EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
by and among
AMERICAN RADIO SYSTEMS CORPORATION
AMERICAN RADIO SYSTEMS LICENSE CORP.
and
ENTERTAINMENT COMMUNICATIONS, INC.
Dated July 18, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.................................................................. 2
ARTICLE II
SALE AND PURCHASE.............................................................6
2.1. TRANSFER OF ASSETS....................................................6
2.2. PURCHASE PRICE........................................................6
2.3. PAYMENT...............................................................6
2.4. APPRAISAL.............................................................6
ARTICLE III
LIABILITIES...................................................................7
3.1. ASSUMPTION OF LIABILITIES.............................................7
3.2. LIABILITIES OF ARS....................................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................8
4.1. ARS AND ARS LICENSE...................................................8
4.2. ENTERCOM REPRESENTATIONS.............................................20
ARTICLE V
CONDITIONS...................................................................21
5.1. COMMISSION CONSENT AND APPROVAL AND HSR ACT
WAITING PERIOD.......................................................21
5.2. ENTERCOM'S CONDITIONS................................................22
5.3. ARS AND ARS LICENSE CONDITIONS.......................................23
5.4. NONOCCURRENCE OF CONDITIONS..........................................24
ARTICLE VI
OPERATIONS PENDING CLOSING...................................................24
6.1. AFFIRMATIVE COVENANTS OF ARS AND ARS LICENSE.........................24
6.2. NEGATIVE COVENANTS OF ARS AND ARS LICENSE............................28
6.3. NO CONTROL BY ENTERCOM...............................................31
ARTICLE VII
PREPARATION FOR CLOSING......................................................32
7.1. APPLICATION TO COMMISSION............................................32
7.2. INSPECTION BY ENTERCOM...............................................33
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7.3. CONFIDENTIALITY......................................................33
7.4. XXXX-XXXXX-XXXXXX NOTIFICATION.......................................34
ARTICLE VIII
CLOSING......................................................................34
8.1. CLOSING..............................................................34
8.2. ADJUSTMENTS..........................................................34
8.3. CLOSING DELIVERIES TO ENTERCOM.......................................37
8.4. CLOSING DELIVERIES TO ARS............................................41
8.5. COVENANTS OF FURTHER ASSURANCE.......................................43
8.6. DAMAGE TO PROPERTY...................................................43
8.7. TAXES ON TRANSACTION.................................................44
ARTICLE IX
TERMINATION, DEFAULT AND INDEMNIFICATION.....................................44
9.1. TERMINATION BY REASON OTHER THAN DEFAULT.............................44
9.2. EFFECT OF TERMINATION BY REASON OTHER THAN DEFAULT...................45
9.3. DEFAULT..............................................................45
9.4. ARS' REMEDY..........................................................45
9.5. ENTERCOM'S REMEDIES..................................................46
9.6. LIQUIDATED DAMAGES NOT A PENALTY.....................................46
9.7. INDEMNIFICATION......................................................46
ARTICLE X
GENERAL PROVISIONS...........................................................50
10.1. EXPENSES OF THE PARTIES..............................................50
10.2. BROKERS..............................................................50
10.3. SURVIVAL OF ARS' AND ARS LICENSE'S COVENANTS,
REPRESENTATIONS AND WARRANTIES.......................................51
10.4. AMENDMENT AND WAIVER.................................................51
10.5. EFFECT OF THIS AGREEMENT.............................................51
10.6. HEADINGS.............................................................51
10.7. COUNTERPARTS.........................................................51
10.8. GOVERNING LAW........................................................51
10.9. NOTICES..............................................................52
10.10. STATION EMPLOYEES....................................................53
10.11. SECTION 1031 ASSET EXCHANGE..........................................53
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT made and entered into this 18th day of July,
1997 by and between AMERICAN RADIO SYSTEMS CORPORATION, a Delaware corporation
(hereinafter "ARS"), AMERICAN RADIO SYSTEMS LICENSE CORP., a Delaware
corporation (hereinafter "ARS License"), and ENTERTAINMENT COMMUNICATIONS, INC.,
a Pennsylvania corporation (hereinafter "Entercom").
W I T N E S S E T H:
WHEREAS, pursuant to authorizations duly granted and issued by
the Federal Communications Commission (the "Commission"), ARS is the owner of
radio station KCTC(AM) licensed to Sacramento, California, (the "Station") and
ARS operates the Station under a management agreement with ARS License, the
holder of the Authorizations for the operation of the Station; and
WHEREAS, Entercom, ARS and ARS License have agreed, subject to
prior approval by the Commission and certain other conditions, to transfer and
assign the licenses and all other authorizations relating to the Station from
ARS and ARS License to Entercom and for ARS and ARS License to transfer and
Entercom to receive all of the assets, properties, rights and privileges used in
connection with the Station as hereinafter set forth; and
WHEREAS, Entercom may elect to accomplish such transfer in
whole or part as the acquisition of replacement property in a deferred like-kind
exchange under ss._1031 of the Code.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and of the representations and warranties hereinafter set forth and
for other good and valuable consideration, the parties, intending to be legally
bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following
respective meanings:
"Adjustment Time" shall mean 12:00:01 a.m. current local time
in Sacramento, California on the Closing Date.
"Agreement" shall mean this Asset Purchase Agreement.
"Applications" shall have the meaning set forth in Section 7.1
hereof.
"ARS" shall mean the corporation identified as such in the
Preamble to this Agreement.
"ARS License" shall mean the corporation identified as such in
the Preamble to this Agreement.
"Assets" shall mean the Property and all of the Authorizations
and all applications for Authorizations for the Station pending before the
Commission.
"Authorizations" shall mean all of the licenses, permits and
authorities granted by the Commission with respect to the operation of the
Station.
"Closing" shall mean the event of consummation of the
transactions contemplated by this Agreement as more fully described in Article
VIII of this Agreement.
"Closing Date" shall mean the date specified for Closing in
Section 8.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
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"Commission" shall mean the Federal Communications Commission.
"Contaminant" shall mean and include any pollutant,
contaminant, hazardous material (as defined in any of the Environmental Laws),
toxic substances (as defined in any of the Environmental Laws), asbestos or
asbestos containing material, urea formaldehyde, polychlorinated biphenyls,
regulated substances and wastes, radioactive materials, and petroleum or
petroleum by-products, including crude oil or any fraction thereof.
"Contracts" shall mean all agreements, arrangements,
commitments and undertakings, written or oral, express or implied, relating to
the Assets or any of them, or to the present or future operation of the Station
and to which ARS and/or ARS License is a party or by which ARS and/or ARS
License or its assignee is bound or obligated in any way (including without
limitation all agreements for the sale of advertising time on the Station and
all trade or barter agreements) except for any Leases.
"Environmental Laws" shall mean and include, but not be
limited to, any applicable federal, state or local law, statute, charter,
ordinance, rule or regulation or any governmental agency interpretation, policy
or guidance, including without limitation applicable safety/environmental health
laws such as but not limited to the Commission's standards relating to radio
frequency ("RF") radiation exposure, the Resource Conservation and Recovery Act
of 1976, Comprehensive Environmental Response Compensation and Liability Act,
Federal Emergency Planning and Community Right-to-Know Law, the Clean Air Act,
the Clean Water Act, the Occupational Safety and Health Act, and the Toxic
Substance Control Act, as any of the foregoing have been amended, and any
permit, order, directive, court ruling or order or consent decree applicable to
or affecting the Property or any other property (real or personal) used by or
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relating to the Station promulgated or issued pursuant to any Environmental Laws
which pertains to, governs, or controls the generation, storage, remediation or
removal of Contaminants or otherwise regulates the protection of health and the
environment including, but not limited to, any of the following activities,
whether on site or off site: (a) the emission, discharge, release, spilling or
dumping of any Contaminant into the air, surface water, ground water, soil or
substrata; or (b) the use, generation, processing, sale, recycling, treatment,
handling, storage, disposal, transportation, labeling or any other management of
any Contaminant.
"Entercom" shall mean the corporation identified as such in
the Preamble to this Agreement and any Qualified Intermediary to which Entercom
may elect to assign all or part of its rights hereunder pursuant to Section
10.11 hereof.
"Final Order" shall mean an action by the Commission upon any
application including, without limitation, the Applications for its consent,
approval or authorization, which action has not been reversed, stayed, enjoined,
set aside, annulled or suspended, and with respect to which action, no protest,
petition to deny, petition for rehearing or reconsideration, appeal or request
for stay is pending, and as to which action the time for filing of any such
protest, petition, appeal or request and any period during which the Commission
may reconsider or review such action on its own authority has expired.
"Leases" shall mean all agreements, arrangements or
commitments and undertakings, written or oral, express or implied, for the use
or occupation of any real or personal property required or used by ARS or ARS
License in the operation of the Station.
"Permitted Encumbrances" shall mean (i) liens for current
taxes not yet due and payable, (ii) easements or restrictions of record which do
not, either individually or in
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the aggregate, impede or restrict the present operations of the Station or
impair the marketability of any property, and (iii) statutory liens of landlords
and carriers, materialmen, mechanics, warehousemen, suppliers, and repairmen
arising in the ordinary course of business and with respect to amounts not yet
delinquent, provided that such statutory liens do not interfere in any material
respect with the operation of the Station as currently conducted, and provided
that such statutory liens are removed or satisfied on or prior to the Closing.
"Property" shall mean all of the tangible and intangible
property, whether real or personal or mixed, and all rights and interests which
are or were at any time since December 31, 1996 owned, used, or held for use by
or for ARS with the Station or the present or future operation of the Station,
other than property disposed of and replaced with equivalent or higher value or
quality in the ordinary course of business excluding only cash, cash
equivalents, accounts receivable and those assets listed on Schedule 4.1.5 as
"Excluded Assets" and including without limitation (i) the assets and property
listed in" Schedule 4.1.5 hereto as "Included Assets" (which schedule of assets
and property has been furnished to Entercom by ARS); (ii) all of ARS and/or ARS
License's rights, titles, and interests under the Leases listed on Schedule
4.1.6 hereto and the Contracts listed on Schedule 4.1.7 hereto (other than
Contracts expiring prior to Closing by their terms which Contracts Entercom has
instructed ARS not to renew); and (iii) the call letters, copyrights, trademarks
and other intellectual property associated with the Station.
