1
Exhibit 10.2.2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 15th of November, 1996,
by and between AudioNet, Inc., a Delaware corporation maintaining its principal
office at 0000 Xxx Xxxxxx, Xxxxxx Xxxxx 00000 (the "Company"), and Premiere
Radio Networks, Inc. a Delaware corporation maintaining its principal office at
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 ("Premiere").
WHEREAS, the Company and Premiere have reached certain agreements with
regard to the purchase of certain securities of the Company by Premiere, all
upon the terms and conditions more particularly described herein; and, inasmuch
as the parties desire to set forth their agreements and understandings in
writing, in consideration of the promises, covenants and matters hereinafter set
forth, the parties mutually covenant, contract and agree, each with the other,
as follows:
1. AUTHORIZATION OF ISSUANCE OF STOCK; PURCHASE AND SALE.
(a) Authorization. The Company has authorized issuing to Premiere 9,810
shares of its Common Stock, $0.01 par value per share (the "Common Stock").
(b) Sale of Stock. Subject to the terms and conditions hereof, and in
reliance on the representations and warranties contained herein, the Company
hereby agrees to issue and sell to Premiere, and Premiere hereby agrees to
purchase from the Company, 9,810 shares of Common Stock (the "Shares"), for
the purchase price of $407.75 per share, for a total purchase price of
$4,000,027.50.
(c) Closing. The closing shall be held on a mutually agreeable date not
later than November , 1996 at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP 0000
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 at 9:00 a.m. or on such other date
and at such other time and place as the parties may mutually agree (the
"Closing"). At the Closing, Premiere shall pay the Company the full purchase
price of the Shares in cash, by certified or bank cashier's check or by wire
transfer to an account designated in writing by the Company. At the Closing, the
Company shall deliver to Premiere a stock certificate or certificates registered
in Premiere's name representing the number of Shares purchased in form and
substance acceptable to Premiere, and shall also deliver the documents described
in Section 2 hereof.
2. DELIVERIES AT CLOSING.
At or prior to the Closing, the Company shall deliver or shall have
delivered to Premiere the following:
(a) Financial Information. Such financial information relative to the
Company's financial condition winch may be reasonably requested by Premiere,
which information shall include, at a minimum, the balance sheet of the Company
at June 30, 1996, together with statements of income and changes in financial
position for the period commencing January 1, 1996 and ended June 30, 1996.
(b) Closing Documents. The following closing documents, in form and
substance satisfactory to Premiere and its counsel:
(i) This Agreement, duly executed by the Company;
(ii) Executed copy of an Addendum to the Registration Rights Agreement
in the form attached as Exhibit A;
2
(iii) Executed copy of the Advertising Purchase Agreement in the form
attached as Exhibit B;
(iv) Executed copy of the Internet Services Agreement in the form
attached as Exhibit C;
(v) Executed copy of the Network Sales Representation Agreement in the
form attached as Exhibit D;
(vi) Certificates representing the Shares being purchased by Premiere
at the Closing;
(vii) The opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, legal counsel for the
Company, substantially in the form of Exhibit E;
(viii) Certificate of the Secretary of State of the State of Delaware
as to the good standing of the Company as of a date recent to the Closing Date;
(ix) Copies of the Certificate of Incorporation and Bylaws of the
Company, as amended to date, certified by the Secretary of the Company to be
true, correct and complete and in full force and effect;
(x) Copies of resolutions of the Board of Directors of the Company
authorizing the transactions contemplated by this Agreement, which resolutions
shall have been certified by the Secretary of the Company to be true, correct
and complete and in full force and effect;
(c) Evidence of any and all consents, permits and waivers necessary for
consummation of the transactions contemplated by this Agreement, including, but
not limited to, any qualification of the Shares under the Texas and California
securities laws.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Premiere that, except as set
forth in the Schedules attached hereto, which exceptions shall be deemed to be
representations and warranties as if made hereunder:
(a) Organization and Good Standing; Corporate Power. The Company is a
corporation duly organized and validly existing under the laws of the State of
Delaware, and is in good standing under such laws, and, except as set forth in
Schedule 3(a), is qualified and authorized to do business in, and in good
standing as a foreign corporation in, all other states in which such
qualification or authorization is necessary for the conduct of the business in
which the Company is now engaged, and has all necessary licenses and permits
required by all governmental authorities to carry on such business, except where
the failure to be so qualified or to have obtained such licenses and permits
would not have a material adverse effect on the Company. The Company has all
requisite legal and corporate power to own, lease and operate its property and
assets, to carry on its business as presently conducted, to enter into this
Agreement, to sell and issue the Shares and to carry out and perform its
obligations under the term of this Agreement.
(b) Affiliations. The Company has no subsidiaries and does not own or
control any shares of stock or any other investments in any other Person.
(c) Authorized and Issued Capital. The authorized capital stock of the
Company, immediately prior to the consummation of the transactions with Premiere
contemplated hereby, consists of (i)
2
3
50,000,000 shares of Common Stock, no par value per share, and 5,000,000 shares
of preferred stock,.01 par value of which 175,759 shares of common stock are
validly issued and outstanding. All such issued shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable, and were
issued in compliance with all applicable federal and state laws concerning the
issuance of securities. There are no subscriptions, contracts or agreements for
the issuance or purchase of any additional shares of the Company's capital
stock, either in the form of stock option or purchase agreements, warrants,
calls or convertible debentures or other securities except as set forth on
Schedule 3(c). There are no preemptive or similar rights to purchase or
otherwise acquire shares of the Company's capital stock pursuant to any
provision of law, the Certificate of Incorporation or Bylaws of the Company, or
any agreement to which the Company is a party, or otherwise except as set forth
on Schedule 3(c). To the knowledge of the Company, the outstanding shares of
Common Stock and other rights described herein and on Schedule 3(c) attached
hereto are owned by the persons named on Schedule 3(c) and, to the knowledge of
the Company, such shares, contracts and rights are not pledged to secure any
indebtedness or other obligation, no other persons have any rights to acquire or
vote such securities or any other rights thereto, and none of such shares are
subject to any voting agreements or trusts.
