REPRESENTATIONS AND
WARRANTIES TO BUYER. ALL PERSONAL PROPERTY IS SOLD TO BUYER "AS IS" AND "WITH
ALL FAULTS"; NO WARRANTIES OF ANY KIND ARE IMPLIED IN THIS TRANSACTION.
(I) REAL PROPERTY. SECTION 2(I) of the Disclosure Schedule lists and
describes briefly all Owned Real Estate and real property leased to the Seller
(including, without limitation, complete legal descriptions for all of the Real
Estate). The Seller has delivered to the Buyer correct complete copies of the
Leases. With respect to the Real Estate:
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(i) the Seller has good and marketable title to all of the Owned
Real Estate and said Real Estate will at Closing be free and clear of all liens,
charges, mortgages, security interests, easements, restrictions or other
encumbrances of any nature whatsoever except real estate taxes for the year of
Closing and recorded utility easements.
(ii) to the best knowledge and belief of Seller, the Leases are
and, following the Closing will continue to be, legal, valid, binding,
enforceable, and in full force and effect;
(iii) no party to any Lease is in breach or default (or has
repudiated any provision thereof), and no event has occurred which, with notice
or lapse of time, would constitute a breach or default thereunder or permit
termination, modification, or acceleration thereunder;
(iv) there are no disputes, oral agreements, or forbearance
programs in effect as to any Lease;
(v) none of the Owned Real Estate and to the Seller's Knowledge,
none of the properties
subject to the Leases is subject to any lease (other than Leases), option to
purchase or rights of first refusal;
(vi) except for Permitted Real Estate Encumbrances, there are to
the best knowledge and belief of Seller, no (i) actual or, proposed special
assessments with respect to any of the Real Estate; (ii) pending or threatened
condemnation proceedings with respect to any of the Real Estate; (iii) pending
or threatened litigation or administrative actions with respect to any of the
Real Estate; (iv) mechanic's or materialmens' liens with respect to the Owned
Real Estate; (v) structural or mechanical defects in any of the buildings or
improvements located in the Real Estate; (vi) planned or commenced improvements
which will result in an assessment or otherwise affect the Real Estate; (vii)
governmental agency or court orders requiring the repair, alteration or
correction of any existing condition with respect to the Real Estate or any
portion thereof, or (viii) any pending or threatened changed in any zoning laws
or ordinances which may affect any of the Real Estate or Seller's use thereof;
(vii) all buildings and improvements on the Real estate, to the
knowledge of Seller, are in good operating condition and repair, normal wear and
tear excepted;
(viii) the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the Leases or its rights
thereunder;
(ix) to the Seller's Knowledge, all facilities on the Real Estate
have received all approvals, of governmental authorities (including licenses,
permits, and zoning approvals) required in connection with the operation thereof
and have been operated and maintained in accordance with applicable laws, rules,
and regulations;
(x) all facilities on the Real Estate are supplied with utilities
and other services necessary
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for the operation of said facilities; and
(xi) to the Seller's Knowledge, the owner of each leased facility
has good and marketable title to the underlying parcel of real property, free
and clear of any Security Interest, easement, covenant, or other restriction,
except for Permitted Real Estate Encumbrances and Seller's leasehold interest in
each Lease has priority over any other interest except for the fee interest
therein and Permitted Real Estate Encumbrances;
(J) INTELLECTUAL PROPERTY. To the best knowledge and belief of Seller, the
Seller owns or has the right to use pursuant to license, sublicense, agreement,
or permission all Intellectual Property necessary for or currently used in the
operation of the business of the 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, to Seller's knowledge and belief, has taken
all necessary or action to protect each item of Intellectual Property that it
owns or uses. With respect to such Intellectual Property:
(i) To the best of Seller's knowledge and belief, 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(K) 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, 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
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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 item of
Intellectual Property; and
(G) the Seller has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
(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 which are listed in SECTION 2(S) of the
Disclosure Schedule) 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 furnishings 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, compensation
agreement, employment agreement, commission agreement, or severance agreement;
(vii) any written arrangement under which the consequences of a
default or termination could have an adverse effect on the assets, liabilities,
business, condition, operations, results of operations, or future prospects of
the Seller or the Stations;
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(viii) any written arrangement concerning a guaranty by the Seller
and any other party; or
(ix) any other written arrangement (or group of related written
arrangements) either involving more than $5,000 or not entered into in the
Ordinary Course of Business.
The 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). With respect to written arrangement so listed which
constitutes an Assumed Contract: (A) the written arrangement is legal, valid,
binding, enforceable, and in full force and effect; (B) the written arrangement
will continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms following the Closing (if the arrangement has not
expired according to its terms); (C) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or acceleration, under the
written arrangement; and (D) no party has repudiated any provision of the
written arrangement. The Seller is not a party to any verbal contract,
agreement, or other arrangement which, if reduced to written form, would be
required to be listed in SECTION 2(K) of the Disclosure Schedule under the terms
of this SECTION 2(K). Except for the Assumed
Contracts, the Buyer shall not have any Liability or obligations for or in
respect of any of the contracts set forth in SECTION 2(K) of the Disclosure
Schedule or any other contracts or agreements of the Seller.
(L) COMMISSION LICENSES AND COMPLIANCE WITH COMMISSION REQUIREMENTS.
(i) To the knowledge and belief of Seller, 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, in
all material respects, (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, to the knowledge and belief of Seller, 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) To the knowledge and belief of Seller, the Stations are each
in compliance in all material respects with the FCC's policy on exposure to
radio frequency radiationand 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.
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(iii) Except as set forth in SECTION 2(L) of the Disclosure
Schedule, to the Seller's knowledge and belief, the Seller is not the subject of
any FCC or other governmental investigation or notice of violation or order, or
any material complaint, objection, petition to deny, or opposition issued by or
filed with the FCC or any other governmental authority in connection with the
operation of or authorization for the Stations, and there are no proceedings
(other than rule making proceedings of general applicability) before the FCC or
any other governmental authority that could adversely affect any of the FCC
Licenses or the authorizations listed in SECTION 2(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.
