AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
DATED AUGUST 20, 1999
AMONG
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
WCGV, INC.
▇▇▇▇▇▇▇▇ RADIO OF MILWAUKEE LICENSEE, LLC
▇▇▇▇▇▇▇▇ RADIO OF NEW ORLEANS, LLC
▇▇▇▇▇▇▇▇ RADIO OF NEW ORLEANS LICENSEE, LLC
▇▇▇▇▇▇▇▇ RADIO OF MEMPHIS, INC.
▇▇▇▇▇▇▇▇ RADIO OF MEMPHIS LICENSEE, INC.
▇▇▇▇▇▇▇▇ PROPERTIES, LLC
▇▇▇▇▇▇▇▇ RADIO OF NORFOLK/GREENSBORO LICENSEE ▇.▇.
▇▇▇▇▇▇▇▇ RADIO OF NORFOLK LICENSEE, LLC
▇▇▇▇▇▇▇▇ RADIO OF BUFFALO, INC.
▇▇▇▇▇▇▇▇ RADIO OF BUFFALO LICENSEE, LLC
WLFL, INC.
▇▇▇▇▇▇▇▇ RADIO OF GREENVILLE LICENSEE, INC.
▇▇▇▇▇▇▇▇ RADIO OF ▇▇▇▇▇▇-▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ RADIO OF ▇▇▇▇▇▇-▇▇▇▇▇ LICENSEE, LLC.
as SELLERS,
AND
ENTERCOM COMMUNICATIONS CORP.
as BUYER
TABLE OF CONTENTS
1. CERTAIN DEFINITIONS............................................................................................3
1.1 Terms Defined in this Section...........................................................................3
1.2 Terms Defined Elsewhere in this Agreement...............................................................9
Greenville Stations....................................................................................10
2. EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE..................................................................11
2.1 Agreement to Exchange and Transfer.....................................................................11
2.2 Excluded Assets........................................................................................12
2.3 Purchase Price.........................................................................................14
Purchase Price Increase................................................................................14
Prorations.............................................................................................14
Manner of Determining Adjustments......................................................................16
2.4 Payment of Purchase Price..............................................................................16
Payment of Estimated Purchase Price At Closing.........................................................17
Payments to Reflect Adjustments........................................................................17
2.5 Assumption of Liabilities and Obligations..............................................................17
3. REPRESENTATIONS AND WARRANTIES OF SELLERS.....................................................................18
3.1 Organization and Authority of Sellers..................................................................18
3.2 Authorization and Binding Obligation...................................................................18
3.3 Absence of Conflicting Agreements; Consents............................................................18
3.4 Governmental Licenses..................................................................................19
3.5 Real Property..........................................................................................19
3.6 Tangible Personal Property.............................................................................20
3.7 Contracts..............................................................................................21
3.8 Intangibles............................................................................................21
3.9 Title to Properties....................................................................................21
3.10 Financial Statements...................................................................................22
3.11 Taxes..................................................................................................22
3.12 Insurance..............................................................................................22
3.13 Reports................................................................................................22
3.14 Personnel and Employee Benefits........................................................................22
Employees and Compensation.............................................................................22
Pension Plans..........................................................................................23
Welfare Plans..........................................................................................23
Benefit Arrangements...................................................................................24
Multiemployer Plans....................................................................................24
Delivery of Copies of Relevant Documents and Other Information.........................................24
Labor Relations........................................................................................24
3.15 Claims and Legal Actions...............................................................................24
3.16 Environmental Compliance...............................................................................25
3.17 Compliance with Laws...................................................................................25
3.18 Conduct of Business in Ordinary Course.................................................................25
3.19 Transactions with Affiliates...........................................................................26
3.20 Broker.................................................................................................26
3.21 Insolvency Proceedings.................................................................................26
3.22 Year 2000 Compatibility................................................................................26
4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................................................26
4.1 Organization, Standing and Authority...................................................................26
4.2 Authorization and Binding Obligation...................................................................27
4.3 Absence of Conflicting Agreements and Required Consents................................................27
4.4 Brokers................................................................................................27
4.5 Availability of Funds..................................................................................27
4.6 Qualifications of Buyer................................................................................27
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4.7 WARN Act...............................................................................................28
4.8 Buyer's Defined Contribution Plan......................................................................28
5. OPERATION OF THE STATIONS PRIOR TO CLOSING....................................................................28
5.1 Contracts..............................................................................................28
5.2 Compensation...........................................................................................28
5.3 Encumbrances...........................................................................................29
5.4 Dispositions...........................................................................................29
5.5 Access to Information..................................................................................29
5.6 Insurance..............................................................................................29
5.7 Licenses...............................................................................................29
5.8 Obligations............................................................................................29
5.9 No Inconsistent Action.................................................................................29
5.10 Maintenance of Assets..................................................................................29
5.11 Consents...............................................................................................30
5.12 Books and Records......................................................................................30
5.13 Notification...........................................................................................30
5.14 Financial Information..................................................................................31
5.15 Compliance with Laws...................................................................................31
5.16 Programming............................................................................................31
5.17 Preservation of Business...............................................................................31
5.18 Normal Operations......................................................................................31
5.19 Buffalo Build-Out Property.............................................................................31
6. SPECIAL COVENANTS AND AGREEMENTS..............................................................................31
6.1 FCC Consent............................................................................................31
6.2 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇......................................................................................32
6.3 Risk of Loss...........................................................................................32
6.4 Confidentiality........................................................................................32
6.5 Cooperation............................................................................................32
6.6 Control of the Stations................................................................................33
6.7 Accounts Receivable....................................................................................33
6.8 Allocation of Purchase Price...........................................................................34
6.9 Access to Books and Records............................................................................34
6.10 Employee Matters.......................................................................................35
Certain Payments.......................................................................................36
6.11 Lease..................................................................................................37
6.12 Public Announcements...................................................................................37
6.13 Disclosure Schedules...................................................................................37
6.14 Bulk Sales Law.........................................................................................38
6.15 Environmental Site Assessment..........................................................................38
6.16 Purchase of Advertising Time...........................................................................39
6.17 Adverse Developments...................................................................................39
6.18 Title Insurance........................................................................................39
6.19 Surveys................................................................................................39
6.20 Pending Transactions...................................................................................39
6.21 Assignment of Contracts for Pending Transactions.......................................................39
6.22 Cooperation on Tax Matters...................................................ERROR! BOOKMARK NOT DEFINED.
6.23 Reference to Original Agreement........................................................................40
7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER.................................................................40
7.1 Conditions to Obligations of Buyer.....................................................................40
Representations and Warranties.........................................................................40
Covenants and Conditions...............................................................................40
FCC Consent............................................................................................40
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇......................................................................................41
Governmental Authorizations............................................................................41
Consents...............................................................................................41
Lease..................................................................................................41
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Deliveries.............................................................................................41
Satisfactory Environmental Assessment..................................................................41
7.2 Conditions to Obligations of Sellers...................................................................41
Representations and Warranties.........................................................................41
Covenants and Conditions...............................................................................41
FCC Consent............................................................................................42
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇......................................................................................42
Deliveries.............................................................................................42
8. CLOSING AND CLOSING DELIVERIES................................................................................42
8.1 Closing................................................................................................42
Closing Date...........................................................................................42
Closing Place..........................................................................................43
8.2 Deliveries by Sellers..................................................................................43
Conveyancing Documents.................................................................................43
Officer's Certificate..................................................................................43
Secretary's Certificate................................................................................44
Consents...............................................................................................44
Good Standing Certificates.............................................................................44
Opinions of Counsel....................................................................................44
Lease..................................................................................................44
Other Documents........................................................................................44
8.3 Deliveries by Buyer....................................................................................44
Closing Payment........................................................................................44
Officer's Certificate..................................................................................44
Secretary's Certificate................................................................................45
Assumption Agreements..................................................................................45
Good Standing Certificates.............................................................................45
Oinion of Counsel......................................................................................45
Lease..................................................................................................45
Other Documents........................................................................................45
9. TERMINATION..................................................................................................45
9.1 Termination by Mutual Consent..........................................................................45
9.2 Termination by Seller..................................................................................45
9.3 Termination by Buyer...................................................................................46
9.4 Rights on Termination..................................................................................47
9.5 Liquidated Damages Not a Penalty.......................................................................47
9.6 Specific Performance...................................................................................47
9.7 Attorneys' Fees........................................................................................47
9.8 Survival...............................................................................................47
9.9 Limitations of Termination.............................................................................47
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES.............................................................................................48
10.1 Survival of Representations............................................................................48
10.2 Indemnification by Seller..............................................................................48
10.3 Indemnification by Buyer...............................................................................49
10.4 Procedure for Indemnification..........................................................................49
10.5 Certain Limitations....................................................................................50
11. MISCELLANEOUS...............................................................................................51
11.1 Fees and Expenses......................................................................................51
11.2 Notices................................................................................................52
11.3 Benefit and Binding Effect.............................................................................53
11.4 Further Assurances.....................................................................................53
11.4 GOVERNING LAW..........................................................................................53
11.6 Entire Agreement.......................................................................................54
11.7 Waiver of Compliance; Consents.........................................................................54
11.8 Headings...............................................................................................54
11.9 Counterparts...........................................................................................54
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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this "Agreement")
is entered into on August 20, 1999, but is effective as of August 18, 1999, by
and among ▇▇▇▇▇▇▇▇ Communications, Inc., a Maryland corporation ("SCI"), WCGV,
Inc., a Maryland corporation ("WCGV"), ▇▇▇▇▇▇▇▇ Radio of Milwaukee Licensee,
LLC, a Maryland limited liability company ("MILWAUKEE LICENSEE"), ▇▇▇▇▇▇▇▇ Radio
of New Orleans, LLC, a Maryland limited liability company ("▇▇▇▇▇▇▇▇ NEW
ORLEANS"), ▇▇▇▇▇▇▇▇ Radio of New Orleans Licensee, LLC, a Maryland limited
liability company ("NEW ORLEANS LICENSEE"), ▇▇▇▇▇▇▇▇ Radio of Memphis, Inc., a
Maryland corporation ("▇▇▇▇▇▇▇▇ MEMPHIS"), ▇▇▇▇▇▇▇▇ Radio of Memphis Licensee,
Inc., a Delaware corporation ("MEMPHIS LICENSEE"), ▇▇▇▇▇▇▇▇ Properties, LLC, a
Virginia limited liability company ("PROPERTIES"), ▇▇▇▇▇▇▇▇ Radio of
Norfolk/Greensboro Licensee L.P., a Virginia limited partnership
("NORFOLK/GREENSBORO LICENSEE"), ▇▇▇▇▇▇▇▇ Radio of Norfolk Licensee, LLC, a
Maryland limited liability company ("NORFOLK LICENSEE"), ▇▇▇▇▇▇▇▇ Radio of
Buffalo, Inc., a Maryland corporation ("▇▇▇▇▇▇▇▇ BUFFALO"), ▇▇▇▇▇▇▇▇ Radio of
Buffalo Licensee, LLC, a Maryland limited liability company ("BUFFALO
LICENSEE"), WLFL, Inc., a Maryland corporation ("WLFL"), ▇▇▇▇▇▇▇▇ Radio of
Greenville Licensee, Inc., a Delaware corporation ("GREENVILLE LICENSEE"),
▇▇▇▇▇▇▇▇ Radio of ▇▇▇▇▇▇-▇▇▇▇▇, Inc., a Maryland corporation ("▇▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇"), and ▇▇▇▇▇▇▇▇ Radio of ▇▇▇▇▇▇-▇▇▇▇▇ Licensee, LLC, a Maryland
limited liability company ("▇▇▇▇▇▇-▇▇▇▇▇ LICENSEE") (each a "SELLER" and
collectively, "SELLERS"), and Entercom Communications Corp., a Pennsylvania
corporation ("BUYER").
This Agreement amends and restates in its entirety the Asset Purchase
Agreement dated as of August 18, 1999 by and between Sellers, the Kansas City
Sellers and Buyer (the "Original Purchase Agreement"). All references herein to
"date hereof" and "date of this Agreement" shall mean August 18, 1999, and all
representations and warranties made herein shall be deemed to have been made as
of August 18, 1999. The Exhibits and Schedules attached to the Original Purchase
Agreement are hereby superceded by the Exhibits and Schedules attached hereto.
R E C I T A L S:
WHEREAS, Properties operates radio broadcast stations WPTE-FM, Virginia
Beach, VA; WWDE-FM, Hampton, VA; and WNVZ-FM, Norfolk, VA (collectively, the
"NORFOLK STATIONS") WVKL-FM, Norfolk VA ("WVKL") and WMQX-FM, Winston-Salem, NC;
WQMG-FM, Greensboro, NC; WJMH-FM, Reidsville, NC; and WEAL-AM, Greensboro, NC
(collectively, the "GREENSBORO STATIONS") and owns or leases certain assets used
in connection with the Norfolk Stations, WVKL and the Greensboro Stations;
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WHEREAS, WCGV operates radio broadcast stations WEMP-AM, Milwaukee, WI;
WMYX-FM, Milwaukee, WI; and WXSS-FM, Wauwatosa, WI (collectively, the "MILWAUKEE
STATIONS") and owns or leases certain assets used in connection with the
Milwaukee Stations;
WHEREAS, Milwaukee Licensee is the licensee of each of the Milwaukee
Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, ▇▇▇▇▇▇▇▇ New Orleans operates radio broadcast stations
WLMG-FM, New Orleans, LA; WWL-AM, New Orleans, LA; WSMB-AM, New Orleans, LA; and
WEZB-FM, New Orleans, LA (collectively, the "NEW ORLEANS STATIONS") and owns or
leases certain assets used in connection with the New Orleans Stations;
WHEREAS, New Orleans Licensee is the licensee of each of the New
Orleans Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, ▇▇▇▇▇▇▇▇ New Orleans operates radio broadcast stations
WLTS-FM, Kenner, LA; and WTKL-FM, New Orleans, LA (collectively, the "PHASE II
STATIONS"), pursuant to a time brokerage agreement (the "PHASE II TBA") with
Phase II Broadcasting, Inc. ("PHASE II") and has entered into an agreement (the
"PHASE II PURCHASE AGREEMENT") with Phase II to acquire substantially all the
assets of the Phase II Stations from Phase II;
WHEREAS, ▇▇▇▇▇▇▇▇ Memphis operates radio broadcast stations WRVR-FM,
Memphis, TN; WJCE-AM, Memphis, TN and WOGY-FM, Germantown, TN (collectively, the
"MEMPHIS Stations") and owns or leases certain assets used in connection with
the Memphis Stations;
WHEREAS, Memphis Licensee is the licensee of each of the Memphis
Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, Norfolk/Greensboro Licensee is the licensee of each of the
Norfolk Stations and each of the Greensboro Stations pursuant to certain
authorizations issued by the FCC;
WHEREAS, Norfolk Licensee is the licensee of WVKL pursuant to certain
authorizations issued by the FCC;
WHEREAS, ▇▇▇▇▇▇▇▇ Buffalo operates radio broadcast stations WMJQ-FM,
Buffalo, NY, WKSE-FM, Niagara Falls, NY; WBEN-AM, Buffalo, NY; WWKB-AM, Buffalo,
NY; WGR-AM, Buffalo, NY: and WWWS-AM, Buffalo, NY (collectively, the "BUFFALO
STATIONS") and owns or leases certain assets used in connection with the Buffalo
Stations;
WHEREAS, Buffalo Licensee is the licensee of each of the Buffalo
Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, WLFL operates radio broadcast stations WFBC-FM, Greenville, SC
and WSPA-FM, Spartanburg, SC; WYRD-AM, Greenville, SC; WORD-AM, Spartanburg, SC;
and WSPA-AM, Spartanburg, SC (collectively, the "GREENVILLE STATIONS") and owns
or leases certain assets used in connection with the Greenville Stations;
2
WHEREAS, Greenville Licensee is the licensee of each of the Greenville
Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, WLFL provides sales services to radio broadcast stations
WOLI-FM, Easely, SC and WOLT-FM, Greer, SC (the "PALM STATIONS"), pursuant to
joint sales agreement with Palm Broadcasting, Inc. (the "PALM JSA") and has
exercised an option to purchase the Palm Stations pursuant to an option
agreement with Palm Broadcasting, Inc. (the "PALM OPTION AGREEMENT");
WHEREAS, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇, operates radio broadcast stations
WGGI-FM, ▇▇▇▇▇▇, PA; WKRZ-FM, ▇▇▇▇▇▇-▇▇▇▇▇, PA; WGGY-FM, Scranton, PA; ▇▇▇▇-AM,
▇▇▇▇▇▇-▇▇▇▇▇, PA: WGBI-AM, Scranton, PA; WSHG-FM, Pittston, PA; WILP-AM, West
▇▇▇▇▇▇▇▇, PA; WWFH-FM, Freeland, PA; and WKRF-FM, Tobyhanna, PA (collectively,
the "▇▇▇▇▇▇-▇▇▇▇▇ STATIONS") and owns or leases certain assets used in
connection with the ▇▇▇▇▇▇-▇▇▇▇▇ Stations;
WHEREAS, ▇▇▇▇▇▇-▇▇▇▇▇ Licensee is the licensee of each of the
▇▇▇▇▇▇-▇▇▇▇▇ Stations pursuant to certain authorizations issued by the FCC;
WHEREAS, the parties hereto desire to enter into this Agreement to
provide for the sale, assignment and transfer by Sellers to Buyer of certain of
the assets owned, leased or used by Sellers in connection with the business and
operations of the Palm Stations and the Phase II Stations (collectively, the
"Non-Owned Stations") and the Milwaukee Stations, the New Orleans Stations, the
Memphis Stations, the Norfolk Stations, WVKL, the Greensboro Stations, the
Buffalo Stations, the Greenville Stations, and the ▇▇▇▇▇▇-▇▇▇▇▇ Stations (each
[including the Non-Owned Stations) a "STATION" and collectively, the
"STATIONS");
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
SECTION 1: CERTAIN DEFINITIONS
1.1 Terms Defined in this Section. The following terms, as used in this
Agreement, have the meanings set forth in this Section:
"ACCOUNTS RECEIVABLE" means the rights of Sellers as of any Closing
Date to payment in cash for the sale of advertising time and other goods and
services by the Stations prior to any Closing Date.
