Exhibit 10.18
EXECUTION COPY
AMENDED AND RESTATED REPRESENTATION AGREEMENT
AMENDED AND RESTATED REPRESENTATION AGREEMENT, dated as of
March 30, 1999 (the "Agreement"), by and between INFINITY BROADCASTING
CORPORATION, a Delaware corporation ("Owner"), and WESTWOOD ONE, INC., a
Delaware corporation ("Representative").
W I T N E S S E T H :
WHEREAS, Owner owns and operates the CBS Radio Networks
(collectively, the "Networks"), which provide news, sports and other programming
to affiliated stations nationwide; and
WHEREAS, Representative is engaged, among other things, in the
business of operating radio networks; and
WHEREAS, Owner (as assignee of CBS Inc.), and Representative
are parties to a Representation Agreement, dated as of March 31, 1997 (the
"Existing Representation Agreement"), which is scheduled to expire as of March
30, 1999. Pursuant to the Existing Representation Agreement, Representative
represents Owner with respect to, among other things, the day-to-day business
and operations of the Networks; and
WHEREAS, Owner desires to continue to engage Representative to
represent Owner with respect to the day-to-day business and operations of the
Networks, and Representative is willing to continue to provide such
representation, on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, concurrently with the execution of this Agreement,
Owner and Representative have entered into a Management Agreement (the
"Management Agreement") pursuant to which Owner will provide certain management
services to Representative;
NOW, THEREFORE, the parties hereto covenant and agree as
follows:
#366383 v4
Article 1
Services
Section 1.1. Provision of Services.
(a) Description. Owner hereby engages Representative, as an
independent contractor, and Representative hereby accepts such engagement, on
the terms and subject to the conditions set forth in this Agreement, to
represent Owner in the day-to-day business and operations of the Networks and,
except as otherwise provided herein, to make all decisions relating to such
operations not requiring Owner Approval (as defined in Section 8.1), and to
provide such additional services, if any, as Owner may request in writing from
time to time on terms mutually satisfactory to the parties hereto (all of the
foregoing collectively, the "Services"). The Services shall include making all
decisions (subject to the provisions of Section 8.1 (Owner Approval Matters)),
with respect to (i) sales of commercial time on the Networks, (ii) marketing
with respect to the Networks, (iii) relations with all radio stations affiliated
with one or more of the Networks and (iv) subject to the provisions of Section
6.2 (Programming), programming for the Networks (including, without limitation,
the execution, renewal, amendment, modification or termination of all Personal
Services Contracts (as defined in Section 7.1(b)) and Programming Agreements (as
defined in Section 7.1(c)), other than those related to Owner Programming (as
defined below). As used herein, "Owner Programming" shall mean (i) the
programming provided pursuant to the News Agreement (as defined in Section
6.2(a)), (ii) the programming listed on Schedule 1.1(a) hereto (including the
Programming Agreements and Personal Services Contracts listed therein) and (iii)
such other programming (and the related Personal Services Contracts and
Programming Agreements) for the Networks as may from time to time be derived
from or associated with programming broadcast by or talent associated with the
CBS Television Network (e.g., college football bowl games). The Services shall
not include the exercise by Owner of its rights and obligations under this
Agreement, which rights and obligations shall be exercised and performed by, or
as directed by, the executive management and Board of Directors of Owner. The
parties hereto acknowledge that Representative is being engaged to provide the
Services principally due to its expertise in such matters.
(b) Manner. The Services shall be performed by Representative
with such care as a prudent manager would use in the conduct of his company's
affairs, and Representative shall accord the Networks the same priority as
Representative accords its own operations and the operations of other radio
networks managed or represented by Representative. In providing the Services and
representing Owner with respect to the Networks, Representative shall use its
reasonable commercial efforts to (i) promote the Networks as an advertising
medium and (ii) seek to preserve and maximize the long-term value of the
Networks, including the "CBS Radio Network" tradename. Representative shall, at
Representative's expense, furnish to Owner the services of such full-time and
part-time employees of Representative, including, without limitation, executive,
technical, marketing, research and sales personnel and such other personnel as
2
may be required properly to render the Services. Representative hereby
undertakes, on the terms set forth in the first sentence of this Section 1.1(b),
to cause the Services to be provided such that Owner complies in all material
respects with all obligations required thereof by the Network Agreements (as
defined in Section 7.1) and by all applicable laws, rules and regulations.
(c) Affiliate Matters. Subject to the provisions of Section
7.3 (New Affiliation Agreements) and Section 8.1 (Owner Approval Matters), in
providing the Services and representing Owner with respect to the Networks,
Representative shall use its reasonable commercial efforts to retain affiliates
of the Networks, conduct affiliate relations, and seek to extend Affiliation
Agreements (as defined in Section 7.1(a)) for a term not less than the term of
this Agreement and enter into new Affiliation Agreements.
(d) Consultation. Owner and Representative will consult with
each other from time to time with respect to the Services, the Networks and the
performance of their respective obligations hereunder and under the other
agreements contemplated hereby.
Section 1.2. Reports; Access to Information.
(a) Notice. Representative shall notify Owner as promptly as
practicable after the occurrence of any of the following:
(i) receipt by Representative of (A) any notice or inquiry
from any governmental authority with respect to the
transactions contemplated by this Agreement or the
other agreements contemplated hereby or (B) any written
notice from any governmental authority or third party
of any claim or legal process or notification that, in
the reasonable opinion of Representative, is or is
likely to become material to the Networks; or
(ii) any other development that, in the reasonable opinion
of Representative, materially affects or is likely to
materially affect the Networks or the ability of
Representative to fulfill its obligations under this
Agreement.
(b) Requests for Information. Representative promptly shall
provide to Owner such information (including financial information) concerning
the results of operations and business of the Networks as Owner reasonably may
request from time to time.