(v) The Seller is not aware of any information concerning the
Stations that could cause
the FCC or any other regulatory authority not to issue to the Buyer all
regulatory certificates and approvals necessary for the consummation of the
transactions contemplated hereunder or the Buyer's operation and/or ownership of
the Stations. Seller is not aware of any pending FCC applications which, if
approved, would allow for the operation of a new radio Stations with a signal
reaching the signal area of the Stations and, in addition, Seller is not aware
of any plans or proposals by existing radio Stations with a signal reaching the
signal area of the Stations to alter or change their format to a format similar
to that of the Stations.
(M) INSURANCE. SECTION 2(M) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which the 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) to the knowledge and belief of
Seller, the policy is legal, valid, binding, and enforceable and in full force
and effect; (B) to the knowledge and belief of
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 11 OF 37
Seller, 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 judgment, 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 quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. None of the charges,
complaints, actions, suits, proceedings, hearings, and investigations set forth
in SECTION 2(N) of the Disclosure Schedule could result in any adverse change in
the assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Seller or the Stations taken as a whole.
The Seller has no reason to believe that any such charge, 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. SECTION 2(O) of the Disclosure Schedule also sets forth a list of
all employee handbooks and/or manuals relating to the employees of Seller, true
and correct copies of which have been delivered to the Buyer. 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
understanding (whether written or oral), agreement or contract with any union,
labor organization, employee group or other entity or individual which affects
the employment of employees of the Seller including, but not limited to any
collective bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes. The
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. The Seller has not been in a strike, slow down or other work
stoppage during the five (5) year period immediately preceding the date hereof
and, to the Seller's Knowledge, there are no strikes, slow downs or work
stoppages threatened against the Seller. To the Seller's Knowledge, it has not
committed any unfair labor practice. To the Knowledge and belief of Seller,
there is no basis for any claim by any past or present employee of the Seller
that such employee was subject to wrongful discharge or any employment
discrimination by the Seller or its management arising out of or relating to the
employee's race, sex, age, religion, national origin, ethnicity, handicap or any
other protected characteristic under applicable law. To the Knowledge and
belief of Seller, no proceedings are pending before any court, governmental
agency or instrumentality or arbitrator relating to labor matters, and there is
no pending investigation by any governmental agency or, to the Knowledge of the
Seller, threatened claim by any such agency or other person relating to labor or
employment matters.
(P) EMPLOYEE BENEFITS. SECTION 2(P) of the Disclosure Schedule lists all
Employee Benefit Plans that the Seller maintains or to which the Seller
contributes or is required to contribute for the benefit of any current or
former employee of the Seller and true and correct copies of each such Employee
Benefit Plan have been delivered to the Buyers. Each Employee Benefit Plan (and
each related trust or insurance contract) complies and at all times has complied
in form and in operation in all respects
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 12 OF 37
with the applicable requirements of ERISA and the Code. The Seller does not
have any commitment to create any additional Employee Benefit Plan or modify or
change any existing Employee Benefit Plan that would affect any employee or
terminated employee of the Seller. There are no pending or, to the Knowledge of
the Seller, threatened claims under, by or on behalf of any of the Employee
Benefit Plans, by any employee or beneficiary covered by any such Employee
Benefit Plan, or otherwise involving any such Employee Benefit Plan (other than
routine claims for benefits), nor have there been any Reportable Events or
Prohibited Transactions with respect to any Employee Benefit Plan.
(Q) ENVIRONMENT, HEALTH, AND SAFETY.
(i) With respect to the operation of the Stations and the Real
Estate, to the best Knowledge and belief of Seller, the Seller is, and at all
times in the past has been, in compliance in all material respects with all
Environmental Laws and all laws (including rules and regulations thereunder) of
federal, state, and local governments (and all agencies thereof) concerning
employee health and safety, and to the Knowledge and belief of Seller, no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has ever been filed or commenced or, to the Seller's
Knowledge, is threatened, against the Seller alleging any failure to comply with
any such Environmental Law or laws concerning employee health and safety.
(ii) With respect to the operation of the Stations and the Real
Estate, the Seller, to Seller's best Knowledge and belief, has no Liability (and
to Seller's Knowledge there is no Basis related to the present operations of
the Seller for any present 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 of any federal, state, local, or
foreign government or agency thereof (including rules, regulations, codes,
plans, judgments, orders, decrees, stipulations, injunctions, and charges
thereunder) relating to public health and safety, or pollution or protection of
the environment, including, without limitation, laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes ("ENVIRONMENTAL LAWS");
(iii) To the best Knowledge and belief of Seller, the Seller has no
Liability (and to Seller's Knowledge there is no Basis for any present charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against the Seller giving rise to any Liability) under the Occupational Safety
and Health Act, as amended, or any other law (or rule or regulation thereunder)
of any federal, state, local, or foreign government (or agency thereof)
concerning employee health and safety, or for any illness of or personal injury
to any employee.
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 13 OF 37
(iv) SECTION 2(Q) of the Disclosure Schedule contains a copy of all
environmental claims, reports, studies, compliance actions or the like of the
Seller or which are available to the Seller with respect to any of the Real
Estate or any of the Acquired Assets.
(R) LEGAL COMPLIANCE.
(i) To the best Knowledge and belief of Seller, the Seller has
complied in all material respects with all laws (including rules and regulations
thereunder) of federal, state, local and foreign governments (and all agencies
thereof, and no charge, complaint, action, suit, proceeding, hearing, to the
best Knowledge and belief of Seller, investigation, or claim, demand, or notice
has been filed or commenced or, to the Seller's Knowledge, is threatened,
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) To the best Knowledge and belief of Seller, 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) of federal state, local and foreign governments (and all
agencies thereof). 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).
(S) ADVERTISING CONTRACTS. SECTION 2(S) of the Disclosure Schedule lists
all arrangements for the sale of air time or advertising on the Stations in
excess of $ 1 000, and the amount to be paid to the Seller therefor. The Seller
has no reason to believe and has not received a notice or indication of the
intention of any of the advertisers or third parties to material contracts of
the Seller to cease doing business or to reduce in any material respect the
business transacted with the Seller or to terminate or modify any agreements
with the Seller (whether as a result of consummation of the transactions
contemplated hereby or otherwise).