"AFFILIATE" means, with respect to any Person, (a) any other Person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person, or (b) an officer or
director of such Person or of an Affiliate of such Person within the meaning of
clause (a) of this
3
definition. For purposes of clause (a) of this definition, (i) a Person shall be
deemed to control another Person if such Person (A) has sufficient power to
enable such Person to elect a majority of the board of directors of such Person,
or (B) owns a majority of the beneficial interests in income and capital of such
Person; and (ii) a Person shall be deemed to control any partnership of which
such Person is a general partner.
"ALLOCABLE ESCROW DEPOSIT" means that portion of the Escrow Deposit
equaling $42,601,575.00.
"ASSETS" means the assets to be transferred or otherwise conveyed by
Sellers to Buyer under this Agreement, as specified in Section 2.1.
"ASSUMED CONTRACTS" means (a) all Contracts set forth on Schedule 3.7,
(b) Contracts entered into prior to the date of this Agreement with advertisers
for the sale of advertising time or production services for cash at rates
consistent with past practices, (c) Contracts entered into by any Seller prior
to the date of this Agreement which are not required to be included on Schedule
3.7 hereto, (d) any Contracts entered into by Sellers between the date of this
Agreement and the Closing Date that Buyer agrees in writing to assume, and (e)
other contracts entered into by Sellers between the date of this Agreement and
the Closing Date in compliance with Section 5.
"BUFFALO BUILD-OUT PROPERTY" shall have the meaning set forth in
Section 2.3(b)(iv).
"CLOSING" means the consummation of the exchange and acquisition of the
Assets pursuant to this Agreement on either one or more Closing Date in
accordance with the provisions of Section 8.1.
"CLOSING DATE" means the date on which a Closing occurs, as determined
pursuant to Section 8.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CONSENTS" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"CONTAMINANT" shall mean and include any pollutant, contaminant,
hazardous material (as defined in any of the Environmental Laws), toxic
substances (as defined in any of the Environmental Laws), asbestos or asbestos
containing material, urea formaldehyde, polychlorinated biphenyls, regulated
substances and wastes, radioactive materials, and petroleum or petroleum
by-products, including crude oil or any fraction thereof, except the term
"Contaminant" shall not include small quantities of maintenance, cleaning and
emergency generator fuel supplies customary for the operation of radio stations
and maintained in compliance with all Environmental Laws in the ordinary course
of business.
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"CONTRACTS" means all contracts, consulting agreements, leases,
non-governmental licenses and other agreements (including leases for personal or
real property and employment agreements), written or oral (including any
amendments and other modifications thereto) to which ▇▇▇▇▇▇▇▇, SCI, or any
Seller is a party or that are binding upon any Seller, that relate to or affect
the Assets or the business or operations of the Stations, and that either (a)
are in effect on the date of this Agreement, including (without limitation) the
Phase II TBA, the Phase II Purchase Agreement, the Palm JSA, the Palm Option
Agreement, and those listed on Schedule 3.7 hereto, or (b) are entered into by
any Seller between the date of this Agreement and the Closing Date.
"DELAY AMOUNT" shall equal 0.75% of the amount which is the Initial
Purchase Price, less any portion of the Initial Purchase Price which has been
received by Sellers pursuant to any Closings which have occurred prior to the
time such payment is due.
"DEPOSIT RELEASE DATE" is the date on which a Closing has occurred for
Radio Groups for which more than forty-five percent (45%) of the Initial
Purchase Price has been paid to Sellers.
"EFFECTIVE TIME" means 12:01 a.m., Eastern time, on each Closing Date
and the Closing Date for the Kansas City Stations.
"ENVIRONMENTAL LAWS" shall mean and include, but not be limited to, any
applicable federal, state or local law, statute, charter, ordinance, rule or
regulation or any governmental agency interpretation, policy or guidance,
including without limitation applicable safety/environmental/health laws such as
but not limited to the Resource Conservation and Recovery Act of 1976,
Comprehensive Environmental Response Compensation and Liability Act, Federal
Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the Clean
Water Act, and the Toxic Substance Control Act, as any of the foregoing have
been amended, and any permit, order, directive, court ruling or order or consent
decree applicable to or affecting the Property or any other property (real or
personal) used by or relating to the Station in question promulgated or issued
pursuant to any Environmental Laws which pertains to, governs, or controls the
generation, storage, remediation or removal of Contaminants or otherwise
regulates the protection of health and the environment including, but not
limited to, any of the following activities, whether on site or off site if such
could materially affect the site: (i) the emission, discharge, release, spilling
or dumping of any Contaminant into the air, surface water, ground water, soil or
substrata; or (ii) the use, generation, processing, sale, recycling, treatment,
handling, storage, disposal, transportation, labeling or any other management of
any Contaminant.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW DEPOSIT" means the sum of Fifty Million Dollars
($50,000,000.00) or, at Buyer's option, a letter of credit in favor of Sellers
in the face amount of Fifty Million Dollars ($50,000,000.00), which was
deposited by Buyer with First Union National Bank (the "ESCROW AGENT") on August
18, 1999 to secure the obligations of Buyer to close under this Agreement and
the Kansas City Agreement, with (i) such deposit being held by the Escrow Agent
in
5
accordance with the Escrow Agreement executed among Buyer, Sellers and Escrow
Agent on August 18, 1999, and (ii) the Escrow Deposit, and all earnings thereon,
being returned to Buyer upon the consummation of this Agreement and the Kansas
City Agreement or as otherwise provided herein.
"EXCESS AMOUNT" has the meaning set forth in Section 10.5.
"EXCLUDED REAL PROPERTY INTERESTS" means all interests in Real Property
listed on Schedule 2.2 hereto.
"EXCLUDED TANGIBLE PERSONAL PROPERTY" means all tangible personal
property owned or held by Sellers that is located at the Excluded Real Property
other than such tangible personal property listed on Schedule 3.6 hereto, any
assets used primarily in the operation of any television broadcast station
owned, operated or programmed by Sellers or any Affiliate of Sellers, any assets
used primarily in the operation of any radio broadcast station owned, operated
or programmed by Sellers, but not included as a "Station" hereunder, and any
tangible personal property located at Suite 220, Meadow Mill at ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"FCC" means the Federal Communications Commission.
"FCC CONSENT" means action by the FCC granting its consent to the
transfer of the FCC Licenses by Sellers to Buyer as contemplated by this
Agreement.
"FCC LICENSES" means those licenses, permits and authorizations issued
by the FCC to Sellers in connection with the business and operations of the
Stations.
"FINAL CLOSING DATE" means the date on which all of the Assets for all
of the Stations have been exchanged and acquired in accordance with Section 8.1.
"FINAL ORDER" shall mean an action by the Commission upon any
application for FCC Consent filed by the parties hereto for FCC consent,
approval or authorization, which action has not been reversed, stayed, enjoined,
set aside, annulled or suspended, and with respect to which action, no protest,
petition to deny, petition for rehearing or reconsideration, appeal or request
for stay is pending, and as to which action the time for filing of any such
protest, petition, appeal or request and any period during which the Commission
may reconsider or review such action on its own authority has expired.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Acts of 1976, as amended, and all Laws promulgated pursuant thereto or in
connection therewith.
"INTANGIBLES" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by
Sellers or under which Sellers are licensed or franchised and that are used in
the business and
6
operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"KANSAS CITY AGREEMENT" means that certain Asset Purchase Agreement
dated as of the date hereof (but effective August 18, 1999) by and between the
Kansas City Sellers and Buyer pursuant to which the Kansas City Sellers have
agreed to sell, and Buyer has agreed to purchase, the Kansas City Stations.
"KANSAS CITY SELLERS" means ▇▇▇▇▇▇▇▇ Media III, Inc. and ▇▇▇▇▇▇▇▇ Radio
of Kansas City Licensee, LLC.
"KANSAS CITY STATIONS" means KCFX-FM, Harrisonville, MO; KQRC-FM,
Leavenworth, KS; KCIY-FM, Liberty, MO; and KXTR-FM, Kansas City, MO.
"KNOWLEDGE" or any derivative thereof with respect to the Sellers
means, exclusively, the actual Knowledge of the President and Chief Executive
Officer or the Chief Financial Officer of ▇▇▇▇▇▇▇▇ Broadcast Group, Inc.
("▇▇▇▇▇▇▇▇"), the general managers of the Stations, and any other employee of
▇▇▇▇▇▇▇▇ or SCI designated as a "vice president" or any officer of any of the
Sellers.
"LEASED REAL PROPERTY" means all real property and all buildings and
other improvements thereon and appurtenant thereto leased or held by Sellers and
used in the business or operation of the Stations.
"LICENSES" means all licenses, permits, construction permits and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Sellers, currently in
effect and used in connection with the conduct of the business or operations of
the Stations (other than the Non-Owned Stations), together with any additions
thereto between the date of this Agreement and the Closing Date.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets or financial condition of the Stations taken as a whole, except
for any such material adverse effect resulting from (a) general economic
conditions applicable to the radio broadcast industry, (b) general conditions in
the markets in which the Stations operate, or (c) circumstances that are not
likely to recur and either have been substantially remedied or can be
substantially remedied without substantial cost or delay.
"MATERIAL CONTRACT" means those Assumed Contracts that are designated
on Schedules 3.5 and 3.7 as "Material Contracts."
"OWNED REAL PROPERTY" means all real property and all buildings and
other improvements thereon and appurtenant thereto owned by Sellers and used in
the business or operations of the Stations.
"PALM AMOUNT" shall equal either (a) $0 if the acquisition of the Palm
Stations by WLFL shall have occurred prior to Closing applicable to the Palm
Stations, or (b) the purchase
7
price which Buyer would be required to pay to acquire the Palm Stations,
including, after taking into account the application of any deposit made
pursuant to the acquisition agreement without regard to prorations or similar
adjustments.
"PENDING TRANSACTION AMOUNT" means the sum of the Phase II Amount and
the Palm Amount.
"PERMITTED ENCUMBRANCES" means (a) encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord's liens arising in the
ordinary course of business, (b) encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Contracts
set forth on the Schedules, which Contracts have been made available to Buyer,
(c) encumbrances for Taxes not yet delinquent or which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on Sellers' books in accordance with generally accepted
accounting principles, or (d) encumbrances that do not materially detract from
the value of any of the Assets or materially interfere with the use thereof as
currently used.
"PERSON" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"PHASE II AMOUNT" shall equal either (a) $0 if the acquisition of the
Phase II Stations by ▇▇▇▇▇▇▇▇ Radio of New Orleans, Inc. shall have occurred
prior to Closing applicable to the Phase II Stations, or (b) the purchase price
which Buyer would be required to pay to acquire the Phase II Stations,
including, after taking into account the application of any deposit made
pursuant to the acquisition agreement, without regard to prorations or similar
adjustments.
"RADIO GROUP" means the Stations located in the same Designated Market
Area as determined by the Arbitron Company.
"RADIO GROUP FCC CONSENT" means receipt of initial grant of the FCC
Consents as to each of the Stations in any Radio Group.
"RADIO ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ADVERSE EFFECT" means a material adverse effect
on the business, assets, or financial condition of a Radio Group taken as a
whole, except for any such material adverse effect resulting from (a) general
economic conditions applicable to the radio broadcast industry, (b) general
conditions in the markets in which the Stations comprising the Radio Group
operate, or (c) circumstances that are not likely to recur and have either been
substantially remedied or can be substantially remedied without substantial cost
or delay.
"REAL PROPERTY" means all real property and all buildings and other
improvements thereon and appurtenant thereto, whether or not owned, leased or
held by Sellers used in the business or operations of the Stations.
"REAL PROPERTY INTERESTS" means all interests in Owned Real Property
and Leased Real Property, including fee estates, leaseholds and subleaseholds,
purchase options, easements, licenses, rights to access, and rights of way, and
all buildings and other improvements thereon
8
and appurtenant thereto, owned or held by Sellers that are used in the business
or operations of the Stations, together with any additions, substitutions and
replacements thereof and thereto between the date of this Agreement and the
Closing Date, but excluding the Excluded Real Property Interests.
"TANGIBLE PERSONAL PROPERTY" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property owned or held by Sellers that
is used or useful in the conduct of the business or operations of the Stations,
together with any additions, substitutions and replacements thereof and thereto
between the date of this Agreement and the Closing Date, but excluding the
Excluded Tangible Personal Property.
"TAX" means any federal, state, local, or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or other
tax or similar governmental assessment, together with any interest, additions,
or penalties with respect thereto and any interest in respect of such additions
or penalties.
"TAX RETURN" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing required to be
submitted to any governmental authority with respect to any Tax.
"THRESHOLD AMOUNT" has the meaning set forth in Section 10.5.
"UNEXPENDED REMEDIATION AMOUNT" shall mean Three Million Dollars
($3,000,000.00) as aggregated with the Unexpended Remediation Amount under the
Kansas City Agreement, minus any amounts previously expended by Sellers to
remediate any of the Real Property pursuant to Section 6.16.
"USA DIGITAL SHARES" means the 300,000 shares of common stock of USA
Digital Radio, Inc. of which Sellers are the record owner.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth in the sections indicated:
Term Section
---- -------
Balance Sheet Date Section 3.10
Benefit Arrangement Section 3.14 (a)(v)
Benefit Plans Section Section 3.14(a)(ii)
Buffalo Stations Recitals
Buyer Preamble
Buyer's Plan Section 4.8
Claimant Section 10.4
9
Collection Period Section 6.7(a)
Confidentiality Agreement Section 6.4
Deferred Contract Section 5.11(b)
Designee Section 11.3(b)
Employees Section 3.14(a)
Environmental Laws Section 3.16
Estimated Purchase Price Section 2.4(a)
Excluded Real Property Interests Section 1.1
Excluded Tangible Personal Property Section 1.1
FCC Objection Section 7.1(c)
FTC Section 4.6
Financial Statements Section 3.10
Greensboro Stations Recitals
Greenville Stations Recitals
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filing Section 6.2
Indemnity Cap Section 10.5
Indemnifying Party Section 10.4
Initial Employee Cap Section 6.10(g)
Initial Purchase Price Section 2.3
Lease Section 6.12
Memphis Stations Recitals
Milwaukee Stations Recitals
Multiemployer Plan Section 3.14(a)(ii)
New Orleans Stations Recitals
Non-Owned Stations Recitals
Operational Equipment Section 3.22
Original Agreement Recitals
Norfolk Stations Recitals
Palm Amount Section 1.1
Palm JSA Recitals
Palm Option Agreement Recitals
Palm Stations Recitals
10
Pension Plan Section 3.14(a)(iii)
Phase II Recitals
Phase II Amount Section 1.1
Phase II Purchase Agreement Recitals
Phase II Stations Recitals
Phase II TBA Recitals
Purchase Price Section 2.3
Radio Group Section 1.1
Reimbursement Period Section 6.10(g)
Represented Employees Section 6.10(e)
Scheduled Employees Section 6.10(g)
Scheduled Retention Agreements Section 6.10(g)
SCI Preamble
Section 6.9 Amount Section 6.19
Seller Preamble
Seller Entities Section 6.10(i)
Sellers' Employees Section 6.10(i)
▇▇▇▇▇▇▇▇ Section 1.1
Stations Recitals
Stations Delay Amount Section 2.3(a)(i)
Stations Delay Amount Date Section 2.3(a)(i)
Transferred Employees Section 6.10
WVKL Recitals
Welfare Plan Section 3.14(a)(i)
▇▇▇▇▇▇-▇▇▇▇▇ Stations Recitals
SECTION 2: EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE
2.1 Agreement to Exchange and Transfer. Subject to the terms and conditions
set forth in this Agreement with respect to the Stations or any Radio Group,
Sellers hereby agree to transfer, convey, assign and deliver to Buyer on one
or more Closing Dates as applicable, and Buyer agrees to acquire, all of
Sellers' right, title and interest in the tangible and intangible assets used
in connection with the conduct of the business or operations of the Stations
or any Radio Group, as the case may be, together with any additions thereto
between the date of this Agreement and the applicable Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, charges, or
11
encumbrances of any nature whatsoever (except for Permitted Encumbrances),
including the following:
(a) The Tangible Personal Property;
(b) The Real Property Interests;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill of the Stations, if any;
(f) The USA Digital Shares.
