PURCHASE AND SALE AGREEMENT
---------------------------
This PURCHASE AND SALE AGREEMENT (the "Agreement") is made and
entered into as of the 23rd day of October, 1996 by and among WWYZ, Inc.
("WWYZ"), a Connecticut corporation and Great American Music Fest & Production
Co., a Connecticut corporation (collectively, the "Companies"); each of the
shareholders of the Companies, as set forth on Schedule 1 and the signature
page of the Agreement (collectively the "Sellers"); and SFX BROADCASTING OF
HARTFORD, INC., a Delaware corporation (the "Buyer"); and SFX BROADCASTING,
INC., a Delaware Corporation, ("SFX"), and the indirect parent of Buyer;
WHEREAS, the Sellers own beneficially and of record all of the issued
and outstanding shares of the capital stock (the "Shares") of the Companies,
WWYZ is the licensee, and the Companies are the owners of all of the assets,
of radio station WWYZ-FM serving the Hartford, Connecticut market (the
"Station"); and
WHEREAS, the Sellers desire to sell to the Buyer and the Buyer
desires to purchase from the Sellers all of the issued and outstanding Shares
of the Companies;
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and upon the terms and
subject to the conditions hereinafter set forth, the parties hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE
-----------------
1.1 Purchase and Sale of Shares of the Companies. On the Closing Date
(as defined in Section 3.1), the Sellers shall sell to the Buyer, and the
Buyer shall purchase from the Sellers, the Shares for the Purchase Price (as
defined in Section 2.1) specified herein. At the Closing (as defined in
Section 3.1), the Sellers shall deliver to the Buyer certificates representing
all of the Shares which are required to be delivered or are otherwise
deliverable by the Sellers pursuant hereto duly endorsed
1
in blank for transfer or accompanied by duly executed stock powers assigning
such Shares in blank, and the Buyer shall deliver to the Sellers the Purchase
Price subject to the adjustment contemplated by Section 2.4 below.
ARTICLE 2
CONSIDERATION
-------------
2.1 Purchase Price. The aggregate consideration for the Shares shall
be Twenty-Five Million Five Hundred Thousand Dollars ($25,500,000) subject to
adjustment as set forth in Section 2.4 below (the "Purchase Price").
2.2 Payment. At the Closing, Buyer shall pay to Sellers the Purchase
Price, less the Indemnity Retention Amount (as defined below) and less the
amounts of any Net Cash Deposits (as defined below) together with interest
thereon at the greater rate of (i) the 120 day certificate of deposit rate as
of the date hereof or (ii) the actual interest earned on such Cash Deposits.
Payment shall be made by wire transfer in immediately available funds to the
Waterbury office of The Bank of Boston. At the Closing, the Parties shall
direct the Escrow Agent (as defined below) to deliver the Net Cash Deposits to
the Seller together with interest thereon at the greater rate of (i) the 120
day certificate of deposit rate as of the date hereof or (ii) the actual
interest earned on such Cash Deposits.
2.3 Escrow Account. (a) On the date of this Agreement, Buyer shall
deposit the sum of Two Million Five Hundred Thousand Dollars ($2,500,000) by
wire transfer in immediately available funds into an escrow account (the
"Initial Cash Deposit") with the Waterbury office of the Bank of Boston, as
escrow Agent (the "Escrow Agent"), to be held in escrow in accordance with the
terms of an escrow agreement (the "Escrow Agreement") between the parties
substantially in the form of Exhibit A hereto. Beginning February 1, 1997, the
Initial Cash Deposit may be increased by subsequent monthly cash deposits of
$50,000 per month by the Buyer pursuant to Section 16.4 of this Agreement,
such monthly deposits being intended to extend the Expiration Date, on a
monthly
2
basis, after February 1, 1997, but in no event later than October 1, 1997
without the Sellers' prior written approval. The Initial Cash Deposit and such
monthly deposits shall collectively be called the "Cash Deposit". The Cash
Deposit less the Indemnity Retention Amount shall be called the "Net Cash
Deposit".
(b) Notwithstanding any other provision of this Agreement, and irrespective of
the receipt of governmental approvals or adverse proceedings as described in
Sections 10.2, 10.3 or 10.4, Buyer and SFX agree, and the Escrow Agreement
shall so provide, that Sellers shall be entitled to receive from the Escrow
Agent, as a "breakage fee", the sum of $500,000, increased by $50,000 per
month for each month that the Expiration Date is extended beyond February 1,
1997, if the Closing does not occur by the Expiration Date because of the
failure to receive all governmental approvals contemplated herein or the
failure of Buyer to proceed with the closing and such failure, in eitehr
event, is in no way attributable to the Companies, the Sellers or the
operation of the Station prior to Closing.
2.4 Working Capital Purchase Price Adjustment. (a) The Purchase Price
shall be increased or decreased to the extent that on the Closing Date the
Companies' Net Working Capital (as defined below) is less than or exceeds TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000). For purposes of this Agreement, Net
Working Capital shall mean the difference between (i) the sum of (a) cash, (b)
billed and unbilled receivables, net of a reserve of 8/10ths of 1% for bad
debt and exclusive of trade and (c) pre-paid expense and other current assets,
minus (ii) the sum of (a) accounts payable, (b) accrued compensation and
benefits and accrued vacation and the like, computed on a basis consistent
with prior practice as set forth in Schedule 2.4 (a) of the Disclosure
Schedule (c) other accrued expenses, and (d) other current liabilities
exclusive of federal and state corporate income taxes and trade obligations as
determined in accordance with GAAP.
(b) Sellers shall submit to Buyer within ten (10) days of the estimated
Closing Date a certificate setting forth the Companies' estimated Net Working
Capital as of the Closing Date. Buyer shall have five (5) days from receipt of
such certificate to either accept or object to the determination of
3
the Companies' estimated Net Working Capital set forth in such certificate. If
Buyer accepts Sellers' calculation of the Companies' Net Working Capital, the
Purchase Price shall be adjusted at Closing accordingly. If Buyer, in good
faith, objects to the Companies' Net Working Capital as set forth in Sellers'
certificate, Buyer shall set forth the basis for such objection, and, if
possible, its proposed calculation of Net Working Capital. If Buyer and Seller
cannot agree on the amount of the Net Working Capital, Buyer and Sellers shall
jointly engage an independent accounting firm to determine the Companies' Net
Working Capital as of the Closing Date (the "Independent Valuation"). If Buyer
and Sellers receive the Independent Valuation prior to the Closing Date, the
Purchase Price shall be adjusted accordingly at Closing. If Buyer and Sellers
do not receive the Independent Valuation prior to the Closing Date, then Buyer
shall have the right, at the Closing, to withhold an amount equal to the
difference between Seller's and Buyers estimates of the Companies Net Working
Capital at Closing. Thereafter, upon receipt of the Independent Valuation, the
Buyer, shall immediately remit to Sellers, (after pro ration between WWYZ, Inc.
and Great American Music Fest & Production Co.) in the same proportion as their
stock ownership interests as set forth in Schedule I attached hereto, the
amount, if any, by which the Companies Net Working Capital on the Closing Date,
as determined by the Independent Valuation, exceeds $250,000, and shall retain
the amount by which the Companies Net Working Capital, as determined by the
Independent Valuation is below $250,000.
2.5 Remittance of Indemnity Retention Amount. Any balance of the
Indemnity Retention Amount, not permitted to be retained by the Buyer pursuant
to Section 15 of this Agreement, shall be paid by the Escrow Agent to the
Sellers at the termination of the Claim Period, as defined in Section 15.5 of
this Agreement.
ARTICLE 3
CLOSING
-------
3.1 Closing. Except as otherwise mutually agreed upon by the Sellers
and the Buyer, the consummation of the transactions contemplated herein (the
"Closing") shall occur within thirty (30)
4
calendar days following the latter of (i) the date of expiration or termination
of all waiting periods, including any extensions thereof, which are applicable
to the transactions contemplated by this Agreement pursuant to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the rules and regulations thereunder and (ii) the date on which the
FCC Consent (as defined in Section 4.1) has become a Final Order (as defined
below), unless the Buyer in its sole discretion shall have waived in writing
the condition that such consent shall have become final (the "Closing Date").
In no event shall the Closing occur after the Expiration Date without Seller's
prior written consent which Sellers may withhold in their sole discretion if
additional deposits are not made under Section 16.4, and in any event, after
October 1,1 997. For purposes of this Agreement, the FCC Consent shall be
deemed to be a Final Order (i) when it has not been vacated, reversed, stayed,
set aside, annulled or suspended; (ii) when it is not the subject of any
pending timely appeal, request for stay or petition for rehearing,
reconsideration or review by any party or by the Federal Communications
Commission (the "FCC") on its own motion; and (iii) is an action by the FCC as
to which the time for filing any such appeal, request, petition or similar
document or for the reconsideration or review by the FCC on its own motion
under the Communications Act of 1934 and the rules and regulations of the FCC
has expired.
The Closing shall be held at the Xxxxxxx & Torrance in Waterbury,
Connecticut unless the parties agree to close by release of pre-approved
executed closing documents on the Closing Date.
ARTICLE 4
GOVERNMENTAL CONSENTS
---------------------
4.1 FCC Consent. It is specifically understood and agreed by the
Buyer and the Sellers that the Closing and the purchase of the Shares is
expressly conditioned on and is subject to the prior consent of the FCC and
any condition imposed in such consent reasonably acceptable to the Buyer (the
"FCC Consent"). This provision and the provisions of Sections 4.2 and 4.3 are
not intended to override the provision in the Section 3.2 (b) regarding
Seller's rights to retain a portion of the Cash
5
Deposit if FCC approval is not obtained due to circumstances not involving the
Companies or the Sellers.