(T) BROKERS' FEES. The Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(U) UNDISCLOSED COMMITMENTS OR LIABILITIES. There are no commitments,
liabilities or obligations relating to any of the Stations, whether accrued,
absolute, contingent or otherwise including, without limitation, guaranties by
the Seller of the liabilities of third parties, for which specific and adequate
provisions have not been made on the Financial Statements except those incurred
in or as a result of the Ordinary Course of Business since September 1, 1997
(none of which Ordinary Course of Business obligations have had or will have a
material adverse effect on any Stations).
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyers represent and
warrant 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
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 14 OF 37
Date were substituted for the date of this Agreement throughout this SECTION 3),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this SECTION 3.
(A) ORGANIZATION OF THE BUYERS. Broadcasting and Licensing are
corporations duly organized, validly existing, and in good standing under the
laws of Nevada.
(B) AUTHORIZATION OF TRANSACTION. Buyers have full power and authority to
execute and deliver this Agreement and the Ancillary Agreements and to perform
their obligations hereunder and thereunder. This Agreement and the Ancillary
Agreements constitute the valid and legally binding obligation of the Buyers,
enforceable against the Buyers in accordance with their respective terms and
conditions.
(C) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in SECTION 1(E) above), will to best of Buyers' knowledge, in any
material way, (i) violate any statute, regulation, rule, judgment, order,
decree, stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which the Buyers are subject or any provision
of their articles of organization or other charter documents, or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice or third party consent under any contract,
lease, sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, Security Interest or
other arrangement to which the Buyers are a party or by which they are bound or
to which any of their assets is subject. Other than the Assignment Application
described in SECTION 4(B), the Buyers do not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any court
or government or governmental agency in order for the Parties to consummate the
actions contemplated by this Agreement or the Ancillary Agreements (including
the assignments and assumptions referred to in SECTION 1(E) above).
(D) BROKERS' FEES. Other than the fee payable to Xxxxxx Xxxxxxx &
Associates, which shall be the exclusive responsibility of the Buyers; the
Buyers have no Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which the 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).
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 15 OF 37
(B) ASSIGNMENT APPLICATIONS. Within ten (10) business days after the
execution of this Agreement, the Seller and the Buyers shall jointly file with
the FCC an application for assignment of the FCC Licenses, permits and
authorizations pertaining to the Stations from the Seller to Licensing (the
"ASSIGNMENT APPLICATION"). The costs of the FCC filing fees in connection with
the Assignment Application shall be divided equally between the Parties. Each
party shall pay its own attorneys' fees. The Seller and the Buyers shall
thereafter prosecute the Assignment Application with all reasonable diligence
and otherwise use the commercially reasonable efforts to obtain the grant of the
Assignment Application as expeditiously as practicable (but neither the Seller
nor the Buyers shall have any obligation to satisfy complainants or the FCC by
taking any steps which would have material adverse effect upon the Stations or
upon any Affiliate or impose significant costs on such party). If the FCC
imposes any condition on either party to the Assignment Application, such party
shall use commercially reasonable efforts to comply with such condition,
provided, that neither party shall be required hereunder to comply with any
condition that would have a material adverse effect upon the Stations or any
Affiliate. The Seller and the Buyers shall jointly oppose any requests for
reconsideration or judicial review of FCC approval of the Assignment Application
and shall jointly request from the FCC extension of the effective period of FCC
approval of the Assignment Application if the Closing shall not have occurred
prior to the expiration of the original effective period of the FCC Consent.
Nothing in this SECTION 4(B) shall be construed to limit either party's right to
terminate this Agreement pursuant to SECTION 9 of this Agreement.
(C) EMPLOYMENT OFFERS. Upon notice to the Seller, and at mutually
agreeable times, the Seller will permit the Buyers to meet with its employees
prior to the Closing Date. Not earlier than one (1) week prior to the Closing,
the Buyers may, at their option, extend offers of employment to all or any of
the Seller's employees effective on the Closing Date. From and after the
execution of this Agreement, the Seller shall use its best efforts to assist
Buyers in retaining those employees of the Stations which the Buyers wish to
hire in connection with the operation of the Stations by the Buyers subsequent
to the Closing, and 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 Buyers.
(D) NOTICES AND CONSENTS. The Seller will give all notices to third
parties and shall have obtained all third party consents, that the Buyers
reasonably may request in connection with the matters pertaining to the Seller
disclosed or required to be disclosed in the Disclosure Schedule (including,
without limitation, consents to assignment of the Leases and other Assumed
Contracts). Each of the Parties will take any additional action that may be
necessary, proper, or advisable in connection with any other notices to, filings
with, and authorizations, consents, and approvals of governments, governmental
agencies, and third parties that it may be required to give, make, or obtain.
(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(F) above.
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 16 OF 37
(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 Ten Thousand Dollars ($10,000.00) worth of air time without the
Buyers' consent. On the Closing Date, the Seller shall deliver to the Buyers 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) CONTRACTS. The Seller will not without the prior written consent of
the Buyers amend, change, or modify any of the contracts listed on SECTION 2(K)
of the Disclosure Schedule in any material respect. The Seller will not without
prior written consent of the Buyers enter into any new contracts respecting the
Stations or their properties, except (i) contracts for the sale of time on the
Stations for cash, goods or services which are entered into in the Ordinary
Course of Business and comply with SECTIONS 4(F) AND 4(J) hereof, (ii) contracts
entered into in the Ordinary Course of Business which are calculable 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.
(H) 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.
(I) 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.
(J) PRESERVATION OF BUSINESS. The Seller will keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions, relationships with lessors, licensors,
advertisers, suppliers, customers, and employees, all of the Confidential
Information which means any information concerning the businesses and affairs of
the Seller, call letters and trade secrets of the Stations, and the FCC
Licenses.
(K) FULL ACCESS AND CONSULTATION. Prior to closing of this transaction as
defined herein, the Seller will permit representatives of the Buyers to have
full access at all reasonable times, and in a Manner so as not to interfere with
the normal business operations of the Stations, to all premises, properties,
books, records, contracts, Tax records, and documents of or pertaining to the
Seller for the purpose of permitting the Buyer to, among other things: (a)
conduct its due diligence review, (b) review financial statements of the Seller,
(c) verify the accuracy of representations and warranties of the Seller
contained in this Agreement, and (d) prepare for the consummation of the
transactions contemplated by this Agreement. The Seller will consult with the
Buyers' management with a view to informing Buyer's management as to the
operations, management and business of the Stations.