(c) Access. Representative shall make available for inspection
by Owner or its representatives, during normal business hours, Representative's
books of account relating to the Networks, and all other records, books and
other information received, compiled or otherwise maintained by Representative
with respect to the Networks, and all other documents reasonably requested by
Owner and its officers, managerial employees, counsel and auditors.
3
(d) Advertising Information. Without limiting the foregoing
provisions of this Section 1.2, during the last six months of the Term (as
defined in Section 2.1), in order to facilitate Owner's determination whether to
seek to extend the term of this Agreement or take other actions with respect to
the Networks upon expiration of the Term, Representative shall make or cause to
be made available to Owner and its representatives such information as Owner
reasonably requests relating to the historical advertising revenues of the
Networks during the Term and the booked advertising sales relating to the
Networks.
Section 1.3. Title. Representative acknowledges that it will
acquire no right, title or interest in any property or assets of Owner by reason
of this Agreement or Representative's provision of the Services hereunder.
Representative further acknowledges that all records, books and other
information received, compiled or otherwise maintained by Representative with
respect to the Networks in connection with Representative's provision of the
Services hereunder are solely the property of Owner and shall be returned to
Owner promptly upon the expiration or earlier termination of the Term; provided,
however, that Owner shall, upon reasonable request of Representative and at
reasonable times, and subject to such confidentiality arrangements as Owner
reasonably requests, permit Representative to make reasonable examination of
such books, records and other information and permit Representative to make
copies of the relevant portions of such books, records and other information.
Section 1.4. Power of Attorney. Subject to the provisions of
Sections 6.2 (Programming) and 8.1 (Owner Approval Matters), Owner appoints
Representative its attorney-in-fact for the Networks during the Term and
authorizes Representative, in the name and on behalf of the Networks, to make,
execute, deliver, acknowledge, swear to, file and record all documents as may be
necessary, in the discretion of Representative, in the performance of the
Services hereunder.
Article 2
Term
Section 2.1. Term. The term during which the Services shall be
provided (the "Term") shall be a period of five (5) years commencing at 12:01
a.m. on March 31, 1999 (the "Effective Date") and terminating on the earlier of
(a) 11:59 p.m. on March 31, 2004 and (b) the termination of this Agreement
pursuant to Article 12 (Termination).
Article 3
Payments
Section 3.1. Representation Rights Fee. (a) Representative
shall pay to Owner for the right to render Services under this Agreement a fixed
annual representation fee of $12,000,000, payable quarterly in arrears in four
(4) equal installments of $3,000,000 on each June 30, September 30, December 31
and March 31 of each year during the Term.
4
(b) The dollar amount of the representation fee (and the
installment payments thereof) set forth in paragraph (a) above shall be
increased, effective as of each anniversary of the Effective Date, beginning
April 1, 2000, by a percentage amount equal to the percentage increase in the
Consumer Price Index All Urban Consumers (Los Angeles-Anaheim-Riverside area;
base 1982-1984=100) as published by the United States Department of Labor,
Bureau of Labor Statistics, as of such anniversary of the Effective Date
compared to such index as in effect on the date hereof. The representation fee,
as adjusted from time to time, shall hereinafter be referred to as the
"Representation Rights Fee."
(c) Each date on which a payment of the Representation Rights
Fee is required to be made under this Article 3 is referred to herein as a
"Payment Date."
Section 3.2. Unconditional Obligation. Except as otherwise set
forth herein, the obligations of Representative to pay the Representation Rights
Fee are unconditional.
Article 4
Expenses
Section 4.1. Operating Expenses.
(a) General. From and after the Effective Date, all expenses
of representing and operating the business of the Networks in accordance with
past practice arising from events which occur from and after the Effective Date,
including, without limitation, the expenses of performing Owner's obligations
under all Network Agreements, shall be the responsibility of, and shall be borne
by, Representative.
(b) No Expense Reimbursement. Representative shall not be
reimbursed for any out-of-pocket costs or expenses incurred by or on behalf of
Representative in connection with or relating to the provision of the Services.
Section 4.2. Working Capital.
(a) Opening Working Capital Balance. The parties acknowledge
and agree that the Opening Working Capital Balance (as defined in Section 4.2(f)
of the Existing Representation Agreement) is $9,012,000.
(b) Interest Payments. The Opening Working Capital Balance
shall bear interest, during each three-month interest period during the Term, at
a rate (the "Interest Rate") per annum equal to 50 basis points above the
six-month London interbank market rate ("LIBOR") (as set forth on the Telerate
Screen as of 10:00 A.M., London time, two business days prior to the beginning
5
of such interest period or, if such rate does not appear on such screen at such
time, such rate shall be determined by reference to such other publicly
available service for displaying LIBOR rates as may be agreed upon by Owner and
Representative). Interest shall be paid on each Payment Date in immediately
available funds; provided, however, that if this Agreement is terminated prior
to the expiration of the Term, the payment required to be made pursuant to
Section 12.5(a)(ii) (Certain Matters Upon Termination - Release of Rights;
Payment) shall be accompanied by a payment of all interest accrued under this
Section 4.2(b) through the date of such payment unless Owner has exercised the
Purchase Right (as defined in Section 12.6(a)), in which event the Opening
Working Capital Balance shall continue to bear interest until Owner or
Representative, as the case may be, makes the payment contemplated by Section
12.6(g) (Purchase of Final Working Capital - Payment).
Article 5
Revenues
Section 5.1. Advertising Revenues. During the Term,
Representative shall have the exclusive authority, subject at all times to
compliance with all applicable laws, rules and regulations and all Network
Agreements (including all agreements and arrangements with advertisers or their
representatives relating to the Networks as in effect from time to time during
the Term (collectively, "Advertising Arrangements")) to sell for its own account
commercial time on the Networks and to retain all revenues from the sale of such
commercial time.