4.2 FCC Application. WWYZ, its shareholders and the Buyer shall within
ten (10) business days following the date of this Agreement file with the FCC
the requisite applications (the "FCC Applications") for the transfer of control
of the Companies' FCC licenses (the "Station Licenses") from the shareholders
of WWYZ to the Buyer and to prosecute the FCC Applications with all reasonable
diligence and otherwise use their best efforts to obtain the grant of the FCC
Applications as expeditiously as practicable (but neither the Sellers nor the
Buyer shall have any obligation to satisfy complainants or the FCC by taking
any steps which would have a material adverse effect upon the Sellers or the
Buyer or upon any affiliated entity). If the FCC Consent imposes any condition
on either party hereto, such party shall use his or its best efforts to comply
with such condition; provided, however, that neither party shall be required
hereunder to comply with any condition that would have a material adverse
effect upon Sellers, the Buyer, or SFX or any direct or indirect subsidiary of
SFX; and provided further, that the Buyer is not obligated to accept any
conditions that are imposed which arise out of the actions, inactions or
misconduct of the Sellers. If reconsideration or judicial review is sought with
respect to the FCC Consent, the party affected shall vigorously oppose such
efforts for reconsideration or judicial review; provided, however, that nothing
herein shall be construed to limit either party's right to terminate this
Agreement pursuant to Article 16 hereof. SFX shall take all necessary action to
cause Buyer to meet its obligations under this Section 4.2 and Section 4.3
following.
4.3 HSR Act. Within ten (10) business days from the date hereof,
Sellers and Buyer shall make any filings as may be required under the HSR Act.
Each party shall furnish to the other party such necessary information and
reasonable assistance as such party shall request in connection with its
preparation of any necessary filings under the HSR Act. Each party shall keep
the other party informed of the status of any inquiries made of such party by
the Federal Trade Commission or any other Antitrust Division of the U.S.
Department of Justice or any other governmental agency or authority with
respect to this Agreement or the transactions contemplated hereby. The parties
6
hereby acknowledge that in making such filings, the parties will be relying on
information provided by the other party without independent investigation. The
Sellers and the Buyer agree to request early termination of the waiting periods
under the HSR Act, but if additional information is required, Buyer, with
Seller's cooperation, shall use its best efforts to resolve any objections to
the transactions contemplated by this Agreement as expeditiously as possible.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND SFX
---------------------------------------------------
The Buyer and SFX hereby make the following representations and
warranties to the Sellers, each of which is true and correct on the date
hereof, shall remain true and correct to and including the Closing Date, shall
be unaffected by any notice to the Sellers and shall survive the Closing.
5.1 Organization and Standing. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and will at Closing be duly qualified as a foreign corporation to
do business in the State of Connecticut and have the corporate power and
authority to own the Shares and to carry on the business of the Station as now
being conducted and as proposed to be conducted by the Companies between the
date hereof and the Closing Date.
5.2 (a) Authorization and Binding Obligation. The Buyer has all
necessary power and authority and financing commitments necessary to enter
into and perform this Agreement and the transactions contemplated hereby, and
to own the Shares and to carry on the business of the Station as it is now
being conducted, and the Buyer's execution, delivery and performance of this
Agreement and the transactions contemplated hereby have been duly and validly
authorized by all necessary action on its part. This Agreement has been duly
executed and delivered by the Buyer, and this Agreement constitutes, and the
other agreements to be executed in connection herewith will constitute, the
valid and binding obligation of the Buyer, enforceable in accordance with
their terms, except as limited by laws affecting the enforcement of creditors'
rights or equitable principles
7
generally.
(b) Absence of Conflicting Agreements or Required Consents. Except as
set forth in Article 4 hereof with respect to governmental consents, the
execution, delivery and performance of this Agreement by the Buyer: (a) does
not require the consent of any third party; (b) will not violate any
applicable law, judgment, order, injunction, decree, rule, regulation or
ruling of any governmental authority to which the Buyer, SFX or any direct or
indirect subsidiary of SFX are a party or by which they are bound; and (c)
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, agreement, instrument, license or permit to which the
Buyer, SFX or any direct or indirect subsidiary of SFX are now subject.
5.3 Qualification. To the best of the Buyer's and SFX's knowledge,
there are no facts applicable to Buyer, SFX or any direct or indirect
subsidiary of SFX which, under the Communications Act of 1934, as amended, or
the existing Rules and Regulations of the FCC, the Federal Trade Commission or
the Justice Department would disqualify the Buyer as a licensee of the Station
Licenses.
5.4 Litigation and Compliance with Law. There is no litigation,
administrative, arbitration or other proceeding, or petition, complaint or, to
the best of the Buyer's or SFX's knowledge, investigation before any court or
governmental body, pending against the Buyer, SFX or any of their respective
principals or any direct or indirect subsidiary of SFX that would adversely
affect the Buyer's ability to perform its obligations pursuant to this
Agreement or the agreements to be executed in connection herewith. To the best
of the Buyer's and SFX's knowledge, there is no violation of any law,
regulation or ordinance or any other requirement of any governmental body or
court by Buyer, SFX or direct or indirect subsidiary of SFX which would have a
material adverse effect on the Buyer or its ability to perform its obligations
pursuant to this Agreement or the agreements to be executed in connection
herewith.
8
5.5 Investment Intent. The Buyer is acquiring the Shares solely for
its own account and not with a view to sale or distribution thereof in
violation of any securities laws. The Buyer acknowledges that it has received,
or has had access to, information which it considers necessary or advisable to
enable it to make a decision concerning its purchase of the Shares, provided
that the foregoing shall not limit or otherwise affect the rights or remedies
of the Buyer hereunder with respect to the breach of any representations,
warranties, covenants or agreements of the Sellers contained herein.
5.6 Accuracy of Information. To the best of Buyer's and SFX'
knowledge, no written statement made by the Buyer herein and no information
provided by the Buyer herein or in the documents, instruments or other written
communications made or delivered directly by the Buyer or SFX to the Sellers
in connection with the negotiations covering the purchase and sale of the
Shares contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained therein or herein not
misleading and there is no fact known to the Buyer or SFX which relates to any
information contained in any such written document, instrument or
communications which the Buyer has not disclosed to the Sellers in writing
which could materially affect adversely Buyers ability to acquire the Station.
To the extent that a representation or other information is made to the
Buyer's knowledge or is otherwise qualified by its terms, this representation
shall not be interpreted to expand such limitations or qualifications.
5.7 Audit. The Audit, as defined below, is consistent in all respects
with the Financial Statements, as defined below.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE COMPANIES
--------------------------------
The Sellers and the Companies hereby make the following
representations and warranties to the Buyer, each of which is true and correct
on the date hereof, shall remain true and correct to
9
and including the Closing Date, shall be unaffected by any notice to the Buyer
other than in the Disclosure Schedule (as defined herein) and shall survive the
Closing. Such representations and warranties are subject to, and qualified by,
any fact or facts disclosed in the separate Disclosure Schedule which are
attached hereto (the "Disclosure Schedule").
6.1 Organization and Standing. The Companies are corporations duly
organized, validly existing and in good standing under the laws of the State
of Connecticut and have the corporate power and authority to own, lease and
operate the Station and to carry on the business of the Station as now being
conducted and as proposed to be conducted by the Companies between the date
hereof and the Closing Date.
6.2 Authorization and Binding Obligation. The Companies have the
corporate power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and the Companies' execution, delivery and
performance of this Agreement, and the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on their
part. This Agreement has been duly executed and delivered by the Companies,
and this Agreement constitutes, and the other agreements to be executed in
connection herewith will constitute, the valid and binding obligation of the
Companies and the Sellers, enforceable in accordance with their terms, except
as limited by laws affecting the enforcement of creditor's rights or equitable
principles generally.
6.3 Capitalization. The authorized capital stock of WWYZ, Inc.
consists of 50,000 of common stock, no par value per share, of which 1,680
shares of common stock are issued and outstanding, all of which are owned of
record and beneficially by the Sellers in the amounts set forth in Schedule
6.3 of the Disclosure Schedule. The authorized capital stock of Great American
Music Fest & Production Co. consists of 1,000 shares of common stock, $1.00
par value per share, of which 1,000 shares of common stock are issued and
outstanding, all of which are owned of record and beneficially by the Sellers
in the amounts set forth in Schedule 6.3 of the Disclosure Schedule. All
outstanding Shares have been duly authorized and validly issued, are fully
paid and non-assessable
10
and were not issued in violation of any pre-emptive rights. There is
outstanding no security, option, warrant, right, call, subscription, agreement,
commitment or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the issuance, sale, pledge or other
disposition of any Shares or of any capital stock of the Companies or any
securities convertible into, or other rights to acquire, any such Shares or
other capital stock of the Companies; or (ii) obligates the Companies or the
Sellers to grant, offer or enter into any of the foregoing; or (iii) relates to
the voting or control of such Shares, capital stock, securities or rights. No
person has any right to require the Companies to register any of its securities
under the Securities Act of 1933 as amended.
6.4 Title to Shares. The Sellers are the owners of record and
beneficially of all of the Shares. The Sellers have not received any notice of
any adverse claim to the ownership of the Shares, do not have any reason to
know of any such adverse claim and are not aware of existing facts that would
give rise to any adverse claim to the ownership of the Shares. The sale and
delivery of the Shares to the Buyer pursuant to this Agreement shall vest in
the Buyer legal and valid title to the Shares, free and clear of all liens,
security interests, adverse claims or other encumbrances of any character
whatsoever ("Encumbrances"), other than Encumbrances created by the Buyer and
restrictions on resales of the Shares under applicable securities laws.
6.5 Absence of Conflicting Agreements or Required Consents. Except as
set forth in Article 4 hereof with respect to governmental consents and as set
forth in Schedule 6.5 of the Disclosure Schedule, the execution, delivery and
performance of this Agreement by the Companies and the Sellers: (a) does not
require the consent of any third party; (b) will not violate any applicable
law, judgment, order, injunction, decree, rule, regulation or ruling of any
governmental authority to which the Companies and the Sellers are a party or
by which they or the Shares are bound; (c) 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, agreement,
instrument, license or permit to which the Companies, the Sellers or the
Shares are now subject; and (d) will not result in the creation of any lien,
charge or Encumbrance on any of the Shares.