ASSET PURCHASE AGREEMENT
XXXXX/XXXXX/CUMULUS PAGE 17 OF 37
(L) NOTICE OF DEVELOPMENTS. The Seller, when such facts become known to
Seller, will give prompt written notice to the Buyers of any material
development, which in Seller's opinion may affect the assets, Liabilities,
business, financial condition, operations, results of operations. 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.
(M) 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 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 Buyers immediately if any person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
(N) TITLE INSURANCE, SURVEYS AND ENVIRONMENTAL ASSESSMENTS.
(i) TITLE POLICY. Seller shall furnish to Buyer at Seller's
expense an Owner's Policy of Title Insurance (the Title Policy) issued by a
Title Company duly licensed and authorized to do business in the State of Texas,
(the "Title Company") reasonably satisfactory to Buyer in the amount of the fair
market value of the land and improvements conveyed and dated at or after
closing.
(A) TAX PRORATION. Current taxes shall be prorated through
the Closing Date. If ad valorem taxes for the year in which the sale
is closed are not available on the Closing Date, proration of taxes
shall be made on the basis of taxes assessed in the previous year
unless substantial improvements have been made.
(B) TITLE APPROVAL.
(1) PRELIMINARY TITLE REPORT. Seller, will cause the
Title Company to furnish Buyer a Commitment to issue
Title Insurance (the "Title Report") accompanied by
copies of all recorded documents relating to easements,
rights-of-way, etc., affecting the Property and deliver
the report to Buyer's counsel.
(C) TITLE POLICY. The Title Policy delivered by Seller to
Buyer hereunder shall guarantee Buyer's title to be as good and
indefeasible subject only to:
(1) any discrepancies, conflicts or shortages in area
or boundary lines, or any encroachments, or any
overlapping of improvements
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XXXXX/XXXX/XXXXXXX PAGE 18 OF 37
(2) taxes for the current and subsequent years and
subsequent assessments for prior years due to a change
in land usage or ownership
(3) rights of parties in possession
(4) liens created as security for the sale
consideration
(5) exceptions, reservations, conditions or
restrictions set out described in this contract and
(6) any other reservations or exceptions permitted by
the terms of this contract or acceptable to Buyer.
(D) Seller shall furnish tax statements showing no delinquent
taxes; a General Warranty Deed conveying title subject only to liens
securing payment of debt created or assumed as part of the
consideration, taxes for the current year; and exceptions or
reservations set forth in the Title Report referenced above. In case
of dispute as to the form of the Deed, the form prepared by the State
Bar of Texas shall be used.
(ii) PROPERTY SURVEY. A current plat or survey of the property may
be obtained at Buyer's cost and expense showing the location of the Property
with respect to the original survey lines and showing the boundaries and visible
conditions along the boundaries, perimeter fences, easements, highways, rights
of way, roadways, on or adjacent to the property and contain a computation of
area, and has been prepared by a mutually acceptable Registered Public Surveyor
licensed by the State of Texas. This survey has been be staked on the ground,
and the plat shall shows the location of all improvements and contains a
surveyor's certification that there are no encroachments on the property and
sets forth the total number of net and gross acres comprising the property,
together with a metes and bounds description thereof.
(iii) OBJECTIONS TO TITLE AND SURVEY. Buyer shall have a period of
fifteen (15) days from the date Buyer receives the last of the title commitment
and survey referred to herein within which to notify Seller of any objections to
the title commitment and survey. Seller shall have a period of thirty (30) days
from the date Buyer notifies Seller of such objections to use Seller's best
efforts to cure such objections. In the event the objections are not cured
within the time period provided herein despite Seller's exercise of its best
efforts, then Buyer may elect, within fifteen (15) days of the expiration of
Seller's cure period, to either: (a) terminate this agreement; or (b) proceed to
close this transaction notwithstanding Seller's inability to cure said
objections.
(iv) ENVIRONMENTAL ASSESSMENT. Prior to closing Buyer, at its
option and at its cost, may arrange for an environmental assessment to be
conducted on the Property by a qualified environmental consultant. The
assessment shall be conducted according to the following minimum standards:
(A) Phase I of the assessment shall include:
PAGE 19 OF 37
(1) A review of available documents;
(2) Interviews with people aware of operations that
have been conducted on the Property; and,
(3) A physical inspection of the Property.
(B) If the results of Phase I are inconclusive to show the
presence or absence of any hazardous substances on the Property, Buyer
shall have the option of terminating this Contract and his xxxxxxx
money shall be refunded to him or, at his option, Buyer may proceed
with a Phase II assessment of the Property. In the event that Phase
II of the assessment is done, it shall include:
(1) A more detailed review of the Property; and
(2) Specialized physical sampling as necessarily
indicated from the results of Phase I.
(C) If the results of the Phase II assessment are
inconclusive to show the presence or absence of any hazardous
substances on the Property, Buyer shall have the option of terminating
this Contract and his xxxxxxx money shall be refunded to him or, at
his option, Buyer may proceed with a Phase III assessment of the
Property. The nature of the inquiries to be made in the Phase III
assessment, if any, shall be determined by the Buyer and the
environmental consultant retained to conduct the assessment following
the Buyer's analysis of a report on the Phase II assessment.
(D) The cost of the environmental assessment shall be paid by
Buyer. If the environmental assessment conducted pursuant hereto
indicates that remedial action is necessary to bring the Property into
compliance with any and all local, state and federal ordinances, laws
or regulations, Seller shall be responsible for undertaking all
remedial action recommended by the environmental consultant, the Texas
Natural Resource Conservation Commission, the Environmental Protection
Agency, or any other local, state or federal governmental agency
requiring any remedial action. If, however, the projected cost of
such remedial action exceeds Ten Thousand and No/100 Dollars
($10,000.00), then Seller shall have the option to terminate this
Contract.
Notwithstanding anything to the contrary herein, in the event Buyer fails to
obtain a Phase I Environmental Assessment within sixty (60) days after the
delivery of this contract, such right to have an assessment shall be waived by
Buyers, and Buyers shall be required to proceed with the purchase of the
Property.
(v) COST APPORTIONMENT. Not withstanding anything to the contrary
herein contained, the Seller will pay one-half (1/2) up to a total of $2,500.00
of the cost to Buyer of the title policy, Survey and environmental assessments.
