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EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of December 17, 1999, by
and among Cumulus Broadcasting, Inc., a Nevada corporation ("Broadcasting"),
Cumulus Licensing Corp., a Nevada corporation ("Licensing), Cumulus Wireless
Services Inc., a Nevada corporation ("Wireless"), and McDonald Media Group,
Inc., a Delaware corporation (the "Seller"). Broadcasting, Licensing and
Wireless are referred to collectively herein as the "Buyers." The Buyers and the
Seller are referred to individually as the "Party" or collectively as the
"Parties." Capitalized terms used in this Agreement are defined in Section 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 KNRQ-FM (licensed to Creswel, Oregon), and KNRQ-AM and KZEL-FM
(licensed to Eugene, Oregon) (the "Stations") in return for cash.
Now, therefore, in consideration of the above premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. BASIC TRANSACTION.
A. PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Seller agrees to sell, transfer, convey and
deliver to (i) Licensing, and Licensing agrees to purchase from the Seller, all
of the FCC Licenses listed in Section 2(k) of the disclosure schedule
("Disclosure Schedule"); and (ii) Seller agrees to sell, transfer convey and
deliver to Broadcasting and Wireless, and Broadcasting and Wireless agree to
purchase from the Seller, all of the Acquired Assets other than the FCC
Licenses. Both such sales shall take place at the Closing for the consideration
specified in Schedule A of this Agreement.
B. ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, Broadcasting agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing. The Buyers 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 assumed by Broadcasting, 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 purchase price (the "Purchase Price")
described in Schedule A to this Agreement.
D. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at a mutually agreed location, within
ten (10) days 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
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will have been satisfied, or such other date as the Parties may mutually
determine (the "Closing Date"). The Closing shall occur not earlier later than
May 1, 2000; provided, however, that if the parties are proceeding with all due
diligence and in good faith to close the transaction, but the Closing has not
occurred as a result of the failure of the FCC to approve the transaction and
for such approval to become a Final Order, the Closing shall be extended for
such an additional period of time for the FCC to issue its approval and for such
approval to become a Final Order, but in any event, not later than the 360th day
following the date of this Agreement.
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), as is bills of sale
and statutory warranty deeds in form reasonably acceptable to the Buyers, (B)
such affidavits, transfer tax returns, memorandums of lease, and other
additional 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 provide 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 A
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 Schedule 1(c) above.
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 in all material respects as
of the date of this Agreement and will be correct and complete in all material
respects as of the Closing Date, except as set forth in the Disclosure Schedule.
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.
B. AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority to execute and deliver this Agreement and all agreements and
instruments to be executed and delivered by Seller pursuant to this Agreement
(collectively, the "Ancillary Agreements") and to perform its obligations
hereunder and thereunder. Without limiting the generality of the foregoing, the
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, subject to general equitable
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principles, bankruptcy, insolvency, fraudulent transfer, or similar laws
generally affecting creditors' rights.
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), assuming the receipt of all necessary
regulatory approvals, will (i) violate any statute, regulation, rule, judgment,
order, decree, stipulation, injunction, charge, or other restriction of any
government, governmental agency, or court to which the Seller is subject or any
provision of the charter or bylaws of the Seller; or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice or third party consent under any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest, or other
agreement, arrangement to which the Seller is a party or by which it is bound or
to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). Other than with respect to the
Assignment Application described in Section 4(b) the Seller does not need to
give any notice to, make any filing with, or obtain any Licenses, consent, or
approval of any court or government or governmental agency in order for the
Parties to enter into this agreement or the Ancillary Agreements or to
consummate the transactions contemplated by this Agreement or the Ancillary
Agreements (including the assignments and assumptions referred to in Section
1(e) above).
D. TITLE TO ACQUIRED ASSETS. Other than the Security Interests set
forth on Section 2(d) of the Disclosure Schedule (which shall be released at or
before the Closing) the Seller has good and marketable title to all of the
Acquired Assets, free and clear of any Security Interest or restriction on
transfer.
E. FINANCIAL STATEMENTS. Included in Section 2(e) of the Disclosure
Schedule are the following financial statements (collectively the "Financial
Statements"): (i) unaudited balance sheets and statements of income, and cash
flow as of and for the fiscal years ended December 31, 1996, December 31, 1997,
and December 31, 1998 for the Stations; and (ii) unaudited balance sheets and
statements of income, as of and for each month during 1998 and each month to
date in 1999 for the Stations. The Financial Statements have been prepared in
conformity with the Seller's normal accounting policies, practices and
procedures applied on a consistent basis (except for minor reclassification
items), throughout the periods covered thereby, are correct and complete, fairly
present the financial condition of the Stations and the results of operation of
Stations at the dates and for the periods indicated, and are consistent with the
books and records of the Seller (which books and records are correct and
complete in all material respects). The Financial Statements accurately state
the revenues of the Stations for the period indicated therein and include an
accurate breakout of cash and trade revenues.
F. EVENTS SUBSEQUENT TO JANUARY 1, 1999. From January 1, 1999 to the
effective date of the Management Agreement between Broadcasting and Seller (the
"MA Commencement Date"), except as set forth in Section 2(f) of the Disclosure
Schedule, there has not been any material adverse change in the assets,
Liabilities, business, financial condition, operations, results of operations,
except for conditions affecting the radio industry generally. Without limiting
the
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generality of the foregoing and with respect to the operation of the
Stations since January 1, 1999:
(i) other than this Agreement, the Seller has not entered
into any material agreement, contract, lease, sublease, license, or
sublicense (or series of related agreements, contracts, leases, subleases,
licenses, and sublicenses) outside the Ordinary Course of Business;
(ii) the Seller has not delayed or postponed (beyond its
normal practice in the Ordinary Course of Business) the payment of accounts
payable and other Liabilities;
(iii) the Seller has not altered its credit and collection
policies or its accounting policies;
(iv) other than in the Ordinary Course of Business, the
Seller has not entered into or terminated any employment arrangement,
employment contract, consulting contract or severance agreement or
collective bargaining agreement, written or oral, or modified the terms of
any existing such contract or agreement;
(v) other than in the Ordinary Course of Business, there have
been no changes and, to Seller's Knowledge, any threatened changes in
employment terms for any of its directors, officers, and employees;
(vi) there has not been any other occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving the Seller;
(vii) the Seller has not materially altered the programming,
format or call letters of the Stations, or its promotional and marketing
activities;
(viii) the Seller has not applied to the FCC for any
modification of the FCC Licenses or failed to take any action necessary to
preserve the FCC Licenses and has operated the Stations in material
compliance therewith and with all FCC rules and regulations;
(ix) the Seller has not terminated or received notice of
termination for any syndicated programming; and
(x) the Seller has not committed to any of the foregoing.
G. TAX MATTERS. With respect to the Stations, the Seller has timely
and properly filed all Tax Returns that it was required to file with respect to
the Seller's operations. To Seller's Knowledge, all such Tax Returns were
correct and complete and properly reflect the tax liability of the Seller. No
Tax deficiencies have been proposed or assessed against the Seller. All Taxes
owed by the Seller with respect to its operations of the Stations 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
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other third party. No claim has ever been made by any authority in any
jurisdiction where the Seller does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
H. TANGIBLE ASSETS. Section 2(h) of the Disclosure Schedule sets
forth a listing of all transmitter and Stations equipment, vehicles and other
tangible personal property used in conducting the operation and business of the
Stations. The Seller owns or leases all tangible assets necessary for the
conduct of the operation and business of the Stations as presently conducted and
as presently proposed to be conducted and all leased assets are specifically
identified as such in Section 2(h) of the Disclosure Schedule.