"Qualified Intermediary" shall mean a party described in U.S.
Treasury Regulations Section 1.1031(k)-1(g)(4).
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"Station" shall mean the amplitude modulation (AM) radio
broadcast station licensed by the Commission to Sacramento, California
broadcasting on 1320 Khz with and currently assigned the call letters KCTC(AM).
ARTICLE II
SALE AND PURCHASE
2.1. TRANSFER OF ASSETS. Subject to the terms and conditions
set forth in this Agreement, at the Closing ARS and ARS License shall transfer,
convey, grant, assign and deliver to Entercom free and clear of all liens and
encumbrances (other than Permitted Encumbrances) and Entercom shall buy, accept
and receive from ARS, all of the Assets.
2.2. PURCHASE PRICE. The Purchase Price for the Assets is the
sum of Four Million Dollars ($4,000,000).
2.3. PAYMENT. The Purchase Price to be paid by Entercom shall
be payable in cash delivered at the Closing by wire transfer or in other
immediately available funds to the account of ARS at such financial institution
as ARS shall specify in writing.
2.4. APPRAISAL. Entercom, ARS and ARS License agree that the
aggregate fair market value of the Station Assets (the "Aggregate Fair Market
Value") will be appraised at Entercom's expense by the appraisal firm of Bond &
Xxxxxx (the "Appraisal"). Entercom shall prepare IRS Form 8594 reflecting the
Aggregate Fair Market Value as found by Bond & Xxxxxx and such other information
as required by the form, and shall forward it within 30 days after Closing to
ARS and ARS License for its approval, which approval shall not be withheld
unreasonably. Entercom, ARS and ARS License shall each file with their
respective federal income tax return for the tax year in which the Closing
occurs, IRS Form 8594 containing the
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information agreed upon by the parties pursuant to the immediately preceding
sentence. Entercom agrees to report the purchase of the Station Assets and ARS
and ARS License agree to report the sale of such assets for income tax purposes
in a manner consistent with the information agreed upon by the parties pursuant
to this section and contained in its IRS Form 8594. In the event either or both
of the parties elects to treat all or a portion of the Assets transferred as
part of a deferred like-kind exchange under Section 1031 of the Code, each party
shall, in completing any IRS Forms 8824 that the party might be required to file
with the IRS, reflect the values for the Assets as determined in the Appraisal.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 2.4 shall survive the Closing without limitation.
ARTICLE III
LIABILITIES
3.1. ASSUMPTION OF LIABILITIES. As partial consideration for
the Assets, Entercom, from and after the Closing Date, shall assume and pay,
perform and discharge the following obligations and commitments of ARS and ARS
License and no others:
3.1.1. The liabilities and obligations accruing after
the Adjustment Time with respect to the Leases listed on Schedule 4.1.6 hereto
that are specifically identified on Schedule 4.1.6 as being assumed by Entercom;
3.1.2. The liabilities and obligations accruing after
the Adjustment Time with respect to those Contracts listed on Schedule 4.1.7
that are specifically identified on Schedule 4.1.7 as being assumed by Entercom;
and any contracts entered into after the execution hereof which Entercom
expressly agrees to assume.
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3.1.3. All taxes and assessments that accrue on or
with respect to the Assets and the operation of the Station after the Adjustment
Time
3.1.4. Entercom shall discharge those obligations and
liabilities for which it receives the benefit of a closing proration with
respect to such liabilities or obligations in accordance with Section 8.2
hereof.
3.2. LIABILITIES OF ARS. Except as specifically assumed by
Entercom pursuant to Section 3.1 hereof, ARS and/or ARS License shall pay or
discharge any and all taxes, assessments, accounts payable, commitments,
agreements, undertakings, claims, debts, demands, obligations and liabilities:
3.2.1. Incurred or made by ARS and/or ARS License; or
3.2.2. Caused by, arising out of or resulting from
any act or omission of ARS and/or ARS License, their directors, officers, agents
or independent contractors; or
3.2.3. Relating to ARS and/or ARS License or the
operation of the Station before the Adjustment Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. ARS AND ARS LICENSE. ARS and ARS License hereby represent
and warrant to Entercom that:
4.1.1. CORPORATE STANDING. ARS and ARS License are
corporations, duly organized, validly existing and in good standing under the
laws of the State of Delaware and are qualified to do business in the State of
California. ARS and ARS License have full power and authority to engage in the
business in which they are presently engaged and
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to make and perform this Agreement according to its terms. ARS and ARS License
have duly and properly taken all necessary corporate actions and proceedings
required to be taken by ARS and ARS License to authorize ARS and ARS License to
execute, deliver and perform this Agreement and to convey, assign, transfer and
deliver to Entercom the Assets hereunder.
4.1.2. AUTHORIZATION. The execution, delivery and
performance of this Agreement and all transactions contemplated hereby by ARS
and ARS License have been duly authorized by ARS' and ARS License's Board of
Directors and shareholders and all necessary corporate action on ARS' and ARS
License's part has been duly taken.
4.1.3. QUALIFICATIONS AS ASSIGNOR. ARS and ARS
License know of no facts which, under the Communications Act of 1934, as
amended, or the existing rules and regulations of the Commission, would
disqualify ARS or ARS License as an assignor of the Authorizations.
4.1.4. ABSENCE OF CONFLICTING ORDERS. Neither ARS nor
ARS License is subject to any judgment, award, order, writ, injunction,
arbitration decision or decree which prohibits or prevents the performance of
this Agreement or the consummation of any transaction contemplated under this
Agreement, and there is no litigation, administrative action, arbitration,
proceeding or investigation pending, or to the knowledge of ARS and ARS License,
threatened, against ARS or ARS License or affecting ARS or ARS License in any
federal, state or local court or before any administrative agency or arbitrator
that would adversely affect ARS' or ARS License's ability to perform their
obligations under this Agreement or would hinder the consummation of the
transactions contemplated hereunder.
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4.1.5. PROPERTY. The Property to be furnished to
Entercom by ARS and ARS License, listed under the heading "Included Property" on
Schedule 4.1.5 hereto, accurately lists and includes all of the material
tangible and intangible property whether real, personal or mixed and
substantially all of the rights and interests that are now or were at any time
since December 31, 1996 used, necessary, connected or associated with or related
to the Assets or the present or future operation of the Station except for
property replaced in the ordinary course of business with property listed on
Schedule 4.1.5 and except those assets specifically listed on Schedule 4.1.5
under the heading "Excluded Property."
4.1.6. LEASES. ARS and ARS License have delivered to
Entercom true and correct copies of all Leases listed on Schedule 4.1.6 hereto.
There are no other Leases for any items of real or personal property related to
or associated with the Assets or the present or future operation of the Station
other than those disclosed on Schedule 4.1.6 hereto.
4.1.7. CONTRACTS. ARS and ARS License have delivered
to Entercom true and correct copies of all Contracts individually identified on
Schedule 4.1.7 hereto. There are no Contracts now in effect, written or oral,
express or implied, which in any way affect the Property or Assets or the
present or future operation of the Station other than as set forth on Schedule
4.1.7 hereto.
4.1.8. APPLICATIONS. There are no applications
relating to the Station presently pending before the Commission other than those
listed on Schedule 4.1.11 attached hereto.
4.1.9. TITLE TO PROPERTY. Except as disclosed on
Schedule 4.1.9 hereto, at Closing ARS and ARS License will have good, marketable
and indefeasible
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ownership, right, title and interest to the Property including the right to
transfer same free and clear of any mortgage, conditional sale agreement,
security interest, lease, lien, hypothecation, pledge, encumbrance, restriction,
liability, charge, claim or imperfection of title applicable to the Property or
any of the income or revenue therefrom whatsoever except for the Permitted
Encumbrances.
4.1.10. NO DEFAULTS. ARS and ARS License have
complied with all of the terms of the Contracts listed on Schedule 4.1.7 hereto
and the Leases listed on Schedule 4.1.6 hereto and such Contracts and Leases at
Closing shall be enforceable by ARS and ARS License in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy and similar laws affecting the enforcement of creditors' rights and
general equitable principles affecting the enforcement of equitable remedies
(including within said equitable remedies without limitation the remedy of
specific performance). Neither ARS nor ARS License is in default thereunder and
no event has occurred which with the passage of time or the giving of notice or
both would constitute a default by ARS thereunder. To ARS' and ARS License's
knowledge all other parties to the Contracts and Leases have complied with the
provisions thereof and are not in default thereunder and no event has occurred
which with the passage of time or the giving of notice or both would constitute
a default by any such other party thereunder.
4.1.11. AUTHORIZATIONS. All authorizations necessary
to the lawful operations of the Station as presently conducted have been granted
and issued by the Commission to ARS and/or ARS License and are listed on
Schedule 4.1.11 attached hereto and are now in full force and effect. There are
no applications of ARS or ARS License relating to
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the Station pending with the the Commission except as listed on such Schedule
4.1.11 and ARS and ARS License have performed and complied with all of the terms
and conditions of said Authorizations. Except as listed on Schedule 4.1.11 and
4.1.14 no Proceedings are pending, or to the knowledge of any officer of ARS or
ARS License are threatened, which may result in the revocation, modification,
non-renewal or suspension of any of any of the Authorizations, the denial of any
pending applications, the issuance of a cease and desist order, or the
imposition of any other administrative or judicial sanction to which the Station
or the Assets is or may be subject. All ownership reports, renewal applications,
and other material reports and documents required to be filed by ARS or ARS
License with the Commission have been filed, and all such reports, applications
and documents are true and correct. The Station is identified by its present
call letters and unless otherwise validly authorized by the Commission is
operated at maximum authorized power on its assigned frequency at the power and
height authorized by the Commission.