Article 6
Owner Agreements
Section 6.1. License Agreement. On the Effective Date, Owner
and Representative shall enter into a license agreement in the form attached
hereto as Exhibit A (the "License Agreement") pursuant to which Owner shall
grant to Representative a royalty-free license to use the tradename "CBS Radio
Network" in connection with Representative's performance of the Services during
the Term.
Section 6.2. Programming. (a) News Agreement. On the Effective
Date, Owner and Representative shall enter into a programming agreement in the
form attached hereto as Exhibit B (the "News Agreement").
(b) Programming Decisions. (i) During the Term, Owner shall
continue, in the ordinary course of business, to make all decisions
(other than with respect to the Services) concerning the Owner
Programming, including all decisions relating to the execution,
renewal, amendment, modification or termination of all Personal
Services Contracts and Programming Agreements related thereto
(including those Personal Services Contracts and Programming Agreements
described on Schedule 1.1(a), collectively, the "Owner Programming
6
Agreements"); provided, however, that no renewal, amendment,
modification or termination that materially affects Representative's
obligations in respect of such Owner Programming shall be made without
the prior consent of Representative. Owner shall consult with
Representative with respect to such decisions involving any proposed
execution, amendment, modification, renewal or termination of any Owner
Programming Agreement (it being understood that Representative shall
not have any right hereunder to approve any of the foregoing).
Notwithstanding anything to the contrary contained in this Agreement,
it is understood and agreed that Representative shall make all
decisions with respect to whether the Networks should carry Owner
Programming not currently carried by the Networks.
(ii) During the Term, Representative shall, in the ordinary
course of business, make all decisions concerning the programming on the
Networks (other than the Owner Programming), including all decisions relating to
the execution, renewal, amendment, modification or termination of all Personal
Services Contracts and Programming Agreements (other than the Owner Programming
Agreements). Without the written consent of Representative, Owner shall not
execute, amend, modify, renew or terminate any Personal Services Contract or
Programming Agreement that is not an Owner Programming Agreement. Representative
shall consult with Owner with respect to decisions involving any proposed
execution, amendment, modification, renewal or termination of any Personal
Services Contract or Programming Agreement that is not an Owner Programming
Agreement (it being understood that Owner shall not have any right hereunder to
approve any of the foregoing).
Section 6.3. Technical Services Agreement. On the Effective
Date, Owner and Representative shall enter into a service agreement in the form
attached hereto as Exhibit C (the "Technical Services Agreement").
Section 6.4. O&O Commitment.
(a) O&O Affiliated Stations. Attached hereto as Schedule
6.4(a) is a true, correct and complete list of all radio stations that were
subject to the Existing Representation Agreement and that are owned by Owner as
of the date hereof (each, an "O&O Affiliated Station" and, collectively, the
"O&O Affiliated Stations"). Concurrently with the execution hereof, the Company
has entered into a standard Affiliation Agreement, the form of which is attached
hereto as Exhibit D, with each such O&O Affiliated Station for the annual
compensation listed on Schedule 6.4(a).
(b) Commitment. Owner hereby agrees to cause all of the O&O
Affiliated Stations to continue to be affiliates of the Networks with which it
is affiliated as of the Effective Date until the earlier of (i) the expiration
or earlier termination of the Term or (ii) with respect to any O&O Affiliated
Station, such time as such O&O Affiliated Station no longer is owned and
operated by Owner, and shall cause the term of the Affiliation Agreements to be
amended and/or extended to reflect the foregoing.
7
(c) Additional O&O Affiliated Stations. If, during the Term,
(i) Owner acquires a radio station and desires that such station become an
affiliate of the CBS Spectrum Radio Network or the CBS Radio Network (if not
already an affiliate thereof), or (ii) Owner desires that a radio station
currently owned and operated by Owner and not affiliated with either or both of
such Networks become an affiliate of such Network(s) with which such station is
not affiliated, Representative shall, if so requested by Owner, enter into an
affiliation agreement on behalf of such Network(s) with respect to such station.
(d) No Limitations on Owner. Nothing contained in this Section
6.4 shall restrict or limit in any respect whatsoever Owner's right to sell,
transfer or otherwise dispose of any radio station which is or becomes an O&O
Affiliated Station.
Article 7
Network Agreements and Arrangements
Section 7.1. Owner hereby represents and warrants to
Representative as follows:
(a) Personal Services Contracts. Set forth on Schedule 7.1(a)
hereto is a true, correct and complete description of all personal services
contracts of Owner with respect to the Networks as of the date hereof that were
in effect as of March 31, 1997 (as the same may be amended, modified, renewed or
extended by Owner or Representative during the Term in accordance with this
Agreement, and together with all other personal services contracts entered into
by Owner or Representative during the Term with respect to the Networks in
accordance with this Agreement, the "Personal Services Contracts").
(b) Programming Agreements. Set forth on Schedule 7.1(b)
hereto are true, correct and complete lists (as of the date thereof) of all
broadcast rights agreements between Owner or Representative and third parties
with respect to the provision of programming to or for the Networks that were in
effect as of March 31, 1997 (as the same may be amended, modified, renewed or
extended by Owner or Representative during the Term in accordance with this
Agreement, and together with all other broadcast rights agreements entered into
by Owner or Representative during the Term with respect to the Networks in
accordance with this Agreement, the "Programming Agreements").
As used in this Agreement, "Network Agreements" refers collectively to (i) all
affiliation agreements with radio stations affiliated with one or more of the
Networks, (ii) Personal Services Contracts, (iii) Programming Agreements, and
(iv) Advertising Arrangements.
Section 7.2. Performance of Network Agreements. During the
Term, Representative shall pay, satisfy and discharge the liabilities,
obligations and commitments of Owner arising or accruing after the Effective
Date under all Network Agreements.
8
Section 7.3. New Affiliation Agreements. Subject to the
provisions of Section 8.1 (Owner Approval Matters), all Affiliation Agreements
entered into during the Term shall be required to be entered into by
Representative on behalf of Owner, and Representative shall not enter into any
such new Affiliation Agreement in its own name, to the extent that such
programming received by the affiliate is Owner Programming.