(d) Authorization. The execution and delivery of this Agreement and the
Addendum to the Registration Rights Agreement and the sale and issuance to
Premiere of the Shares as herein provided, have been duly authorized by all
necessary corporate action of the Company so that when issued and delivered
against payment therefor in accordance with the terms of this Agreement (i) the
Shares will be duly and validly authorized and issued, fully paid and
non-assessable, and (ii) neither the execution and delivery of this Agreement
nor the issuance of the Shares, will be in contravention, or result in the
creation of any mortgage, lien, charge or encumbrance upon any of the properties
or assets of the Company pursuant to, any law, or of any judgment, decree,
statute, order, rule or regulation applicable to the Company or of its
Certificate of Incorporation, Bylaws or any other contract, agreement or
instrument to which the Company may be a party or to which its property is or
may be subject. Each of this Agreement, the Addendum to the Registration Rights
Agreement, the Advertising Purchase Agreement and the Internet Services
Agreement constitute legal, valid and binding obligations of the Company
enforceable in accordance with each of their respective terms except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors, as well as general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) (ii) that the
Company is not making this representation with respect to the indemnification
provisions of Section 7 of the Registration Rights Agreement.
(e) Good Title to, and Condition of, All Properties and Assets. The Company
has good title to or a valid leasehold interest in all the properties and assets
used in its business or described in its internal financial records, and to all
patents, trademarks, trademark rights, trade names, copyrights, licenses and
other intellectual property either developed by or assigned to the Company for
its use, subject to no lien, mortgage, pledge, material reservation of rights,
restrictions, security interest, material encumbrance or material charge of any
kind. All items of the owned and leased real and tangible personal property of
the Company are in good repair and condition, subject to routine maintenance
requirements. The owned and leased real and tangible personal property of the
Company is sufficient for the conduct of the present business of the Company
subject to acquisition of additional equipment with the proceeds of this sale of
the Shares.
(f) Litigation. There is no investigation or litigation or any proceeding
before any court, commission or other administrative authority pending, or, to
the knowledge of the Company, any basis therefor or threat thereof, against the
Company, or its officers or directors which involves the possibility of any
judgment or liability in amount of at least $5,000. None of the Company's
officers are subject to any
3
4
contract, prohibition, non-compete, trade secret or any other restrictive
agreement which would impair his ability to provide services to the Company. To
the knowledge of the Company, no third party may assert any valid claim under
any agreements or arrangement or any laws governing unfair competition, trade
secrets or proprietary information against the Company with respect to the use
in the Company's business, as presently conducted or proposed to be conducted,
of any information which the Company or any such officer or employee would be
prohibited from using.
(g) Tax Matters. The Company has completed and duly filed in correct form
with the appropriate United States, state and local governmental agencies and
with the appropriate foreign countries and political subdivisions thereof, all
tax returns and reports required to be filed (with respect to local and foreign
returns and reports, to the extent material to the business of the Company):
such returns and reports are accurate and complete in all material respects; and
the Company has paid in full or made adequate provisions on its financial
statements delivered to Premiere pursuant to this Agreement for all taxes,
interest, penalties, assessments or deficiencies shown to be due on such tax
returns and reports or claimed to be due by any taxing authority or otherwise
due and owing, including, without limitation, those due in respect of
properties, income, franchises, licenses, sales and payrolls. The Company has
made all payments of estimated income tax due through the date hereof and all
withholdings of tax required to be made under all applicable United States,
state and local tax regulations and such withholdings have either been paid to
the respective governmental agencies or set aside in accounts for such purpose
or accrued, reserved against and entered upon the books of the Company.
Estimated income taxes for the Company which are not yet due to be paid to the
Internal Revenue Service have been accrued, reserved against and entered upon
the books of the Company. The Company has not executed or filed with the
Internal Revenue Service or any other taxing authority, domestic or foreign, any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of taxes. There are no tax liens (other than
liens for taxes for current and subsequent years which are not yet due and
delinquent) upon any properties or assets of the Company, whether real, personal
or mixed, tangible or intangible. The Company does not have outstanding any
power of attorney authorizing any person to represent it before the Internal
Revenue Service or before the taxing authorities of any state or subdivision
thereof with respect to any tax matter. No election under Section 341(f) of the
Internal Revenue Code of 1986 is in effect with respect to any of the assets of
the Company.
(h) Other Contracts. Listed on Schedule 3(h) attached hereto are all its
material leases, licenses, franchise and managerial contracts and agreements,
and any and all other of its material contracts and agreements, used or to be
used in connection with the conduct of its business, which includes, but is not
limited to, any written or oral:
(i) contract with any labor union;
(ii) contract for the future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of normal operating
requirements;
(iii) contract for the employment of any Person on a full-time basis or
any contract with any Person on a consulting basis and any noncompetition
agreements between the Company and any of its officers or directors;
(iv) bonus, pension, profit-sharing, retirement, stock purchase, stock
option, hospitalization, medical insurance or similar plan, contract or
understanding in effect with respect to its employees or the employees of
others;
4
5
(v) promissory note, agreement or indenture relating to the borrowing
of money or to the mortgaging, pledging or otherwise placing a lien on any
assets of the Company;
(vi) guaranty of any obligation for borrowed money or otherwise;
(vii) lease or agreement providing for rental payments in excess of
$30,000 Dollars per year under which the Company is lessee of or holds or
operates any property, real or personal, owned by any other party;
(viii) lease or agreement providing for rental payments in excess of
$30,000 per year under which the Company is lessor of or permits any third party
to hold or operate any property, real or personal, owned by the Company;
(ix) agreement or other commitment for capital expenditures in excess
of $30,000;
(x) contract, agreement or commitment under which the Company is
obligated to pay any broker's fees, finder's fees or any such similar fees to
any third party in connection with the transactions contemplated by this
Agreement; or
(xi) any other contract, agreement, arrangement or understanding which
is material to the business of the Company (including contracts under which
there are continuing product warranty obligations) or which is material to a
prudent investor's understanding of the business of the Company which are listed
on Schedule 3(h)(xi) attached hereto.
The Company is not a party to any other contract or agreement which may
materially or adversely affect the business, properties, assets or condition of
the Company.
Where any of the foregoing subsections provides a dollar limitation, if any
group of substantially similar contracts, leases or commitments in the aggregate
exceeds such dollar limitation, then such substantially similar contracts,
leases and commitments shall be deemed to be material if they in the aggregate
exceed the dollar limitation, notwithstanding that no individual contract, lease
or commitment exceeds the dollar limit.
(i) Defaults. Except as described on Schedule 3(i), the Company is not in
default of any material contracts and agreements described in Section 3(h)
hereof. The Company is capable of performing each of said contracts and
agreements in a timely manner.
