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EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into as of June 29, 1999, by
and among Cumulus Broadcasting, Inc., a Nevada corporation ("Broadcasting"),
Cumulus Licensing Corporation, a Nevada corporation ("Licensing), and Coast
Radio, L.C., a Florida limited liability company (the "Seller"). Broadcasting
and Licensing 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 WWRO-FM and WCOA-AM (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 Broadcasting agrees 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 below in this Section
1.
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, and agree to make the escrow deposit
(the "Escrow Deposit") in the form and manner described in Schedule A and more
particularly in the earnest money escrow agreement ("Earnest Money Escrow
Agreement") attached hereto as Exhibit A.
D. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at a mutually agreed location, after
the FCC approval of the
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Assignment Application becomes a Final Order, by which date all other conditions
to the obligations of the Parties to consummate the transactions contemplated
hereby will have been satisfied, or such other date as the Parties may mutually
determine (the "Closing Date").
E. DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyers the various certificates, instruments, and documents
referred to in Section 5(a) below; (ii) the Buyers will deliver to the Seller
the various certificates, instruments, and documents referred to in Section 5(b)
below; (iii) the Seller will execute, acknowledge (if appropriate), and deliver
to the Buyers (A) assignments (including Lease and other Assumed Contract
assignments and Intellectual Property transfer documents), bills of sale and
warranty deeds in form 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 C and (B) such other
instruments of assumption as the Seller and its counsel reasonably may request;
and (v) the Buyers will deliver to the Seller the consideration specified in
Schedule 1(c) above.
F. POSTCLOSING AGREEMENT. On the Closing Date, the Seller shall
execute, and shall cause Gregory W. Gordon and Thomas W. Diamond to execute, a
Postclosing Agreement with the Buyers including covenants not to compete with
the Buyers in the markets served by the Stations and agreements to indemnify the
Buyers in the form of Exhibit D attached hereto. A portion of the Purchase Price
equal to Fifty Thousand Dollars ($50,000) shall be paid to the Seller by the
Buyers on the Closing Date as consideration for the agreements set forth in the
Postclosing Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Buyers that the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date, except as set
forth in the Disclosure Schedule.
A. ORGANIZATION OF THE SELLER. The Seller is a limited liability
company duly organized, validly existing, and in good standing under the laws of
the jurisdiction of its organization. The Seller does not have any Subsidiaries.
The Seller has the power and authority to own or lease its properties and to
carry on all business activities now conducted by it. The shareholders of the
Seller are Thomas W. Diamond, Gregory W. Gordon, Eddie Gordon and David Pavlock.
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
requisite number of members of the Seller has duly authorized the execution,
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delivery, and performance of this Agreement and the Ancillary Agreements by the
Seller. This Agreement and the Ancillary Agreements constitute the valid and
legally binding obligation of the Seller, enforceable in accordance with their
respective terms and conditions.
C. NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement or 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
Seller is subject or any provision of the articles of organization or operating
agreement 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 (other than as
described in Section 2(c) of the Disclosure Schedule) 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, 1995, December
31, 1996, December 31, 1997, and December 31, 1998 for the Seller; 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 Seller. The Financial
Statements have been prepared in conformity with the Seller's normal accounting
policies, practices and procedures applied on a consistent basis, throughout the
periods covered thereby, are correct and complete, fairly present the financial
condition of the Seller and the results of operation of Seller 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). 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 JUNE 30, 1998. Since June 30, 1998, 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, or future prospects of the Seller
with respect to the operation of the Stations. Without limiting the
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generality of the foregoing and with respect to the operation of the Stations
since January 1, 1998:
(i) other than this Agreement, the Seller has not entered
into any agreement, contract, lease, sublease, license, or sublicense
(or series of related agreements, contracts, leases, subleases,
licenses, and sublicenses) outside the Ordinary Course of Business;
(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) 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) there have been no changes and, to Seller's Knowledge,
any threatened changes in employment terms for any of its managers,
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
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. The Seller has timely and properly filed all Tax
Returns that it was required to file with respect to the Seller's operations.