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 Buyers correct and complete copies of
the Leases. With respect to the Real Estate relating to the Stations:
(i) the Seller has title to all of the Owned Real Estate 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 municipal and zoning ordinances
and recorded utility easements which do not impair the current use,
occupancy or value or the marketability of title of the property and which
are disclosed in Section 2(i) of the Disclosure Schedule (collectively, the
"Permitted Real Estate Encumbrances");
(ii) the Leases are and, following the Closing will continue
to be, legal, valid, binding, enforceable against Seller, and in full force
and effect;
(iii) to Sellers' Knowledge, 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) to Seller's Knowledge, 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
no (i) actual or, to the Seller's Knowledge, proposed special assessments
with respect to any of the Real Estate; (ii) pending or, to the Seller's
Knowledge, threatened condemnation proceedings with respect to any of the
Real Estate; or (iii) any pending or, to the Seller's Knowledge, threatened
changed in any zoning laws or ordinances which may materially adversely
affect any of the Real Estate or Seller's use thereof;
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(vii) the Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or its
rights thereunder;
(viii) 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 in all material respects; and
(ix) to the Seller's Knowledge, the owner of each leased
facility has good and marketable title to the underlying parcel of real
property, free and clear of any Security Interest, easement, covenant, or
other restriction, except for Permitted Real Estate Encumbrances and
Seller's leasehold interest in each Lease has priority over any other
interest except for the fee interest therein and Permitted Real Estate
Encumbrances.
J. CONTRACTS. Section 2(j) of the Disclosure Schedule lists any
written arrangement (or group of related written arrangements) either involving
more than $5,000 or not entered into in the Ordinary Course of Business. The
Seller has delivered to the Buyers a correct and complete copy of each written
arrangement listed in Section 2(j) of the Disclosure Schedule (as amended to
date). With respect to each written arrangement so listed which constitutes an
Assumed Contract: (A) the written arrangement is legal, valid, binding,
enforceable against Seller, and in full force and effect; (B) the written
arrangement will continue to be legal, valid, binding, and enforceable against
Seller and in full force and effect on identical terms following the Closing (if
the arrangement has not expired according to its terms); (C) to Seller's
Knowledge, no party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration, under the written arrangement; and
(D) no party has repudiated any provision of the written arrangement. The Seller
is not a party to any verbal contract, agreement, or other arrangement which, if
reduced to written form, would be required to be listed in Section 2(j) of the
Disclosure Schedule under the terms of this Section 2(j). Except for the Assumed
Contracts, the Buyers shall not have any Liability or obligations for or in
respect of any of the contracts set forth in Section 2(j) of the Disclosure
Schedule or any other contracts or agreements of the Seller.
K. COMMISSION LICENSES AND COMPLIANCE WITH COMMISSION REQUIREMENTS.
(i) All licenses, permits, authorizations, franchises,
certificates of compliance, and consents of governmental bodies, including,
without limitation, the FCC Licenses, used or useful in the operation of
the Stations as they are now being operated are (A) in full force and
effect, (B) unimpaired by any acts or omissions of the Seller or the
Seller's employees or agents, (C) free and clear of any restrictions which
might limit the full operation of the Stations, and (D) detailed in Section
2(k) of the Disclosure Schedule. With respect to the licenses, permits,
authorizations, franchises, certificates of compliance and consents
referenced in the preceding sentence, Section 2(k) 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(k) of the Disclosure Schedule, no
condition exists or event has occurred that
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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(k) of
the Disclosure Schedule, the Seller is not aware of any reason why the FCC
licenses might not be renewed in the ordinary course or revoked.
(ii) The Stations are in material compliance with the FCC's
policy on exposure to radio frequency radiation. No renewal of any FCC
License would constitute a major environmental action under the FCC's rules
or policies. Access to the Stations' transmission facilities is restricted
in accordance with the policies of the FCC.
(iii) Except as set forth in Section 2(k) of the Disclosure
Schedule, to the Seller's Knowledge, the Stations are not the subject of
any FCC or other governmental investigation or any 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(k) 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 Buyers 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.
L. INTELLECTUAL PROPERTY. The Seller owns or has the right to use
pursuant to license, sublicense, agreement or permission all Intellectual
Property necessary for the operation of the businesses of the Stations 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 is set forth on Section 2(l) of the Disclosure Schedule and
each item listed will be owned or available for use by the Buyers on identical
terms and conditions immediately subsequent to the Closing hereunder. With
respect to the Stations, 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, or notice alleging any such interference, infringement,
misappropriation, or violation. To the Knowledge of the Seller, with respect to
the Stations, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of the Seller.
M. INSURANCE. Section 2(m) of the Disclosure Schedule sets forth a
complete and
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accurate description of all Seller's insurance coverage. With respect to each
such insurance policy, to Seller's Knowledge, the policy is legal, valid, and
binding.
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 quasijudicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. None of the charges, complaints,
actions, suits, proceedings, hearings, and investigations set forth in Section
2(n) of the Disclosure Schedule could result in any adverse change in the
assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of the Seller or the Stations taken as a whole.
The Seller has no Knowledge of any Basis for any such charge, complaint, action,
suit, proceeding, hearing, or investigation against the Seller.
O. EMPLOYEES. Section 2(o) of the Disclosure Schedule sets forth a
listing of the names, positions, job descriptions, salary or wage rates and all
other forms of compensation paid for work at the Stations of each employee as of
the date of this Agreement. To the Knowledge of the Seller, no key employee or
group of employees has any plans to terminate employment with the Stations. With
respect to the Stations, the Seller is not a party to or bound by any collective
bargaining or similar agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices or other collective bargaining disputes. With
respect to the Stations, the Seller has no Knowledge of any organizational
effort presently being made or threatened by or on behalf of any labor union
with respect to the employees of the Seller. The Seller has no Knowledge of any
Basis for any claim by past or current employees of the Seller or applicants for
employment that the Seller or its management has discriminated based on each
individuals race, sex, national origin, religion, ethnicity, handicap or any
other protected characteristic under applicable law.
P. EMPLOYEE BENEFITS. Section 2(p) of the Disclosure Schedule lists
all Employee Benefit Plans that the Seller maintains with respect to the
Stations or to which the Seller contributes or is required to contribute for the
benefit of any current or former employee of the Seller with respect to the
Stations, 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 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 Stations. 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.
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(i) To Seller's Knowledge, with respect to the operation of
the Stations and the Real Estate, the Seller is, and at all times in the
past has been, in compliance in all material respects with all
Environmental Laws and all laws (including rules and regulations
thereunder) of federal, state, and local governments (and all agencies
thereof) concerning employee health and safety, and the Seller has no
Liability (and to Seller's Knowledge there is no Basis related to the past
or present operations of the Seller for any present or future Liability)
under any Environmental Law. The Seller has no Liability (and to Seller's
Knowledge there is no Basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand against
the Seller giving rise to any Liability) under the Occupational Safety and
Health Act, as amended, or any other law (or rule or regulation thereunder)
of any federal, state, local, or foreign government (or agency thereof)
concerning employee health and safety, or for any illness of or personal
injury to any employee.
(ii) To Seller's Knowledge, the Seller has obtained and at
all times has been in compliance in all material respects with all of the
terms and conditions of all permits, licenses, and other authorizations
which are required under, and has complied with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all
Environmental Laws or law of any federal, state, or local or foreign
government relating to worker health and safety.
(iii) To Seller's Knowledge, all properties and equipment
used in the Stations and the Acquired Assets have been free of asbestos,
PCB's, methylene chloride, trichloroethylene, 1, 2-trans-dichloroethylene,
dioxins, dibenzofurans, and Extremely Hazardous Substances. No pollutant,
contaminant, or chemical, industrial, hazardous, or toxic material or waste
ever has been buried, stored, spilled, leaked, discharged, emitted, or
released on any of the Real Estate. Except as disclosed in Section 2(q) of
the Disclosure Schedule, no above ground or underground storage tanks have
ever been located at, on or under the Real Estate. The Seller has delivered
to the Buyers a complete copy of all environmental claims, reports,
studies, compliance actions or the like of the Seller or which are
available to the Seller with respect to any of the Real Estate or any of
the Acquired Assets.
R. LEGAL COMPLIANCE. With respect to the operation of the Stations,
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. With respect to the operation of the Stations, the
Seller has filed in a timely manner all reports, documents, and other materials
it was required to file (and the information contained therein was correct and
complete in all material respects) under all applicable laws.