(j) Certificate of Incorporation and Bylaws. The Company's Certificate of
Incorporation and Bylaws, copies of which and all amendments thereto have been
furnished to Premiere, are in full force and effect, without further changes,
amendments or modifications, and neither the aforementioned Certificate of
Incorporation or Bylaws are violated by any of the actions or transactions
contemplated herein.
(k) Financial Statements. The audited financial statements at and for the
period ending December 31, 1995 attached to this Agreement in EXHIBIT E (the
"Financial Statements"). The Financial Statements are true, complete and correct
in all material respects and were prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied. At December 31, 1995, (i)
the Company had no material liabilities of any nature (matured or unmatured,
fixed or contingent) which were not provided for in the Financial Statements, to
the extent required by GAAP; and (ii) all reserves set forth in the Financial
Statements were adequate for the purposes indicated therein, to the extent
required by GAAP. There are no loss contingencies (as such term is used in
Statement of Financial Accounting
5
6
Standards No. 5 issued by the Financial Accounting Standards Board in March
1975) which are not adequately provided for in the Financial Statements as
required by said Statement No. 5. Since December 31, 1995, there has not been
except as described in Schedule 3(k):
(i) any material or adverse change in the financial condition, results
of operations, properties, assets, liabilities business or business prospects of
the Company;
(ii) any material borrowing or agreement to borrow any funds or
material liability or obligation of any nature whatsoever (contingent or
otherwise) incurred by the Company, other than current liabilities or
obligations incurred in the ordinary course of business;
(iii) any waiver, release or compromise of any material right of the
Company, or the cancellation of any material debt or claim held by the Company;
(iv) any declaration or payment of dividends on, or other distributions
with respect to, or any direct or indirect redemption or acquisition of, any
shares of the capital stock of the Company, or any agreement or commitment
therefor;
(v) any encumbrance, mortgage, pledge, sale, assignment or transfer of
any tangible or intangible, including, but not limited to, intellectual property
rights, assets of the Company, except, with respect to tangible assets, in the
ordinary course of business;
(vi) any material loan by the Company to any officer, director,
employee or shareholder of the Company, or any agreement or commitment therefor,
other than travel advances and similar obligations in the ordinary course of
business;
(vii) any material increase, direct or indirect, in the compensation
paid or payable or any commitment or obligation to pay a bonus or other
additional compensation to any officer, director, employee or agent of the
Company;
(viii) any change in the accounting methods or practices followed by
the Company;
(ix) any loss contingencies (as such term is used in Statement of
Financial Accounting Standards No. 5 issued by the Financial Accounting
Standards Board in March 1975);
(x) any change in the contingent material obligations of the Company
by way of guaranty, surety, endorsement, indemnity, warranty (other than
customary product warranties) or otherwise; or
(xi) any agreement or commitment by the Company to do any of the
things described in clauses (i) through (x) above.
(1) Offering of Stock. Neither the Company nor any agent acting on its
behalf has taken in the past or in the future will take any action which would
subject the issuance or sale of the Shares, to the provisions of section 5 of
the Securities Act of 1933 (the "1933 Act") without complying with Section 5 of
the 1933 Act or an exemption therefrom.
(m) Consents and Approvals. No consent or approval of, authorization of, or
qualification or filing with, any governmental agency or authority or any other
person or entity is required in connection
6
7
with the execution, delivery or performance of this Agreement (or any agreement
or obligation contemplated hereby) by the Company.
(n) Untrue Statements. Neither this Agreement nor any certificate,
schedule, exhibit, or any other document required to be delivered pursuant to
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading, in light of the circumstances under which they were
made. There is no material fact known to the Company relating to its business,
finances, or operations that has not been disclosed to Premiere in writing by
the Company or in agreements or other documents made available to Premiere to
review. The representations contained herein shall not apply to any projections
furnished to Premiere, provided, however, that the Company represents and
warrants such projections are made in good faith and with belief in the
reasonableness of all assumptions made in connection therewith.
(o) Patents, Licenses, Trademarks. etc.
(i) The Company owns and possesses all patents, licenses, trademarks,
trade names, trademark rights and copyrights and other intellectual property
listed on Schedule 3(o) attached hereto and such listed intellectual property
constitutes all intellectual property necessary to conduct its business as now
conducted or as contemplated to be conducted, without conflict, to the best of
the Company's knowledge, with any patent, license, trademark, trade name, or
copyright of any other Person.
(ii) No royalties, fees, commissions or other payments are payable by
the Company to other Persons by reason of the ownership or use of the
Intellectual Property Rights as defined in Section 3(o)(iii) hereof; provided
that this provision shall not apply to the payment of salary to persons in
connection with the performance of services to the Company.
(iii) To the knowledge of the Company, no product manufactured,
marketed or sold by the Company will violate any license or infringe any
Intellectual Property Rights or assumed name of another. To the knowledge of the
Company, there is no pending or threatened claim or litigation against the
Company (nor to the knowledge of the Company, does there exist any basis
therefor) contesting the validity or right to use of any of the foregoing. The
Company has not received any notice that any of the Intellectual Property Rights
or the operation or proposed operation of the Company's business conflicts, or
will conflict, with the asserted rights of others, nor to the knowledge of the
Company does there exist any basis for any such conflict. "Intellectual Property
Rights" shall mean all industrial, commercial and intellectual property rights,
including, without limitation, patents, patent applications, patent rights,
trademarks, trade names, service marks, copyrights, computer programs, software
designs, source codes and related materials, certificates of public convenience
and necessity, franchises, licenses, trade secrets, proprietary processes and
formulae.
(p) Labor Matters. The Company and all its officers, employees described in
Section 5(b) hereof have executed and delivered Proprietary Information
Agreements in the form of EXHIBIT F hereto, and Xxxx Xxxxx and Xxxx Xxxxxx have
executed and delivered Employment Agreements in the form of EXHIBIT G hereto and
such agreements remain in full force and effect. To the knowledge of the
Company, no employee of the Company is in violation of any term of such
agreement or of any employment agreement. No employees of the Company are
represented by a union or other labor organization. There have been no labor
disputes to which the Company has been a party and the Company has received no
notice from any union or employee setting forth demands for representation,
elections or for present or future changes in wages, terms of employment or
working conditions. All written agreements and other documents of the Company,
with or relating to any officer, director, employee or agent of the
7
8
Company, under any employment contract, noncompetition agreement, nondisclosure
agreement, consulting agreement, collective bargaining agreement, executive
compensation agreement, deferred compensation agreement, pension plan,
retirement plan, profit sharing plan, stock purchase plan, stock option plan,
group life insurance, hospitalization insurance, vacation pay, severance pay or
any other similar agreements or employee benefit plans, arrangements or
understandings with or relating to any officer, director or employee of the
Company are listed in Schedule 3(p) attached hereto, and all material
obligations of the Company pursuant to any such oral agreements are summarized
in Schedule 3(p) attached hereto. True, complete and correct copies of all such
written agreements and other documents have been delivered to Premiere.