(g) All of Sellers' proprietary information, technical information and
data, machinery and equipment warranties, maps, computer discs and tapes, plans,
diagrams, blueprints and schematics, including filings with the FCC, in each
case to the extent relating to the business and operation of the Stations;
(h) All choses in action of Sellers relating to the Stations to the
extent they relate to the period after the Effective Time; and
(i) All books and records relating to the business or operations of
the Stations, including executed copies of the Assumed Contracts, and all
records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following:
(a) Sellers' cash, cash equivalents and deposits, all interest payable
in connection with any such items and rights in and to bank accounts, marketable
and other securities and similar investments of Sellers;
(b) Any insurance policies, promissory notes, amounts due to Sellers
from employees, bonds, letters of credit, certificates of deposit, or other
similar items, and any cash surrender value in regard thereto; provided, that in
the event Seller is obligated to assign to Buyer the proceeds of any such
insurance policy at the time a Closing occurs under Section 6.3, such proceeds
shall be included in the Assets;
(c) Any pension, profit-sharing, or employee benefit plans, including
all of Sellers' interest in any Welfare Plan, Pension Plan or Benefit
Arrangement (each as defined in Section 3.14(a);
(d) All Tangible Personal Property disposed of or consumed in the
ordinary course of business as permitted by this Agreement;
12
(e) All Tax Returns and supporting materials, all original financial
statements and supporting materials, all books and records that Sellers are
required by law to retain, all of Sellers' organizational documents, corporate
books and records (including minute books and stock ledgers) and originals of
account books of original entry, all records of Sellers relating to the sale of
the Assets and all records and documents related to any assets excluded pursuant
to this Section 2.2;
(f) Any interest in and to any refunds of federal, state, or local
franchise, income, or other taxes for periods (or portions thereof) ending on or
prior to the Closing Date;
(g) All Accounts Receivable;
(h) All rights and claims of Sellers whether mature, contingent or
otherwise, against third parties relating to the Assets of the Stations, whether
in tort, contract or otherwise, other than rights and claims against third
parties relating to the Assets which have as their basis loss, damage or
impairment of or to any of the Assets and which loss, damage or impairment has
not been restored or repaired prior to any Closing in which any of the Assets
which has been so damaged or impaired is being acquired by Buyer (or in the case
of a lost asset, that would have been acquired but for such loss);
(i) Any Contracts which are not Assumed Contracts;
(j) All of each Sellers' deposits and prepaid expenses; provided, any
deposits and prepaid expenses shall be included in the Assets to the extent that
Sellers receive a credit therefor in the proration of the Purchase Price
pursuant to Section 2.3(b);
(k) All rights of Sellers under or pursuant to this Agreement (or any
other agreements contemplated hereby);
(l) All rights to the names ▇▇▇▇▇▇▇▇ Broadcast Group, "▇▇▇▇▇▇▇▇
Communications," ▇▇▇▇▇▇▇▇ and any logo or variation thereof and goodwill
associated therewith;
(m) The Excluded Real Property Interests;
(n) The Excluded Tangible Personal Property;
(o) All assets owned by the Sellers and used in connection with any
television or radio broadcast stations owned and/or programmed by any of the
Sellers or Sellers have the right to acquire other than the Stations, including
(without limitation) all assets related to Sellers' operation and ownership of
the Interstate Road Network and the Road Gang Coast to Coast Network; KPNT-FM,
St. ▇▇▇▇▇▇▇▇▇, MO; WVRV-FM, East St. Louis, IL; WIL-FM, St. Louis, MO; WRTH-AM,
St. Louis, MO; KIHT-FM, St. Louis, MO; KXOK-FM, St. Louis, MO; KUPN-AM, Mission,
KS; KCFX-FM, Harrisonville, MO; KQRC-FM, Leavenworth, KS; KCIY-FM, Liberty, MO;
and KXTR-FM, Kansas City, MO;
13
(p) All shares of capital stock, partnership interests, interests in
limited liability companies or other equity interest, including, but not limited
to, any options, warrants or voting trusts relating thereto which are owned by
Sellers and not expressly specified in Section 2.1.
2.3 Purchase Price. The purchase price of the Assets shall be the excess of the
sum of (i) Seven Hundred Two Million Five Hundred Thousand Dollars
($702,500,000) (the "Initial Purchase Price"), plus the Section 6.9 Amount over
(ii) the "Pending Transaction Amount," adjusted as provided below (the "PURCHASE
PRICE").
(a) Purchase Price Increase. Except as otherwise provided in this
Agreement, the Initial Purchase Price shall be increased by the Delay Amount
upon the occurrence of any of the following events:
(i) one hundred thirty five (135) days following public notice
by the FCC that applications for FCC Consent have been accepted for filing (the
"Stations Delay Amount Date") if Closing has not occurred with respect to all
Stations other than the Kansas City Stations due to the failure to receive any
necessary regulatory consent, including, but not limited to, the FCC Consent,
any Radio Group FCC Consent, or expiration or termination under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, as a result of facts relating to Buyer or its Affiliates,
including, without limitation, such facts as are disclosed on Schedule 4.6
hereto, provided, that such Delay Amount shall be applied to the Initial
Purchase Price only for those Stations for which a Closing has not occurred
prior to the Stations Delay Amount Date, as allocated on Schedule 6.8 (the
"Stations Delay Amount"); and
(ii) [RESERVED]
(iii) each thirty (30) day period subsequent to the occurrence
of the Stations Delay Amount Date as to the Station Delay Amount until the later
to occur of (x) the Closing, or (y) termination of this Agreement in accordance
with its terms.
The Purchase Price and any increase due pursuant to this Section 2.3(a)
shall be paid at Closing or pro rata (based on the allocation of the Initial
Purchase Price among the Radio Groups) at a Radio Group Closing.
(b) Prorations. The Purchase Price shall be increased or decreased as
required to effectuate the proration of revenues and expenses, as set forth
below. All revenues and all expenses arising from the operation of the Stations
or Radio Group which are the subject of any Closing, including tower rental,
business and license fees, utility charges, real property and personal property
and other similar Taxes and assessments levied against or with respect to the
Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, payments due under film or programming license
agreements, and employee compensation, including wages (including bonuses which
constitute wages), salaries, accrued sick leave, severance pay and related Taxes
shall be prorated between Buyer and Sellers as to those Stations for which a
Closing is to be held in accordance with the principle that Sellers shall
receive all revenues and shall be responsible for all expenses, costs and
liabilities allocable to the operations of the Stations or Radio Group, as the
case may be, for the period prior to the Effective Time of such Closing, and
Buyer shall receive all revenues and shall be responsible for
14
all expenses, costs and obligations allocable to the operations of the Stations
for the period after the Effective Time of such Closing, subject to the
following:
(i) There shall be no adjustment for, and Sellers shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.2. An adjustment and proration shall be made in favor
of Buyer to the extent that Buyer assumes any liability under any Assumed
Contract to refund (or to credit against payments otherwise due) any security
deposit or similar prepayment paid to Sellers by any lessee or other third
party. An adjustment and proration shall be made in favor of Sellers to the
extent Buyer receives the right to receive a refund (or to a credit against
payments otherwise due) under any Assumed Contract to any security deposit or
similar pre-payment paid by or on behalf of Sellers.
(ii) An adjustment and proration shall be made in favor of
Sellers for the amount, if any, by which the fair market value of the goods or
services to be received by any Radio Group under its trade or barter agreements
as of the Effective Time exceeds by more than Two Hundred Fifty Thousand Dollars
($250,000) the fair market value of any advertising time remaining to be run by
such Radio Group as of the Effective Time. An adjustment and proration shall be
made in favor of Buyer to the extent that the amount of any advertising time
remaining to be run by any Radio Group and the Kansas City Stations under its
trade or barter agreements as of the Effective Time exceeds by more than Two
Hundred Fifty Thousand Dollars ($250,000) the fair market value of the goods or
services to be received by such Radio Group as of the Effective Time.
(iii) There shall be no proration for program barter.
(iv) An adjustment and proration shall be made in favor of
Sellers for the prorata portion of the capital expenditures incurred by Sellers
in connection with the build-out of the studio/office space located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Buffalo Build-Out Property"), based
on the remaining potion of the initial term of the Lease relating to such
property, dated May 15, 1999, between ▇▇▇▇▇▇▇▇ Radio of Buffalo, Inc. and the
Uniland Partnership of Delaware, L.P.; provided, that the adjustment and
proration to be made pursuant to this Section 2.3(b)(iv) shall not exceed the
lesser of (i) fifty percent (50%) of the capital expenditures (i.e.,
out-of-pocket construction and equipment expenses, architecture fees and
building rent prior to occupancy) paid by Sellers with respect to the Buffalo
Build-Out Property prior to Closing, and (ii) Two Million Dollars ($2,000,000).
(v) An adjustment and proration shall be made in favor of
Sellers for the amount, if any, of prepaid expense, the benefit of which accrues
to Buyer hereunder, and other current assets acquired by Buyer hereunder which
are paid by Sellers to the extent such prepaid expenses and other current assets
relate to the period after the Effective Time.
(vi) There shall be no proration for any payment(s) made by
Interep to any of the Sellers in connection with obtaining the right to serve as
the national sales representative of any of the Stations.
15
(c) Manner of Determining Adjustments. The Purchase Price, taking into
account the adjustments and prorations pursuant to Section 2.3(b), will be
determined in accordance with the following procedures:
(i) Sellers shall prepare and deliver to Buyer not later than
five (5) days before any Closing Date a preliminary settlement statement which
shall set forth Sellers' good faith estimate of the adjustments to the Purchase
Price under Section 2.3(b) with respect to those Stations for which Closing is
to occur. The preliminary settlement statement shall (A) contain all information
reasonably necessary to determine the adjustments to the Purchase Price under
Section 2.3(b) as to such Stations, to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (B) be
certified by Sellers to be true and complete to Sellers' Knowledge as of the
date thereof.
(ii) Not later than ninety (90) days after each Closing Date,
Buyer will deliver to Sellers a statement setting forth Buyer's determination of
the Purchase Price and the calculation thereof pursuant to Section 2.3(b) as to
the Stations for which such Closing has occurred. Buyer's statement (A) shall
contain all information reasonably necessary to determine the adjustments to the
Purchase Price under Section 2.3(b) relating to the applicable Closing, and such
other information as may be reasonably requested by Sellers relating to the
applicable Closing, and (B) shall be certified by Buyer to be true and complete
to Buyer's knowledge as of the date thereof. If Sellers dispute the amount of
such Purchase Price determined by Buyer, they shall deliver to Buyer within
thirty (30) days after receipt of Buyer's statement a statement setting forth
their determination of the amount of such Purchase Price. If Sellers notify
Buyer of its acceptance of Buyer's statement, or if Sellers fail to deliver
their statement within the thirty (30)-day period specified in the preceding
sentence, Buyer's determination of the Purchase Price shall be conclusive and
binding on the parties as of the last day of the thirty (30)-day period.
(iii) Buyer and Sellers shall use good faith efforts to resolve
any dispute involving the determination of the Purchase Price paid by Buyer at
any Closing. If the parties are unable to resolve the dispute within forty-five
(45) days following the delivery of all of Buyer's statements to be provided
pursuant to Section 2.3(c)(ii) after the Final Closing (or in the event this
Agreement is terminated prior to the Final Closing) forty five (45) days
following such termination, Buyer and Sellers shall jointly designate an
independent certified public accounting firm of national standing which has not
regularly provided services to either the Buyer or Sellers in the last three (3)
years, who shall be knowledgeable and experienced in the operation of radio
broadcasting stations, to resolve the dispute. If the parties are unable to
agree on the designation of an independent certified public accounting firm, the
selection of the accounting firm to resolve the dispute shall be submitted to
arbitration to be held in Baltimore, Maryland, in accordance with the commercial
arbitration rules of the American Arbitration Association. The accounting firm's
resolution of the dispute shall be final and binding on the parties, and a
judgment may be entered thereon in any court of competent jurisdiction. Any fees
of this accounting firm, and, if necessary, for arbitration to select such
accountant, shall be divided equally between the parties.
2.4 Payment of Purchase Price. The Purchase Price shall be paid by Buyer to
Sellers as follows:
16
(a) Payment of Estimated Purchase Price At Closing. The Purchase Price,
adjusted by the estimated adjustments pursuant to Section 2.3(b) as set forth in
Sellers' preliminary settlement statement pursuant to Section 2.3(c)(i), is
referred to as the "ESTIMATED PURCHASE PRICE." At the Closing, Buyer shall pay
or cause to be paid to Sellers the Estimated Purchase Price for the Stations or
any Radio Group subject to the Closing, as the case may be, including, if
applicable, any Delay Amount, by federal wire transfer of same-day funds
pursuant to wire transfer instructions, which instructions shall be delivered to
Buyer by Sellers at least two (2) business days prior to such Closing Date.
(b) Buyer and Sellers shall cause the Escrow Deposit or such pro rata
portion allocable to a Radio Group Closing to be released to Sellers as partial
payment of the Estimated Purchase Price by delivering wiring instructions to the
Escrow Agent two (2) days prior to the Closing Date; provided, however, that
none of the Escrow Deposit shall be released by the parties at any Closing until
the Deposit Release Date. Once the Deposit Release Date has occurred, the
Sellers agree immediately to deliver to the Escrow Agent their consent to the
release of that pro rata portion of the Escrow Deposit attributable to Radio
Group Closings consummated prior to the Deposit Release Date. Until the Deposit
Release Date, Buyer shall deliver the entire Estimated Purchase Price at the
Closing on any Station.
(c) Payments to Reflect Adjustments. The Purchase Price as finally
determined pursuant to Section 2.3(c) shall be paid as follows:
(i) If the Purchase Price as finally determined pursuant to
Section 2.3(c) exceeds the Estimated Purchase Price, Buyer shall pay to Sellers,
in immediately available funds within five (5) business days after the date on
which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
(ii) If the Purchase Price as finally determined pursuant to
Section 2.3(c) is less than the Estimated Purchase Price, Sellers shall pay to
Buyer, in immediately available funds within five (5) business days after the
date on which the Purchase Price is determined pursuant to Section 2.3(c), the
difference between the Purchase Price and the Estimated Purchase Price.
2.5 Assumption of Liabilities and Obligations. As of the Closing Date and any
Radio Group Closing Date as applicable, Buyer shall assume and undertake to pay,
discharge and perform all obligations and liabilities of Sellers under the
Licenses, the Assumed Contracts or as otherwise specifically provided for herein
to the extent that either (i) the obligations and liabilities relate to the time
after the Effective Time of such Closing with respect to the Stations for which
Closing has occurred, or (ii) the Purchase Price was reduced pursuant to Section
2.3(b) as a result of the proration of such obligations and liabilities. Buyer
shall not assume any other obligations or liabilities of Sellers, including (1)
any obligations or liabilities under any Contract not included in the Assumed
Contracts, (2) any obligations or liabilities under the Assumed Contracts
relating to the period prior to the Effective Time of any Closing to which such
Assumed Contracts relate, except insofar as an adjustment therefor is made in
favor of Buyer under Section 2.3(b), (3) any claims or pending litigation or
proceedings relating to the operation of the Stations prior to such
17
Closing or (4) any obligations or liabilities of Sellers under any employee
pension, retirement, or other benefit plans.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer as of the date hereof and as of any
Closing Date (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date or time) as follows:
3.1 Organization and Authority of Sellers. Each Seller is a corporation, limited
liability company or limited partnership (as applicable), duly organized,
validly existing and in good standing under the laws of the State listed on
Schedule 3.1 next to each such Seller's name. Each Seller has the requisite
corporate power and authority (or other appropriate power and authority based on
the structure of such Seller) to own, lease and operate its properties, to carry
on its business in the places where such properties are now owned, leased, or
operated and such business is now conducted, and to execute, deliver and perform
this Agreement and the documents contemplated hereby according to their
respective terms. Each Seller is duly qualified and in good standing in each
jurisdiction listed on Schedule 3.1 next to each such Seller's name, which are
all jurisdictions in which such qualification is required. Except as set forth
on Schedule 3.1, no Seller is a participant in any joint venture or partnership
with any other Person with respect to any part of the operations of the Stations
or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by each Seller have been duly authorized by all
necessary corporate or other required action on the part of each Seller. This
Agreement has been duly executed and delivered by each Seller and constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. Subject to obtaining the
Consents listed on Schedules 3.3 and 3.7, the execution, delivery and
performance by each Seller of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a)
do not require the consent of any third party; (b) will not conflict with any
provision of the Articles of Incorporation, Bylaws or other organizational
documents of Sellers; (c) will not conflict with, result in a breach of, or
constitute a default under any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (d) will not conflict with, constitute grounds for termination
of, result in a breach of, constitute a default under, or accelerate or permit
the acceleration of any performance required by the terms of, any material
agreement, instrument, license, or permit to which any Seller is a party or by
which any Seller may be bound legally; and (e) will not create any claim,
liability, mortgage, lien, pledge, condition, charge, or encumbrance of any
nature whatsoever upon any of the Assets. Except for the FCC Consent provided
for in Section 6.1, the filings required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ provided for in
Section 6.2 and the other Consents described in Schedules 3.3 and 3.7, no
consent, approval, permit, or
18
authorization of, or declaration to, or filing with any governmental or
regulatory authority or any other third party is required (a) to consummate this
Agreement and the transactions contemplated hereby, or (b) to permit Sellers to
transfer and convey the Assets to Buyer.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete list of the
FCC Licenses. Sellers have made available to Buyer true and complete copies of
the main Licenses (including any amendments and other modifications thereto).
The Licenses have been validly issued, and each Seller is the authorized legal
holder of the Licenses and those FCC Licenses listed on Schedule 3.4. The
Licenses and the FCC Licenses listed on Schedule 3.4 comprise all of the
material licenses, permits, and other authorizations required from any
governmental or regulatory authority for the lawful conduct in all material
respects of the business and operations of the Stations in the manner and to the
full extent they are now conducted, and, except as otherwise disclosed on
Schedule 3.4, none of the Licenses is subject to any unusual or special
restriction or condition that could reasonably be expected to limit materially
the full operation of the Stations as now operated. The FCC Licenses are in full
force and effect, are valid for the balance of the current license term
applicable generally to radio stations licensed to the same communities as the
Stations, are unimpaired by any acts or omissions of any Seller or any of its
Affiliates, or the employees, agents, officers, directors, or shareholder of any
Seller or any of its Affiliates, and are free and clear of any restrictions
which might limit the full operation of the Stations in the manner and to the
full extent as they are now operated (other than restrictions under the terms of
the licenses themselves or applicable to the radio broadcast industry
generally). Except as listed on Schedule 3.4 hereto, there are no applications,
proceedings or complaints pending or, to the knowledge of any Seller, threatened
which may have an adverse effect on the business or operation of the Stations
(other than rulemaking proceedings that apply to the radio broadcasting industry
generally). Except as disclosed on Schedule 3.4 hereto, no Seller is aware of
any reason why any of the FCC Licenses might not be renewed in the ordinary
course for a full term without material qualifications or of any reason why any
of the FCC Licenses might be revoked. The Stations are in compliance with the
Commission's policy on exposure to radio frequency radiation. No renewal of any
FCC License would constitute a major environmental action under the rules of the
Commission. To the knowledge of Sellers, there are no facts relating to Sellers
which, under the Communications Act of 1934, as amended, or the existing rules
of the Commission, would (a) disqualify any Seller from assigning any of its FCC
Licenses to Buyer, (b) cause the filing of any objection to the assignment of
the FCC Licenses to Buyer, (c) lead to a delay in the processing by the FCC of
the applications of the FCC Licenses to Buyer, (d) lead to a delay in the
termination of the waiting period required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, or (e)
disqualify any Seller from consummating the transactions contemplated herein
within the times contemplated herein. An appropriate public inspection file for
each Station is maintained at the Station's studio in accordance with Commission
rules. Access to the Stations' transmission facilities are restricted in
accordance with the policies of the Commission.