S. 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 $5000, 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
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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 material
commitments, liabilities or obligations relating to 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
January 1, 1999.
V. YEAR 2000 COMPLIANCE. To Seller's Knowledge, all data processing
systems, other computer systems, chips, firmware and software owned, used,
affecting or relied upon by Seller ("Computer Systems") will be usable to,
during and after the calendar year 2000, and will operate during such time
period without error relating to date data, specifically including any error
relating to, or the product of, date data which represents or references
different centuries or more than one century. The Computer Systems will manage
and manipulate data involving dates, including but not limited to single century
formulas and multi-century formulas, and will not cause an abnormally ending
scenario within the application or generate incorrect values or invalid results
involving such date(s).
W. DISCLOSURE. The representations and warranties contained in this
Section 2 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 2 not misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
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 except as set forth in the
Disclosure Schedule.
A. ORGANIZATION OF THE BUYERS. Broadcasting, Licensing, and Wireless
are corporations duly organized, validly existing, and in good standing under
the laws of Nevada. Broadcasting or an affiliated subsidiary of Cumulus Media
Inc. as of the effective date of the MA Agreement is duly registered to do
business and is in good standing in the State of Oregon.
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 legally binding obligations 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
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the Ancillary Agreements, nor the consummation of the transactions contemplated
hereby and thereby (including the assignments and assumptions referred to in
Section 1(e) above), will (i) violate any statute, regulation, rule, judgment,
order, decree, stipulation, injunction, charge, or other restriction of any
government, governmental agency, or court to which the 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
transactions contemplated by this Agreement or the Ancillary Agreements
(including the assignments and assumptions referred to in Section 1 (e) above).
D. BROKERS' FEES. 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.
E. QUALIFICATIONS. Licensing is legally and financially qualified
under the Communications Act of 1934, as amended, and the rules, regulations and
policies of the FCC to acquire the FCC Licenses. There is no fact that would,
under present law (including the Communications Act of 1934, as amended) and the
present rules and regulations of the FCC, disqualify Buyers from being the
assignee of the Stations or that would materially delay Commission approval of
the Assignment Application. Should Buyer become aware of any such fact, it will
inform Seller and will use commercially reasonably efforts to remove any such
disqualification. Buyers will not take any action that Buyers know, or have
reason to believe, would result in such disqualification. Buyers have sufficient
financial resources available now, and will on the Closing Date have financial
resources available for the consummation of this transaction.
4. PRE-CLOSING COVENANTS.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
A. GENERAL. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfying the closing conditions set forth in Section 5 below).
B. ASSIGNMENT APPLICATIONS. Within ten (10) business days after the
date 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
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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 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 a material adverse effect upon the
Stations 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. 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. 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.
D. OPERATING STATEMENTS. The Seller shall deliver to the Buyer, for
the Buyer's informational purposes only, monthly unaudited statements of
operating revenues and operating expenses of the Station through the MA
Commencement Date, within ten (10) days after each such statement is prepared by
or for the Company or the Seller. The Seller shall provide to the Buyer such
written or oral sales, inventory, and pacing reports as Seller may have
available and Buyer may reasonably request.
E. 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 contract outside the
Ordinary Course of Business which involves more than Five Thousand Dollars
($5,000).
F. OPERATION OF STATIONS. The Seller will not engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business. 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.
G. PRESERVATION OF STATIONS AND THE ACQUIRED ASSETS. The Seller will
keep its Stations and the Acquired Assets and properties substantially intact,
including its present
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operations, employee relationships, physical facilities, working conditions,
relationships with lessors, licensors, advertisers, insurance, suppliers,
customers, and employees, all of the Confidential Information, call letters and
trade secrets of the Stations, and the FCC Licenses.
H. FULL ACCESS AND CONSULTATION. 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. The Seller will consult with the
Buyers' management with a view to informing Buyers' management as to the
operations, management and business of the Stations.
I. NOTICE OF DEVELOPMENTS. The Seller will give prompt written notice
to the Buyers of any material development affecting business or operations of
the Stations or the Acquired Assets or the ability of the Seller to perform
hereunder.
J. EXCLUSIVITY. The Seller will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
any (A) merger or consolidation, (B) acquisition or purchase of securities or
assets, or (C) 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.
K. TITLE INSURANCE, SURVEYS AND ENVIRONMENTAL ASSESSMENTS. The Seller
will obtain with respect to each parcel of Real Estate subject to the Leases, a
leasehold owner's policy issued by a title insurer reasonably satisfactory to
the Seller, in an amount equal to the fair market value of such Real Estate
(including all improvements located thereon), insuring over the standard
pre-printed exceptions and insuring leasehold title to such Real Estate in the
Buyers as of the Closing subject only to the Permitted Real Estate Encumbrances,
together with such endorsements for zoning, contiguity, public access and
extended coverage as the Buyers or their lender reasonably request, (ii) with
respect to each parcel of Owned Real Estate, an owner's policy of title
insurance by a title insurer reasonably satisfactory to the Buyers, in an amount
equal to the fair market value of such Real Estate (including all improvements
located thereon), insuring over the standard pre-printed exceptions and insuring
title to the Owned Real Estate to be vested in the Buyers as of the Closing free
and clear of all liens and encumbrances except Permitted Real Estate
Encumbrances, together with such endorsements for zoning, contiguity, public
access and extended coverage as the Buyers or its lender reasonably request,
(iii) a current survey of each parcel of Real Estate certified to the Buyers and
its lender, prepared by a licensed surveyor and conforming to current ALTA
Minimum Detail Requirements for Land Title Surveys, disclosing the location of
all improvements, easements, party walls, sidewalks, roadways, utility lines,
and other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Surveys') which shall not
disclose any survey defect or encroachment from or onto any of the Real Estate
which has not been cured or insured over prior to the Closing; and (iv) with
respect to each parcel of Real Estate, a current Phase I environmental site
assessment from an environmental consultant or engineer reasonably
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satisfactory to the Seller which does not indicate that the Seller and the Real
Estate are not in compliance with any Environmental Law and which shall not
disclose or recommend any action with respect to any condition to be remediated
or investigated or any contamination on the site assessed. The Buyers and Seller
will each pay one-half (1/2) the costs of standard ALTA owner's title policies,
Surveys, and environmental assessments; provided, the Buyers will pay the fees
of any title endorsements.
L. 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. Except as provided in the Management
Agreement, 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.
M. RISK OF LOSS. The risk of loss, damage, or destruction to any of
the Acquired Assets (other than the FCC Licenses) shall remain with the Seller
until the MA Commencement Date and, to the extent not covered by Seller's
insurance, shall belong to the Buyers between the MA Commencement Date and the
Closing.
5. CONDITIONS TO OBLIGATION TO CLOSE.
A. CONDITIONS TO OBLIGATION OF THE BUYERS. The obligation of Buyers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Sections
2(a), (b), (c), (d), (i), (k), (o), and (p) above shall be true and correct
in all material respects at and as of the Closing Date as though made on
and as of the Closing Date, and all other representations and warranties
set forth in Section 2 shall be true and correct in all material respects
as of the MA Commencement Date as though made on and as of the MA
Commencement Date;
(ii) the Seller shall have performed and complied with all of
its covenants hereunder in all respects through the Closing;
(iii) the Seller shall have procured all of the third party
consents specified in Section 4(d) above and all of the title insurance
commitments (and endorsements), Surveys and environmental site assessments
described in Section 4(o) above;
(iv) no action, suit, investigation, inquiry or other
proceeding shall be pending or threatened before any court or quasijudicial
or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or impose damages or penalties
upon any of the parties if such transactions are consummated, (B) cause any
of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect
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adversely the right of the Buyers 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 Buyers a
certificate to the effect that each of the conditions specified above in
Sections 5(a)(i) through (iv) is satisfied in all material respects;
(vi) 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 governments and governmental agencies set forth
in the Disclosure Schedule;
(vii) the relevant parties shall have entered into the
Postclosing Agreement;
(viii) the Buyers shall have received from counsel to the
Seller an opinion with respect to the matters set forth in Exhibit C
attached hereto, addressed to the Buyers and its lender and dated as of the
Closing Date;
(ix) the Parties shall have agreed to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial accounting and tax purposes) in accordance
with an allocation schedule to be delivered at closing; and
(x) all actions to be taken by the Seller in connection with
the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in
form and substance to the Buyers.
B. CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3
above shall be true and correct in all respects at and as of the Closing
Date as though made on and as of the Closing Date;
(ii) 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 wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or impose damages or penalties
upon any of the Parties if such transactions are consummated, or (B) cause
any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such
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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, the transaction shall have received
clearance under the HSR Act, and the Buyers shall have received all
governmental approvals required to transfer all other authorizations,
consents, and approvals of governments and governmental agencies set forth
in the Disclosure Schedule;
(vi) 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; and
(vii) the Buyers shall have delivered to Seller the Purchase
Price in readily available funds by bank wire, to an account designated by
Seller, on the Closing Date; and
(viii) the Sellers shall have received from counsel to the
Buyers or its general counsel an opinion with respect to the matters set
forth in Exhibit D attached hereto, addressed to the Seller and dated as of
the MA Commencement Date;
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
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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. Such items as power and utilities charges, insurance,
real and personal property taxes, prepaid expenses, and deposits shall be
prorated between the Seller and the Buyers as of the Closing Date and as of the
MA Commencement Date in accordance with the foregoing principle. The prorations
and adjustments hereunder shall be made and paid insofar as feasible on the
Closing Date and the MA Commencement Date, with a final settlement sixty (60)
days after such dates, respectively. 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. 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 Buyers shall
receive the Seller's interest in the benefits under any such Assumed Contract,
including performance by the Seller as agent, if economically feasible;
provided, however, that the Buyers shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the extent that
Buyers would have been responsible therefor if such consent or assignment had
been obtained.
7. REMEDIES FOR BREACHES OF THIS AGREEMENT.
A. SURVIVAL. All of the representations and warranties of the Seller
contained in Section 2 of this Agreement (other than the representations and
warranties of the Seller contained in Sections 2(a), 2(b), 2(c), and 2(d) hereof
or relating to the Seller's title to the Acquired Assets) shall survive the
Closing and continue in full force and effect for a period until one (1) year
after the effective date of this Agreement. All of the other representations and
warranties (including the representations and warranties Seller contained in
Sections 2(a), 2(b), 2(c), and 2(d) hereof or relating to the Seller's title to
the Acquired Assets) and all covenants of the Buyers and the Seller contained in
this Agreement shall survive the Closing and continue in full force and effect
for five (5) years.
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
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:
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(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 which is
not cured within any applicable cure period (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
(including under any bulk transfer law of any jurisdiction or under any
common law doctrine of defacto merger or successor liability) which is not
an Assumed Liability.
C. INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE SELLER. Except
as described below in Section 7(e) with respect to a breach of a warranty or
covenant prior to the Closing Date, the Buyers agree 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 Ancillary Agreement executed
and/or delivered by the Buyers which is not cured within any applicable cure
period (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.
D. SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the Buyers 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 Buyers
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the matter
(subject to the provisions set forth in Section 10(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 Buyers for a breach of any provision of this
Agreement.
E. LIQUIDATED DAMAGES. The Buyers and the Seller acknowledge that in
the event that the transactions contemplated by this Agreement are not closed
because of a default by the Buyers, the Adverse Consequences to the Seller as a
result of such default may be difficult, if not impossible, to ascertain.
Accordingly, in lieu of indemnification pursuant to Section 7(c), the Seller
shall be entitled to retain Eight Million Dollars as liquidated damages without
the need for proof of damages. Seller acknowledges that Buyer has previously
deposited Eight Million Dollars with Seller in connection with the extension of
the letter of intent with respect to this
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transaction and certain other stations to be sold by Seller to Buyer, and in
connection with the execution and commencement of the Management Agreement. This
amount shall represent full satisfaction of liquidated damages owed by the
Buyers and Seller's sole remedy for a failure of the transactions contemplated
hereby to occur as a result of a material breach of the terms of this Agreement
by the Buyers; provided, however, that any liquidated damages received by Seller
in connection with the Option Agreement between Seller and Buyers with respect
to the California radio stations shall be deducted from the liquidated damages
owed by Buyers to Seller under this section.
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 matter with
counsel of its choice reasonably satisfactory to the Indemnified Party, (ii) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
(except that the Indemnifying Party will be responsible for the fees and
expenses of the separate co-counsel to the extent the Indemnified Party
reasonably concludes that the counsel the Indemnifying Party has selected has a
conflict of interest), (iii) the Indemnified Party will not consent to the entry
of any judgment or enter into any settlement with respect to the matter without
the written consent of the Indemnifying Party (not to be withheld unreasonably),
and (iv) the Indemnifying Party will not consent to the entry of any judgment
with respect to the matter, or enter into any settlement which does not include
a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all Liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld unreasonably). In the event
the Indemnifying Party does not notify the Indemnified Party within 15 days
after the Indemnified Party has given notice of the matter that the Indemnifying
Party is assuming the defense thereof, however, and/or in the event the
Indemnifying Party shall fail to defend such claim actively and in good faith,
then the Indemnified Party may defend against, or enter into any settlement with
respect to, the matter in any manner it reasonably may deem appropriate.
G. LIMITATION OF LIABILITY. Notwithstanding anything in this
Agreement to the contrary, after the Closing neither party shall indemnify or
otherwise be liable to the other party from and after the Closing Date except to
the extent that the Adverse Consequences suffered by the Indemnified Party, in
the aggregate from all indemnifiable events shall exceed Fifty Thousand Dollars
($50,000) and indemnification shall be made by the indemnifying party only to
the extent of such excess over Fifty Thousand Dollars ($50,000); provided,
however, that the Option Money, amounts due under trade agreements, and
adjustments to the Purchase Price shall not be credited toward the $50,000
limitation of liability; provided, further, that the maximum liability for
Adverse Consequences in the aggregate from all indemnifiable events shall be Two
Million Dollars ($2,000,000); and provided, further, that the foregoing
limitations shall not be
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applicable to: (i) the obligations of the Buyer to pay and discharge any
Liability of the Seller to third parties from and after the Closing Date assumed
by the Buyer under the terms of this Agreement; (ii) the obligation of the
Seller to pay and discharge any Liability to third parties not assumed by the
Buyer under the terms of this Agreement, or (iii) the Seller's obligation to
deliver clear title to the Acquired Assets.
8. DEFINITIONS.
"ACQUIRED ASSETS" means all right, title, and interest in and to all of the
assets of the Stations, 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) real property, leaseholds and other interests of any kind
therein, improvements, fixtures, and fittings thereon (such as towers and
antennae), and easements, rights-of-way, and other 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
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions; (d) rights under orders and
agreements (including those Barter Agreements 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, chooses 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 governments 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 (j) 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.
"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.
"AS IS" means the condition of the Stations and Acquired Assets on the MA
Commencement Date.
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"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 identified on Section 2(k) of the
Disclosure Schedule as those to be assumed by Broadcasting.
"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.
"BARTER AGREEMENTS" has the meaning set forth in Section 4(e) above.
"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 1(d) above.
"CLOSING DATE" has the meaning set forth in Section 1(d) above.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPUTER SYSTEMS" has the meaning set forth in Section 2(v) above.
"CONFIDENTIAL INFORMATION" means any information concerning the businesses
and affairs of the Seller.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 1 above.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multi-employer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(1).
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"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Federal Water Pollution Control Act of 1972, the Clean Air Act
of 1970, the Safe Drinking Water Act of 1974, the Toxic Substances Control Act
of 1976, the Refuse Act of 1899, or the Emergency Planning and Community
Right-to-Know Act of 1986 (each as amended), or any other law of any federal,
state, local, or foreign government or agency thereof (including rules,
regulations, codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety, or
pollution or protection of the environment, including, without limitation, laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or chemical, industrial, hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or lands or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" means Bank One, NA.