(q) ERISA. The Company has no Employee Benefit Plans as defined in the
Employee Retirement Income Security Act of 1974 ("ERISA"). The Company is in
compliance with the applicable provisions of ERISA and the regulations and
published interpretations thereunder and other federal and state statutes and
regulations relating to employee benefit plans and has met all applicable
minimum funding requirements under Section 302 of ERISA in respect to its plans.
No Reportable Event (as defined in Section 4043(b) of ERISA) has occurred with
respect to any Employee Benefit Plan (as defined in ERISA) and no notice of
termination has been filed by the plan administrator pursuant to Section 4041 of
ERISA or issued by the Pension Benefit Guaranty Corporation ("PBGC") pursuant
to Section 4042 of ERISA with respect to any pension plan subject to ERISA. The
present value of all benefits vested under all employee benefit plans maintained
by the Company does not exceed the value of the assets of such plans allocable
to such vested benefits. The Company (i) has not engaged in any Prohibited
Transaction (as defined in Section 406 of ERISA and Section 4975 of the Internal
Revenue Code of 1986, as amended), (ii) has no fiduciary responsibility for
investments with respect to any plan existing for the benefit of persons other
than employees, and (iii) has not withdrawn, completely or partially, from any
multi-employer pension plan so as to incur liability under the Multi-employer
Pension Plan Amendments Act of 1980. No event or occurrence has occurred which
would cause PBGC to institute proceedings under Title IV of ERISA to terminate
any employee benefit plan. The Company has caused to be delivered to Premiere
true and complete copies of the most recent actuarial reports relating to each
such pension benefit plan for which a report is required by Section 6059 of the
Internal Revenue Code of 1986, as amended, and such actuarial reports correctly
set forth the funding status of such plans as of such dates. The Company has
made all required contributions to all pension, profit sharing and other
employee benefit plans covering its employees.
(r) Suppliers and Customers. The Company has provided Premiere with access
to all of the Company's supplier and customer files.
(s) Environmental Matters. The Company has obtained all federal, state and
local environmental permits necessary for carrying on its business and use of
its properties, is in full compliance with the terms and conditions of these
environmental permits, and is in full compliance with all applicable federal,
state, and local environmental statutory and regulatory requirements. There are
no pending environmental civil, criminal, or administrative proceedings against
the Company and to the best knowledge of the Company, there are no threatened
civil, criminal, or administrative proceedings against the Company relating to
environmental matters. There is no fact or circumstance that may give rise to
any future civil, criminal, or administrative proceedings against the Company
relating to environmental matters.
(t) Compliance with Law and Other Instruments. The Company is not in
violation of any instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to it, including without limitation federal
and state securities laws, zoning laws and ordinances, federal labor laws and
regulations, the Federal Occupational Safety and Health Act and regulations
thereunder, the Federal
8
9
Employees Retirement Income Security Act, the Americans With Disabilities Act
and federal, state and local environmental protection laws and regulations, the
violation of which might have a material adverse effect on the business,
prospects, affairs, operations or condition of the Company.
(u) Brokerage Fees. Except as set forth in Schedule 3(u), there are no
claims or, to the knowledge of the Company, potential claims against the Company
or any of its officers, directors or shareholders, for brokerage commissions,
finders' fees, or other similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Company or such officer, director or shareholder.
(v) No Crimes. Neither the Company nor to the knowledge of the Company, any
of its current directors or officers have been arrested, indicted for or
convicted of any crime, other than minor traffic offenses, during the past ten
years.
Neither the Company nor to the knowledge of the Company, any of its current
executive officers or directors have since January 1, 1990:
(i) filed a petition, or had a petition filed against it or than, under
the Federal Bankruptcy laws or any state insolvency law, or had a receiver,
fiscal agent or similar officer appointed by a court for its or their business
or property, or for any partnership in which it or they were a general partner
or any corporation or business association of which it or they were an executive
officer at or within two years before such filing;
(ii) been convicted in a criminal proceeding or been named the subject
of a pending criminal proceeding (excluding traffic violations and other minor
offenses);
(iii) been the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction permanently or temporarily enjoining it or them from or otherwise
limiting the following activities:
(a) acting as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection with such
activity;
(b) engaging in any type of business practice; or
(c) engaging in any activity in connection with the purchase or
sale of any security or in connection with any violation of federal or state
securities law;
(iv) been the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting its or their right to engage in any
activity described in (iii) above, or to be associated with persons engaged in
any such activity; or
(v) been found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission (the "Commission") or any state
securities administrator or commissioner to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Commission or any state securities administrator or commissioner has not been
subsequently reversed, suspended or vacated.
9
10
(w) Related Transactions. Except as set forth on Schedule 3(w), the Company
has no written or oral agreements, leases, indebtedness or other commitments to
or with "Restricted Persons," and has not entered into any "Conflict of Interest
Transaction" with any "Restricted Person." For purposes of this Agreement, a
"Restricted Person" shall consist of an employee, a shareholder, director or
officer of the Company, or a relative of any such individual or any entity
controlled by any such individual, or a customer or supplier of the Company, and
a "Conflict of Interest Transaction" shall include, but not be limited to, the
sale of merchandise for less than fair market value, or the purchase of
merchandise or supplies in transactions involving rebates to or from a
Restricted Person, or the payment of fees or salaries in excess of the
legitimate and documentable fair market value of the services rendered for such
fees or salaries or any loan or guaranty.
(x) Use of Proceeds. Attached hereto as Schedule 3(x) is a detailed
statement of the purposes, including dollar amounts, to which the Company
proposes to apply the proceeds of the sale of the Shares to be issued and sold
at the Closing.
(y) Insurance. The Company has the insurance coverage described on Schedule
3(y) hereto.