PAGE 20 OF 37
(O) CONTROL OF STATIONS. The transactions contemplated by this Agreement
shall not be consummated until after the FCC has given its consent and approval
to the Assignment Application. Between the date of this Agreement and the
Closing Date, the Buyers and their employees or agents shall not directly or
indirectly control, supervise, or direct, or attempt to control, supervise, or
direct, the operation of the Stations, and such operation shall be the sole
responsibility of and in the control of the Seller.
(P) 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, at Seller's expense, repair or replace such
Acquired Assets to their former condition 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
Buyers, and the Buyers determine that the Seller's failure to repair or replace,
alone or in the aggregate with any other then existing factors, would have a
material adverse effect on the operation of the Stations:
(a) the Buyers may elect to terminate this Agreement; or
(b) the Buyers may postpone the Closing Date until such time as the
property has been repaired, replaced or restored in a manner and to an extent
reasonably satisfactory to the Buyers, unless the same cannot be reasonably
effected within ninety (90) days of the date of the Seller's notice to the
Buyers, in which case either party may terminate this Agreement; or
(c) the Buyers may choose to accept the Acquired Assets in their
"then" condition, together with the Seller's assignment to the Buyers of all
rights under any insurance claims covering the loss, damage or destruction and
payment over to the Buyers of any proceeds under any such insurance policies,
previously received by the Seller with respect thereto.
In the event the Closing Date is postponed pursuant to this SECTION 4(G.), the
parties hereto will cooperate to extend the time during which this Agreement
must be closed as specified in the consent of the FCC.
5. CONDITIONS TO OBLIGATION TO CLOSE.
(A) CONDITIONS TO OBLIGATION OF THE BUYERS. The obligation of the Buyers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
PAGE 21 OF 37
(i) the representations and warranties set forth in SECTION 2
above shall be true and correct in all respects at and as of the Closing Date as
though made on and as of the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all respects through the Closing;
(iii) the third party consents specified in SECTION 4(D) above,
including but not limited to those relating to transmitter and studio leases,
and all of the title insurance commitments (and endorsements), Surveys and
environmental site assessments described in SECTION 4(O) above have been
obtained;
(iv) no action, suit, investigation, inquiry or other proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation, injunction, or
charge would (A) prevent consummation of any of the transactions contemplated by
this Agreement or impose damages or penalties upon any of the parties if such
transactions are consummated, (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or (C) affect adversely
the right of the 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 SECTIONS 5(A)(I) THROUGH
(IV) is satisfied in all respects and the statements contained in such
certificate shall be deemed a warranty of the Seller which shall survive the
Closing;
(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; and
(viii) all actions to be taken by the Seller in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer.
In the event that any of the foregoing conditions to Closing shall not have been
satisfied, the Buyers may elect to (i) terminate this Agreement without
liability to the Seller, or (ii) consummate the transactions contemplated herein
despite such failure. Regardless of whether the Buyers elect to terminate this
Agreement or consummate the transactions described herein, if such failure shall
be as a result of a breach of any provision of this Agreement by the Seller
(including, without limitation, any breach arising as a result of the failure of
the Seller to execute and/or deliver any item described in this SECTION 5(A),
the Buyers may seek appropriate remedies for any and all damages, costs and
expenses incurred
PAGE 22 OF 37
by the Buyers by reason of such breach including, without limitation,
indemnification pursuant to SECTION 7, below.
(B) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the Seller to
consummate the actions to be performed by it in connection with the Closing is
subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in SECTION 3
above shall be true and correct in all respects at and as of the Closing Date as
though made on and as of the Closing Date;
(ii) the Buyers shall have performed and complied with all of their
covenants hereunder
in all respects through the Closing;
(iii) no action, suit, investigation, inquiry or other proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
injunction, or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or impose damages or penalties upon any of the
Parties if such transactions are consummated, or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such judgment, order, decree, stipulation, injunction, or
charge shall be in effect);
(iv) the Buyers shall have delivered to the 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 and the statements contained in such certificate shall
be deemed a warranty of the Buyers which shall survive the Closing;
(v) each of the Assignment Applications shall have been approved
by a Final Order of
the FCC and the Buyers shall have received all governmental approvals required
to transfer all other authorizations, consents, and approvals of government and
governmental agencies set forth in the Disclosure Schedule;
(vi) the relevant parties shall have entered into the Postclosing
Agreement; and
(vii) all actions to be taken by the Buyers in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Seller.
In the event that any of the foregoing conditions to Closing shall not have been
satisfied, the Seller may elect to (i) terminate this Agreement without
liability to the Buyers, or (ii) consummate the transactions contemplated herein
despite such failure. Regardless of whether the Seller elects to terminate this
Agreement or consummate the transactions described herein, if such failure shall
be as a result of a breach of any provision of this Agreement by the Buyers
(including, without limitation, any breach arising as a result of the failure of
the Buyers to execute and/or deliver any item described in this SECTION
PAGE 23 OF 37
5(A), the Seller may seek appropriate remedies for any and all damages, costs
and expenses incurred by the Seller by reason of such breach including, without
limitation, indemnification pursuant to SECTION 7, below.
6. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the Closing:
(A) GENERAL. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under SECTION 7 below).
(B) LITIGATION SUPPORT. In the event and for so long as any Party actively
is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Stations, each of the other Parties will reasonably cooperate with
the contesting or defending Party and its counsel in the contest or defense,
make available his or its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under SECTION 7 below); provided, however, that such access and
cooperation does not unreasonably disrupt the normal operations of the
cooperating party.
(C) ADJUSTMENTS. Except to the extent otherwise provided in the Local
Marketing Agreement executed this same date by Seller and Buyers, the following
adjustments shall be made:
(i) 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 Buyers;
(ii) such items as employee salaries, vacation, sick day and
personal time accruals, and fringe benefits, power and utilities charges,
insurance, real and personal property taxes, prepaid expenses, deposits, music
license fees, and rents and payments pertaining to the Assumed Contracts
(including any contracts for the sale of time for cash, trade or barter so
assigned) shall be prorated between the Seller and the Buyers as of the Closing
Date in accordance with the foregoing principle;
(iii) in addition, all commissions payable with respect to the
accounts receivable of the Seller (whether due before or after Closing) shall be
solely for the account and responsibility of the Seller.