Section 7.4. Assignments. Owner is not assigning and shall
have no obligation to assign any Network Agreement or any other agreement to
Representative.
Article 8
Owner Approval Matters
Section 8.1. Owner Approval Matters. Notwithstanding anything
to the contrary contained herein, Representative shall not take any of the
following actions without the prior written approval of the Chairman or the
Chief Financial Officer of Owner: (a) institute any legal proceedings on behalf
of the Networks (other than ordinary course collection matters instituted by
Representative following not less than thirty (30) days' prior written notice to
Owner); or (b) enter into, terminate, extend or modify in any material respect
any Affiliation Agreement, except that Owner approves of the extension of any
Affiliation Agreements for a term of up to five years and shall assist
Representative in obtaining such extensions.
Article 9
Conditions
Section 9.1. Conditions. The rights and obligations of the
parties hereto that are to commence on the Effective Date shall be subject to
the following conditions, which may be waived by the applicable party:
(a) Representations, Warranties and Covenants. The
representations and warranties of the other party made in this Agreement shall
be true and correct in all material respects as of the Effective Date as though
made on such date, and the other party shall have performed all obligations
required to be performed by it under this Agreement at or prior to the Effective
Date. Each party shall have received an officer's certificate of the other
party, dated the Effective Date, to the foregoing effect.
(b) Absence of Certain Termination Events. There shall not
have occurred an event that would permit either party to terminate this
Agreement pursuant to Section 12.2 (Termination for Change in FCC Rules or
Policies; Legal Proceedings) or, in the case of Owner, would permit Owner to
terminate this Agreement pursuant to Section 12.3 (Owner Termination Event).
9
Article 10
Indemnification
Section 10.1. Indemnification.
(a) Indemnification of Representative by Owner. From and after
the Effective Date, Owner shall indemnify and hold Representative, its
affiliates and their respective directors, officers, affiliates, employees and
agents, and the successors and assigns of any of them, harmless from and against
any and all actions, claims, damages and liabilities (and all actions in respect
thereof and any legal or other expenses in giving testimony or furnishing
documents in response to a subpoena or otherwise and whether or not a party
thereto), whether or not arising out of third party claims, including reasonable
legal fees and expenses in connection with, and other costs of, investigating,
preparing or defending any such action or claim, whether or not in connection
with litigation in which such person is a party, and as and when incurred
(collectively, "Losses"), caused by, relating to, based upon or arising out of
(directly or indirectly) (i) any breach of, or inaccuracy in, any representation
or warranty of Owner in this Agreement, the License Agreement, the News
Agreement, the Technical Services Agreement or any certificate or other document
delivered pursuant hereto or thereto or in connection herewith or therewith, and
(ii) any breach of any covenant or agreement of Owner contained in this
Agreement, the License Agreement, the News Agreement or the Technical Services
Agreement.
(b) Indemnification of Owner by Representative. From and after
the Effective Date, Representative shall indemnify and hold Owner, its
affiliates and their respective directors, officers, affiliates, employees and
agents, and the successors and assigns of any of them, harmless from and against
any and all Losses caused by, relating to, based upon or arising out of
(directly or indirectly) (i) any liabilities, obligations or commitments
(whether absolute, accrued, contingent or otherwise) arising or accruing after
the Effective Date under the Network Agreements or Representative's performance
of the Services or operation of the Networks on or after the Effective Date
through the expiration date or termination date hereof (except to the extent
caused by, relating to, based upon or arising out of (directly or indirectly)
the matters described in clauses (i) and (ii) of Section 10.1(a) or actions
taken by Owner under the Owner Programming Agreements); (ii) any breach of, or
inaccuracy in, any representation or warranty of Representative in this
Agreement, the License Agreement, the News Agreement, the Technical Services
Agreement or any certificate or other document delivered pursuant hereto or
thereto or in connection herewith or therewith; and (iii) any breach of any
covenant or agreement of Representative contained in this Agreement, the License
Agreement, the News Agreement or the Technical Services Agreement.
Section 10.2. Procedure for Indemnification.
(a) Notice of Claims. In the event of a claim for breach of
the representations and warranties contained in this Agreement or for failure to
fulfill a covenant or agreement, the party asserting such breach or failure
10
shall provide a written notice to the other party which shall state specifically
the representation, warranty, covenant or agreement with respect to which the
claim is made, the facts giving rise to an alleged basis for the claim and the
amount of liability asserted against the other party by reason of the claim.