4. REPRESENTATIONS AND WARRANTIES OF PREMIERE.
Premiere hereby represents and warrants to the Company that, as of the date
hereof:
(a) Organization and Good Standing. Premiere is a corporation duly
organized and validly existing under the laws of the State of Delaware and is in
good standing under such laws;
(b) Corporate Power. Premiere has all requisite corporate power to enter
into this Agreement and to carry out and perform its obligations under the terms
of this Agreement;
(c) Authorization. All corporate action on the part of Premiere
necessary for the performance of Premiere's obligations hereunder has been taken
or will be taken prior to the Closing. This Agreement is a valid and binding
obligation of Premiere, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors, as well as general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) Securities Laws. Premiere is purchasing the Securities for its own
account for investment purposes only and not with a view to, or for resale in
connection with, any "distribution" thereof for purposes of the Securities Act.
(e) Premiere has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of investment in
the Company and of making an informed investment decision.
(f) Premiere has the capacity to protect its own interest in connection
with this transaction by reason of its prior personal or business relationships
with the Company or its officers or directors or its business or financial
experience.
10
11
(g) Accredited Investor. Premiere is an accredited investor as defined in
Rule 501(a) of Regulation D of the Commission under the Securities Act of 1933,
as amended (the "Securities Act").
4A. UNDERSTANDINGS AND AGREEMENTS OF PREMIERE.
Premiere understands the following:
(a) There is no public market for the Shares or any of the Company's
securities and there is no certainty that such a market will ever develop. There
can be no assurance that Premiere will be able to sell or dispose of the Shares.
Moreover, no assignment, sale, transfer, exchange or other disposition of the
Shares can be made other than in accordance with all applicable securities laws.
It is understood that in order not to jeopardize the offering's exempt status
under Section 4(2) and Regulation D of the Securities Act and the state
securities law, any transferee may be required to fulfill certain investor
suitability requirements.
(b) Premiere understands and agrees that because the Shares have not been
registered under the Securities Act or applicable state securities laws,
Premiere cannot dispose of any or all of the Shares unless such Shares are
subsequently registered under the Securities Act, and/or applicable state
securities laws, or exemptions from such registration are available. Premiere
acknowledges and understands it has no right to require the Company to register
the Shares, except as provided in the Registration Rights Agreement. Premiere is
aware that the Company may not accomplish a public offering of its stock.
Premiere further understands that the Company, as a condition to the transfer of
any of the Shares, may require that the request for transfer be accompanied by
opinion of counsel reasonably satisfactory to the Company, in form and substance
reasonably satisfactory to the Company and preceded by prior written notice, to
the effect that the proposed transfer does not result in violation of the
Securities Act or applicable state securities laws, unless such transfer is
covered by an effective registration statement under the Securities Act and
compliance with all applicable state securities laws or an exemption or
exemptions from registration is or are available. Premiere understands that each
certificate representing the Shares and any securities issued upon conversion of
the Shares or on account of ownership thereof will bear the following legend or
one substantially similar thereto:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state. These securities have been acquired for
investment and not with a view to distribution or resale, and may not be
sold, mortgaged, pledged, hypothecated or otherwise transferred without an
effective registration statement for such shares under the Securities Act
and applicable state securities laws, or an opinion of counsel reasonably
satisfactory to the corporation that registration is not required under the
Securities Act and applicable state securities laws. The securities are
also subject to certain rights of first refusal of the corporation and
other contractual restrictions on transfer.
(c) Premiere is organized under the laws of the State of Delaware, its
principal offices are located in the State of California and all decisions
relating to purchase of the Shares have occurred solely in California.
11
12
5. AFFIRMATIVE COVENANTS OF THE COMPANY.
Until an Initial Public Offering (as defined in Section 7(a) hereof) by the
Company, the Company covenants and agrees that for so long as Premiere owns,
beneficially or of record, any of the Shares, any Common Stock or other
securities of the Company, the Company shall:
(a) Reports and Information. Furnish to Premiere the following reports:
(i) Annual Reports. As soon as available and in any event within 90
days after the end of each fiscal year, consolidated and consolidating financial
statements of the Company including a balance sheet as of the end of such fiscal
year and statements of income and retained earnings and of sources and
applications of funds for such fiscal year, prepared in reasonable detail and in
accordance with generally accepted accounting principles consistently applied
and accompanied by the opinion thereon of a recognized firm of independent
certified public accountants as may be selected by the Board of Directors of the
Company.
(ii) Interim Reports. As soon as available, and in any event within 45
days after the end of each of the first three quarters of each of the Company's
fiscal years beginning with the quarter ending September 30, 1996, consolidated
and consolidating financial statements of the Company including a cash flow
statement, a balance sheet as of the end of such accounting period and
statements of income and retained earnings and of sources and applications of
funds for such accounting period and for the period from the beginning of such
fiscal year to the end of such accounting period, and setting forth in
comparative form the figures for the corresponding periods of the preceding
fiscal year, prepared in reasonable detail and in accordance with generally
accepted accounting principles consistently applied and certified as correct by
the chief executive officer and chief financial officer of the Company.
(iii) Monthly Reports. If such reports are otherwise prepared, and in
such case as soon as available, for each month beginning after June 30, 1996,
consolidated and consolidating financial statements of the Company including a
cash flow statement and a balance sheet as of the end of the month in reasonable
detail in accordance with generally acceptable accounting principles
consistently applied and certified as correct by the chief executive officer and
chief financial officer of the Company. The management of the Company will
include with each monthly report, if any, comments on progress and problems
facing the Company.
(iv) Other. Such other financial information and data as Premiere may
from time to time reasonably request.
(v) SEC Filings, Etc. Promptly upon their becoming available (and in no
event later than the ten days after release to the public) copies (without
duplication) of all financial statements, reports, press releases, notices and
proxy statements sent by the Company to its security holders and all annual,
periodic or special reports or registration statements filed by the Company with
the Commission, and all other material communications sent by the Company to its
security holders or filed by the Company with the Commission. The Company shall
not enter into any transactions with its management, directors or consultants or
with any member of their families or any entity controlled by any such person,
without the prior written approval of the Board of Directors of the Company,
without counting the vote of any interested director, including, without
limitation, increasing salaries above current levels, increasing employee
benefits, selling securities or granting options, warrants or other rights to
purchase securities of the Company.
