ASSET PURCHASE AGREEMENT
By and Among
WESTWOOD ONE BROADCASTING SERVICES, INC.
CHICAGO SHADOW TRAFFIC LIMITED PARTNERSHIP
NEW YORK SHADOW TRAFFIC LIMITED PARTNERSHIP
LOS ANGELES SHADOW TRAFFIC LIMITED PARTNERSHIP
PHILADELPHIA EXPRESS TRAFFIC LIMITED PARTNERSHIP
CITI TRAFFIC CORP.
EXPRESS TRAFFIC CORP.
and
XXXX XXXXXXXXX
Dated as of March 1, 1996
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS....................................................................................1
ARTICLE II PURCHASE OF ASSETS...........................................................................12
2.1 Closing...........................................................................................12
2.2 Transfer of Assets................................................................................12
2.3 Excluded Assets...................................................................................14
2.4 Initial Purchase Price; Payment...................................................................15
2.5 Allocation of Purchase Price......................................................................15
ARTICLE III ASSUMPTION OF OBLIGATIONS...................................................................15
3.1 Assumption of Obligations.........................................................................15
3.2 Limitation........................................................................................16
ARTICLE IV ADJUSTMENTS TO INITIAL PURCHASE PRICE........................................................17
4.1 First Adjustment of Initial Purchase Price........................................................17
4.2 Second Adjustment of Initial Purchase Price.......................................................19
4.3 Dispute Resolution................................................................................21
ARTICLE V GOVERNMENTAL CONSENTS.........................................................................23
5.1 Compliance with HSRA..............................................................................23
5.2 Other Governmental Consents.......................................................................23
5.3 FCC Applications..................................................................................24
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER......................................................24
6.1 Organization and Standing.........................................................................24
6.2 Authorization and Binding Obligation..............................................................24
6.3 Absence of Conflicting Agreements or Required Consents............................................25
6.4 Litigation........................................................................................25
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF SELLERS AND XXXXXXXXX.....................................25
7.1 Organization and Standing.........................................................................25
7.2 Authorization and Binding Obligation..............................................................26
7.3 Absence of Conflicting Agreements or Required Consents............................................26
7.4 Governmental Authorization........................................................................26
7.5 Real Property.....................................................................................27
7.6 Title to and Condition of Personal Property.......................................................29
7.7 Intellectual Property.............................................................................29
7.8 Contracts.........................................................................................30
7.9 Personnel Information.............................................................................31
7.10 Employee Benefit Plans............................................................................31
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7.11 Litigation........................................................................................32
7.12 Compliance with Laws..............................................................................32
7.13 Transaction with Affiliates.......................................................................33
7.14 Financial Statements; Adjusted Current Assets.....................................................33
7.15 Absence of Changes or Events......................................................................33
7.16 Insurance.........................................................................................33
7.17 Taxes.............................................................................................34
7.18 Bankruptcy........................................................................................34
7.19 Environmental Matters.............................................................................34
7.20 Financing Statements..............................................................................35
7.21 The Assets........................................................................................35
7.22 Subsidiaries......................................................................................35
7.23 Broker or Finder's Fee............................................................................35
7.24 Overhead Costs....................................................................................35
7.25 Purchase for Investment...........................................................................35
7.26 Disclosure........................................................................................36
ARTICLE VIII COVENANTS OF SELLERS AND XXXXXXXXX.........................................................36
8.1 Conduct of Business...............................................................................36
8.2 Access and Information Prior to the Closing.......................................................37
8.3 Notification......................................................................................38
8.4 No Inconsistent Action............................................................................38
8.5 No Solicitation...................................................................................38
8.6 Financial Statements..............................................................................38
8.7 Estoppel Certificates; Consent and Waiver.........................................................39
8.8 Employee Matters..................................................................................39
8.9 Installation of Cameras...........................................................................40
8.10 Name Change; Post-Closing Use of Trademarks.......................................................40
ARTICLE IX ADDITIONAL COVENANTS.........................................................................40
9.1 Reasonable Commercial Efforts.....................................................................40
9.2 Renewal of Contracts..............................................................................41
9.3 Treatment of Books and Records....................................................................41
9.4 Post-Closing Restriction on Buyer.................................................................41
9.5 Activities of Xxxxxxxxx in the First, Second and Third Tier Radio Markets; Non-Competes...........44
9.6 Special Call Rights...............................................................................45
ARTICLE X POST-CLOSING SERVICES.........................................................................45
10.1 Overhead Services.................................................................................45
10.2 General Marketing Services........................................................................46
10.3 Termination.......................................................................................46
10.4 Fees and Expenses.................................................................................47
10.5 Billing and Payment...............................................................................47
ARTICLE XI RIGHTS REGARDING SECOND TIER RADIO MARKETS...................................................47
11.1 Put and Call Rights...............................................................................47
11.2 Terms of Put or Call..............................................................................48
11.3 Termination of Put and Call Rights................................................................49
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ARTICLE XII RIGHTS REGARDING THIRD TIER RADIO MARKETS...................................................49
12.1 Put and Call Rights...............................................................................49
12.2 Terms of Put or Call..............................................................................50
12.3 Termination of Put and Call Rights................................................................51
ARTICLE XIII CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE........................................52
13.1 Representations, Warranties and Covenants.........................................................52
13.2 Governmental Consents.............................................................................52
13.3 Third-Party Consents..............................................................................53
13.4 Employment Agreement..............................................................................53
13.5 Adverse Proceedings...............................................................................53
13.6 Payment of Indebtedness; Financing Statements.....................................................53
13.7 Transitional Agreement............................................................................54
13.8 Deliveries........................................................................................54
ARTICLE XIV CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE........................................54
14.1 Representations, Warranties and Covenants.........................................................54
14.2 Governmental Consents.............................................................................55
14.3 Adverse Proceedings...............................................................................55
14.4 Transitional Agreement............................................................................55
14.5 Employment Agreement..............................................................................55
14.6 Deliveries........................................................................................55
ARTICLE XV THE CLOSING..................................................................................56
15.1 Documents to be Delivered by Sellers and Xxxxxxxxx................................................56
15.2 Documents to be Delivered by Buyer................................................................57
ARTICLE XVI TRANSFER TAXES; FEES AND EXPENSES...........................................................58
16.1 Transfer Taxes and Similar Charges................................................................58
16.2 Expenses..........................................................................................58
ARTICLE XVII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS......................................58
ARTICLE XVIII INDEMNIFICATION...........................................................................59
18.1 Indemnification by Sellers and Xxxxxxxxx..........................................................59
18.2 Indemnification by Buyer..........................................................................60
18.3 Indemnification Procedures........................................................................61
18.4 Offset............................................................................................62
18.5 Exclusive Remedy..................................................................................62
ARTICLE XIX TERMINATION RIGHTS..........................................................................63
19.1 Termination.......................................................................................63
19.2 Liability.........................................................................................63
ARTICLE XX REMEDIES UPON DEFAULT........................................................................63
ARTICLE XXI OTHER PROVISIONS............................................................................64
21.1 Confidentiality...................................................................................64
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21.2 Publicity.........................................................................................65
21.3 Benefit and Assignment............................................................................65
21.4 Acquisition of Partnership Interests..............................................................65
21.5 Entire Agreement..................................................................................66
21.6 Headings..........................................................................................66
21.7 Choice of Law.....................................................................................66
21.8 Arbitration Procedures............................................................................66
21.9 Notices...........................................................................................67
21.10 Counterparts......................................................................................68
21.11 Further Assurances................................................................................68
EXHIBITS
A. Form of Opinions of Counsel to Sellers and Xxxxxxxxx
B. Form of Opinions of Counsel to Buyer
C. Form of Surety Agreement
SCHEDULES
1.20 Buyout Allocation
1.98 Third Tier Radio Markets
2.3(e) Certain Excluded Assets
6.3 Buyer's Required Consents
7.1 Sellers' Organization & Standing
7.3 Sellers' Required Consents
7.4(a) Non-Transferrable Governmental Approvals
7.4(b) Material Governmental Approvals
7.5 Real Property
7.6 Personal Property
7.7 Intellectual Property
7.8 Contracts
7.9 Personnel Information
7.10 Employee Benefit Plans
7.11 Litigation Involving Sellers
7.12 Compliance with Laws
7.13 Transactions with Affiliates
7.14 Financial Statements
7.15 Absence of Changes or Events
7.16 Insurance
7.20 Financing Statements
7.22 Subsidiaries
8.10 Camera Installation
13.3 Third-Party Consents
13.4 Employment Agreement
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), made as of
the 1st day of March, 1996, is by and among Westwood One Broadcasting Services,
Inc., a Delaware corporation ("Buyer"), Chicago Shadow Traffic Limited
Partnership ("CSTLP"), New York Shadow Traffic Limited Partnership ("NYSTLP"),
Los Angeles Shadow Traffic Limited Partnership ("LASTLP"), Philadelphia Express
Traffic Limited Partnership ("PETLP"), Citi Traffic Corp. ("Citi"), Express
Traffic Corp. ("Express"; Express, Citi, PETLP, CSTLP, NYSTLP and LASTLP are
referred to herein individually as a "Seller" and collectively as the "Sellers")
and Xxxx Xxxxxxxxx ("Xxxxxxxxx").
RECITALS
WHEREAS, Sellers own and desire to sell the Assets and the
Business (as such terms and other capitalized terms used herein without
definition are defined in Article I hereof) on the terms and subject to the
conditions herein provided; and
WHEREAS, Buyer desires to purchase, as a going concern, the
Assets and the Business, on the terms herein provided.
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
Unless otherwise stated, the following terms when used herein
have the meanings assigned to them below.
1.1 "Accounts" shall have the meaning set forth in Section
2.4 hereof.
1.2 "Adjustment Balance" has the meaning set forth in Section
4.2(b)(iii) hereof.
1.3 "Adjusted Closing Statement" has the meaning set forth in
Section 4.3(d) hereof.
1
1.4 "Adjusted Contingent Payment Income Statement" has the
meaning set forth in Section 4.3(d) hereof.
1.5 "Adjusted Current Assets" means the excess of (i) cash,
cash accounts receivables (less the reserve for doubtful accounts) and prepaid
expenses of the Business over (ii) the accounts payable, accrued expenses and
deferred income of the Business, in all cases as reflected on the Adjusted
Closing Statement.
1.6 "Adjusted Profits" shall mean the net income, if any, of
the Business as reflected on the Adjusted Contingent Payment Income Statement.
1.7 "Adjusted Profits Multiple" means, subject to the last
sentence of Section 4.2(b)(i), the product of (a) the Adjusted Profits TIMES (b)
six.
1.8 "Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Person specified.
1.9 "Applicable Law" means all applicable provisions of all
(i) constitutions, treaties, statutes, laws (including, but not limited to, the
common law), rules, regulations, ordinances, codes or orders of any Governmental
Authority and (ii) orders, decisions, rulings, injunctions, judgments, awards
and decrees or consents of or agreements with any Governmental Authority.
1.10 "Arbitrator" shall have the meaning set forth in Section
4.3(b) hereof.
1.11 "Assets" means the assets to be transferred to Buyer
hereunder, as more specifically described in Section 2.2 hereof.
1.12 "Audited Balance Sheet" shall have the meaning set forth
in Section 4.1(b)(i) hereof.
1.13 "Audited Income Statement" shall have the meaning set
forth in Section 4.2(b)(i) hereof.
1.14 "Base Amount" means $2,881,873.
1.15 "Board" has the meaning set forth in Section 21.8
hereof.
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1.16 "Business" means the Local Content Radio Programming
Businesses currently conducted by Sellers in the Chicago, New York City, Los
Angeles and Philadelphia Radio Markets, and all such Local Content Radio
Programming Businesses as are conducted in such Radio Markets at any time
hereafter by Sellers, to and including the Closing Date.
1.17 "Business Day", whether or not initially capitalized,
shall mean every day of the week excluding Saturdays, Sundays and Federal
holidays.
1.18 "Buyer's Contingent Payment" has the meaning set forth
in Section 4.2(b)(ii) hereof.
1.19 "Buyer's Purchase Price Adjustment" has the meaning set
forth in Section 4.1(b)(ii) hereof.
1.20 "Buyout Allocation" means, with respect to any Second
Tier Radio Market or Third Tier Radio Market, as the case may be, the amount set
forth opposite such Radio Market on SCHEDULE 1.20 hereto.
1.21 "Buyout Amount" means, with respect to any Second Tier
Radio Market or Third Tier Radio Market, as the case may be, the greatest of (i)
the product of (x) the consolidated net income for such Radio Market during the
most recently completed twelve-month period preceding the date such Buyout
Amount is paid, calculated using the same methodology which is employed to
calculate the Adjusted Profits of the Business, TIMES (y) six, (ii) the sum of
(x) the Buyout Allocation applicable to such Radio Market PLUS (y) the
out-of-pocket expenses set forth in the Start-Up Cost Certificate applicable to
such Radio Market and (iii) in the case of any Second Tier Radio Market or Third
Tier Radio Market which has been profitable during the six-month period most
recently completed prior to the delivery of the Buyout Notice with respect to
such Radio Market, the product of (x) the projected net income for such Radio
Market for the twelve-month period following the date of the delivery of such
Buyout Notice, as such net income is reflected on the Projection Certificate for
such Radio Market, times (y) six.
1.22 "Buyout Notice" has the meaning set forth in Section
9.4(c) hereof.
1.23 "Carryover Amount" means, as of any date of
determination, the sum of (i) the portion of the Buyer's Purchase Price
Adjustment, if any, not paid in cash under Section 4.1(b)(ii) hereof, PLUS (ii)
the portion of the Buyer's Contingent Payment, if any, not paid in cash under
Section 4.2(b)(ii) hereof, MINUS (iii) the Utilized Amount as of such date of
determination, together with interest on such sum from the date of delivery of
the Closing Statement to Xxxxxxxxx under Section 4.1(b)(i) hereof through the
date of such determination, calculated at a rate of 10% per annum, compounded
annually.
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1.24 "Citi" has the meaning set forth in the preamble to this
Agreement.
1.25 "Closing" has the meaning set forth in Section 2.1
hereof.
1.26 "Closing Date" means the date on which the Closing
occurs.
1.27 "Closing Statement" has the meaning set forth in Section
4.1(b)(i) hereof.
1.28 "Code" means the Internal Revenue Code of 1986, as
amended.
1.29 "Computer Programs" means all computer software,
firmware, programs and source disks, program documentation, tapes, manuals,
forms, guides and other materials with respect thereto.
1.30 "Contingent Payment Balance" has the meaning set forth
in Section 4.2(b)(iii) hereof.
1.31 "Contingent Payment Income Statement" has the meaning
set forth in Section 4.2(b)(i) hereof.
1.32 "Contracts" means (i) all contracts, agreements and
purchase orders for the sale, purchase or barter of programming, goods or
services or any combination of the foregoing, relating to the Assets or the
Business, (ii) all leases for the use of Personal Property, (iii) all Real
Property Leases relating to the Business, (iv) all Trade Agreements relating to
the Business and (v) all other contracts and agreements of whatever nature which
pertain to the Assets or the Business, including, but not limited to, those
purchase orders, leases, barter agreements and other agreements and contracts
set forth on SCHEDULES 7.5 AND 7.8 to this Agreement, PROVIDED that the term
Contracts shall not include any of the Excluded Assets or any Plan.
4
1.33 "Disputed Amount" has the meaning set forth in Section
9.4(d) hereof.
1.34 "Disputed Item" has the meaning set forth in Section
4.3(b) hereof.
1.35 "Employment Agreement" shall have the meaning set forth
in Section 13.4.
1.36 "Environmental Laws" shall mean all applicable local,
state and federal statutes and regulations relating to the protection of human
health or the environment.
1.37 "Environmental Liabilities and Costs" means all Losses,
whether direct or indirect, known or unknown, current or potential, past,
present or future, imposed by, under or pursuant to Environmental Laws,
including, without limitation, all Losses related to remedial actions, and all
reasonable fees, disbursements and expenses of counsel, experts, personnel and
consultants based on, arising out of or otherwise in respect of: (i) the
ownership or operation of (x) the Assets through the Closing Date by any Seller
or any of its predecessors or Affiliates or (y) any other assets, equipment or
facilities owned, leased or operated at any time by any Seller or any of its
predecessors or Affiliates at any time; (ii) the environmental conditions on,
under, above, or about (x) the Assets existing on the Closing Date or (y) any
other assets, equipment or facilities owned, leased or operated at any time by
any Seller, or any of its predecessors or Affiliates; and (iii) expenditures
necessary to cause any of the Assets to be in compliance with any and all
requirements of Environmental Laws as of the Closing Date, including, without
limitation, all environmental permits issued under or pursuant to such
Environmental Laws, and reasonably necessary to make full economic use of the
Assets.
1.38 "Excluded Assets" has the meaning set forth in Section
2.3 hereof.
1.39 "Excluded Liabilities" has the meaning set forth in
Section 3.2 hereof.
1.40 "Express" has the meaning set forth in the preamble to
this Agreement.
1.41 "Existing Employees" has the meaning set forth in
Section 8.9(b) hereof.
1.42 "Financial Statements" means the audited balance sheet
for the Business as of December 31, 1995, together with the related statements
of operations and cash flows for the fiscal year then ended, certified by the
New Jersey office of Ernst & Young.
5
1.43 "FCC" means the Federal Communications Commission.
1.44 "FCC Applications" has the meaning set forth in Section
5.3 hereof.
1.45 "First Tier Markets" means the Chicago, Los Angeles, New
York City and Philadelphia Radio Markets.