4.1.12. PERMITS AND LICENSES. In addition to the
Authorizations at Closing, ARS or ARS License shall have obtained and/or holds
all other governmental permits and licenses necessary for the lawful operation
of the Station as it is currently operated. All such governmental permits and
licenses are also listed on Schedule 4.1.11 hereto. All terms, restrictions and
requirements of such permits and licenses have been complied with and neither
ARS nor ARS License is in default of any of same.
4.1.13. COMPLIANCE WITH LAWS. ARS and ARS License
have complied in all material respects with all orders (to which ARS or ARS
License respectively is a party or is subject to), applicable laws, rules, and
regulations of all federal, state and local
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authorities with respect to the Assets and operation of the Station. Neither ARS
nor ARS License is, nor to ARS' or ARS License's knowledge, has any third party
asserted that they are in default with respect to or in violation of (a) any
judgment, order, injunction or decree; or (b) rule or regulation of any court,
administrative agency or other governmental authority, in either case in any
respect material to this transaction. All material reports, returns and other
documents filed by ARS and ARS License with any administrative agency or
governmental authority are true, correct and complete in all material respects.
4.1.14. LITIGATION AND CLAIMS. Except as disclosed in
Schedule 4.1.14 hereto, no litigation, proceeding, or controversy is pending
against ARS or ARS' License, or to the knowledge of ARS or ARS License, against
any other party, or to the knowledge of ARS or ARS License, threatened against
ARS, ARS License or any other party, which might affect any of the Assets, ARS'
or ARS License's right or power to transfer the same, the ownership, possession,
use or resale of any of the Assets, or the operation of the Station by the
Entercom or by any assignee of Entercom. No claim has been made or asserted
against ARS or ARS License material to this transaction; and there is no basis
known to ARS or ARS License for any such litigation, proceeding, controversy or
claim.
4.1.15. LABOR RELATIONS. In all respects material to
this transaction, ARS and ARS License have complied with all applicable laws,
rules and regulations pertaining to the employment of labor, including those
relating to wages, hours, collective bargaining and the payment of or
withholding of taxes, and ARS and ARS License have withheld all amounts required
by law or agreement to be withheld from the wages or salaries of its employees
and are not liable for any arrears of wages or any tax or withholding or any
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penalties or interest for failure to comply with any of the foregoing; and there
are no collective bargaining agreements relating to the relationship between any
employee of the Station. Neither ARS nor ARS License has any knowledge of any
union organizing activities involving or targeting any employees of the Station.
4.1.16. EMPLOYMENT CONTRACTS. Except as disclosed on
Schedule 4.1.16 there are no written contracts for the employment of any
personnel relating to the Station and all employees of the Station are employed
on an "at will" basis which may be terminated without cause at any time and with
not more than two weeks' notice.
4.1.17. INSURANCE. ARS currently maintains and has in
the past maintained insurance coverage on the Property and with respect to its
employees and operations in amounts and in respect of liabilities and risks
prudently insured against by radio broadcasters. Schedule 4.1.17 attached hereto
contains a true and complete listing of all such policies and binders of
insurance currently held by or on behalf of ARS, relating to the Property and
the Station's employees and operations. Such policies and binders are valid and
enforceable by ARS, in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy and similar laws affecting
the enforcement of creditor's rights and general equitable principles affecting
the enforcement of equitable remedies (including within said equitable remedies
without limitation the remedy of specific performance) and are outstanding and
duly in force as of the date hereof and provide adequate property insurance for
the replacement of the tangible assets of the Station and adequate liability
insurance for the protection of the business and operations of the Station.
4.1.18. EMPLOYEE BENEFIT AND RETIREMENT PLANS. ARS
and ARS License do not now maintain and have never maintained any "employee
pension benefit plan" or any "employee welfare benefit plan" (as defined
respectively in Sections_3(2) and 3(l) of ERISA) on behalf of the Station's
employees except as listed on Schedule_4.1.18 hereto and all retirement plans,
bonus arrangements, life insurance or medical insurance programs or any other
fringe benefit arrangements (collectively "Fringe Benefit Arrangements") for any
employees of the Station whether written or unwritten except as are listed on
Schedule 4.1.18 hereto. All "employee pension benefit plans," "employee welfare
benefit plans" and Fringe Benefit Arrangements listed on Schedule 4.1.18 hereto
comply in all respects with all applicable requirements of law and regulation.
ARS and ARS License do not maintain an employee pension benefit plan which is
subject to Title IV of ERISA and has never sponsored or contributed to any
"multi-employer pension plan" (as defined in Section 3(37) of ERISA).
4.1.19. EMPLOYEES. Schedule 4.1.19 attached hereto
contains a listing of the name, address, salary or compensation, accrued and/or
earned vacation, sick leave and/or other benefits, job description and original
employment date of all current employees of the Station along with, to the best
of ARS' and ARS License's knowledge, the dates and information concerning any
previous salary or compensation change or adjustment and the reasons for any
such change or adjustment for each such current employee. Entercom may, but
shall not be obligated (other than through its own actions independent of any
provisions of this Agreement) to offer employment to any employee of Station who
was employed by ARS at or before the Closing. With respect to any employees of
ARS that Entercom employs at Closing, ARS shall be responsible for and pay to
such employees all accrued or earned compensation and benefits of
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any kind as of the Adjustment Time, including without limitation severance or
other termination benefits if any, provided that ARS shall not be responsible
for such items to the extent that Entercom agrees to be responsible for such
items and receives a credit therefore pursuant to the provisions of Section 8.2
hereof.
4.1.20. BULK TRANSFER LAWS. Neither this Agreement,
the Closing, nor any other transactions contemplated by this Agreement are
subject to any Bulk Transfer Law or similar law in any jurisdiction applicable
to the transactions contemplated by this Agreement.
4.1.21. BROADCASTING CONTRACTS. Except as disclosed
on Schedule 4.1.21, all Contracts for the sale of broadcast advertising are
terminable without penalty by Station on not more than thirty (30) days prior
written notice and all Contracts for the sale of broadcast advertising on a
trade or barter basis are subject to preemption in favor of cash advertising and
all trade or barter advertising under such Contracts are to be broadcast prior
to the time of Closing. Schedule 4.1.21 also lists the trade and barter
contracts for the Station as of the date of this Agreement, showing the current
amount of trade and barter advertising obligations of the Station now
outstanding and all trade and barter receivables owed to the Station. The total
amount of all trade and barter advertising obligations of the Station
outstanding at Closing will not exceed $20,000 and the total of the value of the
advertising obligations of the Station outstanding less the value of the trade
and barter receivables owed to the Station as of the Closing Date shall not
exceed Ten Thousand Dollars ($10,000).
4.1.22. PROPERTY, PLANT AND EQUIPMENT. All
structures, facilities machinery, equipment, furniture, fixtures, automobiles,
trucks, tools and other tangible
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personal property included within the Property are in good operating condition
and reasonable repair and are usable in the ordinary course of the operation of
the Station, ordinary wear and tear excepted. Such tangible personal property
includes all equipment and devices reasonably necessary for proper and safe
operation of the Station, ordinary wear and tear excepted in accordance with
generally accepted engineering and operating practices of a prudent radio
broadcast operator.
4.1.23. ENVIRONMENTAL COMPLIANCE, POLYCHLORINATED
BIPHYENYLS, ASBESTOS AND OTHER TOXIC OR HAZARDOUS SUBSTANCES. None of the
Property used by the Station in its operations or for which the owner of the
Property could be held responsible under any Environmental Laws contains: (i)
any asbestos, polychlorinated biphenals ("PCBs") or any PCB contaminated oil;
(ii) any Contaminants; or (iii) any underground storage tanks. All of the
Property and such real property are in full compliance with all applicable
Environmental Laws and neither ARS nor ARS License has knowledge of any notice,
assertion or claim to the contrary.
4.1.24. FINANCIAL AND OTHER INFORMATION. Schedule
4.1.24 attached hereto contains a list of all of the financial, technical and
operating information provided to Entercom by ARS or ARS License concerning the
operation of the Station. All such information and any additional information
provided to Entercom by ARS or ARS License pursuant to this Agreement is true
and correct and not misleading, does not fail to state any material information
necessary to make the statements made therein not misleading, and the financial
statements and material to be provided to Entercom by ARS fairly present the
financial condition of the Station as of the respective dates thereof and the
results of operation of the
17
Station for the respective periods then ended; and were prepared in accordance
with generally accepted accounting principles consistently applied.
4.1.25. REAL PROPERTY.
(a) The real property identified on Schedule
4.1.25 has vehicular access to a road and is supplied with utilities and other
services necessary for the operation of that portion of the Station conducted
there. No real property other than that listed on Schedule 4.1.25 or listed on
Schedule 4.1.5 pertaining to Excluded Property, is used in, held for use in
connection with or necessary for the conduct of, the business or operations of
the Station. The transmitting towers, related improvements, guy anchors of the
transmitting towers, and the transmitter buildings used by ARS in the operation
of the Station are located entirely on such real property. The improvements of
ARS and ARS License upon such real property and the current use and operation on
such premises by ARS and ARS License conform in all material respects to all
restrictive covenants, conditions, easements, building, subdivision and similar
codes and federal, state and local laws, regulations, rules, orders and
ordinances and ARS has not received any notice of any violation or claimed
violation of any such restrictive covenant, condition or easement, or any
building, subdivision or similar code, or any federal, state or local law,
regulation, rule, order or ordinance which, either individually or in the
aggregate, could have a material adverse effect on the assets, business or
financial
18
condition of the Station. There is no plan, study or effort by any governmental
authority or agency which could reasonably be expected to have a material
adverse effect on the assets, business or financial condition of the Station.
There are no latent defects in the real property which could reasonably be
expected to have a material adverse effect on the assets, business or financial
condition of the Station. All improvements upon the real property identified on
Schedule 4.1.25 are in good operating condition and repair, normal wear and tear
excluded. Neither ARS nor ARS License has knowledge or notice (i) of any
pending, threatened, or contemplated action to take by eminent domain or
otherwise to condemn any portion of the real property or interest therein or
(ii) of any levied, threatened or proposed assessments for public improvements
with respect to the real property.