12
13
(b) Employee Agreements The Company shall diligently enforce all material
provisions of the existing Employment Agreements and Proprietary Information
Agreements and all future similar agreements and shall not amend any such
agreements or waive any rights thereunder without the prior written approval of
the Board of Directors of the Company.
(c) Corporate Existence. Preserve and keep in full force and effect its
corporate existence, its qualification to do business and its good standing in
every state where it is or is required to be qualified to do business, except
that nothing herein shall prevent the Company from changing its state of
incorporation.
(d) Licenses, Permits and Franchises. Maintain, preserve and protect at all
times all of its corporate and operational licenses, permits and franchises and
comply with each and all of the terms, conditions and requirements of such
licenses, permits and franchises, except to the extent management of the Company
determines it is not in the best interest of the Company to do so.
(e) Properties. Preserve all of its assets and properties that are used in
the conduct of its business and maintain and keep these assets and properties in
good repair, working order and condition, and from time to time make or cause to
be made all needed and proper repairs, renewals, replacements, betterments and
improvements to these assets and properties to preserve and maintain their
value, normal wear and tear excepted, so that the business carried on in
connection with these assets and properties may be properly conducted at all
times, except to the extent management of the Company determines it is not in
the best interest of the Company to do so.
(f) Insurance. Maintain "all-risk" insurance at all times on all properties
(real and personal) with responsible, reputable and financially sound insurance
companies or associations approved by the Board of Directors in the full amount
Of the replacement cost, and also maintain adequate (at least $1,000,000 per
occurrence and $2,000,000 in the aggregate) insurance against liability to
persons for such risks and hazards and in such amounts as are usually carried by
companies engaged in similar businesses.
(g) Records. Financial Statements. Keep at all times complete books of
record and accounts, and an accounting system, in conformity with generally
accepted accounting principles as revised from time to time, with full, true
and correct in all material respects entries of all dealings and transactions in
relation to the Company's business and affairs, and reasonably protect such
books and accounts against loss or damage. The Company shall have its books and
accounts audited arid, as set forth in Section 5(a), provide Premiere with
audited financial statements showing its financial condition and the results of
its operations during the preceding fiscal year, together with any supporting
schedules, which statements will be accompanied by an opinion thereon of
independent certified public accountants selected by the Board of Directors of
the Company.
(h) Inspection. Permit Premiere, its agents and/or representatives to visit
and inspect, at reasonable times and upon prior notice, the Company's assets,
properties, books of record and accounts (including making copies thereof), and
to discuss these items and the results of such inspections with the Company's
chief operating officer.
(i) Payment of Taxes. Timely file or cause to be filed any and all federal,
state and local tax returns and reports and timely pay and discharge any and all
taxes and assessments, and any and all federal, state and local governmental
impositions, fees, charges and/or levies, including but not limited to, any
income taxes, municipal taxes, real estate and personal property taxes, social
security, unemployment excise and withholding taxes, and the like imposed upon
the Company, its operations, or upon its income and profits, or upon all or any
part of its properties, real, personal or mixed, or upon its payroll, in each
13
14
case before the same becomes delinquent and before penalties accrue thereon,
except for taxes the liability of which is being contested in good faith in an
appropriate forum, and for the payment of which adequate reserve has been
established on the Company's balance sheet.
(j) Other Information. Furnish promptly to Premiere any Information related
to this Agreement or any other agreements with Premiere or any other documents
executed in connection with this Agreement as Premiere may reasonably request
regarding the Company's operations, business affairs, financial condition, or
any of the Company's covenants, agreements and/or undertakings under this
Agreement or any of the other agreements or documents, provided the Company is
not restricted from doing so by law, rule, regulation or contractual provisions.
(k) Environmental Matters. The Company shall comply in all material
respects with all applicable federal, state, and local laws and regulations
pertaining to environmental matters, and shall promptly give written notice to
Premiere of the occurrence of any event under any such laws and regulations that
would require an oral, telephonic or written notice or communication to the U.S.
Environmental Protection Agency, or any successor agency, and shall promptly
forward to Premiere copies of all orders, notices, permits, applications or
other communications and reports received, made or given in connection with any
such event, and any enforcement action taken against the Company or against any
property owned or leased by the Company.
(1) Statutory Compliance. At all times, conduct its business in accordance
with, and comply in all material respects with, all applicable statutes,
regulations, judgments, decrees, resolutions and orders of, and all applicable
restrictions imposed by, any and all governmental entities and/or authorities,
federal, state, local and non-U.S., judicial or administrative, applicable to
the conduct of the Company's businesses and activities (including environmental
and other regulatory requirements) or the ownership or operation of its
properties, licenses, permits and/or franchises, particularly those pertaining
to the business the Company currently operates.
(m) Contractual Compliance. Pay and discharge all of the Company's
indebtedness and obligations promptly and in accordance with their terms and
substantially comply with the terms and conditions of any indentures,
agreements, contracts or other instruments to which it is party or which may
affect its assets or properties or enter into mutually satisfactory agreements
with the other parties to such documents and instruments; provided, however,
that nothing herein shall prevent the Company from withholding payment or
otherwise failing to comply with any agreement, if its management determines it
to be in the best interest of the Company to do so and if such action will not
result in any material adverse effect on the Company.
(n) Full Compliance. Comply with each and all of the terms of this
Agreement hereof and all other agreements with Premiere.
(o) Conduct of Business. Carry on its business and activities diligently
and consistent with prudent business practice for a company of the size and
character of the Company and will use its reasonable efforts to preserve its
relationship with suppliers, customers and others having business relationships
with it subject to the reasonable business judgment of management.
(p) Attendance of Board Meetings. As long as Premiere owns 75% of the
Shares, the Company shall give Premiere adequate notice of and shall permit a
member of Premiere's board of directors to attend as an observer (at Premiere's
expense) all meetings of the Board of Directors of the Company; provided,
however, that the Company reserves the right to exclude such representative from
access to any
14
15
material or meeting or any portion thereof if the Company reasonably believes
that such exclusion is necessary to preserve the attorney-client privilege or to
protect highly confidential proprietary information. Premiere shall be entitled
to receive all written materials and other information given to directors in
connection with any meeting of the Board of Directors of the Company as soon as
practicable after such materials and other information have been given to the
directors.
(q) Press Releases. Except as provided by law, the Company will secure
advanced written approval from Premiere of the decision to issue and the content
of any statement regarding or mentioning Premiere, whether in writing or
otherwise to the public or press. This provision shall not be deemed to have
been breached if the Company acting on the advice of its securities or other
regulatory counsel makes disclosures to investors and potential investors or to
any governmental or other regulatory agency or organization.