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
(whether or not shown on any Tax Return) have been paid. The Seller has withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party. No claim has ever
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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:
(i) the Seller has good and marketable 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, recorded utility easements, and
other restrictions and encumbrances 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, and in full force
and effect;
(iii) no party to any Lease is in breach or default (or has
repudiated any provision thereof), and no event has occurred which,
with notice or lapse of time, would constitute a breach or default
thereunder or permit termination, modification, or acceleration
thereunder;
(iv) there are no disputes, oral agreements, or forbearance
programs in effect as to any Lease;
(v) none of the Owned Real Estate and to the Seller's
Knowledge, none of the properties subject to the Leases is subject to
any lease (other than Leases), option to purchase or rights of first
refusal;
(vi) except for Permitted Real Estate Encumbrances, there
are 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; (iii) structural or mechanical
defects in any of the buildings or improvements located on the Real
Estate; (iv) 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;
and
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, and in full force and effect; (B) the written arrangement will
continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms following the Closing (if the arrangement has not
expired according to its terms); (C) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or acceleration, under the
written arrangement; and (D) no party has repudiated any provision of the
written arrangement. The Seller is not a party to any verbal contract,
agreement, or other arrangement which, if reduced to written form, would be
required to be listed in Section 2(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 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.
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(ii) The Stations are in compliance with the FCC's policy
on exposure to radio frequency radiation. No renewal of any FCC License
would constitute a major environmental action under the FCC's rules or
policies. Access to the Stations' transmission facilities is restricted
in accordance with the policies of the FCC.
(iii) Except as set forth in Section 2(k) of the Disclosure
Schedule, to the Seller's Knowledge, the Seller is not the subject of
any FCC or other governmental investigation or any notice of violation
or order, or any material complaint, objection, 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.
Seller is not aware of any pending FCC applications which, if approved,
would allow for the operation of a new radio station with a signal
reaching the signal area of the Stations and, in addition, Seller is
not aware of any plans or proposals by any existing radio stations with
a signal reaching the signal area of the Stations to alter or change
their format to a format similar to that of the Stations.
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 Seller as
presently conducted and as presently proposed to be conducted. Each item of
Intellectual Property owned or used by the Seller immediately prior to the
Closing hereunder 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. 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, 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 accurate description of all Seller's insurance coverage. With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
and enforceable and in full force and effect; (B) the policy will continue to be
legal, valid, binding, and enforceable and in full force and effect on identical
terms through the Closing Date.
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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,
including all employees leased through Amstaff Leasing, Inc., which are
designated as leased employees on Section 2(o) of the Disclosure Schedule. To
the Knowledge of the Seller, no key employee or group of employees has any plans
to terminate employment with the Seller. The Seller is not a party to or bound
by any collective bargaining or similar agreement, nor has it experienced any
strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. The Seller has no Knowledge of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to 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 or to which the
Seller contributes or is required to contribute for the benefit of any current
or former employee of the Seller and true and correct copies of each such
Employee Benefit Plan have been delivered to the Buyers. Each Employee Benefit
Plan (and each related trust or insurance contract) complies and at all times
has complied in form and in operation in all respects with the applicable
requirements of ERISA and the Code. The Seller does not have any commitment to
create any additional Employee Benefit Plan or modify or change any existing
Employee Benefit Plan that would affect any employee or terminated employee of
the Seller. There are no pending or, to the Knowledge of the Seller, threatened
claims under, by or on behalf of any of the Employee Benefit Plans, by any
employee or beneficiary covered by any such Employee Benefit Plan, or otherwise
involving any such Employee Benefit Plan (other than routine claims for
benefits), nor have there been any Reportable Events or Prohibited Transactions
with respect to any Employee Benefit Plan.