(b) Procedures; Third Party Claims. If any suit, action,
proceeding or investigation shall be commenced or any claim or demand shall be
asserted by any third party (a "Third Party Claim") in respect of which
indemnification may be sought by any party or parties from any other party or
parties under the provisions of this Article 10, the party or parties seeking
indemnification (collectively, the "Indemnitee") shall promptly provide written
notice to the party or parties from which indemnification is sought
(collectively, the "Indemnitor"); provided, however, that any failure by an
Indemnitee to so notify an Indemnitor will not relieve the Indemnitor from its
obligations hereunder, except to the extent that such failure shall have
prejudiced the defense of such Third Party Claim. The Indemnitor shall have the
right to control (except where an insurance carrier has the right to control or
where an insurance policy or applicable law prohibits the Indemnitor from taking
control of) the defense of any Third Party Claim; provided, however, that the
Indemnitee may participate in any such proceeding with counsel of its choice and
at its own expense unless there exists a conflict between the Indemnitor and the
Indemnitee as to their respective legal defenses, in which case the fees and
expenses of any such counsel shall be reimbursed by the Indemnitor. Except as
otherwise set forth herein, the Indemnitee shall have the right to participate
in (but not control) the defense of any Third Party Claim and to retain its own
counsel in connection therewith, but the fees and expenses of any such counsel
for the Indemnitee shall be borne by the Indemnitee. The Indemnitor shall not,
without the prior written consent of the Indemnitee, effect any settlement of
any pending or threatened proceeding in respect of which such Indemnitee is, or
with reasonable foreseeability could have been, a party and indemnity could have
been sought to be collected from the Indemnitor, unless such settlement includes
an unconditional release of such Indemnitee from all liability arising out of
such proceeding (provided, however, that, whether or not such a release is
required to be obtained, the Indemnitor shall remain liable to such Indemnitee
in accordance with Section 10.1 (Indemnification) in the event that a Third
Party Claim is subsequently brought against or sought to be collected from such
Indemnitee). The Indemnitor shall be liable for all Losses arising out of any
settlement of any Third Party Claim; provided, however, that the Indemnitor
shall not be liable for any settlement of any Third Party Claim brought against
or sought to be collected from an Indemnitee, the settlement of which is
effected by such Indemnitee without such Indemnitor's written consent, but if
settled with such Indemnitor's written consent, or if there is a final judgment
for the plaintiff in any such Third Party Claim, such Indemnitor shall (to the
extent stated above) indemnify the Indemnitee from and against any Losses in
connection with such Third Party Claim. The indemnification required by Section
10.1 (Indemnification) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Losses are incurred.
11
Section 10.3. Survival of Representations, Warranties and
Covenants. The representations and warranties contained in this Agreement, the
License Agreement, the News Agreement, the Technical Services Agreement or any
certificate, document or instrument delivered pursuant hereto or thereto shall
survive for a period of six (6) months following the termination of this
Agreement (the "Survival Period"). No claim may be brought under this Agreement
unless the requisite written notice is given on or prior to the termination of
the Survival Period. In any event such notice is given prior to the termination
of the Survival Period, the right to indemnification with respect thereto shall
survive until such claim is finally resolved and any obligations thereto are
fully satisfied. Any investigation by or on behalf of any party thereto shall
not constitute a waiver as to enforcement of any representation or warranty
contained herein.
Article 11
Events of Default and Cure Periods
Section 11.1. Events of Default. The following shall, after
the expiration of the applicable cure periods (if any) as set forth in Section
11.2 (Cure Periods), each constitute an "Event of Default" under this Agreement.
(a) Non-Payment. Representative's failure to pay when due the
fees or other amounts payable by Representative under this Agreement, the News
Agreement or the Technical Services Agreement;
(b) Default in Covenants. Either party defaults in any
material respect in the performance of any covenant or undertaking contained in
this Agreement, the License Agreement, the News Agreement or the Technical
Services Agreement;
(c) Breach of Representation. Any representation or warranty
made by either party to this Agreement, the License Agreement, the News
Agreement or the Technical Services Agreement proves to have been false or
misleading in any material respect as of the time made.
(d) Bankruptcy. Either party (a) makes a general assignment
for the benefit of creditors, or (b) files or has filed against it a petition
for bankruptcy, for reorganization or an arrangement, or for the appointment of
a receiver, trustee or similar creditors' representative for the property or
assets of such party under any federal or state insolvency law, which, if filed
against such party, has not been dismissed or discharged within sixty (60) days
thereafter.
Section 11.2. Cure Periods. Except for an Event of Default
described in Section 11.1(a) (as to which there shall be a ten (10) day cure
period commencing, with notice, immediately upon the occurrence of any
non-payment described in such section), an Event of Default shall not be deemed
to have occurred until thirty (30) days after the non-defaulting party has
provided the defaulting party with written notice specifying the event or events
that, if not cured, would constitute an Event of Default and specifying the
12
actions necessary to cure the default(s) within such period. Such thirty (30)
day period may be extended for a reasonable period of time if the defaulting
party is acting in good faith to cure and such delay is not materially adverse
to the other party.
Article 12
Termination
Section 12.1. Termination Upon Default. Upon the occurrence of
an Event of Default, the non-defaulting party may terminate this Agreement,
provided that it is not also in material default of this Agreement, the License
Agreement or the News Agreement. Without limiting Owner's remedies hereunder in
connection with a default by Representative, if Representative has defaulted in
the performance of its obligations, all amounts accrued or payable to Owner
hereunder or under the News Agreement or the Technical Services Agreement up to
the date of termination which have not been paid shall immediately become due
and payable.
Section 12.2. Termination for Change in FCC Rules or Policies;
Legal Proceedings. Either party may terminate this Agreement upon written notice
to the other if:
(a) FCC Matters. There has been a material change in FCC rules
or policies that would cause this Agreement to be in violation thereof and such
change is in effect and not the subject of an appeal or further administrative
review; provided, however, that in such event the parties shall negotiate in
good faith and attempt to agree to an amendment to this Agreement that will
provide the parties with a valid and enforceable agreement that conforms to the
new FCC rules or policies.
(b) Legal Proceedings. An action or proceeding shall have been
instituted by any governmental authority seeking to restrain, prohibit or
otherwise limit in any material respect the consummation of the transactions
contemplated hereby or the performance by any party of its obligations hereunder
or under the License Agreement, the News Agreement or the Technical Services
Agreement, or a court or governmental authority shall have issued any order
restraining, prohibiting or limiting in any material respect the consummation of
such transaction or the performance of such obligations, or which could
reasonably be expected to adversely affect the business of the Networks.
Section 12.3. Owner Termination Event. Owner may terminate
this Agreement if the Management Agreement shall have expired without renewal or
shall have been terminated pursuant to Section 3.2 thereof.
Section 12.4. Representative Termination Event. Representative
may terminate this Agreement, upon not less than ninety (90) days' prior written
notice to Owner if the Management Agreement shall have (i) expired without
renewal, (ii) been terminated pursuant to Section 3.2(a) or 3.2 (c) thereof or
(iii) been terminated pursuant to Section 3.2(b) thereof.