"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.
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"INTELLECTUAL PROPERTY" means, with respect to the Stations, all (a)
patents, patent applications, patent disclosures, and improvements thereto, (b)
trademarks, service marks, domain names, trade dress, call letters, logos, and
trade names; (c) all programs, programming materials, copyrights and
registrations and applications for registration thereof, (d) mask works and
registrations and applications for registration thereof, (e) computer software,
data, and documentation, (f) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, market and other
research information, drawings, specifications, designs, plans proposals,
technical data, copyrightable works, financial, marketing, and business data,
pricing and cost information, business and marketing plans, and customer and
supplier lists and information), (g) other proprietary rights, and (h) copies
and tangible embodiments thereof (in whatever form or medium).
"KNOWLEDGE" means the current actual knowledge without independent inquiry
or investigation of Jack Standridge, Turner O. Waide, William W. McDonald,
representatives or officers of Seller, and Rick Prusator, President of Keen
Management Group.
"LEASES" means those real estate leases to which Seller is a party
governing Seller's studios and FM tower sites, 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.
"MANAGEMENT AGREEMENT " OR "MA" means the Management Agreement dated as of
the MA Commencement Date.
"MA COMMENCEMENT DATE" means the commencement date of the Management
Agreement.
"MULTI-EMPLOYER PLAN" has the meaning set forth in ERISA Sec. 3(37).
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"OWNED REAL ESTATE" means the real property owned by the Seller 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.
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"PERMITTED REAL ESTATE ENCUMBRANCES" shall have the meaning set forth in
Section 2(i), above.
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA Section 406 and
Code Section 4975.
"PURCHASE PRICE " has the meaning set forth in Section 1(c) above.
"REAL ESTATE" means the 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.
"RETAINED ASSETS" means (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of the Seller
as a corporation; (ii) any of the rights of the Seller under this Agreement (or
under any side agreement between the Seller on the one hand and the Buyers on
the other hand entered into on or after the date of this Agreement); (iii)
accounts, notes and other receivables of the Seller; (iv) Cash and cash
equivalents such as certificates of deposits and marketable securities; (v)
sufficient information to enable Seller to file its tax returns; and (vi)
claims, deposits, prepayments, refunds, causes of action, chooses in action,
rights of recovery (including rights under policies of insurance), rights of set
off, and rights of recoupment.
"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 (other than those
contemplated by the MA Agreement); (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 KNRQ-FM, KNRQ-AM, and
KZEL-FM, licensed to Eugene, Oregon.
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"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.
"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 material 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
thirty (30) days after notice of breach is received by the Seller from the
Buyers (which 30-day period shall be extended for an additional ninety (90)
days if Seller is proceeding with diligence and in good faith to cure or
correct such default or breach);
(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 material 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 thirty (30) days
after notice of breach is received by the Buyers from the Seller (which
30-day period shall be extended for an additional ninety (90) days if the
Buyers are proceeding with diligence and in good faith to cure or correct
such default or breach,
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other than a breach or default in the delivery of payment);
(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 360th 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 360th 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);
(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 above, all obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (except for any
Liability of any Party then in breach).
10. MISCELLANEOUS.
a. 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).
b. 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.
c. 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.
d. 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) Buyers or Seller may assign all
of their right, title, interest in, and obligations under this Agreement to one
or more Affiliates, provided that such assignment shall not eliminate the
liability of the assignor under
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this Agreement, and (ii) Buyers may assign all of their right, title, interest
in, and obligations under this Agreement to a party qualified to serve as an FCC
licensee under the Communications Act of 1934, as amended, and the rules and
regulations thereunder, provided such assignment shall not eliminate the
liability of the assignor under this Agreement; and (iii) Buyers may assign
their indemnification claims and their rights under the warranties and
representations of the Seller to the financial institution(s) providing
financing to the Buyers in connection with this transaction.
e. 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.
f. 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.
g. NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be considered to be given
and received in all respects when hand delivered, when delivered via prepaid
express or courier delivery service, when sent by facsimile transmission
actually received by the receiving equipment or three (3) days after deposited
in the United States mail, certified mail, postage prepaid, return receipt
requested, in each case addressed to the intended recipient as set forth below:
If to the Seller:
McDonald Media Group, Inc.
One Office Park Circle
Suite 300
Birmingham, Alabama 35223
Attn: Mr. Jack Standridge
Phone: (205) 879-0456
Fax: (205) 879-0479
Copy to:
J. Fred Powell, Esquire
Burr & Forman
420 North 20th Street
Suite 3100
Birmingham, Alabama 35203
Phone: (205) 251-3000
Fax: (205) 458-5100
(which copy shall not constitute notice to Seller)
If to the Buyers:
Cumulus Broadcasting, Inc.
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Cumulus Licensing Corp.
Cumulus Wireless Services Inc.
111 E. Kilbourn Avenue
Suite 2700
Milwaukee, WI 53202
Attn: Terrence J. Leahy
Phone: (414) 615-2800
Fax: (414) 615-2880
With a copy to:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
Cumulus Wireless Services Inc.
875 N. Michigan Avenue
Suite 1460
Chicago, Illinois 60611
Attn: Richard J. Bonick
Phone: (312) 867-0091
Fax: (312) 867-0098
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.
h. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts) of the State
of Oregon.
i. 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.
j. 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
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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.
k. 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. The Seller will pay all income taxes. The Purchaser will
pay any privilege taxes from the recording of deeds associated with this
transaction.
l. 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.
m. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
n. SUBMISSION TO JURISDICTION. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Ventura, California, in
any action or proceeding arising out of or relating to this Agreement, agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto. Any Party may
make service on the other Party by sending or delivering a copy of the process
to the Party to be served at the address and in the manner provided for the
giving of notices in Section 10(g) above. Nothing in this Section 10(n),
however, shall affect the right of any Party to serve legal process in any other
manner permitted by law. Each Party agrees that a final judgment in any action
or proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the
date first above written.
CUMULUS BROADCASTING, INC.
By: /s/ Richard Weening
-----------------------------
Richard Weening
Executive Chairman
CUMULUS LICENSING CORP.
By: /s/ Richard Weening
-----------------------------
Richard Weening
Executive Chairman
CUMULUS WIRELESS SERVICES INC.
By: /s/ Richard Weening
-----------------------------
Richard Weening
Executive Chairman
MCDONALD MEDIA GROUP, INC.
By: /s/ William W. McDonald
-----------------------------
William W. McDonald (printed)
-----------------------------
Title: President
--------------------------
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SCHEDULE A
PURCHASE PRICE. The purchase price for the assets associated with KNRQ-FM
(licensed to Creswel, Oregon), KNRQ-AM and KZEL-FM (licensed to Eugene, Oregon),
shall be Eight Million Dollars ($8,000,000), which shall be payable in cash on
the Closing Date.
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EXHIBIT A
INSTRUMENT OF ASSUMPTION
THIS INSTRUMENT OF ASSUMPTION, dated as of, 1998 from Cumulus
Broadcasting, Inc., a Nevada corporation ("Assignee"); to McDonald Media Group,
Inc., a Delaware company ("Assignor"); is delivered pursuant to Section 1(e) of
that certain Asset Purchase Agreement, dated as of, 1999 (the "Asset Purchase
Agreement"), between Assignee and Assignor. Defined terms used herein without
definition have the meanings assigned to such terms in the Asset Purchase
Agreement.