11
6.6 Government Authorizations. Schedule 6.6 of the Disclosure
Schedule contains a true and complete list of the Station Licenses and other
material licenses, permits or other authorizations from governmental and
regulatory authorities which are required for the lawful conduct of the
business and operations of the Station in the manner and to the full extent
they are presently conducted. WWYZ is the authorized legal holders of the
Station Licenses and other licenses, permits and authorizations listed in the
Disclosure Schedule, none of which is subject to any restrictions or condition
which would limit in any respect the full operation of the Station as now
operated or requires the Companies or any transferee or assignee to perform
any acts or make any filings not required of all licensees by the FCC.
Except as set forth in Schedule 6.6 of the Disclosure Schedule, there are no
applications, complaints or proceedings pending or, to the best of the Sellers'
knowledge, threatened as of the date hereof before the FCC relating to the
business or operations of the Station other than applications, complaints or
proceedings which generally affect the broadcasting industry. The Sellers have
delivered to the Buyer true and complete copies of the Station Licenses,
including any and all amendments and other modifications thereto. The Station
Licenses listed in Schedule 6.6 of the Disclosure Schedule are in good
standing, are in full force and effect and are unimpaired by any act or
omission of the Sellers, the Companies or its officers, directors or employees;
and the operation of the Station is in accordance with the Station Licenses and
the underlying construction permits. Except as set forth in Schedule 6.6 of the
Disclosure Schedule, no proceedings are pending or, to the knowledge of the
Sellers, are threatened which may result in the revocation, modification,
non-renewal or suspension of any of the Station Licenses, the denial of any
pending applications, the issuance of any cease and desist order, the
imposition of any administrative actions by the FCC with respect to the Station
Licenses or which may affect the Buyer's ability to continue to operate the
Station as it is currently operated. The Sellers have no reason to believe that
the Station Licenses will not be renewed in their ordinary course. All material
reports, forms and statements required to be filed by the Companies with the
FCC with respect to the Station since the grant of the last renewal of the
Station Licenses have been filed and are substantially complete and accurate.
To the best knowledge of the Sellers, there are no facts which, under the
Communications Act of 1934, as
12
amended, or the existing Rules and Regulations of the FCC, would disqualify the
Companies as a transferor of the Station Licenses.
6.7 Compliance with FCC Regulations. To the best of Sellers'
knowledge, the operation of the Station has been, is and will as of the
Closing Date be in material compliance in all material respects with (i) all
applicable engineering standards required to be met under applicable FCC
rules, and (ii) all other applicable rules, regulations, requirements and
policies of the FCC, including, but not limited to, ANSI Radiation Standards
C95.1 - 1982.
6.8 Subsidiaries. The Companies do not own any equity ownership
interest, directly or indirectly, in any person, corporation or other entity.
6.9 Taxes. The Companies have filed all federal, state, local and
foreign income, franchise, sales, use, property, excise, payroll and other tax
returns required by law and has paid in full all taxes, estimated taxes,
interest, assessments, and penalties due and payable. All returns and forms
which have been filed have been true and correct in all material respects and
no tax or other payment in a material amount other than as shown on such
returns and forms are required to be paid and have been paid by the Companies.
Except as noted in Schedule 6.9, there are no present audit reviews as to
taxes of any nature payable by the Companies.
6.10 Personal Property. Schedule 6.10 of the Disclosure Schedule
contains a list of all material tangible personal property and assets owned or
held by the Companies and used primarily or exclusively in the conduct of the
business and operations of the Station (the "Personal Property"). Schedule
6.10 of the Disclosure Schedule contains a list of Personal Property which
will not be transferred to the Buyer at the Closing. Except as disclosed in
Schedule 6.10 of the Disclosure Schedule, and except as may be subject to
lease agreements of the Companies specifically identified in the Disclosure
Schedule, the Companies owns and has, and will have on the Closing Date, good
and marketable title to all such property (and to all other tangible and
intangible personal property and assets including cash and receivables to be
transferred to the Buyer hereunder), and none of such
13
property is, or at the Closing will be, subject to any security interest,
mortgage, pledge, conditional sales agreement or other lien or encumbrance
other than as set forth in Schedule 6.10 of the Disclosure Schedule. All of the
items of the tangible personal property and assets included in Schedule 6.10 of
the Disclosure Schedule are in all respects in good operating condition
(ordinary wear and tear excepted) and are available for immediate use in the
conduct of the business and operations of the Station. The technical equipment
constituting a part of the Personal Property transferred hereunder has been
maintained in accordance with industry practice and is in good operating
condition and complies in all material respects with all applicable rules and
regulations of the FCC and the terms of the Station Licenses. The properties
listed in Schedule 6.10 of the Disclosure Schedule include all such properties
used and necessary to conduct in all material respects the business and
operations of the Station as now conducted. The representations and warranties
contained in this Section shall survive the Closing only for a period of 120
days.
6.11 Real Property. The Companies own no real property. The leases
described in Schedule 6.11 of the Disclosure Schedule contain a complete and
accurate list of all real property currently leased by the Companies and used
exclusively by the Station relating to the antenna, transmitter, studio site
and offices of the Station (collectively the "Real Estate Contracts") and a
summary of the applicable leases. The Real Estate Contracts listed in Schedule
6.11 of the Disclosure Schedule, copies of which are attached hereto as
Exhibit E and Exhibit F will constitute valid and binding obligations of the
Companies and, to the best of the Sellers' knowledge, of all other persons
purported to be parties thereto and will be in full force and effect as of the
Closing Date and will constitute valid and binding obligations of the
Companies and, to the best of the Sellers' knowledge, of all other persons
purported to be parties thereto and shall be in full force and effect and are
all of the leases and agreements necessary for the Buyer to continue to
operate the Station after the Closing as it is currently operating. Except as
set forth in Schedule 6.11 of the Disclosure Schedule, the Companies are not
in default under any of such Real Estate Contracts and have not received or
given written notice of any default thereunder from or to any of the other
parties thereto and will not have received any such notice at or prior to the
Closing.
14
6.12 Contracts. Schedule 6.12 of the Disclosure Schedule lists or
describes by reference all material written and oral contracts as of the date
of this Agreement for which the Companies shall continue to be liable as of
the Closing Date, except contracts entered into in the ordinary course of
business (i) of less than three (3) months duration and which impose monetary
obligations of Ten Thousand Dollars ($10,000) in the aggregate or (ii) which
are currently scheduled to expire prior to Closing Date and for which the
Companies will no longer be liable. Those contracts which the Sellers and the
Buyer agree are critical to the consummation of the transactions contemplated
hereby are identified as "Material Contracts". Notwithstanding the foregoing,
if it is discovered before Closing that the Sellers failed to list any
contract in the Disclosure Schedule which was required to be listed, the
failure by the Sellers to disclose such contract shall not permit the Buyer to
refuse to close under this Agreement or to bring an action for damages against
the Sellers if the absence of such contract would not have a material adverse
effect on the Buyer, the Companies or the Station.
6.13 Status of Contracts. Except as noted in Schedule 6.12 of the
Disclosure Schedule, the Sellers have delivered to the Buyer true and complete
copies of all written Material Contracts, including any and all amendments and
other modifications to such Material Contracts. All Material Contracts are
valid, binding and enforceable by the Companies in accordance with their
respective terms, except as limited by laws affecting creditors' rights or
equitable principles generally. To the best of the Sellers' knowledge, the
Companies have complied in all material respects with all Material Contracts
and are not in default beyond any applicable grace periods under any of the
Material Contracts, and no other contracting party is in default under any of
the Material Contracts.
6.14 Environmental Matters. The Companies have not unlawfully
disposed of any hazardous waste or hazardous substance including
Polychlorinated Byphenyls ("PCBs") in a manner which has caused, or could
cause, the Buyer to incur a material liability under applicable law in
connection therewith; and the Sellers and the Companies warrant that the
technical equipment owned by the Station does not contain any PCBs which are
required by law to be removed and if any equipment does contain PCBs, that
such equipment is stored and maintained in compliance with applicable law. To
the best of the Sellers' knowledge, the Companies have complied in all
material
15
respects with all federal, state and local environmental laws, rules and
regulations applicable to the Station and its operations, including but not
limited to the FCC's guidelines regarding RF radiation. No hazardous waste has
been disposed of by the Companies, and to the best of the Sellers' knowledge,
no hazardous waste has been disposed of by any other person on the real estate
leased by the Companies. As used herein, the term "hazardous waste" shall mean
as defined in the Resource Conservation and Recovery Act (RCRA) as amended and
in the equivalent state statute under California law.
6.15 Copyrights, Trademarks and Similar Rights. The Companies have no
copyrights, trademarks, patents or permits other than the government
authorization listed in Section 6.6, and pursuant to contracts under Section
6.1. Schedule 6.15 of the Disclosure Schedule lists, in all material respects,
all licenses, jingles and other similar intangible property rights and
interests applied for, issued to or owned by the Companies or under which the
Companies is a licensee or franchisee and used exclusively or primarily in the
conduct of the business and operations of the Station. Except as set forth in
Schedule 6.15 of the Disclosure Schedule, all of such rights and interests are
issued to or owned by the Companies, or if licensed or franchised to the
Companies, to the best of the Sellers' knowledge, are valid and in good
standing and uncontested. The Sellers have delivered or made available to the
Buyer copies of all material documents, if any, establishing such rights,
licenses or other authority. The Companies have received no written notice and
have no knowledge of any infringements or unlawful use of such property. The
properties listed in the Disclosure Schedule include all such properties
necessary to conduct in all material respects the business and operations of
the Station as now conducted.