13
Section 12.5. Certain Matters Upon Termination.
(a) Release of Rights; Payment. If this Agreement expires or
is terminated for any reason in accordance herewith:
(i) Representative shall cease providing the Services and,
following such expiration or termination, shall
cooperate with Owner in connection with the resumption
by Owner of overall management of the Networks;
(ii) Representative shall, on the expiration date or, in the
case of earlier termination, not later than sixty (60)
days following the termination date, pay to Owner, by
wire transfer of immediately available funds, (x) the
Opening Working Capital Amount and (y) accrued interest
thereon as provided in Section 4.2(b) (Working
Capital-Interest Payments);
(iii) In the case of termination prior to the expiration of
this Agreement, Representative shall pay to Owner, by
wire transfer of immediately available funds, not later
than sixty (60) days following the termination date,
all amounts of the Representation Rights Fee accrued
through the termination date, together with interest
thereon at the Interest Rate from and including the
next scheduled Payment Date through but excluding the
actual date of payment; provided, however, that if
Representative terminates this Agreement pursuant to
Section 12.4 (other than clause (iii) thereof),
Representative shall pay to Owner, by wire transfer of
immediately available funds, not later than sixty (60)
days following the termination date, all remaining
installments of the Representation Rights Fee for the
remainder of the Term, together with interest thereon
at the Interest Rate from and including the next
scheduled Payment Date through but excluding the actual
date of payment; and
(iv) Owner may terminate the License Agreement, the News
Agreement and/or the Technical Services Agreement.
(b) Indemnification Rights Survive. No expiration or
termination of this Agreement shall terminate the obligation of any party to
indemnify the other under Section 10.1 (Indemnification) or limit or impair any
party's rights to receive payments due and owing hereunder on or before the date
of such termination.
Section 12.6. Purchase of Final Working Capital.
(a) Purchase Right. Notwithstanding anything to the contrary
contained in this Agreement, Owner shall have the right (the "Purchase Right"),
but not the obligation, upon the expiration or earlier termination of the Term,
to acquire all of Representative's right, title and interest in and to, and
shall in connection therewith assume Representative's liabilities included in,
all items of Working Capital (as hereinafter defined) set forth in the Final
Working Capital Amount (as hereinafter defined). "Working Capital" shall mean,
14
as of any date, the excess of the current assets (excluding cash) over the
current liabilities of the Networks as of such date, calculated in accordance
with the principles, practices and captions historically used in the preparation
of such amount by Owner.
(b) Exercise. If Owner desires to exercise the Purchase Right
(i) upon expiration of the Term, Owner shall provide written notice to such
effect to Representative not less than sixty (60) days prior to the end of the
Term or (ii) in connection with a termination of this Agreement other than upon
its expiration, Owner shall provide written notice to such effect to
Representative prior to the effective date of any such termination.
(c) Final Working Capital Statement. Not later than sixty (60)
days after the expiration date or effective date of any such termination, as the
case may be (in any such case, the "Termination Date"), Representative shall
prepare a statement in accordance with those principles, practices and captions
utilized in preparing the Opening Working Capital Statement (as defined in the
Existing Representation Agreement) which shall set forth the Working Capital of
the Networks as of the close of business on the Termination Date (the "Final
Working Capital Statement"), and shall deliver the Final Working Capital
Statement to Owner.
(d) Resolution of Disputes. After delivery of the Final
Working Capital Statement pursuant to Section 12.6(c), Owner shall have thirty
(30) days to review the Final Working Capital Statement (the "Review Period")
and notify Representative in writing (in reasonable detail) (a "Dispute Notice")
of any proposed adjustments thereto. If Owner does not so notify Representative
during the Review Period, the Final Working Capital Statement and
Representative's calculation of the Working Capital of the Networks as of the
close of business on the Termination Date shall be deemed final and binding on
both parties (absent manifest error). If Owner delivers a Dispute Notice during
the Review Period and Owner and Representative fail to resolve (which resolution
may include, for example, the exclusion from Working Capital of any account
receivable or payable as to which a dispute exists) any dispute with respect to
any such proposed adjustment to the amount of Working Capital set forth in the
Final Working Capital Statement within ten (10) business days following delivery
of such Dispute Notice (the "Negotiation Period"), such dispute shall be
submitted to a nationally-recognized firm of independent public accountants
jointly selected by Owner and Representative whose determination with respect to
any such proposed adjustment(s) shall be final and binding on both parties
(absent manifest error); provided, however, that if Owner and Representative
fail to agree upon such firm within five (5) business days following the
Negotiation Period, each of Owner and Representative shall during such five (5)
business day period name such a firm, and such firms shall in turn select a
third such firm (the firm selected pursuant to this Section 12.6(d) being
referred to as the "Referee"), whose determination with respect to any such
proposed adjustment(s) shall be final and binding on both parties.
Representative and Owner agree to share equally the costs and expenses of the
Referee, but each party shall bear its own legal and other expenses, if any.
15
(e) Final Working Capital Amount. The amount finally
determined as the Working Capital as of the Termination Date pursuant to this
Section 12.6 is referred to in this Agreement as the "Final Working Capital
Amount".