1.46 "GAAP" means United States generally accepted accounting
principles.
1.47 "Government Approvals" has the meaning set forth in
Section 7.4 hereof.
1.48 "Governmental Authority" means any nation or government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, but not limited to, any government
authority, agency, department, board, commission or instrumentality of the
United States, any State of the United States, or any political subdivision
thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any
self-regulatory organization.
1.49 "Hazardous Substance" means asbestos-containing material
and any and all hazardous or toxic substances, materials or wastes as defined or
listed under the Resource Conservation and Recovery Act, the Toxic Substances
Control Act, the Comprehensive Environmental Response, Compensation and
Liability Act or any comparable state statute or any regulation promulgated
under any of such federal or state statutes.
1.50 "HSRA" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the regulations adopted thereunder.
1.51 "Initial Purchase Price" has the meaning set forth in
Section 2.4 hereof.
1.52 "Intellectual Property" means United States (federal and
state) and foreign trademarks, service marks, trade names, trade dress,
copyrights, and similar rights, including registrations and applications to
register or renew the (federal and state) registration of any of the foregoing,
the United States and foreign letters patent and patent applications, and
inventions, processes, designs, formulae, trade secrets, jingles, know-how,
confidential business and technical information, Computer Programs, data and
documentation, and all similar intangible property rights, tangible embodiments
of any of the foregoing (in any medium including electronic media), and licenses
or permits to use any of the foregoing.
6
1.53 "Intellectual Property Assets" has the meaning set forth
in Section 7.7 hereof.
1.54 "Liens" has the meaning set forth in Section 2.2 hereof.
1.55 "Local Content Radio Programming Business" means the
provision of local news, sports, traffic and weather programming to radio
stations and other media outlets under arrangements whereby the provider of such
programming can sell advertising which is broadcast by such radio station or
other media outlet in connection with such radio station's or media outlet's
broadcast of such programming.
1.56 "Losses" has the meaning set forth in Section 18.1
hereof.
1.57 "Xxxxxxxxx" has the meaning set forth in the preamble to
this Agreement.
1.58 "NASDAQ" means the quotation system of the National
Association of Security Dealers, Inc.
1.59 "Other Services" has the meaning set forth in Section
10.2 hereof.
1.60 "Overhead Charge" means the sum of (i) $350,000 plus
(ii) all salary and benefits allocable to any employee during the Profit
Measuring Period who is hired by Buyer pursuant to Xxxxxxx X'Xxxxxxx'x exercise
of his rights under the Employment Agreement.
1.61 "Overhead Services" has the meaning set forth in Section
10.1 hereof.
1.62 "Owned Real Property" means all real property and
interests in real property owned by any Seller and used in or held for use in
connection with the Business, together with all easements and other
appurtenances for the benefit thereof.
1.63 "Permitted Encumbrances" has the meaning set forth in
Section 13.6 hereof.
1.64 "Person" means an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
1.65 "Personal Property" has the meaning set forth in Section
7.6 hereof.
1.66 "Pennsylvania Lease" means the lease agreement between
555 Associates and PETLP, dated January 31, 1992, as amended.
7
1.67 "Plan" has the meaning set forth in Section 7.10 hereof.
1.68 "Profit Measuring Period" means the period of March 1,
1996 through February 28, 1997.
1.69 "Projection Certificate" has the meaning set forth in
Section 9.4(c) hereof.
1.70 "Purchase Price" has the meaning set forth in Section
2.4 hereof.
1.71 "Radio Market" means, with respect to a given geographic
location, such geographic location or radio market as established from time to
time by Arbitron Radio Market Reports.
1.72 "Real Property Leases" means the leases, subleases,
licenses and occupancy agreements, including any amendments thereto, pursuant to
which any Seller or any Affiliate of any Seller is the lessee, sublessee,
licensee or occupant of real property used in, held for use in connection with,
necessary for the conduct of, or otherwise material to, the Business or the
Assets, together with all easements and other appurtenances for the benefit
thereof.
1.73 "Second Tier Adjusted Profits" means the consolidated
net income of the Second Tier Business, calculated using the same methodology
which is employed to calculate the Adjusted Profits of the Business, during the
most recently completed twelve calendar month period prior to the Second Tier
Closing Date.
1.74 "Second Tier Assets" means all rights, titles and
interests in, to and under all of the assets, real, personal and mixed, tangible
and intangible, owned or held by Xxxxxxxxx or any Affiliate of Xxxxxxxxx and
used, useful or necessary in the conduct of the Second Tier Business, as
described more specifically in the Second Tier Purchase Agreement, but excluding
those assets that are excluded therein.
1.75 "Second Tier Business" means the Local Content Radio
Programming Businesses conducted by Xxxxxxxxx or an Affiliate of Xxxxxxxxx in
the Second Tier Radio Markets prior to the Second Tier Closing Date.
1.76 "Second Tier Call Notice" has the meaning set forth in
Section 11.1(b) hereof.
8
1.77 "Second Tier Closing Date" has the meaning set forth in
Section 11.2(a) hereof.
1.78 "Second Tier Initial Purchase Price" means an amount
equal to the product of (I) the Second Tier Adjusted Profits TIMES (ii) six.
1.79 "Second Tier Purchase Agreement" has the meaning set
forth in Section 11.2(a) hereof.
1.80 "Second Tier Put Notice" has the meaning set forth in
Section 11.1(a) hereof.
1.81 "Second Tier Radio Markets" means the District of
Columbia, Houston, San Diego, Baltimore and San Francisco Radio Markets.
1.82 "Sellers" has the meaning set forth in the preamble to
this Agreement.
1.83 "Sellers' Contingent Payment" has the meaning set forth
in Section 4.2(b)(iii) hereof.
1.84 "Sellers' Purchase Price Adjustment" has the meaning set
forth in Section 4.1(b)(iii) hereof.
1.85 "Service Costs" has the meaning set forth in Section
10.4 hereof.
1.86 "Service Recipient" means an Affiliate of Xxxxxxxxx
engaged in the Local Content Radio Programming Businesses in any Second Tier
Radio Market or any Third Tier Radio Market.
1.87 "Services" has the meaning set forth in Section 10.2
hereof.
1.88 "Start-Up Cost Certificate" has the meaning set forth in
Section 9.4(c) hereof.
1.89 "Tax" shall mean any federal, state, local or foreign
income, alternative, minimum, accumulated earnings, personal holding company,
franchise, unincorporated business, capital stock, profits, windfall profits,
gross receipts, sales, use, value added, transfer, registration, stamp, premium,
excise, customs duties, severance, environmental (including taxes under Section
59A of the Code), real property, personal property, ad valorem, occupancy,
license, occupation, employment, payroll, social security, disability,
unemployment, workers' compensation, withholding, estimated or similar tax,
duty, fee, assessment or other governmental charge or deficiencies thereof
(including all interest and penalties thereon and additions thereto).
9
1.90 "Third Tier Adjusted Profits" means, with respect to any
Third Tier Business and Third Tier Assets, the consolidated net income of such
Third Tier Business, calculated using the same methodology which is employed to
calculate the Adjusted Profits of the Business, during the most recently
completed twelve month period preceding the Third Tier Closing Date relating to
such Third Tier Business and Third Tier Assets.
1.91 "Third Tier Assets" means, with respect to any Third
Tier Radio Market, all rights, titles and interests in, to and under all of the
assets, real, personal and mixed, tangible and intangible, owned or held by
Xxxxxxxxx or any Affiliate of Xxxxxxxxx and used, useful or necessary in the
conduct of the Third Tier Business in such Third Tier Radio Market, as described
more specifically in the Third Tier Purchase Agreement with respect to such
Third Tier Radio Market, but excluding those assets that are excluded therein.
1.92 "Third Tier Business" means, with respect to any Third
Tier Radio Market, the Local Content Radio Programming Business conducted by
Xxxxxxxxx or any Affiliate of Xxxxxxxxx in such Third Tier Radio Market prior to
the Third Tier Closing Date with respect to such Third Tier Radio Market.
1.93 "Third Tier Call Notice" has the meaning set forth in
Section 12.1(b) hereof.
1.94 "Third Tier Closing Date" means, with respect to any
sale of any Third Tier Radio Market pursuant to Article XII hereof, the date of
the closing of the transactions contemplated by the Third Tier Purchase
Agreement for such sale.
1.95 "Third Tier Initial Purchase Price" means, with respect
to the Third Tier Assets and Third Tier Business relating to any Third Tier
Radio Market, an amount equal to the product of (i) the Third Tier Adjusted
Profits for such Third Tier Business TIMES (ii) six.
1.96 "Third Tier Purchase Agreement" has the meaning set
forth in Section 12.2(a) hereof.
1.97 "Third Tier Put Notice" has the meaning set forth in
Section 12.1(a) hereof.
1.98 "Third Tier Radio Markets" means the Radio Markets
listed on SCHEDULE 1.98.
1.99 "Trade Agreements" means Contracts for the sale of
advertising time for consideration other than cash.
10
1.100 "Utilized Amount" means, as of any date of
determination, the aggregate amount, if any, of the Carryover Amount previously
offset against (w) the Sellers' Contingent Payment under Section 4.2(b)(iii)
hereof, (x) any Buyout Amount under Section 9.4(c) hereof, (iii) the Second Tier
Initial Purchase Price under Section 11.2(b) hereof and (iv) any Third Tier
Initial Purchase Price under Section 12.2(b) hereof.
1.101 "Westwood" means Westwood One, Inc.
1.102 "Westwood Stock" means the common stock of Westwood,
par value $.01 per share.
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ARTICLE II
PURCHASE OF ASSETS
2.1 CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the purchase of the Assets and the Business (the
"Closing") shall take place on March 4, 1996, or on such other date as the
parties may agree. The Closing shall be held at 10:00 a.m. in the offices of
Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place or time as the parties may agree.
2.2 TRANSFER OF ASSETS. On the Closing Date, Sellers shall
sell, assign, transfer and convey (or cause to be sold, assigned, transferred or
conveyed) to Buyer or to one or more Affiliates of Buyer designated by Buyer in
writing to Sellers at least five Business Days prior to the Closing Date, and
Buyer or one or more of such designated Affiliates of Buyer shall purchase from
Sellers, as a going concern, the Assets and the Business. As used herein,
"Assets" means all rights, titles and interests in, to and under all of the
assets, real, personal and mixed, tangible and intangible, owned or held by any
Seller or any Affiliate of any Seller and used, useful or necessary in the
conduct of the Business, including all such property acquired by any Seller or
any Affiliate of any Seller between the date hereof and the Closing Date, but
excluding the Excluded Assets. The term Assets shall include, but not be limited
to, the following:
(a) all cash, accounts, notes receivable, trade receivables
and prepaid expenses arising out of or relating to the Business;
(b) all right, title and interest in all Real Property Leases
(except the Pennsylvania Lease), together with any additions thereto
between the date hereof and the Closing Date;
(c) all licenses, permits and other authorizations issued to
any Seller by any governmental authority and used, useful or necessary in
the conduct of the Business, together with any additions thereto (including
renewals or modifications of such licenses, permits and authorizations and
applications therefor) between the date hereof and the Closing Date, in
each case to the extent the same is transferrable;
(d) all equipment, office furniture and fixtures, office
materials and supplies, inventory, spare parts and other tangible personal
property of every kind and description, owned, leased or held by any Seller
or any Affiliate of any Seller and used, useful or necessary in the conduct
of the Business, including the items listed in SCHEDULE 7.6, together with
any replacements thereof and additions thereto made between the date hereof
and the Closing Date;
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(e) subject to the provisions of Article III hereof, all of
each Seller's and each Seller's Affiliates' rights under and interest in
all Contracts, including the Contracts listed in SCHEDULES 7.5 AND 7.8,
together with all of each Seller's and each Seller's Affiliates' rights
under and interest in all Contracts entered into or acquired by such Seller
or such Affiliate between the date hereof and the Closing Date in
accordance with this Agreement;
(f) all programs and programming materials of whatever form
or nature owned by any Seller or any Affiliate of any Seller relating to
the Business;
(g) all of each Seller's and each Seller's Affiliates' rights
in and to the Intellectual Property Assets, including those listed in
SCHEDULE 7.7, together with any additions thereto between the date hereof
and the Closing Date;
(h) all of each Seller's and each Seller's Affiliates' files,
records, books of account, and logs relating to the Business, including,
without limitation, receivable records and statements, programming
information and studies, technical information and engineering data, news
and advertising studies or consulting reports, marketing and demographic
data, sales correspondence, lists of advertisers, promotional materials,
credit and sales reports, and copies of all written Contracts to be
assigned hereunder, other than any such documents relating to any employee
or former employee of the Business that does not become an Existing
Employee;
(i) all of each Seller's and each Seller's Affiliates' rights
under manufacturers' and vendors' warranties relating to items included in
the Assets and all similar rights against third parties relating to items
included in the Assets to the extent contractually assignable; and
(j) all goodwill and all other rights, properties and assets
of any character whatsoever which are owned by any Seller or any Affiliate
thereof in connection with the Business and which are not otherwise
described in nor expressly excluded by the terms of this Agreement.
The Assets shall be transferred to Buyer free and clear of
all debts, liens, security interests, mortgages, pledges, judgments, trusts,
adverse claims, liabilities, encumbrances and other impairments of title (the
"Liens"), other than Permitted Encumbrances.
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2.3 EXCLUDED ASSETS. The Assets shall not include, and Buyer
shall not purchase from Sellers, any of the following (collectively, the
"Excluded Assets"):
(a) all books and records that any Seller is required by law
to retain, and all payables records and invoices, provided that, at Buyer's
request, Sellers shall provide Buyer, at Sellers' expense, with copies of
such records covering the period that Sellers conducted the Business;
(b) all books, records, and other intangible assets related
solely to any Sellers' internal partnership matters and not related to the
Business;
(c) all claims, rights, and interest in and to any refunds
for federal, state, or local franchise, income, or other taxes or fees of
any nature whatsoever for periods prior to the Closing Date;
(d) all Contracts of insurance;
(e) all of the assets listed on SCHEDULE 2.3(E) hereto; and
(f) subject to clause (a) of Section 3.1 hereof, all Plans,
including, without limitation, all employment agreements or arrangements
with the persons listed in SCHEDULE 7.9 hereto, and all labor agreements,
together with all assets, trusts and other funding arrangements with
respect thereto.
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2.4 INITIAL PURCHASE PRICE:PAYMENT. In consideration for the
sale, conveyance, transfer and assignment of the Assets by Sellers to Buyer, at
the Closing Buyer will pay to Sellers an aggregate amount of $20,000,000 (the
"Initial Purchase Price"; the Initial Purchase Price, as adjusted under Sections
4.1 and 4.2 hereof, the "Purchase Price"). Buyer shall pay the Initial Purchase
Price by wire transfers of immediately available funds to accounts (the
"Accounts") at banks or other financial institutions designated by Sellers to
Buyer at least two Business Days before the Closing Date.
2.5 ALLOCATION OF PURCHASE PRICE. The Initial Purchase Price,
as adjusted upward or downward by the adjustment of the Initial Purchase Price
under Section 4.1 hereof (such amount the "Allocation Total"), shall be
allocated for all purposes (including tax and financial accounting purposes) as
set forth in this Section 2.5 among the Assets. Not later than 45 days after
receipt by Sellers of the Closing Statement, Buyer will provide Sellers with an
allocation of the Allocation Total among the Assets. Such allocation shall be
controlling on the parties hereto for all purposes of this Agreement. The
Allocation Total shall be allocated among the Assets based upon the fair market
values of the Assets as of the Closing Date as reasonably determined in good
faith by Buyer provided that a maximum amount of $100,000 will be allocated to
the covenant not to compete in Section 9.5 hereof. In connection with Buyer's
work on such allocation, the parties will cooperate with one another and provide
one another with such information as any other party shall reasonably request.
Buyer, Sellers and Xxxxxxxxx each agree to report the federal, state and local
income and other Tax consequences of the transactions contemplated herein in a
manner consistent with such allocation and not to take any position inconsistent
therewith upon examination of any tax return, in any refund claim, in any
litigation, investigation or otherwise.
ARTICLE III
ASSUMPTION OF OBLIGATIONS
3.1 ASSUMPTION OF OBLIGATIONS. Subject to the provisions of
this Article III, Buyer shall assume and undertake to pay, satisfy or discharge
the following (collectively, the "Assumed Liabilities"): (a) the accounts
payable and deferred obligations, including, barter payables, of the Business,
in each case to the extent (and only to the extent) that such obligations are
expressly reflected on the face of the Adjusted Closing Statement, (b) accrued
compensation and other payroll items in respect of employees of the Business who
accept Buyer's offer of employment as described in Section 8.9(a) hereof, in
each case to the extent (and only to the extent) that such obligations are
expressly reflected on the face of the Adjusted Closing Balance Sheet, (c) all
deferred income relating to prepaid advertising to the extent (and only to the
extent) such deferred income is expressly reflected on the face of the Adjusted
Closing Statement, (d) all liabilities, obligations or commitments of Sellers
15
arising or accruing after the Closing Date under (i) the Contracts listed on
SCHEDULES 7.5 AND 7.8 hereto, and (ii) any contracts entered into by any Seller
in the ordinary course of the Business that are not required to be set forth on
such Schedules because of the dollar thresholds set forth in the representations
and warranties corresponding thereto and (e) all liabilities, obligations and
commitments of Sellers arising or accruing after the Closing Date relating to
the Business under leases, contracts, licenses, arrangements, agreements and
other arrangements entered into by Sellers between the date of this Agreement
and the Closing Date in accordance with this Agreement. Nothing contained in
this Agreement shall require Buyer to pay, perform or discharge any Assumed
Liability so long as it shall in good faith contest or cause to be contested the
amount or validity thereof and shall have indemnified and have held harmless
Sellers with respect thereto.