Q. ENVIRONMENT, HEALTH, AND SAFETY.
(i) With respect to the operation of the Stations and the
Real Estate, 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
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health and safety, and to Seller's Knowledge there is no current
Liability (and to Seller's Knowledge there is no Basis related to the
past or present operations of the Seller or its predecessors for any
present or future Liability) under any Environmental Law. To Seller's
Knowledge there is no current 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) 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. To Seller's Knowledge, 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. To Seller's Knowledge, 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. 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). 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 $1000, and the amount to be paid to the Seller therefor. The Seller
has no reason to believe and has not received a notice or indication of the
intention of any of the advertisers or third parties to material contracts of
the Seller to cease doing business or to reduce in any material respect the
business transacted with the Seller or to terminate or modify any agreements
with the Seller (whether as a result of consummation of the transactions
contemplated hereby or otherwise).
T. BROKERS' FEES. Other than the fee payable to Media Services
Group, which shall be the exclusive responsibility of Seller, the Seller has no
Liability or obligation to pay any
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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, 1998.
S. DISCLOSURE. The representations and warranties contained in
this Section 2 do
not contain any untrue statement of a fact or omit to state any fact necessary
in order to make the statements and information contained in this Section 2 not
misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
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 and Licensing are
corporations duly organized, validly existing, and in good standing under the
laws of Nevada.
B. AUTHORIZATION OF TRANSACTION. Buyers have full power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to perform their obligations hereunder and thereunder. This Agreement and the
Ancillary Agreements constitute 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 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).
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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.
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. On a date to be agreed by the Parties,
the Seller and the Buyers shall jointly file with the FCC an application for
assignment of the FCC Licenses, permits and authorizations pertaining to the
Stations from the Seller to Licensing (the "Assignment Application"). The costs
of the FCC filing fees in connection with the Assignment Application shall be
divided equally between the Parties. Each party shall pay its own attorneys'
fees. The Seller and the Buyers shall thereafter prosecute the Assignment
Application with all reasonable diligence and otherwise use 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 or impose significant costs on such party.
The Seller and the Buyers shall jointly oppose any requests for reconsideration
or judicial review of FCC approval of the Assignment Application and shall
jointly request from the FCC extension of the effective period of FCC approval
of the Assignment Application if the Closing shall not have occurred prior to
the expiration of the original effective period of the FCC Consent. Nothing in
this Section 4(b) shall be construed to limit either party's right to terminate
this Agreement pursuant to Section 9 of this Agreement.
C. EMPLOYMENT OFFERS. Upon notice to the Seller, and at mutually
agreeable times, the Seller will permit the Buyers to meet with its employees
prior to the Closing Date. The Buyers may, at their option, extend offers of
employment to all or any of the Seller's employees effective on the Closing
Date. From and after the execution of this Agreement, the Seller shall use its
best efforts to assist Buyers in retaining those employees of the Stations which
the Buyers wish to hire in connection with the operation of the Stations by the
Buyers subsequent to the Closing, and the Seller will not take any action to
preclude or discourage any of the Seller's employees from accepting any offer of
employment extended by the Buyers.
D. NOTICES AND CONSENTS. The Seller will give all notices to third
parties and shall use commercially reasonable efforts to obtain all third party
consents that the Buyers reasonably may request, provided that only such
consents designated by Buyer in the Disclosure
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Schedule shall be required to be obtained as a condition of closing. Each of the
Parties will take any additional action that may be necessary, proper, or
advisable in connection with any other notices to, filings with, and
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make, or obtain.