(b) The ground system for the Station is
complete and contains the requisite number of ground radials. The ground system
for the Station is accessible and fully contained within real property that is
owned by ARS. The Station operates within licensed parameters in both daytime
and nighttime transmission, and its proof of performance is current and complete
and indicates such compliance.
4.1.26. CLOSING. All of the foregoing
representations and warranties of ARS and ARS License shall be true and accurate
as of the Closing Date and said representations and warranties shall be deemed
to have been restated in full by ARS and ARS License as of the Closing Date
except to the extent they speak as of a particular time other than the Closing
Date, or except for changes contemplated by the terms hereof.
19
4.2. ENTERCOM REPRESENTATIONS. Entercom represents and
warrants to ARS and ARS License that:
4.2.1. CORPORATE STANDING. Entercom is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and at the Closing Date will have the corporate
power and authority to conduct its business as proposed to be conducted and upon
the acquisition of the Assets will be duly qualified to do business in the State
of California.
4.2.2. AUTHORIZATION OF AGREEMENT: NO BREACH.
Entercom has the corporate power and authority to execute, deliver and perform
this Agreement and such other agreements as are necessary to consummate the
transactions contemplated hereby and this Agreement constitutes the valid and
binding obligation of Entercom subject to the receipt of the consents and
approvals required elsewhere herein. Assuming the said consents and approvals
are obtained, neither such execution, delivery and performance nor compliance by
Entercom with the terms and provisions hereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of Entercom or any judgment, order, injunction, decree,
regulation or ruling of any court or any other governmental authority to which
Entercom is subject or any material agreement or contract to which Entercom is a
party or to which it is subject, or constitute a material default thereunder.
4.2.3. QUALIFICATION AS ASSIGNEE. Entercom knows of
no facts which, under the Communications Act of 1934, as amended, or the
existing rules and regulations of the Commission, would disqualify Entercom as
an assignee of the Authorizations.
20
4.2.4. ABSENCE OF CONFLICTING AGREEMENT AND REQUIRED
CONSENTS. Entercom is not subject to any judgment, award, order, writ,
injunction, arbitration decision or decree which prohibits the performance of
this Agreement or the consummation of any transaction contemplated under this
Agreement, and there is no litigation, administrative action, arbitration,
proceeding or investigating pending, or to the knowledge of Entercom,
threatened, against Entercom or affecting Entercom in any federal, state or
local court, or before any administrative agency or arbitrator that would
adversely affect Entercom's ability to perform its obligations under this
Agreement or would hinder the consummation of the transactions contemplated
hereunder.
4.2.5. All of the foregoing representations and
warranties of Entercom shall be true and accurate as of the Closing date and
said representations and warranties shall be deemed to have been restated in
full by Entercom as of the Closing Date except to the extent they speak as of a
particular time other than the Closing Date.
ARTICLE V
CONDITIONS
5.1. COMMISSION CONSENT AND APPROVAL AND HSR ACT WAITING
PERIOD. Performance of the obligations of the parties under this Agreement and
the Closing of the transaction provided for herein are and shall be subject to
the occurrence and concurrence of the express condition precedent that the
Commission has granted its consent and approval in writing to the assignment to
Entercom of the Authorizations issued by the Commission for the Station as
contemplated hereby, such consent to be free of any material adverse condition,
and the waiting periods (as it may be extended) applicable to the transfer of
21
the Assets under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act") shall have expired or been earlier terminated.
5.2. ENTERCOM'S CONDITIONS. Performance of the obligations of
Entercom under this Agreement and the Closing of the transactions provided for
herein are and shall be subject to the occurrence of the express conditions
precedent, any of which may be waived by Entercom that:
5.2.1. The Commission's consent and approval required
by Section 5.1 hereof and the consent and required approval of any other
governmental authority has been issued or received without any material adverse
condition and the Commission's consent shall have become a Final Order; and
5.2.2. The application of ARS License for the renewal
of the Authorizations of the Station shall have been granted without any
material adverse condition and such grant shall have become a Final Order by the
date that is 120 days after the closing of that certain Asset Exchange Agreement
by and between the parties dated July 18, 1997.
5.2.3. Between the date of this Agreement and the
date of Closing, except for periods not to exceed twenty-four (24) hours in any
one continuous period or forty-eight (48) hours in the aggregate, the Station
shall have broadcast continuously from its main antenna.
5.2.4. At or prior to Closing, Entercom shall not
have received any information that the Property and/or any real property used by
the Station in its operations and for which Entercom could be held responsible
under any Environmental Law may contain any asbestos, PCB's, PCB contaminated
oil, underground storage tanks, or any Contaminant, or that
22
any of the property or any such real property are not or may not be in full
compliance with all Environmental Laws.
5.2.5. ARS' and ARS License's representations and
warranties contained in Section 4.1 hereof shall be true and correct in all
material respects at and as of the Closing Date as if made on and as of such
date except to the extent that they speak as of a particular time other then the
Closing Date.
5.2.6. All of the terms, covenants and conditions to
be complied with and performed by ARS on or prior to the Closing Date shall have
been complied with or performed in all material respects.
5.2.7. Closing shall have been consummated on or
before June_30, 1998 provided that the failure to consummate Closing shall not
be due to a default by Entercom in its obligations hereunder.
5.2.8. Closing under the Asset Exchange Agreement
between the parties dated as of July 18, 1997, shall have occurred.
5.3 ARS AND ARS LICENSE CONDITIONS. Performance of the
obligations of the ARS and ARS License under this Agreement and the Closing of
the transactions provided for herein are and shall be subject to the occurrence
of the express conditions precedent, each of which may be waived by the ARS and
ARS License that:
5.3.1. Entercom's representations and warranties
contained in Section 4.2 hereof shall be true and correct in all material
respects at and as of the Closing Date as if made on and as of such date except
to the extent they speak as of a particular time other than the
23
Closing Date and only if the failure of any such representation or warranty to
be true and correct at Closing prevents Entercom from consummating the Closing
hereunder.
5.3.2. All of the terms, covenants and conditions to
be complied with and performed by Entercom on or prior to the Closing Date shall
have been complied with or performed in all material respects.
5.4. NONOCCURRENCE OF CONDITIONS. This Agreement may be
terminated in accordance with Article IX hereof as follows:
5.4.1. By either party if consent to the assignment
of the Authorizations issued by the Commission for said Station is denied by
Final Order;
5.4.2. By Entercom if Entercom is not then in default
hereunder and the conditions set forth in Section_5.2 of this Agreement shall
not either have been met or waived by Entercom; and
5.4.3. By ARS or ARS License if ARS or ARS License is
not then in default hereunder and the conditions set forth in Section 5.3 of
this Agreement shall not either have been met or waived by ARS or ARS License.
ARTICLE VI
OPERATIONS PENDING CLOSING.
6.1. AFFIRMATIVE COVENANTS OF ARS AND ARS LICENSE. During the
period from the date of this Agreement to the Closing Date, ARS and ARS License
shall:
6.1.1. Conduct the business and operations of the Station in
accordance with sound and prudent operating practices and all requirements of
law and regulation and, to
24
the extent consistent with the foregoing, in the same manner in which the same
have heretofore been conducted with the intent of preserving the ongoing
operations and business of the Station. In connection therewith ARS and ARS
License shall use their reasonable efforts to preserve the operations,
organization and reputation of the Station consistent with past practice, to
preserve the good will and business of the Station's advertisers, suppliers and
others having business relations with the Station with no less effort than as in
the prior conduct of the business of the Station.
6.1.2. Cooperate with Entercom in connection with Entercom's
review, analysis and monitoring of the Assets and the operations of the Station
to the end that an efficient transfer of the Assets may be made at Closing and
the business of Station may continue on an uninterrupted basis. In addition to
providing information required hereunder or reasonably requested by Entercom,
ARS and ARS License agree to promptly notify Entercom of any unusual problems or
developments of which ARS or ARS License becomes aware with respect to the
Assets, or the business of the Station and of any change in any of the
information contained in the representation and warranties made in Article 4
including without limitation, immediate notification to Entercom of any
information ARS or ARS License receives concerning offers of employment by third
parties to any of the Station's employees and of any litigation, arbitration or
administrative proceeding pending, or to the knowledge of ARS or ARS License,
threatened which challenges the transactions contemplated hereby.
6.1.3. Consult with Entercom regarding any proposed material
changes to the operation of the Station to insure the continued operation of the
Station as it is now operated and cooperate with Entercom to insure a smooth
transfer of ownership and continuity
25
of operations at Closing. The foregoing shall not be construed to require
Entercom to consult with ARS or ARS License or to render any advice to ARS or
ARS License.
6.1.4. Entercom may obtain a Phase I Environmental Assessment
of all of the property and any real property used by the Station in their
operations and for which Entercom could be held responsible under any
Environmental Laws. In the event such Assessment discloses any potential for
conditions contrary to the representations and warranties contained in Section
4.1.23, ARS and/or ARS License will take whatever additional measures
recommended in such Assessment and will take whatever steps are necessary to
insure that such representations and warranties are true and correct as of the
date of Closing.
6.1.5. Cooperate with Entercom in Entercom's efforts to employ
at Closing any of the current employees relating to the Station listed on
Schedule 4.1.19 that Entercom chooses, including without limitation: (i)
allowing Entercom to meet privately with any such current employees of the
Station; (ii) not interfering with or attempting to undermine in any way,
Entercom's efforts to employ such employees at the Closing; and (iii) not
discussing or offering continued employment with any such employees until
Entercom has affirmatively notified ARS that Entercom will not offer employment
to that employee at Closing.
6.1.6. ARS and/or ARS License shall make capital expenditures
reasonably required to maintain and repair the Station equipment and to continue
the operations of the Station consistent with past practice.