3.5 Real Property. Schedule 3.5 contains a complete description of all Real
Property Interests (including street address, owner, and Sellers' use thereof)
other than the Excluded Real Property Interests. The Real Property Interests
listed on Schedule 3.5, together with the Real Property Interests which will be
created by the execution of the Lease by Buyer and the appropriate Sellers,
comprises all interests in real property necessary to conduct the business and
operations of the Stations as now conducted. Except as described on Schedule
3.5, Sellers have good fee simple title to all fee estates included in the Real
Property Interests and good title to all
19
other Real Property Interests, in each case free and clear of all liens,
mortgages, pledges, covenants, easements, restrictions, encroachments, leases,
charges, and other claims and encumbrances, except for Permitted Encumbrances.
Each leasehold or subleasehold interest included as a Material Contract on
Schedule 3.5 is legal, valid, binding, enforceable and in full force and effect.
To Sellers' Knowledge, each leasehold or subleasehold designated in the Real
Property Interests, but not designated as Material Contracts on Schedule 3.5 is
legal, binding and enforceable and in full force and effect. Neither the Seller
party thereto or to Sellers' Knowledge any other party thereto, is in default,
violation or breach under any lease or sublease and no event has occurred and is
continuing that constitutes (with notice or passage of time or both) a default,
violation or breach thereunder. Sellers have not received any notice of a
default, offset or counterclaim under any lease or sublease with respect to any
of the Real Property Interests. As of the date hereof and as of the applicable
Closing Date, Sellers enjoy peaceful and undisturbed possession of the leased
Real Property Interests; and so long as Sellers fulfill their obligations under
the lease therefor, Sellers have enforceable rights to nondisturbance and quiet
enjoyment against its lessor or sublessor, and, to the Knowledge of Sellers,
except as set forth in Schedule 3.5, no third party holds any interest in the
leased premises with the right to foreclose upon Sellers' leasehold or
subleasehold interest. Sellers have legal and practical access to all of the
Owned Real Property and Leased Real Property, as applicable. Except as otherwise
disclosed in Schedule 3.5, all towers, guy anchors, ground radials, and
buildings and other improvements included in the Assets are located entirely on
the Owned Real Property or the Leased Real Property, as applicable, listed in
Schedule 3.5. All Owned Real Property and Leased Real Property (including the
improvements thereon) (a) is in good condition and repair consistent with its
current use, (b) is available for immediate use in the conduct of the business
and operations of the Stations, and (c) complies in all material respects with
all applicable material building or zoning codes and the regulations of any
governmental authority having jurisdiction, except to the extent that the
current use by Sellers, while permitted, constitutes or would constitute a
"nonconforming use" under current zoning or land use regulations. No eminent
domain or condemnation proceedings are pending or, to the knowledge of Sellers,
threatened with respect to any Real Property Interests.
3.6 Tangible Personal Property. The lists of Tangible Personal Property
comprising all material items of tangible personal property, other than the
Excluded Tangible Personal Property, necessary to conduct the business and
operations of the Stations as now conducted has been provided to Buyer
previously. Except as described in Schedule 3.6, Sellers own and have good title
to each item of Tangible Personal Property and none of the Tangible Personal
Property owned by Sellers is subject to any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for Permitted
Encumbrances. With allowance for normal repairs, maintenance, wear and
obsolescence, each material item of Tangible Personal Property is in good
operation condition and repair and is available for immediate use in the
business and operations of the Stations. All material items of transmitting and
studio equipment included in the Tangible Personal Property (a) have been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (b) will permit the Stations and any unit auxiliaries
thereto to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC and in all material respects with all other
applicable federal, state and local statutes, ordinances, rules and regulations.
20
3.7 Contracts. Schedule 3.7 is a true and complete list of all Contracts which
either (a) have a remaining term (after taking into account any cancellation
rights of Sellers) of more than one year after the date hereof or (b) require
expenditures in excess of Twenty Five Thousand Dollars ($25,000) in any calendar
year after the date hereof, except contracts with advertisers for production or
the sale of advertising time on the Stations for cash that may be canceled by
Sellers without penalty on not more than ninety days' notice. Sellers have
delivered or made available to Buyer true and complete copies of all written
Assumed Contracts, and true and complete descriptions of all oral Assumed
Contracts (including any amendments and other modifications to such Contracts).
Other than the Contracts listed on Schedule 3.7, Schedule 3.5, and the Lease,
Sellers require no material contract, lease, or other agreement to enable them
to carry on their business in all material respects as now conducted. All of the
Contracts are in full force and effect and are valid, binding and enforceable in
accordance with their terms except as the enforceability of such Contracts may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and by judicial discretion in the enforcement of equitable
remedies. Neither the Seller party thereto or, to the knowledge of Sellers, any
other party thereto, is in default, violation or breach in any material respect
under any Contract and no event has occurred and is continuing that constitutes
(with notice or passage of time or both) a default, violation, or breach in any
material respect thereunder. Except as disclosed on Schedule 3.7, other than in
the ordinary course of business, Sellers do not have Knowledge of any intention
by any party to any Contract (a) to terminate such Contract or amend the terms
thereof, (b) to refuse to renew the Contract upon expiration of its term, or (c)
to renew the Contract upon expiration only on terms and conditions that are more
onerous than those now existing. Except for the need to obtain the Consents
listed on Schedule 3.7, the exchange and transfer of the Assets in accordance
with this Agreement will not affect the validity, enforceability, or
continuation of any of the Contracts.
3.8 Intangibles. Schedule 3.8 is a true and complete list of all Intangibles
(exclusive of Licenses listed in Schedule 3.4) that are required to conduct the
business and operations of the Stations as now conducted, all of which are valid
and in good standing and uncontested. Sellers have provided or made available to
Buyer copies of all documents establishing or evidencing the Intangibles listed
on Schedule 3.8. Sellers own or have a valid license to use all of the
Intangibles listed on Schedule 3.8. Other than with respect to matters generally
affecting the radio broadcasting industry and not particular to Sellers and
except as set forth on Schedule 3.8, Sellers have not received any notice or
demand alleging that Sellers are infringing upon or otherwise acting adversely
to any trademarks, trade names, service marks, service names, copyrights,
patents, patent applications, know-how, methods, or processes owned by any other
Person, and there is no claim or action pending, or to the Knowledge of Sellers
threatened, with respect thereto. To the knowledge of Sellers, except as set
forth on Schedule 3.8, no other Person is infringing upon Sellers rights or
ownership interest in the Intangibles.
3.9 Title to Properties. Except as disclosed in Schedule 3.5 or 3.6, Sellers
have good and marketable title to the Assets subject to no mortgages, pledges,
liens, security interests, encumbrances, or other charges or rights of others of
any kind or nature except for Permitted Encumbrances.
21
3.10 Financial Statements. Sellers have furnished Buyer with true and complete
copies of unaudited financial statements of the Stations containing a balance
sheet and statement of income, as at and for the fiscal year ended December 31,
1998, and an unaudited balance sheet and statement of income as at and for the
seven (7) months ended July 31, 1999 (the "BALANCE SHEET DATE") (collectively,
the "FINANCIAL STATEMENTS"). To the extent the Financial Statements relate to
the period of time during which the Stations were owned by the Sellers (or any
Affiliate thereof) the Financial Statements have been prepared from the books
and records of Sellers and have been prepared in a manner consistent with the
audited Financial Statements of ▇▇▇▇▇▇▇▇, except for the absence of footnotes
and certain year-end adjustments. The Financial Statements accurately reflect
the books, records and accounts of Sellers, present fairly and accurately the
financial condition of the Stations as at their respective dates and the results
of operations for the periods then ended and none of the Financial Statements
understates in any material respect the normal and customary costs and expenses
of conducting the business or operations of the Stations in any material respect
as currently conducted by Sellers or otherwise materially inaccurately reflects
the operations of the Stations; provided, that the foregoing representations are
given only to the Sellers' Knowledge to the extent the Financial Statements
relate to a period of time during which the Stations were not owned by Sellers
(or an Affiliate thereof).
3.11 Taxes. Except as set forth in Schedule 3.11, Sellers have filed or caused
to be filed all Tax Returns that are required to be filed with respect to their
ownership and operation of the Stations, and have paid or caused to be paid all
Taxes shown on those returns or on any Tax assessment received by them to the
extent that such Taxes have become due, or have set aside on their books
adequate reserves (segregated to the extent required by generally accepted
accounting principles) with respect thereto. There are no legal, administrative,
or other Tax proceedings presently pending, and there are no grounds existing
pursuant to which Sellers are or could be made liable for any Taxes, the
liability for which could extend to Buyer as transferee of the business of the
Stations.
3.12 Insurance. Schedule 3.12 is a true and complete list of all insurance
policies of or covering Sellers. All policies of insurance listed in Schedule
3.12 are in full force and effect as of the date hereof. During the past three
years, no insurance policy of Sellers or the Stations has been canceled by the
insurer and, except as set forth on Schedule 3.12, no application of Sellers for
insurance has been rejected by any insurer.
3.13 Reports. All material returns, reports and statements that the Stations is
currently required to file with the FCC or Federal Aviation Administration have
been filed, and all reporting requirements of the FCC and Federal Aviation
Administration have been complied with in all material respects. All of such
returns, reports and statements, as filed, satisfy all applicable legal
requirements.
3.14 Personnel and Employee Benefits.
(a) Employees and Compensation. Schedule 3.14 contains a true and
complete list of all employees of Sellers employed at the Stations as of June
30, 1999 who earned in excess of $20,000 in 1998 or whose present rate of pay
would cause them to earn more than that amount in 1999, and indicates the salary
and bonus, if any, to which each such Employee is currently
22
entitled (limited in the case of Employees who are compensated on a commission
basis to a general description of the manner in which such commissions are
determined). As of the date of this Agreement, Sellers have no knowledge that
any General Manager, Sales Manager, or Program Director employed at the Stations
currently plans to terminate employment, whether by reason of the transactions
contemplated by this Agreement or otherwise. Schedule 3.14 also contains a true
and complete list of all employee benefit plans or arrangements covering the
employees employed at the Stations (the "EMPLOYEES"), including, with respect to
the Employees any:
(i) "Employee welfare benefit plan," as defined in Section
3(1) of ERISA, that is maintained or administered by Sellers or to which Sellers
contribute or are required to contribute (a "WELFARE PLAN");
(ii) "Multiemployer pension plan," as defined in Section 3(37)
of ERISA, that is maintained or administered by Sellers or to which Sellers
contribute or are required to contribute (a "MULTIEMPLOYER PLAN" and, together
with the Welfare Plans, the "BENEFIT PLANS");
(iii) "Employee pension benefit plan," as defined in Section
3(2) of ERISA (other than a Multiemployer Plan), to which Sellers contribute or
are required to contribute (a "PENSION PLAN");
(iv) Employee plan that is maintained in connection with any
trust described in Section 501(c)(9) of the Internal Revenue Code of 1986, as
amended; and
(v) Employment, severance, or other similar contract,
arrangement, or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, or retirement benefits or arrangement for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights, stock
purchases, or other forms of incentive compensation or post-retirement
insurance, compensation, or benefits that (A) is not a Welfare Plan, Pension
Plan, or Multiemployer Plan, and (B) is entered into, maintained, contributed
to, or required to be contributed to by any Seller or under which any Seller has
any liability relating to Employees, (collectively, "BENEFIT ARRANGEMENTS").
(b) Pension Plans. Sellers do not sponsor, maintain, or contribute to
any Pension Plan other than the ▇▇▇▇▇▇▇▇ Broadcast Group 401(k) Profit Sharing
Plan. Each Pension Plan complies currently and has been maintained in
substantial compliance with its terms and, both as to form and in operation,
with all material requirements prescribed by any and all material statutes,
orders, rules and regulations that are applicable to such plans, including ERISA
and the Code, except where the failure to do so will not have a Material Adverse
Effect.
(c) Welfare Plans. Each Welfare Plan complies currently and has been
maintained in substantial compliance with its terms and, both as to form and in
operation, with all material requirements prescribed by any and all material
statutes, orders, rules and regulations that are applicable to such plans,
including ERISA and the Code, except where the failure to do so will not have a
Material Adverse Effect. Sellers do not sponsor, maintain, or contribute to any
23
Welfare Plan that provides health or death benefits to former employees of the
Stations other than as required by Section 4980B of the Code or other applicable
laws.
(d) Benefit Arrangements. Each Benefit Arrangement has been maintained
in substantial compliance with its terms and with the material requirements
prescribed by all statutes, orders, rules and regulations that are applicable to
such Benefit Arrangement, except where the failure to do so will not have a
Material Adverse Effect. Except for those employment agreements listed on
Schedule 3.7, Sellers have no written contract prohibiting the termination of
any Employee.
(e) Multiemployer Plans. Except as disclosed in Schedule 3.14, Sellers
have not at any time been a participant in any Multiemployer Plan.
(f) Delivery of Copies of Relevant Documents and Other Information.
Sellers have delivered or made available to Buyer true and complete copies of
each of the following documents:
(i) Each Welfare Plan and Pension Plan (and, if applicable,
related trust agreements) and all amendments thereto, and written descriptions
thereof that have been distributed to Employees, all annuity contracts or other
funding instruments; and
(ii) Each Benefit Arrangement and written descriptions thereof
that have been distributed to Employees and complete descriptions of any Benefit
Arrangement that is not in writing.
(g) Labor Relations. Except as set forth in Schedule 3.14(g), no Seller
is a party to or subject to any collective bargaining agreement or written or
oral employment agreement with any Employee. With respect to the Employees
Sellers have complied in all material respects with all laws, rules and
regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and have not
received any notice alleging that any Seller has failed to comply materially
with any such laws, rules, or regulations. Except as set forth on Schedule
3.14(g), no proceedings are pending or, to the Knowledge of Sellers, threatened,
between any Seller and any Employee (singly or collectively) that relate to the
Stations. Except as set forth on Schedule 3.14(g), no labor union or other
collective bargaining unit represents or claims to represent any of the
Employees. Except as set forth in Schedule 3.14, to the Knowledge of Sellers,
there is no union campaign being conducted to solicit cards from any Employees
to authorize a union to represent any of the employees of any Seller or to
request a National Labor Relations Board certification election with respect to
any Employees.
3.15 Claims and Legal Actions. Except as disclosed on Schedule 3.15 and except
for any FCC rulemaking proceedings generally affecting the radio broadcasting
industry and not particular to any of Sellers, there is no claim, legal action,
counterclaim, suit, arbitration, or other legal, administrative, or tax
proceeding, nor any order, decree, or judgment, in progress or pending, or to
the Knowledge of Sellers threatened, against or relating to the Assets, or the
business or operations of any of the Stations, nor does any Seller know of any
basis for the same.
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3.16 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed on Schedule 3.16, (x) none of the Owned Real
Property and none of the Tangible Personal Property and, to Sellers' Knowledge
(provided such knowledge qualifer shall not apply to the extent caused by the
Tangible Personal Property), none of the Leased Real Property contains (i) any
asbestos, polychlorinated biphenyls or any PCB contaminated oil; (ii) any
Contaminants; or (iii) any underground storage tanks; (y) no underground storage
tank disclosed on Schedule 3.16 has leaked and has not been remediated or leaks
and such tank is in substantial compliance with all applicable Environmental
Laws; and (z) all of the Owned Real Property and, to Sellers' Knowledge, all of
the Leased Real Property is in substantial compliance with all applicable
Environmental Laws.
(b) Sellers have obtained all material permits, licenses and other
authorizations that are required under all Environmental Laws.
3.17 Compliance with Laws. Sellers have complied in all material respects with
the Licenses and all material federal, state and local laws, rules, regulations
and ordinances applicable or relating to the ownership and operation of the
Assets and Stations, and Sellers have not received any notice of any material
violation of federal, state and local laws, regulations and ordinances
applicable or relating to the ownership or operation of the Assets and the
Stations nor, to Sellers' Knowledge, have Sellers received any notice of any
immaterial violation of federal, state and local laws, regulations, and
ordinances applicable or relating to the ownership or operation of the Assets or
the Stations.
3.18 Conduct of Business in Ordinary Course. Since the Balance Sheet Date and
through the date hereof, Sellers have conducted their business and operations in
the ordinary course and, except as disclosed in Schedule 3.18, have not:
(a) made any material increase in compensation payable or to become
payable to any of its employees other than those in the normal and usual course
of business or in connection with any change in an employee's responsibilities,
or any bonus payment made or promised to any of its Employees, or any material
change in personnel policies, employee benefits, or other compensation
arrangements affecting its employees;
(b) made any sale, assignment, lease, or other transfer of assets other
than in the normal and usual course of business with suitable replacements being
obtained therefor;
(c) canceled any debts owed to or claims held by Sellers, except in the
normal and usual course of business;
(d) made any changes in Sellers' accounting practices;
(e) suffered any material write-down of the value of any Assets or any
material write-off as uncorrectable of any Accounts Receivable; or
25
(f) transferred or granted any right under, or entered into any
settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right.
3.19 Transactions with Affiliates. Except as disclosed in Schedule 3.19 or with
respect to the Excluded Real Property Interests and the Excluded Tangible
Personal Property, no Seller has been involved in any business arrangement or
relationship with any Affiliate of Seller, and no Affiliate of any Seller owns
any property or right, tangible or intangible, that is material to the
operations of the business of the Stations.