E. ADVERTISING OBLIGATIONS. An adjustment to the Purchase Price
for the value of trade time and goods and services shall be made at the Closing
as follows: on all agreements or arrangements pursuant to which advertising is
exchanged for goods and services ("Barter Agreements") for which an obligation
to broadcast advertising time remains, Buyer shall be entitled to an adjustment
in their favor equal to the aggregate value of the advertising time which
remains to be broadcast as of the Closing Date to the extent that such value
exceeds the aggregate value of goods yet to be received and services yet to be
used by more than $5,000 in the aggregate for all Barter Agreements. The amount
to be attributed to the value of remaining broadcast advertising time and goods
and services hereunder shall be the amount specified in the Barter Agreement in
question, as established at the time the Barter Agreement was entered into. At
the Closing, Seller shall deliver a reconciliation of the Barter Agreements as
of the Closing Date. In the event of any dispute between the parties as to
adjustments under this section 4(e), the amounts not in dispute shall
nonetheless be paid and adjusted for at the closing and such disputes shall be
promptly presented for resolution to an independent certified public accountant
mutually acceptable to the parties. The accountant's resolution of the dispute
shall be final and binding on the parties and a judgment may be entered thereon,
provided, however, that any such accountant shall have no authority to assess
damages or award attorney's fees or costs. The fees and expenses of such
accountant shall be paid one-half by the Seller and one-half by the Buyer.
F. 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 with 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.
G. CONTRACTS. The Seller will not without the prior written
consent of the Buyers amend, change, or modify any of the contracts listed on
Section 2(j) 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).
H. 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.
I. CREDIT AND RECEIVABLES. The Seller will follow its usual and
customary policies with respect to extending credit for sales of air time and
advertising on the Stations and with respect to collecting accounts receivable
arising from such extension of credit.
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J. PRESERVATION OF STATIONS AND THE ACQUIRED ASSETS. The Seller
will keep its Stations and the Acquired Assets and properties substantially
intact, including its present operations, physical facilities, working
conditions, relationships with lessors, licensors, advertisers, suppliers,
customers, and employees, all of the Confidential Information, call letters and
trade secrets of the Stations, and the FCC Licenses.
K. 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.
L. NOTICE OF DEVELOPMENTS. The Seller will give prompt written
notice to the Buyers of any material development affecting business, operations
or prospects of the Stations or the Acquired Assets or the ability of the Seller
to perform hereunder.
M. EXCLUSIVITY. The Seller will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
any (A) 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.
N. TITLE INSURANCE, SURVEYS AND ENVIRONMENTAL ASSESSMENTS. The
Seller will obtain with respect to each parcel of Real Estate subject to the
Leases, (i) 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
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Phase I environmental site assessment from an environmental consultant or
engineer reasonably 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 will pay the costs of these title policies, Surveys, and environmental
assesments.
O. CONTROL OF STATIONS. The transactions contemplated by this
Agreement shall not be consummated until after the FCC has given its consent and
approval to the Assignment Application. Between the date of this Agreement and
the Closing Date, the Buyers and their employees or agents shall not directly or
indirectly control, supervise, or direct, or attempt to control, supervise, or
direct, the operation of the Stations, and such operation shall be the sole
responsibility of and in the control of the Seller.
P. RISK OF LOSS. The risk of loss, damage, or destruction to any
of the Acquired Assets shall remain with the Seller until the Closing. In the
event of any such loss, damage, or destruction the Seller will promptly notify
the Buyers of all particulars thereof, stating the cause thereof (if known) and
the extent to which the cost of restoration, replacement and repair of the
Acquired Assets lost, damaged or destroyed will be reimbursed under any
insurance policy with respect thereto. The Seller will, at Seller's expense,
repair or replace such Acquired Assets to their former condition as soon as
possible after loss, damage or destruction thereof and shall use its best
efforts to restore as promptly as possible transmissions as authorized in the
FCC Licenses. The Closing Date shall be extended (with FCC consent, if
necessary) for up to sixty (60) days to permit such repair or replacement. If
repair or replacement cannot be accomplished within sixty (60) days of the date
of the Seller's notice to the Buyers and the Buyers determine that the Seller's
failure to repair or replace would have a material adverse effect on the
operation of the Stations:
(i) the Buyers may elect to terminate this Agreement; or
(ii) the Buyers may postpone the Closing Date until such
time as the property has been repaired, replaced or restored in a
manner and to an extent reasonably satisfactory to the Buyers, unless
the same cannot be reasonably effected within ninety (90) days of the
date of the Seller's notice to the Buyers, in which case either party
may terminate this Agreement; or
(iii) the Buyers may choose to accept the Acquired Asset in
their "then" condition, together with the Seller's assignment to the
Buyers of all rights under any insurance claims covering the loss,
damage or destruction and payment over to the Buyers of any proceeds
under any such insurance policies, previously received by the Seller
with respect thereto plus an amount equal to the amount of any
deductible or self-insurance maintained by Seller on such Acquired
Assets. In the event the Closing Date is postponed pursuant to this
Section 4(p), the parties hereto will cooperate to extend the time
during which this Agreement must be closed as specified in the consent
of the FCC.