6.1.7. ARS shall, within thirty (30) days after the execution
of this Agreement at its expense, (i) commission a qualified title company to
prepare and provide to Entercom a preliminary title report with respect to the
real property within the Station Property
26
other than the real property subject to the Communications Site License
Agreement (the "KCTC Preliminary Title Report"), and ARS shall promptly provide
a copy of the KCTC Title Report to Entercom, together with complete copies of
all documents relating to the title exceptions referred to in the KCTC
Preliminary Title Report, (ii) commission a qualified surveyor to prepare and
provide to Entercom a Category 1-A Condition IV Survey of the real property
within the Station Property other than the real property subject to the
Communications Site License Agreement (the "KCTC Survey") depicting the location
of all title exceptions. Entercom shall have the right to disapprove of any
title exceptions other than Permitted Encumbrances (whether or not disclosed in
the KCTC Preliminary Title Report) which in Entercom's reasonable discretion,
have an adverse impact on the Property or Entercom's use thereof, and Entercom
shall notify ARS of any such disapproval within thirty (30) days after receipt
of the KCTC Preliminary Title Report and KCTC Survey by Entercom. All title
exceptions set forth in the KCTC Preliminary Title Report and any supplemental
reports or updates to the KCTC Preliminary Title Report and not disapproved by
Entercom within the time periods provided herein shall constitute Permitted
Encumbrances. Prior to the Closing, ARS shall, at its expense, remove or cause
to be removed, all disapproved exceptions (the "Disapproved Matters") or, in the
alternative, obtain title insurance in a form satisfactory to Entercom, insuring
against the effect of such Disapproved Matters.
6.1.8. ARS and ARS License shall use their best efforts to
prosecute with the Commission the application for renewal of the Authorizations,
such that the application is granted without any material adverse condition and,
to the extent reasonably possible, on or prior to the date for expiration of
such Authorizations.
27
6.1.9. Within a period of ten (10) days following the
execution of this Agreement, ARS and ARS License shall use their best efforts to
finalize all schedules referred to in Section_4.1 and shall use their best
efforts thereafter to promptly supplement or amend the final schedules referred
to herein with respect to any matter arising after the date of this Agreement
that would have been required to make such schedules complete and accurate.
Prior to the acceptance of final schedules or any modification of any schedule
referred to in Section_4.1 by ARS or ARS License pursuant to this Section_6.1.9,
Entercom and ECI shall have the right to approve such schedule or modification,
such approval not to be unreasonably withheld, conditioned or delayed. If
Entercom disapproves of any final schedule or modification thereafter pursuant
to this Section_6.1.9, any such schedule or proposed modification will not be
accepted or permitted, as the case may be, except as thereafter agreed to by the
parties. If the parties fail to agree in the exercise of reasonable good faith
judgment on any such final schedule or proposed modification thereto, this
Agreement shall terminate and no party shall have any further liability to any
other party hereunder in the case of disagreement over final schedule or, in the
case of a schedule modification, Entercom may proceed to Closing and seek
indemnification pursuant to Section_9.7 hereof.
6.1.10. ARS shall consult with Entercom concerning any
impending expiration of any Lease or Contract and renew such Leases or Contracts
to the extent requested by Entercom, with such modified terms (if any) as shall
be approved by Entercom.
6.2. NEGATIVE COVENANTS OF ARS AND ARS LICENSE. Unless
Entercom has given its consent in writing, which consent shall not be
unreasonably withheld or delayed, ARS and ARS License shall not, directly or
indirectly, during the period from the date hereof to the Closing Date:
6.2.1. Cancel, amend, modify adversely, assign,
encumber or in any way discharge or terminate the Leases.
6.2.2. By any act or omission surrender, modify
adversely, forfeit or fail to renew on regular terms any Authorizations for the
Station or take or omit any action which might result in the Commission
instituting any proceedings for the revocation, suspension or modification of
any of the Authorizations.
6.2.3. Except in the usual and ordinary course of
business, sell or dispose of any of the Assets; provided that any Assets so
disposed of in the ordinary course of business are replaced with Assets of like
kind, quality and quantity;
6.2.4. Suffer or permit the creation of any mortgage,
conditional sale agreement, security interest, lease, lien, hypothecation,
pledge, encumbrance, restriction, liability, charge, claim or imperfection of
title on or with respect to any of the Assets other than Permitted Encumbrances.
6.2.5. Fail to repair, replace or maintain the
Station's transmitting equipment, studio and other technical equipment and
furniture, fixtures and office equipment in good order and condition reasonable
wear and tear excepted and in accordance with the generally accepted standards
of maintenance applicable to the broadcasting industry or fail to maintain at
levels consistent with past practice its equipment, supplies and other tangible
property used or usable in the operation of the Station;
29
6.2.6. Enter into any agreement for the sale of
broadcast time on the Station which cannot be terminated upon not more than
thirty (30) days' written notice.
6.2.7. Enter into or extend or renew any agreement
for the sale of broadcast time on the Station on a trade or barter basis which
would cause the total obligation for trade broadcast time or the differential
between trade broadcast time due and trade receivables to exceed the limits in
Section 4.1.21.
6.2.8. Increase or decrease the number of full time
employees currently employed solely by the Station or increase or decrease the
total current weekly employee payroll expense from that existing in the last
payroll period in June, 1997 for the Station by more than ten percent (10%) or
materially change any sales commission formula.
6.2.9. Hire any new or replacement management or
supervisory employees, or talent for major dayparts, including without
limitation general manager, sales manager, program director, announcer for any
period 6 a.m. to midnight Monday through Friday, business manager, or promotion
director.
6.2.10. Modify the current forma and/or the program
selection practices of the Station or materially modify the music/program
rotation policy of the Station.
6.2.11. Reduce by more than ten percent (10%) the
amount or modify the type of research and external promotion advertising for the
Station from that which has been budgeted by ARS as reflected in the documents
listed on Schedule 4.1.24 hereto.
6.2.12. Reduce or increase by more than ten percent
(10%) the amount of on-air promotion, contests or the dollar value of prizes on
the Station from that which has been budgeted by ARS as reflected in the
documents listed on Schedule 4.1.24 hereto.
30
6.2.13. Allow or cause to exist any event of default
material to this transaction under any agreement to which ARS or ARS License is
a party.
6.2.14. Fail to take any reasonable actions necessary
to maintain the Station's continuous broadcast operations from its main antenna.
6.2.15. Fail to take any reasonable actions necessary
to avoid the happening of or to cure the existence of any damage to or
impairment of any of the Assets.
6.2.16. Enter into any new material contracts, other
than Contract for the sale of broadcast time, that will not be fully performed
prior to the date of Closing.
6.2.17. Renew, extend, modify or cancel, or allow or
suffer the automatic renewal, extension or cancellation of any of the Contracts
or Leases, except for renewal of such Contracts or Leases as is otherwise
provided herein.
6.2.18. Fail to operate the Station in conformity
with all of the applicable requirements of law and regulation.
6.2.19. Deviate from the Station's current broadcast
scheduling practices of broadcasting not more than twelve (12) commercial
announcements nor more than ten (10) minutes of commercial announcements in any
one hour period.
6.2.20. Deviate in any material way with respect to
the methodology ARS, ARS License and its predecessors have utilized during the
one year period prior to the date of this Agreement for selling commercial air
time on the Station and for setting rates with respect to such commercial air
time.
6.3. NO CONTROL BY ENTERCOM. Nothing contained in this
Agreement shall give to Entercom any right to control the operations of the
Station prior to the
31
Closing Date. Any advice, counsel or consent given to ARS or ARS License by
Entercom under this Article VI will not mitigate, detract from or otherwise
affect ARS' or ARS License's representations, warranties or obligations under
this Agreement and the consequences of ARS and/or ARS License acting on any such
advice, counsel or consent will be solely ARS' and ARS License's responsibility.
Any advice, counsel or consent given to Entercom by ARS and/or ARS License under
this Article VI will not mitigate, detract from or otherwise affect Entercom's
representations, warranties or obligations under this Agreement.
ARTICLE VII
PREPARATION FOR CLOSING
7.1. APPLICATION TO COMMISSION. The parties hereby bind
themselves to use all reasonable efforts, and to cooperate with each other, in
seeking the consent and approval of the Commission to the assignment of all
Authorizations heretofore granted and issued in connection with the Station, as
herein provided; diligently and promptly to prepare, sign and file with the
Commission within ten (10) days from the date of this Agreement any and all
applications requisite or desirable to procure such consent and approval (the
"Applications"); and diligently and promptly to prepare and submit to the
Commission all information, data, exhibits, amendments, resolutions, statements
and other material necessary or proper in connection with the Applications; and
diligently to pursue the grant of a Final Order approving such Applications by
the Commission. With respect to the foregoing, ARS and ARS License hereby agree,
commit and bind themselves to prepare and deliver to Entercom on or before five
(5) days from the date of this Agreement ARS' and ARS License's portions of all
applications and documents necessary for filing with the Commission to obtain
the consent and approval of
32
the Commission as required to permit the consummation of the transactions
contemplated by this Agreement.
7.2. INSPECTION BY ENTERCOM. During the period from the date
of this Agreement to the Closing Date, ARS and ARS License shall afford
engineers, attorneys, accountants and other consultants and/or representatives
of Entercom free access during normal business hours to the employees, offices,
studios, transmitter site, equipment, records and other documents pertaining to
the Station and furnish Entercom with all information concerning said Station as
Entercom may reasonably request, including but not limited to applications,
responses to the Commission inquiries, and other documents filed by ARS or ARS
License with the Commission. For purposes of the foregoing records shall
include, without limitation, any sales, research, consulting and ratings reports
relating to the Station.
7.3. CONFIDENTIALITY. Entercom hereby covenants and agrees
that in the event the transactions contemplated by this Agreement are not
consummated for any reason whatsoever, Entercom will upon request return to ARS
within ten (10) days from the date of such request, all copies of all
information designated at the time of delivery as confidential by ARS or ARS
License regarding ARS or ARS License, the Assets, the Station and the business
and operation of the Station; and Entercom hereby covenants and agrees to hold
all such information (the "Confidential Information") in confidence and not to
disclose, or cause any representative, agent or employee of Entercom to disclose
to any third parry any portion of the Confidential Information and not to use
any portion of the Confidential Information for Entercom's own benefit.