WHEREAS, by a General Assignment being executed and delivered by Assignor
to Assignee simultaneously herewith pursuant to the Asset Purchase Agreement,
Assignor is selling, transferring, assigning, conveying and delivering to
Assignee substantially all of the assets of Assignor (the "Assets");
NOW THEREFORE, in partial consideration of such sale, transfer, assignment,
conveyance and delivery on and as of the date hereof, subject to and in
accordance with the terms and conditions of the Asset Purchase Agreement,
Assignee hereby assumes and becomes responsible for the following Assumed
Liabilities:
Obligations of Assignor under the licenses, sublicenses, leases,
subleases, contracts, and other arrangements referred to in the
definition of Acquired Assets either: (i) to furnish services, and
other non-Cash benefits to another party after the Closing; or (ii) to
pay for goods, services, and other non-Cash benefits that another
party will furnish to it after the Closing;
provided, however, that the Assumed Liabilities shall not include any other
obligations or liabilities of Assignor, 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 Assignor for income, transfer, sales, use, and
other Taxes arising in connection with the consummation contemplated by the
Asset Purchase Agreement; (iii) any Liability of Assignor for costs and expenses
incurred in connection with the Asset Purchase Agreement or the consummation of
the transactions contemplated hereby; or (iv) any Liability or obligation of
Assignor under the Asset Purchase Agreement (or under any side agreement between
Assignor on the one hand and Assignee on the other hand).
Other than as specifically stated in this Instrument of Assignment,
Assignee assumes no obligation of Assignor. As to any lease, contract,
agreement, permit or other authorization included in the Acquired Assets which
may be assigned only with
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the consent of the other party thereto, this Instrument of Assumption shall be
of no force and effect until such requisite consents shall have been obtained,
whereupon it shall become of full force and effect as of the date of such
consent.
IN WITNESS WHEREOF, Assignee has caused this instrument to be signed in its
name by its officers thereunto duly authorized on the date first above written.
ASSIGNEE:
CUMULUS BROADCASTING, INC.
By:
Richard Weening
Chairman
ASSIGNOR:
MCDONALD MEDIA GROUP, INC.
By:
Its:
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EXHIBIT C
POST-CLOSING AGREEMENT
Agreement dated as of , 1998 among CUMULUS BROADCASTING, INC., a
Nevada corporation, CUMULUS LICENSING CORP., a Nevada corporation, CUMULUS
WIRELESS SERVICES INC., a Nevada corporation (collectively the "Buyers"),
MCDONALD MEDIA GROUP, INC., a Delaware corporation ("Seller"), and CITATION
CABLEVISION, INC., a corporation (the "Seller's Owner"). The Buyers,
the Seller, and the Seller's Owner are referred to collectively herein as the
"Parties."
The Buyers and the Seller are concurrently herewith concluding a
transaction in which the Buyers will purchase the "Acquired Assets" (and accept
responsibility for the "Assumed Liabilities") of the Sellers in return for cash
pursuant to the terms of an Asset Purchase Agreement dated , 1999 (the
"Asset Purchase Agreement"). Certain terms used herein without definition are
used herein as defined in the Asset Purchase Agreement.
The Buyers and the Seller have made certain representations,
warranties, and covenants in the Asset Purchase Agreement which will survive the
Closing for purposes of potential indemnification. The Seller's Owner, however,
may cause the Seller to liquidate and dissolve immediately after the Closing.
The Buyers and the Seller's Owner therefore wish to provide for post-Closing
indemnification against breaches of these representations, warranties, and
covenants and to make certain other covenants among themselves.
Now, therefore, in consideration of the premises and the mutual
promises herein made, the Buyers and the Seller's Owner agree as follows.
1. Representations and Warranties of Seller's Owner. The Seller's Owner
represents and warrants to the Buyers that the statements contained in this
Section 1 are correct and complete as of the date of this Agreement.
(a) Enforceability. The Seller's Owner has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Seller's Owner, enforceable in accordance with its terms and conditions.
(b) Absence of Conflicts. Neither the execution and the delivery of
this Agreement by the Seller's Owner, nor his performance of his obligations
hereunder, will (i) violate any statute, regulation, rule, judgment, order,
decree, stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which he is subject or (ii ) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest, or other arrangement to which he
is a party or by which he is bound or to which any of his assets is subject.
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2. 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 the Asset Purchase
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 4 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 the Asset Purchase 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 Sellers, each of the other Parties will
cooperate with the contesting or defending Party and his or its counsel in the
contest or defense, make available his or its personnel, and provide such
testimony and access to his or 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 3 below.)
(c) Transition. Neither the Seller's Owner nor any of his respective
Affiliates will take any action that primarily is designed or intended to have
the effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of the Seller from maintaining the same business
relationships with the Buyers after the Closing as it maintained with the Seller
prior to the Closing. The Seller's Owner will refer all customer inquiries
relating to the Stations or to the business of the Seller to the Buyers from and
after the Closing. Except with the Buyers' prior written consent, neither the
Seller's Owner nor any of his respective Affiliates will employ or offer to
employ any employee of the Seller for a period of three (3) years after the
Closing Date.
(d) Confidentiality. The Seller's Owner and his Affiliates will treat and
hold as such all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to the Buyers or destroy, at the request and option of the Buyers, all
tangible embodiments (and all copies) of the Confidential Information which are
in his or its possession. In the event that the Seller's Owner or any Affiliate
is requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Information, that
person will notify the Buyers promptly of the request or requirement so that the
Buyers may seek an appropriate protective order or waive compliance with the
provisions of this Section 2(d). If, in the absence of a protective order or the
receipt of a waiver hereunder, the Seller's Owner or any Affiliate is, on the
advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else
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stand liable for contempt, that person may disclose the Confidential Information
to the tribunal; provided, however, that the disclosing Person shall use his or
its best efforts to obtain, at the reasonable request of the Buyers, an order or
other assurance that confidential treatment will be accorded to such portion of
the Confidential Information required to be disclosed as the Buyers shall
designate. The foregoing provisions shall not apply to any Confidential
Information which is generally available to the public immediately prior to the
time of disclosure.
(e) Covenant Not to Compete. For a period of three (3) years from and
after the Closing Date, neither the Seller's Owner nor any of his respective
Affiliates will engage directly or indirectly in any business that the Seller
conducts as of the Closing Date within (75) seventy-five miles of the Eugene,
Oregon Arbitron market; provided, however, that no owner of less than 1% of the
outstanding stock of any publicly traded corporation shall be deemed to engage
solely by reason thereof in any of its businesses.
3. Remedies for Breaches of This Agreement and the Asset Purchase
Agreement.
(a) Survival. All of the representations, warranties, and covenants
of the Buyers, the Seller, and the Seller's Owner contained in the Asset
Purchase Agreement and in this Agreement shall survive the Closing and continue
in full force and effect to the extent set forth in the Asset Purchase
Agreement.
(b) Indemnification Provisions for Benefit of the Buyers.
(i) In the event the Seller is liquidated or has insufficient
assets to cover claims by Buyers for indemnification under the Asset
Purchase Agreement, Seller's Owner agrees to indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers may suffer,
subject to the limitation of liability set forth in Section 7(g) of the
Asset Purchase Agreement, to the extent applicable, resulting from, arising
out of, relating to, in the nature of, or caused by:
(a) any breach of any of the Seller's representations,
warranties, and covenants contained in the Asset Purchase Agreement
(so long as the particular representation, warranty, or covenant
survives the Closing and the Buyers makes a written claim for
indemnification pursuant to Section 3(d) below within the applicable
survival period);
(b) any Liability of the Seller which is not an Assumed
Liability; or
(c) any Liability of the Buyers arising by operation of law
(including under any bulk transfer law of any jurisdiction or under
any common law doctrine of defacto merger or successor liability)
which is not an Assumed Liability.
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(ii) The Seller's Owner agrees to indemnify the Buyers 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 the breach of any of the Seller's Owner's
representations, warranties, and covenants contained in Section 1 and
Section 2 above (so long as the particular representation, warranty,
or covenant survives the Closing and the Buyers make a written claim
for indemnification pursuant to Section 3(d) below within the
applicable survival period).