3.20 Broker. Except as disclosed on Schedule 3.20, no Seller nor any Person
acting on its behalf has incurred any liability for any finders' or brokers'
fees or commissions in connection with the transactions contemplated by this
Agreement, and Buyer shall have no liability for any finders' or brokers' fees
or commissions in connection with the transactions contemplated by this
Agreement for any broker listed on Schedule 3.20.
3.21 Insolvency Proceedings. None of the Sellers nor any of the Assets are the
subject of any pending or threatened insolvency proceedings of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary. No Seller
has made an assignment for the benefit of creditors or taken any action in
contemplation of or which would constitute a valid basis for the institution of
any such insolvency proceedings. No Seller is insolvent nor will it become
insolvent as a result of entering into or performing this Agreement.
3.22 Year 2000 Compatibility. Sellers believe that the Stations' hardware,
software, broadcast and ancillary equipment (the "Operational Equipment") that
are date dependent and are material to the operation of the Stations are year
2000 compliant. To Sellers' Knowledge, there are no facts or circumstances that
would result in material costs or disruption to the operation of the Stations
due to the failure of Sellers' customers or suppliers to be year 2000 compliant.
For the purposes of this section, "Year 2000 Compliant" shall mean that the
Operational Equipment will correctly process, provide and receive date data
before, during and after December 31, 1999.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as of the date hereof and as of any
Closing Date (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date and time) as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has the requisite corporate power and authority to execute,
deliver and perform this Agreement and the documents contemplated hereby
according to their respective terms and to own the Assets. Prior to the Closing
Date, Buyer will be qualified to do business in each of the States in which any
of the Stations are located.
26
4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by Buyer have been duly authorized by all
necessary action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Subject to the
receipt of the Consents, the execution, delivery and performance by Buyer of
this Agreement and the documents contemplated hereby (with or without the giving
of notice, the lapse of time, or both): (a) do not require the consent of any
third party; (b) will not conflict with the Articles of Incorporation or Bylaws
of Buyer; (c) will not conflict with, result in a breach of, or constitute a
default under, any applicable law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; and (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license or permit to which Buyer is a party or by which
Buyer may be bound. Except for the FCC Consent provided for in Section 6.1. the
filings required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ provided for in Section 6.2 and the other
Consents described in Schedule 4.3, no consent, approval, permit, or
authorization of, or declaration to, or filing with any governmental or
regulatory authority or any other third party is required (a) to consummate this
Agreement and the transactions contemplated hereby, or (b) to permit Buyer to
acquire the Assets from Sellers or to assume certain liabilities and obligations
of Sellers in accordance with Section 2.5.
4.4 Brokers. Neither Buyer nor any person or entity acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Availability of Funds. Buyer will have available on the Closing Date
sufficient funds to enable it to consummate the transactions contemplated
hereby.
4.6 Qualifications of Buyer. Except as disclosed in Schedule 4.6, Buyer is, and
pending Closing will remain legally, financially and otherwise qualified under
the Communications Act, ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ and all rules, regulations and
policies of the FCC, the Department of Justice, the Federal Trade Commission
(the "FTC") and any other governmental agency, to acquire and operate the
Stations. Except as disclosed in Schedule 4.6, there are no facts or proceedings
which would reasonably be expected to disqualify Buyer under the Communications
Act or ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ or otherwise from acquiring or operating the Stations
or would cause the FCC not to approve the assignment of the FCC Licenses to
Buyer or the Department of Justice and the FTC not to allow the waiting period
under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ to terminate within 30 days of the filing provided for
in Section 6.2. Except as disclosed in Schedule 4.6, Buyer has no knowledge of
any fact or circumstance relating to Buyer or any of Buyer's Affiliates that
would reasonably be expected to (a) cause the filing of any objection to the
assignment of the FCC Licenses to Buyer, (b) lead to a delay in the processing
by the FCC of the applications for such assignment or (c) lead to a delay in the
termination of the waiting period required by ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
27
Except as disclosed in Schedule 4.6, no waiver of any FCC rule or policy is
necessary to be obtained for the grant of the applications for the assignment of
the FCC Licenses to Buyer, nor will processing pursuant to any exception or rule
of general applicability be requested or required in connection with the
consummation of the transactions herein.
4.7 WARN Act. Buyer is not planning or contemplating, and has not made or taken
any decisions or actions concerning the employees of the Stations after the
Closing Date that would require the service of notice under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, or any similar
state law.
4.8 Buyer's Defined Contribution Plan. Schedule 4.8 completely and accurately
lists all Buyer's defined contribution plan or plans (the "Buyer's Plan")
intended to be qualified under Section 401(a) and 401(k) of the Code in which
the Transferred Employees will be eligible to participate. Buyer has a currently
applicable determination letter from the Internal Revenue Service.
SECTION 5: OPERATION OF THE STATIONS PRIOR TO CLOSING
Sellers covenants and agrees that between the date hereof and Final Closing
Date, Sellers will operate the Stations in the ordinary course in accordance
with Sellers' past practices (except where such conduct would conflict with the
following covenants or with other obligations of Sellers under this Agreement),
and, except as contemplated by this Agreement or with the prior written consent
of Buyer (such consent not to be unreasonably withheld), Sellers will act in
accordance with the following insofar as such actions relate to the Stations:
5.1 Contracts. Seller will not renew, extend, amend or terminate, or waive any
material right under, any Material Contract, or enter into any contract or
commitment or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract, regardless of whether such Contract
is a Material Contract) that will be assumed by or be otherwise binding on Buyer
after Closing, except for (a) cash time sales agreements and production
agreements made in the ordinary course of business consistent with Seller's past
practices, (b) the renewal or extension of any existing Contract (other than
network affiliation agreements) on its existing terms in the ordinary course of
business, and (c) other contracts (other than network affiliation agreements, or
time brokerage or local marketing arrangements) entered into in the ordinary
course of business consistent with Sellers' past practices that do not, with
respect to any Radio Group, involve consideration, in the aggregate, in excess
of Fifty Thousand Dollars ($50,000) measured at Closing. Prior to the applicable
Closing Date, Sellers shall deliver to Buyer a list of all material Contracts
entered into between the date of this Agreement and the applicable Closing Date
and shall make available to Buyer copies of such Contracts.
5.2 Compensation. Sellers shall not materially increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices, as required by an employment agreement
or consulting agreement or in connection and commensurate with the change in
responsibility of any employee.
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5.3 Encumbrances. Sellers will not create, assume, or permit to exist any
mortgage, pledge, lien, or other charge or encumbrance affecting any of the
Assets, except for (a) liens disclosed in Schedule 5.3, (b) liens that will be
removed prior to the applicable Closing Date, and (c) Permitted Encumbrances.
5.4 Dispositions. Sellers will not sell, assign, lease, or otherwise transfer or
dispose of any of the Assets except (a) Assets that are no longer used in the
operations of the Stations, (b) Assets that are replaced with Assets of
equivalent kind and value that are acquired after the date of this Agreement,
and (c) any intercompany accounts receivable.
5.5 Access to Information. Upon prior reasonable notice by Buyer, Sellers will
give to Buyer and its investors, lenders, counsel, accountants, engineers and
other authorized representatives reasonable access to the Stations and all
books, records and documents of Sellers which are material to the business and
operation of the Stations, and will furnish or cause to be furnished to Buyer
and its authorized representatives all information relating to Sellers and the
Stations that they reasonably request (including any financial reports and
operations reports produced with respect to the Stations).
5.6 Insurance. Sellers or their Affiliates shall maintain in full force and
effect policies of insurance of the same type, character and coverage as the
policies currently carried with respect to the business, operations and assets
of the Stations.
5.7 Licenses. Sellers shall not cause or permit, by any act or failure to act,
any of the Licenses listed on Schedule 3.4 to expire or to be revoked, suspended
or modified, or take any action that could reasonably be expected to cause the
FCC or any other governmental authority to institute proceedings for the
suspension, revocation or material adverse modification of any of the Licenses.
Sellers shall prosecute with due diligence any applications to any governmental
authority necessary for the operation of the Stations.
5.8 Obligations. Sellers shall pay all its obligations insofar as they relate to
the Stations as they become due, consistent with past practices.
5.9 No Inconsistent Action. Sellers shall not take any action that is
inconsistent with its obligations under this Agreement in any material respect
or that could reasonably be expected to hinder or delay the consummation of the
transactions contemplated by this Agreement. Neither Seller nor any of its
respective representatives or agents shall, directly or indirectly, solicit,
initiate, or participate in any way in discussions or negotiations with, or
provide any confidential information to, any Person (other than Buyer or any
Affiliate or associate of Buyer and their respective representatives and agents)
concerning any possible disposition of the Stations, the sale of any material
assets of the Stations, or any similar transaction.
5.10 Maintenance of Assets. Sellers shall maintain all of the Assets in good
condition (ordinary wear, tear and casualty excepted), consistent with their
overall condition on the date of this Agreement, and use, operate and maintain
all of the Assets in a reasonable manner. Sellers shall maintain inventories of
spare parts and expendable supplies at levels consistent with past
29
practices. If any insured or indemnified loss, damage, impairment, confiscation,
or condemnation of or to any of the Assets occurs, Sellers shall repair,
replace, or restore the Assets to their prior condition as represented in this
Agreement as soon thereafter as possible, and Sellers shall use the proceeds of
any claim under any property damage insurance policy or other recovery solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Consents.
(a) Subject to Section 6.5 hereof, Sellers shall use their reasonable
efforts to obtain all Consents described in Section 3.3, without any adverse
change in the terms or conditions of any Assumed Contract or License. Sellers
shall promptly advise Buyer of any difficulties experienced in obtaining any of
the Consents and of any conditions proposed, considered or requested for any of
the Consents.
(b) Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign or transfer any Contract
or any claim, right or benefit arising thereunder or resulting therefrom, if an
attempted assignment or transfer thereof, without the consent of a third party
thereto would constitute a breach thereof or in any way adversely affect the
rights of the Buyer thereunder. If such consent (a "Deferred Consent") is not
obtained, or if an attempted assignment or transfer thereof would be ineffective
or would affect the rights thereunder so that the Buyer would not receive all
such rights, then (i) the Seller and the Buyer will cooperate, in all reasonable
respects, to obtain such Deferred Consents as soon as practicable; provided that
Sellers shall have no obligation (y) to expend funds to obtain any Deferred
Consent, other than ministerial processing fees, and Sellers' out-of-pocket
expenses to its attorney or other agents incurred in connection with obtaining
any Deferred Consent, or (z) to agree to any adverse change in any License or
Assumed Contract in order to obtain a Deferred Consent, and (ii) until such
Deferred Consent is obtained, the Seller and the Buyer will cooperate in all
reasonable respects, to provide to the Buyer the benefits under the Contract, to
which such Deferred Consent relates (with the Buyer responsible for all the
liabilities and obligations thereunder). In particular, in the event that any
such Deferred Consent is not obtained prior to Closing, then the Buyer and the
Seller shall enter into such arrangements (including subleasing or
subcontracting if permitted) to provide to the parties the economic and
operational equivalent of obtaining such Deferred Consent and assigning or
transferring such Contract, including enforcement for the benefit of the Buyer
of all claims or rights arising thereunder, and the performance by the Buyer of
the obligations thereunder on a prompt and punctual basis.
5.12 Books and Records. Sellers shall maintain their books and records in
accordance with past practices.
5.13 Notification. Sellers shall promptly notify Buyer in writing of any or
material developments with respect to the business or operations of the Stations
and of any material change in any of the information contained in the
representations and warranties contained in Section 3 of this Agreement.
30
5.14 Financial Information. Sellers shall furnish Buyer with sales pacing
reports for the Stations on a weekly basis and shall furnish to Buyer within
thirty (30) days after the end of each month ending between the date of this
Agreement and the Final Closing Date a statement of income and expense for the
month just ended and such other financial information (including information on
payables and receivables) as Buyer may reasonably request. All financial
information delivered by Sellers to Buyer pursuant to this Section 5.14 shall be
prepared from the books and records of Sellers in accordance with generally
accepted accounting principles, consistently applied, shall accurately reflect
the books, records and accounts of the Stations, shall be complete and correct
in all material respects, and shall present fairly the financial condition of
the Stations as at their respective dates and the results of operations for the
periods then ended.
5.15 Compliance with Laws. Sellers shall comply in all material respects with
all material laws, rules and regulations.
5.16 Programming. Sellers shall not make any material changes in the Stations'
formats, except such changes as in the good faith judgment of Seller are
required by the public interest.
5.17 Preservation of Business. Sellers shall use commercially reasonable efforts
consistent with past practices to preserve the business and organization of the
Stations and to keep available to the Stations its present employees and to
preserve the audience of the Stations and the Stations' present relationships
with suppliers, advertisers, and others having business relations with it.
5.18 Normal Operations. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 5.1), prior to either the Final Closing
or a Radio Closing Date, as applicable, Sellers shall carry on the business and
activities of the Stations, including, without limitation, promotional
activities, the sale of advertising time, entering into other contracts and
agreements, purchasing and scheduling programming, performing research, and
operating in all material respects in accordance with existing budgets and past
practice and will not enter into trade and barter obligations except in the
ordinary course of business consistent with past practice.
5.19 Buffalo Build-Out Property. Sellers shall keep Buyer fully informed of the
status of the construction and build-out of the Buffalo Build-Out Property and
shall make available to Buyer for its review and approval, which approval shall
not be unreasonably withheld, notice of any material changes to the capital
expenditure budget provided to Buyer prior to the date hereof.
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent
(a) The exchange and transfer of the Assets as contemplated by this
Agreement is subject to the prior consent and approval of the FCC.
(b) Sellers and Buyer shall prepare and within seven (7) business days
after the date of this Agreement shall file with the FCC an appropriate
application for FCC Consent. The parties shall thereafter prosecute the
application with all reasonable diligence and otherwise use their
31
respective best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by the
FCC Consent, except that no party shall be required to comply with a condition
if (i) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by that party of any of its
representations, warranties or covenants hereunder, and (ii) compliance with the
condition would have a material adverse effect upon it. Buyer and Sellers shall
oppose any petitions to deny or other objections filed with respect to the
application for the FCC Consent and any requests for reconsideration or judicial
review of the FCC Consent.
(c) If any Closing shall not have occurred for any reason within the
original effective period of the FCC Consent or Radio Group FCC Consent, and
neither party shall have terminated this Agreement under Section 9, the parties
shall jointly request an extension of the effective period of the FCC Consent or
Radio Group FCC Consent, as the case may be. No extension of the effective
period of the FCC Consent or Radio Group FCC Consent shall limit the exercise by
either party of its right to terminate the Agreement under Section 9.
6.2 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Within ten (10) days following the execution of this
Agreement, Sellers and Buyer shall complete any filing that may be required
pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HRS Filing"). Sellers and Buyer shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
comply with, the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
6.3 Risk of Loss. The risk of any loss, damage, impairment, confiscation, or
condemnation of any of the Assets of Sellers for any cause whatsoever shall be
borne by Sellers at all times prior to the Final Closing or Radio Group Closing,
as the case may be. In the event of loss or damage prior to the Final Closing
Date or a Radio Group Closing Date, Sellers shall use commercially reasonable
efforts to fix, restore, or replace such loss, damage, impairment, confiscation,
or condemnation to its former operational condition. If Sellers have adequate
replacement cost insurance, Buyer may elect to have Sellers assign such
insurance proceeds to Buyer, in which case, Buyer shall proceed with the Final
Closing or Radio Group Closing, as the case may be, and receive at such Closing
the insurance proceeds or an assignment of the right to receive such insurance
proceeds, as applicable, to which Sellers otherwise would be entitled, whereupon
Sellers shall have no further liability to Buyer for such loss or damage.
6.4 Confidentiality. Except as necessary for the consummation of the transaction
contemplated by this Agreement, including Buyer's obtaining of financing related
hereto, and except as and to the extent required by law, each party will keep
confidential any information obtained from the other party in connection with
the transactions specifically contemplated by this Agreement. If this Agreement
is terminated, each party will return to the other party all information
obtained by the such party from the other party in connection with the
transactions contemplated by this Agreement. Buyer shall continue to be bound by
the terms and conditions of the Confidentiality Agreement dated June 30, 1999
between the parties hereto (the "CONFIDENTIALITY AGREEMENT").
6.5 Cooperation. Buyer and Sellers shall reasonably cooperate with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of
32
their respective obligations under this Agreement, and in connection with any
litigation after any Closing Date which relate to the Stations for periods prior
to the applicable Effective Time, Buyer and Sellers shall execute such other
documents as may be reasonably necessary and desirable to the implementation and
consummation of this Agreement, and otherwise use their commercially reasonable
efforts to consummate the transaction contemplated hereby and to fulfill their
obligations under this Agreement. Notwithstanding the foregoing, Sellers shall
have no obligation (a) to expend funds to obtain any of the Consents, other than
ministerial processing fees, and Sellers' out-of-pocket expenses to its attorney
or other agents incurred in connection with obtaining such consents, or (b) to
agree to any adverse change in any License or Assumed Contract in order to
obtain a Consent required with respect thereto.
6.6 Control of the Stations. Prior to any Closing, Buyer shall not, directly or
indirectly, control, supervise or direct, or attempt to control, supervise or
direct, the operations of the Stations; those operations, including complete
control and supervision of all of each Stations' programs, employees and
policies, shall be the sole responsibility of Seller.