3.2 LIMITATION. Except as expressly set forth in Section 3.1
hereof, Buyer expressly does not, and shall not, assume or be deemed to assume,
under this Agreement or otherwise by reason of the transactions contemplated
hereby, any liabilities, obligations or commitments of Xxxxxxxxx or any Seller
of any nature whatsoever, whether known or unknown, contingent or otherwise
(collectively, the "Excluded Liabilities"). Without limiting the generality of
the foregoing, Buyer shall not assume or be liable for any liability, obligation
or responsibility of Xxxxxxxxx or any Seller arising out of or relating to (a)
the breach of any Contract prior to the Closing, whether or not such breach is
threatened or asserted before, on or after the Closing Date, (b) any contractual
liabilities, obligations or commitments to the extent such liability does not
relate to the conduct of the Business, (c) any legal, accounting, transactional,
brokerage or other expense relating to this Agreement or the transactions
contemplated hereunder, (d) except to the extent expressly provided in clause
(a) of Section 3.1 hereof, any Plan or other contract or arrangement in respect
of employment or termination of employment, collective bargaining or other labor
agreement or employee or retiree compensation or benefit plan, program,
arrangement, trust or other funding vehicle entered into, established or
maintained for the benefit of any person employed by any Seller at any time
prior to the Closing, whether or not any such liability, obligation or
responsibility relates to any claim, event or occurrence existing or arising
before, on or after the Closing Date, (e) any litigation, proceeding or claim by
any person or entity relating to the Business as conducted prior to the Closing,
whether or not such litigation, proceeding or claim is pending, threatened or
asserted before, on or after the Closing Date, including, without limitation,
those litigations listed on SCHEDULE 7.11 hereto, or (f) any liability for Taxes
(whether imposed on any Seller, any of their Affiliates, or otherwise) arising
with respect to the Business or the ownership of the Assets, on or before the
Closing, or the sale of the Assets to Buyer, whenever such Taxes become due or
payable.
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ARTICLE IV
ADJUSTMENTS TO INITIAL PURCHASE PRICE
4.1 FIRST ADJUSTMENT OF INITIAL PURCHASE PRICE. (a) The
Initial Purchase Price will be subject to adjustment, as described in this
Section 4.1.
(b) (i) As soon as practicable after the Closing Date (but in
no event later than 60 days following the Closing Date), Buyer will prepare
and deliver to Xxxxxxxxx, as the representative of Sellers, a statement of
the consolidated current assets and current liabilities of the Business as
of immediately preceding the Closing (the "Closing Statement"). In
connection with the preparation of the Closing Statement, Buyer and its
authorized representatives, including Buyer's independent public
accountants, will have the right to review the information used in the
preparation of the Financial Statements, including, but not limited to, all
existing workpapers of the accountants which compiled such statements. The
Closing Statement shall be prepared in accordance with GAAP and the
principles, procedures and elections within GAAP utilized by Sellers in the
preparation of the audited balance sheet (the "Audited Balance Sheet")
included in the Financial Statements, except that the Closing Statement
shall include a liability, calculated in accordance with GAAP, for all
accrued but unpaid vacation in respect of all Existing Employees.
Simultaneously with its delivery of the Closing Statement to Xxxxxxxxx,
Buyer will deliver to Xxxxxxxxx, as the representative of Sellers, Buyer's
calculation of the Adjusted Current Assets.
(ii) In the event that the Base Amount exceeds the Adjusted
Current Assets (the amount of such excess, the "Buyer's Purchase Price
Adjustment"), within 45 days after the date of receipt by Sellers of the
Closing Statement, Xxxxxxxxx and Sellers shall, subject to Section 4.3
hereof, either (x) jointly and severally pay to Buyer by wire transfer in
immediately available funds an amount equal to the Buyer's Purchase Price
Adjustment or (y) deliver to Buyer a notice, signed by Xxxxxxxxx, stating
that Xxxxxxxxx has elected to allow Buyer to recover the Buyer's Purchase
Price Adjustment by crediting the Buyer's Purchase Price Adjustment against
(A) the Sellers' Contingent Payment, if any, in the manner set forth in
Section 4.2(b)(iii) hereof, (B) the Buyout Amount in the manner set forth
in Section 9.4(c) hereof, (C) the Second Tier Initial Purchase Price in the
manner set forth in Section 11.2(b) hereof and/or (D) any Third Tier
Initial Purchase Price in the manner set forth in Section 12.2(b) hereof.
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In the event Sellers and Xxxxxxxxx neither pay such Buyer's Purchase Price
Adjustment nor deliver such notice to Buyer within such 45-day period,
Xxxxxxxxx and Sellers shall be deemed to have delivered to Buyers the
certificate provided for in clause (y) of the immediately preceding
sentence of this Section 4.1(b)(ii).
(iii) In the event that the Adjusted Current Assets exceed
the sum of (x) the Base Amount plus (y) $500,000 (the amount of such
excess, the "Sellers' Purchase Price Adjustment"), within 45 days after the
date of receipt by Sellers of the Closing Statement, Buyer shall, subject
to Sections 4.3 and 18.4 hereof, pay to Sellers an amount equal to the sum
of (i) 60% of the Sellers' Purchase Price Adjustment plus (ii) that portion
of the Adjustment Balance, if any, that Buyer does not elect to pay by
delivering Westwood Stock to Sellers pursuant to the next sentence of this
Section 4.1(b)(iii), by wire transfer of immediately available funds to the
Accounts. Buyer shall have the right, at its sole option, to pay up to 40%
of the Sellers' Purchase Price Adjustment (such amount, the "Adjustment
Balance") by delivering such number of shares of Westwood Stock, rounded up
or down to the nearest whole share, as have a value equal to that portion
of Sellers' Purchase Price Adjustment Buyer so chooses to pay by delivering
such Westwood Stock. For purposes of this Section 4.1(b)(iii), each share
of Westwood Stock shall be valued based upon a per share price equal to the
average of the closing price of the Westwood Stock, as reported on NASDAQ,
for the ten trading days preceding the second Business Day prior to the
date the Sellers' Purchase Price Adjustment is made.
(iv) Subject to Section 4.3 hereof, the Closing Statement
delivered by Buyer to Xxxxxxxxx shall be final, binding and conclusive on
the parties hereto.
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4.2 SECOND ADJUSTMENT OF INITIAL PURCHASE PRICE. (a) The
Initial Purchase Price, as adjusted under Section 4.1 hereof, will be subject to
further adjustment, as described in this Section 4.2.
(b) (i) Subject to the last sentence of this Section
4.2(b)(i), within 60 days after the end of the Profit Measuring Period,
Buyer will prepare and deliver to Xxxxxxxxx, as the representative of
Sellers, an income statement of the Business for the Profit Measuring
Period (the "Contingent Payment Income Statement"). The Contingent Payment
Income Statement shall be prepared in accordance with GAAP and the
principles, procedures and elections within GAAP utilized by Sellers in the
preparation of the audited income statement (the "Audited Income
Statement") included in the Financial Statements, except (A) all interest
expenses and interest income of the Business shall be excluded from such
Statement, (B) all federal, state and local income Tax expenses of the
Business shall be excluded from such Statement, (C) all depreciation and
amortization expenses and interest income of the Business shall be excluded
from such Statement, EXCEPT for depreciation expense attributable to any
equipment that is acquired by Buyer in the ordinary course of business
after the Closing Date, which equipment shall be depreciated on a
straight-line basis over the useful life of the equipment in question, (D)
no income or expense will be recognized in such Statement with respect to
any barter arrangements of the Business , (E) no expense of Westwood for
indirect corporate charges (such as internal charges for accounting,
marketing, finance, management, administration, human resources and legal)
shall be included in such Statement, (F) no costs, expenses or other
charges incurred by Sellers in connection with the transactions
contemplated by this Agreement, including, without limitation, accounting
and legal costs, shall be included in such Statement, (G) no expense
consisting of any salary or bonus paid to any Existing Employee shall be
included in such Statement to the extent, and only to the extent, that such
salary or bonus expense exceeds such employee's bonus and salary for the
calendar year preceding the Closing Date plus a customary raise unless such
expense has been authorized in writing by Xxxxxxx X'Xxxxxxx, (H) no expense
constituting a non-recurring expense, and no income constituting
non-recurring income (in each case, as determined in accordance with GAAP),
shall be included in such Statement and (I) such Statement shall include
the Overhead Charge in respect of all corporate level overhead charges of
the Business during the Profit Measuring Period. Simultaneously with its
delivery of the Contingent Payment Income Statement, Buyer will deliver to
Xxxxxxxxx Buyer's calculation of the Adjusted Profits and the Adjusted
Profits Multiple. Notwithstanding anything in this Agreement to the
contrary, if Buyer pays any Buyout Amount to Xxxxxxxxx or any Affiliate of
Xxxxxxxxx pursuant to Section 9.4 hereof prior to the end of the Profit
Measuring Period, Buyer shall not be required to prepare or deliver the
Contingent Payment Income Statement, the Adjusted Profits Multiple shall be
deemed for all purposes of this Agreement to be $34,800,000, and the
dispute mechanisms in Section 4.3 shall not apply to such deemed Adjusted
Profit Multiple.
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(ii) In the event that the Adjusted Profits Multiple is less
than $20,000,000 (such deficit, the "Buyer's Contingent Payment"),
Xxxxxxxxx and Sellers shall, subject to Section 4.3 hereof, either (x)
jointly and severally pay to Buyer by wire transfer in immediately
available funds an amount equal to the Buyer's Contingent Payment, such
payment to be made within 30 days of Xxxxxxxxx'x receipt of the Contingent
Payment Income Statement, or (y) deliver to Buyer a notice, signed by
Xxxxxxxxx, stating that Sellers and Xxxxxxxxx have elected to allow Buyer
to recover the Buyer's Contingent Payment by crediting such payment against
(A) any Buyout Amount in the manner set forth in Section 9.4(c) hereof, (B)
the Second Tier Initial Purchase Price in the manner set forth in Section
11.2(b) hereof and/or (C) any Third Tier Initial Purchase Price in the
manner set forth in Section 12.2(b) hereof. In the event Xxxxxxxxx and
Sellers neither pay such amount to Buyer nor deliver such notice to Buyer
within such 30-day period, Xxxxxxxxx and Sellers shall be deemed to have
delivered to Buyer the certificate provided for in clause (y) of the
immediately preceding sentence of this Section 4.2(b)(ii).
(iii) In the event that the Adjusted Profits Multiple is more
than $20,000,000 (such excess, as it may be adjusted pursuant to the next
sentence of this Section 4.2(b)(iii), the "Sellers' Contingent Payment"),
Buyer, subject to Sections 4.3 and 18.4 hereof, shall pay to Sellers an
amount equal to the sum of (i) 60% of the Sellers' Contingent Payment plus
(ii) that portion of the Contingent Payment Balance, if any, that Buyer
does not elect to pay by delivering Westwood Stock to Sellers pursuant to
the next sentence of this Section 4.2(b)(iii), by wire transfer of
immediately available funds to the Accounts. Buyer shall have the right, at
its sole option, to pay up to 40% of the Sellers' Contingent Payment (such
amount, the "Contingent Payment Balance") by delivering such number of
shares of Westwood Stock, rounded up or down to the nearest whole share, as
have a value equal to that portion of Sellers' Contingent Payment Buyer so
chooses to pay by delivering such Westwood Stock. For purposes of this
Section 4.2(b)(iii), each share of Westwood Stock shall be valued based
upon a per share price equal to the average of the closing price of the
Westwood Stock, as reported on NASDAQ, for the ten trading days preceding
the second Business Day prior to the date the Sellers' Contingent Payment
is made. Notwithstanding the foregoing, the Sellers' Contingent Payment
shall be reduced by the Carryover Amount, if any, at the time such Sellers'
Contingent Payment is paid.
(iv) Subject to Section 4.3 hereof, the Contingent Payment
Income Statement delivered by Buyer to Xxxxxxxxx shall be final, binding
and conclusive on the parties hereto.
20
4.3 DISPUTE RESOLUTION. (a) This Section will govern
resolution of any disputes between Buyer and Sellers regarding the calculations
on the Closing Statement, the Contingent Payment Income Statement, or both.
(b) Xxxxxxxxx will have the right, with Sellers' independent
public accountant, to review the information used in the preparation of the
Closing Statement or the Contingent Payment Income Statement, as the case
may be, and to discuss such information and the preparation and review
thereof with the personnel of Buyer responsible therefor. Xxxxxxxxx may
dispute items reflected on the Closing Statement or the Contingent Payment
Income Statement, as the case may be, only on the basis that such amounts
(i) resulted from mechanical errors of computation or (ii) were not arrived
at in accordance with the applicable accounting provisions of Section
4.1(b)(i) or 4.2(b)(i) hereof, as the case may be. In the event Xxxxxxxxx
so disagrees with any item on the Closing Statement or the Contingent
Payment Income Statement, as the case may be, Xxxxxxxxx shall, within 45
days after receipt of such Closing Statement or Contingent Payment Income
Statement, as the case may be, give Buyer notice of such disagreement
specifying the items in dispute (any such item a "Disputed Item") and
setting forth his proposed adjustments. If the parties and their respective
accountants are unable to agree on a resolution within 15 days after
delivery of such notice of disagreement, then the parties will submit such
dispute to Deloitte & Touche (the "Arbitrator"), certified public
accountants. The Arbitrator shall, within 30 days after such submission,
determine and report to the parties upon the Disputed Items and such report
shall be final, binding and conclusive on the parties with respect to such
Disputed Items.
(c) Any fees, expenses and costs of the Arbitrator for the
services described in Section 4.3(b) with respect to the Closing Statement
or the Contingent Payment Income Statement, as the case may be, shall be
allocated among Xxxxxxxxx and Sellers, on the one hand, and Buyer, on the
other, in the same proportion that the aggregate amount of all of the
Disputed Items on the Closing Statement or the Contingent Payment Income
Statement, as the case may be, that are submitted to the Arbitrator and are
unsuccessfully disputed by Xxxxxxxxx, bear to the total amount of all of
the Disputed Items on the Closing Statement or the Contingent Payment
Income Statement, as the case may be. Xxxxxxxxx and Sellers shall bear all
such fees, costs and disbursements of the Arbitrator with respect to its
work on the Closing Statement or the Contingent Payment Income Statement,
as the case may be, if this Section 4.3 results in no adjustment being made
to any Disputed Item on such statement. Buyer, on the one hand, and
Xxxxxxxxx and Sellers, on the other, shall each reimburse the other to the
extent the other pays more than the amount so required pursuant to the
preceding sentence.
21
(d) The term "Adjusted Closing Statement", as used herein,
shall mean (x) the Closing Statement delivered by Buyer to Xxxxxxxxx
pursuant to Section 4.1(b)(i) hereof, in the event Xxxxxxxxx does not
dispute any item on the Closing Statement within 45 days after receipt
thereof, or (y) the definitive Closing Statement resulting from the
determinations made by the Arbitrator, in accordance with this Section 4.3
(in addition to those items theretofore agreed to by Buyer and Xxxxxxxxx),
in the event Xxxxxxxxx does dispute any such item. The term "Adjusted
Contingent Payment Income Statement", as used herein, shall mean (x) the
Contingent Payment Income Statement delivered by Buyer to Sellers pursuant
to Section 4.2(b)(i) hereof, in the event Xxxxxxxxx does not dispute any
item on the Contingent Payment Income Statement within 45 days after
receipt thereof, or (y) the definitive Contingent Payment Income Statement
resulting from the determinations made by the Arbitrator in accordance with
this Section 4.3 (in addition to those items theretofore agreed to by Buyer
and Xxxxxxxxx), in the event Xxxxxxxxx does dispute any such item.
(e) Payment of the Buyer's Purchase Price Adjustment, the
Sellers' Purchase Price Adjustment, the Buyer's Contingent Payment or the
Sellers' Contingent Payment, as the case may be, shall be delayed until the
final resolution of all disputes regarding such adjustment or payment as
provided in this Section 4.3, upon which event such adjustment or payment
shall be paid in accordance Section 4.1(b)(ii), 4.1(b)(iii), 4.2(b)(ii) or
4.2(b)(iii) hereof, as the case may be, within 10 days thereafter,
together, in each case, with interest on such amount from the period
Xxxxxxxxx first received the Closing Statement or the Contingent Payment
Income Statement, as the case may be, through the date such payment is
made, calculated at a rate of 10% per annum, compounded annually.
22
ARTICLE V
GOVERNMENTAL CONSENTS
5.1 COMPLIANCE WITH HSRA. Buyer and Sellers shall make or
cause to be made in a timely fashion all filings which are required in
connection with the transactions contemplated hereby under the HSRA, and shall
furnish to the other party all information that the other reasonably requests in
connection with such filings.
5.2 OTHER GOVERNMENTAL CONSENTS. Promptly following the
execution of this Agreement, the parties shall prepare and file with the
appropriate Governmental Authorities any requests for approval or waiver not
referred to in Section 5.1 that are required from such Governmental Authorities
in connection with the transactions contemplated hereby and shall diligently and
expeditiously prosecute, and shall cooperate fully with each other in the
prosecution of, such requests for approval or waiver and all proceedings
necessary to secure such approvals and waivers. All such governmental approvals
and waivers not referred to in Section 5.1 are listed in SCHEDULE 7.3.