7.4. XXXX-XXXXX-XXXXXX NOTIFICATION. As promptly as
practicable and no later than twenty (20) days after the date hereof, the
parties hereto shall take all steps reasonably necessary to file and shall
participate in the filing of all requisite documents and notifications required
to be filed pursuant to the HSR Act. All filing fees in connection with such
notifications shall be divided equally between ARS and Entercom. The parties
agree diligently to take and fully cooperate in the taking of, all necessary and
proper steps, and provide any additional information reasonably requested in
order to obtain promptly the expiration of the waiting period under the HSR Act.
ARTICLE VIII
CLOSING
8.1. CLOSING. Closing shall take place at the time and place
agreed to by the parties hereto. In the absence of agreement thereon and except
as modified elsewhere herein, the Closing shall take place by mail at 10:00
a.m., Eastern Time on a date selected by Entercom on at least five (5) days
prior written notice but not later than, except as set forth below, five (5)
business days after the later of: (a) the satisfaction or waiver of each
condition to closing contained herein (other than such conditions as can only be
satisfied at the Closing); and (b) the expiration of any period of extension for
Closing provided elsewhere in this Agreement. If such date falls on a Saturday,
Sunday or legal holiday in the State of California, then such Closing shall take
place as provided herein on the next business day.
8.2. ADJUSTMENTS. Operation of the Assets and the income and
expense attributable thereto up to the Adjustment Time shall be for the account
of ARS and thereafter for the account of Entercom. Proration between ARS, ARS
License and Entercom of the items
34
mentioned in this section shall be effected as of the Adjustment Time in
accordance with the provisions of this section. If the amount of any such items
cannot readily be ascertained on the Closing Date, an estimate of the proper
proration of such items shall be agreed upon by the parties and the actual
proration of such item shall be computed and paid not later than ninety (90)
days from the Closing Date. Such proration shall include, without limitation,
the following:
8.2.1. ARS shall be entitled to all income or other
consideration to be paid on account of all Contracts or Leases, to the extent
that such income or other considerations accrue before the Adjustment Time and
thereafter Entercom shall be entitled to same.
8.2.2. All accounts receivable for broadcasts on the
Station which occur prior to the Adjustment Time (the "Accounts Receivable")
shall belong to ARS and for broadcasts which occur thereafter shall belong to
Entercom. Within five (5) days following the Closing, ARS shall deliver to
Entercom a Schedule of Accounts Receivable of the Station as of the Adjustment
Time (the "Schedule of Accounts Receivable"). Entercom agrees to collect for ARS
its Accounts Receivable as shown on the Schedule of Accounts Receivable for a
period of one hundred twenty (120) days following the Closing. ARS will at the
Closing provide Entercom a power of attorney or other required authorization for
the limited purpose of allowing Entercom to endorse and deposit checks and other
instruments received in payment of such Accounts Receivable. All payments
received by Entercom from any customer whose name appears in the Schedule of
Accounts Receivable and who is also a customer of Entercom shall be credited as
payment of the account or invoice designated by such customer. In the absence of
any such designation by the customer, payments shall be first credited to the
oldest invoice which is not disputed by said customer. Entercom shall keep
accurate records of the payment
35
received by it on such Accounts Receivable and ARS shall have access at
reasonable times to Entercom's records to verify such status of the Accounts
Receivable. Within thirty (30) days from the end of each standard broadcast
month, Entercom shall remit to ARS amounts previously collected by Entercom on
such Accounts Receivable, along with a written accounting of same. Any Accounts
Receivable that have not been collected within such one hundred twenty (120) day
period shall be returned to ARS, together with all records in connection
therewith, whereupon ARS may pursue collection thereof in such manner as ARS, in
its sole discretion, may determine. Entercom shall not have the right to
compromise, settle or adjust the amounts of any such Accounts Receivable without
ARS' prior written consent. Except to remit collected Accounts Receivable in
accordance herewith, Entercom shall have no liability or obligation to ARS with
respect to the collection of ARS' accounts and shall not be obligated to take
any action to collect such accounts.
8.2.3. Rental and other obligations under the Leases
and Contracts to be assigned and assumed hereunder including utilities and other
cost or expenses payable thereunder.
8.2.4. General and special state, county, school and
municipal taxes and assessments (exclusive of rebates, penalties or interest) on
the Property to be conveyed hereunder payable during the fiscal year of the
taxing authority in which the Adjustment Time falls and if the amount of any
such items may not then be ascertained, an interim adjustment shall be effected
on the basis of the corresponding items for the preceding year subject to final
adjustment at such time as the relevant information becomes available. The
foregoing notwithstanding, ARS and/or ARS License shall be responsible for and
shall pay any penalties or
36
interest which are assessed and be entitled to recover any rebate or refund on
account of any such taxes or amounts which accrue at or before the Adjustment
Time, provided that any such penalty or interest or portion thereof which
results from any failure by Entercom to perform any of Entercom's obligation
under this Agreement after the Closing shall be Entercom's responsibility.
8.3. CLOSING DELIVERIES TO ENTERCOM. At or before the Closing,
ARS and/or ARS License shall deliver to Entercom the following items and
documents in form satisfactory to counsel for Entercom and properly executed,
unless Entercom shall waive in whole or in part in writing such delivery and
then only to the extent of such waiver:
8.3.1. Bills of Sale and assignments and other
instruments of transfer and conveyance, transferring to Entercom the Property to
be sold, transferred or assigned hereunder and the rights and interests under
the Leases and Contracts being assigned to Entercom hereunder and estoppel
certifications by the other parties to such Leases and those Contracts
designated as material contracts on Schedule 4.1.7 that ARS and/or ARS License
are not then in default under the terms of the Lease or Contract to which such
other party is a party.
8.3.2. An assignment of all right title and interest
of ARS License in and to the Authorizations and all pending applications
relating to the Station before the Commission.
8.3.3. All keys to and actual possession of all of
the Property, in the same condition as the same now is, except for ordinary wear
and tear thereof.
8.3.4. A certified copy of resolutions of the Board
of Directors of ARS and ARS License duly authorizing the execution, delivery and
performance of this Agreement
37
and all documents to be executed and delivered by ARS and ARS License at the
Closing and thereafter.
8.3.5. A certificate signed by an authorized officer
of ARS and ARS License, to the effect that no act or omission of ARS or state of
facts contrary to the agreements, representations and warranties contained
herein has been taken or has occurred and that said representations and
warranties are true and correct in all material respects as of the Closing Date
with the same effect as if made as of the time of Closing.
8.3.6. The consents of any public authorities or
third persons that may be required in connection with the performance of this
Agreement.
8.3.7. Opinions of Xxxxxxx X. Xxxxxx, General Counsel
for ARS, with respect to matters other than Commission related matters and of
Dow, Xxxxxx & Xxxxxxxxx, with respect to Commission related matters, dated as of
the date of Closing and in form and substance satisfactory to Entercom to the
effect that:
8.3.7.1. ARS and ARS License are
corporations duly organized and existing and in good standing under the laws of
the State of Delaware and are duly qualified to do business in the State of
California and any other jurisdiction where such qualification is required;
8.3.7.2. ARS and ARS License have the
corporate power and authority to execute, deliver and perform this Agreement and
to convey, assign, transfer and deliver the Assets pursuant to the terms of this
Agreement;
8.3.7.3. All corporate proceedings required
to be taken by ARS and ARS License to authorize ARS and ARS License to execute,
deliver and perform this
38
Agreement and to convey, assign, transfer and deliver to Entercom the Assets
hereunder have been duly and properly taken;
8.3.7.4. This Agreement and all documents
and instruments executed and delivered hereunder by ARS and ARS License are the
legal, valid and binding obligations of ARS and ARS License and have been
validly executed on behalf of ARS and ARS License and are valid and enforceable
in accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally and by application of
general equitable principles affecting the enforcement of equitable remedies
(including within said equitable remedies, without limitation, the remedy of
specific performance).
8.3.7.5. The execution and delivery by ARS
and ARS License of this Agreement and all the documents delivered by ARS and ARS
License pursuant to this Agreement and the sale of the Assets to Entercom will
not: (i) constitute a violation of the Certificate of Incorporation, as amended,
or the Bylaws, as amended, of ARS or ARS License; (ii) constitute a violation of
any statute, judgment, order, decree or regulation of any court, governmental
authority or arbitrator applicable or relating to ARS, ARS License or the
Assets; (iii) conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the acceleration
of any performance required by the terms of any material agreement known to such
counsel to which ARS or ARS License is a party or by which ARS or ARS License
may be bound; or (iv) create any claim, lien, charge or encumbrance on the
Station or the Assets pursuant to or as a consequence of any of the foregoing.
39
8.3.7.6. All other actions and proceedings
required by federal, state and local laws or this Agreement to be taken by ARS
or ARS License at or prior to the Closing in connection with this Agreement and
the transactions provided for therein have been duly and validly taken.
8.3.7.7. Such counsel knows of no claim,
legal action, court action, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding pending or threatened against ARS
or ARS License or to which ARS or ARS License is or would be a party or relating
to the Assets or the transactions contemplated by this Agreement which would
have an adverse effect on the Station business or on the Assets or on the
transfer of the Assets to Entercom, other than those set forth in Schedule
4.1.14.
8.3.7.8. ARS License is the authorized legal
holder of the Authorizations. The Authorizations are in full force and effect.
To such counsel's knowledge after reasonable investigation: (i) there is not now
pending or threatened any action by or before the Commission to revoke, cancel,
rescind, modify or refuse to renew any of the Authorizations and (ii) there is
not then pending or threatened, issued or outstanding by or before the
Commission, any investigation, Order to Show Cause, Notice of Violation, Notice
of Apparent Liability or Notice of Forfeiture or complaint concerning the
Station or concerning ARS or ARS License if such matter could have an adverse
effect on the Station or the consummation of the transactions contemplated by
this Agreement.