(iv) contractual arrangements that do not reflect an equal rate of
compensation to a Stations over the term of the agreement shall be equitably
adjusted as of the Closing Date.
PAGE 24 OF 37
(v) 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.
(vi) in the event of any disputes between the Parties as to such
adjustments, the amounts not in dispute shall nonetheless be paid at such time
and such disputes shall be determined by an independent accounting firm mutually
acceptable to both parties and the fees and expenses of such accounting firm
shall be paid one-half (1/2) by the Seller and one-half (1/2) by the Buyer.
(D) COLLECTION OF ACCOUNTS RECEIVABLE. At the Closing, the Seller will
turn over to the Buyers, 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
Buyers on the Closing Date or as soon thereafter as possible. The Buyers agree
to use commercially reasonable efforts in the ordinary course of business (but
without responsibility to institute legal or collection proceedings) to collect
such accounts receivable during the 120-day period following the Closing Date,
and will remit all payments received on such accounts during each calendar month
during this 120-day period on the one hundred twentieth (120th) day together
with an accounting of all payments received within such period. The Buyers shall
have the sole right to collect such accounts receivable during such one hundred
twenty (120) day period. In the event the Buyers receive 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 Buyers shall
immediately return the account to the Seller prior to expiration of the 120-day
period following the Closing Date. If the Buyers return a disputed account to
the Seller, the Buyers shall have no further responsibility for its collection
and may accept payment from the account debtor for advertising carried on any of
the Stations after the Closing Date. At the end of the 120-day period following
the Closing Date, the Buyers will turn back to the 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 Buyers will thereafter have no further
responsibility with respect to the collection of such receivables. During the
120-day period following the Closing Date, the Buyers shall afford the Seller
reasonable access to the accounts receivable "aging list." The Seller
acknowledges and agrees that the Buyers are acting as its collection agent
hereunder for the sole benefit of the Seller and that Buyers have accepted such
responsibility for the accommodation of the Seller. The Buyer shall not have
any duty to inquire as to the form, manner of execution or validity of any item,
document, instrument or notice deposited, received or delivered in connection
with such collection efforts, nor shall the Buyers have any duty to inquire as
to the identity, authority or rights of the persons who executed the same. The
Seller shall indemnify Buyers and hold them harmless from and against any
judgments, expenses (including attorney's fees) costs or liabilities which the
Buyers may incur or sustain as a result of or by reason of such collection
efforts.
PAGE 25 OF 37
(F) CONSENTS. In the event any of the Assumed Contracts are not assignable
or any consent to such assignment is not obtained on or prior to the Closing
Date, and the Buyers elect to consummate the transactions contemplated herein
despite such failure or inability to obtain such consent, the Seller shall
continue to use commercially reasonable efforts to obtain any such assignment or
consent after the Closing Date. Until such time as such assignment or approval
has been obtained, the Seller will cooperate with Buyers in any lawful and
economically feasible. arrangement to provide that the Buyer shall receive the
Seller's interest in the benefits under any such Assumed Contract, including
performance by the Seller as agent, if economically feasible.
7. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(A) SURVIVAL. All of the representations and warranties of the Seller
contained in this Agreement shall survive the Closing and continue in full
force and effect for a period of eighteen (18) months from the Closing Date with
respect to any claim by the Buyers based on a claim or action by a third party
and for a period of one (1) year following Closing with respect to any claim by
the Buyers not based on a claim or action by a third party. All covenants of
the Buyers and the Seller contained in this Agreement shall survive the Closing
but remain in full force and effect for eighteen (18) months from Closing.
(B) INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE BUYERS. Except as
described below in SECTION 7(E) with respect to a breach of a warranty or
covenant prior to the Closing Date, the Seller agrees to indemnify the Buyers
(so long as the Seller makes a written claim for indemnification within the
applicable survival period) from and against the entirety of any Adverse
Consequences the Buyers may suffer resulting from, arising out of, relating to,
in the nature of, or caused by:
(i) any misrepresentation or breach of any of the Seller's
representations or warranties, and covenants contained in this Agreement or in
any Ancillary Agreement executed and/or delivered by the Seller (so long as the
Buyers make a written claim for indemnification within the applicable survival
period);
(ii) any breach or nonfulfillment of any agreement or covenant of
the Seller contained herein or in any Ancillary Agreement;
(iii) any Liability of the Seller which is not an Assumed Liability;
and/or
(iv) any Liability of the Buyers arising by operation of law.
The Seller's liability shall be limited to $82,000.00 under this SECTION 7(B).
(C) INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE SELLER. Except as
described below in SECTION 7(E) with respect to a breach of a warranty or
covenant prior to the Closing Date, Buyer agrees to indemnify the Seller from
and against the entirety of any Adverse Consequences the Seller may suffer
resulting from, arising out of, relating to, in the nature of, or caused by (i)
any misrepresentation or breach of any of the Buyers' representations or
warranties contained in this Agreement or in any
PAGE 26 OF 37
Ancillary Agreement executed and/or delivered by the Buyers (so long as the
Seller makes a written claim for indemnification within the applicable survival
period) or (ii) any breach or nonfulfillment of any agreement or covenant of the
Buyers contained herein or in any Ancillary Agreement, or (iii) any Assumed
Liability.
Buyers' liability under this SECTION 7(C) shall be limited to $82,000.00.
(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 a court of the
United States or the State of Texas sitting in Amarillo, Texas (subject to the
provisions set forth in SECTION 10(O) 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 warranty or covenant of this
Agreement prior to the Closing, money damages would not be an adequate remedy
for a breach of any provision of this Agreement.
(E) LIQUIDATED DAMAGES. The 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 7(B) OR 7(C), the non-defaulting
Party shall be entitled to receive from the defaulting Party for such default
the sum of Eighty-Two Thousand Dollars ($82,000.00) as liquidated damages
without the need for proof of damages, subject only to successfully proving in a
court of competent jurisdiction that the other Party has materially breached
this Agreement and that the transactions contemplated thereby have not occurred;
provided however, that the Seller and Buyers shall retain the option to receive,
pursuant to SECTION 7(D), and in lieu of receiving the liquidated damages
provided in this SECTION 7(G), the remedy of specific performance with respect
to a breach of this Agreement prior to the Closing. The Buyers 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, and agree that in the
event this Agreement is terminated by the Seller prior to the Closing Date as a
result of a breach or default by the Buyers under this Agreement, the Seller
shall proceed against the Xxxxxxx Money as satisfaction of liquidated damages
owed by Buyers.