5. CONDITIONS TO OBLIGATION TO CLOSE.
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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
Section 2 above shall be true and correct in all respects at and as of
the Closing Date as though made on and as of the Closing Date;
(ii) the Seller shall have performed and complied with all
of its covenants hereunder in all respects through the Closing;
(iii) the 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(n) 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
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 (without qualification as to knowledge or materiality or
otherwise except as provided in the specific representation, warranty,
or covenant at issue) to the effect that each of the conditions
specified above in Sections 5(a)(i) through (iv) is satisfied in all
respects;
(vi) each of the Assignment Applications shall have been
approved by a Final Order of the FCC and the 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 E
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
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(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 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 except as may be provided in the specific representation,
warranty or covenant at issue) to the effect that each of the
conditions specified above in Section 5(b)(i)-(iii) is satisfied in all
respects and the statements contained in such certificate shall be
deemed a warranty of the Buyers which shall survive the Closing;
(v) each of the Assignment Applications shall have been
approved by a Final Order of the FCC and the Buyers shall have received
all governmental approvals required to transfer all other
authorizations, consents, and approvals of governments and governmental
agencies set forth in the Disclosure Schedule;
(vi) the relevant parties shall have entered into the
Postclosing Agreement; and
(vii) the environmental assessments to be obtained by Buyer
with respect to Seller's Owned Real Property and Pensacola Studio shall
not disclose environmental contamination or potential environmental
contamination with an aggregate estimated remediation cost in excess of
Five Thousand Dollars ($5,000), and Buyer shall not have agreed to
cover the cost of remediation in excess of Five Thousand Dollars
($5,000);
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(viii) between January , 1999, and the Closing Date, no
federal or state tax legislation shall have been enacted which shall
cause a material increase in the combined federal and state income
taxes (including capital gain taxes) payable by either the Seller or
its Members, or a combination of the Seller and its Members, as a
result of the consummation of the transaction described herein;
provided, however, that Buyer shall not have agreed to compensate
Seller or its Members for any increase in taxes beyond the material
increase. Material increase for purposes of this subparagraph shall
mean a more than 2.5 percent increase in such combined federal or state
income taxes;
(ix) on or before the Closing Date, the Buyers and Gregory
Gordon shall have entered into an Employment Agreement in the form
attached hereto as Exhibit F, provided, however, that if Gordon fails
or refuses to enter into the Employment Agreement on or before the
Closing Date, this condition shall be deemed waived by Seller;
(x) 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.
6. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following
the Closing:
A. GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 7 below).
B. LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Stations, each of the other Parties will reasonably cooperate with
the contesting or defending Party and its counsel in the contest or defense,
make available his or its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 7 below); provided, however, that such access and
cooperation does not unreasonably disrupt the normal operations of the
cooperating party.