6.7 Accounts Receivable.
(a) As soon as practicable after the Closing Date or any Radio Group
Closing Date, as the case may be, Sellers shall deliver to Buyer a complete and
detailed list of all the Accounts Receivable. During the period beginning on the
Closing Date or Radio Group Closing Date, as applicable, and ending on the last
day of the sixth full calendar month beginning after the Closing Date or Radio
Group Closing Date, as applicable (the "COLLECTION PERIOD"), Buyer shall use
commercially reasonable efforts, as Sellers' agent, to collect the Accounts
Receivable in the usual and ordinary course of business, using the Stations'
credit, sales and other appropriate personnel in accordance with customary
practices, which may include referral to a collection agency. Notwithstanding
the foregoing, Buyer shall not be required to institute legal proceedings on
Sellers' behalf to enforce the collection of any Accounts Receivable. Buyer
shall not adjust any Accounts Receivable or grant credit without Sellers'
written consent, and Buyer shall not pledge, secure or otherwise encumber such
Accounts Receivable or the proceeds therefrom. On or before the twelfth business
day after the end of each calendar month during the Collection Period, Buyer
shall remit to Sellers collections received by Buyer with respect to the
Accounts Receivable, together with a report of all amounts collected with
respect to the Accounts Receivable during, as the case may be, the period from
any Closing or the beginning of such month through the end of such month, less
any sales commissions or collection costs paid by Buyer during the respective
periods with respect to those Accounts Receivable.
(b) Any payments received by Buyer during the Collection Period from
any Person that is an account debtor with respect to any account disclosed in
the list of Accounts Receivable delivered by Sellers to Buyer shall be applied
first to the invoice designated by the account debtor and, if none, such payment
shall be applied to the oldest account which is not disputed. Buyer shall incur
no liability to Sellers for any uncollected account, other than as a result of
Buyer's breach of its obligations under this Section 6.7. Prior to the end of
the third full calendar month after any Closing, neither Sellers nor any agent
of Sellers shall make any direct solicitation of the account debtors for
payment. After the end of the third full calendar month after any Closing,
Sellers shall have the right, at their expense, to assist and participate with
33
Buyer in the collection of unpaid Accounts Receivable, provided, however,
Seller's collection efforts shall be commercially reasonable and consistent with
its past practices.
(c) At the end of the Collection Period, Buyer shall return to Sellers
all files concerning the collection or attempts to collect the Accounts
Receivable, and Buyer's responsibility for the collection of the Accounts
Receivable shall cease.
6.8 Allocation of Purchase Price. Buyer and Sellers agree to allocate the
Purchase Price among the Stations for all purposes (including financial
accounting and Tax purposes) as set forth on Schedule 6.8 hereto. Buyer and
Sellers agree that the fair market value of the Assets of the Stations (the
"Fair Market Value of the Assets") will be appraised by the appraisal firm of
BIA, whose expenses will be borne one-half (1/2) by Buyer and one-half (1/2) by
Sellers. Buyer and Sellers shall collaborate in good faith in the preparation of
mutually satisfactory Form(s) 8594 (and Form 8824 to the extent applicable)
reflecting the Fair Market Value of the Assets as found by BIA and such other
information as is required by the form. Buyer and Sellers shall each file with
their respective federal income tax return for the tax year in which any Closing
occurs, IRS Form(s) 8594 (and Form 8824 to the extent applicable) containing the
information agreed upon by the parties pursuant to the immediately preceding
sentence. Buyer agrees to report the purchase of the Assets of the Stations, and
Sellers agree to report the sale of such assets for income tax purposes on their
respective income tax returns in a manner consistent with the information agreed
upon by the parties pursuant to this section and contained in the IRS Form(s)
8594 (and Form 8824 to the extent applicable).
6.9 Access to Books and Records. To the extent reasonably requested by Buyer,
Sellers shall provide Buyer access and the right to copy from and after any
Closing Date any books and records relating to the Assets but not included in
the Assets. To the extent reasonably requested by Sellers, Buyer shall provide
Sellers access and the right to copy from and after the applicable Closing Date
any books and records relating to the Assets that are included in the Assets.
Buyer and Sellers shall each retain any such books and records, for a period of
three years (or such longer period as may be required by law or good business
practice) following the Final Closing Date. Subject to and in accordance with
the terms of this Section 6.9, Sellers shall cause its accountants regularly
servicing Sellers to conduct audits and reviews of Sellers' financial
information as Buyer may reasonably determine is necessary to satisfy Buyer's
due diligence, including, without limitation, (a) causing Sellers' auditors to
permit Buyer's auditors to have access to Sellers' auditor's work papers, and
(b) causing Sellers' auditors to consent to such access by Buyer. Under no
circumstance shall the preparation of any financial statements pursuant to such
audits and reviews (i) require any Seller to change or modify any accounting
policy, (ii) cause any unreasonable disruption in the business or operations of
any Station, or (iii) cause any delay that is more than de minimis in any
internal reporting requirements of any Seller. All costs and expenses incurred
in connection with the preparation of (and assimilation of relevant information
for) the audits and reviews of financial information shall be paid by Sellers;
provided, Buyer shall promptly pay upon presentation of any invoice, as a
non-refundable prepayment of the Purchase Price, for all charges incurred in
connection with such audit to the extent relating to work performed on or after
July 26, 1999 (such charges, the "Section 6.9 Amount") (it being understood that
the hourly charges of Sellers' accountants for the period of time for which
Buyer is responsible may be greater than the hourly charges incurred by
Sellers).
34
In addition, Buyer shall be responsible for any costs and expenses (a)
associated with the inclusion of such audited financial statements in Buyer's
publicly filed documents, including, without limitation, any fees for consents
to such inclusion and a "comfort letter," and (b) incurred in connection with
any review of financial statements for the periods ended June 30, 1998 or June
30, 1999, or for any other periods other than the financial statements for
calendar year 1998.
6.10 Employee Matters.
(a) Upon consummation of the Closing or a Radio Group Closing
hereunder, Buyer shall offer employment to each of the Employees of the Stations
included in such Radio Group (including those on leave of absence, whether
short-term, long-term, family, maternity, disability, paid, unpaid or other, and
those hired after the date hereof in the ordinary course of business) at a
comparable salary, position and place of employment as held by each such
employee immediately prior to the Closing Date (such employees who are given
such offers of employment are referred to herein as the "TRANSFERRED EMPLOYEES")
(b) Except as provided otherwise in this Section 6.10, Sellers shall
pay, discharge and be responsible for (a) all salary and wages arising out of or
relating to the employment of the Employees prior to the Closing Date or a Radio
Group Closing Date, as the case may be, and (b) any employee benefits arising
under the Benefit Plans or Benefit Arrangements of Sellers and their Affiliates
during the period prior to such Closing Date. From and after each Closing Date,
Buyer shall pay, discharge and be responsible for all salary, wages and benefits
arising out of or relating to the employment of the Transferred Employees by
Buyer on and after the Closing Date or Radio Group Closing Date, as applicable.
Buyer shall be responsible for all severance liabilities, and all COBRA
liabilities for any Transferred Employees of the Stations terminated on or after
any Closing Date, including, without limitation, any related to any deemed
termination by Sellers of the Transferred Employees as a result of the
consummation of the transaction contemplated hereby and any required pursuant to
those retention/severance agreements listed on Schedule 6.10 hereto, but
excluding any severance due as a result of those agreements listed on Schedule
6.10-A.
(c) Buyer shall cause all Transferred Employees as of any Closing Date
to be eligible to participate in its "employee welfare benefit plans" and
"employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA,
respectively) of Buyer in which similarly situated employees of Buyer are
generally eligible to participate; provided, however, that all Transferred
Employees and their spouses and dependents shall be eligible for coverage
immediately after such Closing Date (and shall not be excluded from coverage on
account of any pre-existing condition) to the extent provided under such plans
with respect to Transferred Employees.
(d) For purposes of any length of service requirements, waiting period,
vesting periods or differential benefits based on length of service in any such
plan for which a Transferred Employee may be eligible after any Closing, Buyer
shall ensure that, to the extent permitted by law, and except as limited by
Buyer's Employment Termination/Severance policy service by such Transferred
Employee with Sellers, any Affiliate of Sellers or any prior owner of the
Stations shall be deemed to have been service with the Buyer. In addition, Buyer
shall ensure
35
that each Transferred Employee receives credit under any welfare benefit plan of
Buyer for any deductibles or co-payments paid by such Transferred Employee and
his or her dependents for the current plan year under a plan maintained by
Sellers or any Affiliate of Sellers to the extent allowable under any such plan.
Buyer shall grant credit to each Transferred Employee for all sick leave in
accordance with the policies of Buyer applicable generally to its employees
after giving effect to service for Sellers, any Affiliate of Sellers or any
prior owner of the Stations, as service for Buyer. To the extent taken into
account in determining prorations pursuant to Section 2.3 hereof, Buyer shall
assume and discharge Sellers' liabilities for the payment of all unused vacation
leave accrued by Transferred Employees as of the Closing Date or a Radio Group
Closing Date, as the case may be. To the extent any claim with respect to such
accrued vacation leave is lodged against Sellers with respect to any Transferred
Employee for which Buyer has received a proration credit, Buyer shall, to the
extent of such credit, indemnify, defend and hold harmless Sellers from and
against any and all losses, directly or indirectly, as a result of, or based
upon or arising from the same.
(e) As soon as practicable following any Closing Date, Buyer shall make
available to the Transferred Employees Buyer's 401(k) Plan. To the extent
requested by a Transferred Employee, Sellers shall cause to be transferred to
Buyer's 401(k) Plan, in cash and in kind, all of the individual account balances
of Transferred Employees under the Sellers' Plan, including any outstanding plan
participant loan receivables allocated to such accounts.
(f) Buyer acknowledges and agrees that Buyer's obligations pursuant to
this Section 6.10 are in addition to, and not in limitation of, Buyer's
obligation to assume the employment contracts included in the Assumed Contracts.
Nothing in this Agreement shall be construed to provide employees of Sellers
with any rights under this Agreement, and no Person, other than the parties
hereto, is or shall be entitled to bring any action to enforce any provision of
this Agreement against any of the parties hereto, and the covenants and
agreements set forth in this Agreement shall be solely for the benefit of, and
shall only be enforceable by, the parties hereto and their respective successors
and assigns as permitted hereunder.
(g) Certain Payments. Subject to the terms of this Section 6.10(g) and
Section 6.10(h), in the event Buyer terminates any of the Transferred Employees
during the six (6) calendar month period after the Closing Date or a Radio Group
Closing Date, as the case may be (a "Reimbursement Period"), which relates to
the Station at which such employee is employed, as applicable, Sellers shall
promptly reimburse Buyer for the amount paid by Buyer to such Terminated
Employee pursuant to the terms of the Retention Agreements listed on Schedules
6.10 (as in effect on the date hereof) (the "Scheduled Retention Agreements") as
follows: (y) the full amount of such payments in an amount, when aggregated with
the payments made by the Kansas City Sellers under 6.10(g) of the Kansas City
Agreement, that does not to exceed $1,000,000 (the "Initial Employee Cap"); and
(z) 50% of such payments above the Initial Employee Cap in an amount, when
aggregated with payments made by the Kansas City Sellers under 6.10(g) of the
Kansas City Agreement, that does not to exceed $500,000. The payments made
pursuant to this Section 6.10(g) shall not be counted against the Threshold
Amount. In no event shall Sellers be obligated to reimburse Buyer (i) for any
payments made by Buyer pursuant to the Scheduled Retention Agreements to
Transferred Employees terminated after the expiration of a Reimbursement Period,
or (ii) for any amount, when aggregated with any payments made by
36
the Kansas City Sellers under 6.10(g) of the Kansas City Agreement, in excess of
$1,500,000.
(h) Notwithstanding any provisions of Section 6.10(g) of the Asset
Purchase Agreement to the contrary, Sellers shall have no obligation to
reimburse Buyer for any severance amount (whether or not pursuant to the
Scheduled Retention Agreements), which obligations shall be the sole obligation
of Buyer regardless of when such termination occurs paid to (i) any Transferred
Employee who is terminated (a) at the request of a third party who subsequently
enters into a memorandum of understanding, letter of intent, or agreement to
acquire any of the Stations, or (b) as a result of Buyer entering into a
memorandum of understanding, letter of intent, or an agreement to sell, assign,
swap, or otherwise dispose of or convey any Station to a third party, and/or
(ii) the employees listed on Schedule 6.10(h), including, but not limited to,
any employees of the Kansas City Stations listed thereon.
(i) For twelve (12) calendar months after the Closing Date or any Radio
Group Closing Date, as applicable, (a) none of Sellers or any of their
Affiliates shall hire any of the Transferred Employees of any Radio Group for
which such Closing has occurred; provided that the provisions of this Section
6.10(i)(a) shall not apply to any Transferred Employee terminated by Buyer; and
provided further that this Section 6.10(i)(a) does not apply to any employees
(other than the Transferred Employees) hired by the Seller Entities (as defined
below) after the Closing Date or any Radio Group Closing Date, as applicable,
and (b) other than the Transferred Employees, Buyer shall not hire any employees
of Sellers or any Affiliate or parent of Sellers (the "Seller Entities") who are
employees, as of the Closing Date or any Radio Group Closing Date, of any of the
television broadcast stations owned, operated, or programmed by any of the
Seller Entities in any market in which the Stations broadcast ("Sellers'
Employees"); provided that the provisions of this Section 6.10(i)(b) do not
apply to Sellers' Employees whose employment is terminated by the Seller
Entities; and provided further that the provisions of this Section 6.10(i)(b) do
not apply to any employees (other than Sellers' Employees) hired by Buyer after
the Closing Date or any Radio Group Closing Date, as applicable.
6.11 Lease. Buyer and the Sellers specified in the Lease attached hereto as
Exhibit 1 (the "LEASE") shall execute and deliver the Lease on the Closing Date
applicable to the Station to which the Lease applies.
6.12 Public Announcements. Sellers and Buyer shall consult with each other
before issuing any press releases or otherwise making any public statements with
respect to this Agreement or the transactions contemplated herein and shall not
issue any such press release or make any such public statement without the prior
written consent of the other party, which shall not be unreasonably withheld;
provided, however, that a party may, without the prior written consent of the
other party, issue such press release or make such public statement as may be
required by Law or any listing agreement with a national securities exchange to
which ▇▇▇▇▇▇▇▇ or Buyer is a party if it has used all reasonable efforts to
consult with the other party and to obtain such party's consent but has been
unable to do so in a timely manner.
6.13 Disclosure Schedules. Sellers and Buyer acknowledge and agree that Sellers
shall not be liable for the failure of the Schedules to be accurate as a result
of the operation of the Stations prior to a Closing in accordance with Section 5
of this Agreement. The inclusion of any fact or item on a Schedule referenced by
a particular section in this Agreement shall, should the
37
existence of the fact or item or its contents be relevant to any other section,
be deemed to be disclosed with respect to such other section whether or not an
explicit cross-reference appears in the Schedules if such relevance is readily
apparent from examination of such Schedules.
6.14 Bulk Sales Law. Buyer hereby waives compliance by Sellers, in connection
with the transactions contemplated hereby, with the provisions of any applicable
bulk transfer laws.
6.15 Environmental Site Assessment.
6.15.1 Within sixty (60) days of the execution of this Agreement, Buyer
may obtain Phase I Environmental Assessments at Buyer's expense for any or all
of the parcels of the Owned or Leased Real Property set forth on Schedule 6.15
(the "Environmental Assessments"). In the event any Environmental Assessment
discloses any conditions contrary to any representations and warranties
(determined without regard to any Knowledge qualifier therein) or any potential
that such conditions may exist, the Buyer may conduct or have conducted at its
expense additional testing to confirm or negate the existence of any such
conditions. If any such Environmental Assessment or additional testing reflects
the existence of any such conditions at any Owned Real Property or, to the
extent caused by any of the Assets, at any of the Leased Real Property, and if,
and only if, the cost of remediation, when aggregated with costs or remediation
as to the Kansas City Stations, exceeds One Hundred Thousand Dollars
($100,000.00), in the aggregate for all parcels of the Real Property to be
conveyed by Sellers hereunder and the Kansas City Sellers pursuant to the Kansas
City Agreement shall cause the conditions to be remedied as quickly as possible
(and in all events prior to Closing for any Radio Group for which such property
is used in the operation of any Station in such Radio Group) such that no
conditions contrary to the representations and warranties (determined with
regard to any knowledge qualifier contained therein) of this Agreement exist;
provided, however, that Sellers shall not be obligated to expend in the
aggregate for all parcels of the Real Property of Stations and the Kansas City
Stations in excess of Three Million Dollars ($3,000,000.00) to effect such
remediation for all Real Property to be conveyed hereunder and under the Kansas
City Agreement. In the event that such remedial action(s) does cost in the
aggregate in excess of Three Million Dollars ($3,000,000.00), Sellers may elect
not to take such remedial action. In such event, Buyer may require Sellers to
proceed to the Closing of the Stations or of one or more Radio Groups, as the
case may be, and at any such Closing, the purchase price for any of the Stations
acquired at such Closing shall be reduced by the estimated cost of remediation
for that portion of the Owned Real Property to be acquired at such Closing, not
to exceed in the aggregate for all Closings the Unexpended Remediation Amount.
Alternatively, Buyer may terminate this Agreement, and Sellers shall have no
liability to Buyer as a result of such termination. Such Environmental
Assessments shall not relieve Sellers of any obligation with respect to any
representation, warranty, or covenant of Sellers in this Agreement or waive any
condition to Buyer's obligations under this Agreement. The cost of completing
the Environmental Assessments shall be paid by Buyer.
6.15.2 Nothing in this Section 6.15 shall be deemed to extend the date
on which any Closing would otherwise occur under this Agreement.
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6.16 Purchase of Advertising Time. After the Closing, Buyer agrees to purchase
for cash from Sellers over the five (5) year period subsequent to the Closing
Date, Five Million Dollars ($5,000,000) of advertising time on television
broadcast stations owned and/or programmed by Sellers or their Affiliates at
prevailing rates (taking into account the aggregate amount of the advertising
purchase), and Buyer shall use reasonable efforts to purchase such advertising
time pro rata over the five (5) year period. In the event that Sellers (and
their Affiliates) cease to own and/or program a material percentage of
television broadcast stations located in the same designated market areas as
radio broadcast stations owned and/or programmed by Buyer (or its Affiliates),
Sellers and Buyer shall negotiate in good faith to permit Buyer to expend an
appropriate amount of the advertising buy required by this Section 6.16 on
television broadcast stations previously owned and/or programmed by Sellers (and
its Affiliates), which expenditure on such television stations shall be counted
for purposes of Buyer's satisfaction of its obligation to purchase the
$5,000,000 aggregate amount of advertising time.