6.16 Personnel Information. Schedule 6.16 of the Disclosure Schedule
contains a true and complete list of all persons employed at the Station and
by the Companies, including a description of material compensation
arrangements and employee benefit plans and a list of other terms of any and
all agreements affecting such persons. As of the date hereof only and except
as set forth in Schedule 6.16 of the Disclosure Schedule and the resignation
of certain officers of the Companies at the Closing as identified on Schedule
II, the Companies have not received notification
16
that any of the employees of the Companies presently plan to terminate their
employment, whether by reason of the transactions contemplated hereby or
otherwise.
6.16.1 The Companies are not a party to any contract with any
labor organization, nor have the Companies agreed to recognize any union or
other collective bargaining unit, nor has any union or other collective
bargaining unit been certified as representing any of the Companies'
employees. As if the date hereof only, the Sellers have no knowledge of any
organizational effort currently being made or threatened by or on behalf of
any labor union with respect to employees of the Companies. During the past
three (3) years, the Companies have not experienced any strikes, work
stoppages, grievance proceedings, claims of unfair labor practices filed or
other significant labor difficulties of any nature.
6.16.2 Except as disclosed in Schedule 6.16 of the Disclosure
Schedule, the Companies have complied in all material respects with all laws
relating to the employment of labor, including, without limitation, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
those laws relating to wages, hours, collective bargaining, unemployment
insurance, workers' compensation, equal employment opportunity, sexual
harassment and payment and withholding of taxes. More specifically, the
Companies have substantially complied with and are not in default in any
material respect under any laws, rules and regulations relating to employment
of labor, including those relating to wages, hours, equal employment
opportunities, sexual harassment, employment of protected minorities
(including women and persons over 40 years of age), collective bargaining and
the withholding and payment of taxes and contributions and has withheld all
amounts required or agreed to be withheld from wages and salaries of its
employees, and are not liable for any arrearage of wages or for any tax or
penalty or failure to comply with the foregoing. There are no claims or
complaints pending or, to the knowledge of the Sellers, threatened against the
Companies or the Station before any court or governmental agency and involving
any alleged unlawful employment practices, whether or not relating to the laws
described above. The Companies have not consented to any decree involving any
claim of unfair labor practice and have not been held in any judicial
proceeding to have committed any unfair labor practice and there are
17
no material controversies pending or threatened between the Companies and any
of its employees.
6.17 Financial Statements. The Companies have delivered to Buyer
complete copies of the operating income statements for the Station for years
ended December 31, 1994 and 1995, and for the nine month period ended
September 30, 1996 (the "Financial Statements"). The Financial Statements
accurately represent and present fairly the financial condition and results of
operations of the Station for the periods indicated. Between September 30,
1996 and the date hereof, there has been no material adverse change in the
business, property, assets or condition (financial or otherwise) of the
Companies and (except for the transaction contemplated herein) the Companies
have operated the Station in all respects only in the ordinary course of
business. The Companies have engaged Ernst & Young, LLP (the expenses of which
shall paid 50% by the Sellers and 50% by the Buyer up to a maximum payment by
the Seller of $15,000), to perform an audit (the "Audit") of the Companies
operations for the year ended December 31, 1995 and to perform a review of the
Companies operations for the nine month period ended September 30, 1996
(collectively, the "Audit and Review") which shall be delivered to Buyer by
October 21, 1996.
Except for (a) liabilities as and to the extent reflected or reserved
against in the Financial Statements, (b) liabilities not yet due and payable
or obligations to be performed or satisfied after the date hereof under
contracts and agreements listed in the Disclosure Schedule, or excluded from
the Disclosure Schedule pursuant to the terms of this Agreement, (c)
liabilities incurred between September 30, 1996 and the date hereof at or by
the Station in the ordinary and usual course of business including tax
liabilities resulting solely from the normal operations of the Companies
during such period but not taxes, if any, arising as a result of the
transactions contemplated by this Agreement which Buyer expressly assumes to
the extent that they are attributable solely to the Companies; and (d) any
other liabilities relating to the Station disclosed in this Agreement or in
the Disclosure Schedule, on the date hereof, the Companies have no material
liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise, of a nature customarily reflected in financial
statements reflecting the accrual basis of accounting.
18
6.18 Liabilities. Except as set forth in the Disclosure Schedule and
the Financial Statements, the Companies have no debts, obligations or
liabilities of any kind or nature, either direct or indirect, absolute or
contingent, matured or unmatured.
6.19 Absence of Certain Changes or Events. Except as set forth in
Schedule 6.19 of the Disclosure Schedule or except as otherwise contemplated
by this Agreement, since September 30, 1996 there has not been (a) any damage,
destruction or casualty loss to the physical properties of the Companies
(whether covered by insurance or not); (b) any material change in the
business, operations or financial condition of the Companies; (c) any entry
into any transaction, commitment or agreement (including without limitation
any borrowing or capital expenditure) material to the Companies's course of
business; (d) any redemption or other acquisition by the Companies of the
Companies' capital stock or any declaration, setting aside or payment of any
dividend or other distribution in cash, stock or property with respect to the
Companies' capital stock; (e) except for normal salary reviews, not to exceed
5%, with personnel on the anniversary date of employment, consistent with past
practice, and compensation to the employees and officers who are to resign at
Closing and are listed on Schedule II, any increase in the rate or terms of
compensation payable or to become payable by the Companies to its directors,
officers, employees or any increase in the rate or terms of any bonus,
pension, insurance or other employee benefit plan, payment or arrangement made
to, for or with any such directors, officers or key employees; (f) any change
in or acceleration of sales, or reduction of aggregate administrative,
marketing, advertising and promotional expenses or research expenditures other
than in the ordinary course of business; (g) any sale, transfer or other
disposition of any asset of the Companies to any party, including the Sellers,
except for payment of third-party obligations incurred in the ordinary course
of business in accordance with the Companies' regular payment practices; (h)
any termination or waiver of any rights of value to the business of the
Companies; or (i) any failure by the Companies to pay its accounts payable or
other obligations in the ordinary course of business consistent with past
practices.
6.20 Title to Properties. Except as set forth on Schedule 6.20 of the
Disclosure Schedule, the Companies have good and marketable title to all of
the assets and properties which they purport
19
to own including, without limitation, those which are reflected on the
Financial Statements, free and clear of all Encumbrances, except for (a) liens
for current taxes not yet due and payable or for taxes the validity of which is
being contested in good faith by appropriate proceedings, and (b) Encumbrances
which individually or in the aggregate do not materially and adversely affect
the business, operations or financial condition of the Companies.
6.21 Litigation. Except as set forth in Schedule 6.21 of the
Disclosure Schedule, (a) the Companies are subject to no judgment, award,
order, writ, injunction, arbitration decision or decree materially adversely
affecting the conduct of the business of the Station, and there is no
litigation, arbitration, administration or other proceeding or, to the best of
the Sellers' knowledge, investigation pending or any basis for any person to
assert a claim or, to the best of the Sellers' knowledge, threatened against
the Companies or the Station in any federal, state or local court, or before
any administrative agency or arbitrator (including, without limitation, any
proceeding which seeks the forfeiture of, or opposes the renewal of, any of
the Station Licenses), or before any other tribunal duly authorized to resolve
disputes, which would reasonably be expected to have any material adverse
effect upon the business, property, assets or condition (financial or
otherwise) of the Station or which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken pursuant to or in
connection with this Agreement; and (b) in particular, but without limiting
the generality of the foregoing, there are no applications, complaints or
proceedings pending or, to the best of the Sellers' knowledge, threatened
before the FCC or any other governmental organization with respect to or
adverse to the business or operations of the Station other than applications,
complaints or proceedings which affect the broadcasting industry generally.
6.22 Compliance With Laws. Except as set forth in Schedule 6.22 of
the Disclosure Schedule, (a) the Companies have not received any notice
asserting any non-compliance by them with any applicable statute, rule or
regulation, whether federal, state or local; (b) the Companies are not in
default with respect to any judgment, order, injunction or decree of any
court, administrative agency or other governmental authority or any other
tribunal duly authorized to resolve disputes in any respect material to the
transactions contemplated hereby; and (c) the Companies are in
20
compliance with all material laws, regulations and governmental orders
applicable to the conduct of the business and operations of the Companies and
the Station, the failure to comply with which would have a material adverse
effect on the business, operations or financial condition of the Station, and
their present use of the Station's assets does not violate any of such laws,
regulations or orders, violation of which would have a material adverse effect
on the Station's operation.
6.23 Insurance. All insurance policies with respect to the
properties, assets, operations and business of the Companies (the "Insurance
Policies") are in full force and effect. Except as set forth in Schedule 6.23
of the Disclosure Schedule, there are no pending claims against the Insurance
Policies by the Companies as to which the insurers have denied liability and
with respect to which there is a reasonable likelihood of a settlement or
determination adverse to the Companies. To the best of the Sellers' knowledge,
there are no circumstances existing which would enable the insurers to avoid
liability under the Insurance Policies, nor are there any other parties having
an interest under the Insurance Policies. Except as set forth in Schedule 6.23
of the Disclosure Schedule, (i) there exist no material claims under the
Insurance Policies that have not been properly filed by the Companies; (ii) no
insurance company has refused to renew any material insurance policy of the
Companies during the past eighteen (18) months; and (iii) there have been no
material rate or premium increases or written notice of prospective changes
therein on general liability, property or directors and officers liability
Insurance Policies during the past eighteen (18) months. Schedule 6.23 of the
Disclosure Schedule contains a list that includes all Insurance Policies.
6.24 Accuracy of Information. No written statement made by the
Sellers herein and no information provided by the Sellers herein or in the
documents, instruments or other written communications made or delivered
directly by the Sellers to the Buyer in connection with the negotiations
covering the purchase and sale of the Shares contains any untrue statement of
a material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading and there is no fact known to the
Sellers which relates to any information contained in any such written
document, instrument or communications which the Sellers have not disclosed to
the Buyer in writing which materially affects adversely the Station. To the
extent that a
21
representation or other information is made to the Sellers' knowledge or is
otherwise qualified by its terms, this representation shall not be interpreted
to expand such limitations or qualifications.