8.3.7.9. The Commission has granted approval
to the assignment of the Authorizations and the application for renewal of the
Authorizations such grants have become a Final Order (unless waived by Entercom)
in accordance with the rules and
40
regulations of the Commission, subject to timely notice of consummation of the
sale of the Assets and assignment of the Authorizations.
8.3.8. All books, records, public files, contracts,
leases, Commission filings, correspondence, files and other documents relating
to and necessary or appropriate to the operation of the Station, excluding
however, accounting records relating to ARS' and ARS License's period of
ownership (provided Entercom is given copies thereof), minute books and other
corporate records of ARS or ARS License.
8.3.9. The Communications Site License Agreement
executed by American Tower Systems Corporation, in the same form attached as
Exhibit A hereto.
8.3.10. ARS shall deliver to Entercom a General
Warranty Deed in recordable form transferring a fee simple interest in any fee
estate included within the Property other than the real property subject to the
Communications Site License Agreement and a fully paid policy of title insurance
(ATLA owners policy-Form 1970, if available or Form 1984 or 1990 with 1970
endorsements), for the benefit of insuring good and marketable title to such
real property free and clear of all liens and encumbrances issued by a title
insurance company reasonably acceptable to Entercom and in the amount allocated
to such real property hereunder, subject to standard title exceptions and survey
exceptions, none of which will impair or interfere with the continued use of
such real property as such is currently used.
8.4. CLOSING DELIVERIES TO ARS. At the Closing, Entercom shall
deliver to ARS or a qualified intermediary designated by ARS the Purchase Price
as set forth in Section 2.3 and deliver to ARS or a "qualified intermediary"
designated by ARS the following
41
items and documents in form satisfactory to counsel for ARS and properly
executed unless ARS shall waive in whole or part in writing such delivery and
then only to the extent of such waiver:
8.4.1. An opinion of Xxxx X. Xxxxxxxx, Esq.,
Entercom's General Counsel, in form and substance satisfactory to ARS to the
effect that Entercom is a corporation duly organized, validly existing and in
good standing in the Commonwealth of Pennsylvania, is duly authorized and
empowered to enter into all of its undertakings herein provided and is duly
qualified to do business in the State of California; that this Agreement and all
documents to be executed or delivered hereunder by Entercom at Closing are valid
and binding upon Entercom in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by application of general equitable principles
affecting the enforcement of equitable remedies (including within said equitable
remedies without limitation the remedy of specific performance); all corporate
proceedings required to be taken by Entercom to authorize Entercom to execute,
deliver and perform this Agreement have been duly and properly taken; and
Entercom's counsel does not know or have any reasonable grounds to know of any
violation by Entercom of any of its agreements, representations, warranties,
certificates or affidavits contained herein or delivered pursuant hereto which
would prevent Entercom from consummating the Closing hereunder. With respect to
matters of California law such opinion of Entercom's counsel may be based solely
on or may be given by Entercom's California counsel.
8.4.2. One or more Agreements whereby Entercom
assumes and agrees to pay when due any liabilities of ARS or ARS License
specifically assumed by Entercom
42
hereunder, including without limitation, those liabilities accruing after the
Adjustment Time with respect to those Leases and Contracts being assumed by
Entercom hereunder.
8.4.3. Certified copies of the resolutions of the
Board of Directors of Entercom approving and ratifying this Agreement and all
transactions contemplated by this Agreement.
8.4.4. A certificate signed by the President or any
Vice President of Entercom to the effect that with respect to any matter which
would prevent Entercom from consummating the Closing, no act or omission of
Entercom or state of facts contrary to the agreements, representations and
warranties contained herein has been taken or has occurred and that said
representations are true and correct as of the Closing Date with the same force
and effect as if made as of the time of Closing.
8.5. COVENANTS OF FURTHER ASSURANCE. At and after the time of
Closing, upon request of Entercom, ARS and/or ARS License shall take such action
and deliver to Entercom such further instruments of assignment, conveyance or
transfer or other documents of further assurance as in the opinion of counsel
for Entercom may be reasonably necessary to evidence the full and effective
transfer, conveyance and assignment of the Assets and possession thereof to
Entercom, its successors and assigns, and to assure complete performance of this
Agreement by ARS and ARS License in all respects.
8.6. DAMAGE TO PROPERTY. If, at the time of Closing, the
tangible personal property to be sold hereunder shall have suffered loss or
damage to an extent that affects the value thereof and ARS or ARS License shall
not have repaired, replaced or restored the same with property of like kind,
quality and value, Entercom shall have the right at its
43
election to (i) complete the purchase and Closing, in which event it shall be
entitled to a reduction in the Purchase Price equal to the greater of the amount
necessary to repair, replace or restore such damaged property with property of
like kind, quality and value or the amount of any and all insurance proceeds
available to ARS, if any, collectible by reason of such loss or damage,
(ii) postpone closing until such time as ARS or ARS License shall have so
repaired, replaced or restored such property, provided that if such postponement
exceeds ninety (90) days then Entercom shall have the right to terminate this
Agreement in accordance with Article IX hereof.
8.7. TAXES ON TRANSACTION. All sales, purchase, transfer, use
or documentary taxes, if any, payable by reason of this Agreement or any of the
transactions contemplated hereby or the sale, transfer or delivery of any of the
Assets to Entercom whether or not imposed on ARS or ARS License, shall be paid
and borne by ARS or ARS License, either directly or by reimbursement to Entercom
and ARS or ARS License shall indemnify and hold Entercom harmless with respect
to the above taxes and any expenses incurred by Entercom relating to same.
ARTICLE IX
TERMINATION, DEFAULT AND INDEMNIFICATION
9.1. TERMINATION BY REASON OTHER THAN DEFAULT. This Agreement
may be terminated by a party hereto not then in default hereunder upon written
notice to the other party if:
9.1.1. Events occur which give rise to a specific
right hereunder to terminate this Agreement by the party seeking to terminate;
or
44
9.1.2. Any material condition set forth herein to the
obligation of the party seeking to terminate this Agreement to complete the
transaction has not been satisfied or complied with by the Closing Date and has
not been waived by the party seeking to terminate.
9.2. EFFECT OF TERMINATION BY REASON OTHER THAN DEFAULT. If
this Agreement is duly terminated by either party as provided in Section 9.1,
then all obligations of either party to the other shall cease and both parties
shall be fully and finally released herefrom.
9.3. DEFAULT. The following shall constitute a default
hereunder:
9.3.1. If any of the representations or warranties of
a party contained herein is inaccurate or breached in any material respect; or
9.3.2. If any of the obligations to be performed her
under by a party hereto is not performed during the period or at or before the
time specified herein for such performance.
9.4. ARS' REMEDY. In the event Entercom is obligated to
complete Closing hereunder and defaults in such obligation which default is not
waived by ARS, ARS' sole remedy shall be to receive Two Hundred Thousand Dollars
($200,000) as liquidated damages in full and final settlement of all claims
under this Agreement and there shall be no other or further obligations,
liabilities or remedies of the parties hereunder. In the event Closing occurs
hereunder, ARS' or ARS License's remedy for any default by Entercom shall be
indemnification pursuant to Section 9.7 hereof.
45
9.5. ENTERCOM'S REMEDIES. In the event of a default by ARS
and/or ARS License hereunder, which is not waived by Entercom, Entercom shall
have the following remedies:
9.5.1. Entercom may by written notice to ARS and ARS
License terminate this Agreement in which event Entercom shall be entitled to
recover from ARS or ARS License any damages Entercom sustained as a result of
the default by ARS and/or ARS License hereunder.
9.5.2.Entercom may seek specific performance by ARS
or ARS License of ARS' or ARS License's obligations hereunder and shall also be
entitled to any other remedy available at law or in equity, including without
limitation the recovery of any damages incurred by Entercom as a result of the
default by ARS or ARS License hereunder. ARS and ARS License covenant that under
such circumstances they shall not assert in defense of an action seeking
specific performance of this Agreement in favor of Entercom that Entercom has
available adequate remedies at Law.
0.0.0.Xx the event Closing occurs hereunder,
Entercom's remedy for any default by ARS or ARS License shall b indemnified
pursuant to Section 9.7 hereof.
9.6. LIQUIDATED DAMAGES NOT A PENALTY. With respect to the
liquidated damages provided for in Section 9.4 her of, ARS and Entercom hereby
acknowledge and agree that the damage that may be suffered by either party in
the event of a default by the other party hereunder is not readily ascertainable
and that such liquidated damages as of the date hereof are a reasonable estimate
of such damages and are intended to compensate ARS for any such damage and are
not to be construed as a penalty.
46
9.7. INDEMNIFICATION.
9.7.1. By ARS and ARS License. ARS and ARS License
shall indemnify, defend and hold Entercom and its officers, directors, employees
and affiliates harmless from, against and with respect to any and all loss,
damage, claim, obligation, assessment, cost, liability, and expense (including,
without limitation, reasonable attorney's fees and costs and expenses incurred
in investigating, preparing, defending against or prosecuting any litigation or
claim, action, suit, proceeding or demand) of any kind or character (a "Loss")
incurred, suffered, sustained or required to be paid by any of them and
resulting from, related to or arising out of:
(a) any breach of any of the representations
or warranties made by ARS or ARS License in or pursuant to this Agreement, or in
any agreement, document or instrument executed and delivered pursuant hereto or
in connection with the Closing hereunder;
(b) any failure by ARS or ARS License to
perform or observe, or to have performed or observed, in full, any covenant or
agreement to be performed or observed by it pursuant to this Agreement or in any
agreement, document or instrument executed and delivered by or on behalf of it
in connection with the Closing hereunder;
(c) any and all obligations of ARS or ARS
License, except for obligations to be assumed or retained by Entercom under the
terms of this Agreement; or
(d) ARS' or ARS License's operation or
ownership of the Assets prior to the Adjustment Time, including any and all
obligations and liabilities
47
arising under the Authorizations or the Contracts and Leases which accrue or
relate to a period of time prior to the Adjustment Time; or
9.7.2. By Entercom. If Closing does not occur due to
a default by Entercom in its obligation to complete such Closing hereunder, ARS'
and ARS License's remedy shall be liquidated damages pursuant to Section 9.4
hereof. Provided Closing occurs hereunder, Entercom shall indemnify, defend and
hold ARS and ARS License and their officers, directors, employees and affiliates
harmless from, against and with respect to any Loss (as defined in Section
9.7.1) incurred, suffered, sustained or required to be paid by any of them and
resulting from, related to or arising out of:
(a) any breach of any of the representations
or warranties made by Entercom in or pursuant to this Agreement or in any
agreement, document or instrument executed and delivered pursuant hereto or in
connection with the Closing hereunder;
(b) any failure by Entercom to perform or
observe, or to have performed or observed, in full, any covenant or agreement to
be performed or observed by it pursuant to this Agreement or in any agreement,
document or instrument executed and delivered by or on behalf of it in
connection with the Closing hereunder; or
(c) any and all obligations of Entercom
except for obligations to be assumed or retained by ARS and ARS License under
the terms of this Agreement; or
(d) Entercom's operation or ownership of the
Assets after the Adjustment Time, including any and all liabilities arising
under the Authorizations or the
48
Contracts assumed by Entercom and Leases assumed by Entercom which accrue after
the Adjustment Time or which relate to or arise out of events occurring after
the Adjustment Time.