(f) Transfer of Final Working Capital. If Owner exercises the
Purchase Right, on the Termination Date, (i) Representative shall transfer to
Owner all assets (including accounts receivable), and Owner shall assume
Representative's liabilities (including accounts payable), included in the Final
Working Capital Statement, (ii) to the extent practicable, Representative shall
assign, transfer and convey to Owner all of Representative's rights in, to and
under all Advertising Arrangements existing on the Termination Date relating to
the Networks (collectively, the "Assigned Advertising Arrangements") (it being
agreed that Representative shall use its reasonable efforts to promptly obtain
and deliver to Owner, at Representative's expense, any necessary consents to the
assignment of the Assigned Advertising Arrangements to Owner) and (iii) Owner
shall assume from Representative all liabilities, obligations and commitments of
Representative arising or accruing on or after the Termination Date pursuant to
the Assigned Advertising Arrangements (solely to the extent of the Networks'
interest therein). Following the Termination Date, (i) each of Owner and
Representative shall use reasonable commercial efforts to collect all accounts
receivable included in Working Capital as of the Termination Date and (ii)
Representative shall remit semi-monthly to Owner all amounts received by
Representative as payments in respect of accounts receivable included in Working
Capital as of the Termination Date. If any of the accounts receivable included
in Working Capital as of the Termination Date have not been collected as of the
date that is nine months following the Termination Date, Representative shall
purchase such uncollected accounts receivable ("Final Purchased Accounts
Receivable") from Owner not later than ten days following the expiration of such
nine month period for 85% of their gross amount (before agency commissions),
less any reserve for doubtful accounts reflected as an offset to a current asset
on the Final Working Capital Statement (such amounts, in the aggregate, the
"Final Purchased Accounts Receivable Amount"), except that Representative will
not be required to purchase any accounts receivable as to which Owner has waived
the right to collect all or a portion of the sum due. For purposes of
determining whether or not an account receivable has been collected, all
payments of accounts receivable shall be applied against the oldest outstanding
account receivable from the applicable obligor, unless such obligor specifies
the receivable against which payment is being made. The Final Purchased Accounts
Receivable Amount shall be paid, by wire transfer in immediately available
funds, not later than the expiration of such ten-day period. If Representative
is required to, and does, purchase any such accounts receivable, Owner will
execute appropriate documents of assignment, transferring such Final Purchased
Accounts Receivable to Representative, and if Representative so requests, Owner
will attempt to collect such Final Purchased Accounts Receivable as agent for
Representative and to remit promptly to Representative any sums that are
collected.
(g) Payment. Not later than ten (10) days following the final
determination of the Final Working Capital Amount, (i) if the Final Working
16
Capital Amount exceeds the Opening Working Capital Balance (plus accrued
interest thereon as provided in Section 4.2(b) (Working Capital - Interest
Payments)), Owner shall pay to Representative, by wire transfer of immediately
available funds, an amount equal to the amount of such excess, and (ii) if the
Opening Working Capital Balance (plus accrued interest thereon as provided in
Section 4.2(b) (Working Capital - Interest Payments)) exceeds the Final Working
Capital Amount, Representative shall pay to Owner, by wire transfer of
immediately available funds, an amount equal to the amount of such excess.
Section 12.7. Attorneys' Fees and Costs. In the event any
action or proceeding is commenced by either party to enforce the provisions of
this Agreement or to seek remedies for a breach or wrongful termination of this
Agreement, the prevailing party in such an action or proceeding shall be
entitled to the award of its reasonable attorneys' fees and costs incurred in
and relating to such an action or proceeding.
Section 12.8. Waiver of Owner Purchase Right. Effective as of
the Effective Date, Owner hereby permanently waives the provisions of Sections
13.5(a)(ii) (Certain Matters Upon Termination - Release of Rights; Payment) and
13.6 (Purchase of Final Working Capital) of the Existing Representation
Agreement.
Article 13
Representations and Warranties
Section 13.1. Representations and Warranties of Owner. Owner
hereby represents and warrants that:
(a) Organization and Standing. Owner is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, and has all necessary corporate power and authority to carry on the
business of the Networks and to perform its obligations hereunder.
(b) Authorization and Binding Obligation. Owner has all
necessary power and authority to enter into and perform this Agreement, the
License Agreement, the News Agreement and the Technical Services Agreement and
the transactions contemplated hereby and thereby, and Owner's execution,
delivery and performance of this Agreement, the License Agreement, the News
Agreement and the Technical Services Agreement have been duly and validly
authorized and all necessary action on its part. This Agreement has been, and
upon execution and delivery thereof on the Effective Date each of the License
Agreement, the News Agreement and the Technical Services Agreement will have
been duly executed and delivered by Owner and constitutes and will constitute
its valid and binding obligations enforceable against Owner in accordance with
their respective terms.
(c) Absence of Conflicting Agreements or Required Consents.
The execution, delivery and performance of this Agreement, the License
Agreement, the News Agreement and the Technical Services Agreement by Owner: (i)
17
do not and will not violate any provision of Owner's organizational documents;
(ii) do not and will not require the consent of or any filing with any third
party or governmental authority; (iii) do not and will not violate any
applicable law, judgment, order, injunction, decree, rule, regulation or ruling
of any governmental authority; and (iv) do not and will not, either alone or
with the giving of notice or the passage of time, or both, conflict with,
constitute grounds for termination or acceleration of or result in a breach of
the terms, conditions or provisions of, or constitute a default under any
agreement, lease, instrument, license or permit to which Owner is now subject.
(d) Absence of Proceedings. There is no action, suit or
proceeding, at law or an equity, by or before any court, tribunal or
governmental authority pending or, to the knowledge of Owner, threatened, which,
if adversely determined, would materially and adversely affect Owner's ability
to perform its obligations hereunder or under the License Agreement, the News
Agreement or the Technical Services Agreement or the validity or enforceability
of this Agreement or such other agreements.
Section 13.2. Representations and Warranties of
Representative. Representative hereby represents and warrants that:
(a) Organization and Standing. Representative is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority to perform its
obligations hereunder.
(b) Authorization and Binding Obligation. Representative has
all necessary power and authority to enter into and perform this Agreement, the
License Agreement, the News Agreement and the Technical Services Agreement and
the transactions contemplated hereby and thereby, and Representative's
execution, delivery and performance of this Agreement have been duly and validly
authorized by all necessary action on its part. This Agreement has been, and
upon execution and delivery thereof the License Agreement, the News Agreement
and the Technical Services Agreement will have been duly executed and delivered
by Representative and constitutes and will constitute its valid and binding
obligations enforceable against Representative in accordance with their
respective terms.