6.25 Accounts Receivable. All accounts receivable reflected on the
Financial Statements represent sales actually made or services actually
rendered in the ordinary course of business on or prior to September 30, 1996;
all accounts receivable of the Companies as of the Closing Date will represent
sales actually made on services actually rendered in the ordinary course of
business consistent with past practices prior to the Closing Date.
6.26 Qualification. To the best of the Sellers' knowledge, there are
no facts which, under the Communications Act of 1934, as amended, or the
existing rules and regulations of the FCC, would disqualify the WWYZ from
remaining the FCC licensee of the Station.
ARTICLE 7
COVENANTS OF THE BUYER AND SFX
------------------------------
7.1 Closing. On the Closing Date, the Buyer shall purchase the Shares
from the Sellers as provided in Articles 1 and 2 hereof and shall deliver or
cause to be delivered to the Sellers the Purchase Price as provided in Article
2 hereof.
7.2 Notification. The Buyer shall immediately notify the Sellers, and
thereafter keep Sellers informed on a current basis, of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against the Buyer, or to its knowledge, SFX and SFX's direct and
indirect subsidiaries which challenges, or would otherwise impact on the
transactions contemplated hereby.
7.3 No Inconsistent Action. The Buyer shall not take any other action
which is materially inconsistent with its obligations under this Agreement.
22
7.4 Notification on Sellers Warranties and Covenants. From and after
the date of this Agreement until the Closing Date, Buyer shall immediately
notify Sellers, and provide Sellers an opportunity to cure, any fact,
circumstance or event which Buyer discovers during its due diligence
investigation, which Buyer could otherwise assert is a breach of Sellers' or
the Companies warranties or pre-closing covenants.
7.5 SFX Covenant. SFX shall cause Buyer to perform its obligations
hereunder, and, if Buyer fails to perform, shall pay Sellers the amounts due
hereunder in Buyer's stead.
ARTICLE 8
COVENANTS OF THE SELLERS AND THE COMPANIES
------------------------------------------
8.1 Pre-Closing Covenants. The Sellers and the Companies covenant and
agree with respect to the Station that between the date hereof and the Closing
Date, except as expressly permitted by this Agreement or with the prior
written consent of the Buyer, they shall act in accordance with the following;
provided that Buyer agrees that if Sellers and the Companies fully comply with
their obligations hereunder, Sellers shall not be responsible under covenants
8.1.1 or 8.1.2, if its employees or customers elect to discontinue their
association with the companies, due to the announcement of the transactions
contemplated by the Agreement or if there is a change in the historic
revenues, or the Arbitron (or other audience) ratings for the Station, between
the date hereof and the Closing.
8.1.1 The Sellers shall cause the Companies to and the Companies
shall conduct the business and operations of the Station in the ordinary and
prudent course of business and with the intent of preserving the ongoing
operations and assets of the Station, including, but not limited to, retaining
the current format of the Station, using its reasonable best efforts to retain
the services of its employees, and keeping in good standing all licenses,
permits and authorizations.
8.1.2 The Sellers shall cause the Companies to and the Companies
shall use
23
reasonable efforts to preserve the operation of the Station intact and to
preserve the business of Station's customers, suppliers and others having
business relations with the Station and continue to conduct the financial
operations of the Station, including its credit and collection policies, in the
ordinary course of business with substantially the same effort, and to
substantially the same extent and in the same manner, as in the prior conduct
of the business of the Station.
8.1.3 The Shareholders of WWYZ shall cause the Companies to and
the Companies shall operate the Station in accordance with all material FCC
Rules and Regulations and the Station Licenses and with all other laws,
regulations, rules and orders, and shall not cause or permit by any act, or
failure to act, any of the Station Licenses to expire, be surrendered,
adversely modified, or otherwise terminated, or the FCC to institute any
proceedings for the suspension, revocation or adverse modification of any of
the Station Licenses, or fail to prosecute with due diligence any pending
applications to the FCC.
8.1.4 Should any fact relating to the WWYZ or its shareholders
which would cause the FCC to deny its consent to the transactions contemplated
by this Agreement come to WWYZ's or its shareholders attention, the
shareholders or WWYZ, as the case may be, shall promptly notify the Buyer
thereof and shall use their reasonable efforts to take such steps as may be
necessary to remove any such impediment to the transactions contemplated by
this Agreement.
8.1.5 The Sellers shall prevent the Companies from, and the
Companies shall not other than in the ordinary course of business or in
accordance with a pre-existing plan or arrangement listed in the Disclosure
Schedule (i) sell or dispose of or commit to sell or dispose of any of the
Companies or the Station's assets; (ii) except for normal salary reviews, not
to exceed 5%, with personnel on the anniversary date of employment, consistent
with past practice, and for compensation for certain officers and employees
how are due to resgin at the Closing and are listed on Schedule II, grant or
agree to grant any general increases in the rates of salaries or compensation
payable to employees of the Companies or the Station; (iii) except for normal
salary reviews, not to exceed 5%, with personnel on the anniversary date of
employment, consistent with past practice, and
24
for compensation to certain officers and employees who are to resign at Closing
and are as listed on Schedule II, grant or agree to grant any specific bonus or
increase to any executive or management employee of the Companies or the
Station; or (iv) provide for any new pension, retirement or other employment
benefits for employees of the Companies or the Station or any increases in any
existing benefits.
8.1.6 The Sellers shall provide the Buyer prompt written notice
of any material change in any of the information contained in the
representations and warranties made in Article 6 hereof or any Exhibits or the
Disclosure Schedule herein or attached hereto.
8.1.7 Following the acquisition of all approvals under Section 4,
provided there is no unsatisfied condition precedent to Buyer's obligation,
the Companies and the Sellers shall give the Buyer and the Buyer's counsel,
accountants, engineers and other representatives, full and reasonable access
during normal business hours to all of the Companies's personnel, properties,
books, contracts, reports and records including financial information and tax
returns, to all real estate, buildings and equipment relating, and to the
Companies and the Station's employees in order that the Buyer may have full
opportunity to make such investigation as it desires of the affairs of the
Companies and to furnish the Buyer with information, and copies of all
documents and agreements including but not limited to financial and operating
data and other information concerning the financial condition, results of
operations and business of the Companies and the Station, that the Buyer may
reasonably request. The rights of the Buyer under this Section shall not be
exercised in such a manner as to interfere with the business of the Station.
Prior to such date, Sellers and Companies shall provide Buyer with such
information as may be requested for review off premises. The failure to
provide such information shall constitute a material breach of this Agreement
unless cured by Sellers within the time periods set forth herein.
8.2 Trade Agreements. At the Closing, the aggregate value by which
the Companies's post-closing obligations under all contracts for the sale of
advertising time on the Station for consideration other than cash such as
merchandise, services or promotional consideration exceeds
25
the aggregate value of the merchandise, services or promotional consideration
to be received by the Station after the Closing, shall not be more than Fifty
Thousand Dollars ($50,000).
8.3 Notification. The Sellers and the Companies shall notify the
Buyer of any material litigation, arbitration or administrative proceeding
pending or, to their knowledge, threatened against the Sellers or the
Companies which challenges the transactions contemplated hereby.
8.4 No Inconsistent Action. The Sellers and the Companies shall take
no action which is materially inconsistent with their obligations under this
Agreement.
8.5 Closing Covenant. On the Closing Date, the Sellers shall sell and
deliver the Shares to the Buyer as provided in Articles 1 and 2 of this
Agreement.
ARTICLE 9
JOINT COVENANTS
---------------
SFX, through its power to control the Buyer, or directly if Buyer
defaults, the Buyer, the Sellers and the Companies covenant and agree that
between the date hereof and the Closing Date, they shall act in accordance
with the following:
9.1 Conditions. Except as otherwise provided in this Agreement, if
any event should occur, either within or without the control of any party
hereto, which would prevent fulfillment of the conditions upon the obligations
of any party hereto to consummate the transactions contemplated by this
Agreement, the parties hereto shall use their reasonable best efforts to cure
the event as expeditiously as possible.
9.2 Confidentiality. WWYZ and SFX have entered into a confidentiality
agreement dated as of August 27, 1996, which shall continue to apply to the
parties hereto, including the Buyer. In addition the Buyer, the Sellers and
the Companies shall each keep confidential all information
26
obtained by it or them with respect to the other in connection with this
Agreement and the negotiations preceding this Agreement, and will use such
information solely in connection with the transactions contemplated by this
Agreement, and if the transactions contemplated hereby are not consummated for
any reason, each shall return to the other, without retaining a copy thereof,
any schedules, documents or other written information obtained from the other
in connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, no party shall 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,
(ii) is or becomes publicly known through no fault of the receiving party or
its agents, (iii) is required to be disclosed pursuant to an order or request
of a judicial or governmental authority or because of the rules and regulations
of the Securities and Exchange Commission (provided the other parties are given
reasonable prior notice), or (iv) is developed by the receiving party
independently of the disclosure by the disclosing party.
9.3 Cooperation. The Buyer, the Sellers and the Companies shall
cooperate fully with each other in taking any actions, including actions to
obtain the required consent of any governmental instrumentality or any third
party necessary or helpful to accomplish the transactions contemplated by this
Agreement; provided, however, that no party shall be required to take any
action which would have a material adverse effect upon it or any of its direct
or indirect subsidiaries. Buyer and SFX shall bear the costs to the extent set
forth in Section 12.3.
ARTICLE 10
CONDITIONS OF CLOSING BY THE BUYER
----------------------------------
The obligations of the Buyer hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions, provided, however, that Buyer may not rely upon conditions 10.2,
10.3 or 10.4 or the delivery of Closing documents if the Agreement is
terminated as a basis not to pay the "breakage fee" as set forth in Section
2.3 (b):
27
10.1 Representations, Warranties and Covenants.
10.1.1 All representations and warranties of the Companies and
the Sellers made in this Agreement shall be true and complete in all material
respects as of the date hereof and on and as of the Closing Date as if made on
and as of that date.