6. NEGATIVE COVENANTS OF THE COMPANY.
Until an Initial Public Offering (as defined in Section 7(a) hereof) by the
Company, from the Closing Date, so long as Premiere owns, beneficially or of
record, any of the Shares, any Common Stock or any other securities of the
Company, the Company covenants and agrees that it shall not without the
affirmative vote of more than eighty percent (80%), for a period of 12 months
from the date hereof, and fifty percent (50%) after the expiration of such 12
month period of the members of the Board of Directors of the Company, do any of
the matters or things listed below:
(a) Properties. Sell, lease, sublease, transfer, convey, alienate or
otherwise dispose of, in any manner, all or substantially all of the Company's
assets (including licenses, receivables, trademarks, trade names, good will and
other intangible assets).
(b) Merger Consolidation. Liquidate, dissolve, reorganize, merge with or
into or consolidate with any other corporation or entity.
(c) Directors. Change the authorized number of directors of the Company.
(d) Company Plans. Reserve or have reserved for issuance or issue, shares
of the Company's capital stock or any securities of the Company convertible into
the capital stock of the Company in an aggregate amount in excess of 15.5% of
the outstanding shares of capital stock of the Company and any security of the
Company convertible into the capital stock of the Company pursuant to any
Company stock bonus, pension, profit-sharing, retirement, stock purchase, stock
option or similar plan, contract or understanding with respect to Company
directors, officers, employees, or consultants, calculated using a denominator
consisting of the amount of capital stock and other securities of the Company
outstanding as of October 30, 1996, provided that such denominator shall not
include securities of the Company which are sold (i) after the date hereof with
an aggregate purchase price exceeding $7,000,000 (excluding the Shares sold
pursuant to this Agreement) or (ii) subsequent to December 31, 1996.
7. RIGHTS OF SHAREHOLDER AND TRANSFER RESTRICTIONS.
(a) Rights of Shareholders. At any time prior to the first registration
under the Securities Act of 1933 and sale of the Company's Common Stock (the
"Initial Public Offering").
(i) Premiere shall have the pre-emptive and preferential right to
purchase or subscribe for its then pro-rata percentage of any of the following
securities that are offered for sale or subscription: (i) any unissued or
treasury shares of any class of stock (whether now or hereafter authorized) of
the
15
16
Company; (ii) any obligations, evidences of indebtedness, or other securities of
the Company, whether convertible into or exchangeable for, or carrying or
accompanied by any rights to purchase or subscribe for, any such unissued or
treasury shares; (iii) any right or subscription for or to receive, or any
warrant or option for the purchase of, or any of the foregoing securities, other
than warrants, options or convertible securities issued to directors, employees
and consultants approved by the Board of Directors of the Company and permitted
under Section 6(e); and (iv) any other securities that may be issued or sold by
the Company, provided, however, that Premiere shall be required to pay for such
securities at the same price and on the same terms and conditions that such
securities are offered or sold to third parties, provided however, that such
pre-emptive rights shall not be applicable in the case of issuance of Company
securities for acquisition. The Company shall give Premiere written notice as
soon as reasonably practicable of a proposed or pending offering or sale of
securities including the expiration of such offer a sale. Premiere shall
indicate in writing prior to the expiration of such offer or sale whether it
intends to exercise its preemptive rights. If it so elects, it shall pay for
such securities on or before the 60th day following the expiration of such
offering or sale.
(ii) If Premiere does not exercise its preemptive rights within the
time periods specified in clauses (a) above, the Company shall be free to sell
up to the quantity of such securities not agreed by Premiere to be purchased by
Premiere (or up to all such securities in the event such offer is rejected or is
not accepted within applicable time periods after it has been made by the
Company), at a price no less favorable to the Company than that specified in
such offer and on payment terms no less favorable to the Company than those
specified in such offer.
However, if such sale is not consummated within ninety (90) days after the
date an offer pursuant to this subsection 7(a) was made, the Company shall not
sell such securities without again complying with this Section.
(iii) The rights provided to Premiere in Section 7(a) above are
exercisable at the same time and are in parity with respect to preference as the
pre-emptive and preferential rights granted by the Company to Cameron
Broadcasting Systems, Inc. ("CBS") pursuant to a Xxxx of Conveyance and
Agreement to Assume Liabilities dated October 25, 1995, until such rights
granted to CBS terminate.
(iv) The rights provided to Premiere in this Section 7(a) shall not
apply with respect to (A) the Company's initial strategic investor financings,
to the extent such financings (1) occur prior to December 31, 1996 and (2)
involve the sale of Common Stock for an aggregate purchase price not to exceed
$7,000,000 on terms no more favorable to the investors than those provided to
Premiere in this Agreement and (B) shares of Common Stock pursuant to the terms
of the Contribution Agreement, dated as of January 1, 1996, between the Company
and University Sports America, Inc.
(b) Rights of the Company. In the event Premiere desires to sell or
otherwise transfer any shares of Stock, at any time prior to an Initial Public
Offering by the Company, Premiere shall first notify the Company in writing of
the identity of the purchaser or other transferee and the material terms and
conditions of sale, including the number of securities to be sold, price and
payment terms.
If within thirty (30) days after the notice of sale or other transfer is
received by the Company, the Company determines the purchaser or other
transferee is a competitor of the Company, which determination shall be made by
the Board of Directors of the Company, the Company may prohibit the proposed
sale or transfer to such purchaser or other transferee. Any determination made
by the Board of Directors in good faith shall be final and binding.
16
17
If within thirty (30) days after the notice of sale or transfer is received
by the Company, the Company notifies Premiere in writing it desires to purchase
all the securities to be sold or transferred by Premiere, Premiere shall sell
such shares to the Company on the same terms and conditions as specified in the
notice sent to the Company by Premiere. The Company shall complete such purchase
within sixty (60) days after receipt of notice of sale or transfer by the
Company.
In the event within thirty (30) days after receipt by the Company of the
notice of sale or transfer, the Company neither (i) notifies Premiere in writing
the purchaser or transferee has been deemed to be a competitor of the Company,
nor (ii) notifies Premiere in writing the Company desires to purchase all the
securities to be sold or transferred, Premiere shall be free to sell or transfer
the securities on the terms and conditions specified in its notice to the
Company to the Person specified in such notice subject to compliance with
applicable securities laws and regulations or pursuant to an exemption therefrom
and Section 4A of this Agreement. If such sale or transfer is not consummated
within ninety (90) days after the Company received notice of the proposed sale
or transfer from Premiere, Premiere may not sell or transfer such securities
without again complying with this Section.