(F) MATTERS INVOLVING THIRD PARTIES. If any third party shall notify any
Party (the "INDEMNIFIED PARTY") with respect to any matter which may give rise
to a claim for indemnification against any other Party (the "INDEMNIFYING
PARTY") under this SECTION 7, then the Indemnified Party shall notify the
Indemnifying Party thereof promptly; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any liability or obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is damaged as a result
of such failure. In the event any Indemnifying Party notifies the Indemnified
Party within 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
PAGE 27 OF 37
matter with counsel of its choice; (ii) the Indemnified Party may retain
separate co-counsel at its sole cost and expense; (iii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the matter without the written consent of the Indemnifying Party (not
to be withheld unreasonably), and (iv) the Indemnifying Party will not consent
to the entry of any judgment with respect to the matter, or enter into any
settlement which does not include a provision whereby the plaintiff or claimant
in the matter releases the Indemnified Party from all Liability with respect
thereto, without the written consent of the Indemnified Party (not to be
withheld unreasonably). In the event the Indemnifying Party does not notify the
Indemnified Party within 15 days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense thereof, however,
and/or in the event the Indemnifying Party shall fail to defend such claim
actively and in good faith, then the Indemnified Party may defend against, or
enter into any settlement with respect to, the matter in any manner it
reasonably may deem appropriate.
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, wherever located, including but not limited to all of
its (a) leaseholds and other interests of any kind therein, improvements,
fixtures, and fittings thereon (such as towers and antennae), and easements,
rights-of-way, and other appurtenances thereto); (b) tangible personal property
(such as fixed assets, computers, data processing equipment, electrical devices,
monitoring equipment, test equipment, switching, terminal and studio equipment,
transmitters, transformers, receivers, broadcast facilities, furniture,
furnishings, inventories of compact disks, records, tapes and other supplies,
vehicles, and all assignable warranties with respect thereto; (c) Intellectual
Property, goodwill associated therewith, licenses and sublimeness granted and
obtained with respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests therein under the
laws of all jurisdictions; (d) rights under orders and agreements (including
those Barter Agreements and Advertising Contracts identified on the Disclosure
Schedule) now existing or entered into in the Ordinary Course of Business for
the sale of advertising time on the Stations; (e) Assumed Contracts, indentures,
Security Interests, guaranties, other similar arrangements, and rights
thereunder; (f) call letters of the Stations, jingles, logos, slogans, and
business goodwill of the Stations; (g) claims, deposits, prepayments, refunds,
causes of action, causes in action, rights of recovery (including rights under
policies of insurance), rights of set off, and rights of recoupment; (h)
Licenses and similar rights obtained from government and governmental agencies;
and (i) FCC logs and records and all other books, records. ledgers, logs, files,
documents, correspondence, advertiser lists, all other lists, plats,
architectural plans, drawings, and specifications, creative materials,
advertising and promotional materials, program production materials, studies,
reports, and other printed or written materials; and o) goodwill of the
Stations.
"ADVERSE CONSEQUENCES" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including all attorneys' fees and court costs.
PAGE 28 OF 37
"ADVERTISING CONTRACTS" has the meaning set forth in SECTION 2(S), above.
"AFFILIATE" means with reference to any person or entity, another person or
entity controlled by, under the control of or under common control with that
person or entity.
"ASSIGNMENT APPLICATION" has the meaning set forth in SECTION 4(B) above.
"ASSUMED CONTRACTS" means the Leases, the Barter Agreements, the
Advertising Contracts and those contracts listed on EXHIBIT "G" attached hereto.
"ASSUMED LIABILITIES" means (a) obligations of the Seller which accrue
after the Closing Date under the Assumed Contract 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 Liabilities.
"BASIS" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"BUYERS" has the meaning set forth in the preface above.
"CASH" means cash and cash equivalents determined in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
"CLOSING" has the meaning set forth in SECTION L(D) above.
"CLOSING DATE" has the meaning set forth in SECTION L(D) above.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means information concerning customer lists,
advertising rates, employee salaries and like matters.
"DISCLOSURE SCHEDULE" has the meaning set forth in SECTION 2 above.
"XXXXXXX MONEY DEPOSIT" has the meaning set forth in Section l(c) above.
"XXXXXXX MONEY ESCROW AGREEMENT" has the meaning set forth in SECTION L(C)
above.
"EMPLOYEE BENEFIT PLAN" means any (a) non-qualified 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.
PAGE 29 OF 37
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(1).
"ENVIRONMENTAL LAWS" has the meaning set forth in SECTION 2(Q), above.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" means Xxxxxx Xxxxxxx & Associates.
"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in Section 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FCC" means the Federal Communications Commission of the United States.
"FCC LICENSES" means the licenses, permits and other authorizations,
including any temporary waiver or special temporary authorization, issued by the
FCC to the Seller in connection with the conduct of the business and operation
of the Stations.
"FINAL ORDER" means an action by the FCC as to which: (a) no request for
stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"FINANCIAL STATEMENTS" has the meaning set forth in SECTION 2(E) above.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 7(D) above.
"INDEMNIFYING PARTY" has the meaning set forth in SECTION 7(D) above.
"INTELLECTUAL PROPERTY" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, call letters, logos, trade names, and corporate names and registrations
and applications for 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 patent able or unpatentable and whether or not reduced to
practice), know-how, market and other research information, drawings,
specifications, designs, plans, proposals,
PAGE 30 OF 37
technical data, copyright able 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 (h) copies
and tangible embodiments thereof (in whatever form or medium).
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LEASES" means those real estate leases to which Seller is a party
governing Seller's studios and FM tower sites in as described in SECTION 2(I) of
the Disclosure Schedule.
"LIABILITY" means any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"LICENSES" means all 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 (3 7).
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"OWNED REAL ESTATE" means the real property owned by the Seller in as
described in SECTION 2(I) of the Disclosure Schedule and all buildings,
fixtures, and improvements located thereon.
"PARTY" has the meaning set forth in the preface above.
"PERMITTED REAL ESTATE ENCUMBRANCES" shall have the meaning set forth in
SECTION 2(I), above.