10.1.2 All of the terms, covenants and conditions to be complied
with and performed by the Companies and the Sellers on or prior to Closing
Date shall have been complied with or performed in all material respects.
10.1.3 The Buyer shall have received a certificate, dated as of
the Closing Date, executed by a duly qualified officer of the Companies and
each of the Sellers, to the effect that their respective representations and
warranties contained in this Agreement are true and complete in all material
respects on and as of the Closing Date as if made on and as of that date, and
that each has complied with or performed all terms, covenants and conditions
to be complied with or performed by him or it in all material respects on or
prior to the Closing Date.
10.2 Governmental Consents. The FCC Consent shall have become a Final
Order, or such condition shall have been waived in writing by the Buyer, and
all consents, approvals, authorizations or other requirements prescribed by
the HSR Act shall have been obtained and satisfied.
10.3 Governmental Authorizations. The Companies shall be the holder of
the Station Licenses and all other material licenses, permits and other
authorizations listed in the Disclosure Schedule, and there shall not have been
any modification of any of such licenses, permits and other authorizations which
has a material adverse effect on the Station or the conduct of its business and
operations. No proceeding shall be pending which seeks or the effect of which
reasonably could be to revoke, cancel, fail to renew, suspend or modify
materially and adversely the Station Licenses or any other material licenses,
permits or other authorizations.
28
10.4 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, or no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered
against, any party hereto which challenges or would render it unlawful, as of
the Closing Date, to effect the transactions contemplated by this Agreement in
accordance with its terms.
10.5 Legal Opinion. The Companies and the Seller shall have delivered
to the Buyer a written opinion of its or their counsel, dated as of the
Closing Date, substantially in the form attached hereto as Exhibit C.
10.6 FCC Legal Opinion. The Sellers shall have furnished the Buyer a
written opinion of the Companies' and the Sellers' FCC counsel, dated as of
the Closing Date, addressed to the Buyer substantially in the form attached
hereto as Exhibit D.
10.7 Delivery of Shares. On the Closing Date, the Buyer shall have
received certificates representing the Shares.
10.8 Resignations. On the Closing Date, the Buyer shall have received
the resignations of all of the officers and directors of the Companies as set
forth on Schedule II.
10.9 Leases. On the Closing Date, the Sellers' shall have entered
into lease agreements with Buyer for the Station's studio and tower facilities
substantially in the form attached hereto as Exhibit E and Exhibit F.
10.10 Seller's Cure. Buyer shall not have a right to rely on any
event under Sections 10.1.1 and 10.1.2, if such event can be cured, in the
reasonable judgment of Buyer, by the payment of money, and Seller elects to
permit an offset to the Purchase Price at the Closing for the cost of the
cure. In the event that the Buyer agree's that the breach can be cured by the
payment of money and the cure is not capable of exact determination, the
parties shall apply the procedure set forth in
29
Section 2.4(b) as to Net Working Capital to determine the cost of such cure.
10.11 Escrow Agreement. On the Closing Date, the Escrow Agreement
shall be in full force and effect.
ARTICLE 11
CONDITIONS OF CLOSING BY THE SELLERS
------------------------------------
The obligations of the Sellers hereunder are, at their option, subject
to satisfaction, at or prior to the Closing Date, of each of the following
conditions:
11.1 Representations, Warranties and Covenants.
11.1.1 All representations and warranties of the Buyer shall be
true and complete in all material respects as of the date hereof and on and as
of the Closing Date as if made on and as of that date.
11.1.2 All the terms, covenants and conditions to be complied
with and performed by the Buyer on or prior to the Closing Date shall have
been complied with or performed in all material respects.
11.1.3 The Sellers shall have received a certificate, dated as
of the Closing Date, executed by a duly qualified officer of the Buyer, to the
effect that the representations and warranties of the Buyer contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date, and that the Buyer has
complied with or performed all terms, covenants and conditions to be complied
with or performed by it in all material respects on or prior to the Closing
Date.
11.2 Governmental Consents. The FCC Consent shall have become a Final
Order, or such
30
condition shall have been waived by the Sellers, and all consents, approvals,
authorizations or other requirements prescribed by the HSR Act shall have been
obtained and satisfied.
11.3 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, or no other, decree or judgment of any
court, agency or other governmental authority shall have been rendered against
any party hereto which challenge or would render it unlawful, as of the
Closing Date, to effect the transactions contemplated by this Agreement in
accordance with its terms.
11.4 Legal Opinion. The Buyer and SFX shall have delivered to the
Sellers opinions of their corporate counsel, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit G.
11.5 Employment Agreement. The Buyer shall have entered into an
employment agreement with Xxxxxxx X. Xxxxxxx substantially in the form
attached hereto as Exhibit H.
11.6 Payment of Purchase Price. The Buyer shall have delivered or
caused to be delivered to the Sellers the Purchase Price in accordance with
the terms of Article 2 hereof.
ARTICLE 12
TRANSFER TAXES; FEES AND EXPENSES
---------------------------------
12.1 Expenses. Except as set forth in Sections 6.17, 12.2 and 12.3
hereof , each party hereto shall be solely responsible for all costs and
expense incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement.
12.2 Governmental Filing or Grant Fees. Any filing or grant fees
imposed by any governmental authority the consent of which is required to the
transactions contemplated hereby shall be paid by the Buyer; provided, however,
the Sellers shall reimburse the Buyer, within ten (10)
31
days of a written request of Buyer, 50% of any FCC fling fees and $12,000
toward the HSR Act filing fees.
12.3 Costs of Consultants, Accountants and Attorneys. Each party will
bear the cost of their respective counsel and other consultants (unless
otherwise specifically provided) unless and until an objection or request for
additional information is received pursuant to the HRS filing, or the FCC
filing for any reason relating to Buyers or SFX's operations or structure.
Thereafter, Buyer or SFX shall be solely responsible for all reasonable costs
incurred for attorneys or other consultants used by Sellers, Companies and
Buyer in such proceedings or any collateral proceeding challenging the
transactions contemplated by this Agreement and in obtaining the approvals as
required herein. Buyer's responsibility for Seller's costs in prosecuting the
proceedings contemplated by this Agreement shall be limited to proceedings or
investigations caused solely by reason of Buyer's or SFX's operations or
structure in regard to the transactions contemplated by this Agreement.
ARTICLE 13
COMMISSIONS OR FINDER'S FEE
---------------------------
13.1 The Buyer's Representation and Agreement to Indemnify. The
parties hereto represent and warrant that neither they nor any person or
entity acting on their behalf has agreed to pay a commission, finder's fee or
similar payment in connection with this Agreement or any matter related hereto
to any person or entity, other than to Media Services Corp. The parties hereto
further agree to indemnify, defend and hold each other harmless from and
against any and all claims, losses, liabilities and expenses (including
reasonable attorney's fees) arising out of a claim by any person or entity
(including Media Services Corp.) based on any such arrangement or agreement
made or alleged to have been made by the Buyer. Each party hereto shall enter
into a separate arrangement with Media Services Corp. relating to any finder's
fee or similar payment in connection with the transactions contemplated
hereby.
32
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
------------------------------------
14.1 The Sellers' Documents. At the Closing, the Sellers and the
Companies shall deliver or cause to be delivered to the Buyer the following:
14.1.1 Certified resolutions of the Board of Directors of the
Companies approving the execution and delivery of this Agreement and each of
the other documents and authorizing the consummation of the transactions
contemplated hereby and thereby;
14.1.2 Certificates, dated the Closing Date, by the Companies
and the Sellers in the form described in Section 10.1.3 above;
14.1.3 Articles of Incorporation and Bylaws of the Companies
certified by the Companies secretary as of the Closing Date;
14.1.4 At the time and place of Closing, originals or copies of
all program, operations, transmissions, or maintenance logs and all other
records required to be maintained by the FCC with respect to the Station,
including the Station's public file, shall be left at the Station and thereby
delivered to the Buyer;
14.1.5 The opinion letters, dated the Closing Date, referenced
in Sections 10.5 and 10.6 above;
14.1.6 The leases, effective as of the Closing date, referenced
in Section 10.9 above;
14.1.7 Certificates evidencing the Shares;
14.1.8 Governmental certificates showing that the Companies are
duly incorporated
33
and in good standing in the State of Connecticut, dated not more than
forty-five (45) calendar days before the Closing Date; and
14.1.9 Such additional information and material as the Buyer
shall have requested in a timely manner in writing and which is reasonably
necessary for the Closing.
14.1.10 The resignations of the officers and directors of the
Companies listed on Schedule II.
14.1.11 The Escrow Agreement attached as Exhibit A.
14.2 The Buyer's Documents. At the Closing, the Buyer shall deliver
or cause to be delivered to the Sellers the following:
14.2.1 The Purchase Price in accordance with Section 2.2 hereof.
14.2.2 A certificate, dated the Closing Date, by the Buyer in
the form described in Section 11.1.3 above.
14.2.3 The opinions of the Buyer's and SFX's corporate counsel,
dated the Closing Date, to the effect set forth in Section 11.4;
14.2.4 Governmental certificates showing that the Buyer is duly
incorporated and in good standing in the State of Delaware and is qualified as
a foreign corporation in the State of Connecticut, dated not more than
forty-five (45) calendar days before the Closing Date;
14.2.5 Certified resolutions of the Board of Directors of the
Buyer approving the execution and delivery of this Agreement and each of the
other documents and agreements referred to herein and authorizing the
consummation of the transactions contemplated hereby and thereby;
34
14.2.6 Articles of Incorporation and Bylaws of the Buyer
certified by the Buyer's secretary as of the Closing Date; and
14.2.7 Such additional information and material as the Sellers
shall have requested in a timely manner in writing and which is reasonably
necessary for the Closing.