Any purchaser or transferee of Shares shall agree as a condition to
consummation of such sale or transfer that any subsequent sale or transfer of
the Stock shall be subject to the rights of the Company set forth in this
Section 7.
The restrictions on transfer of securities contained herein are in addition
to, and not in lieu of, restrictions pursuant to applicable law.
8. GENERAL.
The parties hereto further warrant, covenant, contract and agree each with
the other as follows:
(a) Entire Agreement. This Agreement, the Exhibits and Schedules hereto
and other documents referred to herein constitute the entire understanding among
the parties with respect to the subject matter hereof and they supersede all
prior negotiations, understandings, correspondence, undertakings, promises,
representations and agreements, whether oral or written, in connection with the
subject matter hereof.
(b) Survival of Agreements and Representations and Warranties. An
agreements, representations and warranties contained herein or made in writing
in connection herewith, to the extent applicable, shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, regardless of any investigation made by Premiere or on its
behalf, and shall continue until all Shares cease to be outstanding unless
specifically limited to a shorter time by the terms of this Agreement.
(c) Binding Effect. All covenants, representations, warranties and
other stipulations in this Agreement, given by or on behalf of any of the
parties hereto, shall bind and inure to the benefit of the respective
successors, heirs, personal representatives and permitted assigns of the parties
hereto.
(d) Cumulative Powers. No remedy herein conferred upon a party to this
Agreement is intended to be exclusive of any other remedy, and each such remedy
shall be cumulative and in addition to every other remedy given hereunder or now
or hereafter existing at law, or in equity or by statute or otherwise.
17
18
(e) Loss of Securities. Upon:
(i) receipt of evidence satisfactory to the Company of loss, theft,
mutilation or destruction of the certificate(s) representing the Shares, and
(ii) in the case of any such loss, theft, or destruction, upon
delivery of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of such certificates representing the Shares, the Company will
make and deliver a new certificate representing the Shares, of like tenor, in
lieu of such lost, stolen, mutilated or destroyed stock certificate upon receipt
of an appropriate indemnification agreement executed by Premiere and reasonably
satisfactory to the Company. In addition, upon request of Premiere, and upon
surrender of such certificate representing the Shares or other securities to the
Company and compliance with any restrictive legends, the Company will reissue,
in lesser denominations to parties designated by Premiere, certificates
representing the Shares, or other securities in the equivalent amounts of such
other securities surrendered.
(f) Notices. Except in cases where oral or other notice is permitted by
this Agreement, all notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (i) when
hand delivered, including delivery by messenger or courier service (or if
delivery is refused, at the time of refusal), to the address set forth below,
(ii) when received or refused as evidenced by the postal receipt if sent by
United States mail as Certified Mail, Return Receipt Requested, with proper
postage prepaid, addressed as set forth below or (iii) when received as
evidenced by the transmission report of the telefax machine of the transmitting
party acknowledging a good transmission if sent by telefax to the number set
forth below:
a. If to Premiere:
Premiere Radio Networks, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx, President
b. If to the Company:
AudioNet, Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
Telefax Number: 214/748-6657
c. With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Telefax Number: 212/351-4035
18
19
Any of the parties may change its mailing address or telecopy number, by
giving notice to the other party pursuant to this Section 9(f) as long as the
mailing address and telecopy number is within the United States of America.
(g) Governing Law. This Agreement shall be governed in all respects by the
laws of the State of New York.
(h) Headings. The descriptive section headings herein have been inserted
for convenience only and shall not be deemed to limit or otherwise affect the
construction of any provisions hereof.
(i) Multiple Originals. The Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
(j) Assignment. Neither this agreement, nor any interest herein or any
rights hereunder, shall be assigned by either party without the prior written
consent of the other party.
(k) Waiver. Failure or delay on the part of either party to exercise any
right, remedy, power, privilege or option hereunder which is not subject to an
express time limitation with respect to exercise shall not operate or be
construed to operate as a waiver thereof. A waiver, to be effective, must be In
writing and be signed by the party making the waiver. No written waiver of any
term or condition of this Agreement shall operate or be construed to operate as
a waiver of any other term or condition, nor shall any written waiver of any
breach or default operate or be construed to operate as a waiver of any other
breach or default or of the same type of breach or default on a subsequent
occasion or operate or be construed to operate as a continuing waiver.
(1) Amendment. This Agreement may not be modified, altered nor amended in
any manner whatsoever, except by another written agreement executed by the
parties.
(m) Severability. If any of the articles, paragraphs, sections and/or
clauses of this Agreement is declared by judicial interpretation or construction
or otherwise to be null, void and/or unenforceable in any respect, such article,
paragraph, section and/or clause shall be deemed to be eliminated from this
Agreement, but the other parts of this Agreement shall remain in full force and
effect; provided, however, if the elimination of any part of this Agreement
materially affects any right, benefit, option or privilege of either party, the
parties agree to negotiate in good faith to replace such part with a substitute
valid and enforceable pan that achieves the intent and purpose of the eliminated
part.
9. DEFINITIONS.
For the purpose of this Agreement, the following terms shall have the
following meanings:
(a) "Person" shall include both the singular and the plural and shall mean
any individual, partnership, corporation, trust, unincorporated organization or
government or department or agency thereof.
(b) "Shares" shall mean the shares of Common Stock sold pursuant to this
Agreement and all other securities of the Company issued on account of ownership
thereof.
19
20
(c) "Subsidiary" shall mean any corporation with respect to which Premiere
or the Company, as the case may be, owns, directly or indirectly, a majority of
the voting shares, or shares or other interest entitling Premiere or the
Company, as the case may be, to elect a majority of the Board of Directors.
(d) To the extent not specifically defined herein, any accounting term used
herein shall have the meaning ordinarily accorded to it under generally accepted
accounting principles consistently applied.
20
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
PREMIERE NETWORKS INC. AUDIONET, INC.
By: /s/ XXXXX XXXXXX By: /s/ XXXX XXXXXX
------------------------------ ---------------------------
Title: President/CEO Title: CEO
-------------------------- ------------------------
21