"POST-CLOSING AGREEMENT" means the Post-Closing Agreement with Seller's
owners in the form attached hereto as EXHIBIT "D".
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"PURCHASE PRICE" has the meaning set forth in SECTION L(C) above.
"REAL ESTATE" means the Owned Real Estate and the real estate, building,
fixtures and improvements which are the subject of the Leases.
"REPORTABLE EVENT" has the meaning set forth in ERISA Section 4043.
PAGE 31 OF 37
"RETAINED ASSETS" I 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 Buyers on
the other hand entered into on or after the date of this Agreement); (iii)
accounts, notes and other receivables of the Seller; and (iv) 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 (except as set forth in
SECTION 4(I) relating to Surveys, title commitments and environmental audits and
SECTION 4(B) with regard to the Assignment Application; or (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 Buyers on the other hand entered into
on or after the date of this Agreement).
"SECURITY INTEREST" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) liens for Taxes not yet due
and payable; and (b) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation.
"SELLER" has the meaning set forth in the preface above.
"STATIONS" means the radio broadcast Stations having the call letters
XXXX-FM, licensed by the FCC to operate in Canyon, Texas, and XXXX-AM, licensed
by the FCC to operate in Amarillo, Texas.
"SUBSIDIARY," with respect to any person, means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which) 50% or more of (i) the outstanding capital stock or other equity
interest having voting power to elect a majority of the Board of Directors of
such corporation or persons having a similar role as to an entity that is not a
corporation, (ii) the interest in the profits of such partnership or joint
venture, or (iii) the beneficial interest of such trust or estate are at such
time directly or indirectly owned by such person or one or more of such person's
Subsidiaries.
"SURVEYS" has the meaning set forth in SECTION 4(O) above.
"TAX" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
PAGE 32 OF 37
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
9. TERMINATION
(A) TERMINATION OF AGREEMENT. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyers and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyers may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing in the event the Seller is
in breach of any representation, warranty, or covenant contained in this
Agreement; provided, however, that if such breach is capable of being cured,
such breach also remains uncured for twenty (20) days after notice of breach is
received by the Seller from the Buyers;
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing in the event the Buyers
are in breach of any representation, warranty, or covenant contained in this
Agreement; provided, however that if such breach is capable being cured,
such breach remains uncured for twenty (20) days after notice of breach is
received by the Buyers from the Seller;
(iv) the Buyers 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 Buyers themselves breaching any
representation, warranty, or covenant contained in this Agreement);
(v) the Seller may terminate this Agreement by giving written
notice to the Buyers at any time prior to the Closing if the Closing shall not
have occurred on or before the 270th day following the date of this Agreement by
reason of the failure of any condition precedent under SECTION 5(B) hereof
(unless the failure results primarily from the Seller itself breaching any
representation, warranty, or covenant contained in this Agreement); or
(vi) the Buyers 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 9(A) above, all obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability
of any Party then in breach).
PAGE 33 OF 37
10. MISCELLANEOUS
(A) SURVIVAL. All of the representations, warranties, and covenants of the
Parties contained in this Agreement shall survive the Closing hereunder as and
to the extent provided in SECTION 7(A) hereof and the Post-Closing Agreement
with respect to Seller's owners.
(B) PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue any press
release or announcement relating to the subject matter of this Agreement prior
to the Closing without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Party prior to making the disclosure).
(C) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
(D) ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, that may have related in any way to the subject matter hereof.
(E) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party, provided that (i) the Buyers may assign all of its right,
title and interest in, to and under this Agreement to one or more Affiliates,
who shall then, subject to the terms and conditions of this Agreement, have the
right to receive the Acquired Assets, assume the Assumed Liabilities, and to pay
to the Seller the Purchase Price therefor or to any successor to the Buyers in
the event of any sale, merger or consolidation of the Buyers.
(F) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(G) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be considered to be given
and received in all respects when hand delivered, when delivered via prepaid
express or courier delivery service, when sent by facsimile transmission
actually received by the receiving equipment or three (3) days after deposited
in the United States mail, certified mail, postage prepaid, return receipt
requested, in each case addressed to the intended recipient as set forth below:
PAGE 34 OF 37
IF TO THE SELLER:
Xxxxx Xxxxx
Xxx 0000
Xxxxxxxxx Xxx, XX 00000
Copy to:
Xxxxxx X. Xxxxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
(which copy shall not constitute notice to Seller)
IF TO THE BUYERS:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
c/o QUAESTUS Management Corp.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given unless and until it actually is received by
the party for whom it is intended. Any party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
(I) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
PAGE 35 OF 37
(J) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyers and the 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 Buyers and the Seller, will each bear their own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby, other than as set forth
in SECTION 4(B) with regard to the Assignment Applications and as set forth in
SECTION 4(O) with respect to Surveys, title commitments and environmental
audits.
(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.
(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) SERVICE OF PROCESS. Any Party may make service on the other Party by
sending or delivering a copy of the process to the Party to be served at the
address and in the manner provided for the giving of notices in SECTION 10(H)
above. Nothing in this SECTION 10(O) however, shall affect the right of any
Party to serve legal process in any other manner permitted by law.
PAGE 36 OF 37
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
CUMULUS BROADCASTING, INC.
By:
---------------------------
(printed)
---------------------------
Title:
------------------------
CUMULUS LICENSING CORPORATION
By:
---------------------------
(printed)
---------------------------
Title:
------------------------
WESTWIND BROADCASTING, INC.
By:
---------------------------
(printed)
---------------------------
Title: President
------------------------
PAGE 37 OF 38
LIST OF OMITTED SCHEDULES AND/OR EXHIBITS:
Escrow Agreement by and among Cumulus Broadcasting, Cumulus Licensing,
Westwind Communicationa, Inc. and Xxxxxx Xxxxxxx & Associates, Inc., dated
as of January 2, 1998
Ex. B-1 - General Assignment
Ex. B-2 - General Assignment
Ex. C - Instrument of Assumption
Ex. D - Post Closing Agreement
Ex. E - Allocation Schedule
Ex. G - Assumed Contracts
Disclosure Schedules
The preceding schedules and/or exhibits have been omitted from this
exhibit. The Company agrees to provide copies of such schedules and/or
exhibits to the Commission upon request.
PAGE 38 OF 38
