OPTION AGREEMENT
THIS OPTION AGREEMENT is made as of the 3rd day of February, 1997, by
and between Xxxxxxxx Media System, Inc., a Texas corporation ("Grantor"), and
Heart Unlimited Company, a Delaware corporation ("Grantee").
W I T N E S S E T H:
WHEREAS, Grantor is the licensee of radio station KXTN-AM (the "Station")
authorized by the Federal Communications Commission; and
WHEREAS, the Grantee desires to have the right and option to purchase
(the "Purchase Option") from Grantor all of the radio station properties and
assets used or useful in the ownership and operation of the Station (the
"Station Assets") under the terms and conditions herein set forth, and
Grantor desires to grant to the Grantee such right and option; and
WHEREAS, the Grantor and the Grantee have entered into a Time Brokerage
Agreement pursuant to which the Grantee will broadcast certain programs on
the Station;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
1. In consideration of the entering of the Time Brokerage Agreement,
Grantor hereby grants the Purchase Option in favor of Grantee. Grantee may
exercise the Purchase Option by giving written notice to Grantor of its
exercise of the Purchase Option during the Option Period (as defined herein).
Upon exercise of the Purchase Option, Grantor shall be required, subject to
the terms and conditions set forth herein, to sell the Station Assets used or
useful in the operation of the Station to Grantee. As used herein, the term
"Option Period" means the period commencing on the date hereof and
terminating 21 months after the date hereof; provided, however, if the
Grantor terminates the Time Brokerage Agreement pursuant to the early
termination provisions contained in Section 2.2 of the Time Brokerage
Agreement, then the Option Period will terminate on the 30th day after such
termination date.
2. Upon the exercise of the Purchase Option, Grantee and Grantor shall
negotiate and execute a mutually acceptable Asset Purchase Agreement,
providing for a purchase price of $1.0 million and containing customary
representations and warranties (the "Asset Purchase Agreement"). A closing
(the "Closing") for the sale and purchase of the Station Assets shall be held
at such time and at such place as designated in the Asset Purchase Agreement
(the "Closing Date").
3. Prior to the Closing Date, all notices to third parties and other
publicity relating to the transaction contemplated by this Agreement shall be
jointly planned and agreed to by the Grantor and Grantee.
4. Except as otherwise expressly provided herein, each party shall pay
the fees and expenses incurred by it in connection with the transactions
contemplated by this Agreement. If any action is brought for breach of this
Agreement or to enforce any provision of this Agreement, the prevailing party
shall be entitled to recover court costs, arbitration expenses and reasonable
attorneys' fees.
5. This Agreement may be amended at any time but only by an instrument
in writing signed by the parties hereto.
6. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered by certified mail, return receipt
requested, or by nationally recognized "next-day" delivery service, to the
parties at the addresses set forth in the Time Brokerage Agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs and permitted assigns.
8. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXXXX MEDIA SYSTEM, INC.
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
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XxXxxxx X. Xxxxxxxx, Xx.
President
[GRANTEE]
HEART UNLIMITED COMPANY
By: /s/ XxXxxxx X. Xxxxxxxx
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