23
5.3 FCC APPLICATIONS. The assignment of the FCC licenses
listed in SCHEDULE 7.4(b) as contemplated by this Agreement is subject to the
prior consent and approval of the FCC. No later than seven (7) Business Days
after the date of the Agreement, Sellers and Buyer shall file applications ("FCC
Applications") to assign all of the FCC licenses listed in SCHEDULE 7.4(b)
(other than FCC license KLC-635 issued to Group W Radio, Inc.) which are used by
Sellers in the operation of the Business from Sellers to Buyer. Sellers and
Buyer shall thereafter prosecute the FCC Applications with all reasonable
diligence and otherwise use their best efforts to obtain grant of the FCC
Applications as expeditiously as practicable; provided, however, that neither
Sellers nor Buyer shall have any obligation to satisfy any complainant or the
FCC by taking any steps which would have a material adverse effect upon Sellers
or Buyer or upon any affiliated entity, but neither the expense or inconvenience
to a party of defending against a complainant or an inquiry by the FCC shall be
considered a material adverse effect on such party. If reconsideration or
judicial review is sought with respect to the consent to the FCC Applications,
the party affected shall vigorously oppose such efforts for reconsideration or
judicial review.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
6.1 ORGANIZATION AND STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
6.2 AUTHORIZATION AND BINDING OBLIGATION. Buyer has all
necessary corporate power and authority to enter into and perform its
obligations under this Agreement and the transactions contemplated hereby, and
Buyer's execution, delivery and performance of this Agreement have been duly and
validly authorized by all necessary corporate action on its part. This Agreement
has been duly executed and delivered by Buyer and constitutes its valid and
binding obligation, enforceable against it in accordance with its terms, except
as limited by laws affecting the enforcement of creditors' rights generally or
equitable principles.
24
6.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except as set forth in Article V with respect to governmental consents or
disclosed in SCHEDULE 6.3, the execution, delivery and performance of this
Agreement by Buyer: (a) does not require the consent of any third party; (b)
will not violate any provision of Buyer's articles of incorporation or by-laws;
(c) will not violate any Applicable Law to which Buyer is bound; and (d) will
not, either alone or with the giving of notice or the passage of time, or both,
conflict with, constitute grounds for termination of or result in a material
breach of the terms, conditions or provisions of, or constitute a material
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 now subject, except for any such conflict, termination, breach, default
or acceleration which would not impair Buyer's ability to perform its
obligations under this Agreement.
6.4 LITIGATION. There is no claim, litigation, proceeding or
investigation pending or, to the best of Buyer's knowledge, threatened, which
seeks to enjoin or prohibit, or otherwise questions the validity of, any action
taken or to be taken by Buyer in connection with this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
OF SELLERS AND XXXXXXXXX
Sellers and Xxxxxxxxx jointly and severally represent and
warrant to Buyer as follows:
7.1 ORGANIZATION AND STANDING. Each Seller (other than Citi
and Express) is a limited partnership duly formed, validly existing and in good
standing under the laws of the applicable jurisdiction set forth in SCHEDULE
7.1. Citi is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of New Jersey. Express is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Pennsylvania. Each Seller is duly qualified to do business in, and is
in good standing in the applicable jurisdictions set forth in SCHEDULE 7.1,
which are all the jurisdictions where the character of the properties or assets
such Seller leases, owns or operates, or the conduct of the portion of the
Business it conducts, requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the portion of the
Business conducted by such Seller. Each Seller (other than Citi and Express) has
all necessary partnership or corporate power and authority, as the case may be,
to own, lease and operate the Assets owned, leased or operated by it and to
carry on the Business conducted by it.
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7.2 AUTHORIZATION AND BINDING OBLIGATION. Each Seller (other
than Citi and Express) has all necessary partnership power and authority to
enter into and perform its obligations under this Agreement and the transactions
contemplated hereby and each of Citi and Express has all necessary corporate
power and authority to enter into and perform its obligations under this
Agreement and the transactions contemplated hereby. Each Seller's execution,
delivery and performance of this Agreement has been duly and validly authorized
by all necessary partnership action on its part. This Agreement has been duly
executed and delivered by each Seller and Xxxxxxxxx. This Agreement constitutes
the valid and binding obligation of each Seller and Xxxxxxxxx, enforceable
against each such Person in accordance with its terms, except as limited by laws
affecting the enforcement of creditors' rights generally or equitable
principles.
7.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except for the requirements of the HSRA or as specifically disclosed in SCHEDULE
7.3, 7.5 OR 7.8, the execution, delivery and performance of this Agreement by
each Seller and Xxxxxxxxx (a) does not require the consent of any third party;
(b) will not violate any provision of any Seller's agreement of limited
partnership charter or by-laws, as the case may be; (c) will not violate any
Applicable Law to which any Seller or Xxxxxxxxx is a party or by which it or the
Assets are bound; (d) will not, either alone or with the giving of notice or the
passage of time, or both, conflict with, constitute grounds for termination of
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any Contract, instrument, license or permit to which any Seller,
Xxxxxxxxx or the Assets are subject; (e) will not result in the creation of any
Lien on any of the Assets; and (f) will not result in the acceleration of any
obligation under or the creation of any new liability under any Plan.
7.4 GOVERNMENTAL AUTHORIZATION. Except as set forth on
SCHEDULE 7.4(a), all FCC licenses held or used by Sellers and all licenses,
permits and other authorizations issued to any Seller by any governmental or
regulatory authority and used, useful or necessary in the conduct of the
Business (collectively, the "Governmental Approvals") are transferrable to Buyer
on the Closing Date, subject only to the receipt of any applicable consents
listed on SCHEDULE 7.3. SCHEDULE 7.4(b) is a true and complete list of all FCC
licenses held or used by Sellers and all other material Governmental Approvals.
Except as set forth in Schedule 7.4(b) there are no FCC licenses or Governmental
Approvals required for the lawful conduct of the Business in the manner and to
the full extent that it is now conducted. Sellers are the valid and legal
holders of each of the material Governmental Approvals, and none is subject to
any restriction or condition which limits in any material respect the conduct of
the Business. Sellers have delivered to Buyer true and complete copies of all
FCC licenses and all the material Governmental Approvals, including any and all
amendments and other modifications to such items. Except as may be set forth in
SCHEDULE 7.4(b), there has been no violation, cancellation, suspension,
revocation or default of any material Governmental Authority or any notice of
violation, cancellation, suspension, revocation, default or dispute affecting
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any material Governmental Approval. The FCC licenses and other material
Governmental Approvals listed on SCHEDULE 7.4(b) were validly issued to and are
validly held by Sellers, are in full force and effect and are unimpaired by any
act or omission of Sellers and, except as disclosed on SCHEDULE 7.4(b), none is
subject to any restriction or condition which would limit in any respect the
full operation of the Business as it is now operating. Sellers have no reason to
believe that the FCC will not renew the FCC licenses in the ordinary course.
Except as disclosed on SCHEDULE 7.4(b), there are no applications, complaints or
proceedings pending or to the best of Sellers' knowledge, threatened, before the
FCC relating to the Business or that may result in the revocation, modification,
non-renewal or suspension of any of the FCC licenses or the imposition of any
fines, forfeitures or other administrative actions by the FCC with respect to
the Business or its operation.
7.5 REAL PROPERTY. (a) SCHEDULE 7.5 PART (a) contains a
complete and correct list of all Real Property Leases, setting forth the
address, landlord and tenant for each Real Property Lease, describing all
improvements leased pursuant to each Real Property Lease, listing the expiration
date of and the current annual rent paid under each Real Property Lease and
whether such Real Property Lease contains any renewal or purchase options. There
is no Owned Real Property and no Seller occupies any real property other than
that listed on SCHEDULE 7.5 PART (a).
(b) The improvements upon each parcel of real property leased
by any Seller and the current use and operation of such real property
conforms in all material respects to all restrictive covenants, conditions,
easements, building, subdivision and similar codes and federal, state and
local laws, regulations, rules, orders and ordinances and no Seller has
received any notice of any material violation or claimed violation of any
such restrictive covenant, condition or easement, or any building,
subdivision or similar code, or any federal, state or local law,
regulation, rule, order or ordinance. To each Seller's and Xxxxxxxxx'x
knowledge, the premises which are the subject of the Real Property Leases
are zoned for the purposes for which they are currently being used by the
applicable Seller. Each Seller's improvements on the real property premises
which are the subject of the Real Property Leases to which such Seller is a
party are in good working condition and repair. No Seller has any knowledge
of or has received notice of any pending, threatened, or contemplated
action to take by eminent domain or otherwise to condemn any portion of any
premises which are the subject of the Real Property Leases. To each
Seller's and Xxxxxxxxx'x knowledge, there exists no writ, injunction,
decree, order or judgment, nor any litigation, pending or threatened,
relating to the ownership, use, lease, occupancy or operation of any of the
premises which are the subject of the Real Property Leases.
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(c) Each Real Property Lease is legal, valid, binding,
enforceable and in full force and effect with respect to the Seller that is
a party thereto. No Seller nor, to Sellers' or Xxxxxxxxx'x knowledge, any
other party is in default, violation or breach under any Real Property
Lease, and no event has occurred and is continuing that constitutes or,
with notice or the passage of time or both, would constitute a default,
violation or breach thereunder. No amount payable under any Real Property
Lease is past due. No Seller has received any notice of a default, offset
or counterclaim under any Real Property Lease or any other communication
asserting non-compliance with any Real Property Lease. Each Seller has the
exclusive right to use and occupy the premises leased under each Real
Property Lease to which such Seller is a party. Each Seller enjoys peaceful
and undisturbed possession of the premises leased by such Seller under each
Real Property Lease to which it is a party. Except as set forth on SCHEDULE
7.5 PART(c), the Real Property Leases are free and clear of all Liens,
covenants, easements, restrictions, conditions, encroachments and rights of
way, recorded or unrecorded, subleases, charges, and other claims and
encumbrances, except for lessors' interests in the Real Property Leases.
Sellers have delivered to Buyer, complete and correct copies of the Real
Property Leases, together, in the case of any subleases or similar
occupancy agreements, with copies of all overleases.
(d) Except as disclosed in SCHEDULE 7.5 PART (d), each Seller
has full legal power and authority to assign its rights under each Real
Property Lease to which it is a party to Buyer in accordance with this
Agreement on terms and conditions no less favorable than those in effect on
the date hereof, and such assignment will not affect the validity,
enforceability and continuity of any such lease.
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7.6 TITLE TO AND CONDITION OF PERSONAL PROPERTY. SCHEDULE 7.6
lists all tangible personal property owned, leased or held by Sellers and used
or useful in the conduct of the Business (the "Personal Property"). Except as
described in SCHEDULE 7.6 hereto, Sellers have valid title to all Personal
Property (and to all other Assets to be transferred to Buyer hereunder) free and
clear of any Lien. Except as described in SCHEDULE 7.6 hereto, all of the
material items of tangible personal property and facilities included in the
Assets are in good operating condition and repair and are adequate for the
purposes for which they are being used in the Business. All such tangible assets
are in compliance in all material respects with all applicable federal, state
and local statutes, ordinances, rules and regulations. The Personal Property
listed in SCHEDULE 7.6 includes all such properties necessary to conduct the
Business as it is presently being conducted.
7.7 INTELLECTUAL PROPERTY. Except as set forth on SCHEDULE
7.7, SCHEDULE 7.7 contains a complete and correct list and description of all
Intellectual Property which is used or useful in the Business (the "Intellectual
Property Assets"). Each Intellectual Property Asset is either owned or validly
licensed by a Seller and SCHEDULE 7.7 identifies which Intellectual Property
Assets are so owned and which are so licensed. Sellers have delivered to Buyer
copies of all material documents and true and complete memoranda describing the
terms of any oral agreements regarding Intellectual Property Assets, if any,
establishing such rights, licenses or other authority. No Seller or Affiliate
thereof has any knowledge of any pending or threatened proceeding or litigation
affecting, or with respect to, the Intellectual Property Assets. Each Seller is
in compliance in all material respects with the terms of any license of an
Intellectual Property Asset and no Seller or Affiliate thereof has received any
notice or has any knowledge of any infringement or unlawful use of the
Intellectual Property Assets. The conduct of the Business does not infringe the
rights of any third party in respect of any Intellectual Property. Except as
disclosed in SCHEDULE 7.7, each Intellectual Property Asset owned by any Seller
is owned free and clear of any Lien. No Seller or Affiliate thereof has sold,
licensed or otherwise disposed of any of the Intellectual Property Assets to any
Person and no Seller or Affiliate thereof has agreed to indemnify any Person for
any patent, trademark or copyright infringement. The Intellectual Property
Assets listed in SCHEDULE 7.7 include all Intellectual Property which is used in
useful to or necessary to the Business. SCHEDULE 7.7 lists all of the
Intellectual Property Assets which have been duly registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark Office and
United States Copyright Office or other filing offices.
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7.8 CONTRACTS. (a) SCHEDULE 7.8 lists all Contracts as of the
date of this Agreement (except Real Property Leases which are listed in SCHEDULE
7.5) which have an unexpired term of more than 6 months or provide for future
aggregate payments in excess of $25,000.
(b) Sellers have delivered to Buyer true and complete copies
of all written Contracts, or true and complete memoranda describing the
terms of all oral Contracts, listed in SCHEDULES 7.5 AND 7.8, and all
liabilities and obligations under such Contracts can be ascertained from
such copies or memoranda. Each Contract to be assumed by Buyer hereunder
pursuant to Section 3.1 is valid, binding and enforceable by the Seller
party thereto in accordance with its respective terms. Sellers have
complied in all material respects with all Contracts to be assumed by Buyer
hereunder pursuant to Section 3.1 and are not in default under any of the
Contracts to be assumed by Buyer hereunder pursuant to Section 3.1. Sellers
have not granted or been granted any waiver or forbearance with respect to
any of the Contracts. To Sellers' and Xxxxxxxxx'x knowledge, no other
contracting party is in default under any of the Contracts to be assumed by
Buyer hereunder pursuant to Section 3.1. Except as set forth in SCHEDULES
7.3, 7.5 AND 7.8, each Seller has full legal power and authority to assign
its respective rights under the Contracts to be assumed by Buyer hereunder
pursuant to Section 3.1 to Buyer in accordance with this Agreement on terms
and conditions no less favorable than those in effect on the date hereof,
and such assignment will not require the consent of any third party or
affect the validity, enforceability and continuity of any of the Contracts
to be assumed by Buyer hereunder pursuant to Section 3.1. The Contracts to
be assumed by Buyer hereunder pursuant to Section 3.1 include all those
necessary to conduct the Business as presently conducted.
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7.9 PERSONNEL INFORMATION. (a) SCHEDULE 7.9 contains a true
and complete list of all persons employed, and a description of all
compensation, including bonus arrangements, and employee and retiree benefit
plans or arrangements applicable to such employees, other than employee benefit
plans or arrangements included in SCHEDULE 7.10. No Seller is a party to any
agreement or arrangement, written or oral, with salaried or non-salaried
employees except as described in SCHEDULES 7.9 AND 7.10.
(b) Except as disclosed in SCHEDULES 7.9 AND 7.10, no Seller
is a party to any contract or agreement with any labor organization, nor
has any Seller agreed to recognize any union or other collective bargaining
unit, nor has any union or other collective bargaining unit been certified
as representing any employees of any Seller. No Seller has any knowledge of
any organizational effort currently being made or threatened by or on
behalf of any labor union with respect to any employees of any Seller.
There are no unfair labor practice charges pending against any Seller;
there are no pending or threatened strikes, arbitration proceedings
involving labor matters or other labor disputes affecting any Seller; and
no Seller has experienced any strikes, work stoppages or other significant
labor difficulties of any nature in the past two years.
(c) Each Seller has complied in all material respects with
all laws relating to the employment or termination of employment of labor,
including, without limitation, those laws relating to safety, health, labor
relations, wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and payment and
withholding of taxes.
7.10 EMPLOYEE BENEFIT PLANS. SCHEDULES 7.9 AND 7.10,
together, set forth a correct and complete list of each employee or retiree
benefit or compensation plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or compensation,
bonus, incentive, deferral, equity based, severance, termination, retention,
change in control, employment or other similar program, agreement, arrangement,
trust or other funding arrangement, whether or not subject to the provisions of
ERISA, to which any Seller is a party or by which any Seller is bound or that is
or has been established or maintained or in respect of which any Seller has ever
had any obligation to contribute (each, a "Plan"). Except pursuant to a Plan, no
Seller has any fixed or contingent liability or obligation to or in respect of
any person now or formerly employed by any Seller or any beneficiary or
dependent of any such person, including, without limitation, in respect of
pension or thrift benefits or payments, individual or supplemental pension
benefits or payments or compensation arrangements, contributions to
hospitalization or other health, life or other welfare benefits, incentive
benefits or payments, bonus benefits or payments or vacation, sick leave,
disability and severance, termination retention or change in control benefits or
payments, including workers' compensation. No trade or business (whether or not
incorporated) is or has been as of any date within the preceding 6 years been
31
treated as a single employer together with any Seller pursuant to Section 414 of
the Code. No Seller has incurred or reasonably expects to incur (either directly
or indirectly, including as a result of any indemnification obligation) any
liability that could become a liability of Buyer or, following the Closing,
remain a liability of the Business under or pursuant to Title I or IV of ERISA
or the penalty, excise tax or joint and several liability provisions of the Code
relating to employee benefit plans and no event, transaction or condition has
occurred or exists which could result in any such liability to Buyer or the
Business on or after the Closing. Each of the Plans has been operated and
administered in all respects in accordance with all Applicable Laws, including
but not limited to ERISA and the Code.