14.2.8 The Employment Agreement with Xxxxxxx X. Xxxxxxx.
ARTICLE 15
INDEMNIFICATION
---------------
15.1.1 The Sellers' Indemnities. To the extent set forth in
Section 15.1.2, the Sellers hereby agree to indemnify, defend and hold the
Buyer harmless with respect to any and all demands, claims, actions, suits,
proceedings, assessments, judgments, costs, losses, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' fees)
(collectively, "Losses"), asserted against, resulting from, imposed upon or
incurred by the Buyer directly or indirectly relating to or arising out of (i)
the inaccuracy of any representation or warranty, or the breach of any
covenant or agreement, contained herein or in any instrument or certificate
delivered pursuant hereto and (ii) all operations of the Station prior to the
Closing including, but not limited to, the payment of all Federal, state,
local, foreign and other governmental taxes, assessments, duties, fees, levies
or similar charges of any kind (including, without limitation, all interest,
penalties and additions imposed with respect to such amounts), including,
without limitation, all sales, payroll, employment and other withholding
taxes, and including, without limitation, all obligations under any tax
sharing agreement, tax indemnity obligation or similar written or unwritten
agreement, arrangement or practice and any liability for taxes imposed by
reason of transferee liability or status as the successor to another entity or
member of a consolidated, combined or unitary group including other entities
for all taxable periods ending on or before the Closing Date and the portion
ending on the Closing Date of any taxable period that includes (but does not
end on) such day.
35
15.1.2 As a condition to Sellers' agreement to assume all risks
of Closing prior to the Expiration Date, as to the "breakage fee" set forth in
Section 3.2 (b), and Buyer's agreement to close without regard to certain
pre-closing conditions set forth Section 10, Sellers have agreed that a
portion of the Purchase Price may be retained by the Buyer in the Escrow
Account until all of the Sellers' indemnity responsibilities, as set forth in
this Section 15, are satisfied to the satisfaction of Buyer. Buyer hereby
agrees to periodically review with the Sellers the amount of money retained in
the Escrow Account and authorize the reduction of such amounts upon
satisfaction that the indemnity obligations of the Sellers have been
satisfied. At the Closing, the Sellers shall permit the Buyer to retain with
the Escrow Agent under the Escrow Agreement, the amount of $2,000,000 (the
"Indemnity Retention Amount") as security for Sellers indemnification
obligations contained here, such amount to be retained until the settlement of
al claims presented within the Claims Period (as defined below), as provided
in this Section 15. Any balance shall be paid from the Escrow Agent to the
Sellers.
15.2 SFX's and Buyer's Indemnities. SFX and the Buyer hereby agrees
to indemnify, defend and hold the Sellers harmless with respect to any and all
demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including, without limitation,
reasonable attorneys' fees) asserted against, resulting from, imposed upon or
incurred by the Sellers directly or indirectly relating to or arising out of
the inaccuracy of any representation or warranty, or the breach of any
covenant or agreement, contained herein or in any instrument or certificate
delivered pursuant hereto or from the operations of Buyer after the Closing.
15.3 Rights. The Buyer and the Sellers agree that the rights of
indemnification provided in this Article 15 are exclusive of any and all other
such rights of the Buyer and the Sellers hereunder and that Sellers' liability
for all claims asserted hereunder may not exceed 20% of the Purchase Price.
Buyer hereby agrees to periodically review with the Sellers the percentage of
the Purchase Price for which the Sellers remain liable authorize the reduction
of such percentage upon satisfaction that the indemnity obligations of the
Sellers have been satisfied.
36
15.4 Survival of Representations and Warranties. The representations,
warranties and covenants contained herein set forth in Sections 6.10, 6.12 and
6.19 (a), (e) and (f) and 8.1.1 and 8.1.2 shall survive the Closing for a
period of 120 days (the "120 day Claims") and all other representations and
warranties, other than with respect to Section 6.9 which shall survive the
Closing, shall survive the Closing for a period of twenty-four (24) months
(the "Claims Period") following the Closing Date, and upon the expiration of
such period shall lapse and be of no further effect.
15.5 Limitation on Indemnity. Notwithstanding anything to the contrary
contained in this Agreement, and subject to the proviso set forth in this
Section 15.5, neither the Buyer nor the Sellers shall have any liability or
obligation to the other for breach of any representation, warranty, covenant or
agreement of such other party made in this Agreement except to the extent that
the aggregate of all 120 day Claims by such other party for such breaches, net
of tax benefit, exceed Fifty Thousand Dollars ($50,000) (the "Threshold Amount")
in the aggregate, in which event the party so liable shall then be liable for
all claims for any such breaches, including the sums constituting the Threshold
Amount, if asserted within the 120 day claim period. All other Claims may be
asserted for a period of 24 moths following the Closing Date, but only if such
claims exceed $5,000 as to any single matter, and then only if the aggregate
of such claims exceed $150,000 (the "Other Claim Threshold") in which case the
Sellers shall only be liable for the excess over $100,000.
15.6 Procedures.
15.6.1 Promptly after the receipt by any party (the "Indemnified
Party") of notice of (A) any claim or (B) the commencement of any action or
proceeding which may entitle such party to indemnification under this Section,
such party shall give the other party (the "Indemnifying Party") written
notice of such claim or the commencement of such action or proceeding and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting from such claim. The failure to give the Indemnifying
Party timely notice under this clause shall not preclude the Indemnified Party
from seeking indemnification from the Indemnifying Party unless such failure
has materially prejudiced the Indemnifying Party's ability to defend the claim
or
37
litigation.
15.6.2 If Indemnifying Party assumes the defense of any such
claim or litigation resulting therefrom with counsel reasonably acceptable to
Indemnified Party, the obligations of the Indemnifying Party as to such claim
shall be limited to taking all steps necessary in the defense or settlement of
such claim or litigation resulting therefrom and to holding the Indemnified
Party harmless from and against any losses, damages and liabilities caused by
or arising out of any settlement approved by the Indemnifying Party or any
judgment in connection with such claim or litigation resulting therefrom;
however, the Indemnified Party may participate, at its or his expense, in the
defense of such claim or litigation provided that the Indemnifying Party shall
direct and control the defense of such claim or litigation. The Indemnified
Party shall cooperate and make available all books and records reasonably
necessary and useful in connection with the defense. The Indemnifying Party
shall not, in the defense of such claim or any litigation resulting therefrom,
consent to entry of any judgment, except with the written consent of the
Indemnified Party, or enter into any settlement, except with the written
consent of the Indemnified Party, which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnified
Party of a release from all liability in respect of such claim or litigation.
15.6.3 If the Indemnifying Party shall not assume the defense of
any such claim or litigation resulting therefrom, the Indemnified Party may,
but shall have no obligation to, defend against such claim or litigation in
such manner as it may deem appropriate, and the Indemnified Party may
compromise or settle such claim or litigation without the Indemnifying Party's
consent. The Indemnifying Party shall promptly reimburse the Indemnified Party
for the amount of all expenses, legal or otherwise, incurred by the
Indemnified Party in connection with the defense against or settlement of such
claim or litigation. If no settlement of the claim or litigation is made, the
Indemnifying Party shall promptly reimburse the Indemnified Party for the
amount of any judgment rendered with respect to such claim or in such
litigation and of all expenses, legal or otherwise, incurred by the
Indemnified Party in the defense against such claim or litigation.
38
ARTICLE 16
TERMINATION RIGHTS
------------------
16.1 Termination. Subject to Buyer's obligation for the "breakage
fee" set forth in Section 2.3 (b), this Agreement may be terminated by either
the Buyer or the Sellers, if the party seeking to terminate is not in material
default or breach of this Agreement, upon written notice to the other upon the
occurrence of any of the following (for purposes of this Article, the term
Buyer shall include SFX):
(a) if, on or prior to the Closing Date, the other party
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
material default shall not be cured, within ten (10) calendar days of the date
of written notice of default served by the party claiming such material
default or if such event cannot be cured within such ten (10) day period, the
defaulting party is diligently pursuing the cure, and the extension of the
cure period does not prejudice the rights of the non-defaulting party to a
cure by the Closing Date; or
(b) subject to Section 16.4 below, if the FCC denies the FCC
Application, or fails to grant the FCC Consent of if all applicable waiting
periods under the HSR Act have not expired by February 1, 1997, as the same
may be extended by Section 16.4 (the "Expiration Date"), provided that the
party seeking termination has diligently prosecuted and utilized its best
efforts to obtain the FCC Application in good faith; or
(c) if there shall be in effect any judgment, final decree or
order that would prevent or make unlawful the Closing of this Agreement; or
(d) by the Buyer only if broadcast transmissions are interrupted
for a period of five (5) consecutive calendar days or for seven (7) or more
calendar days within any thirty (30) day period, or normal broadcast
transmissions are not resumed by the date immediately
39
preceding the Closing Date; or
(e) as provided in Section 17.2 or any other Section of this
Agreement which specifically provides for termination.
16.2 Right to Cure. A defaulting party under Section 16.1(a) of this
Agreement shall only be entitled to invoke the cure provisions whenever
necessary during the term of this Agreement. Additionally, if a delay in the
Closing Date under Section 16.1(a) would cause the Closing to fall at any time
after the period permitted by the FCC Consent, the Sellers and the Buyer shall
file an appropriate request with the FCC for an extension of time within which
to complete the Closing.
16.3 Liability. The termination of this Agreement under Section 16.1
shall not relieve any party of any liability for breach of this Agreement
prior to the date of termination. In the event Sellers or Buyer cannot proceed
because of the failure to obtain governmental approvals, Sellers shall be
entitled to retain the amounts set forth in the Escrow Agreement even though
Buyer fulfilled its obligations hereunder.
16.4 Extension of Expiration Date. Notwithstanding the provisions of
Section 16.1(b) above, the Buyer may, at its option, extend the Expiration
Date for successive thirty (30) day periods, up to and including September 30,
1997, by placing into escrow with the Escrow Agent additional cash deposits
(the "Additional Cash Deposits") in the amount of FIFTY THOUSAND DOLLARS
($50,000) for each such successive thirty (30) day period. The term Cash
Deposit and Additional Cash Deposits are collectively referred to herein as
the "Cash Deposits." The Escrow Agent shall hold such Additional Cash Deposits
pursuant to the terms of the Escrow Agreement. The term Expiration Date as
used herein shall include any successive thirty (30) day period for which the
Buyer has remitted Additional Cash Deposits in accordance with this Section
16.4.