9.7.3. Procedures. Any party seeking indemnification
under this Agreement (the "Indemnified Party") shall give the party from who
indemnification is sought (the "Indemnifying Party") written notice of any claim
or the commencement of any action or proceeding for which the Indemnified Party
seek indemnification, and the Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting from
such claim, unless injunctive relief is sought against the Indemnified Party in
which case the Indemnified Party shall have the right to join in any defense.
The Indemnified Party's failure to give the Indemnifying Party notice under this
clause shall not preclude the Indemnified Party from seeking indemnification
from the Indemnifying Party except to the extent that the Indemnified Party's
failure has materially prejudiced the Indemnifying Party's ability to defend the
claim or litigation. The Indemnifying Party shall not settle any claim for which
the Indemnified Party seeks indemnification or consent to entry of any judgment
in litigation arising from such a claim without obtaining a release of the
Indemnified Party from all liability in respect of such claim or litigation. If
the Indemnifying Party shall not assume the defense of any such claim or
litigation resulting therefrom, or if injunctive relief is sought against the
Indemnified Party, the Indemnified Party may defend against or settle such claim
or litigation in such manner as it may deem appropriate. The Indemnifying Party
shall promptly reimburse the Indemnified Part 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
49
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
for all expenses, legal or otherwise, incurred by the Indemnified Party in the
defense against such claim or litigation.
ARTICLE X
GENERAL PROVISIONS
10.1. EXPENSES OF THE PARTIES. Except as otherwise provided
herein, all expenses involved in the preparation, authorization and consummation
of this Agreement, including, without limitation, all fees and expenses of
agents, representatives, counsel and accountants in connection therewith and in
connection with applications to the Commission hereunder, shall be borne solely
by the party who shall have incurred the same, and the other party shall have no
liability in respect thereof. The foregoing notwithstanding, the parties agree
to pay in equal shares any filing fees of the Commission relating to the filing
of the Applications.
10.2. BROKERS. Each party hereto represents and warrants to
the other party hereto that it has not incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents commissions or
other like payment in connection with this Agreement or the transactions
contemplated hereby for which the other party will have any liability, and each
party hereto agrees to indemnify and hold the other party hereto harmless
against and in respect to any such obligation or liability based in any way on
any agreement, arrangement or understanding claimed to have been made by such
party with any third party.
10.3. SURVIVAL OF ARS' AND ARS LICENSE'S COVENANTS,
REPRESENTATIONS AND WARRANTIES. The provisions hereof which by their terms are
to be performed and observed after the Closing Date and the several
representations, warranties, indemnities and agreements of ARS and ARS License
herein contained shall survive the Closing Date hereunder and shall remain
effective and unaltered or unimpaired by any investigation that may have been or
may be made at any time prior to Closing by or on behalf of the Entercom.
10.4. AMENDMENT AND WAIVER. This Agreement cannot be changed
or terminated orally. Any amendment or modification hereof must be in writing
signed by the party against whom enforcement is sought. No waiver of compliance
with any provision or condition hereof, and no consent provided for herein,
shall be effective unless evidenced by an instrument in writing duly executed by
the party sought to be charged with such waiver or consent.
10.5. EFFECT OF THIS AGREEMENT. This Agreement sets forth the
entire understanding of the parties and supersedes any and all prior written or
oral agreements, arrangements or understandings relating to the subject matter
hereof. No representation, promise, inducement or statement of intention has
been made by either party which is not embodied in this Agreement, and neither
party shall be bound by, or be liable for, any alleged representation, promise,
inducement or statement of intention not embodied herein unless same shall have
been made subsequent hereto, shall be in writing and shall be signed by the
party to be charged therewith. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
51
10.6. HEADINGS. The article or section headings of this
Agreement are for convenience of reference only and do not form a part of and do
not in any way modify, interpret or construe the intention of the parties.
10.7. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and all such counterparts shall be construed as one and the
same instrument.
10.8. GOVERNING LAW. The construction and performance of this
Agreement shall be governed by the laws of the State of California.
10.9. NOTICES. Any notice, report, demand, waiver or consent
required or permitted hereunder shall be in writing and shall be given by hand
delivery, by prepaid registered or certified mail, with return receipt
requested, by an established national overnight courier providing proof of
delivery for next business day delivery or by telecopy addressed as follows:
If to ARS/ARS License: Xxxxxx X. Xxxxx, President & CEO
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telecopy Number: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telecopy Number: (000) 000-0000
Xxxx Xxxxxxx, Esq.
Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
52
If to Entercom: Xxxxxx X. Field, President
Entertainment Communications, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telecopy Number: (000) 000-0000
with a copy to: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Telecopy Number: (000) 000-0000
The date of any such notice and service thereof shall be deemed to be: (i) the
day of delivery if hand delivered or delivered by overnight courier; (ii) the
day of delivery as indicated on the return receipt if dispatched by mail, or
(iii) the date of telecopy transmission as indicated on the telecopier
transmission report provided that any telecopy transmission shall not be
effective unless a paper copy is sent by overnight courier on the date of the
telecopy transmission. Either party may change its address for the purpose of
notice by giving notice of such change in accordance with the provisions of this
section.
10.10. STATION EMPLOYEES. ARS and ARS License agree that for a
period of one year after the Closing neither they nor any of their successors or
assignees will employ, offer employment to or counsel others to offer employment
to any current employee of the Station that Entercom employs after the Closing.
10.11. SECTION 1031 ASSET EXCHANGE.
10.11.1. Entercom may elect to effect the acquisition
of all or part of the Assets as part of a deferred like-kind exchange under
Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), in
lieu of buying such assets hereunder. If Entercom so elects, it shall provide
notice to ARS and ARS License of its election, and
53
thereafter (i) may at any time at or prior to Closing assign its rights under
this Agreement to a "qualified intermediary" as defined in Treas. Reg.
ss._1.1031(k)-1(g)(4), subject to all of ARS' and ARS License's rights and
obligations hereunder and (ii) shall promptly provide written notice of such
assignment to all parties hereto. Notwithstanding the assignment of Entercom's
rights hereunder, the parties acknowledge and agree that the representations,
warranties and covenants of ARS and ARS License hereunder are for the benefit of
Entercom and shall remain enforceable by Entercom against ARS and ARS License in
accordance with the terms hereof. ARS and ARS License shall cooperate with all
reasonable requests of Entercom and the "qualified intermediary" in arranging
and effecting the exchange as one which qualifies under section 1031 of the
Code. Without limiting the generality of the foregoing, if Entercom has given
notice of its intention to effect the acquisition of all or part of the Assets
as part of a tax-deferred exchange, ARS and ARS License shall (i) promptly
provide Entercom with written acknowledgment of such notice and (ii) at Closing,
accept payment for all or that portion of the Assets for which like-kind
exchange treatment is sought by Entercom from the "qualified intermediary"
rather than from Entercom (which payment shall discharge the obligation of
Entercom hereunder to make payment for such assets) and transfer, assign and
convey such assets to Entercom.
10.11.2. ARS and ARS License may elect to effect the
transfer and conveyance of all or part of the Assets as part of a deferred
like-kind exchange under Section 1031 of the Code in lieu of selling such assets
hereunder. If ARS and ARS License so elect, they shall provide notice to
Entercom of their election, and thereafter (i) may at any time at or prior to
Closing assign their rights under this Agreement to a "qualified intermediary"
as defined
54
in Treas. Reg. ss._1.1031(k)-1(g)(4), subject to all of Entercom's rights and
obligations hereunder and (ii) shall promptly provide written notice of such
assignment to all parties hereto. Entercom shall cooperate with all reasonable
requests of ARS and ARS License and the "qualified intermediary" in arranging
and effecting the exchange as one which qualifies under section 1031 of the
Code. Without limiting the generality of the foregoing, if ARS and ARS License
has given notice of their intention to effect the acquisition of all or part of
the Assets as part of a tax-deferred exchange, Entercom shall (i) promptly
provide ARS and ARS License with written acknowledgment of such notice and (ii)
at Closing, pay that portion of the Purchase Price allocable to that portion of
the Assets for which like-kind exchange treatment is sought by ARS and ARS
License to the "qualified intermediary" rather than to ARS and ARS License
(which payment shall discharge the obligation of Entercom to make payment for
such assets hereunder)
[THIS SPACE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized corporate officers and their respective corporate seals
thereunto affixed on this the day and date first written above.
ARS:
AMERICAN RADIO SYSTEMS
CORPORATION
By:_______________________________
Title:____________________________
ARS LICENSE:
AMERICAN RADIO SYSTEMS LICENSE
CORPORATION
By:_______________________________
Title:____________________________
ENTERCOM
ENTERTAINMENT COMMUNICATIONS,
INC.
By:_______________________________
Title:____________________________
56