7.11 LITIGATION. Except as set forth in SCHEDULE 7.11, there
is no claim, litigation, proceeding or investigation pending or, to Sellers' and
Xxxxxxxxx'x knowledge, threatened, against or affecting any of the Assets or the
Business which, if adversely determined, is reasonably likely to have a material
adverse effect on the Business, or which seeks to enjoin or prohibit, or
otherwise questions the validity of, any action taken or to be taken in
connection with this Agreement.
7.12 COMPLIANCE WITH LAWS. Each Seller has operated and is
operating the Business in material compliance with all Applicable Laws, and its
use of the Assets does not violate any Applicable Laws in any material respect.
Except as set forth in SCHEDULE 7.12, no Seller or Xxxxxxxxx has received any
notice asserting any noncompliance with any Applicable Law in connection with
the Business or the Assets.
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7.13 TRANSACTION WITH AFFILIATES. Except as disclosed on
SCHEDULE 7.13, all Assets used, useful or necessary in the Business are owned,
leased or held by one or more Seller. No Affiliate of any Seller (other than
another Seller) owns any Assets or is a party to any Contract.
7.14 FINANCIAL STATEMENTS; ADJUSTED CURRENT ASSETS. SCHEDULE
7.14 contains true and complete copies of the Financial Statements. The
Financial Statements have been prepared in accordance with GAAP consistently
applied. The Financial Statements fairly present the financial condition and the
results of the operations of the Business as of the dates and for the periods
indicated. Since December 31, 1995, there has been no material adverse change in
the business, operations, property, assets, liabilities or condition (financial
or otherwise) of the Business. Except for (a) liabilities as and to the extent
reflected or reserved against on the balance sheet of the Business as of
December 31, 1995 included in the Financial Statements, and (b) liabilities
incurred since December 31, 1995, in the ordinary and normal course of business,
no Seller has any liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, relating to the Assets or the Business,
except as disclosed in this Agreement or SCHEDULE 7.14.
7.15 ABSENCE OF CHANGES OR EVENTS. Except as disclosed in
SCHEDULE 7.15, since December 31, 1995, the Business has been conducted in all
material respects only in the ordinary course and no Seller has, except in the
ordinary course of business, purchased, sold, assigned or transferred any of the
Assets.
7.16 INSURANCE. The Assets are insured against loss, damage
or injury in amounts listed in SCHEDULE 7.16, which shows all insurance policies
held by each Seller relating to the Business, together with the policy limits,
the type of coverage, the location of the property covered, annual premium,
premium payment dates and expiration date of each of the policies. Copies of all
such insurance policies have been furnished to Buyer. All such insurance
policies are in full force and effect.
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7.17 TAXES. Each Seller has duly filed all Tax returns and
forms required to be filed by such Seller, and has paid in full or discharged
all Taxes required to be paid except for Taxes contested in good faith or
believed in good faith not to be due and payable. No Seller is currently under
audit with respect to Taxes by any Governmental Authority and no Governmental
Authority is now asserting in writing against any Seller any deficiency or claim
for Taxes. No event has occurred that could impose on Buyer any liability for
any Taxes due or to become due from any Seller from any taxing authority.
7.18 BANKRUPTCY. No insolvency proceedings of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
any Seller or any of the Assets, are pending or threatened, and no Seller has
made any assignment for the benefit of creditors or taken any action in
contemplation of or which would constitute the basis for the institution of such
insolvency proceedings.
7.19 ENVIRONMENTAL MATTERS. (a) Each Seller's operation and
use of each Real Property Lease is in compliance in all material respects with
all Environmental Laws. Sellers have obtained all material environmental, health
and safety permits necessary for the operation of the Business, and all such
permits are in full force and effect and Sellers are in compliance in all
material respects with the terms and conditions of each such permit. There are
no outstanding Liens on any Seller's interest in any of the Real Property Leases
under any Environmental Laws. No Seller has received any notice, or is aware of,
any administrative or judicial investigations, proceedings or actions with
respect to material violations, alleged or proven, of Environmental Laws by any
Seller or any tenants or subtenants of any Seller, or otherwise involving the
Real Property Leases or the operations conducted on the property subject to the
Real Property Leases.
(b) There has been no release (nor, to the best of each
Seller's knowledge, is there any substantial threat of a release) of any
Hazardous Substance at or from the Real Property Leases in amounts or
concentrations requiring remediation under or that would violate current
Environmental Laws in any material respect. There are no Hazardous Substances
present on the Real Property Leases except for ordinary quantities of properly
stored Hazardous Substances found in consumer or commercial products that are
used in the normal course of the Business. There are no underground storage
tanks, or underground piping associated with such tanks, on the property subject
to the Real Property Leases.
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7.20 FINANCING STATEMENTS. The Assets are and have been
located in the states of California, Illinois, New Jersey, New York and
Pennsylvania since they were acquired by Sellers. All financing statements filed
by any party with respect to the Assets are listed in SCHEDULE 7.20.
7.21 THE ASSETS. Except for the Excluded Assets, the Assets,
taken as a whole, constitute all of the properties and assets (A) used or held
for use in connection with the Business and (b) required for the continued
conduct of the Business. Except for any Permitted Encumbrances, the Assets will
be transferred to Buyer at the Closing free and clear of any Lien.
7.22 SUBSIDIARIES. Except as set forth on SCHEDULE 7.22, none
of CSTLP, NYSTLP, LASTLP or PETLP owns, directly or indirectly, any shares of
capital stock or other equity interest (or any other interest convertible into
an equity interest) in any corporation, partnership, joint venture or other
entity, or has any commitment to contribute to the capital of, make loans to, or
share in the losses of, any enterprise.
7.23 BROKER OR FINDER'S FEE. No Seller or Xxxxxxxxx has
incurred any liability to any broker, finder or agent for any fees, commissions
or similar compensation with respect to the transactions contemplated by this
Agreement.
7.24 OVERHEAD COSTS. The Overhead Charge represents Sellers'
and Xxxxxxxxx'x good faith estimate of the corporate level overhead charges that
will be incurred by the Business during the Profit Measuring Period.
7.25 PURCHASE FOR INVESTMENT. Each Seller is purchasing any
shares of Westwood Stock issued to it by Buyer pursuant to this Agreement for
its own account and not directly or indirectly with a view to, or for sale in
connection with any distribution thereof, other than, in the case of each Seller
which is a partnership, for distribution to the limited partners of such
partnership. Each Seller is an Accredited Investor within the meaning of
Regulation D under the Securities Act.
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7.26 DISCLOSURE. To each Seller's knowledge, none of this
Agreement or any certificate or other document delivered by Sellers to Buyer as
expressly required by this Agreement contains any untrue statement of a material
fact or omits any statement of a material fact necessary to make any statement
contained herein or therein not misleading.
ARTICLE VIII
COVENANTS OF SELLERS AND XXXXXXXXX
8.1 CONDUCT OF BUSINESS. Except as provided in this Article
VIII, from the date hereof until the Closing, Sellers and Xxxxxxxxx, jointly and
severally, covenant and agree that Sellers shall conduct the Business in the
ordinary and normal course of business, consistent with Sellers' past practices
and with the intent of preserving the ongoing operations and Assets of the
Business. Without limiting the generality of the foregoing, except as expressly
permitted by this Agreement or with the prior written consent of Buyer:
(a) No Seller shall sell, assign, lease or otherwise transfer
or dispose of any of the Assets, unless the same shall be replaced with
assets of equal or greater value and utility, and each Seller's inventories
of spare parts and expendable supplies, if any, shall be maintained at
levels consistent with past practices;
(b) No Seller shall create, assume or permit to exist any
Lien upon the Assets, except for those in existence on the date of this
Agreement, all of which will be removed on or prior to the Closing Date;
(c) Each Seller shall operate the Business in all material
respects in accordance with Applicable Law, and shall not cause or permit
by any act, or failure to act, any of the Governmental Approvals to expire,
be surrendered, adversely modified, or otherwise terminated;
(d) Each Seller shall not waive any material right under any
Contract or license relating to the Assets or the Business;
(e) No Seller shall enter into or renew any Contract to be
assumed by Buyer hereunder pursuant to Section 3.1 other than in a manner
consistent with the past practices of the Business;
(f) Each Seller shall timely make all payments required to be
paid under any Contract to be assumed by Buyer when due and otherwise pay
all liabilities and satisfy all obligations within 60 days of invoice;
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(g) No Seller shall increase or modify or agree to increase
or modify the compensation, bonuses or other benefits or perquisites of any
employee of the Business, except in the ordinary course of business,
consistent with past practice;
(h) Each Seller and Xxxxxxxxx shall use their respective best
efforts to preserve the operations, organization and reputation of the
Business intact, to preserve the goodwill and business of each Seller's
advertisers, programming, suppliers, and others having business relations
with it, and to continue to conduct financial operations of each Seller,
including its credit and collection policies, with no less effort, as
heretofore;
(i) Each Seller shall remove, cure, correct and repair prior
to the Closing (to the extent within such Seller's control) any material
deficiencies in the Assets being sold under this Agreement;
(j) Each Seller shall maintain the insurance policies on the
Business and the Assets listed in SCHEDULE 7.16 or their equivalent; and
(k) Each Seller shall maintain its books and records in
accordance with GAAP and the principles, procedures and elections utilized
by Sellers in the preparation of the audited financial statements included
in the Financial Statements.
8.2 ACCESS AND INFORMATION PRIOR TO THE CLOSING. Between the
date of this Agreement and the Closing Date, each Seller shall give Buyer and
Buyer's counsel, accountants, engineers and other representatives reasonable
access during normal business hours to all of such Seller's Assets, properties,
records and employees relating to the Business, including the data underlying
the Financial Statements, and shall furnish Buyer with all information that
Buyer reasonably requests concerning the Assets and the Business, in each case
after reasonable prior notice. The rights of Buyer under this Section shall not
be exercised in such a manner as to interfere unreasonably with the conduct of
the Business.
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8.3 NOTIFICATION. (a) Each Seller and Xxxxxxxxx shall notify
Buyer of any litigation, arbitration or administrative proceeding pending or, to
its actual knowledge, threatened against any Seller which challenges the
transactions contemplated hereby or which could have a material adverse effect
upon any Seller, the Assets or the Business.
(b) Between the date of this Agreement and the Closing, each
Seller and Xxxxxxxxx shall keep Buyer reasonably informed of all material
operational matters and business developments known to Xxxxxxxxx or any
Seller with respect to the Business and its market including any
competitive changes.
8.4 NO INCONSISTENT ACTION. No Seller or Xxxxxxxxx shall take
any action which is inconsistent with its obligations under this Agreement or
that would hinder or delay the consummation of the transactions contemplated by
this Agreement.
8.5 NO SOLICITATION. None of Seller, any Affiliate of Seller,
Xxxxxxxxx or any Affiliate of Xxxxxxxxx shall directly or indirectly (a)
solicit, initiate or encourage submission of any proposal or offer from any
Person relating to any acquisition or purchase of the Business, any Assets, any
Second Tier Business, any Second Tier Assets, any Third Tier Business or any
Third Tier Assets (other than the sale of assets in the ordinary course of
business consistent with past practices), or any equity interest in, any Seller
or any other Affiliate of Xxxxxxxxx which conducts any such Second Tier Business
or Third Tier Business or holds any such Third Tier Assets or Third Tier
Business, or (b) participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to, or otherwise cooperate in
any way, or assist or participate in, facilitate or encourage, any effort or
attempt by any Person to do or seek any of the foregoing. Each Seller and
Xxxxxxxxx shall promptly notify Buyer in writing if any such offer or proposal
is made to it or any of its Affiliates.
8.6 FINANCIAL STATEMENTS. Within 30 days after the end of
each month until the Closing Date, Sellers shall deliver to Buyer unaudited
consolidated statements of revenue and operations for the Business for the month
then ended, along with a balance sheet of the Business as of the end of such
month. All financial statements furnished pursuant to this Section shall fairly
represent the financial condition and the results of operations as of the dates
and for the periods covered by such statements, subject to normal year-end
adjustments. Each Seller shall furnish to Buyer any and all other information
customarily prepared by such Seller concerning its financial condition that
Buyer may reasonably request.
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8.7 ESTOPPEL CERTIFICATES; CONSENT AND WAIVER. Each Seller
shall use all reasonable commercial efforts to obtain estoppel certificates
containing customary provisions and consents and waivers from any landlord with
respect to the Real Property Leases or other lessor of any Asset that Buyer
requests at least 15 business days before the Closing Date.
8.8 EMPLOYEE MATTERS. (a) Each Seller shall use all
reasonable efforts to cause the employees employed in the Business to make
available their employment services to Buyer. For a period of two years
following the Closing Date, neither Seller shall, nor shall permit any of their
respective Affiliate's to, solicit, offer to employ or retain the services of or
otherwise interfere with the relationship of Buyer or any of its Affiliates with
any Person employed by or otherwise engaged to perform services for Buyer or any
such Affiliate in connection with the operation of the Business.
(b) Effective as of the Closing Date, Buyer shall offer
employment to substantially all employees who are then actively employed by
a Seller in the operation of the Business at wage or salary levels, as
applicable, and with employee benefits that are substantially comparable to
the benefits provided to employees under the Plans as in effect on the date
hereof. Those employees who accept such offers of employment effective as
of the Closing Date shall be referred to herein as the "Existing
Employees". Effective as of the Closing Date, the Buyer shall assume the
liability of the Sellers in respect of the Existing Employees for accrued
but unpaid salaries, wages, vacation and sick pay and 1996 incentive
compensation, but only to the extent such liability constitutes an Assumed
Liability pursuant to clause (a) of Section 3.1 hereof. Subject to clause
(a) of Section 3.1 hereof, the Sellers shall, jointly and severally, remain
responsible for payment of any and all retention, change in control,
severance, termination or other similar compensation or benefits which are
or may become payable to any employee or former employee of the Business,
including the Existing Employees, in connection with the consummation of
the transactions contemplated by this Agreements, including, without
limitation, any liability, obligation or commitment in respect of any claim
of any such employee or former employee of actual or constructive
termination of employment.
(c) From and after the Closing, each Seller shall honor, pay
and perform each and every liability, obligation and commitment in respect
of each Existing Employee and the beneficiaries and dependents thereof
under each Plan, including, without limitation, each such liability,
obligation and commitment in respect of benefits, rights or entitlements
under any such Plan accrued as of the Closing Date or, in the case of
health and other welfare benefits, relating to events or conditions
occurring or existing as of, or confinements or treatments commencing prior
on or to, the Closing Date, subject in the case of any such liability for
compensation or other payroll items, to clause (a) of Section 3.1 hereto.
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8.9 INSTALLATION OF CAMERAS. Prior to the Closing, Sellers
shall use their reasonable efforts to install the traffic cameras at the
locations and at the times described in SCHEDULE 8.10.
8.10 NAME CHANGE; POST-CLOSING USE OF TRADEMARKS. Within 30
days of the Closing, each Seller and each Affiliate of Xxxxxxxxx shall change
its name to eliminate the words "Shadow Traffic", "Express Traffic" or any
derivatives thereof. From and after the Closing Date, no Seller and no Affiliate
of Xxxxxxxxx shall use any of the trademarks listed on SCHEDULE 7.7 hereof nor
any derivatives thereof in the conduct of such Seller's or such Affiliate's
respective business, except pursuant to the license agreement referred to in
Sections 13.9 and 14.5 hereof.
ARTICLE IX
ADDITIONAL COVENANTS
Buyer, each Seller and Xxxxxxxxx covenant and agree that for
the applicable periods set forth below, they shall act in accordance with the
following:
9.1 REASONABLE COMMERCIAL EFFORTS. Prior to the Closing, each
party shall use its reasonable commercial efforts to cause the fulfillment at
the earliest practicable date of all of the conditions to the obligations of the
other party to consummate the sale and purchase under this Agreement.
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9.2 RENEWAL OF CONTRACTS. Prior to the Closing, each Seller
shall use its reasonable efforts to renew any Contract to be assumed by Buyer
hereunder pursuant to Section 3.1 which by its terms expires or terminates
between the date of this Agreement and the Closing Date, provided that any such
renewal shall be on terms and conditions consistent with the past practices of
the Business.
9.3 TREATMENT OF BOOKS AND RECORDS. For a period of three
years after the Closing Date, at least 30 days prior to discarding or destroying
any books or records relating to the Assets that are being sold hereunder, Buyer
shall give Xxxxxxxxx notice of its intended action and an opportunity for
Xxxxxxxxx to retain any of the books or records proposed to be discarded or
destroyed by Buyer. Prior to the destruction of any such books or records,
Sellers and Xxxxxxxxx shall have the right, upon reasonable advance request, to
have access to such books and records during normal business hours to enable any
of them to fulfill the Tax and ordinary course partnership obligations of
Sellers.
9.4 POST-CLOSING RESTRICTION ON BUYER. (a) Subject to
Sections 9.4(b) and 9.4(c) hereof, Buyer covenants and agrees that from and
after the Closing Date it will not conduct, directly or indirectly through any
Affiliate (other than Infinity Broadcasting Corporation or any wholly-owned
subsidiary of Infinity Broadcasting Corporation), any Local Content Radio
Programming in any Second Tier Radio Market or Third Tier Radio Market, in each
case to the extent (and only to the extent) that the advertising inventory for
such Local Content Radio Programming consists primarily of ten second
advertising units, PROVIDED that the foregoing provision shall have no
application to and shall not be deemed to limit in any way any Local Content
Radio Programming Business in any Second Tier Radio Market or Third Tier Radio
Market that Buyer is conducting, directly or indirectly through any Affiliate,
as of the date of this Agreement.