6.17 Adverse Developments. Sellers shall promptly notify Buyer of any unusual or
materially adverse developments that occur prior to any Closing with respect to
the Assets or the operation of the Stations; provided, however, that Sellers'
compliance with the disclosure requirements of this Section 6.17 shall not
relieve Sellers of any obligation with respect to any representation, warranty
or covenant of Sellers in this Agreement or relieve Buyer of any obligation or
duty hereunder, waive any condition to Buyer's obligations under this Agreement,
or expand or enhance any right of Buyer hereunder.
6.18 Title Insurance. Within ten (10) days of the date of this Agreement, each
Seller shall deliver to Buyer its current title insurance policies. Sellers
shall cooperate with Buyer in obtaining the commitment of a title insurance
company reasonably satisfactory to Buyer agreeing to issue to Buyer, at standard
rates, ALTA [1992] Form extended coverage title insurance policies, insuring
Buyer's interest in the Real Property (the "Title Commitment"). The costs of the
Title Commitment and the policy to be issued pursuant to the Title Commitment
shall be paid by Buyer.
6.19 Surveys. Within sixty (60) days of the date of this Agreement, each Seller
of Real Property shall deliver to Buyer, at Buyer's expense, surveys of the Real
Property performed by surveyors reasonably acceptable to Buyer sufficient to
remove any "survey exception" from the title insurance policies to be issued
pursuant to the Title Commitments.
6.20 Pending Transactions. Nothing in this Agreement shall preclude Sellers from
completing any pending transactions, including, but not limited to, the
acquisition of the Palm Stations and the Phase II Stations in accordance with
the terms and conditions thereof.
6.21 Assignment of Contracts for Pending Transactions. In the event the closing
for the acquisition by Sellers of the Palm Stations and/or the Phase II Stations
has not occurred on or before the Final Closing Date, Sellers shall deliver to
Buyer on the Final Closing Date such documentation reasonably requested by
Buyer's counsel, allowing for the assignment to Buyer from Sellers of Sellers'
rights, duties and obligations under the Phase II Purchase Agreement and the
Palm Asset Purchase Agreement.
39
6.22 Cooperation on Tax Matters. The parties intend to allow for the election by
Sellers ("Election") to have the sale of all or a portion of the Assets
contemplated by this Agreement become part of a "Tax Deferred Exchange" in
accordance with the provisions of Section 1031 of the Internal Revenue Code of
1986 (the "Code"). Buyer covenants and agrees to participate and fully cooperate
with Sellers (and any qualified intermediary (as that term is defined in the
Code) involved in the Tax Deferred Exchange), in the event of an Election, so
long as such participation and cooperation does not have an adverse effect on
Buyer. To the extent that any provision in this Section 6.22 or in this
Agreement shall be found inconsistent with or in violation of any of the terms
of Section 1031 of the Code, such provision shall be null and void, all other
provisions of this Agreement shall remain in full force and effect, and the
parties shall endeavor to agree upon alternative provisions that affect a "Tax
Deferred Exchange" of property in such manner as will comply with Section 1031
of the Code. If no such agreement is reached within a reasonable period, then
this Agreement shall be performed without an exchange of properties.
6.23 Reference to Original Agreement. Buyer and Sellers agree that reference
shall be made to the Original Agreement and the accompanying Letter Agreement
dated August 18, 1999, and the Escrow Agreement dated August 18, 1999, to
resolve any ambiguity in this Agreement or any inconsistency between this
Agreement and the Kansas City Agreement.
SECTION 7: CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the Closing
hereunder with respect to the Stations or any Radio Group are subject at Buyer's
option to the fulfillment prior to or at the Closing Date or a Radio Group
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and warranties
of Sellers contained in this Agreement shall be true and complete at and as of
the Closing Date as though made at and as of that time, (except for
representations and warranties that speak as of a specific date or time which
need only be true and complete as of such date or time), except where the
failure to be true and complete (determined without regard to any materiality
qualifications therein) does not have a Material Adverse Effect.
(b) Covenants and Conditions. Sellers shall have performed and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date, except where
the failure to have performed and complied (determined without regard to any
materiality qualifications therein) does not have a Radio ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Adverse
Effect.
(c) FCC Consent. The FCC Consent or a Radio Group FCC Consent shall
have been granted, notwithstanding that it may not have yet become a "Final
Order," unless any filing is made with the FCC that pertains to or becomes
associated with any request for consent to the assignment of any of the FCC
Licenses (an "FCC Objection"), in which case, Buyer shall not be obligated to
close on a Radio Group which includes such Station to which such FCC Objection
is applicable until the FCC Consent shall have become a "Final Order," unless in
the reasonable judgment of Buyer's counsel such objection would not reasonably
be expected to result in a
40
denial of the FCC Consent, or a Radio Group FCC Consent, as the case may be, or
the designation for hearing for the applications for FCC Consent or a Radio
Group FCC Consent, as the case may be.
(d) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have expired or terminated.
(e) Governmental Authorizations. Sellers shall be the holder of all FCC
Licenses (other than the FCC Licenses for the Palm Stations and Phase II
Stations if Sellers have not closed on the Palm Stations and the Phase II
Stations), and there shall not have been any modification, revocation, or
non-renewal of any License that has had a Radio ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Adverse Effect.
No proceeding shall be pending the effect of which could be to revoke, cancel,
fail to renew, suspend, or modify materially and adversely any FCC License.
(f) Consents. All consents of third parties that are required for the
valid and binding assignment from Sellers to Buyer of all Material Contracts
marked by an asterisk on Schedules 3.5 and 3.7 with respect to a Radio Group
shall have been obtained (or available upon consummation of the Closing) .
(g) Lease. Seller shall have entered into the lease described on
Schedule 7.1(g) and (to the extent required by such lease) shall have obtained a
valid and binding assignment of such lease from Sellers to Buyer.
(h) Deliveries. Sellers shall have made or stand willing to make all
the deliveries to Buyer described in Section 8.2.
(i) Satisfactory Environmental Assessment. To the extent that any
Environmental Assessment or additional testing conducting pursuant to Section
6.15 hereof reflects the existence of conditions contrary to any representation
or warranty in this Agreement, either (i) Sellers shall have completed the
remediation of such conditions in accordance with Section 6.15 hereof, or (ii)
Buyer shall have provided notice to Sellers of Buyer's election to proceed to
Closing with the proration to the Purchase Price specified in Section 6.15
hereof.
7.2 Conditions to Obligations of Sellers. All obligations of Sellers at the
Closing hereunder with respect to the Stations or any Radio Group are subject at
Sellers' option to the fulfillment prior to or at the Closing Date of each of
the following conditions:
(a) Representations and Warranties. All representations and warranties
of Buyer contained in this Agreement shall be true and complete in all material
respects at and as of the Closing Date as though made at and as of that time.
(b) Covenants and Conditions. Buyer shall have performed and complied
in all material respects with all covenants, agreements and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.
41
(c) FCC Consent. The FCC Consent or a Radio Group FCC Consent shall
have been granted.
(d) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have expired or terminated.
(e) Deliveries. Buyer shall have made or stand willing to make all the
deliveries described in Section 8.3.
SECTION 8: CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(i) Except as provided below in this Section 8.1 or as otherwise agreed
to by Buyer and Sellers, the Closing hereunder shall be held for all of the
Stations on a date specified by Buyer on at least five (5) days written notice
that is not earlier than the first business day after or later than ten (10)
business days after the date on which all of the conditions to Closing have been
satisfied or waived; provided, that the parties acknowledge and agree that there
may be multiple Closings hereunder as follows:
(w) If a Radio Group FCC Consent for any Radio Group is issued
prior to the issuance of the FCC Consent, and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting
period has expired or has been terminated for such Radio Group (whether or not
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period has expired or has been terminated in
respect of any other Radio Group), Closing on such Radio Group shall be set by
Buyer on at least five (5) days' written notice to Sellers, which shall be not
earlier than the first business day after such Radio Group FCC Consent is
granted and not later than ten (10) business days after the date on which all
conditions to such Closing have been satisfied or waived; provided that, in no
event, shall a Closing occur for less than an entire Radio Group;
(x) Notwithstanding 8.1(a)(i)(w) above, Sellers may elect to
postpone such Closing for thirty (30) days if, based on advice of Sellers'
counsel, there is a reasonable likelihood that the FCC Consent or an additional
Radio Group FCC Consent will be received during such period; provided that in
the event Sellers elect to postpone any Closing under this Section 8.1(a)(i)(x),
the Stations Delay Amount Date and/or the Kansas City Stations Delay Amount
Date, as applicable, shall be extended through the Closing Date as postponed by
Sellers and no Delay Amount shall accrue during such period with respect to the
Stations or Radio Group for which any Closing has been postponed by Seller
pursuant to this Section 8.1(a)(i)(x);
(y) For purposes of this Agreement, if there shall be multiple
Closings for the Stations, then the terms "Closing" and "Closing Date" shall
only be deemed to refer to the Stations for which the sale by Sellers, and the
purchase by Buyers, shall have occurred on such date. If a Closing Date
hereunder shall fall on a date that is not a business day, then such Closing
Date shall be the next business day.
42
(ii) If any event occurs that prevents signal transmission by any of
the Stations in the normal and usual manner and Sellers cannot restore the
normal and usual transmission before the date on which any Closing as to any
Radio Group to which the Station so affected belongs would otherwise occur
pursuant to this Section 8.1(a), and this Agreement has not been terminated
under Section 9, Sellers shall diligently take such action as reasonably
necessary to restore such transmission, and the Closing shall be postponed only
with respect to the Radio Group to which the Station so affected belongs until a
date within the effective period of the FCC Consent or a Radio Group FCC Consent
(as it may be extended pursuant to Section 6.1(c)) to allow Sellers to restore
the normal and usual transmission for such Station. If any Closing is postponed
pursuant to this paragraph, the date of such Closing shall be ten (10) days
after notice by Sellers to Buyer that transmission has been restored.
Notwithstanding anything to the contrary in this Agreement, Buyer shall not be
obligated to close on any Radio Group which includes any Station the
transmission of which is not operating in the normal and usual manner, unless
and until the Sellers have restored the transmission of such Station to its
normal and usual level.
(iii) If there is in effect on the date on which any Closing would
otherwise occur pursuant to this Section 8.1(a) any judgment, decree or order
that would prevent or make unlawful such Closing on that date, such Closing
shall be postponed until a date within the effective period of the FCC Consent
or the Radio Group FCC Consent, as the case may be (as it may be extended
pursuant to Section 6.1(c)), to be agreed upon by Buyer and Sellers, when such
judgment, decree, or order no longer prevents or makes unlawful such Closing. If
any Closing is postponed pursuant to this paragraph, the date of such Closing
shall be mutually agreed to by Seller and Buyer.
(b) Closing Place. All Closings hereunder shall be held at the offices
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, or any
other place that is mutually agreed upon by Buyer and Sellers.
8.2 Deliveries by Sellers. Prior to or on any Closing Date, Sellers shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
(a) Conveyancing Documents. Duly executed deeds in form and quality
equivalent to the deeds by which Sellers obtained title, bills of sale, motor
vehicle titles, assignments, and other transfer documents that are sufficient to
vest good and marketable title to the Assets being transferred at such Closing
in the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims and obligations except for Permitted Encumbrances;
(b) Officer's Certificate. A certificate, dated as of such Closing
Date, executed by an officer of Sellers, certifying: (i) that the
representations and warranties of Sellers contained in this Agreement as to the
Radio Group for which a Closing is occurring are true and complete as of such
Closing Date as though made on and as of that date (except for representations
and warranties that speak as of a specific date or time, which need only be true
and complete as of such date or time), except to the extent that the failure of
such representations and warranties (in each case determined without regard to
any materiality qualifications contained therein) shall not have had a Material
Adverse Effect, and (ii) that Sellers, as to the Radio Group for which a Closing
is occurring, have in all respects performed and complied with all of its
obligations,
43
covenants and agreements in this Agreement to be performed and complied with on
or prior to such Closing Date, except to the extent that the failure to perform
such covenants (in each case determined without regard to any materiality
qualifications contained therein) shall not have had a Radio ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Adverse Effect.
(c) Secretary's Certificate. A certificate, dated as of such Closing
Date, executed by each of the Seller's Secretary, members, partners or
designees, as the case may be: (i) certifying that the resolutions, as attached
to such certificate, were duly adopted by such Seller's Board of Directors and
shareholders (if required) (or by the general partner in the case of a
partnership or by the members in the case of a limited liability company),
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect; and (ii) providing, as attachments thereto, the Articles of
Incorporation and Bylaws (or other organizational documents) of such Seller;
(d) Consents. A manually executed copy of any instrument evidencing
receipt of any Consent which has been received by Sellers which relate to the
Stations or, in the case of a Radio Group Closing, such Radio Group, the Assets
of which are being transferred at such Closing;
(e) Good Standing Certificates. To the extent available from the
applicable jurisdictions and to the extent applicable to the Stations or Radio
Group which are the subject of the Closing, certificates as to the formation
and/or good standing of each Seller issued by the appropriate governmental
authorities in the states of organization and each jurisdiction in which such
Sellers are qualified to do business, each such certificate (if available) to be
dated a date not more than a reasonable number of days prior to the applicable
Closing Date;
(f) Opinions of Counsel. Opinions of Sellers' counsel and
communications counsel dated as of the Closing Date, substantially in the form
of Exhibits 2 and 3 hereto;
(g) Lease. Duly executed copy of the Lease; and
(h) Other Documents. Such other documents reasonably requested by Buyer
or its counsel for complete implementation of this Agreement and consummation of
the transaction contemplated hereby, including the assignments referred to in
Section 6.21, if applicable.
8.3 Deliveries by Buyer. Prior to or on any Closing Date, Buyer shall deliver to
Sellers the following, in form and substance reasonably satisfactory to Sellers
and their counsel:
(a) Closing Payment. The payment of the Estimated Purchase Price
described in Section 2.4(a) for the Stations or Radio Groups as applicable;
(b) Officer's Certificate. A certificate, dated as of such Closing
Date, executed on behalf of an officer of the Buyer, certifying (i) that the
representations and warranties of Buyer contained in this Agreement are true and
complete in all material respects as of such Closing Date as though made on and
as of that date, and (ii) that Buyer has in all material respects performed and
complied with all of its obligations, covenants and agreements in this Agreement
to be performed and complied with on or prior to such Closing Date;
44
(c) Secretary's Certificate. A certificate, dated as of such Closing
Date, executed by Buyer's Secretary: (i) certifying that the resolutions, as
attached to such certificate, were duly adopted by Buyer's Board of Directors,
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect; and (ii) providing, as an attachment thereto, Buyer's
Certificate of Incorporation and Bylaws;
(d) Assumption Agreements. Appropriate assumption agreements pursuant
to which Buyer shall assume and undertake to perform Sellers' obligations and
liabilities to the extent provided under this Agreement for the Stations or
Radio Group for which a Closing occurs, including (without limitation) under the
Licenses and the Assumed Contracts;
(e) Good Standing Certificates. To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of Buyer issued by the appropriate governmental authorities in the state of
organization and each jurisdiction in which Buyer is qualified to do business,
each such certificate (if available) to be dated a date not more than a
reasonable number of days prior to such applicable Closing Date;
(f) Opinion of Counsel. An opinion of Buyer's counsel dated as of the
Closing Date, substantially in the form of Exhibit 4 hereto;
(g) Lease. Duly executed copy of the Lease; and
(h) Other Documents. Such other documents reasonably requested by
Sellers or their counsel for complete implementation of this Agreement and
consummation of the transactions contemplated hereby.
SECTION 9: TERMINATION
9.1 Termination by Mutual Consent. This Agreement may be terminated at any time
prior to Closing by the mutual consent of the parties.
9.2 Termination by Seller. This Agreement may be terminated by Sellers and the
sale and transfer of the Stations or any Radio Group for which a Closing has not
occurred abandoned, if:
(a) Sellers are not then in material default hereunder, upon written
notice to Buyer if on the date that would otherwise be the Final Closing Date
any of the conditions precedent to the obligations of Sellers set forth in
Sections 7.2(a), 7.2(b) and 7.2(e) of this Agreement has not been satisfied or
waived in writing by Sellers (whether or not occurring as the result of Buyer's
material breach of any provision of this Agreement);
(b) Buyer shall default in the performance of its obligations under
this Agreement in any material respect and such default is not cured within
thirty (30) days after notice thereof;
45
(c) Sellers are not then in material default hereunder and Final
Closing has not occurred within one (1) calendar year from the date hereof and
failure of Final Closing to have occurred is due to the failure to receive any
regulatory approval required for Final Closing, including, but not limited to,
expiration or termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period, any FCC
Consents (including, without limitation, such facts as are disclosed on Schedule
4.6 hereto), and the failure of such consent, expiration or termination to be
granted is the result of facts relating to Buyer or any Affiliate of Buyer; or
(d) Sellers are not then in material default hereunder if Closing as to
the Stations or any Radio Group has not occurred within twenty four (24) months
from the date hereof due to the failure to receive any regulatory approval
required for Final Closing, including, but not limited to, the expiration or
termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period of any FCC Consent, and the
failure of such consent, expiration, or termination to be granted is the result
of facts relating to Sellers.
(e) Final Closing has not occurred with respect to all of the Stations
or any Radio Group within eighteen (18) months from the date hereof, if Sellers
are not then in material default hereunder, and such Closing has not occurred
for any reason other than as provided in Section 9.2(d).