(c) Indemnification Provisions for Benefit of the Seller's
Owner. The Buyers agree to indemnify the Seller's Owner from and against the
entirety of any Adverse Consequences they may suffer in excess of the limitation
of liability set forth in Section 7(g) of the Asset Purchase Agreement, to the
extent applicable, resulting from, arising out of, relating to, in the nature
of, or caused by (i) the breach of any of the Buyers' representations,
warranties, and covenants contained in the Asset Purchase Agreement and this
Agreement (so long as the particular representation, warranty, or covenant
survives the Closing and the Seller's Owner makes a written claim for
indemnification pursuant to Section 3(d) below within the applicable survival
period) or (ii) any Assumed Liability.
(d) Matters Involving Third Parties. If any third party shall
notify any Party (the "Indemnified Party") with respect to any matter which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 3, then the Indemnified Party shall
notify each Indemnifying Party thereof promptly; provided, however, that no
delay on the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any liability or obligation hereunder
unless (and then solely to the extent) the Indemnifying Party thereby is
damaged. In the event any Indemnifying Party notifies the Indemnified Party
within 15 days after the Indemnified Party has given notice of the matter that
the Indemnifying Party is assuming the defense thereof, (A) the Indemnifying
Party will defend the Indemnified Party against the matter with counsel of its
choice reasonably satisfactory to the Indemnified Party, (B) the Indemnified
Party may retain separate co-counsel at its sole cost and expense (except that
the Indemnifying Party will be responsible for the fees and expenses of the
separate co-counsel to the extent the Indemnified Party concludes reasonably
that the counsel the Indemnifying Party has selected has a conflict of
interest), (C) 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
(D) 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
no 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, however, the Indemnified Party may defend against,
or enter into any settlement with respect to, the matter in any manner it may
deem appropriate.
(e) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory or common law remedy any Party may have for breach of representation,
warranty, or covenant.
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4. Miscellaneous.
(a) Press Releases and Announcements. Neither the Seller's Owner
nor any of his Affiliates shall issue any press release or announcement relating
to the subject matter of the Asset Purchase Agreement without the prior written
approval of the Buyers; provided, however, that the Seller's Owner may make any
public disclosure he believes in good faith is required by law or regulation (in
which case the Seller's Owner will advise the Buyers prior to making the
disclosure).
(b) 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.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, that may have related in any way to the subject
matter hereof.
(d) 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 his or its rights, interests, or obligations hereunder without the prior
written approval of the Buyers and the Seller's Owner; provided, however, that
the Buyers may (i) assign any or all of their rights and interests hereunder to
one or more of their Affiliates and (ii) designate one or more of their
Affiliates to perform their obligations hereunder (in any or all of which cases
the Buyers nonetheless shall remain liable and responsible for the performance
of all of their obligations hereunder).
(e) 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.
(f) 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.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, or if (and then the next business day after) it is
sent by reputable overnight courier, in each case addressed to the intended
recipient at the address for notices (and copies thereof) set forth in the Asset
Purchase Agreement. Any Party may give any notice, request, demand, claim, or
other communication hereunder using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
-38-
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actually is received by the individual for whom it is intended. Any Party may
change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware.
(i) 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 Requisite Seller's Owner. 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.
(j) 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.
(k) Expenses. Each of the Parties will bear his or its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby (except as otherwise
provided herein).
(l) 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.
(m) Specific Performance. Each of the Parties acknowledges and
agrees that the other Parties 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 Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 4(o) below), in addition to any other remedy to which they may
be entitled, at law or in equity. Each of the Parties acknowledges and agrees
that notwithstanding the provision in Section 4(n) with respect to liquidated
damages upon a breach
-39-
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of a covenant of this Agreement, money damages would not be an adequate remedy
for a breach of any provision of this Agreement.
(o) Submission to Jurisdiction. Each of the Parties submits to
the jurisdiction of any state or federal court sitting in Ventura, California in
any action or proceeding arising out of or relating to this Agreement, agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto. Any Party may
make service on any 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 4(g) above. Nothing in this Section 4(o), however,
shall affect the right of any Party to serve legal process in any other manner
permitted by law. Each Party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
* * * * *
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
MCDONALD MEDIA GROUP, INC.
By:
--------------------------------------
Its:
--------------------------------------
"Seller"
CUMULUS BROADCASTING, INC.
By:
--------------------------------------
Its:
--------------------------------------
CUMULUS LICENSING CORP.
By:
--------------------------------------
Its:
--------------------------------------
CUMULUS WIRELESS SERVICES INC.
By:
--------------------------------------
Its:
--------------------------------------
"Buyers"
SELLER'S OWNER:
[ ]
------------
------------------------------------------
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EXHIBIT F
[LETTERHEAD OF SELLER'S COUNSEL]
, 2000
- ------------
Cumulus Broadcasting, Inc.
Cumulus Licensing Corporation
111 E. Kilbourn Avenue
Suite 2700
Milwaukee, WI 53202
Lehman Brothers Commercial Paper Inc.
Gentlemen:
We have acted as counsel to McDonald Media Group, Inc. (the
"Company") in connection with the preparation of the Asset Purchase Agreement
dated [ ], 1999 (the "Agreement"), and have participated on its behalf in
connection with the purchase and sale to be made by you with the Company
pursuant to the Agreement (the "Transaction") and the transfer of control
thereby of radio stations he radio broadcast stations (collectively, the
"Stations"). We have also acted as counsel to in connection with the
preparation of the Post-Closing Agreement dated the date hereof between you and
each of them (the "Post-Closing Agreement"). The Agreement, the Post-Closing
Agreement, the Warranty Deeds, the Assignment of Lease, the General Assignment
and the Instrument of Assumption are referred to in this Opinion Letter as the
Transaction Documents.
In connection with this Opinion Letter, we have examined signed
copies of the Transaction Documents and a certificate as to certain objective
facts executed by an officer of the Company (the "Officer's Certificate"). We
have considered such matters of law and fact, and relied upon such certificates
and other information furnished to us, as we have deemed appropriate as a basis
for our opinions set forth below. We have also relied upon the representations
of the Company made in the Agreement.
This Opinion Letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this Opinion
Letter should be read in conjunction therewith. The law covered by the opinions
expressed herein is limited to the Federal law of the United States and the laws
of the States of Alabama and Oregon.
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Based upon the foregoing, and subject to the qualifications and
exceptions set forth below, we are of the opinion that:
1. The Company is a corporation organized and existing under the laws
of the State of Alabama and is qualified to do business under the laws of
the State of Oregon.
2. The Company has the requisite corporate authority to enter into the
Transaction Documents, perform its obligations thereunder and to own its
properties and carry on its business as presently conducted in the State of
Oregon.
3. The Agreement and each of the other Transaction Documents
contemplated thereby to which the Company is a party have been duly
authorized, executed and delivered by the Company and each is enforceable
against the Company in accordance with its terms.
4. The execution and delivery by the Company of, and performance of its
obligations under the Transaction Documents do not violate the Company's
articles of incorporation or bylaws or, based and relying upon the
Officer's Certificate, breach, or result in a default under, any of the
agreements or instruments identified therein or require the consent or
other action of or filing with any governmental body or agency which has
not been obtained or which has not been made.
5. The Post-Closing Agreement has been duly executed and delivered by
the Company and [ ] and is enforceable against each of them in
accordance with its terms.
6. The Assignment of Leases and the General Assignment convey all of
the Seller's right, title and interest in the Acquired Assets to the Buyer
and the Assignment of Leases is in appropriate form under the laws of the
State of Oregon for recording.
7. The Seller has obtained and validly holds the FCC Licenses listed in
Attachment 1 to this opinion letter. The FCC Licenses listed in Attachment
1 constitute the only authorizations, licenses, and permits of the FCC
required by the FCC or necessary in connection with the present operation
of Stations. The FCC Licenses relating to the Stations listed in Attachment
1 are in full force and effect and are duly issued in the name of, or
validly assigned to, the Seller. The FCC has approved the assignment of the
Licenses to operate the Stations from the Seller to the Buyer, and such
approval is in full force and effect, and is no longer subject to
administrative or judicial review. Upon execution and delivery of the
General Assignment, the Buyer will validly hold the FCC Licenses to operate
the Stations.