(b) The covenants set forth in Section 9.4(a) hereof shall
terminate (i) with respect to each Second Tier Radio Market, upon the first
to occur of (A) the first anniversary of the Second Tier Closing Date, (B)
the expiration (without exercise) of the put and call arrangements with
respect to the Second Tier Assets set forth in Section 11.1 hereof and (C)
Buyer's payment of the Buyout Amount with respect to such Second Tier Radio
Market under Section 9.4(c) hereof and (ii) with respect to any Third Tier
Radio Market, upon the first to occur of (V) the first anniversary of the
Third Tier Closing Date with respect to such Third Tier Radio Market, (W)
the expiration (without exercise) of the put and call arrangements with
respect to such Third Tier Radio Market set forth in Section 12.1 hereof,
(X) Xxxxxxxxx'x failure to comply with any of the covenants in Section 9.5
hereof with respect to such Third Tier Radio Market, (Y) Xxxxxxxxx'x
decision to cease to conduct Local Content Radio Programming Business in
such Third Tier Radio Market pursuant to the third sentence of Section
9.5(a) hereof and (Z) Buyer's payment of the Buyout Amount with respect to
such Third Tier Radio Market under Section 9.4(c) hereof.
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(c) At any time following the Closing Date, Buyer may, by
delivering a written notice to Xxxxxxxxx (the "Buyout Notice"), terminate
the covenants set forth in Section 9.4(a) hereof with respect to any of the
Second Tier Radio Markets or Third Tier Radio Markets by paying the Buyout
Amount applicable to such Radio Market to Xxxxxxxxx, such payment to be
made on such date as Buyer specifies in the Buyout Notice. Any Buyout
Amount otherwise payable by Buyer to Xxxxxxxxx under this Section 9.4(c)
shall be reduced by an amount equal to the Carryover Amount on the date
such Buyout Amount is paid. Upon delivery of any Buyout Notice, Xxxxxxxxx
shall promptly provide Buyer with a certificate (a "Start-Up Cost
Certificate") setting forth all of Xxxxxxxxx'x and his Affiliates'
out-of-pocket expenses, if any, incurred in connection with fulfilling the
applicable covenants set forth in Section 9.5(a) hereof for the period from
the Closing Date to the date such Buyout Notice is delivered to Xxxxxxxxx,
together with reasonable supporting documentation of such costs. In
addition, upon delivery of any Buyout Notice with respect to any Radio
Market which has been profitable during the six-month period most recently
completed prior to the delivery of such Buyout Notice, Xxxxxxxxx shall
promptly provide Buyer with a certificate containing a projected net income
statement for such Radio Market for the twelve-month period following the
delivery of such Buyout Notice (a "Projection Certificate"). Each
Projection Certificate shall be prepared in good faith by Xxxxxxxxx, shall
be consistent with the past performance of the business in such Radio
Market and shall employ the methodology described in Section 4.1(b)(i)
applicable to the preparation of the Contingent Payment Income Statement
for the Business. Buyer shall have the right to dispute any Start-Up Cost
Certificate or Projection Certificate in the manner set forth in Section
9.4(d) hereof.
(d) Buyer shall have the right to dispute any amount listed
on any Start-Up Cost Certificate or the net income calculation listed on
any Projection Certificate, as the case may be (each a "Disputed Amount").
If Buyer is unable to reach an agreement with Xxxxxxxxx regarding each such
Disputed Amount within 15 days of the delivery of the applicable
certificate, Buyer and Xxxxxxxxx shall submit the dispute regarding each
such Disputed Amount to arbitration using the procedures set forth in
Section 21.8 hereof. In any such arbitration, the Board shall determine and
report upon each such Disputed Amount and such report shall be final,
binding and conclusive on Buyer and Xxxxxxxxx with respect to each such
Disputed Amount, PROVIDED that if, after giving effect to the Board's
resolution of any Disputed Amount relating to the net income reflected on
any Projection Certificate, the net income for the applicable Radio Market
would not vary from the calculation of such net income as reflected on the
applicable Projection Certificate by 10% or more, then the calculation of
such net income as reflected on such Projection Certificate shall be final,
binding and conclusive on Buyer and Xxxxxxxxx for all purposes of this
Section 9.4.
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(e) Buyer may pay up to 40% of any Buyout Amount by
delivering Westwood Stock to Xxxxxxxxx, such Westwood Stock to be valued
based on a per share price equal to the average of the Closing Price of
Westwood Stock, as reported on NASDAQ, for the ten trading days preceding
the Second Business day before such Buyout Amount is paid.
(f) Simultaneously with Buyer's payment of the Buyout Amount
for any Second Tier Radio Market or Third Tier Radio Market, Xxxxxxxxx
shall transfer all of the assets and businesses used in the Local Content
Radio Programming Business used in such Radio Market to Buyer, free and
clear of all Liens and without any additional cost to Buyer other than the
payment of the Buyout Amount with respect to such Radio Market. The
non-purchase price related terms and conditions with respect to such
transfer shall be comparable to the terms and conditions that would have
applied to such transfer were it made pursuant to the applicable provisions
of Section 11.2 or 12.2 hereof, as the case may be. Upon the receipt of any
Buyout Notice from Buyer, Buyer and Xxxxxxxxx shall use and shall cause
their Affiliates to use their respective best efforts to negotiate, execute
and deliver to Buyer a transfer agreement under which all of such assets
will be delivered to Buyer in accordance with the two immediately preceding
sentences.
(g) Buyer acknowledges that the covenants contained in this
Section 9.4 hereof were a material and necessary inducement for Sellers and
Xxxxxxxxx to agree to the transactions contemplated hereby, and that Buyer
will realize significant monetary benefit from these transactions, that
violations of any of the covenants contained in Section 9.4(a) hereof will
cause irreparable and continuing damage to Sellers and Xxxxxxxxx, that
Sellers and Xxxxxxxxx shall be entitled to injunctive or other equitable
relief from any court of competent jurisdiction restraining any further
violation of such covenants and that such injunctive relief shall be
cumulative and in addition to any other rights or remedies to which Sellers
and Xxxxxxxxx may be entitled.
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9.5 ACTIVITIES OF XXXXXXXXX IN THE FIRST, SECOND AND THIRD
TIER RADIO MARKETS; NON-COMPETES. (a) Xxxxxxxxx shall use his best efforts to
establish, develop and operate a Local Content Radio Programming Business in
each of the Third Tier Radio Markets consistent with the timetable for such
Third Tier Radio Markets set forth on SCHEDULE 1.1. Upon commencement of any
Local Content Radio Programming Business in any Third Tier Radio Market,
Xxxxxxxxx shall promptly deliver a notice to Buyer specifying the date on which
such business commenced in such Third Tier Radio Market. Notwithstanding the
foregoing, Xxxxxxxxx shall have the right upon 30 days advance notice to Buyer
to cease to operate the Local Content Radio Programming Business in any Third
Tier Radio Market if such business, in Xxxxxxxxx'x reasonable good faith
judgment, is, and will continue to be, financially unprofitable.
(b) Xxxxxxxxx shall neither conduct nor be associated with
(as a director, officer, employee, equity holder, partner or otherwise) any
Local Content Radio Programming Business in any First Tier Radio Market
from and after the Closing Date. In addition, Xxxxxxxxx shall neither
conduct nor be associated with (as a director, officer, employee, equity
holder, partner or otherwise) any Local Content Radio Programming Business
in any Second Tier Radio Market or Third Tier Radio Market prior to the
earlier of (i) the expiration of the put and call arrangements with respect
to such market under Article XII or XIII hereof, as the case may be, and
(ii) the Second Tier Closing Date or Third Tier Closing Date with respect
to such market, as the case may be, except, in each case, through an
Affiliate that will be subject to the applicable put and call provisions
set forth in Articles XII and XIII hereof; provided that, notwithstanding
the foregoing, the covenants set forth in this Section 9.5(b) shall
continue in effect forever with respect to any Third Tier Radio Market in
which Xxxxxxxxx ceases to operate a Local Content Radio Programming
Business as permitted under the third sentence of Section 9.5(a) hereof.
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9.6 SPECIAL CALL RIGHTS. In the event Xxxxxxxxx exercises his
right pursuant to the third sentence of Section 9.5(a) hereof to cease to
operate a Local Content Radio Programming Business in any Third Tier Radio
Market, Buyer may, at any time thereafter, by delivering notice to Xxxxxxxxx,
require Xxxxxxxxx to transfer all of the assets and businesses used in such
Local Content Radio Programming Business in such Third Tier Radio Market to
Buyer, free and clear of all Liens and without cost to Buyer. The other terms
and conditions of any such transfer shall be comparable to the terms and
conditions of this Agreement with respect to the First Tier Markets. Upon the
receipt of any such notice from Buyer, Xxxxxxxxx shall use and shall cause his
Affiliates to use their respective best efforts to negotiate, execute and
deliver to Buyer a transfer agreement under which all of such assets will be
delivered to Buyer in accordance with the two immediately preceding sentences.
ARTICLE X
POST-CLOSING SERVICES
10.1 OVERHEAD SERVICES. Upon the reasonable advance request
of Xxxxxxxxx, Buyer, subject to the applicable terms and conditions set forth in
this Article X, will provide to each Service Recipient designated by Xxxxxxxxx
such (i) accounting, audit support and tax services, (ii) employee payroll
services and (iii) personnel services as are specifically requested by Xxxxxxxxx
(collectively, the "Overhead Services"). Notwithstanding anything in this
Article X to the contrary, Buyer shall be obligated to provide Overhead Services
only to the extent such services are utilized by such Service Recipient solely
in connection with its Local Content Radio Programming Business in one of more
of the Second Tier Radio Markets or Third Tier Radio Markets.
45
10.2 GENERAL MARKETING SERVICES. (a) Upon the reasonable
request of Xxxxxxxxx, Buyer, subject to the applicable terms and conditions set
forth in this Article X, will provide to each Service Recipient designated by
Xxxxxxxxx such (i) sales and marketing support, (ii) legal services and (iii)
general managerial services as are specifically requested by Xxxxxxxxx (the
"Other Services"; and together with the Overhead Services, the "Services").
Notwithstanding anything in this Article X to the contrary, Buyer shall be
obligated to provide Other Services only to the extent (x) it employs
individuals who are available to, and capable of, providing such Services, (y)
the Other Services can be provided without disrupting Buyer's conduct of its
ongoing business operations and (z) such services are utilized by such Service
Recipient solely in connection with its Local Content Radio Programming Business
in one or more of the Second Tier Radio Markets or Third Tier Radio Markets.
(b) Without limiting the generality of Section 10.2(a), each
of Xxxxxxxxx and his Affiliates, on the one hand, and Buyer, on the other hand,
will discuss the implementation of joint marketing activities to prospective
national and regional advertising accounts for the Local Content Radio
Programming Business conducted by Buyer in the First Tier Markets and by
Xxxxxxxxx and his Affiliates in the Second Tier Radio Markets and the Third Tier
Radio Markets. The parties will conduct such joint marketing activities subject
to mutual agreement on the nature and terms of such activities. All such joint
marketing efforts will be conducted under Buyer's name.
10.3 TERMINATION. Buyer's obligation to provide the Services
shall commence on the Closing Date and shall terminate (a) in the case of any
Service Recipient engaged in any Local Content Radio Programming Business in any
Second Tier Radio Market, upon the earliest to occur of (i) the Second Tier
Closing Date, (ii) the expiration of the put and call rights described in
Section 11.1 hereof with respect to the Second Tier Assets and (iii) Xxxxxxxxx'x
failure to perform his covenant in Section 9.5 hereof with respect to the Second
Tier Radio Market in which such Service Recipient operates, and (b) in the case
of any Service Recipient engaged in any Local Content Radio Programming Business
in any of the Third Tier Radio Markets, upon the earliest to occur of (w) the
Third Tier Closing Date with respect to the Third Tier Radio Market in which
such Service Recipient operates, (x) the expiration of the put and call rights
described in Section 12.1 hereof with respect to the Third Tier Radio Market in
which such Service Recipient operates, (y) Xxxxxxxxx'x failure to perform his
covenant in Section 9.5 hereof with respect to the Third Tier Radio Market in
which such Service Recipient operates and (z) Xxxxxxxxx'x ceases to conduct
Local Content Radio Programming Business in the Third Tier Radio Market in which
such Service Recipient operates pursuant to the third sentence of Section 9.5(a)
hereof.
46
10.4 FEES AND EXPENSES. Buyer shall be reimbursed at cost
with respect to each Service provided by Buyer pursuant to this Article X
(collectively the "Service Costs"). Without limiting the generality of the
foregoing, with respect to any Service, the Service Costs shall include (i) all
salary and employee benefit costs attributable to those employees of Buyer who
provide such Service for the periods of time during which such employees provide
such Service and (ii) all other out-of-pocket costs incurred by Buyer in
connection with providing such Service or maintaining administrative records
relating to such Service.
10.5 BILLING AND PAYMENT. No later than 30 Business Days
after the end of each calendar month during which any Services are rendered, or
in the case of the first monthly statement to be provided hereunder, no later
than 45 days after the Closing Date, Buyer will deliver to Xxxxxxxxx a statement
showing all of the Service Costs for such calendar month. Upon request, Buyer
will provide Xxxxxxxxx with reasonable supporting documentation of such Service
Costs. Sellers and Xxxxxxxxx, jointly and severally, shall be responsible for
paying each such statement in full within 15 days of receipt. Without limiting
any other right of Buyer, payments made later than 15 days shall accrue simple
interest at 10% per annum (or such lesser rate as may be the legal maximum rate
of interest).
ARTICLE XI
RIGHTS REGARDING SECOND TIER RADIO MARKETS
11.1 PUT AND CALL RIGHTS. (a) Subject to Section 11.3 hereof,
at any time during the 30 day period beginning on the third anniversary of the
Closing Date, Xxxxxxxxx may, by delivering notice to Buyer (the "Second Tier Put
Notice"), require Buyer to purchase all of the Second Tier Assets and the Second
Tier Business from Xxxxxxxxx or any Affiliate of Xxxxxxxxx for the Second Tier
Initial Purchase Price and on the other terms and conditions set forth in
Section 11.2. If, prior to the 30th day following the third anniversary of the
Closing, Xxxxxxxxx has not (i) previously delivered the Second Tier Put Notice
or (ii) delivered a written notice to Buyer stating that he does not wish to
deliver the Second Tier Put Notice, Xxxxxxxxx shall be deemed to have delivered
the Second Tier Put Notice to Buyer on the 30th day following the third
anniversary of the Closing Date.
(b) Subject to Section 11.3 hereof, at any time during the 30
day period beginning on the third anniversary of the Closing Date, Buyer may, by
delivering notice to Xxxxxxxxx (the "Second Tier Call Notice"), require
Xxxxxxxxx to sell all of the Second Tier Assets and the Second Tier Business to
Buyer for the Second Tier Initial Purchase Price and on the other terms and
conditions set forth in Section 11.2 hereof.
47
11.2 TERMS OF PUT OR CALL. (a) Upon delivery of the Second
Tier Put Notice or the Second Tier Call Notice, as the case may be, Buyer and
Xxxxxxxxx shall each use their respective best efforts to promptly negotiate an
asset purchase agreement (the "Second Tier Purchase Agreement") for the Second
Tier Assets and Second Tier Business that, subject to the last sentence of this
Section 11.2(a), conforms in all material respects to the terms and conditions
of this Agreement with respect to the sale and purchase of the Assets and the
Business. Without limiting the generality of the foregoing, the Second Tier
Purchase Agreement shall contain (i) a purchase price adjustment based on the
difference between the audited adjusted current assets of the Second Tier
Business as of the closing under the Second Tier Purchase Agreement (the "Second
Tier Closing Date") compared to an amount equal to the revenues for such Second
Tier Business during the two completed months immediately prior to the Second
Tier Closing Date, (ii) a second purchase price adjustment based on the audited
adjusted pre-tax profits of the Second Tier Business during the first full 12
calendar months following the Second Tier Closing Date compared to the Second
Tier Adjusted Profits, and (iii) representations, warranties, covenants,
conditions and indemnities with respect to the Second Tier Assets and the Second
Tier Business that are comparable in all material respects to the like
representations, warranties, covenants, conditions and indemnities agreed to by
Buyer and Sellers herein with respect to the Assets and the Business.
Notwithstanding the foregoing, unlike this Agreement, the Second Tier Purchase
Agreement shall provide that (A) Buyer may offset any amounts owed to it
pursuant to Section 18.1 hereof against the Second Tier Initial Purchase Price,
or any purchase price adjustment it must make in favor of the seller thereunder,
(B) any purchase price adjustment must be paid by Buyer or the seller
thereunder, as the case may be, in cash within 90 days following the definitive
determination of such purchase price adjustment, (C) Buyer may pay up to 40% of
the Second Tier Initial Purchase Price, and any purchase price adjustment, by
delivering Westwood Stock, to such seller and (D) in the event that Buyer elects
to pay any portion of the Second Tier Initial Purchase Price by delivering such
Westwood Stock, (i) each share of Westwood Stock shall be valued based on a per
share price equal to the average of the closing price of Westwood Stock, as
reported on NASDAQ, for the ten trading days preceding the second Business Day
before the Second Tier Closing Date and (ii) Buyer and such seller shall make
appropriate and conventional representations and warranties to each other with
respect to such Westwood Stock.