C. ADJUSTMENTS. Operation of the Stations and the income and
expenses attributable thereto up through the close of business on the day before
the Closing Date shall be for the account of the Seller and thereafter for the
account of the Buyers. Such items as employee salaries, vacation, sick day and
personal time accruals, and fringe benefits, power and utilities
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charges, insurance, real and personal property taxes, prepaid expenses,
deposits, music license fees, and rents and payments pertaining to the Assumed
Contracts (including any contracts for the sale of time for cash, trade or
barter so assigned) shall be prorated between the Seller and the Buyers as of
the Closing Date in accordance with the foregoing principle. In addition, all
commissions payable with respect to the accounts receivable of the Seller
(whether due before or after Closing) shall be solely for the account and
responsibility of the Seller. Contractual arrangements that do not reflect an
equal rate of compensation to a Stations over the term of the agreement shall be
equitably adjusted as of the Closing Date. The prorations and adjustments
hereunder shall be made and paid insofar as feasible on the Closing Date, with a
final settlement sixty (60) days after the Closing Date. In the event of any
disputes between the Parties as to such adjustments, the amounts not in dispute
shall nonetheless be paid at such time and such disputes shall be determined by
an independent accounting firm mutually acceptable to both parties and the fees
and expenses of such accounting firm shall be paid one-half (1/2) by the Seller
and one-half (1/2) by the Buyer.
D. COLLECTION OF ACCOUNTS RECEIVABLE. At the Closing, the Seller
will turn over to the Buyers, for collection only, the accounts receivable of
the Stations owing to the Seller as of the close of business on the day before
the Closing Date. A schedule of such accounts receivable will be delivered by
the Seller to the Buyers on the Closing Date or as soon thereafter as possible.
The Buyers agree to use commercially reasonable efforts in the ordinary course
of business (but without responsibility to institute legal or collection
proceedings) to collect such accounts receivable during the 120-day period
following the Closing Date, and will remit all payments received on accounts on
the 15th (fifteenth) day following the month in which they are collected,
together with an accounting of all payments received within such period. Except
as specifically provided herein, the Buyers shall have the sole right to collect
such accounts receivable during such one hundred twenty (120) day period. In the
event the Buyers receive monies during the 120-day period following the Closing
Date from an advertiser who, after the Closing Date, is advertising on the
Stations, and that advertiser was included among the accounts receivable as of
the Closing Date, the Buyers shall apply said monies to the oldest outstanding
balance due on the particular account, except in the case of a "disputed"
account receivable. For purposes of this Section 6(d), a "disputed" account
receivable means one which the account debtor refuses to pay because he asserts
that the money is not owed or the amount is incorrect. In the case of such a
disputed account, the Buyers shall immediately return the account to the Seller
prior to expiration of the 120-day period following the Closing Date. If the
Buyers return a disputed account to the Seller, the Buyers shall have no further
responsibility for its collection and may accept payment from the account debtor
for advertising carried on the Stations after the Closing Date. At the end of
the 120-day period following the Closing Date, the Buyers will turn back to the
Seller all of the accounts receivable of the Stations as of the Closing Date
owing to the Seller which have not yet been collected, and the Buyers will
thereafter have no further responsibility with respect to the collection of such
receivables. During the 120-day period following the Closing Date, the Buyers
shall afford the Seller reasonable access to the accounts receivable "aging
list." The Seller acknowledges and agrees that the Buyers are acting as
collection agent hereunder for the sole benefit of the Seller and that Buyers
have accepted such responsibility for the accommodation of the Seller. The
Buyers shall not have any duty to inquire as to the form, manner of execution or
validity of any item, document, instrument or notice deposited, received or
delivered in connection with such collection efforts, nor shall the Buyers
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have any duty to inquire as to the identity, authority or rights of the persons
who executed the same.
E. SEVERANCE OBLIGATIONS. In the event an offer of employment is
extended by the Buyers to and accepted by an employee of the Seller pursuant to
Section 4(c) and such subsequent employment by the Buyers is terminated within
sixty (60) days from the Closing Date, the Seller shall be responsible for, and
shall pay to such accepting employee, all severance benefits (if any, pursuant
to the Seller's practices as in effect on the Closing Date) that may be due and
owing such employee by reason of his or her employment with either the Seller or
the Buyers.