(c) Absence of Conflicting Agreements or Required Consents.
The execution, delivery and performance of this Agreement, the License
Agreement, the News Agreement and the Technical Services Agreement by
Representative: (i) do not and will not violate any provision of
Representative's organizational documents; (ii) do not and will not require the
consent of or any filing with any third party or governmental authority; (iii)
do not and will not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority; and (iv) do
not and will not, either alone or with the giving of notice or the passage of
time, or both, conflict with, constitute grounds for termination or acceleration
of or result in a breach of the terms, conditions or provisions of, or
constitute a default under any agreement, lease, instrument, license or permit
to which Representative is now subject.
18
(d) Absence of Proceedings. There is no action, suit or
proceeding, at law or an equity, by or before any court, tribunal or
governmental authority pending or, to the knowledge of Representative,
threatened, which, if adversely determined, would materially and adversely
affect Representative's ability to perform its obligations hereunder or under
the License Agreement, the News Agreement or the Technical Services Agreement or
the validity or enforceability of this Agreement or such other agreements.
Article 14
Confidentiality
Section 14.1. Confidentiality. Representative shall treat
confidentially all records, books and other information of any type received or
compiled for the benefit of Owner hereunder in connection with this Agreement.
Representative agrees not to disclose any such records, books and information to
any third party (other than directors, officers, partners, employees or outside
advisors of such party and other than expressly in the performance of such
party's obligations hereunder) without the prior written consent of Owner. The
foregoing agreement shall not be applicable to any information that is (i)
publicly available when provided or that thereafter becomes publicly available
other than through a breach by such party of its agreements hereunder, (ii)
required to be disclosed by Representative by judicial or administrative process
in connection with any action, suit, proceeding or claim, or otherwise by
applicable law or (iii) known by Representative on the date of this Agreement,
not otherwise primarily related to the business of the Networks or any Network
Office and not otherwise subject to a confidentiality agreement with, or other
obligation of secrecy to, Owner or any other party. Information shall be deemed
"publicly available" and not subject to Representative's agreement hereunder if
such information becomes a matter of public knowledge or is contained in
materials available to the public or is obtained by Representative from any
source other than Owner (or its directors, officers, partners, employees or
outside advisors), provided that such source has not, to Representative's actual
knowledge, entered into a confidentiality agreement with Owner with respect to
such information.
Article 15
Miscellaneous
Section 15.1. No Partnership or Joint Venture. This Agreement
is not intended to be, and shall not be construed as, a partnership or joint
venture agreement between the parties. Except as otherwise specifically provided
in this Agreement, no party to this Agreement shall be authorized to act as
agent of, or otherwise represent, the other party to this Agreement.
Section 15.2. Entire Agreement; Schedules; Amendment; Waiver.
This Agreement, the License Agreement, the News Agreement and the Technical
Services Agreement, and the exhibits and schedules hereto and thereto, embody
19
the entire agreement and understanding of the parties hereto and supersede any
and all prior agreements, arrangements and understandings relating to the
matters provided for herein. No amendment, waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement, shall be
effective unless evidenced by an instrument in writing signed by the party
against whom enforcement of any amendment, waiver or consent is sought. No
failure or delay on the part of Owner or Representative in exercising any right
or power under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the parties to this Agreement are cumulative and are not
exclusive of any right or remedies which either may otherwise have. This
Agreement will automatically become effective, without further action of the
parties, on the Effective Date, whereupon, except as provided in Section 14.5(b)
thereof, the Existing Representation Agreement shall be superseded in its
entirety, except for the provisions of Sections 7.2(e)-(h) (Employee
Matters-Transferred Employees), which shall remain in full force and effect.
Section 15.3. Further Assurances. Each of Owner and
Representative agrees to execute and deliver such instruments and take such
other actions as may reasonably be required to carry out the intent of this
Agreement.
Section 15.4. Benefit and Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Neither Representative nor Owner may assign
its rights under this Agreement without prior written consent of the other party
hereto.
Section 15.5. Headings. The headings set forth in this
Agreement are for convenience only and will not control or affect the meaning or
construction of the provisions of this Agreement.
Section 15.6. Governing Law. The construction and performance
of this Agreement shall be governed by the laws of the State of New York without
regard to its principles of conflict of laws.
Section 15.7. Notices. All notices, requests, demands and
other communications which are required or may be given under this Agreement
shall be in writing, and addressed as follows:
If to Owner:
Infinity Broadcasting Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
20
With a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Representative:
Westwood One, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice, request, demand or communication shall be deemed to have been
duly delivered and received (a) upon hand delivery thereof during business
hours, (b) upon the earlier of receipt of three (3) days after posting by
registered mail or certified mail, return receipt requested, (c) on the next
business day following delivery to a reliable or recognized air freight delivery
service, and (d) on the date of transmission, if sent by facsimile during normal
business hours (but only if a hard copy is also send by overnight courier), but
in each case only if sent in the same manner to all persons entitled to receive
notice or a copy. Any party may, with written notice to the other, change the
place for which all further notices to such party shall be sent. All costs and
expenses for the delivery of notices hereunder shall be borne and paid for by
the delivering party.
Section 15.8. Severability. If any of the provisions of this
Agreement shall be held unenforceable, then the remaining provisions shall be
construed as if such unenforceable provisions were not contained herein. Any
provision of this Agreement which is unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such unenforceability
without invalidating the remaining provisions hereof, and any such
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent permitted
21
by applicable law, the parties hereto hereby waive any provision of law now or
hereafter in effect which renders any provisions hereof unenforceable in any
respect.
Section 15.9. Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
[The remainder of this page is intentionally left blank]
22
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amended and Restated Representation Agreement to be executed on its behalf by
its duly authorized officer as of the date first above written.
INFINITY BROADCASTING CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
WESTWOOD ONE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President - Finance