(b) The Second Tier Purchase Agreement shall provide that the
Second Tier Initial Purchase Price shall be reduced by an amount equal to the
Carryover Amount at the time the Second Tier Initial Purchase Price is paid and
shall be appropriately adjusted to reflect any transfer of any Second Tier
Assets or Second Tier Businesses pursuant to Section 9.4 hereof.
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11.3 TERMINATION OF PUT AND CALL RIGHTS. Notwithstanding
anything in this Agreement to the contrary, all put and call rights of the
parties under Sections 11.1(a) and 11.1(b) hereof with respect to any Second
Tier Radio Market shall expire and terminate and have no further force or effect
immediately upon Buyer's delivery of a Buyout Notice with respect to such Second
Tier Radio Market under Section 9.4(c) hereof.
ARTICLE XII
RIGHTS REGARDING THIRD TIER RADIO MARKETS
12.1 PUT AND CALL RIGHTS. (a) Subject to Section 12.3 hereof,
at any time during the 30-day period beginning on the third anniversary of the
commencement by Xxxxxxxxx or any of his Affiliates of any Local Content Radio
Programming Business in any of the Third Tier Radio Markets, Xxxxxxxxx may, by
delivering a notice to Buyer (a "Third Tier Put Notice"), require Buyer to
purchase the Third Tier Assets and the Third Tier Business relating to such
Third Tier Radio Market for the Third Tier Initial Purchase Price applicable to
such Third Tier Business and Third Tier Assets and on the other terms and
conditions provided in Section 12.2 hereof. If, prior to the 30th day following
the commencement by Xxxxxxxxx or any of his Affiliates of any Local Content
Radio Programming Business in any Third Tier Radio Market, Xxxxxxxxx has not (i)
previously delivered a Third Tier Put Notice with respect to such Third Tier
Radio Market or (ii) delivered a written notice to Buyer stating that he does
not wish to deliver a Third Tier Put Notice with respect to such Third Tier
Radio Market, Xxxxxxxxx shall be deemed to have delivered such Third Tier Put
Notice with respect to such Third Tier Radio Market on the 30th day following
the third anniversary of the commencement by Xxxxxxxxx or any of his Affiliates
of such Local Content Radio Programming Business in such Third Tier Radio
Market.
(b) Subject to Section 12.3 hereof, at any time during the 30
day period beginning on the third anniversary of the commencement by Xxxxxxxxx
or any of his Affiliates of any Local Content Radio Programming Business in any
Third Tier Radio Market, Buyer may, by delivering a written notice to Xxxxxxxxx
(a "Third Tier Call Notice"), require Xxxxxxxxx to sell all of the Third Tier
Assets and the Third Tier Business relating to such Third Tier Radio Market to
Buyer for the Third Tier Initial Purchase Price applicable to such Third Tier
Business and Third Tier Assets and on the other terms and conditions provided in
Section 12.2 hereof.
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12.2 TERMS OF PUT OR CALL. (a) Upon delivery of a Third Tier
Put Notice or a Third Tier Call Notice, as the case may be, with respect to any
Third Tier Radio Market, Buyer and Xxxxxxxxx shall each use their respective
best efforts to promptly negotiate an asset purchase agreement (each such
agreement, a "Third Tier Purchase Agreement") for all of the Third Tier Assets
and Third Tier Business for such Third Tier Radio Market, which Third Tier
Purchase Agreement shall, subject to the last sentence of this Section 12.2(a),
conform in all material respects to the terms and conditions of this Agreement
with respect to the sale and purchase of the Assets and the Business. Without
limiting the generality of the foregoing, such Third Tier Purchase Agreement
shall contain (i) a purchase price adjustment based on the difference between
the audited adjusted current assets of the Third Tier Business and Third Tier
Assets for such Third Tier Radio Market as of the closing under such Third Tier
Purchase Agreement (a "Third Tier Closing Date") compared to an amount equal to
the revenues for such Third Tier Business during the two completed months
immediately prior to such Third Tier Closing Date, (ii) a second purchase price
adjustment based on the audited pre-tax adjusted profits of the Third Tier
Business and Third Tier Assets for such Third Tier Radio Market during the first
full 12 calendar months following such Third Tier Closing Date compared to the
adjusted profits of such Third Tier Business and Third Tier Assets utilized for
calculating the Third Tier Initial Purchase Price under such Third Tier Purchase
Agreement and (iii) representations, warranties, covenants, conditions and
indemnities with respect to the Third Tier Business and the Third Tier Assets
for such Third Tier Radio Market that are comparable in all material respects to
the like representations, warranties, covenants, conditions and indemnities
agreed to by Buyer and Sellers herein with respect to the Assets and the
Business. Notwithstanding the foregoing, each Third Tier Purchase Agreement
shall provide that (A) Buyer may offset any amounts owed to it under the
indemnification provisions of this Agreement, the Second Tier Purchase Agreement
or any other Third Tier Purchase Agreement against the Third Tier Initial
Purchase Price under such Third Tier Purchase Agreement, or any purchase price
adjustment Buyer must make in favor of the seller thereunder, (B) any purchase
price adjustment thereunder must be paid by Buyer or the seller, as the case may
be, within 90 days following the definitive determination of such purchase price
adjustment, (C) Buyer may pay up to 40% of the purchase price thereunder, and
any purchase price adjustment, by delivering Westwood Stock, to such seller and
(D) in the event that Buyer elects to pay any portion of any Third Tier Initial
Purchase Price by delivering Westwood Stock, (i) each share of Westwood Stock
shall be valued based on a per share price equal to the average of the closing
price of Westwood Stock, as reported on NASDAQ, for the ten trading days
preceding the second day before such Third Tier Closing Date and (ii) Buyer and
such seller shall make appropriate and conventional representations and
warranties to each other with respect to such Westwood Stock.
(b) Each Third Tier Purchase Agreement shall also provide
that the Third Tier Initial Purchase Price under such Third Tier Purchase
Agreement shall be reduced by an amount equal to the Carryover Amount at the
time such Third Tier Initial Purchase Price is paid.
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12.3 TERMINATION OF PUT AND CALL RIGHTS. Notwithstanding
anything in this Agreement to the contrary, in the event Xxxxxxxxx exercises his
right pursuant to the third sentence of Section 9.5(a) hereof to cease to
operate a Local Content Radio Programming Business in any Third Tier Radio
Market, the put and call rights of the parties under Sections 12.1(a) and
12.1(b) hereof with respect to such Local Content Radio Programming Business
shall expire and terminate and have no further force or effect. In addition,
notwithstanding anything in this Agreement to the contrary, all put and call
rights of the parties under Sections 12.1(a) and 12.1(b) hereof with respect to
all Third Tier Radio Markets shall expire and terminate and have no further
force or effect immediately upon Buyer's delivery of the Buyout Notice with
respect to such Third Tier Radio Market under Section 9.4(c) hereof.
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ARTICLE XIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer hereunder are, at its option,
subject to satisfaction, at or prior to the Closing Date, of each of the
following conditions:
13.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. (a) All
representations and warranties of Sellers and Xxxxxxxxx made in this Agreement
shall be true and complete in all material respects on and as of the Closing
Date as if made on and as of that date (it being understood that in applying the
provision of this Section 13.1(a) to any such representation and warranty, any
separate qualification as to materiality or material adverse effect contained in
any such representation or warranty shall be disregarded).
(b) All of the terms, covenants and conditions to be complied
with and performed by any Seller or Xxxxxxxxx on or prior to Closing Date shall
have been complied with or performed.
13.2 GOVERNMENTAL CONSENTS. (a) The conditions specified in
Article V of this Agreement shall have been satisfied, any applicable waiting
period under the HSRA shall have expired or been earlier terminated without
receipt of any objection or the commencement or threat of any litigation by any
Governmental Authority of competent jurisdiction to restrain the consummation of
the transactions contemplated by this Agreement.
(b) The FCC shall either (i) have granted special temporary
authority or authorities permitting Buyer to utilize all of the FCC licenses
listed on SCHEDULE 7.4(b) (other than FCC license KLC-635 issued to Group W
Radio, Inc.) in the same manner and to the same extent used by Sellers in their
operation of the Business, or (ii) Sellers and Buyers shall have entered into
such other arrangements satisfactory to Buyer permitting Buyer to enjoy the
benefits of such FCC licenses until such time as the FCC has granted the FCC
Applications.
(c) Sellers shall (i) have obtained consents from all third
parties and Governmental Authorities that are necessary to permit Buyer to
utilize the technical facilities listed on Schedule 7.4(b) in the same manner
and to the same extent that such facilities are used by Sellers in operation of
the Business, or (ii) Sellers shall provide technical facilities comparable to
those listed on SCHEDULE 7.4(b) to permit Buyer to operate the Business in the
same manner and to the same extent as the Business is presently operated by
Sellers.
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13.3 THIRD-PARTY CONSENTS. Sellers shall have obtained and
shall have delivered to Buyer all third-party consents listed on SCHEDULE 13.3
hereto, without any condition materially adverse to Buyer.
13.4 EMPLOYMENT AGREEMENT. Buyer shall have entered into an
employment agreement (the "Employment Agreement") with Xxxxxxx X'Xxxxxxx, in the
form set forth on SCHEDULE 13.4 hereto.
13.5 ADVERSE PROCEEDINGS. No action, suit, proceeding,
litigation or investigation shall be pending or threatened by any governmental
authority which questions the validity or legality of this Agreement or any
action taken or to be taken in connection herewith or the consummation of the
transactions contemplated hereby. No injunction or other order issued by a court
of competent jurisdiction restraining or prohibiting the consummation of the
transactions contemplated by this Agreement shall be in effect.
13.6 PAYMENT OF INDEBTEDNESS; FINANCING STATEMENTS. Except
for Permitted Encumbrances, as defined below, Sellers shall secure the release
of all Liens on the Assets and the Business, including those Liens listed in
SCHEDULE 7.20, and shall deliver evidence of the filing of such releases to
Buyer at Closing, including but not limited to, releases or terminations under
the Uniform Commercial Code and any other applicable federal, state or local
statutes or regulations of any financing or similar statements filed against any
Assets in (a) the jurisdictions in which the Assets are and have been located
since such Assets were acquired by a Seller, and (b) any other location
specified or required by applicable federal, state or local statutes or
regulations.
"Permitted Encumbrances" shall consist only of liens for
Taxes, assessments, water and sewer charges, license fees, and all other fees,
special assessments and charges assessed or imposed by a public body upon the
Assets or any part thereof or the operation thereof, provided such fees,
assessments or taxes are not yet due and payable.
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13.7 TRANSITIONAL AGREEMENT. Affiliates of Xxxxxxxxx shall
have entered into a Transitional Agreement, in form and substance reasonably
satisfactory to Buyer, under which Affiliates of Xxxxxxxxx shall be permitted to
use the words "Shadow Traffic" and "Express Traffic", and certain agreed upon
intellectual property and other programming material included in the Assets, in
connection with their Local Content Radio Programming Business in the Second and
Third Tier Radio Markets.
13.8 DELIVERIES. Sellers shall have made all the deliveries
set forth in Section 15.1 hereof.
ARTICLE XIV
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
The obligations of Sellers and Xxxxxxxxx are, at their
option, subject to satisfaction, at or prior to the Closing Date, of each of the
following conditions:
14.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. (a) All
representations and warranties of Buyer in Article VI hereof shall be true and
complete in all material respects on and as of the Closing Date as if made on
and as of that date (it being understood and agreed that in applying the
provision of this Section 14.1(a) to any such representation and warranty, any
separate qualification as to materiality or material adverse effect contained in
any such representation or warranty shall be disregarded).
(b) All the terms, covenants and conditions to be complied
with and performed by Buyer on or prior to the Closing Date shall have been
complied with or performed.
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14.2 GOVERNMENTAL CONSENTS. The conditions specified in
Article V of this Agreement shall have been satisfied and any applicable waiting
period under the HSRA shall have expired or been earlier terminated without
receipt of any objection or the commencement or threat of any litigation by any
Governmental Authority of competent jurisdiction to restrain the consummation of
the transactions contemplated by this Agreement.
14.3 ADVERSE PROCEEDINGS. No action, suit, proceeding,
litigation or investigation shall be pending or threatened by any Governmental
Authority of competent jurisdiction which questions the validity or legality of
this Agreement or any action taken or to be taken in connection herewith or the
consummation of the transactions contemplated hereby. No injunction or other
order issued by a court of competent jurisdiction restraining or prohibiting the
consummation of the transactions contemplated by this Agreement shall be in
effect.
14.4 TRANSITIONAL AGREEMENT. Buyer shall have entered into a
Transitional Agreement, in form and substance reasonably satisfactory to
Xxxxxxxxx, under which Affiliates of Xxxxxxxxx in the Second Tier Radio Market
and the Third Tier Radio Markets shall be permitted to use the words "Shadow
Traffic" and "Express Traffic", and certain agreed upon intellectual property
and other programming materials included in the Assets, in connection with their
Local Content Radio Programming Business in the Second and Third Tier Radio
Markets.
14.5 EMPLOYMENT AGREEMENT. Buyer shall have entered into the
Employment Agreement with Xxxxxxx X'Xxxxxxx.
14.6 DELIVERIES. Buyer shall have made all the deliveries set
forth in Section 15.2 hereof.
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ARTICLE XV
THE CLOSING
15.1 DOCUMENTS TO BE DELIVERED BY SELLERS AND XXXXXXXXX. At
the Closing, Sellers shall deliver or cause to be delivered to Buyer the
following:
(a) certificates of each Seller and Xxxxxxxxx, dated the
Closing Date, in form and substance reasonably satisfactory to Buyer,
certifying to the fulfillment of the conditions set forth in Section 13.1
hereof;
(b) opinion of the Sellers' and Xxxxxxxxx'x counsel, dated
the Closing Date, substantially in the form of EXHIBIT A;
(c) instruments of conveyance and transfer, in form and
substance reasonably satisfactory to counsel to Buyer, effecting the sale,
transfer, assignment and conveyance of the Assets and the Business to
Buyer, including, but not limited to, the following:
(i) assignments of the Real Property Leases together with any
consents necessary to permit such assignments;
(ii) assignments or bills of sale, as appropriate, for the
Intellectual Property Assets;
(iii) bills of sale for all Personal Property;
(iv) assignments of the Contracts;
(v) assignments of all intangible personal property,
including all books, records, logs and similar assets which do not
constitute Excluded Assets;
(d) certified resolutions of the board of directors of the
general partner of each Seller, authorizing the execution, delivery and
performance of this Agreement;
(e) the Employment Agreement pursuant to Section 13.4;
(f) an affidavit to the effect that each Seller is not a
"foreign person" within the meaning of Section 1445 of the Code;
(g) the transitional agreement pursuant to Section 13.8
hereof; and
(h) such other documents as may reasonably be requested by
Buyer's counsel.
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15.2 DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing,
Buyer shall deliver or cause to be delivered to Sellers the following:
(a) certificate of Buyer, dated the Closing Date, in form and
substance reasonably satisfactory to Seller, certifying to the fulfillment
of the conditions specified in Section 14.1 hereof;
(b) immediately available wire-transferred funds and/or
Westwood Stock registered in the name of Sellers as provided in Section 2.4
hereof;
(c) instruments, in form and substance reasonably
satisfactory to Seller and its counsel, pursuant to which Buyer assumes the
obligations, liabilities and commitments as provided in Section 3.1 hereof;
(d) opinions of counsel to Buyer, dated the Closing Date,
substantially in the form of EXHIBIT B;
(e) certified resolutions of the board of directors of Buyer,
authorizing the execution, delivery and performance of this Agreement; and
(f) a guarantee agreement of Westwood, substantially in the
form of EXHIBIT C hereto;
(g) the transitional agreement pursuant to Section 14.4
hereof; and
(h) such other documents as may be reasonably requested by
the Sellers' and Xxxxxxxxx'x counsel.
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ARTICLE XVI
TRANSFER TAXES; FEES AND EXPENSES
16.1 TRANSFER TAXES AND SIMILAR CHARGES. Except as provided
otherwise in this Agreement, all costs of transferring the Assets and the
Business in accordance with this Agreement, including: (a) governmental filing
or grant fees, including, without limitation, the HSRA filing fee, (b)
recordation, transfer and documentary taxes and fees, (c) any excise, sales, use
or personal property taxes related to the purchase and sale of the Assets, and
(d) all costs related to the transfer of the premises which are the subject of
the Real Property Leases, including but not limited to related transfer taxes,
if any.
16.2 EXPENSES. Except as provided otherwise in this
agreement, each party hereto shall be solely responsible for all costs and
expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement.
ARTICLE XVII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
Except as otherwise specifically set forth herein, the
representations, warranties and covenants contained in this Agreement or in any
certificate, document or instrument delivered pursuant to this Agreement shall
survive the Closing and continue in effect for 24 months thereafter. Any
investigation by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty or covenant. No action or
proceeding may be brought with respect to any of such representations and
warranties unless written notice thereof, setting forth in reasonable detail the
claimed breach of representation or warranty, shall have been delivered prior to
the second anniversary of the Closing to the party alleged to have breached such
representation or warranty.