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8. The Seller has filed with the FCC all material reports, documents,
instruments, information, and applications required to be filed in
connection with the operation of the Stations pursuant to FCC rules,
regulations and requests. No notice has been issued by the FCC which
permits, or after notice or lapse of time or both, would permit, revocation
or termination of any of the FCC Licenses prior to the respective
expiration dates thereof, or which results or would result in any other
material impairment of any rights thereunder.
9. The Stations are now operating, and prior to the date hereof were
operating, in compliance in all material respects with the Communications
Act of 1934, as amended, and the rules and regulations of the FCC
promulgated thereunder. There is not now issued or outstanding, pending or
threatened, any Notice of Violation, Order to Show Cause, complaint or
investigation or rulemaking proceeding by or before the FCC which might
materially threaten or adversely affect any of the FCC Licenses or result
in any substantial adverse effect upon the operation of the Stations, nor
is there any reason to believe, as of the date hereof, that any of the FCC
Licenses will not be renewed in the ordinary course.
10. The execution, delivery and performance by the Seller of its
obligations under the Transaction Documents (a) is not contrary to the
Communications Act of 1934, as amended, or any of the rules, regulations or
policies of the FCC promulgated thereunder; (b) will not result in any
violation of the present rules, regulations or policies of the FCC; and (c)
will not cause any forfeiture or impairment of any of the FCC Licenses.
This Opinion Letter may be relied upon by you only in
connection with the Transaction and may not be used or relied upon by any other
person for any purpose whatsoever without this firm's prior written consent.
Very truly yours,
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EXHIBIT
---
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT, dated as of , 1999
from MCDONALD MEDIA GROUP, INC., a Delaware corporation (the "Assignor"), to
CUMULUS BROADCASTING, INC., a Nevada corporation, (together with its successors
and assigns, the "Assignee"), is delivered pursuant to Section 1(e) of that
certain Asset Purchase Agreement, dated as of [ ], 1999 (the "Asset
Purchase Agreement"), by and among Assignor and Assignee. Defined terms used
herein without definition have the meanings assigned to such terms in the Asset
Purchase Agreement.
KNOW ALL PERSONS BY THESE PRESENTS that, pursuant to the terms
and conditions of the Asset Purchase Agreement and for the considerations set
forth therein, the receipt and sufficiency of which are hereby acknowledged by
Assignor, Assignor hereby sells, transfers, assigns, conveys and delivers to
Assignee forever all of Assignor's right, title and interest in and to the
following Acquired Assets:
All right, title and interest in and to all of the assets of
Assignor, other than Retained Assets, that are used or useful
in the operation of the Stations, including but not limited to
all of its (a) real property, leaseholds and other interests
of any kind therein, improvements, fixtures, and fittings
thereon (such as towers and antennae), and easements,
rights-of-way, and other appurtenances thereto); (b) tangible
personal property (such as computers, electrical devices,
monitoring equipment, test equipment, switching, terminal and
studio equipment, transmitters, transformers, receivers,
broadcast facilities, inventories of compact disks, records,
tapes and other supplies, and all assignable warranties with
respect thereto; (c) Intellectual Property, goodwill
associated therewith, licenses and sublicenses granted and
obtained with respect thereto, and rights thereunder, remedies
against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions; (d)
rights under orders and agreements (including those barter
agreements identified on the Disclosure Schedule) now existing
or entered into in the Ordinary Course of Business for the
sale of advertising time on the Stations; (e) contracts,
indentures, Security Interests, guaranties, other similar
arrangements, and rights thereunder; (f) call letters of the
Stations, jingles, logos, slogans, and business goodwill of
the Stations; and (g) FCC logs and records and all other
books, records, ledgers, logs, files, documents,
correspondence, lists, plats, architectural plans, drawings,
and specifications, creative materials, advertising and
promotional materials, studies, reports, and other printed or
written materials.
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provided, however, that the Acquired Assets shall not include (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 Assignor under the Asset Purchase Agreement (or under any side
agreement between Assignor on the one hand and Assignee on the other hand
entered into on or after the date of the Asset Purchase Agreement); (iii)
accounts, notes and other receivables; (iv) Cash; and (v) claims, deposits,
prepayments, refunds, causes of action, choses in action, rights of recovery
(including rights under policies of insurance), rights of set off, and rights of
recoupment (including any such item relating to the payment of Taxes).
TO HAVE AND TO HOLD the same unto Assignee forever. Assignor
hereby constitutes and appoints Assignee the true and lawful attorney of
Assignor, with the full power of substitution, in the name of Assignee or in the
name of Assignor, but by and on behalf of and for the sole benefit of Assignee,
to demand and receive from time to time any and all of the above described
Acquired Assets, and from time to time to institute and prosecute, in the name
of Assignor or otherwise on behalf of Assignor, any and all proceedings at law,
in equity or otherwise which Assignee may deem necessary or desirable in order
to receive, collect, assert or enforce any right, title, benefit or interest of
any kind in or to the above described Acquired Assets and to defend and
compromise any and all actions, suits or proceedings in respect thereof and to
do all such acts and things and execute any instruments in relation thereto as
Assignee may deem advisable. Without limitation of any of the foregoing,
Assignor hereby authorizes any authorized representative of Assignee to endorse
or assign any instrument, contract or chattel paper relating to the above
described Acquired Assets. Assignor agrees that the foregoing appointment made
and the powers hereby granted are coupled with an interest and shall be
irrevocable by Assignee.
All of the terms and provisions of this General Assignment
will be binding upon Assignor and its successors and assigns and will enure to
the benefit of Assignee; provided, that nothing in this General Assignment,
express or implied, is intended or shall be construed to confer upon or give to
any person, firm, partnership, corporation or other entity other than Assignee
any rights or remedies under or by reason of this General Assignment.
* * * * *
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IN WITNESS WHEREOF, Assignor has caused this instrument to be signed in its name
by its representative thereunto duly authorized on the date first written above.
MCDONALD MEDIA GROUP, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
ACCEPTED AND AGREED:
CUMULUS BROADCASTING, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
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48
EXHIBIT
---
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT, dated as of , 1999
from MCDONALD MEDIA GROUP, INC., a Delaware corporation (the "Assignor"), to
CUMULUS LICENSING CORP., a Nevada corporation (together with its successors and
assigns, the "Assignee"), is delivered pursuant to Section 1(e) of that certain
Asset Purchase Agreement, dated as of , 1999 (the "Asset Purchase
Agreement"), by and among Assignor and Assignee. Defined terms used herein
without definition have the meanings assigned to such terms in the Asset
Purchase Agreement.
KNOW ALL PERSONS BY THESE PRESENTS that, pursuant to the terms
and conditions of the Asset Purchase Agreement and for the considerations set
forth therein, the receipt and sufficiency of which are hereby acknowledged by
Assignor, Assignor hereby sells, transfers, assigns, conveys and delivers to
Assignee forever all of Assignor's right, title and interest in and to the
following Acquired Assets:
All FCC and other governmental licenses, franchises,
approvals, certificates, authorizations and rights of the
Sellers with respect to the operations of the Stations and all
applications therefor, together with any renewals, extension
or modifications thereof and additions thereto.
TO HAVE AND TO HOLD the same unto Assignee forever.
All of the terms and provisions of this General Assignment
will be binding upon Assignor and its successors and assigns and will enure to
the benefit of Assignee; provided, that nothing in this General Assignment,
express or implied, is intended or shall be construed to confer upon or give to
any person, firm, partnership, corporation or other entity other than Assignee
any rights or remedies under or by reason of this General Assignment.
* * * * *
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IN WITNESS WHEREOF, Assignor has caused this instrument to be
signed in its name by its representative thereunto duly authorized on the date
first written above.
MCDONALD MEDIA GROUP, INC.
By:
---------------------------------
Its:
---------------------------------
ACCEPTED AND AGREED:
CUMULUS LICENSING CORP.
By:
---------------------------------
Its:
---------------------------------
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