ARTICLE 17
OTHER PROVISIONS
----------------
40
17.1 Liquidated Damages. In addition to the "breakage fee" under
Section 2.3 (b), if the parties hereto shall fail to consummate this Agreement
on the Closing Date due to the Buyer's breach of any material representation,
warranty, covenant or condition hereunder, and the Sellers are not at that
time in breach of any material representation, warranty, covenant or condition
hereunder, the parties acknowledge and agree that the Sellers' damages will be
extremely difficult and impractical to ascertain and that the Cash Deposit in
excess of the "breakage fee" represents a reasonable estimate of such damages,
considering all the circumstances existing on the date of this Agreement.
Therefore, the parties acknowledge and agree that in the event of such failure
to perform by the Buyers, the Sellers shall have the right to retain the
amount of the Cash Deposits in excess of the "breakage fee" as liquidated
damages. Such liquidated damages and "breakage fee" constitute the Sellers'
sole and exclusive remedy against the Buyer for failing to consummate this
agreement on the Closing Date or for any other breaches under this Agreement
that prevent the Closing from occurring, all other remedies being hereby
expressly waived by the Sellers.
17.2 Risk of Loss. The risk of loss or damage to the Station or any
of its assets prior to the Closing Date shall be upon the Sellers. The Sellers
shall repair, replace and restore any such damaged or lost Station asset to
its prior condition, as soon as possible and in no event later than the
Closing Date. If the Sellers fail to restore or replace such Station asset,
the Sellers shall assign or cause to be assigned to the Buyer at Closing their
rights under any insurance policy or pay over to the Buyer all proceeds of
insurance covering such Station asset's damage, destruction or loss or, in the
alternative, the Buyer shall have the right to reduce the Purchase Price by an
amount reasonably estimated to be sufficient to repair or replace such
property. If the restoration and replacement of any damaged or destroyed
property has not been completed at the time the Closing would otherwise be
held, then unless the Sellers and the Buyer otherwise agree, the Closing Date
shall be delayed and shall take place within fifteen (15) calendar days after
the Sellers give written notice to the Buyer of completion of the restoration
or replacement of such asset. If the delay in the Closing Date under this
Section 17.2 would cause the Closing to fall at anytime after the period
permitted by the FCC Consent, the Sellers and the Buyer shall file an
appropriate request with the FCC for an extension of time within which to
complete the Closing. Time is of the essence in the Sellers' restoration or
41
replacement of the Station assets.
17.3 Specific Performance. In the event of a material breach by the
Sellers of their respective representations and obligations hereunder, not
cured within ten (10) calendar days after written notice to that effect from
the Buyer, the Buyer shall have the right to bring an action to enforce the
terms of this Agreement by decree of specific performance, it being agreed
that the property to be transferred hereunder is unique and not readily
available in the open market, and the Sellers thereby further agree to waive
any and all defenses against any such action for specific performance based on
the grounds that there is an adequate remedy for money damages available.
17.4 Further Assurances. After the Closing, the Sellers shall from
time to time, at the request of and without further cost or expense to the
Buyer, execute and deliver such other instruments of conveyance and transfer
and take such other actions as may reasonably be requested in order to more
effectively consummate the transactions contemplated hereby to vest in the
Buyer good and marketable title to the assets being transferred hereunder, and
the Buyer shall from time to time, at the request of and without further cost
or expense to the Sellers, execute and deliver such other instruments and take
such other actions as may reasonably be requested in order to more effectively
relieve the Sellers of any obligations being assumed by the Buyer hereunder.
17.5 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may voluntarily or involuntarily
assign its interest under this Agreement without the prior written consent of
the other party, except for any assignment by the Buyer to an affiliate of the
Buyer in which case the Buyer shall remain fully obligated under this
Agreement as an assignor.
17.6 Entire Agreement. This Agreement, the Disclosure Schedule and
the Exhibits 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. In the event of a
conflict between the terms of this Agreement and any other agreement executed
in
42
connection herewith, the terms of this Agreement shall prevail. 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 waiver, amendment,
change, extension or discharge is sought.
17.7 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.
17.8 Governing Law. The construction and performance of this
Agreement shall be governed by the laws of the State of Connecticut without
giving effect to the choice of law provisions thereof.
17.9 Notices. Any notice, demand or request required or permitted to
be given under the provisions of this Agreement shall be in writing and shall
be deemed to have been duly delivered and received on the date of personal
delivery or on the date of receipt, if mailed by registered or certified mail,
postage prepaid and return receipt requested, or on the date of a stamped
receipt, if sent by an overnight delivery service, or on the date of written
confirmation of delivery by facsimile, and shall be addressed to the following
addresses, or to such other address as any party may request, in the case of
the Sellers, by notifying the Buyer, and in the case of the Buyer, by
notifying the Sellers:
To the Companies: WWYZ, Inc.
Prior to Closing Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Mr. B. Xxxxxxx Xxxxxxx
Fax: 000- 000-0000
With a Copy to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx & Torrance
00 Xxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
43
To the Sellers: Mr. B. Xxxxxxx Xxxxxxx
After Closing c/o WATR, Inc.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Mr. B Xxxxxxx Xxxxxxx
Fax: 203-____-______
With a Copy to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx & Torrance
00 Xxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxxx 00000
To the Buyer: SFX Broadcasting of Hartford, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx F.X. Sillerman
Fax: 000-000-0000
With a Copy to: Xxxxxx X. Xxxxx, Esq.
Executive Vice President
and General Counsel
SFX Broadcasting, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
17.10 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.
17.11 Arbitration. Any post closing dispute between the Buyer and the
Seller over any of the terms or conditions of this Agreement shall be
submitted to the American Arbitration Association in the City of Hartford,
Connecticut for arbitration under its then prevailing rules, the arbitrator(s)
to be selected as follows: Each of the parties hereto shall by written notice
to the other have the right to appoint one arbitrator. If, within thirty (30)
days following the giving of such notice by one party, the other shall not, by
written notice, appoint another arbitrator, the first arbitrator shall be the
sole arbitrator. If two arbitrators are so appointed, they shall appoint a
third arbitrator. If thirty (30) days
44
elapse after the appointment of the second arbitrator and the two arbitrators
are unable to agree upon the third arbitrator, then either party may, in
writing, request the American Arbitration Association to appoint the third
arbitrator. The award made in the arbitration shall be binding and conclusive
on the parties and judgment may be, but need not be, entered in any court
having jurisdiction. Such award shall include the fixing of the costs, expenses
and reasonable attorney's fees of arbitration, which shall be borne by the
unsuccessful party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
COMPANIES: SFX:
---------- ----
WWYZ, INC. SFX BROADCASTING, INC.
By: /s/ B. Xxxxxxx Xxxxxxx By: Xxxxxx F.X. Sillerman
-------------------------- --------------------------
Name: B. Xxxxxxx Xxxxxxx Name: Xxxxxx F.X. Sillerman
Title: President Title: Chairman of the
Board and Chief
Executive Officer
GREAT AMERICAN MUSIC FEST & SELLERS OF WWYZ, INC.
PRODUCTION CO. ---------------------
/s/ Xxxxxxxx Xxxxxxx
-----------------------------
By: /s/ Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: President
/s/ B. Xxxxxxx Xxxxxxx
-----------------------------
BUYER: B. Xxxxxxx Xxxxxxx
SFX BROADCASTING OF HARTFORD,
INC.
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
By: Xxxxxx F.X. Sillerman
--------------------------
Name: Xxxxxx F.X. Sillerman
Title: President
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
45
/s/ Xxxxxxxxxx Xxxxxxxx
-------------------------------
Xxxxxxxxxx Xxxxxxxx, a/k/a
/s/ Xxxx Xxxxxxx Xxxxxxxxxx X. Xxxxxxxx, as
------------------------------------------- Custodian for Xxxxxx Xxxxxxxx
Xxxx Xxxxxxx as Custodian for Xxxxx Xxxxxxx under the CTUGMA
under the CTUGMA
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx a/k/a Xxxxxxx
/s/ Xxxx Xxxxxxx Xxxxxxx Xxxxxx a/k/a Xxxxx
------------------------------------------- Xxxxxxx Xxxxxx
Xxxx Xxxxxxx as Custodian for Xxxxx Xxxxxxx
under the CTUGMA
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, a/k/a Xxxxxxx X.
Xxxxxx, as Custodian for Xxxxxxx
Xxxxxx under the CTUGMA
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, a/k/a Xxxxxxx X.
Xxxxxx, as Custodian for Xxxxx
Xxxxxx under the CTUGMA
/s/ Xxxxx Xxxxxxx
-------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx as Custodian for
/s/ Xxxxx Xxxxxxx Xxxxxxxxx Xxxxxxx under the
------------------------------------------- CTUGMA
Xxxxxxx Xxxxxxx as Custodian for
Xxxxxxxxx Xxxxxxx under the CTUGMA SELLERS OF GREAT AMERICAN MUSIC
FEST & PRODUCTION CO.
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxxxxxx Xxxxxxxx
------------------------------------------- -------------------------------
Xxxxxxx Xxxxxxx as Custodian for Xxxxxxx Xxxxxxxxxx Xxxxxxxx
Xxxxxxx under the CTUGMA
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx
-------------------------------------------
Xxxxxxx Xxxxxxx as Custodian for Xxxxxx
Xxxxxxx under the CTUGMA
/s/ Xxxxxxxxxx Xxxxxxxx
-------------------------------------------
Xxxxxxxxxx Xxxxxxxx
a/k/a Xxxxxxxxxx Xxxxxxx Xxxxxxxx
46