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ARTICLE XVIII
INDEMNIFICATION
18.1 INDEMNIFICATION BY SELLERS AND XXXXXXXXX. (a) GENERAL.
Notwithstanding the Closing, each Seller and Xxxxxxxxx, jointly and severally,
covenant and agree to defend, indemnify and hold harmless Buyer, its Affiliates
and the partners, officers, directors, employees, agents, advisers and
representatives of each such Person from and against, and pay or reimburse each
such Person for, any and all claims, liabilities, obligations, losses, fines,
costs, royalties, proceedings, deficiencies or damages (whether absolute,
accrued, conditional or otherwise and whether or not resulting from third party
claims), including out-of-pocket expenses and reasonable attorneys' and
accountants' fees incurred in the investigation or defense of any of the same or
in asserting any of their respective rights hereunder (collectively, "Losses"),
resulting from or arising out of:
(i) any inaccuracy of any representation or warranty made by
any Seller or Xxxxxxxxx herein, other than the representation and
warranty made in the third sentence of Section 7.6 hereof, or in
any certificate, document or instrument delivered to Buyer
hereunder (in each case, without taking into account any
qualification as to the materiality or material adverse effect
contained in such representations or warranties);
(ii) any inaccuracy of the representation and warranty made
by each Seller and Xxxxxxxxx in the third sentence of Section 7.6
hereof;
(iii) any failure of any Seller or Xxxxxxxxx to perform any
covenant or agreement hereunder or fulfill any other obligation in
respect hereof;
(iv) any failure to obtain any of the consents to the
assignment of any of the Contracts listed on SCHEDULES 3.1, 7.5
AND 7.8 hereto.
(v) any failure of Sellers to obtain final, non-appealable
orders from the FCC consenting to the FCC Applications or the
failure of Sellers to obtain any consents from any third parties
or other Governmental Authorities necessary to permit Buyer to
utilize all of the technical facilities used by Sellers in the
conduct of the Business;
(vi) any Excluded Liability;
(vii) any litigation or other matter listed or described on
SCHEDULE 7.11 hereto;
(viii) any action taken by Xxxxxxx X'Xxxxxxx with respect to
any Second Tier Radio Market or Third Tier Radio Market at any
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time when such Radio Market is not owned by Buyer or an Affiliate
of Buyer;
(ix) all Environmental Liabilities and Costs; and
(x) any failure of any Seller to comply with applicable bulk
sales laws (in consideration of which indemnification obligation
Buyer hereby waives compliance by the Sellers with any applicable
bulk sales laws).
(b) LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything
in Section 18.1(a) of this Agreement to the contrary, to the extent
indemnification is sought under clauses (i) or (ii) of Section 18.1 hereof,
Sellers and Xxxxxxxxx shall not be required to provide any such
indemnification until the aggregate amount of Losses resulting from or
arising out of the matters referred to in such clauses exceeds $200,000, in
which event Sellers and Xxxxxxxxx shall only be required to indemnify Buyer
with respect to the aggregate amount of such Losses that exceed $200,000.
18.2 INDEMNIFICATION BY BUYER. (a) GENERAL. Notwithstanding
the Closing, Buyer covenants and agrees to defend, indemnify and hold harmless
each Seller, its Affiliates and the partners, officers, directors, employees,
agents, advisers and representatives of each such Person from and against, and
pay or reimburse each such Person for, any and all Losses resulting from or
arising out of:
(i) any inaccuracy in any representation or warranty made by
Buyer herein or in any certificate, document or instrument
delivered to any Seller hereunder (in each case, without taking
into account any qualification as to materiality or material
adverse effect contained in such representations or warranties);
(ii) any failure of Buyer to perform any covenant or
agreement hereunder or fulfill any other obligation in respect
hereof;
(iii) any liability, obligation or commitment of any Seller
expressly assumed by Buyer under Section 3.1 hereof; and
(iv) the ownership of the Assets or the conduct of the
Business subsequent to the Closing Date, including, without
limitation, any action taken by Xxxxxxx X'Xxxxxxx with respect to
any First Tier Radio Market in accordance with the Employment
Agreement, except, in each case, to the extent such Loss is an
Excluded Liability.
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(b) LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything
in Section 18.2(a) of this Agreement to the contrary, to the extent
indemnification is sought under clause (i) of Section 18.2 hereof, Buyer
shall not be required to provide any such indemnification until the
aggregate amount of Losses resulting from or arising out of the matters
referred to in such clause (i) exceeds $200,000, in which event Buyer shall
only be required to indemnify Sellers and Xxxxxxxxx with respect to the
aggregate amount of such Losses that exceed $200,000.
18.3 INDEMNIFICATION PROCEDURES. In the case of any claim
asserted by a third party against a party entitled to indemnification under this
Agreement (the "Indemnified Party"), notice shall be given by the Indemnified
Party to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and the Indemnified Party shall permit the
Indemnifying Party (at the expense of such Indemnifying Party) to assume the
defense of any claim or any litigation resulting therefrom, provided that (a)
the counsel for the Indemnifying Party who shall conduct the defense of such
claim or litigation shall be reasonably satisfactory to the Indemnified Party,
(b) the Indemnified Party may participate in such defense at such Indemnified
Party's expense, and (c) the omission by any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement except to the extent that such omission results
in a failure of actual notice to the Indemnifying Party and such Indemnifying
Party is materially damaged as a result of such failure to give notice. Except
with the prior written consent of the Indemnified Party, no Indemnifying Party,
in the defense of any such claim or litigation, shall consent to entry of any
judgment or order, interim or otherwise, or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting the Indemnified
Party or that does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such Indemnified Party of a release from all
liability with respect to such claim or litigation. In the event that the
Indemnified Party shall in good faith determine that the conduct of the defense
of any claim subject to indemnification hereunder or any proposed settlement of
any such claim by the Indemnifying Party might be expected to affect adversely
the Indemnified Party's tax liability or, if Buyer is the Indemnified Party, the
ability of Buyer to conduct the Business, or that the Indemnified Party may have
available to it one or more defenses or counterclaims that are inconsistent with
one or more of those that may be available to the Indemnifying Party in respect
of such claim or any litigation relating thereto, the Indemnified Party shall
have the right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim at the sole
cost of the Indemnifying Party, provided that if the Indemnified Party does so
take over and assume control, the Indemnified Party shall not settle such claim
or litigation without the written consent of the Indemnifying Party, such
consent not to be unreasonably withheld. In the event that the Indemnifying
Party does not accept the defense of any matter as above provided, the
Indemnified Party shall have the full right to defend against any such claim or
61
demand and shall be entitled to settle or agree to pay in full such claim or
demand. Notwithstanding the foregoing, the Indemnifying Party shall still
provide indemnification to the Indemnified Party. In any event, the Indemnifying
Party and the Indemnified Party shall cooperate in the defense of any claim or
litigation subject to this Section 18.3 and the records of each shall be
available to the other with respect to such defense.
18.4 OFFSET. Without limiting the liability of Sellers and
Xxxxxxxxx under this Article XVIII or Buyer's other remedies, Buyer shall be
entitled (a) to withhold from any amounts payable under Section 4.1(b)(iii) or
4.2(b)(iii) hereof or from any Buyout Amount, any amount of indemnity claimed by
Buyer under Section 18.1 pending final resolution as to the amount of indemnity
owed by Sellers and Xxxxxxxxx and (b) to offset any amounts due it under Section
18.1 against any amounts payable by Buyer to Sellers under Section 4.1(b)(iii)
or 4.2(b)(iii) hereof or from any Buyout Amount.
18.5 EXCLUSIVE REMEDY. The indemnification provisions of this
Article XVIII shall be the sole and exclusive remedy of the parties against one
another with respect to any claim for monetary relief under this Article XVIII.
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ARTICLE XIX
TERMINATION RIGHTS
19.1 TERMINATION. (a) This Agreement may be terminated by
either Buyer on the one hand or Xxxxxxxxx on the other, if the party seeking to
terminate (and in the case of Xxxxxxxxx, each Seller) is not in material default
or breach of this Agreement, upon written notice to the other upon the
occurrence of any of the following:
(i) if the Closing has not occurred by March 30, 1996;
(ii) the failure of the condition set forth in Section 13.9
hereof; or
(iii) if there shall be in effect any final judgment, final
decree or order that would prevent or make unlawful the Closing.
19.2 LIABILITY. The termination of this Agreement under
Section 19.1 shall not relieve any party of any liability for breach of this
Agreement prior to the date of termination.
ARTICLE XX
REMEDIES UPON DEFAULT
Each Seller and Xxxxxxxxx recognizes that, in the event any
Seller or Xxxxxxxxx defaults in the performance of its obligations to close
under this Agreement, monetary damages alone will not be adequate. Therefore,
unless Buyer is in default in the performance of its obligations to close under
this Agreement, Buyer shall be entitled, in addition to bringing an action for
indemnification under Article XVIII hereof, to obtain specific performance of
the terms of this Agreement. In any action to enforce specifically the
performance of this Agreement, each Seller and Xxxxxxxxx shall waive the defense
that there is another adequate remedy at law or equity and agrees that Buyer
shall have the right to obtain specific performance of Sellers' and Xxxxxxxxx'x
obligations to close under the terms of this Agreement without being required to
prove actual damages, post bond or furnish other security other than to pay the
full Initial Purchase Price and otherwise perform its closing obligations. In
addition, Buyer shall be entitled to obtain from Sellers and Xxxxxxxxx, jointly
and severally, court costs and reasonable attorneys' fees incurred by it in
enforcing its rights hereunder, plus interest at the Delaware statutory rate on
the amount of any judgment obtained against any Seller or Xxxxxxxxx from the
date of default by such Seller or Xxxxxxxxx until the date of payment of the
judgment. As a condition to seeking specific performance, Buyer shall not be
required to have tendered the Initial Purchase Price specified in Section 2.4 of
this Agreement, but shall be required to demonstrate that it is ready, willing
and able to do so and to perform its other closing obligations in all material
respects.
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ARTICLE XXI
OTHER PROVISIONS
21.1 CONFIDENTIALITY. Each Seller, Xxxxxxxxx and Buyer shall
keep confidential and not use or disclose any information previously or
hereafter obtained by it pursuant to this Agreement (the party receiving such
information is hereinafter referred to as the "Receiving Party") with respect to
the other or such other's partners, parents, subsidiaries, affiliates, or other
related entities (the party, or such party's partners, parents, subsidiaries,
affiliates, or other related entities, with respect to which the information
relates is hereinafter referred to as the "Disclosing Party") in connection with
this Agreement and the negotiations preceding this Agreement, including, without
limitation information provided pursuant to Section 8.2 hereof (such information
is hereinafter referred to as the "Confidential Information"), and the Receiving
Party will use such Confidential Information solely in connection with the
transactions contemplated by this Agreement, and if the transactions
contemplated hereby are not consummated for any reason, the Receiving Party
shall either return to the Disclosing Party, without retaining a copy thereof,
or destroy any schedules, documents or other written information constituting
Confidential Information (or prepared based upon such Confidential Information)
in connection with this Agreement and the transactions contemplated hereby and
the negotiations preceding this Agreement. Without limiting the generality of
the foregoing, the Receiving Party shall be permitted to disclose any
Confidential Information to such of its partners, Affiliates, officers,
directors, employees, agents, lenders and representatives (collectively,
"Agents") as have a need to know such Confidential Information, provided such
Agents shall be informed that disclosure of such Confidential Information by
such Agents would be in contravention hereof. Notwithstanding the foregoing, the
Receiving Party shall not be required to keep confidential or return any
information which (i) is known or available through other lawful sources, not
bound by a confidentiality agreement with the Disclosing Party, or (ii) is or
becomes publicly known other than as a result of the disclosure by the Receiving
Party or its Agents, or (iii) is required to be disclosed pursuant to an order
or request or a judicial or governmental authority (provided the Disclosing
Party is given reasonable prior written notice), or (iv) is developed by the
Receiving Party independently of, and is not based upon, the Confidential
Information.
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21.2 PUBLICITY. Except as required by Applicable Law or with
the other parties' express written consent, no party to this Agreement nor any
Affiliate of any party shall issue any press release or make any public
statement (oral or written) regarding this Agreement or the transactions
contemplated by this Agreement.
21.3 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 Buyer nor any Seller may assign this Agreement
without the prior written consent of Buyer, in the case of any such assignment
by any Seller, or Xxxxxxxxx, in the case of any such assignment by Buyer except
that (i) Buyer may assign its rights and obligations under this Agreement to any
of its Affiliates in the manner set forth in Section 2.2 of this Agreement,
PROVIDED that any such assignment shall not relieve Buyer from any of its
obligations under this Agreement and (ii) Buyer may assign its rights under
Article XVIII of this Agreement to any lender which provides financing in
connection with the consummation of this Agreement.
21.4 ACQUISITION OF PARTNERSHIP INTERESTS. Notwithstanding
anything in this Agreement to the contrary, the parties hereto agree that Buyer
may, by delivering notice to Xxxxxxxxx at any time prior to the Closing Date,
require Sellers and Xxxxxxxxx to execute an amendment to this Agreement pursuant
to which Buyer shall purchase all of the outstanding partnership interests of
one or more of CSTLP, NYSTLP, LASTLP and PETLP rather than purchasing the
portion of the Assets held by such Sellers. Sellers and Xxxxxxxxx shall use
their respective best efforts to cause all other holders of the outstanding
partnership interests of such Sellers to execute and deliver such amendment. Any
such amendment (i) will not alter any of the financial, risk-shifting or other
non-structural terms of this Agreement regarding Buyer's purchase of the
Business and (ii) shall include provisions which are customary in purchase
agreements for the purchase of partnership interests.
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21.5 ENTIRE AGREEMENT. This Agreement and the exhibits and
schedules hereto embody 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.
21.6 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.
21.7 CHOICE OF 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, and the state and federal courts of New
York shall have exclusive jurisdiction over any controversy or claim arising out
of or relating to this Agreement.
21.8 ARBITRATION PROCEDURES. Any dispute arising out of
Section 9.4(d) hereof shall be submitted to the decision of a Board of
Arbitration composed of two arbitrators and an umpire (hereinafter referred to
as the "Board"). The members of the Board shall be disinterested in the matter
at issue. Buyer and Xxxxxxxxx shall each appoint an arbitrator and the two
arbitrators shall choose an umpire before instituting the hearing. If Buyer or
Xxxxxxxxx, as the case may be, fails to appoint its arbitrator within 15 days
after being requested to do so by the other party, the other party shall also
appoint the second arbitrator. If the two arbitrators fail to agree upon the
appointment of an umpire within 15 days after their nominations the umpire shall
be appointed by the American Arbitration Association. The claimant shall submit
its initial brief within 10 days from appointment of the umpire. The respondent
shall submit its brief within 10 days after receipt of the claimant's brief and
the claimant shall submit a reply brief within 10 days after receipt of the
respondent's brief. The Board shall make its decision within 20 days following
the termination of the hearings unless the parties consent to an extension. The
majority decision of the Board shall be final and binding upon all parties to
the proceeding. Each party shall bear the expense of its own arbitrator. Except
as provided in the immediately preceding sentence, all other costs and expenses
in connection with each arbitration proceeding, including all expenses of the
umpire, shall be allocated among Buyer and Xxxxxxxxx in the same proportion that
the aggregate amount of all of the Disputed Amounts that are submitted to the
Board in such arbitration and are unsuccessfully disputed by Buyer, bear to the
total amount of all of the Disputed Amounts submitted to the Board in such
arbitration.
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21.9 NOTICES. All notices, requests, demands, letters,
waivers and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, certified or registered mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by fax,
as follows:
To any Seller or Xxxxxxxxx:
Xx. Xxxx Xxxxxxxxx
Shadow Broadcast Services
000 Xxxx Xxxx Xxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Blank, Rome, Xxxxxxx & XxXxxxxx
000 Xxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: A. Xxxx Xxxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
To Buyer:
Westwood One Broadcasting Services, Inc.
c/o Westwood One, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Phone:
Fax:
With copies to:
Xx. Xxxxx Xxxxxxx
Infinity Broadcasting Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000; and
00
Xxxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other person or address as any party shall specify by notice in
writing to the party entitled to notice. All such notices, requests, demands,
letters, waivers and other communications shall be deemed to have been received
(w) if by personal delivery on the day after such delivery, (x) if by certified
or registered mail, on the fifth Business Day after the mailing thereof, (y) if
by next-day or overnight mail or delivery, on the day delivered or (z) if by
fax, on the next day following the day on which such fax was sent, provided that
a copy is also sent by certified or registered mail.
21.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original and all of which
together will constitute one and the same instrument.
21.11 FURTHER ASSURANCES. Each Seller and Xxxxxxxxx shall at
any time and from time to time after the Closing execute and deliver to Buyer
such further conveyances, assignments and other written assurances as Buyer may
reasonably request in order to vest and confirm in Buyer (or its assignees) the
title and rights to and in all of the Assets and the Business to be and intended
to be transferred, assigned and conveyed hereunder.
68
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
WESTWOOD ONE BROADCASTING
SERVICES, INC.
By:/s/ XXXXX XXXXXXX
--------------------------
Name: Xxxxx Xxxxxxx
Title:Chief Financial Officer
CHICAGO SHADOW TRAFFIC
LIMITED PARTNERSHIP
By: Citi Traffic Corp., its
general partner
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
NEW YORK SHADOW TRAFFIC
LIMITED PARTNERSHIP
By: Citi Traffic Corp., its
general partner
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
LOS ANGELES SHADOW TRAFFIC
LIMITED PARTNERSHIP
By: Citi Traffic Corp., its
general partner
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
PHILADELPHIA EXPRESS TRAFFIC
LIMITED PARTNERSHIP
By: Express Traffic Corp., its
general partner
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
CITI TRAFFIC CORP.
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
EXPRESS TRAFFIC CORP.
By:/s/ XXXX XXXXXXXXX
--------------------------
Name: Xxxx Xxxxxxxxx
Title:President
69