F. CONSENTS. In the event any of the Assumed Contracts are not
assignable or any consent to such assignment is not obtained on or prior to the
Closing Date, and the Buyers elect to consummate the transactions contemplated
herein despite such failure or inability to obtain such consent, the Seller
shall continue to use commercially reasonable efforts to obtain any such
assignment or consent after the Closing Date. Until such time as such assignment
or approval has been obtained, the Seller will cooperate with Buyers in any
lawful and economically feasible arrangement to provide that the 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 90 days
after the applicable statute of limitations has expired with respect to any
claim by the Buyers based on a claim or action by a third party and for a period
of three (3) years following Closing with respect to any claim by the Buyers not
based on a claim or action by a third party. All of the other representations
and warranties (including 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) and all covenants of the Buyers and the
Seller contained in this Agreement shall survive the Closing and continue in
full force and effect forever thereafter.
B. INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE BUYERS.
Except as described below in Section 7(d) 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:
(i) any misrepresentation or breach of any of the Seller's
representations or warranties, and covenants contained in this
Agreement or in any Ancillary Agreement executed and/or delivered by
the Seller (so long as the Buyers make a written claim for
indemnification within the applicable survival period);
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(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 (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(n) 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 receive from the defaulting Party for such default the
Earnest Money Deposit as liquidated damages without the need for proof of
damages, subject only to successfully proving in a court of competent
jurisdiction that the Buyer materially breached this Agreement and that the
transactions contemplated thereby have not occurred. The Seller shall proceed
against the Earnest Money Deposit as full satisfaction of liquidated damages
owed by the Buyers and as its 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.
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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,
(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 Identified Party, in
the aggregate from all indemnifiable events shall exceed Ten Thousand Dollars
($10,000) and indemnification shall be made by the indemnifying party only to
the extent of such excess over Ten Thousand Dollars ($10,000); provided however
that the foregoing limitation shall not be 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 Seller, other than Retained Assets that are used or useful in
the operation of the Stations, wherever located, including but not limited to
all of its (a) leaseholds and other interests of any kind therein, improvements,
fixtures, and fittings thereon (such as towers and antennae), and easements,
rights-of-way, and other appurtenances thereto); (b) tangible personal property
(such as fixed assets, computers, data processing equipment, electrical devices,
monitoring equipment, test equipment, switching, terminal and studio equipment,
transmitters, transformers, receivers, broadcast facilities, furniture,
furnishings, inventories of compact disks, records, tapes and other
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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, 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.
"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(j) 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.
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"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.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Seller.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 1 above.
"EARNEST MONEY DEPOSIT" has the meaning set forth in Section 1(c)
above.
"EARNEST MONEY ESCROW AGREEMENT" has the meaning set forth in Section
1(c) above.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any 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).
"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 Media Services Group.
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"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in Section
302 of the Emergency Planning and Community Right-to-Know Act of 1986, as
amended.
"FCC" means the Federal Communications Commission of the United States.
"FCC LICENSES" means the licenses, permits and other authorizations,
including any temporary waiver or special temporary authorization, issued by the
FCC to the Seller in connection with the conduct of the business and operation
of the Stations.
"FINAL ORDER" means an action by the FCC as to which: (a) no request
for stay by the FCC is pending, no such stay is in effect, and any deadline for
filing a request for any such stay has passed; (b) no appeal, petition for
rehearing or reconsideration, or application for review is pending before the
FCC and the deadline for filing any such appeal, petition or application has
passed; (c) the FCC has not initiated reconsideration or review on its own
motion and the time in which such reconsideration or review is permitted has
passed; and (d) no appeal to a court, or request for stay by a court, of the
FCC's action is pending or in effect, and the deadline for filing any such
appeal or request has passed.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 2(e) above.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7(d) above.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7(d) above.