9.3 Termination by Buyer. This Agreement may be terminated by Buyer and the
exchange and transfer of the Stations or any Radio Group for which a Closing has
not occurred abandoned, if:
(a) Buyer is not then in material default, upon written notice to
Sellers if on the date that would otherwise be the Final Closing Date any of the
conditions precedent to the obligations of Buyer set forth in Sections 7.1(a),
7.1(b), 7.1(e), 7.1(f), 7.1(g), and 7(h) of this Agreement (and only such
Sections) has not been satisfied or waived in writing by Buyer (whether or not
occurring as the result of Sellers' material breach of any provision of this
Agreement);
(b) Sellers shall have defaulted in the performance of Sellers'
obligations under this Agreement, and such default is not cured within thirty
(30) days after notice thereof and such default has had either a Radio ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Adverse Effect in the case of a Radio Group Closing or a Material
Adverse Effect in the case of a Closing with respect to all of the Stations; or
(c) Buyer is not then in material default hereunder and Final Closing
has not occurred within fifteen (15) months from the date hereof and failure to
close is due to the failure to receive any regulatory approval required for
Closing, including, but not limited to, expiration or termination of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period and any FCC Consents and the failure to receive
such consent is due to facts relating to Sellers or any Affiliate of Sellers.
(d) Final Closing has not occurred with respect to all of the Stations
or any Radio Group within eighteen (18) months from the date hereof, if the
terminating party is not then in material default hereunder and such Closing has
not occurred for any reason other than as provided in Section 9.2(c).
46
9.4 Rights on Termination. If this Agreement is terminated by Buyer pursuant to
Section 9.3 as a result of Sellers' material breach of any provision of this
Agreement, Buyer shall be entitled to the immediate return of the Allocable
Escrow Deposit, and Buyer shall have all rights and remedies available at law or
equity, including the remedy of specific performance described in Section 9.6
below. If this Agreement is terminated by Sellers pursuant to Section 9.2,
Sellers, as their sole remedy, shall be entitled to receive the Allocable Escrow
Deposit, less any amount thereof released in accord with the provisions of this
Agreement prior to such termination, together with all interest or other
proceeds from the investment thereof, but less any compensation due Escrow
Agent, as liquidated damages in full and final settlement of all claims of
Sellers under this Agreement, and there shall be no other or further obligations
or remedies of Sellers hereunder.
9.5 Liquidated Damages Not a Penalty. With respect to the liquidated damages as
described and provided for in Section 9.4 hereof, Sellers and Buyer hereby
acknowledge and agree that the damage that may be suffered by Sellers in the
event of a default by Buyer hereunder is not readily ascertainable and that such
liquidated damages as of the date hereof are a reasonable estimate of such
damages and are intended to compensate Sellers for any such damage and are not
to be construed as a penalty.
9.6 Specific Performance. The parties recognize that if Sellers breach this
Agreement and refuse to perform under the provisions of this Agreement, monetary
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, in addition to any other remedies that may be
available, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Sellers shall waive the
defense that there is an adequate remedy at law.
9.7 Attorneys' Fees. In the event of a default by either party that results in a
lawsuit or other proceeding for any remedy available under this Agreement, the
prevailing party shall be entitled to reimbursement from the other party of its
reasonable legal fees and expenses (whether incurred in arbitration, at trial,
or on appeal).
9.8 Survival. Notwithstanding the termination of this Agreement pursuant to this
Section 9, the obligations of Buyer and Sellers set forth in Sections 6.2, 6.4,
9, 10 (with respect to all Radio Groups for which any Closing has occurred), and
11 shall survive such termination and the parties hereto shall have any and all
rights and remedies to enforce such obligations provided at law or in equity or
otherwise (including without limitations, specific performance).
9.9 Limitations of Termination. Any termination of this Agreement pursuant to
this Section 9 shall be only in respect of those Stations or Radio Group for
which a Closing has not occurred as of the date of such termination.
47
SECTION 10: SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Survival of Representations. All representations and warranties, covenants
and agreements of Sellers and Buyer contained in or made pursuant to this
Agreement or in any certificate furnished pursuant hereto shall survive the
Closing Date for any of the Stations acquired hereunder and shall remain in full
force and effect to the following extent: (a) representations and warranties
(other than the representations and warranties set forth in Section 3.16) shall
survive for a period of twelve (12) months after the Closing Date for such
Station or Radio Group, (b) except as otherwise provided herein, the covenants
and agreements which, by their terms, survive the Closing for such Station or
Radio Group shall continue in full force and effect until fully discharged (but
not beyond the expiration of twelve (12) months after the Closing Date for such
Station or Radio Group), and (c) any representation, warranty, covenant or
agreement that is the subject of a claim which is asserted in a reasonably
detailed writing prior to the expiration of the survival period set forth in
this Section 10.1 shall survive with respect to such claim or dispute until the
final resolution thereof; provided that notwithstanding the foregoing,
representations and warranties set forth in Section 3.16 and the covenant in
Section 6.15 shall survive for the lesser of eighteen (18) months after the
Closing Date for any Radio Group to which such representations and warranties
relate, and (ii) the expiration of the applicable statute of limitations, but,
in no event, shall the survival period in this proviso be less than one (1) year
after the Closing Date for any Radio Group to which such representations and
warranties relate; provided further that the covenants and agreements set forth
in Section 6.4 Confidentiality, Section 6.5 Cooperation, Section 6.9 Books and
Records, Section 11.1 Fees and Expenses, Section 11.2 Notices, and Section 11.3
Benefit and Binding Effect shall survive any applicable Closing for the period
provided therein or, if no period is specified, in perpetuity; and provided
finally that anything to the contrary in this Section 10.1 notwithstanding any
claim for indemnification under Section 10 hereof which is asserted in a
reasonably detailed writing prior to the expiration of the survival periods
provided in this Section 10.1 shall survive with respect to such claim or
dispute until final resolution thereof.
10.2 Indemnification by Seller. After the Closing or a Radio Group Closing, as
applicable,, but subject to Sections 10.1 and 10.5, with respect to those
Stations for which a Closing has occurred, Sellers hereby agree to indemnify and
hold Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages arising out of or
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Sellers contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement;
(b) Any and all obligations of Sellers not assumed by Buyer pursuant to
this Agreement, including any liabilities arising at any time under any Contract
not included in the Assumed Contracts;
48
(c) Any loss, liability, obligation, or cost arising out of or
resulting from the failure of the parties to comply with the provisions of any
bulk sales law applicable to the transfer of the Assets;
(d) Any and all obligations, losses, liabilities, or damages arising
out of or resulting from the operation or ownership of the Stations prior to the
Closing (except any losses, liabilities or damages for which Buyer has received
a proration in its favor or a reduction in Purchase Price under Section 6.15),
including any liabilities arising under the Licenses or the Assumed Contracts to
the extent that they relate to events occurring prior to the Closing Date;
(e) Any and all out-of-pocket costs and expenses, including reasonable
legal fees and expenses, incident to any action, suit, proceeding, claim,
demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity; and
(f) Any and all loss, liabilities or damages arising out of or
resulting from the loss or revocation of any of the FCC Licenses as a result of
actions taken by the FCC (or, to the extent applicable, by any reviewing court)
solely in connection with the specific applications relating to the Stations and
listed on Schedule 10.2.
10.3 Indemnification by Buyer. Notwithstanding any Closing, but subject to
Section 10.5, Buyer hereby agrees to indemnify and hold Sellers harmless against
and with respect to, and shall reimburse Sellers for:
(a) Any and all losses, liabilities, or damages arising out of or
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Buyer contained in this Agreement or in any certificate,
document, or instrument delivered to Sellers under this Agreement;
(b) Any and all obligations of Sellers assumed by Buyer pursuant to
this Agreement;
(c) Any and all obligations, losses, liabilities, or damages arising
out of or resulting from the operation or ownership of the Stations after the
Closing (including, without limitation, any obligations of ▇▇▇▇▇▇▇▇, SCI, or any
Affiliate thereof pursuant to any agreements by which the obligations of any of
the Stations have been guaranteed), except any losses, liabilities or damages
for which Sellers have received a proration in their favor; and
(d) Any and all out-of-pocket costs and expenses, including reasonable
legal fees and expenses, incident to any action, suit, proceeding, claim,
demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification shall be
as follows:
(a) The party claiming indemnification (the "CLAIMANT") shall promptly
give notice to the party from which indemnification is claimed (the
"INDEMNIFYING PARTY") of any claim,
49
whether between the parties or brought by a third party, specifying in
reasonable detail the factual basis for the claim. If the claim relates to an
action, suit, or proceeding filed by a third party against Claimant, such notice
shall be given by Claimant within five business days after written notice of
such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties, following
receipt of notice from the Claimant of a claim, the Indemnifying Party shall
have thirty days to make such investigation of the claim as the Indemnifying
Party deems necessary or desirable. For the purposes of such investigation, the
Claimant agrees to make available to the Indemnifying Party and its authorized
representatives the information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnifying Party agree at or prior to the
expiration of the thirty-day period (or any mutually agreed upon extension
thereof) to the validity and amount of such claim, the Indemnifying Party shall
immediately pay to the Claimant the full amount of the claim. If the Claimant
and the Indemnifying Party do not agree within the thirty-day period (or any
mutually agreed upon extension thereof), the Claimant may seek appropriate
remedy at law or equity.
(c) With respect to any claim by a third party as to which the Claimant
is entitled to indemnification under this Agreement, the Indemnifying Party
shall have the right at its own expense, to participate in or assume control of
the defense of such claim, and the Claimant shall cooperate fully with the
Indemnifying Party, subject to reimbursement for actual out-of-pocket expenses
incurred by the Claimant as the result of a request by the Indemnifying Party,
provided, however, that Indemnifier may not assume control of the defense unless
it affirms in writing its obligation to indemnify Claimant for any damages
incurred by Claimant with respect to such third-party claim. If the Indemnifying
Party elects to assume control of the defense of any third-party claim, the
Claimant shall have the right to participate in the defense of such claim at its
own expense. If the Indemnifying Party does not elect to assume control or
otherwise participate in the defense of any third-party claim, it shall be bound
by the results obtained in good faith by the Claimant with respect to such
claim.
(d) If a claim, whether between the parties or by a third party,
requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Section 10.2 and Section
10.3 shall extend to the members, partners, shareholders, officers, directors,
employees, representatives and affiliated entities of any Claimant although for
the purpose of the procedures set forth in this Section 10.4, any
indemnification claims by such parties shall be made by and through the
Claimant.
10.5 Certain Limitations.
(a) Notwithstanding anything in this Agreement to the contrary, neither
party shall indemnify or otherwise be liable to the other party with respect to
any claim for any breach of a representation or warranty, or for the breach of
any covenant contained in this Agreement, unless notice of the claim is given
within the relevant survival period specified in Section 10.1.
(b) Notwithstanding anything in this Agreement to the contrary, but
except as otherwise
50
provided in this subsection (b) and Schedule 10.5, Sellers shall not be liable
to Buyer in respect of any indemnification hereunder except to the extent that
(i) the aggregate amount of losses of Buyer, when aggregated with the amount of
losses with respect to the Kansas City Stations pursuant to the Kansas City
Agreement, if any, exceeds One Million Dollars ($1,000,000) (the "Threshold
Amount") (and then only to the extent such losses, when aggregated with the
amount of losses with respect to the Kansas City Stations pursuant to the Kansas
City Agreement, if any, exceed the excess of Five Hundred Thousand Dollars
($500,000)) over an amount (not in excess of $100,000) which Sellers are not
required to expend in environmental remediation as a result of the Environmental
Threshold Amount (such excess being the "Excess Amount"), and (ii) the aggregate
amount of losses of Buyer, when aggregated with the amount of losses with
respect to the Kansas City Stations pursuant to the Kansas City Agreement, if
any, is less than the excess of Fifty Million Dollars) ($50,000,000) over any
amounts expended by Buyer pursuant to Section 6.15 (as aggregated with the
Kansas City Stations as set forth therein), or with respect to which Buyer
receives a proration in its favor under Section 6.15 (such excess being the
"Indemnity Cap"); provided, the foregoing shall not be applicable to any amounts
owed in connection with the Purchase Price or the proration adjustment thereof.
In determining whether Sellers shall be obligated to indemnify Buyer under this
Section 10, once the Threshold Amount has been satisfied, each representation
and warranty and each covenant contained in this Agreement for which indemnity
may be sought hereunder shall be read solely for purposes of determining whether
a breach of such representation, warranty or covenant has occurred without
regard to materiality (including Material Adverse Effect) qualifications that
may be contained therein.
(c) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall a party be entitled to indemnification for such
party's consequential or punitive damages, regardless of the theory of recovery.
Each party hereto agrees to use reasonable efforts to mitigate any losses which
form the basis for any claim for indemnification hereunder.
SECTION 11: MISCELLANEOUS
11.1 Fees and Expenses.
(a) Buyer and Sellers shall each pay one-half of (i) any fees charged
by the FCC in connection with obtaining the FCC Consent, and (ii) any filing
fees incurred in connection with any ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings.
(b) Buyer and Sellers shall each pay one-half (1/2) of any filing fees,
transfer taxes, document stamps, or other charges levied by any governmental
entity (other than income Taxes, which shall be the responsibility of Sellers)
on account of the transfer of the Assets from Sellers to Buyer.
(c) Except as otherwise provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization, preparation,
execution and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar Person retained by or on behalf of such party.
51
11.2 Notices. All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be (a) in writing, (b) sent
by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (c) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
To Buyer:
Entercom Communications Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Field
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
(which shall ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
not constitute Washington, D.C. 20004-2505
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
notice) to: Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To Sellers:
c/o Sinclair Broadcast Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇▇▇ Communications, Inc.
(which shall ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
not constitute ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
notice) to: Attn: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
(which shall ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
not constitute ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
notice) to: ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
52
11.3 Benefit and Binding Effect.
(a) Buyer shall have the right to assign all or any portion of its
rights under this Agreement to (i) any entity under common control with Buyer,
(ii) a Qualified Intermediary under Section 1031 of the Code, or (iii) any
lender or any agent for such lender(s) for collateral purposes only; provided,
that no such assignment shall relieve Buyer of its obligations hereunder.
Sellers may assign, combine, merge, or consolidate among themselves and any
Affiliate of Sellers so long as Sellers or their successors and assigns are
bound by the terms and conditions of this Agreement in all respects as if such
successors and assigns were original parties hereto, and such assignment,
combination, merger, or consolidation does not have an adverse affect on Buyer.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. No Person, other
than the parties hereto, is or shall be entitled to bring any action to enforce
any provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder. Other than as
expressly set forth in this Section 11.3(a), no party may assign or transfer all
or any portion of its rights under this Agreement without the prior written
consent of the parties hereto.
(b) Sellers acknowledge and agree that at any Closing, Buyer may
require that Sellers transfer the Assets and liabilities of any Station to a
third party designated in writing by Buyer (a "DESIGNEE") at least ten (10) days
prior to the Closing; provided, however, that (a) such Designee shall on or
prior to the Closing Date assume all assumed liabilities with respect to the
particular Station so transferred; (b) an FCC Order shall have been issued on or
prior to the Closing Date authorizing such transfer; (c) the transfer to such
Designee would not violate any laws, (d) the transfer to such Designee would not
delay in any respect the date for the Closing as required by the terms of this
Agreement; (e) such transfer to a Designee shall not relieve Buyer from any of
its obligations hereunder; (f) there shall be no assignment or transfer (actual
or implied) of this Agreement to the Designee; (g) Sellers shall have no
liabilities to any such Designee under this Agreement or otherwise; and (h) such
Designee shall deliver to the Sellers a written certificate, pursuant to which
the Designee acknowledges and agrees for the benefit of Sellers to the terms and
conditions of the designation as described herein. The parties shall cooperate
in all reasonable respects in making any modifications to the closing documents
and deliveries that may be necessary or appropriate in connection with the
transfer of Assets and liabilities of any Station to any Designee pursuant to
this Section 11.3(b).
11.4 Further Assurances. The parties shall take any actions and execute any
other documents that may be necessary or desirable to the implementation and
consummation of this Agreement.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND (WITHOUT REGARD TO THE CHOICE
OF LAW PROVISIONS THEREOF). IN ADDITION, EACH OF THE PARTIES HERETO SUBMITS TO
LOCAL JURISDICTION IN THE STATE OF MARYLAND AND AGREES THAT ANY ACTION BY ANY
PARTY HEREUNDER SHALL BE INSTITUTED IN THE STATE OF MARYLAND.
53
11.6 Entire Agreement. This Agreement, the Schedules hereto, and all documents,
certificates and other documents to be delivered by the parties pursuant hereto,
collectively, represent the entire understanding and agreement between Buyer and
Sellers with respect to the subject matter of this Agreement. This Agreement
supersedes all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing duly executed by each
of the parties hereto and by ▇▇▇▇▇▇▇▇.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.7.
11.8 Headings. The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
11.9 Counterparts. This Agreement may be signed in two or more counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
IN WITNESS WHEREOF, this Amended and Restated Asset Purchase Agreement has been
executed by the duly authorized officers of Buyer and Sellers as of the date
first written above.
Buyer: Sellers:
Entercom
---------------------------- ▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------- -----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Executive Vice President Title: Secretary
WCGV, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF MILWAUKEE
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF NEW ORLEANS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF NEW ORLEANS
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF MEMPHIS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
55
▇▇▇▇▇▇▇▇ RADIO OF MEMPHIS
LICENSEE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ PROPERTIES, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF NORFOLK/
GREENSBORO LICENSEE L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF NORFOLK
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF BUFFALO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF BUFFALO
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
WLFL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
56
▇▇▇▇▇▇▇▇ RADIO OF GREENVILLE
LICENSEE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF ▇▇▇▇▇▇-▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ RADIO OF ▇▇▇▇▇▇-▇▇▇▇▇
LICENSEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
57