"INTELLECTUAL PROPERTY" means all (a) patents, patent applications,
patent disclosures, and improvements thereto, (b) trademarks, service marks,
trade dress, call letters, logos, trade names, and corporate names and
registrations and applications for registration thereof, (c) all programs,
programming materials, copyrights and registrations and applications for
registration thereof, (d) mask works and registrations and applications for
registration thereof, (e) computer software, data, and documentation, (f) trade
secrets and confidential business information (including ideas, formulas,
compositions, inventions (whether 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 actual knowledge of a Member of Seller without
further investigation.
"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.
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"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.
"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.
"PERMITTED REAL ESTATE ENCUMBRANCES" shall have the meaning set forth
in Section 2(i), above.
"POST-CLOSING AGREEMENT" means the Post-Closing Agreement with Seller's
Ownerss in the form attached hereto as Exhibit C.
"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 entity, 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 limited liability company; (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; (v) any refunds; and (vi) vehicles and personal effects owned by the
Members of Seller.
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"RETAINED LIABILITIES" means any other obligations or Liabilities of
the Seller, including but not limited to: (i) any Liability relating to the
ownership or operation of the Stations prior to the Closing; (ii) any Liability
of the Seller for income, transfer, sales, use, and other Taxes arising in
connection with the consummation contemplated hereby; (iii) any Liability of the
Seller for costs and expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated hereby (except as set forth in
Section 4(n) 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 WWRO-FM and WCOA-AM.
"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(n) 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:
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(i) the Buyers and the Seller may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(ii) the Buyers may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing in the
event the Seller is in breach of any representation, warranty, or
covenant contained in this Agreement; provided, however, that if such
breach is capable of being cured, such breach also remains uncured for
twenty (20) days after notice of breach is received by the Seller from
the Buyers;
(iii) the Seller may terminate this Agreement by giving
written notice to the Buyers at any time prior to the Closing in the
event the Buyers are in breach of any representation, warranty, or
covenant contained in this Agreement; provided, however that if such
breach is capable being cured, such breach remains uncured for twenty
(20) days after notice of breach is received by the Buyers from the
Seller;
(iv) the Buyers may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing if the
Closing shall not have occurred on or before the 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 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.
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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) the Buyers may assign all of
their right, title and interest in, to and under this Agreement to one or more
Affiliates, who shall then, subject to the terms and conditions of this
Agreement, have the right to receive the Acquired Assets, assume the Assumed
Liabilities, and to pay to the Seller the Purchase Price therefor or to any
successor to the Buyers in the event of any sale, merger or consolidation of the
Buyers, and (ii) 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:
Coast Radio, L.C.
P.O. Box 12487
Pensacola, Florida 32573
Copy to:
Helmsing, Sims & Leach, P.C.
150 Government Street
Mobile, Alabama 36602
Attn: Robert H. Rouse
Phone: (334) 432-5521
Fax: (334) 432-0633
(which copy shall not constitute notice to Seller)
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If to the Buyers:
Cumulus Broadcasting, Inc.
Cumulus Licensing Corp.
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.
875 N. Michigan Avenue
Suite 3650
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 Florida.
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 that is valid and enforceable and that comes closest to expressing the
intention of the invalid or
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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(n) with respect to Surveys, title commitments and
environmental audits. The Seller will pay all income taxes. The Seller and the
Buyers will each pay one-half (1/2) of any title insurance company closing fee,
transfer or sales taxes and other recording or similar fees necessary to vest
title to each of the Acquired Assets in the Buyers.
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 Pensacola, Florida 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 W. Weening
-----------------------------
Richard W. Weening (printed)
-----------------------------
Title: Executive Chairman
-----------------------------
CUMULUS LICENSING CORPORATION
By: /s/ Richard W. Weening
-----------------------------
Richard W. Weening (printed)
-----------------------------
Title: Executive Chairman
-----------------------------
COAST RADIO, L.C.
By: Thomas W. Diamond
------------------------------
Thomas W. Diamond (printed)
------------------------------
Title: Manager
------------------------------
By: Gregory W. Gordon
------------------------------
Gregory W. Gordon (printed)
------------------------------
Title: Manager
------------------------------
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